Sie sind auf Seite 1von 640

Karl Marx

A Critique of Political Economy Volume III


The Process of Capitalist Production as a Whole Edited by Friedrich Engels
Written: Karl Marx, 1863-1883, edited by Friedrick Engels and completed by im 11 years a!ter Marx"s deat # $o%rce: &nstit%te o! Marxism-'eninism, ($$), 1*+*# ,%blis er: &nternational ,%blis ers, -., /n0d01 First ,%blis ed: 18*2# 3n-'ine 4ersion: Marx0org 1**6, Marxists0org 1***# 5ranscribed: in 1**6 by 6inric K% ls, 7a8e Walters and 9odiac, and by 5im 7elaney and M0 :ri!!in in 1***#65M' Mark%p: 9odiac 1**6, 5im 7elaney and M0 :ri!!in in 1***# ,roo!ed and ;orrected: by ; ris ;layton <==6->, Mark 6arris <=1=0

Capital

Table of Contents
Preface (Engels, 1894)...................................................................................................................5 Part I. The Conversion of Sur lus!"alue into Profit an# of the $ate of Sur lus!"alue into the $ate of Profit.........................................................................................................................19 ; apter 10 ;ost-,rice and ,ro!it000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000001* ; apter <0 5 e )ate o! ,ro!it0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000<> ; apter 30 5 e )elation o! t e )ate o! ,ro!it to t e )ate o! $%rpl%s-4al%e0000000000000000000000000000003< ; apter 20 5 e E!!ect o! t e 5%rno8er on t e )ate o! ,ro!it000000000000000000000000000000000000000000000000000002+ ; apter +0 Economy in t e Employment o! ;onstant ;apital0000000000000000000000000000000000000000000000000002* &0 &n :eneral000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000002* &&0 $a8ings &n 'abo%r ;onditions ?t 5 e Expense 3! 5 e 'abo%rers00000000000000000000000000000000000++ &&&0 Economy &n 5 e :eneration ?nd 5ransmission 3! ,o@er, ?nd &n A%ildings000000000000000062 &40 (tilisation 3! 5 e Excretions 3! ,rod%ction000000000000000000000000000000000000000000000000000000000000000000>= 40 Economy 5 ro%g &n8entions000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000>3 ; apter 60 5 e E!!ect o! ,rice Fl%ct%ation00000000000000000000000000000000000000000000000000000000000000000000000000000000>2 &0 Fl%ct%ations in t e ,rice o! )a@ Materials, and t eir 7irect E!!ects on t e )ate o! ,ro!it >2 &&0 ?ppreciation, 7epreciation, )elease ?nd 5ie-(p 3! ;apital0000000000000000000000000000000000000000000>> &&&0 :eneral &ll%stration0 5 e ;otton ;risis 3! 1861-6+0000000000000000000000000000000000000000000000000000000086 Experiments in corpore 8ili00000000000000000000000000000000000000000000000000000000000000000000000000000000000000001=< ; apter >0 $%pplementary )emarks00000000000000000000000000000000000000000000000000000000000000000000000000000000000000001=+ Part II. Conversion of Profit into %verage Profit...................................................................1&'

; apter 80 7i!!erent ;ompositions o! ;apitals in 7i!!erent Aranc es o! ,rod%ction and )es%lting 7i!!erences in )ates o! ,ro!it00000000000000000000000000000000000000000000000000000000000000000000000000000000001=> ; apter *0 Formation o! a :eneral )ate o! ,ro!it B?8erage )ate o! ,ro!itC and 5rans!ormation o! t e 4al%es o! ;ommodities into ,rices o! ,rod%ction00000000000000000000000000000000000000000000000000000000112 ; apter 1=0 ED%alisation o! t e :eneral )ate o! ,ro!it 5 ro%g ;ompetition0 Market-,rices and Market-4al%es0 $%rpl%s-,ro!it0000000000000000000000000000000000000000000000000000000000000000001<6 ; apter 110 E!!ects o! :eneral Wage Fl%ct%ations on ,rices o! ,rod%ction000000000000000000000000000121 ; apter 1<0 $%pplementary )emarks00000000000000000000000000000000000000000000000000000000000000000000000000000000000000122 &0 ;a%ses &mplying a ; ange in t e ,rice o! ,rod%ction00000000000000000000000000000000000000000000000000000122 &&0 ,rice o! ,rod%ction o! ;ommodities o! ?8erage ;omposition0000000000000000000000000000000000000012+ &&&0 5 e ;apitalist"s :ro%nds !or ;ompensating00000000000000000000000000000000000000000000000000000000000000000012+ Part III. The (a) of the Ten#enc* of the $ate of Profit to +all............................................148 ; apter 130 5 e 'a@ ?s $%c 000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000128 ; apter 120 ;o%nteracting &n!l%ences000000000000000000000000000000000000000000000000000000000000000000000000000000000000016= &0 &ncreasing &ntensity 3! Exploitation0000000000000000000000000000000000000000000000000000000000000000000000000000000016= &&0 7epression 3! Wages Aelo@ 5 e 4al%e 3! 'abo%r-,o@er000000000000000000000000000000000000000000016< &&&0 ; eapening 3! Elements 3! ;onstant ;apital0000000000000000000000000000000000000000000000000000000000000016< &40 )elati8e 38er-,op%lation00000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000016< 40 Foreign 5rade00000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000163 4&0 5 e &ncrease 3! $tock ;apital00000000000000000000000000000000000000000000000000000000000000000000000000000000000000162 ; apter 1+0 Exposition o! t e &nternal ;ontradictions o! t e 'a@000000000000000000000000000000000000000000166 &0 :eneral000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000166 &&0 ;on!lict Aet@een Expansion 3! ,rod%ction ?nd ,rod%ction 3! $%rpl%s-4al%e00000000000016* &&&0 Excess ;apital ?nd Excess ,op%lation00000000000000000000000000000000000000000000000000000000000000000000000001>1 &40 $%pplementary )emarks000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000001>> Part I". Conversion of Co,,o#it*!Ca ital an# -one*!Ca ital into Co,,ercial Ca ital an# -one*!.ealing Ca ital (-erchant/s Ca ital).................................................................180 ; apter 160 ;ommercial ;apital00000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000018< ; apter 1>0 ;ommercial ,ro!it000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000001*= ; apter 180 5 e 5%rno8er o! Merc ant"s ;apital0 ,rices00000000000000000000000000000000000000000000000000000000<=< ; apter 1*0 Money-7ealing ;apital000000000000000000000000000000000000000000000000000000000000000000000000000000000000000<1= ; apter <=0 6istorical Facts abo%t Merc ant"s ;apital00000000000000000000000000000000000000000000000000000000000<12 Part ". .ivision of Profit into Interest an# Profit of Enter rise. Interest!1earing Ca ital 000 ; apter <10 &nterest-Aearing ;apital000000000000000000000000000000000000000000000000000000000000000000000000000000000000000<<< ; apter <<0 7i8ision o! ,ro!it0 )ate o! &nterest0 -at%ral )ate o! &nterest00000000000000000000000000000000<32 ; apter <30 &nterest and ,ro!it o! Enterprise000000000000000000000000000000000000000000000000000000000000000000000000000<21 ; apter <20 ExternaliEation o! t e )elations o! ;apital in t e Form o! &nterest-Aearing ;apital 000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000<++ ; apter <+0 ;redit and Fictitio%s ;apital00000000000000000000000000000000000000000000000000000000000000000000000000000000<6< ; apter <60 ?cc%m%lation o! Money-;apital0 &ts &n!l%ence on t e &nterest )ate00000000000000000000<81 ; apter <>0 5 e )ole o! ;redit in ;apitalist ,rod%ction0000000000000000000000000000000000000000000000000000000003=3 ; apter <80 Medi%m o! ;irc%lation and ;apital# 4ie@s o! 5ooke and F%llarton000000000000000000003=>

; apter <*0 ;omponent ,arts o! Aank ;apital000000000000000000000000000000000000000000000000000000000000000000000000318 ; apter 3=0 Money-;apital and )eal ;apital0 &000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000003<> ; apter 310 Money ;apital and )eal ;apital0 &&00000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000033* 5rans!ormation 3! Money &nto 'oan ;apital00000000000000000000000000000000000000000000000000000000000000000000033* <0 5rans!ormation 3! ;apital 3r )e8en%e &nto Money 5 at &s 5rans!ormed &nto 'oan ;apital000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000326 ; apter 3<0 Money ;apital and )eal ;apital0 &&&00000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000328 ; apter 330 5 e Medi%m o! ;irc%lation in t e ;redit $ystem0000000000000000000000000000000000000000000000003+8 ; apter 320 5 e ;%rrency ,rinciple and t e Englis Aank 'egislation o! 1822000000000000000000000383 ; apter 3+0 ,recio%s Metal and )ate o! Exc ange000000000000000000000000000000000000000000000000000000000000000002=< &0 Mo8ement 3! 5 e :old )eser8e00000000000000000000000000000000000000000000000000000000000000000000000000000000000002=< &&0 5 e )ate 3! Exc ange0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000002=8 )ate 3! Exc ange Wit ?sia0000000000000000000000000000000000000000000000000000000000000000000000000000000000000021= England"s Aalance 3! 5rade0000000000000000000000000000000000000000000000000000000000000000000000000000000000000002<1 ; apter 360 ,re-;apitalist )elations ips0000000000000000000000000000000000000000000000000000000000000000000000000000000002<2 &nterest &n 5 e Middle ?ges00000000000000000000000000000000000000000000000000000000000000000000000000000000000000023+ ?d8antages 7eri8ed Ay 5 e ; %rc From 5 e ,ro ibition 3! &nterest000000000000000000000238 Part "I. Transfor,ation of Sur lus!Profit into 2roun#!$ent..............................................44& ; apter 3>0 &ntrod%ction00000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000022= ; apter 380 7i!!erential )ent: :eneral )emarks000000000000000000000000000000000000000000000000000000000000000000002+> ; apter 3*0 First Form o! 7i!!erential )ent B7i!!erential )ent &C0000000000000000000000000000000000000000000263 ; apter 2=0 $econd Form o! 7i!!erential )ent B7i!!erential )ent &&C000000000000000000000000000000000000002>* ; apter 210 7i!!erential )ent &&0 First ;ase: ;onstant ,rice o! ,rod%ction00000000000000000000000000000000000000000000000000000000000000000000000000000000286 ; apter 2<0 7i!!erential )ent &&0 $econd ;ase: Falling ,rice o! ,rod%ction00000000000000000000000000000000000000000000000000000000000000000000000000000002*1 &0 ,rod%cti8ity o! t e additional in8estment o! capital remains t e same00000000000000000000000000002*1 &&0 7ecreasing rate o! prod%cti8ity o! t e additional capital0000000000000000000000000000000000000000000000002*6 &&&0 )ising rate o! prod%cti8ity o! t e additional capital0000000000000000000000000000000000000000000000000000002*> ; apter 230 7i!!erential )ent &&0 5 ird ;ase: )ising ,rice o! ,rod%ction00000000000000000000000000000000000000000000000000000000000000000000000000000000000+=1 ; apter 220 7i!!erential )ent ?lso on t e Worst ;%lti8ated $oil0000000000000000000000000000000000000000000+<3 ; apter 2+0 ?bsol%te :ro%nd-)ent00000000000000000000000000000000000000000000000000000000000000000000000000000000000000000+<* ; apter 260 A%ilding $ite )ent0 )ent in Mining0 ,rice o! 'and0000000000000000000000000000000000000000000000+22 ; apter 2>0 :enesis o! ;apitalist :ro%nd-)ent0000000000000000000000000000000000000000000000000000000000000000000000++= &0 &ntrod%ctory )emarks00000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000++= &&0 'abo%r rent000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000++2 &&&0 )ent &n Kind00000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000++6 &40 Money-)ent000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000++8

40 MFtayage ?nd ,easant ,roprietors ip 3! 'and ,arcels0000000000000000000000000000000000000000000000000+61 Part "II. $evenues an# their Sources.....................................................................................538 ; apter 280 5 e 5rinity Form%la00000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000+68 & 00000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000+68 &&00000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000+6* &&&0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000+6* ; apter 2*0 ;oncerning t e ?nalysis o! t e ,rocess o! ,rod%ction0000000000000000000000000000000000000000+>* ; apter +=0 &ll%sions ;reated Ay ;ompetition000000000000000000000000000000000000000000000000000000000000000000000000+*= ; apter +10 7istrib%tion )elations and ,rod%ction )elations00000000000000000000000000000000000000000000000006=+ ; apter +<0 ;lasses0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000061= Su le,ent 4* +re#eric5 Engels..................................................................................................................311 &ntrod%ction000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000611 'a@ o! 4al%e and )ate o! ,ro!it00000000000000000000000000000000000000000000000000000000000000000000000000000000000000000611 5 e $tock Exc ange000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000006<1

Preface (Engels, 1894)


?t last & a8e t e pri8ilege o! making p%blic t is t ird book o! MarxGs main @ork, t e concl%sion o! t e t eoretical part0 W en & p%blis ed t e second 8ol%me, in 188+, & t o%g t t at except !or a !e@, certainly 8ery important, sections t e t ird 8ol%me @o%ld probably o!!er only tec nical di!!ic%lties0 5 is @as indeed t e case0 A%t & ad no idea at t e time t at t ese sections, t e most important parts o! t e entire @ork, @o%ld gi8e me as m%c tro%ble as t ey did, H%st as & did not anticipate t e ot er obstacles, @ ic @ere to retard completion o! t e @ork to s%c an extent0 -ext and most important o! all, it @as my eye @eakness @ ic !or years restricted my @riting time to a minim%m, and @ ic , e8en no@, permits me to @rite by arti!icial lig t only in exceptional cases0 F%rt ermore, t ere @ere ot er pressing labo%rs @ ic co%ld not be t%rned do@n, s%c as ne@ editions and translations o! MarxGs and my o@n earlier @orks, ence re8ie@s, pre!aces, and s%pplements, o!ten impossible @it o%t !res st%dy, etc0 ?bo8e all, t ere @as t e Englis edition o! t e !irst 8ol%me o! t is @ork, !or @ ose text & am %ltimately responsible and @ ic conseD%ently cons%med m%c o! my time0 W oe8er as in any @ay !ollo@ed t e colossal gro@t o! international socialist literat%re d%ring t e last ten years, partic%larly t e great n%mber o! translations o! MarxGs and my o@n earlier @orks, @ill agree @it me t at & a8e been l%cky t at t e n%mber o! lang%ages in @ ic & co%ld be o! elp to t e translators, and t ere!ore co%ld not re!%se in all conscience to re8ie@ t eir @ork, is 8ery limited0 A%t t e gro@t o! literat%re @as merely indicati8e o! a corresponding gro@t o! t e international @orking-class mo8ement itsel!0 ?nd t is imposed ne@ obligations %pon me0 From t e !irst days o! o%r p%blic acti8ity it @as Marx and & @ o s o%ldered t e main b%rden o! t e @ork as go-bet@eens !or t e national mo8ements o! $ocialists and @orkers in t e 8ario%s co%ntries0 5 is @ork expanded in proportion to t e expansion o! t e mo8ement as a @ ole0 (p to t e time o! is deat , Marx ad borne t e br%nt o! t e b%rden in t is as @ell0 A%t a!ter is deat t e e8er-increasing b%lk o! @ork ad to be done by mysel! alone0 $ince t en it as become t e r%le !or t e 8ario%s national @orkersG parties to establis direct contacts, and t is is !ort%nately e8er more t e case0 .et reD%ests !or my assistance are still !ar more !reD%ent t an & @o%ld @is in 8ie@ o! my t eoretical @ork0 A%t i! a man as been acti8e in t e mo8ement !or more t an !i!ty years, as & a8e been, e regards t e @ork connected @it it as a bo%nden d%ty t at brooks no delay0 &n o%r e8ent!%l time, H%st as in t e 16t cent%ry, p%re t eorists on social a!!airs are !o%nd only on t e side o! reaction and !or t is reason t ey are not e8en t eorists in t e !%ll sense o! t e @ord, b%t simply apologists o! reaction0 &n 8ie@ o! t e !act t at & li8e in 'ondon my party contacts are limited to correspondence in @inter, @ ile in s%mmer t ey are largely personal0 5 is !act, and t e necessity o! !ollo@ing t e mo8ement in a steadily gro@ing n%mber o! co%ntries and a still more rapidly gro@ing n%mber o! press organs, a8e compelled me to reser8e matters @ ic permit no interr%ption !or completion d%ring t e @inter mont s, and primarily t e !irst t ree mont s o! t e year0 W en a man is past se8enty is MeynertGs association !ibres o! t e brain !%nction @it annoying pr%dence0 6e no longer s%rmo%nts interr%ptions in di!!ic%lt t eoretical problems as easily and D%ickly as be!ore0 &t came abo%t t ere!ore t at t e @ork o! one @inter, i! it @as not completed, ad to be largely beg%n ane@ t e !ollo@ing @inter0 5 is @as t e case @it t e most di!!ic%lt !i!t part0 ?s t e reader @ill obser8e !rom t e !ollo@ing, t e @ork o! editing t e t ird 8ol%me @as essentially di!!erent !rom t at o! editing t e second0 &n t e case o! t e t ird 8ol%me t ere @as not ing to go by o%tside a !irst extremely incomplete dra!t0 5 e beginnings o! t e 8ario%s parts @ere, as a r%le, pretty care!%lly done and e8en stylistically polis ed0 A%t t e !art er one @ent, t e more sketc y and incomplete @as t e man%script, t e more exc%rsions it contained into arising side-iss%es @ ose proper place in t e arg%ment @as le!t !or later decision, and t e longer and

more complex t e sentences, in @ ic t o%g ts @ere recorded in statu nascendi. &n some places and@riting and presentation betrayed all too clearly t e o%tbreak and grad%al progress o! t e attacks o! ill ealt , ca%sed by o8er@ork, @ ic at t e o%tset rendered t e a%t orGs @ork increasingly di!!ic%lt and !inally compelled im periodically to stop @ork altoget er0 ?nd no @onder0 Aet@een 1863 and 186>, Marx not only completed t e !irst dra!t o! t e t@o last 8ol%mes o! Capital and prepared t e !irst 8ol%me !or t e printer, b%t also per!ormed t e enormo%s @ork connected @it t e !o%nding and expansion o! t e &nternational WorkingmenGs ?ssociation0 ?s a res%lt, already in 1862 and 186+ omino%s signs o! ill ealt appeared @ ic pre8ented Marx !rom personally p%tting t e !inis ing to%c es to t e second and t ird 8ol%mes0 & began my @ork by dictating into readable copy t e entire man%script, @ ic @as o!ten ard to decip er e8en !or me0 5 is alone reD%ired considerable time0 &t @as only t en t at & co%ld start on t e act%al editing0 & limited t is to t e essential0 & tried my best to preser8e t e c aracter o! t e !irst dra!t @ ere8er it @as s%!!iciently clear0 & did not e8en eliminate repetitions, @ ere8er t ey, as @as MarxGs c%stom, 8ie@ed t e s%bHect !rom anot er standpoint or at least expressed t e same t o%g t in di!!erent @ords0 W ere8er my alterations or additions exceeded t e bo%nds o! editing, or @ ere & ad to apply MarxGs !act%al material to independent concl%sions o! my o@n, i! e8en as !ait !%l as possible to t e spirit o! Marx, & a8e enclosed t e entire passage in brackets and a!!ixed my initials0 $ome o! my !ootnotes are not enclosed in brackets# b%t @ ere8er & a8e initialled t em & am responsible !or t e entire note0 ?s is only to be expected in a !irst dra!t, t ere are n%mero%s all%sions in t e man%script to points @ ic @ere to a8e been expanded %pon later, @it o%t t ese promises al@ays a8ing been kept0 & a8e le!t t em, beca%se t ey re8eal t e a%t orGs intentions relati8e to !%t%re elaboration0 -o@ as to details0 ?s regards t e !irst part, t e main man%script @as ser8iceable only @it s%bstantial limitations0 5 e entire mat ematical calc%lation o! t e relation bet@een t e rate o! s%rpl%s-8al%e and t e rate o! pro!it B@ ic makes %p o%r ; apter &&&C is introd%ced in t e 8ery beginning, @ ile t e s%bHect treated in o%r ; apter & is considered later and as t e occasion arises0 5@o attempts at re8ising, eac o! t em eig t pages in folio, @ere %se!%l ere0 A%t e8en t ese did not possess t e desired contin%ity t ro%g o%t0 5 ey !%rnis ed t e s%bstance !or @ at is no@ ; apter &0 ; apter && is taken !rom t e main man%script0 5 ere @as a series o! %ncompleted mat ematical calc%lations !or ; apter &&&, as @ell as a @ ole, almost complete, note-book dating !rom t e se8enties, @ ic presents t e relation o! t e rate o! s%rpl%s-8al%e to t e rate o! pro!it in t e !orm o! eD%ations0 My !riend $am%el Moore, @ o as also translated t e greater portion o! t e !irst 8ol%me into Englis , %ndertook to edit t is notebook !or me, a @ork !or @ ic e @as !ar better eD%ipped, being an old ;ambridge mat ematician0 &t @as !rom is s%mmary, @it occasional %se o! t e main man%script, t at & t en compiled ; apter &&&0 -ot ing b%t t e title @as a8ailable !or ; apter &40 A%t since its s%bHect-matter, t e in!l%ence o! t%rno8er on t e rate o! pro!it, is o! 8ital importance, & a8e @ritten it mysel!, !or @ ic reason t e @ ole c apter as been placed in brackets0 &t de8eloped in t e co%rse o! t is @ork t at t e !orm%la !or t e rate o! pro!it gi8en in ; apter &&& reD%ired modi!ication to be generally 8alid0 Aeginning @it ; apter 4, t e main man%script is t e sole so%rce !or t e remainder o! t e part, alt o%g many transpositions and s%pplements @ere also essential0 ?s !or t e !ollo@ing t ree parts, aside !rom stylistic editing & @as able to !ollo@ t e original man%script almost t ro%g o%t0 ? !e@ passages dealing mostly @it t e in!l%ence o! t%rno8er ad to be bro%g t into agreement @it ; apter &4, @ ic & ad inserted, and are like@ise placed in brackets and !ollo@ed by my initials0 5 e greatest di!!ic%lty @as presented by ,art 4 @ ic dealt @it t e most complicated s%bHect in t e entire 8ol%me0 ?nd it @as H%st at t is point t at Marx @as o8ertaken by one o! t e abo8e-

mentioned serio%s attacks o! illness0 6ere, t en, @as no !inis ed dra!t, not e8en a sc eme @ ose o%tlines mig t a8e been !illed o%t, b%t only t e beginning o! an elaboration I o!ten H%st a disorderly mass o! notes, comments and extracts0 & tried at !irst to complete t is part, as & ad done to a certain extent @it t e !irst one, by !illing in t e gaps and expanding %pon passages t at @ere only indicated, so t at it @o%ld at least approximately contain e8eryt ing t e a%t or ad intended0 & tried t is no less t an t ree times, b%t !ailed in e8ery attempt, and t e time lost in t is is one o! t e c ie! ca%ses t at eld %p t is 8ol%me0 ?t last & realised t at & @as on t e @rong track0 & s o%ld a8e ad to go t ro%g t e entire 8ol%mino%s literat%re in t is !ield, and @o%ld in t e end a8e prod%ced somet ing t at @o%ld ne8ert eless not a8e been a book by Marx0 & ad no ot er c oice b%t to more or less c%t t e :ordian knot by con!ining mysel! to as orderly an arrangement o! a8ailable matter as possible, and to making only t e most indispensable additions0 ?nd so it @as t at & s%cceeded in completing t e principal labo%rs !or t is part in t e spring o! 18*30 ?s !or t e 8ario%s c apters, ; apters JJ& to JJ&4 @ere, in t e main, complete0 ; apters JJ4 and JJ4& reD%ired a si!ting o! t e re!erences and an interpolation o! material !o%nd else@ ere0 ; apters JJ4&& and JJ&J co%ld be taken almost completely !rom t e original man%script, b%t ; apter JJ4&&& ad to be re-arranged in places0 5 e real di!!ic%lty, o@e8er, began @it ; apter JJJ0 From ere on it @as not only a matter o! properly arranging t e re!erences, b%t o! p%tting t e train o! t o%g t into proper order, interr%pted as it @as at e8ery point by inter8ening cla%ses and de8iations, etc0, and res%med else@ ere, o!ten H%st cas%ally0 5 %s, ; apter JJJ @as p%t toget er by means o! transpositions and excisions @ ic @ere %tilised, o@e8er, in ot er places0 ; apter JJJ&, again, possessed greater contin%ity0 A%t t en !ollo@s a long section in t e man%script, entitled K5 e ;on!%sionL, containing not ing b%t extracts !rom parliamentary reports on t e crises o! 1828 and 18+>, in @ ic are compiled statements o! t@enty-t ree b%sinessmen and economists, largely on money and capital, gold drain, o8er-spec%lation, etc0, and s%pplied ere and t ere @it s ort !acetio%s comments0 ,ractically all t e t en c%rrent 8ie@s concerning t e relation o! money to capital are represented t erein, eit er in t e ans@ers or in t e D%estions, and it @as t e Kcon!%sionL re8ealed in identi!ying money and capital in t e money-market t at Marx meant to treat @it criticism and sarcasm0 ?!ter many attempts & con8inced mysel! t at t is c apter co%ld not be p%t into s ape0 &ts material, partic%larly t at s%pplied @it MarxGs comments, @as %sed @ ere8er & !o%nd an opport%ne place !or it0 -ext, in tolerable order, comes @ at & placed in ; apter JJJ&&0 A%t t is is immediately !ollo@ed by a ne@ batc o! extracts !rom parliamentary reports on e8ery concei8able t ing pertinent to t is part, intermingled @it t e a%t orGs comments0 5o@ard t e end t ese extracts and comments are !oc%ssed more and more on t e mo8ement o! monetary metals and on exc ange rates, and close @it all kinds o! miscellaneo%s remarks0 3n t e ot er and, t e K,recapitalistL c apter B; ap0 JJJ4&C @as D%ite complete0 3! all t is material beginning @it t e K;on!%sionL, sa8e t at @ ic ad been pre8io%sly inserted, & made %p ; apters JJJ&&& to JJJ40 5 is co%ld not, o! co%rse, be done @it o%t considerable interpolations on my part !or t e sake o! contin%ity0 (nless t ey are merely !ormal in nat%re, t e interpolations are expressly indicated as belonging to me0 &n t is @ay & a8e !inally s%cceeded in @orking into t e text all t e a%t orGs rele8ant statements0 -ot ing as been le!t o%t b%t a small portion o! t e extracts, @ ic eit er repeated @ at ad already been said, or to%c ed on points @ ic t e man%script did not treat any !%rt er0 5 e part on gro%nd-rent @as m%c more !%lly treated, alt o%g by no means properly arranged, i! only !or t e !act t at Marx !o%nd it necessary to recapit%late t e plan o! t e entire part in ; apter J'&&& Bt e last portion o! t e part on rent in t e man%scriptC0 5 is @as all t e more desirable, since t e man%script opens @it ; apter JJJ4&&, !ollo@ed by ; apters J'4 to J'4&&, and only t erea!ter ; apters JJJ4&&& to J'&40 5 e titles !or t e di!!erential rent && in8ol8ed t e

greatest amo%nt o! @ork and so did t e disco8ery t at t e t ird case o! t is class o! rent ad not at all been analysed in ; apter J'&&&, @ ere it belonged0 &n t e se8enties Marx engaged in entirely ne@ special st%dies !or t is part on gro%nd-rent0 For years e ad st%died t e )%ssian originals o! statistical reports ine8itable a!ter t e Kre!ormL o! 1861 in )%ssia and ot er p%blications on lando@ners ip, ad taken extracts !rom t ese originals, placed at is disposal in admirably complete !orm by is )%ssian !riends, and ad intended to %se t em !or a ne@ 8ersion o! t is part0 3@ing to t e 8ariety o! !orms bot o! lando@ners ip and o! exploitation o! agric%lt%ral prod%cers in )%ssia, t is co%ntry @as to play t e same role in t e part dealing @it gro%nd-rent t at England played in Aook & in connection @it ind%strial @agelabo%r0 6e @as %n!ort%nately denied t e opport%nity o! carrying o%t t is plan0 'astly, t e se8ent part @as a8ailable complete, b%t only as a !irst dra!t, @ ose endlessly in8ol8ed periods ad !irst to be dissected to be made printable0 5 ere exists only t e beginning o! t e !inal c apter0 &t @as to treat o! t e t ree maHor classes o! de8eloped capitalist society I t e lando@ners, capitalists and @age-labo%rers I corresponding to t e t ree great !orms o! re8en%e, gro%nd-rent, pro!it and @ages, and t e class str%ggle, an ine8itable concomitant o! t eir existence, as t e act%al conseD%ence o! t e capitalist period0 Marx %sed to lea8e s%c concl%ding s%mmaries %ntil t e !inal editing, H%st be!ore going to press, @ en t e latest istorical de8elopments !%rnis ed im @it %n!ailing reg%larity @it proo!s o! t e most la%dable timeliness !or is t eoretical propositions0 ;itations and proo!s ill%strating is statements are, as in t e second 8ol%me, considerably less n%mero%s t an in t e !irst0 M%otations !rom Aook & re!er to pages in t e <nd and 3rd editions0 W ere8er t e man%script re!ers to t eoretical statements o! earlier economists, t e name alone is gi8en as a r%le, and t e D%otations @ere to be added d%ring t e !inal editing0 3! co%rse, & ad to lea8e t is as it @as0 5 ere are only !o%r parliamentary reports, b%t t ese are ab%ndantly %sed0 5 ey are t e !ollo@ing: 1C )eports !rom ;ommittees Bo! t e 'o@er 6o%seC, 4ol%me 4&&&, ;ommercial 7istress, 4ol%me &&, ,art &0 182>-280 Min%tes o! E8idence0 I M%oted as ;ommercial 7istress 182>-280 <C $ecret ;ommittee o! t e 6o%se o! 'ords on ;ommercial 7istress 182>0 )eport printed in 18280 E8idence printed in 18+> Bbeca%se considered too compromising in 1828C0 I M%oted as ;0 70 1828N+>0 3C )eport: Aank ?cts, 18+>0 I 7itto, 18+80 I )eports o! t e ;ommittee o! t e 'o@er 6o%se on t e E!!ect o! t e Aank ?cts o! 1822 and 182+0 Wit e8idence0 I M%oted as: A0 ?0 Balso as A0 ;0C 18+> or 18+80 & am going to start on t e !o%rt 8ol%me-t e istory o! t e t eory o! s%rpl%s-8al%e I as soon as it is in any @ay possible0 &n t e pre!ace to t e second 8ol%me o! Capital & ad to sD%are acco%nts @it t e gentlemen @ o raised a %e and cry at t e time beca%se t ey !ancied to a8e disco8ered Kin )odbert%s t e secret so%rce and s%perior predecessor o! MarxL0 & o!!ered t em an opport%nity to s o@ K@ at t e economics o! a )odbert%s can accomplis L# & de!ied t em to s o@ Kin @ ic @ay an eD%al a8erage rate o! pro!it can and m%st come abo%t, not only @it o%t a 8iolation o! t e la@ o! 8al%e, b%t on t e 8ery basis o! itL0 5 ese same gentlemen @ o !or eit er s%bHecti8e or obHecti8e, b%t as a r%le anyt ing b%t scienti!ic reasons @ere t en lionising t e bra8e )odbert%s as an economic star o! t e !irst magnit%de, a8e @it o%t exception !ailed to !%rnis an ans@er0 6o@e8er, ot er people a8e t o%g t it @ort t eir @ ile to occ%py t emsel8es @it t e problem0 &n is critiD%e o! t e second 8ol%me B Conrads Jahrbcher, J&, 188+, $0 2+<-6+C, ,ro!essor 'exis took %p t e D%estion, alt o%g e did not care to o!!er a direct sol%tion0 6e says:

K5 e sol%tion o! t e contradictionL Bbet@een t e )icardo-Marxian la@ o! 8al%e and an eD%al a8erage rate o! pro!itC Kis impossible i! t e 8ario%s classes o! commodities are considered individually and i! t eir 8al%e is to be eD%al to t eir exc ange-8al%e, and t e latter eD%al or proportional to t eir price0L ?ccording to im, t e sol%tion is only possible i! K@e cease meas%ring t e 8al%e o! indi8id%al commodities according to labo%r, and consider only t e prod%ction o! commodities as a whole and t eir distrib%tion among t e aggregate classes o! capitalists and @orkers0000 5 e @orking class recei8es b%t a certain portion o! t e total prod%ct,000 t e ot er portion, @ ic !alls to t e s are o! t e capitalist class, represents t e s%rpl%s-prod%ct in t e Marxian sense, and accordingly 000 t e s%rpl%s-8al%e0 5 en t e members o! t e capitalist class di8ide t is total s%rpl%s-8al%e among t emsel8esnot in accordance @it t e n%mber o! @orkers employed by t em, b%t in proportion to t e capital in8ested by eac , t e land also being acco%nted !or as capital-8al%e0L 5 e Marxian ideal 8al%es determined by %nits o! labo%r incorporated in t e commodities do not correspond to prices b%t may be Kregarded as points o! depart%re o! a s i!t @ ic leads to t e act%al prices0 5 e latter depend on t e !act t at eD%al s%ms o! capital demand eD%al pro!its0L For t is reason some capitalists @ill sec%re prices ig er t an t e ideal 8al%es !or t eir commodities, and ot ers @ill sec%re lo@er prices0 KA%t since t e losses and gains o! s%rpl%s-8al%e balance one anot er @it in t e capitalist class, t e total amo%nt o! t e s%rpl%s-8al%e is t e same as it @o%ld be i! all prices @ere proportional to t e ideal 8al%es0L &t is e8ident t at t e problem as not in any @ay been sol8ed ere, b%t as, t o%g some@ at loosely and s allo@ly, been on t e @ ole correctly formulated. ?nd t is is, indeed, more t an @e co%ld a8e expected !rom a man @ o, like t e abo8e a%t or, takes a certain pride in being a

K8%lgar economistL0 &t is really s%rprising @ en compared @it t e andi@ork o! ot er 8%lgar economists, @ ic @e s all later disc%ss0 'exisGs 8%lgar economy is, any o@, in a class o! its o@n0 6e says t at capital gains might, at any rate, be deri8ed in t e @ay indicated by Marx, b%t t at not ing compels one to accept t is 8ie@0 3n t e contrary0 4%lgar economy, e says, as at least a more pla%sible explanation, namely: K5 e capitalist sellers, s%c as t e prod%cer o! ra@ materials, t e man%!act%rer, t e @ olesale dealer, and t e retail dealer, all make a gain on t eir transactions by selling at a price ig er t an t e p%rc ase price, t %s adding a certain percentage to t e price t ey t emsel8es pay !or t e commodity0 5 e @orker alone is %nable to obtain a similar additional 8al%e !or is commodity# e is compelled by reason o! is %n!a8o%rable condition 8is-O-8is t e capitalist to sell is labo%r at t e price it costs im, t at is to say, !or t e essential means o! is s%bsistence0000 5 %s, t ese additions to prices retain t eir !%ll impact @it regard to t e b%ying @orker, and ca%se t e trans!er o! a part o! t e 8al%e o! t e total prod%ct to t e capitalist class0L 3ne need not strain is t inking po@ers to see t at t is explanation !or t e pro!its o! capital, as ad8anced by K8%lgar economy,L amo%nts in practice to t e same t ing as t e Marxian t eory o! s%rpl%s-8al%e# t at t e @orkers are in H%st t e same K%n!a8o%rable conditionL according to 'exis as according to Marx# t at t ey are H%st as m%c t e 8ictims o! s@indle beca%se e8ery non-@orker can sell commodities abo8e price, @ ile t e @orker cannot do so# and t at it is H%st as easy to b%ild %p an at least eD%ally pla%sible 8%lgar socialism on t e basis o! t is t eory, as t at b%ilt in England on t e !o%ndation o! Pe8onsGs and MengerGs t eory o! %se-8al%e and marginal %tility0 & e8en s%spect t at i! Mr0 :eorge Aernard $ a@ ad been !amiliar @it t is t eory o! pro!it, e @o%ld a8e likely !allen to @it bot ands, discarding Pe8ons and Karl Menger, to b%ild ane@ t e Fabian c %rc o! t e !%t%re %pon t is rock0 &n reality, o@e8er, t is t eory is merely a parap rase o! t e Marxian0 W at de!rays all t e price additionsQ &t is t e @orkersG Ktotal prod%ctL0 ?nd t is is d%e to t e !act t at t e commodity Klabo%rL, or, as Marx as it, labo%r-po@er, as to be sold belo@ its price0 For i! it is a common property o! all commodities to be sold at a price ig er t an t eir cost o! prod%ction, @it labo%r being t e sole exception since it is al@ays sold at t e cost o! prod%ction, t en labo%r is simply sold belo@ t e price t at r%les in t is @orld o! 8%lgar economy0 6ence t e res%ltant extra pro!it accr%ing to t e capitalist, or capitalist class, arises, and can only arise, in t e last analysis, !rom t e !act t at t e @orker, a!ter reprod%cing t e eD%i8alent !or t e price o! is labo%r-po@er, m%st prod%ce an additional prod%ct !or @ ic e is not paid I i0e0, a s%rpl%s-prod%ct, a prod%ct o! %npaid labo%r, or s%rpl%s-8al%e0 'exis is an extremely ca%tio%s man in t e c oice o! is terms0 6e does not say any@ ere o%trig t t at t e abo8e is is o@n conception0 A%t i! it is, it is plain as day t at @e are not dealing @it one o! t ose ordinary 8%lgar economists, o! @ om e says imsel!

t at e8ery one o! t em is Kat best only a opeless idiotL in MarxGs eyes, b%t @it a Marxist disg%ised as a 8%lgar economist0 W et er t is disg%ise as occ%rred conscio%sly or %nconscio%sly is a psyc ological D%estion @ ic does not interest %s at t is point0 W oe8er @o%ld care to in8estigate t is, mig t also probe o@ a man as s re@d as 'exis %ndo%btedly is, co%ld at one time de!end s%c nonsense as bimetallism0 5 e !irst to really attempt an ans@er to t e D%estion @as 7r0 Conrad Schmidt in is pamp let entitled Die Durchsdinittsprofitrate auf Grundlage des Mar !schen "erthgeset#es, $t%ttgart, 7ietE, 188*0 $c midt seeks to reconcile t e details o! t e !ormation o! market-prices @it bot t e la@ o! 8al%e and @it t e a8erage rate o! pro!it0 5 e ind%strial capitalist recei8es in is prod%ct, !irst, an eD%i8alent o! t e capital e as ad8anced, and, second, a s%rpl%s-prod%ct !or @ ic e as paid not ing0 A%t to obtain a s%rpl%s-prod%ct e m%st ad8ance capital to prod%ction0 5 at is, e m%st apply a certain D%antity o! materialised labo%r to be able to appropriate t is s%rpl%s-prod%ct0 For t e capitalist, t ere!ore, t e capital e ad8ances represents t e D%antity o! materialised labo%r socially necessary !or im to obtain t is s%rpl%s-prod%ct0 5 is applies to e8ery ind%strial capitalist0 -o@, since commodities are m%t%ally exc anged, according to t e la@ o! 8al%e, in proportion to t e labo%r socially necessary !or t eir prod%ction and since, as !ar as t e capitalist is concerned, t e labo%r necessary !or t e man%!act%re o! t e s%rpl%s-prod%ct appens to be past labo%r acc%m%lated in is capital, it !ollo@s t at s%rpl%s-prod%cts are exc anged in proportion to t e s%ms o! capital reD%ired !or t eir prod%ction, and not in proportion to t e labo%r actually incorporated in t em0 6ence t e s are o! eac %nit o! capital is eD%al to t e s%m o! all prod%ced s%rpl%s-8al%es di8ided by t e s%m o! t e capitals expended in prod%ction0 ?ccordingly, eD%al s%ms o! capital yield eD%al pro!its in eD%al time spans, and t is is accomplis ed by adding t e cost-price o! t e s%rpl%s-prod%ct so calc%lated, i0e0, t e a8erage pro!it, to t e cost-price o! t e paid prod%ct and by selling bot t e paid and %npaid prod%ct at t is increased price0 5 e a8erage rate o! pro!it takes s ape in spite o! a8erage commodity-prices being determined, as $c midt olds, by t e la@ o! 8al%e0 5 e constr%ction is extremely ingenio%s0 &t is completely patterned a!ter t e 6egelian model, b%t like t e maHority o! 6egelian constr%ctions it is not correct0 $%rpl%s-prod%ct or paid prod%ct, makes no di!!erence0 &! t e la@ o! 8al%e is also to be directly 8alid !or t e a8erage prices, bot o! t em m%st be sold at prices proportionate to t e socially necessary labo%r reD%ired and expended in prod%cing t em0 5 e la@ o! 8al%e is aimed !rom t e !irst against t e idea deri8ed !rom t e capitalist mode o! t o%g t t at acc%m%lated labo%r o! t e past, @ ic comprises capital, is not merely a certain s%m o! !inis ed 8al%e, b%t t at, beca%se a !actor in prod%ction and t e !ormation o! pro!it, it also prod%ces 8al%e and is ence a so%rce o! more 8al%e t an it as itsel!# it establis es t at li8ing labo%r alone possesses t is !ac%lty0 &t is @ell kno@n t at capitalists expect eD%al pro!its proportionate to t eir capitals and regard t eir ad8ances o! capital as a sort o! costprice o! t eir pro!its0 A%t i! $c midt %tilises t is conception as a means o! reconciling prices based on t e a8erage rate o! pro!it @it t e la@ o! 8al%e, e rep%diates t e la@ o! 8al%e itsel! by attrib%ting to it as one o! its co-determinati8e !actors a conception @it @ ic t e la@ is @ olly at 8ariance0 Eit er acc%m%lated labo%r creates 8al%e t e same as li8ing labo%r0 &n t at case t e la@ o! 8al%e does not apply0 3r, it does not create 8al%e0 &n t at case $c midtGs demonstration is incompatible @it t e la@ o! 8al%e0 $c midt strayed into t is bypat @ en D%ite close to t e sol%tion, beca%se e belie8ed t at e needed not ing s ort o! a mat ematical !orm%la to demonstrate t e con!ormance o! t e a8erage price o! e8ery indi8id%al commodity @it t e la@ o! 8al%e0 A%t @ ile on t e @rong track in t is instance, in t e immediate proximity o! t e goal, t e rest o! is booklet is e8idence o! t e

%nderstanding @it @ ic e dre@ !%rt er concl%sions !rom t e !irst t@o 8ol%mes o! Capital. 6is is t e ono%r o! independently !inding t e correct explanation de8eloped by Marx in t e t ird part o! t e t ird 8ol%me !or t e it erto inexplicable sinking tendency o! t e rate o! pro!it, and, similarly, o! explaining t e deri8ation o! commercial pro!it o%t o! ind%strial s%rpl%s-8al%e, and o! making a great n%mber o! obser8ations concerning interest and gro%nd-rent, in @ ic e anticipates ideas de8eloped by Marx in t e !o%rt and !i!t parts o! t e t ird 8ol%me0 &n a s%bseD%ent article B$eue %eit, 18*<-*3, -os0 3 and 2C, $c midt takes a di!!erent tack in is e!!ort to sol8e t e problem0 6e contends t at it is competition @ ic prod%ces t e a8erage rate o! pro!it by ca%sing t e trans!er o! capital !rom branc es o! prod%ction @it %nder-a8erage pro!it to branc es @it abo8e-a8erage pro!it0 &t is not a re8elation t at competition is t e great eD%aliser o! pro!its0 A%t no@ $c midt tries to pro8e t at t is le8elling o! pro!its is identical @it a red%ction o! t e selling price o! commodities in excess s%pply to a magnit%de o! 8al%e @ ic society can pay !or t em according to t e la@ o! 8al%e0 MarxGs analyses in t e book itsel! are ample e8idence @ y t is @ay, too, co%ld not lead to t e goal0 ?!ter $c midt &. 'ireman tackled t e problem BConrads Jahrbcher, dritte Folge, &&&, $0 >*3C0 & s all not go into is remarks on ot er aspects o! t e Marxian analysis0 5 ey rest %pon t e !alse ass%mption t at Marx @is es to de!ine @ ere e only in8estigates, and t at in general one mig t expect !ixed, c%t-to-meas%re, once and !or all applicable de!initions in MarxGs @orks0 &t is sel!e8ident t at @ ere t ings and t eir interrelations are concei8ed, not as !ixed, b%t as c anging, t eir mental images, t e ideas, are like@ise s%bHect to c ange and trans!ormation# and t ey are not encaps%lated in rigid de!initions, b%t are de8eloped in t eir istorical or logical process o! !ormation0 5 is makes clear, o! co%rse, @ y in t e beginning o! is !irst book Marx proceeds !rom t e simple prod%ction o! commodities as t e istorical premise, %ltimately to arri8e !rom t is basis to capital I @ y e proceeds !rom t e simple commodity instead o! a logically and istorically secondary !orm I !rom an already capitalistically modi!ied commodity0 5o be s%re, Fireman positi8ely !ails to see t is0 5 ese and ot er side-iss%es, @ ic co%ld gi8e rise to still ot er di8erse obHections, are better le!t by t e @ayside, @ ile @e go on !ort @it to t e gist o! t e matter0 W ile t eory teac es Fireman t at at a gi8en rate o! s%rpl%s-8al%e t e latter is proportional to t e labo%r-po@er employed, e learns !rom experience t at at a gi8en a8erage rate o! pro!it, pro!it is proportional to t e total capital employed0 6e explains t is by saying t at pro!it is merely a con8entional p enomenon B@ ic means in is lang%age t at it belongs to a de!inite social !ormation @it @ ic it stands and !allsC0 &ts existence is simply tied %p @it capital0 5 e latter, pro8ided it is strong eno%g to sec%re a pro!it !or itsel!, is compelled by competition also to sec%re !or itsel! a rate o! pro!it eD%al !or all s%ms o! capital0 ;apitalist prod%ction is simply impossible @it o%t an eD%al rate o! pro!it0 :i8en t is mode o! prod%ction, t e D%antity o! pro!it !or t e indi8id%al capitalist can, at a certain rate o! pro!it, depend only on t e magnit%de o! is capital0 3n t e ot er and, pro!it consists o! s%rpl%s-8al%e, o! %npaid labo%r0 A%t o@ is s%rpl%s8al%e, @ ose magnit%de inges %pon t e degree o! labo%r exploitation, trans!ormed into pro!it, @ ose magnit%de depends %pon t e amo%nt o! t e capital employedQ K$imply by selling commodities abo8e t eir 8al%e in all branc es o! prod%ction in @ ic t e ratio bet@een 000 constant and 8ariable capital is greatest# b%t t is also implies t at commodities are sold belo@ t eir 8al%e in t ose branc es o! prod%ction in @ ic t e ratio bet@een constant and 8ariable capital R c:8 is smallest, and t at commodities are sold at t eir tr%e

8al%e only in branc es in @ ic

t e ratio o! c:8

represents a certain mean !ig%re0000 &s t is discrepancy bet@een indi8id%al prices and t eir respecti8e 8al%es a re!%tation o! t e 8al%e principleQ Ay no means0 For since t e prices o! some commodities rise abo8e t eir 8al%e as m%c as t e prices o! ot ers !all belo@ it, t e total s%m o! prices remains eD%al to t e total s%m o! 8al%es 000 in t e end t is incongr%ity disappears0L 5 is incongr%ity is a Kdist%rbanceL# K o@e8er, in t e exact sciences it is not c%stomary to regard a predictable dist%rbance as a re!%tation o! a la@L0 3n comparing t e rele8ant passages in ; apter &J @it t e abo8e, it @ill be seen t at Fireman as indeed placed is !inger on t e salient point0 A%t t e %ndeser8edly cool reception o! is able article s o@s o@ many interconnecting links @o%ld still be needed e8en a!ter t is disco8ery to enable Fireman to @ork o%t a !%ll and compre ensi8e sol%tion0 ?lt o%g many @ere interested in t is problem, t ey @ere all still !ear!%l o! getting t eir !ingers b%rnt0 ?nd t is is explained not only by t e incomplete !orm in @ ic Fireman le!t is disco8ery, b%t also by t e %ndeniable !a%ltiness o! bot is conception o! t e Marxian analysis and o! is o@n general critiD%e o! t e latter, based as it @as on is misconception0 W ene8er t ere is a c ance o! making a !ool o! imsel! o8er some di!!ic%lt matter, 6err ,ro!essor P%li%s "olf, o! 9%ric , ne8er !ails to do so0 6e tells %s B Conrads Jahrbcher, 18*1, dritte Folge, &&, $0 3+< and !ollo@ingC t at t e entire problem is resol8ed in relati8e s%rpl%s-8al%e0 5 e prod%ction o! relati8e s%rpl%s-8al%e rests on t e increase o! constant capital 8is-O-8is 8ariable capital0 K? pl%s in constant capital pres%pposes a pl%s in t e prod%cti8e po@er o! t e labo%rers0 $ince t is pl%s in prod%cti8e po@er Bby @ay o! lo@ering t e @orkerGs cost o! li8ingC prod%ces a pl%s in s%rpl%s-8al%e, a direct relation is establis ed bet@een t e increasing s%rpl%s-8al%e and t e increasing s are o! constant capital in total capital0 ? pl%s in constant capital indicates a pl%s in t e prod%cti8e po@er o! labo%r0 Wit 8ariable capital remaining t e same and constant capital increasing, s%rpl%s-8al%e m%st t ere!ore, in accordance @it Marx, increase as @ell0 5 is @as t e problem presented to %s0L 5r%e, Marx says t e 8ery opposite in a %ndred places in t e !irst ook# tr%e, t e assertion t at, according to Marx, @ en 8ariable capital s rinks, relati8e s%rpl%s-8al%e increases in proportion to t e increase in constant capital, is so asto%nding t at it p%ts to s ame all parliamentary

declamation# tr%e, 6err P%li%s Wol! demonstrates in is e8ery line t at e does not in t e least %nderstand, be it relati8ely or absol%tely, t e concepts o! relati8e or absol%te s%rpl%s-8al%e# to be s%re e says imsel! t at Kat !irst glance one seems really to e in a nest o! incongr%itiesL, @ ic , by t e @ay, is t e only tr%e statement in is entire article0 A%t @ at does all t at matterQ 6err P%li%s Wol! is so pro%d o! is brilliant disco8ery t at e cannot re!rain !rom besto@ing post %mo%s praise on Marx !or it and !rom extolling is o@n !at omless nonsense as a Kne@ proo! o! t e keen and !ar-sig ted @ay set !ort L0 A%t no@ comes t e c oicest bit o! all0 6err Wol! says: K)icardo as like@ise claimed t at an eD%al in8estment o! capital yielded eD%al s%rpl%s-8al%e Bpro!itC, H%st as t e same expendit%re o! labo%r created t e same s%rpl%s-8al%e Bas regards its D%antityC0 ?nd t e D%estion no@ @as o@ t e one agreed @it t e ot er0 A%t Marx as re!%sed to accept t is @ay o! p%tting t e problem0 (e has proved beyond a doubt )in the third volume* t at t e second statement @as not necessarily a conseD%ence o! t e la@ o! 8al%e, t at it e8en contradicted is la@ o! 8al%e and s o%ld t ere!ore be !ort @it rep%diated0L ?nd t ere%pon Wol! probes @ o o! %s t@o, Marx or &, ad made a mistake0 &t does not occ%r to im, nat%rally, t at it is e @ o is groping in t e dark0 & s o%ld o!!end my readers and !ail to see t e %mo%r o! t e sit%ation i! & @ere to @aste a single @ord on t is c oice morsel0 & s all only add t at is a%dacity in %sing t e opport%nity to report t e ostensible gossip among pro!essors t at ;onrad $c midtGs abo8e-named @ork @as Kdirectly inspired by EngelsL matc es t e a%dacity @it @ ic e dared to say at one time @ at KMarx as pro8ed beyond a do%bt in t e t ird 8ol%me0L 6err P%li%s Wol!S &t may be c%stomary in t e @orld in @ ic yo% li8e and stri8e !or t e man @ o p%blicly poses a problem to ot ers to acD%aint is close !riends on t e sly @it its sol%tion0 & am D%ite prepared to belie8e t at yo% are capable o! t is sort o! t ing0 A%t t at a man need not stoop to s%c s abby tricks in my @orld is pro8ed by t e present pre!ace0 -o sooner ad Marx died t an Mr0 +chille ,oria astened to p%blis an article abo%t im in t e $uova +ntologia B?pril 1883C0 5o begin @it , a biograp y brimming @it misin!ormation, !ollo@ed by a critiD%e o! p%blic, political and literary @ork0 6e !alsi!ies MarxGs materialist conception o! istory and distorts it @it an ass%rance t at bespeaks a great p%rpose0 ?nd t is p%rpose @as e8ent%ally carried o%t0 &n 1886, t e same Mr0 'oria p%blis ed a book, ,a teoria economica della constitu#ione politica, in @ ic e anno%nced to is asto%nded contemporaries t at MarxGs conception o! istory, so completely and p%rpose!%lly misrepresented by im in isL BMarxGsC Ksystem o! criticism o! capitalist economy is

1883, @as is o@n disco8ery0 5o be s%re, t e Marxian t eory is red%ced in t is book to a rat er , ilistine le8el, and t e istorical ill%strations and proo!s abo%nd in bl%nders @ ic @o%ld ne8er be tolerated in a !o%rt -!orm boy0 A%t @ at does t at matterQ 5 e disco8ery t at political conditions and e8ents are e8ery@ ere in8ariably explained by corresponding economic conditions @as, as is ere@it demonstrated, not made by Marx in 182+, b%t by Mr0 'oria in 18860 ?t least e as appily con8inced is co%ntrymen o! t is, and, a!ter is book appeared in Frenc , also some Frenc men, and can no@ pose in &taly as t e a%t or o! a ne@ epoc -making t eory o! istory %ntil t e &talian $ocialists !ind time to strip t e ill%strio%s 'oria o! is stolen peacock !eat ers0 A%t t is is H%st a sample or Mr0 'oriaGs style0 6e ass%res %s t at all MarxGs t eories rest on conscious sop istry Bun consaputo sofismaC# t at Marx did not stop at paralogisms e8en @ en he -new them to be paralogisms )sapendoli tali*, etc0 ?nd a!ter t %s impressing t e necessary %pon is readers @it a series o! similar contemptible insin%ations, so t at t ey s o%ld regard Marx as an %nprincipled %pstart . la 'oria @ o ac ie8es is little e!!ects by t e same @retc ed %mb%g as o%r pro!essor !rom ,ad%a, e re8eals an important secret to t em, and t ereby takes %s back to t e rate o! pro!it0 Mr0 'oria says: ?ccording to Marx, t e amo%nt o! s%rpl%s-8al%e B@ ic Mr0 'oria ere identi!ies @it pro!itC prod%ced in a capitalist ind%strial establis ment s o%ld depend on t e 8ariable capital employed in it, since constant capital does not yield pro!it0 A%t t is is contrary to !act0 For in practice pro!it does not depend on 8ariable, b%t on total capital0 ?nd Marx imsel! recognises t is BAook &, ; ap0 J&&&C and admits t at on t e s%r!ace !acts appear to contradict is t eory0 A%t o@ does e get aro%nd t is contradictionQ 6e re!ers is readers to an as yet %np%blis ed s%bseD%ent 8ol%me0 'oria as already told his readers abo%t t is 8ol%me t at e did not belie8e Marx ad e8er entertained t e t o%g t o! @riting it, and no@ exclaims tri%mp antly: K& a8e not been @rong in contending t at t is second 8ol%me, @ ic Marx al@ays !lings at is ad8ersaries @it o%t it e8er appearing, mig t 8ery @ell a8e been a s re@d expedient applied by Marx @ ene8er scienti!ic arg%ments !ailed spediente ideato dal Mar im )un ingegnoso a sostitu#ione degli

argomenti scientifici*./ ?nd @ osoe8er is not con8inced a!ter t is t at Marx stands in t e same class o! scienti!ic s@indlers as l!illustre 'oria, is past all redemption0 We a8e at least learned t is m%c : ?ccording to Mr0 'oria, t e Marxian t eory o! s%rpl%s-8al%e is absol%tely incompatible @it t e existence o! a general eD%al rate o! pro!it0 5 en, t ere appeared t e second 8ol%me and t ere@it my p%blic c allenge precisely on t is 8ery point0 &! Mr0 'oria ad been one o! %s di!!ident :ermans, e @o%ld a8e experienced a certain degree o! embarrassment0 A%t e is a cocky so%t erner, coming !rom a ot climate, @ ere, as e can testi!y, cool ner8e is a nat%ral reD%irement0 5 e D%estion o! t e rate o! pro!it as been p%blicly p%t0 Mr0 'oria as p%blicly declared it insol%ble0 ?nd !or t is 8ery reason e is no@ going to o%tdo imsel! by p%blicly sol8ing it0

5 is miracle is accomplis ed in Conrads Jahrbcher, ne%e Folge, A%c JJ, $0 <>< and !ollo@ing, in an article dealing @it ;onrad $c midtGs already cited pamp let0 ?!ter 'oria learned !rom $c midt o@ commercial pro!it @as made, e s%ddenly sa@ daylig t0 K$ince determining 8al%e by means o! labo%r-time is to t e ad8antage o! t ose capitalists @ o in8est a greater portion o! t eir capital in @ages, t e %nprod%cti8eL Bread commercialC Kcapital can deri8e a ig er interestL Bread pro!itC K!rom t ese pri8ileged capitalists and t %s bring abo%t an eD%alisation bet@een t e indi8id%al ind%strial capitalists000 For instance, i! eac o! t e ind%strial capitalists ?, A, ; %ses 2== @orking-days and =, 2==, <== constant capital respecti8ely in prod%ction, and i! t e @ages !or 2== @orking-days amo%nt to += @orking-days, t en eac recei8es a s%rpl%s-8al%e o! += @orking-days, and t e rate o! pro!it is 2==T !or t e !irst, 3303T !or t e second, and <=T !or t e t ird capitalist0 A%t i! a !o%rt capitalist 7 acc%m%lates an %nprod%cti8e claims an interestL Bpro!itC capital o! 3==, @ ic

KeD%al in 8al%e to 2= @orking-days !rom ?, and an interest o! <= @orking-days !rom A, t en t e rate o! pro!it o! capitalists ? and A @ill sink to <=T, H%st as t at o! ;, @ ile 7 @it is capital o! 3== recei8es pro!it o! 6=, or a rate o! pro!it o! <=T, t e same as t e ot er capitalists0L Wit s%c astonis ing dexterity, l!illustre 'oria sol8es by sleig t o! and t e D%estion @ ic e ad declared insol%ble ten years pre8io%sly0 (n!ort%nately, e did not let %s into t e secret @ ere!rom t e K%nprod%cti8e capitalL obtained t e po@er to sD%eeEe o%t o! t e ind%strialists t eir extra pro!it in excess o! t e a8erage rate o! pro!it, and to retain it in its o@n pocket, H%st as t e lando@ner pockets t e tenantGs s%rpl%s-pro!it as gro%nd-rent0 &ndeed, according to im it @o%ld be t e merc ants @ o @o%ld raise a trib%te analogo%s to gro%nd-rent !rom t e ind%strialists, and @o%ld t ereby bring abo%t an a8erage rate o! pro!it0 ;ommercial capital is indeed a 8ery essential !actor in prod%cing t e general rate o! pro!it, as nearly e8erybody kno@s0 A%t only a literary ad8ent%rer @ o in is eart sneeEes at political economy, can 8ent%re t e assertion t at it as t e magic po@er to absorb all s%rpl%s-8al%e in excess o! t e general rate o! pro!it e8en be!ore t is general rate as taken s ape, and to con8ert it into gro%nd-rent !or itsel! @it o%t, moreo8er, e8en a8ing need to do @it any real estate0 -o less astonis ing is t e assertion t at commercial capital manages to disco8er t e partic%lar ind%strialists, @ ose s%rpl%s-8al%e H%st co8ers t e a8erage rate o! pro!it, and t at it considers it a pri8ilege to mitigate t e lot o! t ese l%ckless 8ictims o! t e Marxian la@ o! 8al%e to a certain extent by selling t eir prod%cts gratis !or t em, @it o%t asking

as m%c as a commission !or it0 W at a mo%ntebank one m%st be to imagine t at Marx ad need to resort to s%c miserable tricksS A%t it is not %ntil @e compare im @it is nort ern competitors, !or instance @it 6err P%li%s Wol!, @ o @as not born yesterday eit er, t at t e ill%strio%s 'oria s ines in is !%ll glory0 W at a yelping p%p 6err Wol! appears e8en in is big 8ol%me on So#ialismus und -apitalistische Gesellschaftsordnung,alongside t e &talianS 6o@ a@k@ard, & am almost tempted to say modest, e appears beside t e rare con!idence o! t e maestro @ o takes it !or granted t at Marx, neit er more nor less t an ot er people, @as as m%c a sop ist, paralogist, %mb%g and mo%ntebank as Mr0 'oria imsel! I t at Marx took in t e p%blic @it t e promise o! ro%nding o%t is t eory in a s%bseD%ent 8ol%me @ ene8er e @as in a di!!ic%lt position, kno@ing !%ll @ell t at e neit er co%ld nor e8er @o%ld @rite it0 Ao%ndless ner8e co%pled @it a !lair !or slipping like an eel t ro%g impossible sit%ations, a eroic contempt !or p%mmellings recei8ed, asty plagiarism o! ot er peopleGs accomplis ments, import%nate and !an!aronading ad8ertising, spreading is !ame by means o! a c or%s o! !riends I @ o can eD%al im in all t isQ &taly is t e land o! classicism0 E8er since t e great era @ en t e da@n o! modern times rose t ere, it as prod%ced magni!icent c aracters o! %neD%alled classic per!ection, !rom 7ante to :aribaldi0 A%t t e period o! its degradation and !oreign domination also beD%eat ed it classic c aractermasks, among t em t@o partic%larly clear-c%t types, t at o! $ganarelle and 7%lcamara0 5 e classic %nity o! bot is embodied in o%r illustre 'oria0 &n concl%sion & m%st take my readers across t e ?tlantic0 7r0 BMed0C George C. Stiebeling, o! -e@ .ork, as also !o%nd a sol%tion to t e problem, and a 8ery simple one0 $o simple, indeed, t at no one eit er ere, or t ere, took im serio%sly0 5 is aro%sed is ire, and e complained bitterly abo%t t e inH%stice o! it in an endless stream o! pamp lets and ne@spaper articles appearing on bot sides o! t e great @ater0 6e @as told in t e $eue %eit t at is entire sol%tion rested on a mat ematical error0 A%t t is co%ld scarcely dist%rb im0 Marx ad also made mat ematical errors, and @as yet rig t in many t ings0 'et %s t en take a look at 7r0 $tiebelingGs sol%tion0 K& take t@o !actories @orking @it eD%al capitals !or an eD%al lengt o! time, b%t @it a di!!erent ratio o! ;onstant and 8ariable capitals0 & make t e total capital Bc U 8C R y, and t e di!!erence in t e ratio o! t e constant and 8ariable capital R x0 For !actory &, y R c U 8, !or !actory &&, y R Bc I xC U B8 U xC0 5 ere!ore t e rate o! s%rpl%s-8al%e !or !actory & R sN8, and !or !actory && R sNB8 U xC0 ,ro!it BpC is @ at & call t e total s%rpl%s-8al%e BsC by @ ic t e total capital y, or c U 8, is a%gmented in t e gi8en time# t %s p R s0 6ence, t e rate o! pro!it !or !actory & R pNy, or sNBc U 8C, and !or !actory && it is also pNy, or sN Bc - xC U B8 U xC, i0e0, it is also sNBc U 8C0 5 e 000 problem t %s resol8es itsel! in s%c a @ay t at, on t e basis o! t e la@ o! 8al%e, @it eD%al capital and eD%al time, b%t %neD%al D%antities o!

li8ing labo%r, a c ange in t e rate o! s%rpl%s-8al%e ca%ses t e eD%alisation o! an a8erage rate o! pro!it0L B:0 ;0 $tiebeling, Das "erthgeset# und die &rofitrate, -e@ .ork, Po n 6einric 0C 6o@e8er pretty and re8ealing t e abo8e calc%lation may be, @e are compelled to ask 7r0 $tiebeling one D%estion: 6o@ does e kno@ t at t e s%m o! s%rpl%s-8al%e prod%ced by !actory & is exactly eD%al to t e s%m o! t e s%rpl%s-8al%e prod%ced by !actory &&Q 6e states explicitly t at c, 8, y and x, t at is, all t e ot er !actors in t e calc%lation, are t e same !or bot !actories, b%t makes no mention o! s0 &t does not by any means !ollo@ !rom t e !act t at e designated bot o! t e abo8e-mentioned D%antities o! s%rpl%s-8al%e algebraically @it s0 )at er, it is H%st t e t ing t at as to be pro8ed, since Mr0 $tiebeling @it o%t !%rt er ado also identi!ies pro!it p @it t e s%rpl%s-8al%e0 -o@ t ere are H%st t@o possible alternati8es0 Eit er t e t@o sGs are eD%al, bot !actories prod%ce eD%al D%antities o! s%rpl%s-8al%e, and t ere!ore also eD%al D%antities o! pro!it, since bot capitals are eD%al0 &n t at case Mr0 $tiebeling as !rom t e start taken !or granted @ at e @as really called %pon to pro8e0 3r, one !actory prod%ces more s%rpl%s-8al%e t an t e ot er, in @ ic case is entire calc%lation t%mbles abo%t is ears0 Mr0 $tiebeling spared neit er pains nor money to b%ild mo%ntains o! calc%lations %pon t is mat ematical error, and to ex ibit t em to t e p%blic0 & can ass%re im, !or is o@n peace o! mind, t at t ey are nearly all eD%ally @rong, and t at in t e exceptional cases @ en t is is not so, t ey pro8e somet ing entirely di!!erent !rom @ at e set o%t to pro8e0 6e pro8es, !or instance, by comparing (0$0 cens%s !ig%res !or 18>= and 188= t at t e rate o! pro!it as act%ally !allen, b%t interprets it @rongly and ass%mes t at MarxGs t eory o! a constantly stable rate o! pro!it s o%ld be corrected on t e basis o! experience0 .et it !ollo@s !rom t e t ird part o! t e present t ird book t at t is Marxian Kstable rate o! pro!itL is p%rely a !igment o! Mr0 $tiebelingGs imagination, and t at t e tendency !or t e rate o! pro!it to !all is d%e to circ%mstances @ ic are H%st t e re8erse o! t ose indicated by 7r0 $tiebeling0 -o do%bt 7r0 $tiebeling as t e best intentions, b%t @ en a man @ants to deal @it scienti!ic D%estions e s o%ld abo8e all learn to read t e @orks e @is es to %se H%st as t e a%t or ad @ritten t em, and abo8e all @it o%t reading anyt ing into t em t at t ey do not contain0 5 e o%tcome o! t e entire in8estigation s o@s again @it re!erence to t is D%estion as @ell t at it is t e Marxian sc ool alone @ ic as accomplis ed somet ing0 &! Fireman and ;onrad $c midt read t is t ird book, eac one, !or is part, may @ell be satis!ied @it is o@n @ork0 'ondon, 3ctober 2, 18*2 'rederic- 0ngels

Part I. The Conversion of Surplus !alue into Profit an" of the #ate of Surplus !alue into the #ate of Profit
Chapter 1. Cost-Price and Profit
&n Aook & @e analysed t e p enomena @ ic constit%te t e process of capitalist production as s%c , as t e immediate prod%cti8e process, @it no regard !or any o! t e secondary e!!ects o! o%tside in!l%ences0 A%t t is immediate process o! prod%ction does not ex a%st t e li!e span o! capital0 &t is s%pplemented in t e act%al @orld by t e process of circulation, @ ic @as t e obHect o! st%dy in Aook &&0 &n t e latter, namely in ,art &&&, @ ic treated t e process o! circ%lation as a medi%m !or t e process o! social reprod%ction, it de8eloped t at t e capitalist process o! prod%ction taken as a @ ole represents a synt esis o! t e processes o! prod%ction and circ%lation0 ;onsidering @ at t is t ird book treats, it cannot con!ine itsel! to general re!lection relati8e to t is synt esis0 3n t e contrary, it m%st locate and describe t e concrete !orms @ ic gro@ o%t o! t e movements of capital as a whole 0 &n t eir act%al mo8ement capitals con!ront eac ot er in s%c concrete s ape, !or @ ic t e !orm o! capital in t e immediate process o! prod%ction, H%st as its !orm in t e process o! circ%lation, appear only as special instances0 5 e 8ario%s !orms o! capital, as e8ol8ed in t is book, t %s approac step by step t e !orm @ ic t ey ass%me on t e s%r!ace o! society, in t e action o! di!!erent capitals %pon one anot er, in competition, and in t e ordinary conscio%sness o! t e agents o! prod%ction t emsel8es0 5 e 8al%e o! e8ery commodity prod%ced in t e capitalist @ay is represented in t e !orm%la: ; R c U 8 U s0 &! @e s%btract s%rpl%s-8al%es !rom t is 8al%e o! t e prod%ct t ere remains a bare eD%i8alent or a s%bstit%te 8al%e in goods, !or t e capital-8al%e c U 8 expended in t e elements o! prod%ction0 For example, i! t e prod%ction o! a certain article reD%ires a capital o%tlay o! V+==, o! @ ic V<= are !or t e @ear and tear o! instr%ments o! prod%ction, V38= !or t e materials o! prod%ction, and V1== !or labo%r-po@er, and i! t e rate o! s%rpl%s-8al%e is 1==T, t en t e 8al%e o! t e prod%ct R 2==c U 1==8 U 1==s R V6==0 ?!ter ded%cting t e s%rpl%s-8al%e o! V1==, t ere remains a commodity-8al%e o! V+== @ ic only replaces t e expended capital o! V+==0 5 is portion o! t e 8al%e o! t e commodity, @ ic replaces t e price o! t e cons%med means o! prod%ction and labo%r-po@er, only replaces @ at t e commodity costs t e capitalist imsel!0 For im it, t ere!ore, represents t e cost-price o! t e commodity0 W at t e commodity costs t e capitalist and its act%al prod%ction cost are t@o D%ite di!!erent magnit%des0 5 at portion o! t e commodity-8al%e making %p t e s%rpl%s-8al%e does not cost t e capitalist anyt ing simply beca%se it costs t e labo%rer %npaid labo%r0 .et, on t e basis o! capitalist prod%ction, a!ter t e labo%rer enters t e prod%ction process e imsel! constit%tes an ingredient o! operating prod%cti8e capital, @ ic belongs to t e capitalist0 5 ere!ore, t e capitalist is t e act%al prod%cer o! t e commodity0 For t is reason t e cost-price o! t e commodity necessarily appears to t e capitalist as t e act%al cost o! t e commodity0 &! @e take k to be t e cost-price, t e !orm%la ; R c U 8 U s t%rns into t e !orm%la ; R k U s, t at is, t e commodity-8al%e R cost-price U s%rpl%s-8al%e0

<=

; apter &

5 e gro%ping o! t e 8ario%s 8al%e portions o! a commodity @ ic only replace t e 8al%e o! t e capital expended in its prod%ction %nder t e ead o! cost-price expresses, on t e one and, t e speci!ic c aracter o! capitalist prod%ction0 5 e capitalist cost o! t e commodity is meas%red by t e expendit%re o!capital, @ ile t e act%al cost o! t e commodity is meas%red by t e expendit%re o! labour0 5 %s, t e capitalist cost-price o! t e commodity di!!ers in D%antity !rom its 8al%e, or its act%al cost-price0 &t is smaller t an t e 8al%e o! t e commodity, beca%se, @it ; R k U s, it is e8ident t at k R ; - s0 3n t e ot er and, t e cost-price o! a commodity is by no means simply a category @ ic exists only in capitalist book-keeping0 5 e indi8id%alisation o! t is portion o! 8al%e is contin%ally mani!est in practice in t e act%al prod%ction o! t e commodity, beca%se it as e8er to be recon8erted !rom its commodity-!orm by @ay o! t e process o! circ%lation into t e !orm o! prod%cti8e capital, so t at t e cost-price o! t e commodity al@ays m%st rep%rc ase t e elements o! prod%ction cons%med in its man%!act%re0 5 e category o! cost-price, on t e ot er and, as not ing to do @it t e !ormation o! commodity-8al%e, or @it t e process o! sel!-expansion o! capital0 W en & kno@ t at o! t e 8al%e o! a commodity @ort V6==, !i8e-sixt s, or V+==, represent no more t an an eD%i8alent o! t e capital o! V+== cons%med in its prod%ction and t at it can t ere!ore s%!!ice only to rep%rc ase t e material elements o! t is capital, & kno@ not ing as yet eit er o! t e @ay in @ ic t ese !i8esixt s o! t e 8al%e o! t e commodity, @ ic represent its cost-price, are prod%ced, or abo%t t e @ay in @ ic t e last sixt , @ ic constit%tes its s%rpl%s-8al%e, @as prod%ced0 5 e in8estigation @ill s o@, o@e8er, t at in capitalist economics t e cost-price ass%mes t e !alse appearance o! a category o! 8al%e prod%ction itsel!0 5o ret%rn to o%r example0 $%ppose t e 8al%e prod%ced by one labo%rer d%ring an a8erage social @orking-day is represented by a money s%m o! 6s0 R 6M0 5 en t e ad8anced capital o! V+== R 2==c U 1==8 represents a 8al%e prod%ced in 1,666W ten- o%r @orking-days, o! @ ic 1,333X @orking-days are crystallised in t e 8al%e o! t e means o! prod%ction R 2== c, and 333X are crystallised in t e 8al%e o! labo%r-po@er R 1==80 6a8ing ass%med a rate o! s%rpl%s-8al%e o! 1==T, t e prod%ction o! t e commodity to be ne@ly !ormed entails a labo%r expendit%re R 1== 8 U 1==s R 666W ten- o%r @orking-days0 We kno@, t en Bsee A%c 1, Kap0 4&&, $0 <=1N1*3C /Englis edition: ; 0 &J, p0 <1<0-0d01 t at t e 8al%e o! t e ne@ly created prod%ct o! V6== is composed o! 1C t e reappearing 8al%e o! t e constant capital o! V2== expended !or means o! prod%ction, and <C a ne@ly prod%ced 8al%e o! V<==0 5 e cost-price o! t e commodity R V+== comprises t e reappearing 2== c and one- al! o! t e ne@ly prod%ced 8al%e o! V<== B R 1==8C, t at is, t@o elements o! t e commodity-8al%e @ ic are o! entirely di!!erent origin0 3@ing to t e p%rposi8e nat%re o! t e labo%r expended d%ring 666W ten- o%r @orking-days, t e 8al%e o! t e cons%med means o! prod%ction amo%nting to V2== is trans!erred !rom t ese means o! prod%ction to t e prod%ct0 5 is pre8io%sly existing 8al%e t %s reappears as a component part o! t e 8al%e o! t e prod%ct, b%t is not created in t e process o! prod%ction o! this commodity0 &t exists as a component o! t e 8al%e o! t e commodity only beca%se it pre8io%sly existed as an element o! t e in8ested capital0 5 e expended constant capital is t ere!ore replaced by t at portion o! t e 8al%e o! t e commodity @ ic t is capital itsel! adds to t at 8al%e0 5 is element o! t e cost-price, t ere!ore, as a do%ble meaning0 3n t e one and, it goes into t e cost-price o! t e commodity, beca%se it is part o! t e commodity-8al%e @ ic replaces cons%med capital0 ?nd on t e ot er and, it !orms an element o! t e commodity-8al%e only beca%se it is t e 8al%e o! expended capital or beca%se t e means o! prod%ction cost so and so m%c 0 &t is D%ite t e re8erse in t e case o! t e ot er element o! t e cost-price0 5 e 666W @orking-days expended in t e prod%ction o! t e commodity create a ne@ 8al%e o! V<==0 3ne portion o! t is ne@ 8al%e merely replaces t e ad8anced 8ariable capital o! V1==, or t e price o! t e labo%r-po@er employed0 A%t t is ad8anced capital-8al%e does not in any @ay go into t e creation o! t e ne@ 8al%e0 $o !ar as t e ad8ance o! capital is concerned, labo%r-po@er co%nts as a value0 A%t in t e

<1

; apter &

process o! prod%ction it acts as t e creator o! 8al%e0 5 e place o! t e 8al%e o! t e labo%r-po@er t at obtains @it in t e ad8anced capital is taken in t e act%ally functioning prod%cti8e capital by li8ing 8al%e-creating labo%r-po@er itsel!0 5 e di!!erence bet@een t ese 8ario%s elements o! t e commodity-8al%e, @ ic toget er make %p t e cost-price, leaps to t e eye @ ene8er a c ange takes place in t e siEe o! t e 8al%e o! eit er t e expended constant, or t e expended 8ariable, part o! t e capital0 'et t e price o! t e same means o! prod%ction, or o! t e constant part o! capital, rise !rom V2== to V6==, or, con8ersely, let it !all to V<==0 &n t e !irst case it is not only t e cost-price o! t e commodity @ ic rises !rom V+== to 6==c U 1==8 R V>==, b%t also t e 8al%e o! t e commodity @ ic rises !rom V6== to 6== c U 1==8 U 1==s R V8==0 &n t e second case, it is not only t e cost-price @ ic !alls !rom V+== to <== cU1==8 R V3==, b%t also t e 8al%e o! t e commodity @ ic !alls !rom V6== to <== c U 1==8 U 1==s R V2==0 $ince t e expended constant capital trans!ers its o@n 8al%e to t e prod%ct, t e 8al%e o! t e prod%ct rises or !alls @it t e absol%te magnit%de o! t at capital-8al%e, ot er conditions remaining eD%al0 ?ss%me, on t e ot er and, t at, ot er circ%mstances remaining %nc anged, t e price o! t e same amo%nt o! labo%r-po@er rises !rom V1== to V1+=, or, con8ersely, t at it !alls !rom V1== to V+=0 &n t e !irst case, t e cost-price rises !rom V+== to 2== c U 1+=8 R V++=, and !alls in t e second case !rom V+== to 2== c U +=8 R V2+=0 A%t in eit er case t e commodity-8al%e remains %nc anged R V6==# one time it is 2== cU 1+=8 U +=s, and t e ot er time, 2== c U +=8 U 1+=s0 5 e ad8anced 8ariable capital does not add its o@n 8al%e to t e prod%ct0 5 e place o! its 8al%e is taken in t e prod%ct rat er by a ne@ 8al%e created by labo%r0 5 ere!ore, a c ange in t e absol%te magnit%de o! t e 8ariable capital, so !ar as it expresses merely a c ange in t e price o! labo%rpo@er, does not in t e least alter t e absol%te magnit%de o! t e commodity-8al%e, beca%se it does not alter anyt ing in t e absol%te magnit%de o! t e ne@ 8al%e created by li8ing labo%r-po@er0 $%c a c ange rat er a!!ects only t e relati8e proportion o! t e t@o component parts o! t e ne@ 8al%e, o! @ ic one !orms s%rpl%s-8al%e and t e ot er makes good t e 8ariable capital and t ere!ore passes into t e cost-price o! t e commodity0 5 e t@o elements o! t e cost-price, in t e present case 2== c U 1==8, a8e only t is in common t at t ey are bot parts o! t e commodity-8al%e t at replace ad8anced capital0 A%t t is tr%e state o! a!!airs necessarily appears re8ersed !rom t e standpoint o! capitalist prod%ction0 5 e capitalist mode o! prod%ction di!!ers !rom t e mode o! prod%ction based on sla8ery, among ot er t ings, by t e !act t at in it t e 8al%e, and accordingly t e price, o! labo%r-po@er appears as t e 8al%e, or price, o! labo%r itsel!, or as @ages BA%c 1, Kap0 J4&&C /Englis edition: ; 0 J&J0 I 0d010 5 e 8ariable part o! t e ad8anced capital, t ere!ore, appears as capital expended in @ages, as a capital-8al%e @ ic pays !or t e 8al%e, and accordingly t e price, o! all t e labo%r expended in prod%ction0 'et %s ass%me, !or instance, t at an a8erage ten- o%r social @orking-day is incorporated in a s%m o! money amo%nting to 6 s illings0 &n t at case t e ad8ance o! a 8ariable capital o! V1== represents t e money expression o! a 8al%e prod%ced in 333 X# ten- o%r @orkingdays0 A%t t is 8al%e, representing p%rc ased labo%r-po@er in t e capital ad8anced, does not, o@e8er, !orm a part o! t e act%ally !%nctioning prod%cti8e capital0 &ts place in t e process o! prod%ction is taken by li8ing labo%r-po@er0 &!, as in o%r ill%stration, t e degree o! exploitation o! t e latter is 1==T, t en it is expended d%ring 666W ten- o%r @orking-days, and t ereby adds to t e prod%ct a ne@ 8al%e o! V<==0 A%t in t e capital ad8anced t e 8ariable capital o! V1== !ig%res as capital in8ested in @ages, or as t e price o! labo%r per!ormed d%ring 666W ten- o%r days0 5 e s%m o! V1== di8ided by 666W gi8es %s 3 s illings as t e price o! a ten- o%r @orking-day, @ ic is eD%al in 8al%e to t e prod%ct o! !i8e o%rs" labo%r0 -o@, i! @e compare t e capital ad8anced on t e one and @it t e commodity-8al%e on t e ot er, @e !ind:

<<

; apter &

&0 ;apital ad8anced V+== R V2== o! capital expended in means o! prod%ction Bprice o! means o! prod%ctionC U V1== o! capital expended in labo%r Bprice o! 666W @orking-days, or @ages !or sameC0 &&0 4al%e o! commodities V6== R V+== representing t e cost-price BV2== price o! expended means o! prod%ction U V1== price o! expended 666W# @orking-daysC U V1== s%rpl%s-8al%e0 &n t is !orm%la, t e portion o! capital in8ested in labo%r-po@er di!!ers !rom t at in8ested in means o! prod%ction, s%c as cotton or coal, only by ser8ing as payment !or a materially di!!erent element o! prod%ction, b%t not by any means beca%se it ser8es a !%nctionally di!!erent p%rpose in t e process o! creating commodity-8al%e, and t ereby also in t e process o! t e sel!-expansion o! capital0 5 e price o! t e means o! prod%ction reappears in t e cost-price o! t e commodities, H%st as it !ig%red in t e capital ad8anced, and it does so beca%se t ese means o! prod%ction a8e been p%rposi8ely cons%med0 5 e price, or @ages, !or t e 666W @orking-days cons%med in t e prod%ction o! t ese commodities like@ise reappears in t e cost-price o! t e commodities H%st as it as !ig%red in t e capital ad8anced, and also beca%se t is amo%nt o! labo%r as been p%rposi8ely expended0 We see only !inis ed and existing 8al%es I t e portions o! t e 8al%e o! t e ad8anced capital @ ic go into t e making o! t e 8al%e o! t e prod%ct I b%t not t e element creating ne@ 8al%es0 5 e distinction bet@een constant and 8ariable capital as disappeared0 5 e entire costprice o! V+== no@ as t e do%ble meaning t at, !irst, it is t at portion o! t e commodity-8al%e o! V6== @ ic replaces t e capital o! V+== expended in t e prod%ction o! t e commodity# and t at, secondly, t is component o! t e commodity-8al%e exists only beca%se it existed pre8io%sly as t e cost-price o! t e elements o! prod%ction employed, namely means o! prod%ction and labo%r, i0e0, as ad8anced capital0 5 e capital-8al%e reappears as t e cost-price o! a commodity beca%se, and in so !ar as, it as been expended as a capital-8al%e0 5 e !act t at t e 8ario%s components o! t e 8al%e o! t e ad8anced capital a8e been expended !or materially di!!erent elements o! prod%ction, namely !or instr%ments o! labo%r, ra@ materials, a%xiliary materials, and labo%r, reD%ires only t at t e cost-price o! t e commodity m%st b%y back t ese materially di!!erent elements o! prod%ction0 $o !ar as t e !ormation o! t e cost-price is concerned, o@e8er, only one distinction is appreciable, namely t at bet@een !ixed and circ%lating capital0 &n o%r example @e a8e set do@n V<= !or @ear and tear o! instr%ments o! labo%r B2==c R V<= !or depreciation o! instr%ments o! labo%r U V38= !or materials o! prod%ctionC0 Ae!ore t e prod%cti8e process t e 8al%e o! t ese instr%ments o! labo%r @as, say, V1,<==0 ?!ter t e commodities a8e been prod%ced it exists in t@o !orms, t e V<= as part o! t e 8al%e o! t e commodity, and 1,<== - <=, or V1,18=, as t e remaining 8al%e o! t e instr%ments o! labo%r @ ic , as be!ore, are in t e possession o! t e capitalist# in ot er @ords, as an element o! is prod%cti8e, not o! is commodity-capital0 Materials o! prod%ction and @ages, as distinct !rom means o! labo%r, are entirely cons%med in t e prod%ction o! t e commodity and t %s t eir entire 8al%e goes into t at o! t e prod%ced commodity0 We a8e seen o@ t ese 8ario%s components o! t e ad8anced capital ass%me t e !orms o! !ixed and circ%lating capital in relation to t e t%rno8er0 ?ccordingly, t e capital ad8anced R V1,68=: !ixed capital R V1,<== U circ%lating capital R V28= B R V38= in materials o! prod%ction pl%s V1== in @agesC0 A%t t e cost-price o! t e commodity only R V+== BV<= !or t e @ear and tear o! t e !ixed capital, and V28= !or circ%lating capitalC0 5 is di!!erence bet@een t e cost-price o! t e commodity and t e capital ad8anced merely pro8es, o@e8er, t at t e cost-price o! t e commodity is !ormed excl%si8ely by t e capital act%ally cons%med in its prod%ction0 Means o! prod%ction 8al%ed at V1,<== are employed in prod%cing t e commodity, b%t only V<= o! t is ad8anced capital-8al%e are lost in prod%ction0 5 %s, t e employed !ixed capital goes only partially into t e cost-price o! t e commodity, beca%se it is only partially cons%med in its

<3

; apter &

prod%ction0 5 e employed circ%lating capital goes entirely into t e cost-price o! t e commodity, beca%se it is entirely cons%med in prod%ction0 A%t does not t is only pro8e t at t e cons%med portions o! t e !ixed and circ%lating capital pass %ni!ormly, pro rata to t e magnit%de o! t eir 8al%es, into t e cost-price o! t e commodity and t at t is component o! t e 8al%e o! t e commodity originates solely @it t e capital expended in its prod%ctionQ &! t is @ere not so, it @o%ld be inexplicable @ y t e ad8anced !ixed capital o! V1,<== s o%ld not, aside !rom t e V<= @ ic it loses in t e prod%cti8e process, also contrib%te t e ot er V1,18= @ ic it does not lose0 5 is di!!erence bet@een !ixed and circ%lating capital @it re!erence to t e calc%lation o! t e costprice, t ere!ore, only con!irms t e seeming origination o! t e cost-price !rom t e expended capital-8al%e, or t e price paid by t e capitalist imsel! !or t e expended elements o! prod%ction, incl%ding labo%r0 3n t e ot er and, so !ar as t e !ormation o! 8al%e is concerned, t e 8ariable portion o! capital in8ested in labo%r-po@er is ere emp atically identi!ied %nder t e ead o! circ%lating capital @it constant capital Bt at part o! capital @ ic consists o! materials o! prod%ctionC, and t is completes t e mysti!ication o! t e sel!-expansion process o! capital0 1 $o !ar @e a8e considered H%st one element o! t e 8al%e o! commodities, namely t e cost-price0 We m%st no@ t%rn also to t e ot er component o! t e 8al%e o! commodities, namely t e excess o8er t e cost-price, or t e s%rpl%s-8al%e0 &n t e !irst place, t en, s%rpl%s-8al%e is t e excess 8al%e o! a commodity o8er and abo8e its cost-price0 A%t since t e cost-price eD%als t e 8al%e o! t e cons%med capital, into @ ose material elements it is contin%ally recon8erted, t is excess 8al%e is an accretion in t e 8al%e o! t e capital expended in t e prod%ction o! t e commodity and ret%rning by @ay o! its circ%lation0 We a8e already seen earlier t at, t o%g s, t e s%rpl%s-8al%e, springs merely !rom a c ange in t e 8al%e o! t e 8ariable capital 8 and is, t ere!ore, originally b%t an increment o! 8ariable capital, a!ter t e process o! prod%ction is o8er it ne8ert eless also !orms an increment o! c U 8, t e expended total capital0 5 e !orm%la c U B8 U sC, @ ic indicates t at s is prod%ced t ro%g t e con8ersion o! a de!inite capital-8al%e 8 ad8anced !or labo%r-po@er into a !l%ct%ating magnit%de, i0e0, o! a constant magnit%de into a 8ariable one, may also be represented as Bc U 8C U s0 Ae!ore prod%ction took place @e ad a capital o! V+==0 ?!ter prod%ction is completed @e a8e t e capital o! V+== pl%s a 8al%e increment o! V1==0< 6o@e8er, s%rpl%s-8al%e !orms an increment not only o! t e portion o! t e ad8anced capital @ ic goes into t e sel!-expansion process, b%t also o! t e portion @ ic does not go into it0 &n ot er @ords, it is an accretion not only to t e cons%med capital made good o%t o! t e cost-price o! t e commodity, b%t to all t e capital in8ested in prod%ction0 Ae!ore t e prod%ction process @e ad a capital 8al%ed at V1,68=, namely V1,<== o! !ixed capital in8ested in means o! prod%ction, only V<= o! @ ic go into t e 8al%e o! t e commodity !or @ear and tear, pl%s V28= o! circ%lating capital in materials o! prod%ction and @ages0 ?!ter t e prod%ction process @e a8e V1,18= as t e constit%ent element o! t e 8al%e o! t e prod%cti8e capital pl%s a commodity-capital o! V6==0 Ay adding t ese t@o s%ms o! 8al%e @e !ind t at t e capitalist no@ as a 8al%e o! V1,>8=0 ?!ter ded%cting is ad8anced total capital o! V1,68= t ere remains a 8al%e increment o! V1==0 5 e V1== o! s%rpl%s-8al%e t %s !orm as m%c o! an increment in relation to t e in8ested V1,68= as to its !raction o! V+== expended d%ring prod%ction0 &t is no@ clear to t e capitalist t at t is increment o! 8al%e springs !rom t e prod%cti8e processes %ndertaken @it t e capital, t at it t ere!ore springs !rom t e capital itsel!, beca%se it is t ere a!ter t e prod%ction process, @ ile it is not t ere be!ore it0 ?s !or t e capital cons%med in prod%ction, t e s%rpl%s-8al%e seems to spring eD%ally !rom all its di!!erent elements o! 8al%e consisting o! means o! prod%ction and labo%r0 For all t ese elements contrib%te eD%ally to t e !ormation o! t e cost-price0 ?ll o! t em add t eir 8al%es, obtaining as ad8anced capital, to t e 8al%e o! t e prod%ct, and are not di!!erentiated as constant and 8ariable magnit%des o! 8al%e0 5 is becomes ob8io%s i! @e ass%me !or a moment t at all t e expended capital consisted eit er excl%si8ely o! @ages, or excl%si8ely o! t e 8al%e o! t e means o! prod%ction0 &n t e !irst case, @e s o%ld t en a8e t e

<2

; apter &

commodity-8al%e o! +==8 U 1==s instead o! t e commodity-8al%e o! 2== c U 1==8 U 1==s0 5 e capital o! V+== laid o%t in @ages represents t e 8al%e o! all t e labo%r expended in t e prod%ction o! t e commodity-8al%e o! V6==, and !or H%st t is reason !orms t e cost-price o! t e entire prod%ct0 A%t t e !ormation o! t is cost-price, @ ereby t e 8al%e o! t e expended capital is reprod%ced as a constit%ent part o! t e 8al%e o! t e prod%ct, is t e only process in t e !ormation o! t is commodity-8al%e t at is kno@n to %s0 We do not kno@ o@ its s%rpl%s-8al%e portion o! V1== is !ormed0 5 e same is tr%e in t e second case, in @ ic t e commodity-8al%e R +== c U 1==s0 We kno@ in bot cases t at s%rpl%s-8al%e is deri8ed !rom a gi8en 8al%e, beca%se t is 8al%e @as ad8anced in t e !orm o! prod%cti8e capital, be it in t e !orm o! labo%r or o! means o! prod%ction0 3n t e ot er and, t is ad8anced capital-8al%e cannot !orm s%rpl%s-8al%e !or t e reason t at it as been expended and t ere!ore constit%tes t e cost-price o! t e commodity0 ,recisely beca%se it !orms t e cost-price o! t e commodity, it does not !orm any s%rpl%s-8al%e, b%t merely an eD%i8alent, a 8al%e replacing t e expended capital0 $o !ar, t ere!ore, as it !orms s%rpl%s-8al%e, it does so not in its speci!ic capacity as expended, b%t rat er as ad8anced, and ence %tilised, capital0 For t is reason, t e s%rpl%s-8al%e arises as m%c o%t o! t e portion o! t e ad8anced capital @ ic goes into t e cost-price o! t e commodity, as o%t o! t e portion @ ic does not0 &n s ort, it arises eD%ally o%t o! t e !ixed and t e circ%lating components o! t e %tilised capital0 5 e aggregate capital ser8es materially as t e creator o! prod%cts, t e means o! labo%r as @ell as t e materials o! prod%ction, and t e labo%r0 5 e total capital materially enters into t e act%al labo%rprocess, e8en t o%g only a portion o! it enters t e process o! sel!-expansion0 5 is is, per aps, t e 8ery reason @ y it contrib%tes only in part to t e !ormation o! t e cost-price, b%t totally to t e !ormation o! s%rpl%s-8al%e0 6o@e8er t at may be, t e o%tcome is t at s%rpl%s-8al%e springs sim%ltaneo%sly !rom all portions o! t e in8ested capital0 5 is ded%ction may be s%bstantially abbre8iated, by saying pointedly and concisely in t e @ords o! Malt %s: K5 e capitalist 000 e pects an eD%al pro!it %pon all t e parts o! t e capital @ ic e ad8ances0L 3 &n its ass%med capacity o! o!!spring o! t e aggregate ad8anced capital, s%rpl%s-8al%e takes t e con8erted !orm o! profit0 6ence, a certain 8al%e is capital @ en it is in8ested @it a 8ie@ to prod%cing pro!it2 , or, t ere is pro!it beca%se a certain 8al%e @as employed as capital0 $%ppose pro!it is p0 5 en t e !orm%la ; R c U 8 U s R k U s t%rns into t e !orm%la ; R k U p, or t e value of a commodity R cost1price U profit0 5 e pro!it, s%c as it is represented ere, is t %s t e same as s%rpl%s-8al%e, only in a mysti!ied !orm t at is nonet eless a necessary o%tgro@t o! t e capitalist mode o! prod%ction0 5 e genesis o! t e m%tation o! 8al%es t at occ%rs in t e co%rse o! t e prod%ction process, m%st be trans!erred !rom t e 8ariable portion o! t e capital to t e total capital, beca%se t ere is no apparent distinction bet@een constant and 8ariable capital in t e ass%med !ormation o! t e cost-price0 Aeca%se at one pole t e price o! labo%r-po@er ass%mes t e transm%ted !orm o! @ages, s%rpl%s-8al%e appears at t e opposite pole in t e transm%ted !orm o! pro!it0 We a8e seen t at t e cost-price o! a commodity is smaller t an its 8al%e0 $ince ; R k U s, it !ollo@s t at k R ; - s0 5 e !orm%la ; R k U s red%ces itsel! to ; R k, or commodity-8al%e R commodity cost-price only i! s R =, a case @ ic ne8er occ%rs on t e basis o! capitalist prod%ction, alt o%g pec%liar market conditions may red%ce t e selling price o! commodities to t e le8el o!, or e8en belo@, t eir cost-price0 6ence, i! a commodity is sold at its 8al%e, a pro!it is realised @ ic is eD%al to t e excess o! its 8al%e o8er its cost-price, and t ere!ore eD%al to t e entire s%rpl%s-8al%e incorporated in t e 8al%e o! t e commodity0 A%t t e capitalist may sell a commodity at a pro!it e8en @ en e sells it belo@ its 8al%e0 $o long as its selling price is ig er t an its cost-price, t o%g it may be lo@er t an its 8al%e, a portion o! t e s%rpl%s-8al%e incorporated in it is al@ays realised, t %s al@ays yielding a pro!it0 &n o%r ill%stration t e 8al%e o! t e commodity is V6==, and t e cost-price V+==0 &! t e

<+

; apter &

commodity is sold at V+1=, +<=, +3=, +6= or +*=, it is sold respecti8ely V*=, 8=, >=, 2=, or 1= belo@ its 8al%e0 .et a pro!it o! V1=, <=, 3=, 6=, or *= respecti8ely is realised in its sale0 5 ere is ob8io%sly an inde!inite n%mber o! selling prices possible bet@een t e 8al%e o! a commodity and its cost-price0 5 e greater t e s%rpl%s-8al%e element o! t e 8al%e o! a commodity, t e greater t e practical range o! t ese intermediate prices0 5 is explains more t an H%st t e e8eryday p enomena o! competition, s%c as certain cases o! %nderselling, abnormally lo@ commodity-prices in certain lines o! ind%stry + , etc0 5 e !%ndamental la@ o! capitalist competition, @ ic political economy ad not it erto grasped, t e la@ @ ic reg%lates t e general rate o! pro!it and t e so-called prices o! prod%ction determined by it, rests, as @e s all later see, on t is di!!erence bet@een t e 8al%e and t e cost-price o! commodities, and on t e res%lting possibility o! selling a commodity at a pro!it %nder its 8al%e0 5 e minimal limit o! t e selling price o! a commodity is its cost-price0 &! it is sold %nder its costprice, t e expended constit%ent elements o! prod%cti8e capital cannot be !%lly replaced o%t o! t e selling price0 &! t is process contin%es, t e 8al%e o! t e ad8anced capital disappears0 From t is point o! 8ie@ alone, t e capitalist is inclined to regard t e cost-price as t e tr%e inner 8al%e o! t e commodity, beca%se it is t e price reD%ired !or t e bare conser8ation o! is capital0 A%t t ere is also t is, t at t e cost-price o! a commodity is t e p%rc ase price paid by t e capitalist imsel! !or its prod%ction, t ere!ore t e p%rc ase price determined by t e prod%ction process itsel!0 For t is reason, t e excess 8al%e, or t e s%rpl%s-8al%e, realised in t e sale o! a commodity appears to t e capitalist as an excess o! its selling price o8er its 8al%e, instead o! an excess o! its 8al%e o8er its cost-price, so t at accordingly t e s%rpl%s-8al%e incorporated in a commodity is not realised t ro%g its sale, b%t springs o%t o! t e sale itsel!0 We a8e gi8en t is ill%sion closer consideration in Aook & BKap0 &4, <C/Englis edition: ; 0 4, <0 I 0d01 BK;ontradictions in t e :eneral Form%la o! ;apitalLC, b%t re8ert ere !or a moment to t e !orm in @ ic it @as rea!!irmed by 5orrens, among ot ers, as an ad8ance o! political economy beyond )icardo0 K5 e nat%ral price, consisting o! t e cost o! prod%ction, or, in ot er @ords, o! t e capital expended in raising or !abricating commodities, cannot incl%de t e pro!it0000 5 e !armer, @e @ill s%ppose, expends one %ndred D%arters o! corn in c%lti8ating is !ields, and obtains in ret%rn one %ndred and t@enty D%arters0 &n t is case, t@enty D%arters, being t e excess o! prod%ce abo8e expendit%re, constit%te t e !armer"s pro!it# b%t it @o%ld be abs%rd to call t is excess, or pro!it, a part o! t e expendit%res000 5 e master man%!act%rer expends a certain D%antity o! ra@ material, o! tools and implements o! trade, and o! s%bsistence !or labo%r, and obtains in ret%rn a D%antity o! !inis ed @ork0 5 is !inis ed @ork m%st possess a ig er exc angeable 8al%e t an t e materials, tools, and s%bsistence, by t e ad8ance o! @ ic obtained0L it @as

<6

; apter &

5orrens concl%des t ere!rom t at t e excess o! t e selling price o8er t e cost-price, or pro!it, is deri8ed !rom t e !act t at t e cons%mers, Keit er by immediate or circ%ito%s barter gi8e some greater portion o! all t e ingredients o! capital t an t eir prod%ction costs0L 6 &ndeed, t e excess o8er a gi8en magnit%de cannot !orm a part o! t is magnit%de, and t ere!ore t e pro!it, t e excess 8al%e o! a commodity o8er t e capitalist"s expendit%res, cannot !orm a part o! t ese expendit%res0 6ence, i! no ot er element t an t e 8al%e ad8ance o! t e capitalist enters into t e !ormation o! t e 8al%e o! a commodity, it is inexplicable o@ more 8al%e s o%ld come o%t o! prod%ction t an @ent into it, !or somet ing cannot come o%t o! not ing0 A%t 5orrens only e8ades t is creation o%t o! not ing by trans!erring it !rom t e sp ere o! commodity-prod%ction to t at o! commodity-circ%lation0 ,ro!it cannot come o%t o! prod%ction, says 5orrens, !or ot er@ise it @o%ld already be contained in t e cost o! prod%ction, and t ere @o%ld not be a s%rpl%s o8er t is cost0 ,ro!it cannot come o%t o! t e exc ange o! commodities, replies )amsay, %nless it already existed be!ore t is exc ange0 5 e s%m o! t e 8al%e o! t e exc anged prod%cts is e8idently not altered in t e exc ange o! t ese prod%cts, @ ose s%m o! 8al%e it is0 &t is t e same be!ore and a!ter t e exc ange0 &t s o%ld be noted ere t at Malt %s re!ers expressly to t e a%t ority o! 5orrens > alt o%g e imsel! as a di!!erent explanation !or t e sale o! commodities abo8e t eir 8al%e, or rat er as no explanation at all, since all arg%ments o! t is sort ne8er, in e!!ect, !ail to be red%ced to t e same t ing as t e once-!amed negati8e @eig t o! p logiston0 &n a social order dominated by capitalist prod%ction e8en t e non-capitalist prod%cer is gripped by capitalist conceptions0 AalEac, @ o is generally remarkable !or is pro!o%nd grasp o! reality, aptly describes in is last no8el, ,es &aysans, o@ a petty peasant per!orms many small tasks grat%ito%sly !or is %s%rer, @ ose good@ill e is eager to retain, and o@ e !ancies t at e does not gi8e t e latter somet ing !or not ing beca%se is o@n labo%r does not cost im any cas o%tlay0 ?s !or t e %s%rer, e t %s !ells t@o dogs @it one stone0 6e sa8es t e cas o%tlay !or @ages and enmes es t e peasant, @ o is grad%ally r%ined by depri8ing is o@n !ield o! labo%r, deeper and deeper in t e spider-@eb o! %s%ry0 5 e t o%g tless conception t at t e cost-price o! a commodity constit%tes its act%al 8al%e, and t at s%rpl%s-8al%e springs !rom selling t e prod%ct abo8e its 8al%e, so t at commodities @o%ld be sold at t eir 8al%e i! t eir selling price @ere to eD%al t eir cost-price, i0e0, i! it @ere to eD%al t e price o! t e cons%med means o! prod%ction pl%s @ages, as been eralded to t e @orld as a ne@ly disco8ered secret o! socialism by ,ro%d on @it is c%stomary D%asi-scienti!ic c icanery0 &ndeed, t is red%ction o! t e 8al%e o! commodities to t eir cost-price is t e basis o! is ,eople"s Aank0 &t @as earlier s o@n t at t e 8ario%s constit%ent elements o! t e 8al%e o! a prod%ct may be represented in proportional parts o! t e prod%ct itsel!0 For instance BA%c &, Kap0 4& 1, <, $0 <11N<=3C/Englis edition: ; 0 &J, <, pp0 <<=-<10 I 0d01 i! t e 8al%e o! <= lbs0 o! yarn is 3= s illings I namely <2 s illings o! means o! prod%ction, 3 s illings o! labo%r-po@er, and 3 s illings o! s%rpl%s-8al%e I t en t is s%rpl%s-8al%e may be represented as 1N1= o! t e prod%ctR< lbs0 o! yarn0 $ o%ld t ese <= lbs0 o! yarn no@ be sold at t eir cost-price, at <> s illings, t en t e p%rc aser recei8es < lbs0 o! yarn !or not ing, or t e article is sold 1N1= belo@ its 8al%e0 A%t t e labo%rer as, as be!ore, per!ormed is s%rpl%s-labo%r, only t is time !or t e p%rc aser o! t e yarn instead o! t e capitalist yarn prod%cer0 &t @o%ld be altoget er @rong to ass%me t at i! all commodities @ere sold at t eir cost-price, t e res%lt @o%ld really be t e same as i! t ey ad all been sold abo8e t eir cost-price, b%t at t eir 8al%e0 For e8en i! t e 8al%e o! t e labo%r-po@er, t e lengt o! t e @orking-day, and t e degree o! exploitation o! labo%r @ere t e same e8ery@ ere, t e D%antities o! s%rpl%s-8al%e contained in t e 8al%es o! t e 8ario%s kinds o! commodities @o%ld be %neD%al, depending on t e di!!erent organic composition o! t e capitals ad8anced !or t eir prod%ction08

Chapter 2. The Rate of Profit


5 e general !orm%la o! capital is M-;-M"0 &n ot er @ords, a s%m o! 8al%e is t ro@n into circ%lation to extract a larger s%m o%t o! it0 5 e process @ ic prod%ces t is larger s%m is capitalist prod%ction0 5 e process t at realises it is circ%lation o! capital0 5 e capitalist does not prod%ce a commodity !or its o@n sake, nor !or t e sake o! its %se-8al%e, or is personal cons%mption0 5 e prod%ct in @ ic t e capitalist is really interested is not t e palpable prod%ct itsel!, b%t t e excess 8al%e o! t e prod%ct o8er t e 8al%e o! t e capital cons%med by it0 5 e capitalist ad8ances t e total capital @it o%t regard to t e di!!erent roles played by its components in t e prod%ction o! s%rpl%s-8al%e0 6e ad8ances all t ese components %ni!ormly, not H%st to reprod%ce t e ad8anced capital, b%t rat er to prod%ce 8al%e in excess o! it0 5 e only @ay in @ ic e can con8ert t e 8al%e o! is ad8anced 8ariable capital into a greater 8al%e is by exc anging it !or li8ing labo%r and exploiting li8ing labo%r0 A%t e cannot exploit t is labo%r %nless e makes a sim%ltaneo%s ad8ance o! t e conditions !or per!orming t is labo%r, namely means o! labo%r and s%bHects o! labo%r, mac inery and ra@ materials, i0e0, %nless e con8erts a certain amo%nt o! 8al%e in is possession into t e !orm o! conditions o! prod%ction# !or e is a capitalist and can %ndertake t e process o! exploiting labo%r only beca%se, being t e o@ner o! t e conditions o! labo%r, e con!ronts t e labo%rer as t e o@ner o! only labo%r-po@er0 ?s already s o@n in t e !irst book /Englis edition: 4ol0 1, pp0 168-6*0 >12-160 I0d01, it is precisely t e !act t at non-@orkers o@n t e means o! prod%ction @ ic t%rns labo%rers into @age-@orkers and non-@orkers into capitalists0 5 e capitalist does not care @ et er it is considered t at e ad8ances constant capital to make a pro!it o%t o! is 8ariable capital, or t at e ad8ances 8ariable capital to en ance t e 8al%e o! t e constant capital# t at e in8ests money in @ages to raise t e 8al%e o! is mac inery and ra@ materials, or t at e in8ests money in mac inery and ra@ materials to be able to exploit labo%r0 ?lt o%g it is only t e 8ariable portion o! capital @ ic creates s%rpl%s-8al%e, it does so only i! t e ot er portions, t e conditions o! prod%ction, are like@ise ad8anced0 $eeing t at t e capitalist can exploit labo%r only by ad8ancing constant capital and t at e can t%rn is constant capital to good acco%nt only by ad8ancing 8ariable capital, e l%mps t em all toget er in is imagination, and m%c more so since t e act%al rate o! is gain is not determined by its proportion to t e 8ariable, b%t to t e total capital, not by t e rate o! s%rpl%s-8al%e, b%t by t e rate o! pro!it0 ?nd t e latter, as @e s all see, may remain t e same and yet express di!!erent rates o! s%rpl%s-8al%e0 5 e costs o! t e prod%ct incl%de all t e elements o! its 8al%e paid by t e capitalist or !or @ ic e as t ro@n an eD%i8alent into prod%ction0 5 ese costs m%st be made good to preser8e t e capital or to reprod%ce it in its original magnit%de0 5 e 8al%e contained in a commodity is eD%al to t e labo%r-time expended in its prod%ction, and t e s%m o! t is labo%r consists o! paid and %npaid portions0 A%t !or t e capitalist t e costs o! t e commodity consist only o! t at portion o! t e labo%r materialised in it !or @ ic e as paid0 5 e s%rpl%s-labo%r contained in t e commodity costs t e capitalist not ing, alt o%g , like t e paid portion, it costs t e labo%rer is labo%r, and alt o%g it creates 8al%e and enters into t e commodity as a 8al%e-creating element D%ite like paid labo%r0 5 e capitalist"s pro!it is deri8ed !rom t e !act t at e as somet ing to sell !or @ ic e as paid not ing0 5 e s%rpl%s-8al%e, or pro!it, consists precisely in t e excess 8al%e o! a commodity o8er its cost-price, i0e0, t e excess o! t e total labo%r embodied in t e commodity o8er t e paid labo%r embodied in it0 5 e s%rpl%s8al%e, @ ate8er its origin, is t %s a s%rpl%s o8er t e ad8anced total capital0 5 e proportion o! t is s%rpl%s to t e total capital is t ere!ore expressed by t e !raction sN;, in @ ic ; stands !or total capital0 We t %s obtain t e rate of profitsN;RsNBcU8C, as distinct !rom t e rate o! s%rpl%s-8al%e sN80

<8

; apter &&

5 e rate o! s%rpl%s-8al%e meas%red against t e 8ariable capital is called rate o! s%rpl%s-8al%e0 5 e rate o! s%rpl%s-8al%e meas%red against t e total capital is called rate o! pro!it0 5 ese are t@o di!!erent meas%rements o! t e same entity, and o@ing to t e di!!erence o! t e t@o standards o! meas%rement t ey express di!!erent proportions or relations o! t is entity0 5 e trans!ormation o! s%rpl%s-8al%e into pro!it m%st be ded%ced !rom t e trans!ormation o! t e rate o! s%rpl%s-8al%e into t e rate o! pro!it, not 8ice 8ersa0 ?nd in !act it @as rate o! pro!it @ ic @as t e istorical point o! depart%re0 $%rpl%s-8al%e and rate o! s%rpl%s-8al%e are, relati8ely, t e in8isible and %nkno@n essence t at @ants in8estigating, @ ile rate o! pro!it and t ere!ore t e appearance o! s%rpl%s-8al%e in t e !orm o! pro!it are re8ealed on t e s%r!ace o! t e p enomenon0 $o !ar as t e indi8id%al capitalist is concerned, it is e8ident t at e is only interested in t e relation o! t e s%rpl%s-8al%e, or t e excess 8al%e at @ ic e sells is commodities, to t e total capital ad8anced !or t e prod%ction o! t e commodities, @ ile t e speci!ic relations ip and inner connection o! t is s%rpl%s @it t e 8ario%s components o! capital !ail to interest im, and it is, moreo8er, rat er in is interests to dra@ t e 8eil o8er t is speci!ic relations ip and t is intrinsic connection0 ?lt o%g t e excess 8al%e o! a commodity o8er its cost-price is s aped in t e immediate process o! prod%ction, it is realised only in t e process o! circ%lation, and appears all t e more readily to a8e arisen !rom t e process o! circ%lation, since in reality, %nder competition, in t e act%al market, it depends on market conditions @ et er or not and to @ at extent t is s%rpl%s is realised0 5 ere is no need to @aste @ords at t is point abo%t t e !act t at i! a commodity is sold abo8e or belo@ its 8al%e, t ere is merely anot er kind o! di8ision o! s%rpl%s-8al%e, and t at t is di!!erent di8ision, t is c anged proportion in @ ic 8ario%s persons s are in t e s%rpl%s-8al%e, does not in any @ay alter eit er t e magnit%de or t e nat%re o! t at s%rpl%s-8al%e0 &t is not alone t e metamorp oses disc%ssed by %s in Aook && t at take place in t e process o! circ%lation# t ey !all in @it act%al competition, t e sale and p%rc ase o! commodities abo8e or belo@ t eir 8al%e, so t at t e s%rpl%s-8al%e realised by t e indi8id%al capitalist depends as m%c on t e s arpness o! is b%siness @its as on t e direct exploitation o! labo%r0 &n t e process o! circ%lation t e time o! circ%lation comes to exert its in!l%ence alongside t e @orking-time, t ereby limiting t e amo%nt o! s%rpl%s-8al%e realisable @it in a gi8en time span0 $till ot er elements deri8ed !rom circ%lation intr%de decisi8ely into t e act%al prod%ction process0 5 e act%al process o! prod%ction and t e process o! circ%lation intert@ine and intermingle contin%ally, and t ereby in8ariably ad%lterate t eir typical distincti8e !eat%res0 5 e prod%ction o! s%rpl%s-8al%e, and o! 8al%e in general, recei8es ne@ de!inition in t e process o! circ%lation, as pre8io%sly s o@n0 ;apital passes t ro%g t e circ%it o! its metamorp oses0 Finally, stepping beyond its inner organic li!e, so to say, it enters into relations @it o%ter li!e, into relations in @ ic it is not capital and labo%r @ ic con!ront one anot er, b%t capital and capital in one case, and indi8id%als, again simply as b%yers and sellers, in t e ot er0 5 e time o! circ%lation and @orking-time cross pat s and t %s bot seem to determine t e s%rpl%s-8al%e0 5 e original !orm in @ ic capital and @age-labo%r con!ront one anot er is disg%ised t ro%g t e inter8ention o! relations ips seemingly independent o! it0 $%rpl%s-8al%e itsel! does not appear as t e prod%ct o! t e appropriation o! labo%r-time, b%t as an excess o! t e selling price o! commodities o8er t eir cost-price, t e latter t %s being easily represented as t eir act%al 8al%e B valeur intrins23ueC, @ ile pro!it appears as an excess o! t e selling price o! commodities o8er t eir immanent 8al%e0 5r%e, t e nat%re o! s%rpl%s-8al%e impresses itsel! constantly %pon t e conscio%sness o! t e capitalist d%ring t e process o! prod%ction, as is greed !or t e labo%r-time o! ot ers, etc0, as re8ealed in o%r analysis o! s%rpl%s-8al%e0 A%t: 1C 5 e act%al process o! prod%ction is only a !leeting stage @ ic contin%ally merges @it t e process o! circ%lation, H%st as t e latter merges @it t e !ormer, so t at in t e process o! prod%ction, t e more or less clearly da@ning notion o! t e so%rce o! t e gain made in it, i0e0, t e inkling o! t e nat%re o! s%rpl%s-8al%e, stands at best as a !actor eD%ally 8alid as t e idea t at t e realised s%rpl%s originates in a mo8ement t at is

