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Karl Marx

Capital
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*+*#
,%bliser: &nternational ,%blisers, -., /n0d01
First ,%blised: 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
Table of Contents
Preface (Engels, 1894)................................................................................................................... 5
Part I. The Conversion of Surlus!"alue into Profit an# of the $ate of Surlus!"alue into
the $ate of Profit.........................................................................................................................19
;apter 10 ;ost-,rice and ,ro!it000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000001*
;apter <0 5e )ate o! ,ro!it0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000<>
;apter 30 5e )elation o! te )ate o! ,ro!it to te )ate o! $%rpl%s-4al%e0000000000000000000000000000003<
;apter 20 5e E!!ect o! te 5%rno8er on te )ate o! ,ro!it0000000000000000000000000000000000000000000000000000002+
;apter +0 Economy in te Employment o! ;onstant ;apital0000000000000000000000000000000000000000000000000002*
&0 &n :eneral00000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000 2*
&&0 $a8ings &n 'abo%r ;onditions ?t 5e Expense 3! 5e 'abo%rers00000000000000000000000000000000000++
&&&0 Economy &n 5e :eneration ?nd 5ransmission 3! ,o@er, ?nd &n A%ildings0000000000000000062
&40 (tilisation 3! 5e Excretions 3! ,rod%ction0000000000000000000000000000000000000000000000000000000000000000000>=
40 Economy 5ro%g &n8entions0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000>3
;apter 60 5e E!!ect o! ,rice Fl%ct%ation00000000000000000000000000000000000000000000000000000000000000000000000000000000>+
&0 Fl%ct%ations in te ,rice o! )a@ Materials, and teir 7irect E!!ects on te )ate o! ,ro!it >+
&&0 ?ppreciation, 7epreciation, )elease ?nd 5ie-(p 3! ;apital00000000000000000000000000000000000000000000>8
&&&0 :eneral &ll%stration0 5e ;otton ;risis 3! 1861-6+000000000000000000000000000000000000000000000000000000008>
Experiments in corpore 8ili000000000000000000000000000000000000000000000000000000000000000000000000000000000000000001=3
;apter >0 $%pplementary )emarks00000000000000000000000000000000000000000000000000000000000000000000000000000000000000001=6
Part II. Conversion of Profit into %verage Profit....................................................................1&8
;apter 80 7i!!erent ;ompositions o! ;apitals in 7i!!erent Arances o! ,rod%ction and
)es%lting 7i!!erences in )ates o! ,ro!it00000000000000000000000000000000000000000000000000000000000000000000000000000000001=8
;apter *0 Formation o! a :eneral )ate o! ,ro!it B?8erage )ate o! ,ro!itC and 5rans!ormation
o! te 4al%es o! ;ommodities into ,rices o! ,rod%ction00000000000000000000000000000000000000000000000000000000011+
;apter 1=0 ED%alisation o! te :eneral )ate o! ,ro!it 5ro%g ;ompetition0
Market-,rices and Market-4al%es0 $%rpl%s-,ro!it00000000000000000000000000000000000000000000000000000000000000000001<>
;apter 110 E!!ects o! :eneral Wage Fl%ct%ations on ,rices o! ,rod%ction000000000000000000000000000012<
;apter 1<0 $%pplementary )emarks0000000000000000000000000000000000000000000000000000000000000000000000000000000000000012+
&0 ;a%ses &mplying a ;ange in te ,rice o! ,rod%ction0000000000000000000000000000000000000000000000000000012+
&&0 ,rice o! ,rod%ction o! ;ommodities o! ?8erage ;omposition000000000000000000000000000000000000000126
&&&0 5e ;apitalist"s :ro%nds !or ;ompensating000000000000000000000000000000000000000000000000000000000000000000126
Part III. The 'a( of the Ten#enc) of the $ate of Profit to *all.............................................149
;apter 130 5e 'a@ ?s $%c000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000012*
;apter 120 ;o%nteracting &n!l%ences0000000000000000000000000000000000000000000000000000000000000000000000000000000000000161
&0 &ncreasing &ntensity 3! Exploitation00000000000000000000000000000000000000000000000000000000000000000000000000000000161
&&0 7epression 3! Wages Aelo@ 5e 4al%e 3! 'abo%r-,o@er000000000000000000000000000000000000000000000163
&&&0 ;eapening 3! Elements 3! ;onstant ;apital00000000000000000000000000000000000000000000000000000000000000163
&40 )elati8e 38er-,op%lation0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000163
40 Foreign 5rade000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000162
4&0 5e &ncrease 3! $tock ;apital0000000000000000000000000000000000000000000000000000000000000000000000000000000000000016+
;apter 1+0 Exposition o! te &nternal ;ontradictions o! te 'a@00000000000000000000000000000000000000000016>
&0 :eneral00000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000016>
&&0 ;on!lict Aet@een Expansion 3! ,rod%ction ?nd ,rod%ction 3! $%rpl%s-4al%e00000000000001>=
&&&0 Excess ;apital ?nd Excess ,op%lation00000000000000000000000000000000000000000000000000000000000000000000000001><
&40 $%pplementary )emarks0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000001>8
Part I". Conversion of Co++o#it)!Caital an# ,one)!Caital into Co++ercial Caital
an# ,one)!-ealing Caital (,erchant.s Caital).................................................................18/
;apter 160 ;ommercial ;apital000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000183
;apter 1>0 ;ommercial ,ro!it000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000001*1
;apter 180 5e 5%rno8er o! Mercant"s ;apital0 ,rices000000000000000000000000000000000000000000000000000000000<=3
;apter 1*0 Money-7ealing ;apital0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000<11
;apter <=0 6istorical Facts abo%t Mercant"s ;apital000000000000000000000000000000000000000000000000000000000000<1+
Part ". -ivision of Profit into Interest an# Profit of Enterrise. Interest!0earing Caital. 11/
;apter <10 &nterest-Aearing ;apital000000000000000000000000000000000000000000000000000000000000000000000000000000000000000<<3
;apter <<0 7i8ision o! ,ro!it0 )ate o! &nterest0 -at%ral )ate o! &nterest00000000000000000000000000000000<3+
;apter <30 &nterest and ,ro!it o! Enterprise000000000000000000000000000000000000000000000000000000000000000000000000000<2<
;apter <20 ExternaliEation o! te )elations o! ;apital in te Form o! &nterest-Aearing ;apital
000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000 <+6
;apter <+0 ;redit and Fictitio%s ;apital00000000000000000000000000000000000000000000000000000000000000000000000000000000<63
;apter <60 ?cc%m%lation o! Money-;apital0 &ts &n!l%ence on te &nterest )ate00000000000000000000<8<
;apter <>0 5e )ole o! ;redit in ;apitalist ,rod%ction0000000000000000000000000000000000000000000000000000000003=2
;apter <80 Medi%m o! ;irc%lation and ;apital# 4ie@s o! 5ooke and F%llarton0000000000000000000003=8
;apter <*0 ;omponent ,arts o! Aank ;apital0000000000000000000000000000000000000000000000000000000000000000000000003<=
;apter 3=0 Money-;apital and )eal ;apital0
&00000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000 3<*
;apter 310 Money ;apital and )eal ;apital0
&&000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000 321
5rans!ormation 3! Money &nto 'oan ;apital0000000000000000000000000000000000000000000000000000000000000000000000321
<0 5rans!ormation 3! ;apital 3r )e8en%e &nto Money 5at &s 5rans!ormed &nto 'oan
;apital000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000 328
;apter 3<0 Money ;apital and )eal ;apital0
&&&00000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000 3+=
;apter 330 5e Medi%m o! ;irc%lation in te ;redit $ystem00000000000000000000000000000000000000000000000036=
;apter 320 5e ;%rrency ,rinciple and te Englis Aank 'egislation o! 182200000000000000000000038+
;apter 3+0 ,recio%s Metal and )ate o! Excange000000000000000000000000000000000000000000000000000000000000000002=2
&0 Mo8ement 3! 5e :old )eser8e00000000000000000000000000000000000000000000000000000000000000000000000000000000000002=2
&&0 5e )ate 3! Excange000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000021=
)ate 3! Excange Wit ?sia0000000000000000000000000000000000000000000000000000000000000000000000000000000000000021<
England"s Aalance 3! 5rade00000000000000000000000000000000000000000000000000000000000000000000000000000000000000002<3
;apter 360 ,re-;apitalist )elationsips0000000000000000000000000000000000000000000000000000000000000000000000000000000002<6
&nterest &n 5e Middle ?ges00000000000000000000000000000000000000000000000000000000000000000000000000000000000000023>
?d8antages 7eri8ed Ay 5e ;%rc From 5e ,roibition 3! &nterest00000000000000000000022=
Part "I. Transfor+ation of Surlus!Profit into 2roun#!$ent..............................................441
;apter 3>0 &ntrod%ction00000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000022<
;apter 380 7i!!erential )ent: :eneral )emarks0000000000000000000000000000000000000000000000000000000000000000000002+*
;apter 3*0 First Form o! 7i!!erential )ent B7i!!erential )ent &C0000000000000000000000000000000000000000000026+
;apter 2=0 $econd Form o! 7i!!erential )ent B7i!!erential )ent &&C00000000000000000000000000000000000000281
;apter 210 7i!!erential )ent &&0
First ;ase: ;onstant ,rice o! ,rod%ction000000000000000000000000000000000000000000000000000000000000000000000000000000000288
;apter 2<0 7i!!erential )ent &&0
$econd ;ase: Falling ,rice o! ,rod%ction00000000000000000000000000000000000000000000000000000000000000000000000000000002*3
&0 ,rod%cti8ity o! te additional in8estment o! capital remains te same00000000000000000000000000002*3
&&0 7ecreasing rate o! prod%cti8ity o! te additional capital0000000000000000000000000000000000000000000000002*8
&&&0 )ising rate o! prod%cti8ity o! te additional capital0000000000000000000000000000000000000000000000000000002**
;apter 230 7i!!erential )ent &&0
5ird ;ase: )ising ,rice o! ,rod%ction00000000000000000000000000000000000000000000000000000000000000000000000000000000000+=2
;apter 220 7i!!erential )ent ?lso on te Worst ;%lti8ated $oil00000000000000000000000000000000000000000000+<6
;apter 2+0 ?bsol%te :ro%nd-)ent00000000000000000000000000000000000000000000000000000000000000000000000000000000000000000+3<
;apter 260 A%ilding $ite )ent0 )ent in Mining0 ,rice o! 'and0000000000000000000000000000000000000000000000+2>
;apter 2>0 :enesis o! ;apitalist :ro%nd-)ent0000000000000000000000000000000000000000000000000000000000000000000000++3
&0 &ntrod%ctory )emarks00000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000++3
&&0 'abo%r rent000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000++>
&&&0 )ent &n Kind000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000++*
&40 Money-)ent0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000 +61
40 MFtayage ?nd ,easant ,roprietorsip 3! 'and ,arcels00000000000000000000000000000000000000000000000000+62
Part "II. $evenues an# their Sources.....................................................................................531
;apter 280 5e 5rinity Form%la000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000+>1
& 00000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000 +>1
&&00000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000 +><
&&&0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000 +>3
;apter 2*0 ;oncerning te ?nalysis o! te ,rocess o! ,rod%ction00000000000000000000000000000000000000000+8<
;apter +=0 &ll%sions ;reated Ay ;ompetition000000000000000000000000000000000000000000000000000000000000000000000000+*3
;apter +10 7istrib%tion )elations and ,rod%ction )elations00000000000000000000000000000000000000000000000006=8
;apter +<0 ;lasses00000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000 613
Sule+ent
4) *re#eric5 Engels..................................................................................................................614
&ntrod%ction0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000 612
'a@ o! 4al%e and )ate o! ,ro!it000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000612
5e $tock Excange0000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000006<2
Preface (Engels, 1894)
?t last & a8e te pri8ilege o! making p%blic tis tird book o! MarxGs main @ork, te concl%sion
o! te teoretical part0 Wen & p%blised te second 8ol%me, in 188+, & to%gt tat except !or a
!e@, certainly 8ery important, sections te tird 8ol%me @o%ld probably o!!er only tecnical
di!!ic%lties0 5is @as indeed te case0 A%t & ad no idea at te time tat tese sections, te most
important parts o! te entire @ork, @o%ld gi8e me as m%c tro%ble as tey did, H%st as & did not
anticipate te oter obstacles, @ic @ere to retard completion o! te @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 ligt only in
exceptional cases0 F%rtermore, tere @ere oter 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 @ito%t !res st%dy, etc0 ?bo8e all, tere @as te
Englis edition o! te !irst 8ol%me o! tis @ork, !or @ose text & am %ltimately responsible and
@ic conseD%ently cons%med m%c o! my time0 Woe8er as in any @ay !ollo@ed te colossal
gro@t o! international socialist literat%re d%ring te last ten years, partic%larly te great n%mber
o! translations o! MarxGs and my o@n earlier @orks, @ill agree @it me tat & a8e been l%cky
tat te n%mber o! lang%ages in @ic & co%ld be o! elp to te translators, and tere!ore co%ld
not re!%se in all conscience to re8ie@ teir @ork, is 8ery limited0 A%t te gro@t o! literat%re @as
merely indicati8e o! a corresponding gro@t o! te international @orking-class mo8ement itsel!0
?nd tis imposed ne@ obligations %pon me0 From te !irst days o! o%r p%blic acti8ity it @as Marx
and & @o so%ldered te main b%rden o! te @ork as go-bet@eens !or te national mo8ements o!
$ocialists and @orkers in te 8ario%s co%ntries0 5is @ork expanded in proportion to te
expansion o! te mo8ement as a @ole0 (p to te time o! is deat, Marx ad borne te br%nt o!
te b%rden in tis as @ell0 A%t a!ter is deat te e8er-increasing b%lk o! @ork ad to be done by
mysel! alone0 $ince ten it as become te r%le !or te 8ario%s national @orkersG parties to
establis direct contacts, and tis is !ort%nately e8er more te case0 .et reD%ests !or my assistance
are still !ar more !reD%ent tan & @o%ld @is in 8ie@ o! my teoretical @ork0 A%t i! a man as
been acti8e in te mo8ement !or more tan !i!ty years, as & a8e been, e regards te @ork
connected @it it as a bo%nden d%ty tat brooks no delay0 &n o%r e8ent!%l time, H%st as in te 16t
cent%ry, p%re teorists on social a!!airs are !o%nd only on te side o! reaction and !or tis reason
tey are not e8en teorists in te !%ll sense o! te @ord, b%t simply apologists o! reaction0
&n 8ie@ o! te !act tat & li8e in 'ondon my party contacts are limited to correspondence in
@inter, @ile in s%mmer tey are largely personal0 5is !act, and te necessity o! !ollo@ing te
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 te @inter monts, and primarily te !irst tree monts o! te year0 Wen a man is past
se8enty is MeynertGs association !ibres o! te brain !%nction @it annoying pr%dence0 6e no
longer s%rmo%nts interr%ptions in di!!ic%lt teoretical problems as easily and D%ickly as be!ore0 &t
came abo%t tere!ore tat te @ork o! one @inter, i! it @as not completed, ad to be largely beg%n
ane@ te !ollo@ing @inter0 5is @as te case @it te most di!!ic%lt !i!t part0
?s te reader @ill obser8e !rom te !ollo@ing, te @ork o! editing te tird 8ol%me @as
essentially di!!erent !rom tat o! editing te second0 &n te case o! te tird 8ol%me tere @as
noting to go by o%tside a !irst extremely incomplete dra!t0 5e beginnings o! te 8ario%s parts
@ere, as a r%le, pretty care!%lly done and e8en stylistically polised0 A%t te !arter one @ent, te
more sketcy and incomplete @as te man%script, te more exc%rsions it contained into arising
side-iss%es @ose proper place in te arg%ment @as le!t !or later decision, and te longer and
more complex te sentences, in @ic to%gts @ere recorded in statu nascendi. &n some places
and@riting and presentation betrayed all too clearly te o%tbreak and grad%al progress o! te
attacks o! ill ealt, ca%sed by o8er@ork, @ic at te o%tset rendered te a%torGs @ork
increasingly di!!ic%lt and !inally compelled im periodically to stop @ork altogeter0 ?nd no
@onder0 Aet@een 1863 and 186>, Marx not only completed te !irst dra!t o! te t@o last 8ol%mes
o! Capital and prepared te !irst 8ol%me !or te printer, b%t also per!ormed te enormo%s @ork
connected @it te !o%nding and expansion o! te &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 te !inising to%ces to te second and tird 8ol%mes0
& began my @ork by dictating into readable copy te entire man%script, @ic @as o!ten ard to
deciper e8en !or me0 5is alone reD%ired considerable time0 &t @as only ten tat & co%ld start on
te act%al editing0 & limited tis to te essential0 & tried my best to preser8e te caracter o! te
!irst dra!t @ere8er it @as s%!!iciently clear0 & did not e8en eliminate repetitions, @ere8er tey, as
@as MarxGs c%stom, 8ie@ed te s%bHect !rom anoter standpoint or at least expressed te same
to%gt in di!!erent @ords0 Were8er my alterations or additions exceeded te 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 te spirit o! Marx, & a8e enclosed te entire passage in brackets and
a!!ixed my initials0 $ome o! my !ootnotes are not enclosed in brackets# b%t @ere8er & a8e
initialled tem & am responsible !or te entire note0
?s is only to be expected in a !irst dra!t, tere are n%mero%s all%sions in te man%script to points
@ic @ere to a8e been expanded %pon later, @ito%t tese promises al@ays a8ing been kept0 &
a8e le!t tem, beca%se tey re8eal te a%torGs intentions relati8e to !%t%re elaboration0
-o@ as to details0
?s regards te !irst part, te main man%script @as ser8iceable only @it s%bstantial limitations0
5e entire matematical calc%lation o! te relation bet@een te rate o! s%rpl%s-8al%e and te rate
o! pro!it B@ic makes %p o%r ;apter &&&C is introd%ced in te 8ery beginning, @ile te s%bHect
treated in o%r ;apter & is considered later and as te occasion arises0 5@o attempts at re8ising,
eac o! tem eigt pages in folio, @ere %se!%l ere0 A%t e8en tese did not possess te desired
contin%ity tro%go%t0 5ey !%rnised te s%bstance !or @at is no@ ;apter &0 ;apter && is
taken !rom te main man%script0 5ere @as a series o! %ncompleted matematical calc%lations !or
;apter &&&, as @ell as a @ole, almost complete, note-book dating !rom te se8enties, @ic
presents te relation o! te rate o! s%rpl%s-8al%e to te rate o! pro!it in te !orm o! eD%ations0 My
!riend $am%el Moore, @o as also translated te greater portion o! te !irst 8ol%me into Englis,
%ndertook to edit tis notebook !or me, a @ork !or @ic e @as !ar better eD%ipped, being an old
;ambridge matematician0 &t @as !rom is s%mmary, @it occasional %se o! te main man%script,
tat & ten compiled ;apter &&&0 -oting b%t te title @as a8ailable !or ;apter &40 A%t since its
s%bHect-matter, te in!l%ence o! t%rno8er on te rate o! pro!it, is o! 8ital importance, & a8e @ritten
it mysel!, !or @ic reason te @ole capter as been placed in brackets0 &t de8eloped in te
co%rse o! tis @ork tat te !orm%la !or te rate o! pro!it gi8en in ;apter &&& reD%ired
modi!ication to be generally 8alid0 Aeginning @it ;apter 4, te main man%script is te sole
so%rce !or te remainder o! te part, alto%g many transpositions and s%pplements @ere also
essential0
?s !or te !ollo@ing tree parts, aside !rom stylistic editing & @as able to !ollo@ te original
man%script almost tro%go%t0 ? !e@ passages dealing mostly @it te in!l%ence o! t%rno8er ad
to be bro%gt into agreement @it ;apter &4, @ic & ad inserted, and are like@ise placed in
brackets and !ollo@ed by my initials0
5e greatest di!!ic%lty @as presented by ,art 4 @ic dealt @it te most complicated s%bHect in
te entire 8ol%me0 ?nd it @as H%st at tis point tat Marx @as o8ertaken by one o! te abo8e-
mentioned serio%s attacks o! illness0 6ere, ten, @as no !inised dra!t, not e8en a sceme @ose
o%tlines migt a8e been !illed o%t, b%t only te beginning o! an elaboration I o!ten H%st a
disorderly mass o! notes, comments and extracts0 & tried at !irst to complete tis part, as & ad
done to a certain extent @it te !irst one, by !illing in te gaps and expanding %pon passages tat
@ere only indicated, so tat it @o%ld at least approximately contain e8eryting te a%tor ad
intended0 & tried tis no less tan tree times, b%t !ailed in e8ery attempt, and te time lost in tis
is one o! te cie! ca%ses tat eld %p tis 8ol%me0 ?t last & realised tat & @as on te @rong track0
& so%ld a8e ad to go tro%g te entire 8ol%mino%s literat%re in tis !ield, and @o%ld in te end
a8e prod%ced someting tat @o%ld ne8erteless not a8e been a book by Marx0 & ad no oter
coice b%t to more or less c%t te :ordian knot by con!ining mysel! to as orderly an arrangement
o! a8ailable matter as possible, and to making only te most indispensable additions0 ?nd so it
@as tat & s%cceeded in completing te principal labo%rs !or tis part in te spring o! 18*30
?s !or te 8ario%s capters, ;apters JJ& to JJ&4 @ere, in te main, complete0 ;apters JJ4
and JJ4& reD%ired a si!ting o! te re!erences and an interpolation o! material !o%nd else@ere0
;apters JJ4&& and JJ&J co%ld be taken almost completely !rom te original man%script, b%t
;apter JJ4&&& ad to be re-arranged in places0 5e real di!!ic%lty, o@e8er, began @it ;apter
JJJ0 From ere on it @as not only a matter o! properly arranging te re!erences, b%t o! p%tting
te train o! to%gt 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
togeter by means o! transpositions and excisions @ic @ere %tilised, o@e8er, in oter places0
;apter JJJ&, again, possessed greater contin%ity0 A%t ten !ollo@s a long section in te
man%script, entitled K5e ;on!%sionL, containing noting b%t extracts !rom parliamentary reports
on te crises o! 1828 and 18+>, in @ic are compiled statements o! t@enty-tree b%sinessmen
and economists, largely on money and capital, gold drain, o8er-spec%lation, etc0, and s%pplied
ere and tere @it sort !acetio%s comments0 ,ractically all te ten c%rrent 8ie@s concerning
te relation o! money to capital are represented terein, eiter in te ans@ers or in te D%estions,
and it @as te Kcon!%sionL re8ealed in identi!ying money and capital in te money-market tat
Marx meant to treat @it criticism and sarcasm0 ?!ter many attempts & con8inced mysel! tat tis
capter co%ld not be p%t into sape0 &ts material, partic%larly tat 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 tis is immediately !ollo@ed
by a ne@ batc o! extracts !rom parliamentary reports on e8ery concei8able ting pertinent to tis
part, intermingled @it te a%torGs comments0 5o@ard te end tese extracts and comments are
!oc%ssed more and more on te mo8ement o! monetary metals and on excange rates, and close
@it all kinds o! miscellaneo%s remarks0 3n te oter and, te K,recapitalistL capter B;ap0
JJJ4&C @as D%ite complete0
3! all tis material beginning @it te K;on!%sionL, sa8e tat @ic ad been pre8io%sly
inserted, & made %p ;apters JJJ&&& to JJJ40 5is co%ld not, o! co%rse, be done @ito%t
considerable interpolations on my part !or te sake o! contin%ity0 (nless tey are merely !ormal in
nat%re, te interpolations are expressly indicated as belonging to me0 &n tis @ay & a8e !inally
s%cceeded in @orking into te text all te a%torGs rele8ant statements0 -oting as been le!t o%t
b%t a small portion o! te extracts, @ic eiter repeated @at ad already been said, or to%ced
on points @ic te man%script did not treat any !%rter0
5e part on gro%nd-rent @as m%c more !%lly treated, alto%g by no means properly arranged, i!
only !or te !act tat Marx !o%nd it necessary to recapit%late te plan o! te entire part in ;apter
J'&&& Bte last portion o! te part on rent in te man%scriptC0 5is @as all te more desirable,
since te man%script opens @it ;apter JJJ4&&, !ollo@ed by ;apters J'4 to J'4&&, and only
terea!ter ;apters JJJ4&&& to J'&40 5e titles !or te di!!erential rent && in8ol8ed te greatest
amo%nt o! @ork and so did te disco8ery tat te tird case o! tis class o! rent ad not at all been
analysed in ;apter J'&&&, @ere it belonged0
&n te se8enties Marx engaged in entirely ne@ special st%dies !or tis part on gro%nd-rent0 For
years e ad st%died te )%ssian originals o! statistical reports ine8itable a!ter te Kre!ormL o!
1861 in )%ssia and oter p%blications on lando@nersip, ad taken extracts !rom tese originals,
placed at is disposal in admirably complete !orm by is )%ssian !riends, and ad intended to %se
tem !or a ne@ 8ersion o! tis part0 3@ing to te 8ariety o! !orms bot o! lando@nersip and o!
exploitation o! agric%lt%ral prod%cers in )%ssia, tis co%ntry @as to play te same role in te part
dealing @it gro%nd-rent tat England played in Aook & in connection @it ind%strial @age-
labo%r0 6e @as %n!ort%nately denied te opport%nity o! carrying o%t tis plan0
'astly, te 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 5ere exists only te beginning o! te !inal
capter0 &t @as to treat o! te tree maHor classes o! de8eloped capitalist society I te lando@ners,
capitalists and @age-labo%rers I corresponding to te tree great !orms o! re8en%e, gro%nd-rent,
pro!it and @ages, and te class str%ggle, an ine8itable concomitant o! teir existence, as te act%al
conseD%ence o! te capitalist period0 Marx %sed to lea8e s%c concl%ding s%mmaries %ntil te
!inal editing, H%st be!ore going to press, @en te latest istorical de8elopments !%rnised im
@it %n!ailing reg%larity @it proo!s o! te most la%dable timeliness !or is teoretical
propositions0
;itations and proo!s ill%strating is statements are, as in te second 8ol%me, considerably less
n%mero%s tan in te !irst0 M%otations !rom Aook & re!er to pages in te <nd and 3rd editions0
Were8er te man%script re!ers to teoretical statements o! earlier economists, te name alone is
gi8en as a r%le, and te D%otations @ere to be added d%ring te !inal editing0 3! co%rse, & ad to
lea8e tis as it @as0 5ere are only !o%r parliamentary reports, b%t tese are ab%ndantly %sed0
5ey are te !ollo@ing:
1C )eports !rom ;ommittees Bo! te '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! te 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! te ;ommittee o! te 'o@er 6o%se on
te E!!ect o! te 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 te !o%rt 8ol%me-te istory o! te teory o! s%rpl%s-8al%e I as soon as it
is in any @ay possible0
&n te pre!ace to te second 8ol%me o! Capital & ad to sD%are acco%nts @it te gentlemen @o
raised a %e and cry at te time beca%se tey !ancied to a8e disco8ered Kin )odbert%s te secret
so%rce and s%perior predecessor o! MarxL0 & o!!ered tem an opport%nity to so@ K@at te
economics o! a )odbert%s can accomplisL# & de!ied tem to so@ Kin @ic @ay an eD%al
a8erage rate o! pro!it can and m%st come abo%t, not only @ito%t a 8iolation o! te la@ o! 8al%e,
b%t on te 8ery basis o! itL0 5ese same gentlemen @o !or eiter s%bHecti8e or obHecti8e, b%t as a
r%le anyting b%t scienti!ic reasons @ere ten lionising te bra8e )odbert%s as an economic star
o! te !irst magnit%de, a8e @ito%t exception !ailed to !%rnis an ans@er0 6o@e8er, oter people
a8e to%gt it @ort teir @ile to occ%py temsel8es @it te problem0
&n is critiD%e o! te second 8ol%me BConrads Jahrbcher, J&, 188+, $0 2+<-6+C, ,ro!essor 'exis
took %p te D%estion, alto%g e did not care to o!!er a direct sol%tion0 6e says:
K5e sol%tion o! te contradictionL Bbet@een te
)icardo-Marxian la@ o! 8al%e and an eD%al a8erage
rate o! pro!itC Kis impossible i! te 8ario%s classes o!
commodities are considered individually and i! teir
8al%e is to be eD%al to teir excange-8al%e, and te
latter eD%al or proportional to teir price0L
?ccording to im, te sol%tion is only possible i!
K@e cease meas%ring te 8al%e o! indi8id%al
commodities according to labo%r, and consider only
te prod%ction o! commodities as a whole and teir
distrib%tion among te aggregate classes o! capitalists
and @orkers0000 5e @orking class recei8es b%t a
certain portion o! te total prod%ct,000 te oter
portion, @ic !alls to te sare o! te capitalist class,
represents te s%rpl%s-prod%ct in te Marxian sense,
and accordingly 000 te s%rpl%s-8al%e0 5en te
members o! te capitalist class di8ide tis total
s%rpl%s-8al%e among temsel8esnot in accordance
@it te n%mber o! @orkers employed by tem, b%t in
proportion to te capital in8ested by eac, te land
also being acco%nted !or as capital-8al%e0L
5e Marxian ideal 8al%es determined by %nits o! labo%r incorporated in te commodities do not
correspond to prices b%t may be
Kregarded as points o! depart%re o! a si!t @ic leads
to te act%al prices0 5e latter depend on te !act tat
eD%al s%ms o! capital demand eD%al pro!its0L
For tis reason some capitalists @ill sec%re prices iger tan te ideal 8al%es !or teir
commodities, and oters @ill sec%re lo@er prices0
KA%t since te losses and gains o! s%rpl%s-8al%e
balance one anoter @itin te capitalist class, te
total amo%nt o! te s%rpl%s-8al%e is te same as it
@o%ld be i! all prices @ere proportional to te ideal
8al%es0L
&t is e8ident tat te problem as not in any @ay been sol8ed ere, b%t as, to%g some@at
loosely and sallo@ly, been on te @ole correctlyformulated. ?nd tis is, indeed, more tan @e
co%ld a8e expected !rom a man @o, like te abo8e a%tor, takes a certain pride in being a
K8%lgar economistL0 &t is really s%rprising @en compared @it te andi@ork o! oter 8%lgar
economists, @ic @e sall later disc%ss0 'exisGs 8%lgar economy is, anyo@, in a class o! its
o@n0 6e says tat capital gains might, at any rate, be deri8ed in te @ay indicated by Marx, b%t
tat noting compels one to accept tis 8ie@0 3n te contrary0 4%lgar economy, e says, as at
least a more pla%sible explanation, namely:
K5e capitalist sellers, s%c as te prod%cer o! ra@
materials, te man%!act%rer, te @olesale dealer, and
te retail dealer, all make a gain on teir transactions
by selling at a price iger tan te p%rcase price,
t%s adding a certain percentage to te price tey
temsel8es pay !or te commodity0 5e @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 te capitalist to sell
is labo%r at te price it costs im, tat is to say, !or
te essential means o! is s%bsistence0000 5%s, tese
additions to prices retain teir !%ll impact @it regard
to te b%ying @orker, and ca%se te trans!er o! a part
o! te 8al%e o! te total prod%ct to te capitalist
class0L
3ne need not strain is tinking po@ers to see tat tis explanation !or te pro!its o! capital, as
ad8anced by K8%lgar economy,L amo%nts in practice to te same ting as te Marxian teory o!
s%rpl%s-8al%e# tat te @orkers are in H%st te same K%n!a8o%rable conditionL according to 'exis
as according to Marx# tat tey are H%st as m%c te 8ictims o! s@indle beca%se e8ery non-@orker
can sell commodities abo8e price, @ile te @orker cannot do so# and tat it is H%st as easy to
b%ild %p an at least eD%ally pla%sible 8%lgar socialism on te basis o! tis teory, as tat b%ilt in
England on te !o%ndation o! Pe8onsGs and MengerGs teory o! %se-8al%e and marginal %tility0 &
e8en s%spect tat i! Mr0 :eorge Aernard $a@ ad been !amiliar @it tis teory o! pro!it, e
@o%ld a8e likely !allen to @it bot ands, discarding Pe8ons and Karl Menger, to b%ild ane@
te Fabian c%rc o! te !%t%re %pon tis rock0
&n reality, o@e8er, tis teory is merely a paraprase o! te Marxian0 Wat de!rays all te price
additionsQ &t is te @orkersG Ktotal prod%ctL0 ?nd tis is d%e to te !act tat te 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 iger tan teir cost o! prod%ction, @it labo%r
being te sole exception since it is al@ays sold at te cost o! prod%ction, ten labo%r is simply
sold belo@ te price tat r%les in tis @orld o! 8%lgar economy0 6ence te res%ltant extra pro!it
accr%ing to te capitalist, or capitalist class, arises, and can only arise, in te last analysis, !rom
te !act tat te @orker, a!ter reprod%cing te eD%i8alent !or te 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 te coice o! is terms0 6e
does not say any@ere o%trigt tat te abo8e is is o@n conception0 A%t i! it is, it is plain as day
tat @e are not dealing @it one o! tose ordinary 8%lgar economists, o! @om e says imsel!
tat e8ery one o! tem is Kat best only a opeless idiotL in MarxGs eyes, b%t @it a Marxist
disg%ised as a 8%lgar economist0 Weter tis disg%ise as occ%rred conscio%sly or %nconscio%sly
is a psycological D%estion @ic does not interest %s at tis point0 Woe8er @o%ld care to
in8estigate tis, migt also probe o@ a man as sre@d as 'exis %ndo%btedly is, co%ld at one time
de!end s%c nonsense as bimetallism0
5e !irst to really attempt an ans@er to te D%estion @as 7r0 Conrad Schmidt in is pamplet
entitled Die Durchsdinittsprofitrate auf Grundlage des Mar!schen "erthgeset#es, $t%ttgart,
7ietE, 188*0 $cmidt seeks to reconcile te details o! te !ormation o! market-prices @it bot
te la@ o! 8al%e and @it te a8erage rate o! pro!it0 5e ind%strial capitalist recei8es in is
prod%ct, !irst, an eD%i8alent o! te capital e as ad8anced, and, second, a s%rpl%s-prod%ct !or
@ic e as paid noting0 A%t to obtain a s%rpl%s-prod%ct e m%st ad8ance capital to prod%ction0
5at is, e m%st apply a certain D%antity o! materialised labo%r to be able to appropriate tis
s%rpl%s-prod%ct0 For te capitalist, tere!ore, te capital e ad8ances represents te D%antity o!
materialised labo%r socially necessary !or im to obtain tis s%rpl%s-prod%ct0 5is applies to e8ery
ind%strial capitalist0 -o@, since commodities are m%t%ally excanged, according to te la@ o!
8al%e, in proportion to te labo%r socially necessary !or teir prod%ction and since, as !ar as te
capitalist is concerned, te labo%r necessary !or te man%!act%re o! te s%rpl%s-prod%ct appens
to be past labo%r acc%m%lated in is capital, it !ollo@s tat s%rpl%s-prod%cts are excanged in
proportion to te s%ms o! capital reD%ired !or teir prod%ction, and not in proportion to te labo%r
actually incorporated in tem0 6ence te sare o! eac %nit o! capital is eD%al to te s%m o! all
prod%ced s%rpl%s-8al%es di8ided by te s%m o! te capitals expended in prod%ction0 ?ccordingly,
eD%al s%ms o! capital yield eD%al pro!its in eD%al time spans, and tis is accomplised by adding
te cost-price o! te s%rpl%s-prod%ct so calc%lated, i0e0, te a8erage pro!it, to te cost-price o! te
paid prod%ct and by selling bot te paid and %npaid prod%ct at tis increased price0 5e a8erage
rate o! pro!it takes sape in spite o! a8erage commodity-prices being determined, as $cmidt
olds, by te la@ o! 8al%e0
5e constr%ction is extremely ingenio%s0 &t is completely patterned a!ter te 6egelian model, b%t
like te maHority o! 6egelian constr%ctions it is not correct0 $%rpl%s-prod%ct or paid prod%ct,
makes no di!!erence0 &! te la@ o! 8al%e is also to be directly 8alid !or te a8erage prices, bot o!
tem m%st be sold at prices proportionate to te socially necessary labo%r reD%ired and expended
in prod%cing tem0 5e la@ o! 8al%e is aimed !rom te !irst against te idea deri8ed !rom te
capitalist mode o! to%gt tat acc%m%lated labo%r o! te past, @ic comprises capital, is not
merely a certain s%m o! !inised 8al%e, b%t tat, beca%se a !actor in prod%ction and te !ormation
o! pro!it, it also prod%ces 8al%e and is ence a so%rce o! more 8al%e tan it as itsel!# it
establises tat li8ing labo%r alone possesses tis !ac%lty0 &t is @ell kno@n tat capitalists expect
eD%al pro!its proportionate to teir capitals and regard teir ad8ances o! capital as a sort o! cost-
price o! teir pro!its0 A%t i! $cmidt %tilises tis conception as a means o! reconciling prices
based on te a8erage rate o! pro!it @it te la@ o! 8al%e, e rep%diates te la@ o! 8al%e itsel! by
attrib%ting to it as one o! its co-determinati8e !actors a conception @it @ic te la@ is @olly at
8ariance0
Eiter acc%m%lated labo%r creates 8al%e te same as li8ing labo%r0 &n tat case te la@ o! 8al%e
does not apply0
3r, it does not create 8al%e0 &n tat case $cmidtGs demonstration is incompatible @it te la@ o!
