The Story of a Great Discovery, Vygodsky, 1965

Chapter 7

What did Marx have to prove? Rent as an illustration of the difference between value and price of production. The theory of capitalist monopoly. Monopoly-price and the theory of value. The breaking of monopoly in capitalist agriculture. Examples of scientific abstraction in the theory of rent.

The completion of the theory of surplus-value

When we turn to the sections on "Theories on Surplus-Value" in which Marx elaborates his theory of average profit and. price of production, it will be seen that the main place in these sections is taken by the theory of rent and especially by the theory of absolute rent. This is because land-rent plays a very special part in the economic theory of Marx. This is because the theory of absolute rent is primarily an inference from the theory of average profit and price of production and thus forms, as it were, the touchstone for the correctness of the latter. Marx's theory of average profit and price of production is based on the fundamental fact that value and price of production do not directly coincide and that only the sum of the prices of production is equal to the sum of the values.

The difference between value and price of production of agricultural products is absolute rent. Ricardo's theory of average profit and price of production is based, in contrast, on the assumption that value and price of production are identical. Thus, in contradiction with the facts, Ricardo denies the existence of absolute rent. In actual fact, if the price of agricultural prod-nets were also to yield an absolute rent in addition to the average profit, this price would then exceed the price of production and - according to the dogma which asserts the identity of value and price of production - the value as well. The result of this would be that the same quantum of labour in agriculture would create greater value than in industry, which would be an obvious violation of the law of value. "Consequently the value of commodities would not be determined by the quantum of labour which they contain. The whole foundation of economics would be overturned by this."[1] In the view of Ricardo, since absolute land-rent was impossible and only differential rent could exist, this confirms the general validity of the law of value. In the desire to 'save' the law of value, Ricardo did not admit of absolute land-rent although capitalist reality obviously contradicted this.

In his theory of absolute rent, Marx found confirmation of the theory of average profit and price of production. At the same time, the theory of absolute rent is evidence that the initial thesis of Smith and Ricardo, which asserts the identity of value and production-price, is incorrect. The function performed by the theory of rent in the substantiation of the theory of average profit and production-price is described by Marx in a letter to Engels of 9th August 1862 in the following words : "The only thing I have got to prove theoretically is the possibility of absolute rent, without violating the law of value. This is the point around which the theoretical controversy has turned from the days of the physiocrats up till now. Ricardo denies this possibility, I affirm it. I maintain at the same time that his denial is based upon a theoretically false dogma taken over from Adam Smith - the assumed identity of cost-prices and values of commodities."[2]

Marx defines absolute rent as the difference between value and price of production and thus demonstrates that the law of average profit and price of production operates on the basis of the law of value and therefore does not contradict this at all, which was what the standard authors of bourgeois political economy believed. This is an important clement in the development of the Marxist theory of value and surplus-value and in the substantiation of the Marxist theory of economics in general.

All this explains why Marx, in "Theories of Surplus-Value ", concentrated his attention. on the problem of absolute rent while in the third volume of "Capital" it is principally a question of differential rent. In the third volume of "Capital'', Marx presents land-rent as one of the derived forms of surplus-value. He begins with differential rent, which is an adequate expression of the capitalist mode of production, while absolute rent and the class of landowners based on it appear as superfluous from the standpoint of capitalist production. The particular structure of "Theories of Surplus-Value", in which the specific problems of the theory of rent are linked with general questions of the theory of value and surplus-value, of average profit and price of production, accordingly results from the task assigned to the theory of rent in substantiating Marx's economic theory in general.