<*

; apter &&

independent o! t e prod%ction process, t at it arises in circ%lation, and t at it belongs to capital irrespecti8e o! t e latter"s relation to labo%r0 E8en s%c modern economists as )amsay, Malt %s, $enior, 5orrens, etc0, identi!y t ese p enomena o! circ%lation directly as proo!s t at capital in its bare material existence, independent o! its social relation to labo%r @ ic makes capital o! it, is, as it @ere, an independent so%rce o! s%rpl%s-8al%e alongside labo%r and independent o! labo%r0 <C (nder t e item o! expenses, @ ic embrace @ages as @ell as t e price o! ra@ materials, @ear and tear o! mac inery, etc0, t e extortion o! %npaid labo%r !ig%res only as a sa8ing in paying !or an article @ ic is incl%ded in expenses, only as a smaller payment !or a certain D%antity o! labo%r, similar to t e sa8ing @ en ra@ materials are bo%g t more c eaply, or t e depreciation o! mac inery decreases0 &n t is @ay t e extortion o! s%rpl%s-labo%r loses its speci!ic c aracter0 &ts speci!ic relations ip to s%rpl%s-8al%e is obsc%red0 5 is is greatly !%rt ered and !acilitated, as s o@n in Aook & B?bsc n0 4&C /Englis edition: ,art 4&, pp0 +3+-230 I 0d01, by representing t e 8al%e o! labo%r-po@er in t e !orm o! @ages0 5 e relations ips o! capital are obsc%red by t e !act t at all parts o! capital appear eD%ally as t e so%rce o! excess 8al%e Bpro!itC0 5 e @ay in @ ic s%rpl%s-8al%e is trans!ormed into t e !orm o! pro!it by @ay o! t e rate o! pro!it is, o@e8er, a !%rt er de8elopment o! t e in8ersion o! s%bHect and obHect t at takes place already in t e process o! prod%ction0 &n t e latter, @e a8e seen, t e s%bHecti8e prod%cti8e !orces o! labo%r appear as prod%cti8e !orces o! capital0 /Englis edition: 4ol0 1, pp0 33<-330 I 0d01 3n t e one and, t e 8al%e, or t e past labo%r, @ ic dominates li8ing labo%r, is incarnated in t e capitalist0 3n t e ot er and, t e labo%rer appears as bare material labo%r-po@er, as a commodity0 E8en in t e simple relations o! prod%ction t is in8erted relations ip necessarily prod%ces certain correspondingly in8erted conceptions, a transposed conscio%sness @ ic is !%rt er de8eloped by t e metamorp oses and modi!ications o! t e act%al circ%lation process0 &t is altoget er erroneo%s, as a st%dy o! t e )icardian sc ool s o@s, to try to identi!y t e la@s o! t e rate o! pro!it @it t e la@s o! t e rate o! s%rpl%s-8al%e, or 8ice 8ersa0 5 e capitalist nat%rally does not see t e di!!erence bet@een t em0 &n t e !orm%la sN; t e s%rpl%s-8al%e is meas%red by t e 8al%e o! t e total capital ad8anced !or its prod%ction, o! @ ic a part @as totally cons%med in t is prod%ction and a part @as merely employed in it0 &n !act, t e !orm%la sN; expresses t e degree o! sel!-expansion o! t e total capital ad8anced, or, taken in con!ormity @it inner concept%al connections and t e nat%re o! s%rpl%s-8al%e, it indicates t e ratio o! t e amo%nt o! 8ariation o! 8ariable capital to t e magnit%de o! t e ad8anced total capital0 &n itsel!, t e magnit%de o! 8al%e o! total capital as no inner relations ip to t e magnit%de o! s%rpl%s-8al%e, at least not directly0 $o !ar as its material elements are concerned, t e total capital min%s t e 8ariable capital, t at is, t e constant capital, consists o! t e material reD%isites I t e means o! labo%r and materials o! labo%r I needed to materialise labo%r0 &t is necessary to a8e a certain D%antity o! means and materials o! labo%r !or a speci!ic D%antity o! labo%r to materialise in commodities and t ereby to prod%ce 8al%e0 ? de!inite tec nical relation depending on t e special nat%re o! t e labo%r applied is establis ed bet@een t e D%antity o! labo%r and t e D%antity o! means o! prod%ction to @ ic t is labo%r is to be applied0 6ence t ere is also to t at extent a de!inite relation bet@een t e D%antity o! s%rpl%s-8al%e, or s%rpl%s-labo%r, and t e D%antity o! means o! prod%ction0 For instance, i! t e labo%r necessary !or t e prod%ction o! t e @age amo%nts to a daily 6 o%rs, t e labo%rer m%st @ork 1< o%rs to do 6 o%rs o! s%rpl%s-labo%r, or prod%ce a s%rpl%s-8al%e o! 1==T0 6e %ses %p t@ice as m%c o! t e means o! prod%ction in 1< o%rs as e does in 60 .et t is is no reason !or t e s%rpl%s-8al%e prod%ced by im in 6 o%rs to be directly related to t e 8al%e o! t e means o! prod%ction %sed %p in t ose 6, or in 1< o%rs0 5 is 8al%e is ere altoget er immaterial# it is only a matter o! t e tec nically reD%ired D%antity0 &t does not matter @ et er t e ra@ materials or means o! labo%r are c eap or dear, as long as t ey a8e t e reD%ired %se-8al%e and are a8ailable in tec nically prescribed proportion to t e labo%r to be applied0 &! & kno@ t at x lbs0 o! cotton are cons%med in an o%r o! spinning and t at t ey cost a

3=

; apter &&

s illings, t en, o! co%rse, & also kno@ t at 1< o%rs" spinning cons%mes 1<x lbs0 o! cotton R 1< a s illings, and can t en calc%late t e proportion o! t e s%rpl%s-8al%e to t e 8al%e o! t e 1< as @ell as to t at o! t e 60 A%t t e relation o! li8ing labo%r to t e value o! means o! prod%ction obtains ere only to t e extent t at a s illings ser8e as a name !or x lbs0 o! cotton# beca%se a de!inite D%antity o! cotton as a de!inite price, and t ere!ore, con8ersely, a de!inite price may also ser8e as an index !or a de!inite D%antity o! cotton, so long as t e price o! cotton does not c ange0 &! & kno@ t at t e labo%rer m%st @ork 1< o%rs !or me to appropriate 6 o%rs o! s%rpl%s-labo%r, t at t ere!ore & m%st a8e a 1<- o%r s%pply o! cotton ready !or %se, and i! & kno@ t e price o! t is D%antity o! cotton needed !or 1< o%rs, t en & a8e an indirect relation bet@een t e price o! cotton Bas an index o! t e reD%ired D%antityC and t e s%rpl%s-8al%e0 A%t, con8ersely, & can ne8er concl%de t e D%antity o! t e ra@ material t at may be cons%med in, say, one o%r, and not 6, o! spinning !rom t e price o! t e ra@ material0 5 ere is, t en, no necessary inner relation bet@een t e 8al%e o! t e constant capital, nor, t ere!ore, bet@een t e 8al%e o! t e total capital BRcU8C and t e s%rpl%s8al%e0 &! t e rate o! s%rpl%s-8al%e is kno@n and its magnit%de gi8en, t e rate o! pro!it expresses not ing b%t @ at it act%ally is, namely a di!!erent @ay o! meas%ring s%rpl%s-8al%e, its meas%rement according to t e 8al%e o! t e total capital instead o! t e 8al%e o! t e portion o! capital !rom @ ic s%rpl%s-8al%e directly originates by @ay o! its exc ange !or labo%r0 A%t in reality Bi0e0, in t e @orld o! p enomenaC t e matter is re8ersed0 $%rpl%s-8al%e is gi8en, b%t gi8en as an excess o! t e selling price o! t e commodity o8er its cost-price# and it remains a mystery @ ere t is s%rpl%s originated I !rom t e exploitation o! labo%r in t e process o! prod%ction, or !rom o%t@itting t e p%rc aser in t e process o! circ%lation, or !rom bot 0 W at is also gi8en is t e proportion o! t is s%rpl%s to t e 8al%e o! t e total capital, or t e rate o! pro!it0 5 e calc%lation o! t is excess o! t e selling price o8er t e cost-price in relation to t e 8al%e o! t e ad8anced total capital is 8ery important and nat%ral, beca%se in e!!ect it yields t e ratio in @ ic total capital as been expanded, i0e0, t e degree o! its sel!-expansion0 &! @e proceed !rom t is rate o! pro!it, @e cannot t ere!ore concl%de t e speci!ic relations bet@een t e s%rpl%s and t e portion o! capital in8ested in @ages0 We s all see in a s%bseD%ent c apter /K0 Marx, 4heorien ber den Mehrwert0 K0 MarxNF0 Engels, "er-e, Aand <6, 5eil 3, $0 <+-<8 0 I 0d01 @ at am%sing somersa%lts Malt %s makes @ en e tries in t is @ay to get at t e secret o! t e s%rpl%s-8al%e and o! its speci!ic relation to t e 8ariable part o! t e capital0 W at t e rate o! pro!it act%ally s o@s is rat er a %ni!orm relation o! t e s%rpl%s to eD%al portions o! t e total capital, @ ic , !rom t is point o! 8ie@, does not s o@ any inner di!!erence at all, %nless it be bet@een t e !ixed and circ%lating capital0 ?nd it s o@s t is di!!erence, too, only beca%se t e s%rpl%s is calc%lated in t@o @ays# namely, !irst, as a simple magnit%de I as excess o8er t e cost-price0 &n t is, its initial, !orm, t e entire circ%lating capital goes into t e cost-price, @ ile o! t e !ixed capital only t e @ear and tear goes into it0 $econd, t e relation o! t is excess in 8al%e to t e total 8al%e o! t e ad8anced capital0 &n t is case, t e 8al%e o! t e total !ixed capital enters into t e calc%lation, D%ite t e same as t e circ%lating capital0 5 ere!ore, t e circ%lating capital goes in bot times in t e same @ay, @ ile t e !ixed capital goes in di!!erently t e !irst time, and in t e same @ay as circ%lating capital t e second time0 (nder t e circ%mstances t e di!!erence bet@een !ixed and circ%lating capital is t e only one @ ic obtr%des itsel!0 &!, as 6egel @o%ld p%t it, t e s%rpl%s t ere!ore re-re!lects itsel! in itsel! o%t o! t e rate o! pro!it, or, p%t di!!erently, t e s%rpl%s is more closely c aracterised by t e rate o! pro!it, it appears as a s%rpl%s prod%ced by capital abo8e its o@n 8al%e o8er a year, or in a gi8en period o! circ%lation0 ?lt o%g t e rate o! pro!it t %s di!!ers n%merically !rom t e rate o! s%rpl%s-8al%e, @ ile s%rpl%s8al%e and pro!it are act%ally t e same t ing and n%merically eD%al, pro!it is ne8ert eless a con8erted !orm o! s%rpl%s-8al%e, a !orm in @ ic its origin and t e secret o! its existence are obsc%red and exting%is ed0 &n e!!ect, pro!it is t e !orm in @ ic s%rpl%s-8al%e presents itsel! to t e 8ie@, and m%st initially be stripped by analysis to disclose t e latter0 &n s%rpl%s-8al%e, t e

31

; apter &&

relation bet@een capital and labo%r is laid bare# in t e relation o! capital to pro!it, i0e0, o! capital to s%rpl%s-8al%e t at appears on t e one and as an excess o8er t e cost-price o! commodities realised in t e process o! circ%lation and, on t e ot er, as a s%rpl%s more closely determined by its relation to t e total capital, the capital appears as a relation to itself, a relation in @ ic it, as t e original s%m o! 8al%e, is disting%is ed !rom a ne@ 8al%e @ ic it generated0 3ne is conscio%s t at capital generates t is ne@ 8al%e by its mo8ement in t e processes o! prod%ction and circ%lation0 A%t t e @ay in @ ic t is occ%rs is cloaked in mystery and appears to originate !rom idden D%alities in erent in capital itsel!0 5 e !%rt er @e !ollo@ t e process o! t e sel!-expansion o! capital, t e more mysterio%s t e relations o! capital @ill become, and t e less t e secret o! its internal organism @ill be re8ealed0 &n t is part, t e rate o! pro!it is n%merically di!!erent !rom t e rate o! s%rpl%s-8al%e# @ ile pro!it and s%rpl%s-8al%e are treated as a8ing t e same n%merical magnit%de b%t only a di!!erent !orm0 &n t e next part @e s all see o@ t e alienation goes !%rt er, and o@ pro!it represents a magnit%de di!!ering also n%merically !rom s%rpl%s-8al%e0

Chapter 3. The Relation of the Rate of Profit to the Rate of Surplus-Value


6ere, as at t e close o! t e preceding c apter, and generally in t is entire !irst part, @e pres%me t e amo%nt o! pro!it !alling to a gi8en capital to be eD%al to t e total amo%nt o! s%rpl%s-8al%e prod%ced by means o! t is capital d%ring a certain period o! circ%lation0 We t %s lea8e aside !or t e present t e !act t at, on t e one and, t is s%rpl%s-8al%e may be broken %p into 8ario%s s%b!orms, s%c as interest on capital, gro%nd-rent, taxes, etc0, and t at, on t e ot er, it is not, as a r%le, identical @it pro!it as appropriated by 8irt%e o! a general rate o! pro!it, @ ic @ill be disc%ssed in t e second part0 $o !ar as t e D%antity o! pro!it is ass%med to be eD%al to t at o! s%rpl%s-8al%e, its magnit%de, and t at o! t e rate o! pro!it, is determined by ratios o! simple !ig%res gi8en or ascertainable in e8ery indi8id%al case0 5 e analysis, t ere!ore, !irst is carried on p%rely in t e mat ematical !ield0 We retain t e designations %sed in Aooks & and &&0 5otal capital ; consists o! constant capital c and 8ariable capital 8, and prod%ces a s%rpl%s-8al%e s0 5 e ratio o! t is s%rpl%s-8al%e to t e ad8anced 8ariable capital, or sN8, is called t e rate o! s%rpl%s-8al%e and designated s"0 5 ere!ore sN8 R s", and conseD%ently s R s"80 &! t is s%rpl%s-8al%e is related to t e total capital instead o! t e 8ariable capital, it is called pro!it, p, and t e ratio o! t e s%rpl%s-8al%e s to t e total capital ;, or sN;, is called t e rate o! pro!it, p"0 ?ccordingly, p" R sN; R sNBc U 8C -o@, s%bstit%ting !or s its eD%i8alent s"8, @e !ind p" R s" B8N;C R s" 8NBc U 8C @ ic eD%ation may also be expressed by t e proportion p" : s" R 8 : ; # t e rate o! pro!it is related to t e rate o! s%rpl%s-8al%e as t e 8ariable capital is to t e total capital0 &t !ollo@s !rom t is proportion t at t e rate o! pro!it, p", is al@ays smaller t an s", t e rate o! s%rpl%s-8al%e, beca%se 8, t e 8ariable capital, is al@ays smaller t an ;, t e s%m o! 8 U c, or t e 8ariable pl%s t e constant capital# t e only, practically impossible case excepted, in @ ic 8 R ;, t at is, no constant capital at all, no means o! prod%ction, b%t only @ages are ad8anced by t e capitalist0 6o@e8er, o%r analysis also considers a n%mber o! ot er !actors @ ic a8e a determining in!l%ence on t e magnit%de o! c, 8, and s, and m%st t ere!ore be brie!ly examined0 First, t e value of money0 We may ass%me t is to be constant t ro%g o%t0 $econd, t e turnover0 We s all lea8e t is !actor entirely o%t o! consideration !or t e present, since its in!l%ence on t e rate o! pro!it @ill be treated specially in a later c apter0 /6ere @e anticipate H%st one point, t at t e !orm%la p" R s" B8N;C is strictly correct only !or one period o! t%rno8er o! t e 8ariable capital0 A%t @e may correct it !or an ann%al t%rno8er by s%bstit%ting !or t e simple rate o! s%rpl%s-8al%e, s", t e ann%al rate o! s%rpl%s-8al%e, s"n0 &n t is, n is t e n%mber o! t%rno8ers o! t e 8ariable capital @it in one year0 B;!0 Aook &&, ; apter J4&, 1C I F0 E01 5 ird, d%e consideration m%st be gi8en to productivity of labour, @ ose in!l%ence on t e rate o! s%rpl%s-8al%e as been t oro%g ly disc%ssed in Aook & B?bsc nitt &4C0 /Englis edition: ,art &40 I Ed01 ,rod%cti8ity o! labo%r may also exert a direct in!l%ence on t e rate o! pro!it, at least o! an indi8id%al capital, i!, as as been demonstrated in Aook & BKap0 J, $0 3<3N3<2 / R MEW <3,

33

; apter &&&

$033+N3361C /Englis edition: ; 0 J&&, pp0 316-1>0 I Ed01 t is indi8id%al capital operates @it a ig er t an t e a8erage social prod%cti8ity and prod%ces commodities at a lo@er 8al%e t an t eir a8erage social 8al%e, t ereby realising an extra pro!it0 6o@e8er, t is case @ill not be considered !or t e present, since in t is part o! t e @ork @e also proceed !rom t e premise t at commodities are prod%ced %nder normal social conditions and are sold at t eir 8al%es0 6ence, @e ass%me in eac case t at t e prod%cti8ity o! labo%r remains constant0 &n e!!ect, t e 8al%e-composition o! a capital in8ested in a branc o! ind%stry, t at is, a certain proportion bet@een t e 8ariable and constant capital, al@ays expresses a de!inite degree o! labo%r prod%cti8ity0 ?s soon, t ere!ore, as t is proportion is altered by means ot er t an a mere c ange in t e 8al%e o! t e material elements o! t e constant capital, or a c ange in @ages, t e prod%cti8ity o! labo%r m%st like@ise %ndergo a corresponding c ange, and @e s all o!ten eno%g see, !or t is reason, t at c anges in t e !actors c, 8, and s also imply c anges in t e prod%cti8ity o! labo%r0 5 e same applies to t e t ree remaining !actors I t e length of the wor-ing1day, intensity of labour, and wages0 5 eir in!l%ence on t e D%antity and rate o! s%rpl%s-8al%e as been ex a%sti8ely disc%ssed in Aook & /Englis edition: 4ol0 1, pp0 +1*-3=0 I Ed01 &t @ill be %nderstood, t ere!ore, t at not@it standing t e ass%mption, @ ic @e make !or t e sake o! simplicity, t at t ese t ree !actors remain constant, t e c anges t at occ%r in 8 and s may ne8ert eless imply c anges in t e magnit%de o! t ese, t eir determining elements0 &n t is respect @e m%st brie!ly recall t at t e @age in!l%ences t e D%antity o! s%rpl%s-8al%e and t e rate o! s%rpl%s-8al%e in in8erse proportion to t e lengt o! t e @orking-day and t e intensity o! labo%r# t at an increase in @ages red%ces t e s%rpl%s-8al%e, @ ile a lengt ening o! t e @orking-day and an increase in t e intensity o! labo%r add to it0 $%ppose a capital o! 1== prod%ces a s%rpl%s-8al%e o! <= employing <= labo%rers @orking a 1=o%r day !or a total @eekly @age o! <=0 5 en @e a8e: 8=c U <=8 U <=s# s" R 1==T, p" R <=T0 -o@ t e @orking-day is lengt ened to 1+ o%rs @it o%t raising t e @ages0 5 e total 8al%e prod%ced by t e <= labo%rers @ill t ereby increase !rom 2= to 6= B1= : 1+ R 2= : 6=C0 $ince 8, t e @ages paid to t e labo%rers, remains t e same, t e s%rpl%s-8al%e rises !rom <= to 2=, and @e a8e: 8=c U <=8 U 2=s# s" R <==T, p" R 2=T0 &!, con8ersely, t e ten- o%r @orking-day remains %nc anged, @ ile @ages !all !rom <= to 1<, t e total 8al%e-prod%ct amo%nts to 2= as be!ore, b%t is di!!erently distrib%ted# 8 !alls to 1<, lea8ing a remainder o! <8 !or s0 5 en @e a8e: 8=c U <=8 U <8s# s" R <33XT, p" R <8N*< R 3= 1=N<3 T0 6ence, @e see t at a prolonged @orking-day Bor a corresponding increase in t e intensity o! labo%rC and a !all in @ages bot increase t e amo%nt, and t %s t e rate, o! s%rpl%s-8al%e0 ;on8ersely, a rise in @ages, ot er t ings being eD%al, @o%ld lo@er t e rate o! s%rpl%s-8al%e0 6ence, i! 8 rises t ro%g a rise in @ages, it does not express a greater, b%t only a dearer D%antity o! labo%r, in @ ic case s" and p" do not rise, b%t !all0 5 is indicates t at c anges in t e @orking-day, intensity o! labo%r and @ages cannot take place @it o%t a sim%ltaneo%s c ange in 8 and s and t eir ratio, and t ere!ore also p", @ ic is t e ratio o! s to t e total capital c U 80 ?nd it is also e8ident t at c anges in t e ratio o! s to 8 also imply corresponding c anges in at least one o! t e t ree abo8e-mentioned labo%r conditions0 ,recisely t is re8eals t e speci!ic organic relations ip o! 8ariable capital to t e mo8ement o! t e total capital and to its sel!-expansion, and also its di!!erence !rom constant capital0 $o !ar as generation o! 8al%e is concerned, t e constant capital is important only !or t e 8al%e it as0 ?nd it is immaterial to t e generation o! 8al%e @ et er a constant capital o! V1,+== represents 1,+== tons o! iron at, say, V1, or +== tons o! iron at V30 5 e D%antity o! act%al material, in @ ic t e 8al%e o!

32

; apter &&&

t e constant capital is incorporated, is altoget er irrele8ant to t e !ormation o! 8al%e and t e rate o! pro!it, @ ic 8aries in8ersely to t is 8al%e no matter @ at t e ratio o! t e increase or decrease o! t e 8al%e o! constant capital to t e mass o! material %se-8al%e @ ic it represents0 &t is di!!erent @it 8ariable capital0 &t is not t e 8al%e it as, not t e labo%r incorporated in it, t at matter at t is point, b%t t is 8al%e as a mere index o! t e total labo%r t at it sets in motion and @ ic is not expressed in it I t e total labo%r, @ ose di!!erence !rom t e labo%r expressed in t at 8al%e, ence t e paid labo%r, i0e0, t at portion o! t e total labo%r @ ic prod%ces s%rpl%s-8al%e, is all t e greater, t e less labo%r is contained in t at 8al%e itsel!0 $%ppose, a ten- o%r @orking-day is eD%al to ten s illings R ten marks0 &! t e labo%r necessary to replace t e @ages, and t %s t e 8ariable capital R + o%rs R + s illings, t en t e s%rpl%s-labo%r R + o%rs and t e s%rpl%s-8al%e R + s illings0 $ o%ld t e necessary labo%r R 2 o%rs R 2 s illings, t en t e s%rpl%s-labo%r R 6 o%rs and t e s%rpl%s-8al%e R 6 s illings0 6ence, as soon as t e 8al%e o! t e 8ariable capital ceases to be an index o! t e D%antity o! labo%r set in motion by it, and, moreo8er, t e meas%re o! t is index is altered, t e rate o! s%rpl%s-8al%e @ill c ange in t e opposite direction and in8ersely0 'et %s no@ go on to apply t e abo8e-mentioned eD%ation o! t e rate o! pro!it, p" R s" B8N;C, to t e 8ario%s possible cases0 We s all s%ccessi8ely c ange t e 8al%e o! t e indi8id%al !actors o! s" B8N;C and determine t e e!!ect o! t ese c anges on t e rate o! pro!it0 &n t is @ay @e s all obtain di!!erent series o! cases, @ ic @e may regard eit er as s%ccessi8e altered conditions o! operation !or one and t e same capital, or as di!!erent capitals existing side by side and introd%ced !or t e sake o! comparison, taken, as it @ere, !rom di!!erent branc es o! ind%stry or di!!erent co%ntries0 &n cases, t ere!ore, @ ere t e conception o! some o! o%r examples as s%ccessi8e conditions !or one and t e same capital appears to be !orced or impracticable, t is obHection !alls a@ay t e moment t ey are regarded as comparisons o! independent capitals0 6ence, @e no@ separate t e prod%ct s" B8N;C into its t@o !actors s" and 8N;0 ?t !irst @e s all treat s" as constant and analyse t e e!!ect o! t e possible 8ariations o! 8N;0 ?!ter t at @e s all treat t e !raction 8N; as constant and let s" pass t ro%g its possible 8ariations0 Finally @e s all treat all !actors as 8ariable magnit%des and t ereby ex a%st all t e cases !rom @ ic la@s concerning t e rate o! pro!it may be deri8ed0 I. s/ constant, v6C varia4le 5 is case, @ ic embraces a n%mber o! s%bordinate cases, may be co8ered by a general !orm%la0 5ake t@o capitals, ; and ; 1, @it t eir respecti8e 8ariable components, 8 and 8 1, @it a common rate o! s%rpl%s-8al%e, s", and rates o! pro!it p" and p" 10 5 en: p" R s" B8N;C # p"1 R s" B81N;1C -o@ let %s make a proportion o! ; and ; 1, and o! 8 and 810 For instance, let t e 8al%e o! t e !raction ;1N; R E, and t at o! 8 1N8 R e0 5 en ;1 R E;, and 81 R e80 $%bstit%ting in t e abo8e eD%ation t ese 8al%es !or p1, ;1 and 81, @e obtain p"1 R s" e8NE; ?gain, @e may deri8e a second !orm%la !rom t e abo8e t@o eD%ations by trans!orming t em into t e proportion: p" : p"1 R s" B8N;C : s" B81N;1C R B8N;C : 81N;1 0 $ince t e 8al%e o! a !raction is not c anged i! @e m%ltiply or di8ide its n%merator and denominator by t e same n%mber, @e may red%ce 8N; and 8 1N;1 to percentages, t at is, @e may make ; and ;1 bot R 1==0 5 en @e a8e 8N; R 8N1== and 8 1N;1 R 81N1==, and may t en drop t e denominators in t e abo8e proportion, obtaining: p" : p"1 R 8 : 81", or:

3+

; apter &&&

5aking any t@o capitals operating @it t e same rate o! s%rpl%s-8al%e, t e rates o! pro!it are to eac ot er as t e 8ariable portions o! t e capitals calc%lated as percentages o! t eir respecti8e total capitals0 5 ese t@o !orm%las embrace all t e possible 8ariations o! 8N;0 3ne more remark be!ore @e analyse t ese 8ario%s cases singly0 $ince ; is t e s%m o! c and 8, o! t e constant and 8ariable capitals, and since t e rates o! s%rpl%s-8al%e, as o! pro!it, are %s%ally expressed in percentages, it is con8enient to ass%me t at t e s%m o! c U 8 is also eD%al to 1==, i0e0, to express c and 8 in percentages0 For t e determination o! t e rate o! pro!it, i! not o! t e amo%nt, it is immaterial @ et er @e say t at a capital o! 1+,===, o! @ ic 1<,=== is constant and 3,=== is 8ariable, prod%ces a s%rpl%s-8al%e o! 3,===, or @ et er @e red%ce t is capital to percentages: 1+,=== ; R 1<,===c U 3,===8 B U 3,===sC 1== ; R 8=c U <=8 B U <=sC0 &n eit er case t e rate o! s%rpl%s-8al%e s" R 1==T, and t e rate o! pro!it R <=T0 5 e same is tr%e @ en @e compare t@o capitals, say, t e !oregoing capital @it anot er, s%c as 1<,=== ; R 1=,8==c U 1,<==8 B U 1,<==sC 1== ; R *=c U 1=8 B U 1=sC0 in bot o! @ ic s" R 1==T, p" R 1=T, and in @ ic t e comparison @it t e !oregoing capital is clearer in percentage !orm0 3n t e ot er and, i! it is a matter o! c anges taking place in one and t e same capital, t e !orm o! percentages is rarely to be %sed, beca%se it almost al@ays obsc%res t ese c anges0 &! a capital expressed in t e !orm o! percentages: 8=c U <=8 U <=s ass%mes t e !orm o! percentages: *=c U 1=8 U 1=s, @e cannot tell @ et er t e c anged composition in percentages, *= 8 U 1=c, is d%e to an absol%te decrease o! 8 or an absol%te increase o! c, or to bot 0 We @o%ld need t e absol%te magnit%des in !ig%res to ascertain t is0 &n t e analysis o! t e !ollo@ing indi8id%al cases o! 8ariation, o@e8er, e8eryt ing depends on o@ t ese c anges a8e come abo%t# @ et er 8= 8 U <=c c anged into *=c U 1=8 t ro%g an increase o! t e constant capital @it o%t any c ange in t e 8ariable capital, !or instance t ro%g 1<,===c U 3,===8 c anging into <>,===c U 3,===8 Bcorresponding to a percentage o! *=c U 1=8C# or @ et er t ey took t is !orm t ro%g a red%ction o! t e 8ariable capital, @it t e constant capital remaining %nc anged, t at is, t ro%g a c ange into 1<,=== c U 1,333X 8 Balso corresponding to a percentage o! *= c U 1=8C# or, lastly, @ et er bot o! t e terms c anged into 13,+==c U 1,+==8 Bcorresponding once more to a percentage o! *= c U 1=8C0 A%t it is precisely t ese cases @ ic @e s all a8e to s%ccessi8ely analyse, and in so doing dispense @it t e con8enient !orm o! percentages, or at least employ t ese only as a secondary alternati8e0 1C s5 and C constant, v variable. &! 8 c anges in magnit%de, ; can remain %naltered only i! c, t e ot er component o! ;, t at is, t e constant capital, c anges by t e same amo%nt as 8, b%t in t e opposite direction0 &! ; originally R 8=c U <=8 R 1==, and i! 8 is t en red%ced to 1=, t en ; can R 1== only i! c is increased to *=# *=c U 1=8 R 1==0 :enerally speaking, i! 8 is trans!ormed into 8 Y d, into 8 increased or decreased by d, t en c m%st be trans!ormed into c Y d, into c 8arying by t e same amo%nt, b%t in t e opposite direction, so t at t e conditions o! t e present case are satis!ied0 $imilarly, i! t e rate o! s%rpl%s-8al%e s" remains t e same, @ ile t e 8ariable capital 8 c anges, t e amo%nt o! s%rpl%s-8al%e s m%st c ange, since s R s"8, and since one o! t e !actors o! s"8, namely 8, is gi8en anot er 8al%e0

36

; apter &&&

5 e ass%mptions o! t e present case prod%ce, alongside t e original eD%ation, p" R s" B8N;C , still anot er eD%ation t ro%g t e 8ariation o! 8: p"1 R s" B81N;C in @ ic 8 as become 81 and p"1, t e res%ltant c anged rate o! pro!it, is to be !o%nd0 &t is determined by t e !ollo@ing proportion: p" : p"1 R s" B8N;C : s" B81N;C R 8 : 81 3r: @it t e rate o! s%rpl%s-8al%e and total capital remaining t e same, t e original rate o! pro!it is to t e ne@ rate o! pro!it prod%ced by a c ange in t e 8ariable capital as t e original 8ar iable capital is to t e c anged 8ariable capital0 &! t e original capital @as, as abo8e: &0 1+,=== ; R 1<,===c U 3,===8 B U 3,===sC, and i! it is no@: &&0 1+,=== ; R 13,===c U <,===8 B U <,===sC, t en ; R 1+,=== and s" R 1==T in eit er case, and t e rate o! pro!it o! &, <=T, is to t at o! &&, 13XT, as t e 8ariable capital o! &, 3,===, is to t at o! &&, <,===, i0 e0, <=T : 13XT R 3,=== : <,===0 -o@, t e 8ariable capital may eit er rise or !all0 'et %s !irst take an example in @ ic it rises0 'et a certain capital be originally constit%ted and employed as !ollo@s: &0 1==c U <=8 U 1=s# ; R 1<=, s" R +=T, p" R 8XT0 -o@ let t e 8ariable capital rise to 3=0 &n t at case, according to o%r ass%mption, t e constant capital m%st !all !rom 1== to *= so t at total capital remains %nc anged at 1<=0 5 e rate o! s%rpl%s-8al%e remaining constant at +=T, t e s%rpl%s-8al%e prod%ced @ill t en rise !rom 1= to 1+0 We s all t en a8e: &&0 *=c U 3=8 U 1+s# ; R 1<=, s" R +=T, p" R 1<ZT0 'et %s !irst proceed !rom t e ass%mption t at @ages remain %nc anged0 5 en t e ot er !actors o! t e rate o! s%rpl%s-8al%e, i0e0, t e @orking-day and t e intensity o! labo%r, m%st also remain %nc anged0 &n t at e8ent t e rise o! 8 B!rom <= to 3=C can signi!y only t at anot er al! as many labo%rers are employed0 5 en t e total 8al%e prod%ced also rises one- al!, !rom 3= to 2+, and is distrib%ted, H%st as be!ore, W !or @ages and X !or s%rpl%s-8al%e0 A%t at t e same time, @it t e increase in t e n%mber o! labo%rers, t e constant capital, t e 8al%e o! t e means o! prod%ction, as !allen !rom 1== to *=0 We a8e, t en, a case o! decreasing prod%cti8ity o! labo%r combined @it a sim%ltaneo%s s rinkage o! constant capital0 &s s%c a case economically possibleQ &n agric%lt%re and t e extracti8e ind%stries, in @ ic a decrease in labo%r prod%cti8ity and, t ere!ore, an increase in t e n%mber o! employed labo%rers is D%ite compre ensible, t is process is on t e basis and @it in t e scope o! capitalist prod%ction attended by an increase, instead o! a decrease, o! constant capital0 E8en i! t e abo8e !all o! c @ere d%e merely to a !all in prices, an indi8id%al capital @o%ld be able to accomplis t e transition !rom & to && only %nder 8ery exceptional circ%mstances0 A%t in t e case o! t@o independent capitals in8ested in di!!erent co%ntries, or in di!!erent branc es o! agric%lt%re or extracti8e ind%stry, it @o%ld be not ing o%t o! t e ordinary i! in one o! t e cases more labo%rers Band t ere!ore more 8ariable capitalC @ere employed and @orked @it less 8al%able or scantier means o! prod%ction t an in t e ot er case0 A%t let %s drop t e ass%mption t at t e @age remains t e same, and let %s explain t e rise o! t e 8ariable capital !rom <= to 3= t ro%g a rise o! @ages by one- al!0 5 en @e s all a8e an entirely di!!erent case0 5 e same n%mber o! labo%rers I say, t@enty I contin%e to @ork @it t e same or only slig tly red%ced means o! prod%ction0 &! t e @orking-day remains %nc anged I say, 1= o%rs I t en t e total 8al%e prod%ced also remains %nc anged0 &t @as and remains R 3=0 A%t all o! t is 3= is no@ reD%ired to make good t e ad8anced 8ariable capital o! 3=# t e s%rpl%s-8al%e @o%ld disappear0 We a8e ass%med, o@e8er, t at t e rate o! s%rpl%s-8al%e s o%ld remain constant, t at

3>

; apter &&&

is, t e same as in &, at +=T0 5 is is possible only i! t e @orking-day is prolonged by one- al! to 1+ o%rs0 5 en t e <= labo%rers @o%ld prod%ce a total 8al%e o! 2+ in 1+ o%rs, and all conditions @o%ld be satis!ied: &&0 *=c U 3=8 U 1+s# ; R 1<=, s" R +=T, p" R 1<ZT0 &n t is case, t e <= labo%rers do not reD%ire any more means o! labo%r, tools, mac ines, etc0, t an in case &0 3nly t e ra@ materials or a%xiliary materials @o%ld a8e to be increased by one- al!0 &n t e e8ent o! a !all in t e prices o! t ese materials, t e transition !rom & to && mig t be more possible economically, e8en !or an indi8id%al capital in keeping @it o%r ass%mption0 ?nd t e capitalist @o%ld be some@ at compensated by increased pro!its !or any loss inc%rred t ro%g t e depreciation o! is constant capital0 -o@ let %s ass%me t at t e 8ariable capital !alls, instead o! rising0 5 en @e a8e b%t to re8erse o%r example, taking && as t e original capital, and passing !rom && to &0 &&0 *=c U 3=8 U 1+s, t en c anges into &0 1==c U <=8 U 1=s, and it is e8ident t at t is transposition does not in t e least alter any o! t e conditions reg%lating t e respecti8e rates o! pro!it and t eir m%t%al relation0 &! 8 !alls !rom 3= to <= beca%se X !e@er labo%rers are employed @it t e gro@ing constant capital, t en @e a8e be!ore %s t e normal case o! modern ind%stry, namely, an increasing prod%cti8ity o! labo%r, and t e operation o! a larger D%antity o! means o! prod%ction by !e@er labo%rers0 5 at t is mo8ement is necessarily connected @it a sim%ltaneo%s drop in t e rate o! pro!it @ill be de8eloped in t e t ird part o! t is book0 &!, on t e ot er and, 8 !alls !rom 3= to <=, beca%se t e same n%mber o! labo%rers is employed at lo@er @ages, t e total 8al%e prod%ced @o%ld, @it t e @orking-day %nc anged, as be!ore R 3= 8 U 1+s R 2+0 $ince 8 !ell to <=, t e s%rpl%s-8al%e @o%ld rise to <+, t e rate o! s%rpl%s-8al%e !rom +=T to 1<+T, @ ic @o%ld be contrary to o%r ass%mption0 5o comply @it t e conditions o! o%r case, t e s%rpl%s-8al%e, @it its rate at +=T, m%st rat er !all to 1=, and t e total 8al%e prod%ced m%st, t ere!ore, !all !rom 2+ to 3=, and t is is possible only i! t e @orking-day is red%ced by X0 5 en, as be!ore, @e a8e: 1==c U <=8 U 1=s# s" R +=T, p" R 8XT0 &t need ardly be said t at t is red%ction o! t e @orking-time, in t e case o! a !all in @ages, @o%ld not occ%r in practice0 A%t t at is immaterial0 5 e rate o! pro!it is a !%nction o! se8eral 8ariable magnit%des, and i! @e @is to kno@ o@ t ese 8ariables in!l%ence t e rate o! pro!it, @e m%st analyse t e indi8id%al e!!ect o! eac in t%rn, regardless o! @ et er s%c an isolated e!!ect is economically practicable @it one and t e same capital0 <C s5 constant, v variable, C changes through the variation of v. 5 is case di!!ers !rom t e preceding one only in degree0 &nstead o! decreasing or increasing by as m%c as 8 increases or decreases, c remains constant0 (nder present-day conditions in t e maHor ind%stries and agric%lt%re t e 8ariable capital is only a relati8ely small part o! t e total capital0 For t is reason, its increase or decrease, so !ar as eit er is d%e to c anges in t e 8ariable capital, are like@ise relati8ely small0 'et %s again proceed @it a capital: &0 1==c U <=8 U 1=s# ; R 1<=, s" R +=T, p" R 8XT0 @ ic @o%ld t en c ange, say, into: &&0 1==c U 3=8 U 1+s# ; R 13=, s" R +=T, p" R 11 >N13T0 5 e opposite case, in @ ic t e 8ariable capital decreases, @o%ld again be ill%strated by t e re8erse transition !rom && to &0 5 e economic conditions @o%ld be essentially t e same as in t e preceding case, and t ere!ore t ey need not be disc%ssed again0 5 e transition !rom & to && implies a decrease in t e prod%cti8ity

38

; apter &&&

o! labo%r by one- al!# !or && t e %tilisation o! 1== reD%ires an increase o! labo%r by one- al! o8er t at o! &0 5 is case may occ%r in agric%lt%re0 1 A%t @ ile t e total capital remains constant in t e preceding case, o@ing to t e con8ersion o! constant into 8ariable capital, or 8ice 8ersa, t ere is in t is case a tie-%p o! additional capital i! t e 8ariable capital increases, and a release o! pre8io%sly employed capital i! t e 8ariable capital decreases0 3C s5 and v constant, c and therefore C variable. &n t is case t e eD%ation c anges !rom: p" R s" B8N;C into p" R s" B8N;1C , and a!ter red%cing t e same !actors on bot sides, @e a8e: p"1 : p" R ; : ;1# @it t e same rate o! s%rpl%s-8al%e and eD%al 8ariable capitals, t e rates o! pro!it are in8ersely proportional to t e total capitals0 $ o%ld @e, !or example, a8e t ree capitals, or t ree di!!erent conditions o! t e same capital: &0 8=c U <=8 U <=s# ; R 1==, s" R 1==T, p" R <=T# &&0 1==c U <=8 U <=s# ; R 1<=, s" R 1==T, p" R 16WT# &&&0 6=c U <=8 U <=s# ; R 8=, s" R 1==T, p" R <+T0 5 en @e obtain t e proportions: <=T : 16WT R 1<= : 1== and <=T : <+T R 8= : 1==0 5 e pre8io%sly gi8en general !orm%la !or 8ariations o! 8N; @it a constant s" @as: p"1 R s" e8NE; # no@ it becomes: p"1 R s" 8NE; , since 8 does not c ange, t e !actor e R 81N8 , becomes R 10 $ince s"8 R s, t e D%antity o! s%rpl%s-8al%e, and since bot s" and 8 remain constant, it !ollo@s t at s, too, is not a!!ected by any 8ariation o! ;0 5 e amo%nt o! s%rpl%s-8al%e is t e same a!ter t e c ange as it @as be!ore it0 &! c @ere to !all to Eero, p" @o%ld R s", i0e0, t e rate o! pro!it @o%ld eD%al t e rate o! s%rpl%s-8al%e0 5 e alteration o! c may be d%e eit er to a mere c ange in t e 8al%e o! t e material elements o! constant capital, or to a c ange in t e tec nical composition o! t e total capital, t at is, a c ange in t e prod%cti8ity o! labo%r in t e gi8en branc o! ind%stry0 &n t e latter case, t e prod%cti8ity o! social labo%r mo%nting d%e to t e de8elopment o! modern ind%stry and large-scale agric%lt%re @o%ld bring abo%t a transition Bin t e abo8e ill%strationC in t e seD%ence !rom &&& to & and !rom & to &&0 ? D%antity o! labo%r @ ic is paid @it <= and prod%ces a 8al%e o! 2= @o%ld !irst %tilise means o! labo%r to a 8al%e o! 6=# i! prod%cti8ity mo%nted and t e 8al%e remained t e same, t e %sed %p means o! labo%r @o%ld rise !irst to 8=, and t en to 1==0 ?n in8ersion o! t is seD%ence @o%ld imply a decrease in prod%cti8ity0 5 e same D%antity o! labo%r @o%ld p%t a smaller D%antity o! means o! prod%ction into motion and t e operation @o%ld be c%rtailed, as may occ%r in agric%lt%re, mining, etc0 ? sa8ing in constant capital increases t e rate o! pro!it on t e one and, and, on t e ot er, sets !ree capital, !or @ ic reason it is o! importance to t e capitalist0 We s all make a closer st%dy o! t is, and like@ise o! t e in!l%ence o! a c ange in t e prices o! t e elements o! constant capital, partic%larly o! ra@ materials, at a later point0 /,resent edition: ; 0 4, 4&0 I Ed01 &t is again e8ident ere t at a 8ariation o! t e constant capital eD%ally a!!ects t e rate o! pro!it, regardless o! @ et er t is 8ariation is d%e to an increase or decrease o! t e material elements o! c, or merely to a c ange in t eir 8al%e0 2C s5 constant, v, c and C all variable.

3*

; apter &&&

&n t is case, t e general !orm%la !or t e c anged rate o! pro!it, gi8en at t e o%tset, remains in !orce: p"1 R s" e8NE; 0 &t !ollo@s !rom t is t at @it t e rate o! s%rpl%s-8al%e remaining t e same: aC 5 e rate o! pro!it !alls i! E is greater t an e, t at is, i! t e constant capital is a%gmented to s%c an extent t at t e total capital gro@s at a !aster rate t an t e 8ariable capital0 &! a capital o! 8= c U <=8 U <=s c anges into 1>=c U 3=8 U 3=s, t en s" remains R 1==T, b%t 8N; !alls !rom <=N1== to 3=N1==, in spite o! t e !act t at bot 8 and ; a8e gro@n, and t e rate o! pro!it !alls correspondingly !rom <=T to 1+T0 bC 5 e rate o! pro!it remains %nc anged only i! e R E, t at is, i! t e !raction 8N; retains t e same 8al%e in spite o! a seeming c ange, i0e0, i! its n%merator and denominator are m%ltiplied or di8ided by t e same !actor0 5 e capitals 8=c U <=8 U <=s and 16=c U 2=8 U 2=s ob8io%sly a8e t e same rate o! pro!it o! <=T, beca%se s" remains R 1==T and 8N; R <=N1== R 2=N<== represents t e same 8al%e in bot examples0 cC 5 e rate o! pro!it rises @ en e is greater t an E, t at is, @ en t e 8ariable capital gro@s at a !aster rate t an t e total capital0 &! 8= c U <=8 U <=s t%rns into 1<=c U 2=8 U 2=s, t e rate o! pro!it rises !rom <=T to <+T, beca%se @it an %nc anged s" B8N;C R <=N1== rises to 2=N16=, or !rom 1N+ to 1N20 &! t e c anges o! 8 and ; are in t e same direction, @e may 8ie@ t is c ange o! magnit%de as t o%g , to a certain extent, bot o! t em 8aried in t e same proportion, so t at 8N; remained %nc anged %p to t at point0 Aeyond t is point, only one o! t em @o%ld 8ary, and @e s all a8e t ereby red%ced t is complicated case to one o! t e preceding simpler ones0 $ o%ld, !or instance, 8=c U <=8 U <=s become 1==c U 3=8 U 3=s, t en t e proportion o! 8 to c, and also to ;, remains t e same in t is 8ariation %p to : 1== c U <+8 U <+s0 (p to t at point, t ere!ore, t e rate o! pro!it like@ise remains %nc anged0 We may t en take 1== c U <+8 U <+s as o%r point o! depart%re# @e !ind t at 8 increased by + to become 3= 8, so t at ; rose !rom 1<+ to 13=, t %s gi8ing %s t e second case, t at o! t e simple 8ariation o! 8 and t e conseD%ent 8ariation o! ;0 5 e rate o! pro!it, @ ic @as originally <=T, rises t ro%g t is addition o! + 8 to <3 1N13 T, pro8ided t e rate o! s%rpl%s-8al%e remains t e same0 5 e same red%ction to a simpler case can also take place i! 8 and ; c ange t eir magnit%des in opposite directions0 For instance, let %s again start @it 8= cU <=8 U <=s, and let t is become: 11=c U 1=8 U 1=s0 &n t at case, @it t e c ange going as !ar as 2= c U 1=8 U 1=s, t e rate o! pro!it @o%ld remain t e same <=T0 Ay adding >=c to t is intermediate !orm, it @ill drop to 8XT0 5 %s, @e a8e again red%ced t e case to an instance o! c ange o! one 8ariable, namely o! c0 $im%ltaneo%s 8ariation o! 8, c, and ;, does not, t ere!ore, o!!er any ne@ aspects and in t e !inal analysis leads back to a case in @ ic only one !actor is a 8ariable0 E8en t e sole remaining case as act%ally been ex a%sted, namely t at in @ ic 8 and ; remain n%merically t e same, @ ile t eir material elements %ndergo a c ange o! 8al%e, so t at 8 stands !or a c anged D%antity o! labo%r p%t in motion and c !or a c anged D%antity o! means o! prod%ction p%t in motion0 &n 8=c U <=8 U <=s, let <=8 originally represent t e @ages o! <= labo%rers @orking 1= o%rs daily0 5 en let t e @ages o! eac rise !rom 1 to 1 [0 &n t at case t e <= 8 @ill pay only 16 labo%rers instead o! <=0 A%t i! <= labo%rers prod%ce a 8al%e o! 2= in <== @orking- o%rs, 16 labo%rers @orking 1= o%rs daily @ill in 16= @orking- o%rs prod%ce a 8al%e o! only 3<0 ?!ter ded%cting <=8 !or @ages, only 1< o! t e 3< @o%ld t en remain !or s%rpl%s-8al%e0 5 e rate o! s%rpl%s-8al%e @o%ld a8e !allen !rom 1==T to 6=T0 A%t since @e a8e ass%med t e rate o! s%rpl%s-8al%e to be constant, t e @orking-day @o%ld a8e to be prolonged by one-D%arter, !rom 1= to 1<Z o%rs0 &! <= labo%rers @orking 1= o%rs daily R <== @orking- o%rs prod%ce a 8al%e o! 2=, t en 16

2=

; apter &&&

labo%rers @orking 1<Z o%rs daily R <== o%rs @ill prod%ce t e same 8al%e, and t e capital o! 8=c U <=8 @o%ld as be!ore yield t e same s%rpl%s-8al%e o! <=0 ;on8ersely, i! @ages @ere to !all to s%c an extent t at <=8 @o%ld represent t e @ages o! 3= labo%rers, t en s @o%ld remain constant only i! t e @orking-day @ere red%ced !rom 1= to 6W o%rs0 For <= \ 1= R 3= \ 6W R <== @orking- o%rs0 We a8e already in t e main disc%ssed to @ at extent c may in t ese di8ergent examples remain %nc anged in terms o! 8al%e expressed in money and yet represent di!!erent D%antities o! means o! prod%ction c anged in accordance @it c anging conditions0 &n its p%re !orm t is case @o%ld be possible only by @ay o! an exception0 ?s !or a c ange in t e 8al%e o! t e elements o! c @ ic increases or decreases t eir mass b%t lea8es t e s%m o! t e 8al%e o! c %nc anged, it does not a!!ect eit er t e rate o! pro!it or t e rate o! s%rpl%s-8al%e, so long as it does not lead to a c ange in t e magnit%de o! 80 We a8e ere@it ex a%sted all t e possible cases o! 8ariation o! 8, c, and ; in o%r eD%ation0 We a8e seen t at t e rate o! pro!it may !all, remain %nc anged, or rise, @ ile t e rate o! s%rpl%s8al%e remains t e same, @it t e least c ange in t e proportion o! 8 to c or to ;, being s%!!icient to c ange t e rate o! pro!it as @ell0 We a8e seen, !%rt ermore, t at in 8ariations o! 8 t ere is a certain limit e8ery@ ere beyond @ ic it is economically impossible !or s" to remain constant0 $ince e8ery one-sided 8ariation o! c m%st also reac a certain limit @ ere 8 can no longer remain %nc anged, @e !ind t at t ere are limits !or e8ery possible 8ariation o! 8N;, beyond @ ic s" m%st like@ise become 8ariable0 &n t e 8ariations o! s" @ ic @e s all no@ disc%ss, t is interaction o! t e di!!erent 8ariables o! o%r eD%ation @ill stand o%t still clearer0 II. s/ varia4le We obtain a general !orm%la !or t e rates o! pro!it @it di!!erent rates o! s%rpl%s-8al%e, no matter @ et er 8N; remains constant or not, by con8erting t e eD%ation: p" R s" B8N;C into p"1 R s"1 B81N;1C , in @ ic p"1, s"1, 81 and ;1 denote t e c anged 8al%es o! p", s", 8 and ;0 5 en @e a8e: p" : p"1 R s"1 B8N;C : s"1 B81N;1C , and ence: p"1 R Bs"1Ns1C \ 81N8 \ ;N;1 \ p"0 1C s5 variable, v6C constant. &n t is case @e a8e t e eD%ations: p" R s" B8N;C# p"1 R s" B8N;C , in bot o! @ ic 8N; is eD%al0 5 ere!ore: p" : p"1 R s" : s"1 5 e rates o! pro!it o! t@o capitals o! t e same composition are to eac ot er as t e t@o corresponding rates o! s%rpl%s-8al%e0 $ince in t e !raction 8N; it is not a D%estion o! t e absol%te magnit%des o! 8 and ;, b%t only o! t eir ratio, t is applies to all capitals o! eD%al composition @ ate8er t eir absol%te magnit%de0 8=c U <=8 U <=s# ; R 1==, s" R 1==T, p" R <=T 16=c U 2=8 U <=s# ; R <==, s" R +=T, p" R 1=T 1==T : +=T R <=T : 1=T0

21

; apter &&&

&! t e absol%te magnit%des o! 8 and ; are t e same in bot cases, t e rates o! pro!it are moreo8er also related to one anot er as t e amo%nts o! s%rpl%s-8al%e: p" : p"1 R s"8 : s"18 R s : s10 For instance: 8=c U <=8 U <=s# s" R 1==T, p" R <=T 8=c U <=8 U 1=s# s" R +=T, p" R 1=T <=T : 1=T R 1== \ <= : += \ <= R <=s : 1=s0 &t is no@ clear t at @it capitals o! eD%al absol%te or percentage composition t e rate o! s%rpl%s8al%e can di!!er only i! eit er t e @ages, or t e lengt o! t e @orking-day, or t e intensity o! labo%r, di!!er0 &n t e !ollo@ing t ree cases: &0 8=c U <=8 U 1=s# s" R +=T, p" R 1=T &&0 8=c U <=8 U <=s# s" R 1==T, p" R <=T &&&0 8=c U <=8 U 2=s# s" R <==T, p" R 2=T t e total 8al%e prod%ced in & is 3= B<=8 U 1=sC# in && it is 2=# in &&& it is 6=0 5 is may come abo%t in t ree di!!erent @ays0 'irst, i! t e @ages are di!!erent, and <= 8 stands !or a di!!erent n%mber o! labo%rers in e8ery indi8id%al case0 $%ppose capital & employs 1+ labo%rers 1= o%rs daily at a @age o! V1X, @ o prod%ce a 8al%e o! V3=, o! @ ic V<= replace t e @ages and V1= are s%rpl%s-8al%e0 &! @ages !all to V1, t en <= labo%rers may be employed !or 1= o%rs# t ey @ill prod%ce a 8al%e o! V2=, o! @ ic V<= @ill replace t e @ages and V<= @ill be s%rpl%s-8al%e0 $ o%ld @ages !all still more, to VW, t irty labo%rers may be employed !or 1= o%rs0 5 ey @ill prod%ce a 8al%e o! V6=, o! @ ic V<= @ill be ded%cted !or @ages and V2= @ill represent s%rpl%s-8al%e0 5 is case I a constant composition o! capital in per cent, a constant @orking-day and constant intensity o! labo%r, and t e rate o! s%rpl%s-8al%e 8arying beca%se o! 8ariation in @ages I is t e only one in @ ic )icardo"s ass%mption is correct: K,ro!it @o%ld be ig or lo@, e actly in proportion as @ages @ere lo@ or ig 0L B&rinciples, ; 0 &, $ect0 &&&, p0 18 o! t e "or-s o! 70 )icardo, ed0 by Mac;%lloc , 18+<0C 3r second, i! t e intensity o! labo%r 8aries0 &n t at case, say, <= labo%rers @orking 1= o%rs daily @it t e same means o! prod%ction prod%ce 3= pieces o! a certain commodity in &, 2= in &&, and 6= in &&&, o! @ ic e8ery piece, aside !rom t e 8al%e o! t e means o! prod%ction incorporated in it, represents a ne@ 8al%e o! V10 $ince e8ery <= pieces R V<= make good t e @ages, t ere remain 1= pieces R V1= !or s%rpl%s-8al%e in &, <= pieces R V<= in &&, and 2= pieces R V2= in &&&0 3r third, t e @orking-day di!!ers in lengt 0 &! <= labo%rers @ork @it t e same intensity !or * o%rs in &, 1< o%rs in &&, and 18 o%rs in &&&, t eir total prod%cts, 3= : 2= : 6= 8ary as * : 1< : 180 ?nd since @ages R <= in e8ery case, 1=, <=, and 2= respecti8ely again remain as s%rpl%s-8al%e0 ? rise or !all in @ages, t ere!ore, in!l%ences t e rate o! s%rpl%s-8al%e in8ersely, and a rise or !all in t e intensity o! labo%r, and a lengt ening or s ortening o! t e @orking-day, act t e same @ay on t e rate o! s%rpl%s-8al%e and t ereby, @it 8N; constant, on t e rate o! pro!it0 <C s5 and v variable, C constant. 5 e !ollo@ing proportion applies in t is case: p" : p"1 R s" B8N;C : s" B81N;C R s"8 : s"181 R s : s10 5 e rates o! pro!it are related to one anot er as t e respecti8e amo%nts o! s%rpl%s-8al%e0

2<

; apter &&&

; anges in t e rate o! s%rpl%s-8al%e @it t e 8ariable capital remaining constant meant a c ange in t e magnit%de and distrib%tion o! t e prod%ced 8al%e0 ? sim%ltaneo%s 8ariation o! 8 and s" also al@ays implies a di!!erent distrib%tion, b%t not al@ays a c ange in t e magnit%de o! t e prod%ced 8al%e0 5 ree cases are possible: aC 4ariation o! 8 and s" takes place in opposite directions, b%t by t e same amo%nt# !or instance: 8=c U <=8 U 1=s# s" R +=T, p" R 1=T *=c U 1=8 U <=s# s" R <==T, p" R <=T 5 e prod%ced 8al%e is eD%al in bot cases, ence also t e D%antity o! labo%r per!ormed# <= 8 U 1=s R 1=8 U <=s R 3=0 5 e only di!!erence is t at in t e !irst case <= is paid o%t !or @ages and 1= remains as s%rpl%s-8al%e, @ ile in t e second case @ages are only 1= and s%rpl%s-8al%e is t ere!ore <=0 5 is is t e only case in @ ic t e n%mber o! labo%rers, t e intensity o! labo%r, and t e lengt o! t e @orking-day remain %nc anged, @ ile 8 and s" 8ary sim%ltaneo%sly0 bC 4ariation o! s" and 8 also takes place in opposite directions, b%t not by t e same amo%nt0 &n t at case t e 8ariation o! eit er 8 or s" o%t@eig s t e ot er0 &0 8=c U <=8 U <=s# s" R 1==T, p" R <=T &&0 ><c U <88 U <=s# s" R >1 3N>T, p" R <=T &&&0 82c U 168 U <=s# s" R 1<+T, p" R <=T0 ;apital & pays !or prod%ced 8al%e amo%nting to 2= @it <=8, && a 8al%e o! 28 @it <8 8, and &&& a 8al%e o! 36 @it 1680 Aot t e prod%ced 8al%e and t e @ages a8e c anged0 A%t a c ange in t e prod%ced 8al%e means a c ange in t e amo%nt o! labo%r per!ormed, ence a c ange eit er in t e n%mber o! labo%rers, t e o%rs o! labo%r, t e intensity o! labo%r, or in more t an one o! t ese0 cC 4ariation o! s" and 8 takes place in t e same direction0 &n t at case t e one intensi!ies t e e!!ect o! t e ot er0 *=c U 1=8 U 1=s# s" R 1==T, p" R 1=T 8=c U <=8 U 3=s# s" R 1+=T, p" R 3=T *<c U 88 U 6s# s" R >+T, p" R 6T0 6ere too t e t ree 8al%es prod%ced are di!!erent, namely <=, +=, and 120 ?nd t is di!!erence in t e magnit%de o! t e respecti8e D%antities o! labo%r red%ces itsel! once more to a di!!erence in t e n%mber o! labo%rers, t e o%rs o! labo%r, and t e intensity o! labo%r, or se8eral or all o! t ese !actors0 3C s5, v and C variable. 5 is case o!!ers no ne@ aspects and is sol8ed by t e general !orm%la gi8en %nder &&, in @ ic s" is 8ariable0 5 e e!!ect o! a c ange in t e magnit%de o! t e rate o! s%rpl%s-8al%e on t e rate o! pro!it ence yields t e !ollo@ing cases: 1C p" increases or decreases in t e same proportion as s" i! 8N; remains constant0 8=c U <=8 U <=s# s" R 1==T, p" R <=T 8=c U <=8 U 1=s# s" R +=T, p" R 1=T 1==T : +=T R <=T : 1=T0 <C p" rises or !alls at a !aster rate t an s" i! 8N; mo8es in t e same direction as s", t at is, i! it increases or decreases @ en s" increases or decreases0 8=c U <=8 U 1=s# s" R +=T, p" R 1=T >=c U 3=8 U <=s# s" R 66WT, p" R 1=T +=T : 66WT ] 1=T : <=T0

23

; apter &&&

3C p" rises or !alls at a slo@er rate t an s" i! 8N; c anges in8ersely to s", b%t at a slo@er rate0 8=c U <=8 U 1=s# s" R +=T, p" R 1=T *=c U 1=8 U 1+s# s" R 1+=T, p" R 1+T +=T : 1+=T ^ 1=T : 1+T0 2C p" rises @ ile s" !alls, or !alls @ ile s" rises i! 8N; c anges in8ersely to, and at, a !aster rate t an, s"0 8=c U <=8 U <=s# s" R 1==T, p" R <=T *=c U 1=8 U 1+s# s" R 1+=T, p" R 1+T0 s" as risen !rom 1==T to 1+=T, p" as !allen !rom <=T to 1+T0 +C Finally, p" remains constant @ ereas s" rises or !alls, @ ile 8N; c anges in8ersely to, b%t in exactly t e same proportion as, s"0 &t is only t is last case @ ic still reD%ires some explanation0 We a8e obser8ed earlier in t e 8ariations o! 8N; t at one and t e same rate o! s%rpl%s-8al%e may be expressed in 8ery m%c di!!erent rates o! pro!it0 -o@ @e see t at one and t e same rate o! pro!it may be based on 8ery m%c di!!erent rates o! s%rpl%s-8al%e0 A%t @ ile any c ange in t e proportion o! 8 to ; is s%!!icient to prod%ce a di!!erence in t e rate o! pro!it so long as s is constant, a c ange in t e magnit%de o! s m%st lead to a corresponding in8erse c ange o! 8N; in order t at t e rate o! pro!it remains t e same0 &n t e case o! one and t e same capital, or in t at o! t@o capitals in one and t e same co%ntry t is is possible b%t in exceptional cases0 ?ss%me, !or example, t at @e a8e a capital o! 8=c U <=8 U <=s# ; R 1==, s" R 1==T, p" R <=T# and let %s s%ppose t at @ages !all to s%c an extent t at t e same n%mber o! labo%rers is obtainable !or 168 instead o! <=80 5 en, ot er t ings being eD%al, and 28 being released, @e s all a8e: 8=c U 168 U <2s# ; R *6, s" R 1+=T, p" R <+T0 &n order t at p" may no@ R <=T as be!ore, t e total capital @o%ld a8e to increase to 1<=, t e constant capital t ere!ore rising to 1=2: 1=2c U 168 U <2s# ; R 1<=, s" R 1+=T, p" R <=T0 5 is @o%ld only be possible i! t e !all in @ages @ere attended sim%ltaneo%sly by a c ange in t e prod%cti8ity o! labo%r @ ic reD%ired s%c a c ange in t e composition o! capital0 3r, i! t e 8al%e in money o! t e constant capital increased !rom 8= to 1=20 &n s ort, it @o%ld reD%ire an accidental coincidence o! conditions s%c as occ%rs in exceptional cases0 &n !act, a 8ariation o! s" t at does not call !or t e sim%ltaneo%s 8ariation o! 8, and t %s o! 8N;, is concei8able only %nder 8ery de!inite conditions, namely in s%c branc es o! ind%stry in @ ic only !ixed capital and labo%r are employed, @ ile t e materials o! labo%r are s%pplied by -at%re0 A%t t is is not so @ en t e rates o! pro!it o! t@o di!!erent co%ntries are compared0 For in t at case t e same rate o! pro!it is, in e!!ect, based largely on di!!erent rates o! s%rpl%s-8al%e0 &t !ollo@s !rom all o! t ese !i8e cases, t ere!ore, t at a rising rate o! pro!it may correspond to a !alling or rising rate o! s%rpl%s-8al%e, a !alling rate o! pro!it to a rising or !alling rate o! s%rpl%s8al%e, and a constant rate o! pro!it to a rising or !alling rate o! s%rpl%s-8al%e0 ?nd @e a8e seen in & t at a rising, !alling, or constant rate o! pro!it may also accord @it a constant rate o! s%rpl%s8al%e0 5 e rate o! pro!it, t ere!ore, depends on t@o main !actors I t e rate o! s%rpl%s-8al%e and t e 8al%e-composition o! capital0 5 e e!!ects o! t ese t@o !actors may be brie!ly s%mmed %p as !ollo@s, by gi8ing t e composition in per cent, !or it is immaterial @ ic o! t e t@o portions o! t e capital ca%ses t e 8ariation:

22

; apter &&&

5 e rates o! pro!it o! t@o di!!erent capitals, or o! one and t e same capital in t@o s%ccessi8e di!!erent conditions, are e3ual 1C i! t e per cent composition o! t e capitals is t e same and t eir rates o! s%rpl%s-8al%e are eD%al# <C i! t eir per cent composition is not t e same, and t e rates o! s%rpl%s-8al%e are %neD%al, pro8ided t e prod%cts o! t e rates o! s%rpl%s-8al%e by t e percentages o! t e 8ariable portions o! capitals Bs" by 8C are t e same, i0e0, i! t e masses o! s%rpl%s-8al%e Bs R s"8C calc%lated in per cent o! t e total capital are eD%al# in ot er @ords, i! t e !actors s" and 8 are in8ersely proportional to one anot er in bot cases0 4hey are une3ual 1C i! t e per cent composition is eD%al and t e rates o! s%rpl%s-8al%e are %neD%al, in @ ic case t ey are related as t e rates o! s%rpl%s-8al%e# <C i! t e rates o! s%rpl%s-8al%e are t e same and t e per cent composition is %neD%al, in @ ic case t ey are related as t e 8ariable portions o! t e capitals# 3C i! t e rates o! s%rpl%s-8al%e are %neD%al and t e per cent composition not t e same, in @ ic case t ey are related as t e prod%cts s"8, i0e0, as t e D%antities o! s%rpl%s-8al%e calc%lated in per cent o! t e total capital0 <

Chapter 4. The Effect of the Turnover on the Rate of Profit


5 e e!!ect o! t e t%rno8er on t e prod%ction o! s%rpl%s-8al%e, and conseD%ently o! pro!it, as been disc%ssed in Aook &&0 Arie!ly s%mmarised it signi!ies t at o@ing to t e time span reD%ired !or t%rno8er, not all t e capital can be employed all at once in prod%ction# some o! t e capital al@ays lies idle, eit er in t e !orm o! money-capital, o! ra@ material s%pplies, o! !inis ed b%t still %nsold commodity-capital, or o! o%tstanding claims# t at t e capital in acti8e prod%ction, i0e0, in t e prod%ction and appropriation o! s%rpl%s-8al%e, is al@ays s ort by t is amo%nt, and t at t e prod%ced and appropriated s%rpl%s-8al%e is al@ays c%rtailed to t e same extent0 5 e s orter t e period o! t%rno8er, t e smaller t is idle portion o! capital as compared @it t e @ ole, and t e larger, t ere!ore, t e appropriated s%rpl%s-8al%e, pro8ided ot er conditions remain t e same0 &t as already been s o@n in detail in Aook && /Englis edition: 4ol0 &&, pp0 <*3-*80 I 0d01 o@ t e D%antity o! prod%ced s%rpl%s-8al%e is a%gmented by red%ctions in t e period o! t%rno8er, or o! one o! its t@o sections, in t e time o! prod%ction and t e time o! circ%lation0 A%t since t e rate o! pro!it only expresses t e relation o! t e prod%ced D%antity o! s%rpl%s-8al%e to t e total capital employed in its prod%ction, it is e8ident t at any s%c red%ction increases t e rate o! pro!it0 W ate8er as been said earlier in ,art && o! Aook && in regard to s%rpl%s-8al%e, applies eD%ally to pro!it and t e rate o! pro!it and needs no repetition ere0 We @is only to stress a !e@ o! t e principal points0 5 e c ie! means o! red%cing t e time o! prod%ction is ig er labo%r prod%cti8ity, @ ic is commonly called ind%strial progress0 &! t is does not in8ol8e a sim%ltaneo%s considerable increase in t e o%tlay o! total capital res%lting !rom t e installation o! expensi8e mac inery, etc0, and t %s a red%ction o! t e rate o! pro!it, @ ic is calc%lated on t e total capital, t is rate m%st rise0 ?nd t is is decidedly tr%e in t e case o! many o! t e latest impro8ements in metall%rgy and in t e c emical ind%stry0 5 e recently disco8ered met ods o! prod%cing iron and steel, s%c as t e processes o! Aessemer, $iemens, :ilc rist-5 omas, etc0, c%t to a minim%m at relati8ely small costs t e !ormerly ard%o%s processes0 5 e making o! aliEarin, a red dye-st%!! extracted !rom coaltar, reD%ires b%t a !e@ @eeks, and t is by means o! already existing coal-tar dye-prod%cing installations, to yield t e same res%lts @ ic !ormerly reD%ired years0 &t took a year !or t e madder to mat%re, and it @as c%stomary to let t e roots gro@ a !e@ years more be!ore t ey @ere processed0 5 e c ie! means o! red%cing t e time o! circ%lation is impro8ed comm%nications0 5 e last !i!ty years a8e bro%g t abo%t a re8ol%tion in t is !ield, comparable only @it t e ind%strial re8ol%tion o! t e latter al! o! t e 18t cent%ry0 3n land t e macadamised road as been displaced by t e rail@ay, on sea t e slo@ and irreg%lar sailing 8essel as been p%s ed into t e backgro%nd by t e rapid and dependable steamboat line, and t e entire globe is being girdled by telegrap @ires0 5 e $%eE ;anal as !%lly opened East ?sia and ?%stralia to steamer tra!!ic0 5 e time o! circ%lation o! a s ipment o! commodities to East ?sia, at least t@el8e mont s in 182> Bc!0 A%c &&, $0 <3+ /Englis edition: Karl Marx, Capital, 4ol0 &&, pp0 <+1-+<0 I 0d01C, as no@ been red%ced to almost as many @eeks0 5 e t@o large centres o! t e crises o! 18<+-+>, ?merica and &ndia, a8e been bro%g t !rom >= to *= per cent nearer to t e E%ropean ind%strial co%ntries by t is re8ol%tion in transport, and a8e t ereby lost a good deal o! t eir explosi8e nat%re0 5 e period o! t%rno8er o! t e total @orld commerce as been red%ced to t e same extent, and t e e!!icacy o! t e capital in8ol8ed in it as been more t an do%bled or trebled0 &t goes @it o%t saying t at t is as not been @it o%t e!!ect on t e rate o! pro!it0

26

; apter &4

5o single o%t t e e!!ect o! t e t%rno8er o! total capital on t e rate o! pro!it @e m%st ass%me all ot er conditions o! t e capitals to be compared as eD%al0 ?side !rom t e rate o! s%rpl%s-8al%e and t e @orking-day it is also notably t e per cent composition @ ic @e m%st ass%me to be t e same0 -o@ let %s take a capital ? composed o! 8= c U <=8 R 1== ;, @ ic makes t@o t%rno8ers yearly at a rate o! s%rpl%s-8al%e o! 1==T0 5 e ann%al prod%ct is t en: 16=c U 2=8 U 2=s0 6o@e8er, to determine t e rate o! pro!it @e do not calc%late t e 2=s on t e t%rned-o8er capital-8al%e o! <==, b%t on t e ad8anced capital o! 1==, and t %s obtain p" R 2=T0 -o@ let %s compare t is @it a capital A R 16= c U 2=8 R <== ;, @ ic as t e same rate o! s%rpl%s-8al%e o! 1==T, b%t @ ic is t%rned o8er only once a year0 5 e ann%al prod%ct o! t is capital is, t ere!ore, t e same as t at o! ?: 16=c U 2=8 U 2=s0 A%t t is time t e 2=s are to be calc%lated on an ad8ance o! capital amo%nting to <==, @ ic yields a rate o! pro!it o! only <=T, or one- al! t at o! ?0 We !ind, t en, t at !or capitals @it an eD%al per cent composition, @it eD%al rates o! s%rpl%s8al%e and eD%al @orking-days, t e rates o! pro!it o! t e t@o capitals are related in8ersely as t eir periods o! t%rno8er0 &! eit er t e composition, t e rates o! s%rpl%s-8al%e, t e @orking-day, or t e @ages, are %neD%al in t e t@o compared cases, t is @o%ld nat%rally prod%ce !%rt er di!!erences in t e rates o! pro!it# b%t t ese are independent o! t e t%rno8er and, !or t is reason, do not concern %s at t is point0 5 ey a8e already been disc%ssed in ; apter &&&0 5 e direct e!!ect o! a red%ced period o! t%rno8er on t e prod%ction o! s%rpl%s-8al%e, and conseD%ently o! pro!it, consists o! an increased e!!iciency imparted t ereby to t e 8ariable portion o! capital, as s o@n in Aook &&, ; apter J4&, K5 e 5%rno8er o! 4ariable ;apitalL0 5 is c apter demonstrated t at a 8ariable capital o! +== t%rned o8er ten times a year prod%ces as m%c s%rpl%s-8al%e in t is time as a 8ariable capital o! +,=== @it t e same rate o! s%rpl%s-8al%e and t e same @ages, t%rned o8er H%st once a year0 5ake capital &, consisting o! 1=,=== !ixed capital @ ose ann%al depreciation is 1=T R 1,===, o! +== circ%lating constant and +== 8ariable capital0 'et t e 8ariable capital t%rn o8er ten times per year at a 1==T rate o! s%rpl%s-8al%e0 For t e sake o! simplicity @e ass%me in all t e !ollo@ing examples t at t e circ%lating constant capital is t%rned o8er in t e same time as t e 8ariable, @ ic is generally t e case in practice0 5 en t e prod%ct o! one s%c period o! t%rno8er @ill be: 1==c BdepreciationC U +==c U +==8 U +==s R 1,6== and t e prod%ct o! one entire year, @it ten s%c t%rno8ers, @ill be 1,===c BdepreciationC U +,===c U +,===8 U +,===s R 16,===, ; R 11,===, s R +,===, p" R +,===N11,=== R 2+ +N11 T0 -o@ let %s take capital &&: *,=== !ixed capital, 1,=== ann%al @ear and tear, 1,=== circ%lating constant capital, 1,=== 8ariable capital, 1==T rate o! s%rpl%s-8al%e, + t%rno8ers o! 8ariable capital per year0 5 en t e prod%ct o! eac o! t e t%rno8ers o! t e 8ariable capital @ill be: <==c BdepreciationC U 1,===c U 1,===8 U 1,===s R 3,<==, and t e total ann%al prod%ct a!ter !i8e t%rno8ers: 1,===c BdepreciationC U +,===c U +,===8 U +,===s R 16,===, ; R 11,===, s R +,===, p" R +,===N11,=== R 2+ +N11 T F%rt er, take capital &&& @it no !ixed capital, 6,=== circ%lating constant capital and +,=== 8ariable capital0 'et t ere be one t%rno8er per year at a 1==T rate o! s%rpl%s-8al%e0 5 en t e total ann%al prod%ct is: 6,===c U +,===8 U +,===s R 16,===, ; R 11,===, s R +,===, p" R +,===N11,=== R 2+ +N11T0

2>

; apter &4

&n all t e t ree cases @e t ere!ore a8e t e same ann%al D%antity o! s%rpl%s-8al%e R +,===, and, since t e total capital is like@ise eD%al in all t ree cases, namely R 11,===, also t e same rate o! pro!it o! 2+ +N11T0 A%t s o%ld capital & a8e only + instead o! 1= t%rno8ers o! its 8ariable part per year, t e res%lt @o%ld be di!!erent0 5 e prod%ct o! one t%rno8er @o%ld t en be: <==c BdepreciationC U +==c U +==8 U +==s R 1,>==0 ?nd t e ann%al prod%ct: 1,===c BdepreciationC U <,+==c U <,+==8 U <,+==s R 8,+==, ; R 11,===, s R <,+==# p" R <,+==N11,=== R << 8N11T0 5 e rate o! pro!it as !allen one- al!, beca%se t e period o! t%rno8er as do%bled0 5 e D%antity o! s%rpl%s-8al%e appropriated in one year is t ere!ore eD%al to t e D%antity o! s%rpl%s-8al%e appropriated in one t%rno8er o! t e variablecapital m%ltiplied by t e n%mber o! s%c t%rno8ers per year0 $%ppose @e call t e s%rpl%s-8al%e, or pro!it, appropriated in one year $, t e s%rpl%s-8al%e appropriated in one period o! t%rno8er s, t e n%mber o! t%rno8ers o! t e 8ariable capital in one year n, t en $ R sn, and t e ann%al rate o! s%rpl%s-8al%e $" R s"n, as already demonstrated in Aook &&, ; apter J4&, &0 /Englis edition: 4ol0 &&, p0 3=+0 I 0d01 &t goes @it o%t saying t at t e !orm%la p" R s" B8N;C R s" 8NBc U 8C is correct only so long as t e 8 in t e n%merator is t e same as t at in t e denominator0 &n t e denominator 8 stands !or t e entire portion o! t e total capital %sed on an a8erage as 8ariable capital !or t e payment o! @ages0 5 e 8 o! t e n%merator is primarily only determined by t e !act t at a certain D%antity o! s%rpl%s-8al%e R s is prod%ced and appropriated by it, @ ose relation to it sN8, is m", t e rate o! s%rpl%s-8al%e0 &t is only along t ese lines t at t e !orm%la p" R sNBc U 8C is trans!ormed into t e ot er: p" R s" 8NBc U 8C0 5 e 8 o! t e n%merator @ill no@ be more acc%rately determined by t e !act t at it m%st eD%al t e 8 o! t e denominator, t at is, t e entire 8ariable portion o! capital ;0 &n ot er @ords, t e eD%ation p" R BsN;C may be correctly trans!ormed into t e eD%ation p" R s" 8NBc U 8C only i! s stands !or s%rpl%s-8al%e prod%ced in one t%rno8er o! t e 8ariable capital0 $ o%ld s be only a portion o! t is s%rpl%s-8al%e, t en s R s"8 is still correct, b%t t is 8 is t en smaller t an t e 8 in ; R c U 8, beca%se it is smaller t an t e entire 8ariable capital expended !or @ages0 A%t s o%ld s stand !or more t an t e s%rpl%s-8al%e o! one t%rno8er o! 8, t en a portion o! t is 8, or per aps t e @ ole o! it, ser8es t@ice, namely in t e !irst and in t e second t%rno8er, and e8ent%ally in s%bseD%ent t%rno8ers0 5 e 8 @ ic prod%ces t e s%rpl%s-8al%e and represents t e s%m o! all paid @ages, is t ere!ore greater t an t e 8 in c U 8 and t e calc%lation !alls into error0 5o make t e !orm%la precise !or t e ann%al rate o! pro!it, @e m%st s%bstit%te t e ann%al rate o! s%rpl%s-8al%e !or t e simple rate o! s%rpl%s-8al%e, t at is, s%bstit%te $" or s"n !or s"0 &n ot er @ords, @e m%st m%ltiply t e rate o! s%rpl%s-8al%e s", or, @ at amo%nts to t e same t ing, t e 8ariable capital 8 contained in ;, by n, t e n%mber o! t%rno8ers o! t is 8ariable capital in one year0 5 %s @e obtain p" R s"n B8N;C, @ ic is t e !orm%la !or t e ann%al rate o! pro!it0 5 e amo%nt o! 8ariable capital in8ested in is b%siness is somet ing t e capitalist imsel! does not kno@ in most cases0 We a8e seen in ; apter 4&&& o! Aook &&, and s all see !%rt er along, t at t e only essential distinction @it in is capital @ ic impresses itsel! %pon t e capitalist is t at o! !ixed and circ%lating capital0 6e takes money to pay @ages !rom is cas -box containing t e part o! t e circ%lating capital e as on and in t e !orm o! money, so !ar as it is not deposited in a bank# e takes money !rom t e same cas -box !or ra@ and a%xiliary materials, and credits bot items to t e same cas -acco%nt0 ?nd e8en i! e s o%ld keep a separate acco%nt !or @ages, at t e close o! t e year t is @o%ld only s o@ t e s%m paid o%t !or t is item, ence 8n, b%t not t e 8ariable capital 8 itsel!0 &n order to ascertain t is, e @o%ld a8e to make a special calc%lation, o! @ ic @e propose ere to gi8e an ill%stration0

28

; apter &4

For t is p%rpose @e select t e cotton spinnery o! 1=,=== m%le spindles described in Aook & B$0 <=*N<=1C /Englis edition: p0 <1*0 I 0d01 and ass%me t at t e data gi8en t ere !or one @eek o! ?pril 18>1, are in !orce d%ring t e @ ole year0 5 e !ixed capital incorporated in t e mac inery @as V1=,===0 5 e circ%lating capital @as not gi8en0 We ass%me it to a8e been V<,+==0 5 is is a rat er ig estimate, b%t H%sti!ied by t e ass%mption, @ ic @e m%st al@ays make ere, t at no credit operations @ere e!!ected, ence no permanent or temporary employment o! ot er people"s capital0 5 e 8al%e o! t e @eekly prod%ct @as composed o! V<= !or depreciation o! mac inery, V3+8 circ%lating constant ad8anced capital Brent V6# cotton V32<# coal, gas, oil, V1=C, V+< 8ariable capital paid o%t !or @ages, and V8= s%rpl%s-8al%e0 5 ere!ore, <=c BdepreciationC U 3+8c U +<8 U 8=s R +1=0 5 e @eekly ad8ance o! circ%lating capital t ere!ore @as 3+8 c U +<8 R 21=0 &n terms o! per cent t is @as 8>03c U 1<0>80 For t e entire circ%lating capital o! V<,+== t is @o%ld be V<,18< constant and V318 8ariable capital0 $ince t e total expendit%re !or @ages in one year @as +< times V+<, or V<,>=2, it !ollo@s t at in a year t e 8ariable capital o! V318 @as t%rned o8er almost exactly 8Z times0 5 e rate o! s%rpl%s-8al%e @as 8=N+< R 1+3 11N130 We calc%late t e rate o! pro!it on t e basis o! t ese elements by inserting t e abo8e 8al%es in t e !orm%la p" R s"n B8N;C : s" R 1+3 11N13, n R 8Z, 8 R 318, ; R 1<,+==# ence: p" R 1+3 11N13 \ 8Z \ 318N1<,+== R 330<>T0 We test t is by means o! t e simple !orm%la p" R BsN;C0 5 e total ann%al s%rpl%s-8al%e or pro!it amo%nts to +< times V8=, or V2,16=, and t is di8ided by t e total capital o! V1<,+== gi8es %s 330<8T, or almost an identical res%lt0 5 is is an abnormally ig rate o! pro!it, @ ic may only be explained by extraordinarily !a8o%rable conditions o! t e moment B8ery lo@ prices o! cotton along @it 8ery ig prices o! yarnC, and co%ld certainly not a8e obtained t ro%g o%t t e year0 5 e s"n in t e !orm%la p" R s"n B8N;C stands, as as been said, !or t e t ing called in Aook && /Englis edition: 4ol0 &&, p0 <*+0 I 0d01 t e ann%al rate o! s%rpl%s-8al%e0 &n t e abo8e case it is 1+3 11N13T m%ltiplied by 8Z or in exact !ig%res, 1,3=> *N18T0 5 %s, i! a certain Aiedermann /Aiedermann I , ilistine0 ? p%n, being also t e name o! t e editor o! t e Deutsche +llgemeine %eitung0 I 0d01 @as s ocked by t e abnormity o! an ann%al rate o! s%rpl%s-8al%e o! 1,===T %sed as an ill%stration in Aook &&, e @ill no@ per aps be paci!ied by t is ann%al rate o! s%rpl%s-8al%e o! more t an 1,3==T taken !rom t e li8ing experience o! Manc ester0 &n times o! greatest prosperity, s%c as @e a8e not indeed seen !or a long time, s%c a rate is by no means a rarity0 For t at matter @e a8e ere an ill%stration o! t e act%al composition o! capital in modern largescale ind%stry0 5 e total capital is broken %p into V1<,18< constant and V318 8ariable capital, a s%m o! V1<,+==0 &n terms o! percent t is is *>Zc U <Z8 R 1== ;0 3nly one-!ortiet o! t e total, b%t in more t an an eig t-!old ann%al t%rno8er, ser8es !or t e payment o! @ages0 $ince 8ery !e@ capitalists e8er t ink o! making calc%lations o! t is sort @it re!erence to t eir o@n b%siness, statistics is almost completely silent abo%t t e relation o! t e constant portion o! t e total social capital to its 8ariable portion0 3nly t e ?merican cens%s gi8es @ at is possible %nder modern conditions, namely t e s%m o! @ages paid in eac line o! b%siness and t e pro!its realised0 M%estionable as t ey may be, being based on t e capitalist"s o@n %ncontrolled statements, t ey are ne8ert eless 8ery 8al%able and t e only records a8ailable to %s on t is s%bHect0 /&n E%rope @e are !ar too delicate to expect s%c re8elations !rom o%r maHor capitalists0 I '.001

Chapter 5. Econo ! in the E plo! ent of Constant Capital


I. In General
5 e increase o! absol%te s%rpl%s-8al%e, or t e prolongation o! s%rpl%s-labo%r, and t %s o! t e @orking-day, @ ile t e 8ariable capital remains t e same and t %s employs t e same n%mber o! labo%rers at t e same nominal @ages, regardless o! @ et er o8ertime is paid or not, red%ces t e relati8e 8al%e o! t e constant capital as compared to t e total and t e 8ariable capital, and t ereby increases t e rate o! pro!it, again irrespecti8e o! t e gro@t o! t e D%antity o! s%rpl%s-8al%e and a possibly rising rate o! s%rpl%s-8al%e0 5 e 8ol%me o! t e !ixed portion o! constant capital, s%c as !actory b%ildings, mac inery, etc0, remains t e same, no matter @ et er t ese ser8e t e labo%rprocess 16 or 1< o%rs0 ? prolongation o! t e @orking-day does not entail any !res expendit%res in t is, t e most expensi8e portion o! constant capital0 F%rt ermore, t e 8al%e o! t e !ixed capital is t ereby reprod%ced in a smaller n%mber o! t%rno8er periods, so t at t e time !or @ ic it m%st be ad8anced to make a certain pro!it is abbre8iated0 ? prolongation o! t e @orking-day t ere!ore increases t e pro!it, e8en i! o8ertime is paid, or e8en i!, %p to a certain point, it is better paid t an t e normal o%rs o! labo%r0 5 e e8er-mo%nting need to increase !ixed capital in modern ind%stry @as t ere!ore one o! t e main reasons prompting pro!it-mad capitalists to lengt en t e @orkingday0 1 5 e same conditions do not obtain i! t e @orking-day is constant0 5 en it is necessary eit er to increase t e n%mber o! labo%rers, and @it t em to a certain extent t e amo%nt o! !ixed capital, t e b%ildings, mac inery, etc0, in order to exploit a greater D%antity o! labo%r B!or @e lea8e aside ded%ctions !rom @ages or t e depression o! @ages belo@ t eir normal le8elC, or, i! t e intensity and, conseD%ently, t e prod%cti8ity o! labo%r, increase and, generally, more relati8e s%rpl%s-8al%e is prod%ced, t e magnit%de o! t e circ%lating portion o! constant capital increases in s%c ind%strial branc es @ ic %se ra@ materials, since more ra@ material, etc0, is processed in a gi8en time# and, secondly, t e amo%nt o! mac inery set in motion by t e same n%mber o! labo%rers, t ere!ore also t is part o! constant capital, increases as @ell0 6ence, an increase in s%rpl%s-8al%e is accompanied by an increase in constant capital, and t e gro@ing exploitation o! labo%r by greater o%tlays o! t e means o! prod%ction t ro%g @ ic labo%r is exploited, i0e0, by a greater in8estment o! capital0 5 ere!ore, t e rate o! pro!it is t ereby red%ced on t e one and @ ile it increases on t e ot er0 M%ite a n%mber o! c%rrent expenses remain almost or entirely t e same @ et er t e @orking-day is longer or s orter0 5 e cost o! s%per8ision is less !or +== @orking-men d%ring 18 @orking- o%rs t an !or >+= @orking-men d%ring 1< @orking- o%rs0 K5 e expense o! @orking a !actory 1= o%rs almost eD%als t at o! @orking it 1<0L B)eports o! &nsp0 o! Fact0, 3ctober 1828, p0 3>0C $tate and m%nicipal taxes, !ire ins%rance, @ages o! 8ario%s permanent employees, depreciation o! mac inery, and 8ario%s ot er expenses o! a !actory, remain %nc anged @ et er t e @orking-time is long or s ort0 5o t e extent to @ ic prod%ction decreases, t ese expenses rise as compared to t e pro!it0 B)eports o! &nsp0 o! Fact0, 3ctober 186<, p0 1*0C 5 e period in @ ic t e 8al%e o! t e mac inery and o! t e ot er components o! !ixed capital is reprod%ced is determined in practice not by t eir mere li!etime, b%t by t e d%ration o! t e entire labo%r-process d%ring @ ic t ey ser8e and @ear o%t0 &! t e labo%rers m%st @ork 18 instead o! 1< o%rs, t is makes a di!!erence o! t ree days more per @eek, so t at one @eek is stretc ed into one and a al!, and t@o years into t ree0 &! t is o8ertime is %npaid t e labo%rers gi8e a@ay gratis a

+=

; apter 4

@eek o%t o! e8ery t ree and a year o%t o! e8ery t ree on top o! t e normal s%rpl%s-labo%r time0 &n t is @ay, t e reprod%ction o! t e 8al%e o! t e mac inery is speeded %p +=T and accomplis ed in W o! t e %s%ally reD%ired time0 5o a8oid %seless complications, @e proceed in t is analysis, and in t at o! price !l%ct%ations !or ra@ materials B; ap0 4&C, !rom t e ass%mption t at t e mass and rate o! s%rpl%s-8al%e are gi8en0 ?s already s o@n in t e presentation o! co-operation, di8ision o! labo%r and mac inery, t e economy o! prod%ction conditions /Englis edition: 4ol0 &, pp0 3<2-<+ I 0d01 !o%nd in large-scale prod%ction is essentially d%e to t e !act t at t ese conditions pre8ail as conditions o! social, or socially combined, labo%r, and t ere!ore as social conditions o! labo%r0 5 ey are commonly cons%med in t e process o! prod%ction by t e aggregate labo%rer, instead o! being cons%med in small !ractions by a mass o! labo%rers operating disconnectedly or, at best, directly co-operating on a small scale0 &n a large !actory @it one or t@o central motors t e cost o! t ese motors does not increase in t e same ratio as t eir orse-po@er and, ence, t eir possible sp ere o! acti8ity0 5 e cost o! t e transmission eD%ipment does not gro@ in t e same ratio as t e total n%mber o! @orking mac ines @ ic it sets in motion0 5 e !rame o! a mac ine does not become dearer in t e same ratio as t e mo%nting n%mber o! tools @ ic it employs as its organs, etc0 F%rt ermore, t e concentration o! means o! prod%ction yields a sa8ing on b%ildings o! 8ario%s kinds not only !or t e act%al @orks ops, b%t also !or storage, etc0 5 e same applies to expendit%res !or !%el, lig ting, etc0 3t er conditions o! prod%ction remain t e same, @ et er %sed by many or by !e@0 5 is total economy, arising as it does !rom t e concentration o! means o! prod%ction and t eir %se en masse, imperati8ely reD%ires, o@e8er, t e acc%m%lation and co-operation o! labo%rers, i0e0, a social combination o! labo%r0 6ence, it originates D%ite as m%c !rom t e social nat%re o! labo%r, H%st as s%rpl%s-8al%e originates !rom t e s%rpl%s-labo%r o! t e indi8id%al labo%rer considered singly0 E8en t e contin%al impro8ements, @ ic are ere possible and necessary, are d%e solely to t e social experience and obser8ation ens%red and made possible by prod%ction o! aggregate labo%r combined on a large scale0 5 e same is tr%e o! t e second big so%rce o! economy in t e conditions o! prod%ction0 We re!er to t e recon8ersion o! t e excretions o! prod%ction, t e so-called @aste, into ne@ elements o! prod%ction, eit er o! t e same, or o! some ot er line o! ind%stry# to t e processes by @ ic t is so-called excretion is t ro@n back into t e cycle o! prod%ction and, conseD%ently, cons%mption, @ et er prod%cti8e or indi8id%al0 5 is line o! sa8ings, @ ic @e s all later examine more closely, is like@ise t e res%lt o! large-scale social labo%r0 &t is t e attendant ab%ndance o! t is @aste @ ic renders it a8ailable again !or commerce and t ereby t%rns it into ne@ elements o! prod%ction0 &t is only as @aste o! combined prod%ction, t ere!ore, o! large-scale prod%ction, t at it becomes important to t e prod%ction process and remains a bearer o! exc ange-8al%e0 5 is @aste, aside !rom t e ser8ices @ ic it per!orms as ne@ element o! prod%ction, red%ces t e cost o! t e ra@ material to t e extent to @ ic it is again saleable, !or t is cost al@ays incl%des t e normal @aste, namely t e D%antity ordinarily lost in processing0 5 e red%ction o! t e cost o! t is portion o! constant capital increases pro tanto t e rate o! pro!it, ass%ming t e magnit%de o! t e 8ariable capital and t e rate o! s%rpl%s-8al%e to be gi8en0 &! t e s%rpl%s-8al%e is gi8en, t e rate o! pro!it can be increased only by red%cing t e 8al%e o! t e constant capital reD%ired !or commodity-prod%ction0 $o !ar as constant capital enters into t e prod%ction o! commodities, it is not its exc ange-8al%e, b%t its %se-8al%e alone, @ ic matters0 5 e D%antity o! labo%r @ ic !lax can absorb in a spinnery does not depend on its 8al%e, b%t on its D%antity, ass%ming t e prod%cti8ity o! labo%r, i0e0, t e le8el o! tec nical de8elopment, to be gi8en0 &n like manner t e assistance rendered by a mac ine to, say, t ree labo%rers does not depend on its 8al%e, b%t on its %se-8al%e as a mac ine0 3n one le8el o! tec nical de8elopment a bad mac ine may be expensi8e and on anot er a good mac ine may be c eap0

+1

; apter 4

5 e increased pro!it recei8ed by a capitalist t ro%g t e c eapening o!, say, cotton and spinning mac inery, is t e res%lt o! ig er labo%r prod%cti8ity# not in t e spinnery, to be s%re, b%t in cotton c%lti8ation and constr%ction o! mac inery0 &t reD%ires smaller o%tlays o! t e conditions o! labo%r to incorporate a gi8en D%antity o! labo%r, and ence to extract a gi8en D%antity o! s%rpl%s-labo%r0 5 e costs reD%ired to appropriate a certain D%antity o! s%rpl%s-labo%r diminis 0 We a8e already mentioned sa8ings yielded in t e prod%ction process t ro%g co-operati8e %se o! means o! prod%ction by t e aggregate, or socially combined, labo%r0 3t er sa8ings o! constant capital arising !rom t e s ortening o! t e time o! circ%lation in @ ic t e de8elopment o! means o! comm%nication is a dominant material !actor @ill be disc%ssed later0 ?t t is point @e s all deal @it t e sa8ings yielded by contin%o%s impro8ements o! mac inery, namely 1C o! its material, e0g0, t e s%bstit%tion o! iron !or @ood# <C t e c eapening o! mac inery d%e to t e general impro8ement o! mac ine-b%ilding# so t at, alt o%g t e 8al%e o! t e !ixed portion o! constant capital increases contin%ally @it t e de8elopment o! labo%r on a large scale, it does not increase at t e same rate<# 3C special impro8ements enabling existing mac inery to @ork more c eaply and e!!ecti8ely# !or instance, impro8ements o! steam-boilers, etc0, @ ic @ill be disc%ssed later on in greater detail# 2C red%ction o! @aste t ro%g better mac inery0 W ate8er red%ces t e @ear o! mac inery, and o! !ixed capital in general, !or any gi8en period o! prod%ction, c eapens not only t e indi8id%al commodity, in 8ie@ o! t e !act t at in its price e8ery indi8id%al commodity reprod%ces its aliD%ot s are o! t is depreciation, b%t red%ces also t e aliD%ot portion o! t e in8ested capital !or t is period0 )epair @ork, etc0, to t e extent t at it becomes necessary, is added to t e original cost o! t e mac inery0 ? red%ction in repair costs, d%e to greater d%rability o! t e mac inery, lo@ers pro tanto t e price o! t is mac inery0 &t may again be said o! all t ese sa8ings t at t ey are largely possible only !or combined labo%r, and are o!ten not realised %ntil prod%ction is carried !or@ard on a still larger scale, so t at t ey reD%ire an e8en greater combination o! labo%r in t e immediate process o! prod%ction0 6o@e8er, on t e ot er and t e de8elopment o! t e prod%cti8e po@er o! labo%r in any one line o! prod%ction, e0g0, t e prod%ction o! iron, coal, mac inery, in arc itect%re, etc0, @ ic may again be partly connected @it progress in t e !ield o! intellect%al prod%ction, notably nat%ral science and its practical application, appears to be t e premise !or a red%ction o! t e 8al%e, and conseD%ently o! t e cost, o! means o! prod%ction in other lines o! ind%stry, e0g0, t e textile ind%stry, or agric%lt%re0 5 is is sel!-e8ident, since a commodity @ ic is t e prod%ct o! a certain branc o! ind%stry enters anot er as a means o! prod%ction0 &ts greater or lesser price depends on t e prod%cti8ity o! labo%r in t e line o! prod%ction !rom @ ic it iss%es as a prod%ct, and is at t e same time a !actor t at not only c eapens t e commodities into @ ose prod%ction it goes as a means o! prod%ction, b%t also red%ces t e 8al%e o! t e constant capital @ ose element it ere becomes, and t ereby one t at increases t e rate o! pro!it0 5 e c aracteristic !eat%re o! t is kind o! sa8ing o! constant capital arising !rom t e progressi8e de8elopment o! ind%stry is t at t e rise in t e rate o! pro!it in one line o! ind%stry depends on t e de8elopment o! t e prod%cti8e po@er o! labo%r in another0 W ate8er !alls to t e capitalist"s ad8antage in t is case is once more a gain prod%ced by social labo%r, i! not a prod%ct o! t e labo%rers e imsel! exploits0 $%c a de8elopment o! prod%cti8e po@er is again traceable in t e !inal analysis to t e social nat%re o! t e labo%r engaged in prod%ction# to t e di8ision o! labo%r in society# and to t e de8elopment o! intellect%al labo%r, especially in t e nat%ral sciences0 W at t e capitalist t %s %tilises are t e ad8antages o! t e entire system o! t e social di8ision o! labo%r0 &t is t e de8elopment o! t e prod%cti8e po@er o! labo%r in its exterior department, in t at department @ ic s%pplies it @it means o! prod%ction, @ ereby t e 8al%e o! t e constant capital employed by t e capitalist is relati8ely lo@ered and conseD%ently t e rate o! pro!it is raised0 ?not er rise in t e rate o! pro!it is prod%ced, not by sa8ings in t e labo%r creating t e constant capital, b%t by sa8ings in t e application o! t is capital itsel!0 3n t e one and, t e concentration

+<

; apter 4

o! labo%rers, and t eir large-scale co-operation, sa8es constant capital0 5 e same b%ildings, and eating and lig ting appliances, etc0, cost relati8ely less !or t e large-scale t an !or small-scale prod%ction0 5 e same is tr%e o! po@er and @orking mac inery0 ?lt o%g t eir absol%te 8al%e increases, it !alls in comparison to t e increasing extension o! prod%ction and t e magnit%de o! t e 8ariable capital, or t e D%antity o! labo%r-po@er set in motion0 5 e economy realised by a certain capital @it in its o@n line o! prod%ction is !irst and !oremost an economy in labo%r, i0 e0, a red%ction o! t e paid labo%r o! its o@n labo%rers0 5 e pre8io%sly mentioned economy, on t e ot er and, is disting%is ed !rom t is one by t e !act t at it accomplis es t e greatest possible appropriation o! ot er people"s %npaid labo%r in t e most economical @ay, i0 e0, @it as little expense as t e gi8en scale o! prod%ction @ill permit0 &nasm%c as t is economy does not rest @it t e pre8io%sly mentioned exploitation o! t e prod%cti8ity o! t e social labo%r employed in t e prod%ction o! constant capital, b%t @it t e economy in t e constant capital itsel!, it springs eit er directly !rom t e co-operation and social !orm o! labo%r @it in a certain branc o! prod%ction, or !rom t e prod%ction o! mac inery, etc0, on a scale in @ ic its 8al%e does not gro@ at t e same rate as its %se-8al%e0 5@o points m%st be borne in mind ere: &t t e 8al%e o! c R Eero, t en p" R s", and t e rate o! pro!it @o%ld be at its maxim%m0 $econd, o@e8er, t e most important t ing !or t e direct exploitation o! labo%r itsel! is not t e 8al%e o! t e employed means o! exploitation, be t ey !ixed capital, ra@ materials or a%xiliary s%bstances0 &n so !ar as t ey ser8e as means o! absorbing labo%r, as media in or by @ ic labo%r and, ence, s%rpl%s-labo%r are materialised, t e exc ange-8al%e o! mac inery, b%ildings, ra@ materials, etc0, is D%ite immaterial0 W at is %ltimately essential is, on t e one and, t e D%antity o! t em tec nically reD%ired !or combination @it a certain D%antity o! li8ing labo%r, and, on t e ot er, t eir s%itability, i0e0, not only good mac inery, b%t also good ra@ and a%xiliary materials0 5 e rate o! pro!it depends partly on t e good D%ality o! t e ra@ material0 :ood material prod%ces less @aste0 'ess ra@ materials are t en needed to absorb t e same D%antity o! labo%r0 F%rt ermore, t e resistance to be o8ercome by t e @orking mac ine is also less0 5 is partly a!!ects e8en t e s%rpl%s-8al%e and t e rate o! s%rpl%s-8al%e0 5 e labo%rer needs more time @ en %sing bad ra@ materials to process t e same D%antity0 ?ss%ming @ages remain t e same, t is ca%ses a red%ction in s%rpl%s-labo%r0 5 is also s%bstantially a!!ects t e reprod%ction and acc%m%lation o! capital, @ ic depend more on t e prod%cti8ity t an on t e amo%nt o! labo%r employed, as s o@n in Aook & B$0 6<>N61*!!0C /Englis edition: p0 6=30 I 0d010 5 e capitalist"s !anatical insistence on economy in means o! prod%ction is t ere!ore D%ite %nderstandable0 5 at not ing is lost or @asted and t e means o! prod%ction are cons%med only in t e manner reD%ired by prod%ction itsel!, depends partly on t e skill and intelligence o! t e labo%rers and partly on t e discipline en!orced by t e capitalist !or t e combined labo%r0 5 is discipline @ill become s%per!l%o%s %nder a social system in @ ic t e labo%rers @ork !or t eir o@n acco%nt, as it as already become practically s%per!l%o%s in piece-@ork0 5 is !anatical insistence comes to t e s%r!ace also con8ersely in t e ad%lteration o! t e elements o! prod%ction, @ ic is one o! t e principal means o! lo@ering t e relation o! t e 8al%e o! t e constant capital to t e 8ariable capital, and t %s o! raising t e rate o! pro!it0 W ereby t e sale o! t ese elements o! prod%ction abo8e t eir 8al%e, so !ar as t is reappears in t e prod%ct, acD%ires a marked element o! c eating0 5 is practice plays an essential part partic%larly in :erman ind%stry, @ ose maxim is: ,eople @ill s%rely appreciate i! @e send t em good samples at !irst, and t en in!erior goods a!ter@ard0 6o@e8er, as t ese matters belong to t e sp ere o! competition t ey do not concern %s ere0 &t s o%ld be noted t at t is raising o! t e rate o! pro!it by means o! lo@ering t e 8al%e o! t e constant capital, i0 e0, by red%cing its expensi8eness, does not in any @ay depend on @ et er t e branc o! ind%stry in @ ic it takes place prod%ces l%x%ries, or necessities !or t e cons%mption o! labo%rers, or means o! prod%ction generally0 5 is last circ%mstance @o%ld only be o! material importance i! it @ere a D%estion o! t e rate o! s%rpl%s-8al%e, @ ic depends essentially on t e

+3

; apter 4

8al%e o! labo%r-po@er, i0 e0, on t e 8al%e o! t e c%stomary necessities o! t e labo%rer0 A%t in t e present case t e s%rpl%s-8al%e and t e rate o! s%rpl%s-8al%e a8e been ass%med as gi8en0 5 e relation o! s%rpl%s-8al%e to total capital I and t is determines t e rate o! pro!it I depends %nder t ese circ%mstances excl%si8ely on t e 8al%e o! t e constant capital, and in no @ay on t e %se8al%e o! t e elements o! @ ic it is composed0 ? relati8e c eapening o! t e means o! prod%ction does not, o! co%rse, excl%de t e possible increase o! t eir absol%te aggregate 8al%e, !or t e absol%te 8ol%me in @ ic t ey are employed gro@s tremendo%sly @it t e de8elopment o! t e prod%cti8e po@er o! labo%r and t e attendant gro@t o! t e le8el o! prod%ction0 Economy in t e %se o! constant capital, !rom @ ate8er angle it may be 8ie@ed, is, in part, t e excl%si8e res%lt o! t e !act t at t e means o! prod%ction !%nction and are cons%med as Hoint means o! prod%ction o! t e combined labo%rer, so t at t e res%lting sa8ing appears as a prod%ct o! t e social nat%re o! directly prod%cti8e labo%r# in part, o@e8er, it is t e res%lt o! de8eloping prod%cti8ity o! labo%r in sp eres @ ic s%pply capital @it its means o! prod%ction, so t at i! @e 8ie@ t e total labo%r in relation to total capital, and not simply t e labo%rers employed by capitalist J in relation to capitalist ., t is economy presents itsel! once more as a prod%ct o! t e de8elopment o! t e prod%cti8e !orces o! social labo%r, @it t e only di!!erence t at capitalist J enHoys t e ad8antage not only o! t e prod%cti8ity o! labo%r in is o@n establis ment, b%t also o! t at in ot er establis ments0 .et t e capitalist 8ie@s economy o! is constant capital as a condition @ olly independent o!, and entirely alien to, is labo%rers0 6e is al@ays @ell a@are, o@e8er, t at t e labo%rer as somet ing to do @it t e employer b%ying m%c or little labo%r @it t e same amo%nt o! money B!or t is is o@ t e transaction bet@een t e capitalist and labo%rer appears in is mindC0 5 is economy in t e application o! t e means o! prod%ction, t is met od o! obtaining a certain res%lt @it a minim%m o%tlay appears more t an any ot er inner po@er o! labo%r as an in erent po@er o! capital and a met od pec%liar and c aracteristic o! t e capitalist mode o! prod%ction0 5 is conception is so m%c t e less s%rprising since it appears to accord @it !act, and since t e relations ip o! capital act%ally conceals t e inner connection be ind t e %tter indi!!erence, isolation, and alienation in @ ic t ey place t e labo%rer 8is-O-8is t e means incorporating is labo%r0 'irst, t e means o! prod%ction t at make %p t e constant capital represent only t e money belonging to t e capitalist BH%st as t e body o! t e )oman debtor represented t e money o! is creditor, according to 'ing%et / 4h7orie des loi civiles, ou principes fondamentau de la soci7t7 , tome &&, 'ondres, 1>6>, li8re 4, c apitre JJ0 I 0d01C and are related to im alone, @ ile t e labo%rer, @ o comes in contact @it t em only in t e direct process o! prod%ction, deals @it t em as %se-8al%es o! prod%ction only as means o! labo%r and materials o! prod%ction0 &ncrease or decrease o! t eir 8al%e, t ere!ore, as as little bearing on is relations to t e capitalist as t e circ%mstance @ et er e may be @orking @it copper or iron0 For t at matter, t e capitalist likes to 8ie@ t is point di!!erently, as @e s all later indicate, @ ene8er t e means o! prod%ction gain in 8al%e and t ereby red%ce is rate o! pro!it0 Second, in so !ar as t ese means o! prod%ction in t e capitalist prod%ction process are at t e same time means o! exploiting labo%r, t e labo%rer is no more concerned @it t eir relati8e dearness or c eapness t an a orse is concerned @it t e dearness or c eapness o! its bit and bridle0 'inally, @e a8e earlier /Englis edition: 4ol0 1, p0 3<+0 I 0d01 seen t at, in !act, t e labo%rer looks at t e social nat%re o! is labo%r, at its combination @it t e labo%r o! ot ers !or a common p%rpose, as e @o%ld at an alien po@er# t e condition o! realising t is combination is alien property, @ ose dissipation @o%ld be totally indi!!erent to im i! e @ere not compelled to economise @it it0 5 e sit%ation is D%ite di!!erent in !actories o@ned by t e labo%rers t emsel8es, as in )oc dale, !or instance0

+2

; apter 4

&t scarcely needs to be mentioned, t en, t at as !ar as concerns t e prod%cti8ity o! labo%r in one branc o! ind%stry as a le8er !or c eapening and impro8ing t e means o! prod%ction in anot er, and t ereby raising t e rate o! pro!it, t e general interconnection o! social labo%r a!!ects t e labo%rers as a matter alien to t em, a matter t at act%ally concerns t e capitalist alone, since it is e @ o b%ys and appropriates t ese means o! prod%ction0 5 e !act t at e b%ys t e prod%ct o! labo%rers in anot er branc o! ind%stry @it t e prod%ct o! labo%rers in is o@n, and t at e t ere!ore disposes o! t e prod%ct o! t e labo%rers o! anot er capitalist only by grat%ito%sly appropriating t at o! is o@n, is a de8elopment t at is !ort%nately concealed by t e process o! circ%lation, etc0 Moreo8er, since prod%ction on a large scale de8elops !or t e !irst time in its capitalist !orm, t e t irst !or pro!its on t e one and, and competition on t e ot er, @ ic compels t e c eapest possible prod%ction o! commodities, make t is economy in t e employment o! constant capital appear as somet ing pec%liar to t e capitalist mode o! prod%ction and t ere!ore as a !%nction o! t e capitalist0 P%st as t e capitalist mode o! prod%ction promotes t e de8elopment o! t e prod%cti8e po@ers o! social labo%r, on t e one and, so does it @ ip on to economy in t e employment o! constant capital on t e ot er0 6o@e8er, it is not only t e alienation and indi!!erence t at arise bet@een t e labo%rer, t e bearer o! li8ing labo%r, and t e economical, i0e0, rational and t ri!ty, %se o! t e material conditions o! is labo%r0 &n line @it its contradictory and antagonistic nat%re, t e capitalist mode o! prod%ction proceeds to co%nt t e prodigio%s dissipation o! t e labo%rer"s li!e and ealt , and t e lo@ering o! is li8ing conditions, as an economy in t e %se o! constant capital and t ereby as a means o! raising t e rate o! pro!it0 $ince t e labo%rer passes t e greater portion o! is li!e in t e process o! prod%ction, t e conditions o! t e prod%ction process are largely t e conditions o! is acti8e li8ing process, or is li8ing conditions, and economy in t ese li8ing conditions is a met od o! raising t e rate o! pro!it# H%st as @e sa@ earlier /Englis edition: 4ol0 &, pp0 <31-3=<0 I 0d01 t at o8er@ork, t e trans!ormation o! t e labo%rer into a @ork orse, is a means o! increasing capital, or speeding %p t e prod%ction o! s%rpl%s-8al%e0 $%c economy extends to o8ercro@ding close and %nsanitary premises @it labo%rers, or, as capitalists p%t it, to space sa8ing# to cro@ding dangero%s mac inery into close D%arters @it o%t %sing sa!ety de8ices# to neglecting sa!ety r%les in prod%ction processes pernicio%s to ealt , or, as in mining, bo%nd %p @it danger, etc0 -ot to mention t e absence o! all pro8isions to render t e prod%ction process %man, agreeable, or at least bearable0 From t e capitalist point o! 8ie@ t is @o%ld be D%ite a %seless and senseless @aste0 5 e capitalist mode o! prod%ction is generally, despite all its niggardliness, altoget er too prodigal @it its %man material, H%st as, con8ersely, t anks to its met od o! distrib%tion o! prod%cts t ro%g commerce and manner o! competition, it is 8ery prodigal @it its material means, and loses !or society @ at it gains !or t e indi8id%al capitalist0 P%st as capital as t e tendency to red%ce t e direct employment o! li8ing labo%r to no more t an t e necessary labo%r, and al@ays to c%t do@n t e labo%r reD%ired to prod%ce a commodity by exploiting t e social prod%cti8eness o! labo%r and t %s to sa8e a maxim%m o! directly applied li8ing labo%r, so it as also t e tendency to employ t is labo%r, red%ced to a minim%m, %nder t e most economical conditions, i0e0, to red%ce to its minim%m t e 8al%e o! t e employed constant capital0 &! it is t e necessary labo%r-time @ ic determines t e 8al%e o! commodities, instead o! all t e labo%r-time contained in t em, so it is t e capital @ ic realises t is determination and, at t e same time, contin%ally red%ces t e labo%r-time socially necessary to prod%ce a gi8en commodity0 5 e price o! t e commodity is t ereby lo@ered to its minim%m since e8ery portion o! t e labo%r reD%ired !or its prod%ction is red%ced to its minim%m0

++

; apter 4

We m%st make a distinction in economy as regards %se o! constant capital0 &! t e D%antity, and conseD%ently t e s%m o! t e 8al%e o! employed capital, increases, t is is primarily only a concentration o! more capital in a single and0 .et it is precisely t is greater D%antity applied by a single so%rce I attended, as a r%le, by an absol%tely greater b%t relati8ely smaller amo%nt o! employed labo%r I @ ic permits economy o! constant capital0 5o take an indi8id%al capitalist, t e 8ol%me o! t e necessary in8estment o! capital, especially o! its !ixed portion, increases0 A%t its 8al%e decreases relati8e to t e mass o! @orked-%p materials and exploited labo%r0 5 is is no@ to be brie!ly ill%strated by a !e@ examples0 We s all begin at t e end I t e economy in t e conditions o! prod%ction, in so !ar as t ese also constit%te t e li8ing conditions o! t e labo%rer0

II. Savings In Labour Conditions At The !pense "f The Labourers.


Coal mines. $eglect of indisputable outlays.
K(nder t e competition @ ic exists among t e coalo@ners and coal-proprietors 000 no more o%tlay is inc%rred t an is s%!!icient to o8ercome t e most ob8io%s p ysical di!!ic%lties# and %nder t at @ ic pre8ails among t e labo%ring colliers, @ o are ordinarily more n%mero%s t an t e @ork to be done reD%ires, a large amo%nt o! danger and expos%re to t e most noxio%s in!l%ences @ill gladly be enco%ntered !or @ages a little in ad8ance o! t e agric%lt%ral pop%lation ro%nd t em, in an occ%pation, in @ ic t ey can moreo8er make a pro!itable %se o! t eir c ildren0 5 is do%ble competition is D%ite s%!!icient 000 to ca%se a large proportion o! t e pits to be @orked @it t e most imper!ect drainage and 8entilation# ill-constr%cted s a!ts, bad gearing, o!ten @it

incompetent engineers, and ill-constr%cted and illprepared bays and road@ays# ca%sing a destr%ction o! li!e, and limb, and ealt , t e statistics o! @ ic @o%ld present an appalling pict%re0L BFirst )eport on ; ildren"s Employment in Mines and ;ollieries, etc0, ?pril <1, 18<*, p0 1=<0C ?bo%t 186=, a @eekly a8erage o! 1+ men lost t eir li8es in t e Englis collieries0 ?ccording to t e report on ;oal Mines ?ccidents BFebr%ary 6, 186<C, a total o! 8,266 @ere killed in t e ten years 18+<-610 A%t t e report admits t at t is n%mber is !ar too lo@, beca%se in t e !irst !e@

