Theories of Surplus Value, Marx 1861-3
[CHAPTER VIII]
Herr Rodbertus.
New Theory of Rent.
(Digression)
[1. Excess Surplus-Value in Agriculture.
Agriculture Develops Slower Than Industry under
Conditions of Capitalism]
||X-445| Herr
Rodbertus. Dritter Brief an von Kirchmann von
Rodbertus. Widerlegung der Ricardoschen Lehre von der
Grundrente und Begründung einer neuen
Rententheorie, Berlin, 1851.
The following remark has to be made beforehand: supposing
the necessary wage is equal to 10 hours, then this is most
easily explained in the following manner. If 10 hours’
labour (i.e., a sum of money equal to 10 hours) enabled the
agricultural labourer, on an average, to purchase all the
necessary means of subsistence, agricultural, industrial
products, etc., then this is the average wage for unskilled
labour. We are thus concerned here with the value of
his daily product which must fall to his share. In the
first place this value exists in the form of the
commodity which he produces, i.e., [in] a certain
quantity of this commodity, in exchange for which,
after deducting what he himself consumes of the commodity
(if he [does consume any of it]), he can procure for himself
the necessary means of subsistence. Not only the
use-value which he himself produces, but industry,
agriculture, etc., thus come into the estimation of his
necessary “income. But this is inherent in the
concept of commodity. He produces a commodity,
not merely a product. We need therefore waste no words
about this.
Herr Rodbertus first investigates the situation in a
country where there is no separation between land
ownership and owner-ship of capital. And here he comes
to the important conclusion that rent (by which he means the
entire surplus-value) is simply equal to the unpaid
labour or the quantity of products which it represents.
In the first instance it is noteworthy that Rodbertus
only takes into account the growth of relative
surplus-value, i.e., the growth of surplus-value in so far
as it arises out of the growing productivity of labour and
not the growth of surplus-value derived from the
prolongation of the working-day itself. All absolute
surplus-value is of course relative in one respect.
Labour must be sufficiently productive for the worker not to
require all his time to keep himself alive. But from
this point the distinction comes into force.
Incidentally, if originally labour is but little productive,
the needs are also extremely simple (as with slaves) and the
masters themselves do not live much better than the
servants. The relative productivity of labour
necessary before a profit-monger, a parasite, can come, into
being is very small. If we find a high rate of profit
though labour is as yet very unproductive, and machinery,
division of labour etc., are not used, then this is the case
only under the following circumstances; either as in India,
partly because the requirements of the worker are extremely
small and he is depressed even below his modest needs, but
partly also because low productivity of labour is identical
with a relatively small fixed capital in proportion to the
share of capital which is spent on wages or, and this comes
to the same thing, with a relatively high proportion of
capital laid out in wages in relation to the total capital;
or finally, because labour-time is excessively long, The
latter is the case in countries (such as Austria etc.) where
the capitalist mode of production is already in existence
but which have to compete with far more developed
countries. Wages can be low here partly because the
requirements of the worker are less developed, partly
because agricultural products are cheaper or—this
amounts to the same thing as far as the capitalist is
concerned—because they have less value in terms of
money. Hence the quantity of the product of, say, 10
hours’ labour, which must go to the worker as necessary
wages, is small. If, however, he works 17 hours
instead of 12 then this can make up (for the low
productivity of labour]. In any case because in a
given country the value of labour is falling relatively to
its productivity, it must not be imagined that wages in
different countries are inversely proportional to the
productivity of labour. In fact exactly the opposite
is the case. The more productive one country is
relative to another in the world market, the higher will be
its wages as compared with the other. In England, not
only nominal wages but [also] real wages are higher than on
the continent. The worker eats more meat; he satisfies
more needs. This, however, only applies to the
industrial worker and not the agricultural labourer.
But in proportion to the productivity of the English workers
their wages are not higher (than the wages paid in other
countries].
Quite apart from the variation in rent according to the
fertility of the land, the very existence of
rent—i.e., the modern form of landed property—is
feasible because the average wage of the agricultural
labourer is below that of the industrial worker.
Since, to start with, by tradition (as the farmer turns
capitalist before capitalists turn farmers) the capitalist
passed on part of his gain to the landlord, he compensated
himself by forcing wages down below their level. With
the labourers’ desertion of the land, wages had to rise and
they did rise. But hardly has this pressure become
evident, when machinery etc. is introduced and the
land once more boasts a (relative) surplus population.
(Vide England.) Surplus-value can be increased, without the
extension of labour-time or the development of the
productive power of labour, by forcing wages below their
traditional level. And indeed this is the case
wherever agricultural production is carried on by capitalist
methods. Where it cannot be achieved by means of
machinery, it is done by turning the land over to sheep
grazing. Here then we already have a potential
basis of ||446| rent since,
in fact, the agricultural labourer’s wage does not
equal the average wage. This rent would be feasible
quite independent of the price of the product, which
is equal to its value.
Ricardo is also aware of the second type of rent
increase, which arises from a greater product sold at the
same price, but he does not take it into account, since he
measures rent per quarter and not per acre. He would
not say that rent has risen (and in this way rent can
rise with falling prices) because 20 quarters [at] 2s, is
more than 10 [quarters at] 2s, or 10 quarters [at] 3s.
Incidentally, however the phenomenon of rent may be
explained, the significant difference between
agriculture and industry remains, in that in the latter,
excess surplus-value is created by cheaper production, in
the former, by dearer production. If the average price
of 1 lb. of yarn is 2s. and I can produce it for 1s. then,
in order to gain an increased market for it, I will
necessarily sell [it] for 1s. 6d. [or] at any rate below
2s. And what is more, this is absolutely necessary,
for cheaper production presupposes production on a larger
scale. So, compared with before, I am now glutting the
market, I must sell more than before. Although 1
lb. of yarn costs only 1s. this is only the case if I now
produce, say, 10,000 lbs. as against my previous 8,000
lbs. The low cost is only achieved because fixed
capital is spread over 10,000 lbs. If I were to sell
only 8,000 lbs., the depreciation of the machines alone
would raise the price per lb. by one-fifth, i.e., 20 per
cent. So I sell at below 2s. in order to be able to
sell 10,000 lbs. In doing so, I am still making an
excess profit of 6d., i.e., of 50 per cent on the value of
my product which is 1s. and already includes the normal
profit. In any case, I am hereby forcing down the
market-price with the result that the consumer gets the
product more cheaply. But in agriculture I sell at
2s. since, if I had sufficient fertile land, the less
fertile would not be cultivated. If the area of
fertile land were enlarged, or the fertility [of the] poorer
soil so improved that I could satisfy demand, then this game
would end, Not only does Ricardo not deny this, but he
expressly calls attention to it.
Thus if we admit that the varying fertility of the land
accounts not for rent itself, but only for the differences
in rent, there remains the law that while in industry, on an
average, excess profit arises from the lowering of the price
of the product, in agriculture the relative size of rent is
determined not only by the relative raising of the price
(raising the price of the product of fertile land above its
value) but by selling the cheaper product at he cost of the
dearer. This is, however, as I have already
demonstrated (Proudhon), merely the law of competition,
which does not emanate from the “soil” but from
“capitalist production” itself.
Furthermore, Ricardo would be right in another respect,
except that, in the manner of the economists, he turns a
historical phenomenon into an eternal law. This
historical phenomenon is the relatively faster development
of manufacture (in fact the truly bourgeois branch of
industry) as against agriculture. The latter has
become more productive but not in the same ratio as
industry. Whereas in manufacture productivity has
increased tenfold, in agriculture it has, perhaps,
doubled. Agriculture has therefore become relatively
less productive, although absolutely more productive.
This only proves the very queer development of bourgeois
production and its inherent contradictions. It does
not, however, invalidate the proposition that agriculture
becomes relatively less productive and hence, compared with
the value of the industrial product, the value of the
agricultural product rises and with it also rent. That
in the course of development of capitalist production,
agricultural labour has become relatively less productive
than industrial labour only means that the productivity of
agriculture has not developed with the same speed and to the
same degree.
Suppose the relation of industry A to industry B is as
1:1. Originally agriculture [was] more productive
because not only natural forces but also a machine created
by nature play a part in agriculture; right from the start,
the individual worker is working with a machine.
Hence, in ancient times and in the Middle Ages agricultural
products were relatively much cheaper than industrial
products, which is obvious (see Wade) from the ratio of the
two within the average wage.
At the same time let 1°: 1° indicate the
fertility of the two [branches of production]. Now if
industry A becomes 10°, [i.e.] its fertility increases
tenfold while industry B merely increases threefold, becomes
3°, then whereas the industries were previously as 1:1
they are now as 10:3 or as 1 :
3/10. The fertility of industry
B has decreased relatively by 7/10
although absolutely it has increased threefold. For
the highest rent [it is] the same—relatively to
industry—as if it had risen because the poorest land
had become 7/10 less fertile.
Now it does not by any means follow, as Ricardo supposes,
that the rate of profit has fallen because wages have risen
as a result of the relative increase in the price of
agricultural products ||447|. For the average wage is
not determined by the relative but by the absolute value of
the products which enter into it. It does however
follow that the rate of profit (really the rate of
surplus-value) has not risen in the same ratio as the
productive power of manufacturing industry, and this is due
to agriculture (not the land) being relatively less
productive. This is absolutely certain. The
reduction in the necessary labour-time seems small compared
with the progress in industry. This is evident from
the fact that the agricultural products of countries like
Russia etc. can beat those of England. The lower value
of money in the wealthier countries (i.e., the low relative
production costs of money in the wealthier countries) does
not enter into it at all. For the question is, why it
does not affect their industrial products in competition
with poorer countries when it does affect their agricultural
products. (Incidentally, this does not prove that poor
countries produce more cheaply, that their agricultural
labour is more productive. Even in the United States,
the volume of corn at a given price has increased, as has
recently been proved by statistical information, not however
because the yield per acre has risen, but because more acres
have come under cultivation. It cannot be said that
the land is more productive where there is a great land mass
and where large areas, superficially cultivated, yield a
greater absolute product with the same amount of labour than
much smaller areas in the more advanced country.)
The fact that less productive land is brought
under cultivation does not necessarily prove that
agriculture has become less productive. On the
contrary, it may prove that it has become more productive;
that the inferior land is being cultivated, not [only]
because the price of the agricultural product has
sufficiently risen to compensate for the capital investment,
but also the converse, that the means of production have
developed to such an extent that the unproductive land has
become “productive” and capable of yielding not
only the normal profit but also rent. Land which is
fertile at a [given] stage of development of productive
power may be unfertile for a lower developmental stage.
In agriculture, the extension of
labour-time—i.e., the augmentation of absolute
surplus-value—is only possible to a limited
degree. One cannot work by gaslight on the land and so
on. True, one can rise early in spring and
summer. But this is offset by the shorter winter days
when, in any case, only a relatively small amount of work
can be accomplished. So in this respect absolute
surplus-value is greater in industry so long as the
normal working-day is not regulated by force of law. A
second reason for a smaller amount of surplus-value being
created in agriculture is the long period during which the
product remains in the process of production without any
labour being expended on it. With the exception of
certain branches of agriculture such as stock-raising, sheep
farming, etc., where the population is positively ousted
from the land, the number of people employed relatively to
the constant capital used, is still far greater—even
in the most advanced large-scale agriculture—than in
industry, or at least in the dominating branches of
industry. Hence in this respect even if, for the
above-mentioned reasons, the mass of surplus-value is
relatively smaller than it [would be] with the employment of
the same number of people in industry—this latter
condition is partly offset again by the wage falling below
its average level—the rate of profit can be greater
than in industry, But if there are, in agriculture, any
causes (we only indicate the above) which raise the rate of
profit (not temporarily but on an average as compared with
industry) then the mere existence of the landlord would
cause this extra profit to consolidate itself and accrue to
the landlord rather than enter into the formation of the
general rate of profit.
[2. The Relationship of the Rate of Profit to the
Rate of Surplus-Value. The Value of Agricultural Raw
Material as an Element of Constant Capital in
Agriculture]
In general terms the question to be answered with regard
to Rodbertus is as follows:
The general form of capital advanced is:
|
Constant capital
|
Variable capital
|
|
Machinery—Raw materials
|
Labour-power
|
In general the two elements of constant capital are the
instruments of labour and the subject of labour. The
latter is not necessarily a commodity, a product of
labour. It may therefore not exist as an element of
capital, although it is invariably an element in the
labour-process. Soil is the husbandman’s raw
material, the mine that of the miner, the water that of the
fisherman and even the forest is that of the hunter.
In the most complete form of capital, however, these three
elements of the labour-process also exist as three elements
of capital, i.e., they are all commodities, use-values which
have an exchange-value and are products of labour. In
this case all three elements enter into the process of
creating value, although machinery [enters into it] not to
the extent to which it enters into the labour-process but
only in so far as it is consumed.
The following question now arises: Can the absence of one
of these elements in a particular branch of industry enhance
the rate of profit (not the rate of surplus-value) in
that industry? In general terms, the formula itself
provides the answer:
The rate of profit equals the ratio of surplus-value to
the total capital advanced.
Throughout this investigation it is assumed that the
rate of surplus-value, i.e., the division of the
value of the product between the capitalist and the worker,
remains constant.
||448| The rate of
surplus-value is s/v; the rate of profit is
s/c+v. Since s’, the rate of
surplus-value, is given, v is given and s/v is
assumed to be a constant value. Therefore the
magnitude of s/c+v can only alter when c + v
changes and since v is given, this can only increase
or decrease because c decreases or increases.
And further, s/c+v will increase or decrease not
in the ratio of c : v but according to c’s
relation to the sum of c + v, If c equals
nought, then s/c+v = s/v. The rate of profit
[would] in this case equal the rate of surplus-value and
this is its highest possible amount, since no sort of
calculation can alter the magnitude of s and
v. Suppose v = 100 and s = 50,
then s/v = 50/100 =
1/2 = 50 per cent. If a constant
capital of 100 were added, then the rate of profit [would
be] 50/150+100 =
50/200 =1/4 = 25
per cent. The rate of profit would have decreased by
half. If 150 c were added to 100 v then
the rate of profit would be 50/100+150
= 50/250 = 1/5 =
20 per cent. In the first instance, total capital
equals v, i.e., equals variable capital, hence the
rate of profit equals the rate of surplus-value. In
the second instance, total capital equals 2 ×
v, hence the rate of profit is only half the rate of
surplus-value. In the third instance total capital is
2 1/2 × 100, that is 2
1/2 × v, that is
5/2 × v; v is now
only 2/5 of total capital.
Surplus-value equals half of v, i.e., half of 100,
hence is only half of 2/5 of total
capital, or 2/10 of total
capital. 250/10 = 25 and
2/10 of 250 = 50. But
2/10 = 20 per cent.
Hence to start with this much has been established.
Provided v remains constant and s/v too, then
it is of no consequence how c is composed. If
c has a certain magnitude, say 100, then it makes no
difference whether it consists of 50 units of raw material
and 50 of machinery or 10 of raw material and 90 of
machinery, or no raw material and 100 machinery or the other
way about. For the rate of profit is determined by the
relationship s/c+v; the relative value of the various
production elements contained in c is of no
consequence here. For instance, in the production of
coal the raw materials (after deducting coal itself which is
used as an auxiliary material) may be reckoned as nought and
the entire constant capital can be assumed to consist of
machinery (including buildings and tools). On the
other hand, with a tailor, machinery can be considered as
nought and here the whole of constant capital resolves into
raw materials (particularly where tailors running a large
business do not as yet use sewing-machines and, on the other
hand, even save buildings, as sometimes occurs nowadays in
London, by employing their workers as outworkers, This is a
new phenomenon, where the second division of labour
reappears in the form of the first).
If the colliery owner employs 1,000 units of machinery
and 1,000 units of labour and the tailor 1,000 of raw
materials and 1,000 of labour, then with an equal rate of
surplus-value, the rate of profit in both instances is the
same. If [we] assume that surplus-value is 20 per
cent, then the rate of profit would in both cases be 10 per
cent, namely: 200/2000 =
2/20 = 1/10 = 10
per cent. Hence there are only two instances in which
the ratio between the component parts of c, i.e., raw
materials and machinery, can affect the rate of profit:
1. If a change in this ratio modifies the absolute
magnitude of c. 2. If the ratio between
the component parts of c modifies the size of
v. This would imply organic changes in
production itself and not merely the tautologous statement
that if a particular part of c accounts for a smaller
portion, then the other must make up a larger portion of the
total amount.
In the real bill of an English farmer, wages
amount to £ 1,690, manure to £ 686, seeds
to £ 150, fodder for cows to £ 100.
Thus “raw material” comes to £ 936, which
is more than half the amount spent on wages. (See
F. W. Newman, Lectures on Political Economy, London,
1851, p. 166.)
“In Flanders” (in the
Belgian areas) “dung and hay are in
these parts imported from Holland” (for flax-growing,
etc. In turn they export flax, linseed,
etc.).” The refuse of the towns has therefore
become[a] a matter of
trade, and is regularly sold at high prices to
Belgium… At about twenty miles from Antwerp, up
the Schelde, the reservoirs may be seen for the manure that
is brought from Holland. The trade is managed by a
company of capitalists and the[b] Dutch boats”
etc. (Banfield).
And so even manure, plain muck, has become merchandise,
not to speak of bone-meal, guano, pottash etc. That
the elements of production are estimated in terms of
money is not merely due to the formal change in
production. New materials are introduced into the soil
and its old ones are sold for reasons of
production. This is not merely a formal
difference between the capitalist and the previous mode of
production. The seed trade has risen in importance to
the extent to which the importance of seed rotation has
become recognised. Hence it would be ridiculous to say
that no “raw material”—i.e., raw material
as a commodity— enters into agriculture whether it be
reproduced by agriculture itself or bought as a commodity,
acquired from outside. It would be equally absurd to
say that the machine employed by the engineer ||449| who constructs machines does
not figure as an element of value in his capital.
A German peasant who year after year produces his own
elements of production, seeds, manure etc., and, with his
family, consumes part of his crops needs to spend money (as
far as production itself is concerned) only on the purchase
of a few tools for cultivating the land, and on wages.
Let us assume that the value of all his expenses is 100
[half of this having to be paid out in money]. He
consumes half [of the product] in kind (production costs
[are also included here]). The other half he sells
and he receives, say, 100, His gross income is thus 100 and
if he relates this to his capital of 50 then it amounts to
100 per cent [profit]. If one-third of the 50 is
deducted for rent and one-third for taxes (33
1/3 in all) then he retains 16
2/3, calculated on 50 this is 33
1/3 per cent. But in fact he has
only received 16 2/3 per cent [of the
100 he laid out originally]. The peasant has merely
miscalculated and has cheated himself. The capitalist
farmer does not make such errors.
Mathieu de Dombasle says in his Annales
agricoles etc. 4 ième livraison, Paris 1828 that
under the métairie contract (in [the province of]
Berry, for example) :
“the landlord supplies the land, the
buildings and usually all or part of the livestock and the
tools required for cultivation; the tenant for his part
supplies his labour and nothing, or almost nothing
else. The products of the land are shared in equal
parts” (l.c., p. 301). “The tenants are as
a rule submerged in dire poverty” (l.c.,
p. 302). “If the metayer, having laid out 1,000
francs, increases his gross product by 1,500 francs”
(i.e., a gross gain of 500 francs) “he must pass half
of it on to the landowner, retaining merely 750 and so loses
250 francs of his expenses” (l.c., p. 304).
“Under the previous system of cultivation the expenses
or costs of production were almost exclusively drawn in
kind, from the products themselves, for the consumption of
the animals and of the cultivator of the land and his
family; hardly any cash was paid out. Only these
particular circumstances could give rise to the belief that
landowner and tenant could divide amongst themselves the
whole of the harvest which had not been consumed during
production. But this process is only applicable to
this type of agriculture, namely, low-level
agriculture. But when it is desired to raise that
level, it is realised that this is only possible by making
certain advances which have to be deducted from the gross
product in order to be able to utilise them again in the
following year. Hence this kind of division of the
gross product becomes an insurmountable obstacle to any sort
of improvement” (l.c., p. 307).
[3. Value and Average Price in Agriculture.
Absolute Rent]
[a) Equalisation of the Rate of Profit in Industry]
Herr Rodbertus seems to think that competition brings
about a normal profit, or average profit or general rate of
profit by reducing the commodities to their real
value; i.e., that it regulates their price relationships
in such a manner that the correlative quantities of
labour-time contained in the various commodities are
expressed in money or whatever else happens to be the
measure of value. This is of course not brought about
by the price of a commodity at any given moment being equal
to its value nor does it have to be equal to its
value. [According to Rodbertus, this is what happens:]
For example the price of commodity A rises above its value
and for a time remains, moreover, at this high level, or
even continues to rise. The profit of [the capitalist
who produces] A thus rises above the average profit in that
he appropriates not only his own “unpaid”
labour-time, but also a part of the unpaid labour-time which
other capitalists have “produced”. This
has to be compensated by a fall in profit in one or other
sphere of production provided the price of the other
commodities in terms of money remains constant. If the
commodity is a means of subsistence generally consumed by
the worker, then it will depress the rate of profit in all
other branches; if it enters as a constituent part into the
constant capital, then it will force down the rate of profit
in all those spheres of production where it forms an element
in constant capital.
Finally, the commodity may neither be an element in any
constant capital, nor form a necessary item in the
workers’ means of subsistence (for those commodities which
the worker can choose to buy or abstain from buying, he
consumes as a consumer in general and not as a worker) but
it may be one of the consumer goods, an article for
individual consumption in general. If, as such, it is
consumed by the industrial capitalist himself, then the rise
in its price in no way affects the amount of surplus-value
or the rate of surplus-value. Now if the capitalist
wanted to maintain his previous standard of consumption,
then that part of profit (surplus-value) which he uses for
individual consumption would rise in relation to that which
he sinks into industrial reproduction. The latter
would decrease. As a result of the price rise, or the
rise in profit above its average rate, in A, the volume of
profit in B, C, etc. would diminish within a certain space
of time (which is also determined by reproduction). If
article A was exclusively consumed by other than industrial
capitalists, then they would consume more than before of
commodity A as compared with commodities B, C, etc.
The demand for commodities B, C, etc. would fall; their
price would fall and, in this case, the price rise in A, or
the rise in profit in A above the average rate, would have
brought about a fall in the profit in B, C, etc. below the
average rate by forcing down the money prices of B, C,
etc. (in contrast to the previous instances where the money
price of B, C, etc. ||450|
remained constant). Capitals would migrate from B, C,
etc., where the rate of profit has sunk below the [average]
level, to A’s sphere of production. This would apply
particularly to a portion of the new capital which is
continually entering the market and which would naturally
tend to penetrate into the more profitable sphere A.
Consequently, after some time, the price of article A would
fall below its value and would continue to do so for a
longer or shorter period, until the reverse movement set in
again. The opposite process would take place in the
spheres B, C, etc., partly as a result of the reduced
supplies of articles B, C, etc., because of the exodus of
capital, i.e., because of the organic changes taking place
in these spheres of production themselves, and partly as a
result of the changes which have occurred in A and which in
turn are affecting B, C, etc. in the opposite direction.
Incidentally, it may well be that in this
process—assuming the value of money to be
constant—the money prices of B, C, etc., never regain
their original level, although they may rise above the value
of commodities B, C, etc. and hence the rate of profit in B,
C, etc. may also rise above the general rate of
profit. Improvements, inventions, greater economy in
the means of production, etc. are introduced not at times
when prices rise above their average level, but when they
fall below it, i.e., when profit falls below its normal
rate. Hence during the period of failing prices of B,
C, etc., their real value may fall, in other words
the minimum labour-time required for the production of these
commodities may decrease. In this case, the commodity
can only regain its former money price if the rise in its
price over its value equals the margin, i.e., the difference
between the price which expresses its new value and the
price which expressed its higher former value. Here
the price of the commodity would have changed the
value of the commodity by affecting supply, and the costs of
production.
The result of the above-mentioned movement: If we take
the average of the increases and decreases in the price of
the commodity above or below its value, or the period of
equalisation of rises and fails—periods which are
constantly repeated—then the average price is
equal to the value of the commodity. The
average profit in a particular sphere is therefore also
equal to the general rate of profit; for although, in this
sphere, profit rose above or fell below its old rate with
the rise or fall in prices—or with the increase or
decrease in costs of production while the price remained
constant—on an average, over the period, the commodity
was sold at its value. Hence the profit
yielded is equal to the general rate of profit. This
is Adam Smith’s conception and, even more so,
Ricardo’s, since the latter adheres more firmly to
the real concept of value. Herr Rodbertus acquires it
from them. And yet this conception is wrong.