An analogy can be drawn here with the theory of money. The theory of money performs the same function in substantiating the theory of value as the theory of rent in substantiating the theory of average profit and price of production. And in the same way that Marx began to elaborate his theory of value in the course of his criticism of Proudhon's theory of money, it is the critique of the theory of rent formulated by the German bourgeois economist Rodbertus that precedes the theory of average profit and price of production. Rodbertus tried to draw up a theory of absolute rent. Marx gives a detailed analysis of this attempt in a special chapter .of "Theories on Surplus-Value" centred on absolute rent.[3] Marx demonstrates that Rodhertus's failure stems from his acceptance of the "dogma of Smith and Ricardo" in the question of the relation of value and price of production which forms the starting point for the theory of absolute rent.

Here, too, Marx proceeds in his analysis first from the concrete to the abstract: as from money to value, so from rent to average profit and price of production.

The theory of average profit and price of production assumes in it general (abstract) form that there are no obstacles at all to free competition in either of its forms.

Capitalist agriculture is a branch :of capitalist production in which the monopoly of private ownership of land leads to a partial restriction of competition. In the theory of land-rent, as described in "Theories on Surplus-Value ", the general theory of average profit and price of production is applied to a specific case which is characterized by the fact that monopoly exists and is operating. In the draft for the third part, i.e., for the future third volume of "Capital", dating from the period when Marx was working on the manuscript of .1861/63, Marx gives the heading of "Land-rent (illustration of the difference between value and price of production) "[4] to the section on rent. Also in a letter to Engels of 2nd August 1862, Marx designates rent as an "illustration"[5] of the law of average profit and price of production. In "Theories of Surplus-Value", Marx sets out his law of absolute land-rent and makes the following remark: "This would be the law developed by me in general applied to a specific industry",[6] namely, the law of average profit and production-price. Thus, in the form in which it was developed in the manuscript of 1861/63, the theory of rent is directly related to the theory of average profit and price of production and consequently to the completion of Marx's theory of surplus-value as well. All this obliges us to examine in detail how Marx worked out this theory but only, of course, to the extent that this is done in the manuscript of 1861/63 and, then only as regards those parts which are directly related. to the problem of average profit and price of production.

The function performed by the theory of rent, in Marx's economic theory in general does not solely consist, of course, in what has already been said. In the theory of rent Marx developed his theory of monopoly in capitalism, his theory of capitalist monopoly within the capitalist mode of production, on the basis of a specific example.

Pm-monopolistic capitalism is often described -as the capitalism of free competition but this does not signify that such competition exists apart from and without monopoly. In fact, the capitalist mode of production as a whole is based on monopoly of ownership of the principal means of production by the entire ruling class - the class of capitalists. Marx writes that "the monopoly of capital alone enables the capitalist to extract surplus-labour from the worker."[7] This is why the theory of rent, as developed in "Theories of Surplus-Value", goes far beyond the limits of its actual subject. For Marx, it signified the completion of his theory of value and surplus-value.

In the theory of absolute rent, Marx takes as his point of departure two fundamental facts which characterize capitalist agriculture: private ownership of the land (the monopoly of private ownership of the land as the most important production-condition) and the circumstance that the organic composition of capital here is lower than in industry. The second fact means that capitalist agriculture, as regards the level of development of the productive forces, of labour productivity, lags behind industry. The consequence of the low organic composition of capital in agriculture is that the surplus-value which is produced in it exceeds the level of average profit in capitalist production as a whole and that, as a result the market-value of agricultural products is greater than their social price of production.

Private ownership of the land prevents the extra surplus-value achieved in agriculture from coming within the control of the capitalist class as a whole and thus increasing average profit. Agriculture, as a branch of capitalist production, does not participate in forming the general profit-rate and agricultural products are sold at their market-value, not at their production-price. Like the wall of a fortress, monopoly of the private ownership of the land protects the agricultural sector, as a sphere of capitalist production, from the action of competition between the various branches of production. But this competition is raging in front of the walls of the fortress which means that the difference between market-value and social price of production does not benefit the agrarian capitalists at all since, if this were so, they would be in a privileged position as compared with the capitalist class as a whole; but competition between the different branches cannot permit this. This is why the whole of the extra surplus-value passes as absolute rent into the control of the landowners who only then enable agriculture, as a branch of production, to occupy a genuine monopoly position.

