Ricardo's Theory of Rent
The main points were dealt with when discussing Rodbertus. Just a few more GLEANINGS here.
Firstly, some comments on the historical aspect: Ricardo was first of all concerned with the period 1770-1815, which came approximately within his own experience, and during which wheat prices were constantly rising. Anderson [on the other hand] was concerned with the 18th century, at the close of which he was writing. During the first half of that century [wheat prices] were falling and during the second half they were rising. Hence for Anderson, the law he discovered was in no way connected with a diminishing PRODUCTIVITY OF AGRICULTURE or a normal //for Anderson an unnatural// rise in the price of the product. For Ricardo however such a connection existed. Anderson believed that the abolition of the corn laws (at that time export premiums) caused the rise in prices during the 2nd half of the 18th century.[1]
Ricardo knew that the introduction of corn laws (1815) was intended to prevent the fall in prices, and TO A CERTAIN DEGREE was bound to do so. With regard to the latter [it was] therefore necessary to point out that, if left to itself, the law of rent — within a definite territory—was bound to result in recourse to less fertile land, thus leading to dearer agricultural products and increased rent at the cost of industry and the mass of the population. And here Ricardo was right, both historically and in practice. Anderson on the other hand [maintained] that corn laws (and he also favours a DUTY ON IMPORTS) must further the even development of agriculture within a definite territory and that for this even development agriculture needs security. Consequently he [maintained] that this progressive development in itself—through the law of rent he discovered — would lead to increased productivity in agriculture and thereby to a fall in the AVERAGE PRICES OF AGRICULTURAL
PRODUCE.
Both of them, however, start out from the viewpoint which, on the Continent, seems so strange: 1. That there is no landed property to shackle any desired investment of capital in land. 2. That expansion takes place from better land to worse (this process is absolute for Ricardo, provided one leaves out of account the interruptions caused by the response of science and industry; for Anderson the worse land is in turn transformed into better land and so it is relative). 3. That a sufficient amount of capital is always available for investment in agriculture.
Now so far as 1. and 2. are concerned, it must seem very odd to the continentals, that in the country in which, according to their conception, feudal landed property has maintained itself most stubbornly, the economists, Anderson as well as Ricardo, start out from the conception that no landed property exists. The explanation for this is:
firstly: the peculiarity of the English "LAW OF ENCLOSURES", which is in no way analogous with the continental portioning out of common land;
secondly: nowhere in the world has capitalist production, since Henry VII, dealt so ruthlessly with the traditional relations of agriculture, adapting and subordinating the conditions to its own requirements. In this respect England is the most revolutionary country in the world. Wherever the conditions handed down from history were at variance with, or did not correspond to, the requirements of capitalist production on the land, they were ruthlessly swept away; this applies not only to the position of the village communities but to the village communities themselves, not only to the habitats of the AGRICULTURAL POPULATION but to the agricultural POPULATION itself, not only to the original centres of cultivation, but to cultivation itself. The German, for example, meets with economic relations that are determined by traditional circumstances such as land boundaries, the position of the economic centres, given conglomerations of the population. The Englishman meets with historical conditions of agriculture which have been progressively created by capital since the end of the 15th century. " CLEARING OF ESTATES" , a technical term [well known] in the UNITED KINGDOM, will not be found in any continental country. But what is the meaning of this "CLEARING OF ESTATES"? It means that without any consideration for the local inhabitants, who are driven away, for existing village communities, which are obliterated, for agricultural buildings, which are torn down, for the type of agriculture, which is transformed in one fell swoop, for instance arable land converted into grazing pasture — none of the conditions of production are accepted as they have traditionally existed but are historically transformed in such a way that, under the circumstances, they will provide the most profitable investment for capital. To that extent, therefore, no landed property exists; it gives capital — i.e., the FARMER — full scope, since it is only concerned with monetary income. A Pomeranian landowner,[3] therefore, with his head full of, ancestral land boundaries, economic centres and boards of agriculture, etc., may well be amazed by Ricardo's "unhistorical" view of the [XI-561] development of conditions in agriculture. This shows merely that he naively confuses Pomeranian conditions with those prevailing in England. But it cannot be said that Ricardo, who in this case starts from the conditions in England, is just as narrow-minded as the Pomeranian landowner, who can think only in terms of Pomeranian conditions. English conditions are the only ones in which modern landovjnership, i.e., landowner ship which has been modified by capitalist production, has been adequately developed. For the modern — the capitalist— mode of production, the English view is here the classical view. The Pomeranian, on the other hand, judges the developed relations from a historically lower and as yet inadequate form.
Indeed, most of Ricardo's continental criticsb even take as their starting-point conditions in which the capitalist mode of production, adequate or inadequate, does not as yet exist at all. It is as if a guild-master wanted, lock, stock and barrel, to apply Adam Smith's laws — which presuppose free competition — to his guild economy.
The presupposition of the movement from better to worse land — relatively to the particular stage in the development of the productive power of labour as with Anderson, and not absolutely as with Ricardo — could only arise in a country such as England, where within a relatively very small territory capital has farmed so ruthlessly and has for centuries mercilessly sought to adapt to its own needs all traditional relationships of agriculture. Thus it [the presupposition] could only arise where, unlike the Continent, capitalist production in agriculture does not date from yesterday and does not have to fight against old traditions.
A second factor influencing the English was the knowledge they gained through their colonies. We have seen(1) that Adam Smith's work — with direct reference to the colonies — already contains the basis for the entire Ricardian viewpoint. In these colonies, and especially in those which produced only merchandise such as tobacco, cotton, sugar, etc., and not the usual foodstuffs, where, right from the start, the colonists did not seek subsistence but set up a business, fertility was of course dicisive, given the situation [of the land], and given the fertility, the situation of the land was decisive. They did not act like the Teutons, who settled in Germany in order to make their home there, but like people who, driven by motives of bourgeois production, wanted to produce commodities, and their point of view was, from the outset, determined not by the product but by the sale of the product. That Ricardo and other English writers [148] transferred this point of view — which emanated from people who were themselves already the product of the capitalist mode of production — from the colonies to the course of world history and that they took the capitalist mode of production as a prius(2) for agriculture in general, as it was for their colonists, is due to the fact that they saw in these colonies, only in a more obvious form, without the fight against traditional relations, and therefore untarnished, the same domination of capitalist production in agriculture as hits the eye everywhere in their own country. Hence, if a German professor or landowner— belonging to a country which differs from all others in its complete lack of colonies — considers such a view to be "false", then this is quite understandable.
Finally the presupposition of a continuous flow of capital from one TRADE into another, this basic assumption of Ricardo 's, amounts to nothing more than the assumption that developed capitalist production predominates. Where this domination is not yet established, this presupposition does not exist. For instance, a Pomeranian landowner will find it strange that neither Ricardo nor indeed any English writer ever suspects that agriculture might lack capital. The Englishman does, indeed, complain of lack of land in proportion to capital, but jamais(3) of a lack of capital in proportion to the land. Wakefield, Chalmers, etc.,try to explain the fall in the rate of profit from the former circumstance. The latter does not exist for any English writer; Corbet notes as a self-explanatory fact that CAPITAL IS ALWAYS REDUNDANT IN ALL TRADES. On the other hand, bearing in mind the situation in Germany, the landowner's difficulties in borrowing money — because mostly it is the landowner himself who cultivates the land and not a capitalist class which is quite independent of him — it is understandable that Mr. Rodbertus, for example (p. 211), is surprised at "the Ricardian fiction, that the supply of capital is regulated by the desire to invest it".(4) What the Englishman lacks is a "FIELD OF ACTION", opportunity for investment of the available stock of capital. But a "desire for capital" to "invest", on the part of the only class which has capital to invest — the capitalist class — this does not exist in England.