+6

; apter 4

years, @ en t e inspectors ad H%st been installed and t eir districts @ere !ar too large, a great many accidents and deat s @ere not reported0 5 e 8ery !act t at t e n%mber o! accidents, t o%g still 8ery ig , as decreased markedly since t e inspection system @as establis ed, and t is in spite o! t e limited po@ers and ins%!!icient n%mbers o! t e inspectors, demonstrates t e nat%ral tendency o! capitalist exploitation0I 5 ese %man sacri!ices are mostly d%e to t e inordinate a8arice o! t e mine o@ners0 4ery o!ten t ey ad only one s a!t s%nk, so t at apart !rom t e lack o! e!!ecti8e 8entilation t ere @as no escape @ere t is s a!t to become obstr%cted0 ;apitalist prod%ction, @ en considered in isolation !rom t e process o! circ%lation and t e excesses o! competition, is 8ery economical @it t e materialised labo%r incorporated in commodities0 .et, more t an any ot er mode o! prod%ction, it sD%anders %man li8es, or li8inglabo%r, and not only blood and !les , b%t also ner8e and brain0 &ndeed, it is only by dint o! t e most extra8agant @aste o! indi8id%al de8elopment t at t e de8elopment o! t e %man race is at all sa!eg%arded and maintained in t e epoc o! istory immediately preceding t e conscio%s reorganisation o! society0 $ince all o! t e economising ere disc%ssed arises !rom t e social nat%re o! labo%r, it is indeed H%st t is directly social nat%re o! labo%r @ ic ca%ses t e @aste o! li!e and ealt 0 5 e !ollo@ing D%estion s%ggested by !actory inspector )0 Aaker is c aracteristic in t is respect: K5 e @ ole D%estion is one !or serio%s consideration, and in @ at @ay this sacrifice of infant life occasioned by congregational labour can be best a8ertedQL B)eports o! &nsp0 o! Fact0, 3ctober 1863, p0 1+>0C 'actories0 (nder t is eading t ere is co8ered t e disregard !or sa!ety meas%res to ens%re t e sec%rity, com!ort, and ealt o! labo%rers also in t e act%al !actories0 &t is to blame !or a large portion o! t e cas%alty lists containing t e @o%nded and killed ind%strial @orkers Bc!0 t e ann%al !actory reportsC0 $imilarly, lack o! space, 8entilation, etc0 ?s !ar back as 3ctober 18++, 'eonard 6orner complained abo%t t e resistance o! 8ery many man%!act%rers to t e legal reD%irements concerning sa!ety de8ices on oriEontal s a!ts, alt o%g t e danger @as contin%ally emp asised by accidents, many o! t em !atal, and alt o%g t ese sa!ety de8ices did not cost m%c and did not inter!ere @it prod%ction0 B)eports o! &nsp0 o! Fact0, 3ctober 18++, p0 60C &n t eir resistance against t ese and ot er legal reD%irements t e man%!act%rers @ere openly seconded by t e %npaid H%stices o! t e peace, @ o @ere t emsel8es mostly man%!act%rers or !riends o! man%!act%rers, and anded do@n t eir decisions accordingly0 W at sort o! 8erdicts t ese gentlemen anded do@n @as re8ealed by $%perior P%dge ;ampbell, @ o said @it re!erence to one o! t em, against @ ic an appeal ad been made to im: K&t is not an interpretation o! t e ?ct o! ,arliament, it is a repeal o! t e ?ct o! ,arliamentL Bloc. cit0, p0 11C0 6orner states in t e same report t at in many !actories labo%rers are not @arned @ en mac inery is abo%t to be started %p0 $ince t ere is al@ays somet ing to be done abo%t mac inery e8en @ en it is not operating, !ingers and ands are al@ays occ%pied @it it, and accidents appen contin%ally d%e to t e mere omission o! a @arning signal B loc. cit0, p0 22C0 5 e man%!act%rers ad a trades-%nion at t e time to oppose !actory legislation, t e so-called -ational ?ssociation !or t e ?mendment o! t e Factory 'a@s in Manc ester, @ ic in Marc 18++ collected more t an V+=,=== by assessing < s illings per orse-po@er, to pay !or t e co%rt proceedings against its members started by !actory inspectors, and to cond%ct t e cases in t e name o! t e %nion0 &t @as a matter o! pro8ing t at killing @as no m%rder /?ll%sion to t e pamp let "Killing no M%rder" @ ic

+>

; apter 4

appeared in England in 16+>0 &ts a%t or @as t e le8eller Ed@ard $exby0 I 0d01 @ en it occ%rred !or t e sake o! pro!it0 ? !actory inspector !or $cotland, $ir Po n Kincaid, tells abo%t a certain !irm in :lasgo@ @ ic %sed t e iron scrap at its !actory to make protecti8e s ields !or all its mac inery, t e cost amo%nting to V* 1s0 Poining t e man%!act%rers" %nion @o%ld a8e cost it an assessment o! V11 !or its 11= orse-po@er, @ ic @as more t an t e cost o! all its protecti8e appliances0 A%t t e -ational ?ssociation ad been organised in 18+2 !or t e express p%rpose o! opposing t e la@ @ ic prescribed s%c protection0 5 e man%!act%rers ad not paid t e least eed to it d%ring t e @ ole period !rom 1822 to 18+20 W en t e !actory inspectors, at instr%ctions !rom ,almerston, t en in!ormed t e man%!act%rers t at t e la@ @o%ld be en!orced in earnest, t e man%!act%rers instantly !o%nded t eir association, many o! @ ose most prominent members @ere t emsel8es H%stices o! t e peace and in t is capacity @ere s%pposed to en!orce t e la@0 W en in ?pril 18++ t e ne@ Minister o! t e &nterior, $ir :eorge :rey, o!!ered a compromise %nder @ ic t e go8ernment @o%ld be content @it practically nominal sa!ety appliances t e ?ssociation indignantly reHected e8en t is0 &n 8ario%s la@s%its t e !amo%s engineer William Fairbairn t re@ t e @eig t o! is rep%tation be ind t e principle o! economy and in de!ence o! t e !reedom o! capital @ ic ad been 8iolated0 5 e ead o! !actory inspection, 'eonard 6orner, @as persec%ted and maligned by t e man%!act%rers in e8ery concei8able manner0 A%t t e man%!act%rers did not rest %ntil t ey obtained a @rit o! t e ;o%rt o! M%een"s Aenc , according to @ ic t e 'a@ o! 1822 did not prescribe protecti8e de8ices !or oriEontal s a!ts installed more t an se8en !eet abo8e t e gro%nd and, !inally, in 18+6 t ey s%cceeded in sec%ring an ?ct o! ,arliament entirely satis!actory to t em in t e circ%mstances, t ro%g t e ser8ices o! t e bigot Wilson ,atten, one o! t ose pio%s so%ls @ ose display o! religion is al@ays ready to do t e dirty @ork !or t e knig ts o! t e money-bag0 5 is ?ct practically depri8ed t e labo%rers o! all special protection and re!erred t em to t e common co%rts !or compensation in t e e8ent o! ind%strial accidents Bs eer mockery in 8ie@ o! t e excessi8e cost o! Englis la@s%itsC, @ ile it made it almost impossible !or t e man%!act%rer to lose t e la@s%it by pro8iding in a !inely@orded cla%se !or expert testimony0 5 e res%lt @as a rapid increase o! accidents0 &n t e six mont s !rom May to 3ctober 18+8, &nspector Aaker reported t at accidents increased by <1T compared @it t e preceding al!-year0 &n is opinion 360>T o! t ese accidents mig t a8e been a8oided0 &t is tr%e t at t e n%mber o! accidents in 18+8 and 18+* @as considerably belo@ t at o! 182+ and 18260 &t @as act%ally <*T less alt o%g t e n%mber o! labo%rers in t e ind%stries s%bHect to inspection ad increased <=T0 A%t @ at @as t e reason !or t isQ &n so !ar as t is iss%e as been settled no@ B186+C, it @as mainly accomplis ed t ro%g t e introd%ction o! ne@ mac inery already pro8ided @it sa!ety de8ices to @ ic t e man%!act%rer did not obHect beca%se t ey cost im no extra expense0 F%rt ermore, a !e@ labo%rers s%cceeded in sec%ring ea8y damages !or t eir lost arms, and ad t is H%dgement %p eld e8en by t e ig est co%rts0 B)eports o! &nsp0 o! Fact0, ?pril 3=, 1861, p0 31, ditto ?pril 186<, p0 1>0C $o m%c !or economy in de8ices protecting t e li!e and limbs o! labo%rers Bamong @ om many c ildrenC against t e dangers o! andling and operating mac inery0 "or- in enclosed places generally 0 &t is @ell kno@n to @ at extent economy o! space, and t %s o! b%ildings, cro@ds labo%rers into close D%arters0 &n addition, t ere is also economy in means o! 8entilation0 ;o%pled @it t e long @orking- o%rs, t e t@o ca%se a large increase in diseases o! t e respiratory organs, and an attendant increase in t e deat -rate0 5 e !ollo@ing ill%strations a8e been taken !rom )eports on ,%blic 6ealt , 6t report, 18630 5 is report @as compiled by 7r0 Po n $imon, @ell kno@n !rom o%r Aook &0 P%st as combination and co-operation o! labo%r permits large-scale employment o! mac inery, concentration o! means o! prod%ction, and economy in t eir %se, it is t is 8ery @orking toget er en masse in enclosed places and %nder conditions rat er determined by ease o! man%!act%re t an by ealt reD%irements I it is t is mass concentration in one and t e same @orks op t at acts, on t e one and, as a so%rce o! greater pro!its !or t e capitalist and, on t e ot er, %nless co%nteracted

+8

; apter 4

by a red%ced n%mber o! o%rs and special preca%tions, as t e ca%se o! t e sD%andering o! t e li8es and ealt o! t e labo%rers0 7r0 $imon !orm%lates t e !ollo@ing r%le and backs it %p @it ab%ndant statistics: K&n proportion as t e people o! a district are attracted to any collecti8e indoor occ%pation, in s%c proportion, ot er t ings being eD%al, t e district deat -rate by l%ng diseases @ill be increasedL Bp0 <3C0 5 e ca%se is bad 8entilation0 K?nd probably in all England t ere is no exception to t e r%le, t at, in e8ery district @ ic as a large indoor ind%stry, t e increased mortality o! t e @orkpeople is s%c as to colo%r t e deat -ret%rn o! t e @ ole district @it a marked excess o! l%ng diseaseL Bp0 <3C0 Mortality !ig%res !or ind%stries carried on in enclosed places, collected by t e Aoard o! 6ealt in 186= and 1861, indicate t at !or t e same n%mber o! men bet@een t e ages o! 1+ and ++, !or @ ic t e deat -rate !rom cons%mption and ot er p%lmonary diseases in Englis agric%lt%ral districts is 1==, t e deat -rate in ;o8entry is 163, in Alackb%rn and $kipton 16>, ;ongleton and Arad!ord 168, 'eicester 1>1, 'eek 18<, Maccles!ield 182, Aolton 1*=, -otting am 1*<, )oc dale 1*3, 7erby 1*8, $al!ord and ?s ton-%nder-'yne <=3, 'eeds <18, ,reston <<=, and Manc ester <63 Bp0 <2C0 5 e !ollo@ing table presents a still more striking ill%stration0 7istrict ; ie! ind%stry 7eat s !rom p%lmonary diseases bet@een t e ages o! 1+ and <+, per 1==,=== pop%lation Men Aerk ampstead $tra@ plaiting B@omenC <1* Women +>8 ++2 61> +>> 2=* 8+6 >*= 8*=

'eig ton A%EEard $tra@ plaiting B@omenC 3=* -e@port ,agnell 5o@cester .eo8il 'eek ;ongleton Maccles!ield 'ace B@omenC 'ace B@omenC man%!act%re 3=1 man%!act%re <3*

Man%!act%re o! glo8es <8= Bmainly @omenC $ilk ind%stry 23> Bpredominantly @omenC $ilk ind%stry +66 Bpredominantly @omenC $ilk ind%stry +*3

+*

; apter 4

Bpredominantly @omenC 6ealt y district co%ntry ?gric%lt%re 331 333

&t s o@s t e deat -rate !or p%lmonary diseases separately !or bot sexes bet@een t e ages o! 1+ and <+ comp%ted !or e8ery 1==,=== pop%lation0 &n t e districts selected only @omen are employed in ind%stries carried on in enclosed places, @ ile men @ork in all ot er possible lines0 &n t e silk districts, @ ere more men are employed in t e !actory, t eir mortality is also ig er0 5 e deat -rate !rom cons%mption, etc0, !or bot sexes, re8eals, as t e report says, Kt e atrocio%s sanitary circ%mstances %nder @ ic m%c o! o%r silk ind%stry is cond%ctedL0 ?nd it is in t is same silk ind%stry t at t e man%!act%rers, pleading exceptionally !a8o%rable and sanitary conditions in t eir establis ments, demanded by @ay o! an exception, and partially obtained, long @orking- o%rs !or c ildren %nder 13 years o! age BA%c &, Kap0 4&&&, 6, $0 <*6N<86C /Englis edition: ; 0 J, 6, p0 <*30 I 0d01 K,robably no ind%stry @ ic as yet been in8estigated 7r0 as a!!orded a @orse pict%re t an t at @ ic

$mit gi8es o! tailoring: I "$ ops 8ary m%c in t eir sanitary conditions, b%t almost %ni8ersally are o8ercro@ded and ill-8entilated, and in a ig degree %n!a8o%rable to ealt 0000 $%c rooms are necessarily @arm# b%t @ en t e gas is lit, as d%ring t e day-time on !oggy days, and at nig t d%ring t e @inter, t e eat increases to 8=_ and e8en to %p@ards o! *=_, ca%sing pro!%se perspiration, and condensation o! 8apo%r %pon t e panes o! glass, so t at it r%ns do@n in streams or drops !rom t e roo!, and t e operati8es are compelled to keep some @indo@s open, at @ ate8er risk to t emsel8es o! taking cold0" ?nd e gi8es t e !ollo@ing acco%nt o! @ at e !o%nd in 16 o! t e most important West End s ops0I "5 e largest c%bic space in t ese ill-8entilated rooms allo@ed to eac operati8e is <>= !eet, and t e least 1=+ !eet, and in t e @ ole a8erages only 1+6 !eet per man0 &n one room, @it a gallery r%nning ro%nd it, and lig ted only !rom t e roo!, !rom *< to %p@ards o! 1== men are employed, @ ere a large n%mber o! gaslig ts b%rn, and @ ere t e %rinals are in t e closest proximity, t e c%bic space

6=

; apter 4

does not exceed 1+= !eet per man0 &n anot er room, @ ic can only be called a kennel in a yard, lig ted !rom t e roo!, and 8entilated by a small skylig t opening, !i8e to six men @ork in a space o! 11< c%bic !eet per man0" 000 5ailors, in t ose atrocio%s @orks ops @ ic 7r0 $mit describes, @ork generally !or abo%t 1< or 13 o%rs a day, and at some times t e @ork @ill be contin%ed !or 1+ or 16 o%rsL Bpp0 <+, <6, <8C -%mbers o! persons Aranc es o! ind%stry and 7eat -rate per 1==,=== bet@een employed locality t e ages o! <+-3+ *+8,<6+ <<,3=1 men and 1<,3>> @omen 13,8=3 5ype-setters printers, 'ondon and 8*2 1,>2> <,36> ?gric%lt%re, England and >23 Wales 5ailoring, 'ondon *+8 3+-2+ 8=+ 1,<6< 2+-++ 1,12+ <,=*3

Bp0 3=C0 &t m%st be noted, and as in !act been remarked by Po n $imon, c ie! o! t e Medical 7epartment and a%t or o! t e report, t at t e mortality-rate !or tailors, type-setters, and printers o! 'ondon bet@een t e ages o! <+ and 3+ @as cited lo@er t an t e real !ig%re, beca%se 'ondon employers in bot lines o! b%siness a8e a large n%mber o! yo%ng people Bprobably %p to 3= years o! ageC !rom t e co%ntry engaged as apprentices and Kimpro8ersL, i0e0, men getting additional training0 5 ese s@ell t e n%mber o! ands !or @ ic t e 'ondon ind%strial deat -rates are comp%ted0 A%t t ey do not proportionally contrib%te to t e n%mber o! deat s in 'ondon beca%se t eir stay t ere is only temporary0 &! t ey !all ill d%ring t is period, t ey ret%rn to t eir omes in t e co%ntry, @ ere t eir deat is registered i! t ey die0 5 is circ%mstance a!!ects t e earlier ages still more and renders t e 'ondon deat -rates !or t ese age gro%ps completely 8al%eless as indexes o! t e ill-e!!ects o! ind%stry on ealt Bp0 3=C0 5 e case o! t e type-setters is similar to t at o! t e tailors0 &n addition to lack o! 8entilation, to poisoned air, etc0, t ere is still nig t-@ork to be mentioned0 5 eir reg%lar @orking-time is 1< to 13 o%rs, sometimes 1+ to 160 K:reat eat and !o%lness @ ic begin @ en t e gasHets are lit0 000 &t not in!reD%ently appens t at !%mes !rom a !o%ndry, or !o%l odo%rs !rom mac inery or sinks, rise !rom t e lo@er room, and aggra8ate t e e8ils o! t e %pper one0 5 e eated air o! t e lo@er rooms al@ays tends to eat t e %pper by @arming t e

61

; apter 4

!loor, and @ en t e rooms are lo@, and t e cons%mption o! gas great, t is is a serio%s e8il, and one only s%rpassed in t e case @ ere t e steamboilers are placed in t e lo@er room, and s%pply %n@is ed-!or eat to t e @ ole o%se0000 ?s a general expression, it may be stated t at %ni8ersally t e 8entilation is de!ecti8e, and D%ite ins%!!icient to remo8e t e eat and t e prod%cts o! t e comb%stion o! gas in t e e8ening and d%ring t e nig t, and t at in many o!!ices, and partic%larly in t ose made !rom d@elling- o%ses, t e condition is most deplorable0 000 ?nd in some o!!ices Bespecially t ose o! @eekly ne@spapersC t ere @ill be @ork I @ork too, in @ ic boys bet@een 1< and 16 years o! age take eD%al part o! or almost %ninterr%pted periods o! t@o days and a nig t at a time# I @ ile, in ot er printing-o!!ices @ ic lay t emsel8es o%t !or t e doing o! "%rgent" b%siness, $%nday gi8es no relaxation to t e @orkman, and is @orking-days become se8en instead o! six in e8ery @eekL Bpp0 <6, <8C0 5 e milliners and dress-makers a8e already attracted o%r attention in Aook & BKap0 4&&&, 3, $0 <2*N<21C /Englis edition: ; 0 J, 3, pp0 <+2-++0 I 0d01 in respect to o8er@ork0 5 eir @orks ops are described in o%r report by 7r0 3rd0 E8en i! better d%ring t e day, t ey become o8er eated, !o%l, and %n ealt y d%ring t e o%rs in @ ic gas is b%rned0 7r0 3rd !o%nd in 32 s ops o! t e better sort t at t e a8erage n%mber o! c%bic !eet per @orker @as as !ollo@s: K000 &n !o%r cases more t an +==, in !o%r ot er cases !rom 2== to +==, 000 in se8en ot ers !rom <== to <+=, in !o%r ot ers !rom 1+= to <==, and in nine ot ers only !rom 1== to 1+=0 5 e largest o! t ese allo@ances @o%ld b%t be scanty !or contin%o%s @ork, %nless t e space @ere t oro%g ly @ell 8entilated# and, except @it extraordinary 8entilation, its atmosp ere co%ld not be tolerably @ olesome d%ring gas-lig t0L ?nd ere is 7r0 3rd"s remark abo%t one o! t e minor @orks ops @ ic acco%nt o! a middleman: e 8isited, operated !or t e

K3ne room area in c%bical !eet, 1,<8=# persons present, 12# area to eac , in c%bical !eet, *10+0 5 e

6<

; apter 4

@omen ere @ere @eary-looking and sD%alid# t eir earnings @ere stated to be >s0 to 1+s0 a @eek, and t eir tea0 000 6o%rs 8 a0 m0 to 8 p0 m0 5 e small room into @ ic t ese 12 persons @ere cro@ded @as ill8entilated0 5 ere @ere t@o mo8able @indo@s and a !ire-place, b%t t e latter @as blocked %p and t ere @as no special 8entilation o! any kindL Bp0 <>C0 5 e same report states @it re!erence to t e o8er@ork o! milliners and dress-makers: K000 5 e o8er@ork o! t e yo%ng @omen in !as ionable dress-making establis ments does not, !or more t an abo%t !o%r mont s o! t e year, pre8ail in t at monstro%s degree @ ic as on many occasions excited momentary p%blic s%rprise and indignation# b%t !or t e indoor ands d%ring t ese mont s it @ill, as a r%le, be o! !%ll 12 o%rs a day, and @ill, @ en t ere is press%re, be, !or days toget er, o! 1> or e8en 18 o%rs0 ?t ot er times o! t e year t e @ork o! t e indoor ands ranges probably !rom 1= to 12 o%rs# and %ni!ormly t e o%rs !or o%tdoor ands are 1< or 130 For mantle-makers, collar-makers, s irt-makers, and 8ario%s ot er classes o! needle@orkers Bincl%ding persons @ o @ork at t e se@ing-mac ineC t e o%rs spent in t e common @orkroom are !e@er I generally not more t an 1= to 1< o%rs# b%t, says 7r0 3rd, t e reg%lar o%rs o! @ork are s%bHect to considerable extension in certain o%ses at certain times, by t e practice o! @orking extra o%rs !or extra pay, and in ot er o%ses by t e practice o! taking @ork a@ay !rom o%ses o! b%siness, to be done a!ter o%rs at ome, bot practices being, it may be added, o!ten comp%lsoryL Bp0 <8C0 Po n $imon remarks in a !ootnote to t is page: KMr0 )adcli!!e, 000 t e 6onorary $ecretary o! t e Epidemiological $ociety, 000 appening to a8e %n%s%al opport%nities !or D%estioning t e yo%ng

63

; apter 4

@omen employed in !irst-class o%ses o! b%siness 000 as !o%nd t at in only one o%t o! t@enty girls examined @ o called t emsel8es "D%ite @ell" co%ld t e state o! ealt be prono%nced good# t e rest ex ibiting in 8ario%s degrees e8idences o! depressed p ysical po@er, ner8o%s ex a%stion, and n%mero%s !%nctional disorders t ere%pon dependent0 6e attrib%tes t ese conditions in t e !irst place to t e lengt o! t e o%rs o! @ork I t e minim%m o! @ ic e estimates at 1< o%rs a day o%t o! t e season# and secondarily to 000 cro@ding and bad 8entilation o! @orkrooms, gas8apo%rs, ins%!!iciency or bad D%ality o! !ood, and inattention to domestic com!ort0L 5 e concl%sion arri8ed at by t e c ie! o! t e Englis Aoard o! 6ealt is t at Kit is practically impossible !or @orkpeople to insist %pon t at @ ic in t eory is t eir !irst sanitary rig t I t e rig t t at @ ate8er @ork t eir employer assembles t em to do, s all, so !ar as depends %pon im, be, at is cost, di8ested o! all needlessly %n@ olesome circ%mstances# 000 @ ile @orkpeople are practically %nable to exact t at sanitary H%stice !or t emsel8es, t ey also Bnot@it standing t e pres%med intentions o! t e la@C cannot expect any e!!ect%al assistance !rom t e appointed administrators o! t e -%isances )emo8al ?ctsL Bp0 <*C0I K7o%btless t ere may be some small tec nical di!!ic%lty in de!ining t e exact line at @ ic employers s all become s%bHect to reg%lation0 A%t 000 in principle, t e sanitary claim is %ni8ersal0 ?nd in t e interest o! myriads o! labo%ring men and @omen, @ ose li8es are no@ needlessly a!!licted and s ortened by t e in!inite p ysical s%!!ering @ ic t eir mere employment engenders, & @o%ld 8ent%re to express my ope, t at %ni8ersally t e sanitary circ%mstances o! labo%r may, at least so !ar, be bro%g t @it in appropriate pro8isions o! la@,

62

; apter 4

t at t e e!!ecti8e 8entilation o! all indoor @orkplaces may be ens%red, and t at in e8ery nat%rally insal%brio%s occ%pation t e speci!ic ealt endangering in!l%ence may as !ar as practicable be red%cedL Bp0 31C0

III. conom# In The Generation And Transmission "f Po$er% And In &uildings
&n is 3ctober 18+< report '0 6orner D%otes a letter o! t e !amo%s engineer Pames -asmyt o! ,atricro!t, t e in8entor o! t e steam- ammer, @ ic , among ot er t ings, contains t e !ollo@ing: K0005 e p%blic are little a@are o! t e 8ast increase in dri8ing po@er @ ic as been obtained by s%c c anges o! system and impro8ements Bo! steamenginesC as & all%de to0 5 e engine po@er o! t is district B'ancas ireC lay %nder t e inc%b%s o! timid and preH%diced traditions !or nearly !orty years, b%t no@ @e are appily emancipated0 7%ring t e last !i!teen years, b%t more especially in t e co%rse o! t e last !o%r years Bsince 1828C, some 8ery important c anges a8e taken place in t e system o! @orking condensing steam-engines0 000 5 e res%lt 000 as been to realise a m%c greater amo%nt o! d%ty or @ork per!ormed by t e identical engines, and t at again at a 8ery considerable red%ction o! t e expendit%re o! !%el0 000 For a great many years a!ter t e introd%ction o! steam-po@er into t e mills and man%!actories o! t e abo8e-named districts, t e 8elocity o! @ ic , it @as considered proper to @ork condensing steam-engines @as abo%t <<= !eet per min%te o! t e piston# t at is to say, an engine @it a +-!eet stroke @as restricted by "r%le" to make << re8ol%tions o! t e cranks a!t per min%te0 Aeyond t is speed it @as not considered pr%dent or desirable to @ork t e engine# and as all t e mill gearing 000 @ere made s%itable to t is <<= !eet per min%te speed o! piston, t is slo@ and abs%rdly restricted 8elocity r%led t e @orking o! s%c engines

6+

; apter 4

!or many years0 6o@e8er, at lengt , eit er t ro%g !ort%nate ignorance o! t e "r%le", or by better reasons on t e part o! some bold inno8ator, a greater speed @as tried, and as t e res%lt @as ig ly !a8o%rable, ot ers !ollo@ed t e example, by, as it is termed, "letting t e engine a@ay", namely, by so modi!ying t e proportions o! t e !irst motion @ eels o! t e mill gearing as to permit t e engine to r%n at 3== !eet and %p@ards per min%te, @ ile t e mill gearing generally @as kept at its !ormer speed0000 5 is "letting t e engine a@ay"000 as led to t e almost %ni8ersal "speeding" o! engines, beca%se it @as pro8ed t at not only @as t ere a8ailable po@er gained !rom t e identical engines, b%t also as t e ig er 8elocity o! t e engine yielded a greater moment%m in t e !ly-@ eel t e motion @as !o%nd to be m%c more reg%lar0000 We 000 obtain more po@er !rom a steam-engine by simply permitting its piston to mo8e at a ig er 8elocity Bpress%re o! steam and 8ac%%m in t e condenser remaining t e sameC0000 5 %s, !or example, s%ppose any gi8en engine yields 2= orse-po@er @ en its piston is tra8elling at <== !eet per min%te, i! by s%itable arrangement or modi!ication @e can permit t is same engine to r%n at s%c a speed as t at its piston @ill tra8el t ro%g space at 2== !eet per min%te Bpress%re o! steam and 8ac%%m, as be!ore said, remaining t e sameC, @e s all t en a8e H%st do%ble t e po@er 000 and as t e press%re by steam and 8ac%%m is t e same in bot cases, t e strain %pon t e parts o! t is engine @ill be no greater at 2== t an at <== !eet speed o! piston, so t at t e risk o! "break-do@n" does not materially increase @it t e increase o! speed0 ?ll t e di!!erence is, t at @e s all in s%c case cons%me steam at a rate proportional to t e speed o! piston, or nearly so# and t ere @ill e some small increase in t e @ear and tear o! "t e brasses" or r%bbing-parts, b%t so slig t as to be

66

; apter 4

scarcely @ort

notice0000 A%t in order to obtain

increase o! po@er !rom t e same engine by permitting its piston to tra8el at a ig er 8elocity it is reD%isite 000 to b%m more coal per o%r %nder t e same boiler, or employ boilers o! greater e8aporating capabilities, i0e0, greater steam-generating po@ers0 5 is accordingly @as done, and boilers o! greater steamgenerating or @ater-e8aporating po@ers @ere s%pplied to t e old "speeded" engines, and in many cases near 1== per cent more @ork @as got o%t o! t e identical engines by means o! s%c c anges as abo8e named0 ?bo%t ten years ago t e extraordinary economical prod%ction o! po@er as realised by t e engines employed in t e mining operations o! ;orn@all began to attract attention# and as competition in t e spinning trade !orced man%!act%rers to look to "sa8ings" as t e c ie! so%rce o! pro!its, t e remarkable di!!erence in t e cons%mption o! coal per orsepo@er per o%r, as indicated by t e per!ormance o! t e ;ornis engines, as also t e extraordinary economical per!ormance o! Wool!"s do%ble-cylinder engines, began to attract increased attention to t e s%bHect o! economy o! !%el in t is district, and as t e ;ornis and do%ble-cylinder engines ga8e a orse-po@er !or e8ery 3Z to 2 lbs o! coal per o%r, @ ile t e generality o! cotton-mill engines @ere cons%ming 8 or 1< po%nds per orse per o%r, so remarkable a di!!erence ind%ced mill-o@ners and engine-makers in t is district to endea8o%r to realise, by t e adoption o! similar means, s%c extraordinary economical res%lts as @ere pro8ed to be common in ;orn@all and France, @ ere t e more s arply to s%c ig price o! coal ad compelled man%!act%rers to look costly departments o! t eir establis ments0 5 e res%lt o! t is increased attention to economy o! !%el as been most important in many respects0 &n t e !irst place, many boilers, t e al! o!

6>

; apter 4

@ ose s%r!ace ad been in t e good old times o! ig pro!its le!t exposed D%ite naked to t e cold air, began to get co8ered @it t ick blankets o! !elt, and brick and plaster, and ot er modes and means @ ereby to pre8ent t e escape o! t at eat !rom t eir exposed s%r!ace @ ic ad cost so m%c !%el to maintain0 $team-pipes began to be "protected" in t e same manner, and t e o%tside o! t e cylinder o! t e engine !elted and cased in @it @ood in like manner0 -ext came t e %se o! " ig steam", namely, instead o! a8ing t e sa!ety-8al8e loaded so as to blo@ o!! at 2, 6, or 8 lbs to t e sD%are inc , it @as !o%nd t at by raising t e press%re to 12 or <= lbs 000 a 8ery decided economy o! !%el res%lted# in ot er @ords, t e @ork o! t e mill @as per!ormed by a 8ery notable red%ced cons%mption o! coals, 000 and t ose @ o ad t e means and t e boldness carried t e increased press%re and "expansion system" o! @orking to t e !%ll extent, by employing properly constr%cted boilers to s%pply steam o! 3=, 2=, +=, 6=, and >= lbs to t e sD%are inc # press%res @ ic @o%ld a8e !rig tened an engineer o! t e old sc ool o%t o! is @its0 A%t as t e economic res%lts o! so increasing t e press%re o! steam000 soon appeared in most %nmistakable V s0 d0 !orms, t e %se o! ig -press%re steam-boilers !or @orking condensing engines became almost general0 ?nd t ose @ o desired to go to t e !%ll extent 000 soon adopted t e employment o! t e Wool! engine in its !%ll integrity, and most o! o%r mills lately b%ilt are @orked by t e Wool! engines, namely, t ose on @ ic t ere are t@o cylinders to eac engine, in one o! @ ic t e ig -press%re steam !rom t e boiler exerts or yields po@er by its excess o! press%re o8er t at o! t e atmosp ere, @ ic , instead o! t e said ig -press%re steam being let pass o!! at t e end o! eac stroke !ree into t e atmosp ere, is ca%sed to pass

68

; apter 4

into a lo@-press%re cylinder o! abo%t !o%r times t e area o! t e !ormer, and a!ter d%e expansion passes to t e condenser, t e economic res%lt obtained !rom engines o! t is class is s%c t at t e cons%mption o! !%el is at t e rate o! !rom 3Z to 2 lbs0 o! coal per orse per o%r# @ ile in t e engines o! t e old system t e cons%mption %sed to be on t e a8erage !rom 1< to 12 lbs0 per orse per o%r0 Ay an ingenio%s as been arrangement, t e Wool! system o! do%ble cylinder or combined lo@- and ig -press%re engine introd%ced extensi8ely to already existing engines, @ ereby t eir per!ormance as been increased bot as to po@er and economy o! !%el0 5 e same res%lt 000 as been in %se t ese eig t or ten years, by a8ing a ig press%re engine so connected @it a condensing engine as to enable t e @aste steam o! t e !ormer to pass on to and @ork t e latter0 5 is system is in many cases 8ery con8enient0 K&t @o%ld not be 8ery easy to get an exact ret%rn as to t e increase o! per!ormance or @ork done by t e identical engines to @ ic impro8ements some or all o! t ese a8e been applied# & am con!ident,

o@e8er, 000 t at !rom t e same @eig t o! steamengine mac inery @e are no@ obtaining at least += per cent more d%ty or @ork per!ormed on t e a8erage, and t at in many cases, t e identical steam-engines @ ic in t e days o! t e restricted speed o! <<= !eet per min%te yielded += orse-po@er, are no@ yielding %p@ards o! 1==0 5 e 8ery economical res%lts deri8ed !rom t e employment o! m%c ig -press%re steam in @orking condensing steam-engines, toget er @it t e ig er po@er reD%ired by mill extensions !rom t e same engines, as @it in t e last t ree years led to t e adoption o! t%b%lar boilers, yielding a m%c more economical res%lt t an t ose !ormerly employed in

6*

; apter 4

generating steam !or mill engines0L B)eports o! &nsp0 o! Fact0, 3ctober 18+<, pp0 <3-<>0C W at applies to po@er generation also applies to po@er transmission and @orking mac inery0 K5 e rapid strides @it @ ic impro8ement in mac inery as ad8anced @it in t ese !e@ years a8e enabled man%!act%rers to increase prod%ction @it o%t additional mo8ing po@er0 5 e more economical application o! labo%r as been rendered necessary by t e diminis ed lengt o! t e @orking-day, and in most @ell-reg%lated mills an intelligent mind is al@ays considering in @ at manner prod%ction can be increased @it decreased expendit%re0 & a8e be!ore me a statement, kindly prepared by a 8ery intelligent gentleman in my district, s o@ing t e n%mber o! ands employed, t eir ages, t e mac ines at @ork, and t e @ages paid !rom 182= to t e present time0 &n 3ctober 182=, is !irm employed 6== ands, o! @ om <== @ere %nder 13 years o! age0 &n 3ctober last, 3+= ands @ere employed, o! @ om 6= only @ere %nder 13# t e same n%mber o! mac ines, @it in 8ery !e@, @ere at @ork, and t e same s%m in @ages @as paid at bot periods0 K B)edgra8e"s )eport in )eports o! &nsp0 o! Fact0, 3ct0 18+<, pp0 +8-+*0C 5 ese impro8ements o! t e mac inery do not s o@ t eir !%ll e!!ect %ntil t ey are %sed in ne@, appropriately arranged !actories0 K?s regards t e impro8ement made in mac inery, & may say in t e !irst place t at a great ad8ance as been made in t e constr%ction o! mills adapted to recei8e impro8ed mac inery0000 &n t e bottom room & do%ble all my yarn, and %pon t at single !loor & s all p%t <*,=== do%bling spindles0 & e!!ect a sa8ing o! labo%r in t e room and s ed o! at least 1= per cent, not so m%c !rom any impro8ement in t e principle o! do%bling yarn, b%t !rom a concentration o! mac inery %nder a single management# and & am enabled to dri8e t e said n%mber o! spindles by one single s a!t, a

>=

; apter 4

sa8ing in s a!ting, compared @it @ at ot er !irms a8e to %se to @ork t e same n%mber o! spindles, o! 6= per cent, in some cases 8= per cent0 5 ere is a large sa8ing in oil, and s a!ting, and in grease0000 Wit s%perior mill arrangements and impro8ed mac inery, at t e lo@est estimate & a8e e!!ected a sa8ing in labo%r o! 1= per cent, a great sa8ing in po@er, coal, oil, tallo@, s a!ting and strapping0L BE8idence o! a cotton spinner, )eports o! &nsp0 o! Fact0, 3ct0 1863, pp0 1=*, 11=0C

IV. 'tilisation "f The !cretions "f Production


5 e capitalist mode o! prod%ction extends t e %tilisation o! t e excretions o! prod%ction and cons%mption0 Ay t e !ormer @e mean t e @aste o! ind%stry and agric%lt%re, slid by t e latter partly t e excretions prod%ced by t e nat%ral exc ange o! matter in t e %man body and partly t e !orm o! obHects t at remains a!ter t eir cons%mption0 &n t e c emical ind%stry, !or instance, excretions o! prod%ction are s%c by-prod%cts as are @asted in prod%ction on a smaller scale# iron !ilings acc%m%lating in t e man%!act%re o! mac inery and ret%rning into t e prod%ction o! iron as ra@ material, etc0 Excretions o! cons%mption are t e nat%ral @aste matter disc arged by t e %man body, remains o! clot ing in t e !orm o! rags, etc0 Excretions o! cons%mption are o! t e greatest importance !or agric%lt%re0 $o !ar as t eir %tilisation is concerned, t ere is an enormo%s @aste o! t em in t e capitalist economy0 &n 'ondon, !or instance, t ey !ind no better %se !or t e excretion o! !o%r and a al! million %man beings t an to contaminate t e 5 ames @it it at ea8y expense0 )ising prices o! ra@ materials nat%rally stim%late t e %tilisation o! @aste prod%cts0 5 e general reD%irements !or t e re-employment o! t ese excretions are: large D%antities o! s%c @aste, s%c as are a8ailable only in large-scale prod%ction# impro8ed mac inery @ ereby materials, !ormerly %seless in t eir pre8ailing !orm, are p%t into a state !it !or ne@ prod%ction# scienti!ic progress, partic%larly o! c emistry, @ ic re8eals t e %se!%l properties o! s%c @aste0 &t is tr%e t at great sa8ings o! t is sort are also obser8ed in small-scale agric%lt%re, as pre8ails in, say, 'ombardy, so%t ern ; ina, and Papan0 A%t on t e @ ole, t e prod%cti8ity o! agric%lt%re %nder t is system obtains !rom t e prodigal %se o! %man labo%r-po@er, @ ic is @it eld !rom ot er sp eres o! prod%ction0 5 e so-called @aste plays an important role in almost e8ery ind%stry0 5 %s, t e Factory )eport !or 7ecember 1863 mentions as one o! t e principal reasons @ y t e Englis and many o! t e &ris !armers do not like to gro@ !lax, or do so b%t rarely, Kt e great @aste 000 @ ic @ater sc%tc as taken place at t e little mills 000 t e @aste in cotton is

comparati8ely small, b%t in !lax 8ery large0 5 e e!!iciency o! @ater steeping and o! good mac ine sc%tc ing @ill red%ce t is disad8antage 8ery considerably0000 Flax, sc%tc ed in &reland in a most

>1

; apter 4

s ame!%l @ay, and a large percentage act%ally lost by it, eD%al to <8 or 3= per centL B)eports o! &nsp0 o! Fact0, 7ec0 1863, pp0 13*, 12<C @ ereas all t is mig t be a8oided t ro%g t e %se o! better mac inery0 $o m%c to@ !ell by t e @ayside t at t e !actory inspector reports: K& a8e been in!ormed @it regard to some o! t e sc%tc mills in &reland, t at t e @aste made at t em as o!ten been %sed by t e sc%tc ers to b%rn on t eir !ires at ome, and yet it is 8ery 8al%ableL Bp0 12= o! t e abo8e reportC0 We s all speak o! cotton @aste later, @ en @e deal @it t e price !l%ct%ations o! ra@ materials0 5 e @ool ind%stry @as s re@der t an t e !lax man%!act%rers0 K&t @as once t e common practice to decry t e preparation o! @aste and @oollen rags !or reman%!act%re, b%t t e preH%dice as entirely s%bsided as regards t e s oddy trade, @ ic as become an important branc o! t e @oollen trade o! .orks ire, and do%btless t e cotton @aste trade @ill be recognised in t e same manner as s%pplying an admitted @ant0 5 irty years since, @oollen rags, i0e0, pieces o! clot , old clot es, etc0, o! not ing b%t @ool, @o%ld a8erage abo%t V2 2s0 per ton in price: @it in t e last !e@ years t ey a8e become @ort V22 per ton, and t e demand !or t em as so increased t at means a8e been !o%nd !or %tilising t e rags o! !abrics o! cotton and @ool mixed by destroying t e cotton and lea8ing t e @ool intact, and no@ t o%sands o! operati8es are engaged in t e man%!act%re o! s oddy, !rom @ ic t e cons%mer as greatly bene!ited in being able to p%rc ase clot o! a !air and a8erage D%ality at a 8ery moderate price0L B)eports o! &nsp0 o! Fact0, 3ct0 1863, p0 1=>0C Ay t e end o! 186< t e reH%8enated s oddy made %p as m%c as one-t ird o! t e entire cons%mption o! @ool in Englis ind%stry0 B)eports o! &nsp0 o! Fact0, 3ctober 186<, p0 810C 5 e Kbig bene!itL !or t e Kcons%merL is t at is s oddy clot es @ear o%t in H%st one-t ird o! t e pre8io%s time and t%rn t readbare in one-sixt o! t is time0

><

; apter 4

5 e Englis silk ind%stry mo8ed along t e same do@n@ard pat 0 5 e cons%mption o! gen%ine ra@ silk decreased some@ at bet@een 183* and 186<, @ ile t at o! silk @aste do%bled0 &mpro8ed mac inery elped to man%!act%re a silk %se!%l !or many p%rposes !rom t is ot er@ise rat er @ort less st%!!0 5 e most striking example o! %tilising @aste is !%rnis ed by t e c emical ind%stry0 &t %tilises not only its o@n @aste, !or @ ic it !inds ne@ %ses, b%t also t at o! many ot er ind%stries0 For instance, it con8erts t e !ormerly almost %seless gas-tar into aniline dyes, aliEarin, and, more recently, e8en into dr%gs0 5 is economy o! t e excretions o! prod%ction t ro%g t eir re-employment is to be disting%is ed !rom economy t ro%g t e pre8ention o! @aste, t at is to say, t e red%ction o! excretions o! prod%ction to a minim%m, and t e immediate %tilisation to a maxim%m o! all ra@ and a%xiliary materials reD%ired in prod%ction0 )ed%ction o! @aste depends in part on t e D%ality o! t e mac inery in %se0 Economy in oil, soap, etc0, depends on o@ @ell t e mec anical parts are mac ined and polis ed0 5 is re!ers to t e a%xiliary materials0 &n part, o@e8er, and t is is most important, it depends on t e D%ality o! t e employed mac ines and tools @ et er a larger or smaller portion o! t e ra@ material is t%rned into @aste in t e prod%ction process0 Finally, t is depends on t e D%ality o! t e ra@ material itsel!0 5 is, in t%rn, depends partly on t e de8elopment o! t e extracti8e ind%stry and agric%lt%re @ ic prod%ce t e ra@ material Bstrictly speaking on t e progress o! ci8ilisationC, and partly on t e impro8ement o! processes t ro%g @ ic ra@ materials pass be!ore t ey enter into man%!act%re0 K,armentier as demonstrated t at t e art o! grinding grain as impro8ed 8ery materially in France since a none too distant epoc , !or instance t e time o! 'o%is J&4, so t at t e ne@ mills, compared to t e old, can make %p to al! as m%c more bread !rom t e same amo%nt o! grain0 5 e ann%al cons%mption o! a ,arisian, indeed, as !irst been estimated at 2 setiers o! grain, t en at 3, !inally at <, @ ile no@adays it is only 1X setiers, or abo%t 32< lbs per capita0000 &n t e ,erc e, @ ere & a8e li8ed !or a long time, t e cr%de mills o! granite and trap rock millstones a8e been mostly reb%ilt according to t e r%les o! mec anics @ ic as made s%c rapid progress in t e last 3= a8e gro%nd t e grain t@ice, t e years0 5 ey a8e been pro8ided @it good millstones !rom 'a FertF, milling sack as been gi8en a circ%lar motion, and t e o%tp%t o! !lo%r !rom t e same amo%nt o! grain as increased 1N60 5 e enormo%s discrepancy bet@een t e daily grain cons%mption o! t e )omans and o%rsel8es is t ere!ore easily explained0 &t is d%e simply to

>3

; apter 4

imper!ect met ods o! milling and bread-making0 5 is is t e @ay & !eel & m%st explain a remarkable obser8ation made by ,liny, J4&&&, ; 0 <=, <: 00, "5 e !lo%r @as sold in )ome, depending on its D%ality, at 2=, 28 or *6 as per modi%s0 5 ese prices, so ig in proportion to t e contemporaneo%s grain prices, are d%e to t e imper!ect state o! t e mills o! t at period, @ ic @ere still in t eir in!ancy, and t e res%ltant ea8y cost o! milling0L" B7%rea% de la Malle, 8conomie &oliti3ue des 9omains, ,aris, 182=, &, pp0 <8=-810C

V. conom# Through Inventions


5 ese sa8ings in t e application o! !ixed capital are, @e repeat, d%e to t e employment o! t e conditions o! labo%r on a large scale# in s ort, are d%e to t e !act t at t ese ser8e as conditions o! directly social, or socialised labo%r or direct co-operation @it in t e process o! prod%ction0 3n t e one and, t is is t e indispensable reD%irement !or t e %tilisation o! mec anical and c emical in8entions @it o%t increasing t e price o! t e commodity, and t is is al@ays t e conditio sine 3ua non0 3n t e ot er and, only prod%ction on a large scale permits t e sa8ings deri8ed !rom cooperati8e prod%cti8e cons%mption0 Finally, it is only t e experience o! t e combined labo%rer @ ic disco8ers and re8eals t e @ ere and o@ o! sa8ing, t e simplest met ods o! applying t e disco8eries, and t e @ays to o8ercome t e practical !rictions arising !rom carrying o%t t e t eory I in its application to t e prod%ction process I etc0 &ncidentally, a distinction s o%ld be made bet@een %ni8ersal labo%r and co-operati8e labo%r0 Aot kinds play t eir role in t e process o! prod%ction, bot !lo@ one into t e ot er, b%t bot are also di!!erentiated0 (ni8ersal labo%r is all scienti!ic labo%r, all disco8ery and all in8ention0 5 is labo%r depends partly on t e co-operation o! t e li8ing, and partly on t e %tilisation o! t e labo%rs o! t ose @ o a8e gone be!ore0 ;o-operati8e labo%r, on t e ot er and, is t e direct co-operation o! indi8id%als0 5 e !oregoing is corroborated by !reD%ent obser8ation, to @it: 1C 5 e great di!!erence in t e cost o! t e !irst model o! a ne@ mac ine and t at o! its reprod%ction Bregarding @ ic , see (re / 4he &hilosophy of Manufactures, $econd edition, 'ondon, 18++0 I 0d01 and Aabbage /:n the 0conomy of Machinery and Manufactures, 'ondon, 183<, pp0 <8=-810 I 0d01C0 <C 5 e !ar greater cost o! operating an establis ment based on a ne@ in8ention as compared to later establis ments arising e suis ossibus0 5 is is so 8ery tr%e t at t e trailblaEers generally go bankr%pt, and only t ose @ o later b%y t e b%ildings, mac inery, etc0, at a c eaper price, make money o%t o! it0 &t is, t ere!ore, generally t e most @ort less and miserable sort o! money-capitalists @ o dra@ t e greatest pro!it o%t o! all ne@ de8elopments o! t e %ni8ersal labo%r o! t e %man spirit and t eir social application t ro%g combined labo%r0

Chapter ". The Effect of Price #luctuation


I. (luctuations in the Price of )a$ *aterials% and their +irect ffects on the )ate of Profit
5 e ass%mption in t is case, as in pre8io%s ones, is t at no c ange takes place in t e rate o! s%rpl%s-8al%e0 &t is necessary to analyse t e case in its p%re !orm0 6o@e8er, it mig t be possible !or a speci!ic capital, @ ose rate o! s%rpl%s-8al%e remains %nc anged, to employ an increasing or decreasing n%mber o! labo%rers, in conseD%ence o! contraction or expansion ca%sed by s%c !l%ct%ations in t e price o! ra@ materials as @e are to analyse ere0 &n t at case t e D%antity o! s%rpl%s-8al%e mig t 8ary, @ ile t e rate o! s%rpl%s-8al%e remains t e same0 .et t is s o%ld also be disregarded ere as a side-iss%e0 &! impro8ements o! mac inery and c anges in t e price o! ra@ materials sim%ltaneo%sly in!l%ence eit er t e n%mber o! labo%rers employed by a de!inite capital, or t e le8el o! @ages, one as b%t to p%t toget er 1C t e e!!ect ca%sed by t e 8ariations o! constant capital on t e rate o! pro!it, and <C t e e!!ect ca%sed by 8ariations in @ages on t e rate o! pro!it0 5 e res%lt is t en obtained o! itsel!0 A%t in general, it s o%ld be noted ere, as in t e pre8io%s case, t at i! 8ariations take place, eit er d%e to sa8ings in constant capital, or d%e to !l%ct%ations in t e price o! ra@ materials, t ey al@ays a!!ect t e rate o! pro!it, e8en i! t ey lea8e t e @age, ence t e rate and amo%nt o! s%rpl%s-8al%e, %nto%c ed0 5 ey c ange t e magnit%de o! ; in s" B8N;C, and t %s t e 8al%e o! t e @ ole !raction0 &t is t ere!ore immaterial, in t is case as @ell I in contrast to @ at @e !o%nd in o%r analysis o! s%rpl%s-8al%e I in @ ic sp ere o! prod%ction t ese 8ariations occ%r# @ et er or not t e prod%ction branc es a!!ected by t em prod%ce necessities !or labo%rers, or constant capital !or t e prod%ction o! s%c necessities0 5 e ded%ctions made ere are eD%ally 8alid !or 8ariations occ%rring in t e prod%ction o! l%x%ry articles, and by l%x%ry articles @e ere mean all prod%ction t at does not ser8e t e reprod%ction o! labo%r-po@er0 5 e ra@ materials ere incl%de a%xiliary materials as @ell, s%c as indigo, coal, gas, etc0 F%rt ermore, so !ar as mac inery is concerned %nder t is ead, its o@n ra@ material consists o! iron, @ood, leat er, etc0 &ts o@n price is t ere!ore a!!ected by !l%ct%ations in t e price o! ra@ materials %sed in its constr%ction0 5o t e extent t at its price is raised t ro%g !l%ct%ations, eit er in t e price o! t e ra@ materials o! @ ic it consists, or o! t e a%xiliary materials cons%med in its operation, t e rate o! pro!it !alls pro tanto0 ?nd 8ice 8ersa0 &n t e !ollo@ing analysis @e s all con!ine o%rsel8es to !l%ct%ations in t e price o! ra@ materials, not so !ar as t ey go to make %p t e ra@ materials o! mac inery ser8ing as means o! labo%r or as a%xiliary materials applied in its operation, b%t in so !ar as t ey enter t e process in @ ic commodities are prod%ced0 5 ere is H%st one t ing to be noted ere: t e nat%ral @ealt in iron, coal, @ood, etc0, @ ic are t e principal elements %sed in t e constr%ction and operation o! mac inery, presents itsel! ere as a nat%ral !ertility o! capital and is a !actor determining t e rate o! pro!it irrespecti8e o! t e ig or lo@ le8el o! @ages0 $ince t e rate o! pro!it is sN;, or sNBc U 8C, it is e8ident t at e8ery t ing ca%sing a 8ariation in t e magnit%de o! c, and t ereby o! ;, m%st also bring abo%t a 8ariation in t e rate o! pro!it, e8en i! s and 8, and t eir m%t%al relation, remain %naltered0 -o@, ra@ materials are one o! t e principal components o! constant capital0 E8en in ind%stries @ ic cons%me no act%al ra@ materials, t ese enter t e pict%re as a%xiliary materials or components o! mac inery, etc0, and t eir price !l%ct%ations t %s accordingly in!l%ence t e rate o! pro!it0 $ o%ld t e price o! ra@ material !all by an amo%nt R d, t en sN;, or sNBc U 8C becomes sNB; - dC, or sNBBc - dC U 8C0 5 %s, t e rate o! pro!it rises0 ;on8ersely, i! t e price o! ra@ material rises, t en sN;, or sNBc U 8C, becomes sNB; U dC, or sN

>+

; apter 4&&

BBc U dC U 8C, and t e rate o! pro!it !alls0 3t er conditions being eD%al, t e rate o! pro!it, t ere!ore, !alls and rises in8ersely to t e price o! ra@ material0 5 is s o@s, among ot er t ings, o@ important t e lo@ price o! ra@ material is !or ind%strial co%ntries, e8en i! !l%ct%ations in t e price o! ra@ materials are not accompanied by 8ariations in t e sales sp ere o! t e prod%ct, and t %s D%ite aside !rom t e relation o! demand to s%pply0 &t !ollo@s !%rt ermore t at !oreign trade in!l%ences t e rate o! pro!it, regardless o! its in!l%ence on @ages t ro%g t e c eapening o! t e necessities o! li!e0 5 e point is t at it a!!ects t e prices o! ra@ or a%xiliary materials cons%med in ind%stry and agric%lt%re0 &t is d%e to an as yet imper!ect %nderstanding o! t e nat%re o! t e rate o! pro!it and o! its speci!ic di!!erence !rom t e rate o! s%rpl%s-8al%e t at, on t e one and, economists Blike 5orrens /)0 5orrens, +n 0ssay on the &roduction of "ealth, 'ondon, 18<1, p0 <8 et seD0 I 0d01C @rongly explain t e marked in!l%ence o! t e prices o! ra@ material on t e rate o! pro!it, @ ic t ey note t ro%g practical experience, and t at, on t e ot er, economists like )icardo /70 )icardo, :n the &rinciples of &olitical 0conomy, and 4a ation , 5 ird edition, 'ondon, 18<1, pp0 131-1380 I 0d01, @ o cling to general principles, do not recognise t e in!l%ence o!, say, @orld trade on t e rate o! pro!it0 5 is makes clear t e great importance to ind%stry o! t is elimination or red%ction o! c%stoms d%ties on ra@ materials0 5 e rational de8elopment o! t e protecti8e tari!! system made t e %tmost red%ction o! import d%ties on ra@ materials one o! its cardinal principles0 5 is, and t e abolition o! t e d%ty on corn, @as t e main obHect o! t e Englis !ree-traders, @ o @ere primarily concerned @it a8ing t e d%ty on cotton li!ted as @ell0 5 e %se o! !lo%r in t e cotton ind%stry may ser8e as an ill%stration o! t e importance o! a price red%ction !or an article @ ic is not strictly a ra@ material b%t an a%xiliary and at t e same time one o! t e principal elements o! no%ris ment0 ?s !ar back as 183>, )0 60 :reg 1 calc%lated t at t e 1==,=== po@er-looms and <+=,=== and-looms t en operating in t e cotton-mills o! :reat Aritain ann%ally cons%med 21 million lbs o! !lo%r to smoot t e @arp0 6e added a t ird o! t is D%antity !or bleac ing and ot er processes, and estimated t e total ann%al 8al%e o! t e !lo%r so cons%med at V32<,=== !or t e preceding ten years0 ? comparison @it !lo%r prices on t e continent s o@ed t at t e ig er !lo%r price !orced %pon man%!act%rers by corn tari!!s alone amo%nted to V1>=,=== per year0 :reg estimated t e s%m at a minim%m o! V<==,=== !or 183> and cited a !irm !or @ ic t e !lo%r price di!!erence amo%nted to V1,=== ann%ally0 ?s a res%lt, Kgreat man%!act%rers, t o%g t!%l, calc%lating men o! b%siness, a8e said t at ten o%rs" labo%r @o%ld be D%ite s%!!icient, i! t e ;orn 'a@s @ere repealedL0 B)eports o! &nsp0 o! Fact0, 3ct0 1828, p0 *80C 5 e ;orn 'a@s @ere repealed0 $o @ere t e d%ties on cotton and ot er ra@ materials0 A%t no sooner ad t is been accomplis ed t an t e opposition o! t e man%!act%rers to t e 5en 6o%rs" Aill became more 8iolent t an e8er0 ?nd @ en t e ten- o%r !actory day ne8ert eless became a la@ soon a!ter, t e !irst res%lt @as a general attempt to red%ce @ages0 5 e 8al%e o! ra@ and a%xiliary materials passes entirely and all at one time into t e 8al%e o! t e prod%ct in t e man%!act%re o! @ ic t ey are cons%med, @ ile t e elements o! !ixed capital trans!er t eir 8al%e to t e prod%ct only grad%ally in proportion to t eir @ear and tear0 &t !ollo@s t at t e price o! t e prod%ct is in!l%enced !ar more by t e price o! ra@ materials t an by t at o! !ixed capital, alt o%g t e rate o! pro!it is determined by t e total 8al%e o! t e capital applied no matter o@ m%c o! it is cons%med in t e making o! t e prod%ct0 A%t it is e8ident I alt o%g @e merely mention it in passing, since @e ere still ass%me t at commodities are sold at t eir 8al%es, so t at price !l%ct%ations ca%sed by competition do not as yet concern %s I t at t e expansion or contraction o! t e market depends on t e price o! t e indi8id%al commodity and is in8ersely proportional to t e rise or !all o! t is price0 &t act%ally de8elops, t ere!ore, t at t e price o! t e

>6

; apter 4&&

prod%ct does not rise in proportion to t at o! t e ra@ material, and t at it does not !all in proportion to t at o! ra@ material0 ;onseD%ently, t e rate o! pro!it !alls lo@er in one instance, and rises ig er in t e ot er t an @o%ld a8e been t e case i! prod%cts @ere sold at t eir 8al%e0 F%rt er, t e D%antity and 8al%e o! t e employed mac inery gro@s @it t e de8elopment o! labo%r prod%cti8ity b%t not in t e same proportion as t is prod%cti8ity, i0 e0, not in t e proportion in @ ic t is mac inery increases its o%tp%t0 &n t ose branc es o! ind%stry, t ere!ore, @ ic do cons%me ra@ materials, i0 e0, in @ ic t e s%bHect o! labo%r is itsel! a prod%ct o! pre8io%s labo%r, t e gro@ing prod%cti8ity o! labo%r is expressed precisely in t e proportion in @ ic a larger D%antity o! ra@ material absorbs a de!inite D%antity o! labo%r, ence in t e increasing amo%nt o! ra@ material con8erted in, say, one o%r into prod%cts, or processed into commodities0 5 e 8al%e o! ra@ material, t ere!ore, !orms an e8er-gro@ing component o! t e 8al%e o! t e commodityprod%ct in proportion to t e de8elopment o! t e prod%cti8ity o! labo%r, not only beca%se it passes @ olly into t is latter 8al%e, b%t also beca%se in e8ery aliD%ot part o! t e aggregate prod%ct t e portion representing depreciation o! mac inery and t e portion !ormed by t e ne@ly added labo%r I bot contin%ally decrease0 3@ing to t is !alling tendency, t e ot er portion o! t e 8al%e representing ra@ material increases proportionally, %nless t is increase is co%nterbalanced by a proportionate decrease in t e 8al%e o! t e ra@ material arising !rom t e gro@ing prod%cti8ity o! t e labo%r employed in its o@n prod%ction0 F%rt er, ra@ and a%xiliary materials, H%st like @ages, !orm parts o! t e circ%lating capital and m%st, t ere!ore, be contin%ally replaced in t eir entirety t ro%g t e sale o! t e prod%ct, @ ile only t e depreciation is to be rene@ed in t e case o! mac inery, and !irst o! all in t e !orm o! a reser8e !%nd0 &t is, moreo8er, in no @ay essential !or eac indi8id%al sale to contrib%te its s are to t is reser8e !%nd, so long as t e total ann%al sales contrib%te t eir ann%al s are0 5 is s o@s again o@ a rise in t e price o! ra@ material can c%rtail or arrest t e entire process o! reprod%ction i! t e price realised by t e sale o! t e commodities s o%ld not s%!!ice to replace all t e elements o! t ese commodities0 3r, it may make it impossible to contin%e t e process on t e scale reD%ired by its tec nical basis, so t at only a part o! t e mac inery @ill remain in operation, or all t e mac inery @ill @ork !or only a !raction o! t e %s%al time0 Finally, t e expense inc%rred t ro%g @aste 8aries in direct proportion to t e price !l%ct%ations o! t e ra@ material, rising, @ en t ey rise and !alling @ en t ey !all0 A%t t ere is a limit ere as @ell0 5 e Factory )eport !or ?pril 18+= maintained: K3ne so%rce o! considerable loss arising !rom an ad8ance in t e price o! t e ra@ material @o%ld ardly occ%r to any one b%t a practical spinner, 8iE0, t at !rom @aste0 & am in!ormed t at @ en cotton ad8ances, t e cost to t e spinner, o! t e lo@er D%alities especially, is increased in a ratio beyond t e ad8ance act%ally paid, beca%se t e @aste made in spinning coarse yarns is !%lly 1+ per cent# and t is rate, @ ile it ca%ses a loss o! Zd0 per lb0 on cotton at 3Zd0 per lb0, brings %p t e loss to 1d0 per lb0 @ en cotton ad8ances to >d0L B)eports o! &nsp0 o! Fact0, ?pril 18+=, p0 1>0C A%t @ en, as a res%lt o! t e ?merican ;i8il War, t e price o! cotton rose to a le8el %neD%alled in almost 1== years, t e report read di!!erently:

>>

; apter 4&&

K5 e price no@ gi8en !or @aste, and its reintrod%ction in t e !actory in t e s ape o! cotton @aste, go some @ay to compensate !or t e di!!erence in t e loss by @aste, bet@een $%rat cotton and ?merican cotton, abo%t 1<Z per cent0 K5 e @aste in @orking $%rat cotton being <+ per cent, t e cost o! t e cotton to t e spinner is en anced one!o%rt be!ore e as man%!act%red it0 5 e loss by @aste %sed not to be o! m%c moment @ en ?merican cotton @as +d0 or 6d0 per lb0, !or it did not exceed `d0 per lb0, b%t it is no@ o! great importance @ en %pon e8ery lb0 o! cotton @ ic costs <s0 t ere is a loss by @aste eD%al to 6d0L <B)eports o! &nsp0 o! Fact0, 3ct0 1863, p0 1=60C

II. Appreciation% +epreciation% )elease And Tie,'p "f Capital


5 e p enomena analysed in t is c apter reD%ire !or t eir !%ll de8elopment t e credit system and competition on t e @orld-market, t e latter being t e basis and t e 8ital element o! capitalist prod%ction0 5 ese more de!inite !orms o! capitalist prod%ction can only be compre ensi8ely presented, o@e8er, a!ter t e general nat%re o! capital is %nderstood0 F%rt ermore, t ey do not come @it in t e scope o! t is @ork and belong to its e8ent%al contin%ation0 -e8ert eless t e p enomena listed in t e abo8e title may be disc%ssed in a general @ay at t is stage0 5 ey are interrelated, !irst @it one anot er and, secondly, also @it t e rate and amo%nt o! pro!it0 5 ey are to be brie!ly disc%ssed ere i! only beca%se t ey create t e impression t at not only t e rate, b%t also t e amo%nt o! pro!it I @ ic is act%ally identical @it t e amo%nt o! s%rpl%s-8al%e I co%ld increase or decrease independently o! t e mo8ements o! t e D%antity or rate o! s%rpl%s8al%e0 ?re @e to consider release and tie-%p o! capital, on t e one and, and its appreciation and depreciation, on t e ot er, as di!!erent p enomenaQ 5 e D%estion is @ at @e mean by release and tie-%p o! capitalQ ?ppreciation and depreciation are sel!-explanatory0 ?ll t ey mean is t at a gi8en capital increases or decreases in 8al%e as a res%lt o! certain general economic conditions, !or @e are not disc%ssing t e partic%lar !ate o! an indi8id%al capital0 ?ll t ey mean, t ere!ore, is t at t e 8al%e o! a capital in8ested in prod%ction rises or !alls, irrespecti8e o! its sel!-expansion by 8irt%e o! t e s%rpl%s-labo%r employed by it0 Ay tie-%p o! capital @e mean t at certain portions o! t e total 8al%e o! t e prod%ct m%st be recon8erted into elements o! constant and 8ariable capital i! prod%ction is to proceed on t e same scale0 Ay release o! capital @e mean t at a portion o! t e total 8al%e o! t e prod%ct @ ic ad to be recon8erted into constant or 8ariable capital %p to a certain time, becomes disposable and s%per!l%o%s, s o%ld prod%ction contin%e on t e pre8io%s scale0 5 is release or tie-%p o! capital is di!!erent !rom t e release or tie-%p o! re8en%e0 &! t e ann%al s%rpl%s-8al%e o! an indi8id%al capital ; is, let %s say, eD%al to x, t en a red%ction in t e price o! commodities cons%med by t e capitalists @o%ld make x I a s%!!icient to proc%re t e same enHoyments, etc0, as be!ore0 ? portion o! t e re8en%e R a is released, t ere!ore, and may ser8e eit er to increase cons%mption or to be

>8

; apter 4&&

recon8erted into capital B!or t e p%rpose o! acc%m%lationC0 ;on8ersely, i! x U a is needed to contin%e to li8e as be!ore, t en t is standard o! li8ing m%st eit er be red%ced or a portion o! t e pre8io%sly acc%m%lated income R a, expended as re8en%e0 ?ppreciation and depreciation may a!!ect eit er constant or 8ariable capital, or bot , and in t e case o! constant capital it may, in t%rn, a!!ect eit er t e !ixed, or t e circ%lating portion, or bot 0 (nder constant capital @e m%st consider t e ra@ and a%xiliary materials, incl%ding semi-!inis ed prod%cts, all o! @ ic @e ere incl%de %nder t e term o! ra@ materials, mac inery, and ot er !ixed capital0 &n t e preceding analysis @e re!erred especially to 8ariations in t e price, or t e 8al%e, o! ra@ materials in respect to t eir in!l%ence on t e rate o! pro!it, and determined t e general la@ t at @it ot er conditions being eD%al, t e rate o! pro!it is in8ersely proportional to t e 8al%e o! t e ra@ materials0 5 is is absol%tely tr%e !or capital ne@ly in8ested in a b%siness enterprise, in @ ic t e in8estment, i0 e0, t e con8ersion o! money into prod%cti8e capital, is only H%st taking place0 A%t aside !rom t is capital, @ ic is being ne@ly in8ested, a large portion o! t e already !%nctioning capital is in t e sp ere o! circ%lation, @ ile anot er portion is in t e sp ere o! prod%ction0 3ne portion is in t e market in t e s ape o! commodities @aiting to be con8erted into money# anot er is on and as money, in @ ate8er !orm, @aiting to be recon8erted into elements o! prod%ction# !inally, a t ird portion is in t e sp ere o! prod%ction, partly in its original !orm o! means o! prod%ction s%c as ra@ and a%xiliary materials, semi-!inis ed prod%cts p%rc ased in t e market, mac inery and ot er !ixed capital, and partly in t e !orm o! prod%cts @ ic are in t e process o! man%!act%re0 5 e e!!ect o! appreciation or depreciation depends ere to a great extent on t e relati8e proportion o! t ese component parts0 'et %s, !or t e sake o! simplicity, lea8e aside all !ixed capital and consider only t at portion o! constant capital @ ic consists o! ra@ and a%xiliary materials, and semi-!inis ed prod%cts, and bot !inis ed commodities in t e market and commodities still in t e process o! prod%ction0 &! t e price o! ra@ material, !or instance o! cotton, rises, t en t e price o! cotton goods I bot semi-!inis ed goods like yarn and !inis ed goods like cotton !abrics I man%!act%red @ ile cotton @as c eaper, rises also0 $o does t e 8al%e o! t e %nprocessed cotton eld in stock, and o! t e cotton in t e process o! man%!act%re0 5 e latter beca%se it comes to represent more labo%r-time in retrospect and t %s adds more t an its original 8al%e to t e prod%ct @ ic it enters, and more t an t e capitalist paid !or it0 6ence, i! t e price o! ra@ materials rises, and t ere is a considerable D%antity o! a8ailable !inis ed commodities in t e market, no matter @ at t e stage o! t eir man%!act%re, t e 8al%e o! t ese commodities rises, t ereby en ancing t e 8al%e o! t e existing capital0 5 e same is tr%e !or t e s%pply o! ra@ materials, etc0, in t e ands o! t e prod%cer0 5 is appreciation o! 8al%e may compensate, or more t an compensate, t e indi8id%al capitalist, or e8en an entire separate sp ere o! capitalist prod%ction, !or t e drop in t e rate o! pro!it attending a rise in t e price o! ra@ materials0 Wit o%t entering into t e detailed e!!ects o! competition, @e mig t state !or t e sake o! t oro%g ness t at 1C i! a8ailable s%pplies o! ra@ material are considerable, t ey tend to co%nteract t e price increase @ ic occ%rred at t e place o! t eir origin# <C i! t e semi-!inis ed and !inis ed goods press 8ery ea8ily %pon t e market, t eir price is t ereby pre8ented !rom rising proportionately to t e price o! t eir ra@ materials0 5 e re8erse takes place @ en t e price o! ra@ material !alls0 3t er circ%mstances remaining t e same, t is increases t e rate o! pro!it0 5 e commodities in t e market, t e articles in t e process o! prod%ction, and t e a8ailable s%pplies o! ra@ material, depreciate in 8al%e and t ereby co%nteract t e attendant rise in t e rate o! pro!it0 5 e e!!ect o! price 8ariations !or ra@ materials is t e more prono%nced, t e smaller t e s%pplies a8ailable in t e sp ere o! prod%ction and in t e market at, say, t e close o! a b%siness year, i0e0, a!ter t e ar8est in agric%lt%re, @ en great D%antities o! ra@ materials are deli8ered ane@0

>*

; apter 4&&

We proceed in t is entire analysis !rom t e ass%mption t at t e rise or !all in prices expresses act%al !l%ct%ations in 8al%e0 A%t since @e are ere concerned @it t e e!!ects s%c price 8ariations a8e on t e rate o! pro!it, it matters little @ at is at t e bottom o! t em0 5 e present statements apply eD%ally i! prices rise or !all %nder t e in!l%ence o! t e credit system, competition, etc0, and not on acco%nt o! !l%ct%ations in 8al%e0 $ince t e rate o! pro!it eD%als t e ratio o! t e excess o8er t e 8al%e o! t e prod%ct to t e 8al%e o! t e total capital ad8anced, a rise ca%sed in t e rate o! pro!it by a depreciation o! t e ad8anced capital @o%ld be associated @it a loss in t e 8al%e o! capital0 $imilarly, a drop ca%sed in t e rate o! pro!it by an appreciation o! t e ad8anced capital mig t possibly be associated @it a gain0 ?s !or t e ot er portion o! constant capital, s%c as mac inery and !ixed capital in general, t e appreciation o! 8al%e taking place in it @it respect mainly to b%ildings, real estate, etc0, cannot be disc%ssed @it o%t t e t eory o! gro%nd-rent, and does not t ere!ore belong in t is c apter0 A%t o! a general importance to t e D%estion o! depreciation are: 5 e contin%al impro8ements @ ic lo@er t e %se-8al%e, and t ere!ore t e 8al%e, o! existing mac inery, !actory b%ildings, etc0 5 is process as a partic%larly dire e!!ect d%ring t e !irst period o! ne@ly introd%ced mac inery, be!ore it attains a certain stage o! mat%rity, @ en it contin%ally becomes antiD%ated be!ore it as time to reprod%ce its o@n 8al%e0 5 is is one o! t e reasons !or t e !lagrant prolongation o! t e @orking-time %s%al in s%c periods, !or alternating day and nig ts i!ts, so t at t e 8al%e o! t e mac inery may be reprod%ced in a s orter time @it o%t a8ing to place t e !ig%res !or @ear and tear too ig 0 &!, on t e ot er and, t e s ort period in @ ic t e mac inery is e!!ecti8e Bits s ort li!e 8is-O-8is t e anticipated impro8ementsC is not compensated in t is manner, it gi8es %p so m%c o! its 8al%e to t e prod%ct t ro%g moral depreciation t at it cannot compete e8en @it and-labo%r03 ?!ter mac inery, eD%ipment o! b%ildings, and !ixed capital in general, attain a certain mat%rity, so t at t ey remain %naltered !or some lengt o! time at least in t eir basic constr%ction, t ere arises a similar depreciation d%e to impro8ements in t e met ods o! reprod%cing t is !ixed capital0 5 e 8al%e o! t e mac inery, etc0, !alls in t is case not so m%c beca%se t e mac inery is rapidly cro@ded o%t and depreciated to a certain degree by ne@ and more prod%cti8e mac inery, etc0, b%t beca%se it can be reprod%ced more c eaply0 5 is is one o! t e reasons @ y large enterprises !reD%ently do not !lo%ris %ntil t ey pass into ot er ands, i0 e0, a!ter t eir !irst proprietors a8e been bankr%pted, and t eir s%ccessors, @ o b%y t em c eaply, t ere!ore begin !rom t e o%tset @it a smaller o%tlay o! capital0 &t leaps to t e eye, partic%larly in t e case o! agric%lt%re, t at t e ca%ses @ ic raise or lo@er t e price o! a prod%ct, also raise or lo@er t e 8al%e o! capital, since t e latter consists to a large degree o! t is prod%ct, @ et er as grain, cattle, etc0 B)icardo /70 )icardo, :n the &rinciples of &olitical 0conomy, and 4a ation, 5 ird edition, 'ondon, 18<1, ; apter &&0 I 0d01C0 5 ere is still 8ariable capital to be considered0 &nasm%c as t e 8al%e o! labo%r-po@er rises beca%se t ere is a rise in t e 8al%e o! t e means o! s%bsistence reD%ired !or its reprod%ction, or !alls beca%se t ere is a red%ction in t eir 8al%e I and t e appreciation and depreciation o! 8ariable capital are really not ing more t an expressions o! t ese t@o cases I a drop in s%rpl%s-8al%e corresponds to s%c appreciation and an increase in s%rpl%s-8al%e to s%c depreciation, pro8ided t e lengt o! t e @orking-day remains t e same0 A%t ot er circ%mstances I t e release and tie-%p o! capital I may also be associated @it s%c cases, and since @e a8e not analysed t em so !ar, @e s all brie!ly mention t em no@0 &! @ages !all in conseD%ence o! a depreciation in t e 8al%e o! labo%r-po@er B@ ic may e8en be attended by a rise in t e real price o! labo%rC, a portion o! t e capital it erto in8ested in @ages is released0 4ariable capital is set !ree0 &n t e case o! ne@ in8estments o! capital, t is as simply t e e!!ect o! its operating @it a ig er rate o! s%rpl%s-8al%e0 &t takes less money t an be!ore to set in motion t e same amo%nt o! labo%r, and in t is @ay t e %npaid portion o! labo%r increases at t e

8=

; apter 4&&

expense o! t e paid portion0 A%t in t e case o! already in8ested capital, not only does t e rate o! s%rpl%s-8al%e rise b%t a portion o! t e capital pre8io%sly in8ested in @ages is also released0 (ntil t is time it @as tied %p and !ormed a reg%lar portion @ ic ad to be ded%cted !rom t e proceeds !or t e prod%ct and ad8anced !or @ages, acting as 8ariable capital i! t e b%siness @ere to contin%e on its !ormer scale0 -o@ t is portion is set !ree and may be %sed as a ne@ in8estment, be it to extend t e same b%siness or to operate in some ot er sp ere o! prod%ction0 'et %s ass%me, !or instance, t at V+== per @eek @ere reD%ired at !irst to employ +== labo%rers, and t at no@ only V2== are needed !or t e same p%rpose0 &! t e D%antity o! 8al%e prod%ced in eit er case R V1,===, t e amo%nt o! @eekly s%rpl%s-8al%e in t e !irst case R V+== and t e rate o! s%rpl%s-8al%e +==N+== R 1==T0 A%t a!ter t e @age red%ction t e D%antity o! s%rpl%s-8al%e V1,=== - V2== R V6==, and its rate 6==N2== R 1+=T0 ?nd t is increase in t e rate o! s%rpl%s-8al%e is t e only e!!ect !or one @ o starts a ne@ enterprise in t is sp ere o! prod%ction @it a 8ariable capital o! V2== and a corresponding constant capital0 A%t @ en t is takes place in a b%siness already in operation, t e depreciation o! t e 8ariable capital does not only increase t e D%antity o! s%rpl%s8al%e !rom V+== to V6==, and t e rate o! s%rpl%s-8al%e !rom 1== to 1+=T, b%t releases V1== o! t e 8ariable capital !or t e !%rt er exploitation o! labo%r0 6ence, t e same amo%nt o! labo%r is exploited to greater ad8antage, and, @ at is more, t e release o! V1== makes it possible to exploit more labo%rers t an be!ore at t e ig er rate @it t e same 8ariable capital o! V+==0 -o@ t e re8erse sit%ation0 $%ppose, @it +== employed labo%rers, t e original proportion in @ ic t e prod%ct is di8ided R 2==8 U 6==s R 1,===, making t e rate o! s%rpl%s-8al%e R 1+=T0 &n t at case, t e labo%rer recei8es V2N+ , or 16 s illings per @eek0 $ o%ld +== labo%rers cost V+== per @eek, d%e to an appreciation o! 8ariable capital, eac one o! t em @ill recei8e a @eekly @age R V1, and V2== can employ only 2== labo%rers0 &! t e same n%mber o! labo%rers as be!ore is p%t to @ork, t ere!ore, @e a8e +==8 U +==s R 1,===0 5 e rate o! s%rpl%s-8al%e @o%ld !all !rom 1+= to 1==T, @ ic is X0 &n t e case o! ne@ capital t e only e!!ect @o%ld be t is lo@er rate o! s%rpl%s8al%e0 3t er conditions being eD%al, t e rate o! pro!it @o%ld also a8e !allen accordingly, alt o%g not in t e same proportion0 For instance, i! c R <,===, @e a8e in t e one case <,=== c U 2==8 U 6==s R 3,===0 5 e rate o! s%rpl%s-8al%e R 1+=T, t e rate o! pro!it R 6==N<,2== R <+T0 &n t e second case, <,===c U +==8 U +==s R 3,===0 5 e rate o! s%rpl%s-8al%e R 1==T, t e rate o! pro!it R +==N<,+== R <=T0 &n t e case o! already in8ested capital, o@e8er, t ere @o%ld be a d%al e!!ect0 3nly 2== labo%rers co%ld be employed @it a V2== 8ariable capital, and t at at a rate o! s%rpl%s8al%e o! 1==T0 5 ey @o%ld t ere!ore prod%ce an aggregate s%rpl%s-8al%e o! only V2==0 F%rt ermore, since a constant capital o! V<,=== reD%ires +== labo%rers !or its operation, 2== labo%rers can p%t into motion only a constant capital o! V1,6==0 For prod%ction to contin%e on t e same scale, so t at 1N+ o! t e mac inery does not stand idle, V1== m%st be added to t e 8ariable capital in order to employ +== labo%rers as be!ore0 ?nd t is can be accomplis ed only by tying %p it erto disposable capital, so t at part o! t e acc%m%lation intended to extend prod%ction ser8es merely to stop a gap, or a portion reser8ed !or re8en%e is added to t e old capital0 5 en a 8ariable capital increased by V1== prod%ces V1== less s%rpl%s-8al%e0 More capital is reD%ired to employ t e same n%mber o! labo%rers, and at t e same time t e s%rpl%s-8al%e prod%ced by eac labo%rer is red%ced0 5 e ad8antages res%lting !rom a release and t e disad8antages res%lting !rom a tie-%p o! 8ariable capital bot exist only !or capital already engaged and reprod%cing itsel! %nder certain gi8en conditions0 For ne@ly in8ested capital t e ad8antages on t e one and, and t e disad8antages on t e ot er, are con!ined to an increase or drop in t e rate o! s%rpl%s-8al%e, and to a corresponding, i! in no @ay proportionate, c ange in t e rate o! pro!it0 5 e release and tie-%p o! 8ariable capital, H%st analysed, is t e res%lt o! a depreciation or appreciation o! t e elements o! 8ariable capital, t at is, o! t e cost o! reprod%cing labo%r-po@er0

81

; apter 4&&

A%t 8ariable capital co%ld also be released i!, @it t e @age rate %nc anged, !e@er labo%rers @ere reD%ired d%e to t e de8elopment o! labo%r prod%cti8ity to set in motion t e same amo%nt o! constant capital0 &n like manner, t ere may re8ersely be a tie-%p o! additional 8ariable capital i! more labo%rers are reD%ired !or t e same D%antity o! constant capital d%e to a drop in prod%cti8ity0 &!, on t e ot er and, a portion o! capital !ormerly employed as 8ariable capital is employed in t e !orm o! constant capital, so t at merely a di!!erent distrib%tion exists bet@een t e components o! t e same capital, t is as an in!l%ence on bot t e rate o! s%rpl%s-8al%e and t e rate o! pro!it, b%t does not belong %nder t e eading o! tie-%p and release o! capital, @ ic is ere being disc%ssed0 We a8e already seen t at constant capital may also be tied %p or released by t e appreciation or depreciation o! its component elements0 ?side !rom t is, it can be tied %p only i! t e prod%cti8e po@er o! labo%r increases Bpro8ided a portion o! t e 8ariable is not con8erted into constant capitalC, so t at t e same amo%nt o! labo%r creates a greater prod%ct and t ere!ore sets in motion a larger constant capital0 5 e same may occ%r %nder certain circ%mstances i! prod%cti8ity decreases, !or instance in agric%lt%re, so t at t e same D%antity o! labo%r reD%ires more means o! prod%ction, s%c as seeds or man%re, drainage, etc0, in order to prod%ce t e same o%tp%t0 ;onstant capital may be released @it o%t depreciation i! impro8ements, %tilisation o! t e !orces o! -at%re, etc0, enable a constant capital o! smaller 8al%e to tec nically per!orm t e same ser8ices as @ere !ormerly per!ormed by a constant capital o! greater 8al%e0 We a8e seen in Aook && /Englis edition: 4ol0 &&, ,art &&&0 I 0d01 t at once commodities a8e been con8erted into money, or sold, a certain portion o! t is money m%st be recon8erted into t e material elements o! constant capital, and in t e proportions reD%ired by t e tec nical nat%re o! t e partic%lar sp ere o! prod%ction0 &n t is respect, t e most important element in all branc es I aside !rom @ages, i0 e0, 8ariable capital I is ra@ material, incl%ding a%xiliary material, @ ic is partic%larly important in s%c lines o! prod%ction as do not in8ol8e ra@ materials in t e strict sense o! t e term, !or instance in mining and t e extracti8e ind%stries in general0 5 at portion o! t e price @ ic is to make good t e @ear and tear o! mac inery enters t e acco%nts c ie!ly nominally so long as t e mac inery is at all in an operating condition0 &t does not greatly matter @ et er it is paid !or and replaced by money one day or t e next, or at any ot er stage o! t e period o! t%rno8er o! t e capital0 &t is D%ite di!!erent in t e case o! t e ra@ material0 &! t e price o! ra@ material rises, it may be impossible to make it good !%lly o%t o! t e price o! t e commodities a!ter @ages are ded%cted0 4iolent price !l%ct%ations t ere!ore ca%se interr%ptions, great collisions, e8en catastrop es, in t e process o! reprod%ction0 &t is especially agric%lt%ral prod%ce proper, i0 e0, ra@ materials taken !rom organic nat%re, @ ic I lea8ingaside t e credit system !or t e present I is s%bHect to s%c !l%ct%ations o! 8al%e in conseD%ence o! c anging yields, etc0 7%e to %ncontrollable nat%ral conditions, !a8o%rable or %n!a8o%rable seasons, etc0, t e same D%antity o! labo%r may be represented in 8ery di!!erent D%antities o! %se-8al%es, and a de!inite D%antity o! t ese %se-8al%es may t ere!ore a8e 8ery di!!erent prices0 &! t e 8al%e x is represented by 1== lbs o! t e commodity a, t en t e price o! one lb0 o! a R xN1==# i! it is represented by 1,=== lbs o! a, t e price o! one lb0 o! a R xN1,===, etc0 5 is is t ere!ore one o! t e elements o! t ese !l%ct%ations in t e price o! ra@ materials0 ? second element, mentioned at t is point only !or t e sake o! completeness I since competition and t e credit system are still o%tside t e scope o! o%r analysis I is t is: &t is, in t e nat%re o! t ings t at 8egetable and animal s%bstances @ ose gro@t and prod%ction are s%bHect to certain organic la@s and bo%nd %p @it de!inite nat%ral time periods, cannot be s%ddenly a%gmented in t e same degree as, !or instance, mac ines and ot er !ixed capital, or coal, ore, etc0, @ ose reprod%ction can, pro8ided t e nat%ral conditions do not c ange, be rapidly accomplis ed in an ind%strially de8eloped co%ntry0 &t is t ere!ore D%ite possible, and %nder a de8eloped system o! capitalist prod%ction e8en ine8itable, t at t e prod%ction and increase o! t e portion o! constant capital consisting o! !ixed capital, mac inery, etc0, s o%ld considerably o%tstrip t e portion consisting o! organic ra@ materials, so t at demand !or t e latter

8<

; apter 4&&

gro@s more rapidly t an t eir s%pply, ca%sing t eir price to rise0 )ising prices act%ally ca%se 1C t ese ra@ materials to be s ipped !rom greater distances, since t e mo%nting prices s%!!ice to co8er greater !reig t rates# <C an increase in t eir prod%ction, @ ic circ%mstance, o@e8er, @ill probably not, !or nat%ral reasons, m%ltiply t e D%antity o! prod%cts %ntil t e !ollo@ing year# 3C t e %se o! 8ario%s pre8io%sly %n%sed s%bstit%tes and greater %tilisation o! @aste0 W en t is rise o! prices begins to exert a marked in!l%ence on prod%ction and s%pply it indicates in most cases t at t e t%rning point as been reac ed at @ ic demand drops on acco%nt o! t e protracted rise in t e price o! t e ra@ material and o! all commodities o! @ ic it is an element, ca%sing a reaction in t e price o! ra@ material0 ?side !rom t e con8%lsions @ ic t is ca%ses in 8ario%s !orms t ro%g depreciation o! capital, t ere are also ot er circ%mstances, @ ic @e s all mention s ortly0 A%t so m%c is already e8ident !rom t e !oregoing: 5 e greater t e de8elopment o! capitalist prod%ction, and, conseD%ently, t e greater t e means o! s%ddenly and permanently increasing t at portion o! constant capital consisting o! mac inery, etc0, and t e more rapid t e acc%m%lation Bpartic%larly in times o! prosperityC, so m%c greater t e relati8e o8er-prod%ction o! mac inery and ot er !ixed capital, so m%c more !reD%ent t e relati8e %nder-prod%ction o! 8egetable and animal ra@ materials, and so m%c more prono%nced t e pre8io%sly described rise o! t eir prices and t e attendant reaction0 ?nd so m%c more !reD%ent are t e con8%lsions ca%sed as t ey are by t e 8iolent price !l%ct%ations o! one o! t e main elements in t e process o! reprod%ction0 &!, o@e8er, a collapse o! t ese ig prices occ%rs beca%se t eir rise ca%sed a drop in demand on t e one and, and, on t e ot er, an expansion o! prod%ction in one place and in anot er importation !rom remote and pre8io%sly less resorted to, or entirely ignored, prod%ction areas, and, in bot cases, a s%pply o! ra@ materials exceeding t e demand I partic%larly at t e old ig prices I t en t e res%lt may be considered !rom di!!erent points o! 8ie@0 5 e s%dden collapse o! t e price o! ra@ materials c ecks t eir reprod%ction, and t e monopoly o! t e original prod%cing co%ntries, @ ic enHoy t e most !a8o%rable conditions o! prod%ction, is t ereby restored I possibly @it certain limitations, b%t restored ne8ert eless0 5r%e, d%e to t e impet%s it as ad, reprod%ction o! ra@ material proceeds on an extended scale, especially in t ose co%ntries @ ic more or less possess a monopoly o! t is prod%ction0 A%t t e basis on @ ic prod%ction carries on a!ter t e extension o! mac inery, etc0, and @ ic , a!ter some !l%ct%ations, is to ser8e as t e ne@ normal basis, t e ne@ point o! depart%re, is 8ery m%c extended by t e de8elopments in t e preceding cycle o! t%rno8er0 &n t e meantime, t e barely increased reprod%ction again experiences considerable impediments in some o! t e secondary so%rces o! s%pply0 For instance, it is easily demonstrated on t e basis o! t e export tables t at in t e last t irty years B%p to 186+C t e prod%ction o! cotton in &ndia increases @ ene8er t ere as been a drop in ?merican prod%ction, and s%bseD%ently it drops again more or less permanently0 7%ring t e period in @ ic ra@ materials become dear, ind%strial capitalists Hoin ands and !orm associations to reg%late prod%ction0 5 ey did so a!ter t e rise o! cotton prices in 1828 in Manc ester, !or example, and similarly in t e case o! !lax prod%ction in &reland0 A%t as soon as t e immediate imp%lse is o8er and t e general principle o! competition to Kb%y in t e c eapest marketL Binstead o! stim%lating prod%ction in t e co%ntries o! origin, as t e associations attempt to do, @it o%t regard to t e immediate price at @ ic t ese may appen at t at time to be able to s%pply t eir prod%ctC I as soon as t e principle o! competition again reigns s%preme, t e reg%lation o! t e s%pply is le!t once again to KpricesL0 ?ll t o%g t o! a common, all-embracing and !ar-sig ted control o! t e prod%ction o! ra@ materials gi8es @ay once more to t e !ait t at demand and s%pply @ill m%t%ally reg%late one anot er0 ?nd it m%st be admitted t at s%c control is on t e @ ole irreconcilable @it t e la@s o! capitalist prod%ction, and remains !or e8er a pio%s @is , or is limited to exceptional co-operation in times o! great stress and con!%sion0 2 5 e s%perstition o! t e capitalists in t is respect is so deep t at in t eir reports e8en !actory inspectors again and again t ro@ %p t eir ands in astonis ment0 5 e alternation o! good and bad years nat%rally also pro8ides !or c eaper ra@ materials0 ?side !rom t e direct e!!ect t is as on raising t e demand,

83

; apter 4&&

t ere is also t e added stim%l%s o! t e pre8io%sly mentioned in!l%ence on t e rate o! pro!it0 5 e a!oresaid process o! prod%ction o! ra@ materials being grad%ally o8ertaken by t e prod%ction o! mac inery, etc0, is t en repeated on a larger scale0 ?n act%al impro8ement o! ra@ materials satis!ying not only t e desired D%antity, b%t also t e D%ality desired, s%c as cotton !rom &ndia o! ?merican D%ality, @o%ld reD%ire a prolonged, reg%larly gro@ing and steady E%ropean demand Bregardless o! t e economic conditions %nder @ ic t e &ndian prod%cer labo%rs in is co%ntryC0 ?s it is, o@e8er, t e sp ere o! prod%ction o! ra@ materials is, by !its, !irst s%ddenly enlarged, and t en again 8iolently c%rtailed0 ?ll t is, and t e spirit o! capitalist prod%ction in general, may be 8ery @ell st%died in t e cotton s ortage o! 1861-6+, !%rt er c aracterised as it @as by t e !act t at a ra@ material, one o! t e principal elements o! reprod%ction, @as !or a time entirely %na8ailable0 5o be s%re, t e price may also rise in t e e8ent o! an ab%ndant s%pply, pro8ided t e conditions !or t is ab%ndance are more knotty0 3r, t ere may be an act%al s ortage o! ra@ material0 &t @as t is last sit%ation @ ic originally pre8ailed in t e cotton crisis0 5 e closer @e approac o%r o@n time in t e istory o! prod%ction, t e more reg%larly do @e !ind, especially in t e essential lines o! ind%stry, t e e8er-rec%rring alternation bet@een relati8e appreciation and t e s%bseD%ent res%lting depreciation o! ra@ materials obtained !rom organic nat%re0 W at @e a8e H%st analysed @ill be ill%strated by t e !ollo@ing examples taken !rom reports o! !actory inspectors0 5 e moral o! istory, also to be ded%ced !rom ot er obser8ations concerning agric%lt%re, is t at t e capitalist system @orks against a rational agric%lt%re, or t at a rational agric%lt%re is incompatible @it t e capitalist system Balt o%g t e latter promotes tec nical impro8ements in agric%lt%reC, and needs eit er t e and o! t e small !armer li8ing by is o@n labo%r or t e control o! associated prod%cers0 6ere@it !ollo@ t e ill%strations re!erred to abo8e, taken !rom t e Englis Factory )eports0 K5 e state o! trade is better# b%t t e cycle o! good and bad times diminis es as mac inery increases, and t e c anges !rom t e one to t e ot er appen o!tener, as t e demand !or ra@ materials increases @it it000 ?t present, con!idence is not only restored a!ter t e panic o! 18+>, b%t t e panic itsel! seems to be almost !orgotten0 W et er t is impro8ement @ill contin%e or not depends greatly %pon t e price o! ra@ materials0 5 ere appear to me e8idences already, t at in some instances t e maxim%m as been reac ed, beyond @ ic t eir man%!act%re becomes grad%ally less and less pro!itable, till it ceases to be so altoget er0 &! @e take, !or instance, t e l%crati8e years in t e @orsted trade o! 182* and 18+=, @e see t at t e price o! Englis combing @ool stood at 1s0 1d0, and o! ?%stralian at bet@een 1s0 <d0 and 1s0 +d0 per lb0, and t at on t e a8erage o! t e ten years !rom 1821 to 18+=, bot incl%si8e, t e a8erage price o! Englis

82

; apter 4&&

@ool ne8er exceeded 1s0 <d0 and o! ?%stralian @ool 1s0 +d0 per lb0 A%t t at in t e commencement o! t e disastro%s year o! 18+>, t e price o! ?%stralian @ool began @it 1s0 11d0, !alling to 1s0 6d0 in 7ecember, @ en t e panic @as at its eig t, b%t as grad%ally risen again to 1s0 *d0 t ro%g 18+8, at @ ic it no@ stands# @ ilst t at o! Englis @ool, commencing @it 1s0 8d0, and rising in ?pril and $eptember 18+> to 1s0 *d0, !alling in Pan%ary 18+8 to 1s0 <d0, as since risen to 1s0 +d0, @ ic is 3d0 per lb0 ig er t an t e a8erage o! t e ten years to @ ic & a8e re!erred000 5 is s o@s, & t ink, one o! t ree t ings I eit er t at t e bankr%ptcies @ ic similar prices occasioned in 18+> are !orgotten# or t at t ere is barely t e @ool gro@n @ ic t e existing spindles are capable o! cons%ming# or else, t at t e prices o! man%!act%red articles are abo%t to be permanently bot ig er000 ?nd as in past experience & a8e seen spindles and looms m%ltiply in n%mbers and speed in an incredibly s ort space o! time, and o%r exports o! @ool to France increase in an almost eD%al ratio, and as bot at ome and abroad t e age o! s eep seems to be getting less and less, o@ing to increasing pop%lations and to @ at t e agric%lt%ralists call "a D%ick ret%rn in stock", so & a8e o!ten !elt anxio%s !or persons @ om, @it o%t t is kno@ledge, & a8e seen embarking skill and capital in %ndertakings, @ olly reliant !or t eir s%ccess on a prod%ct @ ic can only be increased according to organic la@s0 000 5 e same state o! s%pply and demand o! all ra@ materials 000 seems to acco%nt !or many o! t e !l%ct%ations in t e cotton trade d%ring past periods, as @ell as !or t e condition o! t e Englis @ool market in t e a%t%mn o! 18+>, @it its o8er@ elming conseD%ences0L + B)0 Aaker in )eports o! &nsp0 o! Fact0, 3ct0 18+8, pp0 +6-610C

8+

; apter 4&&

5 e alcyon days o! t e West-)iding @orsted ind%stry, o! .orks ire, @ere 182*-+=0 5 is ind%stry employed <*,<26 persons in 1838# 3>,=== persons in 1823# 28,=*> in 182+# and >2,8*1 in 18+=0 5 e same district ad <,>68 mec anical looms in 1838# 11,2+8 in 1821# 16,8>= in 1823# 1*,1<1 in 182+ and <*,+3* in 18+=0 B)eports o! &nsp0 o! Fact0, 18+=, p0 6=0C 5 is prosperity o! t e carded @ool ind%stry excited certain !orebodings as early as 3ctober 18+=0 &n is report !or ?pril 18+1, $%b-&nspector Aaker said in regard to 'eeds and Arad!ord: K5 e state o! trade is, and as been !or some time, 8ery %nsatis!actory0 5 e @orsted spinners are !ast losing t e pro!its o! 18+=, and, in t e maHority o! cases, t e man%!act%rers are not doing m%c good0 & belie8e, at t is moment, t ere is more @oollen mac inery standing t an & a8e almost e8er kno@n at one time, and t e !lax spinners are also t%rning o!! ands and stopping !rames0 5 e cycles o! trade, in !act, in t e textile !abrics, are no@ extremely %ncertain, and & t ink @e s all s ortly !ind to be tr%e 000 t at t ere is no comparison made bet@een t e prod%cing po@er o! t e spindles, t e D%antity o! ra@ material, and t e gro@t o! t e pop%lationL Bp0 +<C0 5 e same is tr%e o! t e cotton ind%stry0 &n t e cited report !or 3ctober 18+8, @e read: K$ince t e o%rs o! labo%r in !actories a8e been !ixed, t e amo%nts o! cons%mption, prod%ce, and @ages in all textile !abrics a8e been red%ced to a r%le o! t ree0 000 & D%ote !rom a recent lect%re deli8ered by 000 t e present Mayor o! Alackb%rn, Mr0 Aaynes, on t e cotton trade, @ o by s%c means as red%ced t e cotton statistics o! K"Eac is o@n neig bo%r ood to t e orse-po@er @ill dri8e closest approximation: I real and mec anical 2+= sel!-acting m%le spindles @it preparation, or <== t rostle spindles, or 1+ looms !or 2= inc es clot , @it @inding, @arping, and siEing0 Eac orse-po@er in spinning @ill gi8e employment to <Z operati8es, b%t in @ea8ing to 1= persons, at @ages a8eraging !%ll 1=s0 6d0 a @eek to eac person0 000 5 e a8erage co%nts o! yarn sp%n and @o8en are !rom 3=s0 to 3<s0 t@ist, and 32s0 to 36s0 @e!t yarns# and taking t e spinning

86

; apter 4&&

prod%ction at 13 o%nces per spindle per @eek, @ill gi8e 8<2,>== lbs yarn sp%n per @eek, reD%iring *>=,=== lbs or <,3== bales o! cotton, at a cost o! V<8,3==000 5 e total cotton cons%med in t is district B@it in a !i8e-mile radi%s ro%nd Alackb%rnC per @eek is 1,+3=,=== lbs, or 3,6+= bales, at a cost o! V22,6<+000 5 is is one-eig teent o! t e @ ole cotton spinning o! t e (nited Kingdom, and one-sixt o! t e @ ole po@er-loom @ea8ing0" K5 %s @e see t at, according to Mr0 Aaynes"s calc%lations, t e total n%mber o! cotton spindles in t e (nited Kingdom is <8,8==,===, and s%pposing t ese to be al@ays @orking !%ll time, t at t e ann%al cons%mption o! cotton o%g t to be 1,23<,=8=,=== lbs0 A%t as t e import o! cotton, less t e export in 18+6 and 18+>, @as only 1,=<<,+>6,83< lbs, t ere m%st necessarily be a de!iciency o! s%pply eD%al to 2=*,+=3,168 lbs0 Mr0 Aaynes, o@e8er, @ o as been good eno%g to comm%nicate @it me on t is s%bHect, t inks t at an ann%al cons%mption o! cotton based %pon t e D%antity %sed in t e Alackb%rn district @o%ld be liable to be o8erc arged, o@ing to t e di!!erence, not only in t e co%nts sp%n, b%t in t e excellence o! t e mac inery0 6e estimates t e total ann%al cons%mption o! cotton in t e (nited Kingdom at 1,===,===,=== lbs0 A%t i! e is rig t, and t ere really is an excess o! s%pply eD%al to <<,+>6,83< lbs, s%pply and demand seem to be nearly balanced already, @it o%t taking into consideration t ose additional spindles and looms @ ic Mr0 Aaynes speaks o! as getting ready !or @ork in is o@n district, and, by parity o! reasoning, probably in ot er districts alsoL Bpp0 +*, 6=C0

III. General Illustration. The Cotton Crisis "f -./-,/0


Preli,inar* 7istor*. 1845!3& ;<=>0 5 e golden age o! cotton ind%stry0 ,rice o! cotton 8ery lo@0 '0 6orner says on t is point:
KFor t e last eig t years & a8e not kno@n so acti8e a state o! trade as as pre8ailed d%ring t e last s%mmer and a%t%mn, partic%larly al!-year & in cotton spinning0 5 ro%g o%t t e a8e been recei8ing

notices e8ery @eek o! ne@ in8estments o! capital in !actories, eit er in t e !orm o! ne@ mills being b%ilt, o! t e !e@ t at @ere %ntenanted !inding occ%piers, o! enlargements o! existing mills, o! ne@ engines o! increased po@er, and o! man%!act%ring mac inery0L B)eports o! &nsp0 o! Fact0, 3ct0 182+, p0 130C

8>

; apter 4&&

;<=?0 5 e complaints begin:


KFor a considerable time past & a8e eard !rom t e occ%piers o! cotton mills 8ery general complaints o! t e depressed state o! t eir trade000 !or @it in t e last six @eeks se8eral mills a8e beg%n to @ork s ort time, %s%ally eig t o%rs a day instead o! t@el8e# t is appears to be on t e increase000 5 ere as been a great ad8ance in t e price o! t e ra@ material000 t ere as been not only no ad8ance in t e man%!act%red articles, b%t 000 prices are lo@er t an t ey @ere be!ore t e rise in cotton began0 From t e great increase in t e n%mber o! cotton mills @it in t e last !o%r years, t ere m%st a8e been, on t e one and, a greatly increased demand !or t e ra@ material, and, on t e ot er, a greatly increased s%pply in t e market o! t e man%!act%red articles# ca%ses t at m%st conc%rrently a8e operated against pro!its, s%pposing t e s%pply o! t e ra@ material and t e cons%mption o! t e man%!act%red article to a8e remained %naltered# b%t, o! co%rse, in t e greater ratio by t e late s ort s%pply o! cotton, and t e !alling o!! in t e demand !or t e man%!act%red articles in se8eral markets, bot ome and !oreign0 B)eports o! &nsp0 o! Fact0, 3ct0 1826, p0 1=0C 5 e rising demand !or ra@ materials nat%rally @ent and in and @it a market !looded @it man%!act%res0 Ay t e @ay, t e expansion o! ind%stry at t at time and t e s%bseD%ent stagnation @ere not con!ined to t e cotton districts0 5 e carded @ool district o! Arad!ord ad only 318 !actories in 1836 and 2*= in 18260 5 ese !ig%res do not by any means express t e act%al gro@t o! prod%ction, since t e existing !actories @ere also considerably enlarged0 5 is @as partic%larly tr%e o! t e !lax spinning-mills0 K?ll a8e contrib%ted more or less, d%ring t e last ten years, to t e o8erstocking o! t e market, to @ ic a great part o! t e present stagnation o! trade m%st be attrib%ted000 5 e depression000 nat%rally res%lts !rom s%c rapid increase o! mills and mac inery0L B)eports o! &nsp0 o! Fact0, 3ct0 1826, p0 3=0C

88

; apter 4&&

;<=@0 &n 3ctober, a money panic0 7isco%nt 8T0 5 is @as preceded by t e debacle o! t e rail@ay s@indle and t e East &ndian spec%lation in accommodation bills0 A%t: KMr0 Aaker enters into 8ery interesting details respecting t e increased demand, in t e last !e@ years, !or cotton, @ool, and !lax, o@ing to t e great extension o! t ese trades0 6e considers t e increased demand !or t ese ra@ materials, occ%rring, as it as, at a period @ en t e prod%ce as !allen m%c belo@ an a8erage s%pply, as almost s%!!icient, e8en @it o%t re!erence to t e monetary derangement, to acco%nt !or t e present state o! t ese branc es0 5 is opinion is !%lly con!irmed, by my o@n obser8ations, and con8ersation @it persons @ell acD%ainted @it trade0 5 ose se8eral branc es @ere all in a 8ery depressed state, @ ile disco%nts @ere readily obtained at and %nder + per cent0 5 e s%pply o! ra@ silk as, on t e contrary, been ab%ndant, t e prices moderate, and t e trade, conseD%ently, 8ery acti8e, till 000 t e last t@o or t ree @eeks, @ en t ere is no do%bt t e monetary derangement as a!!ected not only t e persons act%ally engaged in t e man%!act%re, b%t more extensi8ely still, t e man%!act%rers o! !ancy goods, @ o @ere great c%stomers to t e t ro@ster0 ? re!erence to p%blis ed ret%rns s o@s t at t e cotton trade ad increased nearly <> per cent in t e last t ree years0 ;otton as conseD%ently increased, in ro%nd n%mbers, !rom 2d0 to 6d0 per lb0, @ ile t@ist, in conseD%ence o! t e increased s%pply, is yet only a !raction abo8e its !ormer price0 5 e @oollen trade began its increase in 1836, since @ ic .orks ire as increased its man%!act%re o! t is article 2= per cent, b%t $cotland ex ibits a yet greater increase0 5 e increase o! t e @orsted trade
6

is still larger0

;alc%lations gi8e a res%lt o! %p@ards o! >2 per cent increase @it in t e same period0 5 e cons%mption o! ra@ @ool as t ere!ore been immense0 Flax as

8*

; apter 4&&

increased since 183* abo%t <+ per cent in England, << per cent in $cotland, and nearly *= per cent in &reland > # t e conseD%ence o! t is, in connexion @it per ton, @ ile t e price o! yarn 310C ;<=A0 $ince late in 1828 b%siness re8i8ed0 K5 e price o! !lax @ ic as been so lo@ as to almost g%arantee a reasonable pro!it %nder any !%t%re circ%mstances, as ind%ced t e man%!act%rers to carry on t eir @ork 8ery steadily0000 5 e @oollen man%!act%rers @ere exceedingly b%sy !or a @ ile in t e early part o! t e year0000 & !ear t at consignments o! @oollen goods o!ten take t e place o! real demand, and t at periods o! apparent prosperity, i0 e0, o! !%ll @ork, are not al@ays periods o! legitimate demand0 &n some mont s t e @orsted as been exceedingly good, in !act !lo%ris ing0000 ?t t e commencement o! t e period re!erred to, @ool @as exceedingly lo@# @ at @as bo%g t by t e spinners @as @ell bo%g t, and no do%bt in considerable D%antities0 W en t e price o! @ool rose @it t e spring @ool sales, t e spinner ad t e ad8antage, and t e demand !or man%!act%red goods becoming considerable and imperati8e, t ey kept it0 K B)eports o! &nsp0 o! Fact0, ?pril 182*, p0 2<0C K&! @e look at t e 8ariations in t e state o! trade, @ ic a8e occ%rred in t e man%!act%ring districts o! t e kingdom !or a period no@ o! bet@een t ree and !o%r years, & t ink @e m%st admit t e existence o! a great dist%rbing ca%se some@ ere 000 b%t may not t e immensely prod%cti8e po@er o! increased mac inery a8e added anot er element to t e same ca%seQL B)eports o! &nsp0 o! Fact0, ?pril 182*, pp0 2<, 230C &n -o8ember 1828, and in May and s%mmer o! 182*, rig t %p to 3ctober, b%siness !lo%ris ed0 bad crops, as been t at t e ra@ material as gone %p V1= as !allen 6d0 a b%ndle0L B)eports o! &nsp0 o! Fact0, 3ct0 182>, pp0 3=-

*=

; apter 4&&

K5 e @orsted st%!! o! trade, o! @ ic Arad!ord and 6ali!ax are t e great i8es o! ind%stry, as been t e one most acti8e# t is trade as ne8er be!ore reac ed anyt ing like t e extent, to @ ic it as no@ attained0 $pec%lation, and %ncertainty as to t e probable s%pply o! cotton @ool, a8e e8er ad t e e!!ect o! ca%sing greater excitement, and more !reD%ent alterations in t e state o! t at branc o! man%!act%re, t an any ot er0 5 ere is 000 at present an acc%m%lation in stock o! t e coarser kinds o! cotton goods, @ ic creates anxiety on t e part o! t e smaller spinners, and is already acting to t eir detriment, a8ing ca%sed se8eral o! t em to @ork t eir mills s ort time0 K B)eports o! &nsp0 o! Fact0, 3ct0 182*, pp0 62-6+0C ;<>B0 ?pril0 A%siness contin%ed brisk0 5 e exception: K5 e great depression in a part o! t e cotton trade 000 attrib%table to t e scarcity in t e s%pply o! t e ra@ material more especially adapted to t e branc engaged in spinning lo@ n%mbers o! cotton yarns, or man%!act%ring ea8y cotton goods0 ? !ear is entertained t at t e increased mac inery b%ilt recently !or t e @orsted trade, may be !ollo@ed @it a similar reaction0 Mr0 Aaker comp%tes t at in t e year 182* alone t e @orsted looms a8e increased t eir prod%ce 2= per cent, and t e spindles <+ or 3= per cent, and t ey are still increasing at t e same rate0 K B)eports o! &nsp0 o! Fact0, ?pril 18+=, p0 +20C

;<>B0 3ctober0
K5 e ig price o! ra@ cotton contin%es 000 to ca%se a considerable depression in t is branc o! man%!act%re, especially in t ose descriptions o! goods in @ ic t e ra@ material constit%tes a considerable part o! t e cost o! prod%ction0000 5 e great ad8ance in t e price o! ra@ silk as like@ise ca%sed a depression

*1

; apter 4&&

in many branc es o! t at man%!act%re0L B)eports0 o! &nsp0 o! Fact0, 3ct0 18+=, p0 120C ?nd on pages 31 and 33 o! t e same report @e learn t at t e ;ommittee o! t e )oyal $ociety !or t e ,romotion and &mpro8ement o! t e :ro@t o! Flax in &reland predicted t at t e ig price o! !lax, toget er @it t e lo@ le8el o! prices !or ot er agric%lt%ral prod%cts, ens%red a considerable increase in !lax prod%ction in t e ens%ing year0 ;<>C0 ?pril0 :reat prosperity0 '0 6orner says in is report: K?t no period d%ring t e last se8enteen years t at & a8e been o!!icially acD%ainted @it t e man%!act%ring districts in 'ancas ire a8e & kno@n s%c general prosperity# t e acti8ity in e8ery branc is extraordinary0L B)eports o! &nsp0 o! Fact0, ?pril 18+3, p0 1*0C ;<>C0 3ctober0 7epression in t e cotton ind%stry0 K38er-prod%ction0L B)eports o! &nsp0 o! Fact0, 3ct0 18+3, p0 1+0C ;<>=0 ?pril0 K5 e @oollen trade, alt o%g not brisk, as gi8en !%ll employment to all t e !actories engaged %pon t at !abric, and a similar remark applies to t e cotton !actories0 5 e @orsted trade generally as been in an %ncertain and %nsatis!actory condition d%ring t e @ ole o! t e last al!-year0 5 e man%!act%re o! !lax and emp are more likely to be serio%sly impeded, by reason o! t e diminis ed s%pplies o! t e ra@ materials !rom )%ssia d%e to t e ;rimean @ar0L B)eports o! &nsp0 o! Fact0, ?pril 18+2, p0 3>0C ;<>A0 K5 e trade in t e $cottis !lax districts still contin%es depressed I t e ra@ material being scarce, as @ell as ig in price# and t e in!erior D%ality o! t e last year"s crop in t e Aaltic, !rom @ ence come o%r principal s%pplies, @ill a8e an inH%rio%s e!!ect on t e trade o! t e district# H%te, neit er %n%s%ally o@e8er, @ ic ig is grad%ally s%perseding !lax in many o! t e coarser !abrics, is in price, nor scarce in D%antity 000 abo%t one- al! o! t e mac inery in 7%ndee is no@ employed in H%te spinning0L B)eports o! &nsp0

*<

; apter 4&&

o! Fact0, ?pril 18+*, p0 1*0C I K3@ing to t e ig price o! t e ra@ material, !lax spinning is still !ar !rom rem%nerating, and @ ile all t e ot er mills are going !%ll time, t ere are se8eral instances o! t e stoppage o! !lax mac inery0000 P%te spinning is 000 in a rat er more satis!actory state, o@ing to t e recent decline in t e price o! material, @ ic p0 <=0C as no@ !allen to a 8ery moderate point0L B)eports o! &nsp0 o! Fact0, 3ct0 18+*,

1831!34. %,erican Civil 8ar. Cotton +a,ine. The 2reatest E9a, le of an Interru tion in the Pro#uction Process through Scarcit* an# .earness of $a) -aterial
;<?B0 ?pril0 KWit respect to t e state o! trade, & am appy to be able to in!orm yo% t at, not@it standing t e @it t e exception o! silk, ands ig price o! ra@ material, all t e textile man%!act%res, a8e been !airly b%sy a8e o! d%ring t e past districts al!-year0000 &n some o! t e cotton a8e been ad8ertised !or, and

migrated t it er !rom -or!olk and ot er r%ral co%nties0 5 ere appears to be, in e8ery branc o! it alone, @ ic trade, a great scarcity o! ra@ material0 &t is 000 t e @ant keeps %s @it in bo%nds0 &n t e cotton trade, t e erection o! ne@ mills, t e !ormation o! ne@ systems o! extension, and t e demand !or ands, can scarcely, & t ink, a8e been at any time exceeded0 E8ery@ ere t ere are ne@ mo8ements in searc o! ra@ material0L B)eports o! &nsp0 o! Fact0, ?pril 186=, p0 +>0C

;<?B0 3ctober0
K5 e state o! trade in t e cotton, @oollen, and !lax districts as been good# indeed in &reland, it is stated to a8e been "8ery good" !or no@ more t an a year# and

*3

; apter 4&&

t at it @o%ld a8e been still better, b%t !or t e ig price o! ra@ material0 5 e !lax spinners appear to be looking @it more anxiety t an e8er to t e opening o%t o! &ndia by rail@ays, and to t e de8elopment o! its agric%lt%re, !or a s%pply o! !lax @ ic Fact0, 3ct0 186=, p0 3>0C ;<?;0 ?pril0 K5 e state o! trade is at present depressed0000 ? !e@ cotton mills are r%nning s ort time, and many silk mills are only partially employed0 )a@ material is ig 0 &n almost e8ery branc o! textile man%!act%re it is abo8e t e price at @ ic it can be man%!act%red !or t e masses o! t e cons%mers0L B)eports o! &nsp0 o! Fact0, ?pril 1861, p0 330C &t ad become e8ident t at in 186= t e cotton ind%stry ad o8erprod%ced0 5 e e!!ect o! t is made itsel! !elt d%ring t e next !e@ years0 K&t as taken bet@een t@o and t ree years to absorb t e o8er-prod%ction o! 186= in t e markets o! t e @orld0L B)eports o! &nsp0 o! Fact0, 7ecember 1863, p0 1<>0C K5 e depressed state o! t e markets !or cotton man%!act%res in t e East, early in 186=, @ ic ad a corresponding e!!ect %pon t e trade o! Alackb%rn, in 3=,=== po@er-looms are %s%ally employed almost excl%si8ely in t e prod%ction o! clot to be cons%med in t e East0 5 ere @as conseD%ently b%t a limited demand !or labo%r !or many mont s prior to t e e!!ects o! t e cotton blockade being !elt0000 Fort%nately t is preser8ed many o! t e spinners and man%!act%rers !rom being in8ol8ed in t e common r%in0 $tocks increased in 8al%e so long as t ey @ere eld, and t ere ad been conseD%ently not ing like t at alarming depreciation in t e 8al%e o! property @ ic mig t not %nreasonably a8e been looked !or in s%c a crisis0L B)eports o! &nsp0 o! Fact0, 3ct0 186<, pp0 <*, 310C may be commens%rate @it t eir @ants0L B)eports o! &nsp0 o!