8al%e0
$cmidt strayed into tis bypat @en D%ite close to te sol%tion, beca%se e belie8ed tat e
needed noting sort o! a matematical !orm%la to demonstrate te con!ormance o! te a8erage
price o! e8ery indi8id%al commodity @it te la@ o! 8al%e0 A%t @ile on te @rong track in tis
instance, in te immediate proximity o! te goal, te rest o! is booklet is e8idence o! te
%nderstanding @it @ic e dre@ !%rter concl%sions !rom te !irst t@o 8ol%mes o!Capital. 6is
is te ono%r o! independently !inding te correct explanation de8eloped by Marx in te tird part
o! te tird 8ol%me !or te iterto inexplicable sinking tendency o! te rate o! pro!it, and,
similarly, o! explaining te deri8ation o! commercial pro!it o%t o! ind%strial s%rpl%s-8al%e, and o!
making a great n%mber o! obser8ations concerning interest and gro%nd-rent, in @ic e
anticipates ideas de8eloped by Marx in te !o%rt and !i!t parts o! te tird 8ol%me0
&n a s%bseD%ent article B$eue %eit, 18*<-*3, -os0 3 and 2C, $cmidt takes a di!!erent tack in is
e!!ort to sol8e te problem0 6e contends tat it is competition @ic prod%ces te a8erage rate o!
pro!it by ca%sing te trans!er o! capital !rom brances o! prod%ction @it %nder-a8erage pro!it to
brances @it abo8e-a8erage pro!it0 &t is not a re8elation tat competition is te great eD%aliser o!
pro!its0 A%t no@ $cmidt tries to pro8e tat tis le8elling o! pro!its is identical @it a red%ction o!
te selling price o! commodities in excess s%pply to a magnit%de o! 8al%e @ic society can pay
!or tem according to te la@ o! 8al%e0 MarxGs analyses in te book itsel! are ample e8idence @y
tis @ay, too, co%ld not lead to te goal0
?!ter $cmidt &. 'ireman tackled te problem BConrads Jahrbcher, dritte Folge, &&&, $0 >*3C0 &
sall not go into is remarks on oter aspects o! te Marxian analysis0 5ey rest %pon te !alse
ass%mption tat Marx @ises to de!ine @ere e only in8estigates, and tat in general one migt
expect !ixed, c%t-to-meas%re, once and !or all applicable de!initions in MarxGs @orks0 &t is sel!-
e8ident tat @ere tings and teir interrelations are concei8ed, not as !ixed, b%t as canging,
teir mental images, te ideas, are like@ise s%bHect to cange and trans!ormation# and tey are not
encaps%lated in rigid de!initions, b%t are de8eloped in teir istorical or logical process o!
!ormation0 5is makes clear, o! co%rse, @y in te beginning o! is !irst book Marx proceeds
!rom te simple prod%ction o! commodities as te istorical premise, %ltimately to arri8e !rom
tis basis to capital I @y e proceeds !rom te 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 tis0 5ese and oter side-iss%es, @ic co%ld gi8e rise to still
oter di8erse obHections, are better le!t by te @ayside, @ile @e go on !ort@it to te gist o! te
matter0 Wile teory teaces Fireman tat at a gi8en rate o! s%rpl%s-8al%e te latter is proportional
to te labo%r-po@er employed, e learns !rom experience tat at a gi8en a8erage rate o! pro!it,
pro!it is proportional to te total capital employed0 6e explains tis by saying tat pro!it is merely
a con8entional penomenon B@ic means in is lang%age tat it belongs to a de!inite social
!ormation @it @ic it stands and !allsC0 &ts existence is simply tied %p @it capital0 5e 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 @ito%t an eD%al rate o! pro!it0 :i8en tis mode o! prod%ction, te D%antity o! pro!it
!or te indi8id%al capitalist can, at a certain rate o! pro!it, depend only on te magnit%de o! is
capital0 3n te oter and, pro!it consists o! s%rpl%s-8al%e, o! %npaid labo%r0 A%t o@ is s%rpl%s-
8al%e, @ose magnit%de inges %pon te degree o! labo%r exploitation, trans!ormed into pro!it,
@ose magnit%de depends %pon te amo%nt o! te capital employedQ
K$imply by selling commodities abo8e teir 8al%e in
all brances o! prod%ction in @ic te ratio
bet@een 000 constant and 8ariable capital is greatest#
b%t tis also implies tat commodities are sold belo@
teir 8al%e in tose brances o! prod%ction in @ic
te ratio bet@een constant and 8ariable capital R c:8 is
smallest, and tat commodities are sold at teir tr%e
8al%e only in brances in @ic te ratio o! c:8
represents a certain mean !ig%re0000 &s tis discrepancy
bet@een indi8id%al prices and teir respecti8e 8al%es
a re!%tation o! te 8al%e principleQ Ay no means0 For
since te prices o! some commodities rise abo8e teir
8al%e as m%c as te prices o! oters !all belo@ it, te
total s%m o! prices remains eD%al to te total s%m o!
8al%es 000 in te end tis incongr%ity disappears0L 5is
incongr%ity is a Kdist%rbanceL# Ko@e8er, in te exact
sciences it is not c%stomary to regard a predictable
dist%rbance as a re!%tation o! a la@L0
3n comparing te rele8ant passages in ;apter &J @it te abo8e, it @ill be seen tat Fireman
as indeed placed is !inger on te salient point0 A%t te %ndeser8edly cool reception o! is able
article so@s o@ many interconnecting links @o%ld still be needed e8en a!ter tis disco8ery to
enable Fireman to @ork o%t a !%ll and compreensi8e sol%tion0 ?lto%g many @ere interested in
tis problem, tey @ere all still !ear!%l o! getting teir !ingers b%rnt0 ?nd tis is explained not
only by te incomplete !orm in @ic Fireman le!t is disco8ery, b%t also by te %ndeniable
!a%ltiness o! bot is conception o! te Marxian analysis and o! is o@n general critiD%e o! te
latter, based as it @as on is misconception0
Wene8er tere is a cance 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 BConrads Jahrbcher, 18*1, dritte Folge,
&&, $0 3+< and !ollo@ingC tat te entire problem is resol8ed in relati8e s%rpl%s-8al%e0 5e
prod%ction o! relati8e s%rpl%s-8al%e rests on te increase o! constant capital 8is-O-8is 8ariable
capital0
K? pl%s in constant capital pres%pposes a pl%s in te
prod%cti8e po@er o! te labo%rers0 $ince tis pl%s in
prod%cti8e po@er Bby @ay o! lo@ering te @orkerGs
cost o! li8ingC prod%ces a pl%s in s%rpl%s-8al%e, a
direct relation is establised bet@een te increasing
s%rpl%s-8al%e and te increasing sare o! constant
capital in total capital0 ? pl%s in constant capital
indicates a pl%s in te prod%cti8e po@er o! labo%r0
Wit 8ariable capital remaining te same and constant
capital increasing, s%rpl%s-8al%e m%st tere!ore, in
accordance @it Marx, increase as @ell0 5is @as te
problem presented to %s0L
5r%e, Marx says te 8ery opposite in a %ndred places in te !irst ook# tr%e, te assertion tat,
according to Marx, @en 8ariable capital srinks, relati8e s%rpl%s-8al%e increases in proportion to
te increase in constant capital, is so asto%nding tat it p%ts to same all parliamentary
declamation# tr%e, 6err P%li%s Wol! demonstrates in is e8ery line tat e does not in te least
%nderstand, be it relati8ely or absol%tely, te concepts o! relati8e or absol%te s%rpl%s-8al%e# to be
s%re e says imsel! tat
Kat !irst glance one seems really to e in a nest o!
incongr%itiesL,
@ic, by te @ay, is te only tr%e statement in is entire article0 A%t @at does all tat matterQ
6err P%li%s Wol! is so pro%d o! is brilliant disco8ery tat e cannot re!rain !rom besto@ing
post%mo%s praise on Marx !or it and !rom extolling is o@n !atomless nonsense as a
Kne@ proo! o! te keen and !ar-sigted @ay isL
BMarxGsC Ksystem o! criticism o! capitalist economy is
set !ortL0
A%t no@ comes te coicest bit o! all0 6err Wol! says:
K)icardo as like@ise claimed tat an eD%al
in8estment o! capital yielded eD%al s%rpl%s-8al%e
Bpro!itC, H%st as te same expendit%re o! labo%r created
te same s%rpl%s-8al%e Bas regards its D%antityC0 ?nd
te D%estion no@ @as o@ te one agreed @it te
oter0 A%t Marx as re!%sed to accept tis @ay o!
p%tting te problem0 (e has proved beyond a doubt
)in the third volume* tat te second statement @as
not necessarily a conseD%ence o! te la@ o! 8al%e, tat
it e8en contradicted is la@ o! 8al%e and so%ld
tere!ore be !ort@it rep%diated0L
?nd tere%pon Wol! probes @o o! %s t@o, Marx or &, ad made a mistake0 &t does not occ%r to
im, nat%rally, tat it is e @o is groping in te dark0
& so%ld o!!end my readers and !ail to see te %mo%r o! te sit%ation i! & @ere to @aste a single
@ord on tis coice morsel0 & sall only add tat is a%dacity in %sing te opport%nity to report
te ostensible gossip among pro!essors tat ;onrad $cmidtGs abo8e-named @ork @as Kdirectly
inspired by EngelsL matces te a%dacity @it @ic e dared to say at one time @at KMarx as
pro8ed beyond a do%bt in te tird 8ol%me0L 6err P%li%s Wol!S &t may be c%stomary in te @orld
in @ic yo% li8e and stri8e !or te man @o p%blicly poses a problem to oters to acD%aint is
close !riends on te sly @it its sol%tion0 & am D%ite prepared to belie8e tat yo% are capable o!
tis sort o! ting0 A%t tat a man need not stoop to s%c sabby tricks in my @orld is pro8ed by
te present pre!ace0
-o sooner ad Marx died tan Mr0 +chille ,oria astened to p%blis an article abo%t im in te
$uova +ntologia B?pril 1883C0 5o begin @it, a biograpy 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 tat bespeaks a great p%rpose0 ?nd tis
p%rpose @as e8ent%ally carried o%t0 &n 1886, te same Mr0 'oria p%blised a book, ,a teoria
economica della constitu#ione politica, in @ic e anno%nced to is asto%nded contemporaries
tat MarxGs conception o! istory, so completely and p%rpose!%lly misrepresented by im in 1883,
@as is o@n disco8ery0 5o be s%re, te Marxian teory is red%ced in tis book to a rater
,ilistine le8el, and te 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 tat matterQ 5e disco8ery tat 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! tis, and, a!ter is book appeared in
Frenc, also some Frencmen, and can no@ pose in &taly as te a%tor o! a ne@ epoc-making
teory o! istory %ntil te &talian $ocialists !ind time to strip te ill%strio%s 'oria o! is stolen
peacock !eaters0
A%t tis is H%st a sample or Mr0 'oriaGs style0 6e ass%res %s tat all MarxGs teories rest on
conscious sopistry Bun consaputo sofismaC# tat Marx did not stop at paralogisms e8en @en he
-new them to be paralogisms )sapendoli tali*, etc0 ?nd a!ter t%s impressing te necessary %pon
is readers @it a series o! similar contemptible insin%ations, so tat tey so%ld regard Marx as
an %nprincipled %pstart . la 'oria @o acie8es is little e!!ects by te same @retced %mb%g as
o%r pro!essor !rom ,ad%a, e re8eals an important secret to tem, and tereby takes %s back to te
rate o! pro!it0
Mr0 'oria says: ?ccording to Marx, te 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 establisment so%ld depend on te 8ariable capital
employed in it, since constant capital does not yield pro!it0 A%t tis is contrary to !act0 For in
practice pro!it does not depend on 8ariable, b%t on total capital0 ?nd Marx imsel! recognises tis
BAook &, ;ap0 J&&&C and admits tat on te s%r!ace !acts appear to contradict is teory0 A%t o@
does e get aro%nd tis contradictionQ 6e re!ers is readers to an as yet %np%blised s%bseD%ent
8ol%me0 'oria as already told his readers abo%t tis 8ol%me tat e did not belie8e Marx ad
e8er entertained te to%gt o! @riting it, and no@ exclaims tri%mpantly:
K& a8e not been @rong in contending tat tis second
8ol%me, @ic Marx al@ays !lings at is ad8ersaries
@ito%t it e8er appearing, migt 8ery @ell a8e been
a sre@d expedient applied by Marx @ene8er
scienti!ic arg%ments !ailed im )un ingegnoso
spediente ideato dal Mar a sostitu#ione degli
argomenti scientifici*./ ?nd @osoe8er is not
con8inced a!ter tis tat Marx stands in te same class
o! scienti!ic s@indlers as l!illustre 'oria, is past all
redemption0
We a8e at least learned tis m%c: ?ccording to Mr0 'oria, te Marxian teory o! s%rpl%s-8al%e
is absol%tely incompatible @it te existence o! a general eD%al rate o! pro!it0 5en, tere
appeared te second 8ol%me and tere@it my p%blic callenge precisely on tis 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%terner, coming !rom a ot climate, @ere, as e can testi!y,
cool ner8e is a nat%ral reD%irement0 5e D%estion o! te rate o! pro!it as been p%blicly p%t0 Mr0
'oria as p%blicly declared it insol%ble0 ?nd !or tis 8ery reason e is no@ going to o%tdo imsel!
by p%blicly sol8ing it0
5is miracle is accomplised in Conrads Jahrbcher, ne%e Folge, A%c JJ, $0 <>< and
!ollo@ing, in an article dealing @it ;onrad $cmidtGs already cited pamplet0 ?!ter 'oria
learned !rom $cmidt o@ commercial pro!it @as made, e s%ddenly sa@ dayligt0
K$ince determining 8al%e by means o! labo%r-time is
to te ad8antage o! tose capitalists @o in8est a
greater portion o! teir capital in @ages, te
%nprod%cti8eL Bread commercialC Kcapital can deri8e a
iger interestL Bread pro!itC K!rom tese pri8ileged
capitalists and t%s bring abo%t an eD%alisation
bet@een te indi8id%al ind%strial capitalists000 For
instance, i! eac o! te ind%strial capitalists ?, A, ;
%ses 2== @orking-days and =, 2==, <== constant
capital respecti8ely in prod%ction, and i! te @ages !or
2== @orking-days amo%nt to += @orking-days, ten
eac recei8es a s%rpl%s-8al%e o! += @orking-days, and
te rate o! pro!it is 2==T !or te !irst, 3303T !or te
second, and <=T !or te tird capitalist0 A%t i! a
!o%rt capitalist 7 acc%m%lates an %nprod%cti8e
capital o! 3==, @ic claims an interestL Bpro!itC
KeD%al in 8al%e to 2= @orking-days !rom ?, and an
interest o! <= @orking-days !rom A, ten te rate o!
pro!it o! capitalists ? and A @ill sink to <=T, H%st as
tat o! ;, @ile 7 @it is capital o! 3== recei8es
pro!it o! 6=, or a rate o! pro!it o! <=T, te same as te
oter capitalists0L
Wit s%c astonising dexterity, l!illustre 'oria sol8es by sleigt o! and te D%estion @ic e
ad declared insol%ble ten years pre8io%sly0 (n!ort%nately, e did not let %s into te secret
@ere!rom te K%nprod%cti8e capitalL obtained te po@er to sD%eeEe o%t o! te ind%strialists teir
extra pro!it in excess o! te a8erage rate o! pro!it, and to retain it in its o@n pocket, H%st as te
lando@ner pockets te tenantGs s%rpl%s-pro!it as gro%nd-rent0 &ndeed, according to im it @o%ld
be te mercants @o @o%ld raise a trib%te analogo%s to gro%nd-rent !rom te ind%strialists, and
@o%ld tereby bring abo%t an a8erage rate o! pro!it0 ;ommercial capital is indeed a 8ery essential
!actor in prod%cing te 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 te assertion tat it as te
magic po@er to absorb all s%rpl%s-8al%e in excess o! te general rate o! pro!it e8en be!ore tis
general rate as taken sape, and to con8ert it into gro%nd-rent !or itsel! @ito%t, moreo8er, e8en
a8ing need to do @it any real estate0 -o less astonising is te assertion tat commercial capital
manages to disco8er te partic%lar ind%strialists, @ose s%rpl%s-8al%e H%st co8ers te a8erage rate
o! pro!it, and tat it considers it a pri8ilege to mitigate te lot o! tese l%ckless 8ictims o! te
Marxian la@ o! 8al%e to a certain extent by selling teir prod%cts gratis !or tem, @ito%t asking
as m%c as a commission !or it0 Wat a mo%ntebank one m%st be to imagine tat Marx ad need
to resort to s%c miserable tricksS
A%t it is not %ntil @e compare im @it is nortern competitors, !or instance @it 6err P%li%s
Wol!, @o @as not born yesterday eiter, tat te ill%strio%s 'oria sines in is !%ll glory0 Wat a
yelping p%p 6err Wol! appears e8en in is big 8ol%me on So#ialismus und -apitalistische
Gesellschaftsordnung,alongside te &talianS 6o@ a@k@ard, & am almost tempted to say modest,
e appears beside te rare con!idence o! te maestro @o takes it !or granted tat Marx, neiter
more nor less tan oter people, @as as m%c a sopist, paralogist, %mb%g and mo%ntebank as
Mr0 'oria imsel! I tat Marx took in te p%blic @it te promise o! ro%nding o%t is teory in a
s%bseD%ent 8ol%me @ene8er e @as in a di!!ic%lt position, kno@ing !%ll @ell tat e neiter
co%ld nor e8er @o%ld @rite it0 Ao%ndless ner8e co%pled @it a !lair !or slipping like an eel
tro%g impossible sit%ations, a eroic contempt !or p%mmellings recei8ed, asty plagiarism o!
oter peopleGs accomplisments, import%nate and !an!aronading ad8ertising, spreading is !ame
by means o! a cor%s o! !riends I @o can eD%al im in all tisQ
&taly is te land o! classicism0 E8er since te great era @en te da@n o! modern times rose tere,
it as prod%ced magni!icent caracters o! %neD%alled classic per!ection, !rom 7ante to :aribaldi0
A%t te period o! its degradation and !oreign domination also beD%eated it classic caracter-
masks, among tem t@o partic%larly clear-c%t types, tat o! $ganarelle and 7%lcamara0 5e
classic %nity o! bot is embodied in o%r illustre 'oria0
&n concl%sion & m%st take my readers across te ?tlantic0 7r0 BMed0C George C. Stiebeling, o! -e@
.ork, as also !o%nd a sol%tion to te problem, and a 8ery simple one0 $o simple, indeed, tat no
one eiter ere, or tere, took im serio%sly0 5is aro%sed is ire, and e complained bitterly
abo%t te inH%stice o! it in an endless stream o! pamplets and ne@spaper articles appearing on
bot sides o! te great @ater0 6e @as told in te $eue %eit tat is entire sol%tion rested on a
matematical error0 A%t tis co%ld scarcely dist%rb im0 Marx ad also made matematical errors,
and @as yet rigt in many tings0 'et %s ten 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 te total capital
Bc U 8C R y, and te di!!erence in te ratio o! te
constant and 8ariable capital R x0 For !actory &, y R c
U 8, !or !actory &&, y R Bc I xC U B8 U xC0 5ere!ore te
rate o! s%rpl%s-8al%e !or !actory & R sN8, and !or
!actory && R sNB8 U xC0 ,ro!it BpC is @at & call te total
s%rpl%s-8al%e BsC by @ic te total capital y, or c U 8,
is a%gmented in te gi8en time# t%s p R s0 6ence, te
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 5e 000 problem t%s resol8es itsel! in
s%c a @ay tat, on te basis o! te la@ o! 8al%e, @it
eD%al capital and eD%al time, b%t %neD%al D%antities o!
li8ing labo%r, a cange in te rate o! s%rpl%s-8al%e
ca%ses te eD%alisation o! an a8erage rate o! pro!it0L
B:0 ;0 $tiebeling, Das "erthgeset# und die &rofitrate,
-e@ .ork, Pon 6einric0C
6o@e8er pretty and re8ealing te abo8e calc%lation may be, @e are compelled to ask 7r0
$tiebeling one D%estion: 6o@ does e kno@ tat te s%m o! s%rpl%s-8al%e prod%ced by !actory &
is exactly eD%al to te s%m o! te s%rpl%s-8al%e prod%ced by !actory &&Q 6e states explicitly tat c,
8, y and x, tat is, all te oter !actors in te calc%lation, are te same !or bot !actories, b%t
makes no mention o! s0 &t does not by any means !ollo@ !rom te !act tat e designated bot o!
te abo8e-mentioned D%antities o! s%rpl%s-8al%e algebraically @it s0 )ater, it is H%st te ting
tat as to be pro8ed, since Mr0 $tiebeling @ito%t !%rter ado also identi!ies pro!it p @it te
s%rpl%s-8al%e0 -o@ tere are H%st t@o possible alternati8es0 Eiter te t@o sGs are eD%al, bot
!actories prod%ce eD%al D%antities o! s%rpl%s-8al%e, and tere!ore also eD%al D%antities o! pro!it,
since bot capitals are eD%al0 &n tat case Mr0 $tiebeling as !rom te start taken !or granted @at
e @as really called %pon to pro8e0 3r, one !actory prod%ces more s%rpl%s-8al%e tan te oter, in
@ic case is entire calc%lation t%mbles abo%t is ears0
Mr0 $tiebeling spared neiter pains nor money to b%ild mo%ntains o! calc%lations %pon tis
matematical error, and to exibit tem to te p%blic0 & can ass%re im, !or is o@n peace o!
mind, tat tey are nearly all eD%ally @rong, and tat in te exceptional cases @en tis is not so,
tey pro8e someting 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= tat te rate o! pro!it as act%ally !allen, b%t
interprets it @rongly and ass%mes tat MarxGs teory o! a constantly stable rate o! pro!it so%ld be
corrected on te basis o! experience0 .et it !ollo@s !rom te tird part o! te present tird book
tat tis Marxian Kstable rate o! pro!itL is p%rely a !igment o! Mr0 $tiebelingGs imagination, and
tat te tendency !or te rate o! pro!it to !all is d%e to circ%mstances @ic are H%st te re8erse o!
tose indicated by 7r0 $tiebeling0 -o do%bt 7r0 $tiebeling as te best intentions, b%t @en a man
@ants to deal @it scienti!ic D%estions e so%ld abo8e all learn to read te @orks e @ises to
%se H%st as te a%tor ad @ritten tem, and abo8e all @ito%t reading anyting into tem tat
tey do not contain0
5e o%tcome o! te entire in8estigation so@s again @it re!erence to tis D%estion as @ell tat it
is te Marxian scool alone @ic as accomplised someting0 &! Fireman and ;onrad $cmidt
read tis tird book, eac one, !or is part, may @ell be satis!ied @it is o@n @ork0
'ondon, 3ctober 2, 18*2
' r e d e r i c - 0 n g e l s
Part I. The Conversion of Surplus-
Value into Proft and of the Rate
of Surplus-Value into the Rate of
Proft
Chapter 1. Cost-Price and Proft
&n Aook & @e analysed te penomena @ic constit%te te process of capitalist production as
s%c, as te immediate prod%cti8e process, @it no regard !or any o! te secondary e!!ects o!
o%tside in!l%ences0 A%t tis immediate process o! prod%ction does not exa%st te li!e span o!
capital0 &t is s%pplemented in te act%al @orld by te process of circulation, @ic @as te obHect
o! st%dy in Aook &&0 &n te latter, namely in ,art &&&, @ic treated te process o! circ%lation as a
medi%m !or te process o! social reprod%ction, it de8eloped tat te capitalist process o!
prod%ction taken as a @ole represents a syntesis o! te processes o! prod%ction and circ%lation0
;onsidering @at tis tird book treats, it cannot con!ine itsel! to general re!lection relati8e to
tis syntesis0 3n te contrary, it m%st locate and describe te concrete !orms @ic gro@ o%t o!
te movements of capital as a whole0 &n teir act%al mo8ement capitals con!ront eac oter in
s%c concrete sape, !or @ic te !orm o! capital in te immediate process o! prod%ction, H%st as
its !orm in te process o! circ%lation, appear only as special instances0 5e 8ario%s !orms o!
capital, as e8ol8ed in tis book, t%s approac step by step te !orm @ic tey ass%me on te
s%r!ace o! society, in te action o! di!!erent capitals %pon one anoter, in competition, and in te
ordinary conscio%sness o! te agents o! prod%ction temsel8es0
5e 8al%e o! e8ery commodity prod%ced in te capitalist @ay is represented in te !orm%la: ; R c
U 8 U s0 &! @e s%btract s%rpl%s-8al%es !rom tis 8al%e o! te prod%ct tere remains a bare
eD%i8alent or a s%bstit%te 8al%e in goods, !or te capital-8al%e c U 8 expended in te elements o!
prod%ction0
For example, i! te prod%ction o! a certain article reD%ires a capital o%tlay o! V+==, o! @ic V<=
are !or te @ear and tear o! instr%ments o! prod%ction, V38= !or te materials o! prod%ction, and
V1== !or labo%r-po@er, and i! te rate o! s%rpl%s-8al%e is 1==T, ten te 8al%e o! te prod%ct R
2==c U 1==8 U 1==s R V6==0
?!ter ded%cting te s%rpl%s-8al%e o! V1==, tere remains a commodity-8al%e o! V+== @ic only
replaces te expended capital o! V+==0 5is portion o! te 8al%e o! te commodity, @ic replaces
te price o! te cons%med means o! prod%ction and labo%r-po@er, only replaces @at te
commodity costs te capitalist imsel!0 For im it, tere!ore, represents te cost-price o! te
commodity0
Wat te commodity costs te capitalist and its act%al prod%ction cost are t@o D%ite di!!erent
magnit%des0 5at portion o! te commodity-8al%e making %p te s%rpl%s-8al%e does not cost te
capitalist anyting simply beca%se it costs te labo%rer %npaid labo%r0 .et, on te basis o!
<= ;apter &
capitalist prod%ction, a!ter te labo%rer enters te prod%ction process e imsel! constit%tes an
ingredient o! operating prod%cti8e capital, @ic belongs to te capitalist0 5ere!ore, te
capitalist is te act%al prod%cer o! te commodity0 For tis reason te cost-price o! te commodity
necessarily appears to te capitalist as te act%al cost o! te commodity0 &! @e take k to be te
cost-price, te !orm%la ; R c U 8 U s t%rns into te !orm%la ; R k U s, tat is, te commodity-
8al%e R cost-price U s%rpl%s-8al%e0
5e gro%ping o! te 8ario%s 8al%e portions o! a commodity @ic only replace te 8al%e o! te
capital expended in its prod%ction %nder te ead o! cost-price expresses, on te one and, te
speci!ic caracter o! capitalist prod%ction0 5e capitalist cost o! te commodity is meas%red by
te expendit%re o!capital, @ile te act%al cost o! te commodity is meas%red by te expendit%re
o! labour0 5%s, te capitalist cost-price o! te commodity di!!ers in D%antity !rom its 8al%e, or its
act%al cost-price0 &t is smaller tan te 8al%e o! te commodity, beca%se, @it ; R k U s, it is
e8ident tat k R ; - s0 3n te oter and, te cost-price o! a commodity is by no means simply a
category @ic exists only in capitalist book-keeping0 5e indi8id%alisation o! tis portion o!
8al%e is contin%ally mani!est in practice in te act%al prod%ction o! te commodity, beca%se it as
e8er to be recon8erted !rom its commodity-!orm by @ay o! te process o! circ%lation into te
!orm o! prod%cti8e capital, so tat te cost-price o! te commodity al@ays m%st rep%rcase te
elements o! prod%ction cons%med in its man%!act%re0
5e category o! cost-price, on te oter and, as noting to do @it te !ormation o!
commodity-8al%e, or @it te process o! sel!-expansion o! capital0 Wen & kno@ tat o! te 8al%e
o! a commodity @ort V6==, !i8e-sixts, or V+==, represent no more tan an eD%i8alent o! te
capital o! V+== cons%med in its prod%ction and tat it can tere!ore s%!!ice only to rep%rcase te
material elements o! tis capital, & kno@ noting as yet eiter o! te @ay in @ic tese !i8e-
sixts o! te 8al%e o! te commodity, @ic represent its cost-price, are prod%ced, or abo%t te
@ay in @ic te last sixt, @ic constit%tes its s%rpl%s-8al%e, @as prod%ced0 5e in8estigation
@ill so@, o@e8er, tat in capitalist economics te cost-price ass%mes te !alse appearance o! a
category o! 8al%e prod%ction itsel!0
5o ret%rn to o%r example0 $%ppose te 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 5en te 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 te 8al%e o! te means o! prod%ction R 2==c, and 333X are
crystallised in te 8al%e o! labo%r-po@er R 1==80 6a8ing ass%med a rate o! s%rpl%s-8al%e o! 1==T,
te prod%ction o! te 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@, ten Bsee A%c 1, Kap0 4&&, $0 <=1N1*3C /Englis edition: ;0 &J, p0 <1<0-0d01 tat te
8al%e o! te ne@ly created prod%ct o! V6== is composed o! 1C te reappearing 8al%e o! te
constant capital o! V2== expended !or means o! prod%ction, and <C a ne@ly prod%ced 8al%e o!
V<==0 5e cost-price o! te commodity R V+== comprises te reappearing 2==c and one-al! o! te
ne@ly prod%ced 8al%e o! V<== B R 1==8C, tat is, t@o elements o! te commodity-8al%e @ic are
o! entirely di!!erent origin0
3@ing to te p%rposi8e nat%re o! te labo%r expended d%ring 666W ten-o%r @orking-days, te
8al%e o! te cons%med means o! prod%ction amo%nting to V2== is trans!erred !rom tese means o!
prod%ction to te prod%ct0 5is pre8io%sly existing 8al%e t%s reappears as a component part o!
te 8al%e o! te prod%ct, b%t is not created in te process o! prod%ction o! this commodity0 &t
exists as a component o! te 8al%e o! te commodity only beca%se it pre8io%sly existed as an
element o! te in8ested capital0 5e expended constant capital is tere!ore replaced by tat
portion o! te 8al%e o! te commodity @ic tis capital itsel! adds to tat 8al%e0 5is element o!
te cost-price, tere!ore, as a do%ble meaning0 3n te one and, it goes into te cost-price o! te
commodity, beca%se it is part o! te commodity-8al%e @ic replaces cons%med capital0 ?nd on
<1 ;apter &
te oter and, it !orms an element o! te commodity-8al%e only beca%se it is te 8al%e o!
expended capital or beca%se te means o! prod%ction cost so and so m%c0
&t is D%ite te re8erse in te case o! te oter element o! te cost-price0 5e 666W @orking-days
expended in te prod%ction o! te commodity create a ne@ 8al%e o! V<==0 3ne portion o! tis
ne@ 8al%e merely replaces te ad8anced 8ariable capital o! V1==, or te price o! te labo%r-po@er
employed0 A%t tis ad8anced capital-8al%e does not in any @ay go into te creation o! te ne@
8al%e0 $o !ar as te ad8ance o! capital is concerned, labo%r-po@er co%nts as a value0 A%t in te
process o! prod%ction it acts as te creator o! 8al%e0 5e place o! te 8al%e o! te labo%r-po@er
tat obtains @itin te ad8anced capital is taken in te act%ally functioning prod%cti8e capital by
li8ing 8al%e-creating labo%r-po@er itsel!0
5e di!!erence bet@een tese 8ario%s elements o! te commodity-8al%e, @ic togeter make %p
te cost-price, leaps to te eye @ene8er a cange takes place in te siEe o! te 8al%e o! eiter te
expended constant, or te expended 8ariable, part o! te capital0 'et te price o! te same means
o! prod%ction, or o! te constant part o! capital, rise !rom V2== to V6==, or, con8ersely, let it !all
to V<==0 &n te !irst case it is not only te cost-price o! te commodity @ic rises !rom V+== to
6==c U 1==8 R V>==, b%t also te 8al%e o! te commodity @ic rises !rom V6== to 6==c U 1==8 U
1==s R V8==0 &n te second case, it is not only te cost-price @ic !alls !rom V+== to <==cU1==8 R
V3==, b%t also te 8al%e o! te commodity @ic !alls !rom V6== to <==c U 1==8 U 1==s R V2==0
$ince te expended constant capital trans!ers its o@n 8al%e to te prod%ct, te 8al%e o! te
prod%ct rises or !alls @it te absol%te magnit%de o! tat capital-8al%e, oter conditions
remaining eD%al0 ?ss%me, on te oter and, tat, oter circ%mstances remaining %ncanged, te
price o! te same amo%nt o! labo%r-po@er rises !rom V1== to V1+=, or, con8ersely, tat it !alls
!rom V1== to V+=0 &n te !irst case, te cost-price rises !rom V+== to 2==c U 1+=8 R V++=, and !alls
in te second case !rom V+== to 2==c U +=8 R V2+=0 A%t in eiter case te commodity-8al%e
remains %ncanged R V6==# one time it is 2==cU 1+=8 U +=s, and te oter time, 2==c U +=8 U 1+=s0
5e ad8anced 8ariable capital does not add its o@n 8al%e to te prod%ct0 5e place o! its 8al%e is
taken in te prod%ct rater by a ne@ 8al%e created by labo%r0 5ere!ore, a cange in te absol%te
magnit%de o! te 8ariable capital, so !ar as it expresses merely a cange in te price o! labo%r-
po@er, does not in te least alter te absol%te magnit%de o! te commodity-8al%e, beca%se it does
not alter anyting in te absol%te magnit%de o! te ne@ 8al%e created by li8ing labo%r-po@er0
$%c a cange rater a!!ects only te relati8e proportion o! te t@o component parts o! te ne@
8al%e, o! @ic one !orms s%rpl%s-8al%e and te oter makes good te 8ariable capital and
tere!ore passes into te cost-price o! te commodity0
5e t@o elements o! te cost-price, in te present case 2==c U 1==8, a8e only tis in common tat
tey are bot parts o! te commodity-8al%e tat replace ad8anced capital0
A%t tis tr%e state o! a!!airs necessarily appears re8ersed !rom te standpoint o! capitalist
prod%ction0
5e capitalist mode o! prod%ction di!!ers !rom te mode o! prod%ction based on sla8ery, among
oter tings, by te !act tat in it te 8al%e, and accordingly te price, o! labo%r-po@er appears as
te 8al%e, or price, o! labo%r itsel!, or as @ages BA%c 1, Kap0 J4&&C /Englis edition: ;0 J&J0 I
0d010 5e 8ariable part o! te ad8anced capital, tere!ore, appears as capital expended in @ages,
as a capital-8al%e @ic pays !or te 8al%e, and accordingly te price, o! all te labo%r expended
in prod%ction0 'et %s ass%me, !or instance, tat an a8erage ten-o%r social @orking-day is
incorporated in a s%m o! money amo%nting to 6 sillings0 &n tat case te ad8ance o! a 8ariable
capital o! V1== represents te money expression o! a 8al%e prod%ced in 333 X# ten-o%r @orking-
days0 A%t tis 8al%e, representing p%rcased labo%r-po@er in te capital ad8anced, does not,
o@e8er, !orm a part o! te act%ally !%nctioning prod%cti8e capital0 &ts place in te process o!
prod%ction is taken by li8ing labo%r-po@er0 &!, as in o%r ill%stration, te degree o! exploitation o!
te latter is 1==T, ten it is expended d%ring 666W ten-o%r @orking-days, and tereby adds to
te prod%ct a ne@ 8al%e o! V<==0 A%t in te capital ad8anced te 8ariable capital o! V1== !ig%res
<< ;apter &
as capital in8ested in @ages, or as te price o! labo%r per!ormed d%ring 666W ten-o%r days0 5e
s%m o! V1== di8ided by 666W gi8es %s 3 sillings as te price o! a ten-o%r @orking-day, @ic
is eD%al in 8al%e to te prod%ct o! !i8e o%rs" labo%r0
-o@, i! @e compare te capital ad8anced on te one and @it te commodity-8al%e on te oter,
@e !ind:
&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 te 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 tis !orm%la, te portion o! capital in8ested in labo%r-po@er di!!ers !rom tat 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
te process o! creating commodity-8al%e, and tereby also in te process o! te sel!-expansion o!
capital0 5e price o! te means o! prod%ction reappears in te cost-price o! te commodities, H%st
as it !ig%red in te capital ad8anced, and it does so beca%se tese means o! prod%ction a8e been
p%rposi8ely cons%med0 5e price, or @ages, !or te 666W @orking-days cons%med in te
prod%ction o! tese commodities like@ise reappears in te cost-price o! te commodities H%st as it
as !ig%red in te capital ad8anced, and also beca%se tis amo%nt o! labo%r as been p%rposi8ely
expended0 We see only !inised and existing 8al%es I te portions o! te 8al%e o! te ad8anced
capital @ic go into te making o! te 8al%e o! te prod%ct I b%t not te element creating ne@
8al%es0 5e distinction bet@een constant and 8ariable capital as disappeared0 5e entire cost-
price o! V+== no@ as te do%ble meaning tat, !irst, it is tat portion o! te commodity-8al%e o!