What is the effect of the competition between
capitals? The average price of the commodities
during a period of equalisation is such that these prices
yield the same profits to the producers of commodities in
every sphere, for instance, 10 per cent. What else
does this mean? That the price of each commodity
stands at one-tenth above the price of the production costs,
which the capitalist has incurred, i.e., the amount he has
spent in order to produce the commodity. In general
terms this just means that capitals of equal size yield
equal profits, that the price of each commodity is one-tenth
higher than the price of the capital advanced, consumed or
represented in the commodity. It is however quite
incorrect to say that capitals in the various spheres of
production produce the same surplus-value in relation to
their size, even if we assume that the absolute working-day
is equally long in all spheres, i.e., if we assume a set
rate of surplus-value. <We leave aside here the
possibility of one capitalist enforcing longer working hours
than another, and we assume a fixed absolute
working-day for all spheres. The variation in absolute
working-days is partly offset by the varying intensity of
labour etc., and partly these differences only signify
arbitrary excess profits, exceptional cases, etc.)
Bearing in mind the above assumption, the amount of
surplus-value produced by capitals of equal size
varies firstly according to the correlation of their
organic components, i.e., of variable and constant capital;
secondly according to their period of circulation in
so far as this is determined by the ratio of fixed capital
to circulating capital and also [by] the various periods of
reproduction of the different sorts of fixed capital;
thirdly according to the duration of the actual
period of production as distinct from the duration of
labour-time itself, which again may lead to substantial
differences between the length of the production period and
circulation period. (The first of these correlations,
namely, that between constant and variable capital, can
itself spring from a great divergency of causes; it may, for
example, be purely formal so that the raw material worked up
in one sphere is dearer than that worked up in another, or
it may result from the varying productivity of labour,
etc.)
Thus, if the commodities were sold at their values or if
the average prices of the commodities were equal to
their values, then the rate of profit in the various spheres
would have to vary a great deal. In one case it would
be 50, in others 40, 30, 20, 10, etc. Taking the total
volume of commodities for a year in sphere A, for instance,
their value would be equal to the capital advanced in them
plus the unremunerated labour they contain. Ditto in
spheres B and C. But since A, B and C contain
different amounts of unpaid labour, for instance, A more
than B and B more than C, the commodities A might perhaps
yield 3 S (S = surplus-value) to their producers, B = 2 S
and C = S. Since the rate of profit is determined by
the ratio of surplus-value to capital advanced, and as on
our assumption this is the same in A, B, C, etc., then ||451| if C is the capital advanced,
the various rates of profit will be 3S/C, 2S/C,
S/C. Competition of capitals can therefore only
equalise the rates of profit, for instance in our example,
by making the rates of profit, equal to 2S/C, 2S/C, 2SC, in
the spheres A, B, C. A would sell his commodity at 1 S
less and C at 1 S more than its value. The average
price in sphere A would be below, and in sphere C would be
above, the value of the commodities A and C.
As the example of B shows, it can in fact happen
that the average price and the value of a commodity
coincide. This occurs when the surplus-value created
in sphere B itself equals the average profit; in other
words, when the relationship of the various components of
the capital in sphere B is the same as that which exists
when the total sum of capitals, the capital of the
capitalist class, is regarded as one magnitude on
which the whole of surplus-value [is] calculated,
irrespective of the sphere in which it has been
created. In this aggregate capital the periods of
turnover, etc. are equalised; one can, for instance,
consider that the whole of this capital is turned over
during one year. In that case every section of the
aggregate capital would in accordance with its
magnitude participate in the aggregate surplus-value and
draw a corresponding part of it. And since every
individual capital is to be regarded as shareholder in this
aggregate capital, it would be correct to say first
that its rate of profit is the same as that of all
the others [because] capitals of the same size yield the
same amount of profit; secondly, and this arises
automatically from the first point, that the volume of
profit depends on the size of the capital, on the number of
shares the capitalist owns in that aggregate capital.
Competition among capitals thus seeks to treat every capital
as a share of the aggregate capital and correspondingly to
regulate its participation in surplus-value and hence also
in profit. Competition more or less succeeds in this
by means of its equalisations (we shall not examine here the
reason why it encounters particular obstacles in certain
spheres). But in plain language this just means that
the capitalists strive (and this striving is competition) to
divide among themselves the quantity of unpaid
labour—or the products of this quantity of
labour—which they squeeze out of the working class,
not according to the surplus-labour produced directly by a
particular capital, but corresponding firstly
to the relative portion of the aggregate capital which a
particular capital represents and secondly according
to the amount of surplus-labour produced by the aggregate
capital. The capitalists, like hostile brothers,
divide among themselves the loot of other people’s labour
which they have appropriated so that on an average one
receives the same amount of unpaid labour as another.
Competition achieves this equalisation by regulating
average prices. These average prices themselves,
however, are either above or below the value of the
commodity so that no commodity yields a higher rate of
profit than any other. It is therefore wrong to say
that competition among capitals brings about a general rate
of profit by equalising the prices of commodities to their
values. On the contrary it does so by converting
the values of the commodities into average prices, in which
a part of surplus-value is transferred from one
commodity to another, etc. The value of a
commodity equals the quantity of paid and unpaid labour
contained in it. The average price of a
commodity equals the quantity of paid labour it
contains (materialised or living) plus a average
quota of unpaid labour. The latter does not depend on
whether this amount was contained in the commodity itself or
on whether more or less of it was embodied in the value of
the commodity.
[b) Formulation of the Problem of Rent]
It is possible—I leave this over for a later
inquiry which does not belong to the subject-matter of this
book—that certain spheres of production function under
circumstances which work against a reduction in their values
to average prices in the above sense, and do not
permit competition to achieve this victory. If this
were the case for instance with agricultural rent or rent
from mines (there are rents which are altogether only
explicable by monopoly conditions, for instance the water
rent in Lombardy, and in parts of Asia, also house rent in
so far as it represents rent from landed property) then it
would follow that while the product of all industrial
capitals is raised or lowered to the average price, the
product of agriculture [would] equal its value, which would
be above the average price. Might there be obstacles
here, which cause more of the surplus-value created
in this sphere of production to be appropriated as property
of the sphere itself, than should be the case according to
the laws of competition, more than it should receive
according to the quota of capital invested in this branch of
industry?
Supposing industrial capitals which are producing 10 or
20 or 30 per cent more surplus-value ||452| than industrial capitals of
equal size in other spheres of production, not just
temporarily, but because of the very nature of their
spheres of production as opposed to others; supposing I say,
they were able to hang on to this excess surplus-value in
the face of competition and to prevent it from being
included in the general accounts (distribution) which
determine the general rate of profit, then, in this case,
one could distinguish between two recipients in the spheres
of production of these capitals, the one who would get the
general rate of profit, and the other who would get the
surplus exclusively inherent in this sphere. Every
capitalist could pay, hand over, this excess to the
privileged one, in order to invest his capital here, and he
would retain for himself the general rate of profit, like
every other capitalist, working under the same
conditions. If this were the case in agriculture etc.,
then the splitting of surplus-value into
profit and rent would by no means indicate
that labour as such is actually more
“productive” ([in the sense of production] of
surplus-value) here than in manufacture. Hence [it
would not be necessary] to ascribe any magic powers to the
soil; this, moreover, is in any case absurd, since value
equals labour, therefore surplus-value cannot possibly equal
soil (although relative surplus-value may be due to the
natural fertility of the soil, but under no circumstances
could this result in a higher price for the products
of the soil. Rather the opposite). Nor would it
be necessary to have recourse to Ricardo’s theory, which is
disagreeably linked with the Malthusian trash, has repulsive
consequences and, though in theory it is not especially
opposed to my views on relative surplus-value, it deprives
them of much of their practical significance.
Ricardo’s point is this: Rent (for instance, in
agriculture) can be nothing other than an excess above
general profit where—as he
presupposes—agriculture is run on capitalist lines,
where [there] is [a] farmer. Whether that which
the landlord receives is actually equal to this rent in the
bourgeois-economic sense is quite irrelevant. It may
be purely a deduction from wages (vide Ireland) or it may be
partly derived from the reduction of the farmer’s profit
below the average level of profits. Which of these
possible factors happens to be operative is of no
consequence whatsoever. Rent, in the bourgeois
system, only exists as a special, characteristic form of
surplus-value in so far as it is an excess over and above
(general) profit.
But how is this possible? The commodity wheat, like
every other commodity, is [according to Ricardo] sold at its
value, i.e., it is exchanged for other commodities in
relation to the labour-time embodied in it. (This is
the first erroneous assumption which complicates the problem
by posing it artificially. Only in exceptional
circumstances are commodities exchanged at their
value. Their average prices are determined in a
different way. See above.> The farmer who grows
wheat makes the same profit as all the other
capitalists. This proves that, like all the others, he
appropriates that portion of labour-time for which he has
not paid his workers. Where, on top of this, does the
rent come from? It must represent labour-time.
Why should surplus-labour in agriculture resolve into profit
and rent while in industry it is just profit? And, how
is this possible at all, if the profit in agriculture equals
the profit in every other sphere of production?
<Ricardo’s faulty conception of profit and the way in
which he confuses it with surplus-value have also a
detrimental effect here. They make the whole thing
more difficult for him.>
Ricardo solves this difficulty by assuming that
in principle it is non-existent. <This
indeed is in principle the only possibility of
overcoming any difficulty. But there are two ways of
doing this. Either one shows that the contradiction to
the principle is an illusion which arises from the
development of the thing itself, or one denies the
existence of the difficulty at one point, as Ricardo
does, and then takes this as a starting-point from which one
can proceed to explain its existence at some other
stage.>
He assumes a point at which the farmer’s capital, like
everyone else’s, only yields profit. <This capital
may be invested in a non-rent paying or individual farm, or
in a non-rent paying part of the land of a farm. In
fact it can be any capital which is employed in the
cultivation of land that does not pay rent.> This,
moreover, is the starting-point, and it can also be
expressed as follows: Originally the farmer’s capital only
pays profit, no rent <although this
pseudo-historical form is of no consequence and in
other “laws” is common to all bourgeois
economists>. It is no different from any other
industrial capital. Rent only enters into it because
the demand for grain rises and now, in contrast to other
branches of industry, it becomes necessary to resort to
“less” fertile ground. The farmer (the
supposed original farmer) suffers, like any other industrial
capitalist, in so far as he has to pay his workers more
because of the rise in [the price of] food. But he
gains because of the rise in price of his commodity above
its value, firstly, to the extent to which the value of
other commodities which enter into his constant capital
falls relatively to his commodity and so he buys them more
cheaply, and secondly, in so far as he owns the
surplus-value in the form of his dearer commodity.
Thus this farmer’s profit rises above the average rate of
profit, which has, however, fallen. Hence another
capitalist moves onto the less fertile land, No. II which,
with this lower rate of profit, can supply produce at the
price of I or perhaps even a little more cheaply. Be
that as it may, we now have, once more, ||453| the normal situation on II,
that surplus-value merely resolves itself into profit.
But we have explained the rent for I by the existence of a
twofold price of production: the production price of II
[which] is simultaneously the market price of I. A
temporary surplus gain has been [achieved], just as with the
factory-made commodity which is produced under more
favourable conditions. The price of corn, which in
addition to profit comprises rent, in fact consists only of
materialised labour, and is equal to its value; it is
however equal not to the value embodied in itself, but to
the value of II. It is impossible to have two market
prices [side by side] <While Ricardo introduces
farmer No, II because of the fall in the rate of profit,
Stirling introduces him because wages [have] fallen
not risen following upon the price of corn. This fall
in wages allows No. II to cultivate a piece [of land]
No. II at the old rate of profit, although the soil is less
fertile.> Once the existence of rent has been established
in this way, the rest follows easily. The
difference between rents according to varying
fertility, etc., of course remains correct. This does
not necessarily imply that less and less fertile land has to
come under cultivation.
So here we have Ricardo’s theory. The higher price
of corn, which yields an excess profit to I, does not yield
even as much as the earlier rate of profit for II. It
is thus clear that product II contains more value than
product I, i.e., it is the product of more labour-time, it
embodies a greater quantity of labour. Therefore more
labour-time must be supplied to manufacture the same
product—say, for instance, a quarter of wheat.
And the rise in rent will be relative to this decreasing
fertility of the land, or the growth in the quantity of
labour which must be employed to produce, say, a quarter of
wheat. Of course Ricardo would not talk of a rise in
rent if there were just an increase in the number of
quarters from which rent is paid, but only if the price of
the individual quarter rose from say 30s. to
60s. True, he does sometimes forget that the
absolute volume of rent can grow with a reduced rate of
rent, just as the absolute amount of profit can increase
with a decreasing rate of profit.
Others seek to by-pass this difficulty (Carey for
instance) by directly denying its existence. Rent
[they say] is only interest on the capital which, at an
earlier stage, was incorporated in the land.
Therefore, again only a form of profit. Here then the
very existence of rent is denied and so indeed
explained away.
Others, for instance Buchanan, regard it just as a
consequence of monopoly. See also
Hopkins. With them it is merely a
surcharge above the value.
For Mr. Opdyke, a typical Yankee,* landed property or rent becomes
“the legalised reflection of the
capital”.[c]
With Ricardo the examination is rendered more difficult
by the two false assumptions. <Ricardo it is true
was not the inventor of the theory of rent. West and
Malthus had put it into print before him. The source,
however, is Anderson. But what distinguished
Ricardo is the way in which he links rent with his theory of
value (although West did not entirely miss the real
interconnection either). As his later polemic about
rent with Ricardo shows, Malthus himself did not understand
the theory he had adopted from Anderson.> If we start
from the correct principle that the value of commodities is
determined by the labour-time necessary for their production
(and that value in general is nothing other than
materialised social labour-time) then it follows that the
average price of commodities is determined by the
labour-time required for their production. This
conclusion would be the right one if it had been proved that
average price equals value. But I show
that just because the value of the commodity is
determined by labour-time, the average price of the
commodities (except in the unique case in which the
so-called individual rate of profit in a particular
sphere of production, i.e., the profit determined by the
surplus-value yielded in this sphere of production itself,
[is] equal to the average rate of profit on total capital)
can never be equal to their value although this
determination of the average price is only derived from the
value which is based on labour-time.
In the first place, then, it follows that even
commodities whose average price (if we disregard the value
of constant capital) resolves only into wages and profit, in
such a way that these stand at their normal rate, i.e., are
average wages and average profit, can be sold above or below
their own value, The fact that the commodity yields rent on
top of profit ||454| does not
prove that the commodity is sold above its intrinsic
value, any more than the circumstance of the surplus-value
of a commodity only expressing itself in the category of
normal profit proves that the commodity is sold at its
value. If a commodity can yield an average rate of
profit or general rate of profit on capital which
is below its own rate of profit determined by its
real surplus-value, then it follows that if on top of this
average rate of profit commodities in a particular sphere
of production yield a second amount of surplus-value
which carries a separate name, for instance, rent,
then the sum of profit plus rent need not be higher than the
surplus-value contained in the commodity. Since
profit can be less than the intrinsic surplus-value of the
commodity, or the quantity of unpaid labour it embodies,
profit plus rent need not be larger than the intrinsic
surplus-value of the commodity.
Why this occurs in a particular sphere of
production as opposed to other spheres has of course still
to be explained. But the problem has been
simplified. This commodity (the commodity yielding
rent] differs from the others in the following way: In a
number of these other commodities average price is
above their intrinsic value, but only in order to
raise their rate of profit to the level of the
general rate. In another section of these other
commodities the average price stands at a level below
their intrinsic value, but only to the extent required to
reduce their rate of profit to concur with the
general rate. Finally in a third section of these
other commodities, average price equals their intrinsic
value, but only because if sold at their
intrinsic value they yield the general rate of
profit. But the commodity which yields rent differs
from all these three instances. Whatever the
circumstances, it is sold at a price which will yield
more than average profit—as determined by the
general rate of profit on capital.
Now the question arises, which, or how many, of these
three instances can occur. Supposing the whole of
the surplus-value the commodity contains is realised in
its price. In that case, it excludes the third
instance, namely, those commodities whose entire
surplus-value is realised in their average price, because
they only yield ordinary profit. We may, therefore,
dismiss this one. Similarly, on this
presupposition, we can exclude the first instance, where the
surplus-value realised in the price of the commodity is
above its intrinsic surplus-value. For it is
assumed, that “the surplus-value contained in it is
realised” in its price. This instance is thus
analogous with case 2 of those commodities whose intrinsic
surplus-value is higher than the surplus-value realised in
their average price. As with these commodities the
profit represents a form of this surplus-value—in this
case profit on the capital employed—which has been
reduced to the level of the general rate of profit.
The excess intrinsic surplus-value of the commodity over
and above this profit is, however, in contrast to
commodity 2, also realised in these exceptional
commodities, but accrues not to the owner of the capital,
but to the owner of the land, the natural agent, the mine,
etc.
Or [what happens if we assume that] the price is forced
up to such a degree that it carries more than the average
rate of profit? This is, for instance, the case with
actual monopoly prices. This
assumption—applied to every sphere of production
where capital and labour may be freely employed [and] whose
production, so far as the volume of capital employed is
concerned, is subject to the general laws—would not
only be a petitio principii, but would directly
contradict the foundations of [economic] science and of
capitalist production—the former being merely the
theoretical expression of the latter. For such an
assumption presupposes the very phenomenon which is to be
explained, namely, that in a particular sphere of
production, the price of a commodity must carry more
than the general rate of profit, more than the average rate
of profit, and to this end must be sold above its
value. It presupposes that agricultural products are
excluded from the general laws of value of
commodities and of capitalist production. It,
moreover, presupposes this, because the peculiar presence of
rent side by side with profit prima facie makes it
appear so. Hence this is absurd.
So there is nothing left but to assume that special
circumstances exist in this particular sphere of production,
which influence the situation and cause the prices of the
commodities to realise [the whole] of their intrinsic
surplus-value, This in contrast to [case] 2 of the other
commodities, where only as much of their intrinsic
surplus-value is realised by their prices as is yielded by
the general rate of profit, where their average prices fall
so far below their surplus-value that they only yield the
general rate of profit, or in other words their average
profit is no greater than that in all other spheres of
production of capital.
In this way the problem has already become much
simpler. It is no longer a question of explaining how
it comes about that the price of a commodity yields rent as
well as profit, thus apparently evading the general
law of value and by raising its price above its intrinsic
surplus-value, carrying more than the general rate of
profit for a given capital. The question is why,
in the process of equalisation of commodities at average
prices, this particular commodity does not have to pass on
to other commodities so much of its intrinsic
surplus-value that it only yields the average
profit, but is able to realise a portion of its own
surplus-value which forms an excess over and above
average profit; so that it is possible for a farmer, who
invests capital in this sphere of production, to sell the
commodity at prices which yield him the ordinary profit and
at the same time enable him to pay the excess in
surplus-value realised over and above this profit to
a third person, the landlord.
||455| Put in this way, the
very formulation of the problem carries its own
solution.
[c) Private Ownership of the Land as a Necessary
Condition for the Existence of Absolute Rent.
Surplus-Value in Agriculture Resolves into Profit and
Rent]
It is quite simply the private ownership of land,
mines, water, etc. by certain people, which enables them to
snatch, intercept and seize the excess surplus-value over
and above profit (average profit, the rate of profit
determined by the general rate of profit) contained in the
commodities of these particular spheres of production, these
particular fields of capital investment, and so to prevent
it from entering into the general process by which the
general rate of profit is formed. Moreover, some of
this surplus-value is actually collected in every industrial
enterprise, since rent for the land used (by factory
buildings, workhouses etc.) figures in every instance, for
even where the land is available free, no factories are
built, except in the more or less populated areas with good
means of communication.
Supposing the commodities produced by the poorest
cultivated land belonged to category 3, i.e., those
commodities whose average price equals their value, in other
words, the whole of their inherent surplus-value is realised
in their price because only thus do they yield the
ordinary profit; in this case the land would pay no rent and
land ownership would be purely nominal. If a
payment were made for the use of the land, then it
would only prove that small capitalists, as is partly the
case in England (see Newman), are satisfied with
making a profit below the average. The same
applies whenever the rate of rent is higher than the
difference between the inherent surplus-value of a
commodity and the average profit. There is even
land whose cultivation at most suffices to pay wages, for,
although here the labourer works for himself the whole of
his working-day, his labour-time is longer than the socially
necessary labour-time. It is so
unproductive—relative to the generally prevailing
productivity in this branch of work—that,
although the man works for himself for 12 hours, he hardly
produces as much as a worker under more favourable
conditions of production does in 8 hours. This is the
same relationship as that of the hand-loom weaver who
competes with the power-loom. Although the product of
this hand-loom weaver was equal to 12 hours of labour, it
was only equal to 8 or less hours of socially
necessary labour and his product therefore only [had]
the value of 8 necessary labour hours. If in such an
instance the cottager pays a rent then this is purely a
deduction from his necessary wage and does not
represent surplus-value, let alone an excess over and above
average profit.
Assume that in a country like the United States, the
number of competing farmers is as yet so small and the
appropriation of land so much just a matter of form that
everyone has the opportunity to invest his capital in land
and the cultivation of the soil, without the permission of
hitherto-existing owner-cultivators or farmers. In
these circumstances it is possible over a considerable
period—with the exception of that landed property
which by its very situation in populated areas carries a
monopoly— that the surplus-value which the farmer
produces on top of average profit is not realised in the
price of his product, but that lie may have to share it with
his brother capitalists in the same way as this is done with
the surplus-value of all commodities which would give an
excess profit, i.e., raise the rate of profit above the
general rate, if their surplus-value were realised in their
price. In this case the general rate of profit would
rise, because wheat, etc., like other manufactured
commodities, would be sold below its value.
This selling below its value would not constitute an
exception, but rather would prevent wheat from forming an
exception to other commodities in the same category.
Secondly, assume that in a given country the land is all
of a particular quality, so that if the whole of the
surplus-value from the commodity were realised in its price,
it would yield the usual profit on capital. In this
case no rent would be paid. The absence of rent would
in no way affect the general rate of profit, it would
neither raise it nor lower it, just as it is not influenced
by the fact that other non-agricultural products are to be
found in this category. Since the commodities belong
to this category just because their inherent
surplus-value equals the average profit [they]
cannot alter the level of this profit, on the contrary they
conform with it and do not influence it at all, although it
influences them.
Thirdly, assume that all the land consists of a
particular type of soil, but this is so poor that the
capital employed in it is so unproductive that its product
belongs to that kind of commodity whose surplus-value [lies]
below average profit. Since wages would rise
everywhere as a result of the unproductiveness of
agriculture, surplus-value could in this case of course only
be higher where absolute labour-time can be prolonged, where
the raw material, such as iron, etc., is not the product of
agriculture or, further, where it [is] like cotton, silk
etc., an imported article and a product of more fertile
soil. In this case, the price of the [agricultural]
commodity would include a surplus-value higher than that
inherent in it, to enable it to yield the usual
profit. The general rate of profit would consequently
fall, despite the absence of rent.
Or assume in case 2, that the soil is very
unproductive. Then surplus-value of this agricultural
product, by its very equality with average profit would show
that the latter is altogether low since in agriculture
perhaps 11 of the 12 working hours are required to produce
just the wages, and the surplus-value only equals 1 hour or
less.
||456| These various
examples illustrate the following:
In the first case, the absence or lack of rent is
bound up with, or concurs with, an increased rate of
profit—as compared with other countries where the
phenomenon of rent has developed.
In the second case the lack or absence of rent does not
affect the rate of profit at all.
In the third case, compared with other countries where
rent exists, it is bound up with and indicative of a low,
a relatively low, general rate of profit.
It follows from this that the development of a particular
rent in itself has nothing to do with the productivity of
agricultural labour, since the absence or lack of rent
can be associated with a rising, falling or constant rate of
profit.
The question here is not: Why is the excess
surplus-value above average profit retained in
agriculture etc.? On the contrary, we should rather
ask: Why should the opposite take place here?
Surplus-value is nothing other than unpaid labour; the
average or normal profit is nothing other than the quantity
of unpaid labour which each capital of a given magnitude of
value is supposed to realise. If we say that average
profit is 10 per cent then this means nothing other than
that a capital of 100 commands 10 units of unpaid labour; or
100 units of materialised labour command a tenth of their
amount in unpaid labour. Thus excess of
surplus-value over average profit implies that a
commodity ( its price or that part of its price which
consists of surplus-value) contains a quantity of unpaid
labour [hich is] greater than the quantity of unpaid labour
that forms average profit, which therefore in the average
price of the commodities forms the excess of their price
over the costs of their production. In each
individual commodity the costs of production represent the
capital advanced, and the excess over these production costs
represents the unpaid labour which the advanced
capital commands; hence the relationship of this excess in
price over the costs of production shows the rate at
which a given capital—employed in the production
process of commodities—commands unpaid labour,
irrespective of whether the unpaid labour contained in the
commodity of the particular sphere of production is
equal to this rate or not.