[XI-562] This "desire for capital" is Pomeranian. The objection made by English writers against Ricardo was not that capital was not available in any desired quantity for particular investments, but that the return flow of capital from AGRICULTURE encountered specific technical, etc., obstacles.
This kind of critical-continental censoriousness of Ricardo, therefore, only shows the lower stage in the conditions of production from which these "sages" start out.
Now to the matter in hand. In the first place, in order to isolate the problem, we must leave aside entirely differential rent, which alone exists for Ricardo. By differential rent I understand the difference in the magnitude of rent — the greater or smaller rent which is due to the different fertility of the various types of land. (Given equal fertility, differential rent can only arise from differences in the amounts of capital invested. This case does not exist for our problem and does not affect it.) This differential rent merely corresponds to the excess profits which, given the market price or, more correctly, the market value, will be made in every branch of industry, for example COTTON SPINNING, by that capitalist whose conditions of production are better than the average conditions of this particular TRADE. For the value of the commodity of a particular sphere of production is determined, not by the quantity of labour which the individual commodity costs, but by the quantity which the commodity costs that is produced under the average conditions of the sphere. Manufacture and agriculture only differ from one another here in that in the one, the excess profits fall into the pocket of the capitalist himself, whereas in the other they are pocketed by the landowner, and furthermore, that in the former they are fluid, they are not lasting, are made by this capitalist or that, and always disappear again, while in the latter they become fixed because of their enduring (at least for a long period) natural basis in the variations in the land.
This differential rent must therefore be left out of account, but it should be noted that it may exist not only when a movement from better to inferior land takes place but also from inferior to better land. In both cases the only requirement is that the newly cultivated land is necessary but at the same time only just sufficient to satisfy the ADDITIONAL DEMAND. If the newly cultivated, better land were more than sufficient to satisfy the ADDITIONAL DEMAND then, according to the volume of the ADDITIONAL DEMAND, part or all of the inferior land would be thrown out of cultivation or, at any rate, out of cultivation of that product which forms the basis of the agricultural rent, i.e., in England of wheat and in India of rice. Thus differential rent does not presuppose a progressive deteriora-tion of agriculture, but can equally well spring from a progressive improvement in it. Even where it presupposes the descent to worse types of land, firstly this descent may be due to an improvement in the productive forces of agriculture, in that the cultivation of the worse land, at the price which is set by demand, is only made possible by greater productive power. Secondly, the worse land can be improved; the differences will nevertheless remain, although they will become smaller, so that as a result there is only a relative, comparative decrease in productivity — whereas absolute productivity increases. This was in fact the presupposition made by Anderson, the original AUTHOR of the Ricardian law.
Then, IN THE SECOND INSTANCE, only the agricultural rent in the strict sense should be considered here, in other words the rent of the land which supplies the chief vegetable foods. Smith has already explained that the rents of land which supplies the other products, such as stock-raising,etc., are determined by that rent; that they are themselves derived, determined by the law of rent and not determining it. In themselves therefore these rents do not furnish any useful material for the understanding of the law of rent in its original, pure condition: There is nothing primary about them.
THIS SETTLED, the question is reduced to the following: Does an absolute rent exist? That is, a rent which arises from the fact that capital is invested in agriculture rather than manufacture; a rent which is quite independent of differential rent or excess profits which are yielded by capital invested in better land?
It is clear that Ricardo correctly answers this question in the negative, since he starts from the false assumption that values and average prices of commodities are identical. If this were the case, it would be a tautology to say that the price of agricultural products is above their cost price—when [XI-563] the constant price of agricultural products yields, beyond the average profits, also an extra rent, a constant surplus over and above the average profit — for this cost price equals the advances+the average profit AND NOTHING ELSE. Were the prices of agricultural products to stand above their cost prices, and always to yield an excess profit, they would consequently stand above their value. There would be no alternative but to assume that agricultural products are perpetually sold above their value, which, however, equally presupposes that all other products are sold below their value, or that value in general is something quite different from that which the theory requires it to be. Taking into account all compensations which take place between the different capitals owing to differences arising from the process of circulation, the same quantity of labour (immediate and accumulated) would produce a higher value in agriculture than in manufacture. The value of the commodity would therefore not be determined by the quantity of labour contained in it. The whole foundation of political economy would thus be thrown overboard. Ergo, Ricardo rightly concludes: NO ABSOLUTE RENTS. Only differential rent is possible; in other words the price of the agricultural product grown on the worst land equals the cost price of the product, as [with] every other commodity, [this is equal to its] value. The capital invested in the worst land differs from capital invested in manufacture only by the type of investment, by its being a particular species of investment. Here therefore the universal validity of the law of value becomes apparent. Differential rent—and this is the sole rent — on better land — is nothing but the excess profit yielded by capitals employed in above-average conditions owing to the [establishment of] one identical market value in every sphere of production. This excess profit consolidates itself only in agriculture because of its natural basis and, furthermore, the excess profit flows not into the pocket of the capitalist but into that of the landowner since it is the landowner who represents this natural basis.
The entire argument collapses together with Ricardo's assumption, that cost price = value. The theoretical interest which forces him into a denial of absolute rent disappears. If the value of the commodities differs from their cost price, then they necessarily fall into 3 categories. In the first category, cost price=the value of the commodity, in the second, the value is below its cost price and in the 3rd, it is above its cost price. The fact, therefore, that the price of the agricultural product yields a rent, only shows that the agricultural product belongs to that group of commodities whose value is above their cost price. The only remaining problem requiring solution would be: why, in contrast to other commodities whose value is also above their cost price, competition between capitals does not reduce the value of agricultural products to their cost price. The question already contains the answer. Because, according to the presupposition, this can only happen in so far as the competition between capitals is able to effect such an equalisation, and this in turn can only occur to the extent that all the conditions of production are either directly created by capital or are equally — elementally — at its disposal as if it had created them. With land this is not the case, because landed property exists and capitalist production starts its career on the presupposition of landed property, which is not its own creation, but which was there before it. The mere existence of landed property thus answers the question. All that capital can do is to subject agriculture to the conditions of capitalist production. But the latter cannot deprive landed property of its hold on that part of the agricultural product which capital could appropriate — not through its own action — but only on the assumption of the non-existence of landed property. Since landed property exists, capital must however leave the excess of value over cost price to the landowner. But this difference [between value and cost price] itself only arises from a difference in the composition of the organic component parts of capital. All commodities whose value, in accordance with this organic composition, is above the cost price, thereby show that [the labour expended on them is] relatively less productive than that expended on the commodities whose value=the cost price and even less productive than that expended on the commodities whose value is below the cost price; for they require a greater quantity of immediate labour in proportion to the past labour contained in the constant capital; they require more labour in order to set in motion a definite capital. This is a historical difference and can therefore disappear. The same chain of reasoning which demonstrates the possibility of the existence of absolute rent, shows its reality, its existence, as a purely historical FACT, which belongs to a certain stage of development of agriculture and which may disappear at a higher stage.
