## Sunday, 10 June 2018

### Theories of Surplus Value, Part II, Chapter 16 - Part 17

As Marx explained in Capital I, the primary factor, in determining the organic composition of capital, is the technical composition, as opposed to the value composition. If the value of constant capital is constant then it will require 20 workers to process the materials constituting the £60 c, no matter how wages may change. Moreover, the consumption requirements of these 20 workers are determined by the use value they must consume, not by exchange value. Each worker must consume 1 ton to reproduce their labour-power. Any change in the value of the produce simply means a change in the value of the wage, therefore, and consequently in the surplus value produced.

If the market value rises to £1.846 per ton, as a result of land II now being brought into cultivation, the wages paid to the 20 workers employed on land III rises. But, the value of its output also rises, because it sells this output at £1.846 rather than £1.60 per ton.

Land III then advances £60 for constant capital. The 20 workers continue to produce £60 of new value, so the individual value of its output remains £120. But, the 20 workers must now be paid wages of 20 tons x £1.846 = £36.923. The total capital advanced for II is then £60 + £36.923 = £96.923, leaving a profit of £23.077.

Scaling this up to an advanced capital of £100 gives £61.905 c + £38.095 v, and £23.810 profit. On £100 of capital, 20.615 workers are employed. But, III does not sell its output at £123.810, because the market value is now determined by land II. Dividing the £123.810 output value by £1.60 individual value per ton, for land III, gives us the figure for its output in tons. That is 77.381 tons. If we multiply this figure by the new market value per ton of £1.846, this gives us the output value for land III, which is £142.857.

The differential value between the individual value per ton, and the market value per ton, for land III, is £0.246, which gives a surplus profit of £19.048, which then constitutes differential rent. This is summarised in the following tables.
 [Class] Capital £ [Number of] tons [ATV] Actual total value £ [TMV] Total market value £ MV [Market value per ton] £ IV [Individual value per ton] £ III 100.000 77.381 123.810 142.857 1.846 1.600
 DV Differential value [per ton] Rent £ Rent in tons Rate of profit % Composition of capital Rate of surplus-value % Number of workers [+£0.246] 19.048 10.317 23.317 61.905 c +38.095 v 62.50 20.635

For land II, there is no rent. The individual value per ton is £1.846, the same as the market value per ton. With £100 of capital, it employs 20.635 workers, the same as land III. But, productivity on II is lower than on III, and these workers produce only 67.063 tons.

The details are summarised in the following table.
 [Class] Capital £ [Number of] tons TV [Total value] £ MV [Market value per ton] £ IV [Individual value per ton] £ II 100.000 67.063 123.810 1.846 1.478
 DV [Differential value per ton] Rent £ Rate of profit % Composition of capital Rate of surplus-value % Number of workers 0 0 23.810 61.905 c + 38.095 v 62.500 20.635
Analysing the situation then after land II is introduced, we have the following overall situation, as set out in the following tables.
 [Class] Capital £ [Number of] tons [ATV] Actual total value £ [TMV] Total market value £ MV [Market value per ton] £ IV [Individual value per ton] £ DV [Differential value per ton] £ III 100.000 77.381 123.810 142.857 1.846 1.600 [+£0.246] II 100.000 67.063 123.810 123.810 1.846 1.846 0
 Composition of capital Number of workers Rate of surplus-value % Rate of profit % Wages in tons Profit in tons Rent £ Rent in tons 61.905 c + 38.095 v 20.635 62.50 23.810 20.635 12.897 19.048 10.317 61.905 c + 38.095 v 20.635 62.50 23.810 20.635 12.897 0 0

If we move then to the next situation, whereby demand has continued to rise, the price per ton has risen to £2, and land type I is introduced. If £60 of constant capital is employed, 20 workers must now be paid wages of 20 tons x £2 = £40. So, we have the same situation as previously outlined in Table A, whereby a capital of £100 is divided £60 c + £40 v.

In each case, the 20 workers produce £60 of new value, giving individual value of output of £120. However, this £120 of value is embodied in different quantities of output in each case, so that the individual value per ton is different in each case, resulting in a differential value per ton, in the more fertile lands.

On land III, just as happened when the price per ton rose, leading to land II being introduced, the rise in wages means that with a capital of £100, they can employ fewer workers. Initially, they employed 21.739 workers, which fell to 20.635 workers when land II was introduced. Now, with the price per ton at £2, they can only employ 20 workers. The quantity of output from land III falls correspondingly.

However, the capitals employed on land II and III both sell their output at the new market value of £2 per ton. That means that both land III and II output results in differential values, and surplus profits, which produce differential rent

The output of land III falls to 75 tons, as a result of fewer workers being employed, but it sells this output at £2 per ton, whereas the individual value is only £1.60 per ton, giving a differential value of £0.40 per ton. The total value of its output is £120, but the total market value, at £2 per ton, is £150, giving a profit of £50, which represents a surplus profit of £30, which is appropriated as rent.

The overall situation is summarised in the following tables.
 [Class] Capital £ [Number of] tons ATV [Actual total value] £ TMV [Total market-value] £ MV [Market-value per ton] £ IV [Individual value per ton] £ DV [Differential value per ton] £ III 100.00 75.00 120.00 150.00 2.00 1.600 [£0.40]. II 100.00 65.00 120.00 130.00 2.00 1.846 [£0.154] I 100.00 60.00 120.00 120.00 2.00 2.000 0
 Composition of capital Number of workers Rate of surplus-value % Rate of profit % Wages in tons Profit in tons Rent £ Rent in tons 60 c + 40 v 20 50 20 20 10 30 15 60 c + 40 v 20 50 20 20 10 10 5 60 c + 40 v 20 50 20 20 10 0 0 40 20