## Friday, 8 June 2018

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

Marx then produces two tables. The first is Table A from Chapter 12, and the second is a modification of it, in line with the example just discussed.
 [Class] Capital £ [Number of] tons TV [Total value] £ MV [Market value] per ton £ IV [Individual value] per ton £ DV [Differential value] per ton £ CP [Cost price] per ton £ AR [Absolute rent] £ DR [Differential rent] £ AR [Absolute rent] tons I 100 60 120 2 2 0 1.833 10 0 5 II 100 65 130 2 1.846 0.154 1.692 10 10 5 III 100 75 150 2 1.600 0.400 1.467 10 30 5 300 200 400 30 40 15

 [Class] DR [Differential rent] tons Rental £ Rental tons Composition of capital Rate of surplus-value per cent Number of workers Wages £ Wages tons Rate of profit per cent I 0 10 5 60 c+40 v 50 20 40 20 10 II 5 20 10 60 c+40 v 50 20 40 20 10 III 15 40 20 60 c+40 v 50 20 40 20 10 20 70 35

Marx then sets out the same situation, but on the basis of Ricardo's assumption that the progression is in a descending line from the more fertile land to the less fertile land. The constant capital remains as £60, and the new value created by labour also remains at £60, so that the value of output remains at £120. But, if land type III is the only land in production (because we have started from the most fertile land) then the market value is determined by the individual value of output from III. That individual value is £1.60 per ton. However, the workers require 20 tons for their reproduction, and 20 tons x £1.60 = £32. That means that the output value is comprised £60 material + £32 wages + £28 profit = £120 output value.

As Marx is proceeding on the basis of Ricardo's assumption that there is no Absolute Rent, and only Differential Rent, there is no differential rent when only one type of land is in production. The difference with Table A, here, is that, in Table A, other less fertile land is in production. As a consequence, the market value is £2 per ton, which means that the wages of workers are £2 x 20 tons = £40. That meant that the surplus value was only £20, so that the rate of profit was 20%. Here the rate of profit on land III is 28/92 = 30.43%.

Marx then scales these up to a capital of £100 being advanced. The result is summarised in the following table.
 [Class] Capital £ Number of tons TV [Total Value] £ MV [Market] value per ton £ IV [Individual value] per ton £ DV [Differential value] per ton £ III 100.00 81.522 130.870 1.60 1.60 0 Rent £ Profit £ Rate of Profit % Composition of capital Rate of Surplus value % Number of workers 0 30.435 30.435 65.217 c + 34.783 v 87.50 21.739

Marx then continues with Ricardo's assumptions, and considers the situation where demand rises, requiring land II to be brought into use. For land II, the individual value is £1.846 per ton.

“In this case it is impossible to assume as Ricardo wants that the 21 17/23 workers produce always the same value, i.e., £65 5/23 (wages added to surplus-value).” (p 443)

This is a bit clumsily worded by Marx, but his intention is clear. The intention of his comment, here, is that, because the market value per ton rises, when the less fertile land is brought into use, wages rise. As wages rise, the number of workers that can be employed with a given amount of capital falls. Each worker continues to produce the same amount of value as before, and so Marx's comment that the 21 17/23 workers do not produce the same amount of value is wrong. What he really means to say is that the total value cannot remain the same, as Ricardo assumes, because the number of workers employed must fall, so that the total value they produce falls. Moreover, because wages rise, the rate of surplus value, and mass of surplus value falls.

“At the same time, the composition of the agricultural capital always remains the same. Whatever their wages may be, 20 workers are always required (with a given length of the working-day) in order to set in motion £60c.” (p 443)