“They are part of the outlay of the industrial capitalist and the farmer. They seem here to represent not unpaid surplus labour, but paid surplus labour, that is, surplus labour for which an equivalent is paid during the production process, although not to the worker whose surplus labour it is, but to other people, i.e., the owners of capital and of land. They constitute surplus labour as far as the worker is concerned, but they are equivalents as regards the capitalist [who lends the money] and the landowner to whom they have to be paid.” (p 511)
Interest and rent appear as necessary prices for capital and land, just as wages are a necessary price for labour, and profit of enterprise is a necessary price for the labour of the entrepreneur, or functioning capitalist. All connection of profit, interest and rent to surplus value and surplus labour is thereby extinguished, along, therefore, with the division of labour into paid and unpaid labour.
“That part of the value of the commodity which represents interest, therefore, appears as reproduction of the price paid for capital, and that part which represents rent appears as reproduction of the price paid for the land. These prices therefore become constituent parts of the total price. This does not merely appear to be the case to the industrial capitalist; for him interest and rent really constitute part of his outlay, and whereas, on the one hand, they are determined by the market price of his commodity—as the market price it is a determination of a commodity in which a social process or the result of a social process appears as a particular aspect belonging to the commodity, and the up and down of this process, its movement, appears as the fluctuations of the commodity price—on the other hand, the market price is determined by them, in just the same way as the market price of cotton determines the market price of yarn and, on the other hand, the market price of yarn determines the demand for cotton, hence the market price of cotton.” (p 512)
Out of the value of output, revenues are paid, in the form of interest to the money lender, rent to the landlord, wages to the labourer, and profits to the entrepreneur. As a result of these revenues, all of these different recipients are also, thereby, reproduced. But, in their reproduction, they now appear as themselves prerequisites for production. It appears that production cannot take place unless there are money-capitalists available to provide capital, landlords available to provide land, and entrepreneurs to organise production, as well as wage labourers to provide labour. Instead of production being the basis of the creation of new value, out of which the revenues are distributed, it appears that production itself is is only possible on the basis of the existence of the owners of these different factors of production, and that the prices of these different factors is simply what must be paid for them, and which, when combined determines the value of output.
It makes it appear that the existence of these different categories is eternal, along with the relations between them. Each different category, is, at one and the same time, independent and yet mutually associated with the others. The value contributed by capital is independent from that contributed by labour, land or entrepreneurship, and a function of the price of capital, just as the price of capital is, at the same time, a function of its contribution to the value of output, and the same with land and labour.
“The different relations and aspects not only become independent and assume a heterogeneous mode of existence, apparently independent of one another, but they seem to be the direct properties of things; they assume a material shape.” (p 514)
The marginalist theory epitomises that, measuring the marginal physical product attributable to each factor of production as they are combined in varying proportions.
“Thus the participants in capitalist production live in a bewitched world and their own relationships appear to them as properties of things, as properties of the material elements of production.” (p 514)
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