4 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 amount of capital that has been employed and with the usual rate of profit. The remainder of the rent, on the other hand, must be considered as return from land, and forms the land-rent.
Now, according to Rodbertus, there must always be such a remainder in raw production, in virtue of the assumption that products exchange in proportion to the amount of labour incorporated in them. He proves this as follows. The amount of rent obtainable in manufacture depends, as we have seen, not on the amount of the capital laid out, but on the quantity of labour performed in the manufacture. This labour is made up of two constituent parts; on the one side, the immediate labour of manufacture, on the other side, that indirect labour "which must also be taken into calculation as representing the tools and machines used." Therefore of the different constituent portions of the capital laid out, only those portions will affect the amount of rent which consist of wages and expenditure for machines and tools. On the other hand, no such influence affects the capital laid out in raw materials, because this outlay does not express any labour performed in the manufacturing stage. Yet this part of the outlay increases the capital on which the rent obtainable as return is calculated. The existence of a portion of capital which increases the manufacturing capital on which the share of the rent that falls to it as profit is calculated, while it does not increase this profit itself, must evidently lower the proportion of the profit to the capital; in other words, it must lower the rate of profit on capital engaged in manufacture.
Now the profit on capital engaged in raw production also will be calculated at this reduced rate. But here (in raw production) the circumstances are generally more favourable. For as agriculture begins production ab ovo, and does not work up material derived from a previous production, its outlay of capital has no constituent "value of material." The analogue of material is simply land, and land in all theories is ass