Contrary to Malthus and Ricardo, who argued on the basis of diminishing returns, as more inferior land is brought into cultivation, Jones notes that productivity, in agriculture, rises over time.
““The average corn produce of England at one time did not exceed 12 bushels per acre; it is now about double” (p. 199).
“… every successive portion of capital and labour concentrated on the land, may be more economically and efficiently applied than the last” (pp. 199-200).
Rent will double, triple and quadruple, and so on, if the capital invested in the old land is doubled, tripled, quadrupled, “without a diminished return, and without altering the relative fertility of the soils cultivated” p. 204).” (p 405)
Jones is, then, in advance of Ricardo, both in that he recognises that rent can rise even as agricultural prices remain constant or fall, and in recognising that additional capital can be invested on the land even if prices are not rising. As Marx showed, in Capital III, capital accumulates on the land, just as it does in any other industry, without the need for prices or profits to be rising. It does so because demand for commodities rises, as the market expands. Each capital seeks to capture a portion of this increasing market, by expanding its own capital. In expanding its own capital, it also provides the basis for the expansion of the market. Even if the rate of profit remains the same, or even falls, it increases its mass of profit, as a result of increasing the capital employed. Similarly, the increased mass of capital employed results in a greater mass of rent, even if the rate of rent remains the same.
Jones says,
““… it is not essential to the rise that the proportion between the fertility of the soils should be exactly stationary” (p. 205).” (p 406)
However, as Marx notes, Jones overlooks the point that, where more capital is employed, and the consequence is rising marginal productivity of capital, on the already more fertile soils, this will increase the disparity between these soils and the less fertile soil, so that the differential rent will increase. But, likewise,
“On the other hand, a diminution in the differences of the fertility of the various soils must diminish differential rent, i.e., rent arising from those differences. By taking away the cause you take away the effect. Nevertheless, rent (apart from absolute rent) may increase, but in that case only in consequence of an increase of the agricultural capital employed.” (p 406)
In other words, as Marx set out, in Capital III, building on the work of Anderson, over time, as more capital is employed, on the land, so that the soil is turned from deeper levels, fertilisers applied become bound to the soil, drainage and irrigation is provided, infrastructure is improved, and so on, the advantages of natural fertility, and location, that some lands enjoy, can be reduced, as other lands are improved. That means that differential rents may decline between these different lands, yet rent, in total, may expand, because of this much greater employment of capital, and increase in output.
No comments:
Post a Comment