The revenues of wages, profit, interest and rent are the product of the production process, but, at the same time, they appear as its precondition. The industrial or functioning capitalist produces profit and from this profit they pay rent to the landlord, and interest to the money-lending capitalist, in just the same way that from the value of the output they pay wages to their workers. But, from the standpoint of the functioning capitalist, the interest they must pay to the money-lending capitalist and the rent they must pay to the landlord are just as much costs of production as are the wages they must pay to their workers. They all form preconditions of production costs that must be covered before production itself is feasible.
So, if the rate of interest falls, this appears, to the functioning capitalist, as a reduction in their cost of production. The fall in the rate of interest may be the result of a slowdown in economic activity, which reduces the demand for money-capital. The same slowdown may cause the industrial capitalist to reduce their prices, with a consequent reduction in profits, yet it may still appear to them as a rise in profits, if the reduction in profit is less than the reduction in their cost of borrowing.
But, this illustrates that the value/price of the commodity is not determined by the prices of these different factors of production, but vice versa. Even in relation to wages, as the phenomenal form of the value of labour-power, which acts as an objective determinant, this remains true. If economic activity is buoyant, so that the demand for labour-power is high, wages, as a market price for labour, may rise above the value of labour-power, and vice verse where economic activity is sluggish. If wages/value of labour-power falls, this does not reduce prices, but, instead, increases surplus value, as a proportion of the value of the commodity.
Its not the level of wages that determines the value of commodities. Similarly, the value of commodities is not determined by the rate of interest. The rate of interest is determined by a struggle between money-lending capitalists and functioning capitalists, i.e. by the supply and demand for money-capital. But, this struggle occurs outside the production process, not inside it. Its not lower interest rates which lead to lower commodity prices, and vice versa, any more than low wages lead to lower commodity prices. Lower wages, because either the value of labour-power falls, or because labour is plentiful, and wages are pushed below the value of labour-power, results not in lower commodity prices, but in higher profits, and that lower value of labour-power also arises outside the production process, either because wage goods become cheaper, or because wages are reduced.
A lower rate of interest, because money-capital is plentiful also does not result in lower commodity prices, but in a greater proportion of profit being retained as profit of enterprise, by the functioning capitalist. The same applies with rent. If rents fall, because land is plentiful, this does not reduce commodity prices, but leaves a greater proportion of profit in the hands of the farmer or industrial capitalist.
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