It may be seen here that Marx derives his theory of absolute rent directly from the theory of average profit and, price of production, especially from the principal fact on which this theory is based, i.e. the difference between value and price of production.

Whereas absolute rent results from monopoly of the private ownership of land and from the lower labour productivity of agriculture as compared with industry, differential rent - as Marx shows - results from the monopoly of the capitalist cultivation of the land (from the predominance of capitalist relations in agriculture) and from the better areas of land with higher productivity being limited and being unable, at the prevailing price of production, to satisfy the social demand for agricultural products.

Under these conditions, it is the individual value and the individual price of production of the products of the worst areas of land which determine the market-value and the social price of production of agricultural products. The consequence of this is that the capitalists who farm on more fertile areas achieve a surplus-profit •(extra surplus-value) which is equal to the difference between the social and the individual price of production. This surplus-profit forms the differential rent which, under conditions of private ownership of the land, is appropriated by landowners.

From Marx's theory of rent it follows that both the absolute and the differential rent as well result from the labour of the agricultural worker. With absolute rent this is obvious since it originates from the surplus of the value of the product obtained in agriculture by way of its price of production.. Absolute rent, writes Marx, derives from the fact "that agricultural capital, in relation to the constant part of capital, sets a greater quantity of labour in motion than does average capital in non-agricultural industry."[8]

Differential rent, on the other hand, results from the higher productivity of agricultural workers on more fertile areas of land. In connection with this, Marx notes that "The work of the labourer working on more fertile soil is more productive than that of a man working on less fertile soil ... The surplus-value contained in the additional amount of his product, the greater relative productivity of his labour, or the differential surplus-labour performed by him, is pocketed by the landlord. "[9]

Marx reveals here the essential difference between absolute rent and differential rent: whereas absolute rent is due to the lower productivity of agriculture as a branch of the economy in comparison with industry, differential rent reflects the greater productivity of some capital advancements in agriculture in comparison with other capital advancements in the same branch of production.

Marx's theory of land-rent is based on the distinction which is drawn in agriculture between two kinds of monopoly : the monopoly of the private ownership of land and the monopoly of capitalist cultivation of the land. It may be recalled here that Lenin, in "The Agrarian Question and the Critics of Marx '" which was published in 1901., examined the two kinds of monopolies in agriculture independently. (The "Theories of Surplus-Value" had not been published at that time and consequently could not have been known to Lenin). The expression "monopoly of the capitalist cultivation of the land" comes from Lenin, In a note to the new edition of his book, Lenin wrote that "Marx gives an explanation of absolute rent which confirms the correctness of my interpretation (particularly in regard to the-two forms of monopoly)" in capitalist agriculture.[10]

The fact that Marx distinguishes between two kinds of monopoly in capitalist agriculture is of great significance since by this it is possible to draw an exact line between absolute rent and differential rent and to determine the character of the production relations which are expressed in the two kinds of rent, i.e., the specifically capitalist character of differential rent and the feudal character of absolute rent. This distinction was the theoretical foundation on which Lenin elaborated his programme of land nationalization.

So far as absolute rent and differential rent are based on private ownership of landed property, they are, as Marx says, a "necessary product" of the capitalist mode of production.[11] In capitalism, of course, since it is based on private ownership of the means of production, it is impossible completely to eliminate private ownership of land. "If landed properly were national property"" says Marx, "the basis of capitalist production would completely cease to exist..."[12]