Ricardo explained differential rent from an absolute decrease in productivity in agriculture. Differential rent does not presuppose this, nor does Anderson make this assumption. On the other hand Ricardo denies the existence of absolute rent because he [XI-564] assumes the organic composition of capital to be the same in industry and agriculture and so denies the purely historical fact of the lower development of the productive power of labour in agriculture as compared with manufacture. Hence he falls into a twofold historical error: On the one hand, he assumes that the productivity of labour in agriculture is absolutely the same as in industry, thus denying a purely historical difference in their actual stage of development. On the other hand, he assumes an absolute decrease in the productivity of agriculture and regards this as its law of development. He does the one in order to make cost price on the worst land equal value and he does the other in order to explain the differences between the prices [of the products] of the better kinds of land and their values. The whole BLUNDER originates in the confusion of cost price with value.
Thus the Ricardian theory is disposed of. The rest was dealt with earlier, in the chapter on Rodbertus.
I have already indicateda that Ricardo opens the CHAPTER by stating that it is necessary to examine "WHETHER THE APPROPRIATION OF LAND, AND THE CONSEQUENT CREATION OF RENT" (p. 53) do not interfere with the determination of value by labour time. And he says later:
* "Adam Smith ... cannot be correct in supposing that the original rule which regulated the exchangeable value of commodities, namely, the comparative quantity of labour by which they were produced, can be at all altered by the appropriation of land and the payment of rent"* ([p.] 67).
This direct and conscious connection which Ricardo's theory of rent has with the determination OF VALUE is its theoretical merit. Apart from that this CHAPTER II "ON RENT" is RATHER inferior to West's exposition. It contains much that is QUEER, petitio principiib
and UNFAIR DEALING with the problem.
Actual agricultural rent, which Ricardo justifiably here treats as rent xaT'É£°XTlv>c *s that which is paid for the PERMISSION to invest capital, to produce capitalistically, in the element land. Here land is the element of production. This does not apply, for example, to rent for buildings, waterfalls,etc. The powers of nature which are paid for in these cases enter into production as a condition, be it as productive power or as sine qua non, but they are not the element in which this particular branch of production is carried on. Again, in rents for mines, coal-mines,etc., the earth is the reservoir, from whose BOWELS the use values are to be torn. In this case payment is made for the land, not because it is the element in which production is to take place, as in agriculture, not because it enters into production as one of the conditions of production, as in the case of the waterfall or the building site, but because it is a reservoir containing the use values, which are to be got hold of through industry.
Ricardo's explanation that:
* "Rent is that portion of the produce of the earth, which is paid to the landlord for the use of the original and indestructible powers of the soil" * ([p.] 53)
is poor. Firstly, the soil has n o "INDESTRUCTIBLE POWERS". (A note on this is to follow at the end of this chapter.) Secondly, it has no "ORIGINAL" POWERS either, since the land is in n o way "original", but rather the product of an historical a n d natural process. But passons ça." By "ORIGINAL" POWERS of the land we understand here those, which it possesses independently of the action of h u m a n industry, although, on the other hand, the POWERS given to it by human industry, become just as much its ORIGINAL POWERS as those given to it by the process of nature. Apart from this, it is correct to say that rent is a payment for the "USE" of natural things, irrespective of whether it is for the USE of the "ORIGINAL POWERS" of the SOIL or of the power of the waterfall or of land for building or of the treasures to be found in the water or in the bowels of the earth.
As distinct from the agricultural rent proper, Adam Smith (says Ricardo) speaks of the rent PAID for wood from virgin forests, RENT
OF COAL-MINES and OF STONE-QUARRIES. T h e way in which Ricardo disposes of this is RATHER STRANGE.
H e begins by saying that the RENT OF LAND must not be confused with THE INTEREST AND PROFIT OF CAPITAL ([p.] 53), that is:
* "capital employed in ameliorating the quality of the land, and in erecting such buildings as were necessary to secure and preserve the produce" * ([p.] 54).
From this h e immediately [passes on] to the above-mentioned examples from Adam Smith. With regard to virgin forests:
* "Is it not, however, evident, that the person who paid what he" (Smith) "calls rent, paid it in consideration of the valuable commodity which was then standing on the land, and that he actually repaid himself with a profit, by the sale of timber}" * ([p.] 54.)
Similarly with the STONE-QUARRIES and COAL-MINES.
which regulate the progress of rent, are widely different from those which regulate the progress of profits, and seldom operate in the same direction" * ([pp.] 54-55).
This is very STRANGE LOGIC. O n e must distinguish RENT paid to the OWNER of the LAND for the USE of the ORIGINAL and "INDESTRUCTIBLE POWERS OF THE SOIL" from the INTEREST and PROFIT which is paid to him for the capital he has invested in AMELIORATING the land, etc. The "COMPENSATION" which is paid to the owner of naturally-grown forests for the right TO -REMOVE- wood, or to the owner of STONE-QUARRIES a n d COAL-MINES for the right TO "REMOVE" stones a n d coal, is not RENT, because it is not a payment for the "USE OF THE ORIGINAL
AND INDESTRUCTIBLE POWERS OF THE SOIL". VERYWELL! But Ricardo argues as though this "COMPENSATION" were the same as the profit and interest which are paid for capital invested in AMELIORATIONS of the land. But this is wrong. Has the owner of a "virgin forest" invested "capital" in it so that it may bear "wood" or has the owner of stone-quarries and coal-mines invested "capital" in these, so that they may contain "stones" and "coal"? Whence, therefore, his "COMPENSATION"? It is by no means — as Ricardo tries to make out — PROFIT or INTEREST OF CAPITAL. Therefore it is "RENT" a n d NOTHING ELSE, even if it is not RENT as defined by Ricardo. But this only shows that his definition of rent excludes those forms of it where the "COMPENSATION" is paid for mere natural things, in which n o h u m a n labour is embodied, a n d where it is paid to the owner of these natural things only because h e is the "owner", the owner of land, whether this consists of soil, forest, fish pond, waterfall, building land or anything else. But, says Ricardo, the m a n who paid for the right to fell trees in the virgin forest, paid "IN CONSIDERATION OF THE VALUABLE
COMMODITY WHICH WAS THEN STANDING ON THE LAND, AND ACTUALLY REPAID HIMSELF WITH A PROFIT, BY THE SALE OF THE TIMBER".[3] Stop! When Ricardo here calls the WOOD, i.e., the trees "STANDING ON THE LAND" in the virgin forest a "VALUABLE COMMODITY", then this means only that it is S-uvct|xeib a use value. A n d this use value is expressed here in the word "VALUABLE". But it is not a "COMMODITY". Because for this it would, at the same time, have to be exchange value, in other words, THE REALISATION OF A CERTAIN QUANTITY OF LABOUR EXPENDED UPON IT. It only becomes a COMMODITY by being separated from the virgin forest, by being felled, REMOVED and transported — by being transformed from WOOD into TIMBER. O r does it only become a COMMODITY by the fact it is soldi T h e n arable land too becomes a COMMODITY by the mere act of selling!