V6== @ic replaces te capital o! V+== expended in te prod%ction o! te commodity# and tat,
secondly, tis component o! te commodity-8al%e exists only beca%se it existed pre8io%sly as te
cost-price o! te elements o! prod%ction employed, namely means o! prod%ction and labo%r, i0e0,
as ad8anced capital0 5e capital-8al%e reappears as te cost-price o! a commodity beca%se, and in
so !ar as, it as been expended as a capital-8al%e0
5e !act tat te 8ario%s components o! te 8al%e o! te 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 tat te cost-price o! te commodity m%st b%y back
tese materially di!!erent elements o! prod%ction0 $o !ar as te !ormation o! te cost-price is
concerned, o@e8er, only one distinction is appreciable, namely tat 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 te prod%cti8e process te 8al%e o! tese instr%ments o! labo%r @as, say, V1,<==0 ?!ter te
commodities a8e been prod%ced it exists in t@o !orms, te V<= as part o! te 8al%e o! te
commodity, and 1,<== - <=, or V1,18=, as te remaining 8al%e o! te instr%ments o! labo%r @ic,
as be!ore, are in te possession o! te capitalist# in oter @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 te prod%ction o! te commodity and t%s teir entire 8al%e goes
into tat o! te prod%ced commodity0 We a8e seen o@ tese 8ario%s components o! te
ad8anced capital ass%me te !orms o! !ixed and circ%lating capital in relation to te t%rno8er0
?ccordingly, te 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 te cost-price o! te commodity only R V+== BV<= !or te @ear and tear o! te !ixed capital,
and V28= !or circ%lating capitalC0
<3 ;apter &
5is di!!erence bet@een te cost-price o! te commodity and te capital ad8anced merely pro8es,
o@e8er, tat te cost-price o! te commodity is !ormed excl%si8ely by te capital act%ally
cons%med in its prod%ction0
Means o! prod%ction 8al%ed at V1,<== are employed in prod%cing te commodity, b%t only V<= o!
tis ad8anced capital-8al%e are lost in prod%ction0 5%s, te employed !ixed capital goes only
partially into te cost-price o! te commodity, beca%se it is only partially cons%med in its
prod%ction0 5e employed circ%lating capital goes entirely into te cost-price o! te commodity,
beca%se it is entirely cons%med in prod%ction0 A%t does not tis only pro8e tat te cons%med
portions o! te !ixed and circ%lating capital pass %ni!ormly, pro rata to te magnit%de o! teir
8al%es, into te cost-price o! te commodity and tat tis component o! te 8al%e o! te
commodity originates solely @it te capital expended in its prod%ctionQ &! tis @ere not so, it
@o%ld be inexplicable @y te ad8anced !ixed capital o! V1,<== so%ld not, aside !rom te V<=
@ic it loses in te prod%cti8e process, also contrib%te te oter V1,18= @ic it does not lose0
5is di!!erence bet@een !ixed and circ%lating capital @it re!erence to te calc%lation o! te cost-
price, tere!ore, only con!irms te seeming origination o! te cost-price !rom te expended
capital-8al%e, or te price paid by te capitalist imsel! !or te expended elements o! prod%ction,
incl%ding labo%r0 3n te oter and, so !ar as te !ormation o! 8al%e is concerned, te 8ariable
portion o! capital in8ested in labo%r-po@er is ere empatically identi!ied %nder te ead o!
circ%lating capital @it constant capital Btat part o! capital @ic consists o! materials o!
prod%ctionC, and tis completes te mysti!ication o! te sel!-expansion process o! capital0
1

$o !ar @e a8e considered H%st one element o! te 8al%e o! commodities, namely te cost-price0
We m%st no@ t%rn also to te oter component o! te 8al%e o! commodities, namely te excess
o8er te cost-price, or te s%rpl%s-8al%e0 &n te !irst place, ten, s%rpl%s-8al%e is te excess 8al%e
o! a commodity o8er and abo8e its cost-price0 A%t since te cost-price eD%als te 8al%e o! te
cons%med capital, into @ose material elements it is contin%ally recon8erted, tis excess 8al%e is
an accretion in te 8al%e o! te capital expended in te prod%ction o! te commodity and
ret%rning by @ay o! its circ%lation0
We a8e already seen earlier tat, to%g s, te s%rpl%s-8al%e, springs merely !rom a cange in
te 8al%e o! te 8ariable capital 8 and is, tere!ore, originally b%t an increment o! 8ariable capital,
a!ter te process o! prod%ction is o8er it ne8erteless also !orms an increment o! c U 8, te
expended total capital0 5e !orm%la c U B8 U sC, @ic indicates tat s is prod%ced tro%g te
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 te 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! te portion o! te ad8anced capital @ic
goes into te sel!-expansion process, b%t also o! te portion @ic does not go into it0 &n oter
@ords, it is an accretion not only to te cons%med capital made good o%t o! te cost-price o! te
commodity, b%t to all te capital in8ested in prod%ction0 Ae!ore te 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 te 8al%e o! te commodity !or @ear and tear, pl%s V28= o! circ%lating
capital in materials o! prod%ction and @ages0 ?!ter te prod%ction process @e a8e V1,18= as te
constit%ent element o! te 8al%e o! te prod%cti8e capital pl%s a commodity-capital o! V6==0 Ay
adding tese t@o s%ms o! 8al%e @e !ind tat te capitalist no@ as a 8al%e o! V1,>8=0 ?!ter
ded%cting is ad8anced total capital o! V1,68= tere remains a 8al%e increment o! V1==0 5e V1==
o! s%rpl%s-8al%e t%s !orm as m%c o! an increment in relation to te in8ested V1,68= as to its
!raction o! V+== expended d%ring prod%ction0
&t is no@ clear to te capitalist tat tis increment o! 8al%e springs !rom te prod%cti8e processes
%ndertaken @it te capital, tat it tere!ore springs !rom te capital itsel!, beca%se it is tere a!ter
<2 ;apter &
te prod%ction process, @ile it is not tere be!ore it0 ?s !or te capital cons%med in prod%ction,
te 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 tese elements contrib%te eD%ally to te !ormation o! te
cost-price0 ?ll o! tem add teir 8al%es, obtaining as ad8anced capital, to te 8al%e o! te prod%ct,
and are not di!!erentiated as constant and 8ariable magnit%des o! 8al%e0 5is becomes ob8io%s i!
@e ass%me !or a moment tat all te expended capital consisted eiter excl%si8ely o! @ages, or
excl%si8ely o! te 8al%e o! te means o! prod%ction0 &n te !irst case, @e so%ld ten a8e te
commodity-8al%e o! +==8 U 1==s instead o! te commodity-8al%e o! 2==c U 1==8 U 1==s0 5e
capital o! V+== laid o%t in @ages represents te 8al%e o! all te labo%r expended in te prod%ction
o! te commodity-8al%e o! V6==, and !or H%st tis reason !orms te cost-price o! te entire
prod%ct0 A%t te !ormation o! tis cost-price, @ereby te 8al%e o! te expended capital is
reprod%ced as a constit%ent part o! te 8al%e o! te prod%ct, is te only process in te !ormation o!
tis commodity-8al%e tat is kno@n to %s0 We do not kno@ o@ its s%rpl%s-8al%e portion o! V1==
is !ormed0 5e same is tr%e in te second case, in @ic te commodity-8al%e R +==c U 1==s0 We
kno@ in bot cases tat s%rpl%s-8al%e is deri8ed !rom a gi8en 8al%e, beca%se tis 8al%e @as
ad8anced in te !orm o! prod%cti8e capital, be it in te !orm o! labo%r or o! means o! prod%ction0
3n te oter and, tis ad8anced capital-8al%e cannot !orm s%rpl%s-8al%e !or te reason tat it as
been expended and tere!ore constit%tes te cost-price o! te commodity0 ,recisely beca%se it
!orms te cost-price o! te commodity, it does not !orm any s%rpl%s-8al%e, b%t merely an
eD%i8alent, a 8al%e replacing te expended capital0 $o !ar, tere!ore, as it !orms s%rpl%s-8al%e, it
does so not in its speci!ic capacity as expended, b%t rater as ad8anced, and ence %tilised,
capital0 For tis reason, te s%rpl%s-8al%e arises as m%c o%t o! te portion o! te ad8anced
capital @ic goes into te cost-price o! te commodity, as o%t o! te portion @ic does not0 &n
sort, it arises eD%ally o%t o! te !ixed and te circ%lating components o! te %tilised capital0 5e
aggregate capital ser8es materially as te creator o! prod%cts, te means o! labo%r as @ell as te
materials o! prod%ction, and te labo%r0 5e total capital materially enters into te act%al labo%r-
process, e8en to%g only a portion o! it enters te process o! sel!-expansion0 5is is, peraps, te
8ery reason @y it contrib%tes only in part to te !ormation o! te cost-price, b%t totally to te
!ormation o! s%rpl%s-8al%e0 6o@e8er tat may be, te o%tcome is tat s%rpl%s-8al%e springs
sim%ltaneo%sly !rom all portions o! te in8ested capital0 5is ded%ction may be s%bstantially
abbre8iated, by saying pointedly and concisely in te @ords o! Malt%s:
K5e capitalist 000 epects an eD%al pro!it %pon all te
parts o! te capital @ic e ad8ances0L
3

&n its ass%med capacity o! o!!spring o! te aggregate ad8anced capital, s%rpl%s-8al%e takes te
con8erted !orm o! profit0 6ence, a certain 8al%e is capital @en it is in8ested @it a 8ie@ to
prod%cing pro!it
2
, or, tere is pro!it beca%se a certain 8al%e @as employed as capital0 $%ppose
pro!it is p0 5en te !orm%la ; R c U 8 U s R k U s t%rns into te !orm%la ; R k U p, or te value of
a commodity R cost1price U profit0
5e pro!it, s%c as it is represented ere, is t%s te same as s%rpl%s-8al%e, only in a mysti!ied
!orm tat is noneteless a necessary o%tgro@t o! te capitalist mode o! prod%ction0 5e genesis
o! te m%tation o! 8al%es tat occ%rs in te co%rse o! te prod%ction process, m%st be trans!erred
!rom te 8ariable portion o! te capital to te total capital, beca%se tere is no apparent distinction
bet@een constant and 8ariable capital in te ass%med !ormation o! te cost-price0 Aeca%se at one
pole te price o! labo%r-po@er ass%mes te transm%ted !orm o! @ages, s%rpl%s-8al%e appears at
te opposite pole in te transm%ted !orm o! pro!it0
We a8e seen tat te cost-price o! a commodity is smaller tan its 8al%e0 $ince ; R k U s, it
!ollo@s tat k R ; - s0 5e !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 te basis o! capitalist
<+ ;apter &
prod%ction, alto%g pec%liar market conditions may red%ce te selling price o! commodities to
te le8el o!, or e8en belo@, teir cost-price0
6ence, i! a commodity is sold at its 8al%e, a pro!it is realised @ic is eD%al to te excess o! its
8al%e o8er its cost-price, and tere!ore eD%al to te entire s%rpl%s-8al%e incorporated in te 8al%e
o! te commodity0 A%t te 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 iger tan its cost-price, to%g it may be lo@er tan its
8al%e, a portion o! te 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 te 8al%e o! te commodity is V6==, and te cost-price V+==0 &! te
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 5ere is
ob8io%sly an inde!inite n%mber o! selling prices possible bet@een te 8al%e o! a commodity and
its cost-price0 5e greater te s%rpl%s-8al%e element o! te 8al%e o! a commodity, te greater te
practical range o! tese intermediate prices0
5is explains more tan H%st te e8eryday penomena o! competition, s%c as certain cases o!
%nderselling, abnormally lo@ commodity-prices in certain lines o! ind%stry
+
, etc0 5e
!%ndamental la@ o! capitalist competition, @ic political economy ad not iterto grasped, te
la@ @ic reg%lates te general rate o! pro!it and te so-called prices o! prod%ction determined
by it, rests, as @e sall later see, on tis di!!erence bet@een te 8al%e and te cost-price o!
commodities, and on te res%lting possibility o! selling a commodity at a pro!it %nder its 8al%e0
5e minimal limit o! te selling price o! a commodity is its cost-price0 &! it is sold %nder its cost-
price, te expended constit%ent elements o! prod%cti8e capital cannot be !%lly replaced o%t o! te
selling price0 &! tis process contin%es, te 8al%e o! te ad8anced capital disappears0 From tis
point o! 8ie@ alone, te capitalist is inclined to regard te cost-price as te tr%e inner 8al%e o! te
commodity, beca%se it is te price reD%ired !or te bare conser8ation o! is capital0 A%t tere is
also tis, tat te cost-price o! a commodity is te p%rcase price paid by te capitalist imsel! !or
its prod%ction, tere!ore te p%rcase price determined by te prod%ction process itsel!0 For tis
reason, te excess 8al%e, or te s%rpl%s-8al%e, realised in te sale o! a commodity appears to te
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 tat accordingly te s%rpl%s-8al%e incorporated in a commodity is not realised
tro%g its sale, b%t springs o%t o! te sale itsel!0 We a8e gi8en tis ill%sion closer consideration
in Aook & BKap0 &4, <C/Englis edition: ;0 4, <0 I 0d01 BK;ontradictions in te :eneral Form%la
o! ;apitalLC, b%t re8ert ere !or a moment to te !orm in @ic it @as rea!!irmed by 5orrens,
among oters, as an ad8ance o! political economy beyond )icardo0
K5e nat%ral price, consisting o! te cost o!
prod%ction, or, in oter @ords, o! te capital expended
in raising or !abricating commodities, cannot incl%de
te pro!it0000 5e !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
tis case, t@enty D%arters, being te excess o! prod%ce
abo8e expendit%re, constit%te te !armer"s pro!it# b%t it
@o%ld be abs%rd to call tis excess, or pro!it, a part o!
te expendit%res000 5e 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,
<6 ;apter &
and obtains in ret%rn a D%antity o! !inised @ork0 5is
!inised @ork m%st possess a iger excangeable
8al%e tan te materials, tools, and s%bsistence, by te
ad8ance o! @ic it @as obtained0L
5orrens concl%des tere!rom tat te excess o! te selling price o8er te cost-price, or pro!it, is
deri8ed !rom te !act tat te cons%mers,
Keiter by immediate or circ%ito%s barter gi8e some
greater portion o! all te ingredients o! capital tan
teir prod%ction costs0L
6

&ndeed, te excess o8er a gi8en magnit%de cannot !orm a part o! tis magnit%de, and tere!ore te
pro!it, te excess 8al%e o! a commodity o8er te capitalist"s expendit%res, cannot !orm a part o!
tese expendit%res0 6ence, i! no oter element tan te 8al%e ad8ance o! te capitalist enters into
te !ormation o! te 8al%e o! a commodity, it is inexplicable o@ more 8al%e so%ld come o%t o!
prod%ction tan @ent into it, !or someting cannot come o%t o! noting0 A%t 5orrens only e8ades
tis creation o%t o! noting by trans!erring it !rom te spere o! commodity-prod%ction to tat o!
commodity-circ%lation0 ,ro!it cannot come o%t o! prod%ction, says 5orrens, !or oter@ise it
@o%ld already be contained in te cost o! prod%ction, and tere @o%ld not be a s%rpl%s o8er tis
cost0 ,ro!it cannot come o%t o! te excange o! commodities, replies )amsay, %nless it already
existed be!ore tis excange0 5e s%m o! te 8al%e o! te excanged prod%cts is e8idently not
altered in te excange o! tese prod%cts, @ose s%m o! 8al%e it is0 &t is te same be!ore and a!ter
te excange0 &t so%ld be noted ere tat Malt%s re!ers expressly to te a%tority o! 5orrens
>
alto%g e imsel! as a di!!erent explanation !or te sale o! commodities abo8e teir 8al%e, or
rater as no explanation at all, since all arg%ments o! tis sort ne8er, in e!!ect, !ail to be red%ced
to te same ting as te once-!amed negati8e @eigt o! plogiston0
&n a social order dominated by capitalist prod%ction e8en te 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 tat e does
not gi8e te latter someting !or noting beca%se is o@n labo%r does not cost im any cas
o%tlay0 ?s !or te %s%rer, e t%s !ells t@o dogs @it one stone0 6e sa8es te cas o%tlay !or
@ages and enmeses te peasant, @o is grad%ally r%ined by depri8ing is o@n !ield o! labo%r,
deeper and deeper in te spider-@eb o! %s%ry0
5e to%gtless conception tat te cost-price o! a commodity constit%tes its act%al 8al%e, and
tat s%rpl%s-8al%e springs !rom selling te prod%ct abo8e its 8al%e, so tat commodities @o%ld be
sold at teir 8al%e i! teir selling price @ere to eD%al teir cost-price, i0e0, i! it @ere to eD%al te
price o! te cons%med means o! prod%ction pl%s @ages, as been eralded to te @orld as a ne@ly
disco8ered secret o! socialism by ,ro%don @it is c%stomary D%asi-scienti!ic cicanery0 &ndeed,
tis red%ction o! te 8al%e o! commodities to teir cost-price is te basis o! is ,eople"s Aank0 &t
@as earlier so@n tat te 8ario%s constit%ent elements o! te 8al%e o! a prod%ct may be
represented in proportional parts o! te prod%ct itsel!0 For instance BA%c &, Kap0 4& 1, <, $0
<11N<=3C/Englis edition: ;0 &J, <, pp0 <<=-<10 I 0d01 i! te 8al%e o! <= lbs0 o! yarn is 3=
sillings I namely <2 sillings o! means o! prod%ction, 3 sillings o! labo%r-po@er, and 3
sillings o! s%rpl%s-8al%e I ten tis s%rpl%s-8al%e may be represented as 1N1= o! te prod%ctR<
lbs0 o! yarn0 $o%ld tese <= lbs0 o! yarn no@ be sold at teir cost-price, at <> sillings, ten te
p%rcaser recei8es < lbs0 o! yarn !or noting, or te article is sold 1N1= belo@ its 8al%e0 A%t te
labo%rer as, as be!ore, per!ormed is s%rpl%s-labo%r, only tis time !or te p%rcaser o! te yarn
instead o! te capitalist yarn prod%cer0 &t @o%ld be altogeter @rong to ass%me tat i! all
<> ;apter &
commodities @ere sold at teir cost-price, te res%lt @o%ld really be te same as i! tey ad all
been sold abo8e teir cost-price, b%t at teir 8al%e0 For e8en i! te 8al%e o! te labo%r-po@er, te
lengt o! te @orking-day, and te degree o! exploitation o! labo%r @ere te same e8ery@ere,
te D%antities o! s%rpl%s-8al%e contained in te 8al%es o! te 8ario%s kinds o! commodities @o%ld
be %neD%al, depending on te di!!erent organic composition o! te capitals ad8anced !or teir
prod%ction0
8
Chapter 2. The Rate of Proft
5e general !orm%la o! capital is M-;-M"0 &n oter @ords, a s%m o! 8al%e is tro@n into
circ%lation to extract a larger s%m o%t o! it0 5e process @ic prod%ces tis larger s%m is
capitalist prod%ction0 5e process tat realises it is circ%lation o! capital0 5e capitalist does not
prod%ce a commodity !or its o@n sake, nor !or te sake o! its %se-8al%e, or is personal
cons%mption0 5e prod%ct in @ic te capitalist is really interested is not te palpable prod%ct
itsel!, b%t te excess 8al%e o! te prod%ct o8er te 8al%e o! te capital cons%med by it0 5e
capitalist ad8ances te total capital @ito%t regard to te di!!erent roles played by its components
in te prod%ction o! s%rpl%s-8al%e0 6e ad8ances all tese components %ni!ormly, not H%st to
reprod%ce te ad8anced capital, b%t rater to prod%ce 8al%e in excess o! it0 5e only @ay in @ic
e can con8ert te 8al%e o! is ad8anced 8ariable capital into a greater 8al%e is by excanging it
!or li8ing labo%r and exploiting li8ing labo%r0 A%t e cannot exploit tis labo%r %nless e makes a
sim%ltaneo%s ad8ance o! te conditions !or per!orming tis labo%r, namely means o! labo%r and
s%bHects o! labo%r, macinery and ra@ materials, i0e0, %nless e con8erts a certain amo%nt o! 8al%e
in is possession into te !orm o! conditions o! prod%ction# !or e is a capitalist and can %ndertake
te process o! exploiting labo%r only beca%se, being te o@ner o! te conditions o! labo%r, e
con!ronts te labo%rer as te o@ner o! only labo%r-po@er0 ?s already so@n in te !irst book
/Englis edition: 4ol0 1, pp0 168-6*0 >12-160 I0d01, it is precisely te !act tat non-@orkers o@n
te means o! prod%ction @ic t%rns labo%rers into @age-@orkers and non-@orkers into
capitalists0
5e capitalist does not care @eter it is considered tat e ad8ances constant capital to make a
pro!it o%t o! is 8ariable capital, or tat e ad8ances 8ariable capital to enance te 8al%e o! te
constant capital# tat e in8ests money in @ages to raise te 8al%e o! is macinery and ra@
materials, or tat e in8ests money in macinery and ra@ materials to be able to exploit labo%r0
?lto%g it is only te 8ariable portion o! capital @ic creates s%rpl%s-8al%e, it does so only i!
te oter portions, te conditions o! prod%ction, are like@ise ad8anced0 $eeing tat te capitalist
can exploit labo%r only by ad8ancing constant capital and tat e can t%rn is constant capital to
good acco%nt only by ad8ancing 8ariable capital, e l%mps tem all togeter in is imagination,
and m%c more so since te act%al rate o! is gain is not determined by its proportion to te
8ariable, b%t to te total capital, not by te rate o! s%rpl%s-8al%e, b%t by te rate o! pro!it0 ?nd te
latter, as @e sall see, may remain te same and yet express di!!erent rates o! s%rpl%s-8al%e0
5e costs o! te prod%ct incl%de all te elements o! its 8al%e paid by te capitalist or !or @ic e
as tro@n an eD%i8alent into prod%ction0 5ese costs m%st be made good to preser8e te capital
or to reprod%ce it in its original magnit%de0
5e 8al%e contained in a commodity is eD%al to te labo%r-time expended in its prod%ction, and
te s%m o! tis labo%r consists o! paid and %npaid portions0 A%t !or te capitalist te costs o! te
commodity consist only o! tat portion o! te labo%r materialised in it !or @ic e as paid0 5e
s%rpl%s-labo%r contained in te commodity costs te capitalist noting, alto%g, like te paid
portion, it costs te labo%rer is labo%r, and alto%g it creates 8al%e and enters into te
commodity as a 8al%e-creating element D%ite like paid labo%r0 5e capitalist"s pro!it is deri8ed
!rom te !act tat e as someting to sell !or @ic e as paid noting0 5e s%rpl%s-8al%e, or
pro!it, consists precisely in te excess 8al%e o! a commodity o8er its cost-price, i0e0, te excess o!
te total labo%r embodied in te commodity o8er te paid labo%r embodied in it0 5e s%rpl%s-
8al%e, @ate8er its origin, is t%s a s%rpl%s o8er te ad8anced total capital0 5e proportion o! tis
s%rpl%s to te total capital is tere!ore expressed by te !raction sN;, in @ic ; stands !or total
capital0 We t%s obtain te rate of profitsN;RsNBcU8C, as distinct !rom te rate o! s%rpl%s-8al%e sN80
<* ;apter &&
5e rate o! s%rpl%s-8al%e meas%red against te 8ariable capital is called rate o! s%rpl%s-8al%e0 5e
rate o! s%rpl%s-8al%e meas%red against te total capital is called rate o! pro!it0 5ese are t@o
di!!erent meas%rements o! te same entity, and o@ing to te di!!erence o! te t@o standards o!
meas%rement tey express di!!erent proportions or relations o! tis entity0
5e trans!ormation o! s%rpl%s-8al%e into pro!it m%st be ded%ced !rom te trans!ormation o! te
rate o! s%rpl%s-8al%e into te rate o! pro!it, not 8ice 8ersa0 ?nd in !act it @as rate o! pro!it @ic
@as te istorical point o! depart%re0 $%rpl%s-8al%e and rate o! s%rpl%s-8al%e are, relati8ely, te
in8isible and %nkno@n essence tat @ants in8estigating, @ile rate o! pro!it and tere!ore te
appearance o! s%rpl%s-8al%e in te !orm o! pro!it are re8ealed on te s%r!ace o! te penomenon0
$o !ar as te indi8id%al capitalist is concerned, it is e8ident tat e is only interested in te
relation o! te s%rpl%s-8al%e, or te excess 8al%e at @ic e sells is commodities, to te total
capital ad8anced !or te prod%ction o! te commodities, @ile te speci!ic relationsip and inner
connection o! tis s%rpl%s @it te 8ario%s components o! capital !ail to interest im, and it is,
moreo8er, rater in is interests to dra@ te 8eil o8er tis speci!ic relationsip and tis intrinsic
connection0
?lto%g te excess 8al%e o! a commodity o8er its cost-price is saped in te immediate process
o! prod%ction, it is realised only in te process o! circ%lation, and appears all te more readily to
a8e arisen !rom te process o! circ%lation, since in reality, %nder competition, in te act%al
market, it depends on market conditions @eter or not and to @at extent tis s%rpl%s is realised0
5ere is no need to @aste @ords at tis point abo%t te !act tat i! a commodity is sold abo8e or
belo@ its 8al%e, tere is merely anoter kind o! di8ision o! s%rpl%s-8al%e, and tat tis di!!erent
di8ision, tis canged proportion in @ic 8ario%s persons sare in te s%rpl%s-8al%e, does not in
any @ay alter eiter te magnit%de or te nat%re o! tat s%rpl%s-8al%e0 &t is not alone te
metamorposes disc%ssed by %s in Aook && tat take place in te process o! circ%lation# tey !all
in @it act%al competition, te sale and p%rcase o! commodities abo8e or belo@ teir 8al%e, so
tat te s%rpl%s-8al%e realised by te indi8id%al capitalist depends as m%c on te sarpness o!
is b%siness @its as on te direct exploitation o! labo%r0
&n te process o! circ%lation te time o! circ%lation comes to exert its in!l%ence alongside te
@orking-time, tereby limiting te amo%nt o! s%rpl%s-8al%e realisable @itin a gi8en time span0
$till oter elements deri8ed !rom circ%lation intr%de decisi8ely into te act%al prod%ction process0
5e act%al process o! prod%ction and te process o! circ%lation intert@ine and intermingle
contin%ally, and tereby in8ariably ad%lterate teir typical distincti8e !eat%res0 5e prod%ction o!
s%rpl%s-8al%e, and o! 8al%e in general, recei8es ne@ de!inition in te process o! circ%lation, as
pre8io%sly so@n0 ;apital passes tro%g te circ%it o! its metamorposes0 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 anoter, b%t capital and capital in one case,
and indi8id%als, again simply as b%yers and sellers, in te oter0 5e time o! circ%lation and
@orking-time cross pats and t%s bot seem to determine te s%rpl%s-8al%e0 5e original !orm in
@ic capital and @age-labo%r con!ront one anoter is disg%ised tro%g te inter8ention o!
relationsips seemingly independent o! it0 $%rpl%s-8al%e itsel! does not appear as te prod%ct o!
te appropriation o! labo%r-time, b%t as an excess o! te selling price o! commodities o8er teir
cost-price, te latter t%s being easily represented as teir act%al 8al%e Bvaleur intrins23ueC, @ile
pro!it appears as an excess o! te selling price o! commodities o8er teir immanent 8al%e0
5r%e, te nat%re o! s%rpl%s-8al%e impresses itsel! constantly %pon te conscio%sness o! te
capitalist d%ring te process o! prod%ction, as is greed !or te labo%r-time o! oters, etc0, as
re8ealed in o%r analysis o! s%rpl%s-8al%e0 A%t: 1C 5e act%al process o! prod%ction is only a
!leeting stage @ic contin%ally merges @it te process o! circ%lation, H%st as te latter merges
@it te !ormer, so tat in te process o! prod%ction, te more or less clearly da@ning notion o!
te so%rce o! te gain made in it, i0e0, te inkling o! te nat%re o! s%rpl%s-8al%e, stands at best as a
!actor eD%ally 8alid as te idea tat te realised s%rpl%s originates in a mo8ement tat is
3= ;apter &&
independent o! te prod%ction process, tat it arises in circ%lation, and tat it belongs to capital
irrespecti8e o! te latter"s relation to labo%r0 E8en s%c modern economists as )amsay, Malt%s,
$enior, 5orrens, etc0, identi!y tese penomena o! circ%lation directly as proo!s tat 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 te item o! expenses, @ic embrace @ages as @ell as te price o! ra@ materials, @ear and
tear o! macinery, etc0, te 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 te sa8ing @en ra@ materials are bo%gt more ceaply, or te depreciation o!
macinery decreases0 &n tis @ay te extortion o! s%rpl%s-labo%r loses its speci!ic caracter0 &ts
speci!ic relationsip to s%rpl%s-8al%e is obsc%red0 5is is greatly !%rtered and !acilitated, as
so@n in Aook & B?bscn0 4&C /Englis edition: ,art 4&, pp0 +3+-230 I 0d01, by representing te
8al%e o! labo%r-po@er in te !orm o! @ages0
5e relationsips o! capital are obsc%red by te !act tat all parts o! capital appear eD%ally as te
so%rce o! excess 8al%e Bpro!itC0
5e @ay in @ic s%rpl%s-8al%e is trans!ormed into te !orm o! pro!it by @ay o! te rate o! pro!it
is, o@e8er, a !%rter de8elopment o! te in8ersion o! s%bHect and obHect tat takes place already
in te process o! prod%ction0 &n te latter, @e a8e seen, te 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 te one
and, te 8al%e, or te past labo%r, @ic dominates li8ing labo%r, is incarnated in te capitalist0
3n te oter and, te labo%rer appears as bare material labo%r-po@er, as a commodity0 E8en in
te simple relations o! prod%ction tis in8erted relationsip necessarily prod%ces certain
correspondingly in8erted conceptions, a transposed conscio%sness @ic is !%rter de8eloped by
te metamorposes and modi!ications o! te act%al circ%lation process0
&t is altogeter erroneo%s, as a st%dy o! te )icardian scool so@s, to try to identi!y te la@s o!
te rate o! pro!it @it te la@s o! te rate o! s%rpl%s-8al%e, or 8ice 8ersa0 5e capitalist nat%rally
does not see te di!!erence bet@een tem0 &n te !orm%la sN; te s%rpl%s-8al%e is meas%red by te
8al%e o! te total capital ad8anced !or its prod%ction, o! @ic a part @as totally cons%med in tis
prod%ction and a part @as merely employed in it0 &n !act, te !orm%la sN; expresses te degree o!
sel!-expansion o! te total capital ad8anced, or, taken in con!ormity @it inner concept%al
connections and te nat%re o! s%rpl%s-8al%e, it indicates te ratio o! te amo%nt o! 8ariation o!
8ariable capital to te magnit%de o! te ad8anced total capital0
&n itsel!, te magnit%de o! 8al%e o! total capital as no inner relationsip to te magnit%de o!
s%rpl%s-8al%e, at least not directly0 $o !ar as its material elements are concerned, te total capital
min%s te 8ariable capital, tat is, te constant capital, consists o! te material reD%isites I te
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 tereby to prod%ce 8al%e0 ? de!inite tecnical relation depending on te special
nat%re o! te labo%r applied is establised bet@een te D%antity o! labo%r and te D%antity o!
means o! prod%ction to @ic tis labo%r is to be applied0 6ence tere is also to tat extent a
de!inite relation bet@een te D%antity o! s%rpl%s-8al%e, or s%rpl%s-labo%r, and te D%antity o!
means o! prod%ction0 For instance, i! te labo%r necessary !or te prod%ction o! te @age amo%nts
to a daily 6 o%rs, te 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! te means o! prod%ction in 1< o%rs as e
does in 60 .et tis is no reason !or te s%rpl%s-8al%e prod%ced by im in 6 o%rs to be directly
related to te 8al%e o! te means o! prod%ction %sed %p in tose 6, or in 1< o%rs0 5is 8al%e is
ere altogeter immaterial# it is only a matter o! te tecnically reD%ired D%antity0 &t does not
matter @eter te ra@ materials or means o! labo%r are ceap or dear, as long as tey a8e te
reD%ired %se-8al%e and are a8ailable in tecnically prescribed proportion to te labo%r to be
applied0 &! & kno@ tat x lbs0 o! cotton are cons%med in an o%r o! spinning and tat tey cost a
31 ;apter &&
sillings, ten, o! co%rse, & also kno@ tat 1< o%rs" spinning cons%mes 1<x lbs0 o! cotton R 1< a
sillings, and can ten calc%late te proportion o! te s%rpl%s-8al%e to te 8al%e o! te 1< as @ell
as to tat o! te 60 A%t te relation o! li8ing labo%r to te value o! means o! prod%ction obtains
ere only to te extent tat a sillings ser8e as a name !or x lbs0 o! cotton# beca%se a de!inite
D%antity o! cotton as a de!inite price, and tere!ore, con8ersely, a de!inite price may also ser8e
as an index !or a de!inite D%antity o! cotton, so long as te price o! cotton does not cange0 &! &
kno@ tat te labo%rer m%st @ork 1< o%rs !or me to appropriate 6 o%rs o! s%rpl%s-labo%r, tat
tere!ore & m%st a8e a 1<-o%r s%pply o! cotton ready !or %se, and i! & kno@ te price o! tis
D%antity o! cotton needed !or 1< o%rs, ten & a8e an indirect relation bet@een te price o! cotton
Bas an index o! te reD%ired D%antityC and te s%rpl%s-8al%e0 A%t, con8ersely, & can ne8er concl%de
te D%antity o! te ra@ material tat may be cons%med in, say, one o%r, and not 6, o! spinning
!rom te price o! te ra@ material0 5ere is, ten, no necessary inner relation bet@een te 8al%e o!
te constant capital, nor, tere!ore, bet@een te 8al%e o! te total capital BRcU8C and te s%rpl%s-
8al%e0
&! te rate o! s%rpl%s-8al%e is kno@n and its magnit%de gi8en, te rate o! pro!it expresses noting
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 te 8al%e o! te total capital instead o! te 8al%e o! te portion o! capital !rom @ic
s%rpl%s-8al%e directly originates by @ay o! its excange !or labo%r0 A%t in reality Bi0e0, in te
@orld o! penomenaC te matter is re8ersed0 $%rpl%s-8al%e is gi8en, b%t gi8en as an excess o! te
selling price o! te commodity o8er its cost-price# and it remains a mystery @ere tis s%rpl%s
originated I !rom te exploitation o! labo%r in te process o! prod%ction, or !rom o%t@itting te
p%rcaser in te process o! circ%lation, or !rom bot0 Wat is also gi8en is te proportion o! tis
s%rpl%s to te 8al%e o! te total capital, or te rate o! pro!it0 5e calc%lation o! tis excess o! te
selling price o8er te cost-price in relation to te 8al%e o! te ad8anced total capital is 8ery
important and nat%ral, beca%se in e!!ect it yields te ratio in @ic total capital as been
expanded, i0e0, te degree o! its sel!-expansion0 &! @e proceed !rom tis rate o! pro!it, @e cannot
tere!ore concl%de te speci!ic relations bet@een te s%rpl%s and te portion o! capital in8ested in
@ages0 We sall see in a s%bseD%ent capter /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 tis @ay to get at te secret o! te s%rpl%s-8al%e and o! its speci!ic relation to te
8ariable part o! te capital0 Wat te rate o! pro!it act%ally so@s is rater a %ni!orm relation o!
te s%rpl%s to eD%al portions o! te total capital, @ic, !rom tis point o! 8ie@, does not so@
any inner di!!erence at all, %nless it be bet@een te !ixed and circ%lating capital0 ?nd it so@s tis
di!!erence, too, only beca%se te s%rpl%s is calc%lated in t@o @ays# namely, !irst, as a simple
magnit%de I as excess o8er te cost-price0 &n tis, its initial, !orm, te entire circ%lating capital
goes into te cost-price, @ile o! te !ixed capital only te @ear and tear goes into it0 $econd, te
relation o! tis excess in 8al%e to te total 8al%e o! te ad8anced capital0 &n tis case, te 8al%e o!
te total !ixed capital enters into te calc%lation, D%ite te same as te circ%lating capital0
5ere!ore, te circ%lating capital goes in bot times in te same @ay, @ile te !ixed capital goes
in di!!erently te !irst time, and in te same @ay as circ%lating capital te second time0 (nder te
circ%mstances te di!!erence bet@een !ixed and circ%lating capital is te only one @ic obtr%des
itsel!0
&!, as 6egel @o%ld p%t it, te s%rpl%s tere!ore re-re!lects itsel! in itsel! o%t o! te rate o! pro!it, or,
p%t di!!erently, te s%rpl%s is more closely caracterised by te 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
?lto%g te rate o! pro!it t%s di!!ers n%merically !rom te rate o! s%rpl%s-8al%e, @ile s%rpl%s-
8al%e and pro!it are act%ally te same ting and n%merically eD%al, pro!it is ne8erteless a
con8erted !orm o! s%rpl%s-8al%e, a !orm in @ic its origin and te secret o! its existence are
obsc%red and exting%ised0 &n e!!ect, pro!it is te !orm in @ic s%rpl%s-8al%e presents itsel! to
te 8ie@, and m%st initially be stripped by analysis to disclose te latter0 &n s%rpl%s-8al%e, te
3< ;apter &&
relation bet@een capital and labo%r is laid bare# in te relation o! capital to pro!it, i0e0, o! capital
to s%rpl%s-8al%e tat appears on te one and as an excess o8er te cost-price o! commodities
realised in te process o! circ%lation and, on te oter, as a s%rpl%s more closely determined by its
relation to te total capital, the capital appears as a relation to itself, a relation in @ic it, as te
original s%m o! 8al%e, is disting%ised !rom a ne@ 8al%e @ic it generated0 3ne is conscio%s tat
capital generates tis ne@ 8al%e by its mo8ement in te processes o! prod%ction and circ%lation0
A%t te @ay in @ic tis occ%rs is cloaked in mystery and appears to originate !rom idden
D%alities inerent in capital itsel!0
5e !%rter @e !ollo@ te process o! te sel!-expansion o! capital, te more mysterio%s te
relations o! capital @ill become, and te less te secret o! its internal organism @ill be re8ealed0
&n tis part, te rate o! pro!it is n%merically di!!erent !rom te rate o! s%rpl%s-8al%e# @ile pro!it
and s%rpl%s-8al%e are treated as a8ing te same n%merical magnit%de b%t only a di!!erent !orm0
&n te next part @e sall see o@ te alienation goes !%rter, 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 Proft to
the Rate of Surplus-Value
6ere, as at te close o! te preceding capter, and generally in tis entire !irst part, @e pres%me
te amo%nt o! pro!it !alling to a gi8en capital to be eD%al to te total amo%nt o! s%rpl%s-8al%e
prod%ced by means o! tis capital d%ring a certain period o! circ%lation0 We t%s lea8e aside !or
te present te !act tat, on te one and, tis 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 tat, on te oter, 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 te second part0
$o !ar as te D%antity o! pro!it is ass%med to be eD%al to tat o! s%rpl%s-8al%e, its magnit%de, and
tat o! te rate o! pro!it, is determined by ratios o! simple !ig%res gi8en or ascertainable in e8ery
indi8id%al case0 5e analysis, tere!ore, !irst is carried on p%rely in te matematical !ield0
We retain te 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 5e ratio o! tis s%rpl%s-8al%e to te
ad8anced 8ariable capital, or sN8, is called te rate o! s%rpl%s-8al%e and designated s"0 5ere!ore
sN8 R s", and conseD%ently s R s"80 &! tis s%rpl%s-8al%e is related to te total capital instead o! te
8ariable capital, it is called pro!it, p, and te ratio o! te s%rpl%s-8al%e s to te total capital ;, or
sN;, is called te 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 te proportion
p" : s" R 8 : ; #
te rate o! pro!it is related to te rate o! s%rpl%s-8al%e as te 8ariable capital is to te total capital0
&t !ollo@s !rom tis proportion tat te rate o! pro!it, p", is al@ays smaller tan s", te rate o!
s%rpl%s-8al%e, beca%se 8, te 8ariable capital, is al@ays smaller tan ;, te s%m o! 8 U c, or te
8ariable pl%s te constant capital# te only, practically impossible case excepted, in @ic 8 R ;,
tat is, no constant capital at all, no means o! prod%ction, b%t only @ages are ad8anced by te
capitalist0
6o@e8er, o%r analysis also considers a n%mber o! oter !actors @ic a8e a determining
in!l%ence on te magnit%de o! c, 8, and s, and m%st tere!ore be brie!ly examined0
First, te value of money0 We may ass%me tis to be constant tro%go%t0
$econd, te turnover0 We sall lea8e tis !actor entirely o%t o! consideration !or te present, since
its in!l%ence on te rate o! pro!it @ill be treated specially in a later capter0 /6ere @e anticipate
H%st one point, tat te !orm%la p" R s" B8N;C is strictly correct only !or one period o! t%rno8er o!
te 8ariable capital0 A%t @e may correct it !or an ann%al t%rno8er by s%bstit%ting !or te simple
rate o! s%rpl%s-8al%e, s", te ann%al rate o! s%rpl%s-8al%e, s"n0 &n tis, n is te n%mber o! t%rno8ers
o! te 8ariable capital @itin one year0 B;!0 Aook &&, ;apter J4&, 1C I F0 E01
5ird, d%e consideration m%st be gi8en to productivity of labour, @ose in!l%ence on te rate o!
s%rpl%s-8al%e as been toro%gly disc%ssed in Aook & B?bscnitt &4C0 /Englis edition: ,art &40 I
Ed01 ,rod%cti8ity o! labo%r may also exert a direct in!l%ence on te 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,
32 ;apter &&&
$033+N3361C /Englis edition: ;0 J&&, pp0 316-1>0 I Ed01 tis indi8id%al capital operates @it a
iger tan te a8erage social prod%cti8ity and prod%ces commodities at a lo@er 8al%e tan teir
a8erage social 8al%e, tereby realising an extra pro!it0 6o@e8er, tis case @ill not be considered
!or te present, since in tis part o! te @ork @e also proceed !rom te premise tat commodities
are prod%ced %nder normal social conditions and are sold at teir 8al%es0 6ence, @e ass%me in
eac case tat te prod%cti8ity o! labo%r remains constant0 &n e!!ect, te 8al%e-composition o! a
capital in8ested in a branc o! ind%stry, tat is, a certain proportion bet@een te 8ariable and
constant capital, al@ays expresses a de!inite degree o! labo%r prod%cti8ity0 ?s soon, tere!ore, as
tis proportion is altered by means oter tan a mere cange in te 8al%e o! te material elements
o! te constant capital, or a cange in @ages, te prod%cti8ity o! labo%r m%st like@ise %ndergo a
corresponding cange, and @e sall o!ten eno%g see, !or tis reason, tat canges in te !actors
c, 8, and s also imply canges in te prod%cti8ity o! labo%r0
5e same applies to te tree remaining !actors I te length of the wor-ing1day, intensity of
labour, and wages0 5eir in!l%ence on te D%antity and rate o! s%rpl%s-8al%e as been
exa%sti8ely disc%ssed in Aook & /Englis edition: 4ol0 1, pp0 +1*-3=0 I Ed01 &t @ill be
%nderstood, tere!ore, tat not@itstanding te ass%mption, @ic @e make !or te sake o!
simplicity, tat tese tree !actors remain constant, te canges tat occ%r in 8 and s may
ne8erteless imply canges in te magnit%de o! tese, teir determining elements0 &n tis respect
@e m%st brie!ly recall tat te @age in!l%ences te D%antity o! s%rpl%s-8al%e and te rate o!
s%rpl%s-8al%e in in8erse proportion to te lengt o! te @orking-day and te intensity o! labo%r#
tat an increase in @ages red%ces te s%rpl%s-8al%e, @ile a lengtening o! te @orking-day and
an increase in te 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 5en @e a8e:
8=c U <=8 U <=s# s" R 1==T, p" R <=T0
-o@ te @orking-day is lengtened to 1+ o%rs @ito%t raising te @ages0 5e total 8al%e
prod%ced by te <= labo%rers @ill tereby increase !rom 2= to 6= B1= : 1+ R 2= : 6=C0 $ince 8, te
@ages paid to te labo%rers, remains te same, te 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, te ten-o%r @orking-day remains %ncanged, @ile @ages !all !rom <= to 1<, te
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 5en @e a8e:
8=c U <=8 U <8s# s" R <33XT, p" R <8N*< R 3= 1=N<3 T0
6ence, @e see tat a prolonged @orking-day Bor a corresponding increase in te intensity o!
labo%rC and a !all in @ages bot increase te amo%nt, and t%s te rate, o! s%rpl%s-8al%e0
;on8ersely, a rise in @ages, oter tings being eD%al, @o%ld lo@er te rate o! s%rpl%s-8al%e0
6ence, i! 8 rises tro%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
5is indicates tat canges in te @orking-day, intensity o! labo%r and @ages cannot take place
@ito%t a sim%ltaneo%s cange in 8 and s and teir ratio, and tere!ore also p", @ic is te ratio
o! s to te total capital c U 80 ?nd it is also e8ident tat canges in te ratio o! s to 8 also imply
corresponding canges in at least one o! te tree abo8e-mentioned labo%r conditions0
,recisely tis re8eals te speci!ic organic relationsip o! 8ariable capital to te mo8ement o! te
total capital and to its sel!-expansion, and also its di!!erence !rom constant capital0 $o !ar as
generation o! 8al%e is concerned, te constant capital is important only !or te 8al%e it as0 ?nd it
is immaterial to te generation o! 8al%e @eter a constant capital o! V1,+== represents 1,+== tons
o! iron at, say, V1, or +== tons o! iron at V30 5e D%antity o! act%al material, in @ic te 8al%e o!