Marx shows that differential rent in capitalism is determined by capitalist forms of ownership and to this extent is characteristic of capitalism. Absolute rent, however, is closely associated in capitalism with the relation between labour productivity in agriculture and labour productivity in industry. He remarked that the more rapid development of industry in comparison with agriculture is "an historical phenomenon" which demonstrates "the extremely queer development of bourgeois production and the contradictions inherent it".[13] Marx draws attention to the fact that originally (in Antiquity and the Middle Ages) agriculture was more productive than industry "because here a machine set up by Nature",[14] i.e., the earth, the soil, was involved whereas production with machines did not yet exist. In the period in which large-scale mechanized production then developed, the industrial sector grew more rapidly than agriculture even though this was to a limited extent due to the expropriation of the rural population and a significant improvement in the organic composition of capital in agriculture. In the future, however, as Marx notes, to the extent that concentration of capital in agriculture increases and chemistry, geology and physiology develop - " sciences which to a fairly high degree are directly specific foundations for agriculture as much as for industry" ;of which the "really scientific foundation" is mechanics - , to this extent "the productivity of agriculture" must "increase relatively more rapidly than that of industry".[15] If productivity in agriculture were to equal that of industry and as a consequence the organic composition of capital in agriculture were to attain the same level as in industry, absolute rent would have to disappear. Marx quite definitely says about this that land-rent results from "an historical difference in the organic component-parts of capital (in industry and in agriculture - V. V.) which can he levelled out to some extent and can even disappear completely with the development of agriculture."[16]

Having developed the theory of rent, Marx then shows that the two kinds of monopoly existing in-capitalist agriculture are two kinds of a specifically capitalist monopoly, special cases of the monopoly which is characteristic of capitalist production as a whole. He states that it concerns a monopoly "as found in all spheres of industry" which "establishes itself only in this one (i.e., in agriculture) and thus assumes the form of rent which differs from surplus-profit ".[17]

Marx refers here to the process whereby the market-value and the social price of production are -formed. Both are formed as a consequence of capitalist competition - within a branch and between different branches. But this competition operates under conditions of monopoly of capitalist ownership -of the means of production (under conditions of the monopoly of capitalist cultivation). For this reason, products of the same kind which are on the market at the same time must have the same market-value, the same social price of production and, consequently, the same market-price as well. The sum of the social prices of production of the products of all branches here is equal to the total market-value of these products. The social price of production ensures that the entire capitalist class achieves an average profit. The level of market-value and of social price of production is fixed, however, by the group of capitalists which dominates the market and achieves a surplus-profit.

These are manifestations of capitalist monopoly. They express: 1. the monopoly of ownership of the means of production possessed by the entire capitalist class and 2. the monopoly position of individual groups of capitalists within this class which dominate the market. The special feature of this monopoly of capitalist cultivation is that it is not tied to certain individual capitalists or groups of capitalists. All capitalists here have formally the same opportunities, theoretically they all have a chance of finding themselves in a monopoly position for a certain time and they can all achieve surplus-profit. The only exception here is agriculture in which the monopoly position of landowners (the owners of the main condition of production condition) and, through the landowners, the monopoly position of all agrarian capitalists - also of the group of capitalists which farms better areas of land - is fixed by the special features of capitalist agriculture and by natural conditions. This is why the two kinds of capitalist monopoly in agriculture are of a stable and not momentary character. They are thus a suitable subject for studying capitalist monopoly in its general form.

The only effect of the special features of capitalist agriculture is that this monopoly is stable, the monopoly itself resulting from the operation of the laws of capitalist production.[18] Marx writes that "Here manufacturing and agriculture are different only in that in the one the surplus-profits are pocketed by the capitalist himself and in the other by the landowner and also in that in the first they flow, do not achieve any consistency, at one moment are made by this capitalist and at the next by that one and are regularly eliminated again while in the second they become established on account of their lasting (at least lasting for a fairly long period) natural basis in the different features of the land."[19]

Marx shows, in "Theories of Surplus-Profit", that monopoly is chiefly reflected in monopoly-price which, in addition to the average profit, also includes a certain monopolistic surplus-profit. He concludes that in agriculture this monopolistic surplus-profit is fixed in the shape of rent and that consequently land-rent is a special case of monopolistic surplus-profit while the price of agricultural products, as soon as it includes rent (absolute or differential rent) is a monopoly-price.