T h e n we would have to say: RENT is the PRICE PAID TO THE OWNER OF NATURAL FORCES OR MERE PRODUCTS OF NATURE FOR THE RIGHT OF USING THOSE FORCES
OR APPROPRIATING (BY LABOUR) THOSE PRODUCTS. This is in fact the form in which ALL RENT appears originally. But then the question remains to be solved, how things which have no VALUE can have a PRICE and how this is compatible with the general theory OF VALUES. T h e question: for what purpose does the man pay "A COMPENSATION" FOR
THE RIGHT TO REMOVE WOOD FROM THE LAND UPON WHICH IT STANDS, h a s n o t h i n g to d o with the real question. T h e question is: from what fund does he pay? Well, says Ricardo, "BY THE SALE OF THE TIMBER". That is, out of the price of the TIMBER. A n d furthermore, this price was such THAT, as Ricardo says, THE MAN "ACTUALLY REPAID HIMSELF WITH A PROFIT". Now we know where we are. T h e price of the timber must at any rate equal the sum of money REPRESENTING THE QUANTITY OF LABOUR
NECESSARY TO FELL THE TIMBER, T O REMOVE IT, T O TRANSPORT IT, TO BRING IT T O
MARKET. Now is the profit with which the man "REPAYS" HIMSELF, an addition over and above this value, this exchange value JUST IMPARTED3 to the timber through the LABOUR EXPENDED UPON IT? If Ricardo said this then he would fall into the crudest conception, far beneath his own doctrine. No. Given that the man was a capitalist, the profit is part of the labour he employed in the production of the "timber", the part for which he did not pay; and the man would have made the same profit, if he had set in motion the same MASS OF LABOUR, shall we say, in COTTON SPINNING. (If the man is not a capitalist, then the profit=that quantity of his labour which he exerts beyond that which is necessary to cover his wages, and which would have constituted the profit of the capitalist, had a capitalist employed him, but which now constitutes his own profit because he is his own wage labourer and his own capitalist in one and the same person.) But here we come to the UGLY WORD that this timber man "ACTUALLY REPAID HIMSELF WITH A PROFIT". This gives the whole transaction a very ordinary look and corresponds to the crude manner of thinking which this capitalist, who REMOVES timber, may himself have of the source of his profit. First he pays the owner of the virgin forest for the use value of wood, which, however, has no "value" (VALUE IN EXCHANGE) and which, so long as it "STANDS UPON THE LAND", has not even a use value. H e may pay him £5 per ton. And then he sells the same wood to the public (setting aside his other costs) at £6 and so ACTUALLY pays back to himself the £5 with a profit of 20%. [He] "ACTUALLY REPAID HIMSELF WITH A PROFIT". If the owner of the forest had only demanded "COMPENSATION" of £2 (40s.), then the timber man would have sold the ton at £2 8s.
instead of at £ 6 . [XI-566] Since h e always adds the same rate of profit, the price of timber would be high or low here because the rent is high or low. The latter would enter into the price as a constituent part but would in no way be the result of the price. Whether the "RENT"—COMPENSATION — is paid to the OWNER of the land for the USE of the "power" of the land or for the "USE" of the "NATURAL PRODUCTS" of the land, in n o way alters the economic relations, in n o way alters the fact that money is paid for "A NATURAL THING" (POWER OR PRODUCE OF THE EARTH) UPON WHICH NO PREVIOUS HUMAN LABOUR HAS BEEN SPENT. And thus on the 2nd page of his CHAPTER " ON RENT" Ricardo would have overthrown his whole theory in order to avoid a difficulty. It would appear that Adam Smith was a great deal more far-sighted here.
T h e same CASE with the STONE-QUARRIES and COAL-MINES.
* "The compensation given for the mine or quarry, is paid for the value of the coal or stone which can be removed from them, and has no connection with the original and indestructible powers of the land" * ([pp.] 54-55).
No! But there is a very significant CONNECTION WITH THE "ORIGINAL AND DESTRUCTIBLE PRODUCTS OF THE SOIL". T h e word "VALUE" is just as UGLY here as the phrase "REPAID HIMSELF WITH A PROFIT" was above.
Ricardo never uses the word VALUE for UTILITY or USEFULNESS or "VALUE IN USE". Does he therefore mean to say that the "COMPENSATION" is paid to the OWNER of the QUARRIES and COAL-MINES for the "VALUE" the COAL and STONE have before they ARE REMOVED FROM THE QUARRY AND THE MINE — IN THEIR ORIGINAL STATE? Then he invalidates his entire doctrine of VALUE. O r does VALUE mean here, as it must do, the possible use value and hence also the PROSPECTIVE exchange value of COAL and STONE? T h e n it means nothing but that their OWNER is paid RENT for the permission to use the "ORIGINAL COMPOSITION OF THE SOIL" for the production of coal and stones. And it is absolutely incomprehensible why this should not be called "RENT", in the same way as if the permission were given to use the "POWERS" of the land for the production of wheat. O r we end u p again with the annulment of the whole theory of rent, as explained in connection with wood. According to the correct theory, there are n o difficulties involved here at all. The labour, or capital, employed in the "production" //not reproduction// of wood, coal or stone (this labour, it is true, does not create these natural products, but separates them from their elementary connection with the earth a n d so "produces" them as usable wood, coal or stone) evidently belongs to those spheres of production in which the part of capital laid out in wages is greater than that laid out in constant capital, the direct labour is greater than the "past" labour the result of which serves as a means of production. If, therefore, the commodity is sold at its value here, then this value will be above its cost price, i.e., the wear and tear of the instruments of labour, the wages, and the average profit. T h e excess can thus be paid as rent to the OWNER OF FOREST, QUARRY or COAL-MINE.
But why these CLUMSY MANOEUVRES of Ricardo's, such as the wrong use of VALUE, etc.? Why this CLINGING to the explanation of RENT as a payment for the USE of the "ORIGINAL AND INDESTRUCTIBLE POWERS OF THE LAND"? Perhaps the answer will emerge later. In any case, he wants to distinguish, to mention specifically, the agricultural rent in the strict sense and at the same time to open the way for differential rent, by saying that payment for this elementary POWER can only be made in so far as it develops DIFFERENT DEGREES OF POWER.
A further comment on the above: Supposing more productive or better situated coal-mines and stone-quarries were discovered, so that, with the same quantity of labour, they yielded a larger product than the older ones, and indeed so large a product that it covered the entire demand. [3] T h e n the value and therefore the price of coal, stones, timber, would fall and as a result the old coal-mines and stone-quarries would have to be closed. They would yield neither profit, nor wages, nor rent. Nevertheless, the new ones would yield rent just as the old ones did previously although less (at a lower rate). For every increase in the productivity of labour reduces the amount of capital laid out [in] wages, in proportion to the constant capital which is in this case laid out in tools. Is this correct? Does this also apply here, where the CHANGE in the PRODUCTIVITY OF LABOUR does not arise from a change in the mode of production itself, but from the natural fertility of the coal-mine or the stone-quarry, or from their SITUATIONS? O n e can only say here that in this case the same quantity of capital yields more tons of coal or stone and that therefore each individual ton contains less labour; the total tonnage, however, contains as much as, or even more [labour], if the new mines or quarries satisfy not only the old DEMAND SUPPLIED BY THE OLD MINES AND QUARRIES, but also an ADDITIONAL DEMAND, and, moreover, an ADDITIONAL DEMAND which is greater than the difference between the FERTILITY of the OLD and that of the NEW MINES and QUARRIES. But this would not alter the organic composition of the capital employed. It would be true to say that the price of a ton, an individual ton, contained less rent, but only because altogether it contained less labour, hence also less wages and less profit. The proportion of the rate of rent to profit would, however, not be affected by this. Hence we can [XI-567] only say the following:
If DEMAND remains the same, if, therefore, the same quantity of coal and stone is to be produced as before, then less capital is employed now in the new richer mines and quarries than before, in the old ones, in order to produce the same mass of commodities. The total value of the latter thus falls, hence also the TOTAL AMOUNT OF RENT, PROFIT, wages and constant capital employed. But the proportions of rent and profit change no more than those of profit and wages or of profit and the capital laid out, because there has been no organic CHANGE in the capital employed. Only the size and not the composition of the capital employed has changed, hence neither has the mode of production.