Now what forces the individual capitalist, for instance,
to sell his commodity at an average price, which yields him
only the average profit and makes him realise less unpaid
labour than is in fact worked into his own commodity?
This average price is thrust upon him; it is by no
means the result of his own free will; he would prefer to
sell the commodity above its value. It is
forced upon him by the competition of other capitals.
For every capital of the same size could also be rushed into
A, the branch of production in which the relationship of
unpaid labour to the invested capital, for instance,
£100, is greater than in production spheres B, C,
etc. whose products also satisfy a social need just as much
as the commodities of production sphere A.
When there are spheres of production in which certain
natural conditions of production, such as, for example,
arable land, coal seams, iron mines, water falls,
etc.—without which the production process cannot be
carried out, without which commodities cannot be produced in
this sphere—are in the hands of others than the
proprietors or owners of the materialised labour, the
capitalists, then this second type of proprietor of the
conditions of production will say:
If I let you have this condition of production for your
use, then you will make your average profit; you will
appropriate the normal quantity of unpaid labour. But
your production yields an excess of surplus-value, of unpaid
labour, above the rate of profit. This excess you will
not throw into the common account, as is usual with you
capitalists, but I am going to appropriate it myself.
It belongs to me. This transaction should suit you,
because your capital yields you just the same in this sphere
of production as in any other and besides, this is a very
solid branch of production. Apart from the 10 per cent
unpaid labour which constitutes the average profit, your
capital will also provide a further 20 per cent of
additional unpaid labour here. This you will
pay over to me and in order to do so, you add 20 per cent
unpaid labour to the price of the commodity, and this you
simply do not account for with the other capitalists.
Just as your ownership of one condition of
production—capital, materialised labour—enables
you to appropriate a certain quantity of unpaid labour from
the workers, so my ownership of the other condition of
production, the land, etc., enables me to intercept and
divert away from you and the entire capitalist class, that
part of unpaid labour which is excessive to your average
profit. Your law will have it that under normal
circumstances, capitals of equal size appropriate equal
quantities of unpaid labour and you capitalists can force
each other ||457| into this
position by competition among yourselves. Well, I
happen to be applying this law to you. You are not to
appropriate any more of the unpaid labour of your workers
than you could with the same capital in any other sphere of
production. But the law has nothing to do with the
excess of unpaid labour which you have
“produced” over the normal quota. Who is
going to prevent me from appropriating this
“excess”? Why should I act according to
your custom and throw it into the common pot of capital to
be shared out among the capitalist class, so that everyone
should draw out a part of it in accordance with his share in
the aggregate capital? I am not a capitalist.
The condition of production which I allow you to utilise is
not materialised labour but a natural phenomenon. Can
you manufacture land or water or mines or coal pits?
Certainly not. The means of compulsion which can be
applied to you in order to make you release again a part of
the surplus-labour you have managed to get hold of does not
exist for me. So out with it! The only thing
your brother capitalists can do is to compete against you,
not against me. If you pay me less excess profit than
the difference between the surplus-time you have made
and the quota of surplus-labour due to you according to the
rule of capital, your brother capitalists will appear on the
scene and by their competition will force you to pay me
fairly the full amount I have the power to squeeze
out of you.
The following problems should now be set forth: 1.
The transition from feudal landownership to a different
form, commercial land rent, regulated by capitalist
production, or, on the other hand, the conversion of this
feudal landed property into free peasant property.
2. How rent comes into existence in countries such as
the United States, where originally land has not been
appropriated and where, at any rate in a formal sense, the
bourgeois mode of production prevails from the
beginning. 3. The Asiatic forms of landownership
still in existence. But all this does not belong
here.
According to this theory then, the private ownership of
objects of nature such as the land, water, mines etc., the
ownership of these conditions of production, this essential
ingredient of production emanating from nature, is not a
source from which flows value, since value is only
materialised labour. Neither is it the source from
which excess surplus-value flows, i.e., an excess of unpaid
labour over and above the unpaid labour contained in
profit. This ownership is, however, a source of
revenue. It is a claim, a means, which in the sphere
of production that the property enters as a condition of
production enables the owner to appropriate that part of the
unpaid labour squeezed out by the capitalist which would
otherwise be tossed into the general capital fund as excess
over normal profit. This ownership is a means of
obstructing the process which takes place in the rest of the
capitalist spheres of production, and of holding on to the
surplus-value created in this particular sphere, so that it
is divided between the capitalist and the landowner in that
sphere of production itself. In this way landed
property, like capital, constitutes a claim to unpaid
labour, gratis labour. And just as with capital, the
worker’s materialised labour appears as a power over him, so
with landed property, the circumstance which enables the
landowners to take part of the unpaid labour away from the
capitalists, makes landownership appear as a source of
value.
This then explains the existence of modern
ground-rent. With a given capital investment,
the variation in the amount of rent is only to be explained
by the varying fertility of the land. The variation in
the amount of rent, given equal fertility, can only
be case, rent rises because its rate increases in proportion
to the explained by the varying amount of capital
invested, In the first capital employed(also according
to the area of the land). In the second case, it
rise’s because with the same or even with a different rate
(if the second dose of capital is not equally productive)
the amount of rent increases.
For this theory it is immaterial whether the least
fertile land yields a rent or not. Further, it is by
no means necessary for the fertility of agriculture to
decline, although the diversity in productivity, if not
artificially overcome (which is possible), is much greater
than in similar spheres of industrial production. When
we speak of greater or lesser fertility, we are still
concerned with the same product. The
relationship of the various products, one to another, is
another question.
Rent as calculated on the land itself is the rental, the
amount of rent. It can rise without an increase in the
rate of rent. If the value of money remains unchanged,
then the relative value of agricultural product’s can rise,
not because agriculture is becoming less productive, but
because, although its productivity is rising, it is rising
slower than in industry. On the other hand, a rise in
the money price of agricultural products, while the value of
money remains the same, is only possible if their value
rises, i.e., if agriculture becomes less productive
(provided it is not caused by temporary pressure of demand
upon supply as with other commodities).
In the cotton industry, the price of the raw material
fell continuously with the development of the industry
itself; the same applies to iron, etc., coal, etc. The
growth of rent here was possible, not because its rate rose,
but only because more capital was employed.
Ricardo is of the following opinion: The powers of
nature, such as air, light, electricity, steam, water are
gratis; the land is not, because it is limited. So
already for this reason alone, agriculture is less
productive than other industries. If the land were
just as common, unappropriated, available in any quantities,
as the other element’s and powers of nature, then it would
be much more productive.
||458| In the first place,
if the land were so easily available, at everyone’s free
disposal, then a principal element for the formation of
capital would be missing. A most important
condition of production and—apart from man himself and
his labour—the only original condition of production
could not be disposed of, could not be appropriated.
It could not thus confront the worker as someone else’s
property and make him into a wage-labourer. The
productivity of labour in Ricardo’s sense, i.e., in the
capitalist sense, the “producing” of someone
else’s unpaid labour would thus become impossible. And
this would put an end to capitalist production
altogether.
So far as the powers of nature indicated by Ricardo are
concerned, it is true that these are partly to be had for
nothing and do not cost the capitalist anything. Coal
costs him something, but steam costs him nothing so long as
he gets water gratis. But now, for example, let us
take steam. The properties of steam always
exist. Its industrial usefulness is a new scientific
discovery which the capitalist has appropriated. As a
consequence of this scientific discovery, the productivity
of labour and with it relative surplus-value rose. In
other words, the quantity of unpaid labour which the
capitalist appropriated from a day’s labour grew with the
aid of steam. The difference between the productive
power of steam and that of the soil is thus only that the
one yields unpaid labour to the capitalist and the other to
the landowner, who does not take it away from the worker,
but from the capitalist. The capitalist is therefore
so enthusiastic about this element “belonging to no
one.
Only this much is correct: Assuming the capitalist mode
of production, then the capitalist is not only a necessary
functionary, but the dominating functionary in
production. The landowner, on the other hand, is quite
superfluous in this mode of production. Its only
requirement is that land should not be common
property, that it should confront the working class as a
condition of production, not belonging to it, and the
purpose is completely fulfilled if it becomes
state-property, i.e., if the state draws the rent. The
landowner, such an important functionary in production in
the ancient world and in the Middle Ages, is a useless
superfetation in the industrial world. The radical
bourgeois (with an eye moreover to the suppression of all
other taxes) therefore goes forward theoretically to a
refutation of the private ownership of the land, which, in
the form of state property, he would like to turn into the
common property of the bourgeois class, of capital.
But in practice he lacks the courage, since an attack on one
form of property—a form of the private ownership of a
condition of labour—might cast considerable doubts on
the other form. Besides, the bourgeois has himself
become an owner of land.
[4. Rodbertus’s Thesis that in Agriculture Raw
Materials Lack Value Is Fallacious]
Now to Herr Rodbertus.
According to Rodbertus, no raw material enters into
agricultural calculations, because, so Rodbertus assures us,
the German peasant does not reckon that seeds, feeding
stuffs, etc. cost him anything. He does not
count these as costs of production; in fact he
miscalculates. In England, where the farmer has been
doing his accounts correctly for more than 150 years, there
should accordingly be no ground-rent. The conclusion
therefore should not be the one drawn by Rodbertus, that the
farmer pays a rent because his rate of profit is higher than
in manufacture, but that he pays it because, as a result of
a miscalculation, he is satisfied with a lower rate
of profit. Dr. Quesnay, himself the son of a tenant
farmer and closely acquainted with French farming, would not
have received this idea kindly. [In his Tableau
Economique], Quesnay includes the raw material which the
tenant farmer needs, as one of the items in the annual
outlay of 1,000 million, although the farmer reproduces it
in kind.
Although hardly any fixed capital or machinery is to be
found in one section of manufacture, in another
section—the entire transport industry, the industry
which produces change of location, [using] wagons, railways,
ships, etc.—there is no raw material but only tools of
production. Do such branches of industry yield a rent
apart from profit? How does this branch of industry
differ from, say, the mining industry? In both of them
only machinery and auxiliary materials are used, such as
coal for steamships and locomotives and mines, fodder for
horses, etc. Why should the rate of profit be
calculated differently in one sector than in the
other? [Supposing] the advances to production which
the peasant makes in kind are a fifth of the total
capital he advances, to which we would then have to add
four-fifths in advances for the purchase of machinery and
labour-power, the total expenditure amounting to 150
quarters. If he then makes 10 per cent profit [this
would be] equal to 15 quarters, i.e., the gross product
would be 165 quarters. If he now deducted a fifth,
equal to 30 quarters and calculated the 15 quarters only on
120, then he would have made a profit of 12
1/2 per cent.
Alternatively, we could put it in this way: The value of
his product, or his product, is equal to 165 quarters
(£ 330). He reckons his advances to be 120
quarters (£ 240), 10 percent on this equals 12
quarters (£ 24). But his gross product amounts
to 165 quarters; from which thus 132 quarters are to be
deducted, which leaves 33 quarters. But from these, 30
quarters are deducted in kind. This leaves an extra
profit of 3 quarters (£ 6). His total profit is
15 quarters (£ 30) instead of 12 quarters (£
24). So he can pay a rent of 3 quarters or £ 6
and fancy that he has made a profit of 10 per cent
like every other capitalist. But this 10 per cent
exists only in his imagination. In fact, he has made
advances of 150 quarters, not of 120 quarters and on these,
10 per cent amounts to 15 quarters or £ 30. In
fact he received 3 quarters too few, i.e., a quarter
of the 12 quarters which he actually received ||459| , or a fifth of the total
profit which he should have received, because he did not
consider a fifth of his advances to be advances.
Therefore, as soon as he learnt to calculate according to
capitalist methods, he would cease to pay rent, which would
merely amount to the difference between his rate of
profit and the normal rate of profit.
In other words, the product of unpaid labour embodied in
the 165 quarters amounts to 15 quarters, which equals
£ 30, representing 30 labour weeks. Now if these
30 labour weeks or 15 quarters or £ 30 were calculated
on the total advances of 150 quarters, then they would only
form 10 per cent; if they were calculated only on 120
quarters, then they would represent a higher percentage,
because 10 per cent on 120 quarters would be 12 quarters and
15 quarters are not 10 per cent of 120 quarters but 12
1/2 per cent. In other words:
Since the peasant did not include some of his advances in
the account as a capitalist would have done, he calculates
the accumulated surplus-labour on too small a portion of his
advances. Hence it represents a higher rate of profit
than in other branches of industry and can therefore yield a
rent which is based solely on a miscalculation. The
game would be over if the peasant realised that it is by no
means necessary first to convert his advances into real
money, i.e., to sell them, in order to assess
them in money, and hence to regard them as commodities.
Without this mathematical error (which may be
committed by a large number of German peasants but never by
a capitalist farmer) Rodbertus’s rent would be an
impossibility. It only becomes possible where
raw material enters into costs of production, but not where
it does not. It only becomes feasible where the
raw material enters [into production] without
entering into the accounts, But it is not possible
where it does not enter [into production], although
Herr Rodbertus wants to derive his explanation of the
existence of rent not from a miscalculation,
but from the absence of a real item of
expenditure.
Take the mining industry or the fisheries. Raw
material does not figure in these, except as auxiliary
material, which we can omit, since the use of machinery
always implies (with very few exceptions) the consumption of
auxiliary material, the food of the machine. Assuming
that the general rate of profit is 10 per cent and £
100 are laid out in machinery and wages; why should the
profit on £ 100 amount to more than £ 10,
because the £ 100 have not been expended on raw
material, machinery and wages, but have been expended on raw
material and wages only? If there is to be any sort of
difference, this could only arise because in the various
instances, the ratio of the values of constant capital
and variable capital is in fact different. This
varying ratio would result in varying surplus-value, even if
the rate of surplus-value is taken to be
constant. And if varying surplus-values are related to
capitals of equal size, they must of course yield
unequal profits. But on the other hand the general
rate of profit means nothing other than the equalisation of
these inequalities, abstraction from the organic components
of capital and redistribution of surplus-value, so that
capitals of equal size yield equal profits.
That the amount of surplus-value depends on the size
of the capital employed does not hold
good—according to the general laws of
surplus-value—for capitals in different spheres
of production, but for different capitals in the
same sphere of production, in which it is assumed that
the organic component parts of capital are in the
same proportion. If one says for example: The volume
of profit in spinning corresponds to the size of the
capitals employed (which is also not quite correct, unless
one adds that productivity is assumed to be
constant), this in fact merely means that, given the
rate of exploitation of the spinners, the total amount of
exploitation depends on the number of exploited
spinners. If, on the other hand, one says that the
volume of profit in different branches of production
corresponds to the size of the capitals employed, then this
means that the rate of profit is the same for each capital
of a given size, i.e., the volume of profit can only change
with the size of this capital. In other words, the
rate of profit is independent of the organic relationship of
the components of a capital in a particular sphere of
production; it is altogether independent of the amount of
surplus-value which is realised in these particular spheres
of production.
Mining production ought to be considered right from the
start as belonging to industry and not to agriculture.
Why? Because no product of the mine is used, in kind,
as an element of production; no product of the mine enters
in kind, straight from the mine, into the constant capital
of the mining industry (the same applies to fishing and
hunting, where the outlay consists to a still higher degree
of the instruments of labour and wages or labour itself
||460|). In other words,
because every production element in the mine—even if
its raw material originates in the mine— not only
alters its form, but becomes a commodity, i.e., it must be
bought, before it can re-enter mining as an element
of production. Coal forms the only exception to this,
But it only appears as a means of production at a stage of
development when the exploiter of the mine has graduated as
a capitalist, who uses double entry book-keeping, in which
he not only owes himself his advances, i.e., is a debtor
against his own funds, but his own funds are debtors against
themselves, Thus just here, where in fact no raw material
figures in expenditure, capitalist accounting must prevail
from the outset, making the illusion of the peasant
impossible .
Now let us take manufacture itself, and in particular
that section where all the elements of the labour-process
are also elements in the process of the creation of value;
i.e., where all the production elements enter into the
production of the new commodity as items of expenditure, as
use-values that have a value, as commodities.
There is a considerable difference between the manufacturer
who produces the first intermediate product and the second
and all those that follow in the process towards the
finished product. The raw material of the latter type
of manufacturers enters the production process not only as a
commodity, but is already a commodity of the second degree;
it has already taken on a different form from the first
commodity, which was a raw product in its natural form, it
has already passed through a second phase of the production
process. For example, the spinner: His raw material is
cotton, a raw product which is already a commodity.
The raw material of the weaver however is the yarn produced
by the spinner; that of the printer or dyer is the woven
fabric, the product of the weaver; and all these products,
which reappear as raw materials in further phases of the
process are at the same time commodities. |460||
||461| We seem to have
returned here to the question with which we have already
been concerned on two other occasions, once when discussing
John Stuart Mill, and again during the general analysis of
the relationship between constant capital and revenue.
The continual recurrence of this question shows that there
is still a hitch somewhere. Really this belongs into
Chapter III on profit. But it fits in better here.
For example:
| 4,000 lbs. cotton equals £100; |
| 4,000 lbs. yarn equals £200; |
| 4,000 yards calico equals £400. |
On the basis of this assumption, 1 lb. cotton = 6d., yarn
= 1s., 1 yard [calico] = 2s.
Given a rate of profit of 10 per cent, then
| A in £100, the outlay = £90
10/11 and the profit = £9
1/11 |
| B in £200, the outlay = £181
9/11 and the profit = £18
2/11 |
| C in £400, the outlay = £363
7/11 and the profit = £36
4/11 |
A = cotton [the product of the] peasant (I); B =
yarn [the product of the] spinner (II), C = woven
fabric [the product of the] weaver (III).
Under this assumption it does not matter whether A’s
£ 90 10/11 itself includes a
profit or not. It will not do so if it constitutes
self-replacing constant capital. It is equally
irrelevant for B, whether the £ 100 [the value of
product A] includes profit or not, and ditto with C in
relation to B.
The relationship of C (the cotton-grower) or I, of S
(spinner) or II and of W (weaver) or III is as follows:
|
I) | Outlay = £9010/11
|
Profit =£ 9 1/11
|
Total = £100
|
|
II) | Outlay = £100 (I) + £819/11
|
Profit = £18 2/11
|
Total = £200
|
|
III)
|
Outlay = £200 (II) + £1637/11
|
Profit = £36 4/11
|
Total = £400
|
|
The grand total equals 700.
|
|
Profit equals £9 1/11 +
£18 2/11 + £36
4/11 [=£637/11]
|
|
Capital advanced in all three sections: £90
10/11 + £181
9/11 + £363
7/11 = £636
4/11
|
|
Excess of 700 over 636 4/11 = 63
7/11. But [the ratio of] 63
7/11 : 636 4/11
is as 10 : 100.
|
Continuing to analyse this rubbish, we obtain the
following:
|
I) | Outlay = £90 10/11
|
Profit =£ 9 1/11
|
Total = £100
|
|
II) | Outlay = £100 (I) + £81 9/11
|
Profit = 10+£8 2/11
|
Total = £200
|
|
III) |
Outlay = £200 (II) + £163 7/11
|
Profit = 20+£16 4/11
|
Total = £400
|
I does not have to repay any profit, because it is
assumed that his constant capital of
£9010/11 does not include any
profit, but represents purely constant capital. The
entire product of I figures as constant capital in II’s
outlay. That part of constant capital which equals 100
yields a profit of £ 9 1/11 to
I. The entire product [of] II which amounts to 200,
enters into III’s outlay, and thus yields a profit of
£ 18 2/11. However, this
does not in any way alter the fact that I’s profit is not
one iota larger than II’s or III’s, because the capital
which he has to replace is smaller to the same degree and
the profit corresponds to the volume of the capital,
irrespective of the composition of the capital.
Now let us assume that III produces everything
himself. Then the position seems to change,
because his outlay now appears as follows:
90 10/11 in the production of
cotton; 181 9/11 in the production of
yarn and 363 7/11 in the production of
the woven fabric. He buys all three branches of
production and must therefore continually employ a definite
amount of constant capital in all three. If we now
total this up we get: 90 10/11 + 181
9/11 + 363 7/11
= 636 4/11. 10 per cent of this
is exactly 63 7/11, as above, only
that one individual pockets the lot, whereas previously the
63 7/11 were shared among I, II and
III.
||462| How did the wrong
impression arise a little while ago?
But first, one other comment.
If from the 400, we deduct the profit of the weaver,
which is included in it and which amounts to 36
4/11, then we are left with
400–364/11 =
3637/11, his outlay. This outlay
includes 200 paid out for yarn, Of these 200, 18
2/11 are the profit of the
spinner. If we now deduct these 18
2/11 from the outlay of 363
7/11, we are left with 345
5/11. But the 200 which are
returnable to the spinner, also contain 9
1/11 profit for the
cotton-grower. If we deduct these from the 345
5/11, we are left with 336
4/11. And if we deduct these 336
4/11 from the 400—the total
value of the woven fabric—then it becomes evident that
it contains a profit of 63 7/11.
But a profit of 63 7/11 on 336
4/11 is equal to 18
34/37 per cent.
Previously we calculated these 63
7/11 on 636
4/11, and obtained a profit of 10 per
cent. The excess of the total value of 700 over 636
4/11 was in fact 63
7/11.
According to the present calculation, therefore, 18
34/37 per cent would be made on 100 of
this same capital, whereas according to the previous
calculation only 10 per cent.
How does this tally?
Supposing I, II and III are one and the same person, but
that this individual does not employ three capitals
simultaneously, one in cotton-growing, one in spinning and
one in weaving. Rather, as soon as he ceases to grow
cotton, he begins to spin it and as soon as he has spun, he
finishes with this and begins to weave.
Then his accounting would look like this:
He invests £ 90 10/11 in
cotton-growing. From this he obtains 4,000 lbs. of
cotton, In order to spin these he needs to lay out a further
£ 81 9/11 in machinery,
auxiliary materials and wages. With this he makes the
4,000 lbs. of yarn. Finally he weaves these into 4,000
yards which involves him in a further outlay of £ 163
7/11. If he now adds up his
expenditure, the capital which he has advanced amounts to
£ 90 10/11 + £ 81
9/11 + £ 163
7/11, i.e., £ 336
4/11. 10 per cent on this would
be 33 7/11, because 336
4/11 : 33 7/11
is as 100 : 10. But £ 336
4/11 + £ 33
7/11 = £ 370. He would
thus sell the 4,000 yards at £ 370 instead of at
£ 400, i.e., at £ 30 less, i.e., at a price
which is 7 1/2 per cent lower than
before. If the value indeed were £ 400, he could
thus sell at the usual profit of 10 per cent and in addition
pay a rent of £ 30, because his rate of profit would
not be 33 7/11 but 63
7/11 on his advances of 336
4/11, i.e., 18
34/37 per cent, as we saw earlier
on. And this in fact appears to be the manner in which
Herr Rodbertus makes out his calculation of rent.
What does the fallacy consist of? First of all it
is evident that if spinning and weaving are combined, they
should [according to Rodbertus] yield a rent, just as if
spinning is combined with cultivation or if agriculture is
carried on independently.
Evidently two different problems are involved here.
Firstly we are calculating the £ 63
7/11 only on one capital of £
336 4/11, whereas we should be
calculating it on three capitals of a total value of £
636 4/11.
Secondly in the last capital, that of III, we are
reckoning his outlay to be £ 336
4/11, instead of £ 363
7/11.
Let us go into these points separately.
Firstly: If III, II and I are united in one
person, and if he spins up the entire product of his cotton
harvest, then he does not use any part of this harvest at
all to replace his agricultural capital. He does not
employ part of his capital in ||463| cotton-growing—in
expenditure on cotton-growing, seeds, wages,
machinery—and another part in spinning, but he first
puts a part of his capital into cotton-growing, then this
part plus a second into spinning, and then the whole of
these two first parts, now existing in the form of yarn,
plus a third part, into weaving. Now when the fabric
of 4,000 yards has been woven, how is he to replace its
elements? While he was weaving he wasn’t spinning, and
he had no material from which to spin; while he was spinning
he did not grow any cotton. Therefore his elements of
production cannot be replaced. To help
ourselves along, let us say: Well, the fellow sells the
4,000 yards and then “buys” yarn and the
elements of cotton out of the £ 400. Where does
this get us? To a position where we are in fact
assuming that three capitals are simultaneously employed and
engaged and laid out in production. But yarn cannot be
bought unless it is available and in order to buy cotton it
must be available as well. And so that they are
available to replace the woven yarn and the spun cotton,
simultaneously with the capital employed in weaving,
capitals must be invested which are turned into cotton and
yarn at the same time as the yarn is turned into woven
fabric.