3+ ;apter &&&
te constant capital is incorporated, is altogeter irrele8ant to te !ormation o! 8al%e and te rate
o! pro!it, @ic 8aries in8ersely to tis 8al%e no matter @at te ratio o! te increase or decrease
o! te 8al%e o! constant capital to te mass o! material %se-8al%e @ic it represents0
&t is di!!erent @it 8ariable capital0 &t is not te 8al%e it as, not te labo%r incorporated in it, tat
matter at tis point, b%t tis 8al%e as a mere index o! te total labo%r tat it sets in motion and
@ic is not expressed in it I te total labo%r, @ose di!!erence !rom te labo%r expressed in tat
8al%e, ence te paid labo%r, i0e0, tat portion o! te total labo%r @ic prod%ces s%rpl%s-8al%e, is
all te greater, te less labo%r is contained in tat 8al%e itsel!0 $%ppose, a ten-o%r @orking-day is
eD%al to ten sillings R ten marks0 &! te labo%r necessary to replace te @ages, and t%s te
8ariable capital R + o%rs R + sillings, ten te s%rpl%s-labo%r R + o%rs and te s%rpl%s-8al%e R
+ sillings0 $o%ld te necessary labo%r R 2 o%rs R 2 sillings, ten te s%rpl%s-labo%r R 6 o%rs
and te s%rpl%s-8al%e R 6 sillings0
6ence, as soon as te 8al%e o! te 8ariable capital ceases to be an index o! te D%antity o! labo%r
set in motion by it, and, moreo8er, te meas%re o! tis index is altered, te rate o! s%rpl%s-8al%e
@ill cange in te opposite direction and in8ersely0
'et %s no@ go on to apply te abo8e-mentioned eD%ation o! te rate o! pro!it, p" R s" B8N;C, to te
8ario%s possible cases0 We sall s%ccessi8ely cange te 8al%e o! te indi8id%al !actors o! s" B8N;C
and determine te e!!ect o! tese canges on te rate o! pro!it0 &n tis @ay @e sall obtain
di!!erent series o! cases, @ic @e may regard eiter as s%ccessi8e altered conditions o! operation
!or one and te same capital, or as di!!erent capitals existing side by side and introd%ced !or te
sake o! comparison, taken, as it @ere, !rom di!!erent brances o! ind%stry or di!!erent co%ntries0
&n cases, tere!ore, @ere te conception o! some o! o%r examples as s%ccessi8e conditions !or
one and te same capital appears to be !orced or impracticable, tis obHection !alls a@ay te
moment tey are regarded as comparisons o! independent capitals0
6ence, @e no@ separate te prod%ct s" B8N;C into its t@o !actors s" and 8N;0 ?t !irst @e sall treat
s" as constant and analyse te e!!ect o! te possible 8ariations o! 8N;0 ?!ter tat @e sall treat te
!raction 8N; as constant and let s" pass tro%g its possible 8ariations0 Finally @e sall treat all
!actors as 8ariable magnit%des and tereby exa%st all te cases !rom @ic la@s concerning te
rate o! pro!it may be deri8ed0
I. s. constant, v7C varia4le
5is 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 teir respecti8e 8ariable components, 8 and 81, @it a common
rate o! s%rpl%s-8al%e, s", and rates o! pro!it p" and p"10 5en:
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 te 8al%e o! te
!raction ;1N; R E, and tat o! 81N8 R e0 5en ;1 R E;, and 81 R e80 $%bstit%ting in te abo8e
eD%ation tese 8al%es !or p1, ;1 and 81, @e obtain
p"1 R s" e8NE;
?gain, @e may deri8e a second !orm%la !rom te abo8e t@o eD%ations by trans!orming tem into
te proportion:
p" : p"1 R s" B8N;C : s" B81N;1C R B8N;C : 81N;1 0
$ince te 8al%e o! a !raction is not canged i! @e m%ltiply or di8ide its n%merator and
denominator by te same n%mber, @e may red%ce 8N; and 81N;1 to percentages, tat is, @e may
make ; and ;1 bot R 1==0 5en @e a8e 8N; R 8N1== and 81N;1 R 81N1==, and may ten drop te
denominators in te abo8e proportion, obtaining:
p" : p"1 R 8 : 81", or:
36 ;apter &&&
5aking any t@o capitals operating @it te same rate o! s%rpl%s-8al%e, te rates o! pro!it are to
eac oter as te 8ariable portions o! te capitals calc%lated as percentages o! teir respecti8e
total capitals0
5ese t@o !orm%las embrace all te possible 8ariations o! 8N;0
3ne more remark be!ore @e analyse tese 8ario%s cases singly0 $ince ; is te s%m o! c and 8, o!
te constant and 8ariable capitals, and since te rates o! s%rpl%s-8al%e, as o! pro!it, are %s%ally
expressed in percentages, it is con8enient to ass%me tat te s%m o! c U 8 is also eD%al to 1==, i0e0,
to express c and 8 in percentages0 For te determination o! te rate o! pro!it, i! not o! te amo%nt,
it is immaterial @eter @e say tat a capital o! 1+,===, o! @ic 1<,=== is constant and 3,=== is
8ariable, prod%ces a s%rpl%s-8al%e o! 3,===, or @eter @e red%ce tis capital to percentages:
1+,=== ; R 1<,===c U 3,===8 B U 3,===sC
1== ; R 8=c U <=8 B U <=sC0
&n eiter case te rate o! s%rpl%s-8al%e s" R 1==T, and te rate o! pro!it R <=T0
5e same is tr%e @en @e compare t@o capitals, say, te !oregoing capital @it anoter, 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 te comparison @it te !oregoing capital is
clearer in percentage !orm0
3n te oter and, i! it is a matter o! canges taking place in one and te same capital, te !orm
o! percentages is rarely to be %sed, beca%se it almost al@ays obsc%res tese canges0 &! a capital
expressed in te !orm o! percentages:
8=c U <=8 U <=s
ass%mes te !orm o! percentages:
*=c U 1=8 U 1=s,
@e cannot tell @eter te canged 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 bot0 We @o%ld need te absol%te magnit%des in
!ig%res to ascertain tis0 &n te analysis o! te !ollo@ing indi8id%al cases o! 8ariation, o@e8er,
e8eryting depends on o@ tese canges a8e come abo%t# @eter 8=8 U <=c canged into *=c U
1=8 tro%g an increase o! te constant capital @ito%t any cange in te 8ariable capital, !or
instance tro%g 1<,===c U 3,===8 canging into <>,===c U 3,===8 Bcorresponding to a percentage
o! *=c U 1=8C# or @eter tey took tis !orm tro%g a red%ction o! te 8ariable capital, @it te
constant capital remaining %ncanged, tat is, tro%g a cange into 1<,===c U 1,333X 8 Balso
corresponding to a percentage o! *=c U 1=8C# or, lastly, @eter bot o! te terms canged into
13,+==c U 1,+==8 Bcorresponding once more to a percentage o! *=c U 1=8C0 A%t it is precisely tese
cases @ic @e sall a8e to s%ccessi8ely analyse, and in so doing dispense @it te con8enient
!orm o! percentages, or at least employ tese only as a secondary alternati8e0
1C s5 and C constant, v variable.
&! 8 canges in magnit%de, ; can remain %naltered only i! c, te oter component o! ;, tat is, te
constant capital, canges by te same amo%nt as 8, b%t in te opposite direction0
&! ; originally R 8=c U <=8 R 1==, and i! 8 is ten red%ced to 1=, ten ; 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, ten c m%st be trans!ormed into c Y d, into c 8arying by te same
amo%nt, b%t in te opposite direction, so tat te conditions o! te present case are satis!ied0
$imilarly, i! te rate o! s%rpl%s-8al%e s" remains te same, @ile te 8ariable capital 8 canges, te
amo%nt o! s%rpl%s-8al%e s m%st cange, since s R s"8, and since one o! te !actors o! s"8, namely 8,
is gi8en anoter 8al%e0
3> ;apter &&&
5e ass%mptions o! te present case prod%ce, alongside te original eD%ation,
p" R s" B8N;C ,
still anoter eD%ation tro%g te 8ariation o! 8:
p"1 R s" B81N;C
in @ic 8 as become 81 and p"1, te res%ltant canged rate o! pro!it, is to be !o%nd0
&t is determined by te !ollo@ing proportion:
p" : p"1 R s" B8N;C : s" B81N;C R 8 : 81
3r: @it te rate o! s%rpl%s-8al%e and total capital remaining te same, te original rate o! pro!it
is to te ne@ rate o! pro!it prod%ced by a cange in te 8ariable capital as te original 8ariable
capital is to te canged 8ariable capital0
&! te 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, ten ; R 1+,=== and s" R 1==T in eiter case, and te
rate o! pro!it o! &, <=T, is to tat o! &&, 13XT, as te 8ariable capital o! &, 3,===, is to tat o! &&,
<,===, i0 e0, <=T : 13XT R 3,=== : <,===0
-o@, te 8ariable capital may eiter 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 te 8ariable capital rise to 3=0 &n tat case, according to o%r ass%mption, te constant
capital m%st !all !rom 1== to *= so tat total capital remains %ncanged at 1<=0 5e rate o!
s%rpl%s-8al%e remaining constant at +=T, te s%rpl%s-8al%e prod%ced @ill ten rise !rom 1= to 1+0
We sall ten a8e:
&&0 *=c U 3=8 U 1+s# ; R 1<=, s" R +=T, p" R 1<ZT0
'et %s !irst proceed !rom te ass%mption tat @ages remain %ncanged0 5en te oter !actors o!
te rate o! s%rpl%s-8al%e, i0e0, te @orking-day and te intensity o! labo%r, m%st also remain
%ncanged0 &n tat e8ent te rise o! 8 B!rom <= to 3=C can signi!y only tat anoter al! as many
labo%rers are employed0 5en te 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 te same time, @it te
increase in te n%mber o! labo%rers, te constant capital, te 8al%e o! te means o! prod%ction,
as !allen !rom 1== to *=0 We a8e, ten, a case o! decreasing prod%cti8ity o! labo%r combined
@it a sim%ltaneo%s srinkage o! constant capital0 &s s%c a case economically possibleQ
&n agric%lt%re and te extracti8e ind%stries, in @ic a decrease in labo%r prod%cti8ity and,
tere!ore, an increase in te n%mber o! employed labo%rers is D%ite compreensible, tis process
is on te basis and @itin te scope o! capitalist prod%ction attended by an increase, instead o! a
decrease, o! constant capital0 E8en i! te abo8e !all o! c @ere d%e merely to a !all in prices, an
indi8id%al capital @o%ld be able to accomplis te transition !rom & to && only %nder 8ery
exceptional circ%mstances0 A%t in te case o! t@o independent capitals in8ested in di!!erent
co%ntries, or in di!!erent brances o! agric%lt%re or extracti8e ind%stry, it @o%ld be noting o%t o!
te ordinary i! in one o! te cases more labo%rers Band tere!ore more 8ariable capitalC @ere
employed and @orked @it less 8al%able or scantier means o! prod%ction tan in te oter case0
A%t let %s drop te ass%mption tat te @age remains te same, and let %s explain te rise o! te
8ariable capital !rom <= to 3= tro%g a rise o! @ages by one-al!0 5en @e sall a8e an entirely
di!!erent case0 5e same n%mber o! labo%rers I say, t@enty I contin%e to @ork @it te same or
only sligtly red%ced means o! prod%ction0 &! te @orking-day remains %ncanged I say, 1= o%rs
I ten te total 8al%e prod%ced also remains %ncanged0 &t @as and remains R 3=0 A%t all o! tis
3= is no@ reD%ired to make good te ad8anced 8ariable capital o! 3=# te s%rpl%s-8al%e @o%ld
disappear0 We a8e ass%med, o@e8er, tat te rate o! s%rpl%s-8al%e so%ld remain constant, tat
38 ;apter &&&
is, te same as in &, at +=T0 5is is possible only i! te @orking-day is prolonged by one-al! to
1+ o%rs0 5en te <= 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 tis case, te <= labo%rers do not reD%ire any more means o! labo%r, tools, macines, etc0, tan
in case &0 3nly te ra@ materials or a%xiliary materials @o%ld a8e to be increased by one-al!0 &n
te e8ent o! a !all in te prices o! tese materials, te transition !rom & to && migt be more
possible economically, e8en !or an indi8id%al capital in keeping @it o%r ass%mption0 ?nd te
capitalist @o%ld be some@at compensated by increased pro!its !or any loss inc%rred tro%g te
depreciation o! is constant capital0
-o@ let %s ass%me tat te 8ariable capital !alls, instead o! rising0 5en @e a8e b%t to re8erse
o%r example, taking && as te original capital, and passing !rom && to &0
&&0 *=c U 3=8 U 1+s, ten canges into &0 1==c U <=8 U 1=s, and it is e8ident tat tis transposition
does not in te least alter any o! te conditions reg%lating te respecti8e rates o! pro!it and teir
m%t%al relation0
&! 8 !alls !rom 3= to <= beca%se X !e@er labo%rers are employed @it te gro@ing constant
capital, ten @e a8e be!ore %s te normal case o! modern ind%stry, namely, an increasing
prod%cti8ity o! labo%r, and te operation o! a larger D%antity o! means o! prod%ction by !e@er
labo%rers0 5at tis mo8ement is necessarily connected @it a sim%ltaneo%s drop in te rate o!
pro!it @ill be de8eloped in te tird part o! tis book0
&!, on te oter and, 8 !alls !rom 3= to <=, beca%se te same n%mber o! labo%rers is employed at
lo@er @ages, te total 8al%e prod%ced @o%ld, @it te @orking-day %ncanged, as be!ore R 3=8 U
1+s R 2+0 $ince 8 !ell to <=, te s%rpl%s-8al%e @o%ld rise to <+, te 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 te conditions o! o%r case,
te s%rpl%s-8al%e, @it its rate at +=T, m%st rater !all to 1=, and te total 8al%e prod%ced m%st,
tere!ore, !all !rom 2+ to 3=, and tis is possible only i! te @orking-day is red%ced by X0 5en,
as be!ore, @e a8e:
1==c U <=8 U 1=s# s" R +=T, p" R 8XT0
&t need ardly be said tat tis red%ction o! te @orking-time, in te case o! a !all in @ages, @o%ld
not occ%r in practice0 A%t tat is immaterial0 5e rate o! pro!it is a !%nction o! se8eral 8ariable
magnit%des, and i! @e @is to kno@ o@ tese 8ariables in!l%ence te rate o! pro!it, @e m%st
analyse te indi8id%al e!!ect o! eac in t%rn, regardless o! @eter s%c an isolated e!!ect is
economically practicable @it one and te same capital0
<C s5 constant, v variable, C changes through the variation of v.
5is case di!!ers !rom te 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 te maHor
ind%stries and agric%lt%re te 8ariable capital is only a relati8ely small part o! te total capital0
For tis reason, its increase or decrease, so !ar as eiter is d%e to canges in te 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 ten cange, say, into:
&&0 1==c U 3=8 U 1+s# ; R 13=, s" R +=T, p" R 11 >N13T0
5e opposite case, in @ic te 8ariable capital decreases, @o%ld again be ill%strated by te
re8erse transition !rom && to &0
5e economic conditions @o%ld be essentially te same as in te preceding case, and tere!ore
tey need not be disc%ssed again0 5e transition !rom & to && implies a decrease in te prod%cti8ity
3* ;apter &&&
o! labo%r by one-al!# !or && te %tilisation o! 1== reD%ires an increase o! labo%r by one-al! o8er
tat o! &0 5is case may occ%r in agric%lt%re0
1

A%t @ile te total capital remains constant in te preceding case, o@ing to te con8ersion o!
constant into 8ariable capital, or 8ice 8ersa, tere is in tis case a tie-%p o! additional capital i! te
8ariable capital increases, and a release o! pre8io%sly employed capital i! te 8ariable capital
decreases0
3C s5 and v constant, c and therefore C variable.
&n tis case te eD%ation canges !rom:
p" R s" B8N;C into p" R s" B8N;1C ,
and a!ter red%cing te same !actors on bot sides, @e a8e:
p"1 : p" R ; : ;1#
@it te same rate o! s%rpl%s-8al%e and eD%al 8ariable capitals, te rates o! pro!it are in8ersely
proportional to te total capitals0
$o%ld @e, !or example, a8e tree capitals, or tree di!!erent conditions o! te 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
5en @e obtain te proportions:
<=T : 16WT R 1<= : 1== and <=T : <+T R 8= : 1==0
5e 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 cange, te !actor e R 81N8 , becomes R 10
$ince s"8 R s, te D%antity o! s%rpl%s-8al%e, and since bot s" and 8 remain constant, it !ollo@s tat
s, too, is not a!!ected by any 8ariation o! ;0 5e amo%nt o! s%rpl%s-8al%e is te same a!ter te
cange as it @as be!ore it0
&! c @ere to !all to Eero, p" @o%ld R s", i0e0, te rate o! pro!it @o%ld eD%al te rate o! s%rpl%s-8al%e0
5e alteration o! c may be d%e eiter to a mere cange in te 8al%e o! te material elements o!
constant capital, or to a cange in te tecnical composition o! te total capital, tat is, a cange
in te prod%cti8ity o! labo%r in te gi8en branc o! ind%stry0 &n te latter case, te prod%cti8ity o!
social labo%r mo%nting d%e to te de8elopment o! modern ind%stry and large-scale agric%lt%re
@o%ld bring abo%t a transition Bin te abo8e ill%strationC in te 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 te 8al%e remained te same, te
%sed %p means o! labo%r @o%ld rise !irst to 8=, and ten to 1==0 ?n in8ersion o! tis seD%ence
@o%ld imply a decrease in prod%cti8ity0 5e same D%antity o! labo%r @o%ld p%t a smaller D%antity
o! means o! prod%ction into motion and te operation @o%ld be c%rtailed, as may occ%r in
agric%lt%re, mining, etc0
? sa8ing in constant capital increases te rate o! pro!it on te one and, and, on te oter, sets
!ree capital, !or @ic reason it is o! importance to te capitalist0 We sall make a closer st%dy o!
tis, and like@ise o! te in!l%ence o! a cange in te prices o! te 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 tat a 8ariation o! te constant capital eD%ally a!!ects te rate o! pro!it,
regardless o! @eter tis 8ariation is d%e to an increase or decrease o! te material elements o! c,
or merely to a cange in teir 8al%e0
2C s5 constant, v, c and C all variable.
2= ;apter &&&
&n tis case, te general !orm%la !or te canged rate o! pro!it, gi8en at te o%tset, remains in
!orce:
p"1 R s" e8NE; 0
&t !ollo@s !rom tis tat @it te rate o! s%rpl%s-8al%e remaining te same:
aC 5e rate o! pro!it !alls i! E is greater tan e, tat is, i! te constant capital is a%gmented to s%c
an extent tat te total capital gro@s at a !aster rate tan te 8ariable capital0 &! a capital o! 8=c U
<=8 U <=s canges into 1>=c U 3=8 U 3=s, ten s" remains R 1==T, b%t 8N; !alls !rom <=N1== to
3=N1==, in spite o! te !act tat bot 8 and ; a8e gro@n, and te rate o! pro!it !alls
correspondingly !rom <=T to 1+T0
bC 5e rate o! pro!it remains %ncanged only i! e R E, tat is, i! te !raction 8N; retains te same
8al%e in spite o! a seeming cange, i0e0, i! its n%merator and denominator are m%ltiplied or
di8ided by te same !actor0 5e capitals 8=c U <=8 U <=s and 16=c U 2=8 U 2=s ob8io%sly a8e te
same rate o! pro!it o! <=T, beca%se s" remains R 1==T and 8N; R <=N1== R 2=N<== represents te
same 8al%e in bot examples0
cC 5e rate o! pro!it rises @en e is greater tan E, tat is, @en te 8ariable capital gro@s at a
!aster rate tan te total capital0 &! 8=c U <=8 U <=s t%rns into 1<=c U 2=8 U 2=s, te rate o! pro!it
rises !rom <=T to <+T, beca%se @it an %ncanged s" B8N;C R <=N1== rises to 2=N16=, or !rom 1N+
to 1N20
&! te canges o! 8 and ; are in te same direction, @e may 8ie@ tis cange o! magnit%de as
to%g, to a certain extent, bot o! tem 8aried in te same proportion, so tat 8N; remained
%ncanged %p to tat point0 Aeyond tis point, only one o! tem @o%ld 8ary, and @e sall a8e
tereby red%ced tis complicated case to one o! te preceding simpler ones0
$o%ld, !or instance, 8=c U <=8 U <=s become 1==c U 3=8 U 3=s, ten te proportion o! 8 to c, and
also to ;, remains te same in tis 8ariation %p to : 1==c U <+8 U <+s0 (p to tat point, tere!ore,
te rate o! pro!it like@ise remains %ncanged0 We may ten take 1==c U <+8 U <+s as o%r point o!
depart%re# @e !ind tat 8 increased by + to become 3=8, so tat ; rose !rom 1<+ to 13=, t%s
gi8ing %s te second case, tat o! te simple 8ariation o! 8 and te conseD%ent 8ariation o! ;0 5e
rate o! pro!it, @ic @as originally <=T, rises tro%g tis addition o! +8 to <3 1N13 T, pro8ided
te rate o! s%rpl%s-8al%e remains te same0
5e same red%ction to a simpler case can also take place i! 8 and ; cange teir magnit%des in
opposite directions0 For instance, let %s again start @it 8=cU <=8 U <=s, and let tis become: 11=c U
1=8 U 1=s0 &n tat case, @it te cange going as !ar as 2=c U 1=8 U 1=s, te rate o! pro!it @o%ld
remain te same <=T0 Ay adding >=c to tis intermediate !orm, it @ill drop to 8XT0 5%s, @e
a8e again red%ced te case to an instance o! cange o! one 8ariable, namely o! c0
$im%ltaneo%s 8ariation o! 8, c, and ;, does not, tere!ore, o!!er any ne@ aspects and in te !inal
analysis leads back to a case in @ic only one !actor is a 8ariable0
E8en te sole remaining case as act%ally been exa%sted, namely tat in @ic 8 and ; remain
n%merically te same, @ile teir material elements %ndergo a cange o! 8al%e, so tat 8 stands
!or a canged D%antity o! labo%r p%t in motion and c !or a canged D%antity o! means o!
prod%ction p%t in motion0
&n 8=c U <=8 U <=s, let <=8 originally represent te @ages o! <= labo%rers @orking 1= o%rs daily0
5en let te @ages o! eac rise !rom 1 to 1 [0 &n tat case te <=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! te 3< @o%ld ten remain !or s%rpl%s-8al%e0 5e rate o! s%rpl%s-8al%e
@o%ld a8e !allen !rom 1==T to 6=T0 A%t since @e a8e ass%med te rate o! s%rpl%s-8al%e to be
constant, te @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=, ten 16
21 ;apter &&&
labo%rers @orking 1<Z o%rs daily R <== o%rs @ill prod%ce te same 8al%e, and te capital o!
8=c U <=8 @o%ld as be!ore yield te same s%rpl%s-8al%e o! <=0
;on8ersely, i! @ages @ere to !all to s%c an extent tat <=8 @o%ld represent te @ages o! 3=
labo%rers, ten s @o%ld remain constant only i! te @orking-day @ere red%ced !rom 1= to 6W
o%rs0 For <= \ 1= R 3= \ 6W R <== @orking-o%rs0
We a8e already in te main disc%ssed to @at extent c may in tese di8ergent examples remain
%ncanged in terms o! 8al%e expressed in money and yet represent di!!erent D%antities o! means
o! prod%ction canged in accordance @it canging conditions0 &n its p%re !orm tis case @o%ld
be possible only by @ay o! an exception0
?s !or a cange in te 8al%e o! te elements o! c @ic increases or decreases teir mass b%t
lea8es te s%m o! te 8al%e o! c %ncanged, it does not a!!ect eiter te rate o! pro!it or te rate o!
s%rpl%s-8al%e, so long as it does not lead to a cange in te magnit%de o! 80
We a8e ere@it exa%sted all te possible cases o! 8ariation o! 8, c, and ; in o%r eD%ation0 We
a8e seen tat te rate o! pro!it may !all, remain %ncanged, or rise, @ile te rate o! s%rpl%s-
8al%e remains te same, @it te least cange in te proportion o! 8 to c or to ;, being s%!!icient
to cange te rate o! pro!it as @ell0
We a8e seen, !%rtermore, tat in 8ariations o! 8 tere 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 %ncanged, @e !ind tat tere are
limits !or e8ery possible 8ariation o! 8N;, beyond @ic s" m%st like@ise become 8ariable0 &n te
8ariations o! s" @ic @e sall no@ disc%ss, tis interaction o! te di!!erent 8ariables o! o%r
eD%ation @ill stand o%t still clearer0
II. s. varia4le
We obtain a general !orm%la !or te rates o! pro!it @it di!!erent rates o! s%rpl%s-8al%e, no matter
@eter 8N; remains constant or not, by con8erting te 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 te canged 8al%es o! p", s", 8 and ;0 5en @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 tis case @e a8e te eD%ations:
p" R s" B8N;C# p"1 R s" B8N;C ,
in bot o! @ic 8N; is eD%al0 5ere!ore:
p" : p"1 R s" : s"1
5e rates o! pro!it o! t@o capitals o! te same composition are to eac oter as te t@o
corresponding rates o! s%rpl%s-8al%e0 $ince in te !raction 8N; it is not a D%estion o! te absol%te
magnit%des o! 8 and ;, b%t only o! teir ratio, tis applies to all capitals o! eD%al composition
@ate8er teir 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
2< ;apter &&&
&! te absol%te magnit%des o! 8 and ; are te same in bot cases, te rates o! pro!it are moreo8er
also related to one anoter as te 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 tat @it capitals o! eD%al absol%te or percentage composition te rate o! s%rpl%s-
8al%e can di!!er only i! eiter te @ages, or te lengt o! te @orking-day, or te intensity o!
labo%r, di!!er0 &n te !ollo@ing tree 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
te total 8al%e prod%ced in & is 3= B<=8 U 1=sC# in && it is 2=# in &&& it is 6=0 5is may come abo%t in
tree di!!erent @ays0
'irst, i! te @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 te @ages and V1= are s%rpl%s-8al%e0 &! @ages !all
to V1, ten <= labo%rers may be employed !or 1= o%rs# tey @ill prod%ce a 8al%e o! V2=, o!
@ic V<= @ill replace te @ages and V<= @ill be s%rpl%s-8al%e0 $o%ld @ages !all still more, to
VW, tirty labo%rers may be employed !or 1= o%rs0 5ey @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
5is case I a constant composition o! capital in per cent, a constant @orking-day and constant
intensity o! labo%r, and te rate o! s%rpl%s-8al%e 8arying beca%se o! 8ariation in @ages I is te
only one in @ic )icardo"s ass%mption is correct:
K,ro!it @o%ld be ig or lo@, eactly in proportion as
@ages @ere lo@ or ig0L B&rinciples, ;0 &, $ect0 &&&,
p0 18 o! te "or-s o! 70 )icardo, ed0 by Mac;%lloc,
18+<0C
3r second, i! te intensity o! labo%r 8aries0 &n tat case, say, <= labo%rers @orking 1= o%rs daily
@it te 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 te 8al%e o! te means o! prod%ction incorporated in it,
represents a ne@ 8al%e o! V10 $ince e8ery <= pieces R V<= make good te @ages, tere 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, te @orking-day di!!ers in lengt0 &! <= labo%rers @ork @it te same intensity !or *
o%rs in &, 1< o%rs in &&, and 18 o%rs in &&&, teir 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, tere!ore, in!l%ences te rate o! s%rpl%s-8al%e in8ersely, and a rise or !all
in te intensity o! labo%r, and a lengtening or sortening o! te @orking-day, act te same @ay
on te rate o! s%rpl%s-8al%e and tereby, @it 8N; constant, on te rate o! pro!it0
<C s5 and v variable, C constant.
5e !ollo@ing proportion applies in tis case:
p" : p"1 R s" B8N;C : s" B81N;C R s"8 : s"181 R s : s10
5e rates o! pro!it are related to one anoter as te respecti8e amo%nts o! s%rpl%s-8al%e0
23 ;apter &&&
;anges in te rate o! s%rpl%s-8al%e @it te 8ariable capital remaining constant meant a cange
in te magnit%de and distrib%tion o! te 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 cange in te magnit%de o! te prod%ced
8al%e0 5ree cases are possible:
aC 4ariation o! 8 and s" takes place in opposite directions, b%t by te 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
5e prod%ced 8al%e is eD%al in bot cases, ence also te D%antity o! labo%r per!ormed# <=8 U 1=s
R 1=8 U <=s R 3=0 5e only di!!erence is tat in te !irst case <= is paid o%t !or @ages and 1=
remains as s%rpl%s-8al%e, @ile in te second case @ages are only 1= and s%rpl%s-8al%e is
tere!ore <=0 5is is te only case in @ic te n%mber o! labo%rers, te intensity o! labo%r, and
te lengt o! te @orking-day remain %ncanged, @ile 8 and s" 8ary sim%ltaneo%sly0
bC 4ariation o! s" and 8 also takes place in opposite directions, b%t not by te same amo%nt0 &n tat
case te 8ariation o! eiter 8 or s" o%t@eigs te oter0
&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 <88, and &&& a
8al%e o! 36 @it 1680 Aot te prod%ced 8al%e and te @ages a8e canged0 A%t a cange in te
prod%ced 8al%e means a cange in te amo%nt o! labo%r per!ormed, ence a cange eiter in te
n%mber o! labo%rers, te o%rs o! labo%r, te intensity o! labo%r, or in more tan one o! tese0
cC 4ariation o! s" and 8 takes place in te same direction0 &n tat case te one intensi!ies te e!!ect
o! te oter0
*=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 te tree 8al%es prod%ced are di!!erent, namely <=, +=, and 120 ?nd tis di!!erence in te
magnit%de o! te respecti8e D%antities o! labo%r red%ces itsel! once more to a di!!erence in te
n%mber o! labo%rers, te o%rs o! labo%r, and te intensity o! labo%r, or se8eral or all o! tese
!actors0
3C s5, v and C variable.