Marx demonstrates that the monopoly character of the price of agricultural products primarily results from the monopoly of the private ownership of land. "It is in fact a price ", writes Marx; "which is extorted only by the monopoly of landed property and differs in this as a monopoly-price from the price of industrial products. "[20] Lenin also stresses this aspect "Absolute rent derives from private ownership of landed property. This rent contains an element of monopoly, the element of monopoly-price."[21]

It follows from the monopoly of the private ownership of the land that agricultural products, in contrast to industrial products, are sold at their market-value but not at their social price. of production.

Monopoly of the private ownership of land prevents the values of agricultural products from being converted into prices of production and in this way maintains prices for agricultural products artificially at a monopolistically high level. Marx characterizes the special nature of land-rent as a form of extra surplus-value (surplus-profit) with the words: "Incidentally, no matter how land-rent itself is explained, the significant difference in comparison with industry is still the fact that here an excess surplus-value results through cheaper (production), there through dearer production. "[22] If the monopoly of private ownership of landed property and absolute rent were to be eliminated by nationalization of the land, the prices of agricultural products would drop; the prices of production of industrial products, however, would rise since the average profit rate would have increased.

In connection with this, Marx writes that "... an abandonment of absolute rent would reduce the price of agricultural products and increase that of industrial products to the extent that the average profit rose by this process."[23]

The average profit rate would rise because the profit achieved by agrarian capitalists, after eliminating monopoly of the private ownership of the land, would flow into the communal fund' of the capitalist class. Since the profit rate in agriculture, my account of the low organic composition of capital, is higher than the average profit rate, its incorporation in the process of equalizing profits must result in a rise in the average profit rate.

But elimination of the monopoly of private -ownership of land, abandonment of absolute rent and the reduction of the price of agricultural products to the level of their price of production does not signify - and this is also indicated by Marx - that the monopolistic character of the price of agricultural products is abolished. There still remains the monopoly of the capitalist cultivation of the land, there still remains differential rent as a consequence of this monopoly. This is why the price of agricultural products is still a monopoly-price, even when it includes only differential rent. "Here, too, the price of products carrying differential rent is a monopoly-price..."[24] "In regard to differential rent, it may be said, that it is the effect of 'high value'; so far as by 'high value' is understood the excess of the market value of the produce over its real or individual value, for the relatively more fertile classes of land or mine."[25]

Differential rent stems from the monopoly of the capitalist cultivation of the land and from the competition of agrarian capitalists associated with this. This competition is expressed in the fact that a uniform market-value, a uniform social price of production and consequently a uniform market-price as well are established.

From the conditions of capitalist competition, it follows that the individual price of production on the worst areas of land is the determining price of production.

This produces the "false social value" already mentioned - a market-value artificially inflated by the capitalist monopoly of the cultivation or the land, a social production-price "what society overpays for agricultural products in its capacity of consumer . . ."[26] The "false social value" is a monopoly-price; it is the realization of the monopoly of capitalist cultivation of the land.

Marx comes to the conclusion that in a communist society in which the category of "price" will cease to exist, there will no longer be any differential rent either. As in the past, social labour will be used in agriculture to cultivate areas of varying fertility but the expenditure which is saved on better areas can be used for improving the less productive areas, from which it then follows that the total quantum of labour expended in agriculture will be reduced.[27]

Within the capitalist mode of production, however, it is not possible to eliminate the monopolistic character of prices for agricultural products. Bourgeois nationalization of the land can only cause differential rent to pass from the purse of the landowner to the purse of the bourgeois state, but the price of agricultural products will remain the same.

