es there is at least always a point towards which they gravitate, "that point being the natural as well as the just exchange value."*32 He entirely rejects the idea that goods normally exchange with each other according to any other proportion than that of the labour incorporated in them; that deviations from this proportion may be the result, not merely of accidental and momentary fluctuations of the market, but of a fixed law drawing the value in another direction.*33 At this stage I merely draw attention to the circumstance, and will show its importance later on.
The total production of goods may, according to Rodbertus, be divided into two branches—raw production, which with the assistance of land obtains raw products, and manufacture which works up the raw products. Before division of labour was introduced the obtaining and working up of raw products were performed in immediate succession by one undertaker, who then received without division the whole resulting rent. In this stage of economic development there was no separation of rent into land-rent and profit on capital. But, since the introduction of the division of labour, the undertaker of the raw production and the undertaker of the manufacture which follows it are distinct persons. The preliminary question is, In what proportion will the rent that results from the total production now be divided among the producers of the raw material on the one hand and the manufacturers on the other?
The answer to this question follows from the character of rent. Rent is a proportion of and deduction from the value of the product. The amount of rent that can be obtained in any branch of production is regulated by the value of the product created in this branch of production. As, however, the amount of the value of the product is regulated here also by the amount of the labour spent on it, the total rent will be divided between raw production and manufacture, according to the expenditure of labour in each of these branches. To illustrate this by a concrete example.*34 Say that it requires 1000 days of labour to obtain a certain amount of raw product, and that its manufacture requires 2000 days more; then if rent takes 40 per cent of the value of the product as the share of the owners, the product of 400 days of labour will fall as rent to the producers of raw material, and the product of 800 days of labour as rent to the manufacturing undertakers. On the other hand, the amount of capital employed in each branch of production is a matter of no consequence as regards this division, for though the rent is estimated in relation to this capital, it is not determined by it, but by the amount of labour supplied.
Now the very fact that the amount of capital employed has no causal influence on the amount of rent obtainable in any branch of production becomes the cause of land-rent. Rodbertus proves this in the following manner.
Rent is the product of labour. But it is conditioned by the possession of wealth. Therefore rent is looked on as a return to that wealth. In manufacture this wealth takes the form of capital alone, and not of land. Thus the total rent obtained in manufacture is regarded as return on capital, or profit on capital. And thus by calculating, in the usual way, the proportion between the amount of return and the amount of the capital on which the return is obtained, we come to say that a definite percentage of profit is obtainable from capital engaged in manufacture. In virtue of well-known tendencies of competition this rate of profit will approximate to equality in all branches, and will also become the standard for calculating the profit of capital engaged in raw production; for a much greater portion of the national capital is engaged in manufacture than in agriculture, and obviously the return of the greater portion of capital must dictate to the smaller portion the rate at which its profit shall be calculated. Therefore the raw producers must calculate, as profit on their capital, so much of the total rent gained in the raw production as corresponds with the a