If there is an ADDITIONAL DEMAND to be satisfied, an ADDITIONAL DEMAND moreover that equals the difference in fertility between the new and the old MINES and QUARRIES, then the same amount of capital will be used now as previously. The value of the individual ton falls. But the total tonnage has the same value as before. As regards the individual ton, the size of the portions of value which resolve into profit and rent decreased together with the value it contained. But since the amount of capital has remained the same and with it the total value of its product and no organic CHANGE has taken place in its composition, the ABSOLUTE AMOUNT OF RENT AND PROFIT has remained the same.
If the ADDITIONAL DEMAND is so great that with the same capital investment it is not covered by the difference in FERTILITY between the NEW and the OLD MINES and QUARRIES, then ADDITIONAL CAPITAL will have to be employed in the new mines. In this case — provided the GROWTH of the total capital invested is not accompanied by a CHANGE in the division of labour, the application of machinery, in other words provided there is no CHANGE in the organic composition of the capital—the AMOUNT OF rent and profit grows because the value of the total product grows, the value of the total tonnage, although the value of each individual ton falls and therefore also that part of its value which resolves into rent and profit.
In all these instances, there is no change in the rate of rent, because there is no CHANGE in the ORGANIC COMPOSITION of the capital employed (however much its magnitude may alter). If, on the other hand, the CHANGE arose out of such a CHANGE — i.e., from a decrease in the amount of capital laid out in wages as compared with that laid out in machinery, etc., so that the mode of production itself is altered — then the rate of rent would fall, because the difference between the cost price and the value of the commodity would have decreased. In the 3 cases considered above, this does not decrease. For though the value falls, the cost price of the individual commodity falls likewise, in that less labour has been EXPENDED UPON IT,
LESS PAID + UNPAID LABOUR.
Accordingly, therefore, when the greater productivity of labour, or the lower value of a CERTAIN MEASURE OF COMMODITIES PRODUCED, arises only from a CHANGE in the PRODUCTIVITY of the NATURAL ELEMENTS, from the difference between the NATURAL DEGREE OF FERTILITY OF SOILS, MINES, QUARRIES etc., then the AMOUNT OF RENT may fall because, under the altered conditions, A LESS[ER] QUANTITY OF CAPITAL IS EMPLOYED; it may remain constant if there is an ADDITIONAL DEMAND; it may grow, if the ADDITIONAL DEMAND is greater than the difference in productivity between the previously employed and the newly employed NATURAL AGENCIES. T h e rate of rent, however," could only grow with a CHANGE
IN THE ORGANIC COMPOSITION OF THE CAPITAL EMPLOYED.
T h u s the AMOUNT OF RENT does not necessarily fall if the worse SOIL, QUARRY, COAL-MINE etc. is abandoned. T h e rate of rent, moreover, can never fall if this abandoning is purely the result of lesser natural fertility.
Ricardo distorts the correct idea, that in this case, depending on the STATE OF DEMAND, the AMOUNT OF RENT may fall, in other words depending upon whether the amount of capital employed decreases, remains the same or grows; he confuses it with the fundamentally wrong idea, that the RATE OF RENT must fall, which is an impossibility on the assumption made, since it has been assumed that no CHANGE IN THE ORGANIC COMPOSITION OF CAPITAL has taken place, therefore no CHANGE affecting the relationship between value and COST PRICE, the only relationship that determines the RATE OF RENT.
But what happens to DIFFERENTIAL RENTS in this case? Supposing that 3 groups of COALMINES were being worked: I, II and III. Of these, I bore the absolute rent, II a rent which was twice that of I, and III a rent which was twice that of II or four times that of I. In this example, I bears the absolute rent R, II 2R and I I I 4R. Now if No. IV is opened u p , and if this is more productive then I, II and III, and if it is so extensive that the capital invested in it can be as great as that in I, [then] in this case — THE FORMER STATE OF DEMAND REMAINING CONSTANT—the same amount of capital as was previously invested in I would now be invested in IV. I would thereupon be closed and a part of the capital invested in II would have to be WITHDRAWN. Ill and IV would suffice to replace I and a part of II, but they would not suffice TO SUPPLY THE WHOLE DEMAND, WITHOUT PART OF II CONTINUING TO BE WORKED. Let us assume, for the sake of the illustration, that IV — using the same amount of capital as was previously invested in I — is capable of providing the whole of the supply from I and half the supply from II. If, therefore, V2 the previous capital were invested in II, the old capital in III and the new in IV, then THE
WHOLE MARKET WOULD BE SUPPLIED.
[XI-568] WHAT THEN WERE THE CHANGES THAT HAD TAKEN PLACE, OR HOW
WOULD THE CHANGES ACCOMPLISHED AFFECT THE GENERAL RENTAL, THE RENTS OF I , I I , I I I AND I V ?
*The absolute rent, derived from IV, would, in amount and rate, be absolutely the same as that formerly derived from I; in fact the absolute rent, in amount and rate, would also before have been the same on I, II and III, always supposing that the same amount of capital was employed in those different classes. The value of the produce of IV would be exactly identical to that formerly employed on I, because it is the produce of a capital of the same magnitude and of a capital of the same organic composition. Hence the difference between value and cost price must be the same; hence the rate of rent. Besides, the amount [of rent] must be the same, because — at a given rate of rent — capitals of the same magnitude would have been employed. But, since the value of the coal is not determined by the value of the coal derived from IV, it would bear an excess rent, or an overplus over its absolute rent; a rent derived, not from any difference between cost price and value, but from the difference between the market value and the individual value of the produce No. IV.*
When we say that the absolute rent or the difference between value and cost price on I, II, III, IV, is the same, provided the magnitude of the capital invested in them, and therefore the AMOUNT OF RENT WITH A GIVEN RATE OF RENT is the same, then this is to be understood in the following way: The (individual) value of the coal from I is higher than that from II and that from II is higher than that from III, because one ton of coal from I contains more labour than one ton from II and one ton from II more than one ton from III. But since the ORGANIC COMPOSITION of the capital is in all 3 cases the same, this difference does not affect the individual ABSOLUTE RENT yielded by I, II, III. For if the value of a ton from I is greater, so is its cost price; it is only greater in the proportion that more capital of the same organic composition is employed for the production of one ton in I than in II and of one ton in II than in III. This difference in their values is, therefore, exactly equal to the difference in their cost prices, in other words to [the difference in] the relative amount of capital EXPENDED TO PRODUCE ONE TON OF COAL
31-176 in I, II and III. T h e variation in the magnitudes of value in the 3 classes does not, therefore, affect the difference between value and . cost price in the various classes. If the value is greater, then the cost price is greater in the same proportion, for the value is only greater in proportion as more capital or LABOUR is EXPENDED; hence the relation between value and cost price remains the same, and hence ABSOLUTE RENT is the same.