Thus, whether III combines all three branches of
production or whether three producers share them, three
capitals must be available simultaneously. If he wants
to produce on the same scale, he cannot carry on
spinning and cotton-growing with the same capital which he
used for weaving. Every one of these capitals is
engaged and their reciprocal replacement does not affect the
problem under discussion. The replacement capitals are
the constant capital which must be invested and operating in
each of the three branches simultaneously. If the
£ 400 contain a profit of £ 6
37/11, then this is only because
besides his own profit of £ 36
4/11, we allow III to gather in the
profit which he has to pay to II and I and which, according
to the assumption, is realised in his commodity. But
the profit was not made on his £ 363
7/11. The peasant made it on his
additional £ 90 10/11 and the
spinner on his £ 181 9/11.
When he pockets the whole amount himself, he likewise has
not made it on the £ 363 7/11
that he invested in weaving, but on this capital and on his
two other capitals invested in spinning and
cotton-growing.
Secondly: If we reckon III’s outlay to be £
3364/11 instead of
£3637/11, then this arises from
the following:
We take his outlay on cotton-growing to be only £
90 10/11 instead of 100, But he needs
the whole product and this equals £ 100 and not 90
10/11. It contains the profit of
9 1/11. Or else he would be
employing a capital of £ 90
10/11 which would bring him no
profit. His cotton-growing would yield him no
profit but would just replace his expenditure of £ 90
10/11. In the same way, spinning
would not bring him any profit, but the whole of the product
would only replace his outlay.
In this case, his expenditure would indeed be reduced to
90 10/11 + 81
9/11 + 163 7/11
= 336 4/11. This would be the
capital he has advanced. 10 per cent on this would be
£ 33 7/11. And the value
of the product would be £ 370. The value would
not be one farthing higher because, according to the
supposition, portions I and II have not brought in any
profit. Accordingly III would have done much better to
leave I and II well alone and to keep to the old method of
production. For instead of the £ 63
7/11 which were previously at the
disposal of I, II and III, III now has only £ 33
7/11 for himself whereas previously,
when his fellows were alongside of him, he had £ 36
4/11. He would indeed be a very
bad hand at business. He would only have saved an
outlay of £ 9 1/11 in II because
he had made no profit in I, and he would have saved an
outlay of £ 182/11 in III, by
not making a profit in II. The
£9010/11 in cotton-growing and
the 81 9/11 + 90
10/11 in spinning would both have only
replaced themselves. Only the third capital of 90
10/11 + 81 9/11
+ 163 7/11 invested in weaving, would
have yielded a profit of 10 per cent. This would mean
that [£] 100 would yield 10 per cent profit in
weaving, but not one farthing in spinning and
cotton-growing. This would be very pleasant for III,
so long as I and II are persons other than himself, but by
no means so, if, in order to save these petty profits and
pocket them himself, he has united these three branches
of business in one and the same person, namely, his worthy
self. The saving of advances for profit (or that
component part of the ||464|
constant capital of one capitalist which is profit for the
others) arose therefore from the fact that [the products of]
I and II contained no profits and that I and II performed no
surplus-labour but regarded themselves merely as
wage-labourers who only had to replace their costs of
production, i.e., the outlay in constant capital and
wages. Thus, in these circumstances—provided I
and II were not prepared to work for III, since if they did,
profit would go to his account—less labour
would have been done in any case, and it would not matter to
III whether the work for which he has to pay is only laid
out in wages, or in wages and profit. This is all the
same to him, in so far as he buys and pays for the product,
the commodity.
Whether constant capital is wholly or partially replaced
in kind, in other words, whether it is replaced by
the producers of the commodity for which it serves as
constant capital, is of no consequence. First of all,
all constant capital must in the end be replaced in kind:
machinery by machinery, raw material by raw material,
auxiliary material by auxiliary material. In
agriculture, constant capital may also enter as a
commodity, i.e., be mediated directly by purchase and
sale. In so far as organic substances enter into
reproduction, the constant capital must of course be
replaced by products of the same sphere of production.
But it need not be replaced by the individual producers
within this sphere of production. The more agriculture
develops, the more all its elements enter into it as
commodities, not just formally, but in actual fact. In
other words, they come from outside, for instance, seeds,
fertilisers, cattle, animal substances, etc., are the
products of other producers. In industry, for example,
the continual movement to and fro of iron into the machine
shop and machines into the iron mines, is just as constant
as is the movement of wheat from the granary to the land and
from the land to the granary of the farmer. The
products in agriculture are replaced directly. Iron
cannot replace machines, But iron, to the value of the
machine, replaces the machine for one [producer], and [the
machine replaces] the iron for the other, in so far as the
value of his machine is replaced by iron.
It is difficult to see what difference it is supposed to
make to the rate of profit if the peasant, who lays out the
£ 90 10/11 on a product of
£ 100, were to compute that, for instance, he spends
£ 20 on seeds etc., £ 20 on machinery etc., and
£ 50 10/11 on wages. What
he wants is a profit of 10 per cent on the total sum.
The £ 20 of the product which he sets against seeds do
not include any profit. Nevertheless, this is just as
much £ 20 as the £ 20 in machinery, in which
there may be a profit of 10 per cent, although this may be
only formal. In actual fact the £ 20 in
machinery, like the £ 20 in seeds, may not contain a
single farthing of profit. This is the case if these
£ 20 are merely a replacement for components of the
machine builder’s constant capital, which he draws from
agriculture, for instance.
Just as it would be wrong to say that all machinery goes
into agriculture as its constant capital, so it is incorrect
to say that all raw material goes into manufacture. A
very large part of it remains fixed in agriculture and only
represents a reproduction of constant capital. Another
part of it goes directly into revenue in the form of food
and some of it, like fruit, fish, cattle etc., does not
undergo a “manufacturing process” at all.
It would therefore be incorrect to burden industry with the
entire bill for all the raw materials
“manufactured” by agriculture. Of course
in those branches of manufacture where the raw material
features as an advance, alongside wages and machinery, the
capital advanced must be greater than in those
branches of agriculture which supply the raw material
used. It could also be assumed that if these branches
of manufacture had their own rate of profit
(different from the general rate) it would be smaller here
than in agriculture because less labour is employed.
For, with a given rate of surplus-value, more constant
capital and less variable capital necessarily bring in a
lower rate of profit. This, however, applies equally
to certain branches of manufacture as against others and to
certain branches of agriculture (in the economic sense) as
against others. It is in fact least likely to occur in
agriculture proper, because, although it supplies raw
material to industry, it differentiates between raw
materials, machinery and wages in its own expenditure
account, but industry by no means pays agriculture for the
raw material, i.e., for that part of constant capital
which it replaces from within itself and not by exchange
with industrial products.
[5. Wrong Assumptions in Rodbertus’s Theory of
Rent]
||465| Now to a brief
resumé of Herr Rodbertus.
First he describes the situation as he imagines it, where
the owner of the land is at the same time the capitalist and
slave-owner. Then there comes a separation. That
part of the “product of labour” which has been
taken from the workers—the “one natural
rent”—is now split up into “rent of land
and capital gain” ([Rodbertus, Sociale Briefe an
von Kirchmann. Dritter Brief, Berlin, 1851,]
pp. 81–82). (Mr. Hopkins—see
notebook—explains this in even more simple and blunt
terms.)
Then Herr Rodbertus divides the “raw product”
and “manufactured product” (p.89) between the
landowner and the capitalist—petitio
principii. One capitalist produces raw products
and the other manufactured products. The landowner
produces nothing, neither is he the “owner of
raw products”. That [i.e., that the landowner is
the “owner of raw products”] is the conception
of a German “landed proprietor” such as Herr
Rodbertus is. In England, capitalist production began
simultaneously in manufacture and in agriculture.
How a “rate of capital gain” (rate of profit)
comes about, is explained by Herr Rodbertus purely from the
fact that money now provides a “measure”
of gain, making it possible to “express the
relationship of gain to capital” (p. 94) and thus
“supplying a standard gauge for the equalisation of
capital gains” (p. 94). He has not even a remote
idea that this uniformity of profit is in contradiction
to the equality of rent and unpaid labour in each branch
of production, and that therefore the values of commodities
and the average prices must differ. This rate of
profit also becomes the norm in agriculture because the
“return on property cannot be calculated upon
anything other than capital” (p. 95) and by far the
“larger part of the national capital is
employed” (p. 95) in manufacture. Not a word
about the fact that with the advent of capitalist
production, agriculture itself is revolutionised, not only
in a formal sense but really, and the landowner is
reduced to a mere receptacle, ceasing to fulfil any function
in production. According to Rodbertus
“in manufacture, the value
of the entire product of agriculture is included in the
capital as raw material, whereas this cannot be the
case in primary production” (p. 95).
The entire bit is incorrect.
Rodbertus now asks himself whether apart from the
industrial profit, the profit on capital, there remains
“a rent” for the raw product, and if so
“for what reasons” (p. 96).
He even assumes
“that the raw product like the
manufactured product exchanges according to its labour
costs, that the value of the raw product is only equal
to its labour cost” (p. 96).
True, as Rodbertus says, Ricardo also assumes this.
But it is wrong, at least prima facie, since
commodities do not exchange according to their values, but
at average prices, which differ from their values, and this,
moreover, is a consequence of the apparently contradictory
law, the determination of the value of commodities by
“labour-time”. If the raw product carried
a rent apart from and distinct from average profit, this
would only be possible if the raw product were not
sold at the average price and why this happens would then
have to be explained. But let us see how Rodbertus
operates.
“I have assumed that the
rent” (the surplus-value, the unpaid
labour-time) “is distributed according to the v a l
u e of the raw product and the manufactured product, and
that this value is determined by labour costs”
(labour-time) (pp. 96–97).
To begin with we must examine this first
assumption. In fact this just means that the
surplus-values contained in the commodities are in
the same proportion as their values, or, in other
words, the unpaid labour contained in the
commodities is proportionate to the total quantities of
labour they contain. If the quantity of
labour contained in the commodities A and B is as 3 : 1,
then the unpaid labour—or
surplus-values—contained in them is as 3 : 1.
Nothing could be further from the truth. Given the
necessary labour-time, for instance 10 hours, one commodity
may be the product of 30 workers while the other is the
product of 10. If the 30 workers only work 12 hours,
then the surplus-value created by them [amounts to] 60
hours, which is 5 days (5×12), and if the 10 [others]
work 16 hours a day, then the surplus-value created by them
is also 60 hours. According to this, the value of
product A would be 30×12 = 120×3 = 360 [working
hours] which is 30 working days <12 hours are 1 working
day>. And the value of commodity B would be equal
to 160 working hours which is 13 1/3
working days. The values of commodities A and B
[are as] 360 : 160, as 36 : 16, as 9 : 4, as 3 : 1
1/3. The surplus-values
contained in the commodities, however, are as 60 : 60 = 1 :
1. They are equal, although the values are as 3 : 1
1/3.
||466| [Firstly] therefore,
the surplus-values of the commodities are not proportionate
to their values, if the absolute surplus-values, the
extension of labour-time beyond the necessary labour, i.e.,
the rates of surplus-value, are different.
Secondly, assuming the rates of surplus-value to be the
same, and leaving aside other factors connected with
circulation and the reproductive process, then the
surplus-values are not dependent on the relative quantities
of labour contained in the two commodities, but on the
proportion of the part of capital laid out in wages to the
part which is laid out in constant capital, raw material and
machinery. And this proportion can be entirely
different with commodities of equal values, whether they be
“agricultural products” or “products of
manufacture”, which in any case has nothing to do with
this business, at least not on the face of it.
Rodbertus’s first assumption, that, if the values of
commodities are determined by labour-time, it follows that
the quantities of unpaid labour contained in various
commodities—or their surplus-values—are directly
related to their values is therefore fundamentally
wrong. It is therefore also incorrect to say that
“rent is distributed according
to the value of the raw product and the manufactured
product”, if “this value is determined by
labour costs”(pp. 96–97).
“Of course it follows from this that
the size of these portions of rent is not determined by the
size of the capital on which the gain is calculated,
but by the direct labour, whether it be agricultural
or manufacturing + that amount of labour which must be added
on account of the wear and tear of tools and machines”
(p. 97).
Wrong again. The volume of surplus-value (and in
this case surplus-value is the rent, since rent is
here regarded as the general term, as opposed to profit and
ground-rent) depends only on the immediate labour involved
and not on the depreciation of fixed capital. Just as
it does not depend on the value of the raw material or
indeed on any part of the constant capital.
The wear and tear does, of course, determine the rate at
which fixed capital must be reproduced. (At the same
time, its production depends on the formation of new
capital, on the accumulation of capital.) But the
surplus-labour which is performed in the production of fixed
capital does not affect the sphere of production into which
this fixed capital enters as such, any more than does the
surplus-labour which goes into the production of, say, the
raw materials. It is rather equally valid for all of
them, agriculture, production of machines and manufacture,
that their surplus-value is determined only by the amount of
labour employed, if the rate of surplus-value is given, and,
by the rate of surplus-value, if the amount of labour
employed is given. Herr Rodbertus seeks to “drag
in” wear and tear in order to chuck out “raw
materials”.
On the other hand, Herr Rodbertus maintains
that the size of the rent can never he influenced by
“that part of capital which consists of material
value”, since “for instance, the labour cost of
wool as a raw material cannot affect the labour cost of a
particular product such as yarn or fabric”
(p. 97).
The labour-time which is required for spinning and
weaving is as much, or rather as little, dependent on the
labour-time— i.e., the value—of the
machine, as it is on the labour-time which the raw material
costs. Both machine and raw material enter into the
labour process; neither of them enters into the process of
creating surplus-value.
“On the other hand, the value of the
primary product, or the material value, does figure as
capital outlay in the capital upon which the owner
has to calculate his gain, the part of the rent falling on
the manufactured product. But in agricultural
capital this part of capital is missing.
Agriculture does not require any material which is the
product of a previous production, in fact it actually begins
the production, and in agriculture, that part of the
property which is analogous with material, would be the land
itself, which is however assumed to be without cost”
(pp. 97–98).
This is the conception of the German peasant. In
agriculture (excluding mining, fishing, hunting but by no
means stock-raising) seeds, feeding stuffs, cattle,
mineral fertilisers etc. form the material for manufacturing
and this material ||467| is the
product of labour. This
“outlay” grows proportionately to the
development of industrialised agriculture. All
production—once we are no longer dealing with mere
taking and appropriating—is reproduction and hence
requires “the product of a previous production as
material”. Everything which is the result of
production is at the same time a prerequisite of
production. And the more large-scale agriculture
develops the more it buys products of “a previous
production” and sells its own. In agriculture
these expenses feature as commodities in a formal
sense—converted into commodities by being reckoned in
money—as soon as the farmer becomes at all dependent
on the sale of his product; as soon as the prices of various
agricultural products (like hay for example) have
established themselves, for division of the spheres of
production takes place in agriculture as well. Queer
things must be happening in the mind of a peasant if lie
reckons the quarter of wheat which he sells as
income, but does not reckon the quarter which he puts
into the soil as expenditure. Incidentally,
Herr Rodbertus ought to try somewhere to “begin the
production”, for instance of flax or silk, without
“products of a previous production”. This
is absolute nonsense.
And therefore also the rest of Rodbertus’s
conclusions:
“The two parts of capital that
influence the size of the rent are thus common to
agriculture and industry. The part of capital,
however, that does not influence the size of the
rent—but on which gain, i.e., the rent determined by
those parts of capital, is also calculated—is to be
found in industrial capital alone. According to the
assumption, the value of the raw product like that of the
manufactured product is dependent on labour cost and since
rent accrues to the owners of the primary product and of the
manufactured product proportionately to this value.
Therefore the rent yielded in raw material production and
industrial production is relative to the quantities of
labour which the respective product has cost, but the
capitals employed in agriculture and in industry, on which
the rent is distributed as gain—namely in
manufacture entirely, in agriculture according to the rate
of gain prevailing in manufacture—are not in
the same proportion as those quantities of labour and the
rent determined by them. Although an equal amount
of rent accrues to the primary product and to the industrial
product, industrial capital is larger than agricultural
capital by the entire value of the raw material it
contains. Since the value of this raw material
augments the industrial capital on which the available
rent is calculated as gain, but not the gain itself, and
thus simultaneously helps to lower the rate of capital
gain, which also prevails in agriculture, there
must necessarily be left over in agriculture a part of the
rent accruing there which is not absorbed by the
calculation of gain based on this rate of gain”
(pp. 98–99).
First wrong proposition: If industrial products
and agricultural products exchange according to their
values (i.e., in relation to the labour-time required
for their production), then they yield to their owners equal
amounts of surplus-value or quantities of unpaid
labour. Surplus-values are not proportional to
values.
Second wrong proposition: Since Rodbertus
presupposes a rate of profit (which he calls rate of
capital gain) the supposition that commodities exchange
in the proportion of t h e i r v a l u e s
is incorrect. One proposition excludes the
other. For a (general) rate of profit to exist,
the values of the commodities must have been
transformed into average prices or must be in the
process of transformation. The particular rates of
profit which are formed in every sphere of production on
the basis of the ratio of surplus-value to capital
advanced, are equalised in this general rate. Why
then not in agriculture? That is the question.
But Rodbertus does not even formulate this question
correctly, because firstly he presupposes that there
is a general rate of profit and secondly he
assumes that the particular rates of profit (hence
also their differences) are not equalised and thus
that commodities exchange at their values.
Third wrong proposition: The value of the raw material
does not enter into agriculture. Rather here, the
advances of seeds etc. are component parts of constant
capital and are calculated as such by the
farmer. To the same degree that agriculture becomes a
mere branch of industry—i.e., that capitalist
production is established on the land— ||468| to the degree to which
agriculture produces for the market, produces
commodities, articles for sale and not for its own
consumption—to the same degree it calculates its
outlay and regards each item of expenditure as a commodity,
whether it buys it from itself (i.e., from
production) or from a third person. The
elements of production naturally become commodities
to the same extent as the products do, because, after
all, these elements are those very same products.
Since wheat, hay, cattle, seeds of all kinds etc. are thus
sold as commodities—and, since this sale is the
essential thing, not their use as a means of
subsistence—they also enter into production as
commodities and the farmer would have to be a real
blockhead not to be able to use money as the unit of
account. This is, however, only the formal aspect of
the calculation. But simultaneously [the position]
develops [in such a way] that the farmer buys his
outlay, seeds, cattle, fertilisers, mineral
substances etc. while he sells his receipts, so that
for the individual farmer these advances are also advances
in the formal sense in that they are bought
commodities. (They have always been commodities
for him, component parts of his capital. And when he
has returned them, in kind, to production, he has regarded
them as sold to himself in his capacity as
producer.) Moreover, this takes place to the same
extent as agriculture develops and the final product is
produced increasingly by industrial methods and according to
the capitalist mode of production.
It is therefore wrong to say that there is a part of
capital which enters into industry but not into
agriculture.
Suppose then, according to Rodbertus’s (false)
proposition, that the “portions of rent”
(i.e., shares of surplus-value) yielded by the agricultural
product and the industrial product are given, and that they
are proportionate to the values of the agricultural
product and the industrial product. Supposing, in
other words, industrial products and agricultural products
of equal values yield equal surplus-values to
their owners, i.e., contain equal quantities of unpaid
labour, then no disparity arises owing to a part of
capital entering into industry (for raw material) which does
not enter into agriculture, so that, for instance, the same
surplus-value would be calculated in industry on a capital
augmented by this amount and hence result in a
smaller rate of profit. For the same item of
capital goes into agriculture. There only remains the
question of whether it does so in the same
proportion. But this brings us to mere
quantitative differences whereas Herr Rodbertus wants a
“qualitative” difference. These
same quantitative differences occur between different
industrial spheres of production. They
compensate one another in the general rate of profit.
Why not as between industry and agriculture (if there are
such differences)? Since Herr Rodbertus allows
agriculture to participate in the general rate of
profit, why not in the process of its formation?
But of course that would mean the end of his argument.
Fourth wrong proposition: It is wrong and
arbitrary of Rodbertus to include wear and tear of
machinery etc., that is an element of Constant
capital, in variable capital, that is, in the
part of capital which creates surplus-value and in
particular determines the rate of surplus-value, and at the
same time, not to include raw material. He
makes this accounting error in order to arrive at the
result he wanted from the outset.
Fifth wrong proposition: If Herr Rodbertus wants
to differentiate between agriculture and industry, then that
element of capital which consists of fixed capital
such as machinery and tools belongs entirely to
industry. This element of capital, in so far as
it becomes part of any capital, can only enter into
constant capital; and can never increase
surplus-value by a single farthing.
On the other hand, as a product of industry, it is
the result of a particular sphere of production. Its
price, or the value which it forms within the whole of
social capital, at the same time represents a certain
quantity of surplus-value (just as is the case with raw
material). Now it does enter into the agricultural
product, but it stems from industry. If Herr Rodbertus
reckons raw material to be an element of capital in industry
which comes from outside, then he must charge machines,
tools, vessels, buildings etc. as an element of capital in
agriculture, which comes from outside. He [must]
therefore say that industry comprises only wages and raw
materials (because fixed capital, in so far as it is not raw
materials, is a product of industry, its own product)
whereas agriculture comprises only wages ||469| and machinery etc., i.e.,
fixed capital, because raw material, in so far as it
is not embodied in tools etc., is the product of
agriculture. It would then be necessary to examine how
the absence of this “item” affects the account
in industry.
Sixthly: It is quite true that mining, fishing,
hunting, forestry (in so far as the trees have not been
planted by man) etc., in short, the extractive
industries—concerned with the extraction of raw
material that is not reproduced in kind—use
no raw materials, except auxiliary
materials. This does not apply to
agriculture.
But it is equally [true] that the same does hold
good for a very large part of industry, namely the
transport industry, in which outlay consists
only of machinery, auxiliary materials and wages.
Finally, there are certainly other branches of
industry, such as tailoring etc., which, relatively
speaking, only absorb raw materials and wages, but no
machinery, fixed capital etc.
In all these instances, the size of the profit,
i.e., the ratio of surplus-value to capital
advanced, would not depend on whether the advanced
capital—after deduction of variable capital, or the
part of capital spent on wages—consists of
machinery or raw material or both, but it would depend on
the magnitude of the capital advanced relative to the part
of the capital spent on wages. Different rates of
profit (apart from the modifications brought about by
circulation) would thus exist in the different spheres of
production, the result of their equalisation being the
general rate of profit.
Rodbertus surmises that there is a difference between
surplus-value and its special forms, in particular
profit. But he misses the point because, right from
the beginning, he is concerned with the explanation of a
particular phenomenon (ground rent) and not [with]
the establishment of a general law.
Reproduction occurs in all branches of production;
but only in agriculture does this industrial reproduction
coincide with natural reproduction. It does not do so
in extractive industry. That is why, in the
latter, the product does not in its natural form become an
element in its own reproduction (except in the form of
auxiliary material).
What distinguishes agriculture, stock-raising, etc. from
other industries is, firstly, not the fact that a
product becomes a means of production, since that happens to
all industrial products which have not the definite form of
individual means of subsistence. And even as such they
become means of production of the producer who
reproduces himself or maintains his labour-power by
consuming them.
Secondly, the difference is not the fact
that agricultural products enter into production as
commodities, i.e., as component parts of capital;
they go into production just as they come out of it.
They emerge from it as commodities and they re-enter it as
commodities. The commodity is both the prerequisite
and the result of capitalist production.
Hence thirdly, there only [remains] the
fact that they enter as their own means of production into
the production process whose product they are. This is
also the case with machinery. Machine builds
machine. Coal helps to raise coal from the
shaft. Coal transports coal etc. In agriculture
this appears as a natural process, guided by man, although
he also causes it to some extent. In the other
industries it appears to be a direct effect of industry.
But Herr Rodbertus is on the wrong track altogether if he
thinks that he must not allow agricultural products
to enter into reproduction as
“commodities” because of the peculiar way
in which they enter it as “use-values”
(technologically). He is evidently thinking of the
time when agriculture was not as yet a trade, when only the
excess of its production over what was consumed by
the producer became a commodity and when even those
products, in so far as they entered into production, were
not regarded as commodities. This is a
fundamental misunderstanding of the application of the
capitalist mode of production to industry. For the
capitalist mode of production, every product which has
value—and is therefore in itself a
commodity—also figures as a commodity in the
accounts.
