## Tuesday, 2 January 2018

### Theories of Surplus Value, Part II, Chapter 12 - Part 4

Marx summarises this in two tables.
Table A.
 Class Capital £ Absolute Rent £ Number of Tons Market-Value per ton £ Individual Value per ton £ Total value £ Differential Rent £ I 100 10 60 2.000 2.000 120 0 II 100 10 65 2.000 1.846 130 10 III 100 10 75 2.000 1.600 150 30 Total 300 30 200 400 40
Table B
 Class Capital £ Absolute Rent £ Number of tons Market- Value per ton £ Individual Value per ton £ Total value £ Differential Rent £ II 50 5 32.50 1.846 1.846 60.000 0 III 100 10 75.00 1.846 1.600 138.462 18.462 IV 100 10 92.50 1.846 1.297 170.769 50.769 Total 250 25 200.00 369.231 69.231

“These two tables give rise to some very important considerations.

First of all we see that the amount of absolute rent rises or falls proportionately to the capital invested in agriculture, 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 method 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of the absolute rent falls from £10 to £5, because the capital has fallen from £100 to £50; half the capital has been withdrawn [from the land].” (p 259)

Marx constructs a further three tables to draw out the points. In Table B, it had been assumed that Mine I, and half of the capital from Mine II were withdrawn from production, as a consequence of the new production from Mine IV, and the fall in the market value to £1.846 per ton. Marx now assumes that demand is such that the production from Mine I and the other half of Mine II's production continue to be required.

Mine I pays only absolute rent of £10. It produces 60 tons with a value of £2 per ton = £120. The rent of £10 equals 0.833% of the value of each ton, or £0.166 per ton. The price of production for a ton from Mine I is then £2 less the absolute rent of £0.166 = £1.833 per ton.

The new market value, as shown in Table B is £1.846 per ton, or £0.013 more. That would be the rent at the new market value, and for 60 tons would amount to £0.78. That amounts to less than 1% of the capital of £100. For that rent to fall to zero, the market value would have to fall to the price of production of £1.833 per ton. But, the mine could still produce the average profit of 10%. That is why some mines continued to be operated by landowners, who thereby derived this profit, even though they derived no rent. Only if the market value drops further, below the price of production, does the profit disappear, and the grounds for continued production.

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