But now let us go on to see what is the situation regarding differential rent. Firstly, less capital is now being employed in the entire production of coal in II, III and IV. For the capital in IV is as great as the capital in I had been. Furthermore, half the capital employed in II is now WITHDRAWN. T h e AMOUNT OF RENT on II therefore will at all events drop by a half. Only one CHANGE has taken place in capital investment, namely in II, because in IV the same amount of capital is invested as was previously invested in I. We have, moreover, assumed that capitals of the same size were invested in I, II and I I I , for example 100 in each, altogether 300; now therefore only 250 are invested in II, III and IV, or ï/[6] of the capital HAS BEEN WITHDRAWN FROM THE PRODUCTION OF COAL.
Moreover, the market value of coal has fallen. We saw that I yielded R, II 2R a n d III 4R. Let us assume that the product of 100 on 1=120, of which R = 1 0 and 10=profit, then the market value of II was 130 (10 profit and 20 rent), and of III 150 (10 profit and 40 rent). If the product of 1=60 tons (£2 per ton), then that of 11=65 tons and that of 111 = 75 tons and the total p r o d u c t i o n = 6 0 + 6 5 + 75 tons=200 tons. Now 100 will produce as much in IV as the total product of I and half the product of II, namely, 60 + 32 V2 tons=92'/2 tons, which, according to the old market value, would have cost £ 1 8 5 and since the prof it =10 would thus have yielded a rent of £ 7 5 , amounting to 7 V2 R, for the absolute rent=10.
II, I I I and IV continue to yield the same number of tons, 200, since 3 2 I / [2] + 7 5 + 9 2 [1] / [2] = 2 0 0 tons.
But what is the position now, with regard to market value and DIFFERENTIAL RENTS?
In order to answer this we must see what is the amount of the ABSOLUTE INDIVIDUAL RENT of II. We assume that the absolute difference between cost price and value in this sphere of production = 1 0 % = the rent yielded by the worst mine, although this is not necessary unless the market value was absolutely determined by the value of I. [XI-569] If this was, indeed, the case, then the rent on I (if the COAL from I were sold at its value)
in fact represented the excess of value over its own COST PRICE and the GENERAL COST PRICE OF COMMODITIES in this sphere of production. II would therefore be selling its products at their value, if it sold its tonnage (the 65 tons) at £120, i.e., the individual ton at £1 u/i3-That instead it sold them at £2 was only due to the excess of the market value, as determined by I, over its individual value; it was due to the excess, not of its value, but of its market value over its cost price.
Moreover, on the assumption made, II now sells instead of 65, only 32 V2 tons, because a capital of only 50 instead of a capital of 100 is now invested in the mine.
II therefore now sells 32 V2 tons at £60. 10 on 50 is 20%. Of the £60, 5 are profit and 5 rent.
Thus we have for II: Value of the product, £1 n/is per ton; number of tons=32 V2; total value of the product=£60; rent=£5. The rent has fallen from 20 to 5. If the same AMOUNT of capital were still employed, then it would only have fallen to 10. The rate has therefore only fallen by half. That is, it has fallen by the total difference that existed between the market value as determined by I and its own value, the difference therefore that existed over and above the difference between its own value and cost price. Its differential rent was 10; its rent is now 10=to its absolute rent. In II, therefore, with the reduction of the market value to the value (of coal from II) differential rent has disappeared and consequently also the increased RATE OF RENT which was doubled by this differential rent. Thus it has been reduced from 20 to 10; with this given rate of rent, however, the rent has been further reduced from 10 to 5, because the capital invested in II has fallen by half.
Since the market value is now determined by the value of II, i.e., by £1 n/is per ton, the market value of the 75 tons produced by III now=£138[6]/i3, of which rent=£28[8]/i[3]. Previously the rent=£40. It has, therefore, fallen by £ll [7]/i3. The difference between this rent and the absolute rent used to be 30; now it only amounts to 18 [6]/i3 (for 18 [6]/i3+10 = 28 [6]/i[3]). Previously it=4R, now it is only 2R+£8[6]/is. As the amount of capital invested in III has remained the same, this fall is entirely due to the fall in the rate of differential rent, i.e., the fall in the excess of the market value of III over its individual value. Previously, the whole AMOUNT of the rent in III was equal to the excess of the higher market value over the price of production, now it is only=to the excess of the lower market value over the cost price [149]; the difference is thus coming closer to the absolute rent of III. With a capital of 100, III produces 75 tons,
31* whose value=£120; one ton is therefore = to £1[3]/s. But III sold the ton at £2, the previous market price, therefore, at £ [2]/ [5] more. On 75 tons, this amounted to [2]/5X75=£30, and this was in fact the differential rent of rent [III], for the rent was 40 (10 absolute and 30 differential rent). Now, according to the new market value, the ton is sold at only £1 H/i3- How much above its value is this? [3]/5=M/65 and n/i3=[55]/65- Thus the ton is sold [16]/[65] too dear. On 75 tons this amounts to 18[6]/i3, and this is exactly the differential rent, which is thus always equal to the number of tons multiplied by the excess of the market value of the ton over the [individual] value of the ton. It now remains to work out the fall in rent by 11[7]/i3- The excess of the market value over the value of III has fallen from [2]/[5] of a £ per ton (when it was sold at £2) to [16]/[65] per ton (at £ 1 u/i3), i.e., from [2]/5=[26]/65 to [16]/[6]5, [which is by] [10]/[65]. On 75 tons this amounts to /:>0/65 = [150]/i3= 11 [7]/i3, and this is EXACTLY the AMOUNT by which the rent in III has fallen.
[XI-570] The 92 7[2] tons from IV, at 1 u/i [3] [per ton], =£170 [10]/,[3]. The rent here = 60I0/i[3] and the differential rent=50 [10]/i[3].
If the 92 lh tons were sold at their value (£120), then 1 ton would cost £1 u/s7. Instead it is being sold at 1 n/i3. But n/i3= 407/48i and u/37= [143]/48i- This makes the excess of the market value of IV over its value equal to 264/48i- On 92 V2 tons this amounts to exactly £50 [10]/i3, which is the differential rent of IV.
Now let us put these two CASES together, under A and B. The two tables [below] give rise to some very important considerations.
Capi-Absolute Number Market Individ-Total Differen-tal rent of tons
value per ton
ual value per ton
value tial rent
1st class 100 10 60 £2 £2 120 0 Ilnd class 100 10 65 £2 £ i u / [1 3] 130 10 Illrd class 100 10 75 £2 £i [3]/ [5] 150 30
Total 300 30 200 400 40
The total number of tons=200. Total absolute rent=30. Total differential rent=40. Total rent=£70.
Capi-Absolute Number Market Individ-Total Differen-tal rent of tons
value per ton
ual value
value tial rent
Und class 50 5 32 V[2] £ i n / [1 3] £i u/ [1 3] £60 0 Illrd 100 10 75 £l H/,3 £i[3]/[5] 1386/[13] 18«/1S IVth 100 10 92 V[2] £i n/ [1 3] £i n/ [3 7] 170io/[13] 50>o/ls
Total 250 25 200 369 9/[13] 69 3/[13]
Total capital=250. Absolute rent=25. Differential rent=69 [3]/ [1 3]. Total rent: 94 [3]/ [1 3]. The total value of the 200 tons has fallen from 400 to 369[3]/[13].
First of all we see that the amount of absolute rent rises or falls proportionately to the capital invested in agriculture,lD° that is, to the total amount of capital invested in I, II, III. The rate of this absolute rent is quite independent of the size of the capitals invested for it does not depend on the difference in the various types of land but is derived from the difference between value and [cost] price; this latter difference however is itself determined by the organic composition of the AGRICULTURAL CAPITAL, by the mode of production and not by the land. In II B, the amount of the absolute rent falls from 10 to 5, because the capital has fallen from 100 to 50; half [XI-571] the capital has been withdrawn.