5is case o!!ers no ne@ aspects and is sol8ed by te general !orm%la gi8en %nder &&, in @ic s" is
8ariable0
5e e!!ect o! a cange in te magnit%de o! te rate o! s%rpl%s-8al%e on te rate o! pro!it ence
yields te !ollo@ing cases:
1C p" increases or decreases in te 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 tan s" i! 8N; mo8es in te same direction as s", tat 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
22 ;apter &&&
+=T : 66WT ] 1=T : <=T0
3C p" rises or !alls at a slo@er rate tan s" i! 8N; canges 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; canges in8ersely to, and at, a !aster rate tan,
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; canges in8ersely to, b%t in
exactly te same proportion as, s"0
&t is only tis last case @ic still reD%ires some explanation0 We a8e obser8ed earlier in te
8ariations o! 8N; tat one and te same rate o! s%rpl%s-8al%e may be expressed in 8ery m%c
di!!erent rates o! pro!it0 -o@ @e see tat one and te 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 cange in te proportion o! 8 to ; is
s%!!icient to prod%ce a di!!erence in te rate o! pro!it so long as s is constant, a cange in te
magnit%de o! s m%st lead to a corresponding in8erse cange o! 8N; in order tat te rate o! pro!it
remains te same0 &n te case o! one and te same capital, or in tat o! t@o capitals in one and te
same co%ntry tis is possible b%t in exceptional cases0 ?ss%me, !or example, tat @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 tat @ages !all to s%c an extent tat te same n%mber o! labo%rers is
obtainable !or 168 instead o! <=80 5en, oter tings being eD%al, and 28 being released, @e sall
a8e:
8=c U 168 U <2s# ; R *6, s" R 1+=T, p" R <+T0
&n order tat p" may no@ R <=T as be!ore, te total capital @o%ld a8e to increase to 1<=, te
constant capital tere!ore rising to 1=2:
1=2c U 168 U <2s# ; R 1<=, s" R 1+=T, p" R <=T0
5is @o%ld only be possible i! te !all in @ages @ere attended sim%ltaneo%sly by a cange in te
prod%cti8ity o! labo%r @ic reD%ired s%c a cange in te composition o! capital0 3r, i! te 8al%e
in money o! te constant capital increased !rom 8= to 1=20 &n sort, it @o%ld reD%ire an accidental
coincidence o! conditions s%c as occ%rs in exceptional cases0 &n !act, a 8ariation o! s" tat does
not call !or te sim%ltaneo%s 8ariation o! 8, and t%s o! 8N;, is concei8able only %nder 8ery
de!inite conditions, namely in s%c brances o! ind%stry in @ic only !ixed capital and labo%r
are employed, @ile te materials o! labo%r are s%pplied by -at%re0
A%t tis is not so @en te rates o! pro!it o! t@o di!!erent co%ntries are compared0 For in tat case
te 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! tese !i8e cases, tere!ore, tat 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%s-
8al%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
& tat a rising, !alling, or constant rate o! pro!it may also accord @it a constant rate o! s%rpl%s-
8al%e0
5e rate o! pro!it, tere!ore, depends on t@o main !actors I te rate o! s%rpl%s-8al%e and te
8al%e-composition o! capital0 5e e!!ects o! tese t@o !actors may be brie!ly s%mmed %p as
2+ ;apter &&&
!ollo@s, by gi8ing te composition in per cent, !or it is immaterial @ic o! te t@o portions o!
te capital ca%ses te 8ariation:
5e rates o! pro!it o! t@o di!!erent capitals, or o! one and te same capital in t@o s%ccessi8e
di!!erent conditions,
are e3ual
1C i! te per cent composition o! te capitals is te same and teir rates o! s%rpl%s-8al%e are eD%al#
<C i! teir per cent composition is not te same, and te rates o! s%rpl%s-8al%e are %neD%al,
pro8ided te prod%cts o! te rates o! s%rpl%s-8al%e by te percentages o! te 8ariable portions o!
capitals Bs" by 8C are te same, i0e0, i! te masses o! s%rpl%s-8al%e Bs R s"8C calc%lated in per cent o!
te total capital are eD%al# in oter @ords, i! te !actors s" and 8 are in8ersely proportional to one
anoter in bot cases0
4hey are une3ual
1C i! te per cent composition is eD%al and te rates o! s%rpl%s-8al%e are %neD%al, in @ic case
tey are related as te rates o! s%rpl%s-8al%e#
<C i! te rates o! s%rpl%s-8al%e are te same and te per cent composition is %neD%al, in @ic
case tey are related as te 8ariable portions o! te capitals#
3C i! te rates o! s%rpl%s-8al%e are %neD%al and te per cent composition not te same, in @ic
case tey are related as te prod%cts s"8, i0e0, as te D%antities o! s%rpl%s-8al%e calc%lated in per
cent o! te total capital0
<

Chapter 4. The Efect of the Turnover on the
Rate of Proft
5e e!!ect o! te t%rno8er on te 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 tat o@ing to te time span reD%ired
!or t%rno8er, not all te capital can be employed all at once in prod%ction# some o! te capital
al@ays lies idle, eiter in te !orm o! money-capital, o! ra@ material s%pplies, o! !inised b%t still
%nsold commodity-capital, or o! o%tstanding claims# tat te capital in acti8e prod%ction, i0e0, in
te prod%ction and appropriation o! s%rpl%s-8al%e, is al@ays sort by tis amo%nt, and tat te
prod%ced and appropriated s%rpl%s-8al%e is al@ays c%rtailed to te same extent0 5e sorter te
period o! t%rno8er, te smaller tis idle portion o! capital as compared @it te @ole, and te
larger, tere!ore, te appropriated s%rpl%s-8al%e, pro8ided oter conditions remain te same0
&t as already been so@n in detail in Aook && /Englis edition: 4ol0 &&, pp0 <*3-*80 I 0d01 o@ te
D%antity o! prod%ced s%rpl%s-8al%e is a%gmented by red%ctions in te period o! t%rno8er, or o!
one o! its t@o sections, in te time o! prod%ction and te time o! circ%lation0 A%t since te rate o!
pro!it only expresses te relation o! te prod%ced D%antity o! s%rpl%s-8al%e to te total capital
employed in its prod%ction, it is e8ident tat any s%c red%ction increases te rate o! pro!it0
Wate8er as been said earlier in ,art && o! Aook && in regard to s%rpl%s-8al%e, applies eD%ally to
pro!it and te rate o! pro!it and needs no repetition ere0 We @is only to stress a !e@ o! te
principal points0
5e cie! means o! red%cing te time o! prod%ction is iger labo%r prod%cti8ity, @ic is
commonly called ind%strial progress0 &! tis does not in8ol8e a sim%ltaneo%s considerable
increase in te o%tlay o! total capital res%lting !rom te installation o! expensi8e macinery, etc0,
and t%s a red%ction o! te rate o! pro!it, @ic is calc%lated on te total capital, tis rate m%st
rise0 ?nd tis is decidedly tr%e in te case o! many o! te latest impro8ements in metall%rgy and
in te cemical ind%stry0 5e recently disco8ered metods o! prod%cing iron and steel, s%c as te
processes o! Aessemer, $iemens, :ilcrist-5omas, etc0, c%t to a minim%m at relati8ely small
costs te !ormerly ard%o%s processes0 5e making o! aliEarin, a red dye-st%!! extracted !rom coal-
tar, reD%ires b%t a !e@ @eeks, and tis by means o! already existing coal-tar dye-prod%cing
installations, to yield te same res%lts @ic !ormerly reD%ired years0 &t took a year !or te
madder to mat%re, and it @as c%stomary to let te roots gro@ a !e@ years more be!ore tey @ere
processed0
5e cie! means o! red%cing te time o! circ%lation is impro8ed comm%nications0 5e last !i!ty
years a8e bro%gt abo%t a re8ol%tion in tis !ield, comparable only @it te ind%strial re8ol%tion
o! te latter al! o! te 18t cent%ry0 3n land te macadamised road as been displaced by te
rail@ay, on sea te slo@ and irreg%lar sailing 8essel as been p%sed into te backgro%nd by te
rapid and dependable steamboat line, and te entire globe is being girdled by telegrap @ires0 5e
$%eE ;anal as !%lly opened East ?sia and ?%stralia to steamer tra!!ic0 5e time o! circ%lation o!
a sipment o! commodities to East ?sia, at least t@el8e monts 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 5e t@o large centres o! te crises o! 18<+-+>, ?merica and &ndia, a8e been
bro%gt !rom >= to *= per cent nearer to te E%ropean ind%strial co%ntries by tis re8ol%tion in
transport, and a8e tereby lost a good deal o! teir explosi8e nat%re0 5e period o! t%rno8er o!
te total @orld commerce as been red%ced to te same extent, and te e!!icacy o! te capital
2> ;apter &4
in8ol8ed in it as been more tan do%bled or trebled0 &t goes @ito%t saying tat tis as not been
@ito%t e!!ect on te rate o! pro!it0
5o single o%t te e!!ect o! te t%rno8er o! total capital on te rate o! pro!it @e m%st ass%me all
oter conditions o! te capitals to be compared as eD%al0 ?side !rom te rate o! s%rpl%s-8al%e and
te @orking-day it is also notably te per cent composition @ic @e m%st ass%me to be te
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 5e ann%al prod%ct is ten:
16=c U 2=8 U 2=s0 6o@e8er, to determine te rate o! pro!it @e do not calc%late te 2=s on te
t%rned-o8er capital-8al%e o! <==, b%t on te ad8anced capital o! 1==, and t%s obtain p" R 2=T0
-o@ let %s compare tis @it a capital A R 16=c U 2=8 R <== ;, @ic as te same rate o!
s%rpl%s-8al%e o! 1==T, b%t @ic is t%rned o8er only once a year0 5e ann%al prod%ct o! tis
capital is, tere!ore, te same as tat o! ?:
16=c U 2=8 U 2=s0 A%t tis time te 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! tat o! ?0
We !ind, ten, tat !or capitals @it an eD%al per cent composition, @it eD%al rates o! s%rpl%s-
8al%e and eD%al @orking-days, te rates o! pro!it o! te t@o capitals are related in8ersely as teir
periods o! t%rno8er0 &! eiter te composition, te rates o! s%rpl%s-8al%e, te @orking-day, or te
@ages, are %neD%al in te t@o compared cases, tis @o%ld nat%rally prod%ce !%rter di!!erences in
te rates o! pro!it# b%t tese are independent o! te t%rno8er and, !or tis reason, do not concern
%s at tis point0 5ey a8e already been disc%ssed in ;apter &&&0
5e direct e!!ect o! a red%ced period o! t%rno8er on te prod%ction o! s%rpl%s-8al%e, and
conseD%ently o! pro!it, consists o! an increased e!!iciency imparted tereby to te 8ariable portion
o! capital, as so@n in Aook &&, ;apter J4&, K5e 5%rno8er o! 4ariable ;apitalL0 5is capter
demonstrated tat a 8ariable capital o! +== t%rned o8er ten times a year prod%ces as m%c
s%rpl%s-8al%e in tis time as a 8ariable capital o! +,=== @it te same rate o! s%rpl%s-8al%e and
te 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 te 8ariable capital t%rn o8er ten times per
year at a 1==T rate o! s%rpl%s-8al%e0 For te sake o! simplicity @e ass%me in all te !ollo@ing
examples tat te circ%lating constant capital is t%rned o8er in te same time as te 8ariable,
@ic is generally te case in practice0 5en te 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 te 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 5en te prod%ct o! eac o! te t%rno8ers o! te 8ariable capital @ill be:
<==c BdepreciationC U 1,===c U 1,===8 U 1,===s R 3,<==,
and te 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%rter, take capital &&& @it no !ixed capital, 6,=== circ%lating constant capital and +,=== 8ariable
capital0 'et tere be one t%rno8er per year at a 1==T rate o! s%rpl%s-8al%e0 5en te total ann%al
prod%ct is:
6,===c U +,===8 U +,===s R 16,===,
; R 11,===, s R +,===, p" R +,===N11,=== R 2+ +N11T0
28 ;apter &4
&n all te tree cases @e tere!ore a8e te same ann%al D%antity o! s%rpl%s-8al%e R +,===, and,
since te total capital is like@ise eD%al in all tree cases, namely R 11,===, also te same rate o!
pro!it o! 2+ +N11T0
A%t so%ld capital & a8e only + instead o! 1= t%rno8ers o! its 8ariable part per year, te res%lt
@o%ld be di!!erent0 5e prod%ct o! one t%rno8er @o%ld ten be:
<==c BdepreciationC U +==c U +==8 U +==s R 1,>==0
?nd te ann%al prod%ct:
1,===c BdepreciationC U <,+==c U <,+==8 U <,+==s R 8,+==,
; R 11,===, s R <,+==# p" R <,+==N11,=== R << 8N11T0
5e rate o! pro!it as !allen one-al!, beca%se te period o! t%rno8er as do%bled0
5e D%antity o! s%rpl%s-8al%e appropriated in one year is tere!ore eD%al to te D%antity o!
s%rpl%s-8al%e appropriated in one t%rno8er o! te variablecapital m%ltiplied by te n%mber o!
s%c t%rno8ers per year0 $%ppose @e call te s%rpl%s-8al%e, or pro!it, appropriated in one year $,
te s%rpl%s-8al%e appropriated in one period o! t%rno8er s, te n%mber o! t%rno8ers o! te 8ariable
capital in one year n, ten $ R sn, and te 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 @ito%t saying tat te !orm%la p" R s" B8N;C R s" 8NBc U 8C is correct only so long as te 8 in
te n%merator is te same as tat in te denominator0 &n te denominator 8 stands !or te entire
portion o! te total capital %sed on an a8erage as 8ariable capital !or te payment o! @ages0 5e 8
o! te n%merator is primarily only determined by te !act tat 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", te rate o! s%rpl%s-8al%e0 &t
is only along tese lines tat te !orm%la p" R sNBc U 8C is trans!ormed into te oter: p" R s" 8NBc U
8C0 5e 8 o! te n%merator @ill no@ be more acc%rately determined by te !act tat it m%st eD%al
te 8 o! te denominator, tat is, te entire 8ariable portion o! capital ;0 &n oter @ords, te
eD%ation p" R BsN;C may be correctly trans!ormed into te 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! te 8ariable capital0 $o%ld s be only a portion o!
tis s%rpl%s-8al%e, ten s R s"8 is still correct, b%t tis 8 is ten smaller tan te 8 in ; R c U 8,
beca%se it is smaller tan te entire 8ariable capital expended !or @ages0 A%t so%ld s stand !or
more tan te s%rpl%s-8al%e o! one t%rno8er o! 8, ten a portion o! tis 8, or peraps te @ole o!
it, ser8es t@ice, namely in te !irst and in te second t%rno8er, and e8ent%ally in s%bseD%ent
t%rno8ers0 5e 8 @ic prod%ces te s%rpl%s-8al%e and represents te s%m o! all paid @ages, is
tere!ore greater tan te 8 in c U 8 and te calc%lation !alls into error0
5o make te !orm%la precise !or te ann%al rate o! pro!it, @e m%st s%bstit%te te ann%al rate o!
s%rpl%s-8al%e !or te simple rate o! s%rpl%s-8al%e, tat is, s%bstit%te $" or s"n !or s"0 &n oter @ords,
@e m%st m%ltiply te rate o! s%rpl%s-8al%e s", or, @at amo%nts to te same ting, te 8ariable
capital 8 contained in ;, by n, te n%mber o! t%rno8ers o! tis 8ariable capital in one year0 5%s
@e obtain p" R s"n B8N;C, @ic is te !orm%la !or te ann%al rate o! pro!it0
5e amo%nt o! 8ariable capital in8ested in is b%siness is someting te capitalist imsel! does
not kno@ in most cases0 We a8e seen in ;apter 4&&& o! Aook &&, and sall see !%rter along, tat
te only essential distinction @itin is capital @ic impresses itsel! %pon te capitalist is tat o!
!ixed and circ%lating capital0 6e takes money to pay @ages !rom is cas-box containing te part
o! te circ%lating capital e as on and in te !orm o! money, so !ar as it is not deposited in a
bank# e takes money !rom te same cas-box !or ra@ and a%xiliary materials, and credits bot
items to te same cas-acco%nt0 ?nd e8en i! e so%ld keep a separate acco%nt !or @ages, at te
close o! te year tis @o%ld only so@ te s%m paid o%t !or tis item, ence 8n, b%t not te
8ariable capital 8 itsel!0 &n order to ascertain tis, e @o%ld a8e to make a special calc%lation, o!
@ic @e propose ere to gi8e an ill%stration0
2* ;apter &4
For tis p%rpose @e select te cotton spinnery o! 1=,=== m%le spindles described in Aook & B$0
<=*N<=1C /Englis edition: p0 <1*0 I 0d01 and ass%me tat te data gi8en tere !or one @eek o!
?pril 18>1, are in !orce d%ring te @ole year0 5e !ixed capital incorporated in te macinery
@as V1=,===0 5e circ%lating capital @as not gi8en0 We ass%me it to a8e been V<,+==0 5is is a
rater ig estimate, b%t H%sti!ied by te ass%mption, @ic @e m%st al@ays make ere, tat no
credit operations @ere e!!ected, ence no permanent or temporary employment o! oter people"s
capital0 5e 8al%e o! te @eekly prod%ct @as composed o! V<= !or depreciation o! macinery,
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 5ere!ore,
<=c BdepreciationC U 3+8c U +<8 U 8=s R +1=0
5e @eekly ad8ance o! circ%lating capital tere!ore @as 3+8c U +<8 R 21=0 &n terms o! per cent
tis @as 8>03c U 1<0>80 For te entire circ%lating capital o! V<,+== tis @o%ld be V<,18< constant
and V318 8ariable capital0 $ince te total expendit%re !or @ages in one year @as +< times V+<, or
V<,>=2, it !ollo@s tat in a year te 8ariable capital o! V318 @as t%rned o8er almost exactly 8Z
times0 5e rate o! s%rpl%s-8al%e @as 8=N+< R 1+3 11N130 We calc%late te rate o! pro!it on te
basis o! tese elements by inserting te abo8e 8al%es in te !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 tis by means o! te simple !orm%la p" R BsN;C0 5e total ann%al s%rpl%s-8al%e or pro!it
amo%nts to +< times V8=, or V2,16=, and tis di8ided by te total capital o! V1<,+== gi8es %s
330<8T, or almost an identical res%lt0 5is is an abnormally ig rate o! pro!it, @ic may only
be explained by extraordinarily !a8o%rable conditions o! te moment B8ery lo@ prices o! cotton
along @it 8ery ig prices o! yarnC, and co%ld certainly not a8e obtained tro%go%t te year0
5e s"n in te !orm%la p" R s"n B8N;C stands, as as been said, !or te ting called in Aook &&
/Englis edition: 4ol0 &&, p0 <*+0 I 0d01 te ann%al rate o! s%rpl%s-8al%e0 &n te 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 te name o! te editor o! te Deutsche +llgemeine
%eitung0 I 0d01 @as socked by te 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@ peraps be paci!ied by tis ann%al rate o! s%rpl%s-8al%e
o! more tan 1,3==T taken !rom te li8ing experience o! Mancester0 &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 tat matter @e a8e ere an ill%stration o! te act%al composition o! capital in modern large-
scale ind%stry0 5e total capital is broken %p into V1<,18< constant and V318 8ariable capital, a
s%m o! V1<,+==0 &n terms o! percent tis is *>Zc U <Z8 R 1== ;0 3nly one-!ortiet o! te total,
b%t in more tan an eigt-!old ann%al t%rno8er, ser8es !or te payment o! @ages0
$ince 8ery !e@ capitalists e8er tink o! making calc%lations o! tis sort @it re!erence to teir
o@n b%siness, statistics is almost completely silent abo%t te relation o! te constant portion o!
te total social capital to its 8ariable portion0 3nly te ?merican cens%s gi8es @at is possible
%nder modern conditions, namely te s%m o! @ages paid in eac line o! b%siness and te pro!its
realised0 M%estionable as tey may be, being based on te capitalist"s o@n %ncontrolled
statements, tey are ne8erteless 8ery 8al%able and te only records a8ailable to %s on tis
s%bHect0 /&n E%rope @e are !ar too delicate to expect s%c re8elations !rom o%r maHor capitalists0 I
'.001
Chapter 5. Economy in the Employment of
Constant Capital
I. In General
5e increase o! absol%te s%rpl%s-8al%e, or te prolongation o! s%rpl%s-labo%r, and t%s o! te
@orking-day, @ile te 8ariable capital remains te same and t%s employs te same n%mber o!
labo%rers at te same nominal @ages, regardless o! @eter o8ertime is paid or not, red%ces te
relati8e 8al%e o! te constant capital as compared to te total and te 8ariable capital, and tereby
increases te rate o! pro!it, again irrespecti8e o! te gro@t o! te D%antity o! s%rpl%s-8al%e and a
possibly rising rate o! s%rpl%s-8al%e0 5e 8ol%me o! te !ixed portion o! constant capital, s%c as
!actory b%ildings, macinery, etc0, remains te same, no matter @eter tese ser8e te labo%r-
process 16 or 1< o%rs0 ? prolongation o! te @orking-day does not entail any !res expendit%res
in tis, te most expensi8e portion o! constant capital0 F%rtermore, te 8al%e o! te !ixed capital
is tereby reprod%ced in a smaller n%mber o! t%rno8er periods, so tat te time !or @ic it m%st
be ad8anced to make a certain pro!it is abbre8iated0 ? prolongation o! te @orking-day tere!ore
increases te pro!it, e8en i! o8ertime is paid, or e8en i!, %p to a certain point, it is better paid tan
te normal o%rs o! labo%r0 5e e8er-mo%nting need to increase !ixed capital in modern ind%stry
@as tere!ore one o! te main reasons prompting pro!it-mad capitalists to lengten te @orking-
day0
1
5e same conditions do not obtain i! te @orking-day is constant0 5en it is necessary
eiter to increase te n%mber o! labo%rers, and @it tem to a certain extent te amo%nt o! !ixed
capital, te b%ildings, macinery, etc0, in order to exploit a greater D%antity o! labo%r B!or @e
lea8e aside ded%ctions !rom @ages or te depression o! @ages belo@ teir normal le8elC, or, i! te
intensity and, conseD%ently, te prod%cti8ity o! labo%r, increase and, generally, more relati8e
s%rpl%s-8al%e is prod%ced, te magnit%de o! te circ%lating portion o! constant capital increases in
s%c ind%strial brances @ic %se ra@ materials, since more ra@ material, etc0, is processed in a
gi8en time# and, secondly, te amo%nt o! macinery set in motion by te same n%mber o!
labo%rers, tere!ore also tis 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 te gro@ing exploitation o!
labo%r by greater o%tlays o! te means o! prod%ction tro%g @ic labo%r is exploited, i0e0, by a
greater in8estment o! capital0 5ere!ore, te rate o! pro!it is tereby red%ced on te one and
@ile it increases on te oter0
M%ite a n%mber o! c%rrent expenses remain almost or entirely te same @eter te @orking-day
is longer or sorter0 5e cost o! s%per8ision is less !or +== @orking-men d%ring 18 @orking-o%rs
tan !or >+= @orking-men d%ring 1< @orking-o%rs0
K5e expense o! @orking a !actory 1= o%rs almost eD%als tat 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!
macinery, and 8ario%s oter expenses o! a !actory, remain %ncanged @eter te @orking-time
is long or sort0 5o te extent to @ic prod%ction decreases, tese expenses rise as compared to
te pro!it0 B)eports o! &nsp0 o! Fact0, 3ctober 186<, p0 1*0C
5e period in @ic te 8al%e o! te macinery and o! te oter components o! !ixed capital is
reprod%ced is determined in practice not by teir mere li!etime, b%t by te d%ration o! te entire
labo%r-process d%ring @ic tey ser8e and @ear o%t0 &! te labo%rers m%st @ork 18 instead o! 1<
o%rs, tis makes a di!!erence o! tree days more per @eek, so tat one @eek is stretced into one
+1 ;apter 4
and a al!, and t@o years into tree0 &! tis o8ertime is %npaid te labo%rers gi8e a@ay gratis a
@eek o%t o! e8ery tree and a year o%t o! e8ery tree on top o! te normal s%rpl%s-labo%r time0 &n
tis @ay, te reprod%ction o! te 8al%e o! te macinery is speeded %p +=T and accomplised in
W o! te %s%ally reD%ired time0
5o a8oid %seless complications, @e proceed in tis analysis, and in tat o! price !l%ct%ations !or
ra@ materials B;ap0 4&C, !rom te ass%mption tat te mass and rate o! s%rpl%s-8al%e are gi8en0
?s already so@n in te presentation o! co-operation, di8ision o! labo%r and macinery, te
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 te !act tat tese conditions pre8ail as conditions o! social, or
socially combined, labo%r, and tere!ore as social conditions o! labo%r0 5ey are commonly
cons%med in te process o! prod%ction by te 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 te cost o! tese motors does
not increase in te same ratio as teir orse-po@er and, ence, teir possible spere o! acti8ity0
5e cost o! te transmission eD%ipment does not gro@ in te same ratio as te total n%mber o!
@orking macines @ic it sets in motion0 5e !rame o! a macine does not become dearer in te
same ratio as te mo%nting n%mber o! tools @ic it employs as its organs, etc0 F%rtermore, te
concentration o! means o! prod%ction yields a sa8ing on b%ildings o! 8ario%s kinds not only !or
te act%al @orksops, b%t also !or storage, etc0 5e same applies to expendit%res !or !%el, ligting,
etc0 3ter conditions o! prod%ction remain te same, @eter %sed by many or by !e@0
5is total economy, arising as it does !rom te concentration o! means o! prod%ction and teir %se
en masse, imperati8ely reD%ires, o@e8er, te 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 te social nat%re o! labo%r,
H%st as s%rpl%s-8al%e originates !rom te s%rpl%s-labo%r o! te indi8id%al labo%rer considered
singly0 E8en te contin%al impro8ements, @ic are ere possible and necessary, are d%e solely to
te social experience and obser8ation ens%red and made possible by prod%ction o! aggregate
labo%r combined on a large scale0
5e same is tr%e o! te second big so%rce o! economy in te conditions o! prod%ction0 We re!er to
te recon8ersion o! te excretions o! prod%ction, te so-called @aste, into ne@ elements o!
prod%ction, eiter o! te same, or o! some oter line o! ind%stry# to te processes by @ic tis
so-called excretion is tro@n back into te cycle o! prod%ction and, conseD%ently, cons%mption,
@eter prod%cti8e or indi8id%al0 5is line o! sa8ings, @ic @e sall later examine more closely,
is like@ise te res%lt o! large-scale social labo%r0 &t is te attendant ab%ndance o! tis @aste @ic
renders it a8ailable again !or commerce and tereby t%rns it into ne@ elements o! prod%ction0 &t is
only as @aste o! combined prod%ction, tere!ore, o! large-scale prod%ction, tat it becomes
important to te prod%ction process and remains a bearer o! excange-8al%e0 5is @aste, aside
!rom te ser8ices @ic it per!orms as ne@ element o! prod%ction, red%ces te cost o! te ra@
material to te extent to @ic it is again saleable, !or tis cost al@ays incl%des te normal @aste,
namely te D%antity ordinarily lost in processing0 5e red%ction o! te cost o! tis portion o!
constant capital increases pro tanto te rate o! pro!it, ass%ming te magnit%de o! te 8ariable
capital and te rate o! s%rpl%s-8al%e to be gi8en0
&! te s%rpl%s-8al%e is gi8en, te rate o! pro!it can be increased only by red%cing te 8al%e o! te
constant capital reD%ired !or commodity-prod%ction0 $o !ar as constant capital enters into te
prod%ction o! commodities, it is not its excange-8al%e, b%t its %se-8al%e alone, @ic matters0
5e 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 te prod%cti8ity o! labo%r, i0e0, te le8el o! tecnical de8elopment, to be
gi8en0 &n like manner te assistance rendered by a macine to, say, tree labo%rers does not
depend on its 8al%e, b%t on its %se-8al%e as a macine0 3n one le8el o! tecnical de8elopment a
bad macine may be expensi8e and on anoter a good macine may be ceap0
+< ;apter 4
5e increased pro!it recei8ed by a capitalist tro%g te ceapening o!, say, cotton and spinning
macinery, is te res%lt o! iger labo%r prod%cti8ity# not in te spinnery, to be s%re, b%t in cotton
c%lti8ation and constr%ction o! macinery0 &t reD%ires smaller o%tlays o! te 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
5e costs reD%ired to appropriate a certain D%antity o! s%rpl%s-labo%r diminis0
We a8e already mentioned sa8ings yielded in te prod%ction process tro%g co-operati8e %se o!
means o! prod%ction by te aggregate, or socially combined, labo%r0 3ter sa8ings o! constant
capital arising !rom te sortening o! te time o! circ%lation in @ic te de8elopment o! means
o! comm%nication is a dominant material !actor @ill be disc%ssed later0 ?t tis point @e sall deal
@it te sa8ings yielded by contin%o%s impro8ements o! macinery, namely 1C o! its material,
e0g0, te s%bstit%tion o! iron !or @ood# <C te ceapening o! macinery d%e to te general
impro8ement o! macine-b%ilding# so tat, alto%g te 8al%e o! te !ixed portion o! constant
capital increases contin%ally @it te de8elopment o! labo%r on a large scale, it does not increase
at te same rate
<
# 3C special impro8ements enabling existing macinery to @ork more ceaply 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 tro%g better macinery0
Wate8er red%ces te @ear o! macinery, and o! !ixed capital in general, !or any gi8en period o!
prod%ction, ceapens not only te indi8id%al commodity, in 8ie@ o! te !act tat in its price e8ery
indi8id%al commodity reprod%ces its aliD%ot sare o! tis depreciation, b%t red%ces also te
aliD%ot portion o! te in8ested capital !or tis period0 )epair @ork, etc0, to te extent tat it
becomes necessary, is added to te original cost o! te macinery0 ? red%ction in repair costs, d%e
to greater d%rability o! te macinery, lo@ers pro tanto te price o! tis macinery0
&t may again be said o! all tese sa8ings tat tey 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 tat tey
reD%ire an e8en greater combination o! labo%r in te immediate process o! prod%ction0
6o@e8er, on te oter and te de8elopment o! te prod%cti8e po@er o! labo%r in any one line o!
prod%ction, e0g0, te prod%ction o! iron, coal, macinery, in arcitect%re, etc0, @ic may again be
partly connected @it progress in te !ield o! intellect%al prod%ction, notably nat%ral science and
its practical application, appears to be te premise !or a red%ction o! te 8al%e, and conseD%ently
o! te cost, o! means o! prod%ction in other lines o! ind%stry, e0g0, te textile ind%stry, or
agric%lt%re0 5is is sel!-e8ident, since a commodity @ic is te prod%ct o! a certain branc o!
ind%stry enters anoter as a means o! prod%ction0 &ts greater or lesser price depends on te
prod%cti8ity o! labo%r in te line o! prod%ction !rom @ic it iss%es as a prod%ct, and is at te
same time a !actor tat not only ceapens te commodities into @ose prod%ction it goes as a
means o! prod%ction, b%t also red%ces te 8al%e o! te constant capital @ose element it ere
becomes, and tereby one tat increases te rate o! pro!it0
5e caracteristic !eat%re o! tis kind o! sa8ing o! constant capital arising !rom te progressi8e
de8elopment o! ind%stry is tat te rise in te rate o! pro!it inone line o! ind%stry depends on te
de8elopment o! te prod%cti8e po@er o! labo%r in another0 Wate8er !alls to te capitalist"s
ad8antage in tis case is once more a gain prod%ced by social labo%r, i! not a prod%ct o! te
labo%rers e imsel! exploits0 $%c a de8elopment o! prod%cti8e po@er is again traceable in te
!inal analysis to te social nat%re o! te labo%r engaged in prod%ction# to te di8ision o! labo%r in
society# and to te de8elopment o! intellect%al labo%r, especially in te nat%ral sciences0 Wat te
capitalist t%s %tilises are te ad8antages o! te entire system o! te social di8ision o! labo%r0 &t is
te de8elopment o! te prod%cti8e po@er o! labo%r in its exterior department, in tat department
@ic s%pplies it @it means o! prod%ction, @ereby te 8al%e o! te constant capital employed
by te capitalist is relati8ely lo@ered and conseD%ently te rate o! pro!it is raised0
?noter rise in te rate o! pro!it is prod%ced, not by sa8ings in te labo%r creating te constant
capital, b%t by sa8ings in te application o! tis capital itsel!0 3n te one and, te concentration
+3 ;apter 4
o! labo%rers, and teir large-scale co-operation, sa8es constant capital0 5e same b%ildings, and
eating and ligting appliances, etc0, cost relati8ely less !or te large-scale tan !or small-scale
prod%ction0 5e same is tr%e o! po@er and @orking macinery0 ?lto%g teir absol%te 8al%e
increases, it !alls in comparison to te increasing extension o! prod%ction and te magnit%de o!
te 8ariable capital, or te D%antity o! labo%r-po@er set in motion0 5e economy realised by a
certain capital @itin its o@n line o! prod%ction is !irst and !oremost an economy in labo%r, i0 e0, a
red%ction o! te paid labo%r o! its o@n labo%rers0 5e pre8io%sly mentioned economy, on te
oter and, is disting%ised !rom tis one by te !act tat it accomplises te greatest possible
appropriation o! oter people"s %npaid labo%r in te most economical @ay, i0 e0, @it as little
expense as te gi8en scale o! prod%ction @ill permit0 &nasm%c as tis economy does not rest @it
te pre8io%sly mentioned exploitation o! te prod%cti8ity o! te social labo%r employed in te
prod%ction o! constant capital, b%t @it te economy in te constant capital itsel!, it springs eiter
directly !rom te co-operation and social !orm o! labo%r @itin a certain branc o! prod%ction, or
!rom te prod%ction o! macinery, etc0, on a scale in @ic its 8al%e does not gro@ at te same
rate as its %se-8al%e0
5@o points m%st be borne in mind ere: &t te 8al%e o! c R Eero, ten p" R s", and te rate o! pro!it
@o%ld be at its maxim%m0 $econd, o@e8er, te most important ting !or te direct exploitation
o! labo%r itsel! is not te 8al%e o! te employed means o! exploitation, be tey !ixed capital, ra@
materials or a%xiliary s%bstances0 &n so !ar as tey ser8e as means o! absorbing labo%r, as media
in or by @ic labo%r and, ence, s%rpl%s-labo%r are materialised, te excange-8al%e o!
macinery, b%ildings, ra@ materials, etc0, is D%ite immaterial0 Wat is %ltimately essential is, on
te one and, te D%antity o! tem tecnically reD%ired !or combination @it a certain D%antity o!
li8ing labo%r, and, on te oter, teir s%itability, i0e0, not only good macinery, b%t also good ra@
and a%xiliary materials0 5e rate o! pro!it depends partly on te good D%ality o! te ra@ material0
:ood material prod%ces less @aste0 'ess ra@ materials are ten needed to absorb te same
D%antity o! labo%r0 F%rtermore, te resistance to be o8ercome by te @orking macine is also
less0 5is partly a!!ects e8en te s%rpl%s-8al%e and te rate o! s%rpl%s-8al%e0 5e labo%rer needs
more time @en %sing bad ra@ materials to process te same D%antity0 ?ss%ming @ages remain
te same, tis ca%ses a red%ction in s%rpl%s-labo%r0 5is also s%bstantially a!!ects te reprod%ction
and acc%m%lation o! capital, @ic depend more on te prod%cti8ity tan on te amo%nt o! labo%r
employed, as so@n in Aook & B$0 6<>N61*!!0C /Englis edition: p0 6=30 I 0d010
5e capitalist"s !anatical insistence on economy in means o! prod%ction is tere!ore D%ite
%nderstandable0 5at noting is lost or @asted and te means o! prod%ction are cons%med only in
te manner reD%ired by prod%ction itsel!, depends partly on te skill and intelligence o! te
labo%rers and partly on te discipline en!orced by te capitalist !or te combined labo%r0 5is
discipline @ill become s%per!l%o%s %nder a social system in @ic te labo%rers @ork !or teir
o@n acco%nt, as it as already become practically s%per!l%o%s in piece-@ork0 5is !anatical
insistence comes to te s%r!ace also con8ersely in te ad%lteration o! te elements o! prod%ction,
@ic is one o! te principal means o! lo@ering te relation o! te 8al%e o! te constant capital to
te 8ariable capital, and t%s o! raising te rate o! pro!it0 Wereby te sale o! tese elements o!
prod%ction abo8e teir 8al%e, so !ar as tis reappears in te prod%ct, acD%ires a marked element o!
ceating0 5is practice plays an essential part partic%larly in :erman ind%stry, @ose maxim is:
,eople @ill s%rely appreciate i! @e send tem good samples at !irst, and ten in!erior goods
a!ter@ard0 6o@e8er, as tese matters belong to te spere o! competition tey do not concern %s
ere0
&t so%ld be noted tat tis raising o! te rate o! pro!it by means o! lo@ering te 8al%e o! te
constant capital, i0 e0, by red%cing its expensi8eness, does not in any @ay depend on @eter te
branc o! ind%stry in @ic it takes place prod%ces l%x%ries, or necessities !or te cons%mption o!
labo%rers, or means o! prod%ction generally0 5is last circ%mstance @o%ld only be o! material
importance i! it @ere a D%estion o! te rate o! s%rpl%s-8al%e, @ic depends essentially on te
+2 ;apter 4
8al%e o! labo%r-po@er, i0 e0, on te 8al%e o! te c%stomary necessities o! te labo%rer0 A%t in te
present case te s%rpl%s-8al%e and te rate o! s%rpl%s-8al%e a8e been ass%med as gi8en0 5e
relation o! s%rpl%s-8al%e to total capital I and tis determines te rate o! pro!it I depends %nder
tese circ%mstances excl%si8ely on te 8al%e o! te constant capital, and in no @ay on te %se-
8al%e o! te elements o! @ic it is composed0
? relati8e ceapening o! te means o! prod%ction does not, o! co%rse, excl%de te possible
increase o! teir absol%te aggregate 8al%e, !or te absol%te 8ol%me in @ic tey are employed
gro@s tremendo%sly @it te de8elopment o! te prod%cti8e po@er o! labo%r and te attendant
gro@t o! te le8el o! prod%ction0 Economy in te %se o! constant capital, !rom @ate8er angle it
may be 8ie@ed, is, in part, te excl%si8e res%lt o! te !act tat te means o! prod%ction !%nction
and are cons%med as Hoint means o! prod%ction o! te combined labo%rer, so tat te res%lting
sa8ing appears as a prod%ct o! te social nat%re o! directly prod%cti8e labo%r# in part, o@e8er, it
is te res%lt o! de8eloping prod%cti8ity o! labo%r in speres @ic s%pply capital @it its means
o! prod%ction, so tat i! @e 8ie@ te total labo%r in relation to total capital, and not simply te
labo%rers employed by capitalist J in relation to capitalist ., tis economy presents itsel! once
more as a prod%ct o! te de8elopment o! te prod%cti8e !orces o! social labo%r, @it te only
di!!erence tat capitalist J enHoys te ad8antage not only o! te prod%cti8ity o! labo%r in is o@n
establisment, b%t also o! tat in oter establisments0 .et te 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, tat te labo%rer as someting to do @it te employer b%ying
m%c or little labo%r @it te same amo%nt o! money B!or tis is o@ te transaction bet@een te
capitalist and labo%rer appears in is mindC0 5is economy in te application o! te means o!
prod%ction, tis metod o! obtaining a certain res%lt @it a minim%m o%tlay appears more tan
any oter inner po@er o! labo%r as an inerent po@er o! capital and a metod pec%liar and
caracteristic o! te capitalist mode o! prod%ction0
5is conception is so m%c te less s%rprising since it appears to accord @it !act, and since te
relationsip o! capital act%ally conceals te inner connection beind te %tter indi!!erence,
isolation, and alienation in @ic tey place te labo%rer 8is-O-8is te means incorporating is
labo%r0
'irst, te means o! prod%ction tat make %p te constant capital represent only te money
belonging to te capitalist BH%st as te body o! te )oman debtor represented te money o! is
creditor, according to 'ing%et /4h7orie des loi civiles, ou principes fondamentau de la soci7t7,
tome &&, 'ondres, 1>6>, li8re 4, capitre JJ0 I 0d01C and are related to im alone, @ile te
labo%rer, @o comes in contact @it tem only in te direct process o! prod%ction, deals @it
tem as %se-8al%es o! prod%ction only as means o! labo%r and materials o! prod%ction0 &ncrease or
decrease o! teir 8al%e, tere!ore, as as little bearing on is relations to te capitalist as te
circ%mstance @eter e may be @orking @it copper or iron0 For tat matter, te capitalist likes
to 8ie@ tis point di!!erently, as @e sall later indicate, @ene8er te means o! prod%ction gain in
8al%e and tereby red%ce is rate o! pro!it0
Second, in so !ar as tese means o! prod%ction in te capitalist prod%ction process are at te same
time means o! exploiting labo%r, te labo%rer is no more concerned @it teir relati8e dearness or
ceapness tan a orse is concerned @it te dearness or ceapness o! its bit and bridle0
'inally, @e a8e earlier /Englis edition: 4ol0 1, p0 3<+0 I 0d01 seen tat, in !act, te labo%rer
looks at te social nat%re o! is labo%r, at its combination @it te labo%r o! oters !or a common
p%rpose, as e @o%ld at an alien po@er# te condition o! realising tis combination is alien
property, @ose dissipation @o%ld be totally indi!!erent to im i! e @ere not compelled to
economise @it it0 5e sit%ation is D%ite di!!erent in !actories o@ned by te labo%rers temsel8es,
as in )ocdale, !or instance0
++ ;apter 4
&t scarcely needs to be mentioned, ten, tat as !ar as concerns te prod%cti8ity o! labo%r in one
branc o! ind%stry as a le8er !or ceapening and impro8ing te means o! prod%ction in anoter,
and tereby raising te rate o! pro!it, te general interconnection o! social labo%r a!!ects te
labo%rers as a matter alien to tem, a matter tat act%ally concerns te capitalist alone, since it is
e @o b%ys and appropriates tese means o! prod%ction0 5e !act tat e b%ys te prod%ct o!
labo%rers in anoter branc o! ind%stry @it te prod%ct o! labo%rers in is o@n, and tat e
tere!ore disposes o! te prod%ct o! te labo%rers o! anoter capitalist only by grat%ito%sly
appropriating tat o! is o@n, is a de8elopment tat is !ort%nately concealed by te process o!
circ%lation, etc0
Moreo8er, since prod%ction on a large scale de8elops !or te !irst time in its capitalist !orm, te
tirst !or pro!its on te one and, and competition on te oter, @ic compels te ceapest
possible prod%ction o! commodities, make tis economy in te employment o! constant capital
appear as someting pec%liar to te capitalist mode o! prod%ction and tere!ore as a !%nction o!
te capitalist0
P%st as te capitalist mode o! prod%ction promotes te de8elopment o! te prod%cti8e po@ers o!
social labo%r, on te one and, so does it @ip on to economy in te employment o! constant
capital on te oter0
6o@e8er, it is not only te alienation and indi!!erence tat arise bet@een te labo%rer, te bearer
o! li8ing labo%r, and te economical, i0e0, rational and tri!ty, %se o! te material conditions o! is
labo%r0 &n line @it its contradictory and antagonistic nat%re, te capitalist mode o! prod%ction
proceeds to co%nt te prodigio%s dissipation o! te labo%rer"s li!e and ealt, and te lo@ering o!
is li8ing conditions, as an economy in te %se o! constant capital and tereby as a means o!
raising te rate o! pro!it0
$ince te labo%rer passes te greater portion o! is li!e in te process o! prod%ction, te
conditions o! te prod%ction process are largely te conditions o! is acti8e li8ing process, or is
li8ing conditions, and economy in tese li8ing conditions is a metod o! raising te rate o! pro!it#
H%st as @e sa@ earlier /Englis edition: 4ol0 &, pp0 <31-3=<0 I 0d01 tat o8er@ork, te
trans!ormation o! te labo%rer into a @ork orse, is a means o! increasing capital, or speeding %p
te 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
macinery into close D%arters @ito%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 te absence o! all pro8isions to render te prod%ction process %man, agreeable, or at
least bearable0 From te capitalist point o! 8ie@ tis @o%ld be D%ite a %seless and senseless @aste0
5e capitalist mode o! prod%ction is generally, despite all its niggardliness, altogeter too
prodigal @it its %man material, H%st as, con8ersely, tanks to its metod o! distrib%tion o!
prod%cts tro%g commerce and manner o! competition, it is 8ery prodigal @it its material
means, and loses !or society @at it gains !or te indi8id%al capitalist0
P%st as capital as te tendency to red%ce te direct employment o! li8ing labo%r to no more tan
te necessary labo%r, and al@ays to c%t do@n te labo%r reD%ired to prod%ce a commodity by
exploiting te social prod%cti8eness o! labo%r and t%s to sa8e a maxim%m o! directly applied
li8ing labo%r, so it as also te tendency to employ tis labo%r, red%ced to a minim%m, %nder te
most economical conditions, i0e0, to red%ce to its minim%m te 8al%e o! te employed constant
capital0 &! it is te necessary labo%r-time @ic determines te 8al%e o! commodities, instead o!
all te labo%r-time contained in tem, so it is te capital @ic realises tis determination and, at
te same time, contin%ally red%ces te labo%r-time socially necessary to prod%ce a gi8en
commodity0 5e price o! te commodity is tereby lo@ered to its minim%m since e8ery portion o!
te labo%r reD%ired !or its prod%ction is red%ced to its minim%m0
+6 ;apter 4
We m%st make a distinction in economy as regards %se o! constant capital0 &! te D%antity, and
conseD%ently te s%m o! te 8al%e o! employed capital, increases, tis is primarily only a
concentration o! more capital in a single and0 .et it is precisely tis 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,
te 8ol%me o! te necessary in8estment o! capital, especially o! its !ixed portion, increases0 A%t
its 8al%e decreases relati8e to te mass o! @orked-%p materials and exploited labo%r0
5is is no@ to be brie!ly ill%strated by a !e@ examples0 We sall begin at te end I te economy
in te conditions o! prod%ction, in so !ar as tese also constit%te te li8ing conditions o! te
labo%rer0
II. Savings In Labour Conditions At The
!pense "f The Labourers.