[6. Rodbertus’s Lack of Understanding of the
Relationship Between Average Price and Value in Industry and
Agriculture. The Law of Average Prices]
Supposing, for example, that in the mining industry, the
constant capital, which consists purely of machinery,
amounts to £ 500 and that the capital laid out in
wages also amounts to £ 500. Then, if the
surplus-value is 40 per cent, i.e., £ 200, the profit
[would be] 20 per cent. Thus:
|
constant capital
|
variable capital
|
surplus-value
|
|
Machinery
|
|
|
|
500
|
500
|
200
|
If the same variable capital were laid out in those
branches of manufacture (or of agriculture) in which raw
materials play a part, and furthermore, if the utilisation
of this variable capital (i.e, the employment of this
particular number of workers) required machinery etc., to
the value of £ 500, then indeed a third element, the
value of the raw materials, would have to be added, say
again, £ 500. Hence in this case:
|
constant capital
|
|
variable capital
|
surplus-value
|
|
Machinery
|
|
Raw materials
|
|
|
|
|
500
|
+
|
500
|
= 1,000
|
500
|
200
|
The £ 200 would now have to be reckoned on £
1,500 and would only be 13 1/3 per
cent. This example would still apply, if in the first
case the transport industry had been quoted as an
illustration. On the other hand, the rate of profit
would remain the same in the second case if machinery cost
100 and raw materials 400.
||470| What, therefore, Herr
Rodbertus imagines is that in industry 100 are laid out in
machinery, 100 in wages and x in raw materials, whereas in
agriculture 100 are laid out in wages and 100 in
machinery. The scheme would be like this:
|
I. Agriculture
|
|
Constant capital
|
Variable capital
|
Surplus-value
|
Rate of profit
|
|
Machinery
|
|
|
|
|
100
|
100
|
50
|
50/200 =
1/4
|
|
II. Industry
|
|
Constant capital
|
|
Variable capital
|
Surplus-value
|
Rate of profit
|
|
Raw materials
|
Machinery
|
|
|
|
|
|
x
|
100
|
[=x+100]
|
100
|
50
|
50/200 + x
|
It must therefore be, at any rate, less than
1/4, Hence the rent in I.
Firstly then, this difference between agriculture
and manufacture is imaginary, non-existent: it has
no bearing on that form of rent which determines all
others.
Secondly, Herr Rodbertus could find this
difference between the rates of profit in any two individual
branches of industry. The difference is dependent on
the proportion of constant capital to variable
capital and the proportion in turn may or may not be
determined by the addition of raw materials. In those
branches of industry which use raw materials as well as
machinery, the value of the raw materials, i.e., the
relative share which they form of the total capital, is of
course very important, as I have shown earlier. This
has nothing to do with ground-rent.
“Only when the value of the raw
product falls below the cost of labour is it possible
that in agriculture too the whole portion of rent
accruing to the raw product is absorbed in the gain
calculated on capital. For then this portion of
rent may be so reduced that although agricultural capital
does not comprise the value of raw material, the ratio
between these two is similar to that existing between
the portion of rent accruing to the manufactured product and
the manufacturing capital, although the latter contains the
value of material, Hence only in those circumstances is it
possible that in agriculture too, no rent is left over
besides capital gain, But in so far as, in practice, as a
rule, conditions gravitate towards the law that value equals
labour cast, so, as a rule, ground-rent is also
present. The absence of rent and the existence of
nothing but capital gain, is not the original state of’
affairs, as Ricardo maintains, but only an exception”
(p. 100).
Thus, continuing with the above example; but taking raw
materials as £ 100, to have something tangible, we
get:
| I. Agriculture |
|
Constant capital
|
Variable capital
|
Surplus-value
|
Value
|
Price
|
Profit
|
|
|
Machinery
|
|
|
|
|
|
|
|
100
|
100
|
50
|
250
|
233 1/3
|
[331/3=] 162/3 per cent
|
|
II. Industry
|
|
Constant capital
|
Variable capital
|
Surplus-value
|
Value
|
Price
|
Profit
|
|
Raw materials
|
Machinery
|
|
|
|
|
|
|
100
|
100
|
100
|
50
|
350
|
350
|
50 = 162/3 per cent
|
Here the rate of profit in agriculture and industry would
be the same, therefore nothing would be left over for rent,
because the agricultural product is sold at £ 16
2/3 below its
value. Even if the example were as correct as
it is false for agriculture, then the circumstance
that the value of the raw product falls “below
the cost of labour” would in any case only correspond
to the law of average prices. Rather it needs
to be explained why “as an exception”
this is to a certain extent not the case in
agriculture and why here the total surplus-value (or at
least to a larger extent than in the other branches of
industry, a surplus above the average rate of profit)
remains in the price of the product of this
particular branch of production and does not participate
in. the formation of the general rate of profit.
It becomes evident here that Rodbertus does not understand
what the (general) rate of profit and the average price
are.
In order to make this law quite clear, and this is
far more important than Rodbertus, we shall take five
examples. We assume the rate of surplus-value to be
the same throughout.
It is not at all necessary to compare commodities of
equal value; they are to be compared only at their
value. To simplify matters, the commodities
compared here are taken as produced by capitals of equal
size.
||471|
|
|
Constant Capital
|
Variable Capital (wages)
|
Surplus-value
|
Rate of surplus-value
|
Profit
|
Rate of profit
|
Value of product
|
|
|
Machinery
|
Raw materials
|
|
I
|
100
|
700
|
200
|
100
|
50 per cent
|
100
|
10 per cent
|
1,100
|
|
II
|
500
|
100
|
400
|
200
|
50 per cent
|
200
|
20 per cent
|
1,200
|
|
III
|
50
|
350
|
600
|
300
|
50 per cent
|
300
|
30 per cent
|
1,300
|
|
IV
|
700
|
none
|
300
|
150
|
50 per cent
|
150
|
15 per cent
|
1,150
|
|
V
|
none
|
500
|
500
|
250
|
50 per cent
|
250
|
25 per cent
|
1,250
|
We have here, in the categories I, II, III, IV and V
(five different spheres of production), commodities whose
respective values are £ 1,100, £ 1,200,
£ 1,300, £ 1,150 and £ 1,250. These
are the money prices at which these commodities would
exchange if they were exchanged according to their
values. In all of them the capital advanced is
of the same size, namely £ 1,000. If
these commodities were exchanged at their values, then the
rate of profit in I would be only 10 per cent; in II, twice
as great, 20 per cent; in III, 30 per cent; in IV, 15 per
cent; in V, 25 per cent. If we add up these particular
rates of profit they come to 10 per cent+20 per cent+30 per
cent+15 per cent+25 per cent, which is 100 per cent.
If we consider the entire capital advanced in all five
spheres of production, then one portion of this (I) yields
10 per cent, another (II) 20 per cent etc. The average
yielded by the total capital equals the average yielded by
the five portions, and this is:
100 (the total sum of the rates of profit)/5
(the number of different rates of profit)
i.e., 20 per cent.
In fact we find that the £ 5,000 capital advanced
in the five spheres yield a profit of
100+200+300+150+250=1,000; 1,000 on 5,000 is
1/5 which is 20 per cent.
Similarly: if we work out the value of the total
product, it comes to £ 6,000 and the excess on the
£ 5,000 capital advanced is £ 1,000, which is 20
per cent in relation to the capital advanced, that is
1/6 or 16 2/3
per cent of the total product. (This again is
another calculation.) However, so that in fact each of
the capitals advanced, i.e., I, II, III etc.—or what
comes to the same thing, that capitals of equal
size—should receive a part of the surplus-value
yielded by the aggregate capital only in proportion to
their magnitude, i.e., only in proportion to the share they
represent in the aggregate capital advanced, each of
them should get only 20 per cent profit and each must get
this amount. ||472| But
to make this possible, the products of the various spheres
must in some cases be sold above their value and in
other cases more or less below their value. In
other words, the total surplus-value must be distributed
among them not in the proportion in which it is made in the
particular sphere of production, but in proportion to
the magnitude of the capitals advanced. All
must sell their product at £ 1,200, so that the excess
of the value of the product over the capital advanced is
1/5 of the latter, i.e., 20 per
cent.
According to this apportionment:
|
|
Value of Product
|
Surplus-value
|
Average price
|
[Relation of average price to value]
|
Relation of profit to surplus-value in per cent
|
Calculated Profit
|
|
I
|
1,100
|
100
|
1,200
|
Excess of average price over value 100
|
Excess of profit over surplus-value 100 per cent
|
200
|
|
II
|
1,200
|
200
|
1,200
|
Value equal to price 0
|
0
|
200
|
|
III
|
1,300
|
300
|
1,200
|
Decrease in average price below value 100
|
Decrease in profit below surplus-value
331/3 per cent
|
200
|
|
IV
|
1,150
|
150
|
1,200
|
Excess of price over value 50
|
Excess of profit over surplus-value 331/3 per cent
|
200
|
|
V
|
1,250
|
250
|
1,200
|
Excess of value over price 50
|
Excess of surplus-value over profit 25 per cent.
Decrease in profit below surplus-value 20 per cent
|
200
|
This shows that only in one instance (II) the average
price equals the value of the commodity, because by
coincidence, the surplus-value equals the normal
average profit of 200. In all other instances a
greater or a lesser amount of surplus-value is taken away
from one [sphere] and given to another, etc.
What Herr Rodbertus had to explain was, why this [is]
not the case in agriculture, hence [why] its
commodities should be sold at their value and not
their average price.
Competition brings about the equalisation of profits,
i.e., the reduction of the values of the commodities
to average prices. The individual capitalist,
according to Mr. Malthus, expects an equal profit from every
part of his capital—which, in other words,
means only that he regards each part of his capital (apart
from its organic function) as an independent source
of profit, that is how it seems to him.
Similarly, in relation to the class of capitalists, every
capitalist regards his capital as a source of profit
equal in volume to that which is being made by every
other capital of equal size. This means that
each capital in a particular sphere of production is only
regarded as part of the aggregate capital which has been
advanced to production as a whole and demands its share
in the total surplus-value, in the total amount of unpaid
labour or labour products—in proportion to its size,
its stock—in accordance to the proportion of the
aggregate capital it constitutes. This illusion
confirms for the capitalist—to whom everything in
competition appears in reverse—and not only for
him, but for some of his most devoted pharisees and scribes,
that capital is a source of income independent of
labour, since in fact the profit on capital in each
particular sphere of production is by no means solely
determined by the quantity of unpaid labour which it itself
“produces” and throws into the pot of
aggregate profits, from which the individual capitalists
draw their quota in proportion to their shares in the total
capital.
Hence Rodbertus’s nonsense. Incidentally, in some
branches of agriculture—such as
stock-raising—the variable capital, i.e., that which
is laid out in wages, is extraordinarily small compared with
the constant part of capital.
“Rent, by its very nature, is
always ground-rent” (p. 113).
Wrong. Rent is always paid to the landlord; that’s
all. However, if, as so often occurs in practice, it
is partially or wholly a deduction from normal profit or a
deduction from normal wages (true surplus-value, i.e.,
profit plus rent, is never a deduction f r o
m wages, but is that part of the product of the
worker which remains after deduction of the wage
from this product) then from an economic point of
view, it is not rent of land. In practice this is
proved as soon as ||473|
competition restores the normal Wage and the normal
profit.
Average prices, to which competition constantly
tends to reduce the values of commodities, are thus
achieved by constant additions to the value of
the product of one sphere of production and deductions
from the value of the product of another
sphere—except in the case of II in the above
table—in order to arrive at the general rate of
profit. With the commodities of the particular
sphere of production where the ratio of variable capital to
the total sum of capital advanced (assuming the rate of
surplus-labour to be given) corresponds to the average ratio
of social capital—value equals average price; neither
an addition to nor a deduction from value is
therefore made. If, however, owing to special
circumstances which we will not go into here, in certain
spheres of production a deduction is not made from
the value of the commodities (although it stands
above the average price, not just temporarily but on
an average) then this retention of the entire
surplus-value in a particular sphere of
production— although the value of the commodity
is above the average price and therefore yields a
rate of profit higher than the average—is to be
regarded as a privilege of that sphere of production.
What we are concerned with here and have to explain as a
peculiar feature, as an exception, is not that
the average price of commodities is reduced
below their value—this [would be] a general
phenomenon and a necessary prerequisite for
equalisation—but why, in contrast to other
commodities, certain commodities are sold at their
value, above the average price.
The average price of a commodity equals its cost of
production (the capital advanced in it, be it in wages,
raw material, machinery or whatever else) plus average
profit. Hence if, as in the above example, average
profit is 20 per cent which is 1/5,
then the average price of each commodity is C (the
capital advance) +P/C (the average rate of
profit). If C+P/C equals the value of
this commodity, i.e., if S, the surplus-value created
in this sphere of production, equals P, then the
value of the commodity equals its average price. If
C+P/C is smaller than the value of the
commodity, i.e., if the surplus-value S, created in
this sphere, is larger than P, then the value of the
commodity is reduced to its average price and part of
its surplus-value is added on to the value of other
commodities. Finally, if C+P/C is greater than
the value of the commodity, i.e., S is smaller
than P, then the value of the commodity is
raised to its average price and surplus-value created in
other spheres of production is added to it.
Finally, should there be commodities which are sold at
their value, although their value is greater than
C+P/C, or whose value is at any rate not reduced to
such an extent as to bring it down to the level of the
normal average price C+P/C, then certain conditions
must be operative, which put these commodities into an
exceptional position. In this case the profit realised
in these spheres of production stands above the
general rate of profit. If the capitalist receives the
general rate of profit here, the landlord can get the
excess profit in the form of rent.
[7. Rodbertus’s Erroneous Views Regarding the
Factors Which Determine the Rate of Profit and the Rate of
Rent]
What I call rate of profit and rate of interest or rate
of rent, Rodbertus calls
“Level of Profit on Capital and
Interest” (p. 113).
This level “depends on their ratio to
capital… In all civilised nations a capital of
100 is taken as a unit, which provides the standard
measurement for the level to be calculated. Thus, the
larger the figure that expresses the relation between the
gain or interest falling to the capital of 100, in other
words, the ‘more per cent’ a capital yields, the
higher are profit and interest”
(pp. 113–14).
“The level of ground-rent and of
rental follows from their proportion to a particular
piece of land” (p. 114).
This is bad. The rate of rent is, in the first
place, to be calculated on the capital, i.e., as the
excess of the price of a commodity over its
costs of production and over that part of the
price which forms the profit. Because it
helps him to understand certain phenomena Herr Rodbertus
makes the caculation with an acre or a morgen, the apparent
form of the thing, ||474| in
which the intrinsic connection is lost. The rent
yielded by an acre is the rental, the absolute amount of
rent. It may rise if the rate of rent remains the
same or is even lowered.
“The level of the value of
land follows from the capitalisation of the rent of a
particular piece of land, The greater the amount of capital
derived from the capitalisation of the rent of a piece of
land of a given area, the higher is the value of the
land” (p. 114).
The word “level” is nonsense here. For
to what does it express a relationship? That 10 per
cent yields more than 20 is obvious; but the unit of
measurement here is 100. Altogether the
“level of the value of land” is the same
general phrase as the high or low level of
commodity prices in general.
Herr Rodbertus now wants to investigate:
“What then determines the level of
capital profit and of ground-rent?” (p. 115)
[a) Rodbertus’s First Thesis]
First of all he examines: What determines “the
level of rent in general”, i.e., what regulates
the rate of surplus-value?
“I) With a given value of a product,
or a product of a given quantity of labour or, which again
amounts to the same thing, with a given national product,
the level of rent in general bears an inverse
relationship to the level of wages and a direct relationship
to the level of productivity of labour in general. The
lower the wages, the higher the rent; the higher the
productivity of labour in general, the lower the wages and
the higher the rent” (pp. 115–16).
The “level” of
rent—the rate of surplus-value—says Rodbertus,
depends upon the “size of this portion left
over for rent” (p. 117), i.e., after deducting wages
from the total product, in which “that part of
the value of the product which serves as replacement
of capital…can be disregarded” (p. 117).
This is good (I mean that in this consideration of
surplus-value the constant part of capital is
“disregarded”).
The following is a somewhat peculiar notion:
“when wages fall, i.e., from now on
form a smaller share of the total value of the product, the
aggregate capital on which the other part of
rent” <i.e., the industrial profit>
“is to be calculated as profit, becomes smaller.
Now it is, however, solely the ratio between the value that
becomes capital profit or ground-rent, and the capital, or
the land area on which it has to he calculated as
such, which determines the level of profit and
rent. Thus if wages allow a greater value to be left
over for rent, a greater value is to be reckoned as profit
and ground-rent, even with a diminished capital and
the same area of land. The resulting ratio of both
increases and, therefore, the two together, or rent in
general, has risen… It is assumed that the value
of the product remains the same… Because the
wage, which the labour costs, diminishes, the labour, which
the product costs, does not necessarily diminish”
(pp. 117–18).
The last bit is good. But it is incorrect to say
that when the variable capital that is laid out in wages
decreases, the constant capital must diminish.
In other words, it is not true that the rate of
profit <the quite inappropriate reference to area of
land etc. is omitted here) must rise because the rate of
surplus-value rises. For instance, wages fall
because labour becomes more productive and in all cases this
expresses itself in more raw material being worked up by the
same worker in the same period of time; this part of
constant capital therefore grows, ditto machinery and its
value. Hence the rate of profit can fall with the
reduction in wages. The rate of profit is
dependent on the amount of surplus-value, which is
determined not only by the rate of surplus-value, but also
(by] the number of workers employed.
Rodbertus correctly defines the necessary wage as equal
to
“the amount of necessary
subsistence, that is to a fairly stable definite quantity of
material products for a particular country and a
particular period” (p. 118).
||475| Herr Rodbertus then
puts forward in a most intricately confused,
complicated and clumsy fashion, the propositions set up by
Ricardo on the inverse relationship of profit and wages and
the determination of this relationship by the productivity
of labour. The confusion arises partly because,
instead of taking labour-time as his measure, he foolishly
takes quantities of product and makes non-sensical
differentiations between “level of the value of the
product” and “magnitude of the value of
the product”.
By “level of the value of the product”
this stripling means nothing other than the relation of the
product to the labour-time. If the same amount
of labour-time yields many products then the value of the
product, i.e., the value of separate portions of the
product is low, if the reverse, then the reverse. If
one working-day yielded 100 lbs. yarn and later 200
lbs. then in the second case the value of the yarn would be
half what it was in the first. In the first case its
value is 1/100 of a working-day; in
the second, the value of the lb. of yarn is
1/200 of a working-day. Since
the worker receives the same amount of product, whether its
value be high or low, i.e., whether it
contains more or less labour, wages and profit move
inversely, and wages take more or less of the total product,
according to the productivity of labour. He expresses
this in the following intricate sentences:
“…if the wage, as necessary
subsistence, is a definite quantity of material products,
then, if the value of the product is high, the wage must
have a high value, if it is low, it must constitute a low
value and, since the value of the product available for
distribution is assumed as constant, the wage will absorb a
large part if the value of the product is high, a small part
of it, if its value is low and finally, it will therefore
leave either a large or a small share of the value of the
product for rent. But if one accepts the rule that the
value of the product equals the quantity of labour which it
cost, then the level of the value of the product is
again determined purely by the productivity of labour or
the relationship between the amount of product and the
quantity of labour which is used for its production…if
the same quantity of labour brings forth more product, in
other words, if productivity increases, then the same
quantity of product contains less labour and conversely, if
the same quantity of labour brings forth less product, in
other words, if productivity decreases, then the same
quantity of product contains more labour. But the
quantity of labour determines the value of the
product and the relative value of a particular
quantity of product determines the level of
the value of the product… Hence
“the higher the productivity of labour in general,
the higher” must “be rent in general”
(pp. 119–20).
But this is only correct if the product, for whose
production the worker is employed, belongs to that species
which—according to tradition or
necessity—figures in his consumption as a means of
subsistence. If this is not the case, then the
productivity of this labour has no effect on the relative
height of wages and of profit, or on the amount of
surplus-value in general. The same share in the
value of the total product falls to the worker as wages,
irrespective of the number of products or the quantity of
the product in which this share is expressed. The
division of the value of the product in this case is
not altered by any change in the productivity of labour.
[b) Rodbertus’s Second Thesis]
“II) If with a given value of the
product, the level of rent in general is given, then the
level of ground-rent and of capital profit, bear an inverse
relationship to one another, and also to the productivity of
extractive labour and manufacturing labour
respectively. The higher or lower the rent, the lower
or higher the capital profit and vice versa; the higher or
lower the productivity of extractive labour or of
manufacturing labour, the lower or higher the rent or
capital profit, and alternately also the higher or lower is
the capital profit or rent” (p. 116).
First ([in thesis] I) we had the Ricardian (law] that
wages and profit are related inversely.
Now the second Ricardian [law]—differently evolved
or, rather, “made involved”— that profit
and rent have an inverse relation.
It is obvious, that when a given surplus-value is
divided between capitalist and landowner, then the larger
the share of one, the smaller will be that of the other and
vice versa. But Herr Rodbertus adds something of his
own which requires closer examination.
In the first place, Herr Rodbertus regards it as a new
discovery that surplus-value in general (“the
value of the product of labour which is in fact
available for sharing out as rent”>, the entire
surplus-value filched by the capitalist,
“consists of the value of the raw product+the value of
the manufactured product” (p. 120).
Herr Rodbertus first reiterates his
“discovery” of the absence of “the value
of the material” in ||476| agriculture. This time
in the following flood of words:
“That portion of rent which accrues
to the manufactured product and determines the rate of
capital profit is reckoned as profit not only on the capital
which is actually used for the production of this product
but also on the whole of the raw product value which figures
as value of the material in the capital fund
of the manufacturer. On the other hand, as regards
that portion of rent which accrues to the raw product and
from which the profit on the capital used in raw material
production is calculated according to the given rate
of profit in manufacture” (yes! given rate
of profit!) “leaving a remainder for ground-rent, such
a material value is missing” (p. 121).
We repeat: quod non!
Assume that a ground-rent exists—which Herr
Rodbertus has not proved and cannot prove by his
method—that is to say, a certain portion of the
surplus-value of the raw product falls to the landlord.
Further assume that: “the level of rent in
general” (the rate of surplus-value) “in
a particular value of the product is also given” (p.
121). This amounts to the following: For instance, in
a commodity of £ 100, say half, £ 50, is unpaid
labour; this then forms the fund from which all categories
of surplus-value, rent, profit etc. are paid. Then it
is quite evident that one shareholder in the £ 50 will
draw the more, the less is drawn by the other and vice
versa, or that profit and rent are inversely
proportional. Now the question is, what determines the
apportionment between the two?
In any case it remains true that the revenue of the
manufacturer (be he agriculturist or industrialist) equals
the surplus-value which he draws from the sale of his
manufactured product (which he has pilfered from the workers
in his sphere of production), and that rent of land (where
it does not, as with the waterfall which is sold to
the industrialist, stem directly from the manufactured
product, which is also the case with rent for
houses etc., since houses can hardly be termed raw
product) only arises from the excess profit (that part
of surplus-value which does not enter into the general rate
of profit) which is contained in the raw products and which
the farmer pays over to the landlord.
It is quite true that when the value of the raw product
rises [or falls], the rate of profit in those branches of
industry which use raw material will rise or fall inversely
to the value of the raw product. As I showed in a
previous example, if the value of cotton doubles, then with
a given wage and a given rate of surplus-value, the rate of
profit will fall. The same applies however to
agriculture. If the harvest is poor and production is
to be continued on the same scale (we assume here that the
commodities are sold at their value) then a greater
part of the total product or of its value would have to be
returned to the soil and after deducting wages, if these
remain stationary, the farmer’s surplus-value would consist
of a smaller quantity of product, hence also a smaller
quantity of value would be available for sharing out between
him and the landlord. Although the individual product
would have a higher value than before, not only the amount
of product, but also the remaining portion of value
would be smaller. It would be a different matter if,
as a result of demand, the product rose above its
value, and to such an extent that a smaller quantity of
product had a higher price than a larger quantity of
product did before. But this would be contrary
to our stipulation that the products are sold at their
value.
Let us assume the opposite. Supposing he cotton
harvest is twice as rich and that that part of it which is
returned direct to the soil, for instance as fertiliser and
seed, costs less than before. In this case the portion
of value which is left for the cotton-grower after deduction
of wages is greater than before. The rate of profit
would rise here just as in the cotton industry. True,
in one yard of calico, the proportion of value formed by the
raw product would now be smaller than before and [that]
formed by the manufacturing process would be larger.
