Assigning revenues to use values is irrational, because revenue is exchange-value. It is like assigning an exchange-value to hardness or colour, or asking “What price is yellow?” Land and capital are use values, but they are not use values created by labour. A use value only has value if it is a product, i.e. if it has been produced by labour, and, thereby, acts as a vessel in which that value resides.
“Land—rent and capital—interest are irrational expressions insofar as rent is defined as the price of land and interest as the price of capital.” (p 519)
Land, however, does have a price. The annual price of land is rent. It is the revenue that the landlord obtains for “selling” the use value of land for a year. The use value of the land is as an instrument of labour and means of production, required to produce agricultural products, as well as for the extraction of minerals. The owner of the land obtains the revenue because the agricultural capitalist or mineral extracting capitalist, must use the land for their production, and the landowner will not allow such use without payment. Capital will seek to invest in such production wherever it provides a higher rate of profit than the average, enabling the landlord to demand this surplus profit as rent.
Where land ownership is itself sold, its price is equal to capitalised rent. In other words, it is equal to the amount of loanable money-capital that would be required, at the current rate of interest, to produce a revenue equal to the annual rent on the land.
The rent paid to the landlord is paid by the capitalist out of their profit, i.e. it is equal to the surplus profit. It does not represent any new creation of value. The landlord sells to the capitalist the use value of the land, but the land itself has no value, and so can contribute no value either. The landlord obtains something for nothing, in terms of value, from the capitalist. The landlord obtains, say, £100 a year, in rent, from the capitalist, but does not give the capitalist anything with a value of £100 in exchange. The landlord, thereby, extracts a surplus value from the capitalist.
But, the landlord is only able to extract this surplus value from the capitalist because the capitalist themselves extracts surplus value from their workers. Indeed, the capitalist extracts more surplus value from their workers, in relation to the capital employed, than does the average capitalist. It is that which produces, for them, the surplus profit which the landlord appropriates in rent.
“The common origin [of all these different revenues] is still recognisable in the forms of interest-bearing capital, rent-bearing capital, profit-bearing capital, since, in general, capital involves appropriation of surplus labour; so that these different forms merely express the fact that the surplus labour produced by capital is, as concerns capital in general, divided between two types of capitalists, and in the case of agricultural capital, it is divided between capitalist and landlord.” (p 519)
Capital, as a social relation, as self-expanding value, is also a use value, but, like land, not produced by labour, and so one that has no value. The use value of capital is to be able to produce the average rate of profit. If you are a potential capitalist, an entrepreneur or functioning capitalist, but have no capital, the only way of obtaining capital is to borrow it, i.e. to purchase its use value for a specified time. But, the owner of such loanable capital will not allow the entrepreneur to use it for free, any more than the owner of land will allow it to be used for free. The owner of loanable capital will seek to obtain a price for its use. Unlike land, capital also appears in another form. Both land and capital appear as tangible things, and it is this which leads the vulgar economist to see these “things” as the source of revenue, removed from their specific historical and social existence. “Capital” also exists as the commodities that comprise the elements of the constant and variable capital. It exists as the buildings, machines and materials that comprise the means of production, as well as in the form of wage goods required as means of reproduction of labour-power, which constitute the variable-capital.
Unlike land, all of this “capital” does have a value, because these commodities are the product of labour. Moreover, this value can be represented as a money equivalent. So, money itself can always be capital, it can always be the most elementary particle from which the entire structure of capitalism is built, because it can always be metamorphosed into these commodities that form the elements of productive-capital.
Yet, as Marx described earlier, and in Capital III, these commodities, and money, of themselves are merely commodities, not capital. It is irrational to say that the value of a £1,000 machine is £1,200, just as it is irrational to say that the value of £1,000 is £1,200. Nor is this problem overcome by saying that this £1,000 of value has a price of £1,200, because price, here, is only value expressed in money.
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