Wednesday, 8 January 2020

Theories of Surplus Value, Part III, Addenda - Part 29

The same applies with rent. The capitalist engaged in primary production sees the rent they have to pay to use land as a necessary cost of their production. 

“A “price of land” is indeed even more irrational than a price of capital, but this is not apparent in the form as such. Because in this case the land appears to be the use-value of a commodity and the rent its price. (The irrationality consists in this, that land, i.e., something which is not the product of human labour, has a price, that is, a value expressed in money and consequently a value, and is therefore to be regarded as materialised social labour.)” (p 479) 

Land indeed is a use value, and this use value is vital to production. Not only is the use value of land necessary because from the soil is provided the nutrients required for agricultural production, but also the land acts as a reservoir of ores and minerals required for production. In the case of lakes and rivers it is not only a reservoir of water, vital for production, but also of fish etc. But, in addition to this role in the production process itself, land is essential because, without it, there is nowhere to place buildings or on which workers can stand to undertake production. 

Land is indeed also bought and sold as a commodity under capitalism, and yet, like capital, it is a commodity that has no value. Like capital, it is not the product of labour. The price of land derives solely from the fact of the monopoly of landed property, as landlords can refuse permission to use it unless a rent is paid. 

“Considered purely formally, land, just as any other commodity, is expressed in two ways, as use-value and as exchange-value, and the exchange-value is expressed nominally as price, that is, as something which the commodity as use-value is absolutely not. On the other hand, in the statement: [a capital of] £1,000 equals £1,050, or £50 is the annual price of £1,000, something is compared with itself, exchange-value with exchange-value, and the exchange-value as something different from itself is supposed to be its own price, that is, the exchange-value expressed in money.” (p 479-80) 

For the industrial capitalist, therefore, bot rent and interest appear as costs of production. They do not present themselves as surplus value to him. Even where the industrial capitalist is a landowner and/or provides their own capital, the rent and interest they pay to themselves appear as part of the production cost of capital, and thereby separated from their profit

As far as these forms of surplus-value are concerned, it appears to the individual capitalist that the production of surplus-value is a part of the production costs of capitalist production, and that the appropriation of other people’s labour and of the surplus over and above the value of the commodities consumed in the process (whether these enter into the constant or into the variable capital) is a dominating condition of this mode of production.” (p 480) 

It is only the profit of enterprise, in excess of these payments, of rent and interest, that the industrial capitalist views as profit, and this profit they see as a special form of wages, payable to them as a result of their specific entrepreneurial skills. Yet, they are forced to see this not as something entirely within their own control. No matter how entrepreneurial they may be, at times, the profit of enterprise may fall below a level which makes it worth their while engaging in some particular sphere of activity. The industrial capitalist who engages in production using other people's capital need not worry about going bankrupt, especially following the introduction of limited liability, because it is the business that goes bankrupt not the capitalist. However, if the business does not produce adequate profit, it does not provide the entrepreneur with enough revenue to justify their employment in that activity rather than some other. In other words, the average profit will appear to them as equally a production cost of capital. 

“In critical moments, profit too confronts the capitalist in fact as a condition of production, since he curtails or stops production when profit disappears or is reduced to a marked degree as a result of a fall in prices. Hence the nonsensical pronouncements of those who consider the different forms of surplus-value to be merely forms of distribution; they are just as much forms of production.” (p 480) 

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