Assume that calico costs 2s. a yard when the value of the
cotton it contains is 1s. Now if cotton goes down from
1s. to 6d., (which, on the assumption that its value
equals its price, is only possible because its cultivation
has become more productive) then the value of a yard of
calico is 18d. It has decreased by a quarter which is
25 per cent. But where the cotton-grower previously
sold 100 lbs. at is., he is now supposed to sell 200 at
6d. Previously the value [was] 100s.; now too it is
100s. Although previously cotton formed a greater
proportion of the value of the product—and the rate of
surplus-value in cotton growing itself decreased
simultaneously—the cotton-grower obtained only 50
yds. of calico for his 100s. cotton at 1s. per lb.; now that
the lb. [is sold] at 6d., he receives 66
2/3 yds, for his 100s.
On the assumption that the commodities are sold at their
value, it is wrong to say that the revenue of the
producers who take part in the production of the product is
necessarily dependent on the portion of value ||477| represented by their products
in the total value of the product.
Let the value of the total product of all manufactured
commodities, including machinery, be £ 300 in one
branch, 900 in another and 1,800 in a third.
If it is true to say that the proportion in which the
value of the whole product is divided between the value of
the raw product and the value of the manufactured product
determines the proportion in which the
surplus-value—the rent, as Rodbertus says—is
divided into profit and ground-rent, then this must also be
true of different products in different spheres of
production where raw material and manufactured products
participate in varying proportions.
Suppose out of a value of £ 900, manufactured
product accounts for £ 300 and raw material for
£ 600, and that £ 1 equals 1 working-day.
Furthermore, the rate of surplus-value is given as,
say, 2 hours on 10, with a normal working-day of 12 hours,
then the £ 300 [manufactured product] embodies 300
working-days, and the £ 600 [raw product] twice as
much, i.e., 2×300. The amount of surplus-value
in the one is 600 hours, in the other 1,200. This only
means that, given the rate of surplus-value, its
volume depends on the number of workers or the number
of workers employed simultaneously. Furthermore, since
it has been assumed (not proved) that of the
surplus-value which enters into the value of the
agricultural product a portion falls to the landlord as
rent, it would follow that in fact the amount of
ground-rent grows in the same proportion as the value of
the agricultural product compared with the
“manufactured product” .
In the above example the ratio of the agricultural
product to the manufactured product is as 2:1, i.e.,
600:300. Suppose [in another case] it is as
300:600. Since the rent depends on the surplus-value
contained in the agricultural product, it is clear that if
this [amounts to] 1,200 hours in the first case as against
600 in the second, and if the rent constitutes a
certain part of this surplus-value, it must be
greater in the first case than in the second.
Or—the larger the portion of value which the
agricultural product forms in the value of the total
product, the larger will be its share in the
surplus-value of the whole product, for every portion
of the value of the product contains a certain portion of
surplus-value and the larger the share in the
surplus-value of the whole product which falls to the
agricultural product, the larger will be the rent, since
rent represents a definite proportion of the
surplus-value of the agricultural product.
Let the rent be one-tenth of the agricultural
surplus-value, then it is 120 [hours] if the value of the
agricultural product is £ 600 out of the £ 900
and only 60 [hours] if it is £ 300. According to
this, the volume of rent would in fact alter with the
amount of the value of the agricultural product, hence also
with the relative value of the agricultural product in
relation to the manufactured product. But the
“level” of the rent and of the
profit— their rates—would have absolutely
nothing to do with it whatsoever. In the first
case the value of the product is £ 900 of which
£ 300 is manufactured product and £ 600
agricultural product. Of this, 600 hours surplus-value
accrue to the manufactured product and 1,200 to the
agricultural product. Altogether 1,800 hours. Of
these, 120 go to rent and 1,680 to profit. In the
second case the value of the product is £ 900, of
which £ 600 is manufactured product and £ 300
agricultural product. Thus 1,200 [hours] surplus-value
for manufacture and 600 for agriculture. Altogether
1,800. Of this 60 go to rent and 1,200 to profit for
manufacture and 540 for agriculture. Altogether
1,740. In the second case, the manufactured product is
twice as great as the agricultural product (in terms of
value). In the first case the position is
reversed. In the second case the rent is 60, in the
first it is 120. It has simply grown in the same
proportion as the value of the agricultural product.
As the volume of the latter increased so the volume of the
rent increased. If we consider the total
surplus-value, 1,800, then in the first case the rent is
1/15 and in the second it is
1/30.
If here with the increased portion of value that
falls to agricultural product the volume of rent also
rises and with this, its volume, increases its
proportional share in the total
surplus-value—i.e., the rate at which
surplus-value accrues to rent also rises compared to that at
which it accrues to profit—then this is only so,
because Rodbertus assumes that rent participates
in the surplus-value of the agricultural product in
a d e f i n i t e p r o p o r t i o n.
Indeed this must be so, if this fact is given or
presupposed. But the fact itself by no means
follows from the rubbish which Rodbertus pours forth about
the “value of the material” and which I have
already cited above at the beginning of page 476.
But the level of the rent does not rise in
proportion to the [surplus-value in the] product in
which it participates, because now, as before, this
[proportion is] one-tenth; its volume grows because
the product grows, and because it grows in volume,
without a rise in its “level”, its
“level” rises in comparison with the quantity of
profit or the share of profit in the ||4781 value of the
total product. Because it is presupposed that a
greater part of the value of the total product yields
rent, i.e., a greater part of surplus-value is
turned into rent, that part of surplus-value which is
converted into rent is of course greater. This has
absolutely nothing to do with the “value of the
material”, But that a
“greater rent” at the
same time represents a “higher rent”,
“because the area or number of acres on which it is
calculated remains the same and hence a greater amount of
value falls to the individual acre” (p. 122)
is ridiculous. It amounts to measuring the
“level” of rent by a “standard of
measurement” that obviates the difficulties of the
problem itself.
Since we do not know as yet what rent is, had we put the
above example differently and had left the same rate of
profit for the agricultural product as for the
manufactured product, only adding on one-tenth for rent,
which is really necessary since the same rate of
profit is assumed, then the whole business would look
different and become clearer.
|
|
Manufactured product
|
Agricultural product
|
|
|
I
|
£600 [7,200 hours]
|
£300 [3,600 hours]
|
1,200 [hours] surplus-value for manufacture, 600 for agriculture and 60 for rent. Altogether 1,860 [hours; of these] 1,800 for profit.
|
|
II
|
£300 [3,600 hours]
|
£600 [7,200 hours]
|
600 [hours] surplus-value for manufacture, 1,200 for agriculture and 120 for rent. Altogether 1,920 [hours; of these] 1,800 for profit.
|
In case II the rent is twice that in I because the
agricultural product, the share of the value of the product
on which it sponges, has grown in proportion to the
industrial product. The volume of profit remains the
same in both cases, i.e., 1,800. In the first case
(the rent] is 1/31 of the total
surplus-value, in the second case it is
1/16
If Rodbertus wants to charge the “value of the
material” exclusively to industry, then above all, it
should have been his duty to burden agriculture alone with
that part of constant capital which consists of machinery,
etc. This part of capital enters into agriculture as a
product supplied to it by industry— as a
“manufactured product”, which forms the means of
production for the “raw product”.
Since we are dealing here with an account between two
firms, so far as industry is concerned, that part of the
value of the machinery which consists of “raw
material” is already debited to it under the
heading of “raw material” or “value of the
material”. We cannot therefore book this twice
over. The other portion of value of the
machinery used in manufacture, consists of added
“manufacturing labour” (past and present) and
this resolves into wages and profit (paid and unpaid
labour). That part of capital which has been advanced
here (apart from that contained in the raw material of the
machines) therefore consists only of wages.
Hence it increases not only the amount of capital advanced,
but also the profit, the volume of surplus-value to be
calculated upon this capital.
(The error usually made in such calculations is that, for
instance, the wear and tear of the machinery or of the tools
used is embodied in the machine itself, in its value and
although, in the last analysis, this wear and tear can be
reduced to labour— either labour contained in
the raw material or that which transformed the raw material
into machine, etc.—this past labour never again
enters into profit or wages, but only acts as a produced
condition of production (in so far as the necessary
labour-time for reproduction does not alter) which, whatever
its use-value in the labour-process, only figures as value
of constant capital, in the process of creating
surplus-value. This is of great importance and has
already been explained in the course of my examination of
the exchange of constant capital and revenue. But
apart from this, it needs to be further developed in the
section on the accumulation of capital.)
So far as agriculture is concerned—that is, purely
the production of raw products or so-called primary
production—in balancing the accounts between the
firms “primary production” and
“manufacture” that part of the value of
constant capital which represents machinery, tools, etc.,
can on no account be regarded in any other way than as an
item which enters into agricultural capital without
increasing its surplus-value. If, as a result
of the employment of machinery etc., agricultural labour
becomes more productive, the higher the price of this
machinery etc., the smaller will be the increase in
productivity. It is the use-value of the machinery and
not its value which increases the productivity of
agricultural labour or of any other sort of labour.
Otherwise one might also say that the productivity of
industrial labour is, in the first place, due to the
presence of raw material and its properties. But again
it is the use-value of the raw material, not its value,
which constitutes a condition of production for
industry. Its value, on the contrary, is a
drawback. Thus what Herr Rodbertus says about the
“value of the material” in respect to the
industrial capital, is literally, ||479| mutatis mutandis valid
for machinery etc.
“For instance the labour costs
of a particular product, such as w h e a t or
cotton, cannot be affected by the labour costs of t h
e p l o u g h o r g i n a s m
a c h i n e s” (or the labour costs of a drainage
canal or stable buildings). “On the other hand,
the value of the m a c h i n e or the m a
c h i n e v a l u e does figure in the amount of
capital on which the owner has to calculate his gain, the
rent that falls to the r a w p r o d u c
t.” (Cf. Rodbertus, p. 97.)
In other words: That portion of the value of wheat and
cotton representing the value of the wear and tear of the
plough or gin, is not the result of the work of ploughing or
of separating the cotton fibre from its seed, but the result
of the labour which manufactured the plough and the
gin. This component part of value goes into the
agricultural product without being produced in
agriculture. It only passes through agriculture, which
uses it merely to replace ploughs and gins by buying new
ones from the maker of machines.
The machines, tools, buildings and other manufactured
products required in agriculture consist of two component
parts : 1. the raw materials of these manufactured
products [2. the labour added to the raw
materials.] Although these raw materials are the
product of agriculture, they are a part of its product which
never enters into wages or into profit. Even if there
were no capitalist, the farmer still could not chalk up this
part of his product as wages for himself. He would in
fact have to hand it over gratis to the machine
manufacturer so that the latter would make him a machine
from it and besides he would have to pay for the labour
which is added to this raw material (equal to wages plus
profit). This happens in reality. The machine
maker buys the raw material but in purchasing the machine,
agricultural producer must buy back the raw material.
It is just as if he had not sold it at all, but had lent it
to the machine maker to give it the form of the
machine. Thus that portion of the value of the
machinery employed in agriculture which resolves into
raw material, although it is the product of agricultural
labour and forms part of its value, belongs to production
and not to the producer, it therefore figures in his
expenses, like seed. The other part, however,
represents the manufacturing labour embodied in the
machinery and is a “product of manufacture”
which enters into agriculture as a means of production, just
as raw material enters as a means of production into
industry.
Thus, if it is true that the firm “primary
production” supplies the firm “manufacturing
industry” with the “value of the material”
which enters as an item into the capital of the
industrialist, then it is no less true that the firm
“manufacturing industry” supplies the firm
“primary production” with the value of the
machinery which enters wholly (including that part which
consists of raw material) into the farmer’s capital
without this “component part of value” yielding
him any surplus-value. This circumstance is a reason
why the rate of profit appears to be smaller in
“high agriculture”, as the English call it, than
in primitive agriculture, although the rate of surplus-value
is greater.
At the same time this supplies Herr Rodbertus with
striking proof of how irrelevant it is to the nature of a
capital advance, whether that portion of the product
which is laid out in constant capital is replaced in kind
and therefore only accounted for as a commodity—as
money value—or whether it has really been alienated
and has gone through the process of purchase and sale.
Supposing the producer of raw materials handed over gratis
to the machine builder the iron, copper, wood etc., embodied
in his machine, so that the machine builder in selling him
the machine would charge him for the added labour and the
wear and tear of his own machine, then this machine would
cost the agriculturist just as much as it costs him now and
the same component part of value would figure as
constant capital, as an advance, in his production.
Just as it amounts to the same thing whether a farmer sells
the whole of his harvest and buys seed from elsewhere with
that portion of its value which rep-resents seed (raw
material) perhaps to effect a desirable change in the type
of seed and to prevent degeneration by inbreeding— or
whether he deducts this component part of value directly
from his product and returns it to the soil.
But in order to arrive at his results, Herr Rodbertus
misinterprets that part of constant capital which consists
of machinery.
A second aspect that has to be examined in connection
with [case] II of Herr Rodbertus is this: He speaks of the
manufactured and agricultural products which make up the
revenue, which is something quite different from
those manufactured and agricultural products which make up
the total annual product. Now supposing it were
correct to say of the latter that after deducting the whole
of that part of the agricultural capital which consists of
machinery etc. ||480| and that
part of the agricultural product which is returned direct to
agricultural production, the proportion in which the
surplus-value is distributed between farmer and
manufacturer—and therefore also the proportion in
which the surplus-value accruing to the farmer is
distributed between himself and the landlord—must be
determined by the share of manufacture and of agriculture in
the total value of the products; then it is still highly
questionable whether this is correct if we are speaking of
those products which form the common fund of
revenue. Revenue (we exclude here that part which
is reconverted into new capital) consists of products
which go into individual consumption and the question is,
how much do the capitalists, farmers and landlords draw out
of this pot. Is this quota determined by the share of
manufacture and raw production in the value of the
product that constitutes revenue? Or by the quotas in
which the value of the total revenue is divisible into
agricultural labour and manufacturing labour?
The mass of products which make up revenue, as I have
demonstrated earlier, does not contain any products that
enter into production as instruments of labour (machinery),
auxiliary material, semi-finished goods and the raw material
of semi-finished goods, which form a part of the annual
product of labour. Not only the constant
capital of primary production is excluded but also the
constant capital of the machine makers and the entire
constant capital of the farmer and the capitalist which does
not enter into the process of the creation of value
though it enters into the labour-process. Furthermore,
it excludes not only constant capital, but also the part of
the unconsumable products that represents the revenue
of their producers and enters into the capital of the
producers of products consumable as revenue, for the
replacement of their used up constant capital.
The mass of products on which the revenue is spent
and which in fact represents that part of wealth which
constitutes revenue, in terms of both use-value and
exchange-value—this mass of products can, as I
have demonstrated earlier, be regarded as consisting only of
newly-added (during the year) labour.
Hence it can be resolved only into revenue, i.e., wages and
profit (which again splits up into profit, rent,
taxes, etc.), since not a single particle of it contains
any of the value of the raw material which goes into
production or of the wear and tear of the machinery which
goes into production, in a word, it contains none of the
value of the means of production. Leaving aside the
derivative forms of revenue because they merely show that
the owner of the revenue relinquishes his proportional share
of the said products to another, be it for services etc. or
debt etc.—let us consider this revenue and assume that
wages form a third of it, profit a third and rent a third
and that the value of the product is £ 90. Then
each will be able to draw the equivalent of £ 30 worth
of products from the whole amount.
Since the amount of products which forms the revenue
consists only of newly-added (i.e., added during the
year) labour, it seems very simple that if the product
contains two-thirds agricultural labour and one-third
manufacturing labour, then manufacturers and agriculturists
will share the value in this proportion. One-third of
the value would fall to the manufacturers and two-thirds to
the agriculturists and the proportional amount of the
surplus-value realised in manufacture and agriculture (the
same rate of surplus-value is assumed in both) would
correspond to these shares of manufacture and agriculture in
the value of the total product. But rent again [would]
grow in proportion to the farmer’s volume of profit since it
sits on it like a parasite. And yet this is
wrong. Because a part of the value which consists of
agricultural labour forms the revenue of the
manufacturers of that fixed capital etc., which replaces the
fixed capital worn out in agriculture. Thus the ratio
between agricultural labour and manufacturing labour in the
component parts of value of those products which
constitute the revenue, in no way indicates the
ratio in which the value of this mass of products or
this mass of products itself is distributed between the
manufacturers and the farmers, neither does it indicate the
ratio in which manufacture and agriculture
participate in total production.
Rodbertus goes on to say:
“But again it is only the
productivity of labour in primary production or manufacture,
which determines the relative level of the value of the
primary product and manufactured product or their respective
shares in the value of the total product. The value of
the primary product will be the higher, the lower the
productivity of labour in primary production and vice
versa. In the same way, the value of the manufactured
product will be the higher, the lower the productivity in
manufacture and vice versa. Since a high value of the
raw product effects a high ground-rent and low capital gain,
and a high value of the manufactured product effects a high
capital gain and low ground-rent, if the level of rent in
general is given, the level of ground-rent and of capital
gain must not only bear an inverse relationship to one
another, but also to the productivity of their respective
labour, that in primary production and that in
manufacture” (p. 123).
If the productivity of two different spheres of
production is to be compared, this can only be done
relatively. In other words, one starts at any
arbitrary point, for instance, when the values of hemp and
linen, i.e., the correlative quantities of labour-time
embodied in them, are as 1:3. If this ratio alters,
then it is correct to say that the’ productivity of
these different types of labour has altered. But it is
wrong to say that because the labour-time required for the
production of an ounce of gold ||481| equals three and that for a
ton of iron also equals three, gold production is
“less productive” than iron production.
The relative value of two commodities shows that the one
costs more labour-time than the other; but one cannot say
that because of this one branch is “more
productive” than the other. This would only be
correct if the labour-time were used for the production of
the same use-values in both instances.
It would be entirely wrong to say that manufacture is
three times as productive as agriculture if the value of the
raw product is to that of the manufactured product as
3:1. Only if the ratio changes say to 4:1 or 3:2 or
2:1, i.e., when it rises or falls, could one say that
the relative productivity in the two branches has
altered.
[c) Rodbertus’s Third Thesis]
III) “The level of capital
gain is solely determined by the level of the value
of the product in general and by the level of the value
of the raw product and the manufactured product in
particular; or by the productivity of labour in general and
by the productivity of labour employed in the production of
raw materials and of manufactured goods in particular.
The level of ground-rent is, apart from this, also
dependent on the magnitude of the value of the
product or the quantity of labour, or productive
power, which, with a given state of productivity,
is used for production” (pp. 116–17).
In other words: The rate of profit depends solely
on the rate of surplus-value and this is determined
solely by the productivity of labour. On the
other hand, given the productivity of labour, the rate of
ground-rent also depends on the amount of labour
(the number of workers) employed.
This assertion contains almost as many falsehoods as
words. Firstly the rate of profit is by
no means solely determined by the rate of
surplus-value. But more about this shortly.
First of all, it is wrong to say that the rate of
surplus-value depends solely on the productivity of
labour. Given the productivity of labour, the
rate of surplus-value alters according to the length of
the surplus labour-time. Hence the rate of
surplus-value depends not only on the productivity of labour
but also on the quantity of labour employed because
the quantity of unpaid labour can grow (while
productivity remains constant) without the quantity of
paid labour, i.e., that part of capital laid out in
wages, growing. Surplus-value—absolute or
relative (and Rodbertus only knows the latter from
Ricardo)—cannot exist unless labour is at least
sufficiently productive to leave over some sur-plus
labour-time apart from that required for the worker s own
reproduction. But assuming this to be the case,
with a given minimum productivity, then the rate of
surplus-value alters according to the length of surplus
labour-time.
Firstly, therefore, it is wrong to say that
because the rate of surplus-value is solely determined by
the productivity of the labour exploited by capital, the
rate of profit or the “level of capital
gain” is so determined. Secondly: The
rate of surplus-value—which, if the
productivity of labour is given, alters with the
length of the working-day and, with a given normal
working-day, alters with the productivity of
labour—is assumed to be given.
Surplus-value itself will then vary according to the
number of workers from whose every working-day a
certain quantity of surplus-value is extorted, or according
to the volume of variable capital expended on
wages. The rate of profit, on the other hand,
depends on the ratio of this surplus-value [to] the
variable capital plus the constant capital. If the
rate of surplus-value is given, the amount
of surplus-value does indeed depend on the amount of
variable capital, but the level of profit, the
rate of profit, depends on the ratio of this
surplus-value to the total capital advanced. In this
case the rate of profit will thus be determined by the price
of the raw material (if such exists in this branch of
industry) and the value of machinery of a particular
efficiency.
Hence what Rodbertus says is fundamentally wrong:
“Thus, as the amount of capital gain
increases consequent upon the increase in product value, so
also in the same proportion increases the amount of capital
value on which the gain has to be reckoned, and the hitherto
existing ratio between gain and capital is not altered at
all by this increase in capital gain” (p. 125).
This is only valid if it [signifies] the tautology
that: given the rate of profit <very different
from the rate of surplus-value and surplus-value
itself.>, the amount of capital employed is
immaterial, precisely because the rate of profit is
assumed to be constant. But as a rule the rate
of profit can increase although the productivity of
labour remains constant, or it can fall even
though the productivity of labour rises and rises moreover
in every department.
And now again the silly remark <pp. 125–26> about
ground-rent, the assertion that the mere increase of rent
raises its rate, because in every country’ it is
calculated on the basis of an “unalterable number of
acres” (p. 126). If the volume of profit grows
(given the rate of profit), then the amount of
capital from which it is drawn, grows. On the other
hand, if rent increases, then [according to Rodbertus] only
one factor changes, namely rent itself, while its standard
of measurement, “the number of acres”, remains
unalterably fixed.
||482| “Hence rent can
rise for a reason which enters into the economic development
of society everywhere, namely the increase in labour used
for production, in other words, the increasing
population. This does not necessarily have to
he followed by a rise in the raw product value since
the drawing of rent from a greater quantity of
primary product must already have this effect”
(p. 127).
On p.128, Rodbertus makes the strange discovery that even
if the value of the raw product fell below its normal
level, causing rent to disappear completely, it would be
impossible
“for capital gain ever to amount
to 100 per cent” (i.e., if the commodity is sold
at its value) “however high it may be, it must always
amount to considerably less” (p. 128).
And why?
“Because it” (the capital gain)
“is merely the result of the division of the value of
the product. It must, accordingly, always he a
fraction of this unit” (pp. 127–28).
This, Herr Rodbertus, depends entirely upon the nature of
your calculation.
Let the constant capital advanced be 100, the wages
advanced 50 and let the product of labour over and above
this 50 be 150. We would then have the following
calculation:
|
Constant capital
|
Variable capital
|
Surplus-value
|
value
|
cost of
production
|
Profit
|
Per cent
|
|
100
|
50
|
150
|
300
|
150
|
150
|
100
|
The only requirement to produce this situation is that
the worker should work for his master three quarters of his
working-day, it is therefore assumed that one quarter of his
labour-time suffices for his own reproduction. Of
course, if Herr Rodbertus takes the total value of the
product, which equals 300, and does not consider the excess
it contains over the costs of production, but says that this
product is to be divided between the capitalist and
the worker, then in fact the capitalist’s portion can only
amount to a part of this product, even if it came to
999/1,000. But the calculation
is incorrect, or at least useless in almost every
respect. If a person lays out 150 and makes 300 he is
not in the habit of saying that he has made a profit of 50
per cent on the basis of reckoning the 150 on 300 instead of
150.
Assume, in the above example, that the worker has worked
12 hours, 3 for himself and 9 for the capitalist. Now
let him work 15 hours, i.e., 3 for himself and 12 for the
capitalist. Then, according to the former production
ratio, an outlay of 25 on constant capital would have to be
added (less in fact, because the outlay on machinery would
not grow to the same degree as the quantity of
labour). Thus:
|
Constant capital
|
Variable capital
|
Surplus-value
|
value
|
cost of
production
|
Profit
|
Per cent
|
|
125
|
50
|
200
|
375
|
175
|
200
|
1142/7
|
Then Rodbertus comes up again with the growth of
“rent to infinity”, firstly because he
interprets its mere increase in volume as a rise, and
therefore speaks of its rise when the same rate of rent is
paid on a larger amount of product. Secondly because
he calculates on “an acre” as his standard of
measurement. Two things which have nothing in
common.
***
The following points can be dealt with quite briefly,
since they have nothing to do with my purpose.
The “value of land” is the
“capitalised ground-rent”. Hence
this, its expression in terms of money, depends on the level
of the prevailing rate of interest. Capitalised at 4
per cent, it would have to be multiplied by 25 (since 4 per
cent is 1/25 of 100); at 5 per cent by
20 (since 5 per cent is 1/20 of
100). This would amount to a difference in land value
of 20 per cent (p. 131). Even with a fall in the
value of money, ground-rent and hence the value of
land would rise nominally, since—unlike the
increase in interest or profit (expressed in money)
—the monetary expression of capital does not rise
evenly. The rent, however, which has risen in terms of
money has to be related “to the unchanged number of
acres of the piece of land” (p. 132).
