Friday 16 February 2018

Theories of Surplus Value, Part II, Chapter 13 - Part 12

Marx refers back to the examples previously given in Chapter 12 

The organic composition of capital in industry is taken as 80 c + 20 v, and in agriculture as 60 c + 40 v. In both, the rate of surplus value is 50%. The rate of profit in industry is then 10%, and this determines the general rate of profit. As the rate of profit in agriculture would be 20%, with the value of agricultural output being 120, that means that there is surplus profit of 10, giving rise to a rent of that amount.

Class
Capital
£'s
Kilos of corn
Total value £'s
Market-value per Kilo.
£'s
Individual value per Kilo.
£'s
I
100.00
65
120.00
2.00
2.00
II
100.00
65
130.00
2.00
1.846
III
100.00
75
150.00
2.00
1.600
Total
300.00
200
400.00
Differential value per Kilo.
£'s
Price of production per Kilo
£'s
Absolute rent
£'s
Differential
rent
£'s
I
0
1.833
10.00
5.00
II
0.154
1.462
10.00
10.00
III
0.400
1.133
10.00
20.00
30.00
35.00
Absolute Rent in Kilos.
Differential rent in Kilos
Rental
£'s
Rental in Kilos
I
5
0
10.00
5
II
5
5
20.00
10
III
5
15
40.00
20
15
20
70.00
35

Marx assumes that the effect of a fall in the value of constant capital is the same for whatever type of soil is considered. He assumes a 10% reduction in the value of constant capital from £100 to £90.

There are basically three scenarios that might exist. Firstly, the fall in the value of constant capital might result in an equal fall in the value of variable-capital, or the fall in the value of the variable capital might be proportionately greater or smaller, or finally, the value of variable capital may remain constant, but a fall in the value of constant capital releases capital so that more of both are employed.

If the organic composition of capital of 60:40 remains constant, then on a capital of £90 this would equate to £54 c + £36 v. The value of the land type I output (60 kilos) would then be £54 c + £36 v + £18 s = £108. For this to be the case, the same rise in social productivity that reduced the value of constant capital by 10%, would have to reduce the value of wage goods by 10%, leading to a 10% fall in wages. But, if wages fell by more than 10%, so that v falls not to £36, but to £32.40, the laid out capital falls to £86.40. The value of the 60 kilos is then £54 c + £32.40 v + £16.20 s = £102.60. The organic composition of capital here then would be 62.75:37.5.

Finally, the amount laid out for wages could remain the same so that it rises relative to the constant capital, leading to a lower organic composition. If £90 is laid out and £40 is laid out as variable capital, that leaves £50 to be laid out as constant capital. For that to be the case, there also has to be a change in the technical composition of capital, reflecting a fall in agricultural productivity. The original composition would then be 50:40, and the value of output would be £50 c + £40 v + £20 s = £110.

The consequence of this can be seen in the following table.

Capital
Absolute Rent %
Absolute rent £'s
Differential rent £'s
Absolute rent Kilos
Differential rent Kilos
Rental £'s
Rental Kilos
A) 60 c+40 v
10.00
30.00
40.00
15.00
20.00
70.00
35.00
B) 54 c+36 v
(60 c+40 v)
10.00
27.00
36.00
15.00
20.00
63.00
35.00
C) 54 c + 32.40 v (62.50 c+37.50 v)
8.75
22.03
34.20
13.26
20.00
56.88
33.26
D) 50c+40v
(55.56 c+44.44 v)
12.22
33.00
36.66
18.00
20.00
69.66
38.00

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