*2

; apter 4&&

;<?;0 3ctober0 K5rade as been !or some time in a 8ery depressed state0 &t is not improbable indeed t at d%ring t e @inter mont s many establis ments @ill be !o%nd to @ork 8ery s ort time0 5 is mig t, o@e8er, a8e been anticipated 000 irrespecti8e o! t e ca%ses @ ic and o%r exports, s ort time m%st a8e interr%pted o%r %s%al s%pplies o! cotton !rom ?merica a8e been kept d%ring t e ens%ing @inter in conseD%ence o! t e great increase o! prod%ction d%ring t e last t ree years, and t e %nsettled state o! t e &ndian and ; inese markets0L B)eports o! &nsp0 o! Fact0, 3ct0 1861, p0 1*0C Cotton "aste. 0ast Dndian Cotton )Surat*. Dnfluence on the "ages of ,abourers. Dmprovement of Machinery. +dding Starch 'lour and Mineral Substitutes to Cotton. 0ffect of Starch 'lour Si#ing on ,abourers. Manufacturers of 'iner Earn Grades. Manufacturers5 'raud K? man%!act%rer @rites to me t %s: "?s to estimates o! cons%mption per spindle, & do%bt i! yo% take s%!!iciently into calc%lation t e !act t at @ en cotton is ig in price, e8ery spinner o! ordinary yarns Bsay %p to 2=s0C Bprincipally 1<s0 to 3<s0C @ill raise is co%nts as m%c as e can, t at is, @ill spin 16s0 @ ere e %sed to spin 1<s0, or <<s0 in t e place o! 16s0, and so on# and t e man%!act%rer %sing t ese !ine yarns @ill make is clot t e %s%al @eig t by t e addition o! so m%c more siEe0 5 e trade is a8ailing itsel! o! t is reso%rce at present to an extent @ ic discreditable0 & a8e is e8en eard on good a%t ority o!

ordinary export s irting @eig ing 8 lbs @ ic @as made o! +[ lbs0 cotton and <` lbs siEe0000 &n clot s o! ot er descriptions as m%c as += per cent siEe is sometimes added# so t at a man%!act%rer may and does tr%ly boast t at e is getting ric by selling clot !or less money per po%nd t an e paid !or t e mere yarn o! @ ic t ey are composed0L" B)eports o! &nsp0 o! Fact0, ?pril 1862, p0 <>0C

*+

; apter 4&&

K&

a8e also recei8ed statements t at t e @ea8ers

attrib%te increased sickness to t e siEe @ ic is %sed in dressing t e @arps o! $%rat cotton, and @ ic is not made o! t e same material as !ormerly, 8iE0, !lo%r0 5 is s%bstit%te !or !lo%r is said, o@e8er, to a8e t e 8ery important ad8antage o! increasing greatly t e @eig t o! t e clot man%!act%red, making 1+ lbs o! t e ra@ material to @eig <= lbs @ en @o8en into clot 0L B)eports o! &nsp0 o! Fact0, 3ct0 18630 5 is s%bstit%te @as gro%nd talc%m, called ; ina clay, or gyps%m, called Frenc c alk0C K5 e earnings o! t e @ea8ers Bmeaning t e operati8esC are m%c red%ced !rom t e employment o! s%bstit%tes !or !lo%r as siEing !or @arps0 5 is siEing, @ ic gi8es @eig t to t e yarn, renders it ard and brittle0 Eac t read o! t e @arp in t e loom passes t ro%g a part o! t e loom called "a eald", @ ic consists o! strong t reads to keep t e @arp in its proper place, and t e ard state o! t e @arp ca%ses t e t reads o! t e eald to break !reD%ently# and it is said to take a @ea8er !i8e min%tes to tie %p t e t reads e8ery time t ey break# and a @ea8er as to piece t ese ends at least ten times as o!ten as !ormerly, t %s red%cing t e prod%cti8e po@ers o! t e loom in t e @orking- o%rs0 K BDbid0, pp0 2<-230C K&n ?s ton, $talybridge, Mossley, 3ld am, etc0, t e red%ction o! t e time as been !%lly one-t ird, and t e o%rs are lessening e8ery @eek0000 $im%ltaneo%sly @it t is dimin%tion o! time t ere is also a red%ction o! @ages in many departments0L B)eports o! &nsp0 o! Fact0, 3ct0 1861, pp0 1<-130C Early in 1861 t ere @as a strike among t e mec anical @ea8ers in some parts o! 'ancas ire0 $e8eral man%!act%rers ad anno%nced a @age red%ction o! + to >0+T0 5 e operati8es insisted t at t e @age scale remain t e same @ ile @orking- o%rs @ere red%ced0 5 is @as not granted, and a strike @as called0 ? mont later, t e operati8es ad to gi8e in0 A%t t en t ey got bot 0 K&n addition to t e red%ction o! @ages to @ ic t e operati8es at last consented, many mills are no@

*6

; apter 4&&

r%nning s ort time0L B)eports o! &nsp0 o! Fact0, ?pril 1861, p0 <3:C ;<?F0 ?pril0 K5 e s%!!erings o! t e operati8es since t e date o! my last report a8e greatly increased# b%t at no period o! t e istory o! man%!act%res, a8e s%!!erings so patient sel!-respect0L s%dden and so se8ere been borne @it so m%c silent resignation and so m%c B)eports o! &nsp0 o! Fact0, ?pril 186<, p0 1=0C K5 e proportionate n%mber o! operati8es @ olly o%t o! employment at t is date appears not to be m%c larger t an it @as in 1828, @ en t ere @as an ordinary panic o! s%!!icient conseD%ences to excite alarm amongst t e man%!act%rers, so m%c as to @arrant t e collection o! similar statistics o! t e state o! t e cotton trade as are no@ iss%ed @eekly0000 &n May 1828, t e proportion o! cotton operati8es o%t o! @ork in Manc ester o%t o! t e @ ole n%mber %s%ally employed @as 1+ per cent, on s ort time 1< per cent, @ ilst >= per cent @ere in !%ll @ork0 3n t e <8t o! May o! t e present year, o! t e @ ole n%mber o! persons %s%ally employed 1+ per cent @ere o%t o! @ork, 3+ per cent @ere on s ort time, and 2* per cent @ere @orking !%ll time0000 &n some ot er places, $tockport !or example, t e a8erages o! s ort time and o! non-employment are ig er, @ ilst t ose o! !%ll time are lessL, beca%se coarser n%mbers are sp%n t ere t an in Manc ester Bp0 16C0 ;<?F0 3ctober0 K& !ind by t e last ret%rn to ,arliament t at t ere @ere <,88> cotton !actories in t e (nited Kingdom in 1861, <,1=* o! t em being in my district B'ancas ire and ; es ireC0 & @as a@are t at a 8ery large proportion o! t e <,1=* !actories in my district @ere small establis ments, gi8ing employment to !e@ persons,

*>

; apter 4&&

b%t &

a8e been s%rprised to !ind

o@ large t at

proportion is0 &n 3*<, or 1* per cent, t e steam-engine or @ater@ eel is %nder 1= orse-po@er# in 32+, or 16 per cent, t e orsepo@er is abo8e 1= and %nder <=# and in 1,3>< t e po@er is <= orses and more0000 ? 8ery large proportion o! t ese small man%!act%rers I being more t an a t ird o! t e @ ole n%mber I @ere operati8es t emsel8es at no distant period# t ey are men @it o%t command o! capital0 5 e br%nt o! t e b%rden t en @o%ld a8e to be borne by t e remaining t@o-t irds0L B)eports o! &nsp0 o! Fact0, 3ct0 186<, pp0 18, 1*0C ?ccording to t e same report, 2=,126, or 1103T, o! t e cotton employees in 'ancas ire and ; es ire @ere t en @orking !%ll time# 132,>6>, or 38T, @ere @orking s ort time# and 1>*,><1, or +=0>T, @ere %nemployed0 ?!ter ded%cting t e ret%rns !rom Manc ester and Aolton, @ ere mainly !ine grades @ere sp%n, a line relati8ely little a!!ected by t e cotton !amine, t e matter looks still more %n!a8o%rable# namely, !%lly employed 80+T, partly employed 38T, and %nemployed +30+T Bpp0 1* and <=C0 KWorking %p good or bad cotton makes a material di!!erence to t e operati8e0 &n t e earlier part o! t e year, @ en man%!act%rers @ere endea8o%ring to keep t eir mills at @ork by %sing %p all t e moderately priced cotton t ey co%ld obtain, m%c bad cotton @as bro%g t into mills in @ ic good cotton @as ordinarily %sed, and t e di!!erence to t e operati8es in @ages @as so great t at many strikes took place on t e gro%nd t at t ey co%ld not make a !air day"s @ages at t e old rates0000 &n some cases, alt o%g @orking !%ll time, t e di!!erence in @ages !rom @orking bad cotton @as as m%c as one- al!L Bp0 <>C0 ;<?C0 ?pril0 K7%ring t e present year t ere @ill not be !%ll employment !or m%c Fact0, ?pril 1863, p0 120C K? 8ery serio%s obHection to t e %se o! $%rat cotton, as man%!act%rers are no@ compelled to %se it, is t at more t an one- al! o! t e cotton operati8es in t e co%ntry0L B)eports o! &nsp0 o!

*8

; apter 4&&

t e speed o! t e mac inery m%st be greatly red%ced in t e processes o! man%!act%re0 For some years past e8ery e!!ort as been made to increase t e speed o! mac inery, in order to make t e same mac inery prod%ce more @ork# and t e red%ction o! t e speed becomes t ere!ore a D%estion @ ic a!!ects t e operati8e as @ell as t e man%!act%rer# !or t e c ie! part o! t e operati8es are paid by t e @ork done# !or instance, spinners are paid per lb0 !or t e yarn sp%n, @ea8ers per piece !or t e n%mber o! pieces @o8en# and e8en @it t e ot er classes o! operati8es paid by t e @eek t ere @o%ld be a dimin%tion o! @ages in consideration o! t e less amo%nt o! goods prod%ced0 From inD%iries & a8e made, and statements placed in my ands, o! t e earnings o! cotton operati8es d%ring t e present year, & !ind t ere is a dimin%tion a8eraging <= per cent %pon t eir !ormer earnings, in some instances t e dimin%tion as been as m%c as += per cent, calc%lated %pon t e same rate o! @ages as pre8ailed in 1861L Bp0 13C0 K0005 e s%m earned depends %pon 000 t e nat%re o! t e material operated %pon0000 5 e position o! t e operati8es in regard to t e amo%nt o! t eir earnings is 8ery m%c Mac inery better no@ B3ctober 1863C t an it @as t is time last year0 as impro8ed, t e material is better %nderstood, and t e operati8es are able better to o8ercome t e di!!ic%lties t ey ad to contend @it at !irst0 & remember being in a se@ing sc ool Ba c arity instit%tion !or %nemployedC at ,reston last spring, @ en t@o yo%ng @omen, @ o ad been sent to @ork at a @ea8ing s ed t e day be!ore, %pon t e representation o! t e man%!act%rer t at t ey co%ld earn 2s0 per @eek, ret%rned to t e sc ool to be readmitted, complaining t at t ey co%ld not a8e earned 1s0 per @eek0 & a8e been in!ormed o! "sel!acting minders" 000 men @ o manage a pair o! sel!-

**

; apter 4&&

acting m%les, earning at t e end o! a !ortnig t"s !%ll @ork 8s0 11d0, and t at !rom t is s%m @as ded%cted t e rent o! t e o%se, t e man%!act%rer, o@e8er, ret%rning al! t e rent as a gi!t0 B6o@ genero%sSC 5 e minders took a@ay t e s%m o! 6s0 11d0 &n many places t e sel!-acting minders ranged !rom +s0 to *s0 per @eek, and t e @ea8ers !rom <s0 to 6s0 per @eek in t e last mont s o! 186<0000 ?t t e present time a m%c more ealt y state o! t ings exists, alt o%g t ere is still a great decrease in t e earnings in most districts0000 5 ere are se8eral ca%ses @ ic a8e tended to t e red%ction o! earnings, besides t e s orter staple o! t e $%rat cotton and its dirty condition# !or instance, it is no@ t e practice to mix "@aste" largely @it $%rat, @ ic conseD%ently increases t e di!!ic%lties o! t e spinner or minder0 5 e t reads, !rom t eir s ortness o! !ibre, are more liable to break in t e dra@ing o%t o! t e m%le and in t e t@isting o! t e yarn, and t e m%le cannot be kept so contin%o%sly in motion0000 5 en, !rom t e great attention reD%ired in @atc ing t e t reads in @ea8ing, many @ea8ers can only mind one loom, and 8ery !e@ can mind more t an t@o looms0000 5 ere as been a direct red%ction o! +, >Z and 1= per cent %pon t e @ages o! t e operati8es0000 &n t e maHority o! cases t e operati8e as to make t e best o! is material, and to earn t e best @ages e can at t e ordinary rates0000 ?not er di!!ic%lty t e @ea8ers @ell-!inis ed clot a8e sometimes to contend @it is, t at t ey are expected to prod%ce !rom in!erior materials, and are s%bHect to !ine !or t e !la@s in t eir @ork0L B)eports o! &nsp0 o! Fact0, 3ct0 1863, pp0 21-230C Wages @ere miserable, e8en @ ere @ork @as !%ll time0 5 e cotton @orkers @illingly o!!ered t emsel8es !or all p%blic @orks s%c as drainage, road-b%ilding, stone-breaking and street-pa8ing, in @ ic t ey @ere employed, to get t eir keep !rom t e a%t orities Balt o%g t is practically amo%nted to assistance to t e man%!act%rer0 $ee Aook &, $0 +*8N+8* /Englis edition: pp0 +>2->+0 I 0d01C0 5 e @ ole bo%rgeoisie stood g%ard o8er t e labo%rers0 Were t e @orst dog"s @ages

1==

; apter 4&&

o!!ered, and a labo%rer re!%sed to accept t em, t e )elie! ;ommittee @o%ld strike im !rom its lists0 &t @as in a @ay a golden age !or t e man%!act%rers, !or t e labo%rers ad eit er to star8e or @ork at a price most pro!itable !or t e bo%rgeois0 5 e )elie! ;ommittees acted as @atc -dogs0 ?t t e same time, t e man%!act%rers acted in secret agreement @it t e go8ernment to inder emigration as m%c as possible, partly to retain in readiness t e capital in8ested in t e !les and blood o! t e labo%rers, and partly to sa!eg%ard t e o%se-rent sD%eeEed o%t o! t e labo%rers0 K5 e )elie! ;ommittees acted @it great strictness %pon t is point0 &! @ork @as o!!ered, t e operati8es to @ om it @as proposed @ere str%ck o!! t e lists, and t %s compelled to accept t e o!!er0 W en t ey obHected to accept @ork000 t e ca%se as been t at t eir earnings @o%ld a8e been merely nominal, and t e @ork exceedingly se8ere0L B)eports o! &nsp0 o! Fact0, 3ct0 1863, p0 *>0C 5 e operati8es @ere @illing to per!orm any @ork gi8en to t em %nder t e ,%blic Works ?ct0 K5 e principle %pon @ ic ind%strial employments @ere organised 8aried considerably in di!!erent to@ns, b%t in t ose places e8en in @ ic t e o%tdoor @ork @as not absol%tely a labo%r test t e manner in @ ic labo%r @as rem%nerated by its being paid !or eit er at t e exact rate o! relie!, or closely approximating t e rate, it became in !act a labo%r testL Bp0 6*C0 K5 e ,%blic Works ?ct o! 1863 @as intended to remedy t is incon8enience, and to enable t e operati8e to earn is day"s @ages as an independent labo%rer0 5 e p%rpose o! t is ?ct @as t ree-!old: !irstly, to enable local a%t orities to borro@ money o! t e Exc eD%er 'oan ;ommissioners B@it consent o! t e ,resident o! t e ;entral )elie! ;ommitteeC# secondly, to !acilitate t e impro8ement o! t e to@ns o! t e cotton districts# t irdly, to pro8ide @ork and rem%nerati8e @ages to t e %nemployed operati8es0L 'oans to t e amo%nt o! V883,>== ad been granted %nder t is ?ct %p to t e end o! 3ctober 1863 Bp0 >=C0 5 e @orks %ndertaken @ere mainly canalisation, road-b%ilding, street-pa8ing, @ater@orks reser8oirs, etc0 Mr0 6enderson, president o! t e committee in Alackb%rn, @rote @it re!erence to t is to !actory inspector )edgra8e:

1=1

; apter 4&&

K-ot ing in my experience, d%ring t e present period o! s%!!ering and distress, as str%ck me more !orcibly or gi8en me more satis!action, t an t e c eer!%l alacrity @it @ ic t e %nemployed operati8es o! t is district a8e accepted o! t e @ork o!!ered to t em t ro%g t e adoption o! t e ,%blic Works ?ct, by t e ;orporation o! Alackb%rn0 ? greater contrast t an t at presented bet@een t e cotton spinner as a skilled @orkman in a !actory, and as a labo%rer in a se@er 12 or 18 !eet deep, can scarcely be concei8ed0L B7epending on t e siEe o! is !amily, e earned 2 to 1<s0 per @eek, t is enormo%s amo%nt pro8iding sometimes !or a !amily o! eig t0 5 e to@ns-men deri8ed a do%ble pro!it !rom t is0 &n t e !irst place, t ey sec%red money to impro8e t eir smoky and neglected cities at exceptionally lo@ interest rates0 &n t e second place, t ey paid t e labo%rers !ar less t an t e reg%lar @age0C K?cc%stomed as e ad been to a temperat%re all b%t tropical, to @ork at @ ic manip%lation a8ailed agility and delicacy o! im in!initely more t an

m%sc%lar strengt and to do%ble and sometimes treble t e rem%neration @ ic it is possible !or im no@ to obtain, is ready acceptance o! t e pro!!ered employment in8ol8ed an amo%nt o! sel!-denial and consideration t e exercise o! @ ic is most creditable0 &n Alackb%rn t e men a8e been tested at almost e8ery 8ariety o! o%tdoor @ork# in exca8ating a sti!! ea8y clay soil to a considerable dept , in draining, in stone-breaking, in road-making, and in exca8ating !or street se@ers to a dept o! 12, 16, and sometimes <= !eet0 &n many cases @ ile t %s employed t ey are standing in m%d and @ater to t e dept o! 1= or 1< inc es, and in all t ey are exposed to a climate @ ic , !or c illy %midity is not s%rpassed & s%ppose, e8en i! it is eD%alled, by t at o! any district in EnglandL Bpp0 *1-*<C0 K5 e cond%ct o! t e operati8es make t e best o! o%tdoor labo%rL Bp0 6*C0 ;<?=0 ?pril0 as been almost blameless, and t eir readiness to accept and

1=<

; apter 4&&

K;omplaints are occasionally made in di!!erent districts at t e scarcity o! ands, b%t t is de!iciency is c ie!ly !elt in partic%lar departments, as, !or instance o! @ea8ers0000 5 ese complaints a8e t eir origin as m%c !rom t e lo@ rate o! @ages @ ic t e ands can earn o@ing to t e in!erior D%alities o! yarn %sed, as !rom any positi8e scarcity o! @ork-people e8en in t at partic%lar department0 -%mero%s di!!erences taken place d%ring t e past mont a8e bet@een t e

masters o! partic%lar mills and t eir operati8es in respect o! t e @ages0 $trikes, & am sorry to say, are b%t too !reD%ently resorted to0 000 5 e e!!ect o! t e ,%blic Works ?ct is !elt as a competition by t e millo@ners0 5 e local committee at Aac%p as s%spended operations, !or alt o%g all t e mills are not r%nning, yet a scarcity o! ands as been experienced0L B)eports o! &nsp0 o! Fact0, ?pril 1862, pp0 *, 1=0C &t @as indeed ig time !or t e man%!act%rers0 7%e to t e ,%blic Works ?ct t e demand !or labo%r gre@ so strong t at many a !actory and @as earning 2 to + s illings daily in t e D%arries o! Aac%p0 ?nd so t e p%blic @orks @ere grad%ally s%spended I t is ne@ edition o! t e +teliers nationau o! 1828, b%t t is time instit%ted in t e interests o! t e bo%rgeoisie0

Experiments in corpore vili


K?lt o%g & a8e gi8en t e act%al earnings o! t e operati8es B!%lly employedC in se8eral mills, it does not !ollo@ t at t ey earn t e same amo%nt @eek by @eek0 5 e operati8es are s%bHect to great !l%ct%ation, !rom t e constant experimentalising o! t e man%!act%rers %pon di!!erent kinds and proportions o! cotton and @aste in t e same mill, t e "mixings" as it is called, being !reD%ently c anged# and t e earnings o! t e operati8es rise and !all @it t e D%ality o! t e cotton mixings# sometimes t ey a8e been @it in 1+ per cent o! !ormer earnings, and t en in a @eek or t@o, t ey a8e !allen !rom += to 6= per cent0L &nspector )edgra8e, @ o makes t is report, t en proceeds to cite @age !ig%res taken !rom act%al practice, o! @ ic t e !ollo@ing examples may s%!!ice:

1=3

; apter 4&&

?, @ea8er, !amily o! 6, employed 2 days a @eek, 6s0 80+d0# A, t@ister, employed 20+ days a @eek, 6s0# ;, @ea8er, !amily o! 2, employed + days a @eek, +s0 1d0# 7, sl%bber, !amily o! 6, employed 2 days a @eek, >s0 1=d0# E, @ea8er, !amily o! >, employed 3 days a @eek, +s0, etc0 )edgra8e contin%es: K5 e abo8e ret%rns are deser8ing o! consideration, !or t ey s o@ t at @ork @o%ld become a mis!ort%ne in many a !amily, as it not merely red%ces t e income, b%t brings it so lo@ as to be %tterly ins%!!icient to pro8ide more t an a small portion o! t e absol%te @ants, @ere it not t at s%pplemental relie! is granted to operati8es @ en t e @ages o! t e !amily do not reac t e s%m t at @o%ld be gi8en to t em as relie!, i! t ey @ere all %nemployed0L B)eports o! &nsp0 o! Fact0, 3ct0 1863, pp0 +=-+30C K&n no @eek since t e +t o! P%ne last @as t ere more t an t@o days se8en o%rs and a !e@ min%tes employment !or all t e @orkers0L BDbid0, p0 1<10C From t e beginning o! t e crisis to Marc <+, 1863, nearly t ree million po%nds sterling @ere expended by t e g%ardians, t e ;entral )elie! ;ommittee, and t e Mansion 6o%se ;ommittee0 BDbid0, p0 130C K&n a district in @ ic t e !inest yarn is sp%n 000 t e spinners s%!!er an indirect red%ction o! 1+ per cent in conseD%ence o! t e c ange !rom $o%t $ea &sland to Egyptian cotton0 &n an extensi8e district, in many parts o! @ ic @aste is largely %sed as a mixt%re @it $%rat 000 t e spinners a8e ad a red%ction o! + per cent, and a8e lost !rom <= to 3= per cent in addition, t ro%g @orking $%rat and @aste0 5 e @ea8ers are red%ced !rom 2 looms to < looms0 &n 186=, t ey a8eraged +s0 >d0 per loom, in 1863, only 3s0 2d0 5 e !ines, @ ic !ormerly 8aried !rom 3d0 to 6d0 B!or t e @ea8erC on ?merican, no@ r%n %p to !rom 1s0 to 3s0 6d0L &n one district, @ ere Egyptian cotton @as %sed @it an admixt%re o! East &ndian Kt e a8erage o! t e m%le spinners, @ ic @as in 186= 18s0 to <+s0, no@ a8erages !rom 1=s0 to 18s0 per @eek, ca%sed, in addition to in!erior cotton, by t e red%ction

1=2

; apter 4&&

o! t e speed o! t e m%le to p%t an extra amo%nt o! t@ist in t e yarn, @ ic in ordinary times @o%ld be paid !or according to listL Bpp0 23, 22C0 K?lt o%g t e &ndian cotton may a8e been @orked to pro!it by t e man%!act%rer, it @ill be seen Bsee t e @age list on p0 +3C t at t e operati8es are s%!!erers compared @it 1861, and i! t e %se o! $%rat be con!irmed, t e operati8es @ill @ant to earn t e @ages o! 1861, @ ic @o%ld serio%sly a!!ect t e pro!its o! t e man%!act%rer, %nless e obtain compensation eit er in t e price o! t e ra@ cotton or o! is prod%ctsL Bp0 1=+C0 (ouse19ent0 K5 e rent is !reD%ently ded%cted !rom t e @ages o! operati8es, e8en @ en @orking s ort time, by t e man%!act%rers @ ose cottages t ey may be occ%pying0 -e8ert eless t e 8al%e o! t is class o! property as diminis ed, and o%ses may be obtained at a red%ction o! !rom <+ to += per cent %pon t e rent o! t e o%ses in ordinary times# !or instance, a cottage @ ic @o%ld a8e cost 3s0 6d0 per @eek can no@ be ad !or <s0 2d0 per @eek, and sometimes e8en !or lessL Bp0 +>C0 0migration0 5 e employers @ere nat%rally opposed to emigration o! labo%rers, beca%se, on t e one and, Klooking !or@ard to t e reco8ery o! t e cotton trade !rom its present depression, t ey keep @it in t eir reac t e means @ ereby t eir mills can be @orked in t e most ad8antageo%s mannerL0 3n t e ot er and, Kmany man%!act%rers are o@ners o! t e o%ses in @ ic operati8es employed in t eir mills reside, and some %nD%estionably expect to obtain a portion o! t e back rent o@ingL Bp0 *6C0 Mr0 Aernall 3sborne said in a speec to is parliamentary constit%ents on 3ctober <<, 1862, t at t e labo%rers o! 'ancas ire ad be a8ed like t e ancient p ilosop ers I B$toicsC0 -ot like s eepQ

Chapter $. Supple entar! Re ar%s


$%ppose, as is ass%med in t is part, t e amo%nt o! pro!it in any partic%lar sp ere o! prod%ction eD%als t e s%m o! t e s%rpl%s-8al%e prod%ced by t e total capital in8ested in t at sp ere0 E8en t en t e bo%rgeois @ill not consider is pro!it as identical @it s%rpl%s-8al%e, i0 e0, @it %npaid s%rpl%s-labo%r, and, to be s%re, !or t e !ollo@ing reasons: 1C &n t e process o! circ%lation e !orgets t e process o! prod%ction0 6e t inks t at s%rpl%s-8al%e is made @ en e realises t e 8al%e o! commodities, @ ic incl%des realisation o! t eir s%rpl%s8al%e0 /? blank space @ ic !ollo@s in t e man%script, indicates t at Marx intended to d@ell in greater detail on t is point0 I '. 0.1 <C ?ss%ming a %ni!orm degree o! exploitation, @e a8e seen t at regardless o! all modi!ications originating in t e credit system, regardless o! t e capitalists" e!!orts to o%t@it and c eat one anot er, and, lastly, regardless o! any !a8o%rable c oice o! t e market I t e rate o! pro!it may di!!er considerably, depending on t e lo@ or ig prices o! ra@ materials and t e experience o! t e b%yer, on t e relati8e prod%cti8ity, e!!iciency and c eapness o! t e mac inery, on t e greater or lesser e!!iciency o! t e aggregate arrangement in t e 8ario%s stages o! t e prod%cti8e process, elimination o! @aste, t e simplicity and e!!iciency o! management and s%per8ision, etc0 &n s ort, gi8en t e s%rpl%s-8al%e !or a certain 8ariable capital, it still depends 8ery m%c on t e indi8id%al b%siness ac%men o! t e capitalist, or o! is managers and salesmen, @ et er t is same s%rpl%s8al%e is expressed in a greater or smaller rate o! pro!it, and accordingly yields a greater or smaller amo%nt o! pro!it0 'et t e same s%rpl%s-8al%e o! V1,===, t e prod%ct o! V1,=== in @ages, obtain in enterprise ? !or a constant capital o! V*,===, and in enterprise A !or V11,===0 &n case ? @e a8e p" R 1,===N1=,=== or 1=T0 &n case A @e a8e p" R 1,===N1<,===, or 8XT0 5 e total capital prod%ces relati8ely more pro!it in enterprise ? t an in A, beca%se o! a ig er rate o! pro!it, alt o%g t e 8ariable capital ad8anced in bot cases R V1,=== and t e s%rpl%s-8al%e prod%ced by eac like@ise R V1,===, so t at in bot cases t ere exists t e same degree o! exploitation o! t e same n%mber o! labo%rers0 5 is di!!erence in t e presentation o! t e same mass o! s%rpl%s-8al%e, or t e di!!erence in t e rates o! pro!it, and t ere!ore in t e pro!it itsel!, @ ile t e exploitation o! labo%r is t e same, may also be d%e to ot er ca%ses0 $till, it may also be d%e @ olly to a di!!erence in t e b%siness ac%men @it @ ic bot establis ments are r%n0 ?nd t is circ%mstance misleads t e capitalist, con8inces im t at is pro!its are not d%e to exploiting labo%r, b%t, at least in part, to ot er independent circ%mstances, and partic%larly is indi8id%al acti8ity0 5 e analyses in t is !irst part demonstrate t e incorrectness o! t e 8ie@ B)odbert%s / Sociale Griefe an von Hirchmann, Dritter GriefI "iderlegung der 9icardo5schen ,ehre von der Grundrente und Gegrndung einer neuen 9ententheorie , Aerlin, 18+1, $0 1<+0 I 0d01C according to @ ic Bas distinct !rom gro%nd-rent, in @ ic case, !or example, t e area o! real estate remains t e same and yet t e rent risesC a c ange in t e magnit%de o! an indi8id%al capital is s%pposed to a8e no in!l%ence on t e ratio o! pro!it to capital, and t %s on t e rate o! pro!it, beca%se i! t e mass o! pro!it s o%ld gro@, so does t e mass o! capital %pon @ ic it is calc%lated, and 8ice 8ersa0 5 is is tr%e only in t@o cases0 First, @ en I ass%ming t at all ot er circ%mstances, especially t e rate o! s%rpl%s-8al%e, remain %nc anged I t ere is a c ange in t e 8al%e o! t at commodity @ ic is a money-commodity0 B5 e same occ%rs in a merely nominal c ange o! 8al%e, t e rise or !all o! more tokens o! 8al%e, ot er conditions being eD%al0C 'et t e total capital R V1==, and t e pro!it R V<=, t e rate o! pro!it being R <=T0 $ o%ld gold !all by al!, or do%ble, t e same capital pre8io%sly @ort only V1==, @ill be @ort V<== i! it !alls and t e pro!it @ill be @ort V2=, i0 e0, it @ill be expressed in so m%c money instead o! t e !ormer V<=# i! it rises, t e capital o! V1== @ill

1=6

; apter 4&&

be @ort only V+=, and t e pro!it @ill be represented by a prod%ct, @ ose 8al%e @ill be V1=0 A%t in eit er case <==:2= R +=:1= R 1==:<= R <=T0 &n all t ese examples t ere @o%ld, o@e8er, a8e been no act%al c ange in t e magnit%de o! capital-8al%e, and only in t e money-expression o! t e same 8al%e and t e same s%rpl%s-8al%e0 For t is reason sN;, or t e rate o! pro!it, co%ld not be a!!ected0 &n t e second case t ere is an act%al c ange o! magnit%de in t e 8al%e, b%t %naccompanied by a c ange in t e ratio o! 8 to c# in ot er @ords, @it a constant rate o! s%rpl%s-8al%e t e relation o! capital in8ested in labo%r-po@er B8ariable capital considered as an index o! t e amo%nt o! labo%rpo@er set in motionC to t e capital in8ested in means o! prod%ction remains t e same0 (nder t ese circ%mstances, no matter @ et er @e a8e ;, or n;, or ;Nn, e0g0, 1,===, or <,===, or +==, and t e rate o! pro!it being <=T, t e pro!it R <== in t e !irst case, R 2== in t e second, and R 1== in t e t ird0 A%t <==:1,=== R 2==:<,=== R 1==:+== R <=T0 5 at is to say, t e rate o! pro!it is %nc anged, beca%se t e composition o! capital remains t e same and is not a!!ected by t e c ange in magnit%de0 5 ere!ore, an increase or decrease in t e amo%nt o! pro!it s o@s merely an increase or decrease in t e magnit%de o! t e in8ested capital0 &n t e !irst case t ere is, t ere!ore, b%t t e appearance o! a c ange in t e magnit%de o! t e employed capital, @ ile in t e second case t ere is an act%al c ange in magnit%de, b%t no c ange in t e organic composition o! t e capital, i0 e0, in t e relati8e proportions o! its 8ariable and constant portions0 A%t @it t e exception o! t ese t@o cases, a c ange in t e magnit%de o! t e employed capital is eit er t e result o! a preceding c ange in t e 8al%e o! one o! its components, and t ere!ore o! a c ange in t e relati8e magnit%de o! t ese components Bas long as t e s%rpl%s8al%e itsel! does not c ange @it t e 8ariable capitalC# or, t is c ange o! magnit%de Bas in labo%rprocesses on a large scale, introd%ction o! ne@ mac inery, etc0C is t e cause o! a c ange in t e relati8e magnit%de o! its t@o organic components0 &n all t ese cases, ot er circ%mstances remaining t e same, a c ange in t e magnit%de o! t e employed capital m%st t ere!ore be accompanied sim%ltaneo%sly by a c ange in t e rate o! pro!it0 ? rise in t e rate o! pro!it is al@ays d%e to a relati8e or absol%te increase o! t e s%rpl%s-8al%e in relation to its cost o! prod%ction, i0 e0, to t e ad8anced total capital, or to a decrease in t e di!!erence bet@een t e rate o! pro!it and t e rate o! s%rpl%s-8al%e0 Fl%ct%ations in t e rate o! pro!it may occ%r irrespecti8e o! c anges in t e organic components o! t e capital, or o! t e absol%te magnit%de o! t e capital, t ro%g a rise or !all in t e 8al%e o! t e !ixed or circ%lating ad8anced capital ca%sed by an increase or a red%ction o! t e @orking-time reD%ired !or its reprod%ction, t is increase or red%ction taking place independently o! t e already existing capital0 5 e 8al%e o! e8ery commodity I t %s also o! t e commodities making %p t e capital I is determined not by t e necessary labo%r-time contained in it, b%t by t e social labo%rtime reD%ired !or its reprod%ction0 5 is reprod%ction may take place %nder %n!a8o%rable or %nder propitio%s circ%mstances, distinct !rom t e conditions o! original prod%ction0 &!, %nder altered conditions, it takes do%ble or, con8ersely, al! t e time, to reprod%ce t e same material capital, and i! t e 8al%e o! money remains %nc anged, a capital !ormerly @ort V1== @o%ld be @ort V<==, or V+= respecti8ely0 $ o%ld t is appreciation or depreciation a!!ect all parts o! capital %ni!ormly, t en t e pro!it @o%ld also be accordingly expressed in do%ble, or al!, t e amo%nt o! money0 A%t i! it in8ol8es a c ange in t e organic composition o! t e capital, i! t e ratio o! t e 8ariable to t e constant portion o! capital rises or !alls, t en, ot er circ%mstances remaining t e same, t e rate o! pro!it @ill rise @it a relati8ely rising 8ariable capital and !all @it a relati8ely !alling one0 &! only t e money-8al%e o! t e ad8anced capital rises or !alls Bin conseD%ence o! a c ange in t e 8al%e o! moneyC, t en t e money-expression o! t e s%rpl%s-8al%e rises, or !alls, in t e same proportion0 5 e rate o! pro!it remains %nc anged0

Part II. Conversion of Profit into $verage Profit


Chapter &. 'ifferent Co positions of Capitals in 'ifferent (ranches of Production and Resultin) 'ifferences in Rates of Profit
&n t e preceding part @e demonstrated, among ot er t ings, t at t e rate o! pro!it may 8ary I rise or !all I @ ile t e rate o! s%rpl%s-8al%e remains t e same0 &n t e present c apter @e ass%me t at t e intensity o! labor exploitation, and t ere!ore t e rate o! s%rpl%s-8al%e and t e lengt o! t e @orking-day, are t e same in all t e sp eres o! prod%ction into @ ic t e social labor o! a gi8en co%ntry is di8ided0 ?dam $mit as already compre ensi8ely s o@n t at t e n%mero%s di!!erences in t e exploitation o! labor in 8ario%s sp eres o! prod%ction balance one anot er by means o! all kinds o! existing compensations, or compensations accepted as s%c on t e basis o! c%rrent preH%dice, so t at t ey are merely e8anescent distinctions and are o! no moment in a st%dy o! t e general relations0 3t er di!!erences, !or instance t ose in t e @age scale, rest largely on t e di!!erence bet@een simple and complicated labor mentioned in t e beginning o! Aook & Bp0 1*C, and a8e not ing to do @it t e intensity o! exploitation in t e di!!erent sp eres o! prod%ction, alt o%g t ey render t e lot o! t e laborer in t ose sp eres 8ery %neD%al0 For instance, i! t e labor o! a goldsmit is better paid t an t at o! a day-laborer, t e !ormer"s s%rpl%s-labor prod%ces proportionately more s%rpl%s-8al%e t an t e latter"s0 ?nd alt o%g t e eD%aliEing o! @ages and @orking-days, and t ereby o! t e rates o! s%rpl%s-8al%e, among di!!erent sp eres o! prod%ction, and e8en among di!!erent in8estments o! capital in t e same sp ere o! prod%ction, is c ecked by all kinds o! local obstacles, it is ne8ert eless taking place more and more @it t e ad8ance o! capitalist prod%ction and t e s%bordination o! all economic conditions to t is mode o! prod%ction0 5 e st%dy o! s%c !rictions, @ ile important to any special @ork on @ages, may be dispensed @it as incidental and irrele8ant in a general analysis o! capitalist prod%ction0 &n a general analysis o! t is kind it is %s%ally al@ays ass%med t at t e act%al conditions correspond to t eir conception, or, @ at is t e same, t at act%al conditions are represented only to t e extent t at t ey are typical o! t eir o@n general case0 5 e di!!erence in t e rates o! s%rpl%s-8al%e in di!!erent co%ntries, and conseD%ently t e national di!!erences in t e degree o! exploitation o! labor, are immaterial !or o%r present analysis0 W at @e @ant to s o@ in t is part is precisely t e @ay in @ ic a general rate o! pro!it takes s ape in any gi8en co%ntry0 &t is e8ident, o@e8er, t at a comparison o! t e 8ario%s national rates o! pro!it reD%ires only a collation o! t e pre8io%sly st%died @it t at @ ic is ere to be st%died0 First one s o%ld consider t e di!!erences in t e national rates o! s%rpl%s-8al%e, and t en, on t e basis o! t ese gi8en rates, a comparison s o%ld be made o! t e di!!erences in t e national rates o! pro!it0 &n so !ar as t ose di!!erences are not d%e to di!!erences in t e national rates o! s%rpl%s-8al%e, t ey m%st be d%e to circ%mstances in @ ic t e s%rpl%s-8al%e is ass%med, H%st as in t e analysis o! t is c apter, to be %ni8ersally t e same, i0 e0, constant0 We demonstrated in t e preceding c apter t at, ass%ming t e rate o! s%rpl%s-8al%e to be constant, t e rate o! pro!it obtaining !or a gi8en capital may rise or !all in conseD%ence o! circ%mstances

1=8

; apter 4&&&

@ ic raise or lo@er t e 8al%e o! one or t e ot er portion o! constant capital, and so a!!ect t e proportion bet@een t e 8ariable and constant components o! capital0 We !%rt er obser8ed t at circ%mstances @ ic prolong or red%ce t e time o! t%rno8er o! an indi8id%al capital may similarly in!l%ence t e rate o! pro!it0 $ince t e mass o! t e pro!it is identical @it t e mass o! t e s%rpl%s8al%e, and @it t e s%rpl%s-8al%e itsel!, it @as also seen t at t e mass o! t e pro!it I as distinct !rom t e rate o! pro!it I is not a!!ected by t e a!orementioned !l%ct%ations o! 8al%e0 5 ey only modi!y t e rate in @ ic a gi8en s%rpl%s-8al%e, and t ere!ore a pro!it o! a gi8en magnit%de, express t emsel8es# in ot er @ords, t ey modi!y only t e relati8e magnit%de o! pro!it, i0 e0, its magnit%de compared @it t e magnit%de o! t e ad8anced capital0 &nasm%c as capital @as tied %p or released by s%c !l%ct%ations o! 8al%e, it @as not only t e rate o! pro!it, b%t t e pro!it itsel!, @ ic @as likely to be a!!ected in t is indirect manner0 6o@e8er, t is as t en al@ays applied only to s%c capital as @as already in8ested, and not to ne@ in8estments0 Aesides, t e increase or red%ction o! pro!it al@ays depended on t e extent to @ ic t e same capital co%ld, in conseD%ence o! s%c !l%ct%ation o! 8al%e, set in motion more or less labor# in ot er @ords, it depended on t e extent to @ ic t e same capital co%ld, @it t e rate o! s%rpl%s-8al%e remaining t e same, obtain a larger or smaller amo%nt o! s%rpl%s-8al%e0 Far !rom contradicting t e general r%le, or !rom being an exception to it, t is seeming exception @as really b%t a special case in t e application o! t e general r%le0 &t @as seen in t e preceding part t at, t e degree o! exploitation remaining constant, c anges in t e 8al%e o! t e component parts o! constant capital and in t e time o! t%rno8er o! capital are attended by c anges in t e rate o! pro!it0 5 e ob8io%s concl%sion is t at t e rates o! pro!it in di!!erent sp eres o! prod%ction existing side by side a8e to di!!er @ en, ot er circ%mstances remaining %nc anged, t e time o! t%rno8er o! capitals employed in t e di!!erent sp eres di!!ers, or @ en t e 8al%e-relation o! t e organic components o! t ese capitals di!!ers in t e 8ario%s branc es o! prod%ction0 W at @e pre8io%sly regarded as c anges occ%rring s%ccessi8ely @it one and t e same capital is no@ to be regarded as sim%ltaneo%s di!!erences among capital in8estments existing side by side in di!!erent sp eres o! prod%ction0 &n t ese circ%mstances @e s all a8e to analyEe: 1C t e di!!erence in t e organic composition o! capitals, and <C t e di!!erence in t eir period o! t%rno8er0 5 e premise in t is entire analysis is nat%rally t at by speaking o! t e composition or t%rno8er o! a capital in a certain line o! prod%ction @e al@ays mean t e a8erage normal proportions o! capital in8ested in t is sp ere, and generally t e a8erage in t e total capital employed in t at partic%lar sp ere, and not t e accidental di!!erences o! t e indi8id%al capitals0 $ince it is !%rt er ass%med t at t e rate o! s%rpl%s-8al%e and t e @orking-day are constant, and since t is ass%mption also implies constant @ages, a certain D%antity o! 8ariable capital represents a de!inite D%antity o! labor-po@er set in motion, and t ere!ore a de!inite D%antity o! materialiEed labor0 &!, t ere!ore, V1== represent t e @eekly @age o! 1== laborers, indicating 1== act%al laborpo@ers, t en n times V1== indicate t e labo%r-po@ers o! n times 1== laborers, and V1==Nn t ose o! 1==Nn laborers0 5 e 8ariable capital t %s ser8es ere Bas is al@ays t e case @ en t e @age is gi8enC as an index o! t e amo%nt o! labor set in motion by a de!inite total capital0 7i!!erences in t e magnit%de o! t e employed 8ariable capitals ser8e, t ere!ore, as indexes o! t e di!!erence in t e amo%nt o! employed labor-po@er0 &! V1== indicate 1== laborers per @eek, and represent 6,=== @orking- o%rs at 6= @orking- o%rs per @eek, t en V<== represent 1<,===, and V+= only 3,=== @orking- o%rs0 Ay composition o! capital @e mean, as stated in Aook &, t e proportion o! its acti8e and passi8e components, i0 e0, o! 8ariable and constant capital0 5@o proportions enter into consideration %nder t is eading0 5 ey are not eD%ally important, alt o%g t ey may prod%ce similar e!!ects %nder certain circ%mstances0

1=*

; apter 4&&&

5 e !irst proportion rests on a tec nical basis, and m%st be regarded as gi8en at a certain stage o! de8elopment o! t e prod%cti8e !orces0 ? de!inite D%antity o! labor-po@er represented by a de!inite n%mber o! laborers is reD%ired to prod%ce a de!inite D%antity o! prod%cts in, say, one day, and I @ at is sel!-e8ident I t ereby to cons%me prod%cti8ely, i0 e0, to set in motion, a de!inite D%antity o! means o! prod%ction, mac inery, ra@ materials, etc0 ? de!inite n%mber o! laborers corresponds to a de!inite D%antity o! means o! prod%ction, and ence a de!inite D%antity o! li8ing labor to a de!inite D%antity o! labor materialiEed in means o! prod%ction0 5 is proportion di!!ers greatly in di!!erent sp eres o! prod%ction, and !reD%ently e8en in di!!erent branc es o! one and t e same ind%stry, alt o%g it may by coincidence be entirely or approximately t e same in entirely separate lines o! ind%stry0 5 is proportion !orms t e tec nical composition o! capital and is t e real basis o! its organic composition0 6o@e8er, it is also possible t at t is !irst proportion may be t e same in di!!erent lines o! ind%stry, pro8ided 8ariable capital is merely an index o! labor-po@er and constant capital merely an index o! t e mass o! means o! prod%ction set in motion by t is labor-po@er0 For instance, certain @ork in copper and iron may reD%ire t e same ratio o! labor-po@er to mass o! means o! prod%ction0 A%t since copper is more expensi8e t an iron, t e 8al%e-relation bet@een 8ariable and constant capital is di!!erent in eac case, and ence also t e 8al%e-composition o! t e t@o total capitals0 5 e di!!erence bet@een t e tec nical composition and t e 8al%e composition is mani!ested in eac branc o! ind%stry in t at t e 8al%e-relation o! t e t@o portions o! capital may 8ary @ ile t e tec nical composition is constant, and t e 8al%e-relation may remain t e same @ ile t e tec nical composition 8aries0 5 e latter case @ill, o! co%rse, be possible only i! t e c ange in t e ratio o! t e employed masses o! means o! prod%ction and labor-po@er is compensated by a re8erse c ange in t eir 8al%es0 5 e 8al%e-composition o! capital, inasm%c as it is determined by, and re!lects, its tec nical composition, is called t e organic composition o! capital0 &n t e case o! 8ariable capital, t ere!ore, @e ass%me t at it is t e index o! a de!inite D%antity o! labor-po@er, or o! a de!inite n%mber o! laborers, or a de!inite D%antity o! li8ing labor set in motion0 We a8e seen in t e preceding part t at a c ange in t e magnit%de o! t e 8al%e o! 8ariable capital mig t e8ent%ally indicate not ing b%t a ig er or lo@er price o! t e same mass o! labor0 A%t ere, @ ere t e rate o! s%rpl%s-8al%e and t e @orking-day are taken to be constant, and t e @ages !or a de!inite @orking period are gi8en, t is is o%t o! t e D%estion0 3n t e ot er and, a di!!erence in t e magnit%de o! t e constant capital may like@ise be an index o! a c ange in t e mass o! means o! prod%ction set in motion by a de!inite D%antity o! labor-po@er0 A%t it may also stem !rom a di!!erence in 8al%e bet@een t e means o! prod%ction set in motion in one sp ere and t ose o! anot er0 Aot points o! 8ie@ m%st t ere!ore be examined ere0 Finally, @e m%st take note o! t e !ollo@ing essential !acts: 'et V1== be t e @eekly @age o! 1== laborers0 'et t e @eekly @orking- o%rs R 6=0 F%rt ermore, let t e rate o! s%rpl%s-8al%e R 1==T0 &n t is case, t e laborers @ork 3= o! t e 6= o%rs !or t emsel8es and 3= o%rs gratis !or t e capitalist0 &n !act, t e V1== o! @ages represent H%st t e 3= @orking- o%rs o! 1== laborers, or altoget er 3,=== @orking- o%rs, @ ile t e ot er 3,=== o%rs @orked by t e laborers are incorporated in t e V1== o! s%rpl%s-8al%e, or in t e pro!it pocketed by t e capitalist0 ?lt o%g t e @age o! V1== does not, t ere!ore, express t e 8al%e in @ ic t e @eekly labor o! t e 1== laborers is materialiEed, it indicates ne8ert eless Bsince t e lengt o! t e @orking-day and t e rate o! s%rpl%s-8al%e are gi8enC t at t is capital sets in motion 1== laborers !or 6,=== @orking- o%rs0 5 e capital o! V1== indicates t is, !irst, beca%se it indicates t e n%mber o! laborers set in motion, @it V1 R 1 laborer per @eek, ence V1== R 1== laborers# and, secondly, beca%se, since t e rate o! s%rpl%s-8al%e is gi8en as 1==T, eac o! t ese laborers per!orms t@ice as m%c @ork as is contained in is @ages, so t at V1, i0 e0, is @age, @ ic is t e expression o!

11=

; apter 4&&&

al! a @eek o! labor, act%ates a @ ole @eek"s labor, H%st as V1== sets in motion 1== @eeks o! labor, alt o%g it contains only +=0 ? 8ery essential distinction is t %s to be made in regard to 8ariable capital laid o%t in @ages0 &ts 8al%e as t e s%m o! @ages, i0 e0, as a certain amo%nt o! materialised labo%r, is to be disting%is ed !rom its 8al%e as a mere index o! t e mass o! li8ing labo%r @ ic it sets in motion0 5 e latter is al@ays greater t an t e labo%r @ ic it incorporates, and is, t ere!ore, represented by a greater 8al%e t an t at o! t e 8ariable capital0 5 is greater 8al%e is determined, on t e one and, by t e n%mber o! labo%rers set in motion by t e 8ariable capital and, on t e ot er, by t e D%antity o! s%rpl%s-labo%r per!ormed by t em0 &t !ollo@s !rom t is manner o! looking %pon 8ariable capital t at: W en a capital in8ested in prod%ction sp ere ? expends only 1== in 8ariable capital !or eac >== o! total capital, lea8ing 6== !or constant capital, @ ile a capital in8ested in prod%ction sp ere A expends 6== !or 8ariable and only 1== !or constant capital, t en capital ? o! >== sets in motion only 1== o! labo%r-po@er, or, in t e terms o! o%r pre8io%s ass%mption, 1== @eeks o! labo%r, or 6,=== o%rs o! li8ing labo%r, @ ile t e same amo%nt o! capital A @ill set in motion 6== @eeks o! labo%r, or 36,=== o%rs o! li8ing labo%r0 5 e capital in ? @o%ld t en appropriate only += @eeks o! labo%r, or 3,=== o%rs o! s%rpl%s-labo%r, @ ile t e same amo%nt o! capital in A @o%ld appropriate 3== @eeks o! labo%r, or 18,=== o%rs0 4ariable capital is not only t e index o! t e labo%r embodied in it0 W en t e rate o! s%rpl%s-8al%e is kno@n it is also an index o! t e amo%nt o! labo%r set in motion o8er and abo8e t at embodied in itsel!, i0 e0, o! s%rpl%s-labo%r0 ?ss%ming t e same intensity o! exploitation, t e pro!it in t e !irst case @o%ld be 1==N>== R 1N> R 12 <N>T, and in t e second case, 6==N>== R 6N> R 8+ +N>T, or a six-!old rate o! pro!it0 &n t is case, t e pro!it itsel! @o%ld act%ally be six times as great, 6== in A as against 1== in ?, beca%se t e same capital set in motion six times as m%c li8ing labo%r, @ ic at t e same le8el o! exploitation means six times as m%c s%rpl%s 8al%e, and t %s six times as m%c pro!it0 A%t i! t e capital in8ested in ? @ere not >== b%t V>,===, @ ile t at in8ested in A @ere only V>==, and t e organic composition o! bot @ere to remain t e same, t en t e capital in ? @o%ld employ V1,=== o! t e V>,=== as 8ariable capital, t at is, 1,=== labo%rers per @eek R 6=,=== o%rs o! li8ing labo%r, o! @ ic 3=,=== @o%ld be s%rpl%s-labo%r0 .et eac V>== o! t e capital in ? @o%ld contin%e to set in motion only 1N6 as m%c li8ing labo%r, and ence only 1N6 as m%c s%rpl%slabo%r, as t e capital in A, and @o%ld prod%ce only 1N6 as m%c pro!it0 &! @e consider t e rate o! pro!it, t en in ? 1===N>=== R 1==N>== R 12 <N>T, as compared @it 6==N>==, or 8+ +N>T, in A0 5aking eD%al amo%nts o! capital, t e rates o! pro!it di!!er beca%se, o@ing to t e di!!erent masses o! li8ing labo%r set in motion, t e masses o! s%rpl%s-8al%e, and t %s o! pro!it, di!!er, alt o%g t e rates o! s%rpl%s-8al%e are t e same0 We get practically t e same res%lt i! t e tec nical conditions are t e same in bot sp eres o! prod%ction, b%t t e 8al%e o! t e elements o! t e employed constant capital is greater or smaller in t e one t an in t e ot er0 'et %s ass%me t at bot in8est V1== as 8ariable capital and t ere!ore employ 1== labo%rers per @eek to set in motion t e same D%antity o! mac inery and ra@ materials0 A%t let t e latter be more expensi8e in A t an in ?0 For instance, let t e V1== o! 8ariable capital set in motion V<== o! constant capital in ?, and V2== in A0 Wit t e same rate o! s%rpl%s-8al%e, o! 1==T, t e s%rpl%s-8al%e prod%ced is in eit er case eD%al to V1==0 6ence, t e pro!it is also eD%al to V1== in bot 0 A%t t e rate o! pro!it in ? is 1==NB<== c U 1==8C R X R 33XT, @ ile in A it is 1==NB2==c U 1==8C R 1N+ R <=T0 &n !act, i! @e select a certain aliD%ot part o! t e total capital in eit er case, @e !ind t at in e8ery V1== o! A only V<=, or 1N+, constit%te 8ariable capital, @ ile in e8ery V1== o! ? V33X, or X, !orm 8ariable capital0 A prod%ces less pro!it !or eac V1==, beca%se it sets in motion less li8ing labo%r t an ?0 5 e di!!erence in t e rates o! pro!it t %s resol8es itsel! once more, in t is case, into a di!!erence o! t e masses o! pro!it, beca%se o! t e masses o! s%rpl%s-8al%e, prod%ced by eac 1== o! in8ested capital0 5 e di!!erence bet@een t is second example and t e !irst is H%st t is: 5 e eD%alisation bet@een ? and A in t e second case @o%ld reD%ire only a c ange in t e 8al%e o! t e constant capital o! eit er

111

; apter 4&&&

? or A, pro8ided t e tec nical basis remained t e same0 A%t in t e !irst case t e tec nical composition itsel! is di!!erent in t e t@o sp eres o! prod%ction and @o%ld a8e to be completely c anged to ac ie8e an eD%alisation0 5 e di!!erent organic composition o! 8ario%s capitals is t %s independent o! t eir absol%te magnit%de0 &t is al@ays b%t a D%estion o! o@ m%c o! e8ery 1== is 8ariable and o@ m%c constant capital0 ;apitals o! di!!erent magnit%de, calc%lated in percentages, or, @ at amo%nts to t e same in t is case, capitals o! t e same magnit%de operating !or t e same @orking-time and @it t e same degree o! exploitation may prod%ce 8ery m%c di!!erent amo%nts o! pro!it, beca%se o! s%rpl%s8al%e, !or t e reason t at a di!!erence in t e organic composition o! capital in di!!erent sp eres o! prod%ction implies a di!!erence in t eir 8ariable part, t %s a di!!erence in t e D%antities o! li8ing labo%r set in motion by t em, and t ere!ore also a di!!erence in t e D%antities o! s%rpl%s-labo%r appropriated by t em0 ?nd t is s%rpl%s-labo%r is t e s%bstance o! s%rpl%s-8al%e, and t %s o! pro!it0 &n di!!erent sp eres o! prod%ction eD%al portions o! t e total capital comprise %neD%al so%rces o! s%rpl%s-8al%e, and t e sole so%rce o! s%rpl%s-8al%e is li8ing labo%r0 ?ss%ming t e same degree o! labo%r exploitation, t e mass o! labo%r set in motion by a capital o! 1==, and conseD%ently t e mass o! s%rpl%s-labo%r appropriated by it, depend on t e magnit%de o! its 8ariable component0 &! a capital, consisting in per cent o! *= cU 1=8, prod%ced as m%c s%rpl%s8al%e, or pro!it, at t e same degree o! exploitation as a capital consisting o! 1= c U *=8, it @o%ld be as plain as day t at t e s%rpl%s-8al%e, and t %s 8al%e in general, m%st a8e an entirely di!!erent so%rce t an labo%r, and t at political economy @o%ld t en be depri8ed o! e8ery rational basis0 &! @e are to ass%me all t e time t at V1 stands !or t e @eekly @age o! a labo%rer @orking 6= o%rs, and t at t e rate o! s%rpl%s-8al%e is 1==T, t en it is e8ident t at t e total 8al%e prod%ct o! one labo%rer in a @eek, is V<0 5en labo%rers @o%ld t en prod%ce no more t an V<=0 ?nd since V1= o! t e V<= replace t e @ages, t e ten labo%rers cannot prod%ce more s%rpl%s-8al%e t an V1=0 3n t e ot er and, *= labo%rers, @ ose total prod%ct is V18=, and @ ose @ages amo%nt to V*=, @o%ld prod%ce a s%rpl%s-8al%e o! V*=0 5 e rate o! pro!it in t e !irst case @o%ld t %s be 1=T, and in t e ot er *=T 0 &! t is @ere not so, t en 8al%e and s%rpl%s-8al%e @o%ld be somet ing else t an materialised labo%r0 $ince capitals in di!!erent sp eres o! prod%ction 8ie@ed in percentages I or as capitals o! eD%al magnit%de I are di8ided di!!erently into 8ariable and constant capital, setting in motion %neD%al D%antities o! li8ing labo%r and prod%cing di!!erent s%rpl%s-8al%es, and t ere!ore pro!its, it !ollo@s t at t e rate o! pro!it, @ ic consists precisely o! t e ratio o! s%rpl%s8al%e to total capital in per cent, m%st also di!!er0 -o@, i! capitals in di!!erent sp eres o! prod%ction, calc%lated in per cent, i0 e0, capitals o! eD%al magnit%de, prod%ce %neD%al pro!its in conseD%ence o! t eir di!!erent organic composition, t en it !ollo@s t at t e pro!its o! %neD%al capitals in di!!erent sp eres o! prod%ction cannot be proportional to t eir respecti8e magnit%des, or t at pro!its in di!!erent sp eres o! prod%ction are not proportional to t e magnit%de o! t e respecti8e capitals in8ested in t em0 For i! pro!its @ere to gro@ pro rata to t e magnit%de o! in8ested capital, it @o%ld mean t at in per cent t e pro!its @o%ld be t e same, so t at in di!!erent sp eres o! prod%ction capitals o! eD%al magnit%de @o%ld a8e eD%al rates o! pro!it, in spite o! t eir di!!erent organic composition0 &t is only in t e same sp ere o! prod%ction, @ ere @e a8e a gi8en organic composition o! capital, or in di!!erent sp eres @it t e same organic composition o! capital, t at t e amo%nts o! pro!its are directly proportional to t e amo%nts o! in8ested capitals0 5o say t at t e pro!its o! %neD%al capitals are proportional to t eir magnit%des @o%ld only mean t at capitals o! eD%al magnit%de yield eD%al pro!its, or t at t e rate o! pro!it is t e same !or all capitals, @ ate8er t eir magnit%de and organic composition0 5 ese statements old good on t e ass%mption t at t e commodities are sold at t eir 8al%es0 5 e 8al%e o! a commodity is eD%al to t e 8al%e o! t e constant capital contained in it, pl%s t e 8al%e o! t e 8ariable capital reprod%ced in it, pl%s t e increment I t e s%rpl%s-8al%e prod%ced I o! t is

11<

; apter 4&&&

8ariable capital0 ?t t e same rate o! s%rpl%s-8al%e, its D%antity e8idently depends on t e D%antity o! t e 8ariable capital0 5 e 8al%e o! t e prod%ct o! an indi8id%al capital o! 1== is, in one case, *= c U 1=8 U 1=s R 11=# and in t e ot er, 1=c U *=8 U *=s R l*=0 &! t e commodities go at t eir 8al%es, t e !irst prod%ct is sold at 11=, o! @ ic 1= represent s%rpl%s-8al%e, or %npaid labo%r, and t e second at 1*=, o! @ ic *= represent s%rpl%s-8al%e, or %npaid labo%r0 5 is is partic%larly important in comparing rates o! pro!it in di!!erent co%ntries0 'et %s ass%me t at t e rate o! s%rpl%s-8al%e in one E%ropean co%ntry is 1==T, so t at t e labo%rer @orks al! o! t e @orking-day !or imsel! and t e ot er al! !or is employer0 'et %s !%rt er ass%me t at t e rate o! pro!it in an ?sian co%ntry is <+T, so t at t e labo%rer @orks 2N+ o! t e @orking-day !or imsel!, and 1N+ !or is employer0 'et 82 c U l68 be t e composition o! t e national capital in t e E%ropean co%ntry, and 16c U 828 in t e ?sian co%ntry, @ ere little mac inery, etc0, is %sed, and @ ere a gi8en D%antity o! labo%r-po@er cons%mes relati8ely little ra@ material prod%cti8ely in a gi8en time0 5 en @e a8e t e !ollo@ing calc%lation: &n t e E%ropean co%ntry t e 8al%e o! t e prod%ct R 82 c U 168 U 16s R 116# rate o! pro!it R 16N1== R 16T0 &n t e ?sian co%ntry t e 8al%e o! t e prod%ct R 16 c U 828 U <1s R 1<1# rate o! pro!it R <1N1== R <1T0 5 e rate o! pro!it in t e ?sian co%ntry is t %s more t an <+T ig er t an in t e E%ropean co%ntry, alt o%g t e rate o! s%rpl%s-8al%e in t e !ormer is one-!o%rt t at o! t e latter0 Men like ;arey, Aastiat, and tutti 3uanti, @o%ld arri8e at t e 8ery opposite concl%sion0 Ay t e @ay, di!!erent national rates o! pro!it are mostly based on di!!erent national rates o! s%rpl%s-8al%e0 A%t in t is c apter @e compare %neD%al rates o! pro!it deri8ed !rom t e same rate o! s%rpl%s-8al%e0 ?side !rom di!!erences in t e organic composition o! capitals, and t ere!ore aside !rom t e di!!erent masses o! labo%r I and conseD%ently, ot er circ%mstances remaining t e same, !rom di!!erent masses o! s%rpl%s-labo%r set in motion by capitals o! t e same magnit%de in di!!erent sp eres o! prod%ction, t ere is yet anot er so%rce o! ineD%ality in rates o! pro!it0 5 is is t e di!!erent period o! t%rno8er o! capital in di!!erent sp eres o! prod%ction0 We a8e seen in ; apter &4 t at, ot er conditions being eD%al, t e rates o! pro!it o! capitals o! t e same organic composition are in8ersely proportional to t eir periods o! t%rno8er0 We a8e also seen t at t e same 8ariable capital t%rned o8er in di!!erent periods o! time prod%ces di!!erent D%antities o! ann%al s%rpl%s-8al%e0 5 e di!!erence in t e periods o! t%rno8er is t ere!ore anot er reason @ y capitals o! eD%al magnit%de in di!!erent sp eres o! prod%ction do not prod%ce eD%al pro!its in eD%al periods, and @ y, conseD%ently, t e rates o! pro!it in t ese di!!erent sp eres di!!er0 ?s !ar as t e ratio o! t e !ixed and circ%lating capital in t e composition o! capitals is concerned, o@e8er, it does not in itsel! a!!ect t e rate o! pro!it in t e least0 &t can a!!ect t e rate o! pro!it only i! in one case, t is di!!erence in composition coincides @it a di!!erent ratio o! t e 8ariable and constant parts, so t at t e di!!erence in t e rate o! pro!it is d%e to t is latter di!!erence, and not to t e di!!erent ratio o! !ixed and circ%lating capital# and, in t e ot er case, i! t e di!!erence in t e ratio o! t e !ixed and circ%lating parts o! capital is responsible !or a di!!erence in t e period o! t%rno8er in @ ic a certain pro!it is realised0 &! capitals are di8ided into !ixed and circ%lating capital in di!!erent proportions, t is @ill nat%rally al@ays in!l%ence t e period o! t%rno8er and ca%se di!!erences in it0 A%t t is does not imply t at t e period o! t%rno8er, in @ ic t e same capitals realise certain pro!its, is di!!erent0 For instance, ? may contin%ally a8e to con8ert t e greater part o! its prod%ct into ra@ materials, etc0, @ ile A may %se t e same mac inery, etc0, !or a longer time, and may need less ra@ material, b%t bot ? and A, being occ%pied in prod%ction, al@ays a8e a part o! t eir capital engaged, t e one in ra@ materials, i0 e0, in circ%lating capital, and t e ot er in mac inery, etc0, or in !ixed capital0 ? contin%ally con8erts a portion o! its capital !rom t e !orm o! commodities into t at o! money, and t e latter again into t e !orm o! ra@

113

; apter 4&&&

material, @ ile A employs a portion o! its capital !or a longer time as an instr%ment o! labo%r @it o%t any s%c con8ersions0 &! bot o! t em employ t e same amo%nt o! labo%r, t ey @ill indeed sell D%antities o! prod%cts o! %neD%al 8al%e in t e co%rse o! t e year, b%t bot D%antities o! prod%cts @ill contain eD%al amo%nts o! s%rpl%s-8al%e, and t eir rates o! pro!it, calc%lated on t e entire capital in8ested, @ill be t e same, alt o%g t eir composition o! !ixed and circ%lating capital, and t eir periods o! t%rno8er, are di!!erent0 Aot capitals realise eD%al pro!its in eD%al periods, alt o%g t eir periods o! t%rno8er are di!!erent0 1 5 e di!!erence in t e period o! t%rno8er is in itsel! o! no importance, except so !ar as it a!!ects t e mass o! s%rpl%s-labo%r appropriated and realised by t e same capital in a gi8en time0 &!, t ere!ore, a di!!erent di8ision into !ixed and circ%lating capital does not necessarily imply a di!!erent period o! t%rno8er, @ ic @o%ld in its t%rn imply a di!!erent rate o! pro!it, it is e8ident t at i! t ere is any s%c di!!erence in t e rates o! pro!it, it is not d%e to a di!!erent ratio o! !ixed to circ%lating capital as s%c , b%t rat er to t e !act t at t is di!!erent ratio indicates an ineD%ality in t e periods o! t%rno8er a!!ecting t e rate o! pro!it0 &t !ollo@s, t ere!ore, t at t e di!!erent composition o! constant capital in respect to its !ixed and circ%lating portions in 8ario%s branc es o! prod%ction as in itsel! no bearing on t e rate o! pro!it, since it is t e ratio o! 8ariable to constant capital @ ic decides t is D%estion, @ ile t e 8al%e o! t e constant capital, and t ere!ore also its magnit%de in relation to t e 8ariable is entirely %nrelated to t e !ixed or circ%lating nat%re o! its components0 .et it may be !o%nd I and t is o!ten leads to incorrect concl%sions I t at @ ere8er !ixed capital is considerably ad8anced t is b%t expresses t e !act t at prod%ction is on a large scale, so t at constant capital greatly o%t@eig s t e 8ariable, or t at t e li8ing labo%r-po@er it employs is small compared to t e mass o! t e means o! prod%ction @ ic it operates0 We a8e t %s demonstrated t at di!!erent lines o! ind%stry a8e di!!erent rates o! pro!it, @ ic correspond to di!!erences in t e organic composition o! t eir capitals and, @it in indicated limits, also to t eir di!!erent periods o! t%rno8er# gi8en t e same time o! t%rno8er, t e la@ Bas a general tendencyC t at pro!its are related to one anot er as t e magnit%des o! t e capitals, and t at, conseD%ently, capitals o! eD%al magnit%de yield eD%al pro!its in eD%al periods, applies only to capitals o! t e same organic composition, e8en @it t e same rate o! s%rpl%s-8al%e0 5 ese statements old good on t e ass%mption @ ic as been t e basis o! all o%r analyses so !ar, namely t at t e commodities are sold at t eir 8al%es0 5 ere is no do%bt, on t e ot er and, t at aside !rom %nessential, incidental and m%t%ally compensating distinctions, di!!erences in t e a8erage rate o! pro!it in t e 8ario%s branc es o! ind%stry do not exist in reality, and co%ld not exist @it o%t abolis ing t e entire system o! capitalist prod%ction0 &t @o%ld seem, t ere!ore, t at ere t e t eory o! 8al%e is incompatible @it t e act%al process, incompatible @it t e real p enomena o! prod%ction, and t at !or t is reason any attempt to %nderstand t ese p enomena s o%ld be gi8en %p0 &t !ollo@s !rom t e !irst part o! t is 8ol%me t at t e cost-prices o! prod%cts in di!!erent sp eres o! prod%ction are eD%al i! eD%al portions o! capital a8e been ad8anced !or t eir prod%ction, o@e8er di!!erent t e organic composition o! s%c capitals0 5 e distinction bet@een 8ariable and constant capital escapes t e capitalist in t e cost-price0 ? commodity !or @ ose prod%ction e m%st ad8ance V1== costs im H%st as m%c , @ et er e in8ests *= c U 1=8, or 1=c U *=80 &t costs im V1== in eit er case I no more and no less0 5 e cost-prices are t e same !or eD%al capitals in di!!erent sp eres, no matter o@ m%c t e prod%ced 8al%es and s%rpl%s-8al%es may di!!er0 5 e eD%ality o! cost-prices is t e basis !or competition among in8ested capitals, @ ereby an a8erage pro!it is bro%g t abo%t0

Chapter *. #or ation of a +eneral Rate of Profit ,-vera)e Rate of Profit. and Transfor ation of the Values of Co odities into Prices of Production
5 e organic composition o! capital depends at any gi8en time on t@o circ%mstances: !irst, on t e tec nical relation o! labo%r po@er employed to t e mass o! t e means o! prod%ction employed# secondly, on t e price o! t ese means o! prod%ction0 5 is composition, as @e a8e seen, m%st be examined on t e basis o! percentage ratios0 We express t e organic composition o! a certain capital consisting 2N+ o! constant and 1N+ o! 8ariable capital, by t e !orm%la 8= c U <=80 &t is !%rt ermore ass%med in t is comparison t at t e rate o! s%rpl%s-8al%e is %nc angeable0 'et it be any rate picked at random# say, 1==T0 5 e capital o! 8= c U <=8 t en prod%ces a s%rpl%s-8al%e o! <=s, and t is yields a rate o! pro!it o! <=T on t e total capital0 5 e magnit%de o! t e act%al 8al%e o! its prod%ct depends on t e magnit%de o! t e !ixed part o! t e constant capital, and on t e portion @ ic passes !rom it t ro%g @ear and tear into t e prod%ct0 A%t since t is circ%mstance as absol%tely no bearing on t e rate o! pro!it, and ence, in t e present analysis, @e s all ass%me, !or t e sake o! simplicity, t at t e constant capital is e8ery@ ere %ni!ormly and entirely trans!erred to t e ann%al prod%ct o! t e capitals0 &t is !%rt er ass%med t at t e capitals in t e di!!erent sp eres o! prod%ction ann%ally realise t e same D%antities o! s%rpl%s-8al%e proportionate to t e magnit%de o! t eir 8ariable parts0 For t e present, t ere!ore, @e disregard t e di!!erence @ ic may be prod%ced in t is respect by 8ariations in t e d%ration o! t%rno8ers0 5 is point @ill be disc%ssed later0 'et %s take !i8e di!!erent sp eres o! prod%ction, and let t e capital in eac a8e a di!!erent organic composition as !ollo@s: ;apitals )ate o! $%rpl%s- 4al%e )ate $%rpl%s- 4al%e o! o! 4al%e ,rod%ct ,ro!it &0 8=c U 1==T <=8 &&0 >=c U 1==T 3=8 &&&0 6=c 1==T U 2=8 &40 8+c 1==T U 1+8 40 *+c U 1==T <= 1<= <=T

3=

13=

3=T

2=

12=

2=T

1+

11+

1+T

1=+

+T

11+

; apter &J

+8 6ere, in di!!erent sp eres o! prod%ction @it t e same degree o! exploitation, @e !ind considerably di!!erent rates o! pro!it corresponding to t e di!!erent organic composition o! t ese capitals0 5 e s%m total o! t e capitals in8ested in t ese !i8e sp eres o! prod%ction R +==# t e s%m total o! t e s%rpl%s-8al%e prod%ced by t em R 11=# t e aggregate 8al%e o! t e commodities prod%ced by t em R 61=0 &! @e consider t e +== as a single capital, and capitals & to 4 merely as its component parts Bas, say, di!!erent departments o! a cotton mill, @ ic as di!!erent ratios o! constant to 8ariable capital in its carding, preparatory spinning, spinning, and @ea8ing s ops, and in @ ic t e a8erage ratio !or t e !actory as a @ ole as still to be calc%latedC, t e mean composition o! t is capital o! +== @o%ld R 3*=c U 11=8, or, in per cent, R >8c U <<80 $ o%ld eac o! t e capitals o! 1== be regarded as 1N+ o! t e total capital, its composition @o%ld eD%al t is a8erage o! >8 c U <<8# !or e8ery 1== t ere @o%ld be an a8erage s%rpl%s-8al%e o! <<# t %s, t e a8erage rate o! pro!it @o%ld R <<T, and, !inally, t e price o! e8ery !i!t o! t e total prod%ct prod%ced by t e +== @o%ld R 1<<0 5 e prod%ct o! eac !i!t o! t e ad8anced total capital @o%ld t en a8e to be sold at 1<<0 A%t to a8oid entirely erroneo%s concl%sions it m%st not be ass%med t at all cost-prices R 1==0 Wit 8=c U <=8 and a rate o! s%rpl%s-8al%e R 1==T, t e total 8al%e o! commodities prod%ced by capital & R 1== @o%ld be 8= c U <=8 U <=s R 1<=, pro8ided t e entire constant capital @ent into t e ann%al prod%ct0 -o@, t is may %nder certain circ%mstances be t e case in some sp eres o! prod%ction0 A%t ardly in cases @ ere t e proportion o! c : 8 R 2 : 10 We m%st, t ere!ore, remember in comparing t e 8al%es prod%ced by eac 1== o! t e di!!erent capitals, t at t ey @ill di!!er in accordance @it t e di!!erent composition o! c as to its !ixed and circ%lating parts, and t at, in t%rn, t e !ixed portions o! eac o! t e di!!erent capitals depreciate slo@ly or rapidly as t e case may be, t %s trans!erring %neD%al D%antities o! t eir 8al%e to t e prod%ct in eD%al periods o! time0 A%t t is is immaterial to t e rate o! pro!it0 -o matter @ et er t e 8= c gi8e %p a 8al%e o! 8=, or +=, or +, to t e ann%al prod%ct, and t e ann%al prod%ct conseD%ently R 8= c U <=8 U <=s R 1<=, or +=c U <=8 U <=s R *=, or +8 U <=8 U <=s R 2+# in all t ese cases t e red%ndance o! t e prod%ct"s 8al%e o8er its cost-price R <=, and in calc%lating t e rate o! pro!it t ese <= are related to t e capital o! 1== in all o! t em0 5 e rate o! pro!it o! capital &, t ere!ore, is <=T in e8ery case0 5o make t is still plainer, @e let di!!erent portions o! constant capital go into t e 8al%e o! t e prod%ct o! t e same !i8e capitals in t e !ollo@ing table: ;apitals )ate o! $%rpl%s- )ate $%rpl%s- 4al%e o! 4al%e ,ro!it &0 8=c U 1==T <=8 &&0 >=c U 1==T 3=8 &&&0 6=c 1==T U 2=8 &40 8+c 1==T U 1+8 <= <=T (sed %p c 4al%e o! ;ostcommodities ,rice

+=

*=

>=

3=

3=T

+1

111

81

2=

2=T

+1

131

*1

1+

1+T

2=

>=

++

116

; apter &J

40 *+c U 1==T +8 3*=c 11=8 >8c <<8 U I

+T

1=

<=

1+

11=

11=T I

5otal

U I

<<

<<T

?8erage

&! @e no@ again consider capitals & to 4 as a single total capital, @e s all see t at, in t is case as @ell, t e composition o! t e s%ms o! t ese !i8e capitals R +== R 3*= c U 11=8, so t at @e get t e same a8erage composition R >8c U <<8, and, similarly, t e a8erage s%rpl%s-8al%e remains <<0 &! @e di8ide t is s%rpl%s-8al%e %ni!ormly among capitals & to 4, @e get t e !ollo@ing commodityprices: ;apitals $%rpl%s- 4al%e o! ;ost-,rice o! ,rice o! )ate 7e8iation 4al%e ;ommodities ;ommodities ;ommodities o! o! ,ro!it ,rice !rom 4al%e &0 8=c U <= <=8 &&0 >=c U 3= 3=8 &&&0 6=c 2= U 2=8 &40 8+c 1+ U 1+8 40 *+c U + +8 *= >= *< <<T U<

111

81

1=3

<<T

-8

131

*1

113

<<T

-18

>=

++

>>

<<T

U>

<=

1+

3>

<<T

U1>

5aken toget er, t e commodities are sold at < U > U 1> R <6 abo8e, and 8 U 18 R <6 belo@ t eir 8al%e, so t at t e de8iations o! price !rom 8al%e balance o%t one anot er t ro%g t e %ni!orm distrib%tion o! s%rpl%s-8al%e, or t ro%g addition o! t e a8erage pro!it o! << per 1== %nits o! ad8anced capital to t e respecti8e cost-prices o! t e commodities & to 40 3ne portion o! t e commodities is sold abo8e its 8al%e in t e same proportion in @ ic t e ot er is sold belo@ it0 ?nd it is only t e sale o! t e commodities at s%c prices t at enables t e rate o! pro!it !or capitals & to 4 to be %ni!ormly <<T, regardless o! t eir di!!erent organic composition0 5 e prices @ ic obtain as t e a8erage o! t e 8ario%s rates o! pro!it in t e di!!erent sp eres o! prod%ction added to t e cost-prices o! t e di!!erent sp eres o! prod%ction, constit%te t e prices o! prod%ction0 5 ey a8e as t eir prereD%isite t e existence o! a general rate o! pro!it, and t is, again, pres%pposes t at t e rates o! pro!it in e8ery indi8id%al sp ere o! prod%ction taken by itsel! a8e pre8io%sly been red%ced to H%st as many a8erage rates0 5 ese partic%lar rates o! pro!it R sNc in e8ery sp ere o! prod%ction, and m%st, as occ%rs in ,art & o! t is book, be ded%ced o%t o! t e 8al%es o! t e

11>

; apter &J

commodities0 Wit o%t s%c ded%ction t e general rate o! pro!it Band conseD%ently t e price o! prod%ction o! commoditiesC remains a 8ag%e and senseless conception0 6ence, t e price o! prod%ction o! a commodity is eD%al to its cost-price pl%s t e pro!it, allotted to it in per cent, in accordance @it t e general rate o! pro!it, or, in ot er @ords, to its cost-price pl%s t e a8erage pro!it0 3@ing to t e di!!erent organic compositions o! capitals in8ested in di!!erent lines o! prod%ction, and, ence, o@ing to t e circ%mstance t at I depending on t e di!!erent percentage @ ic t e 8ariable part makes %p in a total capital o! a gi8en magnit%de I capitals o! eD%al magnit%de p%t into motion 8ery di!!erent D%antities o! labo%r, t ey also appropriate 8ery di!!erent D%antities o! s%rpl%s-labo%r or prod%ce 8ery di!!erent D%antities o! s%rpl%s-8al%e0 ?ccordingly, t e rates o! pro!it pre8ailing in t e 8ario%s branc es o! prod%ction are originally 8ery di!!erent0 5 ese di!!erent rates o! pro!it are eD%aliEed by competition to a single general rate o! pro!it, @ ic is t e a8erage o! all t ese di!!erent rates o! pro!it0 5 e pro!it accr%ing in accordance @it t is general rate o! pro!it to any capital o! a gi8en magnit%de, @ ate8er its organic composition, is called t e a8erage pro!it0 5 e price o! a commodity, @ ic is eD%al to its cost-price pl%s t e s are o! t e ann%al a8erage pro!it on t e total capital in8ested Bnot merely cons%medC in its prod%ction t at !alls to it in accordance @it t e conditions o! t%rno8er, is called its price o! prod%ction0 5ake, !or example, a capital o! +==, o! @ ic 1== is !ixed capital, and let 1=T o! t is @ear o%t d%ring one t%rno8er o! t e circ%lating capital o! 2==0 'et t e a8erage pro!it !or t e period o! t%rno8er be 1=T0 &n t at case t e cost-price o! t e prod%ct created d%ring t is t%rno8er @ill be 1= c !or @ear pl%s 2== Bc U 8C circ%lating capital R 21=, and its price o! prod%ction @ill be 21= cost-price pl%s B1=T pro!it on +==C += R 26=0 5 %s, alt o%g in selling t eir commodities t e capitalists o! t e 8ario%s sp eres o! prod%ction reco8er t e 8al%e o! t e capital cons%med in t eir prod%ction, t ey do not sec%re t e s%rpl%s8al%e, and conseD%ently t e pro!it, created in t eir o@n sp ere by t e prod%ction o! t ese commodities0 W at t ey sec%re is only as m%c s%rpl%s-8al%e, and ence pro!it, as !alls, @ en %ni!ormly distrib%ted, to t e s are o! e8ery aliD%ot part o! t e total social capital !rom t e total social s%rpl%s-8al%e, or pro!it, prod%ced in a gi8en time by t e social capital in all sp eres o! prod%ction0 E8ery 1== o! an in8ested capital, @ ate8er its composition, dra@s as m%c pro!it in a year, or any ot er period o! time, as !alls to t e s are o! e8ery 1==, t e -t part o! t e total capital, d%ring t e same period0 $o !ar as pro!its are concerned, t e 8ario%s capitalists are H%st so many stock olders in a stock company in @ ic t e s ares o! pro!it are %ni!ormly di8ided per 1==, so t at pro!its di!!er in t e case o! t e indi8id%al capitalists only in accordance @it t e amo%nt o! capital in8ested by eac in t e aggregate enterprise, i0 e0, according to is in8estment in social prod%ction as a @ ole, according to t e n%mber o! is s ares0 5 ere!ore, t e portion o! t e price o! commodities @ ic replaces t e elements o! capital cons%med in t e prod%ction o! t ese commodities, t e portion, t ere!ore, @ ic @ill a8e to be %sed to b%y back t ese cons%med capital-8al%es, i0 e0, t eir cost-price, depends entirely on t e o%tlay o! capital @it in t e respecti8e sp eres o! prod%ction0 A%t t e ot er element o! t e price o! commodities, t e pro!it added to t is cost-price, does not depend on t e amo%nt o! pro!it prod%ced in a gi8en sp ere o! prod%ction by a gi8en capital in a gi8en period o! time0 &t depends on t e mass o! pro!it @ ic !alls as an a8erage !or any gi8en period to eac indi8id%al capital as an aliD%ot part o! t e total social capital in8ested in social prod%ction0 W en a capitalist sells is commodities at t eir price o! prod%ction, t ere!ore, e reco8ers money in proportion to t e 8al%e o! t e capital cons%med in t eir prod%ction and sec%res pro!it in proportion to t is ad8anced capital as t e aliD%ot part in t e total social capital0 6is cost-prices are speci!ic0 A%t t e pro!it added to t em is independent o! is partic%lar sp ere o! prod%ction, being a simple a8erage per 1== %nits o! in8ested capital0 'et %s ass%me t at t e !i8e di!!erent in8estments & to 4 o! t e !oregoing ill%stration belong to one man0 5 e D%antity o! 8ariable and constant capital cons%med per 1== o! t e in8ested capital in

118

; apter &J

eac o! t e departments & to 4 in t e prod%ction o! commodities & to 4 @o%ld, needless to say, make %p a part o! t eir price, since at least t is price is reD%ired to reco8er t e ad8anced and cons%med portions o! t e capital0 5 ese cost-prices @o%ld t ere!ore be di!!erent !or eac class o! t e commodities & to 4, and @o%ld as s%c be set di!!erently by t e o@ner0 A%t as regards t e di!!erent D%antities o! s%rpl%s-8al%e, or pro!it, prod%ced by & to 4, t ey mig t easily be regarded by t e capitalist as pro!it on is ad8anced aggregate capital, so t at eac 1== %nits @o%ld get t eir de!inite aliD%ot part0 6ence, t e cost-prices o! t e commodities prod%ced in t e 8ario%s departments & to 4 @o%ld be di!!erent# b%t t at portion o! t eir selling price deri8ed !rom t e pro!it added per 1== capital @o%ld be t e same !or all t ese commodities0 5 e aggregate price o! t e commodities & to 4 @o%ld t ere!ore eD%al t eir aggregate 8al%e, i0 e0, t e s%m o! t e costprices & to 4 pl%s t e s%m o! t e s%rpl%s-8al%es, or pro!its, prod%ced in & to 40 &t @o%ld ence act%ally be t e money-expression o! t e total D%antity o! past and ne@ly applied labo%r incorporated in commodities & to 40 ?nd in t e same @ay t e s%m o! t e prices o! prod%ction o! all commodities prod%ced in society I t e totality o! all branc es o! prod%ction I is eD%al to t e s%m o! t eir 8al%es0 5 is statement seems to con!lict @it t e !act t at %nder capitalist prod%ction t e elements o! prod%cti8e capital are, as a r%le, bo%g t on t e market, and t at !or t is reason t eir prices incl%de pro!it @ ic as already been realised, ence, incl%de t e price o! prod%ction o! t e respecti8e branc o! ind%stry toget er @it t e pro!it contained in it, so t at t e pro!it o! one branc o! ind%stry goes into t e cost-price o! anot er0 A%t i! @e place t e s%m o! t e cost-prices o! t e commodities o! an entire co%ntry on one side, and t e s%m o! its s%rpl%s-8al%es, or pro!its, on t e ot er, t e calc%lation m%st e8idently be rig t0 For instance, take a certain commodity ?0 &ts costprice may contain t e pro!its o! A, ;, 7, etc0, H%st as t e cost-prices o! A, ;, 7, etc0, may contain t e pro!its o! ?0 -o@, as @e make o%r calc%lation t e pro!it o! ? @ill not be incl%ded in its costprice, nor @ill t e pro!its o! A, ;, 7, etc0, be incl%ded in t eirs0 -obody e8er incl%des is o@n pro!it in is cost-price0 &! t ere are, t ere!ore, n sp eres o! prod%ction, and i! eac makes a pro!it amo%nting to p, t en t eir aggregate cost-price R k - np0 ;onsidering t e calc%lation as a @ ole @e see t at since t e pro!its o! one sp ere o! prod%ction pass into t e cost-price o! anot er, t ey are t ere!ore incl%ded in t e calc%lation as constit%ents o! t e total price o! t e end-prod%ct, and so cannot appear a second time on t e pro!it side0 &! any do appear on t is side, o@e8er, t en only beca%se t e commodity in D%estion is itsel! an %ltimate prod%ct, @ ose price o! prod%ction does not pass into t e cost-price o! some ot er commodity0 &! t e cost-price o! a commodity incl%des a s%m R p, @ ic stands !or t e pro!its o! t e prod%cers o! t e means o! prod%ction, and i! a pro!it R p 1 is added to t is cost-price, t e aggregate pro!it , R p U p10 5 e aggregate cost-price o! t e commodity, considered @it o%t t e pro!it portions, is t en its o@n cost-price min%s ,0 'et t is cost-price be k0 5 en, ob8io%sly, k U p R k U p U p 10 &n dealing @it s%rpl%s-8al%es, @e a8e seen in Aook & t at t e prod%ct o! e8ery capital may be so treated, as t o%g a part o! it replaces only capital, @ ile t e ot er part represents only s%rpl%s8al%e0 &n applying t is approac to t e aggregate prod%ct o! society, @e m%st make some recti!ications0 'ooking %pon society as a @ ole, t e pro!it contained in, say, t e price o! !lax cannot appear t@ice I not bot as a portion o! t e linen price and as t e pro!it o! t e !lax0 5 ere is no di!!erence bet@een s%rpl%s-8al%e and pro!it, as long as, e0g0, ?"s s%rpl%s-8al%e passes into A"s constant capital0 &t is, a!ter all, D%ite immaterial to t e 8al%e o! t e commodities, @ et er t e labo%r contained in t em is paid or %npaid0 5 is merely s o@s t at A pays !or ?"s s%rpl%s8al%e0 ?"s s%rpl%s-8al%e cannot be entered t@ice in t e total calc%lation0 A%t t e di!!erence is t is: ?side !rom t e !act t at t e price o! a partic%lar prod%ct, let %s say t at o! capital A, di!!ers !rom its 8al%e beca%se t e s%rpl%s-8al%e realised in A may be greater or smaller t an t e pro!it added to t e price o! t e prod%cts o! A, t e same circ%mstance applies also to t ose commodities @ ic !orm t e constant part o! capital A, and indirectly also its 8ariable part, as t e labo%rers" necessities o! li!e0 $o !ar as t e constant portion is concerned, it is itsel!

11*

; apter &J

eD%al to t e cost-price pl%s t e s%rpl%s-8al%e, ere t ere!ore eD%al to cost-price pl%s pro!it, and t is pro!it may again be greater or smaller t an t e s%rpl%s-8al%e !or @ ic it stands0 ?s !or t e 8ariable capital, t e a8erage daily @age is indeed al@ays eD%al to t e 8al%e prod%ced in t e n%mber o! o%rs t e labo%rer m%st @ork to prod%ce t e necessities o! li!e0 A%t t is n%mber o! o%rs is in its t%rn obsc%red by t e de8iation o! t e prices o! prod%ction o! t e necessities o! li!e !rom t eir 8al%es0 6o@e8er, t is al@ays resol8es itsel! to one commodity recei8ing too little o! t e s%rpl%s-8al%e @ ile anot er recei8es too m%c , so t at t e de8iations !rom t e 8al%e @ ic are embodied in t e prices o! prod%ction compensate one anot er0 (nder capitalist prod%ction, t e general la@ acts as t e pre8ailing tendency only in a 8ery complicated and approximate manner, as a ne8er ascertainable a8erage o! ceaseless !l%ct%ations0 $ince t e general rate o! pro!it is !ormed by taking t e a8erage o! t e 8ario%s rates o! pro!it !or eac 1== o! capital in8ested in a de!inite period, e0g0, a year, it !ollo@s t at in it t e di!!erence bro%g t abo%t by di!!erent periods o! t%rno8er o! di!!erent capitals is also e!!aced0 A%t t ese di!!erences a8e a decisi8e bearing on t e di!!erent rates o! pro!it in t e 8ario%s sp eres o! prod%ction @ ose a8erage !orms t e general rate o! pro!it0 &n t e preceding ill%stration concerning t e !ormation o! t e a8erage rate o! pro!it @e ass%med eac capital in eac sp ere o! prod%ction R 1==, and @e did so to s o@ t e di!!erence in t e rates o! pro!it in per cent, and t %s also t e di!!erence in t e 8al%es o! commodities prod%ced by eD%al amo%nts o! capital0 A%t it goes @it o%t saying t at t e act%al amo%nts o! s%rpl%s-8al%e prod%ced in eac sp ere o! prod%ction depend on t e magnit%de o! t e in8ested capitals, since t e composition o! capital is gi8en in eac sp ere o! prod%ction0 .et t e act%al rate o! pro!it in any partic%lar sp ere o! prod%ction is not a!!ected by t e !act t at t e capital in8ested is 1==, or m times 1==, or xm times 1==0 5 e rate o! pro!it remains 1=T, @ et er t e total pro!it is 1=:1==, or 1,===:1=,===0 6o@e8er, since t e rates o! pro!it di!!er in t e 8ario%s sp eres o! prod%ction, @it 8ery m%c di!!erent D%antities o! s%rpl%s-8al%e, or pro!it, being prod%ced in t em, depending on t e proportion o! t e 8ariable to t e total capital, it is e8ident t at t e a8erage pro!it per 1== o! t e social capital, and ence t e a8erage, or general, rate o! pro!it, @ill di!!er considerably in accordance @it t e respecti8e magnit%des o! t e capitals in8ested in t e 8ario%s sp eres0 'et %s take !o%r capitals ?, A, ;, 70 'et t e rate o! s%rpl%s-8al%e !or all R 1==T0 'et t e 8ariable capital !or eac 1== o! t e total be <+ in ?, 2= in A, 1+ in ;, and 1= in 70 5 en eac 1== o! t e total capital @o%ld yield a s%rpl%s-8al%e, or pro!it, o! <+ in ?, 2= in A, 1+ in ;, and 1= in 70 5 is @o%ld total *=, and i! t ese !o%r capitals are o! t e same magnit%de, t e a8erage rate o! pro!it @o%ld t en be *=N2 or <<ZT0 $%ppose, o@e8er, t e total capitals are as !ollo@s: ? R <==, A R 3==, ; R 1,===, 7 R 2,===0 5 e pro!its prod%ced @o%ld t en respecti8ely R +=, 1<=, 1+=, and 2==0 5 is makes a pro!it o! ><=, and an a8erage rate o! pro!it o! 13 1N11T !or +,+==, t e s%m o! t e !o%r capitals0 5 e masses o! t e total 8al%e prod%ced di!!er in accordance @it t e magnit%des o! t e total capitals in8ested in ?, A, ;, 7, respecti8ely0 5 e !ormation o! t e a8erage rate o! pro!it is, t ere!ore, not merely a matter o! obtaining t e simple a8erage o! t e di!!erent rates o! pro!it in t e 8ario%s sp eres o! prod%ction, b%t rat er one o! t e relati8e @eig t @ ic t ese di!!erent rates o! pro!it a8e in !orming t is a8erage0 5 is, o@e8er, depends on t e relati8e magnit%de o! t e capital in8ested in eac partic%lar sp ere, or on t e aliD%ot part @ ic t e capital in8ested in eac partic%lar sp ere !orms in t e aggregate social capital0 5 ere @ill nat%rally be a 8ery great di!!erence, depending on @ et er a greater or smaller part o! t e total capital prod%ces a ig er or lo@er rate o! pro!it0 ?nd t is, again, depends on o@ m%c capital is in8ested in sp eres, in @ ic t e 8ariable capital is relati8ely small or large compared to t e total capital0 &t is H%st like t e a8erage interest obtained by a %s%rer @ o lends 8ario%s D%antities o! capital at di!!erent interest rates# !or instance, at 2, +, 6, >T, etc0 5 e a8erage rate @ill depend entirely on o@ m%c o! is capital e as loaned o%t at eac o! t e di!!erent rates o! interest0

1<=

; apter &J

5 e general rate o! pro!it is, t ere!ore, determined by t@o !actors: 1C 5 e organic composition o! t e capitals in t e di!!erent sp eres o! prod%ction, and t %s, t e di!!erent rates o! pro!it in t e indi8id%al sp eres0 <C 5 e distrib%tion o! t e total social capital in t ese di!!erent sp eres, and t %s, t e relati8e magnit%de o! t e capital in8ested in eac partic%lar sp ere at t e speci!ic rate o! pro!it pre8ailing in it# i0 e0, t e relati8e s are o! t e total social capital absorbed by eac indi8id%al sp ere o! prod%ction0 &n Aooks & and && @e dealt only @it t e value o! commodities0 3n t e one and, t e cost1price as no@ been singled o%t as a part o! t is 8al%e, and, on t e ot er, t e price of production o! commodities as been de8eloped as its con8erted !orm0 $%ppose t e composition o! t e a8erage social capital is 8= c U <=8 and t e ann%al rate o! s%rpl%s8al%e, s", is 1==T0 &n t at case t e a8erage ann%al pro!it !or a capital o! 1== R <=, and t e general ann%al rate o! pro!it R <=T0 W ate8er t e cost-price, k, o! t e commodities ann%ally prod%ced by a capital o! 1==, t eir price o! prod%ction @o%ld t en be k U <=0 &n t ose sp eres o! prod%ction in @ ic t e composition o! capital @o%ld R B8= - xC c U B<= U xC8, t e act%ally prod%ced s%rpl%s8al%e, or t e ann%al pro!it prod%ced in t at partic%lar sp ere, @o%ld be <= U x, t at is, greater t an <=, and t e 8al%e o! t e prod%ced commodities R k U <= U x, t at is, greater t an k U <=, or greater t an t eir price o! prod%ction0 &n t ose sp eres, in @ ic t e composition o! t e capitalRB8= U xC c U B<= - xC8, t e ann%ally prod%ced s%rpl%s-8al%e, or pro!it, @o%ld R <= - x, or less t an <=, and conseD%ently t e 8al%e o! t e commodities k U <= - x less t an t e price o! prod%ction, @ ic R k U <=0 ?side !rom possible di!!erences in t e periods o! t%rno8er, t e price o! prod%ction o! t e commodities @o%ld t en eD%al t eir 8al%e only in sp eres, in @ ic t e composition @o%ld appen to be 8=c U <=80 5 e speci!ic de8elopment o! t e social prod%cti8ity o! labo%r in eac partic%lar sp ere o! prod%ction 8aries in degree, ig er or lo@er, depending on o@ large a D%antity o! means o! prod%ction are set in motion by a de!inite D%antity o! labo%r, ence in a gi8en @orking-day by a de!inite n%mber o! labo%rers, and, conseD%ently, on o@ small a D%antity o! labo%r is reD%ired !or a gi8en D%antity o! means o! prod%ction0 $%c capitals as contain a larger percentage o! constant and a smaller percentage o! 8ariable capital t an t e a8erage social capital are, t ere!ore, called capitals o! higher composition, and, con8ersely, t ose capitals in @ ic t e constant is relati8ely smaller, and t e 8ariable relati8ely greater t an in t e a8erage social capital, are called capitals o! lowercomposition0 Finally, @e call t ose capitals @ ose composition coincides @it t e a8erage, capitals o! a8erage composition0 $ o%ld t e a8erage social capital be composed in per cent o! 8= c U <=8, t en a capital o! *=c U 1=8 is higher, and a capital o! >=c U 3=8 lower t an t e social a8erage0 :enerally speaking, i! t e composition o! t e a8erage social capitalRmc U n8, in @ ic m and n are constant magnit%des and m U n R 1==, t e !orm%la Bm U xC c U Bn - xC8represents t e ig er composition, and Bm - xC c U Bn U xC8 t e lo@er composition o! an indi8id%al capital or gro%p o! capitals0 5 e @ay in @ ic t ese capitals per!orm t eir !%nctions a!ter establis ment o! an a8erage rate o! pro!it and ass%ming one t%rno8er per year, is s o@n in t e !ollo@ing tab%lation, in @ ic & represents t e a8erage composition @it an a8erage rate o! pro!it o! <=T0 &C 8=8 U <=8 U <=s0 )ate o! pro!it R <=T0 ,rice o! prod%ct R 1<=0 4al%e R 1<=0 &&C *=c U 1=8 U 1=s0 )ate o! pro!it R <=T0 ,rice o! prod%ct R 1<=0 4al%e R 11=0 &&&C >=c U 3=8 U 3=s0 )ate o! pro!it R <=T0 ,rice o! prod%ct R 1<=0 4al%e R 13=0

1<1

; apter &J

5 e 8al%e o! t e commodities prod%ced by capital && @o%ld, t ere!ore, be smaller t an t eir price o! prod%ction, t e price o! prod%ction o! t e commodities o! &&& smaller t an t eir 8al%e, and only in t e case o! capital & in branc es o! prod%ction in @ ic t e composition appens to coincide @it t e social a8erage, @o%ld 8al%e and price o! prod%ction be eD%al0 &n applying t ese terms to any partic%lar cases note m%st, o@e8er, be taken @ et er a de8iation o! t e ratio bet@een c and 8 is simply d%e to a c ange in t e 8al%e o! t e elements o! constant capital, rat er t an to a di!!erence in t e tec nical composition0 5 e !oregoing statements a8e at any rate modi!ied t e original ass%mption concerning t e determination o! t e cost-price o! commodities0 We ad originally ass%med t at t e cost-price o! a commodity eD%alled t e 8al%e o! t e commodities cons%med in its prod%ction0 A%t !or t e b%yer t e price o! prod%ction o! a speci!ic commodity is its cost-price, and may t %s pass as cost-price into t e prices o! ot er commodities0 $ince t e price o! prod%ction may di!!er !rom t e 8al%e o! a commodity, it !ollo@s t at t e cost-price o! a commodity containing t is price o! prod%ction o! anot er commodity may also stand abo8e or belo@ t at portion o! its total 8al%e deri8ed !rom t e 8al%e o! t e means o! prod%ction cons%med by it0 &t is necessary to remember t is modi!ied signi!icance o! t e cost-price, and to bear in mind t at t ere is al@ays t e possibility o! an error i! t e cost-price o! a commodity in any partic%lar sp ere is identi!ied @it t e 8al%e o! t e means o! prod%ction cons%med by it0 3%r present analysis does not necessitate a closer examination o! t is point0 &t remains tr%e, ne8ert eless, t at t e cost-price o! a commodity is al@ays smaller t an its 8al%e0 For no matter o@ m%c t e cost-price o! a commodity may di!!er !rom t e 8al%e o! t e means o! prod%ction cons%med by it, t is past mistake is immaterial to t e capitalist0 5 e costprice o! a partic%lar commodity is a de!inite condition @ ic is gi8en, and independent o! t e prod%ction o! o%r capitalist, @ ile t e res%lt o! is prod%ction is a commodity containing s%rpl%s8al%e, t ere!ore an excess o! 8al%e o8er and abo8e its cost-price0 For all ot er p%rposes, t e statement t at t e cost-price is smaller t an t e 8al%e o! a commodity as no@ c anged practically into t e statement t at t e cost-price is smaller t an t e price o! prod%ction0 ?s concerns t e total social capital, in @ ic t e price o! prod%ction is eD%al to t e 8al%e, t is statement is identical @it t e !ormer, namely t at t e cost-price is smaller t an t e 8al%e0 ?nd @ ile it is modi!ied in t e indi8id%al sp eres o! prod%ction, t e !%ndamental !act al@ays remains t at in t e case o! t e total social capital t e cost-price o! t e commodities prod%ced by it is smaller t an t eir 8al%e, or, in t e case o! t e total mass o! social commodities, smaller t an t eir price o! prod%ction, @ ic is identical @it t eir 8al%e0 5 e cost-price o! a commodity re!ers only to t e D%antity o! paid labo%r contained in it, @ ile its 8al%e re!ers to all t e paid and %npaid labo%r contained in it0 5 e price o! prod%ction re!ers to t e s%m o! t e paid labo%r pl%s a certain D%antity o! %npaid labo%r determined !or any partic%lar sp ere o! prod%ction by conditions o8er @ ic it as no control0 5 e !orm%la t at t e price o! prod%ction o! a commodity R k U p, i0 e0, eD%als its cost-price pl%s pro!it, is no@ more precisely de!ined @it p R kp" Bp" being t e general rate o! pro!itC0 6ence t e price o! prod%ction R k U kp"0 &! k R 3== and p" R 1+T, t en t e price o! prod%ction is k U kp" R 3== U 3== \ 1+N1==, or 32+0 5 e price o! prod%ction o! t e commodities in any partic%lar sp ere may c ange in magnit%de: 1C &! t e general rate o! pro!it c anges independently o! t is partic%lar sp ere, @ ile t e 8al%e o! t e commodities remains t e same Bt e same D%antities o! congealed and li8ing labo%r being cons%med in t eir prod%ction as be!oreC0 <C &! t ere is a c ange o! 8al%e, eit er in t is partic%lar sp ere in conseD%ence o! tec nical c anges, or in conseD%ence o! a c ange in t e 8al%e o! t ose commodities @ ic !orm t e elements o! its constant capital, @ ile t e general rate o! pro!it remains %nc anged0 3C Finally, i! a combination o! t e t@o a!orementioned circ%mstances takes place0

1<<

; apter &J

&n spite o! t e great c anges occ%rring contin%ally, as @e s all see, in t e act%al rates o! pro!it @it in t e indi8id%al sp eres o! prod%ction, any real c ange in t e general rate o! pro!it, %nless bro%g t abo%t by @ay o! an exception by extraordinary economic e8ents, is t e belated e!!ect o! a series o! !l%ct%ations extending o8er 8ery long periods, !l%ct%ations @ ic reD%ire m%c time be!ore consolidating and eD%alising one anot er to bring abo%t a c ange in t e general rate o! pro!it0 &n all s orter periods BD%ite aside !rom !l%ct%ations o! market-pricesC, a c ange in t e prices o! prod%ction is, t ere!ore, al@ays traceable prima facie to act%al c anges in t e 8al%e o! commodities, i0 e0, to c anges in t e total amo%nt o! labo%r-time reD%ired !or t eir prod%ction0 Mere c anges in t e money-expression o! t e same 8al%es are, nat%rally, not at all considered ere0 3n t e ot er and, it is e8ident t at !rom t e point o! 8ie@ o! t e total social capital t e 8al%e o! t e commodities prod%ced by it Bor, expressed in money, t eir priceC R 8al%e o! constant capital U 8al%e o! 8ariable capital U s%rpl%s-8al%e0 ?ss%ming t e degree o! labo%r exploitation to be constant, t e rate o! pro!it cannot c ange so long as t e mass o! s%rpl%s-8al%e remains t e same, %nless t ere is a c ange in eit er t e 8al%e o! t e constant capital, t e 8al%e o! t e 8ariable capital, or t e 8al%e o! bot , so t at ; c anges, and t ereby sN;, @ ic represents t e general rate o! pro!it0 &n eac case, t ere!ore, a c ange in t e general rate o! pro!it implies a c ange in t e 8al%e o! commodities @ ic !orm t e elements o! t e constant or 8ariable capital, or o! bot 0 3r, t e general rate o! pro!it may c ange, @ ile t e 8al%e o! t e commodities remains t e same, @ en t e degree o! labo%r exploitation c anges0 3r, i! t e degree o! labo%r exploitation remains t e same, t e general rate o! pro!it may c ange t ro%g a c ange in t e amo%nt o! labo%r employed relati8e to t e constant capital as a res%lt o! tec nical c anges in t e labo%r-process0 A%t s%c tec nical c anges m%st al@ays s o@ t emsel8es in, and be attended by, a c ange in t e 8al%e o! t e commodities, @ ose prod%ction @o%ld t en reD%ire more or less labo%r t an be!ore0 We sa@ in ,art & t at s%rpl%s-8al%e and pro!it are identical !rom t e standpoint o! t eir mass0 A%t t e rate o! pro!it is !rom t e 8ery o%tset distinct !rom t e rate o! s%rpl%s-8al%e, @ ic appears at !irst sig t as merely a di!!erent !orm o! calc%lating0 A%t at t e same time t is ser8es, also !rom t e o%tset, to obsc%re and mysti!y t e act%al origin o! s%rpl%s-8al%e, since t e rate o! pro!it can rise or !all @ ile t e rate o! s%rpl%s-8al%e remains t e same, and 8ice 8ersa, and since t e capitalist is in practice solely interested in t e rate o! pro!it0 .et t ere @as di!!erence o! magnit%de only bet@een t e rate o! s%rpl%s-8al%e and t e rate o! pro!it and not bet@een t e s%rpl%s-8al%e itsel! and pro!it0 $ince in t e rate o! pro!it t e s%rpl%s-8al%e is calc%lated in relation to t e total capital and t e latter is taken as its standard o! meas%rement, t e s%rpl%s-8al%e itsel! appears to originate !rom t e total capital, %ni!ormly deri8ed !rom all its parts, so t at t e organic di!!erence bet@een constant and 8ariable capital is obliterated in t e conception o! pro!it0 7isg%ised as pro!it, s%rpl%s-8al%e act%ally denies its origin, loses its c aracter, and becomes %nrecognisable0 6o@e8er, it erto t e distinction bet@een pro!it and s%rpl%s-8al%e applied solely to a D%alitati8e c ange, or c ange o! !orm, @ ile t ere @as no real di!!erence o! magnit%de in t is !irst stage o! t e c ange bet@een s%rpl%s-8al%e and pro!it, b%t only bet@een t e rate o! pro!it and t e rate o! s%rpl%s-8al%e0 A%t it is di!!erent, as soon as a general rate o! pro!it, and t ereby an a8erage pro!it corresponding to t e magnit%de o! in8ested capital gi8en in t e 8ario%s sp eres o! prod%ction, a8e been establis ed0 &t is t en only an accident i! t e s%rpl%s-8al%e, and t %s t e pro!it, act%ally prod%ced in any partic%lar sp ere o! prod%ction, coincides @it t e pro!it contained in t e selling price o! a commodity0 ?s a r%le, s%rpl%s-8al%e and pro!it and not t eir rates alone, are t en di!!erent magnit%des0 ?t a gi8en degree o! exploitation, t e mass o! s%rpl%s-8al%e prod%ced in a partic%lar sp ere o! prod%ction is t en more important !or t e aggregate a8erage pro!it o! social capital, and

1<3

; apter &J

t %s !or t e capitalist class in general, t an !or t e indi8id%al capitalist in any speci!ic branc o! prod%ction0 &t is o! importance to t e latter only in so !ar as t e D%antity o! s%rpl%s-8al%e prod%ced in is branc elps to reg%late t e a8erage pro!it0 A%t t is is a process @ ic occ%rs be ind is back, one e does not see, nor %nderstand, and @ ic indeed does not interest im0 5 e act%al di!!erence o! magnit%de bet@een pro!it and s%rpl%s-8al%e I not merely bet@een t e rate o! pro!it and t e rate o! s%rpl%s-8al%e I in t e 8ario%s sp eres o! prod%ction no@ completely conceals t e tr%e nat%re and origin o! pro!it not only !rom t e capitalist, @ o as a special interest in decei8ing imsel! on t is score, b%t also !rom t e labo%rer0 5 e trans!ormation o! 8al%es into prices o! prod%ction ser8es to obsc%re t e basis !or determining 8al%e itsel!0 Finally, since t e mere trans!ormation o! s%rpl%s-8al%e into pro!it disting%is es t e portion o! t e 8al%e o! a commodity !orming t e pro!it !rom t e portion !orming its cost-price, it is nat%ral t at t e conception o! 8al%e s o%ld el%de t e capitalist at t is H%nct%re, !or e does not see t e total labo%r p%t into t e commodity, b%t only t at portion o! t e total labo%r !or @ ic e as paid in t e s ape o! means o! prod%ction, be t ey li8ing or not, so t at is pro!it appears to im as somet ing o%tside t e immanent 8al%e o! t e commodity0 -o@ t is idea is !%lly con!irmed, !orti!ied, and ossi!ied in t at, !rom t e standpoint o! is partic%lar sp ere o! prod%ction, t e pro!it added to t e cost-price is not act%ally determined by t e limits o! t e !ormation o! 8al%e @it in is o@n sp ere, b%t t ro%g completely o%tside in!l%ences0 5 e !act t at t is intrinsic connection is ere re8ealed !or t e !irst time# t at %p to t e present time political economy, as @e s all see in t e !ollo@ing and in Aook &4, eit er !orcibly abstracted itsel! !rom t e distinctions bet@een s%rpl%s-8al%e and pro!it, and t eir rates, so it co%ld retain 8al%e determination as a basis, or else abandoned t is 8al%e determination and @it it all 8estiges o! a scienti!ic approac , in order to cling to t e di!!erences t at strike t e eye in t is p enomenon I t is con!%sion o! t e t eorists best ill%strates t e %tter incapacity o! t e practical capitalist, blinded by competition as e is, and incapable o! penetrating its p enomena, to recognise t e inner essence and inner str%ct%re o! t is process be ind its o%ter appearance0 &n !act, all t e la@s e8ol8ed in ,art & concerning t e rise and !all o! t e rate o! pro!it a8e t e !ollo@ing t@o-!old meaning: 1C 3n t e one and, t ey are t e la@s o! t e general rate o! pro!it0 &n 8ie@ o! t e many di!!erent ca%ses @ ic make t e rate o! pro!it rise or !all one @o%ld t ink, a!ter e8eryt ing t at as been said and done, t at t e general rate o! pro!it m%st c ange e8ery day0 A%t a trend in one sp ere o! prod%ction compensates !or t at in anot er, t eir e!!ects cross and paralyse one anot er0 We s all later examine to @ ic side t ese !l%ct%ations %ltimately gra8itate0 A%t t ey are slo@0 5 e s%ddenness, m%ltiplicity, and di!!erent d%ration o! t e !l%ct%ations in t e indi8id%al sp eres o! prod%ction make t em compensate !or one anot er in t e order o! t eir s%ccession in time, a !all in prices !ollo@ing a rise, and 8ice 8ersa, so t at t ey remain limited to local, i0 e0, indi8id%al, sp eres0 Finally, t e 8ario%s local !l%ct%ations ne%tralise one anot er0 Wit in eac indi8id%al sp ere o! prod%ction, t ere take place c anges, i0 e0, de8iations !rom t e general rate o! pro!it, @ ic co%nterbalance one anot er in a de!inite time on t e one and, and t %s a8e no in!l%ence %pon t e general rate o! pro!it, and @ ic , on t e ot er, do not react %pon it, beca%se t ey are balanced by ot er sim%ltaneo%s local !l%ct%ations0 $ince t e general rate o! pro!it is not only determined by t e a8erage rate o! pro!it in eac sp ere, b%t also by t e distrib%tion o! t e total social capital among t e di!!erent indi8id%al sp eres, and since t is distrib%tion is contin%ally c anging, it becomes anot er constant ca%se o! c ange in t e general rate o! pro!it0 A%t it is a ca%se o! c ange @ ic mostly paralyses itsel!, o@ing to t e %ninterr%pted and many-sided nat%re o! t is mo8ement0 <C Wit in eac sp ere, t ere is some room !or play !or a longer or s orter space o! time, in @ ic t e rate o! pro!it o! t is sp ere may !l%ct%ate, be!ore t is !l%ct%ation consolidates s%!!iciently a!ter rising or !alling to gain time !or in!l%encing t e general rate o! pro!it and t ere!ore ass%ming

1<2

; apter &J

more t an local importance0 5 e la@s o! t e rate o! pro!it, as de8eloped in ,art & o! t is book, like@ise remain applicable @it in t ese limits o! space and time0 5 e t eoretical conception concerning t e !irst trans!ormation o! s%rpl%s-8al%e into pro!it, t at e8ery part o! a capital yields a %ni!orm pro!it, expresses a practical !act0 W ate8er t e composition o! an ind%strial capital, @ et er it sets in motion one D%arter o! congealed labo%r and t ree-D%arters o! li8ing labo%r, or t ree-D%arters o! congealed labo%r and one-D%arter o! li8ing labo%r, @ et er in one case it absorbs t ree times as m%c s%rpl%s-labo%r, or prod%ces t ree times as m%c s%rpl%s-8al%e t an in anot er I in eit er case it yields t e same pro!it, gi8en t e same degree o! labo%r exploitation and lea8ing aside indi8id%al di!!erences, @ ic , incidentally, disappear beca%se @e are dealing in bot cases @it t e a8erage composition o! t e entire sp ere o! prod%ction0 5 e indi8id%al capitalist Bor all t e capitalists in eac indi8id%al sp ere o! prod%ctionC, @ ose o%tlook is limited, rig tly belie8es t at is pro!it is not deri8ed solely !rom t e labo%r employed by im, or in is line o! prod%ction0 5 is is D%ite tr%e, as !ar as is a8erage pro!it is concerned0 5o @ at extent t is pro!it is d%e to t e aggregate exploitation o! labo%r on t e part o! t e total social capital, i0 e0, by all is capitalist colleag%es I t is interrelation is a complete mystery to t e indi8id%al capitalist# all t e more so, since no bo%rgeois t eorists, t e political economists, a8e so !ar re8ealed it0 ? sa8ing o! labo%r I not only labo%r necessary to prod%ce a certain prod%ct, b%t also t e n%mber o! employed labo%rers I and t e employment o! more congealed labo%r Bconstant capitalC, appear to be 8ery so%nd operations !rom t e economic standpoint and do not seem to exert t e least in!l%ence on t e general rate o! pro!it and t e a8erage pro!it0 6o@ co%ld li8ing labo%r be t e sole so%rce o! pro!it, in 8ie@ o! t e !act t at a red%ction in t e D%antity o! labo%r reD%ired !or prod%ction appears not to exert any in!l%ence on pro!itQ Moreo8er, it e8en seems in certain circ%mstances to be t e nearest so%rce o! an increase o! pro!its, at least !or t e indi8id%al capitalist0 &! in any partic%lar sp ere o! prod%ction t ere is a rise or !all o! t e portion o! t e cost-price @ ic represents t e 8al%e o! constant capital, t is portion comes !rom t e circ%lation and, eit er enlarged or red%ced, passes !rom t e 8ery o%tset into t e process o! prod%ction o! t e commodity0 &!, on t e ot er and, t e same n%mber o! labo%rers prod%ces more or less in t e same time, so t at t e D%antity o! labo%r reD%ired !or t e prod%ction o! a de!inite D%antity o! commodities 8aries @ ile t e n%mber o! labo%rers remains t e same, t at portion o! t e cost-price @ ic represents t e 8al%e o! t e 8ariable capital may remain t e same, i0 e0, contrib%te t e same amo%nt to t e cost-price o! t o total prod%ct0 A%t e8ery one o! t e indi8id%al commodities @ ose s%m makes %p t e total prod%ct, s ares in more or less labo%r Bpaid and t ere!ore also %npaidC, and s ares conseD%ently in t e greater or smaller o%tlay !or t is labo%r, i0 e0, a 1arger or smaller portion o! t e @age0 5 e total @ages paid by t e capitalist remain t e same, b%t @ages di!!er i! calc%lated per piece o! t e commodity0 5 %s, t ere is a c ange in t is portion o! t e cost-price o! t e commodity0 A%t no matter @ et er t e cost-price o! t e indi8id%al commodity Bor, per aps, t e cost-price o! t e s%m o! commodities prod%ced by a capital o! a gi8en magnit%deC rises or !alls, be it d%e to s%c c anges in its o@n 8al%e, or in t at o! its elements, t e a8erage pro!it o!, e0g0, 1=T remains 1=T0 $till, 1=T o! an indi8id%al commodity may represent 8ery di!!erent amo%nts, depending on t e c ange o! magnit%de ca%sed in t e cost-price o! t e indi8id%al commodity by s%c c anges o! 8al%e as @e a8e ass%med0 $o !ar as t e 8ariable capital is concerned I and t is is most important, beca%se it is t e so%rce o! s%rpl%s-8al%e, and beca%se anyt ing @ ic conceals its relation to t e acc%m%lation o! @ealt by t e capitalist ser8es to mysti!y t e entire system I matters get cr%der or appear to t e capitalist in t e !ollo@ing lig t: ? 8ariable capital o! V1== represents t e @eekly @age o!, say, 1== labo%rers0 &! t ese 1== labo%rers @eekly prod%ce <== pieces o! a commodity R <==;, in a gi8en @orkingtime, t en 1; I abstracted !rom t at portion o! its cost-price @ ic is added by t e constant capital, costs V1==N<== R 1= s illings, since V1== R <==;0 -o@ s%ppose t at a c ange occ%rs in t e prod%cti8eness o! labo%r0 $%ppose it do%bles, so t at t e same n%mber o! labo%rers no@