Herr Rodbertus sums up his wisdom as applied to Europe in
this way:
1. “…with the European
nations, the productivity of labour in general—labour
employed in primary production and manufacturing—has
risen…as a result of which, the part of the national
product used for wages has diminished, the part left over
for rent has increased…so rent in general has
risen” (pp. 138–39).
2. “…the increase in
productivity is relatively greater in manufacture
than in primary production … an equal value of
national product will therefore at present yield a larger
rent share to the raw product than to the manufactured
product. Therefore notwithstanding the rise in rent in
general, in fact only ground-rent has risen while capital
gain has fallen” (p. 139).
Here Herr Rodbertus, just like Ricardo, explains the rise
of rent and the fall of the rate of profit one by the other;
the fall of one is equal to the rise of the other and the
rise of the latter is explained by the relative
unproductiveness ||483|
of agriculture. Indeed, Ricardo says somewhere
quite expressly that it is not a matter of absolute but of
“relative” unproductiveness. But even if
he had said the opposite, it would not comply with the
principle he establishes since Anderson, the original
author of the Ricardian concept, expressly declares that
every piece of land is capable of absolute improvement.
If “surplus-value” (profit and rent) in
general has risen then it is not merely possible that the
rate of the total rent has fallen in proportion to constant
capital, but it will have fallen because productivity has
risen. Although the number of workers employed has
grown, as has the rate at which they are exploited, the
amount of capital expended on wages as a whole has fallen
relatively, although it has risen absolutely; because
the capital which as an advance—a product of the
past—is set in motion by these workers and as a
prerequisite of production forms an ever growing
share of the total capital. Hence the rate of profit
and rent taken together has fallen, although not only its
volume (its absolute amount) has grown, but also the rate at
which labour is being exploited has risen. This Herr
Rodbertus cannot see, because for him constant capital is an
invention of industry of which agriculture is ignorant.
But so far as the relative magnitude of profit and
rent is concerned, it does not by any means follow that,
because agriculture is relatively less productive than
industry, the rate of profit has fallen
absolutely. If, for instance, its relationship to rent
was as 2:3 and is now as 1:3, then whereas previously it
formed two-thirds of rent, it now forms only one-third, or
previously [profit] formed two-fifths of the total
surplus-value and now only a quarter, [or] previously
8/20 and now only
5/20; it would have fallen by
3/20 or [by] 15 per cent.
Assume that the value of 1 lb. of cotton was 2s. It
falls to 1s. 100 workers who previously span 100
lbs. in one day, now spin 300.
Previously, the outlay for 300 lbs. amounted to 600s.;
now it is only 300s. Further, assume that in both
cases machinery equals 1/10, or
60s. Finally, previously 300 lbs. cost 300s. as an
outlay for 300 workers, now only l00s. for 100
[workers]. Since the productivity of the workers
“has increased”, and we must suppose that they
are paid here in their own product, assume that whereas
previously the surplus-value was 20 per cent of wages, it is
now 40.
Thus the cost of the 300 lbs. is:
in the first case:
Raw material 600, machinery 60, wages 300, surplus-value
60, altogether 1,020s.
in the second case:
Raw material 300, machinery 60, wages 100, surplus-value
40, altogether 500s.
In the first case: The costs of production 960,
profit 60, rate of profit 6
1/4 [per cent].
In the second case: [The costs of production] 460,
profit 40, rate of profit 8
16/23 [per cent].
Suppose the rent is a third of 1 lb., then in the first
case it equals 200s., i.e., £10; in the second it is
100s. or £5. The rent has fallen here because
the raw product has become cheaper by 50 per cent. But
the whole of the product has become cheaper by more than 50
per cent. The industrial labour added in I [is to the
value of the raw material] as 300 : 600 = 6 : 10 = 1 : 1
2/3; in II, as 140 : 300 = 1 : 2
1/7. Industrial labour has
become relatively more productive than agricultural labour;
yet in the first case the rate of profit is lower and the
rent higher than in the second. In both cases rent
amounts to one-third of raw materials.
Assume that the amount of raw materials in II doubles so
that 600 lbs. are spun and the ratio would be:
II. 600 lbs. [cotton] = 600s. raw material,
120s. machinery, 200s. wages, 80s. surplus-value.
Altogether 920s. production costs, 80s. profit, rate of
profit 8 16/23 per cent.
The rate of profit [has] risen compared with I.
Rent would be just the same as in I. The 600
lbs. would cost only 1,000, whereas before they cost
2,040.
||484| It does not by any
means follow from the relative dearness of the agricultural
product that it yields a [higher] rent. However, if
one assumes—as Rodbertus can be said to assume, since
his so-called proof is absurd—that rent clings as a
percentage on to every particle of value of the agricultural
product, then indeed it follows that rent rises with the
increasing dearness of agricultural produce.
“…as a result of the increased
population, the value of the total national product has also
grown to an extraordinary extent … today, therefore,
the nation draws more wages, more profit,
more ground-rent … furthermore, this
increased amount of ground-rent has raised it,
whereas the increased amount of wages and profit
could not have a similar effect” (p. 139).
[8. The Kernel of Truth in the Law Distorted by
Rodbertus]
Let us strip Herr Rodbertus of all nonsense (not to speak
of such defective conceptions as I have detailed more fully
above, for instance that the rate of surplus-value
(“level of rent”) can only rise when
labour becomes more productive, i.e., the
overlooking of absolute surplus-value,
etc.);
namely the absurd conception that the “value of
the material” does not form part of the
expenditure in (capitalist) agriculture in the strict
sense.
The second piece of nonsense: that he does not
regard the machinery etc., the second part of the
constant capital of agriculture and manufacture, as a
“component part of value”, which—just as
the “value of the material”—does not arise
from the labour of the sphere of production into which it
enters as machinery, and upon which the profit made in each
sphere of production is also calculated, even though the
value of the machinery does not add a farthing to the
profit, as little as the “value” of the material
although both are means of production and as such enter into
the labour process.
The third piece of nonsense: that he does not
charge to agriculture the entire “value”
of the “machinery” etc. which enters into
it as an item of expenditure and that he does not regard
that element of it which does not consist of raw material as
a debit of agriculture to industry, which does not therefore
belong to the expenditure of industry as a whole and in
payment for which, a part of the raw material of agriculture
must be supplied gratis to industry.
The fourth piece of nonsense : his belief that in
addition to machinery and its auxiliary materials the
“value of the material” enters into all branches
of industry, whereas this is not the case in the entire
transport industry any more than it is in the extractive
industry.
The fifth piece of nonsense: that he does not see
that although, besides variable capital, “raw
material” does enter into many branches of manufacture
(and this the more they supply finished produce for
consumption) the other component part of constant capital
disappears almost completely or is very small, incomparably
smaller than in large-scale industry or agriculture.
The sixth piece of nonsense: that he confuses the
average prices of commodities with their values.
Stripped of all this, which has allowed him to derive
his explanation of rent from the farmer’s wrong
calculation and his own wrong calculation, so that rent
would have to disappear to the extent to which the farmer
accurately calculates the outlay he makes,
then only the following assertion remains as the real
kernel:
When the raw products are sold at their values,
their value stands above the average prices of the
other commodities or above their own average price,
this means their value is greater than the costs of
production plus average profit, thus leaving an excess
profit which constitutes rent. Furthermore,
assuming the same rate of surplus-value, this means
that the ratio of variable capital to constant capital is
greater in primary production than it is, on an average, in
those spheres of production which belong to industry (which
does not prevent it from being higher in some branches of
industry than it is in agriculture). Or, putting it
into even more general terms: agriculture belongs to that
class of industries, whose variable capital is greater
proportionately to constant capital than in industry, on an
average. Hence its surplus-value, calculated on its
costs of production, must be higher than the average in the
industrial spheres. Which means again, that its
particular rate of profit stands above the average
rate of profit or the general rate of
profit. Which means again: when the rate of
surplus-value is the same and the surplus-value itself is
given, then the particular rate of profit in each sphere of
production depends on the proportion of variable capital to
constant capital in that particular sphere.
This would therefore only be an application of the law
developed by me in a general form to a particular
branch of industry.
||485| Consequently:
1. One has to prove that agriculture belongs to
those particular spheres of production whose commodity
values are above their average prices, whose
profit, so long as they appropriate it themselves and do not
hand it over for the equalisation of the general rate of
profit, thus stands above the average profit,
yielding them, therefore, in addition to this, an excess
profit. This point 1 appears certain to apply to
agriculture on an average, because manual labour is still
relatively dominant in it and it is characteristic of the
bourgeois mode of production to develop manufacture more
rapidly than agriculture. This is, however, a
historical difference which can disappear. At
the same time this implies that, on the whole, the means of
production supplied by industry to agriculture fall in
value, while the raw material which agriculture supplies to
industry generally rises in value, the constant capital in a
large part of manufacture has consequently a proportionately
greater value than that in agriculture. In the main,
this will probably not apply to the extractive industry.
2. It is wrong to say, as Rodbertus does:
If—according to the general law—the agricultural
product is sold on an average at its value then it
must yield an excess profit, alias rent; as though
this selling of the commodity at its value, above its
average price, were the general law of capitalist
production. On the contrary, it must be shown
why in primary production—by way of exception
and in contrast to the class of industrial
products whose value similarly stands a b o v e their
average price—the values are not reduced to
the average prices and therefore yield an excess profit,
alias rent. This is to be explained simply by
property in land. The equalisation takes place
only between capitals, because only the action of capitals
on one another has the force to assert the inherent laws of
capital. In this respect, those who derive rent from
monopoly are right. Just as it is the
monopoly of capital alone that enables the capitalist
to squeeze surplus-labour out of the worker, so the monopoly
of land ownership enables the landed proprietor to squeeze
that part of surplus-labour from the capitalist, which would
form a constant excess profit. But those who
derive rent from monopoly are mistaken when they imagine
that monopoly enables the landed proprietor to force the
price of the commodity above its value. On the
contrary, it makes it possible to maintain the value of
the commodity above its average price; to sell the
commodity not above, but at its value.
Modified in this way, the proposition is correct.
It explains the existence of rent, whereas Ricardo
only explains the existence of differential rents and
actually does not credit the ownership of land with
any economic effect. Furthermore, it does away
with the superstructure, which with Ricardo himself was
anyhow only arbitrary and not necessary for his
presentation, namely, that the agricultural industry becomes
gradually less productive; it admits on the contrary that it
becomes more productive. On the bourgeois basis
however agriculture is relatively less productive, or
slower to develop the productive power of labour, than
industry, Ricardo is right when he derives his “excess
surplus-value” not from greater productivity but from
smaller productivity.
[9. Differential Rent and Absolute Rent in Their
Reciprocal Relationship. Rent as an Historical
Category. Smith’s and Ricardo’s Method of
Research]
So far as the difference in rents is concerned,
provided equal capital is invested in land areas of equal
size, it is due to the difference in natural
fertility, in the first place, specifically with regard
to those products which supply bread, the chief nutriment;
provided the lad is of equal size and fertility, differences
in rent arise from unequal capital investment.
The first, natural, difference causes not only the
difference in the size but also in the level or rate of
rent, relatively to the capital which has been laid
out. The second, industrial difference, only
effects a greater rent in proportion to the volume of
capital which has been laid out. Successive capital
investments on the same land may also have different
results. The existence of different excess
profits or different rents on land of varying
fertility does not distinguish agriculture from
industry. What does distinguish it is that those
excess profits in agriculture become permanent
fixtures, because here they rest on a natural basis
(which, it is true, can be to some extent levelled
out). In industry, on the other hand—given the
same average profit—these excess profits can only turn
up fleetingly and they only appear because of
a change-over to more productive machines and combinations
of labour. In industry it is always the most recently
added, most productive capital that yields an excess
profit by reducing average prices. In
agriculture excess profit may be the result, and
very often must be the result, not of the absolute
increase in fertility of the best fields, but the relative
increase in their fertility, because less productive
land is being cultivated. In industry the higher
relative productiveness, the excess profit (which
disappears), must always be due to the absolute
increase in productiveness, or productivity, of the newly
invested capital compared with the old. No capital can
yield an excess profit in industry (we are not
concerned here with a momentary rise in demand),
because less productive capitals are newly
entering into the branch of industry.
||486| It can,
however, also happen in agriculture (and Ricardo admits
this) that more fertile land—land which is either
naturally more fertile or which becomes more fertile under
newly developed advances in technique than the old land
under the old [conditions]—comes into use at a later
stage and even throws a part of the old land out of
cultivation (as in the mining industry and with colonial
products), or forces it to turn to another type of
agriculture which supplies a different product.
The fact that the differences in rents (excess
profits) become more or less fixed distinguishes
agriculture from industry. But the fact that the
market-price is determined by the average conditions
of production, thus raising the price of the product which
is below this average, above its price and even above
its value, this fact by no means arises from the
land, but from competition, from capitalist
production. Hence this is not a law of nature, but
a social law.
This theory neither demands the payment of rent
for the worst land, nor the non-payment of rent.
Similarly, it is possible that a lease rent is paid
where no rent is yielded, where only the ordinary
profit is made, or where not even this is made.
Here the landowner draws a rent although economically
none is available.
Rent (excess profit) is paid only for the better (more
fertile) land. Here rent “as such”
does not exist. In such cases excess
profit—just as the excess profit in
industry—rarely becomes fixed in the form of rent (as
in the West of the United States of North
America). |486||
||486| This is the case
where, on the one hand, relatively great areas of disposable
land have not become private property and, on the
other, the natural fertility is so great that the values of
the agricultural products are equal to (sometimes
below) their average prices, despite the
scant development of capitalist production and
therefore the high proportion of variable capital to
constant capital. If their values were higher,
competition would reduce them to this level. It is
however absurd to say, as for example Rodbertus does, that
the state [appropriates the ground-rent because it] levies,
for instance, a dollar or so per acre, a low, almost nominal
price. One could just as well say that the state
imposes a “trade tax” on the pursuit of every
branch of industry. In this case Ricardo’s law
exists. Rent exists only for relatively fertile
land—although mostly not in a fixed but in a fluid
state, like the excess profit in industry. The land
that pays no rent does so, not because of its low
fertility, but because of its high fertility.
The better kinds of land pay rent, because they possess
more than average fertility, as a result of their
relatively higher fertility.
But in countries where landed property exists, the
same situation, namely that the last cultivated land pays
no rent, may also occur for the reverse
reasons. Supposing, for instance, that the
value of the grain crops was so low (and that its low
value was in no way connected with the payment of
rent), that owing to the relatively low fertility of
the last cultivated land the value of its crop were only
equal to the average price, this means that, if the
same amount of labour were expended here as on the land
which carried a rent, the number of quarters would be
so small (on the capital laid out), that with the average
value of bread products, only the average price of
wheat would be obtained.
||487| Supposing for
example, that the last land which carries rent (and
the land which carries the smallest rent represents
pure rent; the others already differential rent)
produces [with] a capital investment of £100, [a
product] equal to £120 or 360 quarters of wheat at
£ 1/3. In this case 3
quarters equal £ 1. Let £ 1 equal one
week’s labour. £ 100 are 100 weeks’ labour and
£ 120 are 120 weeks’ labour. 1 quarter is
1/3 of a week which is 2 days and of
these 2 days or 24 hours (if the normal working-day is 12
hours) 1/5, or 4
4/5 hours, are unpaid labour which is
equal to the surplus-value embodied in the quarter. 1
quarter equals £ 1/3 which is 6
2/3s. or 6
6/9s.
If the quarter is sold at its value and the average
profit is 10 per cent then the average price of the
360 quarters would be £110 and the average price per
quarter 6 1/9s. The value would
be £10 above the average price. And since the
average profit is 10 per cent the rent would be equal to
half the surplus-value, i.e., £ 10 or
5/9s. per quarter. Better types
of land, which would yield more quarters for the same outlay
of 120 labour weeks (of which, however, only 100 are paid
labour, be it materialised or living), would, at the price
of 6 6/9s. per quarter, yield a higher
rent. But the worst cultivated land would yield a rent
of £ 10 on a capital of £ 100 or of
5/9s. per quarter of wheat.
Assume that a new piece of land is cultivated, which only
yields 330 quarters with 120 labour weeks. If the
value of 3 quarters is £ 1, then that of 330 quarters
is £ 110. But 1 quarter would now be equal to
2 days and 2 2/11 hours,
while before it was equal to only two days.
Previously, 1 quarter was equal to 6
6/9s. or 1 quarter was equal to
6s. 8d.; now, since £ 1 equals 6 days, it is equal to
7s. 3d. 1 1/11 farthing. To be
sold at its value the quarter would now have to be
sold at 7d. 1 1/11 farthing more, at
this price it would also yield the rent of
5/9s. per quarter. The
value of the wheat produced on the better land is
here below the value of that produced on the
worst land. If this worst land sells at the price per
quarter of the next best or rent yielding land then it sells
below its value but at its average price,
i.e., the price at which it yields the normal profit of 10
per cent. It can therefore be cultivated and yield the
normal average profit to the capitalist.
There are two situations in which the worst land would
here yield a rent apart from profit.
Firstly if the value of the quarter of
wheat were above 6 6/9s. (its
price could be above 6 6/9s.,
i.e., above its value, as a result of demand; but this does
not concern us here. The 6
6/9s., the price per quarter, which
yielded a rent of £ 10 on the worst land cultivated
previously, was equal to the value of the wheat grown
on this land, which yields a non-differential rent),
that is [if] the worst land previously cultivated and all
others, while yielding the same rent, were
proportionately less fertile, so that their value were
higher above their average price and the average
price of the other commodities. That the new
worst land does not yield a rent is thus not due to
its low fertility but to the relatively high
fertility of the other land. As against the
new type of land with the new capital investment, the worst,
[previously] cultivated, rent-yielding lad represents
rent in general, the non-differential
rent. And that its rent is not higher is due to the
[high] fertility of the rent-yielding land.
Assume that there are three other classes of land besides
the last rent-yielding land. Class II (that above I,
the last rent-yielding land) carries a rent of one-fifth
more because this land is one-fifth more fertile than class
I; class III again one-fifth more because it is one-fifth
more fertile than class II, and the same again in class IV
because it is a fifth more fertile than class III.
Since the rent in class I equals £ 10, it is 10 +
1/5 = £ 12 in class II, 12 +
1/5 =£ 14
2/5 in class III and 14
2/5 + 1/5 =
£17 7/25 in class IV.
If IV’s fertility were less, the rent of III-I inclusive
||488 | would be greater and
that of IV also greater absolutely (but would the
proportion be the same?). This can be taken in two
ways. If I were more fertile then the rent of II,
III, JV would be proportionately smaller. On the
other hand, I is to II, II is to III and III is to IV as
the newly added, non-rent-yielding type of land is to
I. The new type of land does not carry a rent because
the value of the wheat from I is not above the
average price [of that] from the new land. It would
be above it if I were less fertile. Then the new land
would likewise yield a rent. But the same applies to
I, If II were more fertile then I would yield no rent or a
smaller rent. And it is the same with II and III and
with III and IV, Finally we have the reverse: The absolute
fertility of IV determines the rent of III. If IV
were yet more fertile, III, II, I would yield a smaller
rent or no rent at all. Thus the rent yielded by I,
the undifferentiated rent, is determined by the fertility
of IV, just as the circumstance that the new land yields no
rent is determined by the fertility of I.
Accordingly, Storch’s law is valid here, namely,
that the rent of the most fertile land determines
the rent of the last land to yield any rent at all, and
therefore also the difference between the land which yields
the undifferentiated rent and that which yields no rent at
all.
Hence the phenomenon that here the fifth class, the newly
cultivated land I’ (as opposed to I) yields no rent,
is not to be ascribed to its own lack of fertility,
but to its relative lack of fertility compared with
I, therefore, to the relative fertility of I as compared
with I’.
[Secondly ] The value [of the product] of the
rent-yielding types of land I, II, III, IV, that is
6s. 8d. per quarter (to make it more realistic, one could
say bushel instead of quarter), equals the average
price of I’ and is below its own value. Now
many intermediary stages are in fact possible.
Supposing on a capital investment of £ 100, I’ yielded
any quantity of quarters between its real return of 330
bushels and the return of I which is 360 bushels, say 333,
340, 350 up to 360—x bushels. Then
the value of the quarter at 6s. 8d. would be above the
average price of I’ (per bushel) and the last cultivated
land would yield a rent. That it yields the average
profit at all, it owes to the relatively low fertility
of I, and therefore of I-IV. That it yields no
rent, is due to the relatively high fertility of I and to
its own relatively low fertility. The last cultivated
land I’ could yield a rent if the value of the bushel were
above 6s. 8d., that is, if I, II, III, IV were less
fertile, for then the value of the wheat would be
greater. It could however also yield a rent if the
value were given at 6s. 8d., i.e., if the fertility of I,
II, III and IV were the same. This would be the
case if it were more fertile itself, yielded more than 330
bushels and if the value of 6s. 8d. per bushel were
thus above its average price; in other words,
its average price would then be below 6s. 8d., and
therefore below the value of the wheat grown on I,
II, III, IV. If the value is above the average price,
then there is an excess profit above the average profit,
hence the possibility of a rent.
This shows: When comparing different spheres of
production—for instance industry and
agriculture—the fact that value is above average price
indicates lower productivity in the sphere of
production that yields the excess profit, the excess of
value over the average price. In the same
sphere, on the other hand, [it indicates] greater
productivity of one capital in comparison with other
capitals in the same sphere of production. In the
above example, I yields a rent, only because in agriculture
the proportion of variable capital to constant capital is
greater than in industry, i.e., more new labour has to be
added to the materialised labour—and because of the
existence of landed property this excess of value
over average price is not levelled out by competition
between capitals. But that I yields a rent at all is
due to the fact that the value of 6s. 8d. per bushel is not
below its average price, and that its fertility is
not so low that its own value rises above 6s. 8d. per
bushel. Its price moreover is not
determined by its own value but by the value of the
wheat grown on II, III, IV or, to be precise, by that grown
on II. Whether the market-price is merely equal
to its own average price or stands above it, and
whether its value is above its average price, depends
on its own productivity.
Hence Rodbertus’s view that in agriculture every capital
which yields the average profit must yield rent is
wrong. This false conclusion follows from his ||489| false basis. He reasons
like this: The capital in agriculture, for instance, yields
£ 10. But because, in contrast to industry,
raw materials do not enter into it, the
£ 10 are reckoned on a smaller sum. They
represent therefore more than 10 per cent. But the
point is this: It is not the absence of raw materials (on
the contrary, they do enter into agriculture proper; it
wouldn’t matter a straw if they didn’t enter into it,
provided machinery etc. increased proportionally)
which raises the value of the agricultural products above
the average price (their own and that of other
commodities). Rather is this due to the higher
proportion of variable to constant capital compared with
that existing, not in particular spheres of
industrial production, but on an average in
industry as a whole. The magnitude of this
general difference determines the amount and the
existence of rent on No. I, the absolute, non-differential
rent and hence the smallest rent. The price of
wheat from I’, the newly cultivated land which does not
yield a rent, is, however, not determined by the
value of its own product, but by the value of I, and
consequently by the average market-price of the wheat
supplied by I, II, III and IV.
The privilege of agriculture (resulting from landed
property), that it sells its product not at the average
price but at its value if this value is
above the average price, is by no means valid for
products grown on different types of land as against one
another, for products of different values produced within
the same sphere of production. As against
industrial products, they can only claim to be sold at their
value. As against the other products of the same
sphere, they are determined by the market-price, and it
depends on the fertility of I whether the value—which
equals the average market-price here—is sufficiently
high or low, i.e., whether the fertility of I is
sufficiently high or low, for I’, if it is sold at
this value, to participate little, much or not at all
in the general difference between the value and the average
price of wheat. But, since Herr Rodbertus makes no
distinction at all between values and average prices, and
since he considers it to be a general law for all
commodities, and not a privilege of agricultural products,
that they are sold at their values—he must of
course believe that the product of the least fertile land
has also to be sold at its individual value.
But it loses this privilege in competition with products of
the same type.