Before making any further observations on the two tables, let us construct some other tables. We saw that in B the market value fell to £l n/i3 per ton. But at this value, there is no necessity either for I A to disappear completely from the market, or for II B to employ only half the previous capital. Since in I, the rent=10 out of the total value of the commodity of 120, or V12 of the total value, [this applies] equally to the value of the individual ton which is worth £2. £[2]/i[2], however, is £'/e or 3'/ss. (3V[3]s.x60=£10). The cost price of a ton from I is thus £1 16[2]/3S. The [new] market value is £ 1 u/i [3], or £1 16[12]/!Ss. 16[2]/[3]s., however,= 16s. 8d. or 16[26]/[39]s. Against this, 16[12]/i3S. = 16S6/3gS. or [10]/s9S. more. This would be the rent per ton, at the new market value [[10]/39S.] and would amount to a total rent of 15[5]/iss. for 60 tons. Therefore we put less than 1% rent on the capital of 100. For I A to yield no rent at all, the market value would have to fall to its cost price, namely, to £1 16[2]/ss. or to £l[5]/6 (or to £l[10]/i2). In this case the rent on I A would have disappeared. It could, however, continue to be exploited with a profit of 10%. This would only cease if the market value were to fall further, below £l[5]/[6].
So far as II B is concerned, it has been assumed in Table B that half of the capital is WITHDRAWN. But since the market value of £l"/i3 still yields a rent of 10%, it will do so just as well on 100 as on 50. If, therefore, it is assumed that half the capital has been WITHDRAWN, then only because under these circumstances, II B still yields an absolute rent of 10%. For if [II] B had continued to produce 65 tons instead of 3272, then the market would be over-supplied and the market value of IV, which dominates the market, would fall to such an extent that the capital investment in II B would have to be reduced in order to yield the absolute rent. It is however clear that, if the whole capital [of] 100 yields rent at 9%, the sum total is greater than that yielded by [a capital of] 50 at 10%. Thus if, according to the state of the market, a capital of only 50 were required in II to satisfy the demand, the rent would have to be forced down to £5. It would, in fact, fall even lower, if it is assumed that the additional 3272 tons cannot always be disposed of, i.e., if they were thrown out of the market. The market value would fall so low that not only the rent on II B would disappear, but the profit would also be affected. Then capital would be withdrawn in order to diminish supply, until the correct point of 50 had been reached and then the market value would have been re-established at £l'7is, at which II B would again yield the absolute rent, but only on half the capital previously invested in it. In this instance too, the whole process would emanate from IV and III, who dominate the market.
But it does not by any means follow that if the market only absorbs 200 tons at £1 "/is per ton, it will not absorb an additional 32 7z tons if the market value falls, i.e., if the market value of 232 Vz tons is forced down through the pressure of 32 V2 surplus tons on the market. The cost price in II B is [110:65, i.e.] £1 [9]/i[3] or £1 13 '7i[3]s. But the market value is £1 "/is or £1 16[12]/[13]s. If the market value fell to such an extent that I A no longer yielded a rent, i.e., [if the market value fell] to the cost price of I A, to £1 16[2]/ss. or £1 % or £1 I0/[12], then for 77 B to use its whole capital, demand would have to grow considerably; since I A could continue to be exploited, as it yields the normal profit. The market would have to absorb not 32 7[2] but 92 7s additional tons, 292 7a tons instead of 200, i.e. [almost] half as much again. This is a very significant increase. If a moderate increase is to take place, the market value would have to fall to such an extent that I A is driven out of the market. That is, the market price would have to fall below the cost price of I A, i.e., below £1 [10]/i2, say, to £1 [9]/i2 or £1 15s. It would then still be well above the cost price of II B.
We shall therefore add a further three tables to the tables A and B, namely, C and D and E. And we shall assume in C that the demand grows, so that all classes of A and B can continue to produce, but at the market value of B, at which I A still yields a rent. In D we assume that [the demand] is sufficient for J A to continue to yield the normal profit but no longer a rent. And we shall assume in E that the price falls sufficiently to eliminate I A from the market [XI-572] but that the fall of the price simultaneously leads to the absorption of the 32'/2 surplus tons from II B.
The CASE assumed in A and B is possible. It is possible that if the rent is reduced from £10 to barely 16s., I A would withdraw its land from this particular form of exploitation and let it out to another sphere of exploitation, in which it can yield a higher rent. But in this CASE, II B would be forced through the process described above, TO WITHDRAW V2 OF HIS CAPITAL, if the market did not expand upon the appearance of the new market value.
Capi-Absolute Number Market Individ-Total Rent Differen-tal rent of tons
value ual value
value tial rent
1st class 100 £[10]/l3 60 £i u/ [1 3] £2 £iioio/ [1 3] £[10]/l3
or 155/,ss.
-£9 S/ [1 3]
U n d 100 £ 1 0 65 l U/,3 £ l U / , 3 120 0 Illrd 100 10 75 l U/,3 i[3]/[5] 1386/is +£18 [6]/i [3] IVth 100 10 92i/[2] £i n/ [1 3] £l U/ [3]7 H O " / , , +50l0/,3
Total: 400 30[10]/[13] 292i/[2] 540 693/,
Capital
Absolute rent
Market value
Cost price
Number of tons
Total value
Differential rent
1st class 100 0 £i[5]/[6] £i[5]/[6] 60 £110 0 (-) U n d 100 9'/ [6] £i[5]/[6] 65 U91/6 - (latent) Illrd 100 10 £i[5]/[6] 75 1371/2 + 171/2 IVth 100 10 i [5]/ [6] 92V2 169'/[12] +49?/[12]
Total 400 29i/[6] 292V[2] 536V[4] 67V, Capi-Absolute Market Cost Number Total Différer. tal rent value price of tons
value tial rent
Und 100 £33/[4] £l [9]/l2 £i[9]/[13] 65 1133/4 — vacat* Illrd 100 10 £18/12 75 I3IV4 + HV4 IVth 100 10 £i[9]/I2 05 I66V4 +46V[4]
Total : 300 233/4 235 4IIV4 + 57V[2] [XI-573] Now let us compile the tables, A, B, C, D and E, but in the manner which should have been adopted from the outset. Capital, Total value, Total product, Market value per ton, Individual value, Differential Value,[151] Cost Price, Absolute rent, Absolute rent in tons, Differential rent, Differential rent in tons, Total rent. And then the totals of all classes in each table.[152]
Endnotes
[148] Besides Ricardo, Marx means Smith and Wakefield. See also Capital, Vol. I, Ch. XXXIII (present edition, Vol. 35).—460
[8] See this volume, pp. 389-400 and pp. XIII — 711, XIV — 818, 821-822, 840-841 of the manuscript of 1861-63 (present edition, Vol. 32).—8
[149] The idea that the total rent (the absolute rent and the differential rent taken together) equals the difference between the market value and the cost price is examined by Marx in greater detail later (see this volume, p. 508).—475
[55] systèmes..., Paris, 1821.—129
[150] Earlier examples cited by Marx referred not to agriculture but to the exploitation of coal mines of varying productivity. However, what has been said about the mines is applicable to the cultivation of lands of varying fertility.—477
[143] "(See Corbet)" was pencilled in by Marx. Here he is referring to Thomas Corbet's book An Inquiry into the Causes and Modes of the Wealth of Individuals.. published in London in 1841, where Corbet states that in industry prices are regulated by the commodities produced under the most favourable conditions, and, in his opinion, these commodities constitute the bulk of all commodities of any given type (see pp. 42-44 of Corbet's book).—429
[37] Marx is referring to Notebook VII of the manuscript of 1861-63 (see present edition, Vol. 30, p. 414 et seq.).—91
[39] Marx quotes in French N. F. Canard's definition of wealth from Charles Ganilh's book Des systèmes d'économie politique... (Vol. 1, Paris, 1821, p. 75).—97