1<+

; apter &J

prod%ces t@ice <==; in t e time @ ic it pre8io%sly took to prod%ce <==;0 &n t at case Bconsidering only t at part o! t e cost-price @ ic consists o! @agesC 1; R V1==N2== R + s illings, since no@ V1== R 2==;0 $ o%ld t e prod%cti8eness decrease one- al!, t e same labo%r @o%ld prod%ce only <==;N< and since V1== R <==;N<, 1; R V<==N< R V10 5 e c anges in t e labo%r-time reD%ired !or t e prod%ction o! t e commodities, and ence t e c anges in t eir 8al%e, t %s appear in regard to t e cost-price, and ence to t e price o! prod%ction, as a di!!erent distrib%tion o! t e same @age !or more or !e@er commodities, depending on t e greater or smaller D%antity o! commodities prod%ced in t e same @orking-time !or t e same @age0 W at t e capitalist, and conseD%ently also t e political economist, see is t at t e part o! t e paid labo%r per piece o! commodity c anges @it t e prod%cti8ity o! labo%r, and t at t e 8al%e o! eac piece also c anges accordingly0 W at t ey do not see is t at t e same applies to %npaid labo%r contained in 8ery piece o! t e commodity, and t is is percei8ed so m%c less since t e a8erage pro!it act%ally is only accidentally determined by t e %npaid labo%r absorbed in t e sp ere o! t e indi8id%al capitalist0 &t is only in s%c cr%de and meaningless !orm t at @e can glimpse t at t e 8al%e o! commodities is determined by t e labo%r contained in t em0

Chapter 1/. E0ualisation of the +eneral Rate of Profit Throu)h Co petition. 1ar%et-Prices and 1ar%et-Values. SurplusProfit
5 e capital in8ested in some sp eres o! prod%ction as a mean, or a8erage, composition, t at is, it as t e same, or almost t e same composition as t e a8erage social capital0 &n t ese sp eres t e price o! prod%ction is exactly or almost t e same as t e 8al%e o! t e prod%ced commodity expressed in money0 &! t ere @ere no ot er @ay o! reac ing a mat ematical limit, t is @o%ld be t e one0 ;ompetition so distrib%tes t e social capital among t e 8ario%s sp eres o! prod%ction t at t e prices o! prod%ction in eac sp ere take s ape according to t e model o! t e prices o! prod%ction in t ese sp eres o! a8erage composition, i0e0, t ey R k U kp" Bcost-price pl%s t e a8erage rate o! pro!it m%ltiplied by t e cost priceC0 5 is a8erage rate o! pro!it, o@e8er, is t e percentage o! pro!it in t at sp ere o! a8erage composition in @ ic pro!it, t ere!ore, coincides @it s%rpl%s-8al%e0 6ence, t e rate o! pro!it is t e same in all sp eres o! prod%ction, !or it is eD%aliEed on t e basis o! t ose a8erage sp eres o! prod%ction @ ic as t e a8erage composition o! capital0 ;onseD%ently, t e s%m o! t e pro!its in all sp eres o! prod%ction m%st eD%al t e s%m o! t e s%rpl%s-8al%es, and t e s%m o! t e prices o! prod%ction o! t e total social prod%ct eD%al t e s%m o! its 8al%e0 A%t it is e8ident t at t e balance among sp eres o! prod%ction o! di!!erent composition m%st tend to eD%aliEe t em @it t e sp eres o! a8erage composition, be it exactly or only approximately t e same as t e social a8erage0 Aet@een t e sp eres more or less approximating t e a8erage t ere is again a tendency to@ard eD%aliEation, seeking t e ideal a8erage, i0e0, an a8erage t at does not really exist, i0e0, a tendency to take t is ideal as a standard0 &n t is @ay t e tendency necessarily pre8ails to make t e prices o! prod%ction merely con8erted !orms o! 8al%e, or to t%rn pro!its into mere portions o! s%rpl%s-8al%e0 6o@e8er, t ese are not distrib%ted in proportion to t e s%rpl%s-8al%e prod%ced in eac special sp ere o! prod%ction, b%t rat er in proportion to t e mass o! capital employed in eac sp ere, so t at eD%al masses o! capital, @ ate8er t eir composition, recei8e eD%al aliD%ot s ares o! t e total s%rpl%s-8al%e prod%ced by t e total social capital0 &n t e case o! capitals o! a8erage, or approximately a8erage, composition, t e price o! prod%ction is t %s t e same or almost t e same as t e 8al%e, and t e pro!it t e same as t e s%rpl%s-8al%e prod%ced by t em0 ?ll ot er capitals, o! @ ate8er composition, tend to@ard t is a8erage %nder press%re o! competition0 A%t since t e capitals o! a8erage composition are o! t e same, or approximately t e same, str%ct%re as t e a8erage social capital, all capitals a8e t e tendency, regardless o! t e s%rpl%s-8al%e prod%ced by t em, to realiEe t e a8erage pro!it, rat er t an t eir o@n s%rpl%s-8al%e in t e price o! t eir commodity, i0e0, to realiEe t e prices o! prod%ction0 3n t e ot er and, it may be said t at @ ere8er an a8erage pro!it, and t ere!ore a general rate o! pro!it, is prod%ced I no matter by @ at means I s%c an a8erage pro!it cannot be anyt ing b%t t e pro!it on t e a8erage social capital, @ ose s%m is eD%al to t e s%m o! s%rpl%s-8al%e0 Moreo8er, t e prices obtained by adding t is a8erage pro!it to t e cost-prices cannot be anyt ing b%t t e 8al%es transm%ted into prices o! prod%ction0 -ot ing @o%ld be altered i! capitals in certain sp eres o! prod%ction @o%ld not, !or some reason, be s%bHect to t e process o! eD%aliEation0 5 e a8erage pro!it @o%ld t en be comp%ted on t at portion o! t e social capital @ ic enters t e

1<>

; apter J

eD%aliEation process0 &t is e8ident t at t e a8erage pro!it can be not ing b%t t e total mass o! s%rpl%s-8al%es allotted to t e 8ario%s D%antities o! capital proportionally to t eir magnit%des in t eir di!!erent sp eres o! prod%ction0 &t is t e total realiEed %npaid labo%r, and t is total mass, like t e paid, congealed or li8ing, labo%r, obtains in t e total mass o! commodities and money t at !alls to t e capitalists0 5 e really di!!ic%lt D%estion is t is: o@ is t is eD%aliEation o! pro!its into a general rate o! pro!it bro%g t abo%t, since it is ob8io%sly a res%lt rat er t an a point o! depart%reQ 5o begin @it , an estimate o! t e 8al%es o! commodities, !or instance in terms o! money, can ob8io%sly only be t e res%lt o! t eir exc ange0 &!, t ere!ore, @e ass%me s%c an estimate, @e m%st regard it as t e o%tcome o! an act%al exc ange o! commodity-8al%e !or commodity-8al%e0 A%t o@ does t is exc ange o! commodities at t eir real 8al%e come abo%tQ 'et %s !irst ass%me t at all commodities in t e di!!erent branc es o! prod%ction are sold at t eir real 8al%es0 W at @o%ld t en be t e o%tcomeQ ?ccording to t e !oregoing, 8ery di!!erent rates o! pro!it @o%ld t en reign in t e 8ario%s sp eres o! prod%ction0 &t is prima facie t@o entirely di!!erent matters @ et er commodities are sold at t eir 8al%es Bi0e0, exc anged in proportion to t e 8al%e contained in t em at prices corresponding to t eir 8al%eC, or @ et er t ey are sold at s%c prices t at t eir sale yields eD%al pro!its !or eD%al masses o! t e capital ad8anced !or t eir respecti8e prod%ction0 5 e !act t at capitals employing %neD%al amo%nts o! li8ing labo%r prod%ce %neD%al amo%nts o! s%rpl%s-8al%e, pres%pposes at least to a certain extent t at t e degree o! exploitation or t e rate o! s%rpl%s-8al%e are t e same, or t at any existing di!!erences in t em are eD%aliEed by real or imaginary Bcon8entionalC gro%nds o! compensation0 5 is @o%ld ass%me competition among labo%rers and eD%aliEation t ro%g t eir contin%al migration !rom one sp ere o! prod%ction to anot er0 $%c a general rate o! s%rpl%s-8al%e I 8ie@ed as a tendency, like all ot er economic la@s I as been ass%med by %s !or t e sake o! t eoretical simpli!ication0 A%t in reality it is an act%al premise o! t e capitalist mode o! prod%ction, alt o%g it is more or less obstr%cted by practical !rictions ca%sing more or less considerable local di!!erences, s%c as t e settlement la@s !or !armlabo%rers in Aritain0 A%t in t eory it is ass%med t at t e la@s o! capitalist prod%ction operate in t eir p%re !orm0 &n reality t ere exists only approximation# b%t, t is approximation is t e greater, t e more de8eloped t e capitalist mode o! prod%ction and t e less it is ad%lterated and amalgamated @it s%r8i8als o! !ormer economic conditions0 5 e @ ole di!!ic%lty arises !rom t e !act t at commodities are not exc anged simply as commodities, b%t as products of capitals, @ ic claim participation in t e total amo%nt o! s%rpl%s8al%e, proportional to t eir magnit%de, or eD%al i! t ey are o! eD%al magnit%de0 ?nd t is claim is to be satis!ied by t e total price !or commodities prod%ced by a gi8en capital in a certain space o! time0 5 is total price is, o@e8er, only t e s%m o! t e prices o! t e indi8id%al commodities prod%ced by t is capital0 5 e punctum saliens @ill be best bro%g t i! @e approac t e matter as !ollo@s: s%ppose, t e labo%rers t emsel8es are in possession o! t eir respecti8e means o! prod%ction and exc ange t eir commodities @it one anot er0 &n t at case t ese commodities @o%ld not be prod%cts o! capital0 5 e 8al%e o! t e 8ario%s means o! labo%r and ra@ materials @o%ld di!!er in accordance @it t e tec nical nat%re o! t e labo%rs per!ormed in t e di!!erent branc es o! prod%ction0 F%rt ermore, aside !rom t e %neD%al 8al%e o! t e means o! prod%ction employed by t em, t ey @o%ld reD%ire di!!erent D%antities o! means o! prod%ction !or gi8en D%antities o! labo%r, depending on @ et er a certain commodity can be !inis ed in one o%r, anot er in one day, and so !ort 0 ?lso s%ppose t e labo%rers @ork an eD%al a8erage lengt o! time, allo@ing !or compensations t at arise !rom t e di!!erent labo%r intensities, etc0 &n s%c a case, t@o labo%rers @o%ld, !irst, bot a8e replaced t eir o%tlays, t e cost-prices o! t e cons%med means o! prod%ction, in t e commodities @ ic make %p t e prod%ct o! t eir day"s @ork0 5 ese o%tlays @o%ld di!!er, depending on t e tec nical

1<8

; apter J

nat%re o! t eir labo%r0 $econdly, bot o! t em @o%ld a8e created eD%al amo%nts o! ne@ 8al%e, namely t e @orking-day added by t em to t e means o! prod%ction0 5 is @o%ld comprise t eir @ages pl%s t e s%rpl%s-8al%e, t e latter representing s%rpl%s-labo%r o8er and abo8e t eir necessary @ants, t e prod%ct o! @ ic @o%ld o@e8er belong to t em0 5o p%t it t e capitalist @ay, bot o! t em recei8e t e same @ages pl%s t e same pro!it, or t e same 8al%e, expressed, say, by t e prod%ct o! a ten- o%r @orking-day0 A%t in t e !irst place, t e 8al%es o! t eir commodities @o%ld a8e to di!!er0 &n commodity &, !or instance, t e portion o! 8al%e corresponding to t e cons%med means o! prod%ction mig t be ig er t an in commodity &&0 ?nd, to introd%ce all possible di!!erences, @e mig t ass%me rig t no@ t at commodity & absorbs more li8ing labo%r, and conseD%ently reD%ires more labo%r-time to be prod%ced, t an commodity &&0 5 e 8al%es o! commodities & and && are, t ere!ore, 8ery di!!erent0 $o are t e s%ms o! t e 8al%es o! t e commodities, @ ic represent t e prod%ct o! t e labo%r per!ormed by labo%rers & and && in a gi8en time0 5 e rates o! pro!it @o%ld also di!!er considerably !or & and && i! @e take t e rate o! pro!it to be t e proportion o! t e s%rpl%s-8al%e to t e total 8al%e o! t e in8ested means o! prod%ction0 5 e means o! s%bsistence daily cons%med by & and && d%ring prod%ction, @ ic take t e place o! @ages, ere !orm t e part o! t e in8ested means o! prod%ction ordinarily called 8ariable capital0 A%t !or eD%al @orking periods t e s%rpl%s 8al%es @o%ld be t e same !or & and &&, or, more precisely, since & and && eac recei8e t e 8al%e o! t e prod%ct o! a day"s @ork, bot o! t em recei8e eD%al 8al%es a!ter t e 8al%e o! t e in8ested KconstantL elements as been ded%cted, and one portion o! t ose eD%al 8al%es may be regarded as a s%bstit%te !or t e means o! s%bsistence cons%med in prod%ction, and t e ot er as s%rpl%s-8al%e in excess o! it0 &! labo%rer & as greater expenses, t ey are made good by a greater portion o! t e 8al%e o! is commodity, @ ic replaces t is Kconstant K part, and e t ere!ore as to recon8ert a larger portion o! t e total 8al%e o! is prod%ct into t e material elements o! t is constant part, @ ile labo%rer &&, t o%g recei8ing less !or t is, as so m%c less to recon8ert0 &n t ese circ%mstances, a di!!erence in t e rates o! pro!it @o%ld t ere!ore be immaterial, H%st as it is immaterial to t e @age-labo%rer today @ at rate o! pro!it may express t e amo%nt o! s%rpl%s-8al%e !ilc ed !rom im, and H%st as in international commerce t e di!!erence in t e 8ario%s national rates o! pro!it is immaterial to commodity exc ange0 5 e exc ange o! commodities at t eir 8al%es, or approximately at t eir 8al%es, t %s reD%ires a m%c lo@er stage t an t eir exc ange at t eir prices o! prod%ction, @ ic reD%ires a de!inite le8el o! capitalist de8elopment0 W ate8er t e manner in @ ic t e prices o! 8ario%s commodities are !irst m%t%ally !ixed or reg%lated, t eir mo8ements are al@ays go8erned by t e la@ o! 8al%e0 &! t e labo%r-time reD%ired !or t eir prod%ction appens to s rink, prices !all# i! it increases, prices rise, pro8ided ot er conditions remain t e same0 ?part !rom t e domination o! prices and price mo8ement by t e la@ o! 8al%e, it is D%ite appropriate to regard t e 8al%es o! commodities as not only t eoretically b%t also istorically prius to t e prices o! prod%ction0 5 is applies to conditions in @ ic t e labo%rer o@ns is means o! prod%ction, and t is is t e condition o! t e land-o@ning !armer li8ing o!! is o@n labo%r and t e cra!tsman, in t e ancient as @ell as in t e modern @orld0 5 is agrees also @it t e 8ie@ @e expressed pre8io%sly t at t e e8ol%tion o! prod%cts into commodities arises t ro%g exc ange bet@een di!!erent comm%nities, not bet@een t e members o! t e same comm%nity0 &t olds not only !or t is primiti8e condition, b%t also !or s%bseD%ent conditions, based on sla8ery and ser!dom, and !or t e g%ild organisation o! andicra!ts, so long as t e means o! prod%ction in8ol8ed in eac branc o! prod%ction can be trans!erred !rom one sp ere to anot er only @it di!!ic%lty and t ere!ore t e 8ario%s sp eres o! prod%ction are related to one anot er, @it in certain limits, as !oreign co%ntries or comm%nist comm%nities0 For prices at @ ic commodities are exc anged to approximately correspond to t eir 8al%es, not ing more is necessary t an 1C !or t e exc ange o! t e 8ario%s commodities to cease being

1<*

; apter J

p%rely accidental or only occasional# <C so !ar as direct exc ange o! commodities is concerned, !or t ese commodities to be prod%ced on bot sides in approximately s%!!icient D%antities to meet m%t%al reD%irements, somet ing learned !rom m%t%al experience in trading and t ere!ore a nat%ral o%tgro@t o! contin%ed trading# and 3C so !ar as selling is concerned, !or no nat%ral or arti!icial monopoly to enable eit er o! t e contracting sides to sell commodities abo8e t eir 8al%e or to compel t em to %ndersell0 Ay accidental monopoly @e mean a monopoly @ ic a b%yer or seller acD%ires t ro%g an accidental state o! s%pply and demand0 5 e ass%mption t at t e commodities o! t e 8ario%s sp eres o! prod%ction are sold at t eir 8al%e merely implies, o! co%rse, t at t eir 8al%e is t e centre o! gra8ity aro%nd @ ic t eir prices !l%ct%ate, and t eir contin%al rises and drops tend to eD%alise0 5 ere is also t e mar-et1value I o! @ ic later I to be disting%is ed !rom t e indi8id%al 8al%e o! partic%lar commodities prod%ced by di!!erent prod%cers0 5 e indi8id%al 8al%e o! some o! t ese commodities @ill be belo@ t eir market-8al%e Bt at is, less labo%r time is reD%ired !or t eir prod%ction t an expressed is t e market 8al%eC @ ile t at o! ot ers @ill exceed t e market-8al%e0 3n t e one and, market-8al%e is to be 8ie@ed as t e a8erage 8al%e o! commodities prod%ced in a single sp ere, and, on t e ot er, as t e indi8id%al 8al%e o! t e commodities prod%ced %nder a8erage conditions o! t eir respecti8e sp ere and !orming t e b%lk o! t e prod%cts o! t at sp ere0 &t is only in extraordinary combinations t at commodities prod%ced %nder t e @orst, or t e most !a8o%rable, conditions reg%late t e market-8al%e, @ ic , in t%rn, !orms t e centre o! !l%ct%ation !or market-prices0 5 e latter, o@e8er, are t e same !or commodities o! t e same kind0 &! t e ordinary demand is satis!ied by t e s%pply o! commodities o! a8erage 8al%e, ence o! a 8al%e mid@ay bet@een t e t@o extremes, t en t e commodities @ ose indi8id%al 8al%e is belo@ t e market-8al%e realise an extra s%rpl%s-8al%e, or s%rpl%s-pro!it, @ ile t ose, @ ose indi8id%al 8al%e exceeds t e market8al%e, are %nable to realise a portion o! t e s%rpl%s-8al%e contained in t em0 &t does no good to say t at t e sale o! commodities prod%ced %nder t e least !a8o%rable conditions pro8es t at t ey are reD%ired to satis!y t e demand0 &! in t e ass%med case t e price @ere ig er t an t e a8erage market-8al%e, t e demand @o%ld be smaller0 ?t a certain price, a commodity occ%pies H%st so m%c place on t e market0 5 is place remains t e same in case o! a price c ange only i! t e ig er price is accompanied by a drop in t e s%pply o! t e commodity, and a lo@er price by an increase o! s%pply0 ?nd i! t e demand is so great t at it does not contract @ en t e price is reg%lated by t e 8al%e o! commodities prod%ced %nder t e least !a8o%rable conditions, t en t ese determine t e market-8al%e0 5 is is not possible %nless demand is greater t an %s%al, or i! s%pply drops belo@ t e %s%al le8el0 Finally, i! t e mass o! t e prod%ced commodities exceeds t e D%antity disposed o! at a8erage market-8al%es, t e commodities prod%ced %nder t e most !a8o%rable conditions reg%late t e market-8al%e0 5 ey may, !or example, be sold exactly or approximately at t eir indi8id%al 8al%e, in @ ic case t e commodities prod%ced %nder t e least !a8o%rable conditions may not e8en realise t eir cost-price, @ ile t ose prod%ced %nder a8erage conditions realise only a portion o! t e s%rpl%s-8al%e contained in t em0 W at as been said ere o! market-8al%e applies to t e price o! prod%ction as soon as it takes t e place o! market-8al%e0 5 e price o! prod%ction is reg%lated in eac sp ere, and like@ise reg%lated by special circ%mstances0 ?nd t is price o! prod%ction is, in its t%rn, t e centre aro%nd @ ic t e daily market-prices !l%ct%ate and tend to eD%alise one anot er @it in de!inite periods0 B$ee )icardo on determining t e price o! prod%ction t ro%g t ose @orking %nder t e least !a8o%rable conditions0C -o matter o@ t e prices are reg%lated, @e arri8e at t e !ollo@ing: 1C 5 e la@ o! 8al%e dominates price mo8ements @it red%ctions or increases in reD%ired labo%rtime making prices o! prod%ction !all or rise0 &t is in t is sense t at )icardo B@ o do%btlessly realised t at is prices o! prod%ction de8iated !rom t e 8al%e o! commoditiesC says t at Kt e inD%iry to @ ic & @is to dra@ t e reader"s attention relates to t e e!!ect o! t e 8ariations in t e relati8e 8al%e o! commodities, and not in t eir absol%te 8al%eL0

13=

; apter J

< C 5 e a8erage pro!it determining t e prices o! prod%ction m%st al@ays be approximately eD%al to t at D%antity o! s%rpl%s-8al%e @ ic !alls to t e s are o! indi8id%al capital in its capacity o! an aliD%ot part o! t e total social capital0 $%ppose t at t e general rate o! pro!it, and t ere!ore t e a8erage pro!it, are expressed by money-8al%e greater t an t e money-8al%e o! t e act%al a8erage s%rpl%s-8al%e0 $o !ar as t e capitalists are concerned, it is t en immaterial @ et er t ey reciprocally c arge 1= or 1+T pro!it0 -eit er o! t ese percentages co8ers more act%al commodity-8al%e t an t e ot er, since t e o8erc arge in money is m%t%al0 ?s !or t e labo%rer Bt e ass%mption being t at e recei8es is normal @age and t e rise in t e a8erage pro!it does not t ere!ore imply an act%al ded%ction !rom is @age, i0e0, it expresses somet ing entirely di!!erent !rom t e normal s%rpl%s-8al%e o! t e capitalistC, t e rise in commodity-prices ca%sed by an increase o! t e a8erage pro!it m%st correspond to t e rise o! t e money-expression o! t e 8ariable capital0 $%c a general nominal increase in t e rate o! pro!it and t e a8erage pro!it abo8e t e limit pro8ided by t e ratio o! t e act%al s%rpl%s-8al%e to t e total in8ested capital is not, in e!!ect, possible @it o%t ca%sing an increase in @ages, and also an increase in t e prices o! commodities !orming t e constant capital0 5 e re8erse is tr%e in case o! a red%ction0 $ince t e total 8al%e o! t e commodities reg%lates t e total s%rpl%s-8al%e, and t is in t%rn reg%lates t e le8el o! a8erage pro!it and t ereby t e general rate o! pro!it I as a general la@ or a la@ go8erning !l%ct%ations I it !ollo@s t e la@ o! 8al%e reg%lates t e prices o! prod%ction0 W at competition, !irst in a single sp ere, ac ie8es is a single market-8al%e and market-price deri8ed !rom t e 8ario%s indi8id%al 8al%es o! commodities0 ?nd it is competition o! capitals in di!!erent sp eres, @ ic !irst brings o%t t e price o! prod%ction eD%aliEing t e rates o! pro!it in t e di!!erent sp eres0 5 e latter process reD%ires a ig er de8elopment o! capitalist prod%ction t at t e pre8io%s one0 For commodities o! t e same sp ere o! prod%ction, t e same kind, and approximately t e same D%ality, to be sold at t eir 8al%es, t e !ollo@ing t@o reD%irements are necessary: 'irst, t e di!!erent indi8id%al 8al%es m%st be eD%aliEed at one social 8al%e, t e abo8e-named market 8al%e, and t is implies competition among prod%cers o! t e same kind o! commodities and, like@ise, t e existence o! a common market in @ ic t ey o!!er t eir articles !or sale0 For t e market-price o! identical commodities, eac , o@e8er, prod%ced %nder di!!erent indi8id%al circ%mstances, to correspond to t e market-8al%e and not to de8iate !rom it eit er by rising abo8e or !alling belo@ it, it is necessary t at t e press%re exerted by di!!erent sellers %pon one anot er be s%!!icient to bring eno%g commodities to market to !ill t e social reD%irements, i0e0, a D%antity !or @ ic society is capable o! paying t e market-8al%e0 $ o%ld t e mass o! prod%cts exceed t is demand, t e commodities @o%ld a8e to be sold belo@ t eir market-8al%e# and con8ersely, abo8e t eir market-8al%e i! t e mass o! prod%cts @ere not large eno%g to meet t e demand, or, @ at amo%nts to t e same, i! t e press%re o! competition among sellers @ere not strong eno%g to bring t is mass o! prod%cts to market0 $ o%ld t e market-8al%e c ange, t is @o%ld also entail a c ange in t e conditions on @ ic t e total mass o! commodities co%ld be sold0 $ o%ld t e market-8al%e !all, t is @o%ld entail a rise in t e a8erage social demand Bt is al@ays taken to mean t e e!!ecti8e demandC, @ ic co%ld, @it in certain limits, absorb larger masses o! commodities0 $ o%ld t e market-8al%e rise, t is @o%ld entail a drop in t e social demand, and a smaller mass o! commodities @o%ld be absorbed0 6ence, i! s%pply and demand reg%late t e market-price, or rat er t e de8iations o! t e market-price !rom t e market-8al%e, t en, in t%rn, t e market-8al%e reg%lates t e ratio o! s%pply to demand, or t e centre ro%nd @ ic !l%ct%ations o! s%pply and demand ca%se market-prices to oscillate0 'ooking closer, @e !ind t at t e conditions applicable to t e 8al%e o! an indi8id%al commodity are ere reprod%ced as conditions go8erning t e 8al%e o! t e aggregate o! a certain kind o! commodity0 ;apitalist prod%ction is mass prod%ction !rom t e 8ery o%tset0 A%t e8en in ot er, less de8eloped, modes o! prod%ction t at @ ic is prod%ced in relati8ely small D%antities as a common prod%ct by small-scale, e8en i! n%mero%s, prod%cers, is concentrated in large D%antities

131

; apter J

I at least in t e case o! t e 8ital commodities I in t e ands o! relati8ely !e@ merc ants0 5 e latter acc%m%late t em and sell t em as t e common prod%ct o! an entire branc o! prod%ction, or o! a more or less considerable contingent o! it0 &t s o%ld be ere noted in passing t at t e Ksocial demand,L i0e0, t e !actor @ ic reg%lates t e principle o! demand, is essentially s%bHect to t e m%t%al relations ip o! t e di!!erent classes and t eir respecti8e economic position, notably t ere!ore to, !irstly, t e ratio o! total s%rpl%s-8al%e to @ages, and, secondly, to t e relation o! t e 8ario%s parts into @ ic s%rpl%s-8al%e is split %p Bpro!it, interest, gro%nd-rent, taxes, etc0C0 ?nd t is t %s again s o@s o@ absol%tely not ing can be explained by t e relation o! s%pply to demand be!ore ascertaining t e basis on @ ic t is relation rests0 ?lt o%g bot commodity and money represent a %nity o! exc ange-8al%e and %se-8al%e, @e a8e already seen t at in b%ying and selling bot o! t ese !%nctions are polarised at t e t@o extremes, t e commodity BsellerC representing t e %se-8al%e, and t e money Bb%yerC representing t e exc ange-8al%e0 3ne o! t e !irst premises o! selling @as t at a commodity s o%ld a8e %se8al%e and s o%ld t ere!ore satis!y a social need0 5 e ot er premise @as t at t e D%antity o! labo%r contained in t e commodity s o%ld represent socially necessary labo%r, i0e0, its indi8id%al 8al%e Band, @ at amo%nts to t e same %nder t e present ass%mption, its selling priceC s o%ld coincide @it its social 8al%e0 'et %s apply t is to t e mass o! commodities a8ailable in t e market, @ ic represents t e prod%ct o! a @ ole sp ere0 5 e matter @ill be most readily pict%red by regarding t is @ ole mass o! commodities, prod%ced by one branc o! ind%stry, as one commodity, and t e s%m o! t e prices o! t e many identical commodities as one price0 5 en, @ ate8er as been said o! a single commodity applies literally to t e mass o! commodities o! an entire branc o! prod%ction a8ailable in t e market0 5 e reD%irement t at t e indi8id%al 8al%e o! a commodity s o%ld correspond to its social 8al%e is no@ realised, or !%rt er determined, in t at t e mass contains social labo%r necessary !or its prod%ction, and t at t e 8al%e o! t is mass is eD%al to its market-8al%e0 -o@ s%ppose t at t e b%lk o! t ese commodities is prod%ced %nder approximately similar normal social conditions, so t at t is 8al%e is at t e same time t e indi8id%al 8al%e o! t e indi8id%al commodities @ ic make %p t is mass0 &! a relati8ely small portion o! t ese commodities may no@ a8e been prod%ced belo@, and anot er abo8e, t ese conditions, so t at t e indi8id%al 8al%e o! one portion is greater, and t at o! t e ot er smaller, t an t e a8erage 8al%e o! t e b%lk o! t e commodities, b%t in s%c proportions t at t ese extremes balance one anot er, so t at t e a8erage 8al%e o! t e commodities at t ese extremes is eD%al to t e 8al%e o! commodities in t e centre, t en t e market-8al%e is determined by t e 8al%e o! t e commodities prod%ced %nder a8erage conditions0 5 e 8al%e o! t e entire mass o! commodities is eD%al to t e act%al s%m o! t e 8al%es o! all indi8id%al commodities taken toget er, @ et er prod%ced %nder a8erage conditions, or %nder conditions abo8e or belo@ t e a8erage0 &n t at case, t e market-8al%e, or social 8al%e, o! t e mass o! commodities I t e necessary labo%r-time contained in t em I is determined by t e 8al%e o! t e preponderant mean mass0 $%ppose, on t e contrary, t at t e total mass o! t e commodities in D%estion bro%g t to market remains t e same, @ ile t e 8al%e o! t e commodities prod%ced %nder less !a8o%rable conditions !ails to balance o%t t e 8al%e o! commodities prod%ced %nder more !a8o%rable conditions, so t at t e part o! t e mass prod%ced %nder less !a8o%rable conditions !orms a relati8ely @eig ty D%antity as compared @it t e a8erage mass and @it t e ot er extreme0 &n t at case, t e mass prod%ced %nder less !a8o%rable conditions reg%lates t e market, or social, 8al%e0 $%ppose, !inally, t at t e mass o! commodities prod%ced %nder better t an a8erage conditions considerably exceeds t at prod%ced %nder @orse conditions, and is large e8en compared @it t at prod%ced %nder a8erage conditions0 &n t at case, t e part prod%ced %nder t e most !a8o%rable

13<

; apter J

conditions determines t e market-8al%e0 We ignore ere t e o8erstocked market, in @ ic t e part prod%ced %nder most !a8o%rable conditions al@ays reg%lates t e market-price0 We are not dealing ere @it t e market-price, in so !ar as it di!!ers !rom t e market-8al%e, b%t @it t e 8ario%s determinations o! t e market-8al%e itsel!0 1 &n !act, strictly speaking B@ ic , o! co%rse, occ%rs in reality only in approximation and @it a t o%sand modi!icationsC t e market-8al%e o! t e entire mass, reg%lated as it is by t e a8erage 8al%es, is in case & eD%al to t e s%m o! t eir indi8id%al 8al%es# alt o%g in t e case o! t e commodities prod%ced at t e extremes, t is 8al%e is represented as an a8erage 8al%e @ ic is !orced %pon t em0 5 ose @ o prod%ce at t e @orst extreme m%st t en sell t eir commodities belo@ t e indi8id%al 8al%e# t ose prod%cing at t e best extreme sell t em abo8e it0 &n case && t e indi8id%al lots o! commodity-8al%es prod%ced at t e t@o extremes do not balance one anot er0 )at er, t e lot prod%ced %nder t e @orse conditions decides t e iss%e0 $trictly speaking, t e a8erage price, or t e market-8al%e, o! eac indi8id%al commodity, or eac aliD%ot part o! t e total mass, @o%ld no@ be determined by t e total 8al%e o! t e mass as obtained by adding %p t e 8al%es o! t e commodities prod%ced %nder di!!erent conditions, and in accordance @it t e aliD%ot part o! t is total 8al%e !alling to t e s are o! eac indi8id%al commodity0 5 e market-8al%e t %s obtained @o%ld exceed t e indi8id%al 8al%e not only o! t e commodities belonging to t e !a8o%rable extreme, b%t also o! t ose belonging to t e a8erage lot0 .et it @o%ld still be belo@ t e indi8id%al 8al%e o! t ose commodities prod%ced at t e %n!a8o%rable extreme0 6o@ close t e market-8al%e approac es, or !inally coincides @it , t e latter @o%ld depend entirely on t e 8ol%me occ%pied by commodities prod%ced at t e %n!a8o%rable extreme o! t e commodity sp ere in D%estion0 &! demand is only slig tly greater t an s%pply, t e indi8id%al 8al%e o! t e %n!a8o%rably prod%ced commodities reg%lates t e market-price0 Finally, i! t e lot o! commodities prod%ced at t e !a8o%rable extreme occ%pies greater place t an t e ot er extreme, and also t an t e a8erage lot, as it does in case &&&, t en t e market-8al%e !alls belo@ t e a8erage 8al%e0 5 e a8erage 8al%e, comp%ted by adding t e s%ms o! 8al%es at t e t@o extremes and at t e middle, stands ere belo@ t e 8al%e o! t e middle, @ ic it approac es, or 8ice 8ersa, depending on t e relati8e place occ%pied by t e !a8o%rable extreme0 $ o%ld demand be @eaker t an s%pply, t e !a8o%rably sit%ated part, @ ate8er its siEe, makes room !or itsel! !orcibly by paring its price do@n to its indi8id%al 8al%e0 5 e market-8al%e cannot e8er coincide @it t is indi8id%al 8al%e o! t e commodities prod%ced %nder t e most !a8o%rable conditions, except @ en s%pply !ar exceeds demand0 5 is mode o! determining market-8al%es, @ ic @e a8e ere o%tlined abstractly, is promoted in t e real market by competition among t e b%yers, pro8ided t e demand is large eno%g to absorb t e mass o! commodities at 8al%es so !ixed0 ?nd t is brings %s to t e ot er point0 Second, to say t at a commodity as a %se-8al%e is merely to say t at it satis!ies some social @ant0 $o long as @e dealt @it indi8id%al commodities only, @e co%ld ass%me t at t ere @as a need !or a partic%lar commodity I its D%antity already implied by its price @it o%t inD%iring !%rt er into t e D%antity reD%ired to satis!y t is @ant0 5 is D%antity is, o@e8er, o! essential importance, as soon as t e prod%ct o! an entire branc o! prod%ction is placed on one side, and t e social need !or it on t e ot er0 &t t en becomes necessary to consider t e extent, i0e0, t e amo%nt o! t is social @ant0 &n t e !oregoing determinations o! market-8al%e it @as ass%med t at t e mass o! t e prod%ced commodities is gi8en, i0e0, remains t e same, and t at t ere is a c ange only in t e proportions o! its constit%ent elements, @ ic are prod%ced %nder di!!erent conditions, and t at, ence, t e market-8al%e o! t e same mass o! commodities is di!!erently reg%lated0 $%ppose, t is mass corresponds in siEe to t e %s%al s%pply, lea8ing aside t e possibility t at a portion o! t e prod%ced commodities may be temporarily @it dra@n !rom t e market0 $ o%ld demand !or t is mass no@ also remain t e same, t is commodity @ill be sold at its market-8al%e, no matter @ ic o! t e

133

; apter J

t ree a!orementioned cases reg%lates t is market-8al%e0 5 is mass o! commodities does not merely satis!y a need, b%t satis!ies it to its !%ll social extent0 $ o%ld t eir D%antity be smaller or greater, o@e8er, t an t e demand !or t em, t ere @ill be de8iations o! t e market-price !rom t e market-8al%e0 ?nd t e !irst de8iation is t at i! t e s%pply is too small, t e market-8al%e is al@ays reg%lated by t e commodities prod%ced %nder t e least !a8o%rable circ%mstances and, i! t e s%pply is too large, al@ays by t e commodities prod%ced %nder t e most !a8o%rable conditions# t at t ere!ore it is one o! t e extremes @ ic determines t e market-8al%e, in spite o! t e !act t at in accordance @it t e mere proportion o! t e commodity masses prod%ced %nder di!!erent conditions, a di!!erent res%lt s o%ld obtain0 &! t e di!!erence bet@een demand and t e a8ailable D%antity o! t e prod%ct is more considerable, t e market-price @ill like@ise be considerably abo8e or belo@ t e market-8al%e0 -o@, t e di!!erence bet@een t e D%antity o! t e prod%ced commodities and t at D%antity o! t em at @ ic t ey are sold at market-8al%e may be d%e to t@o reasons0 Eit er t e D%antity itsel! c anges, becoming too small or too large, so t at reprod%ction @o%ld a8e taken place on a di!!erent scale t an t at @ ic reg%lated t e gi8en market-8al%e0 &n t at case, t e s%pply c anged, alt o%g demand remained t e same, and t ere @as, t ere!ore, relati8e o8er-prod%ction or %nder-prod%ction0 3r else reprod%ction, and t %s s%pply, remained t e same, @ ile demand s rank or increased, @ ic may be d%e to se8eral reasons0 ?lt o%g t e absol%te magnit%de o! t e s%pply @as t e same, its relati8e magnit%de, its magnit%de relati8e to, or meas%red by, t e demand, ad c anged0 5 e e!!ect is t e same as in t e !irst case, b%t in t e re8erse direction0 Finally, i! c anges take place on bot sides, b%t eit er in re8erse directions, or, i! in t e same direction, t en not to t e same extent, i! t ere!ore t ere are c anges on bot sides, b%t t ese alter t e !ormer proportion bet@een t e t@o sides, t en t e !inal res%lt m%st al@ays lead to one o! t e t@o abo8e-mentioned cases0 5 e real di!!ic%lty in !orm%lating t e general de!inition o! s%pply and demand is t at it seems to take on t e appearance o! a ta%tology0 First consider t e s%pply I t e prod%ct a8ailable in t e market, or t at @ ic can be deli8ered to it0 5o a8oid d@elling %pon %seless detail, @e s all ere consider only t e mass ann%ally reprod%ced in e8ery gi8en branc o! prod%ction and ignore t e greater or lesser !ac%lty possessed by t e di!!erent commodities to be @it dra@n !rom t e market and stored a@ay !or cons%mption, say, %ntil next year0 5 is ann%al reprod%ction is expressed by a certain D%antity I in @eig t or n%mbers I depending on @ et er t is mass o! commodities is meas%red in discrete elements or contin%o%sly0 5 ey are not only %se-8al%es satis!ying %man @ants, b%t t ese %se-8al%es are a8ailable in t e market in de!inite D%antities0 $econdly, o@e8er, t is D%antity o! commodities as a speci!ic market-8al%e, @ ic may be expressed by a m%ltiple o! t e market-8al%e o! t e commodity, or o! its meas%re, @ ic ser8es as %nit0 5 %s, t ere is no necessary connection bet@een t e D%antitati8e 8ol%me o! t e commodities in t e market and t eir market-8al%e, since, !or instance, many commodities a8e a speci!ically ig 8al%e, and ot ers a speci!ically lo@ 8al%e, so t at a gi8en s%m o! 8al%es may be represented by a 8ery large D%antity o! one commodity, and a 8ery small D%antity o! anot er0 5 ere is only t e !ollo@ing connection bet@een t e D%antity o! t e articles a8ailable in t e market and t e market-8al%e o! t ese articles: 3n a gi8en basis o! labo%r prod%cti8ity t e prod%ction o! a certain D%antity o! articles in e8ery partic%lar sp ere o! prod%ction reD%ires a de!inite D%antity o! social labo%r-time# alt o%g t is proportion 8aries in di!!erent sp eres o! prod%ction and as no inner relation to t e %se!%lness o! t ese articles or t e special nat%re o! t eir %se-8al%es0 ?ss%ming all ot er circ%mstances to be eD%al, and a certain D%antity a o! some commodity to cost b labo%r-time, a D%antity na o! t e same commodity @ill cost nb labo%r-time0 F%rt er, i! society @ants to satis!y some @ant and a8e an article prod%ced !or t is p%rpose, it m%st pay !or it0 &ndeed, since commodity-prod%ction necessitates a di8ision o! labo%r, society pays !or t is article by de8oting a portion o! t e a8ailable labo%r-time to its prod%ction0 5 ere!ore, society b%ys it @it a de!inite D%antity o! its disposable labo%r-time0 5 at part o! society @ ic t ro%g t e di8ision o! labo%r appens to employ its labo%r in prod%cing t is partic%lar article, m%st recei8e an eD%i8alent in social labo%r

132

; apter J

incorporated in articles @ ic satis!y its o@n @ants0 6o@e8er, t ere exists an accidental rat er t an a necessary connection bet@een t e total amo%nt o! social labo%r applied to a social article, i0e0, bet@een t e aliD%ot part o! society"s total labo%r-po@er allocated to prod%cing t is article, or bet@een t e 8ol%me @ ic t e prod%ction o! t is article occ%pies in total prod%ction, on t e one and, and t e 8ol%me @ ereby society seeks to satis!y t e @ant grati!ied by t e article in D%estion, on t e ot er0 E8ery indi8id%al article, or e8ery de!inite D%antity o! a commodity may, indeed, contain no more t an t e social labo%r reD%ired !or its prod%ction, and !rom t is point o! 8ie@ t e market-8al%e o! t is entire commodity represents only necessary labo%r, b%t i! t is commodity as been prod%ced in excess o! t e existing social needs, t en so m%c o! t e social labo%r-time is sD%andered and t e mass o! t e commodity comes to represent a m%c smaller D%antity o! social labo%r in t e market t an is act%ally incorporated in it0 B&t is only @ ere prod%ction is %nder t e act%al, predetermining control o! society t at t e latter establis es a relation bet@een t e 8ol%me o! social labo%r-time applied in prod%cing de!inite articles, and t e 8ol%me o! t e social @ant to be satis!ied by t ese articles0C For t is reason, t ese commodities m%st be sold belo@ t eir market-8al%e, and a portion o! t em may e8en be altoget er %nsaleable0 5 e re8erse applies i! t e D%antity o! social labo%r employed in t e prod%ction o! a certain kind o! commodity is too small to meet t e social demand !or t at commodity0 A%t i! t e D%antity o! social labo%r expended in t e prod%ction o! a certain article corresponds to t e social demand !or t at article, so t at t e prod%ced D%antity corresponds to t e %s%al scale o! reprod%ction and t e demand remains %nc anged, t en t e article is sold at its market-8al%e0 5 e exc ange, or sale, o! commodities at t eir 8al%e is t e rational state o! a!!airs, i0e0, t e nat%ral la@ o! t eir eD%ilibri%m0 &t is t is la@ t at explains t e de8iations, and not 8ice 8ersa, t e de8iations t at explain t e la@0 -o@ let %s look at t e ot er side I t e demand0 ;ommodities are bo%g t eit er as means o! prod%ction or means o! s%bsistence to enter prod%cti8e or indi8id%al cons%mption0 &t does not alter matters t at some commodities may ser8e bot p%rposes0 5 ere is, t en, a demand !or t em on t e part o! prod%cers B ere capitalists, since @e a8e ass%med t at means o! prod%ction a8e been trans!ormed into capitalC and o! cons%mers0 Aot appear at !irst sig t to pres%ppose a gi8en D%antity o! social @ant on t e side o! demand, corresponding on t e ot er side to a de!inite D%antity o! social o%tp%t in t e 8ario%s lines o! prod%ction0 &! t e cotton ind%stry is to accomplis its ann%al reprod%ction on a gi8en scale, it m%st a8e t e %s%al s%pply o! cotton, and, ot er circ%mstances remaining t e same, an additional amo%nt o! cotton corresponding to t e ann%al extension o! reprod%ction ca%sed by t e acc%m%lation o! capital0 5 is is eD%ally tr%e @it regard to means o! s%bsistence0 5 e @orkingclass m%st !ind at least t e same D%antity o! necessities on and i! it is to contin%e li8ing in its acc%stomed a8erage @ay, alt o%g t ey may be more or less di!!erently distrib%ted among t e di!!erent kinds o! commodities0 Moreo8er, t ere m%st be an additional D%antity to allo@ !or t e ann%al increase o! pop%lation0 5 e same, @it more or less modi!ication, applies to ot er classes0 &t @o%ld seem, t en, t at t ere is on t e side o! demand a certain magnit%de o! de!inite social @ants @ ic reD%ire !or t eir satis!action a de!inite D%antity o! a commodity on t e market0 A%t D%antitati8ely, t e de!inite social @ants are 8ery elastic and c anging0 5 eir !ixedness is only apparent0 &! t e means o! s%bsistence @ere c eaper, or money-@ages ig er, t e labo%rers @o%ld b%y more o! t em, and a greater social need @o%ld arise !or t em, lea8ing aside t e pa%pers, etc0, @ ose demand is e8en belo@ t e narro@est limits o! t eir p ysical @ants0 3n t e ot er and, i! cotton @ere c eaper, !or example, t e capitalists" demand !or it @o%ld increase, more additional capital @o%ld be t ro@n into t e cotton ind%stry, etc0 We m%st ne8er !orget t at t e demand !or prod%cti8e cons%mption is, %nder o%r ass%mption, a demand o! t e capitalist, @ ose essential p%rpose is t e prod%ction o! s%rpl%s-8al%e, so t at e prod%ces a partic%lar commodity to t is sole end0 $till, t is does not inder t e capitalist, so long as e appears in t e market as a b%yer o!, say, cotton, !rom representing t e need !or t is cotton, H%st as it is immaterial to t e seller o! cotton @ et er t e b%yer con8erts it into s irting or g%n-cotton, or @ et er e intends to t%rn it

13+

; apter J

into @ads !or is o@n, and t e @orld"s, ears0 A%t t is does exert a considerable in!l%ence on t e kind o! b%yer t e capitalist is0 6is demand !or cotton is s%bstantially modi!ied by t e !act t at it disg%ises is real need !or making pro!it0 5 e limits @it in @ ic t e need !or commodities in t e mar-et, t e demand, di!!ers D%antitati8ely !rom t e actual social need, nat%rally 8ary considerably !or di!!erent commodities# @ at & mean is t e di!!erence bet@een t e demanded D%antity o! commodities and t e D%antity @ ic @o%ld a8e been in demand at ot er moneyprices or ot er money or li8ing conditions o! t e b%yers0 -ot ing is easier t an to realise t e inconsistencies o! demand and s%pply, and t e res%lting de8iation o! market-prices !rom market-8al%es0 5 e real di!!ic%lty consists in determining @ at is meant by t e eD%ation o! s%pply and demand0 $%pply and demand coincide @ en t eir m%t%al proportions are s%c t at t e mass o! commodities o! a de!inite line o! prod%ction can be sold at t eir market-8al%e, neit er abo8e nor belo@ it0 5 at is t e !irst t ing @e ear0 5 e second is t is: &! commodities are sold at t eir market-8al%es, s%pply and demand coincide0 &! s%pply eD%als demand, t ey cease to act, and !or t is 8ery reason commodities are sold at t eir market-8al%es0 W ene8er t@o !orces operate eD%ally in opposite directions, t ey balance one anot er, exert no o%tside in!l%ence, and any p enomena taking place in t ese circ%mstances m%st be explained by ca%ses ot er t an t e e!!ect o! t ese t@o !orces0 &! s%pply and demand balance one anot er, t ey cease to explain anyt ing, do not a!!ect market-8al%es, and t ere!ore lea8e %s so m%c more in t e dark abo%t t e reasons @ y t e market-8al%e is expressed in H%st t is s%m o! money and no ot er0 &t is e8ident t at t e real inner la@s o! capitalist prod%ction cannot be explained by t e interaction o! s%pply and demand BD%ite aside !rom a deeper analysis o! t ese t@o social moti8e !orces, @ ic @o%ld be o%t o! place ereC, beca%se t ese la@s cannot be obser8ed in t eir p%re state, %ntil s%pply and demand cease to act, i0e0, are eD%ated0 &n reality, s%pply and demand ne8er coincide, or, i! t ey do, it is by mere accident, ence scienti!ically R =, and to be regarded as not a8ing occ%rred0 A%t political economy ass%mes t at s%pply and demand coincide @it one anot er0 W yQ 5o be able to st%dy p enomena in t eir !%ndamental relations, in t e !orm corresponding to t eir conception, t at is, is to st%dy t em independent o! t e appearances ca%sed by t e mo8ement o! s%pply and demand0 5 e ot er reason is to !ind t e act%al tendencies o! t eir mo8ements and to some extent to record t em0 $ince t e inconsistencies are o! an antagonistic nat%re, and since t ey contin%ally s%cceed one anot er, t ey balance o%t one anot er t ro%g t eir opposing mo8ements, and t eir m%t%al contradiction0 $ince, t ere!ore, s%pply and demand ne8er eD%al one anot er in any gi8en case, t eir di!!erences !ollo@ one anot er in s%c a @ay I and t e res%lt o! a de8iation in one direction is t at it calls !ort a de8iation in t e opposite direction I t at s%pply and demand are al@ays eD%ated @ en t e @ ole is 8ie@ed o8er a certain period, b%t only as an a8erage o! past mo8ements, and only as t e contin%o%s mo8ement o! t eir contradiction0 &n t is @ay, t e market-prices @ ic a8e de8iated !rom t e market-8al%es adH%st t emsel8es, as 8ie@ed !rom t e standpoint o! t eir a8erage n%mber, to eD%al t e market-8al%es, in t at de8iations !rom t e latter cancel eac ot er as pl%s and min%s0 ?nd t is a8erage is not merely o! t eoretical, b%t also o! practical importance to capital, @ ose in8estment is calc%lated on t e !l%ct%ations and compensations o! a more or less !ixed period0 3n t e one and, t e relation o! demand and s%pply, t ere!ore, only explains t e de8iations o! market-prices !rom market-8al%es0 3n t e ot er, it explains t e tendency to eliminate t ese de8iations, i0e0, to eliminate t e e!!ect o! t e relation o! demand and s%pply0 B$%c exceptions as commodities @ ic a8e a price @it o%t a8ing a 8al%e are not considered ere0C $%pply and demand may eliminate t e e!!ect ca%sed by t eir di!!erence in many di!!erent @ays0 For instance, i! t e demand, and conseD%ently t e market-price, !all, capital may be @it dra@n, t %s ca%sing s%pply to s rink0 &t may also be t at t e market-8al%e itsel! s rinks and balances @it t e marketprice as a res%lt o! in8entions @ ic red%ce t e necessary labo%r-time0 ;on8ersely, i! t e demand

136

; apter J

increases, and conseD%ently t e market-price rises abo8e t e market-8al%e, t is may lead to too m%c capital !lo@ing into t is line o! prod%ction and prod%ction may s@ell to s%c an extent t at t e market-price @ill e8en !all belo@ t e market-8al%e0 3r, it may lead to a price increase, @ ic c%ts t e demand0 &n some lines o! prod%ction it may also bring abo%t a rise in t e market-8al%e itsel! !or a s orter or longer period, @it a portion o! t e desired prod%cts a8ing to be prod%ced %nder @orse conditions d%ring t is period0 $%pply and demand determine t e market-price, and so does t e market-price, and t e market8al%e in t e !%rt er analysis, determine s%pply and demand0 5 is is ob8io%s in t e case o! demand, since it mo8es in a direction opposite to prices, s@elling @ en prices !all, and 8ice 8ersa0 A%t t is is also tr%e o! s%pply0 Aeca%se t e prices o! means o! prod%ction incorporated in t e o!!ered commodities determine t e demand !or t ese means o! prod%ction, and t %s t e s%pply o! commodities @ ose s%pply embraces t e demand !or t ese means o! prod%ction0 5 e prices o! cotton are determinants in t e s%pply o! cotton goods0 5o t is con!%sion I determining prices t ro%g demand and s%pply, and, at t e same time, determining s%pply and demand t ro%g prices I m%st be added t at demand determines s%pply, H%st as s%pply determines demand, and prod%ction determines t e market, as @ell as t e market determines prod%ction0< E8en t e ordinary economist Bsee !ootnoteC agrees t at t e proportion bet@een s%pply and demand may 8ary in conseD%ence o! a c ange in t e market-8al%e o! commodities, @it o%t a c ange being bro%g t abo%t in demand or s%pply by extraneo%s circ%mstances0 E8en e m%st admit t at, @ ate8er t e market-8al%e, s%pply and demand m%st coincide in order !or it to be establis ed0 &n ot er @ords, t e ratio o! s%pply to demand does not explain t e market-8al%e, b%t con8ersely, t e latter rat er explains t e !l%ct%ations o! s%pply and demand0 5 e a%t or o! t e :bservations contin%es a!ter t e passage D%oted in t e !ootnote: K5 is proportionL Bbet@een demand and s%pplyC, K o@e8er, i! @e still mean by "demand" and "nat%ral price", @ at @e meant H%st no@, @ en re!erring to ?dam $mit , m%st al@ays be a proportion o! eD%ality# !or it is only @ en t e s%pply is eD%al to t e e!!ect%al demand, t at is, to t at demand @ ic @ill neit er more nor less t an pay t e nat%ral price, t at t e nat%ral price is in !act paid# conseD%ently, t ere may be t@o 8ery di!!erent nat%ral prices, at di!!erent times, !or t e same commodity, and yet t e proportion, @ ic t e s%pply bears to t e demand, be in bot cases t e same, namely, t e proportion o! eD%ality0L &t is admitted, t en, t at @it t@o di!!erent nat%ral prices o! t e same commodity, at di!!erent times, demand and s%pply are al@ays able to, and m%st, balance one anot er i! t e commodity is to be sold at its nat%ral price in bot instances0 $ince t ere is no di!!erence in t e ratio o! s%pply to demand in eit er case, b%t a di!!erence in t e magnit%de o! t e nat%ral price itsel!, it !ollo@s t at t is price is ob8io%sly determined independently o! demand and s%pply, and t %s t at it can least o! all be determined by t em0 For a commodity to be sold at its market-8al%e, i0e0, proportionally to t e necessary social labo%r contained in it, t e total D%antity o! social labo%r %sed in prod%cing t e total mass o! t is

13>

; apter J

commodity m%st correspond to t e D%antity o! t e social @ant !or it, i0e0, t e e!!ecti8e social @ant0 ;ompetition, t e !l%ct%ations o! market-prices @ ic correspond to t e !l%ct%ations o! demand and s%pply, tend contin%ally to red%ce to t is scale t e total D%antity o! labo%r de8oted to eac kind o! commodity0 5 e proportion o! s%pply and demand recapit%lates, !irst, t e relation o! %se-8al%e to exc ange8al%e, o! commodity to money, and o! b%yer to seller# and, second, t at o! prod%cer to cons%mer, alt o%g bot o! t em may be represented by t ird parties, t e merc ants0 &n considering b%yer and seller, it s%!!ices to co%nterpose t em indi8id%ally in order to present t eir relations ip0 5 ree indi8id%als are eno%g !or t e complete metamorp osis o! a commodity, and t ere!ore !or t e process o! sale and p%rc ase taken as a @ ole0 ? con8erts is commodity into t e money o! A, to @ om e sells is commodity, and recon8erts is money again into commodities, @ en e %ses it to make p%rc ases !rom ;# t e @ ole process takes place among t ese t ree0 F%rt er, in t e st%dy o! money it ad been ass%med t at t e commodities are sold at t eir 8al%es beca%se t ere @as absol%tely no reason to consider prices di8ergent !rom 8al%es, it being merely a matter o! c anges o! !orm @ ic commodities %ndergo in t eir trans!ormation into money and t eir recon8ersion !rom money into commodities0 ?s soon as a commodity as been sold and a ne@ commodity bo%g t @it t e receipts, @e a8e be!ore %s t e entire metamorp osis, and to t is process as s%c it is immaterial @ et er t e price o! t e commodity lies abo8e or belo@ its 8al%e0 5 e 8al%e o! t e commodity remains important as a basis, beca%se t e concept o! money cannot be de8eloped on any ot er !o%ndation, and price, in its general meaning, is b%t 8al%e in t e !orm o! money0 ?t any rate, it is ass%med in t e st%dy o! money as a medi%m o! circ%lation t at t ere is not H%st one metamorp osis o! a certain commodity0 &t is rat er t e social interrelation o! t ese metamorp oses @ ic is st%died0 3nly t %s do @e arri8e at t e circ%lation o! money and t e de8elopment o! its !%nction as a medi%m o! circ%lation0 A%t o@e8er important t is connection may be !or t e con8ersion o! money into a circ%lating medi%m, and !or its res%lting c ange o! !orm, it is o! no moment to t e transaction bet@een indi8id%al b%yers and sellers0 &n t e case o! s%pply and demand, o@e8er, t e s%pply is eD%al to t e s%m o! sellers, or prod%cers, o! a certain kind o! commodity, and t e demand eD%als t e s%m o! b%yers or cons%mers Bbot prod%cti8e and indi8id%alC o! t e same kind o! commodity0 5 e s%ms react on one anot er as %nits, as aggregate !orces0 5 e indi8id%al co%nts ere only as part o! a social !orce, as an atom o! t e mass, and it is in t is !orm t at competition brings o%t t e socialc aracter o! prod%ction and cons%mption0 5 e side o! competition @ ic appens !or t e moment to be @eaker is also t e side in @ ic t e indi8id%al acts independently o!, and o!ten directly against, t e mass o! is competitors, and precisely in t is manner is t e dependence o! one %pon t e ot er impressed %pon t em, @ ile t e stronger side acts al@ays more or less as a %nited @ ole against its antagonist0 &! t e demand !or t is partic%lar kind o! commodity is greater t an t e s%pply, one b%yer o%tbids anot er I @it in certain limits I and so raises t e price o! t e commodity !or all o! t em abo8e t e market-8al%e, @ ile on t e ot er and t e sellers %nite in trying to sell at a ig market-price0 &!, con8ersely, t e s%pply exceeds t e demand, one begins to dispose o! is goods at a c eaper rate and t e ot ers m%st !ollo@, @ ile t e b%yers %nite in t eir e!!orts to depress t e market-price as m%c as possible belo@ t e market-8al%e0 5 e common interest is appreciated by eac only so long as e gains more by it t an @it o%t it0 ?nd %nity o! action ceases t e moment one or t e ot er side becomes t e @eaker, @ en eac tries to extricate imsel! on is o@n as ad8antageo%sly as e possibly can0 ?gain, i! one prod%ces more c eaply and can sell more goods, t %s possessing imsel! o! a greater place in t e market by selling belo@ t e c%rrent market-price, or market8al%e, e @ill do so, and @ill t ereby begin a mo8ement @ ic grad%ally compels t e ot ers to introd%ce t e c eaper mode o! prod%ction, and one @ ic red%ces t e socially necessary labo%r to a ne@, and lo@er, le8el0 &! one side as t e ad8antage, all belonging to it gain0 &t is as t o%g t ey exerted t eir common monopoly0 &! one side is @eaker, t en one may try on is o@n ook to

138

; apter J

become t e stronger B!or instance, one @ o @orks @it lo@er costs o! prod%ctionC, or at least to get o!! as lig tly as possible, and in s%c cases eac !or imsel! and t e de8il take t e indmost, alt o%g is actions a!!ect not only imsel!, b%t also all is boon companions0 3 7emand and s%pply imply t e con8ersion o! 8al%e into market-8al%e, and so !ar as t ey proceed on a capitalist basis, so !ar as t e commodities are prod%cts o! capital, t ey are based on capitalist prod%ction processes, i0e0, on D%ite di!!erent relations ips t an t e mere p%rc ase and sale o! goods0 6ere it is not a D%estion o! t e !ormal con8ersion o! t e 8al%e o! commodities into prices, i0e0, not o! a mere c ange o! !orm0 &t is a D%estion o! de!inite de8iations in D%antity o! t e marketprices !rom t e market-8al%es, and, !%rt er, !rom t e prices o! prod%ction0 &n simple p%rc ase and sale it s%!!ices to a8e t e prod%cers o! commodities as s%c co%nterposed to one anot er0 &n !%rt er analysis s%pply and demand pres%ppose t e existence o! di!!erent classes and sections o! classes @ ic di8ide t e total re8en%e o! a society and cons%me it among t emsel8es as re8en%e, and, t ere!ore, make %p t e demand created by re8en%e0 W ile on t e ot er and it reD%ires an insig t into t e o8er-all str%ct%re o! t e capitalist prod%ction process !or an %nderstanding o! t e s%pply and demand created among t emsel8es by prod%cers as s%c 0 (nder capitalist prod%ction it is not merely a matter o! obtaining an eD%al mass o! 8al%e in anot er !orm I be it t at o! money or some ot er commodity I !or a mass o! 8al%es t ro@n into circ%lation in t e !orm o! a commodity, b%t it is rat er a matter o! realising as m%c s%rpl%s8al%e, or pro!it, on capital ad8anced !or prod%ction, as any ot er capital o! t e same magnit%de, or pro rata to its magnit%de in @ ic e8er line it is applied0 &t is, t ere!ore, a matter, at least as a minim%m, o! selling t e commodities at prices @ ic yield t e a8erage pro!it, i0e0, at prices o! prod%ction0 &n t is !orm capital becomes conscio%s o! itsel! as a social power in @ ic e8ery capitalist participates proportionally to is s are in t e total social capital0 First, capitalist prod%ction is in itsel! indi!!erent to t e partic%lar %se-8al%e, and distincti8e !eat%res o! any commodity it prod%ces0 &n e8ery sp ere o! prod%ction it is only concerned @it prod%cing s%rpl%s-8al%e, and appropriating a certain D%antity o! %npaid labo%r incorporated in t e prod%ct o! labo%r0 ?nd it is like@ise in t e nat%re o! t e @age-labo%r s%bordinated by capital t at it is indi!!erent to t e speci!ic c aracter o! its labo%r and m%st s%bmit to being trans!ormed in accordance @it t e reD%irements o! capital and to being trans!erred !rom one sp ere o! prod%ction to anot er0 $econd, one sp ere o! prod%ction is, in !act, H%st as good or H%st as bad as anot er0 E8ery one o! t em yields t e same pro!it, and e8ery one o! t em @o%ld be %seless i! t e commodities it prod%ced did not satis!y some social need0 -o@, i! t e commodities are sold at t eir 8al%es, t en, as @e a8e s o@n, 8ery di!!erent rates o! pro!it arise in t e 8ario%s sp eres o! prod%ction, depending on t e di!!erent organic composition o! t e masses o! capital in8ested in t em0 A%t capital @it dra@s !rom a sp ere @it a lo@ rate o! pro!it and in8ades ot ers, @ ic yield a ig er pro!it0 5 ro%g t is incessant o%t!lo@ and in!l%x, or, brie!ly, t ro%g its distrib%tion among t e 8ario%s sp eres, @ ic depends on o@ t e rate o! pro!it !alls ere and rises t ere, it creates s%c a ratio o! s%pply to demand t at t e a8erage pro!it in t e 8ario%s sp eres o! prod%ction becomes t e same, and 8al%es are, t ere!ore, con8erted into prices o! prod%ction0 ;apital s%cceeds in t is eD%alisation, to a greater or lesser degree, depending on t e extent o! capitalist de8elopment in t e gi8en nation# i0e0, on t e extent t e conditions in t e co%ntry in D%estion are adapted !or t e capitalist mode o! prod%ction0 Wit t e progress o! capitalist prod%ction, it also de8elops its o@n conditions and s%bordinates to its speci!ic c aracter and its immanent la@s all t e social prereD%isites on @ ic t e prod%ction process is based0 5 e incessant eD%ilibration o! constant di8ergences is accomplis ed so m%c more D%ickly, 1C t e more mobile t e capital, i0e0, t e more easily it can be s i!ted !rom one sp ere and !rom one place to anot er# <C t e more D%ickly labo%r-po@er can be trans!erred !rom one sp ere to anot er and !rom one prod%ction locality to anot er0 5 e !irst condition implies complete !reedom o! trade

13*

; apter J

@it in t e society and t e remo8al o! all monopolies @it t e exception o! t e nat%ral ones, t ose, t at is, @ ic nat%rally arise o%t o! t e capitalist mode o! prod%ction0 &t implies, !%rt ermore, t e de8elopment o! t e credit system, @ ic concentrates t e inorganic mass o! t e disposable social capital 8is-a-8is t e indi8id%al capitalist0 Finally, it implies t e s%bordination o! t e 8ario%s sp eres o! prod%ction to t e control o! capitalists0 5 is last implication is incl%ded in o%r premises, since @e ass%med t at it @as a matter o! con8erting 8al%es into prices o! prod%ction in all capitalistically exploited sp eres o! prod%ction0 A%t t is eD%ilibration itsel! r%ns into greater obstacles, @ ene8er n%mero%s and large sp eres o! prod%ction not operated on a capitalist basis Bs%c as soil c%lti8ation by small !armersC, !ilter in bet@een t e capitalist enterprises and become linked @it t em0 ? great density o! pop%lation is anot er reD%irement0I 5 e second condition implies t e abolition o! all la@s pre8enting t e labo%rers !rom trans!erring !rom one sp ere o! prod%ction to anot er and !rom one local centre o! prod%ction to anot er# indi!!erence o! t e labo%rer to t e nat%re o! is labo%r# t e greatest possible red%ction o! labo%r in all sp eres o! prod%ction to simple labo%r# t e elimination o! all 8ocational preH%dices among labo%rers# and last b%t not least, a s%bH%gation o! t e labo%rer to t e capitalist mode o! prod%ction0 F%rt er re!erence to t is belongs to a special analysis o! competition0 &t !ollo@s !rom t e !oregoing t at in eac partic%lar sp ere o! prod%ction t e indi8id%al capitalist, as @ell as t e capitalists as a @ ole, take direct part in t e exploitation o! t e total @orking-class by t e totality o! capital and in t e degree o! t at exploitation, not only o%t o! general class sympat y, b%t also !or direct economic reasons0 For, ass%ming all ot er conditions I among t em t e 8al%e o! t e total ad8anced constant capital I to be gi8en, t e a8erage rate o! pro!it depends on t e intensity o! exploitation o! t e s%m total o! labo%r by t e s%m total o! capital0 5 e a8erage pro!it coincides @it t e a8erage s%rpl%s-8al%e prod%ced !or eac 1== o! capital, and so !ar as t e s%rpl%s-8al%e is concerned t e !oregoing statements apply as a matter o! co%rse0 &n t e case o! t e a8erage pro!it t e 8al%e o! t e ad8anced capital becomes an additional element determining t e rate o! pro!it0 &n !act, t e direct interest taken by t e capitalist, or t e capital, o! any indi8id%al sp ere o! prod%ction in t e exploitation o! t e labo%rers @ o are directly employed is con!ined to making an extra gain, a pro!it exceeding t e a8erage, eit er t ro%g exceptional o8er@ork, or red%ction o! t e @age belo@ t e a8erage, or t ro%g t e exceptional prod%cti8ity o! t e labo%r employed0 ?side !rom t is, a capitalist @ o @o%ld not in is line o! prod%ction employ any 8ariable capital, and t ere!ore any labo%rer Bin reality an exaggerated ass%mptionC, @o%ld nonet eless be as m%c interested in t e exploitation o! t e @orking-class by capital, and @o%ld deri8e is pro!it D%ite as m%c !rom %npaid s%rpl%s-labo%r, as, say, a capitalist @ o @o%ld employ only 8ariable capital Banot er exaggerationC, and @ o @o%ld t %s in8est is entire capital in @ages0 A%t t e degree o! exploitation o! labo%r depends on t e a8erage intensity o! labo%r i! t e @orking-day is gi8en, and on t e lengt o! t e @orking-day i! t e intensity o! exploitation is gi8en0 5 e degree o! exploitation o! labo%r determines t e rate o! s%rpl%s-8al%e, and t ere!ore t e mass o! s%rpl%s-8al%e !or a gi8en total mass o! 8ariable capital, and conseD%ently t e magnit%de o! t e pro!it0 5 e indi8id%al capitalist, as distinct !rom is sp ere as a @ ole, as t e same special interest in exploiting t e labo%rers e personally employs as t e capital o! a partic%lar sp ere, as distinct !rom t e total social capital, as in exploiting t e labo%rers directly employed in t at sp ere0 3n t e ot er and, e8ery partic%lar sp ere o! capital, and e8ery indi8id%al capitalist, a8e t e same interest in t e prod%cti8ity o! t e social labo%r employed by t e s%m total o! capital0 For t@o t ings depend on t is prod%cti8ity: First, t e mass o! %se-8al%es in @ ic t e a8erage pro!it is expressed# and t is is do%bly important, since t is a8erage pro!it ser8es as a !%nd !or t e acc%m%lation o! ne@ capital and as a !%nd !or re8en%e to be spent !or cons%mption0 $econd, t e 8al%e o! t e total capital in8ested Bconstant and 8ariableC, @ ic , t e amo%nt o! s%rpl%s-8al%e, or pro!it, !or t e @ ole capitalist class being gi8en, determines t e rate o! pro!it, or t e pro!it on a certain D%antity o! capital0 5 e special prod%cti8ity o! labo%r in any partic%lar sp ere, or in any

12=

; apter J

indi8id%al enterprise o! t is sp ere, is o! interest only to t ose capitalists @ o are directly engaged in it, since it enables t at partic%lar sp ere, 8is-a-8is t e total capital, or t at indi8id%al capitalist, 8is-a-8is is sp ere, to make an extra pro!it0 6ere, t en, @e a8e a mat ematically precise proo! @ y capitalists !orm a 8eritable !reemason society 8is-a-8is t e @ ole @orking-class, @ ile t ere is little lo8e lost bet@een t em in competition among t emsel8es0 5 e price o! prod%ction incl%des t e a8erage pro!it0 We call it price o! prod%ction0 &t is really @ at ?dam $mit calls natural price, )icardo calls price of production, or cost of production, and t e p ysiocrats call pri n7cessaire, beca%se in t e long r%n it is a prereD%isite o! s%pply, o! t e reprod%ction o! commodities in e8ery indi8id%al sp ere0 A%t none o! t em as re8ealed t e di!!erence bet@een price o! prod%ction and 8al%e0 We can @ell %nderstand @ y t e same economists @ o oppose determining t e 8al%e o! commodities by labo%r-time, i0e0, by t e D%antity o! labo%r contained in t em, @ y t ey al@ays speak o! prices o! prod%ction as centres aro%nd @ ic market-prices !l%ct%ate0 5 ey can a!!ord to do it beca%se t e price o! prod%ction is an %tterly external and prima facie meaningless !orm o! t e 8al%e o! commodities, a !orm as it appears in competition, t ere!ore in t e mind o! t e 8%lgar capitalist, and conseD%ently in t at o! t e 8%lgar economist0 3%r analysis as re8ealed o@ t e market-8al%e Band e8eryt ing said concerning it applies @it appropriate modi!ications to t e price o! prod%ctionC embraces a s%rpl%s-pro!it !or t ose @ o prod%ce in any partic%lar sp ere o! prod%ction %nder t e most !a8o%rable conditions0 Wit t e exception o! crises, and o! o8erprod%ction in general, t is applies to all market-prices, no matter o@ m%c t ey may de8iate !rom market-8al%es or market-prices o! prod%ction0 For t e marketprice signi!ies t at t e same price is paid !or commodities o! t e same kind, alt o%g t ey may a8e been prod%ced %nder 8ery di!!erent indi8id%al conditions and ence may a8e di!!erent costprices0 BWe do not speak at t is point o! any s%rpl%s-pro!its d%e to monopolies in t e %s%al sense o! t e term, @ et er nat%ral or arti!icial0C ? s%rpl%s-pro!it may also arise i! certain sp eres o! prod%ction are in a position to e8ade t e con8ersion o! t e 8al%es o! t eir commodities into prices o! prod%ction, and t %s t e red%ction o! t eir pro!its to t e a8erage pro!it0 We s all de8ote more attention to t e !%rt er modi!ications o! t ese t@o !orms o! s%rpl%s-pro!it in t e part dealing @it gro%nd-rent0

Chapter 11. Effects of +eneral 2a)e #luctuations on Prices of Production


'et t e a8erage composition o! social capital be 8= c U <=8, and t e pro!it <=T0 5 e rate o! s%rpl%s-8al%e is t en 1==T0 ? general increase o! @ages, all else remaining t e same, is tantamo%nt to a red%ction in t e rate o! s%rpl%s-8al%e0 &n t e case o! a8erage capital, pro!it and s%rpl%s-8al%e are identical0 'et @ages rise <+T0 5 en t e same D%antity o! labo%r, !ormerly set in motion @it <=, @ill cost <+0 We s all t en a8e a t%rno8er 8al%e o! 8= c U <+8 U 1+p, instead o! 8=c U <=8 U <=p0 ?s be!ore, t e labo%r set in motion by t e 8ariable capital prod%ces a 8al%e o! 2=0 &! 8 rises !rom <= to <+, t e s%rpl%s s, or p, @ill amo%nt to only 1+0 5 e pro!it o! 1+ on a capital o! 1=+ is 12 <N>T, and t is @o%ld be t e ne@ a8erage rate o! pro!it0 $ince t e price o! prod%ction o! commodities prod%ced by t e a8erage capital coincides @it t eir 8al%e, t e price o! prod%ction o! t ese commodities @o%ld a8e remained %nc anged0 ? @age increase @o%ld t ere!ore a8e ca%sed a drop in pro!it, b%t no c ange in t e 8al%e and price o! t e commodities0 Formerly, as long as t e a8erage pro!it @as <=T, t e price o! prod%ction o! commodities prod%ced in one period o! t%rno8er @as eD%al to t eir cost-price pl%s a pro!it o! <=T on t is cost-price, t ere!ore R k U kp" R k U <=kN1==0 &n t is !orm%la k is a 8ariable magnit%de, c anging in accordance @it t e 8al%e o! t e means o! prod%ction t at go into t e commodities, and @it t e amo%nt o! depreciation gi8en %p by t e !ixed capital to t e prod%ct0 5 e price o! prod%ction @o%ld t en amo%nt to k U 12 <N> kN1==0 'et %s no@ select a capital, @ ose composition is lo@er t an t e original composition o! t e a8erage social capital o! 8= c U <=8 B@ ic as no@ c anged into >6 2N<1c U <3 1>N<18C# say, +=c U +=80 &n t is case, t e price o! prod%ction o! t e ann%al prod%ct be!ore t e @age increase @o%ld a8e been += c U +=8 U <=p R 1<=, ass%ming !or t e sake o! simplicity t at t e entire !ixed capital passes t ro%g depreciation into t e prod%ct and t at t e period o! t%rno8er is t e same as in t e !irst case0 For t e same D%antity o! labo%r set in motion a @age increase o! <+T means an increase o! t e 8ariable capital !rom += to 6<Z0 &! t e ann%al prod%ct @ere sold at t e !ormer price o! prod%ction o! 1<=, t is @o%ld gi8e %s += c U 6<Z8 U >Zp, or a rate o! pro!it o! 6WT0 A%t t e ne@ a8erage rate o! pro!it is 12 <N>T, and since @e ass%me all ot er circ%mstances to remain t e same, t e capital o! += c U 6<Z 8 m%st also make t is pro!it0 -o@ a capital o! 11<Z makes a pro!it o! 16 1N12 at a rate o! pro!it o! 12 <N>T0 5 ere!ore, t e price o! prod%ction o! t e commodities prod%ced by t is capital is no@ += c U 6<Z 8 U 16[p R 1<8 8N120 3@ing to a @age rise o! <++, t e price o! prod%ction o! t e same D%antity o! t e same commodities, t ere!ore, as ere risen !rom 1<= to 1<8 8N12, or more t an >T0 ;on8ersely, s%ppose @e take a sp ere o! prod%ction o! a ig er composition t an t e a8erage capital# say, *<c U 880 5 e original a8erage pro!it in t is case @o%ld still be <=, and i! @e again ass%me t at t e entire !ixed capital passes into t e ann%al prod%ct and t at t e period o! t%rno8er is t e same as in cases & and &&, t e price o! prod%ction o! t e commodity is ere also 1<=0 3@ing to t e rise in @ages o! <+T t e 8ariable capital !or t e same D%antity o! labo%r rises !rom 8 to 1=, t e cost-price o! t e commodities !rom 1== to 1=<, @ ile t e a8erage rate o! pro!it !alls !rom <=T to 12 <N>T0 A%t 1==:12 <N> R 1=<:12 2N>0 5 e pro!it no@ !alling to t e s are o! 1=< is t ere!ore 12 2N>0 For t is reason, t e total prod%ct sells at k U kp" R 1=< U 12 2N> R 116 2N>0 5 e price o! prod%ction as t ere!ore !allen !rom 1<= to 116 2N>, or 3 3N>0 ;onseD%ently, i! @ages are raised <+T: 1C t e price o! prod%ction o! t e commodities o! a capital o! a8erage social composition does not c ange# <C t e price o! prod%ction o! t e commodities o! a capital o! lo@er composition rises, b%t not in

12<

; apter J&

proportion to t e !all in pro!it# 3C t e price o! prod%ction o! t e commodities o! a capital o! ig er composition !alls, b%t also not in t e same proportion as pro!it0 $ince t e price o! prod%ction o! t e commodities o! t e a8erage capital remained t e same, eD%al to t e 8al%e o! t e prod%ct, t e s%m o! t e prices o! prod%ction o! t e prod%cts o! all capitals remained t e same as @ell, and eD%al to t e s%m total o! t e 8al%es prod%ced by t e aggregate capital0 5 e increase on one side and t e decrease on t e ot er balance !or t e aggregate capital on t e le8el o! t e a8erage social capital0 &! t e price o! prod%ction rises in case && and !alls in case &&&, t ese opposite e!!ects alone, @ ic are bro%g t abo%t by a !all in t e rate o! s%rpl%s-8al%e or by a general @age increase, s o@ t at t is cannot be a matter o! compensation in t e price !or t e rise in @ages, since t e !all in t e price o! prod%ction in case &&& cannot compensate t e capitalist !or t e !all in pro!it, and since t e rise o! t e price in case && does not pre8ent a !all in pro!it0 )at er, in eit er case, @ et er t e price rises or !alls, t e pro!it remains t e same as t at o! t e a8erage capital, in @ ic case t e price remains %nc anged0 &t is t e same a8erage pro!it @ ic as !allen by + +N>, or some@ at o8er <+T, in t e case o! && as @ell as &&&0 &t !ollo@s !rom t is t at i! t e price did not rise in && and !all in &&&, && @o%ld a8e to sell belo@ and &&& abo8e t e ne@ red%ced a8erage pro!it0 &t is sel!-e8ident t at, depending on @ et er +=, <+, or 1= per 1== %nits o! capital are laid o%t !or @ages, t e e!!ect o! a @age increase on a capitalist @ o as in8ested 1N1= o! is capital in @ages m%st be D%ite di!!erent !rom t at on one @ o as in8ested [ or Z0 ?n increase in t e price o! prod%ction on t e one side, a !all on t e ot er, depending on a capital being belo@ or abo8e t e a8erage social composition, occ%rs solely by 8irt%e o! t e process o! le8elling t e pro!it to t e ne@ red%ced a8erage pro!it0 6o@ @o%ld a general red%ction in @ages, and a corresponding general rise o! t e rate o! pro!it, and t %s o! t e a8erage pro!it, no@ a!!ect t e prices o! prod%ction o! commodities prod%ced by capitals de8iating in opposite directions !rom t e a8erage social compositionQ We a8e b%t to re8erse t e !oregoing exposition to obtain t e res%lt B@ ic )icardo !ails to analyseC0 &0 ?8erage capital R 8=c U <=8 R 1==# rate o! s%rpl%s-8al%e R 1==T# price o! prod%ctionR8al%e o! commodities R 8=c U <=8 U <=p R 1<=# rate o! pro!it R <=T0 $%ppose @ages !all by one-!o%rt 0 5 en t e same constant capital is set in motion by 1+ 8, instead o! <=80 5 en t e 8al%e o! commodities R 8=c U 1+8 U <+p R 1<=0 5 e D%antity o! labo%r per!ormed by 8 remains %nc anged, except t at t e 8al%e ne@ly created by it is distrib%ted di!!erently bet@een t e capitalist and t e labo%rer0 5 e s%rpl%s-8al%e rises !rom <= to <+ and t e rate o! s%rpl%s-8al%e !rom <=N<= to <+N1+, or !rom 1==T to 166WT0 5 e pro!it on *+ no@ R <+, so t at t e rate o! pro!it per 1== R <6 6N1*0 5 e ne@ composition o! t e capital in per cent is no@ 82 2N1* c U 1+ 1+N1*8 R 1==0 &&0 'o@er composition0 3riginally +=c U +=8, as abo8e0 7%e to t e !all o! @ages by one-!o%rt 8 is red%ced to 3>Z, and conseD%ently t e ad8anced total capital to += c U 3>Z 8 R 8>Z0 &! @e apply t e ne@ rate o! pro!it o! <6 6N1*T to t is, @e get 1==:<6 6N1* R 8>Z:<3 1N380 5 e same mass o! commodities @ ic !ormerly cost 1<=, no@ costs 8>Z U <3 1N38 R 11= 1=N1*, t is being a price red%ction o! almost 1=T0 &&&0 6ig er composition0 3riginally *< c U 88 R 1==0 5 e red%ction o! @ages by one-!o%rt red%ces 88 to 68, and t e total capital to *80 ;onseD%ently, 1==:<6 6N1* R *8:<+ 16N1*0 5 e price o! prod%ction o! t e commodity, !ormerly 1== U <= R 1<=, is no@, a!ter t e !all in @ages, *8 U <+ 1+N1* R 1<3 1+N1*, t is being a rise o! almost 20 &t is e8ident, t ere!ore, t at @e a8e b%t to !ollo@ t e same de8elopment in t e opposite direction @it t e appropriate modi!ications# t at a general red%ction o! @ages is attended by a general rise o! s%rpl%s-8al%e, o! t e rate o! s%rpl%s-8al%e and, ot er circ%mstances remaining t e same, o! t e rate o! pro!it, e8en i! expressed in a di!!erent proportion# a !all in t e prices o! prod%ction !or commodities prod%ced by capitals o! lo@er composition, and a rise in t e prices o! prod%ction !or

123

; apter J&

commodities prod%ced by capitals o! ig er composition0 5 e res%lt is H%st t e re8erse o! t at obser8ed !or a general rise o! @ages0 1 &n bot cases I rise or !all o! @ages I it is ass%med t at t e @orking-day remains t e same, and also t e prices o! t e means o! s%bsistence0 &n t ese circ%mstances a !all in @ages is possible only i! t ey stood ig er t an t e normal price o! labo%r, or i! t ey are depressed belo@ t is price0 5 e @ay in @ ic t e matter is modi!ied i! t e rise or !all o! @ages is d%e to a c ange in 8al%e, and conseD%ently t e price o! prod%ction o! commodities %s%ally cons%med by t e labo%rer, @ill be analysed at some lengt in t e part dealing @it gro%nd-rent0 ?t t is point, o@e8er, t e !ollo@ing remarks are to be made once and !or all: $ o%ld t e rise or !all in @ages be d%e to a c ange in t e 8al%e o! t e necessities o! li!e, a modi!ication o! t e !oregoing !indings can take place only to t e extent t at commodities, @ ose c ange o! price raises or lo@ers t e 8ariable capital, also go into t e constant capital as constit%ent elements and t ere!ore a!!ect more t an H%st t e @ages alone0 A%t i! t ey a!!ect only @ages, t e abo8e analysis contains all t at needs to be said0 &n t is entire c apter, t e establis ment o! t e general rate o! pro!it and t e a8erage pro!it, and conseD%ently, t e transm%tation o! 8al%es into prices o! prod%ction, are ass%med as gi8en0 5 e D%estion merely @as, o@ a general rise or !all in @ages a!!ected t e ass%med prices o! prod%ction o! commodities0 5 is is b%t a 8ery secondary D%estion compared @it t e ot er important points analysed in t is part0 A%t it is t e only rele8ant D%estion treated by )icardo, and, as @e s all see, e treated it one-sidedly and %nsatis!actorily0

Chapter 12. Supple entar! Re ar%s


I. Causes Impl#ing a Change in the Price of Production
5 ere are H%st t@o ca%ses t at can c ange t e price o! prod%ction o! a commodity: 'irst0 ? c ange in t e general rate o! pro!it0 5 is can solely be d%e to a c ange in t e a8erage rate o! s%rpl%s-8al%e, or, i! t e a8erage rate o! s%rpl%s-8al%e remains t e same, to a c ange in t e ratio o! t e s%m o! t e appropriated s%rpl%s-8al%es to t e s%m o! t e ad8anced total social capital0 &! t e c ange in t e rate o! s%rpl%s-8al%e is not d%e to a depression o! @ages belo@ normal, or t eir rise abo8e normal I and mo8ements o! t at kind are to be regarded merely as oscillations I it can only occ%r eit er t ro%g a rise, or !all, in t e 8al%e o! labo%r-po@er, t e one being H%st as impossible as t e ot er %nless t ere is a c ange in t e prod%cti8ity o! t e labo%r prod%cing means o! s%bsistence, i0e0, in t e 8al%e o! commodities cons%med by t e labo%rer0 3r, t ro%g a c ange in t e proportion o! t e s%m o! appropriated s%rpl%s-8al%es to t e ad8anced total capital o! society0 $ince t e c ange in t is case is not ca%sed by t e rate o! s%rpl%s-8al%e, it m%st be ca%sed by t e total capital, or rat er its constant part0 5 e mass o! t is part, tec nically considered, increases or decreases in proportion to t e D%antity o! labo%r-po@er bo%g t by t e 8ariable capital, and t e mass o! its 8al%e t %s increases or decreases @it t e increase or decrease o! its o@n mass0 &t also increases or decreases, t ere!ore, proportionately to t e mass o! t e 8al%e o! t e 8ariable capital0 &! t e same labo%r sets more constant capital in motion, it as become more prod%cti8e0 &! t e re8erse, t en less prod%cti8e0 5 %s, t ere as been a c ange in t e prod%cti8ity o! labo%r, and t ere m%st a8e occ%rred a c ange in t e 8al%e o! certain commodities0 5 e !ollo@ing la@, t en, applies to bot cases: &! t e price o! prod%ction o! a commodity c anges in conseD%ence o! a c ange in t e general rate o! pro!it, its o@n 8al%e may a8e remained %nc anged0 6o@e8er, a c ange m%st a8e occ%rred in t e 8al%e o! ot er commodities0 Second0 5 e general rate o! pro!it remains %nc anged0 &n t is case t e price o! prod%ction o! a commodity can c ange only i! its o@n 8al%e as c anged0 5 is may be d%e to more, or less, labo%r being reD%ired to reprod%ce t e commodity in D%estion, eit er beca%se o! a c ange in t e prod%cti8ity o! labo%r @ ic prod%ces t is commodity in its !inal !orm, or o! t e labo%r @ ic prod%ces t ose commodities t at go into its prod%ction0 5 e price o! prod%ction o! cotton yarn may !all, eit er beca%se ra@ cotton is prod%ced c eaper t an be!ore, or beca%se t e labo%r o! spinning as become more prod%cti8e d%e to impro8ed mac inery0 5 e price o! prod%ction, as @e a8e seen, R k U p, eD%al to cost-price pl%s pro!it0 5 is, o@e8er, R k U kp", in @ ic k, t e cost-price, is a 8ariable magnit%de, @ ic c anges !or di!!erent sp eres o! prod%ction and is e8ery@ ere eD%al to t e 8al%e o! t e constant and 8ariable capital cons%med in t e prod%ction o! t e commodity, and p" is t e a8erage rate o! pro!it in percentage !orm0 &! k R <==, and p" R <=T, t e price o! prod%ction k U kp" R <== U <== \ <=N1== R <== U 2= R <2=0 5 is price o! prod%ction may clearly remain t e same, in spite o! a c ange in t e 8al%e o! t e commodities0 ?ll c anges in t e price o! prod%ction o! commodities are red%ced, in t e last analysis, to c anges in 8al%e0 A%t not all c anges in t e 8al%e o! commodities need express t emsel8es in c anges in t e price o! prod%ction0 5 e price o! prod%ction is not determined by t e 8al%e o! any one commodity alone, b%t by t e aggregate 8al%e o! all commodities0 ? c ange in commodity ? may t ere!ore be balanced by an opposite c ange in commodity A, so t at t e general relation remains t e same0

12+

; apter J&&

II. Price of Production of Commodities of Average Composition


We a8e seen o@ a de8iation in prices o! prod%ction !rom 8al%es arises !rom: 1C adding t e a8erage pro!it instead o! t e s%rpl%s-8al%e contained in a commodity to is cost-price# <C t e price o! prod%ction, @ ic so de8iates !rom t e 8al%e o! a commodity, entering into t e cost-price o! ot er commodities as one o! its elements, so t at t e cost-price o! a commodity may already contain a de8iation !rom 8al%e in t ose means o! prod%ction cons%med by it, D%ite aside !rom a de8iation o! its o@n @ ic may arise t ro%g a di!!erence bet@een t e a8erage pro!it and t e s%rpl%s-8al%e0 &t is t ere!ore possible t at e8en t e cost-price o! commodities prod%ced by capitals o! a8erage composition may di!!er !rom t e s%m o! t e 8al%es o! t e elements @ ic make %p t is component o! t eir price o! prod%ction0 $%ppose, t e a8erage composition is 8= c U <=80 -o@, it is possible t at in t e act%al capitals o! t is composition 8= c may be greater or smaller t an t e 8al%e o! c, i0e0, t e constant capital, beca%se t is c may be made %p o! commodities @ ose price o! prod%ction di!!ers !rom t eir 8al%e0 &n t e same @ay, <= 8 mig t di8erge !rom its 8al%e i! t e cons%mption o! t e @age incl%des commodities @ ose price o! prod%ction di8erges !rom t eir 8al%e# in @ ic case t e labo%rer @o%ld @ork a longer, or s orter, time to b%y t em back Bto replace t emC and @o%ld t %s per!orm more, or less, necessary labo%r t an @o%ld be reD%ired i! t e price o! prod%ction o! s%c necessities o! li!e coincided @it t eir 8al%e0 6o@e8er, t is possibility does not detract in t e least !rom t e correctness o! t e t eorems demonstrated @ ic old !or commodities o! a8erage composition0 5 e D%antity o! pro!it !alling to t ese commodities is eD%al to t e D%antity o! s%rpl%s-8al%e contained in t em0 For instance, in a capital o! t e gi8en composition 8= c U <=8, t e most important t ing in determining s%rpl%s8al%e is not @ et er t ese !ig%res are expressions o! act%al 8al%es, b%t o@ t ey are related to one anot er, i0e0, @ et er 8 R lN+ o! t e total capital, and c R 2N+0 W ene8er t is is t e case, t e s%rpl%s-8al%e prod%ced by 8 is, as @as ass%med, eD%al to t e a8erage pro!it0 3n t e ot er and, since it eD%als t e a8erage pro!it, t e price o! prod%ction R cost-price pl%s pro!it R k U p R k U s# i0e0, in practice it is eD%al to t e 8al%e o! t e commodity0 5 is implies t at a rise or !all in @ages @o%ld not c ange t e price o! prod%ction, k U p, any more t an it @o%ld c ange t e 8al%e o! t e commodities, and @o%ld merely e!!ect a corresponding opposite mo8ement, a !all or a rise, in t e rate o! pro!it0 For i! a rise or !all o! @ages @ere ere to bring abo%t a c ange in t e price o! commodities, t e rate o! pro!it in t ese sp eres o! a8erage composition @o%ld rise abo8e, or !all belo@, t e le8el pre8ailing in ot er sp eres0 5 e sp ere o! a8erage composition maintains t e same le8el o! pro!it as t e ot er sp eres only so long as t e price remains %nc anged0 5 e practical res%lt is t ere!ore t e same as it @o%ld be i! its prod%cts @ere sold at t eir real 8al%e0 For i! commodities are sold at t eir act%al 8al%es, it is e8ident t at, ot er conditions being eD%al, a rise, or !all, in @ages @ill ca%se a corresponding !all or rise in pro!it, b%t no c ange in t e 8al%e o! commodities, and t at %nder all circ%mstances a rise or !all in @ages can ne8er a!!ect t e 8al%e o! commodities, b%t only t e magnit%de o! t e s%rpl%s-8al%e0

III. The Capitalist1s Grounds for Compensating


&t as been said t at competition le8els t e rates o! pro!it o! t e di!!erent sp eres o! prod%ction into an a8erage rate o! pro!it and t ereby t%rns t e 8al%es o! t e prod%cts o! t ese di!!erent sp eres into prices o! prod%ction0 5 is occ%rs t ro%g t e contin%al trans!er o! capital !rom one sp ere to anot er, in @ ic , !or t e moment, t e pro!it appens to lie abo8e a8erage0 5 e !l%ct%ations o! pro!it ca%sed by t e cycle o! !at and lean years s%cceeding one anot er in any gi8en branc o! ind%stry @it in gi8en periods m%st, o@e8er, recei8e d%e consideration0 5 is incessant o%t!lo@ and in!lo@ o! capital bet@een t e di!!erent sp eres o! prod%ction creates trends

126

; apter J&&

o! rise and !all in t e rate o! pro!it, @ ic eD%alise one anot er more or less and t %s a8e a tendency to red%ce t e rate o! pro!it e8ery@ ere to t e same common and general le8el0 5 is mo8ement o! capitals is primarily ca%sed by t e le8el o! market-prices, @ ic li!t pro!its abo8e t e general a8erage in one place and depress t em belo@ it in anot er0 Merc ant"s capital is le!t o%t o! consideration as it is irrele8ant at t is point, !or @e kno@ !rom t e s%dden paroxysms o! spec%lation appearing in certain pop%lar articles t at it can @it dra@ masses o! capital !rom one line o! b%siness @it extraordinary rapidity and t ro@ t em @it eD%al rapidity into anot er0 .et @it respect to eac sp ere o! act%al prod%ction I ind%stry, agric%lt%re, mining, etc0 I t e trans!er o! capital !rom one sp ere to anot er o!!ers considerable di!!ic%lties, partic%larly on acco%nt o! t e existing !ixed capital0 Experience s o@s, moreo8er, t at i! a branc o! ind%stry, s%c as, say, t e cotton ind%stry, yields %n%s%ally ig pro!its at one period, it makes 8ery little pro!it, or e8en s%!!ers losses, at anot er, so t at in a certain cycle o! years t e a8erage pro!it is m%c t e same as in ot er branc es0 ?nd capital soon learns to take t is experience into acco%nt0 W at competition does not s o@, o@e8er, is t e determination o! 8al%e, @ ic dominates t e mo8ement o! prod%ction# and t e 8al%es t at lie beneat t e prices o! prod%ction and t at determine t em in t e last instance0 ;ompetition, on t e ot er and, s o@s: 1C t e a8erage pro!its, @ ic are independent o! t e organic composition o! capital in t e di!!erent sp eres o! prod%ction, and t ere!ore also o! t e mass o! li8ing labo%r appropriated by any gi8en capital in any gi8en sp ere o! exploitation# <C t e rise and !all o! prices o! prod%ction ca%sed by c anges in t e le8el o! @ages, a p enomenon @ ic at !irst glance completely contradicts t e 8al%e relation o! commodities# 3C t e !l%ct%ations o! market-prices, @ ic red%ce t e a8erage market-price o! commodities in a gi8en period o! time, not to t e market- value, b%t to a 8ery di!!erent marketprice o! prod%ction, @ ic di8erges considerably !rom t is market-8al%e0 ?ll t ese p enomena seem to contradict t e determination o! 8al%e by labo%r-time as m%c as t e nat%re o! s%rpl%s8al%e consisting o! %npaid s%rpl%s-labo%r0 4hus everything appears reversed in competition 0 5 e !inal pattern o! economic relations as seen on t e s%r!ace, in t eir real existence and conseD%ently in t e conceptions by @ ic t e bearers and agents o! t ese relations seek to %nderstand t em, is 8ery m%c di!!erent !rom, and indeed D%ite t e re8erse o!, t eir inner b%t concealed essential pattern and t e conception corresponding to it0 F%rt er0 ?s soon as capitalist prod%ction reac es a certain le8el o! de8elopment, t e eD%alisation o! t e di!!erent rates o! pro!it in indi8id%al sp eres to general rate o! pro!it no longer proceeds solely t ro%g t e play o! attraction and rep%lsion, by @ ic market-prices attract or repel capital0 ?!ter a8erage prices, and t eir corresponding market-prices, become stable !or a time it reac es t e consciousness o! t e indi8id%al capitalists t at t is eD%alisation balances definite differences, so t at t ey incl%de t ese in t eir m%t%al calc%lations0 5 e di!!erences exist in t e mind o! t e capitalists and are taken into acco%nt as gro%nds !or compensating0 ?8erage pro!it is t e basic conception, t e conception t at capitals o! eD%al magnit%de m%st yield eD%al pro!its in eD%al time spans0 5 is, again, is based on t e conception t at t e capital in eac sp ere o! prod%ction m%st s are pro rata to its magnit%de in t e total s%rpl%s-8al%e sD%eeEed o%t o! t e labo%rers by t e total social capital# or, t at e8ery indi8id%al capital s o%ld be regarded merely as a part o! t e total social capital, and e8ery capitalist act%ally as a s are older in t e total social enterprise, eac s aring in t e total pro!it pro rata to t e magnit%de o! is s are o! capital0 5 is conception ser8es as a basis !or t e capitalist"s calc%lations, !or instance, t at a capital @ ose t%rno8er is slo@er t an anot er"s, beca%se its commodities take longer to be prod%ced, or beca%se t ey are sold in remoter markets, ne8ert eless c arges t e pro!it it loses in t is @ay, and compensates itsel! by raising t e price0 3r else, t at in8estments o! capital in lines exposed to greater aEards, !or instance in s ipping, are compensated by ig er prices0 ?s soon as capitalist prod%ction, and @it it t e ins%rance b%siness, are de8eloped, t e aEards are, in e!!ect, made eD%al !or all sp eres o! prod%ction Bc!0 ;orbetC# b%t t e more aEardo%s lines pay ig er

12>

; apter J&&

ins%rance rates, and reco8er t em in t e prices o! t eir commodities0 &n practice all t is means t at e8ery circ%mstance, @ ic renders one line o! prod%ction I and all o! t em are considered eD%ally necessary @it in certain limits I less pro!itable, and anot er more pro!itable, is taken into acco%nt once and !or all as 8alid gro%nd !or compensation, @it o%t al@ays reD%iring t e rene@ed action o! competition to H%sti!y t e moti8es or !actors !or calc%lating t is compensation0 5 e capitalist simply !orgets I or rat er !ails to see, beca%se competition does not point it o%t to im I t at all t ese gro%nds !or compensation m%t%ally ad8anced by capitalists in calc%lating t e prices o! commodities o! di!!erent lines o! prod%ction merely come do@n to t e !act t at t ey all a8e an eD%al claim, pro rata to t e magnit%de o! t eir respecti8e capitals, to t e common loot, t e total s%rpl%s-8al%e0 &t rat er seems to t em t at since t e pro!it pocketed by t em di!!ers !rom t e s%rpl%s-8al%e t ey appropriated, t ese gro%nds !or compensation do not le8el o%t t eir participation in t e total s%rpl%s-8al%e, b%t create the profit itself, @ ic seems to be deri8ed !rom t e additions made on one or anot er gro%nd to t e cost-price o! t eir commodities0 &n ot er respects t e statements made in ; apter 4&& concerning t e capitalists" ass%mptions as to t e so%rce o! s%rpl%s-8al%e, apply also to a8erage pro!it0 5 e present case appears di!!erent only in so !ar as a sa8ing in cost-price depends on indi8id%al b%siness ac%men, alertness, etc0, ass%ming t e market-price o! commodities and t e exploitation o! labo%r to be gi8en0

Part III. The %a& of the Ten"enc' of the #ate of Profit to (all
Chapter 13. The 3a4 -s Such
?ss%ming a gi8en @age and @orking-day, a 8ariable capital, !or instance o! 1==, represents a certain n%mber o! employed labo%rers0 &t is t e index o! t is n%mber0 $%ppose V1== are t e @ages o! 1== labo%rers !or, say, one @eek0 &! t ese labo%rers per!orm eD%al amo%nts o! necessary and s%rpl%s-labo%r, i! t ey @ork daily as many o%rs !or t emsel8es, i.e., !or t e reprod%ction o! t eir @age, as t ey do !or t e capitalist, i.e., !or t e prod%ction o! s%rpl%s-8al%e, t en t e 8al%e o! t eir total prod%ct R V<==, and t e s%rpl%s-8al%e t ey prod%ce @o%ld amo%nt to V1==0 5 e rate o! s%rpl%s-8al%e, sN8, @o%ld R 1==T0 A%t, as @e a8e seen, t is rate o! s%rpl%s-8al%e @o%ld nonet eless express itsel! in 8ery di!!erent rates o! pro!it, depending on t e di!!erent 8ol%mes o! constant capital c and conseD%ently o! t e total capital ;, beca%se t e rate o! pro!it R sN;0 5 e rate o! s%rpl%s-8al%e is 1==T: &! c R +=, and 8 R 1==, t en p" R 1==N1+= R 66WT# c R 1==, and 8 R 1==, t en p" R 1==N<== R +=T# c R <==, and 8 R 1==, t en p" R 1==N3== R 33XT# c R 3==, and 8 R 1==, t en p" R 1==N2== R <+T# c R 2==, and 8 R 1==, t en p" R 1==N+== R <=T0 5 is is o@ t e same rate o! s%rpl%s-8al%e @o%ld express itsel! %nder t e same degree o! labo%r exploitation in a !alling rate o! pro!it, beca%se t e material gro@t o! t e constant capital implies also a gro@t I albeit not in t e same proportion I in its 8al%e, and conseD%ently in t at o! t e total capital0 &! it is !%rt er ass%med t at t is grad%al c ange in t e composition o! capital is not con!ined only to indi8id%al sp eres o! prod%ction, b%t t at it occ%rs more or less in all, or at least in t e key sp eres o! prod%ction, so t at it in8ol8es c anges in t e a8erage organic composition o! t e total capital o! a certain society, t en t e grad%al gro@t o! constant capital in relation to 8ariable capital m%st necessarily lead to a gradual fall of the general rate of profit, so long as t e rate o! s%rpl%s-8al%e, or t e intensity o! exploitation o! labo%r by capital, remain t e same0 -o@ @e a8e seen t at it is a la@ o! capitalist prod%ction t at its de8elopment is attended by a relati8e decrease o! 8ariable in relation to constant capital, and conseD%ently to t e total capital set in motion0 5 is is H%st anot er @ay o! saying t at o@ing to t e distincti8e met ods o! prod%ction de8eloping in t e capitalist system t e same n%mber o! labo%rers, i.e., t e same D%antity o! labo%r-po@er set in motion by a 8ariable capital o! a gi8en 8al%e, operate, @ork %p and prod%cti8ely cons%me in t e same time span an e8er-increasing D%antity o! means o! labo%r, mac inery and !ixed capital o! all sorts, ra@ and a%xiliary materials I and conseD%ently a constant capital o! an e8er-increasing 8al%e0 5 is contin%al relati8e decrease o! t e 8ariable capital 8is-a-8is t e constant, and conseD%ently t e total capital, is identical @it t e progressi8ely ig er organic composition o! t e social capital in its a8erage0 &t is like@ise H%st anot er expression !or t e progressi8e de8elopment o! t e social prod%cti8ity o! labo%r, @ ic is demonstrated precisely by t e !act t at t e same n%mber o! labo%rers, in t e same time, i.e., @it less labo%r, con8ert an e8er-increasing D%antity o! ra@ and a%xiliary materials into prod%cts, t anks to t e gro@ing application o! mac inery and !ixed capital in general0 5o t is gro@ing D%antity o! 8al%e o! t e constant capital I alt o%g indicating t e gro@t o! t e real mass o! %se-8al%es o! @ ic t e constant capital

12*

; apter J&&&

materially consists only approximately I corresponds a progressi8e c eapening o! prod%cts0 E8ery indi8id%al prod%ct, considered by itsel!, contains a smaller D%antity o! labo%r t an it did on a lo@er le8el o! prod%ction, @ ere t e capital in8ested in @ages occ%pies a !ar greater place compared to t e capital in8ested in means o! prod%ction0 5 e ypot etical series dra@n %p at t e beginning o! t is c apter expresses, t ere!ore, t e act%al tendency o! capitalist prod%ction0 5 is mode o! prod%ction prod%ces a progressi8e relati8e decrease o! t e 8ariable capital as compared to t e constant capital, and conseD%ently a contin%o%sly rising organic composition o! t e total capital0 5 e immediate res%lt o! t is is t at t e rate o! s%rpl%s-8al%e, at t e same, or e8en a rising, degree o! labo%r exploitation, is represented by a contin%ally !alling general rate o! pro!it0 BWe s all see later /,resent edition: ; 0 J&40 I 0d01 @ y t is !all does not mani!est itsel! in an absol%te !orm, b%t rat er as a tendency to@ard a progressi8e !all0C 5 e progressi8e tendency o! t e general rate o! pro!it to !all is, t ere!ore, H%st an e pression peculiar to the capitalist mode of production o! t e progressi8e de8elopment o! t e social prod%cti8ity o! labo%r0 5 is does not mean to say t at t e rate o! pro!it may not !all temporarily !or ot er reasons0 A%t proceeding !rom t e nat%re o! t e capitalist mode o! prod%ction, it is t ereby pro8ed logical necessity t at in its de8elopment t e general a8erage rate o! s%rpl%s-8al%e m%st express itsel! in a !alling general rate o! pro!it0 $ince t e mass o! t e employed li8ing labo%r is contin%ally on t e decline as compared to t e mass o! materialised labo%r set in motion by it, i.e., to t e prod%cti8ely cons%med means o! prod%ction, it !ollo@s t at t e portion o! li8ing labo%r, %npaid and congealed in s%rpl%s-8al%e, m%st also be contin%ally on t e decrease compared to t e amo%nt o! 8al%e represented by t e in8ested total capital0 $ince t e ratio o! t e mass o! s%rpl%s-8al%e to t e 8al%e o! t e in8ested total capital !orms t e rate o! pro!it, t is rate m%st constantly !all0 $imple as t is la@ appears !rom t e !oregoing statements, all o! political economy as so !ar ad little s%ccess in disco8ering it, as @e s all see in a later part0 /K0 Marx, 4heorien ber den Mehrwert0 K0 MarxNF0 Engels, "er-e, Aand <6, 5eil <, $0 23+-66, +21-23 . J 0d.1 5 e economists percei8ed t e p enomenon and c%dgelled t eir brains in tort%o%s attempts to interpret it0 $ince t is la@ is o! great importance to capitalist prod%ction, it may be said to be a mystery @ ose sol%tion as been t e goal o! all political economy since ?dam $mit , t e di!!erence bet@een t e 8ario%s sc ools since ?dam $mit a8ing been in t e di8ergent approac es to a sol%tion0 W en @e consider, on t e ot er and, t at %p to t e present political economy as been r%nning in circles ro%nd t e distinction bet@een constant and 8ariable capital, b%t as ne8er kno@n o@ to de!ine it acc%rately# t at it as ne8er separated s%rpl%s-8al%e !rom pro!it, and ne8er e8en considered pro!it in its p%re !orm as distinct !rom its di!!erent, independent components, s%c as ind%strial pro!it, commercial pro!it, interest, and gro%nd-rent# t at it as ne8er t oro%g ly analysed t e di!!erences in t e organic composition o! capital, and, !or t is reason, as ne8er t o%g t o! analysing t e !ormation o! t e general rate o! pro!it I i! @e consider all t is, t e !ail%re to sol8e t is riddle is no longer s%rprising0 We intentionally present t is la@ be!ore going on to t e di8ision o! pro!it into di!!erent independent categories0 5 e !act t at t is analysis is made independently o! t e di8ision o! pro!it into di!!erent parts, @ ic !all to t e s are o! di!!erent categories o! people, s o@s !rom t e o%tset t at t is la@ is, in its entirety, independent o! t is di8ision, and H%st as independent o! t e m%t%al relations o! t e res%ltant categories o! pro!it0 5 e pro!it to @ ic @e are ere re!erring is b%t anot er name !or s%rpl%s-8al%e itsel!, @ ic is presented only in its relation to total capital rat er t an to 8ariable capital, !rom @ ic it arises0 5 e drop in t e rate o! pro!it, t ere!ore, expresses t e !alling relation o! s%rpl%s-8al%e to ad8anced total capital, and is !or t is reason independent o! any di8ision @ atsoe8er o! t is s%rpl%s-8al%e among t e 8ario%s categories0 We a8e seen t at at a certain stage o! capitalist de8elopment, @ ere t e organic composition o! capital c : 8 @as += : 1==, a rate o! s%rpl%s-8al%e o! 1==T @as expressed in a rate o! pro!it o! 66W T, and t at at a ig er stage, @ ere c : 8 @as 2== : 1==, t e same rate o! s%rpl%s-8al%e @as expressed in a rate o! pro!it o! only <=T0 W at is tr%e o! di!!erent s%ccessi8e stages o!

