 a longer time between the expenditure of labour and their completion have, ceteris paribus, a higher value? And is not this law of value of fundamental importance in relation to the phenomenon of interest? And yet it is to be left out of account like an irregular accident of the circumstances of the market!*49
This singular omission is not without result. On the first result I have already touched. In overlooking the influence of time upon the value of products, Rodbertus could not avoid falling into the mistake of confounding the claim of the labourer to the whole present value of his product with the claim to its future value. Some other consequences we shall encounter shortly.
A fourth criticism which I have to make on Rodbertus is, that his doctrine contradicts itself in important points.
His entire theory of land-rent is based upon the repeatedly and emphatically expressed proposition that the absolute amount of "rent" to be gained in a production does not depend upon the amount of the capital employed, but exclusively upon the amount of labour connected with the production.
Supposing that in a certain industrial production—for example, in a shoemaking business—ten labourers are employed. Each labourer produces per year a product of the value of £100. The necessary maintenance which he receives as wages claims £50 of this sum. Thus, whether the capital employed be large or small, the year's rent (as we shall call it with Rodbertus) drawn by the undertaker will amount to £500. If the capital employed amounts, say to £1000, namely, £500 for wages of labour and £500 for material, then the rent will make up 50 per cent of the capital. If in another production, say a jeweller's business, ten labourers likewise are employed, then, under the assumption that the value of products is regulated by the amount of labour incorporated in them, they also will produce another yearly product of £100 each, of which the half falls to them as wages, while the other half falls to the undertaker as rent. But as in this case the material, the gold, represents a considerably higher value than the leather of the shoemaking business, the total rent of £500 is distributed over a far larger business capital. Assume that the jeweller's capital amounts to £20,000, £500 for wages and £19,500 for material, then the rent of £500 will only show a 2½ per cent interest on the business capital.
Both examples are carried out entirely on the lines of Rodbertus's theory.
As in almost every "manufacture" the proportion between the number of the (directly and indirectly) employed labourers and the amount of business capital employed is different, it follows that, in almost every manufacture, business capital must bear interest at the most various possible rates. Now even Rodbertus does not venture to maintain that this is really the case in everyday life. On the contrary, in a remarkable passage in his theory of land-rent, he assumes that, in virtue of the competition of capitals over the whole field of manufacture, an equal rate of profit will become established. I will give the passage in his own words. After remarking that the rent derived from manufacture is considered wholly as profit on capital, since here it is exclusively wealth in the form of capital that is employed, he goes on to say:—
"This, further, will give a rate of profit which will tend to the equalisation of profits, and according to this rate, therefore, must be calculated that profit which, as one part of the rent falling to the raw product, accrues to the capital required for agriculture. For if, in consequence of the universal presence of value in exchange, there now exists a homonymous standard for indicating the ratio between return and resources, this standard, in the case of the portion of rent accruing to the capital employed in manufacture, also serves to indicate the ratio between profit and capital. In other words, it will be right to say that the profit in any trade amounts to ten per cent of the capital employed. This rate will then furnish a standard for the equalisation o