The main problem of the theory of monopoly-price developed by Marx in "Theories of Surplus-Value" is the relation between monopoly-price and value. In particular, he shows that just as a distinction must be drawn between monopoly-price on the one hand and price of production and value on the other a distinction must also be made between market monopoly-price and a monopoly-price which is equal to the market-value or the social price of production. In the latter case, one could speak of a 'monopolistic market-value' and a 'monopolistic price of production'.

Marx describes the market monopoly-price, which he also calls the "actual monopoly-price",[28] as a price which is "only limited by the state ... of the demand backed by the ability to pay..."[29] As an example of the conditions under which the product could be sold at a market monopoly-price, Marx gives an example of a small island in which there is no external trade with grain or other agricultural products.

In contrast to market monopoly-prices, which may deviate to any extent from value, the monopoly-price of agricultural products incorporating absolute rent is equal to their market-value (monopolistic market-value), i.e., it exceeds only their social price of production. (But in this case the social price of production - insofar as it is determined by cost-price on the poorest soils - is also a monopolistic price of production.)

Marx explains why the monopoly-price of agricultural products cannot exceed their value as a rule. Value is the direct foundation of this price. In the pre-capitalist period (up to the 15th century), commodities were exchanged at their values. At this time, private ownership of landed property also existed. With the development of industrial capitalism, a fundamental change in price-formation took place and market-prices no longer fluctuated around value as their pivot but around price of production. In agriculture however, this change in price-formation was prevented by private ownership of the land and value continued to be the direct basis for the price of agricultural products. Thus, as in the past, the market-prices of these products still fluctuated around value. "Those who derive rent from monopoly", writes Marx, "are mistaken when they believe that monopoly enables the, landowners to force up the price of commodities beyond their value. Conversely, it consists in maintaining the value of commodities at above their average price; of selling commodities not above but at their value."[30]

An important factor in substantiating the relation between monopoly-price and value is, as Marx shows, the thesis formulated by bourgeois political economists as early as the beginning of the 19th century : "It is not the rent of land which determines the price of its product but the price of this product which determines rent..."[31] Rent as a form of monopolistic surplus-profit is consequently based on the value of agricultural products and is thus not an additional charge on this value.

The monopoly of private ownership of landed property is a barrier which prevents the free penetration of capital into agriculture but, as Marx demonstrates, no monopoly is an absolute monopoly. As .an example of the undermining of private ownership of land, he quotes the case in which the landowner and the capitalist farmer are one and the same person. Marx writes that "the landowner puts no obstacle in the way..." of this farmer, "makes no resistance, because he (the farmer) has him in his power, not as a capitalist but because he is the owner of the land."[32] Here the rule applies that "landed property ... disappears in the face of capital . . ."[33] This capitalist could be content with the average profit since he does not have to pay rent to anybody.

In this case, it is possible to lower the price of agricultural products to the level of the price of production. In general, it is the result of the competitive struggle between the landowner and the capitalist which determines the extent to which the landowner is able to realize his economic position, whether he is able to take the whole of the absolute rent from the capitalist farmer or whether he must content himself with only a part of it.

Marx also gives another example: absolute rent does not exist where "the supply at an adequate price is so great that landowners are unable to resist the equalization of capitals..."[34] From an economic point of view, ownership of land does not exist here although it can exist juridically.

With the examples given above, Marx characterizes competition between agriculture and other branches of production leading to an undermining, of the monopoly of the private ownership of land. The competitive struggle within the capitalist class can also result in the monopoly of capitalist cultivation of land being undermined. When Marx says that in agriculture it is the price of production on the poorest areas of land which determines price of production, he is assuming that capitalist monopoly of the cultivation of the land is 100 % effective, i.e., it is assumed that the products of the whole of the land available are required to satisfy the demand. When it is a question of the theoretical definition of differential rent, it is completely correct and necessary to abstract from market relations since differential rent can only he completely realized under these conditions.

However, in "Theories of Surplus-Value'', Marx also formulates the law of motion of the market-value of agricultural products which takes account of possible fluctuations in the state of the market.[35] According to this law, market-value can vary within wide limits: from the individual value of the product of the poorest areas of land up to the individual value of the product of the most fertile areas.