1+=

; apter J&&&

de8elopment in one co%ntry, is also tr%e o! di!!erent coexisting stages o! de8elopment in di!!erent co%ntries0 &n an %nde8eloped co%ntry, in @ ic t e !ormer composition o! capital is t e a8erage, t e general rate o! pro!it @o%ld R 66WT, @ ile in a co%ntry @it t e latter composition and a m%c ig er stage o! de8elopment it @o%ld R <=T0 5 e di!!erence bet@een t e t@o national rates o! pro!it mig t disappear, or e8en be re8ersed, i! labo%r @ere less prod%cti8e in t e less de8eloped co%ntry, so t at a larger D%antity o! labo%r @ere to be represented in a smaller D%antity o! t e same commodities, and a larger exc ange-8al%e @ere represented in less %se-8al%e0 5 e labo%rer @o%ld t en spend more o! is time in reprod%cing is o@n means o! s%bsistence, or t eir 8al%e, and less time in prod%cing s%rpl%s8al%e# conseD%ently, e @o%ld per!orm less s%rpl%s-labo%r, @it t e res%lt t at t e rate o! s%rpl%s8al%e @o%ld be lo@er0 $%ppose, t e labo%rer o! t e less de8eloped co%ntry @ere to @ork W o! t e @orking-day !or imsel! and X !or t e capitalist# in accordance @it t e abo8e ill%stration, t e same labo%r-po@er @o%ld t en be paid @it 133X and @o%ld !%rnis a s%rpl%s o! only 6=W0 ? constant capital o! += @o%ld correspond to a 8ariable capital o! 233X0 5 e rate o! s%rpl%s-8al%e @o%ld amo%nt to 66W : 133X R +=T, and t e rate o! pro!it to 66W : 133X, or approximately 36T0 $ince @e a8e not so !ar analysed t e di!!erent component parts o! pro!it, i.e., t ey do not !or t e present exist !or %s, @e make t e !ollo@ing remarks be!ore and merely to a8oid mis%nderstanding: &n comparing co%ntries in di!!erent stages o! de8elopment it @o%ld be a big mistake to meas%re t e le8el o! t e national rate o! pro!it by, say, t e le8el o! t e national rate o! interest, namely @ en comparing co%ntries @it a de8eloped capitalist prod%ction @it co%ntries in @ ic labo%r as not yet been !ormally s%bHected to capital, alt o%g in reality t e labo%rer is exploited by t e capitalist Bas, !or instance, in &ndia, @ ere t e ryot manages is !arm as an independent prod%cer @ ose prod%ction as s%c is not, t ere!ore, as yet s%bordinated to capital, alt o%g t e %s%rer may not only rob im o! is entire s%rpl%s-labo%r by means o! interest, b%t may also, to %se a capitalist term, ack o!! a part o! is @ageC0 5 is interest comprises all t e pro!it, and more t an t e pro!it, instead o! merely expressing an aliD%ot part o! t e prod%ced s%rpl%s-8al%e, or pro!it, as it does in co%ntries @it a de8eloped capitalist prod%ction0 3n t e ot er and, t e rate o! interest is, in t is case, mostly determined by relations Bloans granted by %s%rers to o@ners o! larger estates @ o dra@ gro%nd-rentC @ ic a8e not ing to do @it pro!it, and rat er indicate to @ at extent %s%ry appropriates gro%nd-rent0 ?s regards co%ntries possessing di!!erent stages o! de8elopment o! capitalist prod%ction, and conseD%ently capitals o! di!!erent organic composition, a co%ntry @ ere t e normal @orking-day is s orter t an anot er"s may a8e a ig er rate o! s%rpl%s-8al%e Bone o! t e !actors @ ic determines t e rate o! pro!itC0 'irst, i! t e Englis ten- o%r @orking-day is, on acco%nt o! its ig er intensity, eD%al to an ?%strian @orking-day o! 12 o%rs, t en, di8iding t e @orking-day eD%ally in bot instances, + o%rs o! Englis s%rpl%s-labo%r may represent a greater 8al%e on t e @orld-market t an > o%rs o! ?%strian s%rpl%s-labo%r0 Second, a larger portion o! t e Englis @orking-day t an o! t e ?%strian may represent s%rpl%s-labo%r0 5 e la@ o! t e !alling rate o! pro!it, @ ic expresses t e same, or e8en a ig er, rate o! s%rpl%s8al%e, states, in ot er @ords, t at any D%antity o! t e a8erage social capital, say, a capital o! 1==, comprises an e8er larger portion or means o! labo%r, and an e8er smaller portion o! li8ing labo%r0 5 ere!ore, since t e aggregate mass o! li8ing labo%r operating t e means o! prod%ction decreases in relation to t e 8al%e o! t ese means o! prod%ction, it !ollo@s t at t e %npaid labo%r and t e portion o! 8al%e in @ ic it is expressed m%st decline as compared to t e 8al%e o! t e ad8anced total capital0 3r: ?n e8er smaller aliD%ot part o! in8ested total capital is con8erted into li8ing labo%r, and t is total capital, t ere!ore, absorbs in proportion to its magnit%de less and less s%rpl%s-labo%r, alt o%g t e %npaid part o! t e labo%r applied may at t e same time gro@ in relation to t e paid part0 5 e relati8e decrease o! t e 8ariable and increase o! t e constant capital, o@e8er m%c bot parts may gro@ in absol%te magnit%de, is, as @e a8e said, b%t anot er expression !or greater prod%cti8ity o! labo%r0

1+1

; apter J&&&

'et a capital o! 1== consist o! 8= c U <=8, and t e latter R <= labo%rers0 'et t e rate o! s%rpl%s8al%e be 1==T, i.e., t e labo%rers @ork al! t e day !or t emsel8es and t e ot er al! !or t e capitalist0 -o@ let t e capital o! 1== in a less de8eloped co%ntry R <= c U 8=8, and let t e latter R 8= labo%rers0 A%t t ese labo%rers reD%ire <N3 o! t e day !or t emsel8es, and @ork only 1N3 !or t e capitalist0 E8eryt ing else being eD%al, t e labo%rers in t e !irst case prod%ce a 8al%e o! 2=, and in t e second o! 1<=0 5 e !irst capital prod%ces 8= c U <=8 U <=s R 1<=# rate o! pro!it R <=T0 5 e second capital, <=c U 8=8 U 2=s R 12=# rate o! pro!it 2=T0 &n t e second case t e rate o! pro!it is, t ere!ore, do%ble t e !irst, alt o%g t e rate o! s%rpl%s-8al%e in t e !irst R 1==T, @ ic is do%ble t at o! t e second, @ ere it is only +=T0 A%t t en, a capital o! t e same magnit%de appropriates t e s%rpl%s-labo%r o! only <= labo%rers in t e !irst case, and o! 8= labo%rers in t e second case0 5 e la@ o! t e progressi8e !alling o! t e rate o! pro!it, or t e relati8e decline o! appropriated s%rpl%s-labo%r compared to t e mass o! materialised labo%r set in motion by li8ing labo%r, does not r%le o%t in any @ay t at t e absol%te mass o! exploited labo%r set in motion by t e social capital, and conseD%ently t e absol%te mass o! t e s%rpl%s-labo%r it appropriates, may gro@# nor, t at t e capitals controlled by indi8id%al capitalists may dispose o! a gro@ing mass o! labo%r and, ence, o! s%rpl%s-labo%r, t e latter e8en t o%g t e n%mber o! labo%rers t ey employ does not increase0 5ake a certain @orking pop%lation o!, say, t@o million0 ?ss%me, !%rt ermore, t at t e lengt and intensity o! t e a8erage @orking-day, and t e le8el o! @ages, and t ereby t e proportion bet@een necessary and s%rpl%s-labo%r, are gi8en0 &n t at case t e aggregate labo%r o! t ese t@o million, and t eir s%rpl%s-labo%r expressed in s%rpl%s-8al%e, al@ays prod%ces t e same magnit%de o! 8al%e0 A%t @it t e gro@t o! t e mass o! t e constant B!ixed and circ%latingC capital set in motion by t is labo%r, t is prod%ced D%antity o! 8al%e declines in relation to t e 8al%e o! t is capital, @ ic 8al%e gro@s @it its mass, e8en i! not in D%ite t e same proportion0 5 is ratio, and conseD%ently t e rate o! pro!it, s rinks in spite o! t e !act t at t e mass o! commanded li8ing labo%r is t e same as be!ore, and t e same amo%nt o! s%rpl%s-labo%r is s%cked o%t o! it by t e capital0 &t c anges beca%se t e mass o! materialised labo%r set in motion by li8ing labo%r increases, and not beca%se t e mass o! li8ing labo%r as s r%nk0 &t is a relati8e decrease, not an absol%te one, and as, in !act, not ing to do @it t e absol%te magnit%de o! t e labo%r and s%rpl%s-labo%r set in motion0 5 e drop in t e rate o! pro!it is not d%e to an absol%te, b%t only to a relati8e decrease o! t e 8ariable part o! t e total capital, i.e., to its decrease in relation to t e constant part0 W at applies to any gi8en mass o! labo%r and s%rpl%s-labo%r, also applies to a gro@ing n%mber o! labo%rers, and, t %s, %nder t e abo8e ass%mption, to any gro@ing mass o! commanded labo%r in general, and to its %npaid part, t e s%rpl%s-labo%r, in partic%lar0 &! t e @orking pop%lation increases !rom t@o million to t ree, and i! t e 8ariable capital in8ested in @ages also rises to t ree million !rom its !ormer t@o million, @ ile t e constant capital rises !rom !o%r million to !i!teen million, t en, %nder t e abo8e ass%mption o! a constant @orking-day and a constant rate o! s%rpl%s-8al%e, t e mass o! s%rpl%s-labo%r, and o! s%rpl%s-8al%e, rises by one- al!, i.e., +=T, !rom t@o million to t ree0 -e8ert eless, in spite o! t is gro@t o! t e absol%te mass o! s%rpl%s-labo%r, and ence o! s%rpl%s-8al%e, by +=T, t e ratio o! 8ariable to constant capital @o%ld !all !rom < : 2 to 3 : 1+, and t e ratio o! s%rpl%s-8al%e to total capital @o%ld be Bin millionsC &0 2c U <8 U <s# ; R 6, p" R 33XT0 &&0 1+c U 38 U 3s# ; R 18, p" R 16WT0 W ile t e mass o! s%rpl%s-8al%e as increased by one- al!, t e rate o! pro!it as !allen by oneal!0 6o@e8er, t e pro!it is only t e s%rpl%s-8al%e calc%lated in relation to t e total social capital, and t e mass o! pro!it, its absol%te magnit%de, is socially eD%al to t e absol%te magnit%de o! t e s%rpl%s-8al%e0 5 e absol%te magnit%de o! t e pro!it, its total amo%nt, @o%ld, t ere!ore, a8e gro@n by +=T, in spite o! its enormo%s relati8e decrease compared to t e ad8anced total capital,

1+<

; apter J&&&

or in spite o! t e enormo%s decrease in t e general rate o! pro!it0 5 e n%mber o! labo%rers employed by capital, ence t e absol%te mass o! t e labo%r set in motion by it, and t ere!ore t e absol%te mass o! s%rpl%s-labo%r absorbed by it, t e mass o! t e s%rpl%s-8al%e prod%ced by it, and t ere!ore t e absol%te mass o! t e pro!it prod%ced by it, can, conseD%ently, increase, and increase progressi8ely, in spite o! t e progressi8e drop in t e rate o! pro!it0 ?nd t is not only can be so0 ?side !rom temporary !l%ct%ations it must be so, on t e basis o! capitalist prod%ction0 Essentially, t e capitalist process o! prod%ction is sim%ltaneo%sly a process o! acc%m%lation0 We a8e s o@n t at @it t e de8elopment o! capitalist prod%ction t e mass o! 8al%es to be simply reprod%ced, or maintained, increases as t e prod%cti8ity o! labo%r gro@s, e8en i! t e labo%rpo@er employed s o%ld remain constant0 A%t @it t e de8elopment o! social prod%cti8ity o! labo%r t e mass o! prod%ced %se-8al%es, o! @ ic t e means o! prod%ction !orm a part, gro@s still more0 ?nd t e additional labo%r, t ro%g @ ose appropriation t is additional @ealt can be recon8erted into capital, does not depend on t e 8al%e, b%t on t e mass o! t ese means o! prod%ction Bincl%ding means o! s%bsistenceC, beca%se in t e prod%ction process t e labo%rers a8e not ing to do @it t e 8al%e, b%t @it t e %se-8al%e, o! t e means o! prod%ction0 ?cc%m%lation itsel!, o@e8er, and t e concentration o! capital t at goes @it it, is a material means o! increasing prod%cti8eness0 -o@, t is gro@t o! t e means o! prod%ction incl%des t e gro@t o! t e @orking pop%lation, t e creation o! a @orking pop%lation, @ ic corresponds to t e s%rpl%s-capital, or e8en exceeds its general reD%irements, t %s leading to an o8er-pop%lation o! @orkers0 ? momentary excess o! s%rpl%s-capital o8er t e @orking pop%lation it as commandeered, @o%ld a8e a t@o-!old e!!ect0 &t co%ld, on t e one and, by raising @ages, mitigate t e ad8erse conditions @ ic decimate t e o!!spring o! t e labo%rers and @o%ld make marriages easier among t em, so as grad%ally to increase t e pop%lation0 3n t e ot er and, by applying met ods @ ic yield relati8e s%rpl%s-8al%e Bintrod%ction and impro8ement o! mac ineryC it @o%ld prod%ce a !ar more rapid, arti!icial, relati8e o8er-pop%lation, @ ic in its t%rn, @o%ld be a breeding-gro%nd !or a really s@i!t propagation o! t e pop%lation, since %nder capitalist prod%ction misery prod%ces pop%lation0 &t t ere!ore !ollo@s o! itsel! !rom t e nat%re o! t e capitalist process o! acc%m%lation, @ ic is b%t one !acet o! t e capitalist prod%ction process, t at t e increased mass o! means o! prod%ction t at is to be con8erted into capital al@ays !inds a correspondingly increased, e8en excessi8e, exploitable @orker pop%lation0 ?s t e process o! prod%ction and acc%m%lation ad8ances t ere!ore, t e mass o! a8ailable and appropriated s%rpl%slabo%r, and ence t e absol%te mass o! pro!it appropriated by t e social capital, must gro@0 ?long @it t e 8ol%me, o@e8er, t e same la@s o! prod%ction and acc%m%lation increase also t e 8al%e o! t e constant capital in a mo%nting progression more rapidly t an t at o! t e 8ariable part o! capital, in8ested as it is in li8ing labo%r0 6ence, t e same la@s prod%ce !or t e social capital a gro@ing absol%te mass o! pro!it, and a !alling rate o! pro!it0 We s all entirely ignore ere t at @it t e ad8ance o! capitalist prod%ction and t e attendant de8elopment o! t e prod%cti8eness o! social labo%r and m%ltiplication o! prod%ction branc es, ence prod%cts, t e same amo%nt o! 8al%e represents a progressi8ely increasing mass o! %se8al%es and enHoyments0 5 e de8elopment o! capitalist prod%ction and acc%m%lation li!ts labo%r-processes to an increasingly enlarged scale and t %s imparts to t em e8er greater dimensions, and in8ol8es accordingly larger in8estments o! capital !or eac indi8id%al establis ment0 ? mo%nting concentration o! capitals Baccompanied, t o%g on a smaller scale, by an increase in t e n%mber o! capitalistsC is, t ere!ore, one o! its material reD%irements as @ell as one o! its res%lts0 6and in and @it it, m%t%ally interacting, t ere occ%rs a progressi8e expropriation o! t e more or less direct prod%cers0 &t is, t en, nat%ral !or t e indi8id%al capitalists to command increasingly large armies o! labo%rers Bno matter o@ m%c t e 8ariable capital may decrease in relation to t e constantC, and nat%ral, too, t at t e mass o! s%rpl%s-8al%e, and ence pro!it, appropriated by t em, s o%ld gro@ sim%ltaneo%sly @it , and in spite o!, t e !all in t e rate o! pro!it0 5 e ca%ses @ ic

1+3

; apter J&&&

concentrate masses o! labo%rers %nder t e command o! indi8id%al capitalists, are t e 8ery same t at s@ell t e mass o! t e in8ested !ixed capital, and a%xiliary and ra@ materials, in mo%nting proportion as compared to t e mass o! employed li8ing labo%r0 &t reD%ires no more t an a passing remark at t is point to indicate t at, gi8en a certain labo%ring pop%lation, t e mass o! s%rpl%s-8al%e, ence t e absol%te mass o! pro!it, m%st gro@ i! t e rate o! s%rpl%s-8al%e increases, be it t ro%g a lengt ening or intensi!ication o! t e @orking-day, or t ro%g a drop in t e 8al%e o! @ages d%e to an increase in t e prod%cti8eness o! labo%r, and t at it m%st do so in spite o! t e relati8e decrease o! 8ariable capital in respect to constant0 5 e same de8elopment o! t e prod%cti8eness o! social labo%r, t e same la@s @ ic express t emsel8es in a relati8e decrease o! 8ariable as compared to total capital, and in t e t ereby !acilitated acc%m%lation, @ ile t is acc%m%lation in its t%rn becomes a starting-point !or t e !%rt er de8elopment o! t e prod%cti8eness and !or a !%rt er relati8e decrease o! 8ariable capital I t is same de8elopment mani!ests itsel!, aside !rom temporary !l%ct%ations, in a progressi8e increase o! t e total employed labo%r-po@er and a progressi8e increase o! t e absol%te mass o! s%rpl%s-8al%e, and ence o! pro!it0 -o@, @ at m%st be t e !orm o! t is do%ble-edged la@ o! a decrease in t e rate o! pro!it and a sim%ltaneo%s increase in t e absol%te mass o! pro!it arising !rom t e same ca%sesQ ?s a la@ based on t e !act t at %nder gi8en conditions t e appropriated mass o! s%rpl%s-labo%r, ence o! s%rpl%s8al%e, increases, and t at, so !ar as t e total capital is concerned, or t e indi8id%al capital as an aliD%ot part o! t e total capital, pro!it and s%rpl%s-8al%e are identical magnit%desQ 'et %s take an aliD%ot part o! capital %pon @ ic @e calc%late t e rate o! pro!it, e.g., 1==0 5 ese 1== represent t e a8erage composition o! t e total capital, say, 8= c U <=80 We a8e seen in t e second part o! t is book t at t e a8erage rate o! pro!it in t e 8ario%s branc es o! prod%ction is determined not by t e partic%lar composition o! eac indi8id%al capital, b%t by t e a8erage social composition0 ?s t e 8ariable capital decreases relati8e to t e constant, ence t e total capital o! 1==, t e rate o! pro!it, or t e relati8e magnit%de o! s%rpl%s-8al%e, i.e., its ratio to t e ad8anced total capital o! 1==, !alls e8en t o%g t e intensity o! exploitation @ere to remain t e same, or e8en to increase0 A%t it is not t is relati8e magnit%de alone @ ic !alls0 5 e magnit%de o! t e s%rpl%s-8al%e or pro!it absorbed by t e total capital o! 1== also !alls absol%tely0 ?t a rate o! s%rpl%s-8al%e o! 1==T, a capital o! 6= c U 2=8 prod%ces a mass o! s%rpl%s-8al%e, and ence o! pro!it, amo%nting to 2=# a capital o! 8= c U <=8 a mass o! pro!it o! 3=# and !or a capital o! 8= c U <=8 t e pro!it !alls to <=0 5 is !alling applies to t e mass o! s%rpl%s-8al%e, and ence o! pro!it, and is d%e to t e !act t at t e total capital o! 1== employs less li8ing labo%r, and, t e intensity o! labo%r exploitation remaining t e same, sets in motion less s%rpl%s-labo%r, and t ere!ore prod%ces less s%rpl%s-8al%e0 5aking any aliD%ot part o! t e social capital, i.e., a capital o! a8erage composition, as a standard by @ ic to meas%re s%rpl%s-8al%e I and t is is done in all pro!it calc%lations I a relati8e !all o! s%rpl%s-8al%e is generally identical @it its absol%te !all0 &n t e cases gi8en abo8e, t e rate o! pro!it sinks !rom 2=T to 3=T and to <=T, beca%se, in !act, t e mass o! s%rpl%s-8al%e, and ence o! pro!it, prod%ced by t e same capital !alls absol%tely !rom 2= to 3= and to <=0 $ince t e magnit%de o! t e 8al%e o! t e capital, by @ ic t e s%rpl%s-8al%e is meas%red, is gi8en as 1==, a !all in t e proportion o! s%rpl%s-8al%e to t is gi8en magnit%de can be only anot er expression !or t e decrease o! t e absol%te magnit%de o! s%rpl%s-8al%e and pro!it0 5 is is, indeed, a ta%tology0 A%t, as s o@n, t e !act t at t is decrease occ%rs at all, arises !rom t e nat%re o! t e de8elopment o! t e capitalist process o! prod%ction0 3n t e ot er and, o@e8er, t e same ca%ses @ ic bring abo%t an absol%te decrease o! s%rpl%s8al%e, and ence pro!it, on a gi8en capital, and conseD%ently o! t e rate o! pro!it calc%lated in per cent, prod%ce an increase in t e absol%te mass o! s%rpl%s-8al%e, and ence o! pro!it, appropriated by t e social capital Bi.e., by all capitalists taken as a @ oleC0 6o@ does t is occ%r, @ at is t e only @ay in @ ic t is can occ%r, or @ at are t e conditions obtaining in t is seeming contradictionQ

1+2

; apter J&&&

&! any aliD%ot part R 1== o! t e social capital, and ence any 1== o! a8erage social composition, is a gi8en magnit%de, !or @ ic t ere!ore a !all in t e rate o! pro!it coincides @it a !all in t e absol%te magnit%de o! t e pro!it beca%se t e capital @ ic ere ser8es as a standard o! meas%rement is a constant magnit%de, t en t e magnit%de o! t e social capital like t at o! t e capital in t e ands o! indi8id%al capitalists, is 8ariable, and in keeping @it o%r ass%mptions it m%st 8ary in8ersely @it t e decrease o! its 8ariable portion0 &n o%r !ormer ill%stration, @ en t e percentage o! composition @as 6= c U 2=8, t e corresponding s%rpl%s-8al%e, or pro!it, @as 2=, and ence t e rate o! pro!it 2=T0 $%ppose, t e total capital in t is stage o! composition @as one million0 5 en t e total s%rpl%s-8al%e, and ence t e total pro!it, amo%nted to 2==,===0 -o@, i! t e composition later R 8= c U <=8, @ ile t e degree o! labo%r exploitation remained t e same, t en t e s%rpl%s-8al%e or pro!it !or eac 1== R <=0 A%t since t e absol%te mass o! s%rpl%s-8al%e or pro!it increases, as demonstrated, in spite o! t e decreasing rate o! pro!it or t e decreasing prod%ction o! s%rpl%s-8al%e by e8ery 1== o! capital I increases, say, !rom 2==,=== to 22=,===, t en t is occ%rs solely beca%se t e total capital @ ic !ormed at t e time o! t is ne@ composition as risen to <,<==,===0 5 e mass o! t e total capital set in motion as risen to <<=T, @ ile t e rate o! pro!it as !allen by +=T0 6ad t e total capital no more t an do%bled, it @o%ld a8e to prod%ce as m%c s%rpl%s-8al%e and pro!it to obtain a rate o! pro!it o! <=T as t e old capital o! 1,===,=== prod%ced at 2=T0 6ad it gro@n to less t an do%ble, it @o%ld a8e prod%ced less s%rpl%s-8al%e, or pro!it, t an t e old capital o! 1,===,===, @ ic , in its !ormer composition, @o%ld a8e ad to gro@ !rom 1,===,=== to no more t an 1,1==,=== to raise its s%rpl%s-8al%e !rom 2==,=== to 22=,===0 We again meet ere t e pre8io%sly de!ined la@ t at t e relati8e decrease o! t e 8ariable capital, ence t e de8elopment o! t e social prod%cti8eness o! labo%r, in8ol8es an increasingly large mass o! total capital to set in motion t e same D%antity o! labo%r-po@er and sD%eeEe o%t t e same D%antity o! s%rpl%s-labo%r0 ;onseD%ently, t e possibility o! a relati8e s%rpl%s o! labo%ring people de8elops proportionately to t e ad8ances made by capitalist prod%ction not beca%se t e prod%cti8eness o! social labo%r decreases, b%t beca%se it increases0 &t does not t ere!ore arise o%t o! an absol%te disproportion bet@een labo%r and t e means o! s%bsistence, or t e means !or t e prod%ction o! t ese means o! s%bsistence, b%t o%t o! a disproportion occasioned by capitalist exploitation o! labo%r, a disproportion bet@een t e progressi8e gro@t o! capital and its relati8ely s rinking need !or an increasing pop%lation0 $ o%ld t e rate o! pro!it !all by +=T, it @o%ld s rink one- al!0 &! t e mass o! pro!it is to remain t e same, t e capital m%st be do%bled0 For t e mass o! pro!it made at a declining rate o! pro!it to remain t e same, t e m%ltiplier indicating t e gro@t o! t e total capital m%st be eD%al to t e di8isor indicating t e !all o! t e rate o! pro!it0 &! t e rate o! pro!it !alls !rom 2= to <=, t e total capital m%st rise in8ersely at t e rate o! <= : 2= to obtain t e same res%lt0 &! t e rate o! pro!it !alls !rom 2= to 8, t e capital @o%ld a8e to increase at t e rate o! 8 : 2=, or !i8e-!old0 ? capital o! 1,===,=== at 2=T prod%ces 2==,===, and a capital o! +,===,=== at 8T like@ise prod%ces 2==,===0 5 is applies i! @e @ant t e res%lt to remain t e same0 A%t i! t e res%lt is to be ig er, t en t e capital m%st gro@ at a greater rate t an t e rate o! pro!it !alls0 &n ot er @ords, !or t e 8ariable portion o! t e total capital not to remain t e same in absol%te terms, b%t to increase absol%tely in spite o! its !alling in percentage o! t e total capital, t e total capital m%st gro@ at a !aster rate t an t e percentage o! t e 8ariable capital !alls0 &t m%st gro@ so considerably t at in its ne@ composition it s o%ld reD%ire more t an t e old portion o! 8ariable capital to p%rc ase labo%rpo@er0 &! t e 8ariable portion o! a capital R 1== s o%ld !all !rom 2= to <=, t e total capital m%st rise ig er t an <== to be able to employ a larger 8ariable capital t an 2=0 E8en i! t e exploited mass o! t e @orking pop%lation @ere to remain constant, and only t e lengt and intensity o! t e @orking-day @ere to increase, t e mass o! t e in8ested capital @o%ld a8e to increase, since it @o%ld a8e to be greater in order to employ t e same mass o! labo%r %nder t e old conditions o! exploitation a!ter t e composition o! capital c anges0

1++

; apter J&&&

5 %s, t e same de8elopment o! t e social prod%cti8eness o! labo%r expresses itsel! @it t e progress o! capitalist prod%ction on t e one and in a tendency o! t e rate o! pro!it to !all progressi8ely and, on t e ot er, in a progressi8e gro@t o! t e absol%te mass o! t e appropriated s%rpl%s-8al%e, or pro!it# so t at on t e @ ole a relati8e decrease o! 8ariable capital and pro!it is accompanied by an absol%te increase o! bot 0 5 is t@o-!old e!!ect, as @e a8e seen, can express itsel! only in a gro@t o! t e total capital at a pace more rapid t an t at at @ ic t e rate o! pro!it !alls0 For an absol%tely increased 8ariable capital to be employed in a capital o! ig er composition, or one in @ ic t e constant capital as increased relati8ely more, t e total capital m%st not only gro@ proportionately to its ig er composition, b%t still more rapidly0 &t !ollo@s, t en, t at as t e capitalist mode o! prod%ction de8elops, an e8er larger D%antity o! capital is reD%ired to employ t e same, let alone an increased, amo%nt o! labo%r-po@er0 5 %s, on a capitalist !o%ndation, t e increasing prod%cti8eness o! labo%r necessarily and permanently creates a seeming o8er-pop%lation o! labo%ring people0 &! t e 8ariable capital !orms H%st 1N6 o! t e total capital instead o! t e !ormer Z, t e total capital m%st be trebled to employ t e same amo%nt o! labo%r-po@er0 ?nd i! t@ice as m%c labo%r-po@er is to be employed, t e total capital m%st increase six-!old0 ,olitical economy, @ ic as %ntil no@ been %nable to explain t e la@ o! t e tendency o! t e rate o! pro!it to !all, pointed sel!-consolingly to t e increasing mass o! pro!it, i.e., to t e gro@t o! t e absol%te magnit%de o! pro!it, be it !or t e indi8id%al capitalist or !or t e social capital, b%t t is @as also based on mere platit%de and spec%lation0 5o say t at t e mass o! pro!it is determined by t@o !actors I !irst, t e rate o! pro!it, and, secondly, t e mass o! capital in8ested at t is rate, is mere ta%tology0 &t is t ere!ore b%t a corollary o! t is ta%tology to say t at t ere is a possibility !or t e mass o! pro!it to gro@ e8en t o%g t e rate o! pro!it may !all at t e same time0 &t does not elp %s one step !art er, since it is H%st as possible !or t e capital to increase @it o%t t e mass o! pro!it gro@ing, and !or it to increase e8en @ ile t e mass o! pro!it !alls0 For 1== at <+T yields <+, and 2== at +T yields only <=0 1 A%t i! t e same ca%ses @ ic make t e rate o! pro!it !all, entail t e acc%m%lation, i.e., t e !ormation, o! additional capital, and i! eac additional capital employs additional labo%r and prod%ces additional s%rpl%s8al%e# i!, on t e ot er and, t e mere !all in t e rate o! pro!it implies t at t e constant capital, and @it it t e total old capital, a8e increased, t en t is process ceases to be mysterio%s0 We s all see later /K0 Marx, 4heorien ber den Mehrwert. K0 MarxNF0 Engels, "er-e, Aand <6, 5eil <,0 $0 23+-66, +21- 23. J 0d1 to @ at deliberate !alsi!ications some people resort in t eir calc%lations to spirit a@ay t e possibility o! an increase in t e mass o! pro!it sim%ltaneo%s @it a decrease in t e rate o! pro!it0 We a8e s o@n o@ t e same ca%ses t at bring abo%t a tendency !or t e general rate o! pro!it to !all necessitate an accelerated acc%m%lation o! capital and, conseD%ently, an increase in t e absol%te magnit%de, or total mass, o! t e s%rpl%s-labo%r Bs%rpl%s-8al%e, pro!itC appropriated by it0 P%st as e8eryt ing appears re8ersed in competition, and t %s in t e conscio%sness o! t e agents o! competition, so also t is la@, t is inner and necessary connection bet@een t@o seeming contradictions0 &t is e8ident t at @it in t e proportions indicated abo8e a capitalist disposing o! a large capital @ill recei8e a larger mass o! pro!it t an a small capitalist making seemingly ig pro!its0 E8en a c%rsory examination o! competition s o@s, !%rt ermore, t at %nder certain circ%mstances, @ en t e greater capitalist @is es to make room !or imsel! on t e market, and to cro@d o%t t e smaller ones, as appens in times o! crises, e makes practical %se o! t is, i.e., e deliberately lo@ers is rate o! pro!it in order to dri8e t e smaller ones to t e @all0 Merc ants capital, @ ic @e s all describe in detail later, also notably ex ibits p enomena @ ic appear to attrib%te a !all in pro!it to an expansion o! b%siness, and t %s o! capital0 5 e scienti!ic expression !or t is !alse conception @ill be gi8en later0 $imilar s%per!icial obser8ations res%lt !rom a comparison o! rates o! pro!it in indi8id%al lines o! b%siness, disting%is ed eit er as s%bHect to !ree competition, or to monopoly0 5 e %tterly s allo@ conception existing in t e minds o! t e agents

1+6

; apter J&&&

o! competition is !o%nd in )osc er, namely, t at a red%ction in t e rate o! pro!it is Kmore pr%dent and %maneL0 /)osc er, Die Grundlage der $ationalK-onomie, 3 ?%!lage, 18+8, 1=8, $0 1*< . J 0d.1 5 e !all in t e rate o! pro!it appears in t is case as an effect o! an increase in capital and o! t e concomitant calc%lation o! t e capitalist t at t e mass o! pro!its pocketed by im @ill be greater at a smaller rate o! pro!it0 5 is entire conception B@it t e exception o! ?dam $mit "s, @ ic @e s all mention laterC /K0 Marx, 4heorien ber den Mehrwert. K0 MarxNF0 Engels, "er-e, Aand <6, 5eil <, $0 <12-<80 I 0d01 rests on an %tter misappre ension o! @ at t e general rate o! pro!it is, and on t e cr%de notion t at prices are act%ally determined by adding a more or less arbitrary D%ota o! pro!it to t e tr%e 8al%e o! commodities0 ;r%de as t ese ideas are, t ey arise necessarily o%t o! t e in8erted aspect @ ic t e immanent la@s o! capitalist prod%ction represent in competition0 5 e la@ t at a !all in t e rate o! pro!it d%e to t e de8elopment o! prod%cti8eness is accompanied by an increase in t e mass o! pro!it, also expresses itsel! in t e !act t at a !all in t e price o! commodities prod%ced by a capital is accompanied by a relati8e increase o! t e masses o! pro!it contained in t em and realised by t eir sale0 $ince t e de8elopment o! t e prod%cti8eness and t e correspondingly ig er composition o! capital sets in motion an e8er-increasing D%antity o! means o! prod%ction t ro%g a constantly decreasing D%antity o! labo%r, e8ery aliD%ot part o! t e total prod%ct, i.e., e8ery single commodity, or eac partic%lar lot o! commodities in t e total mass o! prod%cts, absorbs less li8ing labo%r, and also contains less materialised labo%r, bot in t e depreciation o! t e !ixed capital applied and in t e ra@ and a%xiliary materials cons%med0 6ence e8ery single commodity contains a smaller s%m o! labo%r materialised in means o! prod%ction and o! labo%r ne@ly added d%ring prod%ction0 5 is ca%ses t e price o! t e indi8id%al commodity to !all0 A%t t e mass o! pro!its contained in t e indi8id%al commodities may ne8ert eless increase i! t e rate o! t e absol%te or relati8e s%rpl%s-8al%e gro@s0 5 e commodity contains less ne@ly added labo%r, b%t its %npaid portion gro@s in relation to its paid portion0 6o@e8er, t is is t e case only @it in certain limits0 Wit t e absol%te amo%nt o! li8ing labo%r ne@ly incorporated in indi8id%al commodities decreasing enormo%sly as prod%ction de8elops, t e absol%te mass o! %npaid labo%r contained in t em @ill like@ise decrease, o@e8er m%c it may a8e gro@n as compared to t e paid portion0 5 e mass o! pro!it on eac indi8id%al commodity @ill s rink considerably @it t e de8elopment o! t e prod%cti8eness o! labo%r, in spite o! a gro@t in t e rate o! s%rpl%s-8al%e0 ?nd t is red%ction, H%st as t e !all in t e rate o! pro!it, is only delayed by t e c eapening o! t e elements o! constant capital and by t e ot er circ%mstances set !ort in t e !irst part o! t is book, @ ic increase t e rate o! pro!it at a gi8en, or e8en !alling, rate o! s%rpl%s-8al%e0 5 at t e price o! indi8id%al commodities @ ose s%m makes %p t e total prod%ct o! capital !alls, means simply t at a certain D%antity o! labo%r is realised in a larger D%antity o! commodities, so t at eac indi8id%al commodity contains less labo%r t an be!ore0 5 is is t e case e8en i! t e price o! one part o! constant capital, s%c as ra@ material, etc0, s o%ld rise0 3%tside o! a !e@ cases B!or instance, i! t e prod%cti8eness o! labo%r %ni!ormly c eapens all elements o! t e constant, and t e 8ariable, capitalC, t e rate o! pro!it @ill !all, in spite o! t e ig er rate o! s%rpl%s-8al%e, 1C beca%se e8en a larger %npaid portion o! t e smaller total amo%nt o! ne@ly added labo%r is smaller t an a smaller aliD%ot %npaid portion o! t e !ormer larger amo%nt and <C beca%se t e ig er composition o! capital is expressed in t e indi8id%al commodity by t e !act t at t e portion o! its 8al%e in @ ic ne@ly added labo%r is materialised decreases in relation to t e portion o! its 8al%e @ ic represents ra@ and a%xiliary material, and t e @ear and tear o! !ixed capital0 5 is c ange in t e proportion o! t e 8ario%s component parts in t e price o! indi8id%al commodities, i.e., t e decrease o! t at portion o! t e price in @ ic ne@ly added li8ing labo%r is materialised, and t e increase o! t at portion o! it in @ ic !ormerly materialised labo%r is represented, is t e !orm @ ic expresses t e decrease o! t e 8ariable in relation to t e constant capital t ro%g t e price o! t e indi8id%al commodities0 P%st as t is decrease is absol%te !or a certain amo%nt o! capital, say o!

1+>

; apter J&&&

1==, it is also absol%te !or e8ery indi8id%al commodity as an aliD%ot part o! t e reprod%ced capital0 6o@e8er, t e rate o! pro!it, i! calc%lated merely on t e elements o! t e price o! an indi8id%al commodity, @o%ld be di!!erent !rom @ at it act%ally is0 ?nd !or t e !ollo@ing reason: /5 e rate o! pro!it is calc%lated on t e total capital in8ested, b%t !or a de!inite time, act%ally a year0 5 e rate o! pro!it is t e ratio o! t e s%rpl%s-8al%e, or pro!it, prod%ced and realised in a year, to t e total capital calc%lated in per cent0 &t is, t ere!ore, not necessarily eD%al to a rate o! pro!it calc%lated !or t e period o! t%rno8er o! t e in8ested capital rat er t an !or a year0 &t is only i! t e capital is t%rned o8er exactly in one year t at t e t@o coincide0 3n t e ot er and, t e pro!it made in t e co%rse o! a year is merely t e s%m o! pro!its on commodities prod%ced and sold d%ring t at same year0 -o@, i! @e calc%late t e pro!it on t e cost-price o! commodities, @e obtain a rate o! pro!it R pNk in @ ic p stands !or t e pro!it realised d%ring one year, and k !or t e s%m o! t e cost-prices o! commodities prod%ced and sold @it in t e same period0 &t is e8ident t at t is rate o! pro!it pNk @ill not coincide @it t e act%al rate o! pro!it pN;, mass o! pro!it di8ided by total capital, %nless k R ;, t at is, %nless t e capital is t%rned o8er in exactly one year0 'et %s take t ree di!!erent conditions o! an ind%strial capital0 &0 ? capital o! V8,=== prod%ces and sells ann%ally +,=== pieces o! a commodity at 3=s0 per piece, t %s making an ann%al t%rno8er o! V>,+==0 &t makes a pro!it o! 1=s0 on eac piece, or V<,+== per year0 E8ery piece, t en, contains <=s0 ad8anced capital and 1=s0 pro!it, so t at t e rate o! pro!it per piece is 1=N<= R +=T0 5 e t%rned-o8er s%m o! V>,+== contains V+,=== ad8anced capital and V<,+== pro!it0 )ate o! pro!it per t%rno8er, pNk, like@ise +=T0 A%t calc%lated on t e total capital t e rate o! pro!it pN; R <,+==N8,=== R 31[T &&0 5 e capital rises to V1=,===0 3@ing to increased prod%cti8ity o! labo%r it is able to prod%ce ann%ally 1=,=== pieces o! t e commodity at a cost-price o! <=s0 per piece0 $%ppose t e commodity is sold at a pro!it o! 2s0, ence at <2s0 per piece0 &n t at case t e price o! t e ann%al prod%ct R V1<,===, o! @ ic V1=,=== is ad8anced capital and V<,=== is pro!it0 5 e rate o! pro!it pNk R 2N<= per piece, and <,===N1=,=== !or t e ann%al t%rno8er, or in bot cases R <=T0 ?nd since t e total capital is eD%al to t e s%m o! t e cost-prices, namely V1=,===, it !ollo@s t at pN;, t e act%al rate o! pro!it, is in t is case also <=T0 &&&0 'et t e capital rise to V1+,=== o@ing to a constant gro@t o! t e prod%cti8eness o! labo%r, and let it ann%ally prod%ce 3=,=== pieces o! t e commodity at a cost-price o! 13s0 per piece, eac piece being sold at a pro!it o! <s0, or at 1+s0 5 e ann%al t%rno8er t ere!ore R 3=,===\1+s0 R V<<,+==, o! @ ic V1*,+== is ad8anced capital and V3,=== pro!it0 5 e rate o! pro!it pNk t en R <N13 R 3,===N1*,+== R 1+ +N13T0 A%t pN; R 3,===N1+,=== R <=T0 We see, t ere!ore, t at only in case &&, @ ere t e t%rned-o8er capital-8al%e is eD%al to t e total capital, t e rate o! pro!it per piece, or per total amo%nt o! t%rno8er, is t e same as t e rate o! pro!it calc%lated on t e total capital0 &n case &, in @ ic t e amo%nt o! t e t%rno8er is smaller t an t e total capital, t e rate o! pro!it calc%lated on t e cost-price o! t e commodity is ig er# and in case &&&, in @ ic t e total capital is smaller t an t e amo%nt o! t e t%rno8er, it is lo@er t an t e act%al rate calc%lated on t e total capital0 5 is is a general r%le0 &n commercial practice, t e t%rno8er is generally calc%lated inacc%rately0 &t is ass%med t at t e capital as been t%rned o8er once as soon as t e s%m o! t e realised commodity-prices eD%als t e s%m o! t e in8ested total capital0 A%t t e capital can complete one @ ole t%rno8er only @ en t e s%m o! t e cost1prices o! t e realised commodities eD%als t e s%m o! t e total capital0 I '.0.1 5 is again s o@s o@ important it is in capitalist prod%ction to regard indi8id%al commodities, or t e commodity-prod%ct o! a certain period, as prod%cts o! ad8anced capital and in relation to t e total capital @ ic prod%ces t em, rat er t an in isolation, by t emsel8es, as mere commodities0

1+8

; apter J&&&

5 e rate o! pro!it m%st be calc%lated by meas%ring t e mass o! prod%ced and realised s%rpl%s8al%e not only in relation to t e cons%med portion o! capital reappearing in t e commodities, b%t also to t is part pl%s t at portion o! %ncons%med b%t applied capital @ ic contin%es to operate in prod%ction0 6o@e8er, t e mass o! pro!it cannot be eD%al to anyt ing b%t t e mass o! pro!it or s%rpl%s-8al%e, contained in t e commodities t emsel8es, and to be realised by t eir sale0 &! t e prod%cti8ity o! ind%stry increases, t e price o! indi8id%al commodities !alls0 5 ere is less labo%r in t em, less paid and %npaid labo%r0 $%ppose, t e same labo%r prod%ces, say, triple its !ormer prod%ct0 5 en W less labo%r yields indi8id%al prod%ct0 ?nd since pro!it can make %p b%t a portion o! t e amo%nt o! labo%r contained in an indi8id%al commodity, t e mass o! pro!it in t e indi8id%al commodity m%st decrease, and t is takes place @it in certain limits, e8en i! t e rate o! s%rpl%s-8al%e s o%ld rise0 &n any case, t e mass o! pro!it on t e total prod%ct does not !all belo@ t e original mass o! pro!it so long as t e capital employs t e same n%mber o! labo%rers at t e same degree o! exploitation0 B5 is may also occ%r i! !e@er labo%rers are employed at a ig er rate o! exploitation0C For t e mass o! pro!it on t e indi8id%al prod%ct decreases proportionately to t e increase in t e n%mber o! prod%cts0 5 e mass o! pro!it remains t e same, b%t it is distrib%ted di!!erently o8er t e total amo%nt o! commodities0 -or does t is alter t e distrib%tion bet@een t e labo%rers and capitalists o! t e amo%nt o! 8al%e created by ne@ly added labo%r0 5 e mass o! pro!it cannot increase so long as t e same amo%nt o! labo%r is employed, %nless t e %npaid s%rpl%s-labo%r increases, or, s o%ld intensity o! exploitation remain t e same, %nless t e n%mber o! labo%rers gro@s0 3r, bot t ese ca%ses may combine to prod%ce t is res%lt0 &n all t ese cases I @ ic , o@e8er, in accordance @it o%r ass%mption, pres%ppose an increase o! constant capital as compared to 8ariable, and an increase in t e magnit%de o! total capital I t e indi8id%al commodity contains a smaller mass o! pro!it and t e rate o! pro!it !alls e8en i! calc%lated on t e indi8id%al commodity0 ? gi8en D%antity o! ne@ly added labo%r materialises in a larger D%antity o! commodities0 5 e price o! t e indi8id%al commodity !alls0 ;onsidered abstractly t e rate o! pro!it may remain t e same, e8en t o%g t e price o! t e indi8id%al commodity may !all as a res%lt o! greater prod%cti8eness o! labo%r and a sim%ltaneo%s increase in t e n%mber o! t is c eaper commodity i!, !or instance, t e increase in prod%cti8eness o! labo%r acts %ni!ormly and sim%ltaneo%sly on all t e elements o! t e commodity, so t at its total price !alls in t e same proportion in @ ic t e prod%cti8ity o! labo%r increases, @ ile, on t e ot er and, t e m%t%al relation o! t e di!!erent elements o! t e price o! t e commodity remains t e same0 5 e rate o! pro!it co%ld e8en rise i! a rise in t e rate o! s%rpl%s-8al%e @ere accompanied by a s%bstantial red%ction in t e 8al%e o! t e elements o! constant, and partic%larly o! !ixed, capital0 A%t in reality, as @e a8e seen, t e rate o! pro!it @ill !all in t e long r%n0 &n no case does a !all in t e price o! any indi8id%al commodity by itsel! gi8e a cl%e to t e rate o! pro!it0 E8eryt ing depends on t e magnit%de o! t e total capital in8ested in its prod%ction0 For instance, i! t e price o! one yard o! !abric !alls !rom 3s0 to 1Ws0, i! @e kno@ t at be!ore t is price red%ction it contained 1Ws0 constant capital, yarn, etc0, Ws0 @ages, and Ws0 pro!it, @ ile a!ter t e red%ction it contains 1s0 constant capital, ab8+31s0 @ages, and Xs0 pro!it, @e cannot tell i! t e rate o! pro!it as remained t e same or not0 5 is depends on @ et er, and by o@ m%c , t e ad8anced total capital as increased, and o@ many yards more it prod%ces in a gi8en time0 5 e p enomenon, springing !rom t e nat%re o! t e capitalist mode o! prod%ction, t at increasing prod%cti8ity o! labo%r implies a drop in t e price o! t e indi8id%al commodity, or o! a certain mass o! commodities, an increase in t e n%mber o! commodities, a red%ction in t e mass o! pro!it on t e indi8id%al commodity and in t e rate o! pro!it on t e aggregate o! commodities, and an increase in t e mass o! pro!it on t e total D%antity o! commodities I t is p enomenon appears on t e s%r!ace only in a red%ction o! t e mass o! pro!it on t e indi8id%al commodity, a !all in its price, an increase in t e mass o! pro!it on t e a%gmented total n%mber o! commodities prod%ced by t e total social capital or an indi8id%al capitalist0 &t t en appears as i! t e capitalist adds less pro!it to t e price o! t e indi8id%al commodity o! is o@n !ree @ill, and makes %p !or it t ro%g

1+*

; apter J&&&

t e greater n%mber o! commodities e prod%ces0 5 is conception rests %pon t e notion o! pro!it %pon alienation, @ ic , in its t%rn, is ded%ced !rom t e conception o! merc ant capital0 We a8e pre8io%sly seen in Aook & B2 and > ?bsc nittC /Englis edition: ,arts &4 and 4&&0 I 0d01 t at t e mass o! commodities gro@ing along @it t e prod%cti8ity o! labo%r and t e c eapening o! t e indi8id%al commodity as s%c Bas long as t ese commodities do not enter t e price o! labo%r-po@er as determinantsC I t at t is does not a!!ect t e proportion bet@een paid and %npaid labo%r in t e indi8id%al commodity, in spite o! t e !alling price0 $ince all t ings appear distorted, namely, re8ersed in competition, t e indi8id%al capitalist may imagine: 1C t at e is red%cing is pro!it on t e indi8id%al commodity by c%tting its price, b%t still making a greater pro!it by selling a larger D%antity o! commodities# <C t at e !ixes t e price o! t e indi8id%al commodities and t at e determines t e price o! t e total prod%ct by m%ltiplication, @ ile t e original process is really one o! di8ision Bsee Aook &, Kap0 J, $0 <81 /Englis edition: ; 0 J&&0 I 0d1C, and m%ltiplication is only correct secondarily, since it is based on t at di8ision0 5 e 8%lgar economist does practically no more t an translate t e sing%lar concepts o! t e capitalists, @ o are in t e t rall o! competition, into a seemingly more t eoretical and generalised lang%age, and attempt to s%bstantiate t e H%stice o! t ose conceptions0 5 e !all in commodity-prices and t e rise in t e mass o! pro!it on t e a%gmented mass o! t ese c eapened commodities is, in !act, b%t anot er expression !or t e la@ o! t e !alling rate o! pro!it attended by a sim%ltaneo%sly increasing mass o! pro!it0 5 e analysis o! o@ !ar a !alling rate o! pro!it may coincide @it rising prices no more belongs ere t an t at o! t e point pre8io%sly disc%ssed in Aook & B$0 <8=-81 /Englis edition: ; 0 J&&0 I 0d.1C, concerning relati8e s%rpl%s-8al%e0 ? capitalist @orking @it impro8ed b%t not as yet generally adopted met ods o! prod%ction sells belo@ t e market-price, b%t abo8e is indi8id%al price o! prod%ction# is rate o! pro!it rises %ntil competition le8els it o%t0 7%ring t is eD%alisation period t e second reD%isite, expansion o! t e in8ested capital, makes its appearance0 ?ccording to t e degree o! t is expansion t e capitalist @ill be able to employ a part o! is !ormer labo%rers, act%ally per aps all o! t em, or e8en more, %nder t e ne@ conditions, and ence to prod%ce t e same, or a greater, mass o! pro!it0

Chapter 14. Counteractin) 5nfluences


&! @e consider t e enormo%s de8elopment o! t e prod%cti8e !orces o! social labo%r in t e last 3= years alone as compared @it all preceding periods# i! @e consider, in partic%lar, t e enormo%s mass o! !ixed capital, aside !rom t e act%al mac inery, @ ic goes into t e process o! social prod%ction as a @ ole, t en t e di!!ic%lty @ ic as it erto tro%bled t e economist, namely to explain t e !alling rate o! pro!it, gi8es place to its opposite, namely to explain @ y t is !all is not greater and more rapid0 5 ere m%st be some co%nteracting in!l%ences at @ork, @ ic cross and ann%l t e e!!ect o! t e general la@, and @ ic gi8e it merely t e c aracteristic o! a tendency, !or @ ic reason @e a8e re!erred to t e !all o! t e general rate o! pro!it as a tendency to !all0 5 e !ollo@ing are t e most general co%nterbalancing !orces:

I. Increasing Intensit# "f !ploitation


5 e degree o! exploitation o! labo%r, t e appropriation o! s%rpl%s-labo%r and s%rpl%s-8al%e, is raised notably by lengt ening t e @orking-day and intensi!ying labo%r0 5 ese t@o points a8e been compre ensi8ely treated in Aook & as incidental to t e prod%ction o! absol%te and relati8e s%rpl%s-8al%e0 5 ere are many @ays o! intensi!ying labo%r @ ic imply an increase o! constant, as compared to 8ariable, capital, and ence a !all in t e rate o! pro!it, s%c as compelling a labo%rer to operate a larger n%mber o! mac ines0 &n s%c cases I and in most proced%res ser8ing t e prod%ction o! relati8e s%rpl%s-8al%es I t e same ca%ses @ ic increase t e rate o! s%rpl%s8al%e, may also, !rom t e standpoint o! gi8en D%antities o! in8ested total capital, in8ol8e a !all in t e mass o! s%rpl%s-8al%e0 A%t t ere are ot er aspects o! intensi!ication, s%c as t e greater 8elocities o! mac inery, @ ic cons%me more ra@ material in t e same time, b%t, so !ar as t e !ixed capital is concerned, @ear o%t t e mac inery so m%c !aster, and yet do not in any @ay a!!ect t e relation o! its 8al%e to t e price o! t e labo%r @ ic sets it in motion0 A%t notably, it is prolongation o! t e @orking-day, t is in8ention o! modern ind%stry, @ ic increases t e mass o! appropriated s%rpl%s-labo%r @it o%t essentially altering t e proportion o! t e employed labo%rpo@er to t e constant capital set in motion by it, and @ ic rat er tends to red%ce t is capital relati8ely0 Moreo8er, it as already been demonstrated I and t is constit%tes t e real secret o! t e tendency o! t e rate o! pro!it to !all I t at t e manip%lations to prod%ce relati8e s%rpl%s-8al%e amo%nt, on t e @ ole, to trans!orming as m%c as possible o! a certain D%antity o! labo%r into s%rpl%s-8al%e, on t e one and, and employing as little labo%r as possible in proportion to t e in8ested capital, on t e ot er, so t at t e same reasons @ ic permit raising t e intensity o! exploitation r%le o%t exploiting t e same D%antity o! labo%r as be!ore by t e same capital0 5 ese are t e co%nteracting tendencies, @ ic , @ ile e!!ecting a rise in t e rate o! s%rpl%s-8al%e, also tend to decrease t e mass o! s%rpl%s-8al%e, and ence t e rate o! pro!it prod%ced by a certain capital0 Mention s o%ld also be made ere o! t e @idespread introd%ction o! !emale and c ild labo%r, in so !ar as t e @ ole !amily m%st no@ per!orm more s%rpl%s-labo%r !or capital t an be!ore, e8en @ en t e total amo%nt o! t eir @ages increases, @ ic is by no means al@ays t e case0 I E8eryt ing t at promotes t e prod%ction o! relati8e s%rpl%s-8al%e by mere impro8ement in met ods, as in agric%lt%re, @it o%t altering t e magnit%de o! t e in8ested capital, as t e same e!!ect0 5 e constant capital, it is tr%e, does not, in s%c cases, increase in relation to t e 8ariable, inasm%c as @e regard t e 8ariable capital as an index o! t e amo%nt o! labo%r-po@er employed, b%t t e mass o! t e prod%ct does increase in proportion to t e labo%r-po@er employed0 5 e same occ%rs, i! t e prod%cti8eness o! labo%r Bno matter, @ et er its prod%ct goes into t e labo%rer"s cons%mption or into t e elements o! constant capitalC is !reed !rom indrances in comm%nications, !rom arbitrary or ot er restrictions @ ic a8e become obstacles in t e co%rse

161

; apter J&4

o! time# !rom !etters o! all kinds, @it o%t directly a!!ecting t e ratio o! 8ariable to constant capital0 &t mig t be asked @ et er t e !actors t at c eck t e !all o! t e rate o! pro!it, b%t t at al@ays asten its !all in t e last analysis, @ et er t ese incl%de t e temporary, b%t al@ays rec%rring, ele8ations in s%rpl%s-8al%e abo8e t e general le8el, @ ic keep occ%rring no@ in t is and no@ in t at line o! prod%ction redo%nding to t e bene!it o! t ose indi8id%al capitalists, @ o make %se o! in8entions, etc0, be!ore t ese are introd%ced else@ ere0 5 is D%estion m%st be ans@ered in t e a!!irmati8e0 5 e mass o! s%rpl%s-8al%e prod%ced by a capital o! a gi8en magnit%de is t e prod%ct o! t@o !actors I t e rate o! s%rpl%s-8al%e m%ltiplied by t e n%mber o! labo%rers employed at t is rate0 ?t a gi8en rate o! s%rpl%s-8al%e it t ere!ore depends on t e n%mber o! labo%rers, and it depends on t e rate o! s%rpl%s-8al%e @ en t e n%mber o! labo%rers is gi8en0 :enerally, t ere!ore, it depends on t e composite ratio o! t e absol%te magnit%des o! t e 8ariable capital and t e rate o! s%rpl%s8al%e0 -o@ @e a8e seen t at, on t e a8erage, t e same !actors @ ic raise t e rate o! relati8e s%rpl%s-8al%e lo@er t e mass o! t e employed labo%r-po@er0 &t is e8ident, o@e8er, t at t is @ill occ%r to a greater or lesser extent, depending on t e de!inite proportion in @ ic t is con!licting mo8ement obtains, and t at t e tendency to@ards a red%ction in t e rate o! pro!it is notably @eakened by a rise in t e rate o! absol%te s%rpl%s-8al%e, @ ic originates @it t e lengt ening o! t e @orking-day0 We sa@ in t e case o! t e rate o! pro!it t at a drop in t e rate @as generally accompanied by an increase in t e mass o! pro!it, d%e to t e increasing mass o! total capital employed0 From t e standpoint o! t e total 8ariable capital o! society, t e s%rpl%s-8al%e it as prod%ced is eD%al to t e pro!it it as prod%ced0 Aot t e absol%te mass and t e rate o! s%rpl%s-8al%e a8e increased# t e one beca%se t e D%antity o! labo%r-po@er employed by society as gro@n, and t e ot er, beca%se t e intensity o! exploitation o! t is labo%r-po@er as increased0 A%t in t e case o! a capital o! a gi8en magnit%de, e.g., 1==, t e rate o! s%rpl%s-8al%e may increase, @ ile t e a8erage mass may decrease# !or t e rate is determined by t e proportion, in @ ic t e 8ariable capital prod%ces 8al%e, @ ile t e mass is determined by t e proportion o! 8ariable capital to t e total capital0 5 e rise in t e rate o! s%rpl%s-8al%e is a !actor @ ic determines t e mass o! s%rpl%s-8al%e, and ence also t e rate o! pro!it, !or it takes place especially %nder conditions, in @ ic , as @e a8e pre8io%sly seen, t e constant capital is eit er not increased at all, or not proportionately increased, in relation to t e 8ariable capital0 5 is !actor does not abolis t e general la@0 A%t it ca%ses t at la@ to act rat er as a tendency, i.e., as a la@ @ ose absol%te action is c ecked, retarded, and @eakened, by co%nteracting circ%mstances0 A%t since t e same in!l%ences @ ic raise t e rate o! s%rpl%s-8al%e Be8en a lengt ening o! t e @orking-time is a res%lt o! large-scale ind%stryC tend to decrease t e labo%r-po@er employed by a certain capital, it !ollo@s t at t ey also tend to red%ce t e rate o! pro!it and to retard t is red%ction0 &! one labo%rer is compelled to per!orm as m%c labo%r as @o%ld rationally be per!ormed by at least t@o, and i! t is is done %nder circ%mstances in @ ic t is one labo%rer can replace t ree, t en t is one labo%rer @ill per!orm as m%c s%rpl%slabo%r as @as !ormerly per!ormed by t@o, and t e rate o! s%rpl%s-8al%e @ill a8e risen accordingly0 A%t e @ill not per!orm as m%c as t ree ad per!ormed, and t e mass o! s%rpl%s8al%e @ill a8e decreased accordingly0 A%t t is red%ction in mass @ill be compensated, or limited, by t e rise in t e rate o! s%rpl%s-8al%e0 &! t e entire pop%lation is employed at a ig er rate o! s%rpl%s-8al%e, t e mass o! s%rpl%s-8al%e @ill increase, in spite o! t e pop%lation remaining t e same0 &t @ill increase still more i! t e pop%lation increases0 ?nd alt o%g t is is tied %p @it a relati8e red%ction o! t e n%mber o! employed labo%rers in proportion to t e magnit%de o! t e total capital, t is red%ction is moderated, or c ecked, by t e rise in t e rate o! s%rpl%s-8al%e0 Ae!ore lea8ing t is point, it is to be emp asised once more t at @it a capital o! a gi8en magnit%de t e rate o! s%rpl%s-8al%e may rise, @ ile its mass is decreasing, and 8ice 8ersa0 5 e mass o! s%rpl%s-8al%e is eD%al to t e rate m%ltiplied by t e n%mber o! labo%rers# o@e8er, t e rate

16<

; apter J&4

is ne8er calc%lated on t e total, b%t only on t e 8ariable capital, act%ally only !or e8ery @orkingday0 3n t e ot er and, @it a gi8en magnit%de o! capital-8al%e, t e rate of profit can neit er rise nor !all @it o%t t e mass of surplus1value also rising or !alling0

II. +epression "f Wages &elo$ The Value "f Labour,Po$er


5 is is mentioned ere only empirically, since, like many ot er t ings @ ic mig t be en%merated, it as not ing to do @it t e general analysis o! capital, b%t belongs in an analysis o! competition, @ ic is not presented in t is @ork0 6o@e8er, it is one o! t e most important !actors c ecking t e tendency o! t e rate o! pro!it to !all0

III. Cheapening "f lements "f Constant Capital


E8eryt ing said in ,art & o! t is book abo%t !actors @ ic raise t e rate o! pro!it @ ile t e rate o! s%rpl%s-8al%e remains t e same, or regardless o! t e rate o! s%rpl%s-8al%e, belongs ere0 6ence also, @it respect to t e total capital, t at t e 8al%e o! t e constant capital does not increase in t e same proportion as its material 8ol%me0 For instance, t e D%antity o! cotton @orked %p by a single E%ropean spinner in a modern !actory as gro@n tremendo%sly compared to t e D%antity !ormerly @orked %p by a E%ropean spinner @it a spinning-@ eel0 .et t e 8al%e o! t e @orked-%p cotton as not gro@n in t e same proportion as its mass0 5 e same applies to mac inery and ot er !ixed capital0 &n s ort, t e same de8elopment @ ic increases t e mass o! t e constant capital in relation to t e 8ariable red%ces t e 8al%e o! its elements as a res%lt o! t e increased prod%cti8ity o! labo%r, and t ere!ore pre8ents t e 8al%e o! constant capital, alt o%g it contin%ally increases, !rom increasing at t e same rate as its material 8ol%me, i.e., t e material 8ol%me o! t e means o! prod%ction set in motion by t e same amo%nt o! labo%r-po@er0 &n isolated cases t e mass o! t e elements o! constant capital may e8en increase, @ ile its 8al%e remains t e same, or !alls0 5 e !oregoing is bo%nd %p @it t e depreciation o! existing capital Bt at is, o! its material elementsC, @ ic occ%rs @it t e de8elopment o! ind%stry0 5 is is anot er contin%ally operating !actor @ ic c ecks t e !all o! t e rate o! pro!it, alt o%g it may %nder certain circ%mstances encroac on t e mass o! pro!it by red%cing t e mass o! t e capital yielding a pro!it0 5 is again s o@s t at t e same in!l%ences @ ic tend to make t e rate o! pro!it !all, also moderate t e e!!ects o! t is tendency0

IV. )elative "ver,Population


&ts propagation is inseparable !rom, and astened by, t e de8elopment o! t e prod%cti8ity o! labo%r as expressed by a !all in t e rate o! pro!it0 5 e relati8e o8er-pop%lation becomes so m%c more apparent in a co%ntry, t e more t e capitalist mode o! prod%ction is de8eloped in it0 5 is, again, is t e reason @ y, on t e one and, t e more or less imper!ect s%bordination o! labo%r to capital contin%es in many branc es o! prod%ction, and contin%es longer t an seems at !irst glance compatible @it t e general stage o! de8elopment0 5 is is d%e to t e c eapness and ab%ndance o! disposable or %nemployed @age-labo%rers, and to t e greater resistance, @ ic some branc es o! prod%ction, by t eir 8ery nat%re, render to t e trans!ormation o! man%al @ork into mac ine prod%ction0 3n t e ot er and, ne@ lines o! prod%ction are opened %p, especially !or t e prod%ction o! l%x%ries, and it is t ese t at take as t eir basis t is relati8e o8er-pop%lation, o!ten set !ree in ot er lines o! prod%ction t ro%g t e increase o! t eir constant capital0 5 ese ne@ lines start o%t predominantly @it li8ing labo%r, and by degrees pass t ro%g t e same e8ol%tion as t e ot er lines o! prod%ction0 &n eit er case t e 8ariable capital makes %p a considerable portion o! t e total capital and @ages are belo@ t e a8erage, so t at bot t e rate and mass o! s%rpl%s-8al%e in t ese lines o! prod%ction are %n%s%ally ig 0 $ince t e general rate o! pro!it is !ormed by le8elling t e rates o! pro!it in t e indi8id%al branc es o! prod%ction, o@e8er, t e same !actor

163

; apter J&4

@ ic brings abo%t t e tendency in t e rate o! pro!it to !all, again prod%ces a co%nterbalance to t is tendency and more or less paralyses its e!!ects0

V. (oreign Trade
$ince !oreign trade partly c eapens t e elements o! constant capital, and partly t e necessities o! li!e !or @ ic t e 8ariable capital is exc anged, it tends to raise t e rate o! pro!it by increasing t e rate o! s%rpl%s-8al%e and lo@ering t e 8al%e o! constant capital0 &t generally acts in t is direction by permitting an expansion o! t e scale o! prod%ction0 &t t ereby astens t e process o! acc%m%lation, on t e one and, b%t ca%ses t e 8ariable capital to s rink in relation to t e constant capital, on t e ot er, and t %s astens a !all in t e rate o! pro!it0 &n t e same @ay, t e expansion o! !oreign trade, alt o%g t e basis o! t e capitalist mode o! prod%ction in its in!ancy, as become its o@n prod%ct, o@e8er, @it t e !%rt er progress o! t e capitalist mode o! prod%ction, t ro%g t e innate necessity o! t is mode o! prod%ction, its need !or an e8er-expanding market0 6ere @e see once more t e d%al nat%re o! t is e!!ect0 B)icardo as entirely o8erlooked t is side o! !oreign trade0 /70 )icardo, :n the &rinciples of &olitical 0conomy, and 4a ation, 4hird edition, ,ondon, ;<F=, Ch. LDD. J 0d.M* ?not er D%estion I really beyond t e scope o! o%r analysis beca%se o! its special nat%re I is t is: &s t e general rate o! pro!it raised by t e ig er rate o! pro!it prod%ced by capital in8ested in !oreign, and partic%larly colonial, tradeQ ;apitals in8ested in !oreign trade can yield a ig er rate o! pro!it, beca%se, in t e !irst place, t ere is competition @it commodities prod%ced in ot er co%ntries @it in!erior prod%ction !acilities, so t at t e more ad8anced co%ntry sells its goods abo8e t eir 8al%e e8en t o%g c eaper t an t e competing co%ntries0 &n so !ar as t e labo%r o! t e more ad8anced co%ntry is ere realised as labo%r o! a ig er speci!ic @eig t, t e rate o! pro!it rises, beca%se labo%r @ ic as not been paid as being o! a ig er D%ality is sold as s%c 0 5 e same may obtain in relation to t e co%ntry, to @ ic commodities are exported and to t at !rom @ ic commodities are imported# namely, t e latter may o!!er more materialised labo%r in -ind t an it recei8es, and yet t ereby recei8e commodities c eaper t an it co%ld prod%ce t em0 P%st as a man%!act%rer @ o employs a ne@ in8ention be!ore it becomes generally %sed, %ndersells is competitors and yet sells is commodity abo8e its indi8id%al 8al%e, t at is, realises t e speci!ically ig er prod%cti8eness o! t e labo%r e employs as s%rpl%s-labo%r0 6e t %s sec%res a s%rpl%s-pro!it0 ?s concerns capitals in8ested in colonies, etc0, on t e ot er and, t ey may yield ig er rates o! pro!it !or t e simple reason t at t e rate o! pro!it is ig er t ere d%e to back@ard de8elopment, and like@ise t e exploitation o! labo%r, beca%se o! t e %se o! sla8es, coolies, etc0 W y s o%ld not t ese ig er rates o! pro!it, realised by capitals in8ested in certain lines and sent ome by t em, enter into t e eD%alisation o! t e general rate o! pro!it and t %s tend, pro tanto, to raise it, %nless it is t e monopolies t at stand in t e @ay0 1 5 ere is so m%c less reason !or it, since t ese sp eres o! in8estment o! capital are s%bHect to t e la@s o! !ree competition0 W at )icardo !ancies is mainly t is: @it t e ig er prices realised abroad commodities are bo%g t t ere in ret%rn and sent ome0 5 ese commodities are t %s sold on t e ome market, @ ic !act can at best be b%t a temporary extra disad8antage o! t ese !a8o%red sp eres o! prod%ction o8er ot ers0 5 is ill%sion !alls a@ay as soon as it is di8ested o! its money-!orm0 5 e !a8o%red co%ntry reco8ers more labo%r in exc ange !or less labo%r, alt o%g t is di!!erence, t is excess is pocketed, as in any exc ange bet@een labo%r and capital, by a certain class0 $ince t e rate o! pro!it is ig er, t ere!ore, beca%se it is generally ig er in a colonial co%ntry, it may, pro8ided nat%ral conditions are !a8o%rable, go and in and @it lo@ commodity-prices0 ? le8elling takes place b%t not a le8elling to t e old le8el, as )icardo !eels0 5 is same !oreign trade de8elops t e capitalist mode o! prod%ction in t e ome co%ntry, @ ic implies t e decrease o! 8ariable capital in relation to constant, and, on t e ot er and, ca%ses

162

; apter J&4

o8er-prod%ction in respect to !oreign markets, so t at in t e long r%n it again as an opposite e!!ect0 We a8e t %s seen in a general @ay t at t e same in!l%ences @ ic prod%ce a tendency in t e general rate o! pro!it to !all, also call !ort co%nter-e!!ects, @ ic amper, retard, and partly paralyse t is !all0 5 e latter do not do a@ay @it t e la@, b%t impair its e!!ect0 3t er@ise, it @o%ld not be t e !all o! t e general rate o! pro!it, b%t rat er its relati8e slo@ness, t at @o%ld be incompre ensible0 5 %s, t e la@ acts only as a tendency0 ?nd it is only %nder certain circ%mstances and only a!ter long periods t at its e!!ects become strikingly prono%nced0 Ae!ore @e go on, in order to a8oid mis%nderstandings, @e s o%ld recall t@o, repeatedly treated, points0 'irst: 5 e same process @ ic brings abo%t a c eapening o! commodities in t e co%rse o! t e de8elopment o! t e capitalist mode o! prod%ction, ca%ses a c ange in t e organic composition o! t e social capital in8ested in t e prod%ction o! commodities, and conseD%ently lo@ers t e rate o! pro!it0 We m%st be care!%l, t ere!ore, not to identi!y t e red%ction in t e relati8e cost o! an indi8id%al commodity, incl%ding t at portion o! it @ ic represents @ear and tear o! mac inery, @it t e rise in t e 8al%e o! t e constant in relation to 8ariable capital, alt o%g , con8ersely, e8ery red%ction in t e relati8e cost o! t e constant capital ass%ming t e 8ol%me o! its material elements remains t e same, or increases, tends to raise t e rate o! pro!it, i.e., to red%ce pro tanto t e 8al%e o! t e constant capital in relation to t e s rinking proportions o! t e employed 8ariable capital0 Second: 5 e !act t at t e ne@ly added li8ing labo%r contained in t e indi8id%al commodities, @ ic taken toget er make %p t e prod%ct o! capital, decreases in relation to t e materials t ey contain and t e means o! labo%r cons%med by t em# t e !act, t ere!ore, t at an e8er-decreasing D%antity o! additional li8ing labo%r is materialised in t em, beca%se t eir prod%ction reD%ires less labo%r @it t e de8elopment o! t e social prod%cti8eness I t is !act does not a!!ect t e ratio, in @ ic t e li8ing labo%r contained in t e commodities breaks %p into paid and %npaid labo%r0 M%ite t e contrary0 ?lt o%g t e total D%antity o! additional li8ing labo%r contained in t e commodities decreases, t e %npaid portion increases in relation to t e paid portion, eit er by an absol%te or a relati8e s rinking o! t e paid portion# !or t e same mode o! prod%ction @ ic red%ces t e total D%antity o! additional li8ing labo%r in a commodity is accompanied by a rise in t e absol%te and relati8e s%rpl%s-8al%e0 5 e tendency o! t e rate o! pro!it to !all is bo%nd %p @it a tendency o! t e rate o! s%rpl%s-8al%e to rise, ence @it a tendency !or t e rate o! labo%r exploitation to rise0 -ot ing is more abs%rd, !or t is reason, t an to explain t e !all in t e rate o! pro!it by a rise in t e rate o! @ages, alt o%g t is may be t e case by @ay o! an exception0 $tatistics is not able to make act%al analyses o! t e rates o! @ages in di!!erent epoc s and co%ntries, %ntil t e conditions @ ic s ape t e rate o! pro!it are t oro%g ly %nderstood0 5 e rate o! pro!it does not !all beca%se labo%r becomes less prod%cti8e, b%t beca%se it becomes more prod%cti8e0 Aot t e rise in t e rate o! s%rpl%s-8al%e and t e !all in t e rate o! pro!it are b%t speci!ic !orms t ro%g @ ic gro@ing prod%cti8ity o! labo%r is expressed %nder capitalism0

VI. The Increase "f Stoc2 Capital


5 e !oregoing !i8e points may still be s%pplemented by t e !ollo@ing, @ ic , o@e8er, cannot be more !%lly treated !or t e present0 Wit t e progress o! capitalist prod%ction, @ ic goes and in and @it accelerated acc%m%lation, a portion o! capital is calc%lated and applied only as interestbearing capital0 -ot in t e sense in @ ic e8ery capitalist @ o lends o%t capital is satis!ied @it interest, @ ile t e ind%strial capitalist pockets t e in8estor"s pro!it0 5 is as no bearing on t e le8el o! t e general rate o! pro!it, beca%se !or t e latter pro!it R interest U pro!it o! all kinds U gro%nd rent, t e di8ision into t ese partic%lar categories being immaterial to it0 A%t in t e sense t at t ese capitals, alt o%g in8ested in large prod%cti8e enterprises, yield only large or small

16+

; apter J&4

amo%nts o! interest, so-called di8idends, a!ter all costs a8e been ded%cted0 &n rail@ays, !or instance0 5 ese do not t ere!ore go into le8elling t e general rate o! pro!it, beca%se t ey yield a lo@er t an a8erage rate o! pro!it0 &! t ey did enter into it, t e general rate o! pro!it @o%ld !all m%c lo@er0 5 eoretically, t ey may be incl%ded in t e calc%lation, and t e res%lt @o%ld t en be a lo@er rate o! pro!it t an t e seemingly existing rate, @ ic is decisi8e !or t e capitalists# it @o%ld be lo@er, beca%se t e constant capital partic%larly in t ese enterprises is largest in its relation to t e 8ariable capital0

Chapter 15. E6position of the 5nternal Contradictions of the 3a4


I. General
We a8e seen in t e !irst part o! t is book t at t e rate o! pro!it expresses t e rate o! s%rpl%s8al%e al@ays lo@er t an it act%ally is0 We a8e H%st seen t at e8en a rising rate o! s%rpl%s-8al%e as a tendency to express itsel! in a !alling rate o! pro!it0 5 e rate o! pro!it @o%ld eD%al t e rate o! s%rpl%s-8al%e only i! c R =, i.e. , i! t e total capital @ere paid o%t in @ages0 ? !alling rate o! pro!it does not express a !alling rate o! s%rpl%s-8al%e, %nless t e proportion o! t e 8al%e o! t e constant capital to t e D%antity o! labo%r-po@er @ ic sets it in motion remains %nc anged or t e amo%nt o! labo%r-po@er increases in relation to t e 8al%e o! t e constant capital0 3n t e plea o! analysing t e rate o! pro!it, )icardo act%ally analyses t e rate o! s%rpl%s-8al%e alone, and t is only on t e ass%mption t at t e @orking-day is intensi8ely and extensi8ely a constant magnit%de0 ? !all in t e rate o! pro!it and accelerated acc%m%lation are di!!erent expressions o! t e same process only in so !ar as bot re!lect t e de8elopment o! prod%cti8eness0 ?cc%m%lation, in t%rn, astens t e !all o! t e rate o! pro!it, inasm%c as it implies concentration o! labo%r on a large scale, and t %s a ig er composition o! capital0 3n t e ot er and, a !all in t e rate o! pro!it again astens t e concentration o! capital and its centralisation t ro%g expropriation o! minor capitalists, t e !e@ direct prod%cers @ o still a8e anyt ing le!t to be expropriated0 5 is accelerates acc%m%lation @it regard to mass, alt o%g t e rate o! acc%m%lation !alls @it t e rate o! pro!it0 3n t e ot er and, t e rate o! sel!-expansion o! t e total capital, or t e rate o! pro!it, being t e goad o! capitalist prod%ction BH%st as sel!-expansion o! capital is its only p%rposeC, its !all c ecks t e !ormation o! ne@ independent capitals and t %s appears as a t reat to t e de8elopment o! t e capitalist prod%ction process0 &t breeds o8er-prod%ction, spec%lation, crises, and s%rpl%s-capital alongside s%rpl%s-pop%lation0 5 ose economists, t ere!ore, @ o, like )icardo, regard t e capitalist mode o! prod%ction as absol%te, !eel at t is point t at it creates a barrier itsel!, and !or t is reason attrib%te t e barrier to -at%re Bin t e t eory o! rentC, not to prod%ction0 A%t t e main t ing abo%t t eir orror o! t e !alling rate o! pro!it is t e !eeling t at capitalist prod%ction meets in t e de8elopment o! its prod%cti8e !orces a barrier @ ic as not ing to do @it t e prod%ction o! @ealt as s%c # and t is pec%liar barrier testi!ies to t e limitations and to t e merely istorical, transitory c aracter o! t e capitalist mode o! prod%ction# testi!ies t at !or t e prod%ction o! @ealt , it is not an absol%te mode, moreo8er, t at at a certain stage it rat er con!licts @it its !%rt er de8elopment0 5r%e, )icardo and is sc ool considered only ind%strial pro!it, @ ic incl%des interest0 A%t t e rate o! gro%nd-rent like@ise as a tendency to !all, alt o%g its absol%te mass increases, and may also increase proportionately more t an ind%strial pro!it0 BE0 West, / 0ssay on the +pplication of Capital to ,and,'ondon, 181+. J 0d1 @ o de8eloped t e la@ o! gro%nd-rent before )icardo0C &! @e consider t e total social capital ;, and %se p 1 !or t e ind%strial pro!it t at remains a!ter ded%cting interest and gro%nd-rent, i !or interest, and r !or gro%nd-rent, t en sN; R pN; R p 1 U i U rN; R p1N; U iN; U rN;0 We a8e seen t at @ ile s, t e total amo%nt o! s%rpl%s-8al%e, is contin%ally increasing in t e co%rse o! capitalist de8elopment, sN; is H%st as steadily declining, beca%se ; gro@s still more rapidly t an s0 5 ere!ore it is by no means a contradiction !or p 1, i, and r to be steadily increasing, eac indi8id%ally, @ ile sN; R pN;, as @ell as p 1N;, iN;, and rN;, s o%ld eac

16>

; apter J4

by itsel! be steadily s rinking, or t at p 1 s o%ld increase in relation to i, or r in relation to p 1 or to p1 and i0 Wit a rising total s%rpl%s-8al%e or pro!it s R p, and a sim%ltaneo%sly !alling rate o! pro!it sN; R pN;, t e proportions o! t e parts p 1, i, and r, @ ic make %p s R p, may c ange at @ill @it in t e limits set by t e total amo%nt o! s @it o%t t ereby a!!ecting t e magnit%de o! s or sN;0 5 e m%t%al 8ariation o! p1, i, and r is merely a 8arying distrib%tion o! s among di!!erent classes0 ;onseD%ently, p1N;, iN;, or rN;, t e rate o! indi8id%al ind%strial pro!it, t e rate o! interest, and t e ratio o! gro%nd-rent to t e total capital, may rise in relation to one anot er, @ ile sN;, t e general rate o! pro!it, !alls0 5 e only condition is t at t e s%m o! all t ree R sN;0 &! t e rate o! pro!it !alls !rom +=T to <+T, beca%se t e composition o! a certain capital @it , say, a rate o! s%rpl%s-8al%e R 1==T as c anged !rom +=c U +=8 to >+c U <+8, t en a capital o! 1,=== @ill yield a pro!it o! +== in t e !irst case, and in t e second a ;apital o! 2,=== @ill yield a pro!it o! 1,===0 We see t at s or p a8e do%bled, @ ile p" as !allen by one- al!0 ?nd i! t at +=T @as !ormerly di8ided into <= pro!it, 1= interest, and <= rent, t en p 1N; R <=T, iN; R 1=T, and rN; R <=T0 &! t e proportions ad remained t e same a!ter t e c ange !rom +=T to <+T, t en p 1N; R 1=T, iN; R +T, and rN; R 1=T0 &!, o@e8er, p1N; s o%ld !all to 8T and iN; to 2T, t en rN; @o%ld rise to 13T0 5 e relati8e magnit%de o! r @o%ld a8e risen as against p 1 and i, @ ile p @o%ld a8e remained t e same0 (nder bot ass%mptions, t e s%m o! p 1, i, and r @o%ld a8e increased, beca%se prod%ced by a capital !o%r times as large0 F%rt ermore, )icardo"s ass%mption t at originally ind%strial pro!it Bpl%s interestC contains t e entire s%rpl%s-8al%e is istorically and logically !alse0 &t is rat er t e progress o! capitalist prod%ction @ ic 1C gi8es t e @ ole pro!it directly to t e ind%strial and commercial capitalists !or !%rt er distrib%tion, and <C red%ces rent to t e excess o8er t e pro!it0 3n t is capitalist basis, again, t e rent gro@s, being a portion o! pro!it B i.e., o! t e s%rpl%s-8al%e 8ie@ed as t e prod%ct o! t e total capitalC, b%t not t at speci!ic portion o! t e prod%ct, @ ic t e capitalist pockets0 :i8en t e necessary means o! prod%ction, i.e. , a s%!!icient acc%m%lation o! capital, t e creation o! s%rpl%s-8al%e is only limited by t e labo%ring pop%lation i! t e rate o! s%rpl%s-8al%e, i.e. , t e intensity o! exploitation, is gi8en# and no ot er limit b%t t e intensity o! exploitation i! t e labo%ring pop%lation is gi8en0 ?nd t e capitalist process o! prod%ction consists essentially o! t e prod%ction o! s%rpl%s-8al%e, represented in t e s%rpl%s-prod%ct or t at aliD%ot portion o! t e prod%ced commodities materialising %npaid labo%r0 &t m%st ne8er be !orgotten t at t e prod%ction o! t is s%rpl%s-8al%e I and t e recon8ersion o! a portion o! it into capital, or t e acc%m%lation, !orms an integrate part o! t is prod%ction o! s%rpl%s-8al%e I is t e immediate p%rpose and compelling moti8e o! capitalist prod%ction0 &t @ill ne8er do, t ere!ore, to represent capitalist prod%ction as somet ing @ ic it is not, namely as prod%ction @ ose immediate p%rpose is enHoyment or t e man%!act%re o! t e means o! enHoyment !or t e capitalist0 5 is @o%ld be o8erlooking its speci!ic c aracter, @ ic is re8ealed in all its inner essence0 5 e creation o! t is s%rpl%s-8al%e makes %p t e direct process o! prod%ction, @ ic , as @e a8e said, as no ot er limits b%t t ose mentioned abo8e0 ?s soon as all t e s%rpl%s-labo%r it @as possible to sD%eeEe o%t as been embodied in commodities, s%rpl%s-8al%e as been prod%ced0 A%t t is prod%ction o! s%rpl%s-8al%e completes b%t t e !irst act o! t e capitalist process o! prod%ction I t e direct prod%ction process0 ;apital as absorbed so and so m%c %npaid labo%r0 Wit t e de8elopment o! t e process, @ ic expresses itsel! in a drop in t e rate o! pro!it, t e mass o! s%rpl%s-8al%e t %s prod%ced s@ells to immense dimensions0 -o@ comes t e second act o! t e process0 5 e entire mass o! commodities, i.e. , t e total prod%ct, incl%ding t e portion @ ic replaces t e constant and 8ariable capital, and t at representing s%rpl%s-8al%e, m%st be sold0 &! t is is not done, or done only in part, or only at prices belo@ t e prices o! prod%ction, t e labo%rer as been indeed exploited, b%t is exploitation is not realised as s%c !or t e capitalist, and t is can be bo%nd %p @it a total or partial !ail%re to realise t e s%rpl%s-8al%e pressed o%t o! im, indeed e8en @it t e partial or total loss o! t e capital0 5 e conditions o! direct exploitation, and t ose o! realising it, are not identical0 5 ey di8erge not only in place and time, b%t also logically0

168

; apter J4

5 e !irst are only limited by t e prod%cti8e po@er o! society, t e latter by t e proportional relation o! t e 8ario%s branc es o! prod%ction and t e cons%mer po@er o! society0 A%t t is lastnamed is not determined eit er by t e absol%te prod%cti8e po@er, or by t e absol%te cons%mer po@er, b%t by t e cons%mer po@er based on antagonistic conditions o! distrib%tion, @ ic red%ce t e cons%mption o! t e b%lk o! society to a minim%m 8arying @it in more or less narro@ limits0 &t is !%rt ermore restricted by t e tendency to acc%m%late, t e dri8e to expand capital and prod%ce s%rpl%s-8al%e on an extended scale0 5 is is la@ !or capitalist prod%ction, imposed by incessant re8ol%tions in t e met ods o! prod%ction t emsel8es, by t e depreciation o! existing capital al@ays bo%nd %p @it t em, by t e general competiti8e str%ggle and t e need to impro8e prod%ction and expand its scale merely as a means o! sel!-preser8ation and %nder penalty o! r%in0 5 e market m%st, t ere!ore, be contin%ally extended, so t at its interrelations and t e conditions reg%lating t em ass%me more and more t e !orm o! a nat%ral la@ @orking independently o! t e prod%cer, and become e8er more %ncontrollable0 5 is internal contradiction seeks to resol8e itsel! t ro%g expansion o! t e o%tlying !ield o! prod%ction0 A%t t e more prod%cti8eness de8elops, t e more it !inds itsel! at 8ariance @it t e narro@ basis on @ ic t e conditions o! cons%mption rest0 &t is no contradiction at all on t is sel!-contradictory basis t at t ere s o%ld be an excess o! capital sim%ltaneo%sly @it a gro@ing s%rpl%s o! pop%lation0 For @ ile a combination o! t ese t@o @o%ld, indeed, increase t e mass o! prod%ced s%rpl%s-8al%e, it @o%ld at t e same time intensi!y t e contradiction bet@een t e conditions %nder @ ic t is s%rpl%s-8al%e is prod%ced and t ose %nder @ ic it is realised0 &! a certain rate o! pro!it is gi8en, t e mass o! pro!it @ill al@ays depend on t e magnit%de o! t e ad8anced capital0 5 e acc%m%lation, o@e8er, is t en determined by t at portion o! t is mass @ ic is recon8erted into capital0 ?s !or t is portion, being eD%al to t e pro!it min%s t e re8en%e cons%med by t e capitalists, it @ill depend not merely on t e 8al%e o! t is mass, b%t also on t e c eapness o! t e commodities @ ic t e capitalist can b%y @it it, commodities @ ic pass partly into is cons%mption, is re8en%e, and partly into is constant capital0 BWages are ere ass%med to be gi8en0C 5 e mass o! capital set in motion by t e labo%rer, @ ose 8al%e e preser8es by is labo%r and reprod%ces in is prod%ct, is D%ite di!!erent !rom t e 8al%e @ ic e adds to it0 &! t e mass o! t e capital R 1,=== and t e added labo%r R 1==, t e reprod%ced capital R 1,1==0 &! t e mass R 1== and t e added labo%r R <=, t e reprod%ced capital R 1<=0 &n t e !irst case t e rate o! pro!it R 1=T, in t e second R <=T0 ?nd yet more can be acc%m%lated o%t o! 1== t an o%t o! <=0 ?nd t %s t e ri8er o! capital rolls on Baside !rom its depreciation t ro%g increase o! t e prod%cti8enessC, or its acc%m%lation does, not in proportion to t e rate o! pro!it, b%t in proportion to t e impet%s it already possesses0 $o !ar as it is based on a ig rate o! s%rpl%s-8al%e, a ig rate o! pro!it is possible @ en t e @orking-day is 8ery long, alt o%g labo%r is not ig ly prod%cti8e0 &t is possible, beca%se t e @ants o! t e labo%rers are 8ery small, ence a8erage @ages 8ery lo@, alt o%g t e labo%r itsel! is %nprod%cti8e0 5 e lo@ @ages @ill correspond to t e labo%rers" lack o! energy0 ;apital t en acc%m%lates slo@ly, in spite o! t e ig rate o! pro!it0 ,op%lation is stagnant and t e @orking-time @ ic t e prod%ct costs, is great, @ ile t e @ages paid to t e labo%rer etare small0 5 e rate o! pro!it does not sink beca%se t e labo%rer is exploited any less, b%t beca%se generally less labo%r is employed in proportion to t e employed capital0 &!, as s o@n, a !alling rate o! pro!it is bo%nd %p @it an increase in t e mass o! pro!it, a larger portion o! t e ann%al prod%ct o! labo%r is appropriated by t e capitalist %nder t e category o! capital Bas a replacement !or cons%med capitalC and a relati8ely smaller portion %nder t e category o! pro!it0 6ence t e !antastic idea o! priest ; almers, /5 0 ; almers, :n &olitical 0conomy in Conne ion with the Moral State and Moral &rospects of Society, $econd edition, :lasgo@, 183<, p0 <<. J 0d1 t at t e less o! t e ann%al prod%ct is expended by capitalists as capital, t e greater t e pro!its t ey pocket0 &n @ ic case t e state c %rc comes to t eir

16*

; apter J4

assistance, to care !or t e cons%mption o! t e greater part o! t e s%rpl%s-prod%ct, rat er t an a8ing it %sed as capital0 5 e preac er con!o%nds ca%se @it e!!ect0 F%rt ermore, t e mass o! pro!it increases in spite o! its slo@er rate @it t e gro@t o! t e in8ested capital0 6o@e8er, t is reD%ires a sim%ltaneo%s concentration o! capital, since t e conditions o! prod%ction t en demand employment o! capital on a larger scale0 &t also reD%ires its centralisation, i.e. , t e s@allo@ing %p o! t e small capitalists by t e big and t eir depri8ation o! capital0 &t is again b%t an instance o! separating I raised to t e second po@er I t e conditions o! prod%ction !rom t e prod%cers to @ ose n%mber t ese small capitalists still belong, since t eir o@n labo%r contin%es to play a role in t eir case0 5 e labo%r o! a capitalist stands altoget er in in8erse proportion to t e siEe o! is capital, i.e. , to t e degree in @ ic e is a capitalist0 &t is t is same se8erance o! t e conditions o! prod%ction, on t e one and, !rom t e prod%cers, on t e ot er, t at !orms t e conception o! capital0 &t begins @it primiti8e acc%m%lation BA%c &, Kap0 JJ&4 /Englis edition: ,art LDDD. J 0d.1C, appears as a permanent process in t e acc%m%lation and concentration o! capital, and expresses itsel! !inally as centralisation o! existing capitals in a !e@ ands and a depri8ation o! many o! t eir capital Bto @ ic expropriation is no@ c angedC0 5 is process @o%ld soon bring abo%t t e collapse o! capitalist prod%ction i! it @ere not !or co%nteracting tendencies, @ ic a8e a contin%o%s decentralising e!!ect alongside t e centripetal one0

II. Conflict &et$een !pansion "f Production And Production "f Surplus,Value
5 e de8elopment o! t e social prod%cti8eness o! labo%r is mani!ested in t@o @ays: !irst, in t e magnit%de o! t e already prod%ced prod%cti8e !orces, t e 8al%e and mass o! t e conditions o! prod%ction %nder @ ic ne@ prod%ction is carried on, and in t e absol%te magnit%de o! t e already acc%m%lated prod%cti8e capital# secondly, in t e relati8e smallness o! t e portion o! total capital laid o%t in @ages, i.e. , in t e relati8ely small D%antity o! li8ing labo%r reD%ired !or t e reprod%ction and sel!-expansion o! a gi8en capital, !or mass prod%ction0 5 is also implies concentration o! capital0 &n relation to employed labo%r-po@er t e de8elopment o! t e prod%cti8ity again re8eals itsel! in t@o @ays: First, in t e increase o! s%rpl%s-labo%r, i.e. , t e red%ction o! t e necessary labo%r-time reD%ired !or t e reprod%ction o! labo%r-po@er0 $econdly, in t e decrease o! t e D%antity o! labo%r-po@er Bt e n%mber o! labo%rersC generally employed to set in motion a gi8en capital0 5 e t@o mo8ements not only go and in and, b%t m%t%ally in!l%ence one anot er and are p enomena in @ ic t e same la@ expresses itsel!0 .et t ey a!!ect t e rate o! pro!it in opposite @ays0 5 e total mass o! pro!it is eD%al to t e total mass o! s%rpl%s-8al%e, t e rate o! pro!it R sN; R s%rpl%s-8al%eNad8anced total capital0 5 e s%rpl%s-8al%e, o@e8er, as a total, is determined !irst by its rate, and second by t e mass o! labo%r sim%ltaneo%sly employed at t is rate, or, @ at amo%nts to t e same, by t e magnit%de o! t e 8ariable capital0 3ne o! t ese !actors, t e rate o! s%rpl%s8al%e, rises, and t e ot er, t e n%mber o! labo%rers, !alls Brelati8ely or absol%telyC0 &nasm%c as t e de8elopment o! t e prod%cti8e !orces red%ces t e paid portion o! employed labo%r, it raises t e s%rpl%s-8al%e, beca%se it raises its rate# b%t inasm%c as it red%ces t e total mass o! labo%r employed by a gi8en capital, it red%ces t e !actor o! t e n%mber by @ ic t e rate o! s%rpl%s8al%e is m%ltiplied to obtain its mass0 5@o labo%rers, eac @orking 1< o%rs daily, cannot prod%ce t e same mass o! s%rpl%s-8al%e as <2 @ o @ork only < o%rs, e8en i! t ey co%ld li8e on air and ence did not a8e to @ork !or t emsel8es at all0 &n t is respect, t en, t e compensation o! t e red%ced n%mber o! labo%rers by intensi!ying t e degree o! exploitation as certain ins%rmo%ntable limits0 &t may, !or t is reason, @ell c eck t e !all in t e rate o! pro!it, b%t cannot pre8ent it altoget er0 Wit t e de8elopment o! t e capitalist mode o! prod%ction, t ere!ore, t e rate o! pro!it !alls, @ ile its mass increases @it t e gro@ing mass o! t e capital employed0 :i8en t e rate, t e

1>=

; apter J4

absol%te increase in t e mass o! capital depends on its existing magnit%de0 A%t, on t e ot er and, i! t is magnit%de is gi8en, t e proportion o! its gro@t , i.e. , t e rate o! its increment, depends on t e rate o! pro!it0 5 e increase in t e prod%cti8eness B@ ic , moreo8er, @e repeat, al@ays goes and in and @it a depreciation o! t e a8ailable capitalC can directly only increase t e 8al%e o! t e existing capital i! by raising t e rate o! pro!it it increases t at portion o! t e 8al%e o! t e ann%al prod%ct @ ic is recon8erted into capital0 ?s concerns t e prod%cti8ity o! labo%r, t is can only occ%r Bsince t is prod%cti8ity as not ing direct to do @it t e value o! t e existing capitalC by raising t e relati8e s%rpl%s-8al%e, or red%cing t e 8al%e o! t e constant capital, so t at t e commodities @ ic enter eit er t e reprod%ction o! labo%r-po@er, or t e elements o! constant capital, are c eapened0 Aot imply a depreciation o! t e existing capital, and bot go and in and @it a red%ction o! t e 8ariable capital in relation to t e constant0 Aot ca%se a !all in t e rate o! pro!it, and bot slo@ it do@n0 F%rt ermore, inasm%c as an increased rate o! pro!it ca%ses a greater demand !or labo%r, it tends to increase t e @orking pop%lation and t %s t e material, @ ose exploitation makes real capital o%t o! capital0 &ndirectly, o@e8er, t e de8elopment o! t e prod%cti8ity o! labo%r contrib%tes to t e increase o! t e 8al%e o! t e existing capital by increasing t e mass and 8ariety o! %se-8al%es in @ ic t e same exc ange-8al%e is represented and @ ic !orm t e material s%bstance, i.e. , t e material elements o! capital, t e material obHects making %p t e constant capital directly, and t e 8ariable capital at least indirectly0 More prod%cts @ ic may be con8erted into capital, @ ate8er t eir exc ange-8al%e, are created @it t e same capital and t e same labo%r0 5 ese prod%cts may ser8e to absorb additional labo%r, ence also additional s%rpl%s-labo%r, and t ere!ore create additional capital0 5 e amo%nt o! labo%r @ ic a capital can command does not depend on its 8al%e, b%t on t e mass o! ra@ and a%xiliary materials, mac inery and elements o! !ixed capital and necessities o! li!e, all o! @ ic it comprises, @ ate8er t eir 8al%e may be0 ?s t e mass o! t e labo%r employed, and t %s o! s%rpl%s-labo%r increases, t ere is also a gro@t in t e 8al%e o! t e reprod%ced capital and in t e s%rpl%s-8al%e ne@ly added to it0 5 ese t@o elements embraced by t e process o! acc%m%lation, o@e8er, are not to be regarded merely as existing side by side in repose, as )icardo does0 5 ey contain a contradiction @ ic mani!ests itsel! in contradictory tendencies and p enomena0 5 ese antagonistic agencies co%nteract eac ot er sim%ltaneo%sly0 ?longside t e stim%lants o! an act%al increase o! t e labo%ring pop%lation, @ ic spring !rom t e increase o! t e portion o! t e total social prod%ct ser8ing as capital, t ere are agencies @ ic create a merely relati8e o8er-pop%lation0 ?longside t e !all in t e rate o! pro!it mass o! capitals gro@s, and and in and @it t is t ere occ%rs a depreciation o! existing capitals @ ic c ecks t e !all and gi8es an accelerating motion to t e acc%m%lation o! capital-8al%es0 ?longside t e de8elopment o! prod%cti8ity t ere de8elops a ig er composition o! capital, i.e., t e relati8e decrease o! t e ratio o! 8ariable to constant capital0 5 ese di!!erent in!l%ences may at one time operate predominantly side by side in space, and at anot er s%cceed eac ot er in time0 From time to time t e con!lict o! antagonistic agencies !inds 8ent in crises0 5 e crises are al@ays b%t momentary and !orcible sol%tions o! t e existing contradictions0 5 ey are 8iolent er%ptions @ ic !or a time restore t e dist%rbed eD%ilibri%m0 5 e contradiction, to p%t it in a 8ery general @ay, consists in t at t e capitalist mode o! prod%ction in8ol8es a tendency to@ards absol%te de8elopment o! t e prod%cti8e !orces, regardless o! t e 8al%e and s%rpl%s-8al%e it contains, and regardless o! t e social conditions %nder @ ic capitalist prod%ction takes place# @ ile, on t e ot er and, its aim is to preser8e t e 8al%e o! t e existing capital and promote its sel!-expansion to t e ig est limit B i.e., to promote an e8er more rapid gro@t o! t is 8al%eC0 5 e speci!ic !eat%re abo%t it is t at it %ses t e existing 8al%e o! capital as a means o! increasing t is 8al%e to t e %tmost0 5 e met ods by @ ic it accomplis es

1>1

; apter J4

t is incl%de t e !all o! t e rate o! pro!it, depreciation o! existing capital, and de8elopment o! t e prod%cti8e !orces o! labo%r at t e expense o! already created prod%cti8e !orces0 5 e periodical depreciation o! existing capital I one o! t e means immanent in capitalist prod%ction to c eck t e !all o! t e rate o! pro!it and asten acc%m%lation o! capital-8al%e t ro%g !ormation o! ne@ capital I dist%rbs t e gi8en conditions, @it in @ ic t e process o! circ%lation and reprod%ction o! capital takes place, and is t ere!ore accompanied by s%dden stoppages and crises in t e prod%ction process0 5 e decrease o! 8ariable in relation to constant capital, @ ic goes and in and @it t e de8elopment o! t e prod%cti8e !orces, stim%lates t e gro@t o! t e labo%ring pop%lation, @ ile contin%ally creating an arti!icial o8er-pop%lation0 5 e acc%m%lation o! capital in terms o! 8al%e is slo@ed do@n by t e !alling rate o! pro!it, to asten still more t e acc%m%lation o! %se-8al%es, @ ile t is, in its t%rn, adds ne@ moment%m to acc%m%lation in terms o! 8al%e0 ;apitalist prod%ction seeks contin%ally to o8ercome t ese immanent barriers, b%t o8ercomes t em only by means @ ic again place t ese barriers in its @ay and on a more !ormidable scale0 5 e real barrier o! capitalist prod%ction is capital itself0 &t is t at capital and its sel!-expansion appear as t e starting and t e closing point, t e moti8e and t e p%rpose o! prod%ction# t at prod%ction is only prod%ction !or capital and not 8ice 8ersa, t e means o! prod%ction are not mere means !or a constant expansion o! t e li8ing process o! t e society o! prod%cers0 5 e limits @it in @ ic t e preser8ation and sel!-expansion o! t e 8al%e o! capital resting on t e expropriation and pa%perisation o! t e great mass o! prod%cers can alone mo8e I t ese limits come contin%ally into con!lict @it t e met ods o! prod%ction employed by capital !or its p%rposes, @ ic dri8e to@ards %nlimited extension o! prod%ction, to@ards prod%ction as an end in itsel!, to@ards %nconditional de8elopment o! t e social prod%cti8ity o! labo%r0 5 e means I %nconditional de8elopment o! t e prod%cti8e !orces o! society I comes contin%ally into con!lict @it t e limited p%rpose, t e sel!-expansion o! t e existing capital0 5 e capitalist mode o! prod%ction is, !or t is reason, a istorical means o! de8eloping t e material !orces o! prod%ction and creating an appropriate @orld-market and is, at t e same time, a contin%al con!lict bet@een t is its istorical task and its o@n corresponding relations o! social prod%ction0

III. !cess Capital And !cess Population


? drop in t e rate o! pro!it is attended by a rise in t e minim%m capital reD%ired by an indi8id%al capitalist !or t e prod%cti8e employment o! labo%r# reD%ired bot !or its exploitation generally, and !or making t e cons%med labo%r-time s%!!ice as t e labo%r-time necessary !or t e prod%ction o! t e commodities, so t at it does not exceed t e a8erage social labo%r-time reD%ired !or t e prod%ction o! t e commodities0 ;oncentration increases sim%ltaneo%sly, beca%se beyond certain limits a large capital @it a small rate o! pro!it acc%m%lates !aster t an a small capital @it a large rate o! pro!it0 ?t a certain ig point t is increasing concentration in its t%rn ca%ses a ne@ !all in t e rate o! pro!it0 5 e mass o! small dispersed capitals is t ereby dri8en along t e ad8ent%ro%s road o! spec%lation, credit !ra%ds, stock s@indles, and crises0 5 e so-called plet ora o! capital al@ays applies essentially to a plet ora o! t e capital !or @ ic t e !all in t e rate o! pro!it is not compensated t ro%g t e mass o! pro!it I t is is al@ays tr%e o! ne@ly de8eloping !res o!!s oots o! capital I or to a plet ora @ ic places capitals incapable o! action on t eir o@n at t e disposal o! t e managers o! large enterprises in t e !orm o! credit0 5 is plet ora o! capital arises !rom t e same ca%ses as t ose @ ic call !ort relati8e o8er-pop%lation, and is, t ere!ore, a p enomenon s%pplementing t e latter, alt o%g t ey stand at opposite poles I %nemployed capital at one pole, and %nemployed @orker pop%lation at t e ot er0 38er-prod%ction o! capital, not o! indi8id%al commodities I alt o%g o8er-prod%ction o! capital al@ays incl%des o8er-prod%ction o! commodities I is t ere!ore simply o8er-acc%m%lation o! capital0 5o appreciate @ at t is o8er-acc%m%lation is Bits closer analysis !ollo@s laterC, one need

1><

; apter J4

only ass%me it to be absol%te0 W en @o%ld o8er-prod%ction o! capital be absol%teQ 38erprod%ction @ ic @o%ld a!!ect not H%st one or anot er, or a !e@ important sp eres o! prod%ction, b%t @o%ld be absol%te in its !%ll scope, ence @o%ld extend to all !ields o! prod%ctionQ 5 ere @o%ld be absol%te o8er-prod%ction o! capital as soon as additional capital !or p%rposes o! capitalist prod%ction R =0 5 e p%rpose o! capitalist prod%ction, o@e8er, is sel!-expansion o! capital, i.e., appropriation o! s%rpl%s-labo%r, prod%ction o! s%rpl%s-8al%e, o! pro!it0 ?s soon as capital @o%ld, t ere!ore, a8e gro@n in s%c a ratio to t e labo%ring pop%lation t at neit er t e absol%te @orking-time s%pplied by t is pop%lation, nor t e relati8e s%rpl%s @orking-time, co%ld be expanded any !%rt er Bt is last @o%ld not be !easible at any rate in t e case @ en t e demand !or labo%r @ere so strong t at t ere @ere a tendency !or @ages to riseC# at a point, t ere!ore, @ en t e increased capital prod%ced H%st as m%c , or e8en less, s%rpl%s-8al%e t an it did be!ore its increase, t ere @o%ld be absol%te o8er-prod%ction o! capital# i.e., t e increased capital ; U c; @o%ld prod%ce no more, or e8en less, pro!it t an capital ; be!ore its expansion by c;0 &n bot cases t ere @o%ld be a steep and s%dden !all in t e general rate o! pro!it, b%t t is time d%e to a c ange in t e composition o! capital not ca%sed by t e de8elopment o! t e prod%cti8e !orces, b%t rat er by a rise in t e money-8al%e o! t e 8ariable capital Bbeca%se o! increased @agesC and t e corresponding red%ction in t e proportion o! s%rpl%s-labo%r to necessary labo%r0 &n reality, it @o%ld appear t at a portion o! t e capital @o%ld lie completely or partially idle Bbeca%se it @o%ld a8e to cro@d o%t some o! t e acti8e capital be!ore it co%ld expand its o@n 8al%eC, and t e ot er portion @o%ld prod%ce 8al%es at a lo@er rate o! pro!it, o@ing to t e press%re o! %nemployed or b%t partly employed capital0 &t @o%ld be immaterial in t is respect i! a part o! t e additional capital @ere to take t e place o! t e old capital, and t e latter @ere to take its position in t e additional capital0 We s o%ld still al@ays a8e t e old s%m o! capital on one side, and t e s%m o! additional capital on t e ot er0 5 e !all in t e rate o! pro!it @o%ld t en be accompanied by an absol%te decrease in t e mass o! pro!it, since t e mass o! employed labo%rpo@er co%ld not be increased and t e rate o! s%rpl%s-8al%e raised %nder t e conditions @e ad ass%med, so t at t e mass o! s%rpl%s-8al%e co%ld not be increased eit er0 ?nd t e red%ced mass o! pro!it @o%ld a8e to be calc%lated on an increased total capital0 A%t e8en i! it is ass%med t at t e employed capital contin%es to sel!-expand at t e old rate o! pro!it, and t e mass o! pro!it ence remains t e same, t is mass @o%ld still e calc%lated on an increased total capital, t is like@ise implying a !all in t e rate o! pro!it0 &! a total capital o! 1,=== yielded a pro!it o! 1==, and a!ter being increased to 1,+== still yielded 1==, t en, in t e second case, 1,=== @o%ld yield only 66W0 $el!-expansion o! t e old capital, in t e absol%te sense, @o%ld a8e been red%ced0 5 e capital R 1,=== @o%ld yield no more %nder t e ne@ circ%mstances t an !ormerly a capital R 666W0 &t is e8ident, o@e8er, t at t is act%al depreciation o! t e old capital co%ld not occ%r @it o%t a str%ggle, and t at t e additional capital c; co%ld not ass%me t e !%nctions o! capital @it o%t a str%ggle0 5 e rate o! pro!it @o%ld not !all %nder t e e!!ect o! competition d%e to o8er-prod%ction o! capital0 &t @o%ld rat er be t e re8erse# it @o%ld be t e competiti8e str%ggle @ ic @o%ld begin beca%se t e !allen rate o! pro!it and o8er-prod%ction o! capital originate !rom t e same conditions0 5 e part o! c; in t e ands o! old !%nctioning capitalists @o%ld be allo@ed to remain more or less idle to pre8ent a depreciation o! t eir o@n original capital and not to narro@ its place in t e !ield o! prod%ction0 3r t ey @o%ld employ it, e8en at a momentary loss, to s i!t t e need o! keeping additional capital idle on ne@comers and on t eir competitors in general0 5 at portion o! c; @ ic is in ne@ ands @o%ld seek to ass%me a place !or itsel! at t e expense o! t e old capital, and @o%ld accomplis t is in part by !orcing a portion o! t e old capital to lie idle0 &t @o%ld compel t e old capital to gi8e %p its old place and @it dra@ to Hoin completely or partially %nemployed additional capital0 ? portion o! t e old capital as to lie %n%sed %nder all circ%mstances# it as to gi8e %p its c aracteristic D%ality as capital, so !ar as acting as s%c and prod%cing 8al%e is concerned0 5 e

1>3

; apter J4

competiti8e str%ggle @o%ld decide @ at part o! it @o%ld be partic%larly a!!ected0 $o long as t ings go @ell, competition e!!ects an operating !raternity o! t e capitalist class, as @e a8e seen in t e case o! t e eD%alisation o! t e general rate o! pro!it, so t at eac s ares in t e common loot in proportion to t e siEe o! is respecti8e in8estment0 A%t as soon as it no longer is a D%estion o! s aring pro!its, b%t o! s aring losses, e8eryone tries to red%ce is o@n s are to a minim%m and to s o8e it o!! %pon anot er0 5 e class, as s%c , m%st ine8itably lose0 6o@ m%c t e indi8id%al capitalist m%st bear o! t e loss, i.e., to @ at extent e m%st s are in it at all, is decided by strengt and c%nning, and competition t en becomes a !ig t among ostile brot ers0 5 e antagonism bet@een eac indi8id%al capitalist"s interests and t ose o! t e capitalist class as a @ ole, t en comes to t e s%r!ace, H%st as pre8io%sly t e identity o! t ese interests operated in practice t ro%g competition0 6o@ is t is con!lict settled and t e conditions restored @ ic correspond to t e Kso%ndL operation o! capitalist prod%ctionQ 5 e mode o! settlement is already indicated in t e 8ery emergence o! t e con!lict @ ose settlement is %nder disc%ssion0 &t implies t e @it dra@al and e8en t e partial destr%ction o! capital amo%nting to t e !%ll 8al%e o! additional capital c;, or at least a part o! it0 ?lt o%g , as t e description o! t is con!lict s o@s, t e loss is by no means eD%ally distrib%ted among indi8id%al capitals, its distrib%tion being rat er decided t ro%g a competiti8e str%ggle in @ ic t e loss is distrib%ted in 8ery di!!erent proportions and !orms, depending on special ad8antages or pre8io%sly capt%red positions, so t at one capital is le!t %n%sed, anot er is destroyed, and a t ird s%!!ers b%t a relati8e loss, or is H%st temporarily depreciated, etc0 A%t t e eD%ilibri%m @o%ld be restored %nder all circ%mstances t ro%g t e @it dra@al or e8en t e destr%ction o! more or less capital0 5 is @o%ld extend partly to t e material s%bstance o! capital, i.e., a part o! t e means o! prod%ction, o! !ixed and circ%lating capital, @o%ld not operate, not act as capital# some o! t e operating establis ments @o%ld t en be bro%g t to a standstill0 ?lt o%g , in t is respect, time attacks and @orsens all means o! prod%ction Bexcept landC, t e stoppage @o%ld in reality ca%se !ar greater damage to t e means o! prod%ction0 6o@e8er, t e main e!!ect in t is case @o%ld be t at t ese means o! prod%ction @o%ld cease to !%nction as s%c , t at t eir !%nction as means o! prod%ction @o%ld be dist%rbed !or a s orter or longer period0 5 e main damage, and t at o! t e most ac%te nat%re, @o%ld occ%r in respect to capital, and in so !ar as t e latter possesses t e c aracteristic o! 8al%e it @o%ld occ%r in respect to t e values o! capitals0 5 at portion o! t e 8al%e o! a capital @ ic exists only in t e !orm o! claims on prospecti8e s ares o! s%rpl%s-8al%e, i.e., pro!it, in !act in t e !orm o! promissory notes on prod%ction in 8ario%s !orms, is immediately depreciated by t e red%ction o! t e receipts on @ ic it is calc%lated0 ? part o! t e gold and sil8er lies %n%sed, i.e., does not !%nction as capital0 ,art o! t e commodities on t e market can complete t eir process o! circ%lation and reprod%ction only t ro%g an immense contraction o! t eir prices, ence t ro%g a depreciation o! t e capital @ ic t ey represent0 5 e elements o! !ixed capital are depreciated to a greater or lesser degree in H%st t e same @ay0 &t m%st be added t at de!inite, pres%pposed, price relations go8ern t e process o! reprod%ction, so t at t e latter is alted and t ro@n into con!%sion by a general drop in prices0 5 is con!%sion and stagnation paralyses t e !%nction o! money as a medi%m o! payment, @ ose de8elopment is geared to t e de8elopment o! capital and is based on t ose pres%pposed price relations0 5 e c ain o! payment obligations d%e at speci!ic dates is broken in a %ndred places0 5 e con!%sion is a%gmented by t e attendant collapse o! t e credit system, @ ic de8elops sim%ltaneo%sly @it capital, and leads to 8iolent and ac%te crises, to s%dden and !orcible depreciations, to t e act%al stagnation and disr%ption o! t e process o! reprod%ction, and t %s to a real !alling o!! in reprod%ction0 A%t t ere @o%ld a8e been still ot er agencies at @ork at t e same time0 5 e stagnation o! prod%ction @o%ld a8e laid o!! a part o! t e @orking-class and @o%ld t ereby a8e placed t e employed part in a sit%ation, @ ere it @o%ld a8e to s%bmit to a red%ction o! @ages e8en belo@ t e a8erage0 5 is as t e 8ery same e!!ect on capital as an increase o! t e relati8e or absol%te

1>2

; apter J4

s%rpl%s-8al%e at a8erage @ages @o%ld a8e ad0 ,rosperity @o%ld a8e led to more marriages among labo%rers and red%ced t e decimation o! o!!spring0 W ile implying a real increase in pop%lation, t is does not signi!y an increase in t e act%al @orking pop%lation0 A%t it a!!ects t e relations o! t e labo%rer to capital in t e same @ay as an increase o! t e n%mber o! act%ally @orking labo%rers @o%ld a8e a!!ected t em0 3n t e ot er and, t e !all in prices and t e competiti8e str%ggle @o%ld a8e dri8en e8ery capitalist to lo@er t e indi8id%al 8al%e o! is total prod%ct belo@ its general 8al%e by means o! ne@ mac ines, ne@ and impro8ed @orking met ods, ne@ combinations, i.e., to increase t e prod%cti8ity o! a gi8en D%antity o! labo%r, to lo@er t e proportion o! 8ariable to constant capital, and t ereby to release some labo%rers# in s ort, to create an arti!icial o8er-pop%lation0 (ltimately, t e depreciation o! t e elements o! constant capital @o%ld itsel! tend to raise t e rate o! pro!it0 5 e mass o! employed constant capital @o%ld a8e increased in relation to 8ariable, b%t its 8al%e co%ld a8e !allen0 5 e ens%ing stagnation o! prod%ction @o%ld a8e prepared I @it in capitalistic limits I a s%bseD%ent expansion o! prod%ction0 ?nd t %s t e cycle @o%ld r%n its co%rse ane@0 ,art o! t e capital, depreciated by its !%nctional stagnation, @o%ld reco8er its old 8al%e0 For t e rest, t e same 8icio%s circle @o%ld be described once more %nder expanded conditions o! prod%ction, @it an expanded market and increased prod%cti8e !orces0 6o@e8er, e8en %nder t e extreme conditions ass%med by %s t is absol%te o8er-prod%ction o! capital is not absol%te o8er-prod%ction, not absol%te o8er-prod%ction o! means o! prod%ction0 &t is o8er-prod%ction o! means o! prod%ction only in so !ar as t e latter ser8e as capital, and conseD%ently incl%de a sel!-expansion o! 8al%e, m%st prod%ce an additional 8al%e in proportion to t e increased mass0 .et it @o%ld still be o8er-prod%ction, beca%se capital @o%ld be %nable to exploit labo%r to t e degree reD%ired by a Kso%ndL, KnormalL de8elopment o! t e process o! capitalist prod%ction, to a degree @ ic @o%ld at least increase t e mass o! pro!it along @it t e gro@ing mass o! t e employed capital# to a degree @ ic @o%ld, t ere!ore, pre8ent t e rate o! pro!it !rom !alling as m%c as t e capital gro@s, or e8en more rapidly0 38er-prod%ction o! capital is ne8er anyt ing more t an o8er-prod%ction o! means o! prod%ction I o! means o! labo%r and necessities o! li!e I @ ic may ser8e as capital, i.e., may ser8e to exploit labo%r at a gi8en degree o! exploitation# a !all in t e intensity o! exploitation belo@ a certain point, o@e8er, calls !ort dist%rbances, and stoppages in t e capitalist prod%ction process, crises, and destr%ction o! capital0 &t is no contradiction t at t is o8er-prod%ction o! capital is accompanied by more or less considerable relati8e o8er-pop%lation0 5 e circ%mstances @ ic increased t e prod%cti8eness o! labo%r, a%gmented t e mass o! prod%ced commodities, expanded markets, accelerated acc%m%lation o! capital bot in terms o! its mass and its 8al%e, and lo@ered t e rate o! pro!it I t ese same circ%mstances a8e also created, and contin%o%sly create, a relati8e o8erpop%lation, an o8er-pop%lation o! labo%rers not employed by t e s%rpl%s-capital o@ing to t e lo@ degree o! exploitation at @ ic alone t ey co%ld be employed, or at least o@ing to t e lo@ rate o! pro!it @ ic t ey @o%ld yield at t e gi8en degree o! exploitation0 &! capital is sent abroad, t is is not done beca%se it absol%tely co%ld not be applied at ome, b%t beca%se it can be employed at a ig er rate o! pro!it in a !oreign co%ntry0 A%t s%c capital is absol%te excess capital !or t e employed labo%ring pop%lation and !or t e ome co%ntry in general0 &t exists as s%c alongside t e relati8e o8er-pop%lation, and t is is an ill%stration o! o@ bot o! t em exist side by side, and m%t%ally in!l%ence one anot er0 3n t e ot er and, a !all in t e rate o! pro!it connected @it acc%m%lation necessarily calls !ort a competiti8e str%ggle0 ;ompensation o! a !all in t e rate o! pro!it by a rise in t e mass o! pro!it applies only to t e total social capital and to t e big, !irmly placed capitalists0 5 e ne@ additional capital operating independently does not enHoy any s%c compensating conditions0 &t m%st still