Coal mines. $eglect of indisputable outlays.
K(nder te competition @ic exists among te coal-
o@ners and coal-proprietors 000 no more o%tlay is
inc%rred tan is s%!!icient to o8ercome te most
ob8io%s pysical di!!ic%lties# and %nder tat @ic
pre8ails among te labo%ring colliers, @o are
ordinarily more n%mero%s tan te @ork to be done
reD%ires, a large amo%nt o! danger and expos%re to te
most noxio%s in!l%ences @ill gladly be enco%ntered
!or @ages a little in ad8ance o! te agric%lt%ral
pop%lation ro%nd tem, in an occ%pation, in @ic
tey can moreo8er make a pro!itable %se o! teir
cildren0 5is do%ble competition is D%ite s%!!icient 000
to ca%se a large proportion o! te pits to be @orked
@it te most imper!ect drainage and 8entilation#
o!ten @it ill-constr%cted sa!ts, bad gearing,
incompetent engineers, and ill-constr%cted and ill-
prepared bays and road@ays# ca%sing a destr%ction o!
li!e, and limb, and ealt, te 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 teir li8es in te Englis collieries0 ?ccording to
te report on ;oal Mines ?ccidents BFebr%ary 6, 186<C, a total o! 8,266 @ere killed in te ten
years 18+<-610 A%t te report admits tat tis n%mber is !ar too lo@, beca%se in te !irst !e@
+> ;apter 4
years, @en te inspectors ad H%st been installed and teir districts @ere !ar too large, a great
many accidents and deats @ere not reported0 5e 8ery !act tat te n%mber o! accidents, to%g
still 8ery ig, as decreased markedly since te inspection system @as establised, and tis in
spite o! te limited po@ers and ins%!!icient n%mbers o! te inspectors, demonstrates te nat%ral
tendency o! capitalist exploitation0I 5ese %man sacri!ices are mostly d%e to te inordinate
a8arice o! te mine o@ners0 4ery o!ten tey ad only one sa!t s%nk, so tat apart !rom te lack
o! e!!ecti8e 8entilation tere @as no escape @ere tis sa!t to become obstr%cted0
;apitalist prod%ction, @en considered in isolation !rom te process o! circ%lation and te
excesses o! competition, is 8ery economical @it te materialised labo%r incorporated in
commodities0 .et, more tan any oter mode o! prod%ction, it sD%anders %man li8es, or li8ing-
labo%r, and not only blood and !les, b%t also ner8e and brain0 &ndeed, it is only by dint o! te
most extra8agant @aste o! indi8id%al de8elopment tat te de8elopment o! te %man race is at
all sa!eg%arded and maintained in te epoc o! istory immediately preceding te conscio%s
reorganisation o! society0 $ince all o! te economising ere disc%ssed arises !rom te social
nat%re o! labo%r, it is indeed H%st tis directly social nat%re o! labo%r @ic ca%ses te @aste o!
li!e and ealt0 5e !ollo@ing D%estion s%ggested by !actory inspector )0 Aaker is caracteristic
in tis respect:
K5e @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 tis eading tere is co8ered te disregard !or sa!ety meas%res to ens%re te
sec%rity, com!ort, and ealt o! labo%rers also in te act%al !actories0 &t is to blame !or a large
portion o! te cas%alty lists containing te @o%nded and killed ind%strial @orkers Bc!0 te ann%al
!actory reportsC0 $imilarly, lack o! space, 8entilation, etc0
?s !ar back as 3ctober 18++, 'eonard 6orner complained abo%t te resistance o! 8ery many
man%!act%rers to te legal reD%irements concerning sa!ety de8ices on oriEontal sa!ts, alto%g
te danger @as contin%ally empasised by accidents, many o! tem !atal, and alto%g tese
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 teir resistance against tese and oter legal reD%irements te
man%!act%rers @ere openly seconded by te %npaid H%stices o! te peace, @o @ere temsel8es
mostly man%!act%rers or !riends o! man%!act%rers, and anded do@n teir decisions accordingly0
Wat sort o! 8erdicts tese gentlemen anded do@n @as re8ealed by $%perior P%dge ;ampbell,
@o said @it re!erence to one o! tem, against @ic an appeal ad been made to im:
K&t is not an interpretation o! te ?ct o! ,arliament, it
is a repeal o! te ?ct o! ,arliamentL Bloc. cit0, p0 11C0
6orner states in te same report tat in many !actories labo%rers are not @arned @en macinery
is abo%t to be started %p0 $ince tere is al@ays someting to be done abo%t macinery e8en @en
it is not operating, !ingers and ands are al@ays occ%pied @it it, and accidents appen
contin%ally d%e to te mere omission o! a @arning signal Bloc. cit0, p0 22C0 5e man%!act%rers ad
a trades-%nion at te time to oppose !actory legislation, te so-called -ational ?ssociation !or te
?mendment o! te Factory 'a@s in Mancester, @ic in Marc 18++ collected more tan
V+=,=== by assessing < sillings per orse-po@er, to pay !or te co%rt proceedings against its
members started by !actory inspectors, and to cond%ct te cases in te name o! te %nion0 &t @as a
matter o! pro8ing tat killing @as no m%rder /?ll%sion to te pamplet "Killing no M%rder" @ic
+8 ;apter 4
appeared in England in 16+>0 &ts a%tor @as te le8eller Ed@ard $exby0 I 0d01 @en it occ%rred
!or te sake o! pro!it0 ? !actory inspector !or $cotland, $ir Pon Kincaid, tells abo%t a certain !irm
in :lasgo@ @ic %sed te iron scrap at its !actory to make protecti8e sields !or all its
macinery, te cost amo%nting to V* 1s0 Poining te man%!act%rers" %nion @o%ld a8e cost it an
assessment o! V11 !or its 11= orse-po@er, @ic @as more tan te cost o! all its protecti8e
appliances0 A%t te -ational ?ssociation ad been organised in 18+2 !or te express p%rpose o!
opposing te la@ @ic prescribed s%c protection0 5e man%!act%rers ad not paid te least eed
to it d%ring te @ole period !rom 1822 to 18+20 Wen te !actory inspectors, at instr%ctions !rom
,almerston, ten in!ormed te man%!act%rers tat te la@ @o%ld be en!orced in earnest, te
man%!act%rers instantly !o%nded teir association, many o! @ose most prominent members @ere
temsel8es H%stices o! te peace and in tis capacity @ere s%pposed to en!orce te la@0 Wen in
?pril 18++ te ne@ Minister o! te &nterior, $ir :eorge :rey, o!!ered a compromise %nder @ic
te go8ernment @o%ld be content @it practically nominal sa!ety appliances te ?ssociation
indignantly reHected e8en tis0 &n 8ario%s la@s%its te !amo%s engineer William Fairbairn tre@
te @eigt o! is rep%tation beind te principle o! economy and in de!ence o! te !reedom o!
capital @ic ad been 8iolated0 5e ead o! !actory inspection, 'eonard 6orner, @as persec%ted
and maligned by te man%!act%rers in e8ery concei8able manner0
A%t te man%!act%rers did not rest %ntil tey obtained a @rit o! te ;o%rt o! M%een"s Aenc,
according to @ic te 'a@ o! 1822 did not prescribe protecti8e de8ices !or oriEontal sa!ts
installed more tan se8en !eet abo8e te gro%nd and, !inally, in 18+6 tey s%cceeded in sec%ring
an ?ct o! ,arliament entirely satis!actory to tem in te circ%mstances, tro%g te ser8ices o! te
bigot Wilson ,atten, one o! tose pio%s so%ls @ose display o! religion is al@ays ready to do te
dirty @ork !or te knigts o! te money-bag0 5is ?ct practically depri8ed te labo%rers o! all
special protection and re!erred tem to te common co%rts !or compensation in te e8ent o!
ind%strial accidents Bseer mockery in 8ie@ o! te excessi8e cost o! Englis la@s%itsC, @ile it
made it almost impossible !or te man%!act%rer to lose te la@s%it by pro8iding in a !inely-
@orded cla%se !or expert testimony0 5e res%lt @as a rapid increase o! accidents0 &n te six
monts !rom May to 3ctober 18+8, &nspector Aaker reported tat accidents increased by <1T
compared @it te preceding al!-year0 &n is opinion 360>T o! tese accidents migt a8e been
a8oided0 &t is tr%e tat te n%mber o! accidents in 18+8 and 18+* @as considerably belo@ tat o!
182+ and 18260 &t @as act%ally <*T less alto%g te n%mber o! labo%rers in te ind%stries
s%bHect to inspection ad increased <=T0 A%t @at @as te reason !or tisQ &n so !ar as tis iss%e
as been settled no@ B186+C, it @as mainly accomplised tro%g te introd%ction o! ne@
macinery already pro8ided @it sa!ety de8ices to @ic te man%!act%rer did not obHect beca%se
tey cost im no extra expense0 F%rtermore, a !e@ labo%rers s%cceeded in sec%ring ea8y
damages !or teir lost arms, and ad tis H%dgement %peld e8en by te igest 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 te li!e and limbs o! labo%rers Bamong @om many
cildrenC against te dangers o! andling and operating macinery0
"or- in enclosed places generally0 &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, tere is also economy in means o!
8entilation0 ;o%pled @it te long @orking-o%rs, te t@o ca%se a large increase in diseases o!
te respiratory organs, and an attendant increase in te deat-rate0 5e !ollo@ing ill%strations
a8e been taken !rom )eports on ,%blic 6ealt, 6t report, 18630 5is report @as compiled by
7r0 Pon $imon, @ell kno@n !rom o%r Aook &0
P%st as combination and co-operation o! labo%r permits large-scale employment o! macinery,
concentration o! means o! prod%ction, and economy in teir %se, it is tis 8ery @orking togeter
en masse in enclosed places and %nder conditions rater determined by ease o! man%!act%re tan
by ealt reD%irements I it is tis mass concentration in one and te same @orksop tat acts, on
te one and, as a so%rce o! greater pro!its !or te capitalist and, on te oter, %nless co%nteracted
+* ;apter 4
by a red%ced n%mber o! o%rs and special preca%tions, as te ca%se o! te sD%andering o! te li8es
and ealt o! te labo%rers0
7r0 $imon !orm%lates te !ollo@ing r%le and backs it %p @it ab%ndant statistics:
K&n proportion as te people o! a district are attracted
to any collecti8e indoor occ%pation, in s%c
proportion, oter tings being eD%al, te district
deat-rate by l%ng diseases @ill be increasedL Bp0 <3C0
5e ca%se is bad 8entilation0 K?nd probably in all
England tere is no exception to te r%le, tat, in
e8ery district @ic as a large indoor ind%stry, te
increased mortality o! te @orkpeople is s%c as to
colo%r te deat-ret%rn o! te @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 te Aoard o! 6ealt in
186= and 1861, indicate tat !or te same n%mber o! men bet@een te ages o! 1+ and ++, !or
@ic te deat-rate !rom cons%mption and oter p%lmonary diseases in Englis agric%lt%ral
districts is 1==, te 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*=, -ottingam 1*<, )ocdale
1*3, 7erby 1*8, $al!ord and ?ston-%nder-'yne <=3, 'eeds <18, ,reston <<=, and Mancester
<63 Bp0 <2C0 5e !ollo@ing table presents a still more striking ill%stration0
7istrict ;ie! ind%stry 7eats !rom p%lmonary diseases
bet@een te ages o! 1+ and <+, per
1==,=== pop%lation
Men Women
Aerkampstead $tra@ plaiting B@omenC <1* +>8
'eigton A%EEard $tra@ plaiting B@omenC 3=* ++2
-e@port ,agnell 'ace man%!act%re
B@omenC
3=1 61>
5o@cester 'ace man%!act%re
B@omenC
<3* +>>
.eo8il Man%!act%re o! glo8es
Bmainly @omenC
<8= 2=*
'eek $ilk ind%stry
Bpredominantly @omenC
23> 8+6
;ongleton $ilk ind%stry
Bpredominantly @omenC
+66 >*=
Maccles!ield $ilk ind%stry
Bpredominantly @omenC
+*3 8*=
6= ;apter 4
6ealty co%ntry
district
?gric%lt%re 331 333
&t so@s te deat-rate !or p%lmonary diseases separately !or bot sexes bet@een te ages o! 1+
and <+ comp%ted !or e8ery 1==,=== pop%lation0 &n te districts selected only @omen are
employed in ind%stries carried on in enclosed places, @ile men @ork in all oter possible lines0
&n te silk districts, @ere more men are employed in te !actory, teir mortality is also iger0
5e deat-rate !rom cons%mption, etc0, !or bot sexes, re8eals, as te report says,
Kte atrocio%s sanitary circ%mstances %nder @ic
m%c o! o%r silk ind%stry is cond%ctedL0
?nd it is in tis same silk ind%stry tat te man%!act%rers, pleading exceptionally !a8o%rable and
sanitary conditions in teir establisments, demanded by @ay o! an exception, and partially
obtained, long @orking-o%rs !or cildren %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
as a!!orded a @orse pict%re tan tat @ic 7r0
$mit gi8es o! tailoring: I "$ops 8ary m%c in teir
sanitary conditions, b%t almost %ni8ersally are
o8ercro@ded and ill-8entilated, and in a ig degree
%n!a8o%rable to ealt0000 $%c rooms are necessarily
@arm# b%t @en te gas is lit, as d%ring te day-time
on !oggy days, and at nigt d%ring te @inter, te eat
increases to 8=_ and e8en to %p@ards o! *=_, ca%sing
pro!%se perspiration, and condensation o! 8apo%r
%pon te panes o! glass, so tat it r%ns do@n in
streams or drops !rom te roo!, and te operati8es are
compelled to keep some @indo@s open, at @ate8er
risk to temsel8es o! taking cold0" ?nd e gi8es te
!ollo@ing acco%nt o! @at e !o%nd in 16 o! te most
important West End sops0I "5e largest c%bic space
in tese ill-8entilated rooms allo@ed to eac operati8e
is <>= !eet, and te least 1=+ !eet, and in te @ole
a8erages only 1+6 !eet per man0 &n one room, @it a
gallery r%nning ro%nd it, and ligted only !rom te
roo!, !rom *< to %p@ards o! 1== men are employed,
@ere a large n%mber o! gasligts b%rn, and @ere te
%rinals are in te closest proximity, te c%bic space
does not exceed 1+= !eet per man0 &n anoter room,
61 ;apter 4
@ic can only be called a kennel in a yard, ligted
!rom te roo!, and 8entilated by a small skyligt
opening, !i8e to six men @ork in a space o! 11< c%bic
!eet per man0" 000 5ailors, in tose atrocio%s @orksops
@ic 7r0 $mit describes, @ork generally !or abo%t
1< or 13 o%rs a day, and at some times te @ork @ill
be contin%ed !or 1+ or 16 o%rsL Bpp0 <+, <6, <8C
-%mbers o! persons
employed
Arances o! ind%stry and
locality
7eat-rate per 1==,=== bet@een
te ages o!
<+-3+ 3+-2+ 2+-++
*+8,<6+ ?gric%lt%re, England and
Wales
>23 8=+ 1,12+
<<,3=1 men and 5ailoring, 'ondon *+8 1,<6< <,=*3
1<,3>> @omen
13,8=3 5ype-setters and printers,
'ondon
8*2 1,>2> <,36>
Bp0 3=C0 &t m%st be noted, and as in !act been remarked by Pon $imon, cie! o! te Medical
7epartment and a%tor o! te report, tat te mortality-rate !or tailors, type-setters, and printers o!
'ondon bet@een te ages o! <+ and 3+ @as cited lo@er tan te 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 te co%ntry engaged as apprentices and Kimpro8ersL, i0e0, men getting additional
training0 5ese s@ell te n%mber o! ands !or @ic te 'ondon ind%strial deat-rates are
comp%ted0 A%t tey do not proportionally contrib%te to te n%mber o! deats in 'ondon beca%se
teir stay tere is only temporary0 &! tey !all ill d%ring tis period, tey ret%rn to teir omes in
te co%ntry, @ere teir deat is registered i! tey die0 5is circ%mstance a!!ects te earlier ages
still more and renders te 'ondon deat-rates !or tese age gro%ps completely 8al%eless as
indexes o! te ill-e!!ects o! ind%stry on ealt Bp0 3=C0
5e case o! te type-setters is similar to tat o! te tailors0 &n addition to lack o! 8entilation, to
poisoned air, etc0, tere is still nigt-@ork to be mentioned0 5eir reg%lar @orking-time is 1< to 13
o%rs, sometimes 1+ to 160
K:reat eat and !o%lness @ic begin @en te gas-
Hets are lit0 000 &t not in!reD%ently appens tat !%mes
!rom a !o%ndry, or !o%l odo%rs !rom macinery or
sinks, rise !rom te lo@er room, and aggra8ate te
e8ils o! te %pper one0 5e eated air o! te lo@er
rooms al@ays tends to eat te %pper by @arming te
!loor, and @en te rooms are lo@, and te
cons%mption o! gas great, tis is a serio%s e8il, and
6< ;apter 4
one only s%rpassed in te case @ere te steam-
boilers are placed in te lo@er room, and s%pply
%n@ised-!or eat to te @ole o%se0000 ?s a general
expression, it may be stated tat %ni8ersally te
8entilation is de!ecti8e, and D%ite ins%!!icient to
remo8e te eat and te prod%cts o! te comb%stion o!
gas in te e8ening and d%ring te nigt, and tat in
many o!!ices, and partic%larly in tose made !rom
d@elling-o%ses, te condition is most deplorable0 000
?nd in some o!!ices Bespecially tose o! @eekly
ne@spapersC tere @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
nigt at a time# I @ile, in oter printing-o!!ices
@ic lay temsel8es o%t !or te doing o! "%rgent"
b%siness, $%nday gi8es no relaxation to te @orkman,
and is @orking-days become se8en instead o! six in
e8ery @eekL Bpp0 <6, <8C0
5e 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 5eir @orksops
are described in o%r report by 7r0 3rd0 E8en i! better d%ring te day, tey become o8ereated,
!o%l, and %nealty d%ring te o%rs in @ic gas is b%rned0 7r0 3rd !o%nd in 32 sops o! te
better sort tat te a8erage n%mber o! c%bic !eet per @orker @as as !ollo@s:
K000 &n !o%r cases more tan +==, in !o%r oter cases
!rom 2== to +==, 000 in se8en oters !rom <== to <+=,
in !o%r oters !rom 1+= to <==, and in nine oters only
!rom 1== to 1+=0 5e largest o! tese allo@ances
@o%ld b%t be scanty !or contin%o%s @ork, %nless te
space @ere toro%gly @ell 8entilated# and, except
@it extraordinary 8entilation, its atmospere co%ld
not be tolerably @olesome d%ring gas-ligt0L
?nd ere is 7r0 3rd"s remark abo%t one o! te minor @orksops @ic e 8isited, operated !or te
acco%nt o! a middleman:
K3ne room area in c%bical !eet, 1,<8=# persons
present, 12# area to eac, in c%bical !eet, *10+0 5e
@omen ere @ere @eary-looking and sD%alid# teir
earnings @ere stated to be >s0 to 1+s0 a @eek, and teir
63 ;apter 4
tea0 000 6o%rs 8 a0 m0 to 8 p0 m0 5e small room into
@ic tese 12 persons @ere cro@ded @as ill-
8entilated0 5ere @ere t@o mo8able @indo@s and a
!ire-place, b%t te latter @as blocked %p and tere @as
no special 8entilation o! any kindL Bp0 <>C0
5e same report states @it re!erence to te o8er@ork o! milliners and dress-makers:
K000 5e o8er@ork o! te yo%ng @omen in !asionable
dress-making establisments does not, !or more tan
abo%t !o%r monts o! te year, pre8ail in tat
monstro%s degree @ic as on many occasions
excited momentary p%blic s%rprise and indignation#
b%t !or te indoor ands d%ring tese monts it @ill,
as a r%le, be o! !%ll 12 o%rs a day, and @ill, @en
tere is press%re, be, !or days togeter, o! 1> or e8en
18 o%rs0 ?t oter times o! te year te @ork o! te
indoor ands ranges probably !rom 1= to 12 o%rs#
and %ni!ormly te o%rs !or o%tdoor ands are 1< or
130 For mantle-makers, collar-makers, sirt-makers,
and 8ario%s oter classes o! needle@orkers Bincl%ding
persons @o @ork at te se@ing-macineC te o%rs
spent in te common @orkroom are !e@er I generally
not more tan 1= to 1< o%rs# b%t, says 7r0 3rd, te
reg%lar o%rs o! @ork are s%bHect to considerable
extension in certain o%ses at certain times, by te
practice o! @orking extra o%rs !or extra pay, and in
oter o%ses by te 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
Pon $imon remarks in a !ootnote to tis page:
KMr0 )adcli!!e, 000 te 6onorary $ecretary o! te
Epidemiological $ociety, 000 appening to a8e
%n%s%al opport%nities !or D%estioning te yo%ng
@omen employed in !irst-class o%ses o! b%siness 000
as !o%nd tat in only one o%t o! t@enty girls
62 ;apter 4
examined @o called temsel8es "D%ite @ell" co%ld te
state o! ealt be prono%nced good# te rest exibiting
in 8ario%s degrees e8idences o! depressed pysical
po@er, ner8o%s exa%stion, and n%mero%s !%nctional
disorders tere%pon dependent0 6e attrib%tes tese
conditions in te !irst place to te lengt o! te o%rs
o! @ork I te minim%m o! @ic e estimates at 1<
o%rs a day o%t o! te season# and secondarily to 000
cro@ding and bad 8entilation o! @orkrooms, gas-
8apo%rs, ins%!!iciency or bad D%ality o! !ood, and
inattention to domestic com!ort0L
5e concl%sion arri8ed at by te cie! o! te Englis Aoard o! 6ealt is tat
Kit is practically impossible !or @orkpeople to insist
%pon tat @ic in teory is teir !irst sanitary rigt I
te rigt tat @ate8er @ork teir employer assembles
tem to do, sall, 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 tat sanitary H%stice !or temsel8es,
tey also Bnot@itstanding te pres%med intentions o!
te la@C cannot expect any e!!ect%al assistance !rom
te appointed administrators o! te -%isances
)emo8al ?ctsL Bp0 <*C0I K7o%btless tere may be
some small tecnical di!!ic%lty in de!ining te exact
line at @ic employers sall become s%bHect to
reg%lation0 A%t 000 in principle, te sanitary claim is
%ni8ersal0 ?nd in te interest o! myriads o! labo%ring
men and @omen, @ose li8es are no@ needlessly
a!!licted and sortened by te in!inite pysical
s%!!ering @ic teir mere employment engenders, &
@o%ld 8ent%re to express my ope, tat %ni8ersally
te sanitary circ%mstances o! labo%r may, at least so
!ar, be bro%gt @itin appropriate pro8isions o! la@,
tat te e!!ecti8e 8entilation o! all indoor @orkplaces
may be ens%red, and tat in e8ery nat%rally
6+ ;apter 4
insal%brio%s occ%pation te 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! te !amo%s engineer Pames -asmyt o!
,atricro!t, te in8entor o! te steam-ammer, @ic, among oter tings, contains te !ollo@ing:
K0005e p%blic are little a@are o! te 8ast increase in
dri8ing po@er @ic as been obtained by s%c
canges o! system and impro8ements Bo! steam-
enginesC as & all%de to0 5e engine po@er o! tis
district B'ancasireC lay %nder te inc%b%s o! timid
and preH%diced traditions !or nearly !orty years, b%t
no@ @e are appily emancipated0 7%ring te last
!i!teen years, b%t more especially in te co%rse o! te
last !o%r years Bsince 1828C, some 8ery important
canges a8e taken place in te system o! @orking
condensing steam-engines0 000 5e res%lt 000 as been to
realise a m%c greater amo%nt o! d%ty or @ork
per!ormed by te identical engines, and tat again at a
8ery considerable red%ction o! te expendit%re o! !%el0
000 For a great many years a!ter te introd%ction o!
steam-po@er into te mills and man%!actories o! te
abo8e-named districts, te 8elocity o! @ic, it @as
considered proper to @ork condensing steam-engines
@as abo%t <<= !eet per min%te o! te piston# tat is to
say, an engine @it a +-!eet stroke @as restricted by
"r%le" to make << re8ol%tions o! te cranksa!t per
min%te0 Aeyond tis speed it @as not considered
pr%dent or desirable to @ork te engine# and as all te
mill gearing 000 @ere made s%itable to tis <<= !eet per
min%te speed o! piston, tis slo@ and abs%rdly
restricted 8elocity r%led te @orking o! s%c engines
!or many years0 6o@e8er, at lengt, eiter tro%g
!ort%nate ignorance o! te "r%le", or by better reasons
66 ;apter 4
on te part o! some bold inno8ator, a greater speed
@as tried, and as te res%lt @as igly !a8o%rable,
oters !ollo@ed te example, by, as it is termed,
"letting te engine a@ay", namely, by so modi!ying te
proportions o! te !irst motion @eels o! te mill
gearing as to permit te engine to r%n at 3== !eet and
%p@ards per min%te, @ile te mill gearing generally
@as kept at its !ormer speed0000 5is "letting te engine
a@ay"000 as led to te almost %ni8ersal "speeding" o!
engines, beca%se it @as pro8ed tat not only @as tere
a8ailable po@er gained !rom te identical engines, b%t
also as te iger 8elocity o! te engine yielded a
greater moment%m in te !ly-@eel te 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 iger 8elocity Bpress%re o! steam
and 8ac%%m in te condenser remaining te 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 tis same engine to r%n at
s%c a speed as tat its piston @ill tra8el tro%g
space at 2== !eet per min%te Bpress%re o! steam and
8ac%%m, as be!ore said, remaining te sameC, @e sall
ten a8e H%st do%ble te po@er 000 and as te press%re
by steam and 8ac%%m is te same in bot cases, te
strain %pon te parts o! tis engine @ill be no greater
at 2== tan at <== !eet speed o! piston, so tat te risk
o! "break-do@n" does not materially increase @it te
increase o! speed0 ?ll te di!!erence is, tat @e sall
in s%c case cons%me steam at a rate proportional to
te speed o! piston, or nearly so# and tere @ill e
some small increase in te @ear and tear o! "te
brasses" or r%bbing-parts, b%t so sligt as to be
scarcely @ort notice0000 A%t in order to obtain
increase o! po@er !rom te same engine by permitting
6> ;apter 4
its piston to tra8el at a iger 8elocity it is reD%isite 000
to b%m more coal per o%r %nder te same boiler, or
employ boilers o! greater e8aporating capabilities,
i0e0, greater steam-generating po@ers0 5is
accordingly @as done, and boilers o! greater steam-
generating or @ater-e8aporating po@ers @ere s%pplied
to te old "speeded" engines, and in many cases near
1== per cent more @ork @as got o%t o! te identical
engines by means o! s%c canges as abo8e named0
?bo%t ten years ago te extraordinary economical
prod%ction o! po@er as realised by te engines
employed in te mining operations o! ;orn@all began
to attract attention# and as competition in te spinning
trade !orced man%!act%rers to look to "sa8ings" as te
cie! so%rce o! pro!its, te remarkable di!!erence in
te cons%mption o! coal per orsepo@er per o%r, as
indicated by te per!ormance o! te ;ornis engines,
as also te extraordinary economical per!ormance o!
Wool!"s do%ble-cylinder engines, began to attract
increased attention to te s%bHect o! economy o! !%el
in tis district, and as te ;ornis and do%ble-cylinder
engines ga8e a orse-po@er !or e8ery 3Z to 2 lbs o!
coal per o%r, @ile te 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 tis district to endea8o%r to
realise, by te adoption o! similar means, s%c
extraordinary economical res%lts as @ere pro8ed to be
common in ;orn@all and France, @ere te ig
price o! coal ad compelled man%!act%rers to look
more sarply to s%c costly departments o! teir
establisments0 5e res%lt o! tis increased attention
to economy o! !%el as been most important in many
respects0 &n te !irst place, many boilers, te al! o!
@ose s%r!ace ad been in te good old times o! ig
pro!its le!t exposed D%ite naked to te cold air, began
68 ;apter 4
to get co8ered @it tick blankets o! !elt, and brick
and plaster, and oter modes and means @ereby to
pre8ent te escape o! tat eat !rom teir exposed
s%r!ace @ic ad cost so m%c !%el to maintain0
$team-pipes began to be "protected" in te same
manner, and te o%tside o! te cylinder o! te engine
!elted and cased in @it @ood in like manner0 -ext
came te %se o! "ig steam", namely, instead o!
a8ing te sa!ety-8al8e loaded so as to blo@ o!! at 2,
6, or 8 lbs to te sD%are inc, it @as !o%nd tat by
raising te press%re to 12 or <= lbs 000 a 8ery decided
economy o! !%el res%lted# in oter @ords, te @ork o!
te mill @as per!ormed by a 8ery notable red%ced
cons%mption o! coals, 000 and tose @o ad te means
and te boldness carried te increased press%re and
"expansion system" o! @orking to te !%ll extent, by
employing properly constr%cted boilers to s%pply
steam o! 3=, 2=, +=, 6=, and >= lbs to te sD%are inc#
press%res @ic @o%ld a8e !rigtened an engineer o!
te old scool o%t o! is @its0 A%t as te economic
res%lts o! so increasing te press%re o! steam000 soon
appeared in most %nmistakable V s0 d0 !orms, te %se
o! ig-press%re steam-boilers !or @orking
condensing engines became almost general0 ?nd tose
@o desired to go to te !%ll extent 000 soon adopted
te employment o! te Wool! engine in its !%ll
integrity, and most o! o%r mills lately b%ilt are @orked
by te Wool! engines, namely, tose on @ic tere
are t@o cylinders to eac engine, in one o! @ic te
ig-press%re steam !rom te boiler exerts or yields
po@er by its excess o! press%re o8er tat o! te
atmospere, @ic, instead o! te said ig-press%re
steam being let pass o!! at te end o! eac stroke !ree
into te atmospere, is ca%sed to pass into a lo@-
press%re cylinder o! abo%t !o%r times te area o! te
!ormer, and a!ter d%e expansion passes to te
6* ;apter 4
condenser, te economic res%lt obtained !rom engines
o! tis class is s%c tat te cons%mption o! !%el is at
te rate o! !rom 3Z to 2 lbs0 o! coal per orse per
o%r# @ile in te engines o! te old system te
cons%mption %sed to be on te a8erage !rom 1< to 12
lbs0 per orse per o%r0 Ay an ingenio%s arrangement,
te Wool! system o! do%ble cylinder or combined
lo@- and ig-press%re engine as been introd%ced
extensi8ely to already existing engines, @ereby teir
per!ormance as been increased bot as to po@er and
economy o! !%el0 5e same res%lt 000 as been in %se
tese eigt or ten years, by a8ing a ig-press%re
engine so connected @it a condensing engine as to
enable te @aste steam o! te !ormer to pass on to and
@ork te latter0 5is system is in many cases 8ery
con8enient0
K&t @o%ld not be 8ery easy to get an exact ret%rn as to
te increase o! per!ormance or @ork done by te
identical engines to @ic some or all o! tese
impro8ements a8e been applied# & am con!ident,
o@e8er, 000 tat !rom te same @eigt o! steam-
engine macinery @e are no@ obtaining at least +=
per cent more d%ty or @ork per!ormed on te a8erage,
and tat in many cases, te identical steam-engines
@ic in te days o! te restricted speed o! <<= !eet
per min%te yielded += orse-po@er, are no@ yielding
%p@ards o! 1==0 5e 8ery economical res%lts deri8ed
!rom te employment o! ig-press%re steam in
@orking condensing steam-engines, togeter @it te
m%c iger po@er reD%ired by mill extensions !rom
te same engines, as @itin te last tree years led to
te adoption o! t%b%lar boilers, yielding a m%c more
economical res%lt tan tose !ormerly employed in
generating steam !or mill engines0L B)eports o! &nsp0
o! Fact0, 3ctober 18+<, pp0 <3-<>0C
>= ;apter 4
Wat applies to po@er generation also applies to po@er transmission and @orking macinery0
K5e rapid strides @it @ic impro8ement in
macinery as ad8anced @itin tese !e@ years a8e
enabled man%!act%rers to increase prod%ction @ito%t
additional mo8ing po@er0 5e more economical
application o! labo%r as been rendered necessary by
te diminised lengt o! te @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, so@ing te n%mber o!
ands employed, teir ages, te macines at @ork,
and te @ages paid !rom 182= to te 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# te same n%mber o! macines, @itin 8ery !e@,
@ere at @ork, and te 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
5ese impro8ements o! te macinery do not so@ teir !%ll e!!ect %ntil tey are %sed in ne@,
appropriately arranged !actories0
K?s regards te impro8ement made in macinery, &
may say in te !irst place tat a great ad8ance as
been made in te constr%ction o! mills adapted to
recei8e impro8ed macinery0000 &n te bottom room &
do%ble all my yarn, and %pon tat single !loor & sall
p%t <*,=== do%bling spindles0 & e!!ect a sa8ing o!
labo%r in te room and sed o! at least 1= per cent, not
so m%c !rom any impro8ement in te principle o!
do%bling yarn, b%t !rom a concentration o! macinery
%nder a single management# and & am enabled to dri8e
te said n%mber o! spindles by one single sa!t, a
sa8ing in sa!ting, compared @it @at oter !irms
a8e to %se to @ork te same n%mber o! spindles, o!