Now it is possible for the average price of I’ to be
above 6s. 8d. per bushel, the value of I. It can be
assumed (although this is not quite correct), that for land
I’ to be cultivated at all, demand must increase. The
price of wheat from I must therefore rise above its
value, above 6s. 8d., and indeed persistently
so. In this case land I’ will be cultivated, If it can
make the average profit at 6s. 8d. although its value is
above 6s. 8d. and if it can satisfy demand, then the
price will be reduced to 6s. 8d., since demand now again
corresponds to supply, and so I must sell at 6s. 8d. again,
ditto II, III, IV; hence also I’. If, on the other
hand, the average price in I’ amounted to 7s. 8d. so
that it could make the usual profit at this price only
(which would be far below its individual value) and if the
demand could not be otherwise satisfied, then the value of
the bushel would have to consolidate itself at 7s. 8d. and
the demand price of I would rise above its value. That
of II, III, IV, which is already above their
individual value, would rise even higher. If, on the
other hand, there were prospects of grain imports which
would by no means permit of such a stabilisation, then I’
could nevertheless be cultivated if small farmers were
prepared to be satisfied with less than the average
profit. This is constantly happening in both
agriculture and industry. Rent could be paid in this
case just as when I’ yields the average profit, but it would
merely be a deduction from the farmer’s profit. If
this could not be done either, then the landlord could lease
the land to cottagers whose main concern, like that of the
hand-loom weaver, is to get their wages out of it and to pay
the surplus, large or small, to the landlord in the form of
rent. As in the case of the hand-loom weaver, this
surplus could even be a mere deduction, not from the product
of labour, but from the wages of labour. In all
these instances rent could be paid. In one case it
would be a deduction from the capitalist’s profit. In
the other case, the landlord would appropriate the
surplus-labour of the worker which would otherwise be
appropriated by the capitalist. And in the final case
he would live off the worker’s wage as the capitalists are
also often wont to do. But large-scale capitalist
production is only possible where the last cultivated
land yields at least the average profit, that is where the
value of I enables I, to realise at least the average
price.
One can see how the differentiation between value
and average price surprisingly solves the question
and shows that Ricardo and his opponents are right.
||XI-490| If I, the land
which yields absolute rent, were the only cultivated land,
then it would sell the bushel of wheat at its value,
at 6s. 8d. or 6 6/9s. and not reduce
it to the average price of 6 1/9s. or
6s. 1 1/3d. If all land were of
the same type and if the cultivated area increased tenfold,
because demand grew, then since I yields a rent of £10
per £100, the rent would grow to £ 100, although
only a single type of land existed. But its
rate or level would not grow, neither compared with the
capital advanced nor compared with the area of
land cultivated. Ten times as many acres would
be cultivated and ten times as much capital advanced.
This would therefore merely be an augmentation of the
rental, of the volume of rent, not of its
level. The rate of profit would not fall; for the
value and price of the agricultural products would remain
the same. A capital which is ten times as large can
naturally hand over a rent which is ten times larger than a
capital which is one-tenth its size. On the other
hand, if ten times as much capital were employed on the same
area of land with the same result, then the rate of rent
compared with the capital laid out would have remained
the same; it would have risen in proportion to the
area of land, but would not have altered the rate of profit
in any way.
Now supposing the cultivation of I became more
productive, not because the land had altered but because
more constant capital and less variable capital is being
laid out, that is more capital is being spent on machinery,
horses, mineral fertilisers etc. and less on wages; then the
value of wheat would approach its average price and the
average price of the industrial products, because the excess
in the ratio of variable to constant capital would have
decreased. In this case rent would fall and the rate
of profit would remain unaltered. If the mode of
production changed in such a way that the ratio of variable
to constant capital became the same as the average ratio in
industry, then the excess of value over the average price of
wheat would disappear and with it rent, excess profit.
Category I would no longer pay a rent, and landed property
would have become nominal (in so far as the altered mode of
production is not in fact accompanied by additional capital
being embodied in the land, so that, on the termination of
the lease, the owner might draw interest on a capital which
he himself had not advanced; this is indeed a principal
means by which landowners enrich themselves, and the dispute
about tenantry-right in Ireland revolves around this very
point). Now if, besides I, there also existed II, III,
IV, in all of which this mode of production were applied,
then they would still yield rents because of their greater
natural fertility and the rent would be in proportion to the
degree of their fertility. Category I would in this
case have ceased to yield a rent and the rents of II, III,
IV would have fallen accordingly, because the general ratio
of productivity in agriculture had become equal to that
prevailing in industry. The rent of II, III, IV would
correspond with the Ricardian law; it would merely be
equivalent to, and would exist only as an excess
profit of more fertile compared to less fertile land, like
similar excess profits in industry, except in the latter
they lack the natural basis for consolidation.
The Ricardian law would prevail just the same, even if
landed property were non-existent. With the
abolition of landed property and the retention of capitalist
production, this excess profit arising from the difference
in fertility would remain. If the state appropriated
the land and capitalist production continued, then rent from
II, III, IV would be paid to the state, but rent as such
would remain. If landed property became people’s
property then the whole basis of capitalist production
would go, the foundation on which rests the confrontation of
the worker by the conditions of labour as an independent
force.
A question which is to be later examined in connection
with rent: How is it possible for rent to rise in
value and in amount, with more intensive
cultivation, although the rate of rent falls in relation to
the capital advanced? This is obviously only possible
because the amount of capital advanced rises.
If rent is 1/5 and it becomes
1/10, then 20 ×
1/5 = 4 and 50 ×
1/10 = 5. That’s all. But
if conditions of production in intensive cultivation became
the same as those prevailing on an average in industry,
instead of only approximating to them, then rent for
the least fertile land would disappear and for the most
fertile it would be reduced merely to the difference in the
land. Absolute rent would no longer exist.
Now let us assume that, following upon a rise in demand,
new land, II, were cultivated in addition to I.
Category I pays the absolute rent, II would pay a
differential rent, but the price of wheat (value for
I, excess value for II) remains the same. The rate of
profit, too, [is supposed] not to be affected, And so on
till we come to IV. Thus the level, the rate of
rent is also rising if we take the total capital laid out in
I, II, III, IV. But the average rate of profit from
II, III, IV would remain the same as that from I, which
equals that in industry, the general rate of profit.
Thus if ||491| we go on to more
fertile land, the amount and rate of rent can grow, although
the rate of profit remains unchanged and the price of wheat
constant. The rise in level and amount of rent would
be due to the growing productivity of the capital in II,
III, IV, not to the diminishing productivity in I. But
the growing productivity would not cause a rise in profits
and a fall both in the price of the commodity and in wages,
as happens necessarily in industry.
Supposing, however, the reverse process took place: from
IV to III, II, I, Then the price would rise to 6s. 8d. at
which it would still yield a rent of £ 10 on £
100 on I. For the rent of wheat on IV [amounts to]
£ 17 7/25 on £ 100, of
which, however, 7 7/25 are the excess
of its price over the value of I. Category I gave 360
bushels at £ 100 (with a rent of £ 10 and the
value of the bushel at 6s. 8d.) . II—432
bushels. III—518 2/5
bushels and IV—622 2/25
bushels. But the price per bushel of 6s. 8d yielded
IV an excess rent of 7 7/25 per
100. IV sells 3 bushels for £ 1 or 622
2/25 bushels at £ 207
9/25. But its value is only
£ 120, as in I; whatever is above this amount is
excess of its price over its value. IV would sell the
bushel at its value or rather, [he would sell it at its
value] if he sold it, at 3s. 10
8/27d. and at this price he would have
a rent of £ 10 on £ 100. The movement from
IV to III, III to II and II to I, causes the price per
bushel (and with it the rent) to rise until it eventually
reaches 6s. 8d. with I, where this price now yields the same
rent that it previously yielded with IV. The rate of
profit would fall with the rise in price, partly owing to
the rise in value of the means of subsistence and raw
materials. The transition from IV to III could happen
like this: Due to demand, the price of IV rises above its
value, hence it yields not only rent but excess rent.
Consequently III is cultivated which, with the normal
average profit, is not supposed to yield a rent at this
price, If the rate of profit has not fallen as a result of
the rise in price of IV, but wages, have, then III will
yield the average profit. But due to the [additional]
supply from III, wages should rise to their normal level
again; (then] the rate of profit in III falls etc.
Thus the rate of profit falls with this downward movement
on the assumptions which we have made, namely, that
III cannot yield a rent at the price of IV and that III can
only be cultivated at the old rate of profit because wages
have momentarily fallen below their [normal] level.
Under these conditions [it is again possible for] the
Ricardian law [to apply]. But not necessarily, even
according to his interpretation. It is merely
possible in certain circumstances. In reality
the movements are contradictory.
This has disposed of the essence of the theory of
rent.
With Herr Rodbertus, rent arises from eternal nature, at
least of capitalist production, because of his “value
of the material”. In our view rent arises from
an historical difference in the organic component
parts of capital which may be partially ironed out and
indeed disappear completely, with the development of
agriculture. True, the difference in so far as it is
merely due to variation in actual fertility of the land
remains even if the absolute rent disappeared.
But—quite apart from the possible ironing out of
natural variations—differential rent is linked
with the regulation of the market-price and therefore
disappears along with the price and with capitalist
production. There would remain only the fact that
land of varying fertility is cultivated by social
labour and, despite the difference in the amount of labour
employed, labour can become more productive on all types of
land. But the amount of labour used on the worse land
would by no means result in more labour being paid for [the
product] of the better land as now with the bourgeois.
Rather would the labour saved on IV be used for the
improvement of III and that saved from III for the
improvement of II and finally that saved on II would be used
to improve I. Thus the whole of the capital eaten up
by the landowners would serve to equalise the labour used
for the cultivation of the soil and to reduce the amount of
labour in agriculture as a whole.
||492| {Adam Smith, as we
saw above, first correctly interprets value and the relation
existing between profit, wages, etc. as component parts of
this value, and then he proceeds the other way round,
regards the prices of wages, profit and rent as antecedent
factors and seeks to determine them independently, in order
then to compose the price of the commodity out of
them. The meaning of this change of approach is that
first he grasps the problem in its inner relationships, and
then in the reverse form, as it appears in
competition. These two concepts of his run counter to
one another in his work, naively, without his being aware of
the contradiction. Ricardo, on the other hand,
consciously abstracts from the form of competition, from the
appearance of competition, in order to comprehend the laws
as such. On the one hand he must be reproached for not
going far enough, for not carrying his abstraction to
completion, for instance, when he analyses the value of the
commodity, he at once allows himself to be influenced by
consideration of all kinds of concrete conditions. On
the other hand one must reproach him for regarding the
phenomenal form as immediate and direct proof or exposition
of the general laws, and for failing to interpret it.
In regard to the first, his abstraction is too incomplete;
in regard to the second, it is formal abstraction which in
itself is wrong.}
[10. Rate of Rent and Rate of Profit.
Relation Between Productivity in Agriculture and in Industry
in the Different Stages of Historical Development]
Now to return briefly to the remainder of Rodbertus.
“The increase in wages, capital gain
and ground-rent respectively, which arises from the increase
in the value of the national product can raise neither the
wages nor the capital gain of the nation, since more wages
are now distributed among more workers and a greater amount
of capital gain accrues to capital increased in the same
proportion; ground-rent, on the other hand, must rise since
this always accrues to land whose area has remained the
same. It is thus possible to explain satisfactorily
the great rise in land value, which is nothing other than
ground-rent capitalised at the normal rate of interest,
without having to resort to a fall in productivity of
agricultural labour, which is diametrically opposed to the
idea of the perfectibility of human society and to all
agricultural and statistical facts” (pp. 160–61).
First of all it should be noted that Ricardo [at whom
this passage is aimed] nowhere seeks to explain the
“great rise in land value”. This is no
problem at all for him. He says further, and Ricardo
even noted this explicitly (see later in connection with
Ricardo), that—given the rate of rent—rent can
increase with a constant value of corn or agricultural
produce. This increase again presents no problem for
him. The rise in the rental while the rate of rent
remains the same, is no problem for him either. His
problem lies in the rise in the rate of rent, i.e., rent in
proportion to the agricultural capital advanced, and hence
the rise in value not of the amount of agricultural produce,
but the rise in the value, for example, of the quarter of
wheat, i.e., of the same quantity of agricultural produce;
in consequence of this the excess of its value over the
average price increases and thereby also the excess of rent
over the rate of profit. Herr Rodbertus here begs the
Ricardian problem (to say nothing of his erroneous
“value of the material”).
The rate of rent can indeed rise relatively to the
capital advanced, in other words, the relative value of the
agricultural product can rise in proportion to the
industrial product, even though agriculture is constantly
becoming more productive. And this can happen for two
reasons.
Firstly take the above example, the
transition from I to II, III, IV, i.e., to ever more fertile
land (but where the additional supply is not so great as to
throw I out of cultivation or to reduce the difference
between value and average price to such an extent that IV,
III, II pay relatively lower rents and I no rent at
all). If I’s rent amounts to 10, II’s to 20, III’s to
30 and IV’s to 40 and if £ 100 are invested in all
four types of land, then I’s rent would be
1/10 or 10 per cent on the capital
advanced, II’s would be 2/10 or 20 per
cent, III’s would be 3/10 or 30 per
cent and IV’s rent would be 4/10 or 40
per cent. Altogether £ 100 on 400 capital
advanced, which gives an average rate of rent of
100/4=25 per cent. Taking the
entire capital invested in agriculture, the rent amounts now
to 25 per cent. Had only the cultivation of land I
(the unfertile land) been extended, then the rent would be
40 on 400, 10 per cent just as before, and it would not have
risen by 15 per cent. But in the first case (if 330
bushels resulted from an outlay of £ 100 on I) only
1,320 bushels would have been produced at the price
of 6s. 8d. per bushel. In the second case [i.e., when
all four classes of land are cultivated], 1,500 bushels have
been produced at the same price. The same capital has
been advanced in both cases.
But the rise in the level of the rent here is only
apparent. For if we calculate the capital outlay in
relation to the product, then 100 [would have been] needed
in I to produce 330 and 400 to produce 1,320
bushels. But now only 100+90+80+70, i.e., £ 340
are needed to produce 1,320 bushels. £ 90 in II
produce as much as 100 in I, 80 in III as much as 90 in II
and 70 in IV as much as 80 in III. The rate of rent
[has] risen in II, III, IV, compared with I.
If we take society as a whole, it means that a capital of
340 [was] employed to raise the same product, instead
of a capital of 400, that is 85 per cent [of the previous]
capital.
||493| The 1,320 bushels
[would] only be distributed, in a different way from those
in the first case. The farmer must hand over as much
on 90 as previously on 100, as much on 80 as previously on
90 and as much on 70 as previously on 80. But the
capital outlay of 90, 80, 70, gives him just the same amount
of product as he previously obtained on 100. He hands
over more, not because he must employ more capital in order
to supply the same product, but because he employs less
capital; not because his capital has become less productive,
but because it has become more productive and he is still
selling at the price of I, as though he still required the
same capital as before in order to produce the same quantity
of product.
[Secondly.] Apart from this rise in the rate of
rent—which corresponds to the uneven rise in
excess profit in individual branches of industry, though
here it does not become fixed— there is only one other
possibility of the rate of rent rising although the
value of the product remains the same, that is, labour does
not become less productive. It occurs either when
productivity in agriculture remains the same as
before but productivity in industry rises and this rise
expresses itself in a fall in the rate of profit, in other
words when the ratio of variable to constant capital
diminishes. Or, alternatively, when productivity is
rising in agriculture as well though not at the same rate as
in industry but at a lower rate. If productivity in
agriculture rises as 1:2 and in industry as 1:4, then it is
relatively the same as if it had remained at one in
agriculture and had doubled in industry, In this case the
ratio of variable capital to constant capital would be
decreasing in industry twice as fast as in agriculture.
In both cases the rate of profit in industry would fall,
and because it fell the rate of rent would
rise. In the other instances the rate of profit does
not fall absolutely (rather it remains constant) but
it falls relatively to rent. It does so not because it
itself is decreasing but because rent, the rate of
rent in relation to the capital advanced, is rising.
Ricardo does not differentiate between these cases.
Except in these cases (that is where the rate of profit,
although constant, falls relatively because of the
differential rents of the capital employed on the more
fertile types of land or where the general ratio of constant
to variable capital alters as a result of the increased
productivity of industry and hence increases the
excess of value of agricultural products above their average
price) the rate of rent can only rise if the rate of profit
falls without industry becoming more productive. This
is, however, only possible if wages rise or if raw material
rises in value as a result of the lower productivity of
agriculture. In this case both the fall in the rate of
profit and the rise in the level of rent are brought about
by the same cause—the decrease in the productivity of
agriculture and of the capital employed in
agriculture. This is how Ricardo sees it. With
the value of money remaining the same, this must then
show itself in a rise in the prices of the raw
products. If, as above, the rise is relative,
then no change in the price of money can raise the money
prices of agricultural products absolutely as compared with
industrial products. If money fell by 50 per cent then
l quarter which was previously worth £ 3 would now be
worth £ 6, but 1 lb. yarn which was previously worth
1s. would now be worth 2s. The absolute rise in
the money prices of agricultural products compared with
industrial products can therefore never be explained by
changes in [the value of] money.
On the whole it can be assumed that under the cruder,
pre-capitalist mode of production, agriculture is more
productive than industry,
because nature assists here as a machine and an organism,
whereas in industry the powers of nature are still almost
entirely replaced by human action (as in the craft type of
industry etc.). In the period of the stormy growth of
capitalist production, productivity in industry develops
rapidly as compared with agriculture, although its
development presupposes that a significant change as
between constant and variable capital has already
taken place in agriculture, that is, a large number of
people have been driven off the land. Later,
productivity advances in both, although at a uneven
pace. But when industry reaches a certain level the
disproportion must diminish, in other words, productivity in
agriculture must increase relatively more rapidly than in
industry. This requires: 1. The replacement of
the easy-going farmer by the businessman, the fanning
capitalist; transformation of the husbandman into a pure
wage-labourer; large-scale agriculture, i.e., with
concentrated capitals. 2. In particular however:
Mechanics, the really scientific basis of large-scale
industry, had reached a certain degree of perfection during
the eighteenth century. The development of chemistry,
geology and physiology, the sciences that directly
form the specific basis of agriculture rather than of
industry, ||494| does not take
place till the nineteenth century and especially the later
decades.
It is nonsense to talk of the greater or lesser
productivity of two different branches of industry
when merely comparing the values of their commodities.
If, [in] 1800, the pound of cotton was 2s. and of yarn 4s.,
and if, in 1830, the value of cotton was 2s. or 18d. and
that of yarn 3s. or 1s. 8d. then one might compare the
proportion in which the productivity in both branches had
grown—but only because the rate of 1800 is taken as
the starting-point. On the other hand, because the
pound of cotton is 2s, and that of yarn is 3, and hence the
labour which produces the cotton is as great again as the
[newly-added labour] of spinning, it would be absurd to say
that the one is twice as productive as the other. Just
as absurd as it would be to say that because canvas can be
made more cheaply than the artist’s painting on the canvas,
the labour of the latter is less productive than that of the
former.
Only the following is correct, even if it comprises the
capitalist meaning of productive—productive of
surplus-value along with the relative amounts of the
product:
If, on an average, according to the conditions of
production, £ 500 is needed in the form of raw
material and machinery etc.<at given values> in order
to employ 100 workers [whose wages] amount to £ 100 in
the cotton industry, and, on the other hand, £ 150 is
needed for raw materials and machinery in order to employ
100 workers [whose wages] amount to £ 100, in the
cultivation of wheat, then the variable capital in I would
form 1/6 of the total capital
of £ 600, and 1/5 of the
constant capital; in II, the variable capital would
constitute 2/5 of the total capital of
£ 250 and 2/3 of constant
capital. Thus every £ 100 which is laid out in I
can only contain £ 16 2/3
variable capital and must contain £ 83
1/3 constant capital; whereas in II it
comprises £ 40 of variable capital and £ 60 of
constant, In I, variable capital forms
1/6 or 16 2/3
per cent and in II, 40 per cent. Clearly the histories
of prices are at present quite wretched. And they can
be nothing but wretched until theory shows what needs to be
examined. If the rate of surplus-value were given at,
say, 20 per cent then the surplus-value in I would amount to
£ 3 1/3 (hence profit
31/3 per cent). In II, however,
£8 (hence profit 8 per cent). Labour in I would
not be so productive as in II because it would be more
productive (in other words, not so productive of
surplus-value, because it is more productive of
produce). Incidentally, it is cleary only possible to
have a ratio of 1 :1/6, for example,
in the cotton industry, if a constant capital (this depends
on the machines etc.) amounting to say £ 10,000 has
been laid out, hence wages amounting to 2,000, making a
total capital of 12,000. If only 6,000 were laid out,
of which wages would be 1,000, then the machinery would be
less productive etc. At 100 it could not be done at
all. On the other had it is possible that if £
23,000 is laid out, the resulting increase in the efficiency
of the machinery and other economies etc. are so great that
the £ 19,166 2/3 is not entirely
allocated to constant capital, but that more raw material
and the same amount of labour require less machinery
etc. ([in terms of] value) which is assumed to cost £
1,000 less than before. Then the ratio of variable to
constant capital grows again, but only because the absolute
[amount of] capital has grown. This is a check against
the fall in the rate of profit. Two capitals of 12,000
would produce the same quantity of commodities as the one of
23,000, but firstly the commodities would be dearer since
they required an outlay of £ 1,000 more, and secondly
the rate of profit would be smaller because within the
capital of £ 23,000, the variable capital is more than
1/6 of the total capital, i.e., more
than in the sum of the two capitals of £ 12,000.
|494||
||494| (On the one hand,
with the advance of industry, machinery becomes more
effective and cheaper; hence, if only the same
quantify of machinery were employed as in the past, this
part of constant capital in agriculture would diminish; but
the quantity of machinery grows faster than the reduction in
its price, since this element is as yet little developed in
agriculture. On the other hand, with the greater
productivity of agriculture, the price of raw
material—see cotton—falls, so that raw material
does not increase as a component part of the process of
creating value to the same degree as it increases as a
component part of the labour-process.) |494||
* * *
||494| Already Petty
tells us that the Landlord of his time feared improvements
in agriculture because they would cause the price of
agricultural products and (the level of) rent to fall; ditto
the extension of the land and the cultivation of
previously unused land which is equivalent to an extension
of the land. (In Holland this extension of the land is
to be understood in an even more direct way.) He
says:
“…that the draining of Fens,
improving of Forestsa,
inclosing of Commons, Sowing of St. Foyne and Clovergrass,
be grumbled against by Landlords, as the way to depress the
Price of Victuals([William Petty], “Political
Arithmetick” [in: Several Essays in Political
Arithmetick,] London, 1699, p. 230.)
(“…the Rent of all England […] Wales,
and the Low-Lands of Scotland, be about Nine Millions per
Annum ) (Ibid., p. 231.)
Petty fights this view and D’Avenant goes ||495| even further and shows how
the level of rent may decrease while the amount of
rent or the rental increases, He says:
“Rents may fall in some Places, and
Counties, and yet the Land of the Nation” (he means
value of the land) “improve all the while: As for
Example, when Parks are dispark’d, and Forests, and Commons
are taken in, and enclos’d; when Fen-Lands are drein’d, and
when many Parts” (of the country) “are
meliorated by Industry, and manuring[e] it must certainly depretiate that
Ground which has been Improv’d to the full before, or[f] c was capable of no
farther Improvement […] the Rental[g] of private Men does thereby sink,
yet the general Rental[h] of the Kingdom by such Improvements,
at the same time rises.” (Charles D’Avenant,
Discourses on the Publick Revenues, and on the Trade of
England, Part II, London, 1698,
pp. 26–27.)”… fall in private Rents from 1666
to 1688 […] but the Rise in the Kingdomes general
Rental was greater in Proportion during that time, than in
the preceeding Years, because the Improvements upon Land
were greater and more universal, between those two Periods,
than at any time before (l.c. p. 28).
It is also evident here, that the Englishman always
regards the levef of rent as rent related to capital and
never to the total land in the kingdom (or to the
acre in general, like Herr Rodbertus).
[a] Instead of
“of the towns has therefore become” in the
manuscript: “In Dutch towns is”.—Ed.
[b] Instead of
“and the” in the manuscript:
“on”.—Ed
* ||486| <As Opdyke calls landed
property “the legalised reflection of the
capital”, so “capital is the legalised
reflection of other people’s labour”.> |486||
[c] Instead
of “reflection of the capital” in
the manuscript: “reflection of the value of
capital”.—Ed.
[d] In the
manuscript: “woods”.—Ed.
[e] In the
manuscript: “manufacturing” instead of
“manuring”.—Ed.
[f] In the
manuscript: “and” instead of
“or”.—Ed.
[g] In the
manuscript: “income from rent” instead of
“Rental”.—Ed.
[h] In the
manuscript: “rent” instead of
“Rental”.—Ed.