[OPE-L:1275] Re: Gold & Rent -- Questions

Duncan K Foley (dkf2@columbia.edu)
Sat, 2 Mar 1996 08:18:55 -0800

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> John asks:
> 1. Is gold production like that of other commodities? Is there no
> rent "produced" in gold production?
Part of the surplus value in gold production may take the form of rent,
and you could take that into account, if you want to complicate the
production model. Other commodity production also might involve rent. I
don't think there's any fundamental issue here, though surely the
specific predictions will depend on the specific production model.

> 2. Does the value produced in the gold industry enter into
> the process of equalizing the rates of profit? Do any "natural
> monopolies" enter into the equalization of the rate of profit?
The surplus value extracted in the gold industry does enter into the
social surplus value, and could be partially redistributed to other
sectors through price differentials. The equalization of the rate of
profit is an effect of competition, not monopoly. In order to deal with
natural (or unnatural) monopolies, you would need to make explicit what
the source of the monopoly is and how the monopolist is behaving. In
general monopolists divert some surplus value from the rest of the system
to maintain their profit rate higher than the average.

> 3. Should we not, like Marx, assume that the organic composition
> of the gold producer is less than the average as it is
> producing both absolute and differential rent?
This might be (or have been true) depending on the exact technology in
gold production and other commodity production. I'm not sure why the rent
issue is important here (except for the fact that Marx sometimes included
rent as "constant capital" from the point of view of individual
capitalists, despite his clear understanding that from a social point of
view rent is part of the surplus value). "Absolute rent" refers to a
customary or legislated compact on the part of landowners to restrict
access to the land, I think, and I'm not sure why it is an issue in gold