1>+

; apter J4

@in t em, and so it is t at a !all in t e rate o! pro!it calls !ort a competiti8e str%ggle among capitalists, not 8ice 8ersa0 5o be s%re, t e competiti8e str%ggle is accompanied by a temporary rise in @ages and a res%ltant !%rt er temporary !all o! t e rate o! pro!it0 5 e same occ%rs @ en t ere is an o8er-prod%ction o! commodities, @ en markets are o8erstocked0 $ince t e aim o! capital is not to minister to certain @ants, b%t to prod%ce pro!it, and since it accomplis es t is p%rpose by met ods @ ic adapt t e mass o! prod%ction to t e scale o! prod%ction, not 8ice 8ersa, a ri!t m%st contin%ally ens%e bet@een t e limited dimensions o! cons%mption %nder capitalism and a prod%ction @ ic !ore8er tends to exceed t is immanent barrier0 F%rt ermore, capital consists o! commodities, and t ere!ore o8er-prod%ction o! capital implies o8er-prod%ction o! commodities0 6ence t e pec%liar p enomenon o! economists @ o deny o8er-prod%ction o! commodities, admitting o8er-prod%ction o! capital0 5o say t at t ere is no general o8erprod%ction, b%t rat er a disproportion @it in t e 8ario%s branc es o! prod%ction, is no more t an to say t at %nder capitalist prod%ction t e proportionality o! t e indi8id%al branc es o! prod%ction springs as a contin%al process !rom disproportionality, beca%se t e co esion o! t e aggregate prod%ction imposes itsel! as a blind la@ %pon t e agents o! prod%ction, and not as a la@ @ ic , being %nderstood and ence controlled by t eir common mind, brings t e prod%cti8e process %nder t eir Hoint control0 &t amo%nts !%rt ermore to demanding t at co%ntries in @ ic capitalist prod%ction is not de8eloped, s o%ld cons%me and prod%ce at a rate @ ic s%its t e co%ntries @it capitalist prod%ction0 &! it is said t at o8er-prod%ction is only relati8e, t is is D%ite correct# b%t t e entire capitalist mode o! prod%ction is only a relati8e one, @ ose barriers are not absol%te0 5 ey are absol%te only !or t is mode, i.e., on its basis0 6o@ co%ld t ere ot er@ise be a s ortage o! demand !or t e 8ery commodities @ ic t e mass o! t e people lack, and o@ @o%ld it be possible !or t is demand to be so%g t abroad, in !oreign markets, to pay t e labo%rers at ome t e a8erage amo%nt o! necessities o! li!eQ 5 is is possible only beca%se in t is speci!ic capitalist interrelation t e s%rpl%s-prod%ct ass%mes a !orm in @ ic its o@ner cannot o!!er it !or cons%mption, %nless it !irst recon8erts itsel! into capital !or im0 &! it is !inally said t at t e capitalists a8e only to exc ange and cons%me t eir commodities among t emsel8es, t en t e entire nat%re o! t e capitalist mode o! prod%ction is lost sig t o!# and also !orgotten is t e !act t at it is a matter o! expanding t e 8al%e o! t e capital, not cons%ming it0 &n s ort, all t ese obHections to t e ob8io%s p enomena o! o8er-prod%ction Bp enomena @ ic pay no eed to t ese obHectionsC amo%nt to t e contention t at t e barriers o! capitalist prod%ction are not barriers o! production generally, and t ere!ore not barriers o! t is speci!ic, capitalist mode o! prod%ction0 5 e contradiction o! t e capitalist mode o! prod%ction, o@e8er, lies precisely in its tendency to@ards an absol%te de8elopment o! t e prod%cti8e !orces, @ ic contin%ally come into con!lict @it t e speci!ic conditions o! prod%ction in @ ic capital mo8es, and alone can mo8e0 5 ere are not too many necessities o! li!e prod%ced, in proportion to t e existing pop%lation0 M%ite t e re8erse0 5oo little is prod%ced to decently and %manely satis!y t e @ants o! t e great mass0 5 ere are not too many means o! prod%ction prod%ced to employ t e able-bodied portion o! t e pop%lation0 M%ite t e re8erse0 &n t e !irst place, too large a portion o! t e prod%ced pop%lation is not really capable o! @orking, and is t ro%g !orce o! circ%mstances made dependent on exploiting t e labo%r o! ot ers, or on labo%r @ ic can pass %nder t is name only %nder a miserable mode o! prod%ction0 &n t e second place, not eno%g means o! prod%ction are prod%ced to permit t e employment o! t e entire able-bodied pop%lation %nder t e most prod%cti8e conditions, so t at t eir absol%te @orking period co%ld be s ortened by t e mass and e!!ecti8eness o! t e constant capital employed d%ring @orking- o%rs0 3n t e ot er and, too many means o! labo%r and necessities o! li!e are prod%ced at times to permit o! t eir ser8ing as means !or t e exploitation o! labo%rers at a certain rate o! pro!it0 5oo many commodities are prod%ced to permit o! a realisation and con8ersion into ne@ capital o! t e 8al%e and s%rpl%s-8al%e contained in t em %nder t e conditions o! distrib%tion and cons%mption

1>6

; apter J4

pec%liar to capitalist prod%ction, i.e., too many to permit o! t e cons%mmation o! t is process @it o%t constantly rec%rring explosions0 -ot too m%c @ealt is prod%ced0 A%t at times too m%c @ealt is prod%ced in its capitalistic, sel!-contradictory !orms0 5 e limitations o! t e capitalist mode o! prod%ction come to t e s%r!ace: 1C &n t at t e de8elopment o! t e prod%cti8ity o! labo%r creates o%t o! t e !alling rate o! pro!it a la@ @ ic at a certain point comes into antagonistic con!lict @it t is de8elopment and m%st be o8ercome constantly t ro%g crises0 <C &n t at t e expansion or contraction o! prod%ction are determined by t e appropriation o! %npaid labo%r and t e proportion o! t is %npaid labo%r to materialised labo%r in general, or, to speak t e lang%age o! t e capitalists, by pro!it and t e proportion o! t is pro!it to t e employed capital, t %s by a de!inite rate o! pro!it, rat er t an t e relation o! prod%ction to social reD%irements, i.e., to t e reD%irements o!" socially de8eloped %man beings0 &t is !or t is reason t at t e capitalist mode o! prod%ction meets @it barriers at a certain expanded stage o! prod%ction @ ic , i! 8ie@ed !rom t e ot er premise, @o%ld re8ersely a8e been altoget er inadeD%ate0 &t comes to a standstill at a point !ixed by t e prod%ction and realisation o! pro!it, and not t e satis!action o! reD%irements0 &! t e rate o! pro!it !alls, t ere !ollo@s, on t e one and, an exertion o! capital in order t at t e indi8id%al capitalists, t ro%g impro8ed met ods, etc0, may depress t e 8al%e o! t eir indi8id%al commodity belo@ t e social a8erage 8al%e and t ereby realise an extra pro!it at t e pre8ailing market-price0 3n t e ot er and, t ere appears s@indling and a general promotion o! s@indling by reco%rse to !renEied 8ent%res @it ne@ met ods o! prod%ction, ne@ in8estments o! capital, ne@ ad8ent%res, all !or t e sake o! sec%ring a s red o! extra pro!it @ ic is independent o! t e general a8erage and rises abo8e it0 5 e rate o! pro!it, i.e., t e relati8e increment o! capital, is abo8e all important to all ne@ o!!s oots o! capital seeking to !ind an independent place !or t emsel8es0 ?nd as soon as !ormation o! capital @ere to !all into t e ands o! a !e@ establis ed big capitals, !or @ ic t e mass o! pro!it compensates !or t e !alling rate o! pro!it, t e 8ital !lame o! prod%ction @o%ld be altoget er exting%is ed0 &t @o%ld die o%t0 5 e rate o! pro!it is t e moti8e po@er o! capitalist prod%ction0 5 ings are prod%ced only so long as t ey can be prod%ced @it a pro!it0 6ence t e concern o! t e Englis economists o8er t e decline o! t e rate o! pro!it0 5 e !act t at t e bare possibility o! t is appening s o%ld @orry )icardo, s o@s is pro!o%nd %nderstanding o! t e conditions o! capitalist prod%ction0 &t is t at @ ic is eld against im, it is is %nconcern abo%t K %man beings,L and is a8ing an eye solely !or t e de8elopment o! t e prod%cti8e !orces, @ ate8er t e cost in %man beings and capital- values I it is precisely t at @ ic is t e important t ing abo%t im0 7e8elopment o! t e prod%cti8e !orces o! social labo%r is t e istorical task and H%sti!ication o! capital0 5 is is H%st t e @ay in @ ic it %nconscio%sly creates t e material reD%irements o! a ig er mode o! prod%ction0 W at @orries )icardo is t e !act t at t e rate o! pro!it, t e stim%lating principle o! capitalist prod%ction, t e !%ndamental premise and dri8ing !orce o! acc%m%lation, s o%ld be endangered by t e de8elopment o! prod%ction itsel!0 ?nd ere t e D%antitati8e proportion means e8eryt ing0 5 ere is, indeed, somet ing deeper be ind it, o! @ ic e is only 8ag%ely a@are0 &t comes to t e s%r!ace ere in a p%rely economic @ay I i.e., !rom t e bo%rgeois point o! 8ie@, @it in t e limitations o! capitalist %nderstanding, !rom t e standpoint o! capitalist prod%ction itsel! I t at it as its barrier, t at it is relati8e, t at it is not an absol%te, b%t only a istorical mode o! prod%ction corresponding to a de!inite limited epoc in t e de8elopment o! t e material reD%irements o! prod%ction0

1>>

; apter J4

IV. Supplementar# )emar2s


$ince t e de8elopment o! t e prod%cti8ity o! labo%r proceeds 8ery disproportionately in t e 8ario%s lines o! ind%stry, and not only disproportionately in degree b%t !reD%ently also in opposite directions, it !ollo@s t at t e mass o! a8erage pro!it BR s%rpl%s-8al%eC m%st be s%bstantially belo@ t e le8el one @o%ld nat%rally expect a!ter t e de8elopment o! t e prod%cti8eness in t e most ad8anced branc es o! ind%stry0 5 e !act t at t e de8elopment o! t e prod%cti8ity in di!!erent lines o! ind%stry proceeds at s%bstantially di!!erent rates and !reD%ently e8en in opposite directions, is not d%e merely to t e anarc y o! competition and t e pec%liarity o! t e bo%rgeois mode o! prod%ction0 ,rod%cti8ity o! labo%r is also bo%nd %p @it nat%ral conditions, @ ic !reD%ently become less prod%cti8e as prod%cti8ity gro@s I inasm%c as t e latter depends on social conditions0 6ence t e opposite mo8ements in t ese di!!erent sp eres I progress ere, and retrogression t ere0 ;onsider t e mere in!l%ence o! t e seasons, !or instance, on @ ic t e b%lk o! ra@ materials depends !or its mass, t e ex a%stion o! !orest lands, coal and iron mines, etc0 W ile t e circ%lating part o! constant capital, s%c as ra@ materials, etc0, contin%ally increases its mass in proportion to t e prod%cti8ity o! labo%r, t is is not t e case @it !ixed capital, s%c as b%ildings, mac inery, and lig ting and eating !acilities, etc0 ?lt o%g in absol%te terms a mac ine becomes dearer @it t e gro@t o! its bodily mass, it becomes relati8ely c eaper0 &! !i8e labo%rers prod%ce ten times as m%c o! a commodity as be!ore, t is does not increase t e o%tlay !or !ixed capital ten-!old# alt o%g t e 8al%e o! t is part o! constant capital increases @it t e de8elopment o! t e prod%cti8eness, it does not by any means increase in t e same proportion0 We a8e !reD%ently pointed o%t t e di!!erence in t e ratio o! constant to 8ariable capital as expressed in t e !all o! t e rate o! pro!it, and t e di!!erence in t e same ratio as expressed in relation to t e indi8id%al commodity and its price @it t e de8elopment o! t e prod%cti8ity o! labo%r0 /5 e 8al%e o! a commodity is determined by t e total labo%r-time o! past and li8ing labo%r incorporated in it0 5 e increase in labo%r prod%cti8ity consists precisely in t at t e s are o! li8ing labo%r is red%ced @ ile t at o! past labo%r is increased, b%t in s%c a @ay t at t e total D%antity o! labo%r incorporated in t at commodity declines# in s%c a @ay, t ere!ore, t at li8ing labo%r decreases more t an past labo%r increases0 5 e past labo%r contained in t e 8al%e o! a commodity I t e constant part o! capital I consists partly o! t e @ear and tear o! !ixed, partly o! circ%lating, constant capital entirely cons%med by t at commodity, s%c as ra@ and a%xiliary materials0 5 e portion o! 8al%e deri8ing !rom ra@ and a%xiliary materials m%st decrease @it t e increased prod%cti8ity o! labo%r, beca%se @it regard to t ese materials t e prod%cti8ity expresses itsel! precisely by red%cing t eir 8al%e0 3n t e ot er and, it is most c aracteristic o! rising labo%r prod%cti8ity t at t e !ixed part o! constant capital is strongly a%gmented, and @it it t at portion o! its 8al%e @ ic is trans!erred by @ear and tear to t e commodities0 For a ne@ met od o! prod%ction to represent a real increase in prod%cti8ity, it m%st trans!er a smaller additional portion o! t e 8al%e o! !ixed capital to eac %nit o! t e commodity in @ear and tear t an t e portion o! 8al%e ded%cted !rom it t ro%g t e sa8ing in li8ing labo%r# in s ort, it m%st red%ce t e 8al%e o! t e commodity0 &t m%st ob8io%sly do so e8en i!, as it occ%rs in some cases, an additional 8al%e goes into t e 8al%e o! t e commodity !or more or dearer ra@ or a%xiliary materials o8er and abo8e t e additional portion !or @ear and tear o! t e !ixed capital0 ?ll additions to t e 8al%e m%st be more t an o!!set by t e red%ction in 8al%e res%lting !rom t e decrease in li8ing labo%r0 5 is red%ction o! t e total D%antity o! labo%r going into a commodity seems, accordingly, to be t e essential criterion o! increased prod%cti8ity o! labo%r, no matter %nder @ at social conditions prod%ction is carried on0 ,rod%cti8ity o! labo%r, indeed, @o%ld al@ays be meas%red by t is standard in a society, in @ ic prod%cers reg%late t eir prod%ction according to a preconcei8ed plan, or e8en %nder simple commodity-prod%ction0 A%t o@ does t e matter stand %nder capitalist prod%ctionQ

1>8

; apter J4

$%ppose, a certain line o! capitalist ind%stry prod%ces a normal %nit o! its commodity %nder t e !ollo@ing conditions: 5 e @ear and tear o! !ixed capital amo%nts to Z s illing per piece# ra@ and a%xiliary materials go into it to t e amo%nt o! 1>Z s illings per piece# @ages, < s illings# and s%rpl%s-8al%e, < s illings at a rate o! s%rpl%s-8al%e o! 1==T0 5otal 8al%e R << s illings0 We ass%me !or t e sake o! simplicity t at t e capital in t is line o! prod%ction as t e a8erage composition o! social capital, so t at t e price o! prod%ction o! t e commodity is identical @it its 8al%e, and t e pro!it o! t e capitalist @it t e created s%rpl%s-8al%e0 5 en t e cost-price o! t e commodity R Z U 1>Z U < R <=s0, t e a8erage rate o! pro!it <N<= R 1=T, and t e price o! prod%ction per piece o! t e commodity, like its 8al%e R <<s0 $%ppose a mac ine is in8ented @ ic red%ces by al! t e li8ing labo%r reD%ired per piece o! t e commodity, b%t trebles t at portion o! its 8al%e acco%nted !or by t e @ear and tear o! t e !ixed capital0 &n t at case, t e calc%lation is: Wear and tear R 1Z s0, ra@ and a%xiliary materials, as be!ore, 1>Zs0, @ages, 1s0, s%rpl%s-8al%e 1s0, total <1s0 5 e commodity t en !alls 1s0 in 8al%e# t e ne@ mac ine as certainly increased t e prod%cti8ity o! labo%r0 A%t t e capitalist sees t e matter as !ollo@s: is cost-price is no@ 1Zs0 !or @ear, 1>Zs0 !or ra@ and a%xiliary materials, 1s0 !or @ages, total <=s0, as be!ore0 $ince t e rate o! pro!it is not immediately altered by t e ne@ mac ine, e @ill recei8e 1=T o8er is cost-price, t at is, <s0 5 e price o! prod%ction, t en, remains %naltered R <<s0, b%t is 1s0 abo8e t e 8al%e0 For a society prod%cing %nder capitalist conditions t e commodity as not c eapened0 5 e ne@ mac ine is no impro8ement !or it0 5 e capitalist is, t ere!ore, not interested in introd%cing it0 ?nd since its introd%ction @o%ld make is present, not as yet @orn-o%t, mac inery simply @ort less, @o%ld t%rn it into scrap-iron, ence @o%ld ca%se a positi8e loss, e takes good care not to commit t is, @ at is !or im a %topian, mistake0 5 e la@ o! increased prod%cti8ity o! labo%r is not, t ere!ore, absol%tely 8alid !or capital0 $o !ar as capital is concerned, prod%cti8eness does not increase t ro%g a sa8ing in li8ing labo%r in general, b%t only t ro%g a sa8ing in t e paid portion o! li8ing labo%r, as compared to labo%r expended in t e past, as @e a8e already indicated in passing in Aook & BKap0 J& &&, <, +0 2=*N3*8C0 /Englis edition: ; 0 J4, <. J 0d.1 6ere t e capitalist mode o! prod%ction is beset @it anot er contradiction0 &ts istorical mission is %nconstrained de8elopment in geometrical progression o! t e prod%cti8ity o! %man labo%r0 &t goes back on its mission @ ene8er, as ere, it c ecks t e de8elopment o! prod%cti8ity0 &t t %s demonstrates again t at it is becoming senile and t at it is more and more o%tli8ed01 1 (nder competition, t e increasing minim%m o! capital reD%ired @it t e increase in prod%cti8ity !or t e s%ccess!%l operation o! an independent ind%strial establis ment, ass%mes t e !ollo@ing aspect: ?s soon as t e ne@, more expensi8e eD%ipment as become %ni8ersally establis ed, smaller capitals are ence!ort excl%ded !rom t is ind%stry0 $maller capitals can carry on independently in t e 8ario%s sp eres o! ind%stry only in t e in!ancy o! mec anical in8entions0 4ery large %ndertakings, s%c as rail@ays, on t e ot er and, @ ic a8e an %n%s%ally ig proportion o! constant capital, do not yield t e a8erage rate o! pro!it, b%t only a portion o! it, only an interest0 3t er@ise t e general rate o! pro!it @o%ld a8e !allen still lo@er0 A%t t is o!!ers direct employment to large concentrations o! capital in t e !orm o! stocks0 :ro@t o! capital, ence acc%m%lation o! capital, does not imply a !all in t e rate o! pro!it, %nless it is accompanied by t e a!orementioned c anges in t e proportion o! t e organic constit%ents o! capital0 -o@ it so appens t at in spite o! t e constant daily re8ol%tions in t e mode o! prod%ction, no@ t is and no@ t at larger or smaller portion o! t e total capital contin%es to acc%m%late !or certain periods on t e basis o! a gi8en a8erage proportion o! t ose constit%ents, so t at t ere is no organic c ange @it its gro@t , and conseD%ently no ca%se !or a !all in t e rate o! pro!it0 5 is constant expansion o! capital, ence also an expansion o! prod%ction, on t e basis o! t e old met od o! prod%ction @ ic goes D%ietly on @ ile ne@ met ods are already being

1>*

; apter J4

introd%ced at its side, is anot er reason, @ y t e rate o! pro!it does not decline as m%c as t e total capital o! society gro@s0 5 e increase in t e absol%te n%mber o! labo%rers does not occ%r in all branc es o! prod%ction, and not %ni!ormly in all, in spite o! t e relati8e decrease o! 8ariable capital laid o%t in @ages0 &n agric%lt%re, t e decrease o! t e element o! li8ing labo%r may be absol%te0 ?t any rate, it is b%t a reD%irement o! t e capitalist mode o! prod%ction t at t e n%mber o! @age@orkers s o%ld increase absol%tely, in spite o! its relati8e decrease0 'abo%r-po@er becomes red%ndant !or it as soon as it is no longer necessary to employ it !or 1< to 1+ o%rs daily0 ? de8elopment o! prod%cti8e !orces @ ic @o%ld diminis t e absol%te n%mber o! labo%rers, i.e., enable t e entire nation to accomplis its total prod%ction in a s orter time span, @o%ld ca%se a re8ol%tion, beca%se it @o%ld p%t t e b%lk o! t e pop%lation o%t o! t e r%nning0 5 is is anot er mani!estation o! t e speci!ic barrier o! capitalist prod%ction, s o@ing also t at capitalist prod%ction is by no means an absol%te !orm !or t e de8elopment o! t e prod%cti8e !orces and !or t e creation o! @ealt , b%t rat er t at at a certain point it comes into collision @it t is de8elopment0 5 is collision appears partly in periodical crises, @ ic arise !rom t e circ%mstance t at no@ t is and no@ t at portion o! t e labo%ring pop%lation becomes red%ndant %nder its old mode o! employment0 5 e limit o! capitalist prod%ction is t e excess time o! t e labo%rers0 5 e absol%te spare time gained by society does not concern it0 5 e de8elopment o! prod%cti8ity concerns it only in so !ar as it increases t e s%rpl%s labo%r-time o! t e @orking-class, not beca%se it decreases t e labo%r-time !or material prod%ction in general0 &t mo8es t %s in a contradiction0 We a8e seen t at t e gro@ing acc%m%lation o! capital implies its gro@ing concentration0 5 %s gro@s t e po@er o! capital, t e alienation o! t e conditions o! social prod%ction personi!ied in t e capitalist !rom t e real prod%cers0 ;apital comes more and more to t e !ore as a social po@er, @ ose agent is t e capitalist0 5 is social po@er no longer stands in any possible relation to t at @ ic t e labo%r o! a single indi8id%al can create0 &t becomes an alienated, independent, social po@er, @ ic stands opposed to society as an obHect, and as an obHect t at is t e capitalist"s so%rce o! po@er0 5 e contradiction bet@een t e general social po@er into @ ic capital de8elops, on t e one and, and t e pri8ate po@er o! t e indi8id%al capitalists o8er t ese social conditions o! prod%ction, on t e ot er, becomes e8er more irreconcilable, and yet contains t e sol%tion o! t e problem, beca%se it implies at t e same time t e trans!ormation o! t e conditions o! prod%ction into general, common, social, conditions0 5 is trans!ormation stems !rom t e de8elopment o! t e prod%cti8e !orces %nder capitalist prod%ction, and !rom t e @ays and means by @ ic t is de8elopment takes place0 -o capitalist e8er 8ol%ntarily introd%ces a ne@ met od o! prod%ction, no matter o@ m%c more prod%cti8e it may be, and o@ m%c it may increase t e rate o! s%rpl%s-8al%e, so long as it red%ces t e rate o! pro!it0 .et e8ery s%c ne@ met od o! prod%ction c eapens t e commodities0 6ence, t e capitalist sells t em originally abo8e t eir prices o! prod%ction, or, per aps, abo8e t eir 8al%e0 6e pockets t e di!!erence bet@een t eir costs o! prod%ction and t e market-prices o! t e same commodities prod%ced at ig er costs o! prod%ction0 6e can do t is, beca%se t e a8erage labo%r-time reD%ired socially !or t e prod%ction o! t ese latter commodities is ig er t an t e labo%r-time reD%ired !or t e ne@ met ods o! prod%ction0 6is met od o! prod%ction stands abo8e t e social a8erage0 A%t competition makes it general and s%bHect to t e general la@0 5 ere !ollo@s a !all in t e rate o! pro!it I per aps !irst in t is sp ere o! prod%ction, and e8ent%ally it ac ie8es a balance @it t e rest I @ ic is, t ere!ore, @ olly independent o! t e @ill o! t e capitalist0 &t is still to be added to t is point, t at t is same la@ also go8erns t ose sp eres o! prod%ction, @ ose prod%ct passes neit er directly nor indirectly into t e cons%mption o! t e labo%rers, or into t e conditions %nder @ ic t eir necessities are prod%ced# it applies, t ere!ore, also to t ose sp eres o! prod%ction, in @ ic t ere is no c eapening o! commodities to increase t e relati8e

18=

; apter J4

s%rpl%s-8al%e or c eapen labo%r-po@er0 B?t any rate, a c eapening o! constant capital in all t ese lines may increase t e rate o! pro!it, @it t e exploitation o! labo%r remaining t e same0C ?s soon as t e ne@ prod%ction met od begins to spread, and t ereby to !%rnis tangible proo! t at t ese commodities can act%ally be prod%ced more c eaply, t e capitalists @orking @it t e old met ods o! prod%ction m%st sell t eir prod%ct belo@ its !%ll price o! prod%ction, beca%se t e 8al%e o! t is commodity as !allen, and beca%se t e labo%r-time reD%ired by t em to prod%ce it is greater t an t e social a8erage0 &n one @ord I and t is appears as an e!!ect o! competition I t ese capitalists m%st also introd%ce t e ne@ met od o! prod%ction, in @ ic t e proportion o! 8ariable to constant capital as been red%ced0 ?ll t e circ%mstances @ ic lead to t e %se o! mac inery c eapening t e price o! a commodity prod%ced by it, come do@n in t e last analysis to a red%ction o! t e D%antity o! labo%r absorbed by a single piece o! t e commodity# and secondly, to a red%ction in t e @ear-and-tear portion o! t e mac inery, @ ose 8al%e goes into a single piece o! t e commodity0 5 e less rapid t e @ear o! mac inery, t e more t e commodities o8er @ ic it is distrib%ted, and t e more li8ing labo%r it replaces be!ore its term o! reprod%ction arri8es0 &n bot cases t e D%antity and 8al%e o! t e !ixed constant capital increase in relation to t e 8ariable0 K?ll ot er t ings being eD%al, t e po@er o! a nation to sa8e !rom its pro!its 8aries @it t e rate o! pro!its: is great @ en t ey are ig , less, @ en lo@# b%t as t e rate o! pro!its declines, all ot er t ings do not remain eD%al0000 ? lo@ rate o! pro!its is ordinarily accompanied by a rapid rate o! acc%m%lation, relati8ely to t e n%mbers o! t e people, as in England 000 a ig rate o! pro!it by a slo@er rate o! acc%m%lation, relati8ely to t e n%mbers o! t e people0 Examples: ,oland, )%ssia, &ndia, etc0L B)ic ard Pones, +n Dntroductory ,ecture on &olitical 0conomy, 'ondon, 1833, p0 += !!0C Pones emp asises correctly t at in spite o! t e !alling rate o! pro!it t e ind%cements and !ac%lties to acc%m%late are a%gmented# !irst, on acco%nt o! t e gro@ing relati8e o8erpop%lation# second, beca%se t e gro@ing prod%cti8ity o! labo%r is accompanied by an increase in t e mass o! %se8al%es represented by t e same exc ange-8al%e, ence in t e material elements o! capital# t ird, beca%se t e branc es o! prod%ction become more 8aried# !o%rt , d%e to t e de8elopment o! t e credit system, t e stock companies, etc0, and t e res%ltant case o! con8erting money into capital @it o%t becoming an ind%strial capitalist# !i!t , beca%se t e @ants and t e greed !or @ealt increase# and, sixt , beca%se t e mass o! in8estments in !ixed capital gro@s, etc0 5 ree cardinal !acts o! capitalist prod%ction: 1C ;oncentration o! means o! prod%ction in !e@ ands, @ ereby t ey cease to appear as t e property o! t e immediate labo%rers and t%rn into social prod%ction capacities0 E8en i! initially t ey are t e pri8ate property o! capitalists0 5 ese are t e tr%stees o! bo%rgeois society, b%t t ey pocket all t e proceeds o! t is tr%stees ip0 <C 3rganisation o! labo%r itsel! into social labo%r: t ro%g co-operation, di8ision o! labo%r, and t e %niting o! labo%r @it t e nat%ral sciences0

181

; apter J4

&n t ese t@o senses, t e capitalist mode o! prod%ction abolis es pri8ate property and pri8ate labo%r, e8en t o%g in contradictory !orms0 3C ;reation o! t e @orld-market0 5 e st%pendo%s prod%cti8ity de8eloping %nder t e capitalist mode o! prod%ction relati8e to pop%lation, and t e increase, i! not in t e same proportion, o! capital-8al%es Bnot H%st o! t eir material s%bstanceC, @ ic gro@ m%c more rapidly t an t e pop%lation, contradict t e basis, @ ic constantly narro@s in relation to t e expanding @ealt , and !or @ ic all t is immense prod%cti8eness @orks0 5 ey also contradict t e conditions %nder @ ic t is s@elling capital a%gments its 8al%e0 6ence t e crises0

Part I!. Conversion of Co))o"it' Capital an" *one' Capital into Co))ercial Capital an" *one' +ealing Capital (*erchant,s Capital)
Chapter 1". Co ercial Capital

Merc ant"s, or trading, capital breaks %p into t@o !orms or s%b-di8isions, namely, commercial capital and money-dealing capital, @ ic @e s all no@ de!ine more closely, in so !ar as t is is necessary !or o%r analysis o! capital in its basic str%ct%re0 5 is is all t e more necessary, beca%se modern political economy, e8en in t e persons o! its best exponents, t ro@s trading capital and ind%strial capital indiscriminately toget er and, in e!!ect, @ olly o8erlooks t e c aracteristic pec%liarities o! t e !ormer0 5 e mo8ements o! commodity-capital a8e been analysed in Aook &&0 5o take t e total capital o! society, one part o! it I al@ays made %p o! di!!erent elements and e8en c anging in magnit%de I al@ays exists in t e !orm o! commodities on t e market, to be con8erted into money0 ?not er part exists on t e market in t e !orm o! money, to be con8erted into commodities0 &t is al@ays in t e process o! t is transition, o! t is !ormal metamorp osis0 &nasm%c as t is !%nction o! capital in t e process o! circ%lation is at all set apart as a special !%nction o! a special capital, as a !%nction establis ed by 8irt%e o! t e di8ision o! labo%r to a special gro%p o! capitalists, commodity-capital becomes commercial capital0 We a8e explained BAook &&, ; apter 4&, K5 e ;osts o! ;irc%lation,LC to @ at extent t e transport ind%stry, storage and distrib%tion o! commodities in a distrib%table !orm, may be regarded as prod%ction processes contin%ing @it in t e process o! circ%lation0 5 ese episodes incidental to t e circ%lation o! commodity-capital are sometimes con!%sed @it t e distinct !%nctions o! merc ant"s or commercial capital0 $ometimes t ey are, indeed, practically bo%nd %p @it t ese distinct, speci!ic !%nctions, alt o%g @it t e de8elopment o! t e social di8ision o! labo%r t e !%nction o! merc ant"s capital e8ol8es in a p%re !orm, i.e., di8orced !rom t ose real !%nctions, and independent o! t em0 5 ose !%nctions are t ere!ore irrele8ant to o%r p%rpose, @ ic is to de!ine t e speci!ic di!!erence o! t is special !orm o! capital0 &n so !ar as capital solely employed in t e circ%lation process, special commercial capital, partly combines t ose !%nctions @it its speci!ic ones, it does not appear in its p%re !orm0 We obtain its p%re !orm a!ter stripping it o! all t ese incidental !%nctions0 We a8e seen t at t e existence o! capital as commodity-capital and t e metamorp osis it %ndergoes @it in t e sp ere o! circ%lation in t e market as commodity-capital I a metamorp osis @ ic resol8es itsel! into b%ying and selling, con8erting commodity-capital into money-capital and money-capital into commodity-capital I t at t is !orms a p ase in t e reprod%ction process o! ind%strial capital, ence in its process o! prod%ction as a @ ole0 We a8e also seen, o@e8er, t at it is disting%is ed in its !%nction as a capital o! circ%lation !rom its !%nction as prod%cti8e capital0 5 ese are t@o di!!erent and separate !orms o! existence o! t e same capital0 3ne portion o! t e

183

; apter J4&

total social capital is contin%ally on t e market in t e !orm o! capital o! circ%lation, passing t ro%g t is process o! transm%tation, alt o%g !or eac indi8id%al capital its existence as commodity-capital, and its metamorp osis as s%c , merely represent e8er-8anis ing and e8er rene@ed nodal points I i.e., stages o! transition in t e contin%ity o! its prod%ction process, and alt o%g t e elements o! commodity-capital in t e market 8ary contin%o%sly !or t is reason, being constantly @it dra@n !rom t e commodity-market and eD%ally periodically ret%rned to it as ne@ prod%cts o! t e process o! prod%ction0 ;ommercial capital is not ing b%t a transm%ted !orm o! a part o! t is capital o! circ%lation constantly to be !o%nd in t e market, e8er in t e process o! its metamorp osis, and al@ays encompassed by t e sp ere o! circ%lation0 We say a part, beca%se a part o! t e selling and b%ying o! commodities al@ays takes place directly bet@een ind%strial capitalists0 We lea8e t is part entirely o%t o! consideration in t is analysis, beca%se it contrib%tes not ing to de!ining t e conception, or to %nderstanding t e speci!ic nat%re o! merc ant"s capital, and beca%se it as !%rt ermore been ex a%sti8ely treated !or o%r p%rpose in Aook &&0 5 e dealer in commodities, as a capitalist generally, appears on t e market primarily as t e representati8e o! a certain s%m o! money, @ ic be ad8ances as a capitalist, i.e., @ ic e @ants to t%rn !rom x Bits original 8al%eC into x U x Bt e original s%m pl%s pro!itC0 A%t it is e8ident to im I not being H%st a capitalist in general, b%t rat er a special dealer in commodities I t at is capital m%st !irst enter t e market in t e !orm o! money-capital, !or e does not prod%ce commodities0 6e merely trades in t em, expedites t eir mo8ement, and to operate @it t em e m%st !irst b%y t em, and, t ere!ore, m%st be in possession o! money-capital0 $%ppose t at a dealer in commodities o@ns V3,=== @ ic e in8ests as a trading capital0 Wit t ese V3,=== e b%ys, say, 3=,=== yards o! linen !rom some linen man%!act%rer at <s0 per yard0 6e t en sells t e 3=,=== yards0 &! t e ann%al a8erage rate o! pro!it R 1=T and e makes an ann%al pro!it o! 1=T a!ter ded%cting all incidental expenses, t en by t e end o! t e year e as con8erted is V3,=== into V3,3==0 6o@ e makes t is pro!it is a D%estion @ ic @e s all disc%ss later0 ?t present, @e intend to consider solely t e !orm o! t e mo8ements o! is capital0 Wit is V3,=== e keeps b%ying linen and selling it# e constantly repeats t is operation o! b%ying in order to sell, M I ; I M", t e simple !orm o! capital as it obtains entirely in t e process o! circ%lation, %ninterr%pted by t e prod%ction process, @ ic lies o%tside its o@n mo8ement and !%nction0 W at is no@ t e relation o! t is commercial capital to commodity-capital as a mere !orm o! existence o! ind%strial capitalQ $o !ar as t e linen man%!act%rer is concerned, e as realised t e 8al%e o! is linen @it t e merc ant"s money and t ereby completed t e !irst p ase in t e metamorp osis o! is commodity-capital I its con8ersion into money0 3t er conditions being eD%al, e can no@ proceed to recon8ert t is money into yarn, coal, @ages, etc0, and into means o! existence, etc0, !or t e cons%mption o! is re8en%e0 6ence, lea8ing aside t e re8en%e expendit%re, e can go on @it is process o! reprod%ction0 A%t @ ile t e sale o! t e linen, its metamorp osis into money, as taken place !or im, as prod%cer, it as not yet taken place !or t e linen itsel!0 &t is still on t e market as commoditycapital a@aiting to %ndergo its !irst metamorp osis I to be sold0 -ot ing as appened to t is linen besides a c ange in t e person o! its o@ner0 ?s concerns its p%rpose, as concerns its place in t e process, it is still commodity-capital, a saleable commodity, @it t e only di!!erence t at it is no@ in t e merc ant"s ands instead o! t e man%!act%rer"s0 5 e !%nction o! selling it, o! e!!ecting t e !irst p ase o! its metamorp osis, as passed !rom t e man%!act%rer to t e merc ant, as become t e special b%siness o! t e merc ant, @ ereas pre8io%sly it @as a !%nction @ ic t e prod%cer ad to per!orm imsel! a!ter a8ing completed t e !%nction o! its prod%ction0 'et %s ass%me t at t e merc ant !ails to sell t e 3=,=== yards o! linen d%ring t e inter8al reD%ired by t e linen man%!act%rer to bring anot er 3=,=== yards to market at a 8al%e o! V3,===0 5 e merc ant cannot b%y t em again, beca%se e still as in stock t e %nsold 3=,=== yards @ ic

182

; apter J4&

a8e not as yet been recon8erted into money-capital0 ? stoppage ens%es, i.e., an interr%ption o! reprod%ction0 5 e linen prod%cer mig t, o! co%rse, a8e additional money-capital at is disposal, @ ic e co%ld con8ert into prod%cti8e capital, regardless o! t e sale o! t e 3=,=== yards, in order to contin%e t e prod%ction process0 A%t t is @o%ld not alter t e sit%ation0 $o !ar as t e capital tied %p in t e 3=,=== yards o! linen is concerned, its process o! reprod%ction is, and remains, interr%pted0 &t is, indeed, easily seen ere t at t e merc ant"s operations are really not ing b%t operations t at m%st be per!ormed at all e8ents to con8ert t e prod%cer"s commodity-capital into money0 5 ey are operations @ ic e!!ect t e !%nctions o! commodity-capital in t e circ%lation and reprod%ction processes0 &! it de8ol8ed %pon t e prod%cer"s clerk to attend excl%si8ely to t e sale, and also t e p%rc ase, instead o! an independent merc ant, t is connection @o%ld not be obsc%red !or a single moment0 ;ommercial capital is, t ere!ore, not ing b%t t e prod%cer"s commodity I capital @ ic as to %ndergo t e process o! con8ersion into money I to per!orm its !%nction o! commodity-capital on t e market I t e only di!!erence being t at instead o! representing an incidental !%nction o! t e prod%cer, it is no@ t e excl%si8e operation o! a special kind o! capitalist, t e merc ant, and is set apart as t e b%siness o! a special in8estment o! capital0 5 is becomes e8ident, !%rt ermore, in t e speci!ic !orm o! circ%lation o! commercial capital 5 e merc ant b%ys a commodity and t en sells it: M I ; I M"0 &n t e simple circ%lation o! commodities, or e8en in t e circ%lation o! commodities as it appears in t e circ%lation process o! ind%strial capital, ;" I M I ;, circ%lation is e!!ected by eac piece o! money c anging ands t@ice0 5 e linen man%!act%rer sells is commodity-linen, con8erting it into money# t e b%yer"s money passes into is ands0 Wit t is same money e b%ys yarn, coal, labo%r, etc0 I expends t e money !or recon8erting t e 8al%e o! linen into t e commodities @ ic make %p its prod%ction elements0 5 e commodity e b%ys is not t e same commodity, not t e same kind o! commodity @ ic e sells0 6e as sold prod%cts and bo%g t means o! prod%ction0 A%t it is di!!erent @it respect to t e mo8ements o! merc ant"s capital0 Wit is V3,=== t e linen merc ant b%ys 3=,=== yards o! linen# e sells t e same 3=,=== yards o! linen in order to retrie8e is money-capital BV3,=== and t e pro!itC !rom circ%lation0 &t is not t e same pieces o! money, b%t rat er t e same commodity @ ic ere c anges places t@ice# t e commodity passes !rom t e seller into t e ands o! t e b%yer, and !rom t e ands o! t e b%yer, @ o no@ becomes seller, into t ose o! anot er b%yer0 &t is sold t@ice, and may be sold repeatedly t ro%g t e medi%m o! a series o! merc ants0 ?nd it is precisely t ro%g t is repeated sale, t ro%g t is t@o-!old c ange o! place o! t e same commodity, t at t e money ad8anced !or its p%rc ase by t e !irst b%yer is retrie8ed, its re!l%x to im e!!ected0 &n one case, ;" I M I ; e!!ects t e t@o-!old c ange o! place o! t e same money, t e sale o! a commodity in one !orm and t e p%rc ase o! a commodity in anot er0 &n t e ot er case, M I ; I M" e!!ects t e t@o-!old c ange o! place o! t e same commodity, t e @it dra@al o! ad8anced money !rom circ%lation0 &t is e8ident t at t e commodity as not been !inally sold @ en it passes !rom t e prod%cer into t e ands o! t e merc ant, in t at t e latter merely carries on t e operation o! selling I or e!!ects t e !%nction o! commodity-capital0 A%t at t e same time it is e8ident t at @ at is ; I M, a mere !%nction o! is capital in its transient !orm o! commoditycapital !or t e prod%cti8e capitalist, is M I ; I M", a speci!ic increase in t e 8al%e o! is ad8anced money-capital, !or t e merc ant0 3ne p ase o! t e metamorp osis o! commodities appears ere in respect to t e merc ant in t e !orm o! M I ; I M", ence as e8ol%tion o! a distinct kind o! capital0 5 e merc ant !inally sells is commodity, t at is, t e linen, to t e cons%mer, be it a prod%cti8e cons%mer B!or instance, a bleac erC, or an indi8id%al @ o acD%ires t e linen !or is pri8ate %se0 5 e merc ant t ereby reco8ers is ad8anced capital B@it a pro!itC, and can repeat is operation ane@0 6ad t e money ser8ed merely as a means o! payment in p%rc asing t e linen, so t at t e merc ant @o%ld a8e ad to pay only a!ter six @eeks, and ad e s%cceeded in selling be!ore t is term @as o%t, e co%ld a8e paid t e linen man%!act%rer @it o%t ad8ancing any money-capital o! is o@n0 6ad e not sold it, e @o%ld a8e ad to ad8ance is V3,=== on t e date o! expiration,

18+

; apter J4&

instead o! on deli8ery o! t e linen0 ?nd i! a drop in t e market-prices ad compelled im to sell belo@ t e p%rc ase price, e @o%ld a8e ad to make good t e s ortage o%t o! is o@n capital0 W at is it, t en, t at lends to commercial capital t e c aracter o! an independently operating capital, @ ereas in t e ands o! t e prod%cer @ o does is o@n selling it is ob8io%sly merely a special !orm o! is capital in a speci!ic p ase o! t e reprod%ction process d%ring its soHo%rn in t e sp ere o! circ%lationQ 'irst: 5 e !act t at commodity-capital is !inally con8erted into money, t at it per!orms its initial metamorp osis, i.e., its appropriate !%nction on t e market D%a commodity-capital @ ile in t e ands o! an agent ot er t an t e prod%cer, and t at t is !%nction o! commodity-capital is e!!ected by t e merc ant in is operations, is b%ying and selling, so t at t ese operations ass%me t e appearance o! a separate %ndertaking distinct !rom t e ot er !%nctions o! ind%strial capital I and ence o! an independent %ndertaking0 &t is a distinct !orm o! t e social di8ision o! labo%r, so t at part o! t e !%nction ordinarily per!ormed as a special p ase o! t e reprod%ction process o! capital, in t is case I circ%lation, appears as t e excl%si8e !%nction o! speci!ic circ%lation agent distinct !rom t e prod%cer0 A%t t is alone @o%ld by no means gi8e t is partic%lar b%siness t e aspect o! a !%nction o! a speci!ic capital distinct !rom, and independent o!, ind%strial capital engaged in t e process o! reprod%ction# indeed, it does not so appear in cases @ ere trade is carried on by tra8elling salesmen or ot er direct agents o! t e ind%strial capitalist0 5 ere!ore, t ere m%st be a second element in8ol8ed0 Second: 5 is arises !rom t e !act t at in is capacity as an independent circ%lation agent, t e merc ant ad8ances money-capital B is o@n or borro@edC0 5 e transaction @ ic !or ind%strial capital in t e reprod%ction process amo%nts merely to ; I M, i.e., con8erting commodity-capital into money-capital, or mere sale, ass%mes !or t e merc ant t e !orm o! M I ; I M", or p%rc ase and sale o! t e same commodity, and t %s o! a re!l%x o! money-capital @ ic lea8es im in t e p%rc ase, and ret%rns to im in t e sale0 &t is al@ays ; I M, t e con8ersion o! commodity-capital into money-capital, @ ic !or t e merc ant ass%mes t e !orm o! M I ; I M, inasm%c as e ad8ances capital to p%rc ase commodities !rom t eir prod%cers# it is al@ays t e !irst metamorp osis o! commodity-capital, alt o%g !or a prod%cer, or !or ind%strial capital in process o! reprod%ction, t e same transaction may amo%nt to M I ;, to a recon8ersion o! money into commodities Bmeans o! prod%ctionC, to t e second p ase o! t e metamorp osis0 For t e linen prod%cer, t e !irst metamorp osis @as ; I M, t e con8ersion o! is commodity-capital into money-capital0 For t e merc ant t e same act appears as M I ;, as a con8ersion o! is money-capital into commodity-capital0 -o@, i! e sells t is linen to a bleac er, it @ill mean M I ;, i.e., t e con8ersion o! money capital into prod%cti8e capital, t is being t e second metamorp osis o! is commodity-capital !or t e bleac er, @ ile !or t e merc ant it means ; I M, t e sale o! t e linen e ad bo%g t0 A%t in !act it is only at t is point t at t e commodity-capital prod%ced by t e linen man%!act%rer as been !inally sold0 &n ot er @ords, t is M I ; I M o! t e merc ant represents no more t an a middleman"s !%nction !or ; I M bet@een t@o man%!act%rers0 3r let %s ass%me t at t e linen man%!act%rer b%ys yarn !rom a yarn dealer @it a portion o! t e 8al%e o! t e sold linen0 5 is is M I ; !or im0 A%t !or t e merc ant selling t e yarn it is ; I M, t e resale o! t e yarn0 ?s concerning t e yarn in its capacity o! commodity-capital, it is no more t an its !inal sale, @ ereby it passes !rom t e sp ere o! circ%lation into t at o! cons%mption# it is ; I M, t e cons%mmation o! its !irst metamorp osis0 W et er t e merc ant b%ys, or sells to t e ind%strial capitalist, is M I ; I M, t e circ%it o! merc ant"s capital, al@ays expresses @ at is H%st ; I M, or simply t e completion o! its !irst metamorp osis, @it regard to t e commodity-capital, a transient !orm o! ind%strial capital in process o! reprod%ction0 5 e M I ; o! merc ant"s capital is ; I M only !or t e ind%strial capitalist, not !or t e commodity-capital prod%ced by im0 &t is b%t t e trans!er o! commoditycapital !rom t e ind%strial capitalist to t e circ%lation agent0 &t is not %ntil t e merc ant"s capital closes ; I M t at !%nctioning commodity-capital per!orms its !inal ; I M0 M I ; I M amo%nts

186

; apter J4&

solely to t@o ; I M"s o! t e same commodity-capital, t@o s%ccessi8e sales o! it, @ ic merely e!!ect its last and !inal sale0 5 %s, commodity-capital ass%mes in commercial capital t e !orm o! an independent type o! capital beca%se t e merc ant ad8ances money-capital, @ ic is realised and !%nctions as capital only by ser8ing excl%si8ely to mediate t e metamorp osis o! commodity-capital, its !%nction as commodity-capital, i.e., its con8ersion into money, and it accomplis es t is by t e contin%al p%rc ase and sale o! commodities0 5 is is its excl%si8e operation0 5 is acti8ity o! e!!ecting t e circ%lation process o! ind%strial capital is t e excl%si8e !%nction o! t e money-capital @it @ ic t e merc ant operates0 Ay means o! t is !%nction e con8erts is money into money-capital, mo%lds is M into M I ; I M, and by t e same process con8erts commodity-capital into commercial capital0 $o long and so !ar as commercial capital exists in t e !orm o! commodity-capital, it is ob8io%sly not ing else I !rom t e standpoint o! t e reprod%ction process o! t e total social capital I b%t a portion o! ind%strial capital in t e market in process o! metamorp osis, @ ic exists and !%nctions as commodity-capital0 &t is t ere!ore only t e money-capital ad8anced by t e merc ant @ ic is excl%si8ely destined !or p%rc ase and sale and !or t is reason ne8er ass%mes any ot er !orm b%t t at o! commodity-capital and money-capital, ne8er t at o! prod%cti8e capital, and is al@ays con!ined to t e sp ere o! circ%lation o! capital I it is only t is money-capital @ ic is no@ to be regarded @it re!erence to t e entire reprod%ction process o! capital0 ?s soon as t e prod%cer, t e linen man%!act%rer, as sold is 3=,=== yards to t e merc ant !or V3,===, e %ses t e money so obtained to b%y t e necessary means o! prod%ction, so t at is capital ret%rns to t e prod%ction process0 6is process o! prod%ction contin%es @it o%t interr%ption0 $o !ar as e is concerned, t e con8ersion o! is commodity into money is accomplis ed0 A%t !or t e linen itsel!, as @e a8e seen, its metamorp osis as not yet taken place0 &t as not yet been !inally recon8erted into money, as not yet passed as a %se-8al%e into eit er prod%cti8e or indi8id%al cons%mption0 &t is no@ t e linen merc ant @ o represents on t e market t e same commodity-capital originally represented by t e linen man%!act%rer0 For t e latter t e process o! trans!ormation as been c%rtailed, only to be contin%ed in t e merc ant"s ands0 6ad t e linen prod%cer been obliged to @ait %ntil is linen ad really ceased being a commodity, %ntil it as passed into t e ands o! its %ltimate b%yer, its prod%cti8e or indi8id%al cons%mer, is process o! reprod%ction @o%ld a8e been interr%pted0 3r, to a8oid interr%pting it, e @o%ld a8e ad to c%rtail is operations, to con8ert a smaller portion o! is linen into yarn, coal, labo%r, etc0, in s ort, into t e elements o! prod%cti8e capital, and to retain a larger portion o! it as a money reser8e, so t at @it one portion o! is capital on t e market in t e s ape o! commodities, anot er @o%ld contin%e t e process o! prod%ction# one portion @o%ld be on t e market in t e !orm o! commodities, @ ile t e ot er ret%rned in t e !orm o! money0 5 is di8ision o! is capital is not abolis ed by t e merc ant"s inter8ention0 A%t @it o%t it t e portion o! money reser8e in t e capital o! circ%lation @o%ld al@ays a8e to be greater in relation to t e part employed in t e !orm o! prod%cti8e capital, and t e scale o! reprod%ction @o%ld a8e to be restricted accordingly0 &nstead, o@e8er, t e man%!act%rer is enabled to constantly employ a larger portion o! is capital in t e act%al process o! prod%ction, and a smaller portion as money reser8e0 3n t e ot er and, o@e8er, anot er portion o! t e social capital, in t e !orm o! merc ant"s capital, is kept contin%ally @it in t e sp ere o! circ%lation0 &t is employed all t e time !or t e sole p%rpose o! b%ying and selling0 6ence t ere seems to a8e been no more t an a replacement o! persons olding t is capital in t eir ands0 &!, instead o! b%ying V3,=== @ort o! linen @it t e p%rpose o! selling it again, t e merc ant ad applied t ese V3,=== prod%cti8ely, t e prod%cti8e capital o! society @o%ld a8e increased0 5r%e, t e linen man%!act%rer @o%ld t en a8e been obliged to old back a larger portion o! is capital as money reser8e, and like@ise t e merc ant, no@ trans!ormed into an ind%strial capitalist0 3n

18>

; apter J4&

t e ot er and, i! t e merc ant remains merc ant, t e man%!act%rer sa8es time in selling, @ ic e can de8ote to s%per8ising t e prod%ction process, @ ile t e merc ant m%st apply all is time to selling0 &! merc ant"s capital does not o8erstep its necessary proportions, it is to be in!erred, 1C t at as a res%lt o! t e di8ision o! labo%r t e capital de8oted excl%si8ely to b%ying and selling Band t is incl%des not only t e money reD%ired to b%y commodities, b%t also t e money @ ic m%st be in8ested in labo%r to maintain t e merc ant"s establis ment, and in is constant capitalt e store o%ses, transport, etc0C is smaller t an it @o%ld be i! t e ind%strial capitalist @ere constrained to carry on t e entire commercial part o! is b%siness on is o@n# <C t at beca%se t e merc ant de8otes all is time excl%si8ely to t is b%siness, t e prod%cer is able to con8ert is commodities more rapidly into money, and, moreo8er, t e commodity-capital itsel! passes more rapidly t ro%g its metamorp osis t an it @o%ld in t e ands o! t e prod%cer# 3C t at in 8ie@ing t e aggregate merc ant"s capital in its relation to ind%strial capital, one t%rno8er o! merc ant"s capital may represent not only t e t%rno8ers o! many capitals in one sp ere o! prod%ction, b%t t e t%rno8ers o! a n%mber o! capitals in di!!erent sp eres o! prod%ction0 5 e !ormer is t e case @ en, !or instance, t e linen merc ant, a!ter b%ying t e prod%ct o! some linen man%!act%rer @it is V3,===, sells it be!ore t e same man%!act%rer brings anot er lot o! t e same D%antity to market, and b%ys, and again sells, t e prod%ct o! anot er, or se8eral ot er, linen man%!act%rers, t %s e!!ecting t e t%rno8ers o! di!!erent capitals in t e same sp ere o! prod%ction0 5 e latter is t e case i!, !or example, t e merc ant a!ter selling is linen b%ys silk, t %s e!!ecting t e t%rno8er o! a capital in a di!!erent sp ere o! prod%ction0 &n general, it may be noted t at t e t%rno8er o! ind%strial capital is limited not by t e time o! circ%lation alone, b%t also by t e time o! prod%ction0 5 e t%rno8er o! merc ant"s capital dealing in one kind o! commodity is not merely limited by t e t%rno8er o! a single ind%strial capital, b%t by t at o! all ind%strial capitals in t e same branc o! prod%ction0 ?!ter t e merc ant as bo%g t and sold t e linen o! one prod%cer e can b%y and sell t at o! anot er, be!ore t e !irst brings anot er lot to t e market0 5 e same merc ant"s capital may, t ere!ore, s%ccessi8ely promote t e di!!erent t%rno8ers o! capitals in8ested in a certain branc o! prod%ction, @it t e e!!ect t at its t%rno8er is not identical @it t e t%rno8ers o! a sole ind%strial capital, and does not t ere!ore replace H%st t e single money reser8e @ ic t at one ind%strial capitalist @o%ld a8e ad to old in petto0 5 e t%rno8er o! merc ant"s capital in one sp ere o! prod%ction is nat%rally restricted by t e total prod%ction o! t at sp ere0 A%t it is not restricted by t e scale o! prod%ction, or t e period o! t%rno8er, o! any one capital o! t e same sp ere, so !ar as its period o! t%rno8er is D%ali!ied by its time o! prod%ction0 $%ppose, ? s%pplies a commodity reD%iring t ree mont s !or its prod%ction0 ?!ter t e merc ant as bo%g t and sold it, say, in one mont , e can b%y and sell t e same prod%ct o! some ot er man%!act%rer0 3r a!ter e as sold, say, t e corn o! one !armer, e can b%y and sell t at o! anot er @it t e same money, etc0 5 e t%rno8er o! is capital is restricted by t e mass o! corn e is able to b%y and sell s%ccessi8ely @it in a certain period, !or instance, in one year, @ ile t e t%rno8er o! t e !armer"s capital is, regardless o! t e time o! t%rno8er, restricted by t e time o! prod%ction, @ ic lasts one year0 6o@e8er, t e t%rno8er o! t e same merc ant"s capital may eD%ally @ell e!!ect t e t%rno8ers o! capitals in di!!erent branc es o! prod%ction0 &n so !ar as t e same merc ant"s capital ser8es in di!!erent t%rno8ers to trans!orm di!!erent commodity-capitals s%ccessi8ely into money, b%ying and selling t em one a!ter anot er, it per!orms t e same !%nction in its capacity o! money-capital @it regard to commodity-capital, @ ic money in general per!orms by means o! t e n%mber o! its t%rno8ers in a gi8en period @it regard to commodities0 5 e t%rno8er o! merc ant"s capital is not identical @it t e t%rno8er, or a single reprod%ction, o! an ind%strial capital o! eD%al siEe# it is rat er eD%al to t e s%m o! t e t%rno8ers o! a n%mber o!

188

; apter J4&

s%c capitals, @ et er in t e same or in di!!erent sp eres o! prod%ction0 5 e more D%ickly merc ant"s capital is t%rned o8er, t e smaller t e portion o! total money-capital ser8ing as merc ant"s capital# and con8ersely, t e more slo@ly it is t%rned o8er, t e larger t is portion0 5 e less de8eloped prod%ction, t e larger t e s%m o! merc ant"s capital in its relation to t e s%m o! t e commodities t ro@n into circ%lation# b%t t e smaller in absol%te terms, or in comparison @it more de8eloped conditions, and 8ice 8ersa0 &n s%c %nde8eloped conditions, t ere!ore, t e greater part o! t e act%al money-capital is in t e ands o! merc ants, @ ose !ort%ne constit%tes money @ealt 8is-O-8is t e ot ers0 5 e 8elocity o! circ%lation o! t e money-capital ad8anced by t e merc ant depends 1C on t e speed @it @ ic t e process o! prod%ction is rene@ed and t e di!!erent processes o! prod%ction are linked toget er# and <C on t e 8elocity o! cons%mption0 5o accomplis t e t%rno8er @e a8e examined abo8e, merc ant"s capital does not !irst a8e to b%y commodities !or its !%ll amo%nt o! 8al%e, and t en to sell t em0 &nstead, t e merc ant per!orms bot mo8ements sim%ltaneo%sly0 6is capital t en breaks %p into t@o parts0 3ne o! t em consists o! commodity-capital, and t e ot er o! money-capital0 6e b%ys and con8erts is money into commodities at one place0 Else@ ere, e sells and con8erts anot er part o! is commoditycapital into money0 3n one side, is capital ret%rns to im in t e !orm o! money-capital, @ ile on t e ot er e gets commodity-capital0 5 e larger t e portion in one !orm, t e smaller t e portion in t e ot er0 5 is alternates and balances itsel!0 &! t e %se o! money as a medi%m o! circ%lation combines @it its %se as a means o! payment and t e attendant de8elopment o! t e credit system, t en t e money-capital part o! merc ant"s capital is red%ced still more in relation to t e 8ol%me o! t e transactions t is merc ant"s capital e!!ects0 &! & b%y V3,=== @ort o! @ine on t ree mont s" credit and sell all t e @ine !or cas be!ore t is term expires, & do not need to ad8ance a single penny !or t ese transactions0 &n t is case it is also D%ite ob8io%s t at t e money-capital, @ ic ere acts as merc ant"s capital, is not ing more t an ind%strial capital in its money-capital !orm, in its process o! re!l%x in t e !orm o! money0 B5 e !act t at t e man%!act%rer @ o sold V3,=== @ort o! @ine on t ree mont s" credit may disco%nt is promissory note at t e banker"s does not alter t e matter at all and as not ing to do @it t e merc ant"s capital0C &! market-prices s o%ld !all in t e meantime by, say, 1N1=, t e merc ant, !ar !rom making a pro!it, @o%ld reco8er only V<,>== instead o! V3,===0 6e @o%ld a8e to p%t %p V3== o%t o! is o@n pocket0 5 ese V3== @o%ld ser8e merely as a reser8e to balance t e di!!erence in price0 A%t t e same applies to t e man%!act%rer0 &! e imsel! ad sold at !alling prices, e @o%ld like@ise a8e lost V3==, and @o%ld not be able to res%me prod%ction on t e same scale @it o%t reser8e capital0 5 e linen merc ant b%ys V3,=== @ort o! linen !rom t e man%!act%rer0 5 e latter pays, say, V<,=== o! t e V3,=== !or yarn0 6e b%ys t is yarn !rom a yarn dealer0 5 e money @ ic t e man%!act%rer pays to t e yarn dealer is not t e linen dealer"s money, !or t e latter as recei8ed commodities to t is amo%nt0 &t is t e money-!orm o! t e man%!act%rer"s o@n capital0 -o@ in t e ands o! t e yarn dealer t ese V<,=== appear as ret%rned money-capital0 A%t to @ at extent are t ey t at as distinct !rom t e V<,=== representing t e discarded money-!orm o! t e linen and t e ass%med money-!orm o! t e yarnQ &! t e yarn dealer bo%g t on credit and sold !or cas be!ore t e expiration o! is term o! payment, t en t ese V<,=== do not contain one penny o! merc ant"s capital as distinct !rom t e money-!orm @ ic t e ind%strial capital itsel! ass%mes in t e co%rse o! its circ%it0 &n so !ar as commercial capital is not, t ere!ore, H%st a !orm o! ind%strial capital in t e merc ant"s ands as commodity- or money-capital, it is not ing b%t t at portion o! money-capital @ ic belongs directly to t e merc ant and circ%lates in t e p%rc ase and sale o! commodities0 3n a red%ced scale t is portion represents t at part o! capital ad8anced !or prod%ction @ ic s o%ld al@ays a8e to be in t e ands o! t e ind%strialist as money reser8e and means o! p%rc ase, and @ ic s o%ld al@ays a8e to circ%late as is money-capital0 5 is portion, on a red%ced scale, is no@ in t e ands o! merc ant capitalists and per!orms its !%nctions as s%c in t e process o! circ%lation0 &t is t at portion o! t e total capital @ ic , aside !rom @ at is expended

18*

; apter J4&

as re8en%e, m%st contin%ally circ%late on t e market as a means o! p%rc ase in order to maintain t e contin%ity o! t e process o! reprod%ction0 5 e more rapid t e process o! reprod%ction, and t e more de8eloped t e !%nction o! money as a means o! payment, i.e., t e more de8eloped t e credit system,1 t e smaller t at portion is in relation to t e total capital0 Merc ant"s capital is simply capital !%nctioning in t e sp ere o! circ%lation0 5 e process o! circ%lation is a p ase o! t e total process o! reprod%ction0 A%t no 8al%e is prod%ced in t e process o! circ%lation, and, t ere!ore, no s%rpl%s-8al%e0 3nly c anges o! !orm o! t e same mass o! 8al%e take place0 &n !act, not ing occ%rs t ere o%tside t e metamorp osis o! commodities, and t is as not ing to do as s%c eit er @it t e creation or c ange o! 8al%es0 &! a s%rpl%s-8al%e is realised in t e sale o! prod%ced commodities, t en t is is only beca%se it already existed in t em0 &n t e second act, t e re-exc ange o! money-capital against commodities Belements o! prod%ctionC, t e b%yer t ere!ore does not realise any s%rpl%s-8al%e eit er0 6e merely initiates t e prod%ction o! s%rpl%s-8al%e t ro%g exc anging is money !or means o! prod%ction and labo%r-po@er0 A%t so !ar as t ese metamorp oses reD%ire circ%lation time I time d%ring @ ic capital does not prod%ce at all, least o! all s%rpl%s-8al%e I it restricts t e creation o! 8al%es, and t e s%rpl%s-8al%e expresses itsel! t ro%g t e rate o! pro!it in in8erse ratio to t e d%ration o! t e circ%lation period0 Merc ant"s capital, t ere!ore, does not create eit er 8al%e or s%rpl%s-8al%e, at least not directly0 &n so !ar as it contrib%tes to s ortening t e time o! circ%lation, it may elp indirectly to increase t e s%rpl%s8al%e prod%ced by t e ind%strial capitalists0 &n so !ar as it elps to expand t e market and e!!ects t e di8ision o! labo%r bet@een capitals, ence enabling capital to operate on a larger scale, its !%nction promotes t e prod%cti8ity o! ind%strial capital, and its acc%m%lation0 &n so !ar as it s ortens circ%lation time, it raises t e ratio o! s%rpl%s-8al%e to ad8anced capital, ence t e rate o! pro!it0 ?nd to t e extent t at it con!ines a smaller portion o! capital to t e sp ere o! circ%lation in t e !orm o! money-capital, it increases t at portion o! capital @ ic is engaged directly in prod%ction0

Chapter 1$. Co

ercial Profit

We a8e seen in Aook && t at t e p%re !%nctions o! capital in t e sp ere o! ;irc%lation I t e operations @ ic t e ind%strial capitalist m%st per!orm, !irst, to realise t e 8al%e o! is commodities, and second, to recon8ert t is 8al%e into elements o! prod%ction, operations e!!ecting t e metamorp osis o! commodity-capital, ;" I M I ;, ence t e acts o! selling and b%ying-prod%ce neit er 8al%e nor s%rpl%s-8al%e0 &t @as rat er seen t at t e time reD%ired !or t is p%rpose, obHecti8ely in regard to commodities and s%bHecti8ely in regard to t e capitalist, sets t e limit to t e prod%ction o! 8al%e and s%rpl%s-8al%e0 W at is tr%e o! t e metamorp osis o! commodity-capital in general, is, o! co%rse, not in t e least altered by t e !act t at a part o! it may ass%me t e s ape o! commercial capital, or t at t e operations, e!!ecting t e metamorp osis o! commodity-capital, appear as t e special concern o! a special gro%p o! capitalists, or as t e excl%si8e !%nction o! a portion o! t e money-capital0 &! selling and b%ying commodities I and t at is @ at t e metamorp osis o! commodity-capital ;" I M I ; amo%nts to I by ind%strial capitalists t emsel8es are not operations @ ic create 8al%e or s%rpl%s-8al%e, t ey @ill certainly not create eit er o! t ese @ en carried o%t by persons ot er t an t e ind%strial capitalists0 F%rt ermore, i! t at portion o! t e total social capital, @ ic m%st contin%ally be on and as money-capital, in order t at t e process o! reprod%ction is not interr%pted by t e process o! circ%lation and proceeds contin%o%sly I i! t is money-capital creates neit er 8al%e nor s%rpl%s-8al%e, it cannot acD%ire t e properties o! creating t em by being contin%ally t ro@n into circ%lation by some section o! capitalists ot er t an t e ind%strial capitalists, to per!orm t e same !%nction0 We a8e already indicated to @ at extent merc ant"s capital may be indirectly prod%cti8e, and @e s all later disc%ss t is point at greater lengt 0 ;ommercial capital, t ere!ore I stripped o! all eterogeneo%s !%nctions, s%c as storing, expressing, transporting, distrib%ting, retailing, @ ic may be connected @it it, and con!ined to its tr%e !%nction o! b%ying in order to sell I creates neit er 8al%e nor s%rpl%s-8al%e, b%t acts as middleman in t eir realisation and t ereby sim%ltaneo%sly in t e act%al exc ange o! commodities, i.e., in t eir trans!er !rom and to and, in t e social metabolism0 -e8ert eless, since t e circ%lation p ase o! ind%strial capital is H%st as m%c a p ase o! t e reprod%ction process as prod%ction is, t e capital operating independently in t e process o! circ%lation m%st yield t e a8erage ann%al pro!it H%st as @ell as capital operating in t e 8ario%s branc es o! prod%ction0 $ o%ld merc ant"s capital yield a ig er percentage o! a8erage pro!it t an ind%strial capital, t en a portion o! t e latter @o%ld trans!orm itsel! into merc ant"s capital0 $ o%ld it yield a lo@er a8erage pro!it, t en t e con8erse @o%ld res%lt0 ? portion o! t e merc ant"s capital @o%ld t en be trans!ormed into ind%strial capital0 -o species o! capital c anges its p%rpose, or !%nction, @it greater ease t an merc ant"s capital0 $ince merc ant"s capital does not itsel! prod%ce s%rpl%s-8al%e, it is e8ident t at t e s%rpl%s-8al%e @ ic it pockets in t e !orm o! a8erage pro!it m%st be a portion o! t e s%rpl%s-8al%e prod%ced by t e total prod%cti8e capital0 A%t no@ t e D%estion arises: 6o@ does merc ant"s capital attract its s are o! t e s%rpl%s-8al%e or pro!it prod%ced by t e prod%cti8e capitalQ &t is H%st an ill%sion t at commercial pro!it is a mere addition to, or a nominal rise o!, t e prices o! commodities in excess o! t eir 8al%e0 &t is plain t at t e merc ant can dra@ is pro!it only o%t o! t e price o! t e commodities e sells, and plainer still t at t e pro!it e makes in selling is commodities m%st be eD%al to t e di!!erence bet@een is p%rc ase price and is selling price, i.e., eD%al to t e excess o! t e latter o8er t e !ormer0

1*1

; apter J4&&

&t is possible t at additional costs Bcosts o! circ%lationC may enter into t e commodities a!ter t eir p%rc ase and be!ore t eir sale, and it is also possible t at t is may not appen0 &! s%c costs s o%ld occ%r, it is plain t at t e excess o! t e selling price o8er t e p%rc ase price @o%ld not be all pro!it0 5o simpli!y t e analysis, @e s all ass%me at t is point t at no s%c costs occ%r0 For t e ind%strial capitalist t e di!!erence bet@een t e selling price and t e p%rc ase price o! is commodities is eD%al to t e di!!erence bet@een t eir price o! prod%ction and t eir cost-price, or, !rom t e standpoint o! t e total social capital, eD%al to t e di!!erence bet@een t e 8al%e o! t e commodities and t eir cost-price !or t e capitalists, @ ic again comes do@n to t e di!!erence bet@een t e total D%antity o! labo%r and t e D%antity o! paid labo%r incorporated in t em0 Ae!ore t e commodities bo%g t by t e ind%strial capitalist are t ro@n back on t e market as saleable commodities, t ey pass t ro%g t e process o! prod%ction, in @ ic alone t e portion o! t eir price to be realised as pro!it is created0 A%t it is di!!erent @it t e merc ant0 5 e commodities are in is ands only so long as t ey are in t e process o! circ%lation0 6e merely contin%es t eir sale, t e realisation o! t eir price @ ic @as beg%n by t e prod%cti8e capitalist, and t ere!ore does not ca%se t em to pass t ro%g any intermediate process in @ ic t ey co%ld again absorb s%rpl%s8al%e0 W ile t e ind%strial capitalist merely realises t e pre8io%sly prod%ced s%rpl%s-8al%e, or pro!it, in t e process o! circ%lation, t e merc ant as not only to realise is pro!it d%ring and t ro%g circ%lation, b%t m%st !irst make it0 5 ere appears to be no ot er @ay o! doing t is o%tside o! selling t e commodities bo%g t by im !rom t e ind%strial capitalist at t eir prices o! prod%ction, or, !rom t e standpoint o! t e total commodity-capital, at t eir 8al%es in excess o! t eir prices o! prod%ction, making a nominal extra c arge to t eir prices, ence, selling t em, !rom t e standpoint o! t e total commodity-capital, abo8e t eir 8al%e, and pocketing t is excess o! t eir nominal 8al%e o8er t eir real 8al%e# in s ort, selling t em !or more t an t ey are @ort 0 5 is met od o! adding an extra c arge is easy to grasp0 For instance, one yard o! linen costs <s0 &! & @ant to make a 1=T pro!it in reselling it, & m%st add 1N1= to t e price, ence sell t e yard at <s0 < <N+ d0 5 e di!!erence bet@een its act%al price o! prod%ction and its selling price is t en R < <N+d0, and t is represents a pro!it o! 1=T on <s0 5 is amo%nts to my selling t e yard to t e b%yer at a price @ ic is in reality t e price o! 1 1N1= yard0 3r, @ at amo%nts to t e same, it is as t o%g & sold to t e b%yer only 1=N11 o! a yard !or <s0 and kept 1N11 o! a yard !or mysel!0 &n !act & can b%y back 1N11 o! a yard !or < <N+d0 at t e price o! <s0 < <N+d0 per yard0 5 is @o%ld, t ere!ore, be H%st a ro%ndabo%t @ay o! s aring in t e s%rpl%s-8al%e and s%rpl%s-prod%ct by a nominal rise in t e price o! commodities0 5 is is realisation o! commercial pro!it by raising t e price o! commodities, as it appears at !irst glance0 ?nd, indeed, t is @ ole notion t at pro!it originates !rom a nominal rise in t e price o! commodities, or !rom t eir sale abo8e t eir 8al%e, springs !rom t e obser8ations o! commercial capital0 A%t it is D%ickly apparent on closer inspection t at t is is mere ill%sion0 ?ss%ming capitalist prod%ction to be predominant, commercial pro!it cannot be realised in t is manner0 B&t is ere al@ays a D%estion o! a8erages, not o! isolated cases0C W y do @e ass%me t at t e merc ant can realise a pro!it o! no more t an, say, 1=T on is commodities by selling t em 1=T abo8e t eir price o! prod%ctionQ Aeca%se @e ass%me t at t e prod%cer o! t ese commodities, t e ind%strial capitalist B@ o appears as K the producerL be!ore t e o%tside @orld, being t e personi!ication o! ind%strial capitalC, ad sold t em to t e dealer at t eir prices o! prod%ction0 &! t e p%rc ase price o! commodities paid by t e dealer is eD%al to t eir price o! prod%ction, or, in t e last instance, eD%al to t eir 8al%e, so t at t e price o! prod%ction or, in t e last instance, t e 8al%e, represent t e merc ant"s cost-price, t en, indeed, t e excess o! is selling price o8er is p%rc ase price I and t is di!!erence alone is t e so%rce o! is pro!it I m%st be an excess o! t eir commercial price o8er t eir price o! prod%ction, so t at in t e !inal analysis t e merc ant sells all commodities abo8e t eir 8al%es0 A%t @ y @as it ass%med t at t e ind%strial capitalist sells is commodities to t e merc ant at t eir prices o! prod%ctionQ 3r rat er, @ at @as taken !or granted in t at ass%mptionQ

1*<

; apter J4&&

&t @as t at merc ant"s capital did not go into !orming t e general rate o! pro!it B@e are dealing @it it as yet only in its capacity o! commercial capitalC0 We proceeded necessarily !rom t is premise in disc%ssing t e general rate o! pro!it, !irst, beca%se merc ant"s capital as s%c did not exist !or %s at t e time, and, second, beca%se a8erage pro!it, and ence t e general rate o! pro!it, ad !irst to be de8eloped as a le8elling o! pro!its or s%rpl%s-8al%es act%ally prod%ced by t e ind%strial capitals in t e di!!erent sp eres o! prod%ction0 A%t in t e case o! merc ant"s capital @e are dealing @it a capital @ ic s ares in t e pro!it @it o%t participating in its prod%ction0 6ence, it is no@ necessary to s%pplement o%r earlier exposition0 $%ppose, t e total ind%strial capital ad8anced in t e co%rse o! t e year R ><= c U 18=8 R *== Bsay million VC, and t at s" R 1==T0 5 e prod%ct t ere!ore R ><= c U 18=8 U 18=s0 'et %s call t is prod%ct or t e prod%ced commodity-capital, ;, @ ose 8al%e, or price o! prod%ction Bsince bot are identical !or t e totality o! commoditiesC R 1,=8=, and t e rate o! pro!it !or t e total social capital o! *== R <=T0 5 ese <=T are, according to o%r earlier analyses, t e a8erage rate o! pro!it, since t e s%rpl%s-8al%e is not calc%lated ere on t is or t at capital o! any partic%lar composition, b%t on t e total ind%strial capital o! a8erage composition0 5 %s, ; R 1,=8=, and t e rate o! pro!it R <=T0 'et %s no@ ass%me, o@e8er, t at aside !rom t ese V*== o! ind%strial capital, t ere are still V1== o! merc ant"s capital, @ ic s ares in t e pro!it pro rata to its magnit%de H%st as t e !ormer0 ?ccording to o%r ass%mption, it is 1N1= o! t e total capital o! 1,===0 5 ere!ore, it participates to t e extent o! 1N1= in t e total s%rpl%s-8al%e o! 18=, and t %s sec%res a pro!it o! 18T0 ?ct%ally, t en, t e pro!it to be distrib%ted among t e ot er 1N1= o! t e total capital is only R 16<, or on t e capital o! *== like@ise R 18T0 6ence, t e price at @ ic ; is sold by t e o@ners o! t e ind%strial capital o! *== to t e merc ants R ><=c U 18=8 U 16<s R 1,=6<0 &! t e dealer t en adds t e a8erage pro!it o! 18T to is capital o! 1==, e sells t e commodities at 1,=6< U 18 R 1,=8=, i.e., at t eir price o! prod%ction, or, !rom t e standpoint o! t e total commodity-capital, at t eir 8al%e, alt o%g e makes is pro!it only d%ring and t ro%g t e circ%lation process, and only !rom an excess o! is selling price o8er is p%rc ase price0 .et e does not sell t e commodities abo8e t eir 8al%e, or abo8e t eir price o! prod%ction, precisely beca%se e as bo%g t t em !rom t e ind%strial capitalist belo@ t eir 8al%e, or belo@ t eir price o! prod%ction0 5 %s, merc ant"s capital enters t e !ormation o! t e general rate o! pro!it as a determinant pro rata to its part in t e total capital0 6ence, i! @e say in t e gi8en case t at t e a8erage rate o! pro!it R 18T, it @o%ld R <=T, i! it @ere not t at 1N1= o! t e total capital @as merc ant"s capital and t e general rate o! pro!it t ereby lo@ered by 1N1=0 5 is leads to a closer and more compre ensi8e de!inition o! t e price o! prod%ction0 Ay price o! prod%ction @e mean, H%st as be!ore, t e price o! a commodity R its costs Bt e 8al%e o! t e constant U 8ariable capital contained in itC U t e a8erage pro!it0 A%t t is a8erage pro!it is no@ determined di!!erently0 &t is determined by t e total pro!it prod%ced by t e total prod%cti8e capital# b%t not as calc%lated on t e total prod%cti8e capital alone, so t at i! t is R *==, as ass%med abo8e, and t e pro!it R 18=, t en t e a8erage rate o! pro!it R 18=N*== R <=T0 A%t, rat er, as calc%lated on t e total prod%cti8e U merc ant"s capital, so t at @it *== prod%cti8e and 1== merc ant"s capital, t e a8erage rate o! pro!it R 18=N1,=== R 18T0 5 e price o! prod%ction is, t ere!ore R k Bt e costsC U 18, instead o! k U <=0 5 e s are o! t e total pro!it !alling to merc ant"s capital is t %s incl%ded in t e a8erage rate o! pro!it0 5 e act%al 8al%e, or price o! prod%ction, o! t e total commodity-capital is t ere!ore R k U p U m B@ ere m is commercial pro!itC0 5 e price o! prod%ction, or t e price at @ ic t e ind%strial capitalist as s%c sells is commodities, is t %s smaller t an t e act%al price o! prod%ction o! t e commodity# or in terms o! all commodities taken toget er, t e prices at @ ic t e class o! ind%strial capitalists sell t eir commodities are lo@er t an t eir 8al%e0 6ence, in t e abo8e case, *== BcostsC U 18T on *==, or *== U 16<R 1,=6<0 &t !ollo@s, t en, t at in selling a commodity at 118 !or @ ic e paid 1== t e merc ant does, indeed, add 18T to t e price0 A%t since t is commodity, !or @ ic e paid 1==, is really @ort 118, e does not sell it abo8e its 8al%e0 We s all ence!ort %se t e term price o! prod%ction in t is, its more precise, sense0 &t is e8ident, t ere!ore, t at t e pro!it o! t e

1*3

; apter J4&&

ind%strial capitalist eD%als t e excess o! t e price o! prod%ction o! t e commodity o8er its costprice, and t at commercial pro!it, as distinct !rom t is ind%strial pro!it, eD%als t e excess o! t e selling price o8er t e price o! prod%ction o! t e commodity @ ic , !or t e merc ant, is its p%rc ase price# b%t t at t e act%al price o! t e commodity R its price o! prod%ction U t e commercial pro!it0 P%st as ind%strial capital realises only s%c pro!its as already exist in t e 8al%e o! commodities as s%rpl%s-8al%e, so merc ant"s capital realises pro!its only beca%se t e entire s%rpl%s-8al%e, or pro!it, as not as yet been !%lly realised in t e price c arged !or t e commodities by t e ind%strial capitalist0 1 5 e merc ant"s selling price t %s exceeds t e p%rc ase price not beca%se t e !ormer exceeds t e total 8al%e, b%t beca%se t e latter is belo@ t is 8al%e0 Merc ant"s capital, t ere!ore, participates in le8elling s%rpl%s-8al%e to a8erage pro!it, alt o%g it does not take part in its prod%ction0 5 %s, t e general rate o! pro!it contains a ded%ction !rom s%rpl%s-8al%e d%e to merc ant"s capital, ence a ded%ction !rom t e pro!it o! ind%strial capital0 &t !ollo@s !rom t e !oregoing: 1C 5 e larger t e merc ant"s capital in proportion to t e ind%strial capital, t e smaller t e rate o! ind%strial pro!it, and 8ice 8ersa0 <C &t @as demonstrated in t e !irst part t at t e rate o! pro!it is al@ays lo@er t an t e rate o! t e act%al s%rpl%s-8al%e, i.e., it al@ays %nderstates t e intensity o! exploitation, as in t e abo8e case, ><=c U 18=8 U 18=s, t e rate o! s%rpl%s-8al%e o! 1==T and a rate o! pro!it o! only <=T0 ?nd t e di!!erence becomes still greater, inasm%c as t e a8erage rate o! pro!it appears smaller again, dropping !rom <=T to 18T, i! t e s are !alling to merc ant"s capital is also taken into acco%nt0 5 e a8erage rate o! pro!it o! t e direct capitalist exploiter, t ere!ore, expresses a rate o! pro!it smaller t an it act%ally is0 ?ss%ming all ot er circ%mstances remaining t e same, t e relati8e 8ol%me o! merc ant"s capital B@it t e exception o! t e small dealer @ o represents a ybrid !ormC is in in8erse proportion to t e 8elocity o! its t%rno8er, ence in in8erse proportion to t e energy o! t e process o! reprod%ction in general0 &n t e co%rse o! scienti!ic analysis, t e !ormation o! a general rate o! pro!it appears to res%lt !rom ind%strial capitals and t eir competition, and is only later corrected, s%pplemented, and modi!ied by t e inter8ention o! merc ant"s capital0 &n t e co%rse o! its istorical de8elopment, o@e8er, t e process is really re8ersed0 &t is t e commercial capital @ ic !irst determines t e prices o! commodities more or less in accordance @it t eir 8al%es, and it is t e sp ere o! circ%lation, t e sp ere t at promotes t e process o! reprod%ction, in @ ic a general rate o! pro!it initially takes s ape0 &t is originally t e commercial pro!it @ ic determines t e ind%strial pro!it0 -ot %ntil t e capitalist mode o! prod%ction as asserted itsel! and t e prod%cer imsel! as become merc ant, is commercial pro!it red%ced to t at aliD%ot part o! t e total s%rpl%s-8al%e !alling to t e s are o! merc ant"s capital as an aliD%ot part o! t e total capital engaged in t e social process o! reprod%ction0 &t @as seen in t e s%pplementary eD%alisation o! pro!it t ro%g t e inter8ention o! merc ant"s capital t at no additional element entered t e 8al%e o! commodities @it t e merc ant"s ad8anced money-capital, and t at t e extra c arge to t e price, @ ereby t e merc ant makes is pro!it, @as merely eD%al to t at portion o! t e 8al%e o! t e commodities, @ ic prod%cti8e capital ad not calc%lated in t e price o! prod%ction, i.e., ad le!t o%t0 5 e case o! t is money-capital is similar to t at o! t e ind%strial capitalist"s !ixed capital, since it is not cons%med and its 8al%e, t ere!ore, does not make %p an element o! t e 8al%e o! commodity0 &t is in t e p%rc ase price o! commodity-capital t at t e merc ant replaces its price o! prod%ction R M, in money0 6is o@n selling price, as pre8io%sly s o@n, is R M U M, @ ere M stands !or t e addition to t e price o! commodities determined by t e general rate o! pro!it0 3nce e sells t e commodities, is original money-capital, @ ic e ad8anced !or t eir p%rc ase, ret%rns to im toget er @it t is M0 We see once more t at is money-capital is not ing b%t t e ind%strial capitalist"s commodity-capital trans!ormed into money-capital, @ ic a!!ects t e magnit%de o! t e 8al%e o! t is commodity-

1*2

; apter J4&&

capital no more t an @o%ld a direct sale o! t e latter to t e %ltimate cons%mer, instead o! to t e merc ant0 &t, act%ally, merely anticipates t e payment o! t e cons%mer0 6o@e8er, t is is correct only on t e condition it erto ass%med, t at t e merc ant as no o8er ead expenses, or t at aside !rom t e money-capital @ ic e m%st ad8ance to b%y commodities !rom t e prod%cer e need not ad8ance any ot er capital, circ%lating or !ixed, in t e process o! commodity metamorp osis0, t e process o! b%ying and selling0 A%t t is is not so in reality, as @e a8e seen in t e analysis o! t e costs o! circ%lation BAook &&, ; ap0 4&C0 5 ese costs o! circ%lation are partly expenses @ ic t e merc ant as to reclaim !rom ot er agents o! circ%lation, and partly expenses arising directly !rom is speci!ic b%siness0 -o matter @ at t e nat%re o! t ese costs o! circ%lation I @ et er t ey arise !rom t e p%rely commercial nat%re o! t e merc ant"s establis ment as s%c and ence belong to t e merc ant"s speci!ic costs o! circ%lation, or represent items @ ic are c arges !or s%bseD%ent processes o! prod%ction added in t e process o! circ%lation, s%c as expressage, transport, storage, etc0 I t ey al@ays reD%ire o! t e merc ant, aside !rom is money-capital, ad8anced to t e p%rc ase o! commodities, some additional capital !or t e p%rc ase and payment o! s%c means o! circ%lation0 ?s m%c o! t is element o! cost as consists o! circ%lating capital passes @ olly as an additional element into t e selling price o! t e commodities# and as m%c o! it as consists o! !ixed capital only to t e extent o! its @ear and tear0 A%t only as an element @ ic !orms a nominal 8al%e, e8en i! as t e p%rely commercial costs o! circ%lation, it does not add any real 8al%e to t e commodities0 A%t @ et er !ixed or circ%lating, t is entire additional capital participates in !orming t e general rate o! pro!it0 5 e p%rely commercial costs o! circ%lation B ence, excl%ding costs o! expressage, s ipping, storage, etc0C resol8e t emsel8es into costs reD%ired to realise t e 8al%e o! commodities, to trans!orm it !rom commodities into money, or !rom money into commodities, to e!!ect t eir exc ange0 We lea8e entirely o%t o! consideration all possible processes o! prod%ction @ ic may contin%e in t e process o! circ%lation, and !rom @ ic t e merc ant"s b%siness can be altoget er separated# as, in !act, t e act%al transport ind%stry and expressage may be, and are, ind%strial branc es entirely distinct !rom commercial# and p%rc aseable and saleable commodities may be stored in docks or in ot er p%blic premises, @it t e res%ltant cost o! storage being c arged to t e merc ant by t ird persons inasm%c as e as to ad8ance it0 ?ll t is takes place in act%al @ olesale commerce, @ ere merc ant"s capital appears in its p%rest !orm, %nmixed @it ot er !%nctions0 5 e express company o@ner, t e rail@ay director, and t e s ipo@ner, are not Kmerc ants0L 5 e costs @ ic @e consider ere are t ose o! b%ying and selling0 We a8e already remarked earlier t at t ese resol8e t emsel8es into acco%nting, book-keeping, marketing, correspondence, etc0 5 e constant capital reD%ired !or t is p%rpose consists o! o!!ices, paper, postage, etc0 5 e ot er costs break %p into 8ariable capital ad8anced !or t e employment o! mercantile @age-@orkers0 BExpressage, transport costs, ad8ances !or c%stoms d%ties, etc0, may partly be considered as being ad8anced by t e merc ant in p%rc asing commodities and t %s enter t e p%rc ase price as !ar as e is concerned0C ?ll t ese costs are not inc%rred in prod%cing t e %se-8al%e o! commodities, b%t in realising t eir 8al%e0 5 ey are p%re costs o! circ%lation0 5 ey do not enter into t e immediate process o! prod%ction, b%t since t ey are part o! t e process o! circ%lation t ey are also part o! t e total process o! reprod%ction0 5 e only portion o! t ese costs o! interest to %s at t is point is t at ad8anced as 8ariable capital0 B5 e !ollo@ing D%estions s o%ld also be analysed: First, o@ does t e la@ t at only necessary labo%r enters t e 8al%e o! commodities operate in t e process o! circ%lationQ $econd, o@ does acc%m%lation obtain in merc ant"s capitalQ 5 ird, o@ does merc ant"s capital !%nction in t e act%al aggregate reprod%ction process o! societyQC 5 ese costs arise d%e to t e prod%ct a8ing t e economic !orm o! a commodity0

1*+

; apter J4&&

&! t e labo%r-time @ ic t e ind%strial capitalists t emsel8es lose @ ile directly selling commodities to one anot er I ence, speaking obHecti8ely, t e circ%lation time o! t e commodities I does not add 8al%e to t ese commodities, it is e8ident t at t is labo%r-time does not c ange its nat%re in t e least by !alling to t e merc ant instead o! t e ind%strial capitalist0 5 e con8ersion o! commodities Bprod%ctsC into money, and o! money into commodities Bmeans o! prod%ctionC is a necessary !%nction o! ind%strial capital and, t ere!ore, a necessary operation o! t e capitalist I @ o is act%ally b%t personi!ied capital endo@ed @it a conscio%sness o! its o@n and a @ill0 A%t t ese !%nctions neit er create 8al%e, nor prod%ce s%rpl%s-8al%e0 Ay per!orming t ese operations and carrying on t e !%nctions o! capital in t e sp ere o! circ%lation a!ter t e prod%cti8e capitalist as ceased to be in8ol8ed t e merc ant merely takes t e place o! t e ind%strial capitalist0 5 e labo%r-time reD%ired in t ese operations is de8oted to certain necessary operations o! t e reprod%ction process o! capital, b%t yields no additional 8al%e0 &! t e merc ant did not per!orm t ese operations B ence, did not expend t e labo%r-time entailedC, e @o%ld not be applying is capital as a circ%lation agent o! ind%strial capital# e @o%ld not t en be contin%ing t e interr%pted !%nction o! t e ind%strial capitalist, and conseD%ently co%ld not participate as a capitalist pro rata to is ad8anced capital, in t e mass o! pro!it prod%ced by ind%strial capitalists0 &n order to s are in t e mass o! s%rpl%s-8al%e, to expand t e 8al%e o! is ad8ance as capital, t e commercial capitalist need not employ @age-@orkers0 &! is b%siness and capital are small, e may be t e only @orker in it0 6e is paid @it t at portion o! t e pro!it @ ic !alls to im t ro%g t e di!!erence bet@een t e p%rc ase price paid by im !or commodities and t eir act%al price o! prod%ction0 A%t, on t e ot er and, t e pro!it realised by t e merc ant on a small amo%nt o! ad8anced capital may be no larger, or may e8en be smaller, t an t e @ages o! one o! t e better-paid skilled @age@orkers0 &n !act, e br%s es s o%lders @it many direct commercial agents o! t e prod%cti8e capitalist, s%c as b%yers, sellers, tra8ellers, @ o enHoy t e same or a ig er income eit er in t e !orm o! @ages, or in t e !orm o! a s are in t e pro!it Bpercentages, bon%sesC made !rom eac sale0 &n t e !irst case, t e merc ant pockets t e mercantile pro!it as an independent capitalist# in t e ot er, t e salesman, t e ind%strial capitalist"s @age-labo%rer, recei8es a portion o! t e pro!it eit er in t e !orm o! @ages, or as a proportional s are in t e pro!it o! t e ind%strial capitalist, @ ose direct agent e is, @ ile is employer pockets bot t e ind%strial and t e commercial pro!it0 A%t in all t ese cases, alt o%g is income may appear to t e circ%lation agent as an ordinary @age, as payment !or @ork per!ormed, and alt o%g , @ ere it does not so appear, t e pro!it may be no larger t an t e @age o! a better-paid labo%rer, is income is deri8ed solely !rom t e mercantile pro!it0 5 is !ollo@s !rom is labo%r not being labo%r @ ic prod%ces 8al%e0 5 e lengt ening o! t e act o! circ%lation represents !or t e ind%strial capitalist 1C a personal loss o! time, since it pre8ents im !rom per!orming in person is !%nction as manager o! t e prod%cti8e process# <C a longer stay o! is prod%ct in money- or commodity-!orm, in t e circ%lation process, ence in a process @ ere it does not expand 8al%e and @ ere t e direct prod%ction process is interr%pted0 &! t is process is not to be interr%pted, prod%ction m%st eit er be c%rtailed, or more money-capital m%st be ad8anced to maintain t e process o! prod%ction on t e same scale0 5 is means t at eac time eit er a smaller pro!it is made on t e capital it erto in8ested, or t at additional money-capital m%st be ad8anced to make t e pre8io%s pro!it0 ?ll t is remains %nc anged @ en t e merc ant takes t e place o! t e ind%strial capitalist0 &nstead o! t e ind%strial capitalist de8oting more time to t e process o! circ%lation, it is t e merc ant @ o is so engaged# instead o! t e ind%strial capitalist it is t e merc ant @ o ad8ances additional capital !or circ%lation# or, @ at amo%nts to t e same t ing, instead o! a large portion o! t e ind%strial capital being contin%ally di8erted into t e process o! circ%lation, it is t e merc ant"s capital @ ic is @ olly tied %p in it# and instead o! making a smaller pro!it, t e ind%strial capitalist m%st yield a portion o! is pro!it @ olly to t e merc ant0 $o long as merc ant"s capital remains @it in t e bo%nds in @ ic it is necessary, t e only di!!erence is t at t is di8ision o! t e !%nctions o! capital

1*6

; apter J4&&

red%ces t e time excl%si8ely %sed %p in t e process o! circ%lation, t at less additional capital is ad8anced !or t is p%rpose, and t at t e loss in total pro!it, represented by mercantile pro!it, is smaller t an it @o%ld ot er@ise a8e been0 &! in t e abo8e example, ><= c U 18=8 U 18=s, assisted by a merc ant"s capital o! 1==, prod%ces a pro!it o! 16<, or 18T, !or t e ind%strial capitalist, ence implying a ded%ction o! 18, t en, b%t !or t is independent merc ant"s capital, t e additional capital reD%ired @o%ld probably be <==, and @e s o%ld a8e a total ad8ance by t e ind%strial capitalist o! 1,1== instead o! *==, @ ic , based %pon a s%rpl%s-8al%e o! 18=, @o%ld yield a rate o! pro!it o! only 16 2N11T0 &! t e ind%strial capitalist @ o acts as is o@n merc ant ad8ances not only t e additional capital to b%y ne@ commodities be!ore is prod%ct in t e process o! circ%lation as been recon8erted into money, b%t also capital Bo!!ice expenses and @ages !or commercial employeesC to realise t e 8al%e o! is commodity-capital, or, in ot er @ords, !or t e process o! circ%lation, t en t ese s%pplements !orm additional capital, b%t do not create s%rpl%s-8al%e0 5 ey m%st be made good o%t o! t e 8al%e o! t e commodities, beca%se a portion o! t e 8al%e o! t ese commodities m%st be recon8erted into t ese circ%lation costs0 A%t no additional s%rpl%s-8al%e is created t ereby0 $o !ar as t is concerns t e total capital o! society, it means in !act t at a portion o! it m%st be set aside !or secondary operations @ ic are no part o! t e sel!-expansion process, and t at t is portion o! t e social capital m%st be contin%ally reprod%ced !or t is p%rpose0 5 is red%ces t e rate o! pro!it !or t e indi8id%al capitalist and !or t e entire class o! ind%strial capitalists, an e!!ect arising !rom e8ery ne@ in8estment o! additional capital @ ene8er s%c capital is reD%ired to set in motion t e same mass o! 8ariable capital0 &n so !ar as t ese additional costs connected @it t e b%siness o! circ%lation are trans!erred !rom t e ind%strial to t e commercial capitalist, t ere takes place a similar red%ction in t e rate o! pro!it, b%t to a lesser degree and in a di!!erent @ay0 &t no@ de8elops t at t e merc ant ad8ances more capital t an @o%ld be necessary i! t ese costs did not exist, and t at t e pro!it on t is additional capital increases t e amo%nt o! t e commercial pro!it, so t at more o! t e merc ant"s capital Hoins ind%strial capital in le8elling t e a8erage rate o! pro!it and t ereby t e a8erage pro!it !alls0 &! in o%r abo8e example an additional capital o! += is ad8anced besides t e merc ant"s capital o! 1== to co8er t e costs in D%estion, t en t e total s%rpl%s-8al%e o! 18= is distrib%ted @it respect to a prod%cti8e capital o! *== pl%s a merc ant"s capital o! 1+=, toget er R 1,=+=0 5 e a8erage rate o! pro!it, t ere!ore, sinks to 1> 1N>T 5 e ind%strial capitalist sells is commodities to t e merc ant at *== U 1+2 <N> R 1,=+2< 1N>, and t e merc ant sells t em at 1,13= B1,=8= U += !or costs @ ic e m%st reco8erC0 Moreo8er, it m%st be admitted t at t e di8ision bet@een merc ant"s and ind%strial capital is accompanied by a centralisation o! t e commercial expenses and, conseD%ently, by t eir red%ction0 5 e D%estion no@ arises: W at abo%t t e commercial @age-@orkers employed by t e commercial capitalist, ere t e merc antQ &n one respect, s%c a commercial employee is a @age-@orker like any ot er0 &n t e !irst place, is labo%r-po@er is bo%g t @it t e 8ariable capital o! t e merc ant, not @it money expended as re8en%e, and conseD%ently it is not bo%g t !or pri8ate ser8ice, b%t !or t e p%rpose o! expanding t e 8al%e o! t e capital ad8anced !or it0 &n t e second place, t e 8al%e o! is labo%r-po@er, and t %s is @ages, are determined as t ose o! ot er @age-@orkers, i.e., by t e cost o! prod%ction and reprod%ction o! is speci!ic labo%r-po@er, not by t e prod%ct o! is labo%r0 6o@e8er, @e m%st make t e same distinction bet@een im and t e @age-@orkers directly employed by ind%strial capital @ ic exists bet@een ind%strial capital and merc ant"s capital, and t %s bet@een t e ind%strial capitalist and t e merc ant0 $ince t e merc ant, as a mere agent o! circ%lation, prod%ces neit er 8al%e nor s%rpl%s-8al%e B!or t e additional 8al%e @ ic e adds to t e commodities t ro%g is expenses resol8es itsel! into an addition o! pre8io%sly existing 8al%es, alt o%g t e D%estion ere poses itsel!, o@ e preser8es t is 8al%e o! is constant capitalQC it !ollo@s t at t e mercantile @orkers employed by im in t ese same !%nctions cannot

1*>

; apter J4&&

directly create s%rpl%s-8al%e !or im0 6ere, as in t e case o! prod%cti8e labo%rers, @e ass%me t at @ages are determined by t e 8al%e o! t e labo%r-po@er, and t at, ence, t e merc ant does not enric imsel! by depressing @ages, so t at e does not enter into is cost acco%nt an ad8ance !or labo%r @ ic e as paid only in part# in ot er @ords, t at e does not enric imsel! t ro%g c eating is clerks, etc0 5 e di!!ic%lty as concerns mercantile @age-@orkers is by no means to explain o@ t ey prod%ce direct pro!its !or t eir employer @it o%t creating any direct s%rpl%s-8al%e Bo! @ ic pro!it is b%t a transm%ted !ormC0 5 is D%estion as, indeed, already been sol8ed in t e general analysis o! commercial pro!its0 P%st as ind%strial capital makes pro!it by selling labo%r embodied and realised in commodities, !or @ ic it as not paid any eD%i8alent, so merc ant"s capital deri8es pro!it !rom not paying in !%ll to prod%cti8e capital !or all t e %npaid labo%r contained in t e commodities Bin commodities, in so !ar as capital in8ested in t eir prod%ction !%nctions as an aliD%ot part o! t e total ind%strial capitalC, and by demanding payment !or t is %npaid portion still contained in t e commodities @ en making a sale0 5 e relation o! merc ant"s capital to s%rpl%s-8al%e is di!!erent !rom t at o! ind%strial capital0 5 e latter prod%ces s%rpl%s-8al%e by directly appropriating t e %npaid labo%r o! ot ers0 5 e !ormer appropriates a portion o! t is s%rpl%s-8al%e by a8ing t is portion trans!erred !rom ind%strial capital to itsel!0 &t is only t ro%g its !%nction o! realising 8al%es t at merc ant"s capital acts as capital in t e process o! reprod%ction, and ence dra@s on t e s%rpl%s-8al%e prod%ced by t e total capital0 5 e mass o! t e indi8id%al merc ant"s pro!its depends on t e mass o! capital t at e can apply in t is process, and e can apply so m%c more o! it in b%ying and selling, t e more t e %npaid labo%r o! is clerks0 5 e 8ery !%nction, by 8irt%e o! @ ic t e merc ant"s money becomes capital, is largely done t ro%g is employees0 5 e %npaid labo%r o! t ese clerks, @ ile it does not create s%rpl%s8al%e, enables im to appropriate s%rpl%s-8al%e, @ ic , in e!!ect, amo%nts to t e same t ing @it respect to is capital0 &t is, t ere!ore, a so%rce o! pro!it !or im0 3t er@ise commerce co%ld ne8er be cond%cted on a large scale, capitalistically0 P%st as t e labo%rer"s %npaid labo%r directly creates s%rpl%s-8al%e !or prod%cti8e capital, so t e %npaid labo%r o! t e commercial @age-@orker sec%res a s are o! t is s%rpl%s-8al%e !or merc ant"s capital0 5 e di!!ic%lty lies ere: $ince t e merc ant"s labo%r-time and labo%r do not create 8al%e, alt o%g t ey sec%re !or im a s are o! already prod%ced s%rpl%s-8al%e, o@ does t e matter stand @it t e 8ariable capital @ ic e lays o%t in p%rc asing commercial labo%r-po@erQ &s t is 8ariable capital to be incl%ded in t e cost o%tlays o! t e ad8anced merc ant"s capitalQ &! not, t is appears to con!lict @it t e la@ o! eD%alisation o! t e rate o! pro!it# @ at capitalist @o%ld ad8ance 1+= i! e co%ld c arge only 1== to ad8anced capitalQ &! so, it seems to con!lict @it t e nat%re o! merc ant"s capital, since t is kind o! capital does not act as capital by setting in motion t e labo%r o! ot ers, as ind%strial capital does, b%t rat er by doing its o@n @ork, i.e., per!orming t e !%nctions o! b%ying and selling, t is being precisely t e means and t e reason @ y it recei8es a portion o! t e s%rpl%s-8al%e prod%ced by t e ind%strial capital0 BWe m%st t ere!ore analyse t e !ollo@ing points: t e merc ant"s 8ariable capital# t e la@ o! necessary labo%r in t e sp ere o! circ%lation# o@ t e merc ant"s labo%r maintains t e 8al%e o! is constant capital# t e part played by merc ant"s capital in t e process o! reprod%ction as a @ ole# and, !inally, t e d%plication in commodity-capital and money-capital, on t e one and, and in commercial capital and money-dealing capital on t e ot er0C &! e8ery merc ant ad only as m%c capital as e imsel! @ere able to t%rn o8er by is o@n labo%r, t ere @o%ld be in!inite !ragmentation o! merc ant"s capital0 5 is !ragmentation @o%ld increase in t e same proportion as prod%cti8e capital raised prod%ction and operated @it greater masses in t e !or@ard marc o! t e capitalist mode o! prod%ction0 6ence, an increasing disproportion o! t e t@o0 ;apital in t e sp ere o! circ%lation @o%ld become decentralised in t e

1*8

; apter J4&&

same proportion as it became centralised in t e sp ere o! prod%ction0 5 e p%rely commercial b%siness o! t e ind%strial capitalist, and t %s is p%rely commercial expenses, @o%ld expand in!initely t ereby, !or e @o%ld a8e to deal @it , say, 1,=== merc ants, instead o! 1==0 5 %s, t e ad8antages o! independently operating merc ant"s capital @o%ld largely be lost0 ?nd not t e p%rely commercial expenses alone, b%t also t e ot er costs o! circ%lation, s%c as sorting, expressage, etc0, @o%ld gro@0 5 is, as !ar as t e ind%strial capital is concerned0 -o@ let %s consider merc ant"s capital0 Firstly, t e p%rely commercial operations0 &t does not take more time to deal @it large !ig%res t an @it small ones0 &t takes ten times as m%c time to make 1= p%rc ases at V1== eac as it does to make one p%rc ase at V1,===0 &t takes ten times as m%c correspondence, paper, and postage, to correspond @it 1= small merc ants as it does @it one large merc ant0 5 e clearly de!ined di8ision o! labo%r in a commercial o!!ice, in @ ic one keeps t e books, anot er looks a!ter money matters, a t ird as c arge o! correspondence, one b%ys, anot er sells, a t ird tra8els, etc0, sa8es immense D%antities o! labo%r-time, so t at t e n%mber o! @orkers employed in @ olesale commerce are in no @ay related to t e comparati8e siEe o! t e establis ment0 5 is is so, beca%se in commerce m%c more t an in ind%stry t e same !%nction reD%ires t e same labo%r-time, @ et er per!ormed on a large or a small scale0 5 is is t e reason @ y concentration appears earlier istorically in t e merc ant"s b%siness t an in t e ind%strial @orks op0 F%rt er, regarding o%tlays in constant capital0 3ne %ndred small o!!ices cost incomparably more t an one large o!!ice, 1== small @are o%ses more t an a large one, etc0 5 e costs o! transport, @ ic enter t e acco%nts o! a commercial establis ment at least as costs to be ad8anced, gro@ @it t e !ragmentation0 5 e ind%strial capitalist @o%ld a8e to lay o%t more in labo%r and in circ%lation costs in t e commercial part o! is b%siness0 5 e same merc ant"s capital, @ en di8ided among many small capitalists, @o%ld, o@ing to t is !ragmentation, reD%ire more labo%rers to per!orm its !%nctions, and more merc ant"s capital @o%ld, !%rt ermore, be needed to t%rn o8er t e same commoditycapital0 $%ppose A is t e entire merc ant"s capital directly applied in b%ying and selling commodities, and b t e corresponding 8ariable capital paid o%t in @ages to t e commercial employees0 5 en A U b is smaller t an t e total merc ant"s capital, A, @o%ld be i! e8ery merc ant ad to get along @it o%t assistants, ence @o%ld in8est not ing in b0 6o@e8er, @e a8e not yet o8ercome t e di!!ic%lty0 5 e selling price o! t e commodities m%st s%!!ice 1C to pay t e a8erage pro!it on A U b0 5 is is explained i! only by t e !act t at A U b is generally a red%ction o! t e original A, representing a smaller merc ant"s capital t an @o%ld be reD%ired @it o%t b0 A%t t is selling price m%st s%!!ice <C to co8er not only t e additional pro!it on b, b%t to replace also t e paid @ages, t e merc ant"s 8ariable capital R b0 5 is last consideration gi8es rise to t e di!!ic%lty0 7oes b represent a ne@ constit%ent o! t e price, or is it merely a part o! t e pro!it made by means o! A U b, @ ic appears as @ages only so !ar as t e mercantile @age-@orker is concerned, and as concerns t e merc ant simply replaces 8ariable capitalQ &n t e latter case, t e merc ant"s pro!it on is ad8anced capital A U b @o%ld H%st eD%al t e pro!it d%e to A by 8irt%e o! t e general rate, pl%s b, @ ic e pays o%t in t e !orm o! @ages, b%t @ ic does not itsel! yield a pro!it0 5 e cr%x o! t e matter is, indeed, to !ind t e limits Bmat ematically speakingC o! b0 'et %s !irst acc%rately de!ine t e problem0 'et A stand !or capital in8ested directly in b%ying and selling commodities, K !or t e constant capital Bact%al andling costsC cons%med in t is !%nction, and b !or t e 8ariable capital in8ested by t e merc ant0 )eco8ering A o!!ers no di!!ic%lties at all0 For t e merc ant it is simply t e realised p%rc ase price, and t e price o! prod%ction !or t e man%!act%rer0 &t is t e price paid by t e merc ant, and in reselling e reco8ers A as part o! is selling price# in addition to t is A, e makes a pro!it on A, as pre8io%sly explained0 For example, let t e commodity cost V1==0 $%ppose t e pro!it is 1=T0 &n

1**

; apter J4&&

t at case, t e commodity is sold at 11=0 5 e commodity pre8io%sly cost 1==, and t e merc ant"s capital o! 1== merely adds 1= to it0 -o@ i! @e look at K, it is at most as large as, b%t in !act smaller t an, t e portion o! constant capital @ ic t e prod%cer @o%ld %se %p in b%ying and selling, b%t t en it @o%ld !orm an addition to t e constant capital e reD%ires directly in prod%ction0 5 is portion, nonet eless, m%st be contin%ally reco8ered in t e price o! t e commodity, or, @ at amo%nts to t e same, a corresponding portion o! t e commodity m%st be contin%ally expended in t is !orm, or, !rom t e standpoint o! t e total capital o! society, m%st be contin%ally reprod%ced in t is !orm0 5 is portion o! t e ad8anced constant capital @o%ld a8e a limiting e!!ect on t e rate o! pro!it, H%st as t e entire mass o! it directly in8ested in prod%ction0 &n so !ar as t e ind%strial capitalist lea8es t e commercial part o! is b%siness to t e merc ant, e need not ad8ance t is part o! t e capital0 5 e merc ant ad8ances it in is stead0 &n a @ay, e does t is b%t nominally, since a merc ant neit er prod%ces, nor reprod%ces, t e constant capital cons%med by im Bt e act%al andling costsC0 &ts prod%ction appears a separate b%siness, or at least a part o! t e b%siness, o! some ind%strial capitalists @ o t %s play a role similar to t ose @ o s%pply constant capital to prod%cers o! necessities o! li!e0 First, t ere!ore, t e merc ant as t is constant capital reco8ered !or im and, secondly, recei8es is pro!it on it0 5 ro%g bot o! t ese, t ere!ore, t e ind%strial capitalist"s pro!it is red%ced0 A%t o@ing to economising and concentration @ ic are bo%nd %p @it di8ision o! labo%r, it s rinks less t an it @o%ld i! e imsel! ad to ad8ance t is capital0 5 e red%ction in t e rate o! pro!it is less, beca%se t e capital t %s ad8anced is less0 $o !ar, t en, t e selling price is made %p o! A U K U t e pro!it on A U K0 5 is portion o! it o!!ers no !%rt er di!!ic%lties0 A%t no@ b, t e 8ariable capital ad8anced by t e merc ant, enters into it0 5 e res%ltant selling price is A U K U b U t e pro!it on A U K U t e pro!it on b0 A merely reco8ers t e p%rc ase price and adds not ing to it b%t t e pro!it on A0 K adds t e pro!it on K, and K itsel!# b%t K U t e pro!it on K, t e part o! t e circ%lation costs ad8anced in t e !orm o! constant capital U t e corresponding a8erage pro!it, @o%ld be larger in t e ands o! t e ind%strial capitalist t an in t e merc ant"s0 5 e s rinking o! t e a8erage pro!it appears in t e !orm o! t e !%ll a8erage pro!it calc%lated a!ter ded%cting A U K !rom t e ad8anced ind%strial capital, @it t e ded%ction !rom t e a8erage pro!it on A U K paid to t e merc ant, so t at t is ded%ction appears as t e pro!it o! a speci!ic capital, merc ant"s capital0 A%t t e sit%ation is di!!erent @it respect to b U t e pro!it on b, or, in t e present case, @ ere t e rate o! pro!it is ass%med R 1=T, @it b U 1N1= b0 ?nd t e real di!!ic%lty lies ere0 W at t e merc ant b%ys @it b is, according to o%r ass%mption, not ing b%t commercial labo%r, ence labo%r reD%ired to per!orm t e !%nctions o! circ%lating capital, ; I M and M I ;0 A%t commercial labo%r is t e labo%r generally necessary !or a capital to operate as merc ant"s capital, to elp con8ert commodities into money and money into commodities0 &t is labo%r @ ic realises, b%t does not create, 8al%es0 ?nd only in so !ar as a capital per!orms t ese !%nctions I ence a capitalist per!orms t ese operations, or t is @ork @it is capital I does it ser8e as merc ant"s capital and participate in reg%lating t e general rate o! pro!it, i.e., dra@ its di8idends o%t o! t e total pro!it0 A%t Bb U t e pro!it on bC appears to incl%de, !irst, payment !or labo%r B!or it makes no di!!erence @ et er t e ind%strial capitalist pays t e merc ant !or is o@n labo%r, or t e labo%r o! t e clerks paid by t e merc antC, and, secondly, t e pro!it on t e payment !or t is labo%r, @ ic t e merc ant @o%ld a8e to per!orm in person0 First, merc ant"s capital gets its b re!%nded, and, secondly, e makes t e pro!it on it0 5 is arises !rom t e !act, t ere!ore, t at, !irst, it reD%ires payment !or t e @ork @ ereby it operates as merchant5s capital, and t at, secondly, it demands t e pro!it, beca%se it operates as capital, i.e., beca%se it per!orms @ork !or @ ic pro!it is paid to it as !%nctioning capital0 5 is is, t ere!ore, t e D%estion to be sol8ed0 'et %s ass%me t at A R 1==, b R 1=, and t e rate o! pro!it R 1=T0 We take it t at K R =, in order to lea8e o%t o! consideration t is element o! t e p%rc ase price, @ ic does not belong ere and as

<==

; apter J4&&

already been acco%nted !or0 6ence, t e selling price @o%ld R A U p U b U p BR A U Ap" U b U bp"# @ ere p stands !or t e rate o! pro!itC R 1== U 2= U 1= U 1R1<10 A%t i! b @ere not in8ested by t e merc ant in @ages I since b is paid only !or commercial labo%r, ence labo%r reD%ired, to realise t e 8al%e o! t e commodity I capital t ro@n on t e market by ind%strial capital I t e matter @o%ld stand as !ollo@s: to b%y or sell !or A R 1==, t e merc ant @o%ld de8ote is time, and @e @is to ass%me t at t is is t e only time at is disposal0 5 e commercial labo%r represented by b, or 1=, i! paid !or by pro!it instead o! @ages, @o%ld pres%ppose anot er merc ant"s capital R 1==, since at 1=T t is makes b R 1=0 5 is second A R 1== @o%ld not additionally go into t e price o! commodities, b%t t e 1=T @o%ld0 5 ere @o%ld, ence, be t@o operations at 1== R <==, t at @o%ld b%y commodities at <== U <= R <<=0 $ince merc ant"s capital is absol%tely not ing b%t an indi8id%alised !orm o! a portion o! ind%strial capital engaged in t e process o! circ%lation, all D%estions re!erring to it m%st be sol8ed by representing t e problem primarily in a !orm# in @ ic t e p enomena pec%liar to merc ant"s capital do not yet appear independently, b%t still in direct connection @it ind%strial capital, as a branc o! it0 ?s an o!!ice, distinct !rom a @orks op, mercantile capital operates contin%ally in t e circ%lation process0 &t is ere I in t e o!!ice o! t e ind%strial capitalist imsel! I t at @e m%st !irst analyse t e b no@ %nder consideration0 5 e o!!ice is !rom t e o%tset al@ays in!initesimally small compared to t e ind%strial @orks op0 ?s !or t e rest, it is clear t at as t e scale o! prod%ction is extended, commercial operations reD%ired constantly !or t e circ%lation o! ind%strial capital, in order to sell t e prod%ct existing as commodity-capital, to recon8ert t e money so recei8ed into means o! prod%ction, and to keep acco%nt o! t e @ ole process, m%ltiply accordingly0 ;alc%lation o! prices, book-keeping, managing !%nds, correspondence I all belong %nder t is ead0 5 e more de8eloped t e scale o! prod%ction, t e greater, e8en i! not proportionately greater, t e commercial operations o! t e ind%strial capital, and conseD%ently t e labo%r and ot er costs o! circ%lation in8ol8ed in realising 8al%e and s%rpl%s-8al%e0 5 is necessitates t e employment o! commercial @age-@orkers @ o make %p t e act%al o!!ice sta!!0 5 e o%tlay !or t ese, alt o%g made in t e !orm o! @ages, di!!ers !rom t e 8ariable capital laid o%t in p%rc asing prod%cti8e labo%r0 &t increases t e o%tlay o! t e ind%strial capitalist, t e mass o! t e capital to be ad8anced, @it o%t directly increasing s%rpl%s8al%e0 Aeca%se it is an o%tlay !or labo%r employed solely in realising 8al%e already created0 'ike e8ery ot er o%tlay o! t is kind, it red%ces t e rate o! pro!it be-ca%se t e ad8anced capital increases, b%t not t e s%rpl%s-8al%e0 &! s%rpl%s-8al%e s remains constant @ ile ad8anced capital ; increases to ; U ;, t en t e rate o! pro!it sN; is replaced by t e smaller rate o! pro!it sN; U ;0 5 e ind%strial capitalist endea8o%rs, t ere!ore, to c%t t ese expenses o! circ%lation do@n to a minim%m, H%st as is expenses !or constant capital0 6ence, ind%strial capital does not maintain t e same attit%de to its commercial @age-labo%rers as it does to its prod%cti8e @age-labo%rers0 5 e more prod%cti8e @age-labo%rers it employs %nder ot er@ise eD%al circ%mstances, t e greater t e o%tp%t, and t e greater t e s%rpl%s-8al%e, or pro!it0 ;on8ersely, o@e8er, t e larger t e scale o! prod%ction, t e greater t e D%antity o! 8al%e and s%rpl%s-8al%e to be realised, t e greater t e prod%ced commodity-capital, t e greater are t e absol%te, i! not relati8e, o!!ice costs, gi8ing rise to a kind o! di8ision o! labo%r0 5o @ at extent pro!it is t e precondition !or t ese o%tlays, is seen, among ot er t ings, !rom t e !act t at @it t e increase o! commercial salaries, a part o! t em is !reD%ently paid by a s are in t e pro!it0 &t is in t e nat%re o! t ings t at labo%r consisting merely o! intermediate operations connected partly @it calc%lating 8al%es, partly @it realising t em, and partly @it recon8erting t e realised money into means o! prod%ction, is a labo%r @ ose magnit%de t ere!ore depends on t e D%antity o! t e prod%ced 8al%es t at a8e to e realised, and does not act as t e ca%se, like directly prod%cti8e labo%r, b%t rat er as an e!!ect, o! t e respecti8e magnit%des and masses o! t ese 8al%es0 5 e same applies to t e ot er costs o! circ%lation0 5o do m%c meas%ring, @eig ing, packing, and transporting, m%c m%st be on and0 5 e amo%nt o!