>1 ;apter 4
6= per cent, in some cases 8= per cent0 5ere is a large
sa8ing in oil, and sa!ting, and in grease0000 Wit
s%perior mill arrangements and impro8ed macinery,
at te lo@est estimate & a8e e!!ected a sa8ing in
labo%r o! 1= per cent, a great sa8ing in po@er, coal,
oil, tallo@, sa!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
5e capitalist mode o! prod%ction extends te %tilisation o! te excretions o! prod%ction and
cons%mption0 Ay te !ormer @e mean te @aste o! ind%stry and agric%lt%re, slid by te latter
partly te excretions prod%ced by te nat%ral excange o! matter in te %man body and partly
te !orm o! obHects tat remains a!ter teir cons%mption0 &n te cemical 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 te man%!act%re o! macinery and ret%rning into te prod%ction o! iron as
ra@ material, etc0 Excretions o! cons%mption are te nat%ral @aste matter discarged by te
%man body, remains o! cloting in te !orm o! rags, etc0 Excretions o! cons%mption are o! te
greatest importance !or agric%lt%re0 $o !ar as teir %tilisation is concerned, tere is an enormo%s
@aste o! tem in te capitalist economy0 &n 'ondon, !or instance, tey !ind no better %se !or te
excretion o! !o%r and a al! million %man beings tan to contaminate te 5ames @it it at
ea8y expense0
)ising prices o! ra@ materials nat%rally stim%late te %tilisation o! @aste prod%cts0
5e general reD%irements !or te re-employment o! tese excretions are: large D%antities o! s%c
@aste, s%c as are a8ailable only in large-scale prod%ction# impro8ed macinery @ereby
materials, !ormerly %seless in teir pre8ailing !orm, are p%t into a state !it !or ne@ prod%ction#
scienti!ic progress, partic%larly o! cemistry, @ic re8eals te %se!%l properties o! s%c @aste0 &t
is tr%e tat great sa8ings o! tis sort are also obser8ed in small-scale agric%lt%re, as pre8ails in,
say, 'ombardy, so%tern ;ina, and Papan0 A%t on te @ole, te prod%cti8ity o! agric%lt%re
%nder tis system obtains !rom te prodigal %se o! %man labo%r-po@er, @ic is @iteld !rom
oter speres o! prod%ction0
5e so-called @aste plays an important role in almost e8ery ind%stry0 5%s, te Factory )eport !or
7ecember 1863 mentions as one o! te principal reasons @y te Englis and many o! te &ris
!armers do not like to gro@ !lax, or do so b%t rarely,
Kte great @aste 000 @ic as taken place at te little
@ater sc%tc mills 000 te @aste in cotton is
comparati8ely small, b%t in !lax 8ery large0 5e
e!!iciency o! @ater steeping and o! good macine
sc%tcing @ill red%ce tis disad8antage 8ery
considerably0000 Flax, sc%tced in &reland in a most
same!%l @ay, and a large percentage act%ally lost by
>< ;apter 4
it, eD%al to <8 or 3= per centL B)eports o! &nsp0 o!
Fact0, 7ec0 1863, pp0 13*, 12<C
@ereas all tis migt be a8oided tro%g te %se o! better macinery0 $o m%c to@ !ell by te
@ayside tat te !actory inspector reports:
K& a8e been in!ormed @it regard to some o! te
sc%tc mills in &reland, tat te @aste made at tem
as o!ten been %sed by te sc%tcers to b%rn on teir
!ires at ome, and yet it is 8ery 8al%ableL Bp0 12= o!
te abo8e reportC0
We sall speak o! cotton @aste later, @en @e deal @it te price !l%ct%ations o! ra@ materials0
5e @ool ind%stry @as sre@der tan te !lax man%!act%rers0
K&t @as once te common practice to decry te
preparation o! @aste and @oollen rags !or re-
man%!act%re, b%t te preH%dice as entirely s%bsided
as regards te soddy trade, @ic as become an
important branc o! te @oollen trade o! .orksire,
and do%btless te cotton @aste trade @ill be
recognised in te same manner as s%pplying an
admitted @ant0 5irty years since, @oollen rags, i0e0,
pieces o! clot, old clotes, etc0, o! noting b%t @ool,
@o%ld a8erage abo%t V2 2s0 per ton in price: @itin
te last !e@ years tey a8e become @ort V22 per
ton, and te demand !or tem as so increased tat
means a8e been !o%nd !or %tilising te rags o! !abrics
o! cotton and @ool mixed by destroying te cotton
and lea8ing te @ool intact, and no@ to%sands o!
operati8es are engaged in te man%!act%re o! soddy,
!rom @ic te cons%mer as greatly bene!ited in
being able to p%rcase 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 te end o! 186< te reH%8enated soddy made %p as m%c as one-tird o! te entire
cons%mption o! @ool in Englis ind%stry0 B)eports o! &nsp0 o! Fact0, 3ctober 186<, p0 810C 5e
Kbig bene!itL !or te Kcons%merL is tat is soddy clotes @ear o%t in H%st one-tird o! te
pre8io%s time and t%rn treadbare in one-sixt o! tis time0
5e Englis silk ind%stry mo8ed along te same do@n@ard pat0 5e cons%mption o! gen%ine
ra@ silk decreased some@at bet@een 183* and 186<, @ile tat o! silk @aste do%bled0 &mpro8ed
>3 ;apter 4
macinery elped to man%!act%re a silk %se!%l !or many p%rposes !rom tis oter@ise rater
@ortless st%!!0
5e most striking example o! %tilising @aste is !%rnised by te cemical ind%stry0 &t %tilises not
only its o@n @aste, !or @ic it !inds ne@ %ses, b%t also tat o! many oter ind%stries0 For
instance, it con8erts te !ormerly almost %seless gas-tar into aniline dyes, aliEarin, and, more
recently, e8en into dr%gs0
5is economy o! te excretions o! prod%ction tro%g teir re-employment is to be disting%ised
!rom economy tro%g te pre8ention o! @aste, tat is to say, te red%ction o! excretions o!
prod%ction to a minim%m, and te 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 te D%ality o! te macinery in %se0 Economy in oil, soap,
etc0, depends on o@ @ell te mecanical parts are macined and polised0 5is re!ers to te
a%xiliary materials0 &n part, o@e8er, and tis is most important, it depends on te D%ality o! te
employed macines and tools @eter a larger or smaller portion o! te ra@ material is t%rned
into @aste in te prod%ction process0 Finally, tis depends on te D%ality o! te ra@ material itsel!0
5is, in t%rn, depends partly on te de8elopment o! te extracti8e ind%stry and agric%lt%re @ic
prod%ce te ra@ material Bstrictly speaking on te progress o! ci8ilisationC, and partly on te
impro8ement o! processes tro%g @ic ra@ materials pass be!ore tey enter into man%!act%re0
K,armentier as demonstrated tat te art o! grinding
grain as impro8ed 8ery materially in France since a
none too distant epoc, !or instance te time o! 'o%is
J&4, so tat te ne@ mills, compared to te old, can
make %p to al! as m%c more bread !rom te same
amo%nt o! grain0 5e ann%al cons%mption o! a
,arisian, indeed, as !irst been estimated at 2 setiers
o! grain, ten at 3, !inally at <, @ile no@adays it is
only 1X setiers, or abo%t 32< lbs per capita0000 &n te
,erce, @ere & a8e li8ed !or a long time, te cr%de
mills o! granite and trap rock millstones a8e been
mostly reb%ilt according to te r%les o! mecanics
@ic as made s%c rapid progress in te last 3=
years0 5ey a8e been pro8ided @it good millstones
!rom 'a FertF, a8e gro%nd te grain t@ice, te
milling sack as been gi8en a circ%lar motion, and te
o%tp%t o! !lo%r !rom te same amo%nt o! grain as
increased 1N60 5e enormo%s discrepancy bet@een te
daily grain cons%mption o! te )omans and o%rsel8es
is tere!ore easily explained0 &t is d%e simply to
imper!ect metods o! milling and bread-making0 5is
is te @ay & !eel & m%st explain a remarkable
>2 ;apter 4
obser8ation made by ,liny, J4&&&, ;0 <=, <: 00, "5e
!lo%r @as sold in )ome, depending on its D%ality, at
2=, 28 or *6 as per modi%s0 5ese prices, so ig in
proportion to te contemporaneo%s grain prices, are
d%e to te imper!ect state o! te mills o! tat period,
@ic @ere still in teir in!ancy, and te res%ltant
ea8y cost o! milling0L" B7%rea% de la Malle,
8conomie &oliti3ue des 9omains, ,aris, 182=, &, pp0
<8=-810C
V. conom# Through Inventions
5ese sa8ings in te application o! !ixed capital are, @e repeat, d%e to te employment o! te
conditions o! labo%r on a large scale# in sort, are d%e to te !act tat tese ser8e as conditions o!
directly social, or socialised labo%r or direct co-operation @itin te process o! prod%ction0 3n
te one and, tis is te indispensable reD%irement !or te %tilisation o! mecanical and cemical
in8entions @ito%t increasing te price o! te commodity, and tis is al@ays teconditio sine 3ua
non0 3n te oter and, only prod%ction on a large scale permits te sa8ings deri8ed !rom co-
operati8e prod%cti8e cons%mption0 Finally, it is only te experience o! te combined labo%rer
@ic disco8ers and re8eals te @ere and o@ o! sa8ing, te simplest metods o! applying te
disco8eries, and te @ays to o8ercome te practical !rictions arising !rom carrying o%t te teory
I in its application to te prod%ction process I etc0
&ncidentally, a distinction so%ld be made bet@een %ni8ersal labo%r and co-operati8e labo%r0 Aot
kinds play teir role in te process o! prod%ction, bot !lo@ one into te oter, b%t bot are also
di!!erentiated0 (ni8ersal labo%r is all scienti!ic labo%r, all disco8ery and all in8ention0 5is labo%r
depends partly on te co-operation o! te li8ing, and partly on te %tilisation o! te labo%rs o!
tose @o a8e gone be!ore0 ;o-operati8e labo%r, on te oter and, is te direct co-operation o!
indi8id%als0
5e !oregoing is corroborated by !reD%ent obser8ation, to @it:
1C 5e great di!!erence in te cost o! te !irst model o! a ne@ macine and tat o! its
reprod%ction Bregarding @ic, see (re /4he &hilosophy of Manufactures, $econd
edition, 'ondon, 18++0 I 0d01 and Aabbage /:n the 0conomy of Machinery and
Manufactures, 'ondon, 183<, pp0 <8=-810 I 0d01C0
<C 5e !ar greater cost o! operating an establisment based on a ne@ in8ention as
compared to later establisments arising e suis ossibus0 5is is so 8ery tr%e tat te trail-
blaEers generally go bankr%pt, and only tose @o later b%y te b%ildings, macinery,
etc0, at a ceaper price, make money o%t o! it0 &t is, tere!ore, generally te most
@ortless and miserable sort o! money-capitalists @o dra@ te greatest pro!it o%t o! all
ne@ de8elopments o! te %ni8ersal labo%r o! te %man spirit and teir social application
tro%g combined labo%r0
Chapter 6. The Efect of Price Fluctuation
I. (luctuations in the Price of )a$ *aterials%
and their +irect ,ects on the )ate of Pro-t
5e ass%mption in tis case, as in pre8io%s ones, is tat no cange takes place in te rate o!
s%rpl%s-8al%e0 &t is necessary to analyse te case in its p%re !orm0 6o@e8er, it migt be possible
!or a speci!ic capital, @ose rate o! s%rpl%s-8al%e remains %ncanged, 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 te price o! ra@ materials as @e are to analyse ere0 &n tat case te D%antity o!
s%rpl%s-8al%e migt 8ary, @ile te rate o! s%rpl%s-8al%e remains te same0 .et tis so%ld also be
disregarded ere as a side-iss%e0 &! impro8ements o! macinery and canges in te price o! ra@
materials sim%ltaneo%sly in!l%ence eiter te n%mber o! labo%rers employed by a de!inite capital,
or te le8el o! @ages, one as b%t to p%t togeter 1C te e!!ect ca%sed by te 8ariations o! constant
capital on te rate o! pro!it, and <C te e!!ect ca%sed by 8ariations in @ages on te rate o! pro!it0
5e res%lt is ten obtained o! itsel!0
A%t in general, it so%ld be noted ere, as in te pre8io%s case, tat i! 8ariations take place, eiter
d%e to sa8ings in constant capital, or d%e to !l%ct%ations in te price o! ra@ materials, tey al@ays
a!!ect te rate o! pro!it, e8en i! tey lea8e te @age, ence te rate and amo%nt o! s%rpl%s-8al%e,
%nto%ced0 5ey cange te magnit%de o! ; in s" B8N;C, and t%s te 8al%e o! te @ole !raction0
&t is tere!ore immaterial, in tis case as @ell I in contrast to @at @e !o%nd in o%r analysis o!
s%rpl%s-8al%e I in @ic spere o! prod%ction tese 8ariations occ%r# @eter or not te
prod%ction brances a!!ected by tem prod%ce necessities !or labo%rers, or constant capital !or te
prod%ction o! s%c necessities0 5e ded%ctions made ere are eD%ally 8alid !or 8ariations
occ%rring in te prod%ction o! l%x%ry articles, and by l%x%ry articles @e ere mean all prod%ction
tat does not ser8e te reprod%ction o! labo%r-po@er0
5e ra@ materials ere incl%de a%xiliary materials as @ell, s%c as indigo, coal, gas, etc0
F%rtermore, so !ar as macinery is concerned %nder tis ead, its o@n ra@ material consists o!
iron, @ood, leater, etc0 &ts o@n price is tere!ore a!!ected by !l%ct%ations in te price o! ra@
materials %sed in its constr%ction0 5o te extent tat its price is raised tro%g !l%ct%ations, eiter
in te price o! te ra@ materials o! @ic it consists, or o! te a%xiliary materials cons%med in its
operation, te rate o! pro!it !alls pro tanto0 ?nd 8ice 8ersa0
&n te !ollo@ing analysis @e sall con!ine o%rsel8es to !l%ct%ations in te price o! ra@ materials,
not so !ar as tey go to make %p te ra@ materials o! macinery ser8ing as means o! labo%r or as
a%xiliary materials applied in its operation, b%t in so !ar as tey enter te process in @ic
commodities are prod%ced0 5ere is H%st one ting to be noted ere: te nat%ral @ealt in iron,
coal, @ood, etc0, @ic are te principal elements %sed in te constr%ction and operation o!
macinery, presents itsel! ere as a nat%ral !ertility o! capital and is a !actor determining te rate
o! pro!it irrespecti8e o! te ig or lo@ le8el o! @ages0
$ince te rate o! pro!it is sN;, or sNBc U 8C, it is e8ident tat e8ery ting ca%sing a 8ariation in te
magnit%de o! c, and tereby o! ;, m%st also bring abo%t a 8ariation in te rate o! pro!it, e8en i! s
and 8, and teir m%t%al relation, remain %naltered0 -o@, ra@ materials are one o! te principal
components o! constant capital0 E8en in ind%stries @ic cons%me no act%al ra@ materials, tese
enter te pict%re as a%xiliary materials or components o! macinery, etc0, and teir price
!l%ct%ations t%s accordingly in!l%ence te rate o! pro!it0 $o%ld te price o! ra@ material !all by
an amo%nt R d, ten sN;, or sNBc U 8C becomes sNB; - dC, or sNBBc - dC U 8C0 5%s, te rate o! pro!it
>6 ;apter 4&&
rises0 ;on8ersely, i! te price o! ra@ material rises, ten sN;, or sNBc U 8C, becomes sNB; U dC, or sN
BBc U dC U 8C, and te rate o! pro!it !alls0 3ter conditions being eD%al, te rate o! pro!it, tere!ore,
!alls and rises in8ersely to te price o! ra@ material0 5is so@s, among oter tings, o@
important te lo@ price o! ra@ material is !or ind%strial co%ntries, e8en i! !l%ct%ations in te price
o! ra@ materials are not accompanied by 8ariations in te sales spere o! te prod%ct, and t%s
D%ite aside !rom te relation o! demand to s%pply0 &t !ollo@s !%rtermore tat !oreign trade
in!l%ences te rate o! pro!it, regardless o! its in!l%ence on @ages tro%g te ceapening o! te
necessities o! li!e0 5e point is tat it a!!ects te 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! te nat%re o! te rate o!
pro!it and o! its speci!ic di!!erence !rom te rate o! s%rpl%s-8al%e tat, on te 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 te marked in!l%ence o! te prices o! ra@ material on te rate o!
pro!it, @ic tey note tro%g practical experience, and tat, on te oter, economists like
)icardo /70 )icardo, :n the &rinciples of &olitical 0conomy, and 4aation, 5ird edition,
'ondon, 18<1, pp0 131-1380 I 0d01, @o cling to general principles, do not recognise te
in!l%ence o!, say, @orld trade on te rate o! pro!it0
5is makes clear te great importance to ind%stry o! tis elimination or red%ction o! c%stoms
d%ties on ra@ materials0 5e rational de8elopment o! te protecti8e tari!! system made te %tmost
red%ction o! import d%ties on ra@ materials one o! its cardinal principles0 5is, and te abolition
o! te d%ty on corn, @as te main obHect o! te Englis !ree-traders, @o @ere primarily
concerned @it a8ing te d%ty on cotton li!ted as @ell0
5e %se o! !lo%r in te cotton ind%stry may ser8e as an ill%stration o! te importance o! a price
red%ction !or an article @ic is not strictly a ra@ material b%t an a%xiliary and at te same time
one o! te principal elements o! no%risment0 ?s !ar back as 183>, )0 60 :reg
1
calc%lated tat
te 1==,=== po@er-looms and <+=,=== and-looms ten operating in te cotton-mills o! :reat
Aritain ann%ally cons%med 21 million lbs o! !lo%r to smoot te @arp0 6e added a tird o! tis
D%antity !or bleacing and oter processes, and estimated te total ann%al 8al%e o! te !lo%r so
cons%med at V32<,=== !or te preceding ten years0 ? comparison @it !lo%r prices on te
continent so@ed tat te iger !lo%r price !orced %pon man%!act%rers by corn tari!!s alone
amo%nted to V1>=,=== per year0 :reg estimated te s%m at a minim%m o! V<==,=== !or 183> and
cited a !irm !or @ic te !lo%r price di!!erence amo%nted to V1,=== ann%ally0 ?s a res%lt,
Kgreat man%!act%rers, to%gt!%l, calc%lating men o!
b%siness, a8e said tat ten o%rs" labo%r @o%ld be
D%ite s%!!icient, i! te ;orn 'a@s @ere repealedL0
B)eports o! &nsp0 o! Fact0, 3ct0 1828, p0 *80C
5e ;orn 'a@s @ere repealed0 $o @ere te d%ties on cotton and oter ra@ materials0 A%t no
sooner ad tis been accomplised tan te opposition o! te man%!act%rers to te 5en 6o%rs" Aill
became more 8iolent tan e8er0 ?nd @en te ten-o%r !actory day ne8erteless became a la@
soon a!ter, te !irst res%lt @as a general attempt to red%ce @ages0
5e 8al%e o! ra@ and a%xiliary materials passes entirely and all at one time into te 8al%e o! te
prod%ct in te man%!act%re o! @ic tey are cons%med, @ile te elements o! !ixed capital
trans!er teir 8al%e to te prod%ct only grad%ally in proportion to teir @ear and tear0 &t !ollo@s
tat te price o! te prod%ct is in!l%enced !ar more by te price o! ra@ materials tan by tat o!
!ixed capital, alto%g te rate o! pro!it is determined by te total 8al%e o! te capital applied no
matter o@ m%c o! it is cons%med in te making o! te prod%ct0 A%t it is e8ident I alto%g @e
merely mention it in passing, since @e ere still ass%me tat commodities are sold at teir 8al%es,
so tat price !l%ct%ations ca%sed by competition do not as yet concern %s I tat te expansion or
contraction o! te market depends on te price o! te indi8id%al commodity and is in8ersely
>> ;apter 4&&
proportional to te rise or !all o! tis price0 &t act%ally de8elops, tere!ore, tat te price o! te
prod%ct does not rise in proportion to tat o! te ra@ material, and tat it does not !all in
proportion to tat o! ra@ material0 ;onseD%ently, te rate o! pro!it !alls lo@er in one instance, and
rises iger in te oter tan @o%ld a8e been te case i! prod%cts @ere sold at teir 8al%e0
F%rter, te D%antity and 8al%e o! te employed macinery gro@s @it te de8elopment o! labo%r
prod%cti8ity b%t not in te same proportion as tis prod%cti8ity, i0 e0, not in te proportion in
@ic tis macinery increases its o%tp%t0 &n tose brances o! ind%stry, tere!ore, @ic do
cons%me ra@ materials, i0 e0, in @ic te s%bHect o! labo%r is itsel! a prod%ct o! pre8io%s labo%r,
te gro@ing prod%cti8ity o! labo%r is expressed precisely in te proportion in @ic a larger
D%antity o! ra@ material absorbs a de!inite D%antity o! labo%r, ence in te increasing amo%nt o!
ra@ material con8erted in, say, one o%r into prod%cts, or processed into commodities0 5e 8al%e
o! ra@ material, tere!ore, !orms an e8er-gro@ing component o! te 8al%e o! te commodity-
prod%ct in proportion to te de8elopment o! te prod%cti8ity o! labo%r, not only beca%se it passes
@olly into tis latter 8al%e, b%t also beca%se in e8ery aliD%ot part o! te aggregate prod%ct te
portion representing depreciation o! macinery and te portion !ormed by te ne@ly added labo%r
I bot contin%ally decrease0 3@ing to tis !alling tendency, te oter portion o! te 8al%e
representing ra@ material increases proportionally, %nless tis increase is co%nterbalanced by a
proportionate decrease in te 8al%e o! te ra@ material arising !rom te gro@ing prod%cti8ity o!
te labo%r employed in its o@n prod%ction0
F%rter, ra@ and a%xiliary materials, H%st like @ages, !orm parts o! te circ%lating capital and
m%st, tere!ore, be contin%ally replaced in teir entirety tro%g te sale o! te prod%ct, @ile
only te depreciation is to be rene@ed in te case o! macinery, and !irst o! all in te !orm o! a
reser8e !%nd0 &t is, moreo8er, in no @ay essential !or eac indi8id%al sale to contrib%te its sare to
tis reser8e !%nd, so long as te total ann%al sales contrib%te teir ann%al sare0 5is so@s again
o@ a rise in te price o! ra@ material can c%rtail or arrest te entire process o! reprod%ction i! te
price realised by te sale o! te commodities so%ld not s%!!ice to replace all te elements o!
tese commodities0 3r, it may make it impossible to contin%e te process on te scale reD%ired by
its tecnical basis, so tat only a part o! te macinery @ill remain in operation, or all te
macinery @ill @ork !or only a !raction o! te %s%al time0
Finally, te expense inc%rred tro%g @aste 8aries in direct proportion to te price !l%ct%ations o!
te ra@ material, rising, @en tey rise and !alling @en tey !all0 A%t tere is a limit ere as
@ell0 5e Factory )eport !or ?pril 18+= maintained:
K3ne so%rce o! considerable loss arising !rom an
ad8ance in te price o! te ra@ material @o%ld ardly
occ%r to any one b%t a practical spinner, 8iE0, tat
!rom @aste0 & am in!ormed tat @en cotton ad8ances,
te cost to te spinner, o! te lo@er D%alities
especially, is increased in a ratio beyond te ad8ance
act%ally paid, beca%se te @aste made in spinning
coarse yarns is !%lly 1+ per cent# and tis rate, @ile it
ca%ses a loss o! Zd0 per lb0 on cotton at 3Zd0 per lb0,
brings %p te 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! te ?merican ;i8il War, te price o! cotton rose to a le8el %neD%alled in
almost 1== years, te report read di!!erently:
>8 ;apter 4&&
K5e price no@ gi8en !or @aste, and its re-
introd%ction in te !actory in te sape o! cotton
@aste, go some @ay to compensate !or te di!!erence
in te loss by @aste, bet@een $%rat cotton and
?merican cotton, abo%t 1<Z per cent0
K5e @aste in @orking $%rat cotton being <+ per cent,
te cost o! te cotton to te spinner is enanced one-
!o%rt be!ore e as man%!act%red it0 5e 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 tere 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
5e penomena analysed in tis capter reD%ire !or teir !%ll de8elopment te credit system and
competition on te @orld-market, te latter being te basis and te 8ital element o! capitalist
prod%ction0 5ese more de!inite !orms o! capitalist prod%ction can only be compreensi8ely
presented, o@e8er, a!ter te general nat%re o! capital is %nderstood0 F%rtermore, tey do not
come @itin te scope o! tis @ork and belong to its e8ent%al contin%ation0 -e8erteless te
penomena listed in te abo8e title may be disc%ssed in a general @ay at tis stage0 5ey are
interrelated, !irst @it one anoter and, secondly, also @it te rate and amo%nt o! pro!it0 5ey are
to be brie!ly disc%ssed ere i! only beca%se tey create te impression tat not only te rate, b%t
also te amo%nt o! pro!it I @ic is act%ally identical @it te amo%nt o! s%rpl%s-8al%e I co%ld
increase or decrease independently o! te mo8ements o! te D%antity or rate o! s%rpl%s-8al%e0
?re @e to consider release and tie-%p o! capital, on te one and, and its appreciation and
depreciation, on te oter, as di!!erent penomenaQ
5e D%estion is @at @e mean by release and tie-%p o! capitalQ ?ppreciation and depreciation are
sel!-explanatory0 ?ll tey mean is tat a gi8en capital increases or decreases in 8al%e as a res%lt o!
certain general economic conditions, !or @e are not disc%ssing te partic%lar !ate o! an indi8id%al
capital0 ?ll tey mean, tere!ore, is tat te 8al%e o! a capital in8ested in prod%ction rises or !alls,
irrespecti8e o! its sel!-expansion by 8irt%e o! te s%rpl%s-labo%r employed by it0
Ay tie-%p o! capital @e mean tat certain portions o! te total 8al%e o! te prod%ct m%st be
recon8erted into elements o! constant and 8ariable capital i! prod%ction is to proceed on te same
scale0 Ay release o! capital @e mean tat a portion o! te total 8al%e o! te 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, so%ld prod%ction contin%e on te pre8io%s scale0 5is release or tie-%p o! capital is
di!!erent !rom te release or tie-%p o! re8en%e0 &! te ann%al s%rpl%s-8al%e o! an indi8id%al capital
; is, let %s say, eD%al to x, ten a red%ction in te price o! commodities cons%med by te
capitalists @o%ld make x I a s%!!icient to proc%re te same enHoyments, etc0, as be!ore0 ? portion
o! te re8en%e R a is released, tere!ore, and may ser8e eiter to increase cons%mption or to be
>* ;apter 4&&
recon8erted into capital B!or te p%rpose o! acc%m%lationC0 ;on8ersely, i! x U a is needed to
contin%e to li8e as be!ore, ten tis standard o! li8ing m%st eiter be red%ced or a portion o! te
pre8io%sly acc%m%lated income R a, expended as re8en%e0
?ppreciation and depreciation may a!!ect eiter constant or 8ariable capital, or bot, and in te
case o! constant capital it may, in t%rn, a!!ect eiter te !ixed, or te circ%lating portion, or bot0
(nder constant capital @e m%st consider te ra@ and a%xiliary materials, incl%ding semi-!inised
prod%cts, all o! @ic @e ere incl%de %nder te term o! ra@ materials, macinery, and oter
!ixed capital0
&n te preceding analysis @e re!erred especially to 8ariations in te price, or te 8al%e, o! ra@
materials in respect to teir in!l%ence on te rate o! pro!it, and determined te general la@ tat
@it oter conditions being eD%al, te rate o! pro!it is in8ersely proportional to te 8al%e o! te
ra@ materials0 5is is absol%tely tr%e !or capital ne@ly in8ested in a b%siness enterprise, in @ic
te in8estment, i0 e0, te con8ersion o! money into prod%cti8e capital, is only H%st taking place0
A%t aside !rom tis capital, @ic is being ne@ly in8ested, a large portion o! te already
!%nctioning capital is in te spere o! circ%lation, @ile anoter portion is in te spere o!
prod%ction0 3ne portion is in te market in te sape o! commodities @aiting to be con8erted into
money# anoter is on and as money, in @ate8er !orm, @aiting to be recon8erted into elements
o! prod%ction# !inally, a tird portion is in te spere o! prod%ction, partly in its original !orm o!
means o! prod%ction s%c as ra@ and a%xiliary materials, semi-!inised prod%cts p%rcased in te
market, macinery and oter !ixed capital, and partly in te !orm o! prod%cts @ic are in te
process o! man%!act%re0 5e e!!ect o! appreciation or depreciation depends ere to a great extent
on te relati8e proportion o! tese component parts0 'et %s, !or te sake o! simplicity, lea8e aside
all !ixed capital and consider only tat portion o! constant capital @ic consists o! ra@ and
a%xiliary materials, and semi-!inised prod%cts, and bot !inised commodities in te market and
commodities still in te process o! prod%ction0
&! te price o! ra@ material, !or instance o! cotton, rises, ten te price o! cotton goods I bot
semi-!inised goods like yarn and !inised goods like cotton !abrics I man%!act%red @ile cotton
@as ceaper, rises also0 $o does te 8al%e o! te %nprocessed cotton eld in stock, and o! te
cotton in te process o! man%!act%re0 5e latter beca%se it comes to represent more labo%r-time in
retrospect and t%s adds more tan its original 8al%e to te prod%ct @ic it enters, and more tan
te capitalist paid !or it0
6ence, i! te price o! ra@ materials rises, and tere is a considerable D%antity o! a8ailable
!inised commodities in te market, no matter @at te stage o! teir man%!act%re, te 8al%e o!
tese commodities rises, tereby enancing te 8al%e o! te existing capital0 5e same is tr%e !or
te s%pply o! ra@ materials, etc0, in te ands o! te prod%cer0 5is appreciation o! 8al%e may
compensate, or more tan compensate, te indi8id%al capitalist, or e8en an entire separate spere
o! capitalist prod%ction, !or te drop in te rate o! pro!it attending a rise in te price o! ra@
materials0 Wito%t entering into te detailed e!!ects o! competition, @e migt state !or te sake o!
toro%gness tat 1C i! a8ailable s%pplies o! ra@ material are considerable, tey tend to co%nteract
te price increase @ic occ%rred at te place o! teir origin# <C i! te semi-!inised and !inised
goods press 8ery ea8ily %pon te market, teir price is tereby pre8ented !rom rising
proportionately to te price o! teir ra@ materials0
5e re8erse takes place @en te price o! ra@ material !alls0 3ter circ%mstances remaining te
same, tis increases te rate o! pro!it0 5e commodities in te market, te articles in te process
o! prod%ction, and te a8ailable s%pplies o! ra@ material, depreciate in 8al%e and tereby
co%nteract te attendant rise in te rate o! pro!it0
5e e!!ect o! price 8ariations !or ra@ materials is te more prono%nced, te smaller te s%pplies
a8ailable in te spere o! prod%ction and in te market at, say, te close o! a b%siness year, i0e0,
a!ter te ar8est in agric%lt%re, @en great D%antities o! ra@ materials are deli8ered ane@0
8= ;apter 4&&
We proceed in tis entire analysis !rom te ass%mption tat te rise or !all in prices expresses
act%al !l%ct%ations in 8al%e0 A%t since @e are ere concerned @it te e!!ects s%c price 8ariations
a8e on te rate o! pro!it, it matters little @at is at te bottom o! tem0 5e present statements
apply eD%ally i! prices rise or !all %nder te in!l%ence o! te credit system, competition, etc0, and
not on acco%nt o! !l%ct%ations in 8al%e0
$ince te rate o! pro!it eD%als te ratio o! te excess o8er te 8al%e o! te prod%ct to te 8al%e o!
te total capital ad8anced, a rise ca%sed in te rate o! pro!it by a depreciation o! te ad8anced
capital @o%ld be associated @it a loss in te 8al%e o! capital0 $imilarly, a drop ca%sed in te rate
o! pro!it by an appreciation o! te ad8anced capital migt possibly be associated @it a gain0
?s !or te oter portion o! constant capital, s%c as macinery and !ixed capital in general, te
appreciation o! 8al%e taking place in it @it respect mainly to b%ildings, real estate, etc0, cannot
be disc%ssed @ito%t te teory o! gro%nd-rent, and does not tere!ore belong in tis capter0 A%t
o! a general importance to te D%estion o! depreciation are:
5e contin%al impro8ements @ic lo@er te %se-8al%e, and tere!ore te 8al%e, o! existing
macinery, !actory b%ildings, etc0 5is process as a partic%larly dire e!!ect d%ring te !irst period
o! ne@ly introd%ced macinery, 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 5is is one o! te reasons !or
te !lagrant prolongation o! te @orking-time %s%al in s%c periods, !or alternating day and nigt-
si!ts, so tat te 8al%e o! te macinery may be reprod%ced in a sorter time @ito%t a8ing to
place te !ig%res !or @ear and tear too ig0 &!, on te oter and, te sort period in @ic te
macinery is e!!ecti8e Bits sort li!e 8is-O-8is te anticipated impro8ementsC is not compensated
in tis manner, it gi8es %p so m%c o! its 8al%e to te prod%ct tro%g moral depreciation tat it
cannot compete e8en @it and-labo%r0
3

?!ter macinery, eD%ipment o! b%ildings, and !ixed capital in general, attain a certain mat%rity, so
tat tey remain %naltered !or some lengt o! time at least in teir basic constr%ction, tere arises
a similar depreciation d%e to impro8ements in te metods o! reprod%cing tis !ixed capital0 5e
8al%e o! te macinery, etc0, !alls in tis case not so m%c beca%se te macinery is rapidly
cro@ded o%t and depreciated to a certain degree by ne@ and more prod%cti8e macinery, etc0, b%t
beca%se it can be reprod%ced more ceaply0 5is is one o! te reasons @y large enterprises
!reD%ently do not !lo%ris %ntil tey pass into oter ands, i0 e0, a!ter teir !irst proprietors a8e
been bankr%pted, and teir s%ccessors, @o b%y tem ceaply, tere!ore begin !rom te o%tset
@it a smaller o%tlay o! capital0
&t leaps to te eye, partic%larly in te case o! agric%lt%re, tat te ca%ses @ic raise or lo@er te
price o! a prod%ct, also raise or lo@er te 8al%e o! capital, since te latter consists to a large
degree o! tis prod%ct, @eter as grain, cattle, etc0 B)icardo /70 )icardo, :n the &rinciples of
&olitical 0conomy, and 4aation, 5ird edition, 'ondon, 18<1, ;apter &&0 I 0d01C0
5ere is still 8ariable capital to be considered0
&nasm%c as te 8al%e o! labo%r-po@er rises beca%se tere is a rise in te 8al%e o! te means o!
s%bsistence reD%ired !or its reprod%ction, or !alls beca%se tere is a red%ction in teir 8al%e I and
te appreciation and depreciation o! 8ariable capital are really noting more tan expressions o!
tese 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 te lengt o! te @orking-day remains te same0 A%t
oter circ%mstances I te release and tie-%p o! capital I may also be associated @it s%c cases,
and since @e a8e not analysed tem so !ar, @e sall brie!ly mention tem no@0
&! @ages !all in conseD%ence o! a depreciation in te 8al%e o! labo%r-po@er B@ic may e8en be
attended by a rise in te real price o! labo%rC, a portion o! te capital iterto in8ested in @ages is
released0 4ariable capital is set !ree0 &n te case o! ne@ in8estments o! capital, tis as simply te
81 ;apter 4&&
e!!ect o! its operating @it a iger rate o! s%rpl%s-8al%e0 &t takes less money tan be!ore to set in
motion te same amo%nt o! labo%r, and in tis @ay te %npaid portion o! labo%r increases at te
expense o! te paid portion0 A%t in te case o! already in8ested capital, not only does te rate o!
s%rpl%s-8al%e rise b%t a portion o! te capital pre8io%sly in8ested in @ages is also released0 (ntil
tis time it @as tied %p and !ormed a reg%lar portion @ic ad to be ded%cted !rom te proceeds
!or te prod%ct and ad8anced !or @ages, acting as 8ariable capital i! te b%siness @ere to contin%e
on its !ormer scale0 -o@ tis portion is set !ree and may be %sed as a ne@ in8estment, be it to
extend te same b%siness or to operate in some oter spere o! prod%ction0
'et %s ass%me, !or instance, tat V+== per @eek @ere reD%ired at !irst to employ +== labo%rers,
and tat no@ only V2== are needed !or te same p%rpose0 &! te D%antity o! 8al%e prod%ced in
eiter case R V1,===, te amo%nt o! @eekly s%rpl%s-8al%e in te !irst case R V+== and te rate o!
s%rpl%s-8al%e +==N+== R 1==T0 A%t a!ter te @age red%ction te D%antity o! s%rpl%s-8al%e V1,===
- V2== R V6==, and its rate 6==N2== R 1+=T0 ?nd tis increase in te rate o! s%rpl%s-8al%e is te
only e!!ect !or one @o starts a ne@ enterprise in tis spere o! prod%ction @it a 8ariable capital
o! V2== and a corresponding constant capital0 A%t @en tis takes place in a b%siness already in
operation, te depreciation o! te 8ariable capital does not only increase te D%antity o! s%rpl%s-
8al%e !rom V+== to V6==, and te rate o! s%rpl%s-8al%e !rom 1== to 1+=T, b%t releases V1== o!
