We continue to assume, as throughout this Part, that the mass of profit appropriated in each particular sphere of production is equal to the sum of the surplus-value produced in this sphere by the total capital applied. The bourgeois, however, will still not conceive profit as identical with surplus-value, i.e. with unpaid surplus labour, and this for the following reasons:
(1) In the process of circulation, he forgets the production process. The realization of commodity value – including the realization of surplus-value – he takes as the making of this surplus-value. (A blank in the manuscript here indicates that Marx intended to develop this point in more detail. – F.E.)
(2) We have shown that, even assuming the same degree of exploitation of labour, and ignoring all modifications introduced by the credit system, all mutual swindling and cheating among the capitalists themselves and all favourable selections of the market, rates of profit can be very different according to whether raw materials are purchased cheaply or less cheaply, with more or less specialist knowledge; according to whether the machinery employed is productive, suitable and cheap; according to whether the overall arrangement of the production process in its various stages is more or less satisfactory, with wastage of material avoided, management and supervision simple and effective, etc. In short, given the surplus-value that accrues to a certain variable capital, it still depends very much on the business acumen of the individual, either the capitalist himself or his managers and salespeople, whether this same surplus-value is expressed in a higher or lower rate of profit and therefore whether it delivers a greater or lesser amount of profit. The same surplus-value of £1,000, the product of £1,000 in wages, may involve £9,000 of constant capital in business A, and £11,000 in business B. In case A we have p′ = 1,000/10,000 = 10 per cent; in case B, p′ = 1,000/12,000 = 8 1/3 per cent. In the first case the total capital produces relatively more profit than in the second, i.e. the rate of profit is higher there, even though the variable capital advanced (£1,000) and the surplus-value that is extracted from it (£1,000) are the same in both cases, and there is thus in each case an equal exploitation of the same number of workers. This variation in the way the same mass of surplus-value is expressed, or the variation in the rate of profit and therefore in the profit itself, with the same exploitation of labour, may also stem from other sources; it can even arise purely and simply from the variation in the business skill with which the two enterprises are conducted. And this circumstance misleads the capitalist by convincing him that his profit is due not to the exploitation of labour, but at least in part also to other circumstances independent of this, and in particular his own individual action.
*
The arguments developed in this first Part show the errors of that view (Rodbertus)* according to which (in distinction from ground-rent, where the land area can remain the same, for example, while the rent rises), even a large variation in the capital can remain without effect on the proportion between capital and profit, i.e. on the profit rate, because if the mass of profit grows, so does the mass of the capital on which it must be calculated, and vice versa.
This is true in only two cases. Firstly, if, other things being equal, and in particular the rate of surplus-value, there is a change in the value of the money commodity. (This is so even with a purely nominal change in value, the rise and fall of tokens of value, as long as other factors remain the same.) Let the total capital be £100 and the profit £20, so that the rate of profit is 20 per cent. If the price of gold is now halved or doubled, in the first case the same capital that was previously worth £100 is now worth £200, and the profit has a value of £40 instead of £20 (i.e. it is expressed in this new amount of money). In the second case, the capital falls to a value of £50, and the profit is now expressed in a product valued at £10. In both cases, however, 200:40 = 50:10 = 100:20 = 20 per cent. There would be no real change in the capital value in any case such as this, but simply a change in the monetary expression of the same value and surplus-value. The rate of profit, s/C, could not be affected.
The other case is when there is a real change in capital value, but this change is not accompanied by a change in the ratio v:c, i.e. when the rate of surplus-value is constant and the ratio of the capital invested in labour-power (the variable capital, taken as an index of the labour-power set in motion) to the capital invested in means of production remains the same. Under these conditions, if we take C or nC or c/n, e.g. 1,000 or 2,000 or 500, the total profit will be in the first case 200, in the second case 400 and in the third case 100, but 200/1,000 = 400/2,000 = 100/500 = 20 per cent; i.e. the rate of profit remains unchanged here because the composition of the capital remains the same and is not affected by its change in magnitude. Hence the increase or decrease in the mass of profit simply indicates an increase or decrease in the size of the capital applied.
In the first case, therefore, there is simply an apparent change in magnitude of the capital applied; in the second case there is a real change in magnitude, but no change in the capital’s organic composition, in the proportion between its variable and its constant parts. Leaving aside these two cases, however, a change in the magnitude of capital applied is either the result of a change in the value of one of its components, and thus a change in their relative magnitude (as long as the surplus-value does not itself change with the variable capital); or else this change in magnitude is the cause of a change in the relative magnitude of its two organic components (as with large-scale operations, the introduction of new machinery, etc.). In all these cases, therefore, a change in the magnitude of the capital applied must be accompanied by a simultaneous change in the rate of profit, as long as other things remain equal.
*
An increase in the rate of profit always stems from a relative or absolute increase in the surplus-value in relation to its costs of production, i.e. to the total capital advanced, or from a reduction in the difference between the rate of profit and the rate of surplus-value.
Fluctuations in the rate of profit that are independent of changes in either the capital’s organic components or its absolute magnitude are possible only if the value of the capital advanced, whatever might be the form – fixed or circulating – in which it exists, rises or falls as a result of an increase or decrease in the labour-time necessary for its reproduction, an increase or decrease that is independent of the capital already in existence. The value of any commodity – and thus also of the commodities which capital consists of – is determined not by the necessary labour-time that it itself contains, but by the socially necessary labour-time required for its reproduction. This reproduction may differ from the conditions of its original production by taking place under easier or more difficult circumstances. If the changed circumstances mean that twice as much time, or alternatively only half as much, is required for the same physical capital to be reproduced, then given an unchanged value of money, this capital, if it was previously worth £100, would now be worth £200, or alternatively £50. If this increase or decrease in value affects all components of the capital equally, the profit is also expressed accordingly in twice or only half the monetary sum. But if it involves a change in the organic composition of the capital, the ratio between the variable and the constant portions of the capital, then, if other circumstances remain the same, the profit rate will rise with a relatively rising share of variable capital and fall with a relatively falling share. If it is only the money value that rises or falls (as a result of a change in the value of money), the monetary expression of the surplus-value rises or falls in the same proportion. The profit rate then remains unchanged.