[151] Differential value, as Marx explains further on (see this volume, p. 486), is the difference between market value and individual value. Differential value is calculated per unit of product, while the differential rent is worked out for the aggregate product in the given class. If the market value of a unit of product is greater than its individual value, the difference is a positive magnitude. If, however, the market value is smaller than the individual value, this difference is a negative magnitude. In the case of negative magnitudes (Table C, p. 479 of this volume) fertility is so low that, given the existing market value, the lands in this class not only fail to yield any differential rent but even the absolute rent drops substantially below its normal size. In the summary table placed between pp. 480 and 481 of this volume, Marx expresses the phenomenon of negative differential rent through negative differential value, and in these cases he simply writes nought in the column "Differential rent" thus indicating the absence of positive differential rent (where, in a number of cases, negative differential rent correspondingly reduces absolute rent, this is shown in the column "Absolute rent"). The transfer of the negative magnitudes into the column representing differential value obviates the difficulty which arose in Table C when it was necessary to add up the differential rents of the different classes. Only the positive differential rents entered into the addition, while the negative magnitude "—£93/13" was simply regarded as zero to avoid duplication. That is why, to calculate negative differential rents, Marx included in his summary table a special column, "Differential value per ton", which contains the negative differential values as well.—480
[152] Further on, on p. XI — 573 of the manuscript, Marx sets out tables A, B, C and D, including in each of them all the categories just enumerated. On the next page of the manuscript, all the data of the tables A, B, C and D are set out again in a more orderly fashion, and the corresponding data of Table E are appended. This makes up a uniform summary table to be found between pp. 480 and 481 of this volume. Since the scheme drawn up by Marx on p. XI — 573 of the manuscript operates with the data that have been incorporated into the summary table in toto, it is not reproduced in the volume.—480
[1] Theories of Surplus Value, on which Marx began work in March 1862, constituted the fifth, concluding section of the first chapter of his research into capital, "The Production Process of Capital". The original intention was to examine absolute and relative surplus value in their combination. Theories of Surplus Value was to be an historical survey included in the chapter on surplus value, similar to the historical notes introducing the chapters on commodity and on money in A Contribution to the Critique of Political Economy. However, during the work, the character of the manuscript of Theories of Surplus Value had changed substantially. Both in its length and content, it surpassed the tasks the author had originally set himself. Marx not only considered the views of bourgeois economists but also put forward a number of major theoretical propositions. Theories of Surplus Value were published in English for the first time, in an abridged form, in: K. Marx, Theories of Surplus Value. A selection from the volumes published between 1905 and 1910 as Theorien über den Mehrwert, edited by Karl Kautsky, taken from Karl Marx's preliminary manuscript for the projected fourth volume of Capital. Translated from the German by G. A. Bonner and Emile Burns. Lawrence & Wishart, London, 1951. The work was first published in full between 1963 and 1971: K. Marx, Theories of Surplus-Value (Vol. IV of Capital), Part I, Foreign Languages Publishing House, Moscow, 1963; Part II, Progress Publishers, Moscow, 1968; Part III, Progress Publishers, Moscow, 1971. This volume contains the sequel to Marx's Theories of Surplus Value. The first five notebooks of the Economic Manuscript of 1861-63 and the beginning of Theories of Surplus Value (Notebook VI and part of Notebook VII), in which Marx critically analyses the views of James Steuart, the Physiocrats, and Adam Smith's determinations of value, are to be found in Volume 30 of the present edition.—6
[3] This is in fact not the conclusion but only the continuation of the section on Smith. The conclusion of this section can be found in Notebook IX.—6
[6] The Economists was the name given to the Physiocrats in France during the second half of the 18th and first half of the 19th centuries. By the 1850s the name acquired a more general meaning and ceased to designate exponents of a particular economic doctrine.— 7, 116
[2] The entries below were made by Marx on the inside covers of notebooks VIII-XII of the manuscript of 1861-63. The table of contents of Notebook \ II is published in Volume 30, p. 347, and its text in Volume 30 and in this volume. The tables of contents had been corrected several times. Marx's original plan was to analyse Adam Smith's doctrine in notebooks VII and VIII and then to pass on to Necker and Ricardo. But later he rejected this scheme. He also proposed to examine Ricardo's views in Notebook X, first after the analysis of Linguet and then of Bray. In the contents of Notebook XI, point "g) Rodbertus" was originally followed by point "h) Ricardo". Later Marx inserted several other points preceding that on Ricardo, probably after the notebooks had been filled in. In Notebook XII, next to the line "5) Theories of Surplus Value", Marx wrote in pencil without the mark of insertion, "(CIRCULATING AND FIXED CAPITAL p. 643) in Ricardo". The last two points in the contents of this notebook were later crossed out in pencil and replaced with "Theories of COST PRICE". The inside cover of Notebook IX has a note "Mercantilists (408)" made in pencil later. Written on the inside cover of Notebook XI are a number of quotations (see this volume, pp. 579-80). Alongside the contents, the inside cover of Notebook XII contains Marx's notes and quotations (see this volume, p. 580).—6
[7] Marx is referring to the vicious circle in Adam Smith's doctrine of the "natural price of wages", which he had discussed in the manuscript of 1861-63 (see present edition, Vol. 30, p. 401).—8
[5] Marx is referring to the section of the manuscript of 1861-63 in Notebook VII entitled in the contents "Inquiry into how it is possible for the annual profit and wages..." (see present edition, Vol. 30, pp. 347, 411 et seq.).—7, 149
[16] Marx discussed concentration of capital as a prerequisite for raising labour productivity in Notebook IV of the manuscript of 1861-63 (present edition, Vol. 30, pp. 294-96).—26
[65] The above two sentences are Marx's rendering of Destutt's: "One can find certain expenses among these that are more or less fruitful, like, for example, the building of a house or the improvement of a landed property; but these are particular cases that put consumers of this kind momentarily back into the class of those who direct profitable enterprises and hire productive labour."—168
[26] See also present edition, Vol. 30, p. 443.-59, 114, 282
[10] Marx examines the Mercantilists' views in Notebook VI of the manuscript of
[13] By its substance the text in double oblique lines belongs not to p. VII — 300 but to p. VII — 299 of the manuscript of 1861-63 (see present edition, Vol. 30, pp. 450-51).—13
[12] Marx is referring to Malthus' remark that the differentiation between productive and unproductive labour is the cornerstone of Adam Smith's work and the basis on which the main line of his reasoning rests (T. R. Malthus, Principles of Political Economy..., 2nd ed., London, 1836, p. 44).—12
[9] Marx analyses the Physiocrats' views in Notebook VI of the manuscript of 1861-63 (see present edition, Vol. 30, pp. 354-55 and 358-61).—9
[4] Marx gave an in-depth analysis of the problem of productive and unproductive labour on pp. XXI — 1317-1331 of the manuscript of 1861-63 (present edition, Vol. 34).—7