Marx shows that agriculture, as a branch of capitalist production, possesses the privilege of selling its product not at the price of production but at its value. But this privilege "does not at all apply ... to the products produced at different values within the same sphere of production."[36] Within agriculture itself, the price-level is determined by whatever part of the total product of the more fertile areas is put on the market. It depends on the fertility of the better areas as to whether the poorer areas can realize a certain part of the difference between the individual value and the individual price of production of their products or whether competition from the more fertile areas is so great that the inferior areas cannot even realize the average profit.

In this way, Marx demonstrates that the more fertile areas play a dominating role on the market, assuming, of course, that the quantity of their products is such that a surplus can be created and the price forcibly lowered. Competition within agriculture can thus have the effect that land-rent is merely a deduction from the profit of the capitalist farmer who, on the one hand, endeavours to remain competitive by cutting back the wages of his agricultural workers.

Marx also employed the method of abstraction in the course of the economic enquiries he carried out in the manuscript of 1861/63 on the theory of land-rent.

When capitalist agriculture is examined, the monopoly of private landed property characteristic of it cannot be disregarded. In this connection, Marx notes that "... were the Earth at the free disposal of everybody, a principal element in the formation of capital would be lacking."[37] The monopoly of ownership of land in its capitalist form and land-rent as the realization of this monopoly are the "necessary product"[38] of the capitalist mode of production.

Ricardo's theory of rent assumes that there is no restriction on the movement of capital in agriculture. His opponents raised the objection that his theory of rent did not consider how difficult it is for a farmer who invests a lot of fixed capital to withdraw capital from agriculture. Marx agrees with this objection and emphasizes that "English history between 1815 mid 1830 proves this to a great extent." Nevertheless, says Marx, this objection does not apply to "the theory at all, leaves it completely untouched, since it is always a question here only of a more or less quick or slow implementation of the economic law."[39] The difficulties involved in the withdrawal of capital do not affect the essence of the economic law - the law of land-rent - but the form in which it appears, the character of its action. These arc external factors which must be disregarded in this context.

However, Ricardo's theory of rent also assumes that there is no restriction on investment of capital in agriculture. In this question, Marx unequivocally takes the side of the opponents of Ricardo when he points out that investment of capital in agriculture will meet with resistance from landowners. Ricardo, on the other hand, abstracted in fact from the private ownership of land. Marx called this abstraction "totally wrong".[40]

This example clearly shows what should be done and what not when using the method of abstraction.

We have attempted here to give a detailed account of how Marx, in the manuscript of 1861/63, developed his theory of value and surplus-value a stage further by elaborating the theory of average profit and price of production and the theory of rent - the converted forms of value and surplus-value. He shows how value and surplus-value appear on the surface of capitalist society, how they are modified under the concrete conditions of capitalist competition and capitalist monopoly. And with this he also completed his theory of value and surplus-value.

In actual fact, after 1863, Marx concentrated all his attention on preparing the work he had carried out on economics for publication. In 1865, he completed the manuscript of the third volume of "Capital" where, in harmony with the overall structure of his economic work, he describes the theory of average profit and price of production and the theory of land-rent.

As already noted, Marx elaborated his theory of value and surplus-value for the first time in "Grundrisse"; he subsequently describes it in "A Contribution to the Critique of Political Economy" and in the first volume of "Capital". These later descriptions of the theory of value and surplus-value are more complete in content than those in "Grundrisse". But this does not at all affect the importance of "Grundrisse" when it is a question of finding out about Marx's `creative laboratory' and learning how he worked out his economic theory. It is quite different with the manuscript of 1861/63 and with "Theories of Surplus-Value". The "Theories of Surplus-Value" supplement the first three volumes of "Capital" in a series of basic questions.

Footnotes

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