<=1

; apter J4&&

packing, transporting, etc0, depends on t e D%antity o! commodities @ ic are t e obHects o! t is acti8ity, not 8ice 8ersa0 5 e commercial @orker prod%ces no s%rpl%s-8al%e directly0 A%t t e price o! is labo%r is determined by t e 8al%e o! is labo%r-po@er, ence by its costs o! prod%ction, @ ile t e application o! t is labo%r-po@er, its exertion, expendit%re o! energy, and @ear and tear, is as in t e ease o! e8ery ot er @age-labo%rer by no means limited by its 8al%e0 6is @age, t ere!ore, is not necessarily proportionate to t e mass o! pro!it @ ic e elps t e capitalist to realise0 W at e costs t e capitalist and @ at e brings in !or im, are t@o di!!erent t ings0 6e creates no direct s%rpl%s-8al%e, b%t adds to t e capitalist"s income by elping im to red%ce t e cost o! realising s%rpl%s-8al%e, inasm%c as e per!orms partly %npaid labo%r0 5 e commercial @orker, in t e strict sense o! t e term, belongs to t e better-paid class o! @age-@orkers I to t ose @ ose labo%r is classed as skilled and stands abo8e a8erage labo%r0 .et t e @age tends to !all, e8en in relation to a8erage labo%r, @it t e ad8ance o! t e capitalist mode o! prod%ction0 5 is is d%e partly to t e di8ision o! labo%r in t e o!!ice, implying a one-sided de8elopment o! t e labo%r capacity, t e cost o! @ ic does not !all entirely on t e capitalist, since t e labo%rer"s skill de8elops by itsel! t ro%g t e exercise o! is !%nction, and all t e more rapidly as di8ision o! labo%r makes it more one-sided0 $econdly, beca%se t e necessary training, kno@ledge o! commercial practices, lang%ages, etc0, is more and more rapidly, easily, %ni8ersally and c eaply reprod%ced @it t e progress o! science and p%blic ed%cation t e more t e capitalist mode o! prod%ction directs teac ing met ods, etc0, to@ards practical p%rposes0 5 e %ni8ersality o! p%blic ed%cation enables capitalists to recr%it s%c labo%rers !rom classes t at !ormerly ad no access to s%c trades and @ere acc%stomed to a lo@er standard o! li8ing0 Moreo8er, t is increases s%pply, and ence competition0 Wit !e@ exceptions, t e labo%r-po@er o! t ese people is t ere!ore de8al%ated @it t e progress o! capitalist prod%ction0 5 eir @age !alls, @ ile t eir labo%r capacity increases0 5 e capitalist increases t e n%mber o! t ese labo%rers @ ene8er e as more 8al%e and pro!its to realise0 5 e increase o! t is labo%r is al@ays a res%lt, ne8er a ca%se o! more s%rpl%s-8al%e0 < 5 ere is d%plication, t ere!ore0 3n t e one and, t e !%nctions as commodity-capital and moneycapital B ence !%rt er designated as merc ant"s capitalC are general de!inite !orms ass%med by ind%strial capital0 3n t e ot er and, speci!ic capitals, and t ere!ore speci!ic gro%ps o! capitalists, are excl%si8ely de8oted to t ese !%nctions# and t ese !%nctions t %s de8elop into speci!ic sp eres o! sel!-expansion o! capital0 &n t e case o! mercantile capital, t e commercial !%nctions and circ%lation costs are !o%nd only in indi8id%alised !orm0 5 at side o! ind%strial capital @ ic is de8oted to circ%lation, contin%o%sly exists not only in t e s ape o! commodity-capital and money-capital, b%t also in t e o!!ice alongside t e @orks op0 A%t it becomes independent in t e case o! mercantile capital0 &n t e latter"s case, t e o!!ice is its only @orks op0 5 e portion o! capital employed in t e !orm o! circ%lation costs appears m%c larger in t e case o! t e big merc ant t an in t at o! t e ind%strialist, beca%se besides t eir o@n o!!ices connected @it e8ery ind%strial @orks op, t at part o! capital @ ic @o%ld a8e to be so applied by t e entire class o! ind%strial capitalists is concentrated in t e ands o! a !e@ merc ants, @ o in carrying o%t t e !%nctions o! circ%lation also pro8ide !or t e gro@ing expenses incidental to t eir contin%ation0 5o ind%strial capital t e costs o! circ%lation appear as %nprod%cti8e expenses, and so t ey are0 5o t e merc ant t ey appear as a so%rce o! is pro!it, proportional, gi8en t e general rate o! pro!it, to t eir siEe0 5 e o%tlay to be made !or t ese circ%lation costs is, t ere!ore, a prod%cti8e in8estment !or mercantile capital0 ?nd !or t is reason, t e commercial labo%r @ ic it b%ys is like@ise immediately prod%cti8e !or it0

Chapter 1&. The Turnover of 1erchant7s Capital. Prices.


5 e t%rno8er o! ind%strial capital is a combination o! its period o! prod%ction and time o! circ%lation, and t ere!ore embraces t e entire process o! prod%ction0 5 e t%rno8er o! merc ant"s capital, on t e ot er and, being in reality not ing b%t an alienated mo8ement o! commoditycapital, represents only t e !irst p ase in t e metamorp osis o! a commodity, ; I M, as t e re!l%ent mo8ement o! a speci!ic capital# M I ;, ; I M, is, !rom t e mercantile point o! 8ie@, t e t%rno8er o! merc ant"s capital0 5 e merc ant b%ys, con8erting is money into commodities, t en sells, con8erting t e latter back into money, and so !ort in constant repetition0 Wit in circ%lation, t e metamorp osis o! ind%strial capital al@ays presents itsel! in t e !orm o! ; 1 I M I ;<# t e money realised by t e sale o! t e prod%ced commodity ; 1 is %sed to p%rc ase ne@ means o! prod%ction, ;<0 5 is amo%nts to a practical exc ange o! ; 1 !or ;<, and t e same money t %s c anges ands t@ice0 &ts mo8ement mediates t e exc ange o! t@o di!!erent kinds o! commodities, ;1 and ;<0 A%t in t e case o! t e merc ant, it is, con8ersely, t e same commodity @ ic c anges ands t@ice in M I ; I M"0 &t merely promotes t e re!l%x o! is money0 &!, !or example, a certain merc ant"s capital is V1==, and !or t ese V1== t e merc ant b%ys commodities and sells t em !or V11=, t en is capital o! V1== as completed one t%rno8er, and t e n%mber o! s%c t%rno8ers per year depends on t e n%mber o! times t is mo8ement M I ; I M" is repeated0 We ere lea8e entirely o%t o! consideration t e costs @ ic may be concealed in t e di!!erence bet@een t e p%rc ase price and t e selling price, since t ese do not alter in any @ay t e !orm, @ ic @e are no@ analysing0 5 e n%mber o! t%rno8ers o! a gi8en merc ant"s capital, t ere!ore, is analogo%s in t is case to t e repeated cycles o! money as a mere medi%m o! circ%lation0 P%st as t e same t aler b%ys ten times its 8al%e in commodities in making ten cycles, so t e same money-capital o! t e merc ant, @ en t%rned o8er ten times, b%ys ten times its 8al%e in commodities, or realises a total commoditycapital o! ten times its 8al%e# a merc ant"s capital o! 1==, !or instance, a ten-!old 8al%e R 1,===0 A%t t ere is t is di!!erence: &n t e cycle o! money as a medi%m o! circ%lation it is t e same piece o! money t at passes t ro%g di!!erent ands, t %s repeatedly per!orming t e same !%nction and ence making %p !or t e mass o! t e circ%lating pieces o! money by its 8elocity0 A%t in t e merc ant"s case it is t e same money capital, t e same money-8al%e, regardless o! @ at pieces o! money it may be composed, @ ic repeatedly b%ys and sells commodity-capital to t e amo%nt o! its 8al%e and @ ic t ere!ore ret%rns to t e same ands, t e same point o! depart%re as M U M, i.e., 8al%e pl%s s%rpl%s-8al%e0 5 is c aracterises its t%rno8er as a capital t%rno8er0 &t al@ays @it dra@s more money !rom circ%lation t an it t ro@s in0 &t is sel!-e8ident, at any rate, t at an accelerated t%rno8er o! merc ant"s capital Bgi8en a de8eloped credit system, t e !%nction o! money as a means o! payment predominatesC implies a more rapid circ%lation o! t e same D%antity o! money0 ? repeated t%rno8er o! commercial capital, o@e8er, ne8er connotes more t an repeated b%ying and selling# @ ile a repeated t%rno8er o! ind%strial capital connotes t e periodicity and reno8ation o! t e entire reprod%ction process B@ ic incl%des t e process o! cons%mptionC0 For merc ant"s capital t is appears merely as an external condition0 &nd%strial capital m%st contin%ally bring commodities to t e market and @it dra@ t em !rom it, in order t at rapid t%rno8er o! merc ant"s capital may remain possible0 &! t e process o! reprod%ction is slo@, t en so is t e t%rno8er o!

<=3

; apter J4&&&

merc ant"s capital0 5r%e, merc ant"s capital promotes t e t%rno8er o! prod%cti8e capital, b%t only in so !ar as it s ortens its time o! circ%lation0 &t as no direct in!l%ence on t e time o! prod%ction, @ ic is also a barrier to t e period o! t%rno8er o! ind%strial capital0 5 is is t e !irst barrier !or t e t%rno8er o! merc ant"s capital0 $econdly, aside !rom t e barrier !ormed by reprod%cti8e cons%mption, t e t%rno8er o! merc ant"s capital is %ltimately limited by t e 8elocity and 8ol%me o! t e total indi8id%al cons%mption, since all t e commodity-capital @ ic is part o! t e cons%mption-!%nd depends on it0 6o@e8er Baside !rom t e t%rno8ers in t e @orld o! commerce, in @ ic one merc ant al@ays sells t e same commodity to anot er, and t is sort o! circ%lation may appear ig ly prospero%s in times o! spec%lationC, t e merc ant"s capital, in t e !irst place, c%rtails p ase ; I M !or prod%cti8e capital0 $econdly, %nder t e modern credit system it disposes o! a large portion o! t e total social money-capital, so t at it can repeat its p%rc ases e8en be!ore it as de!initely sold @ at as pre8io%sly been p%rc ased0 ?nd it is immaterial in t is case, @ et er o%r merc ant sells directly to t e %ltimate cons%mer, or t ere are a doEen ot er intermediate merc ants bet@een t em0 3@ing to t e immense elasticity o! t e reprod%ction process, @ ic may al@ays be p%s ed beyond any gi8en bo%nds, it does not enco%nter any obstacle in prod%ction itsel!, or at best a 8ery elastic one0 ?side !rom t e separation o! ; I M and M I ;, @ ic !ollo@s !rom t e nat%re o! t e commodities, a !ictitio%s demand is t en created0 &n spite o! its independent stat%s, t e mo8ement o! merc ant"s capital is ne8er more t an t e mo8ement o! ind%strial capital @it in t e sp ere o! circ%lation0 A%t by 8irt%e o! its independent stat%s it mo8es, @it in certain limits, independently o! t e bo%nds o! t e reprod%ction process and t ereby e8en dri8es t e latter beyond its bo%nds0 5 is internal dependence and external independence p%s merc ant"s capital to a point @ ere t e internal connection is 8iolently restored t ro%g a crisis0 6ence t e p enomenon t at crises do not come to t e s%r!ace, do not break o%t, in t e retail b%siness !irst, @ ic deals @it direct cons%mption, b%t in t e sp eres o! @ olesale trade, and o! banking, @ ic places t e money-capital o! society at t e disposal o! t e !ormer0 5 e man%!act%rer may act%ally sell to t e exporter, and t e exporter, in is t%rn, to is !oreign c%stomer# t e importer may sell is ra@ materials to t e man%!act%rer, and t e latter may sell is prod%cts to t e @ olesale merc ant, etc0 A%t at some partic%lar imperceptible point t e goods lie %nsold, or else, again, all prod%cers and middlemen may grad%ally become o8erstocked0 ;ons%mption is t en generally at its ig est, eit er beca%se one ind%strial capitalist sets a s%ccession o! ot ers in motion# or beca%se t e labo%rers employed by t em are !%lly employed and a8e more to spend t an %s%al0 5 e capitalists" expendit%res increase toget er @it t eir gro@ing income0 Aesides, as @e a8e seen BAook &&, ,art &&&C, contin%o%s circ%lation takes place bet@een constant capital and constant capital Be8en regardless o! accelerated acc%m%lationC0 &t is at !irst independent o! indi8id%al cons%mption beca%se it ne8er enters t e latter0 A%t t is cons%mption de!initely limits it ne8ert eless, since constant capital is ne8er prod%ced !or its o@n sake b%t solely beca%se more o! it is needed in sp eres o! prod%ction @ ose prod%cts go into indi8id%al cons%mption0 6o@e8er, t is may go on %ndist%rbed !or some time, stim%lated by prospecti8e demand, and in s%c branc es, t ere!ore, t e b%siness o! merc ants and ind%strialists goes briskly !ort 0 5 e crisis occ%rs @ en t e ret%rns o! merc ants @ o sell in distant markets Bor @ ose s%pplies a8e also acc%m%lated on t e ome marketC become so slo@ and meagre t at t e banks press !or payment, or promissory notes !or p%rc ased commodities become d%e be!ore t e latter a8e been resold0 5 en !orced sales take place, sales in order to meet payments0 5 en comes t e cras , @ ic brings t e ill%sory prosperity to an abr%pt end0 A%t t e s%per!iciality and meaninglessness o! t e t%rno8er o! merc ant"s capital are still greater, beca%se t e t%rno8er o! one and t e same merc ant"s capital may sim%ltaneo%sly or s%ccessi8ely promote t e t%rno8ers o! se8eral prod%cti8e capitals0 5 e t%rno8er o! merc ant"s capital does not H%st promote t e t%rno8ers o! se8eral ind%strial capitals, it can also expedite t e opposite p ases o! t e metamorp osis o! commodity-capital0 For

<=2

; apter J4&&&

instance, t e merc ant b%ys linen !rom t e man%!act%rer and sells it to t e bleac er0 &n t is case, t ere!ore t e t%rno8er o! t e same merc ant"s capital I in !act, t e same ; I M, a realisation o! t e linen I represents t@o opposite p ases !or t@o di!!erent ind%strial capitals0 &nasm%c as t e merc ant sells !or prod%cti8e cons%mption, is ; I M is al@ays M I ; !or one ind%strial capitalist, and is M I ; al@ays ; I M !or anot er ind%strial capitalist0 &! @e lea8e o%t K, t e circ%lation costs, as @e do in t is c apter, i!, in ot er @ords, @e lea8e aside t at portion o! capital @ ic t e merc ant ad8ances along @it t e money reD%ired to p%rc ase commodities, it !ollo@s t at @e also omit K, t e additional pro!it made on t is additional capital0 5 is is t %s t e strictly logical and mat ematically correct mode o! analysis i! @e @ant to see o@ pro!it and t%rno8er o! merc ant"s capital a!!ect prices0 &! t e price o! prod%ction o! 1 lb0 o! s%gar @ere V1, t e merc ant co%ld b%y 1== lbs0 o! s%gar @it V1==0 &! e b%ys and sells t is D%antity in t e co%rse o! t e year, and i! t e a8erage ann%al rate o! pro!it is 1+T, e @o%ld add V1+ to t e V1==, and 3s0 to V1, t e price o! prod%ction o! 1 lb0 o! s%gar0 5 at is, e @o%ld sell 1 lb0 o! s%gar at V103s0 A%t i! t e price o! prod%ction o! 1 lb0 o! s%gar s o%ld !all to 1s0, t e merc ant co%ld b%y <,=== lbs0 o! s%gar @it V1==, and sell t e s%gar at 1s0 1 2N+d0 per lb0 5 e ann%al pro!it on capital in8ested in t e s%gar b%siness @o%ld still be V1+ on eac V1==0 A%t t e merc ant as to sell 1== lbs0 in t e !irst case, and <,=== lbs0 in t e second0 5 e ig or lo@ le8el o! t e price o! prod%ction as not ing to do @it t e rate o! pro!it0 A%t it @o%ld greatly and decisi8ely a!!ect t at aliD%ot part o! t e selling price o! eac lb0 o! s%gar, @ ic resol8es itsel! in mercantile pro!it, i.e., t e addition to t e price @ ic t e merc ant makes on a certain D%antity o! commodities or prod%cts0 &! t e price o! prod%ction o! a commodity is small, so, too, t e amo%nt t e merc ant ad8ances in its p%rc ase price, i.e., !or a certain D%antity o! it0 6ence, @it a gi8en rate o! pro!it, t e amo%nt o! pro!it e makes on t is D%antity o! c eap commodities is small as @ell0 3r, @ at amo%nts to t e same, e can t en b%y @it a certain amo%nt o! capital, say, 1==, a larger D%antity o! t ese c eap commodities, and t e total pro!it o! 1+, @ ic e makes per 1==, breaks %p into small !ractions o8er eac indi8id%al piece or portion belonging to t is mass o! commodities0 &! t e opposite takes place, t en t e re8erse is tr%e0 5 is depends entirely on t e greater or smaller prod%cti8ity o! t e ind%strial capital in @ ose prod%cts e trades0 &! @e except t e cases in @ ic t e merc ant is a monopolist and sim%ltaneo%sly monopolises prod%ction, as did t e 7%tc East &ndia ;ompany in its day, not ing can be more ridic%lo%s t an t e c%rrent idea t at it depends on t e merc ant @ et er e sells many commodities at a small pro!it or !e@ commodities at a large pro!it on eac indi8id%al piece o! t e commodities0 5 e t@o limits o! is selling price are: on t e one and, t e price o! prod%ction o! t e commodities, o8er @ ic e as no control# on t e ot er and, t e a8erage rate o! pro!it, o8er @ ic e as H%st as little control0 5 e only t ing %p to im to decide is @ et er e @ants to deal in dear or in c eap commodities, and e8en ere t e siEe o! is a8ailable capital and ot er circ%mstances also a8e t eir e!!ect0 5 ere!ore, it depends @ olly on t e degree o! de8elopment o! t e capitalist mode o! prod%ction, not on t e merc ant"s good@ill, @ at co%rse e s all !ollo@0 ? p%rely commercial company like t e old 7%tc East &ndia ;ompany, @ ic ad a monopoly o! prod%ction, co%ld !ancy t at it co%ld contin%e a met od adapted at best to t e beginnings o! capitalist prod%ction, %nder entirely c anged conditions0 1 5 e !ollo@ing circ%mstances, among ot ers, elp to maintain t at pop%lar preH%dice, @ ic , like all !alse conceptions o! pro!it, etc0, arises !rom t e obser8ation o! p%re commerce and merc ants" preH%dice: 'irst: p enomena o! competition, @ ic , o@e8er, apply merely to t e distrib%tion o! mercantile pro!it among indi8id%al merc ants, t e s are olders o! t e total merc ant"s capital# i! one, !or example, sells c eaper, in order to dri8e is competitors o!! t e !ield0 Secondly: an economist o! t e calibre o! ,ro!essor )osc er may still imagine in 'eipEig t at it @as Kcommon sense and %manitarianL /)osc er, Die Grundlagen der $ationalK-onomie, 30

<=+

; apter J4&&&

?%!lage, 18+8, $0 1*<0 I 0d.1 gro%nds, @ ic prod%ced t e c ange in selling prices, and t at it @as not a res%lt o! a re8ol%tionised mode o! prod%ction0 4hirdly: i! prod%ction prices !all d%e to greater prod%cti8ity o! labo%r, and selling prices !all !or t e same reason, t e demand, and @it it t e market-prices, o!ten rise e8en !aster t an t e s%pply, so t at selling prices yield more t an t e a8erage pro!it0 'ourthly: a merc ant may red%ce is selling price B@ ic is ne8er more t an a red%ction o! t e %s%al pro!it t at e adds to t e priceC so as to t%rn o8er a larger capital more rapidly0 ?ll t ese are matters t at only concern competition bet@een t e merc ants t emsel8es0 We a8e already s o@n in Aook & /Englis edition: 4ol0 1, pp0 +1*-<=0 I 0d10 t at ig or lo@ commodity-prices do not determine eit er t e mass o! s%rpl%s-8al%e prod%ced by a gi8en capital, or t e rate o! s%rpl%s-8al%e# alt o%g t e price o! a commodity, and @it it t e s are o! s%rpl%s8al%e in t is price, are greater or smaller, depending on t e relati8e D%antity o! commodities prod%ced by a gi8en D%antity o! labo%r0 5 e prices o! e8ery speci!ied D%antity o! a commodity are, so !ar as t ey correspond to t e 8al%es, determined by t e total D%antity o! labo%r incorporated in t is commodity0 &! little labo%r is incorporated in m%c commodity, t e %nit price o! t e commodity is lo@ and t e s%rpl%s-8al%e in it is small0 6o@ t is labo%r incorporated in a commodity breaks %p into paid and %npaid labo%r and @ at portion o! its price, t ere!ore, represents s%rpl%s-8al%e, as not ing to do @it t is total D%antity o! labo%r, nor, conseD%ently, @it t e price o! t e commodity0 A%t t e rate o! s%rpl%s-8al%e does not depend on t e absol%te magnit%de o! t e s%rpl%s-8al%e contained in t e %nit price o! t e commodity0 &t depends on its relati8e magnit%de, its proportion to t e @ages contained in t e same commodity0 5 e rate o! s%rpl%s-8al%e may t ere!ore be large, @ ile t e absol%te magnit%de o! s%rpl%s-8al%e in eac %nit o! t e commodity is small0 5 is absol%te magnit%de o! s%rpl%s-8al%e in eac piece o! t e commodity depends primarily on t e prod%cti8ity o! labo%r, and only secondarily on its di8ision into paid and %npaid labo%r0 -o@, in t e case o! t e commercial selling price, t e price o! prod%ction is a gi8en external precondition0 5 e ig commercial commodity-prices in !ormer times @ere d%e 1C to t e ig prices o! prod%ction, i.e., t e %nprod%cti8eness o! labo%r# <C to t e absence o! a general rate o! pro!it, @it merc ant"s capital absorbing a m%c larger D%ota o! s%rpl%s-8al%e t an @o%ld a8e !allen to its s are i! capitals enHoyed greater general mobility0 5 e ending o! t is sit%ation, in bot its aspects, is t ere!ore t e res%lt o! t e de8elopment o! t e capitalist mode o! prod%ction0 5 e t%rno8ers o! merc ant"s capital 8ary in d%ration, t eir ann%al n%mber conseD%ently being greater or smaller, in di!!erent branc es o! commerce0 Wit in t e same branc t e t%rno8er is more or less rapid in t e di!!erent p ases o! t e economic cycle0 .et t ere is an a8erage n%mber o! t%rno8ers, determined by experience0 We a8e already seen t at t e t%rno8er o! merc ant"s capital di!!ers !rom t at o! ind%strial capital0 5 is is in t e nat%re o! t ings0 3ne single p ase in t e t%rno8er o! ind%strial capital appears as a complete t%rno8er o! an independently constit%ted merc ant"s capital, or yet o! its part0 &t also stands in a di!!erent relation to pro!it and price determination0 &n t e case o! ind%strial capital, its t%rno8er expresses, on t e one and, t e periodicity o! reprod%ction, and, t ere!ore, t e mass o! commodities t ro@n on t e market in a certain period depends on it0 3n t e ot er and, its time o! circ%lation creates a barrier, an extensible one, and exerts more or less o! a restraint on t e creation o! 8al%e and s%rpl%s-8al%e, beca%se it a!!ects t e 8ol%me o! t e prod%ction process0 5 e t%rno8er, t ere!ore, acts as a determining element on t e mass o! ann%ally prod%ced s%rpl%s-8al%e, and ence on t e !ormation o! t e general rate o! pro!it, b%t it acts as a limiting, rat er t an positi8e, element0 For merc ant"s capital, on t e contrary, t e a8erage rate o! pro!it is a gi8en magnit%de0 5 e merc ant"s capital does not directly participate in creating pro!it or s%rpl%s-8al%e, and Hoins in s aping t e general rate o! pro!it only in so !ar as it

<=6

; apter J4&&&

dra@s a di8idend proportionate to its s are in t e total capital, o%t o! t e mass o! pro!it prod%ced by ind%strial capital0 5 e greater t e n%mber o! t%rno8ers o! an ind%strial capital %nder conditions described in Aook &&, ,art &&, t e greater t e mass o! pro!it it creates0 5r%e, t ro%g t e !ormation o! a general rate o! pro!it, t e total pro!it is distrib%ted among t e di!!erent capitals not in proportion to t eir act%al part in its prod%ction, b%t in proportion to t e aliD%ot part t ey make %p o! t e total capital, i.e., in proportion to t eir magnit%de0 A%t t is does not alter t e essence o! t e matter0 5 e greater t e n%mber o! t%rno8ers o! t e total ind%strial capital, t e greater t e mass o! pro!its, t e mass o! ann%ally prod%ced s%rpl%s-8al%e, and, t ere!ore, ot er circ%mstances remaining %nc anged, t e rate o! pro!it0 &t is di!!erent @it merc ant"s capital0 5 e rate o! pro!it is a gi8en magnit%de @it respect to it, determined on t e one and by t e mass o! pro!it prod%ced by ind%strial capital, and on t e ot er by t e relati8e magnit%de o! t e total merc ant"s capital, by its D%antitati8e relation to t e s%m o! capital ad8anced in t e processes o! prod%ction and circ%lation0 5 e n%mber o! its t%rno8ers does, indeed, decisi8ely a!!ect its relation to t e total capital, or t e relati8e magnit%de o! merc ant"s capital reD%ired !or t e circ%lation, !or it is e8ident t at t e absol%te magnit%de o! t e reD%ired merc ant"s capital and t e 8elocity o! its t%rno8ers stand in in8erse proportion0 A%t, all ot er conditions remaining eD%al, t e relati8e magnit%de o! merc ant"s capital, or t e part it makes %p o! t e total capital, is determined by its absol%te magnit%de0 &! t e total capital is 1=,===, and t e merc ant"s capital 1N1= o! t at s%m, it is R 1,===# i! t e total capital is 1,===, t en 1N1= o! it R 1==0 5 e absol%te magnit%de o! merc ant"s capital 8aries, depending on t e magnit%de o! t e total capital, alt o%g its relati8e magnit%de remains t e same0 A%t ere @e ass%me t at its relati8e magnit%de, say, 1N1= o! t e total capital, is gi8en0 5 is relati8e magnit%de, o@e8er, is again determined by t e t%rno8er0 &! it is t%rned o8er rapidly, its absol%te magnit%de, !or example, @ill R V1,=== in t e !irst case, R 1== in t e second, and ence its relati8e magnit%de R 1N1=0 Wit a slo@er t%rno8er its absol%te magnit%de is, say, R <,=== in t e !irst case, and R <== in t e second0 &ts relati8e magnit%de @ill t en a8e increased !rom 1N1= to 1N+ o! t e total capital0 ;irc%mstances @ ic red%ce t e a8erage t%rno8er o! merc ant"s capital, like t e de8elopment o! means o! transportation, !or instance, red%ce pro tanto t e absol%te magnit%de o! merc ant"s capital, and t ereby increase t e general rate o! pro!it0 &! t e opposite takes place, t en t e re8erse is tr%e0 ? de8eloped capitalist mode o! prod%ction, compared @it earlier conditions, exerts a t@o-!old in!l%ence on merc ant"s capital0 3n t e one and, t e same D%antity o! commodities is t%rned o8er @it a smaller mass o! act%ally !%nctioning merc ant"s capital# o@ing to t e more rapid t%rno8er o! merc ant"s capital, and t e more rapid reprod%ction process, on @ ic t is depends, t e relation o! merc ant"s capital to ind%strial capital diminis es0 3n t e ot er and, @it t e de8elopment o! t e capitalist mode o! prod%ction all prod%ction becomes t e prod%ction o! commodities, @ ic places all prod%cts into t e ands o! agents o! circ%lation0 &t is to be added t at %nder t e pre8io%s mode o! prod%ction, @ ic prod%ced on a small scale, a 8ery large portion o! t e prod%cers sold t eir goods directly to t e cons%mers, or @orked on t eir personal orders, sa8e !or t e mass o! prod%cts cons%med directly, in kind, by t e prod%cer imsel!, and t e mass o! ser8ices per!ormed in kind0 W ile, t ere!ore, %nder !ormer modes o! prod%ction commercial capital @as greater in relation to t e commodity-capital @ ic it t%rned o8er, it @as: 1C absol%tely smaller, beca%se a disproportionately smaller part o! t e total prod%ct @as prod%ced as commodities, and passed as commodity-capital into circ%lation, !alling into t e ands o! merc ants0 &t @as smaller, beca%se t e commodity-capital @as smaller0 A%t at t e same time it @as proportionately larger, not only beca%se its t%rno8er @as slo@er and not only in relation to t e mass o! commodities t%rned o8er by it0 &t @as larger also beca%se t e price o! t is mass o! commodities, and ence t e merc ant"s capital to be ad8anced !or it, @ere greater t an %nder capitalist prod%ction on acco%nt o! a lo@er prod%cti8ity o! labo%r, so t at t e same 8al%e @as incorporated in a smaller mass o! commodities0

<=>

; apter J4&&&

<C &t is not only t at a larger mass o! commodities is prod%ced on t e basis o! capitalist prod%ction Btaking into acco%nt also t e red%ced 8al%e o! t is mass o! commoditiesC, b%t t e same mass o! prod%cts, !or instance, o! corn, also !orms a greater commodity mass, i.e., more and more o! it becomes an obHect o! commerce0 ?s a conseD%ence, t ere is an increase not only o! t e mass o! merc ant"s capital, b%t o! all capital applied in circ%lation, s%c as in marine s ipping, rail@ays, telegrap , etc0 3C 6o@e8er, and t is is an aspect @ ic belongs to t e disc%ssion o! Kcompetition among capitalsL: idle or only al!-!%nctioning merc ant"s capital gro@s @it t e progress o! t e capitalist mode o! prod%ction, @it t e ease o! entering retail trade, @it spec%lation, and t e red%ndance o! released capital0 A%t, ass%ming t e relati8e magnit%de o! merc ant"s capital to total capital to be gi8en, t e di!!erence o! t%rno8ers in t e 8ario%s branc es o! commerce does not a!!ect eit er t e magnit%de o! t e total pro!it !alling to t e s are o! merc ant"s capital, or t e general rate o! pro!it0 5 e merc ant"s pro!it is not determined by t e mass o! commodity-capital t%rned o8er by im, b%t by t e dimensions o! t e money-capital ad8anced by im to promote t is t%rno8er0 &! t e general ann%al rate o! pro!it is 1+T, and t e merc ant ad8ances V1==, @ ic e t%rns o8er once a year, e @ill sell is commodities at 11+0 &! is capital t%rns o8er !i8e times a year, e @ill sell a commodity-capital e bo%g t at 1== at 1=3 !i8e times a year, ence in a year a commodity-capital o! +== at +1+0 5 is gi8es t e same ann%al pro!it o! 1+ on is ad8anced capital o! 1==0 &! t is @ere not so, merc ant"s capital @o%ld yield a m%c ig er pro!it, proportionate to t e n%mber o! its t%rno8ers, t an ind%strial capital, @ ic @o%ld be in con!lict @it t e la@ o! t e general rate o! pro!it0 6ence, t e n%mber o! t%rno8ers o! merc ant"s capital in t e 8ario%s branc es o! commerce as a direct in!l%ence on t e mercantile prices o! commodities0 5 e amo%nt added to t e mercantile price, t e aliD%ot part o! mercantile pro!it o! a gi8en capital, @ ic !alls %pon t e price o! prod%ction o! a commodity, is in in8erse proportion to t e n%mber o! t%rno8ers, or t e 8elocity o! t%rno8er, o! merc ants" capitals in t e 8ario%s lines o! commerce0 &! a certain merc ant"s capital is t%rned o8er !i8e times a year, it @ill add to a commodity-capital o! eD%al 8al%e b%t 1N+ o! @ at anot er merc ant"s capital, @ ic t%rns o8er H%st once a year, adds to a commodity-capital o! eD%al 8al%e0 5 e modi!ication o! selling prices by t e a8erage period o! t%rno8er o! capitals in di!!erent branc es o! commerce amo%nts to t is: 5 e same mass o! pro!its, determined !or any gi8en magnit%de o! merc ant"s capital by t e general ann%al rate o! pro!it, ence determined independently o! t e speci!ic c aracter o! t e commercial operations o! t is capital, is di!!erently distrib%ted I proportionately to t e rate o! t%rno8er I o8er masses o! commodities o! eD%al 8al%e, so t at, !or instance, i! a merc ant"s capital is t%rned o8er !i8e times a year, 1+N+ R 3T i! once a year, 1+T, is added to t e price o! t e commodities0 5 e same percentage o! commercial pro!it in di!!erent branc es o! commerce, t ere!ore, increases t e selling prices o! commodities by D%ite di!!erent percentages o! t eir 8al%es, all depending on t eir periods o! t%rno8er0 3n t e ot er and, in t e case o! ind%strial capital, t e period o! t%rno8er does not in any @ay a!!ect t e magnit%de o! t e 8al%e o! indi8id%al commodities prod%ced, alt o%g it does a!!ect t e mass o! 8al%es and s%rpl%s-8al%es prod%ced in a gi8en time by a gi8en capital, beca%se it a!!ects t e mass o! exploited labo%r0 5 is is concealed, to be s%re, and seems to be ot er@ise as soon as one t%rns to prices o! prod%ction0 A%t t is is d%e solely to t e !act t at, according to pre8io%sly analysed la@s, t e prices o! prod%ction o! 8ario%s commodities de8iate !rom t eir 8al%es0 &! @e look %pon t e process o! prod%ction as a @ ole, and %pon t e mass o! commodities prod%ced by t e total ind%strial capital, @e s all at once !ind t e general la@ 8indicated0

<=8

; apter J4&&&

W ile, t ere!ore, a closer inspection o! t e in!l%ence o! t e period o! t%rno8er on t e !ormation o! 8al%es by ind%strial capital leads %s back to t e general la@ and to t e basis o! political economy, t at t e 8al%es o! commodities are determined by t e labo%r-time contained in t em, t e in!l%ence o! t e t%rno8ers o! merc ant"s capital on mercantile prices re8eals p enomena @ ic , @it o%t bene!it o! a 8ery !ar-reac ing analysis o! t e connecting links, seem to point to a p%rely arbitrary determination o! prices# namely, t at t ey are !ixed by a capital simply bent %pon pocketing a certain D%antity o! pro!it in a year0 7%e partic%larly to t is in!l%ence o! t%rno8ers, it appears t at @it in certain limits t e process o! circ%lation as s%c determines commodity-prices independently o! t e process o! prod%ction0 ?ll s%per!icial and !alse conceptions o! t e process o! reprod%ction as a @ ole are deri8ed !rom examinations o! merc ant"s capital and !rom t e conceptions @ ic its pec%liar mo8ements call !ort in t e minds o! circ%lation agents0 &!, as t e reader @ill a8e realised to is great dismay, t e analysis o! t e act%al intrinsic relations o! t e capitalist process o! prod%ction is a 8ery complicated matter and 8ery extensi8e# i! it is a @ork o! science to resol8e t e 8isible, merely external mo8ement into t e tr%e intrinsic mo8ement, it is sel!-e8ident t at conceptions @ ic arise abo%t t e la@s o! prod%ction in t e minds o! agents o! capitalist prod%ction and circ%lation @ill di8erge drastically !rom t ese real la@s and @ill merely be t e conscio%s expression o! t e 8isible mo8ements0 5 e conceptions o! t e merc ant, stockbroker, and banker, are necessarily D%ite distorted0 5 ose o! t e man%!act%rers are 8itiated by t e acts o! circ%lation to @ ic t eir capital is s%bHect, and by t e le8elling o! t e general rate o! pro!it0< ;ompetition like@ise ass%mes a completely distorted role in t eir minds0 &! t e limits o! 8al%e and s%rpl%s-8al%e are gi8en, it is easy to grasp o@ competition o! capitals trans!orms 8al%es into prices o! prod%ction and !%rt er into mercantile prices, and s%rpl%s-8al%e into a8erage pro!it0 A%t @it o%t t ese limits, it is absol%tely %nintelligible @ y competition s o%ld red%ce t e general rate o! pro!it to one le8el instead o! anot er, e.g., make it 1+T instead o! 1,+==T0 ;ompetition can at best only red%ce t e general rate o! pro!it to one le8el0 A%t it contains no element by @ ic it co%ld determine t is le8el itsel!0 From t e standpoint o! merc ant"s capital, t ere!ore, it is t e t%rno8er @ ic appears to determine prices0 3n t e ot er and, @ ile t e rate o! t%rno8er o! ind%strial capital, in so !ar as it enables a certain capital to exploit more or less labo%r, exerts a determining and limiting in!l%ence on t e mass o! pro!it, and t %s on t e general rate o! pro!it, t is rate o! pro!it obtains !or merc ant"s capital as an external !act, its internal connection @it t e prod%ction o! s%rpl%s-8al%e being entirely obliterated0 &!, %nder ot er@ise eD%al circ%mstances and partic%larly t e same organic composition, t e same ind%strial capital is t%rned o8er !o%r times a year instead o! t@ice, it prod%ces t@ice as m%c s%rpl%s-8al%e and, conseD%ently, pro!it0 ?nd t is is apparent as soon, and as long, as t is capital as a monopoly on an impro8ed met od o! prod%ction, @ ic makes t is accelerated t%rno8er possible0 ;on8ersely, di!!erences in t e periods o! t%rno8er in di!!erent branc es o! commerce mani!est t emsel8es in t e !act t at pro!it made on t e t%rno8er o! a gi8en commodity-capital is in in8erse proportion to t e n%mber o! times t e money-capital t%rns o8er t is commodity-capital0 $mall pro!its and D%ick ret%rns appear to t e s opkeeper to be t e principle @ ic e !ollo@s o%t o! s eer principle0 For t e rest, it is sel!-e8ident t at regardless o! alternating, m%t%ally compensating, speedier and slo@er t%rno8ers, t is la@ o! t%rno8er o! merc ant"s capital olds good in eac branc o! commerce only !or t e a8erage t%rno8ers made by t e entire merc ant"s capital in8ested in eac partic%lar branc 0 5 e capital o! ?, @ o deals in t e same branc as A, may make more or less t an t e a8erage n%mber o! t%rno8ers0 &n t is case t e ot ers make less or more0 5 is does not alter t e t%rno8er o! t e total mass o! merc ant"s capital in8ested in t is line0 A%t it is o! decisi8e moment !or t e indi8id%al merc ant or s opkeeper0 &n t is case e makes an extra pro!it, H%st as ind%strial capitalists make extra pro!its i! t ey prod%ce %nder better t an a8erage conditions0 &! competition compels im, e can sell c eaper t an is competitors @it o%t lo@ering is pro!it belo@ t e a8erage0 &! t e conditions @ ic @o%ld enable im to t%rn o8er is capital more

<=*

; apter J4&&&

rapidly, are t emsel8es !or sale, s%c as a !a8o%rable s op location, e can pay extra rent !or it, i.e., con8ert a portion o! is s%rpl%s-pro!it into gro%nd-rent0

Chapter 1*. 1one!-'ealin) Capital


5 e p%rely tec nical mo8ements per!ormed by money in t e circ%lation process o! ind%strial, and, as @e may no@ add, o! commercial capital Bsince it takes o8er a part o! t e circ%lation mo8ement o! ind%strial capital as its o@n, pec%liar mo8ementC, i! indi8id%alised as a !%nction o! some partic%lar capital per!orming H%st t ese, and only t ese, operations as its speci!ic operations, con8ert t is capital into money-dealing capital0 ? portion o! ind%strial capital, and, more precisely, also o! commercial capital, not only obtains all t e time in t e !orm o! money, as money-capital in general, b%t as money-capital engaged precisely in t ese tec nical !%nctions0 ? de!inite part o! t e total capital dissociates itsel! !rom t e rest and stands apart in t e !orm o! money-capital, @ ose capitalist !%nction consists excl%si8ely in per!orming t ese operations !or t e entire class o! ind%strial and commercial capitalists0 ?s in t e case o! commercial capital, a portion o! ind%strial capital engaged in t e circ%lation process in t e !orm o! money-capital separates !rom t e rest and per!orms t ese operations o! t e reprod%ction process !or all t e ot er capital0 5 e mo8ements o! t is money-capital are, t ere!ore, once more merely mo8ements o! an indi8id%alised part o! ind%strial capital engaged in t e reprod%ction process0 &t is only @ en, and in so !ar as, capital is ne@ly in8ested I @ ic also applies to acc%m%lation I t at capital in money-!orm appears as t e starting-point and t e end res%lt o! t e mo8ement0 A%t !or all capitals already engaged in t e process, t ese !irst and last points appear merely as points o! transit0 $ince, as already seen in t e case o! simple commodity-circ%lation, !rom t e moment o! lea8ing t e sp ere o! prod%ction to t e moment o! its re-entry ind%strial capital %ndergoes t e metamorp osis ;" I M I ;, M in !act represents t e end res%lt o! one p ase o! t e metamorp osis, H%st to become t e starting-point o! t e re8erse p ase, @ ic s%pplements it0 ?nd alt o%g t e ; I M o! ind%strial capital is al@ays M I ; I M !or merc ant"s capital, t e act%al process !or t e latter is contin%ally also ; I M I ; once it as beg%n to !%nction0 A%t it per!orms t e acts ; I M and M I ; sim%ltaneo%sly0 5 is is to say t at t ere is not H%st one capital in t e stage ; I M @ ile anot er is in t e stage M I ;, b%t t at t e same capital b%ys contin%ally and sells contin%ally at one and t e same time beca%se o! t e contin%ity o! t e prod%ction process0 &t is to be !o%nd al@ays in bot stages at one and t e same time0 W ile one o! its parts t%rns into money, later to be recon8erted into commodities, anot er t%rns sim%ltaneo%sly into commodities, to be recon8erted into money0 &t all depends on t e !orm o! t e commodity exc ange @ et er t e money ser8es ere as a means o! circ%lation or o! payment0 &n bot cases t e capitalist as to pay o%t money constantly to many persons, and to recei8e money contin%ally !rom many persons0 5 is p%rely tec nical operation o! disb%rsing and recei8ing money is in itsel! labo%r @ ic , as long as t e money ser8es as a means o! payment, necessitates dra@ing %p payment balances and acts o! balancing acco%nts0 5 is labo%r is a cost o! circ%lation, i.e., not labo%r creating 8al%e0 &t is s ortened in being carried o%t by a special section o! agents, or capitalists, !or t e rest o! t e capitalist class0 ? de!inite portion o! t e capital m%st be on and constantly as a oard, as potential money-capital I a reser8e o! means o! p%rc ase, a reser8e o! means o! payment, and idle capital in t e !orm o! money @aiting to be p%t to @ork0 ?not er portion streams back contin%ally in t is !orm0 ?side !rom collecting, paying, and book-keeping, t is entails sa!ekeeping t e oard, @ ic is an operation all in itsel!0 &t is, indeed, a contin%o%s con8ersion o! t e oard into means o! circ%lation and means o! payment, and its restoration by means o! money sec%red t ro%g sales and !rom payments d%e0 5 is constant mo8ement o! t e part o! capital existing as money, dissociated !rom t e !%nction o! capital itsel!, t is p%rely tec nical !%nction, ca%ses its o@n labo%r and expense, classi!ied as costs o! circ%lation0

<11

; apter J&J

5 e di8ision o! labo%r brings it abo%t t at t ese tec nical operations, dependent %pon t e !%nctions o! capital, s o%ld be per!ormed !or t e entire capitalist class as m%c as possible by a special section o! agents or capitalists as t eir excl%si8e !%nction I or t at t ese operations s o%ld be concentrated in t eir ands0 We a8e ere, as in merc ant"s capital, di8ision o! labo%r in a t@o!old sense0 &t becomes a specialised b%siness, and beca%se per!ormed as a specialised b%siness !or t e money-mec anism o! t e @ ole class, it is concentrated and cond%cted on a large scale0 ? !%rt er di8ision o! labo%r takes place @it in it, bot t ro%g di8ision into 8ario%s independent branc es, and t ro%g segmentation o! @ork @it in t ese branc es Blarge o!!ices, n%mero%s book-keepers and cas iers, and !ar-reac ing di8ision o! labo%rC0 ,aying and recei8ing money, settling acco%nts, keeping c%rrent acco%nts, storing money, etc0 I all t is, dissociated !rom t e acts necessitating t ese tec nical operations, makes money-dealing capital o! t e capital ad8anced !or t ese !%nctions0 5 e 8ario%s operations, @ ose indi8id%alisation into speci!ic b%sinesses gi8es rise to t e money trade, spring !rom t e di!!erent p%rposes o! money itsel! and !rom its !%nctions, @ ic capital in its money-!orm m%st t ere!ore like@ise carry o%t0 & a8e pointed o%t earlier t at !inance de8eloped originally !rom t e exc ange o! prod%cts bet@een di!!erent comm%nities01 5rading in money, commerce in t e money-commodity, !irst de8eloped t ere!ore o%t o! international commerce0 E8er since di!!erent national coins a8e existed merc ants b%ying in !oreign co%ntries a8e ad to exc ange t eir national coins !or local coins, and 8ice 8ersa, or to exc ange di!!erent coins !or %ncoined p%re sil8er or gold I t e @orld-money0 6ence t e exc ange b%siness @ ic is to be regarded as one o! t e nat%ral !o%ndations o! modern !inance0 < 3%t o! it de8eloped banks o! exc ange, in @ ic sil8er Bor goldC ser8es as @orld-money I no@ called bank money or commercial money I as distinct !rom c%rrency0 Exc ange transactions, in t e sense o! mere notes o! payment to tra8ellers !rom a money-c anger in one co%ntry to a c anger in anot er co%ntry, de8eloped back in )ome and :reece o%t o! t e act%al money-c anging0 5rading in gold and sil8er as commodities Bra@ materials !or t e making o! l%x%ry articlesC is t e nat%ral basis o! t e b%llion trade, or t e trade @ ic acts as a medi%m !or t e !%nctions o! money as %ni8ersal money0 5 ese !%nctions, as pre8io%sly explained BA%c &, Kap0 &&&, 3, c / Englis edition: ; 0 &&&, 3, c0 J 0d.1C, are t@o-!old: c%rrency mo8ement back and !ort bet@een t e 8ario%s national sp eres o! circ%lation in order to balance international payments and in connection @it t e migrations o! capital in D%est o! interest# sim%ltaneo%sly, !lo@ o! precio%s metals !rom t eir so%rces o! prod%ction 8ia t e @orld-market and t eir distrib%tion among t e 8ario%s national sp eres o! circ%lation0 :oldsmit s acted as bankers still d%ring t e greater part o! t e 1>t cent%ry in England0 We s all completely disregard t e @ay in @ ic t e balancing o! international acco%nts de8eloped !%rt er in t e bill Hobbing, etc0, and e8eryt ing re!erring to transactions in 8al%able papers# in s ort, @e s all lea8e o%t o! consideration all special !orms o! t e credit system, @ ic do not as yet concern %s ere0 -ational money discards its local c aracter in t e capacity o! %ni8ersal money# one national c%rrency is expressed in anot er, and t %s all o! t em are !inally red%ced to t eir content o! gold or sil8er, @ ile t e latter, being t e t@o commodities circ%lating as @orld-money, are sim%ltaneo%sly red%ced to t eir reciprocal 8al%e-ratio, @ ic c anges contin%ally0 &t is t is intermediate operation @ ic t e money trader makes is special occ%pation0 Money-c anging and t e b%llion trade are t %s t e original !orms o! t e money trade, and spring !rom t e t@o-!old !%nctions o! money I as national money and @orld-money0 5 e capitalist process o! prod%ction, H%st as commerce in general, e8en %nder pre-capitalist met ods, imply: 'irst, t e acc%m%lation o! money as a oard, i.e., ere as t at part o! capital @ ic m%st al@ays be on and in t e !orm o! money as a reser8e !%nd o! means o! payment and p%rc ase0 5 is is t e

<1<

; apter J&J

!irst !orm o! a oard, as it reappears %nder t e capitalist mode o! prod%ction, and as it appears generally @it t e de8elopment o! merc ant"s capital, at least !or t e p%rposes o! t is capital0 Aot remarks apply to national, as @ell as international, circ%lation0 5 e oard is in contin%o%s !l%x, po%rs ceaselessly into circ%lation, and ret%rns ceaselessly !rom it0 5 e second !orm o! a oard is t at o! idle, temporarily %nemployed capital in t e s ape o! money, incl%ding ne@ly acc%m%lated and not yet in8ested money-capital0 5 e !%nctions entailed by t is !ormation o! a oard are primarily t ose o! sa!ekeeping, bookkeeping, etc0 Secondly, o@e8er, t is in8ol8es o%tlays o! money !or p%rc ases, collecting money !rom sales, making and recei8ing payments, balancing payments, etc0 5 e money-dealer per!orms all t ese ser8ices at !irst as a simple cashier o! t e merc ants and ind%strial capitalists0 3 5 e money trade becomes !%lly de8eloped, e8en in its !irst stages, as soon as its ordinary !%nctions are s%pplemented by lending and borro@ing and by credit0 3! t is more in t e next part, @ ic deals @it interest-bearing capital0 5 e b%llion trade itsel!, t e trans!er o! gold or sil8er !rom one co%ntry to anot er, is merely t e res%lt o! trading in commodities0 &t is determined by t e rate o! exc ange @ ic expresses t e standing o! international payments and t e interest rates in t e di!!erent markets0 5 e b%llion trader as s%c acts merely as an intermediary o! t e res%lts0 &n disc%ssing money and t e @ay its mo8ements and !orms de8elop o%t o! simple commoditycirc%lation, @e sa@ BAook 1 ; 0 &&&C t at t e mo8ements o! t e mass o! money circ%lating as means o! p%rc ase and payment depend on t e metamorp osis o! commodities, on t e 8ol%me and 8elocity o! t is metamorp osis, @ ic @e no@ kno@ to be b%t a p ase in t e entire process o! reprod%ction0 ?s !or sec%ring t e money materials I gold and sil8er I !rom t eir so%rces o! prod%ction, t is resol8es itsel! into a direct exc ange o! commodities, an exc ange o! gold and sil8er as commodities !or ot er commodities0 6ence, it is itsel! as m%c a p ase o! t e exc ange o! commodities as t e sec%ring o! iron or ot er metals0 6o@e8er, so !ar as t e mo8ement o! precio%s metals on t e @orld-market is concerned B@e ere lea8e aside mo8ements expressing t e trans!er o! capital by loans I a type o! trans!er @ ic also obtains in t e s ape o! commoditycapitalC, it is D%ite as m%c determined by t e international exc ange o! commodities as t e mo8ement o! money as a national means o! p%rc ase and payment is determined by t e exc ange o! commodities in t e ome market0 5 e in!lo@ and o%t!lo@ o! precio%s metals !rom one national sp ere o! circ%lation to anot er, inasm%c as t is is ca%sed merely by a depreciation o! t e national c%rrency, or by a do%ble standard, are alien to money circ%lation as s%c and merely represent corrections o! de8iations bro%g t abo%t arbitrarily by state decrees0 Finally, as concerns t e !ormations o! oards @ ic constit%te reser8e !%nds !or means o! p%rc ase and payment, be it !or ome or !oreign trade, and @ ic also merely represent a !orm o! temporarily idle capital, t ey are in bot cases necessary precipitates o! t e circ%lation process0 &! t e entire circ%lation o! money is in 8ol%me, !orm and mo8ement p%rely a res%lt o! commoditycirc%lation, @ ic , in its t%rn, !rom t e capitalist point o! 8ie@, is only t e circ%lation process o! capital Balso embracing t e exc ange o! capital !or re8en%e, and o! re8en%e !or re8en%e, so !ar as o%tlay o! re8en%e is e!!ected t ro%g retail tradeC, it is sel!-e8ident t at dealing in money does not merely promote t e circ%lation o! money, a mere res%lt and p enomenon o! commoditycirc%lation0 5 is circ%lation o! money itsel!, a p ase in commodity-circ%lation, is taken !or granted in money-dealing0 W at t e latter promotes is merely t e tec nical operations o! money circ%lation @ ic it concentrates, s ortens, and simpli!ies0 7ealing in money does not !orm t e oards0 &t pro8ides t e tec nical means by @ ic t e !ormation o! oards may, so !ar as it is 8ol%ntary B ence, not an expression o! %nemployed capital or o! dist%rbances in t e reprod%ction processC, be red%ced to its economic minim%m beca%se, i! managed !or t e capitalist class as a @ ole, t e reser8e !%nds o! means o! p%rc ase and payment need not be as large as t ey @o%ld a8e to be i! eac capitalist @ere to manage is o@n0 5 e money-dealers do not b%y t e precio%s metals0 5 ey merely andle t eir distrib%tion as soon as t e commodity trade as bo%g t t em0

<13

; apter J&J

5 ey !acilitate t e settling o! balances, inasm%c as money ser8es as t e means o! payment, and red%ce t ro%g t e arti!icial mec anism o! t ese settlements t e amo%nt o! money reD%ired !or t is p%rpose0 A%t t ey do not determine eit er t e connections, or t e 8ol%me, o! t e m%t%al payments0 5 e bills o! exc ange and t e c eD%es, !or instance, @ ic are exc anged !or one anot er in banks and clearing o%ses, represent D%ite independent transactions and are t e res%lts o! gi8en operations, and it is merely a D%estion o! a better tec nical settlement o! t ese res%lts0 $o !ar as money circ%lates as a means o! p%rc ase, t e 8ol%me and n%mber o! p%rc ases and sales a8e no connection @ ate8er @it money-dealing0 5 e latter can do no more t an s orten t e tec nical operations t at go @it b%ying and selling, and t %s red%ce t e amo%nt o! cas money reD%ired to t%rn o8er t e commodities0 Money-dealing in its p%re !orm, @ ic @e consider ere, i.e0, set apart !rom t e credit system, is t %s concerned only @it t e tec niD%e o! a certain p ase o! commodity-circ%lation, namely, t at o! money circ%lation and t e di!!erent !%nctions o! money arising in its circ%lation0 5 is s%bstantially disting%is es dealing in money !rom t e dealing in commodities, @ ic promotes t e metamorp osis o! commodities and t eir exc ange, or e8en gi8es t is process o! t e commodity-capital t e appearance o! a process o! a capital set apart !rom ind%strial capital0 W ile, t ere!ore, commercial capital as its o@n !orm o! circ%lation, M I ; I M, in @ ic t e commodity c anges ands t@ice and t %s pro8ides a re!l%x o! money, as distinct !rom ; I M I ;, in @ ic money c anges ands t@ice and t %s promotes commodity exc ange, t ere is no s%c special !orm in t e case o! money-dealing capital0 &n so !ar as money-capital is ad8anced by a separate class o! capitalists in t is tec nical promotion o! money circ%lation I a capital @ ic on a red%ced scale represents t e additional capital t e merc ants and ind%strial capitalists @o%ld ot er@ise a8e to ad8ance t emsel8es !or t ese p%rposes I t e general !orm o! capital, M I M", occ%rs ere as @ell0 Ay ad8ancing M, t e ad8ancing capitalist sec%res M U cM0 A%t promotion o! M I M" does not ere concern t e material, b%t only t e tec nical, processes o! t e metamorp osis0 &t is e8ident t at t e mass o! money-capital @it @ ic t e money-dealers operate is t e moneycapital o! merc ants and ind%strial capitalists in t e process o! circ%lation, and t at t e moneydealers" operations are act%ally operations o! merc ants and ind%strial capitalists, in @ ic t ey act as middlemen0 &t is eD%ally e8ident t at t e money-dealers" pro!it is not ing b%t a ded%ction !rom t e s%rpl%s8al%e, since t ey operate @it already realised 8al%es Be8en @ en realised in t e !orm o! creditors" claimsC0 P%st as in t e commodity trade, t ere is a d%plication o! !%nctions, beca%se a part o! t e tec nical operations connected @it money circ%lation m%st be carried o%t by t e dealers and prod%cers o! commodities t emsel8es0

Chapter 2/. 8istorical #acts a9out 1erchant7s Capital


5 e partic%lar !orm in @ ic commercial and money-dealing capitals acc%m%late money @ill be disc%ssed in t e next part0 &t is sel!-e8ident !rom @ at as gone be!ore t at not ing co%ld be more abs%rd t an to regard merc ant"s capital, @ et er in t e s ape o! commercial or o! money-dealing capital, as a partic%lar 8ariety o! ind%strial capital, s%c as, say, mining, agric%lt%re, cattle-raising, man%!act%ring, transport, etc0, @ ic are side lines o! ind%strial capital occasioned by t e di8ision o! social labo%r, and ence di!!erent sp eres o! in8estment0 5 e simple obser8ation t at in t e circ%lation p ase o! its reprod%ction process e8ery ind%strial capital per!orms as commoditycapital and as money-capital t e 8ery !%nctions @ ic appear as t e excl%si8e !%nctions o! t e t@o !orms o! merc ant"s capital, s o%ld r%le o%t s%c a cr%de notion0 3n t e ot er and, in commercial and money-dealing capital t e di!!erences bet@een ind%strial capital as prod%cti8e capital and t e same capital in t e sp ere o! circ%lation are indi8id%alised t ro%g t e !act t at t e de!inite !orms and !%nctions @ ic capital ass%mes !or t e moment appear as independent !orms and !%nctions o! a separate portion o! t e capital and are excl%si8ely bo%nd %p @it it0 5 e transm%ted !orm o! ind%strial capital and t e material di!!erences bet@een prod%cti8e capitals applied in di!!erent branc es o! ind%stry, @ ic arise !rom t e nat%re o! t ese 8ario%s branc es, are @orlds apart0 ?side !rom t e cr%dity @it @ ic t e economist generally considers distinctions o! !orm, @ ic really concern im only !rom t eir s%bstanti8e side, t is misconception by t e 8%lgar economist is explained on t@o additional co%nts0 First, is inability to explain t e pec%liar nat%re o! mercantile pro!it# and, secondly, is apologetic endea8o%rs to ded%ce commodity-capital and money-capital, and later commercial capital and money-dealing capital as !orms arising necessarily !rom t e process o! prod%ction as s%c , @ ereas t ey are d%e to t e speci!ic !orm o! t e capitalist mode o! prod%ction, @ ic abo8e all pres%pposes t e circ%lation o! commodities, and ence o! money, as its basis0 &! commercial capital and money-dealing capital do not di!!er !rom grain prod%ction any more t an t is di!!ers !rom cattle-raising and man%!act%ring, it is plain as day t at prod%ction and capitalist prod%ction are altoget er identical, and t at, among ot er t ings, t e distrib%tion o! t e social prod%cts among t e members o! a society, be it !or prod%cti8e or indi8id%al cons%mption, m%st H%st as consistently be andled by merc ants and bankers as t e cons%mption o! meat by cattle-raising and t at o! clot ing by t eir man%!act%re0 1 5 e great economists, s%c as $mit , )icardo, etc0, are perplexed o8er mercantile capital being a special 8ariety, since t ey consider t e basic !orm o! capital, capital as ind%strial capital, and circ%lation capital Bcommodity-capital and money-capitalC solely beca%se it is a p ase in t e reprod%ction process o! e8ery capital0 5 e r%les concerning t e !ormation o! 8al%e, pro!it, etc0, immediately ded%ced by t em !rom t eir st%dy o! ind%strial capital, do not extend directly to merc ant"s capital0 For t is reason, t ey lea8e merc ant"s capital entirely aside and mention it only as a kind o! ind%strial capital0 W ere8er t ey make a special analysis o! it, as )icardo does in dealing @it !oreign trade, t ey seek to demonstrate t at it creates no 8al%e Band conseD%ently no s%rpl%s-8al%eC0 A%t @ ate8er is tr%e o! !oreign trade, is also tr%e o! ome trade0 6it erto @e a8e considered merc ant"s capital merely !rom t e standpoint, and @it in t e limits, o! t e capitalist mode o! prod%ction0 6o@e8er, not commerce alone, b%t also merc ant"s capital,

<1+

; apter JJ

is older t an t e capitalist mode o! prod%ction, is, in !act, istorically t e oldest !ree state o! existence o! capital0 $ince @e a8e already seen t at money-dealing and t e capital ad8anced !or it reD%ire not ing more !or t eir de8elopment t an t e existence o! @ olesale commerce, and !%rt er o! commercial capital, it is only t e latter @ ic @e m%st occ%py o%rsel8es @it ere0 $ince merc ant"s capital is penned in t e sp ere o! circ%lation, and since its !%nction consists excl%si8ely o! promoting t e exc ange o! commodities, it reD%ires no ot er conditions !or its existence I aside !rom t e %nde8eloped !orms arising !rom direct barter I o%tside t ose necessary !or t e simple circ%lation o! commodities and money0 3r rat er, t e latter is t e condition o! its existence0 -o matter @ at t e basis on @ ic prod%cts are prod%ced, @ ic are t ro@n into circ%lation as commodities I @ et er t e basis o! t e primiti8e comm%nity, o! sla8e prod%ction, o! small peasant and petty bo%rgeois, or t e capitalist basis, t e c aracter o! prod%cts as commodities is not altered, and as commodities t ey m%st pass t ro%g t e process o! exc ange and its attendant c anges o! !orm0 5 e extremes bet@een @ ic merc ant"s capital acts as mediator exist !or it as gi8en, H%st as t ey are gi8en !or money and !or its mo8ements0 5 e only necessary t ing is t at t ese extremes s o%ld be on and as commodities, regardless o! @ et er prod%ction is @ olly a prod%ction o! commodities, or @ et er only t e s%rpl%s o! t e independent prod%cers" immediate needs, satis!ied by t eir o@n prod%ction, is t ro@n on t e market0 Merc ant"s capital promotes only t e mo8ements o! t ese extremes, o! t ese commodities, @ ic are preconditions o! its o@n existence0 5 e extent to @ ic prod%cts enter trade and go t ro%g t e merc ants" ands depends on t e mode o! prod%ction, and reac es its maxim%m in t e %ltimate de8elopment o! capitalist prod%ction, @ ere t e prod%ct is prod%ced solely as a commodity, and not as a direct means o! s%bsistence0 3n t e ot er and, on t e basis o! e8ery mode o! prod%ction, trade !acilitates t e prod%ction o! s%rpl%s-prod%cts destined !or exc ange, in order to increase t e enHoyments, or t e @ealt , o! t e prod%cers B ere meant are t e o@ners o! t e prod%ctsC0 6ence, commerce imparts to prod%ction a c aracter directed more and more to@ards exc ange-8al%e0 5 e metamorp osis o! commodities, t eir mo8ement, consists 1C materially, o! t e exc ange o! di!!erent commodities !or one anot er, and <C !ormally, o! t e con8ersion o! commodities into money by sale, and o! money into commodities by p%rc ase0 ?nd t e !%nction o! merc ant"s capital resol8es itsel! into t ese 8ery acts o! b%ying and selling commodities0 &t t ere!ore merely promotes t e exc ange o! commodities# yet t is exc ange is not to be concei8ed at t e o%tset as a bare exc ange o! commodities bet@een direct prod%cers0 (nder sla8ery, !e%dalism and 8assalage Bso !ar as primiti8e comm%nities are concernedC it is t e sla8e-o@ner, t e !e%dal lord, t e trib%tecollecting state, @ o are t e o@ners, ence sellers, o! t e prod%cts0 5 e merc ant b%ys and sells !or many0 ,%rc ases and sales are concentrated in is ands and conseD%ently are no longer bo%nd to t e direct reD%irements o! t e b%yer Bas merc antC0 A%t @ ate8er t e social organisation o! t e sp eres o! prod%ction @ ose commodity exc ange t e merc ant promotes, is @ealt exists al@ays in t e !orm o! money, and is money al@ays ser8es as capital0 &ts !orm is al@ays M I ; I M"0 Money, t e independent !orm o! exc ange-8al%e, is t e point o! depart%re, and increasing t e exc ange-8al%e an end in itsel!0 ;ommodity exc ange as s%c and t e operations e!!ecting it I separated !rom prod%ction and per!ormed by non-prod%cers I are H%st a means o! increasing @ealt not as mere @ealt , b%t as @ealt in its most %ni8ersal social !orm, as exc ange-8al%e0 5 e compelling moti8e and determining p%rpose are t e con8ersion o! M into M U cM0 5 e transactions M I ; and ; I M", @ ic promote M I M", appear merely as stages o! transition in t is con8ersion o! M into M U cM0 5 is M I ; I M", t e c aracteristic mo8ement o! merc ant"s capital, disting%is es it !rom ; I M I ;, trade in commodities directly bet@een prod%cers, @ ic as !or its %ltimate end t e exc ange o! %se8al%es0

<16

; apter JJ

5 e less de8eloped t e prod%ction, t e more @ealt in money is concentrated in t e ands o! merc ants or appears in t e speci!ic !orm o! merc ants" @ealt 0 Wit in t e capitalist mode o! prod%ction I i.e., as soon as capital as establis ed its s@ay o8er prod%ction and imparted to it a @ olly c anged and speci!ic !orm I merc ant"s capital appears merely as a capital @it a specific !%nction0 &n all pre8io%s modes o! prod%ction, and all t e more, @ ere8er prod%ction ministers to t e immediate @ants o! t e prod%cer, merc ant"s capital appears to per!orm t e !%nction par e cellence o! capital0 5 ere is, t ere!ore, not t e least di!!ic%lty in %nderstanding @ y merc ant"s capital appears as t e istorical !orm o! capital long be!ore capital establis ed its o@n domination o8er prod%ction0 &ts existence and de8elopment to a certain le8el are in t emsel8es istorical premises !or t e de8elopment o! capitalist prod%ction 1C as premises !or t e concentration o! money @ealt , and <C beca%se t e capitalist mode o! prod%ction pres%pposes prod%ction !or trade, selling on a large scale, and not to t e indi8id%al c%stomer, ence also a merc ant @ o does not b%y to satis!y is personal @ants b%t concentrates t e p%rc ases o! many b%yers in is one p%rc ase0 3n t e ot er and, all de8elopment o! merc ant"s capital tends to gi8e prod%ction more and more t e c aracter o! prod%ction !or exc ange-8al%e and to t%rn prod%cts more and more into commodities0 .et its de8elopment, as @e s all presently see, is incapable by itsel! o! promoting and explaining t e transition !rom one mode o! prod%ction to anot er0 Wit in capitalist prod%ction merc ant"s capital is red%ced !rom its !ormer independent existence to a special p ase in t e in8estment o! capital, and t e le8elling o! pro!its red%ces its rate o! pro!it to t e general a8erage0 &t !%nctions only as an agent o! prod%cti8e capital0 5 e special social conditions t at take s ape @it t e de8elopment o! merc ant"s capital, are ere no longer paramo%nt0 3n t e contrary, @ ere8er merc ant"s capital still predominates @e !ind back@ard conditions0 5 is is tr%e e8en @it in one and t e same co%ntry, in @ ic , !or instance, t e speci!ically merc ant to@ns present !ar more striking analogies @it past conditions t an ind%strial to@ns0< 5 e independent and predominant de8elopment o! capital as merc ant"s capital is tantamo%nt to t e non-s%bHection o! prod%ction to capital, and ence to capital de8eloping on t e basis o! an alien social mode o! prod%ction @ ic is also independent o! it0 5 e independent de8elopment o! merc ant"s capital, t ere!ore, stands in in8erse proportion to t e general economic de8elopment o! society0 &ndependent mercantile @ealt as a predominant !orm o! capital represents t e separation o! t e circ%lation process !rom its extremes, and t ese extremes are t e exc anging prod%cers t emsel8es0 5 ey remain independent o! t e circ%lation process, H%st as t e latter remains independent o! t em0 5 e prod%ct becomes a commodity by @ay o! commerce0 &t is commerce @ ic ere t%rns prod%cts into commodities, not t e prod%ced commodity @ ic by its mo8ements gi8es rise to commerce0 5 %s, capital appears ere !irst as capital in t e process o! circ%lation0 &t is in t e circ%lation process t at money de8elops into capital0 &t is in circ%lation t at prod%cts !irst de8elop as exc ange-8al%es, as commodities and as money0 ;apital can, and m%st, !orm in t e process o! circ%lation, be!ore it learns to control its extremes I t e 8ario%s sp eres o! prod%ction bet@een @ ic circ%lation mediates0 Money and commodity circ%lation can mediate bet@een sp eres o! prod%ction o! @idely di!!erent organisation, @ ose internal str%ct%re is still c ie!ly adH%sted to t e o%tp%t o! %se-8al%es0 5 is indi8id%alisation o! t e circ%lation process, in @ ic sp eres o! prod%ction are interconnected by means o! a t ird, as a t@o-!old signi!icance0 3n t e one and, t at circ%lation as not as yet establis ed a old on prod%ction, b%t is related to it as to a gi8en premise0 3n t e ot er and, t at t e prod%ction process as not as yet absorbed circ%lation as a mere p ase o! prod%ction0 Aot , o@e8er, are t e case in capitalist prod%ction0 5 e prod%ction process rests @ olly %pon circ%lation, and circ%lation is a mere transitional p ase o! prod%ction, in @ ic t e prod%ct created as a commodity is realised and its elements o! prod%ction, like@ise created as commodities, are replaced0 5 at !orm o! capital I merc ant"s

<1>

; apter JJ

capital I @ ic de8eloped directly o%t o! circ%lation appears ere merely as one o! t e !orms o! capital occ%rring in its reprod%ction process0 5 e la@ t at t e independent de8elopment o! merc ant"s capital is in8ersely proportional to t e degree o! de8elopment o! capitalist prod%ction is partic%larly e8ident in t e istory o! t e carrying trade, as among t e 4enetians, :enoese, 7%tc , etc0, @ ere t e principal gains @ere not t %s made by exporting domestic prod%cts, b%t by promoting t e exc ange o! prod%cts o! commercially and ot er@ise economically %nde8eloped societies, and by exploiting bot prod%cing co%ntries03 6ere, merc ant"s capital is in its p%re !orm, separated !rom t e extremes I t e sp eres o! prod%ction bet@een @ ic it mediates0 5 is is t e main so%rce o! its de8elopment0 A%t t is monopoly o! t e carrying trade disintegrates, and @it it t is trade itsel!, proportionately to t e economic de8elopment o! t e peoples, @ om it exploits at bot ends o! its co%rse, and @ ose lack o! de8elopment @as t e basis o! its existence0 &n t e case o! t e carrying trade t is appears not only as t e decline o! a special branc o! commerce, b%t also t at o! t e predominance o! t e p%rely trading nations, and o! t eir commercial @ealt in general, @ ic rested %pon t e carrying trade0 5 is is b%t a special !orm, in @ ic is expressed t e s%bordination o! merc ants to ind%strial capital @it t e ad8ance o! capitalist prod%ction0 5 e be a8io%r o! merc ant"s capital @ ere8er it r%les o8er prod%ction is strikingly ill%strated not only by t e colonial economy Bt e so-called colonial systemC in general, b%t D%ite speci!ically by t e met ods o! t e old 7%tc East &ndia ;ompany0 $ince t e mo8ement o! merc ant"s capital is M I ; I M", t e merc ant"s pro!it is made, !irst, in acts @ ic occ%r only @it in t e circ%lation process, ence in t e t@o acts o! b%ying and selling# and, secondly, it is realised in t e last act, t e sale0 &t is t ere!ore pro!it %pon alienation0 &rima facie, a p%re and independent commercial pro!it seems impossible so long as prod%cts are sold at t eir 8al%e0 5o b%y c eap in order to sell dear is t e r%le o! trade0 6ence, not t e exc ange o! eD%i8alents0 5 e conception o! 8al%e is incl%ded in it in so !ar as t e 8ario%s commodities are all 8al%es, and t ere!ore money0 &n respect to D%ality t ey are all expressions o! social labo%r0 A%t t ey are not 8al%es o! eD%al magnit%de0 5 e D%antitati8e ratio in @ ic prod%cts are exc anged is at !irst D%ite arbitrary0 5 ey ass%me t e !orm o! commodities inasm%c as t ey are exc angeables, i.e., expressions o! one and t e same t ird0 ;ontin%ed exc ange and more reg%lar reprod%ction !or exc ange red%ces t is arbitrariness more and more0 A%t at !irst not !or t e prod%cer and cons%mer, b%t !or t eir go-bet@een, t e merc ant, @ o compares money-prices and pockets t e di!!erence0 &t is t ro%g is o@n mo8ements t at e establis es eD%i8alence0 Merc ant"s capital is originally merely t e inter8ening mo8ement bet@een extremes @ ic it does not control, and bet@een premises @ ic it does not create0 P%st as money originates !rom t e bare !orm o! commodity-circ%lation, ; I M I ;, not only as a meas%re o! 8al%e and a medi%m o! circ%lation, b%t also as t e absol%te !orm o! commodity, and ence o! @ealt , or oard, so t at its conser8ation and acc%m%lation as money becomes an end in itsel!, so, too, does money, t e oard, as somet ing t at preser8es and increases itsel! t ro%g mere alienation, originate !rom t e bare !orm o! t e circ%lation o! merc ant"s capital, M I ; I M"0 5 e trading nations o! ancient times existed like t e gods o! Epic%r%s in t e intermediate @orlds o! t e %ni8erse, or rat er like t e Pe@s in t e pores o! ,olis society0 5 e trade o! t e !irst independent !lo%ris ing merc ant to@ns and trading nations rested as a p%re carrying trade %pon t e barbarism o! t e prod%cing nations, bet@een @ om t ey acted t e middleman0 &n t e pre-capitalist stages o! society commerce r%led ind%stry0 &n modern society t e re8erse is tr%e0 3! co%rse, commerce @ill a8e more or less o! a co%nter-e!!ect on t e comm%nities bet@een @ ic it is carried on0 &t @ill s%bordinate prod%ction more and more to exc ange-8al%e by making l%x%ries and s%bsistence more dependent on sale t an on t e immediate %se o! t e prod%cts0 5 ereby it dissol8es t e old relations ips0 &t m%ltiplies money circ%lation0 &t encompasses no longer merely t e s%rpl%s o! prod%ction, b%t bites deeper and deeper into t e latter, and makes

<18

; apter JJ

entire branc es o! prod%ction dependent %pon it0 -e8ert eless t is disintegrating e!!ect depends 8ery m%c on t e nat%re o! t e prod%cing comm%nity0 $o long as merc ant"s capital promotes t e exc ange o! prod%cts bet@een %nde8eloped societies, commercial pro!it not only appears as o%t-bargaining and c eating, b%t also largely originates !rom t em0 ?side !rom t e !act t at it exploits t e di!!erence bet@een t e prices o! prod%ction o! 8ario%s co%ntries Band in t is respect it tends to le8el and !ix t e 8al%es o! commoditiesC, t ose modes o! prod%ction bring it abo%t t at merc ant"s capital appropriates an o8er@ elming portion o! t e s%rpl%s-prod%ct partly as a mediator bet@een comm%nities @ ic still s%bstantially prod%ce !or %se-8al%e, and !or @ ose economic organisation t e sale o! t e portion o! t eir prod%ct entering circ%lation, or !or t at matter any sale o! prod%cts at t eir 8al%e, is o! secondary importance# and partly, beca%se %nder t ose earlier modes o! prod%ction t e principal o@ners o! t e s%rpl%s-prod%ct @it @ om t e merc ant dealt, namely, t e sla8e-o@ner, t e !e%dal lord, and t e state B!or instance, t e oriental despotC represent t e cons%ming @ealt and l%x%ry @ ic t e merc ant seeks to trap, as ?dam $mit correctly scented in t e passage on !e%dal times D%oted earlier0 Merc ant"s capital, @ en it olds a position o! dominance, stands e8ery@ ere !or a system o! robbery,2 so t at its de8elopment among t e trading nations o! old and modern times is al@ays directly connected @it pl%ndering, piracy, kidnapping sla8es, and colonial conD%est# as in ;art age, )ome, and later among t e 4enetians, ,ort%g%ese, 7%tc , etc0 5 e de8elopment o! commerce and merc ant"s capital gi8es rise e8ery@ ere to t e tendency to@ards prod%ction o! exc ange-8al%es, increases its 8ol%me, m%ltiplies it, makes it cosmopolitan, and de8elops money into @orld-money0 ;ommerce, t ere!ore, as a more or less dissol8ing in!l%ence e8ery@ ere on t e prod%cing organisation, @ ic it !inds at and and @ ose di!!erent !orms are mainly carried on @it a 8ie@ to %se-8al%e0 5o @ at extent it brings abo%t a dissol%tion o! t e old mode o! prod%ction depends on its solidity and internal str%ct%re0 ?nd @ it er t is process o! dissol%tion @ill lead, in ot er @ords, @ at ne@ mode o! prod%ction @ill replace t e old, does not depend on commerce, b%t on t e c aracter o! t e old mode o! prod%ction itsel!0 &n t e ancient @orld t e e!!ect o! commerce and t e de8elopment o! merc ant"s capital al@ays res%lted in a sla8e economy# depending on t e point o! depart%re, only in t e trans!ormation o! patriarc al sla8e system de8oted to t e prod%ction o! immediate means o! s%bsistence into one de8oted to t e prod%ction o! s%rpl%s-8al%e0 6o@e8er, in t e modern @orld, it res%lts in t e capitalist mode o! prod%ction0 &t !ollo@s t ere!rom t at t ese res%lts spring in t emsel8es !rom circ%mstances ot er t an t e de8elopment o! merc ant"s capital0 &t is in t e nat%re o! t ings t at as soon as to@n ind%stry as s%c separates !rom agric%lt%ral ind%stry, its prod%cts are !rom t e o%tset commodities and t %s reD%ire t e mediation o! commerce !or t eir sale0 5 e leaning o! commerce to@ards t e de8elopment o! to@ns, and, on t e ot er and, t e dependence o! to@ns %pon commerce, are so !ar nat%ral0 6o@e8er, it depends on altoget er di!!erent circ%mstances to @ at meas%re ind%strial de8elopment @ill go and in and @it t is de8elopment0 ?ncient )ome, in its later rep%blican days, de8eloped merc ant"s capital to a ig er degree t an e8er be!ore in t e ancient @orld, @it o%t s o@ing any progress in t e de8elopment o! cra!ts, @ ile in ;orint and ot er :recian to@ns in E%rope and ?sia Minor t e de8elopment o! commerce @as accompanied by ig ly de8eloped cra!ts0 3n t e ot er and, D%ite contrary to t e gro@t o! to@ns and attendant conditions, t e trading spirit and t e de8elopment o! merc ant"s capital occ%r !reD%ently among %nsettled nomadic peoples0 5 ere is no do%bt I and it is precisely t is !act @ ic as led to @ olly erroneo%s conceptions I t at in t e 16t and 1>t cent%ries t e great re8ol%tions, @ ic took place in commerce @it t e geograp ical disco8eries and speeded t e de8elopment o! merc ant"s capital, constit%te one o! t e principal elements in !%rt ering t e transition !rom !e%dal to capitalist mode o! prod%ction0 5 e s%dden expansion o! t e @orld-market, t e m%ltiplication o! circ%lating commodities, t e competiti8e Eeal o! t e E%ropean nations to possess t emsel8es o! t e prod%cts o! ?sia and t e treas%res o! ?merica, and t e colonial system I all contrib%ted materially to@ard destroying t e

<1*

; apter JJ

!e%dal !etters on prod%ction0 6o@e8er, in its !irst period I t e man%!act%ring period I t e modern mode o! prod%ction de8eloped only @ ere t e conditions !or it ad taken s ape @it in t e Middle ?ges0 ;ompare, !or instance, 6olland @it ,ort%gal0 + ?nd @ en in t e 16t , and partially still in t e 1>t , cent%ry t e s%dden expansion o! commerce and emergence o! a ne@ @orld-market o8er@ elmingly contrib%ted to t e !all o! t e old mode o! prod%ction and t e rise o! capitalist prod%ction, t is @as accomplis ed con8ersely on t e basis o! t e already existing capitalist mode o! prod%ction0 5 e @orld-market itsel! !orms t e basis !or t is mode o! prod%ction0 3n t e ot er and, t e immanent necessity o! t is mode o! prod%ction to prod%ce on an e8er-enlarged scale tends to extend t e @orld-market contin%ally, so t at it is not commerce in t is case @ ic re8ol%tionises ind%stry, b%t ind%stry @ ic constantly re8ol%tionises commerce0 ;ommercial s%premacy itsel! is no@ linked @it t e pre8alence to a greater or lesser degree o! conditions !or a large ind%stry0 ;ompare, !or instance, England and 6olland0 5 e istory o! t e decline o! 6olland as t e r%ling trading nation is t e istory o! t e s%bordination o! merc ant"s capital to ind%strial capital0 5 e obstacles presented by t e internal solidity and organisation o! pre-capitalistic, national modes o! prod%ction to t e corrosi8e in!l%ence o! commerce are strikingly ill%strated in t e interco%rse o! t e Englis @it &ndia and ; ina0 5 e broad basis o! t e mode o! prod%ction ere is !ormed by t e %nity o! small-scale agric%lt%re and ome ind%stry, to @ ic in &ndia @e s o%ld add t e !orm o! 8illage comm%nities b%ilt %pon t e common o@ners ip o! land, @ ic , incidentally, @as t e original !orm in ; ina as @ell0 &n &ndia t e Englis lost no time in exercising t eir direct political and economic po@er, as r%lers and landlords, to disr%pt t ese small economic comm%nities06 Englis commerce exerted a re8ol%tionary in!l%ence on t ese comm%nities and tore t em apart only in so !ar as t e lo@ prices o! its goods ser8ed to destroy t e spinning and @ea8ing ind%stries, @ ic @ere an ancient integrating element o! t is %nity o! ind%strial and agric%lt%ral prod%ction0 ?nd e8en so t is @ork o! dissol%tion proceeds 8ery grad%ally0 ?nd still more slo@ly in ; ina, @ ere it is not rein!orced by direct political po@er0 5 e s%bstantial economy and sa8ing in time a!!orded by t e association o! agric%lt%re @it man%!act%re p%t %p a st%bborn resistance to t e prod%cts o! t e big ind%stries, @ ose prices incl%de t e fau frais o! t e circ%lation process @ ic per8ades t em0 (nlike t e Englis , )%ssian commerce, on t e ot er and, lea8es t e economic gro%nd@ork o! ?siatic prod%ction %nto%c ed0 > 5 e transition !rom t e !e%dal mode o! prod%ction is t@o-!old0 5 e prod%cer becomes merc ant and capitalist, in contrast to t e nat%ral agric%lt%ral economy and t e g%ild-bo%nd andicra!ts o! t e medie8al %rban ind%stries0 5 is is t e really re8ol%tionising pat 0 3r else, t e merc ant establis es direct s@ay o8er prod%ction0 6o@e8er m%c t is ser8es istorically as a steppingstone I @itness t e Englis 1>t -cent%ry clot ier, @ o brings t e @ea8ers, independent as t ey are, %nder is control by selling t eir @ool to t em and b%ying t eir clot I it cannot by itsel! contrib%te to t e o8ert ro@ o! t e old mode o! prod%ction, b%t tends rat er to preser8e and retain it as its precondition0 5 e man%!act%rer in t e Frenc silk ind%stry and in t e Englis osiery and lace ind%stries, !or example, @as t %s mostly b%t nominally a man%!act%rer %ntil t e middle o! t e 1*t cent%ry0 &n point o! !act, e @as merely a merc ant, @ o let t e @ea8ers carry on in t eir old %norganised @ay and exerted only a merc ant"s control, !or t at @as !or @ om t ey really @orked08 5 is system presents e8ery@ ere an obstacle to t e real capitalist mode o! prod%ction and goes %nder @it its de8elopment0 Wit o%t re8ol%tionising t e mode o! prod%ction, it only @orsens t e condition o! t e direct prod%cers, t%rns t em into mere @age-@orkers and proletarians %nder conditions @orse t an t ose %nder t e immediate control o! capital, and appropriates t eir s%rpl%s-labo%r on t e basis o! t e old mode o! prod%ction0 5 e same conditions exist in some@ at modi!ied !orm in part o! t e 'ondon andicra!t !%rnit%re ind%stry0 &t is practised notably in t e 5o@er 6amlets on a 8ery large scale0 5 e @ ole prod%ction is di8ided into 8ery n%mero%s separate branc es o! b%siness independent o! one anot er0 3ne establis ment makes only c airs, anot er only tables, a t ird only b%rea%s, etc0 A%t t ese establis ments t emsel8es are r%n more or less like andicra!ts by a single minor master and a !e@ Ho%rneymen0

<<=

; apter JJ

-e8ert eless, prod%ction is too large to @ork directly !or pri8ate persons0 5 e b%yers are t e o@ners o! !%rnit%re stores0 3n $at%rdays t e master 8isits t em and sells is prod%ct, t e transaction being closed @it as m%c aggling as in a pa@ns op o8er a loan0 5 e masters depend on t is @eekly sale, i! !or no ot er reason t an to be able to b%y ra@ materials !or t e !ollo@ing @eek and to pay o%t @ages0 (nder t ese circ%mstances, t ey are really only middlemen bet@een t e merc ant and t eir o@n labo%rers0 5 e merc ant is t e act%al capitalist @ o pockets t e lion"s s are o! t e s%rpl%s-8al%e0 * ?lmost t e same applies in t e transition to man%!act%re o! branc es !ormerly carried on as andicra!ts or side lines to r%ral ind%stries0 5 e transition to large-scale ind%stry depends on t e tec nical de8elopment o! t ese small o@ner-operated establis ments I @ ere8er t ey employ mac inery t at admits o! a andicra!t-like operation0 5 e mac ine is dri8en by steam, instead o! by and0 5 is is o! late t e case, !or instance, in t e Englis osiery ind%stry0 5 ere is, conseD%ently, a t ree-!old transition0 'irst, t e merc ant becomes directly an ind%strial capitalist0 5 is is tr%e in cra!ts based on trade, especially cra!ts prod%cing l%x%ries and imported by merc ants toget er @it t e ra@ materials and labo%rers !rom !oreign lands, as in &taly !rom ;onstantinople in t e 1+t cent%ry0 Second, t e merc ant t%rns t e small masters into is middlemen, or b%ys directly !rom t e independent prod%cer, lea8ing im nominally independent and is mode o! prod%ction %nc anged0 4hird, t e ind%strialist becomes merc ant and prod%ces directly !or t e @ olesale market0 &n t e Middle ?ges, t e merc ant @as merely one @ o, as ,oppe rig tly says, Ktrans!erredL t e goods prod%ced by g%ilds or peasants /,oppe, Geschichte der 4echnologie seit der "iederherstellung der "issenschaften bis an das 0nde des acht#ehnten Jahrhunderts , Aand &, :dttingen0 18=>, $0 >=0 I 0d01 5 e merc ant becomes ind%strialist, or rat er, makes cra!tsmen, partic%larly t e small r%ral prod%cers, @ork !or im0 ;on8ersely, t e prod%cer becomes merc ant0 5 e master @ea8er, !or instance, b%ys is @ool or yarn imsel! and sells is clot to t e merc ant, instead o! recei8ing is @ool !rom t e merc ant piecemeal and @orking !or im toget er @it is Ho%rneymen0 5 e elements o! prod%ction pass into t e prod%ction process as commodities bo%g t by imsel!0 ?nd instead o! prod%cing !or some indi8id%al merc ant, or !or speci!ied c%stomers, e prod%ces !or t e @orld o! trade0 5 e prod%cer is imsel! a merc ant0 Merc ant"s capital does no more t an carry on t e process o! circ%lation0 3riginally, commerce @as t e precondition !or t e trans!ormation o! t e cra!ts, t e r%ral domestic ind%stries, and !e%dal agric%lt%re, into capitalist enterprises0 &t de8elops t e prod%ct into a commodity, partly by creating a market !or it, and partly by introd%cing ne@ commodity eD%i8alents and s%pplying prod%ction @it ne@ ra@ and a%xiliary materials, t ereby opening ne@ branc es o! prod%ction based !rom t e !irst %pon commerce, bot as concerns prod%ction !or t e ome and @orld-market, and as concerns conditions o! prod%ction originating in t e @orld-market0 ?s soon as man%!act%re gains s%!!icient strengt , and partic%larly large-scale ind%stry, it creates in its t%rn a market !or itsel!, by capt%ring it t ro%g its commodities0 ?t t is point commerce becomes t e ser8ant o! ind%strial prod%ction, !or @ ic contin%ed expansion o! t e market becomes a 8ital necessity0 E8er more extended mass prod%ction !loods t e existing market and t ereby @orks contin%ally !or a still greater expansion o! t is market !or breaking o%t o! its limits0 W at restricts t is mass prod%ction is not commerce Bin so !ar as it expresses t e existing demandC, b%t t e magnit%de o! employed capital and t e le8el o! de8elopment o! t e prod%cti8ity o! labo%r0 5 e ind%strial capitalist al@ays as t e @orld-market be!ore im, compares, and m%st constantly compare, is o@n cost-prices @it t e market-prices at ome, and t ro%g o%t t e @orld0 &n t e earlier period s%c comparison !ell almost entirely to t e merc ants, and t %s sec%red t e predominance o! merc ant"s capital o8er ind%strial capital0 5 e !irst t eoretical treatment o! t e modern mode o! prod%ction I t e mercantile system I proceeded necessarily !rom t e s%per!icial p enomena o! t e circ%lation process as indi8id%alised in t e mo8ements o! merc ant"s capital, and t ere!ore grasped only t e appearance o! matters0

<<1

; apter JJ

,artly beca%se merc ant"s capital is t e !irst !ree state o! existence o! capital in general0 ?nd partly beca%se o! t e o8er@ elming in!l%ence @ ic it exerted d%ring t e !irst re8ol%tionising period o! !e%dal prod%ction I t e genesis o! modern prod%ction0 5 e real science o! modern economy only begins @ en t e t eoretical analysis passes !rom t e process o! circ%lation to t e process o! prod%ction0 &nterest-bearing capital is, indeed, like@ise a 8ery old !orm o! capital0 A%t @e s all see later @ y mercantilism does not take it as its point o! depart%re, b%t rat er carries on a polemic against it0

Part !. +ivision of Profit into Interest an" Profit of Enterprise. Interest -earing Capital
Chapter 21. 5nterest-(earin) Capital
&n o%r !irst disc%ssion o! t e general, or a8erage, rate o! pro!it B,art && o! t is bookC @e did not a8e t is rate be!ore %s in its complete !orm, t e eD%alisation o! pro!it appearing only as eD%alisation bet@een ind%strial capitals in8ested in di!!erent sp eres0 5 is @as s%pplemented in t e preceding part, @ ic dealt @it t e participation o! merc ant"s capital in t is eD%alisation, and also commercial pro!it0 5 e general rate o! pro!it and t e a8erage pro!it no@ appeared in narro@er limits t an be!ore0 &t s o%ld be remembered in t e co%rse o! o%r analysis t at in any !%t%re re!erence to t e general rate o! pro!it or to a8erage pro!it @e mean t is latter connotation, ence only t e !inal !orm o! a8erage rate0 ?nd since t is rate is t e same !or mercantile, as @ell as ind%strial, capital, it is no longer necessary, so !ar as t is a8erage pro!it is concerned, to make a distinction bet@een ind%strial and commercial pro!it0 W et er ind%strially in8ested in t e sp ere o! prod%ction, or commercially in t e sp ere o! circ%lation, capital yields t e same a8erage ann%al pro!it pro rata to its magnit%de0 Money I ere taken as t e independent expression o! a certain amo%nt o! 8al%e existing eit er act%ally as money or as commodities I may be con8erted into capital on t e basis o! capitalist prod%ction, and may t ereby be trans!ormed !rom a gi8en 8al%e to a sel!-expanding, or increasing, 8al%e0 &t prod%ces pro!it, i.e., it enables t e capitalist to extract a certain D%antity o! %npaid labo%r, s%rpl%s-prod%ct and s%rpl%s-8al%e !rom t e labo%rers, and to appropriate it0 &n t is @ay, aside !rom its %se-8al%e as money, it acD%ires an additional %se-8al%e, namely t at o! ser8ing as capital0 &ts %se-8al%e t en consists precisely in t e pro!it it prod%ces @ en con8erted into capital0 &n t is capacity o! potential capital, as a means o! prod%cing pro!it, it becomes a commodity, b%t a commoditysui generis0 3r, @ at amo%nts to t e same, capital as capital becomes a commodity0 1 $%ppose t e ann%al a8erage rate o! pro!it is <=T0 &n t at case a mac ine 8al%ed at V1==, employed as capital %nder a8erage conditions and an a8erage amo%nt o! intelligence and p%rposi8e e!!ort, @o%ld yield a pro!it o! V<=0 ? man in possession o! V1==, t ere!ore, possesses t e po@er to make V1<= o%t o! V1==, or to prod%ce a pro!it o! V<=0 6e possesses a potential capital o! V1==0 &! e gi8es t ese V1== to anot er !or one year, so t e latter may %se t em as real capital, e gi8es im t e po@er to prod%ce a pro!it o! V<= I a s%rpl%s-8al%e @ ic costs t is ot er not ing, and !or @ ic e pays no eD%i8alent0 &! t is ot er s o%ld pay, say, V+ at t e close o! t e year to t e o@ner o! t e V1== o%t o! t e pro!it prod%ced, e @o%ld t ereby pay t e %se-8al%e o! t e V1== I t e %se-8al%e o! its !%nction as capital, t e !%nction o! prod%cing a pro!it o! V<=0 5 e part o! t e pro!it paid to t e o@ner is called interest, @ ic is H%st anot er name, or special term, !or a part o! t e pro!it gi8en %p by capital in t e process o! !%nctioning to t e o@ner o! t e capital, instead o! p%tting it into its o@n pocket0 &t is plain t at t e possession o! V1== gi8es t eir o@ner t e po@er to pocket t e interest I t at certain portion o! pro!it prod%ced by means o! is capital0 &! e ad not gi8en t e V1== to t e ot er person, t e latter co%ld not a8e prod%ced any pro!it, and co%ld not at all a8e acted as a capitalist @it re!erence to t ese V1==0<

<<3

; apter JJ&

5o speak ere o! nat%ral H%stice, as :ilbart does Bsee noteC, is nonsense0 5 e H%stice o! t e transactions bet@een agents o! prod%ction rests on t e !act t at t ese arise as nat%ral conseD%ences o%t o! t e prod%ction relations ips0 5 e H%ristic !orms in @ ic t ese economic transactions appear as @il!%l acts o! t e parties concerned, as expressions o! t eir common @ill and as contracts t at may be en!orced by la@ against some indi8id%al party, cannot, being mere !orms, determine t is content0 5 ey merely express it0 5 is content is H%st @ ene8er it corresponds, is appropriate, to t e mode o! prod%ction0 &t is %nH%st @ ene8er it contradicts t at mode0 $la8ery on t e basis o! capitalist prod%ction is %nH%st# like@ise !ra%d in t e D%ality o! commodities0 5 e V1== prod%ce t e pro!it o! V<= beca%se t ey !%nction as capital, be it ind%strial or mercantile0 A%t t e sine 3ua non o! t is !%nction as capital is t at t ey are expended as capital, i.e., are expended in p%rc asing means o! prod%ction Bin t e case o! ind%strial capitalC or commodities Bin t e case o! merc ant"s capitalC0 A%t to be expended, t ey m%st be a8ailable0 &! ?, t e o@ner o! t e V1==, @ere eit er to spend t em !or personal cons%mption, or to keep t em as a oard, t ey co%ld not a8e been in8ested as capital by A in is capacity o! !%nctioning capitalist0 A does not expend is o@n capital, b%t ?"s# o@e8er, e cannot expend ?"s capital @it o%t ?"s consent0 5 ere!ore, it is really ? @ o originally expends t e V1== as capital, albeit is !%nction as capitalist is limited to t is o%tlay o! V1== as capital0 &n respect to t ese V1==, A acts as capitalist only beca%se ? lends im t e V1==, t %s expending t em as capital0 'et %s !irst consider t e sing%lar circ%lation o! interest-bearing capital0 We s all t en secondly a8e to analyse t e pec%liar manner in @ ic it is sold as a commodity, namely loaned instead o! relinD%is ed once and !or all0 5 e point o! depart%re is t e money @ ic ? ad8ances to A0 5 is may be done @it or @it o%t sec%rity0 5 e !irst-named !orm, o@e8er, is t e more ancient, sa8e ad8ances on commodities or paper, s%c as bills o! exc ange, s ares, etc0 5 ese special !orms do not concern %s at t is point0 We are dealing ere @it interest-bearing capital in its %s%al !orm0 &n A"s possession t e money is act%ally con8erted into capital, passes t ro%g M I ; I M" and ret%rns to ? as M", as MUcM, @ ere cM represents t e interest0 For t e sake o! simplicity @e s all not consider ere t e case, in @ ic capital remains in A"s possession !or a long term and interest is paid at reg%lar inter8als0 5 e mo8ement, t ere!ore, is M I M I ; I M" I M"0 W at appears d%plicated ere, is 1C t e o%tlay o! money as capital, and <C its re!l%x as realised capital, as M" or MUcM0 &n t e mo8ement o! merc ant"s capital, M I ; I M", t e same commodity c anges ands t@ice, or more t an t@ice, i! merc ant sells to merc ant0 A%t e8ery s%c c ange o! place o! t e same commodity indicates a metamorp osis, a p%rc ase or sale o! t e commodity, no matter o@ o!ten t e process may be repeated, %ntil it enters cons%mption0 3n t e ot er and, t e same money c anges ands t@ice in ; I M I ;, b%t t is indicates t e complete metamorp osis o! t e commodity, @ ic is !irst con8erted into money and t en !rom money back into anot er commodity0 A%t in interest-bearing capital t e !irst time M c anges ands is by no means a p ase eit er o! t e commodity metamorp osis, or o! reprod%ction o! capital0 &t !irst becomes one @ en it is expended a second time, in t e ands o! t e acti8e capitalist @ o carries on trade @it it, or trans!orms it into prod%cti8e capital0 M"s !irst c ange o! ands does not express anyt ing ere, beyond its trans!er !rom ? to A I a trans!er @ ic %s%ally takes place %nder certain legal !orms and stip%lations0

<<2

; apter JJ&

5 is do%ble o%tlay o! money as capital, o! @ ic t e !irst is merely a trans!er !rom ? to A, is matc ed by its do%ble re!l%x0 ?s M", or M U cM, it !lo@s back o%t o! t e process to A, t e person acting as capitalist0 5 e latter t en trans!ers it back to ?, b%t toget er @it a part o! t e pro!it, as realised capital, as M U cM, in @ ic cM is not t e entire pro!it, b%t only a portion o! t e pro!it I t e interest0 &t !lo@s back to A only as @ at e ad expended, as !%nctioning capital, b%t as t e property o! ?0 5o make its re!l%x complete, A m%st conseD%ently ret%rn it to ?0 A%t in addition to t e capital, A m%st also t%rn o8er to ? a portion o! t e pro!it, a part @ ic goes %nder t e name o! interest, @ ic e ad made @it t is capital since ? ad gi8en im t e money only as a capital, i.e., as 8al%e @ ic is not only preser8ed in its mo8ement, b%t also creates s%rpl%s-8al%e !or its o@ner0 &t remains in A"s ands only so long as it is !%nctioning capital0 ?nd @it its re!l%x I on t e stip%lated date I it ceases to !%nction as capital0 W en no longer acting as capital, o@e8er, it m%st again be ret%rned to ?, @ o ad ne8er ceased being its legal o@ner0 5 e !orm o! lending, @ ic is pec%liar to t is commodity, to capital as commodity, and @ ic also occ%rs in ot er transactions instead o! t at o! sale, !ollo@s !rom t e simple de!inition t at capital obtains ere as a commodity, or t at money as capital becomes a commodity0 ? distinction s o%ld be made ere0 We a8e seen BAook &&, ; ap0 &C, and recall brie!ly at t is point, t at in t e process o! circ%lation capital ser8es as commodity-capital and money-capital0 A%t in neit er !orm does capital become a commodity as capital0 ?s soon as prod%cti8e capital t%rns into commodity-capital it m%st be placed on t e market to be sold as a commodity0 5 ere it acts simply as a commodity0 5 e capitalist t en appears only as t e seller o! commodities, H%st as t e b%yer is only t e b%yer o! commodities0 ?s a commodity t e prod%ct m%st realise its 8al%e, m%st ass%me its transm%ted !orm o! money, in t e process o! circ%lation by its sale0 &t is also D%ite immaterial !or t is reason, @ et er t is commodity is bo%g t by a cons%mer as a necessity o! li!e, or by a capitalist as means o! prod%ction, i.e., as a component part o! is capital0 &n t e act o! circ%lation commodity-capital acts only as a commodity, not as a capital0 &t is commodity- capital, as distinct !rom an ordinary commodity, 1C beca%se it is @eig ted @it s%rpl%s-8al%e, t e realisation o! its 8al%e, t ere!ore, being sim%ltaneo%sly t e realisation o! s%rpl%s-8al%e# b%t t is alters not ing abo%t its simple existence as a commodity, as a prod%ct @it a certain price# <C beca%se its !%nction as a commodity is a p ase in its process o! reprod%ction as capital, and t ere!ore its mo8ement as a commodity being only a partial mo8ement o! its process, is sim%ltaneo%sly its mo8ement as capital0 .et it does not become t at t ro%g t e sale as s%c , b%t only t ro%g t e connection o! t e sale @it t e @ ole mo8ement o! t is speci!ic D%antity o! 8al%e in t e capacity o! capital0 &n t e same @ay as money-capital it really acts simply as money, i.e., as a means o! b%ying commodities Bt e elements o! prod%ctionC0 5 e !act t at t is money is sim%ltaneo%sly moneycapital, a !orm o! capital, does not emerge !rom t e act o! b%ying, t e act%al !%nction @ ic it ere per!orms as money, b%t !rom t e connection o! t is act @it t e total mo8ement o! capital, since t is act, per!ormed by capital as money, initiates t e capitalist prod%ction process0 A%t in so !ar as t ey act%ally !%nction, i.e., act%ally play a role in t e process, commodity-capital acts ere only as a commodity and money-capital only as money0 ?t no time d%ring t e metamorp osis, 8ie@ed by itsel!, does t e capitalist sell is commodities as capital to t e b%yer, alt o%g to im t ey represent capital# nor does e gi8e %p money as capital to t e seller0 &n bot cases be gi8es %p is commodities simply as commodities, and money simply as money, i.e., as a means o! p%rc asing commodities0 &t is only in connection @it t e entire process, at t e moment @ ere t e point o! depart%re appears sim%ltaneo%sly as t e point o! ret%rn, in M I M" or ; I ;", t at capital in t e process o! circ%lation appears as capital B@ ereas in t e process o! prod%ction it appears as capital t ro%g t e s%bordination o! t e labo%rer to t e capitalist and t e prod%ction o! s%rpl%s 8al%eC0 &n t is

<<+

; apter JJ&

moment o! ret%rn, o@e8er, t e connection disappears0 W at @e a8e t en is M", or M U cM, a s%m o! money eD%al to t e s%m originally ad8anced pl%s an increment I t e realised s%rpl%s8al%e Bregardless o! @ et er t e amo%nt o! 8al%e increased by cM exists in t e !orm o! money, or commodities, or elements o! prod%ctionC0 ?nd it is precisely at t is point o! ret%rn @ ere capital exists as realised capital, as an expanded 8al%e, t at it ne8er enters t e circ%lation in t is !orm I in so !ar as t is point is !ixed as a point o! rest, @ et er real or imaginary I b%t rat er appears to a8e been @it dra@n !rom circ%lation as a res%lt o! t e @ ole process0 W ene8er it is again expended, it is ne8er gi8en %p to anot er as capital, b%t is sold to im as an ordinary commodity, or gi8en to im as ordinary money in exc ange !or commodities0 &t ne8er appears as capital in its process o! circ%lation, only as commodity or money, and at t is point t is is t e only !orm o! its existence !or others0 ;ommodities and money are ere capital not beca%se commodities c ange into money, or money into commodities, not in t eir act%al relations to sellers or b%yers, b%t only in t eir ideal relations to t e capitalist imsel! Bs%bHecti8ely speakingC, or as p ases in t e process o! reprod%ction BobHecti8ely speakingC0 ;apital exists as capital in act%al mo8ement, not in t e process o! circ%lation, b%t only in t e process o! prod%ction, in t e process by @ ic labo%rpo@er is exploited0 5 e matter is di!!erent @it interest-bearing capital, o@e8er, and it is precisely t is di!!erence @ ic lends it its speci!ic c aracter0 5 e o@ner o! money @ o desires to en ance is money as interest-bearing capital, t%rns it o8er to a t ird person, t ro@s it into circ%lation, t%rns it into a commodity as capital# not H%st capital !or imsel!, b%t also !or ot ers0 &t is not capital merely !or t e man @ o gi8es it %p, b%t is !rom t e 8ery !irst gi8en to t e t ird person as capital, as a 8al%e endo@ed @it t e %se-8al%e o! creating s%rpl%s-8al%e, o! creating pro!it# a 8al%e @ ic preser8es itsel! in its mo8ement and ret%rns to its original o@ner, in t is case t e o@ner o! money, a!ter per!orming its !%nction0 6ence it lea8es im only !or a speci!ied time, passes b%t temporarily o%t o! t e possession o! its o@ner into t e possession o! a !%nctioning capitalist, is t ere!ore neit er gi8en %p in payment nor sold, b%t merely loaned, merely relinD%is ed @it t e %nderstanding t at, !irst, it s all ret%rn to its point o! depart%re a!ter a de!inite time inter8al, and, second, t at it s all ret%rn as realised capital I a capital a8ing realised its %se-8al%e, its po@er o! creating s%rpl%s-8al%e0 ;ommodities loaned o%t as capital are loaned eit er as !ixed or as circ%lating capital, depending on t eir properties0 Money may be loaned o%t in eit er !orm0 &t may be loaned as !ixed capital, !or instance, i! it is paid back in t e !orm o! an ann%ity, @ ereby a portion o! t e capital !lo@s back toget er @it t e interest0 ;ertain commodities, s%c as o%ses, s ips, mac ines, etc0, can be loaned o%t only as !ixed capital by t e nat%re o! t eir %se-8al%es0 .et all loaned capital, @ ate8er its !orm, and no matter o@ t e nat%re o! its %se-8al%e may modi!y its ret%rn, is al@ays only a speci!ic !orm o! money-capital0 Aeca%se @ at is loaned o%t is al@ays a de!inite s%m o! money, and it is t is s%m on @ ic interest is calc%lated0 $ o%ld @ ate8er is loaned o%t be neit er money nor circ%lating capital, it is also paid back in t e @ay !ixed capital ret%rns0 5 e lender periodically recei8es interest and a portion o! t e cons%med 8al%e o! t e !ixed capital itsel!, t is being an eD%i8alent !or t e periodic @ear and tear0 ?nd at t e end o! t e stip%lated term t e %ncons%med portion o! t e loaned !ixed capital is ret%rned in kind0 &! t e loaned capital is circ%lating capital, it is like@ise ret%rned in t e manner pec%liar to circ%lating capital0 5 e manner o! re!l%x is, t ere!ore, al@ays determined by t e act%al circ%it described by capital in t e act o! reprod%ction and by its speci!ic 8arieties0 A%t as !or loaned capital, its re!l%x ass%mes t e form o! ret%rn payments, beca%se its ad8ance, by @ ic it is trans!erred, possesses t e !orm o! a loan0 &n t is c apter @e treat only o! act%al money-capital, !rom @ ic t e ot er !orms o! loaned capital are deri8ed0

<<6

; apter JJ&

5 e loaned capital !lo@s back in t@o @ays0 &n t e process o! reprod%ction it ret%rns to t e !%nctioning capitalist, and t en its ret%rn repeats itsel! once more as trans!er to t e lender, t e money-capitalist, as ret%rn payment to t e real o@ner, its legal point o! depart%re0 &n t e act%al process o! circ%lation, capital appears al@ays as a commodity or as money, and its mo8ement al@ays is broken %p into a series o! p%rc ases and sales0 &n s ort, t e process o! circ%lation resol8es itsel! into t e metamorp osis o! commodities0 &t is di!!erent, @ en @e consider t e process o! reprod%ction as a @ ole0 &! @e start o%t @it money Band t e same is tr%e i! @e start o%t @it commodities, since @e begin @it t eir 8al%e, ence 8ie@ t em sub specie as moneyC, @e s all see t at a certain s%m o! money is expended and ret%rns a!ter a certain period @it an increment0 5 e ad8anced s%m o! money ret%rns toget er @it a s%rpl%s-8al%e0 &t as remained intact and increased in making a certain cycle0 A%t no@, being loaned o%t as capital, money is loaned as H%st t e s%m o! money @ ic preser8es and expands itsel!, @ ic ret%rns a!ter a certain period @it an increment, and is al@ays ready to per!orm t e same process o8er again0 &t is expended neit er as money nor as a commodity, t %s, neit er exc anged against a commodity @ en ad8anced in t e !orm o! money, nor sold in exc ange !or money @ en ad8anced as a commodity# rat er, it is expended as capital0 5 is relation to itsel!, in @ ic capital presents itsel! @ en t e capitalist prod%ction process is 8ie@ed as a @ ole and as a single %nity, and in @ ic capital appears as money t at begets money, is ere imparted to it as its c aracter, its designation, @it o%t any intermediary mo8ement0 ?nd it is relinD%is ed @it t is designation @ en loaned o%t as money-capital0 ? D%eer conception o! t e role o! money-capital is old by ,ro%d on B Gratuit7 du Cr7dit. Discussion entre M. '. Gastiat et M. &roudhon , ,aris, 18+=C0 'oaning seems an e8il to ,ro%d on beca%se it is not selling0 'oaning !or an interest is Kt e !ac%lty o! selling t e same article o8er and o8er again, and o! recei8ing its price again and again, @it o%t once relinD%is ing o@ners ip o! t e obHect @ ic is being soldL Bp0 *C0 /5 e cited @ords belong to ; e8e, one o! t e editors o! t e ne@spaper ,a Loi du peuple, and t e a%t or o! t e K!irst letterL in t e book Gratuit7 du Cr7dit. Discussion entre M. '. Gastiat et M. &roudhon, ,aris, 18+=0 I 0d1 5 e obHect I money, a o%se, etc0 I does not c ange o@ners as in selling and b%ying0 A%t ,ro%d on does not see t at no eD%i8alent is recei8ed in ret%rn !or money gi8en a@ay in t e !orm o! interest-bearing capital0 5r%e, t e obHect is gi8en a@ay in e8ery act o! b%ying and selling, so !ar as t ere are processes o! exc ange at all0 3@ners ip o! t e sold article is al@ays relinD%is ed0 A%t its 8al%e is not gi8en %p0 &n a sale t e commodity is gi8en a@ay, b%t not its 8al%e, @ ic is ret%rned in t e !orm o! money, or in @ at is ere H%st anot er !orm o! it I promissory notes, or titles o! payment0 W en p%rc asing, t e money is gi8en a@ay, b%t not its 8al%e, @ ic is replaced in t e !orm o! commodities0 5 e ind%strial capitalist retains t e same 8al%e in is ands t ro%g o%t t e process o! reprod%ction Bexcl%ding s%rpl%s-8al%eC, b%t in di!!erent !orms0 &nasm%c as t ere is an exc ange, i.e., an exc ange o! articles, t ere is no c ange in t e 8al%e0 5 e same capitalist al@ays retains t e same 8al%e0 A%t so long as s%rpl%s-8al%e is prod%ced by t e capitalist, t ere is no exc ange0 ?s soon as an exc ange occ%rs, t e s%rpl%s-8al%e is already incorporated in t e commodities0 &! @e 8ie@ t e entire circ%it made by capital, M I ; I M", rat er t an indi8id%al acts o! exc ange, @e s all see t at a de!inite amo%nt o! 8al%e is contin%ally ad8anced, and t at t is same amo%nt pl%s s%rpl%s-8al%e, or pro!it, is @it dra@n !rom circ%lation0

<<>

; apter JJ&

5 e act%al acts o! exc ange do not, at any rate, re8eal o@ t is process is promoted0 ?nd it is precisely t is process o! M as capital, on @ ic t e interest o! t e money-lending capitalist rests, and !rom @ ic it is deri8ed0 K&n !act,L says ,ro%d on, Kt e at-maker, @ o sells ats, recei8es t eir 8al%e, neit er more nor less0 A%t t e money-lending capitalist 000 does not reco8er H%st is capital, e reco8ers more t an is capital, more t an e t ro@s into t e exc ange# e recei8es an interest o8er and abo8e is capitalL Bp0 6*C0 6ere t e atter represents t e prod%cti8e capitalist as distinct !rom t e loan capitalist0 ,ro%d on as ob8io%sly !ailed to grasp t e secret o! o@ t e prod%cti8e capitalist can sell commodities at t eir 8al%e BeD%alisation t ro%g prices o! prod%ction is ere immaterial to is conceptionC and recei8e a pro!it o8er and abo8e t e capital e !lings into exc ange0 $%ppose t e price o! prod%ction o! 1== ats R V11+, and t at t is price o! prod%ction appens to coincide @it t e 8al%e o! t e ats, @ ic means t at t e capital prod%cing t e ats is o! t e same composition as t e a8erage social capital0 $ o%ld t e pro!it R 1+T, t e atter makes a pro!it o! V1+ by selling is commodities at t eir 8al%e o! V11+0 5 ey cost im only V1==0 &! e prod%ced t em @it is o@n capital, e pockets t e entire s%rpl%s o! V1+ b%t i! @it borro@ed capital, e may a8e to gi8e %p V+ as interest0 5 is alters not ing in t e 8al%e o! t e ats, only in t e distrib%tion among di!!erent persons o! t e s%rpl%s-8al%e already contained in t is 8al%e0 $ince, t ere!ore, t e 8al%e o! t e ats is not a!!ected by t e payment o! interest, it is nonsense on ,ro%d on"s part to say: K?s in commerce t e interest on capital is added to t e @ages o! labo%rers in making %p t e price o! commodities, it is impossible !or t e labo%rer to b%y back t e prod%ct o! travaillant is a is o@n labo%r0 Livre en @ ic contains a principle

contradiction %nder t e r%le o! interestL Bp0 1=+C0 3 6o@ little ,ro%d on %nderstood t e nat%re o! capital is s o@n in t e !ollo@ing statement, in @ ic e describes t e mo8ement o! capital in general as a mo8ement pec%liar to interest-bearing capital: K$ince money-capital ret%rns to its so%rce !rom exc ange t ro%g t e acc%m%lation o! interest, it !ollo@s t at rein8estment al@ays made by t e same indi8id%al contin%ally brings pro!it to t e same person,L p0 1+20 W at is it t at still p%EEles im in t e pec%liar mo8ement o! interest-bearing capitalQ 5 e categories: b%ying, price, gi8ing %p articles, and t e immediat