te 8ariable capital !or te !%rter exploitation o! labo%r0 6ence, te same amo%nt o! labo%r is
exploited to greater ad8antage, and, @at is more, te release o! V1== makes it possible to exploit
more labo%rers tan be!ore at te iger rate @it te same 8ariable capital o! V+==0
-o@ te re8erse sit%ation0 $%ppose, @it +== employed labo%rers, te original proportion in
@ic te prod%ct is di8ided R 2==8 U 6==s R 1,===, making te rate o! s%rpl%s-8al%e R 1+=T0 &n
tat case, te labo%rer recei8es V2N+ , or 16 sillings per @eek0 $o%ld +== labo%rers cost V+==
per @eek, d%e to an appreciation o! 8ariable capital, eac one o! tem @ill recei8e a @eekly @age
R V1, and V2== can employ only 2== labo%rers0 &! te same n%mber o! labo%rers as be!ore is p%t
to @ork, tere!ore, @e a8e +==8 U +==s R 1,===0 5e rate o! s%rpl%s-8al%e @o%ld !all !rom 1+= to
1==T, @ic is X0 &n te case o! ne@ capital te only e!!ect @o%ld be tis lo@er rate o! s%rpl%s-
8al%e0 3ter conditions being eD%al, te rate o! pro!it @o%ld also a8e !allen accordingly,
alto%g not in te same proportion0 For instance, i! c R <,===, @e a8e in te one case <,===c U
2==8 U 6==s R 3,===0 5e rate o! s%rpl%s-8al%e R 1+=T, te rate o! pro!it R 6==N<,2== R <+T0 &n
te second case, <,===c U +==8 U +==s R 3,===0 5e rate o! s%rpl%s-8al%e R 1==T, te rate o! pro!it
R +==N<,+== R <=T0 &n te case o! already in8ested capital, o@e8er, tere @o%ld be a d%al e!!ect0
3nly 2== labo%rers co%ld be employed @it a V2== 8ariable capital, and tat at a rate o! s%rpl%s-
8al%e o! 1==T0 5ey @o%ld tere!ore prod%ce an aggregate s%rpl%s-8al%e o! only V2==0
F%rtermore, 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 te
same scale, so tat 1N+ o! te macinery does not stand idle, V1== m%st be added to te 8ariable
capital in order to employ +== labo%rers as be!ore0 ?nd tis can be accomplised only by tying %p
iterto disposable capital, so tat part o! te acc%m%lation intended to extend prod%ction ser8es
merely to stop a gap, or a portion reser8ed !or re8en%e is added to te old capital0 5en a 8ariable
capital increased by V1== prod%ces V1== less s%rpl%s-8al%e0 More capital is reD%ired to employ
te same n%mber o! labo%rers, and at te same time te s%rpl%s-8al%e prod%ced by eac labo%rer
is red%ced0
5e ad8antages res%lting !rom a release and te 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 te ad8antages on te one and, and te disad8antages on
te oter, are con!ined to an increase or drop in te rate o! s%rpl%s-8al%e, and to a corresponding,
i! in no @ay proportionate, cange in te rate o! pro!it0
8< ;apter 4&&
5e release and tie-%p o! 8ariable capital, H%st analysed, is te res%lt o! a depreciation or
appreciation o! te elements o! 8ariable capital, tat is, o! te cost o! reprod%cing labo%r-po@er0
A%t 8ariable capital co%ld also be released i!, @it te @age rate %ncanged, !e@er labo%rers @ere
reD%ired d%e to te de8elopment o! labo%r prod%cti8ity to set in motion te same amo%nt o!
constant capital0 &n like manner, tere may re8ersely be a tie-%p o! additional 8ariable capital i!
more labo%rers are reD%ired !or te same D%antity o! constant capital d%e to a drop in prod%cti8ity0
&!, on te oter and, a portion o! capital !ormerly employed as 8ariable capital is employed in te
!orm o! constant capital, so tat merely a di!!erent distrib%tion exists bet@een te components o!
te same capital, tis as an in!l%ence on bot te rate o! s%rpl%s-8al%e and te rate o! pro!it, b%t
does not belong %nder te eading o! tie-%p and release o! capital, @ic is ere being disc%ssed0
We a8e already seen tat constant capital may also be tied %p or released by te appreciation or
depreciation o! its component elements0 ?side !rom tis, it can be tied %p only i! te prod%cti8e
po@er o! labo%r increases Bpro8ided a portion o! te 8ariable is not con8erted into constant
capitalC, so tat te same amo%nt o! labo%r creates a greater prod%ct and tere!ore sets in motion a
larger constant capital0 5e same may occ%r %nder certain circ%mstances i! prod%cti8ity
decreases, !or instance in agric%lt%re, so tat te 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 te same o%tp%t0 ;onstant
capital may be released @ito%t depreciation i! impro8ements, %tilisation o! te !orces o! -at%re,
etc0, enable a constant capital o! smaller 8al%e to tecnically per!orm te 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 tat once commodities a8e
been con8erted into money, or sold, a certain portion o! tis money m%st be recon8erted into te
material elements o! constant capital, and in te proportions reD%ired by te tecnical nat%re o!
te partic%lar spere o! prod%ction0 &n tis respect, te most important element in all brances 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 te strict
sense o! te term, !or instance in mining and te extracti8e ind%stries in general0 5at portion o!
te price @ic is to make good te @ear and tear o! macinery enters te acco%nts cie!ly
nominally so long as te macinery is at all in an operating condition0 &t does not greatly matter
@eter it is paid !or and replaced by money one day or te next, or at any oter stage o! te
period o! t%rno8er o! te capital0 &t is D%ite di!!erent in te case o! te ra@ material0 &! te price o!
ra@ material rises, it may be impossible to make it good !%lly o%t o! te price o! te commodities
a!ter @ages are ded%cted0 4iolent price !l%ct%ations tere!ore ca%se interr%ptions, great collisions,
e8en catastropes, in te 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 te credit system !or te present I
is s%bHect to s%c !l%ct%ations o! 8al%e in conseD%ence o! canging yields, etc0 7%e to
%ncontrollable nat%ral conditions, !a8o%rable or %n!a8o%rable seasons, etc0, te 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!
tese %se-8al%es may tere!ore a8e 8ery di!!erent prices0 &! te 8al%e x is represented by 1== lbs
o! te commodity a, ten te price o! one lb0 o! a R xN1==# i! it is represented by 1,=== lbs o! a,
te price o! one lb0 o! a R xN1,===, etc0 5is is tere!ore one o! te elements o! tese !l%ct%ations
in te price o! ra@ materials0 ? second element, mentioned at tis point only !or te sake o!
completeness I since competition and te credit system are still o%tside te scope o! o%r analysis
I is tis: &t is, in te nat%re o! tings tat 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 te same degree as, !or instance, macines and oter !ixed
capital, or coal, ore, etc0, @ose reprod%ction can, pro8ided te nat%ral conditions do not cange,
be rapidly accomplised in an ind%strially de8eloped co%ntry0 &t is tere!ore D%ite possible, and
%nder a de8eloped system o! capitalist prod%ction e8en ine8itable, tat te prod%ction and
increase o! te portion o! constant capital consisting o! !ixed capital, macinery, etc0, so%ld
83 ;apter 4&&
considerably o%tstrip te portion consisting o! organic ra@ materials, so tat demand !or te latter
gro@s more rapidly tan teir s%pply, ca%sing teir price to rise0 )ising prices act%ally ca%se 1C
tese ra@ materials to be sipped !rom greater distances, since te mo%nting prices s%!!ice to
co8er greater !reigt rates# <C an increase in teir prod%ction, @ic circ%mstance, o@e8er, @ill
probably not, !or nat%ral reasons, m%ltiply te D%antity o! prod%cts %ntil te !ollo@ing year# 3C te
%se o! 8ario%s pre8io%sly %n%sed s%bstit%tes and greater %tilisation o! @aste0 Wen tis rise o!
prices begins to exert a marked in!l%ence on prod%ction and s%pply it indicates in most cases tat
te t%rning point as been reaced at @ic demand drops on acco%nt o! te protracted rise in te
price o! te ra@ material and o! all commodities o! @ic it is an element, ca%sing a reaction in
te price o! ra@ material0 ?side !rom te con8%lsions @ic tis ca%ses in 8ario%s !orms tro%g
depreciation o! capital, tere are also oter circ%mstances, @ic @e sall mention sortly0
A%t so m%c is already e8ident !rom te !oregoing: 5e greater te de8elopment o! capitalist
prod%ction, and, conseD%ently, te greater te means o! s%ddenly and permanently increasing tat
portion o! constant capital consisting o! macinery, etc0, and te more rapid te acc%m%lation
Bpartic%larly in times o! prosperityC, so m%c greater te relati8e o8er-prod%ction o! macinery
and oter !ixed capital, so m%c more !reD%ent te relati8e %nder-prod%ction o! 8egetable and
animal ra@ materials, and so m%c more prono%nced te pre8io%sly described rise o! teir prices
and te attendant reaction0 ?nd so m%c more !reD%ent are te con8%lsions ca%sed as tey are by
te 8iolent price !l%ct%ations o! one o! te main elements in te process o! reprod%ction0
&!, o@e8er, a collapse o! tese ig prices occ%rs beca%se teir rise ca%sed a drop in demand on
te one and, and, on te oter, an expansion o! prod%ction in one place and in anoter
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 te demand I partic%larly at te old ig
prices I ten te res%lt may be considered !rom di!!erent points o! 8ie@0 5e s%dden collapse o!
te price o! ra@ materials cecks teir reprod%ction, and te monopoly o! te original prod%cing
co%ntries, @ic enHoy te most !a8o%rable conditions o! prod%ction, is tereby restored I
possibly @it certain limitations, b%t restored ne8erteless0 5r%e, d%e to te impet%s it as ad,
reprod%ction o! ra@ material proceeds on an extended scale, especially in tose co%ntries @ic
more or less possess a monopoly o! tis prod%ction0 A%t te basis on @ic prod%ction carries on
a!ter te extension o! macinery, etc0, and @ic, a!ter some !l%ct%ations, is to ser8e as te ne@
normal basis, te ne@ point o! depart%re, is 8ery m%c extended by te de8elopments in te
preceding cycle o! t%rno8er0 &n te meantime, te barely increased reprod%ction again experiences
considerable impediments in some o! te secondary so%rces o! s%pply0 For instance, it is easily
demonstrated on te basis o! te export tables tat in te last tirty years B%p to 186+C te
prod%ction o! cotton in &ndia increases @ene8er tere as been a drop in ?merican prod%ction,
and s%bseD%ently it drops again more or less permanently0 7%ring te period in @ic ra@
materials become dear, ind%strial capitalists Hoin ands and !orm associations to reg%late
prod%ction0 5ey did so a!ter te rise o! cotton prices in 1828 in Mancester, !or example, and
similarly in te case o! !lax prod%ction in &reland0 A%t as soon as te immediate imp%lse is o8er
and te general principle o! competition to Kb%y in te ceapest marketL Binstead o! stim%lating
prod%ction in te co%ntries o! origin, as te associations attempt to do, @ito%t regard to te
immediate price at @ic tese may appen at tat time to be able to s%pply teir prod%ctC I as
soon as te principle o! competition again reigns s%preme, te reg%lation o! te s%pply is le!t once
again to KpricesL0 ?ll to%gt o! a common, all-embracing and !ar-sigted control o! te
prod%ction o! ra@ materials gi8es @ay once more to te !ait tat demand and s%pply @ill
m%t%ally reg%late one anoter0 ?nd it m%st be admitted tat s%c control is on te @ole
irreconcilable @it te 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
5e s%perstition o! te
capitalists in tis respect is so deep tat in teir reports e8en !actory inspectors again and again
tro@ %p teir ands in astonisment0 5e alternation o! good and bad years nat%rally also
82 ;apter 4&&
pro8ides !or ceaper ra@ materials0 ?side !rom te direct e!!ect tis as on raising te demand,
tere is also te added stim%l%s o! te pre8io%sly mentioned in!l%ence on te rate o! pro!it0 5e
a!oresaid process o! prod%ction o! ra@ materials being grad%ally o8ertaken by te prod%ction o!
macinery, etc0, is ten repeated on a larger scale0 ?n act%al impro8ement o! ra@ materials
satis!ying not only te desired D%antity, b%t also te 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! te economic conditions %nder @ic te &ndian prod%cer labo%rs in is co%ntryC0
?s it is, o@e8er, te spere o! prod%ction o! ra@ materials is, by !its, !irst s%ddenly enlarged,
and ten again 8iolently c%rtailed0 ?ll tis, and te spirit o! capitalist prod%ction in general, may
be 8ery @ell st%died in te cotton sortage o! 1861-6+, !%rter caracterised as it @as by te !act
tat a ra@ material, one o! te principal elements o! reprod%ction, @as !or a time entirely
%na8ailable0 5o be s%re, te price may also rise in te e8ent o! an ab%ndant s%pply, pro8ided te
conditions !or tis ab%ndance are more knotty0 3r, tere may be an act%al sortage o! ra@
material0 &t @as tis last sit%ation @ic originally pre8ailed in te cotton crisis0
5e closer @e approac o%r o@n time in te istory o! prod%ction, te more reg%larly do @e !ind,
especially in te essential lines o! ind%stry, te e8er-rec%rring alternation bet@een relati8e
appreciation and te s%bseD%ent res%lting depreciation o! ra@ materials obtained !rom organic
nat%re0 Wat @e a8e H%st analysed @ill be ill%strated by te !ollo@ing examples taken !rom
reports o! !actory inspectors0
5e moral o! istory, also to be ded%ced !rom oter obser8ations concerning agric%lt%re, is tat
te capitalist system @orks against a rational agric%lt%re, or tat a rational agric%lt%re is
incompatible @it te capitalist system Balto%g te latter promotes tecnical impro8ements in
agric%lt%reC, and needs eiter te and o! te small !armer li8ing by is o@n labo%r or te control
o! associated prod%cers0
6ere@it !ollo@ te ill%strations re!erred to abo8e, taken !rom te Englis Factory )eports0
K5e state o! trade is better# b%t te cycle o! good and
bad times diminises as macinery increases, and te
canges !rom te one to te oter appen o!tener, as
te demand !or ra@ materials increases @it it000 ?t
present, con!idence is not only restored a!ter te panic
o! 18+>, b%t te panic itsel! seems to be almost
!orgotten0 Weter tis impro8ement @ill contin%e or
not depends greatly %pon te price o! ra@ materials0
5ere appear to me e8idences already, tat in some
instances te maxim%m as been reaced, beyond
@ic teir man%!act%re becomes grad%ally less and
less pro!itable, till it ceases to be so altogeter0 &! @e
take, !or instance, te l%crati8e years in te @orsted
trade o! 182* and 18+=, @e see tat te price o!
Englis combing @ool stood at 1s0 1d0, and o!
?%stralian at bet@een 1s0 <d0 and 1s0 +d0 per lb0, and
8+ ;apter 4&&
tat on te a8erage o! te ten years !rom 1821 to
18+=, bot incl%si8e, te a8erage price o! Englis
@ool ne8er exceeded 1s0 <d0 and o! ?%stralian @ool
1s0 +d0 per lb0 A%t tat in te commencement o! te
disastro%s year o! 18+>, te price o! ?%stralian @ool
began @it 1s0 11d0, !alling to 1s0 6d0 in 7ecember,
@en te panic @as at its eigt, b%t as grad%ally
risen again to 1s0 *d0 tro%g 18+8, at @ic it no@
stands# @ilst tat 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 iger tan te a8erage
o! te ten years to @ic & a8e re!erred000 5is so@s,
& tink, one o! tree tings I eiter tat te
bankr%ptcies @ic similar prices occasioned in 18+>
are !orgotten# or tat tere is barely te @ool gro@n
@ic te existing spindles are capable o! cons%ming#
or else, tat te prices o! man%!act%red articles are
abo%t to be permanently iger000 ?nd as in past
experience & a8e seen spindles and looms m%ltiply
bot in n%mbers and speed in an incredibly sort
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 te age o! seep seems to be getting less
and less, o@ing to increasing pop%lations and to @at
te agric%lt%ralists call "a D%ick ret%rn in stock", so &
a8e o!ten !elt anxio%s !or persons @om, @ito%t
tis kno@ledge, & a8e seen embarking skill and
capital in %ndertakings, @olly reliant !or teir
s%ccess on a prod%ct @ic can only be increased
according to organic la@s0 000 5e same state o! s%pply
and demand o! all ra@ materials 000 seems to acco%nt
!or many o! te !l%ct%ations in te cotton trade d%ring
past periods, as @ell as !or te condition o! te
Englis @ool market in te a%t%mn o! 18+>, @it its
86 ;apter 4&&
o8er@elming conseD%ences0L
+
B)0 Aaker in )eports
o! &nsp0 o! Fact0, 3ct0 18+8, pp0 +6-610C
5e alcyon days o! te West-)iding @orsted ind%stry, o! .orksire, @ere 182*-+=0 5is ind%stry
employed <*,<26 persons in 1838# 3>,=== persons in 1823# 28,=*> in 182+# and >2,8*1 in 18+=0
5e same district ad <,>68 mecanical 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 5is prosperity o! te carded
@ool ind%stry excited certain !orebodings as early as 3ctober 18+=0 &n is report !or ?pril 18+1,
$%b-&nspector Aaker said in regard to 'eeds and Arad!ord:
K5e state o! trade is, and as been !or some time,
8ery %nsatis!actory0 5e @orsted spinners are !ast
losing te pro!its o! 18+=, and, in te maHority o!
cases, te man%!act%rers are not doing m%c good0 &
belie8e, at tis moment, tere is more @oollen
macinery standing tan & a8e almost e8er kno@n at
one time, and te !lax spinners are also t%rning o!!
ands and stopping !rames0 5e cycles o! trade, in
!act, in te textile !abrics, are no@ extremely
%ncertain, and & tink @e sall sortly !ind to be
tr%e 000 tat tere is no comparison made bet@een te
prod%cing po@er o! te spindles, te D%antity o! ra@
material, and te gro@t o! te pop%lationL Bp0 +<C0
5e same is tr%e o! te cotton ind%stry0 &n te cited report !or 3ctober 18+8, @e read:
K$ince te o%rs o! labo%r in !actories a8e been
!ixed, te amo%nts o! cons%mption, prod%ce, and
@ages in all textile !abrics a8e been red%ced to a r%le
o! tree0 000 & D%ote !rom a recent lect%re deli8ered
by 000 te present Mayor o! Alackb%rn, Mr0 Aaynes, on
te cotton trade, @o by s%c means as red%ced te
cotton statistics o! is o@n neigbo%rood to te
closest approximation: I
K"Eac real and mecanical orse-po@er @ill dri8e
2+= sel!-acting m%le spindles @it preparation, or <==
trostle spindles, or 1+ looms !or 2= inces 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 5e a8erage co%nts o!
8> ;apter 4&&
yarn sp%n and @o8en are !rom 3=s0 to 3<s0 t@ist, and
32s0 to 36s0 @e!t yarns# and taking te spinning
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 5e total cotton cons%med in tis district
B@itin 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
5is is one-eigteent o! te @ole cotton spinning o!
te (nited Kingdom, and one-sixt o! te @ole
po@er-loom @ea8ing0"
K5%s @e see tat, according to Mr0 Aaynes"s calc%lations, te total n%mber o! cotton spindles in
te (nited Kingdom is <8,8==,===, and s%pposing tese to be al@ays @orking !%ll time, tat te
ann%al cons%mption o! cotton o%gt to be 1,23<,=8=,=== lbs0 A%t as te import o! cotton, less te
export in 18+6 and 18+>, @as only 1,=<<,+>6,83< lbs, tere 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 tis s%bHect, tinks tat an ann%al cons%mption o! cotton based %pon te
D%antity %sed in te Alackb%rn district @o%ld be liable to be o8ercarged, o@ing to te di!!erence,
not only in te co%nts sp%n, b%t in te excellence o! te macinery0 6e estimates te total ann%al
cons%mption o! cotton in te (nited Kingdom at 1,===,===,=== lbs0 A%t i! e is rigt, and tere
really is an excess o! s%pply eD%al to <<,+>6,83< lbs, s%pply and demand seem to be nearly
balanced already, @ito%t taking into consideration tose 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 oter districts alsoL Bpp0 +*, 6=C0
III. General Illustration. The Cotton Crisis "f
/01/.12
Preli+inar) 8istor). 1845!6&
;<=>0 5e golden age o! cotton ind%stry0 ,rice o! cotton 8ery lo@0
'0 6orner says on tis point:
KFor te last eigt years & a8e not kno@n so acti8e a
state o! trade as as pre8ailed d%ring te last s%mmer
and a%t%mn, partic%larly in cotton spinning0
5ro%go%t te al!-year & a8e been recei8ing
notices e8ery @eek o! ne@ in8estments o! capital in
!actories, eiter in te !orm o! ne@ mills being b%ilt,
o! te !e@ tat @ere %ntenanted !inding occ%piers, o!
88 ;apter 4&&
enlargements o! existing mills, o! ne@ engines o!
increased po@er, and o! man%!act%ring macinery0L
B)eports o! &nsp0 o! Fact0, 3ct0 182+, p0 130C
;<=?0 5e complaints begin:
KFor a considerable time past & a8e eard !rom te
occ%piers o! cotton mills 8ery general complaints o!
te depressed state o! teir trade000 !or @itin te last
six @eeks se8eral mills a8e beg%n to @ork sort
time, %s%ally eigt o%rs a day instead o! t@el8e# tis
appears to be on te increase000 5ere as been a great
ad8ance in te price o! te ra@ material000 tere as
been not only no ad8ance in te man%!act%red
articles, b%t 000 prices are lo@er tan tey @ere be!ore
te rise in cotton began0 From te great increase in te
n%mber o! cotton mills @itin te last !o%r years,
tere m%st a8e been, on te one and, a greatly
increased demand !or te ra@ material, and, on te
oter, a greatly increased s%pply in te market o! te
man%!act%red articles# ca%ses tat m%st conc%rrently
a8e operated against pro!its, s%pposing te s%pply o!
te ra@ material and te cons%mption o! te
man%!act%red article to a8e remained %naltered# b%t,
o! co%rse, in te greater ratio by te late sort s%pply
o! cotton, and te !alling o!! in te demand !or te
man%!act%red articles in se8eral markets, bot ome
and !oreign0 B)eports o! &nsp0 o! Fact0, 3ct0 1826, p0
1=0C
5e rising demand !or ra@ materials nat%rally @ent and in and @it a market !looded @it
man%!act%res0 Ay te @ay, te expansion o! ind%stry at tat time and te s%bseD%ent stagnation
@ere not con!ined to te cotton districts0 5e carded @ool district o! Arad!ord ad only 318
!actories in 1836 and 2*= in 18260 5ese !ig%res do not by any means express te act%al gro@t
o! prod%ction, since te existing !actories @ere also considerably enlarged0 5is @as partic%larly
tr%e o! te !lax spinning-mills0
K?ll a8e contrib%ted more or less, d%ring te last ten
years, to te o8erstocking o! te market, to @ic a
8* ;apter 4&&
great part o! te present stagnation o! trade m%st be
attrib%ted000 5e depression000 nat%rally res%lts !rom
s%c rapid increase o! mills and macinery0L B)eports
o! &nsp0 o! Fact0, 3ct0 1826, p0 3=0C
;<=@0 &n 3ctober, a money panic0 7isco%nt 8T0 5is @as preceded by te debacle o! te rail@ay
s@indle and te East &ndian spec%lation in accommodation bills0 A%t:
KMr0 Aaker enters into 8ery interesting details
respecting te increased demand, in te last !e@ years,
!or cotton, @ool, and !lax, o@ing to te great
extension o! tese trades0 6e considers te increased
demand !or tese ra@ materials, occ%rring, as it as,
at a period @en te prod%ce as !allen m%c belo@
an a8erage s%pply, as almost s%!!icient, e8en @ito%t
re!erence to te monetary derangement, to acco%nt !or
te present state o! tese brances0 5is opinion is
!%lly con!irmed, by my o@n obser8ations, and
con8ersation @it persons @ell acD%ainted @it trade0
5ose se8eral brances @ere all in a 8ery depressed
state, @ile disco%nts @ere readily obtained at and
%nder + per cent0 5e s%pply o! ra@ silk as, on te
contrary, been ab%ndant, te prices moderate, and te
trade, conseD%ently, 8ery acti8e, till 000 te last t@o or
tree @eeks, @en tere is no do%bt te monetary
derangement as a!!ected not only te persons
act%ally engaged in te man%!act%re, b%t more
extensi8ely still, te man%!act%rers o! !ancy goods,
@o @ere great c%stomers to te tro@ster0 ?
re!erence to p%blised ret%rns so@s tat te cotton
trade ad increased nearly <> per cent in te last tree
years0 ;otton as conseD%ently increased, in ro%nd
n%mbers, !rom 2d0 to 6d0 per lb0, @ile t@ist, in
conseD%ence o! te increased s%pply, is yet only a
!raction abo8e its !ormer price0 5e @oollen trade
began its increase in 1836, since @ic .orksire as
increased its man%!act%re o! tis article 2= per cent,
b%t $cotland exibits a yet greater increase0 5e
*= ;apter 4&&
increase o! te @orsted trade
6
is still larger0
;alc%lations gi8e a res%lt o! %p@ards o! >2 per cent
increase @itin te same period0 5e cons%mption o!
ra@ @ool as tere!ore been immense0 Flax as
increased since 183* abo%t <+ per cent in England, <<
per cent in $cotland, and nearly *= per cent in &reland
>
# te conseD%ence o! tis, in connexion @it bad
crops, as been tat te ra@ material as gone %p V1=
per ton, @ile te price o! yarn as !allen 6d0 a
b%ndle0L B)eports o! &nsp0 o! Fact0, 3ct0 182>, pp0 3=-
310C
;<=A0 $ince late in 1828 b%siness re8i8ed0
K5e 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 te man%!act%rers to carry
on teir @ork 8ery steadily0000 5e @oollen
man%!act%rers @ere exceedingly b%sy !or a @ile in
te early part o! te year0000 & !ear tat consignments o!
@oollen goods o!ten take te place o! real demand,
and tat periods o! apparent prosperity, i0 e0, o! !%ll
@ork, are not al@ays periods o! legitimate demand0 &n
some monts te @orsted as been exceedingly good,
in !act !lo%rising0000 ?t te commencement o! te
period re!erred to, @ool @as exceedingly lo@# @at
@as bo%gt by te spinners @as @ell bo%gt, and no
do%bt in considerable D%antities0 Wen te price o!
@ool rose @it te spring @ool sales, te spinner ad
te ad8antage, and te demand !or man%!act%red
goods becoming considerable and imperati8e, tey
kept it0 K B)eports o! &nsp0 o! Fact0, ?pril 182*, p0 2<0C
K&! @e look at te 8ariations in te state o! trade,
@ic a8e occ%rred in te man%!act%ring districts o!
te kingdom !or a period no@ o! bet@een tree and
!o%r years, & tink @e m%st admit te existence o! a
great dist%rbing ca%se some@ere 000 b%t may not te
*1 ;apter 4&&
immensely prod%cti8e po@er o! increased macinery
a8e added anoter element to te 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*, rigt %p to 3ctober, b%siness !lo%rised0
K5e @orsted st%!! o! trade, o! @ic Arad!ord and
6ali!ax are te great i8es o! ind%stry, as been te
one most acti8e# tis trade as ne8er be!ore reaced
anyting like te extent, to @ic it as no@ attained0
$pec%lation, and %ncertainty as to te probable s%pply
o! cotton @ool, a8e e8er ad te e!!ect o! ca%sing
greater excitement, and more !reD%ent alterations in
te state o! tat branc o! man%!act%re, tan any
oter0 5ere is 000 at present an acc%m%lation in stock
o! te coarser kinds o! cotton goods, @ic creates
anxiety on te part o! te smaller spinners, and is
already acting to teir detriment, a8ing ca%sed
se8eral o! tem to @ork teir mills sort time0 K
B)eports o! &nsp0 o! Fact0, 3ct0 182*, pp0 62-6+0C
;<>B0 ?pril0 A%siness contin%ed brisk0 5e exception:
K5e great depression in a part o! te cotton trade 000
attrib%table to te scarcity in te s%pply o! te ra@
material more especially adapted to te branc
engaged in spinning lo@ n%mbers o! cotton yarns, or
man%!act%ring ea8y cotton goods0 ? !ear is
entertained tat te increased macinery b%ilt recently
!or te @orsted trade, may be !ollo@ed @it a similar
reaction0 Mr0 Aaker comp%tes tat in te year 182*
alone te @orsted looms a8e increased teir prod%ce
2= per cent, and te spindles <+ or 3= per cent, and
tey are still increasing at te same rate0 K B)eports o!
&nsp0 o! Fact0, ?pril 18+=, p0 +20C
;<>B0 3ctober0
K5e ig price o! ra@ cotton contin%es 000 to ca%se a
considerable depression in tis branc o!
*< ;apter 4&&
man%!act%re, especially in tose descriptions o! goods
in @ic te ra@ material constit%tes a considerable
part o! te cost o! prod%ction0000 5e great ad8ance in
te price o! ra@ silk as like@ise ca%sed a depression
in many brances o! tat man%!act%re0L B)eports0 o!
&nsp0 o! Fact0, 3ct0 18+=, p0 120C
?nd on pages 31 and 33 o! te same report @e learn tat te ;ommittee o! te )oyal $ociety !or
te ,romotion and &mpro8ement o! te :ro@t o! Flax in &reland predicted tat te ig price o!
!lax, togeter @it te lo@ le8el o! prices !or oter agric%lt%ral prod%cts, ens%red a considerable
increase in !lax prod%ction in te ens%ing year0
;<>C0 ?pril0 :reat prosperity0 '0 6orner says in is report:
K?t no period d%ring te last se8enteen years tat &
a8e been o!!icially acD%ainted @it te
man%!act%ring districts in 'ancasire a8e & kno@n
s%c general prosperity# te acti8ity in e8ery branc is
extraordinary0L B)eports o! &nsp0 o! Fact0, ?pril 18+3,
p0 1*0C
;<>C0 3ctober0 7epression in te cotton ind%stry0 K38er-prod%ction0L B)eports o! &nsp0 o! Fact0,
3ct0 18+3, p0 1+0C
;<>=0 ?pril0
K5e @oollen trade, alto%g not brisk, as gi8en !%ll
employment to all te !actories engaged %pon tat
!abric, and a similar remark applies to te cotton
!actories0 5e @orsted trade generally as been in an
%ncertain and %nsatis!actory condition d%ring te
@ole o! te last al!-year0 5e man%!act%re o! !lax
and emp are more likely to be serio%sly impeded, by
reason o! te diminised s%pplies o! te ra@ materials
!rom )%ssia d%e to te ;rimean @ar0L B)eports o!
&nsp0 o! Fact0, ?pril 18+2, p0 3>0C
;<>A0
K5e trade in te $cottis !lax districts still contin%es
depressed I te ra@ material being scarce, as @ell as
ig in price# and te in!erior D%ality o! te last year"s
crop in te Aaltic, !rom @ence come o%r principal
s%pplies, @ill a8e an inH%rio%s e!!ect on te trade o!
te district# H%te, o@e8er, @ic is grad%ally
*3 ;apter 4&&
s%perseding !lax in many o! te coarser !abrics, is
neiter %n%s%ally ig in price, nor scarce in
D%antity 000 abo%t one-al! o! te macinery in 7%ndee
is no@ employed in H%te spinning0L B)eports o! &nsp0
o! Fact0, ?pril 18+*, p0 1*0C I K3@ing to te ig
price o! te ra@ material, !lax spinning is still !ar !rom
rem%nerating, and @ile all te oter mills are going
!%ll time, tere are se8eral instances o! te stoppage
o! !lax macinery0000 P%te spinning is 000 in a rater
more satis!actory state, o@ing to te recent decline in
te price o! material, @ic as no@ !allen to a 8ery
moderate point0L B)eports o! &nsp0 o! Fact0, 3ct0 18+*,
p0 <=0C
1861!64. %+erican Civil 9ar. Cotton *a+ine. The 2reatest
E:a+le of an Interrution in the Pro#uction Process through
Scarcit) an# -earness of $a( ,aterial
;<?B0 ?pril0
KWit respect to te state o! trade, & am appy to be
able to in!orm yo% tat, not@itstanding te ig
price o! ra@ material, all te textile man%!act%res,
@it te exception o! silk, a8e been !airly b%sy
d%ring te past al!-year0000 &n some o! te cotton
districts ands a8e been ad8ertised !or, and a8e
migrated titer !rom -or!olk and oter r%ral
co%nties0 5ere appears to be, in e8ery branc o!
trade, a great scarcity o! ra@ material0 &t is 000 te @ant
o! it alone, @ic keeps %s @itin bo%nds0 &n te
cotton trade, te erection o! ne@ mills, te !ormation
o! ne@ systems o! extension, and te demand !or
ands, can scarcely, & tink, a8e been at any time
exceeded0 E8ery@ere tere are ne@ mo8ements in
searc o! ra@ material0L B)eports o! &nsp0 o! Fact0,
?pril 186=, p0 +>0C
*2 ;apter 4&&
;<?B0 3ctober0
K5e state o! trade in te cotton, @oollen, and !lax
districts as been good# indeed in &reland, it is stated to
a8e been "8ery good" !or no@ more tan a year# and
tat it @o%ld a8e been still better, b%t !or te ig
price o! ra@ material0 5e !lax spinners appear to be
looking @it more anxiety tan e8er to te opening
o%t o! &ndia by rail@ays, and to te de8elopment o! its
agric%lt%re, !or a s%pply o! !lax @ic may be
commens%rate @it teir @ants0L B)eports o! &nsp0 o!
Fact0, 3ct0 186=, p0 3>0C
;<?;0 ?pril0
K5e state o! trade is at present depressed0000 ? !e@
cotton mills are r%nning sort time, and many silk
mills are only partially employed0 )a@ material is
ig0 &n almost e8ery branc o! textile man%!act%re it
is abo8e te price at @ic it can be man%!act%red !or
te masses o! te cons%mers0L B)eports o! &nsp0 o!
Fact0, ?pril 1861, p0 330C
&t ad become e8ident tat in 186= te cotton ind%stry ad o8erprod%ced0 5e e!!ect o! tis made
itsel! !elt d%ring te next !e@ years0
K&t as taken bet@een t@o and tree years to absorb
te o8er-prod%ction o! 186= in te markets o! te
@orld0L B)eports o! &nsp0 o! Fact0, 7ecember 1863, p0
1<>0C K5e depressed state o! te markets !or cotton
man%!act%res in te East, early in 186=, ad a
corresponding e!!ect %pon te trade o! Alackb%rn, in
@ic 3=,=== po@er-looms are %s%ally employed
almost excl%si8ely in te prod%ction o! clot to be
cons%med in te East0 5ere @as conseD%ently b%t a
limited demand !or labo%r !or many monts prior to
te e!!ects o! te cotton blockade being !elt0000
Fort%nately tis preser8ed many o! te spinners and
man%!act%rers !rom being in8ol8ed in te common
r%in0 $tocks increased in 8al%e so long as tey @ere
*+ ;apter 4&&
eld, and tere ad been conseD%ently noting like
tat alarming depreciation in te 8al%e o! property
@ic migt not %nreasonably a8e been looked !or
in s%c a crisis0L B)eports o! &nsp0 o! Fact0, 3ct0 186<,
pp0 <*, 310C
;<?;0 3ctober0
K5rade as been !or some time in a 8ery depressed
state0 &t is not improbable indeed tat d%ring te
@inter monts many establisments @ill be !o%nd to
@ork 8ery sort time0 5is migt, o@e8er, a8e been
anticipated 000 irrespecti8e o! te ca%ses @ic a8e
interr%pted o%r %s%al s%pplies o! cotton !rom ?merica
and o%r exports, sort time m%st a8e been kept
d%ring te ens%ing @inter in conseD%ence o! te great
increase o! prod%ction d%ring te last tree years, and
te %nsettled state o! te &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 te !act tat @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, tat is, @ill spin 16s0 @ere
e %sed to spin 1<s0, or <<s0 in te place o! 16s0, and
so on# and te man%!act%rer %sing tese !ine yarns
@ill make is clot te %s%al @eigt by te addition o!
so m%c more siEe0 5e trade is a8ailing itsel! o! tis
reso%rce at present to an extent @ic is e8en
discreditable0 & a8e eard on good a%tority o!
ordinary export sirting @eiging 8 lbs @ic @as
made o! +[ lbs0 cotton and <` lbs siEe0000 &n clots o!
oter descriptions as m%c as += per cent siEe is
sometimes added# so tat a man%!act%rer may and
*6 ;apter 4&&
does tr%ly boast tat e is getting ric by selling clot
!or less money per po%nd tan e paid !or te mere
yarn o! @ic tey are composed0L" B)eports o! &nsp0
o! Fact0, ?pril 1862, p0 <>0C
K& a8e also recei8ed statements tat te @ea8ers
attrib%te increased sickness to te siEe @ic is %sed
in dressing te @arps o! $%rat cotton, and @ic is not
made o! te same material as !ormerly, 8iE0, !lo%r0
5is s%bstit%te !or !lo%r is said, o@e8er, to a8e te
8ery important ad8antage o! increasing greatly te
@eigt o! te clot man%!act%red, making 1+ lbs o!
te ra@ material to @eig <= lbs @en @o8en into
clot0L B)eports o! &nsp0 o! Fact0, 3ct0 18630 5is
s%bstit%te @as gro%nd talc%m, called ;ina clay, or
gyps%m, called Frenc calk0C K5e earnings o! te
@ea8ers Bmeaning te operati8esC are m%c red%ced
!rom te employment o! s%bstit%tes !or !lo%r as siEing
!or @arps0 5is siEing, @ic gi8es @eigt to te yarn,
renders it ard and brittle0 Eac tread o! te @arp in
te loom passes tro%g a part o! te loom called "a
eald", @ic consists o! strong treads to keep te
@arp in its proper place, and te ard state o! te @arp
ca%ses te treads o! te eald to break !reD%ently#
and it is said to take a @ea8er !i8e min%tes to tie %p
te treads e8ery time tey break# and a @ea8er as to
piece tese ends at least ten times as o!ten as
!ormerly, t%s red%cing te prod%cti8e po@ers o! te
loom in te @orking-o%rs0 K BDbid0, pp0 2<-230C
K&n ?ston, $talybridge, Mossley, 3ldam, etc0, te
red%ction o! te time as been !%lly one-tird, and te
o%rs are lessening e8ery @eek0000 $im%ltaneo%sly
@it tis dimin%tion o! time tere is also a red%ction
o! @ages in many departments0L B)eports o! &nsp0 o!
Fact0, 3ct0 1861, pp0 1<-130C
Early in 1861 tere @as a strike among te mecanical @ea8ers in some parts o! 'ancasire0
$e8eral man%!act%rers ad anno%nced a @age red%ction o! + to >0+T0 5e operati8es insisted tat
*> ;apter 4&&
te @age scale remain te same @ile @orking-o%rs @ere red%ced0 5is @as not granted, and a
strike @as called0 ? mont later, te operati8es ad to gi8e in0 A%t ten tey got bot0
K&n addition to te red%ction o! @ages to @ic te
operati8es at last consented, many mills are no@
r%nning sort time0L B)eports o! &nsp0 o! Fact0, ?pril
1861, p0 <3:C
;<?F0 ?pril0
K5e s%!!erings o! te operati8es since te date o! my
last report a8e greatly increased# b%t at no period o!
te istory o! man%!act%res, a8e s%!!erings so
s%dden and so se8ere been borne @it so m%c silent
resignation and so m%c patient sel!-respect0L
B)eports o! &nsp0 o! Fact0, ?pril 186<, p0 1=0C K5e
proportionate n%mber o! operati8es @olly o%t o!
employment at tis date appears not to be m%c larger
tan it @as in 1828, @en tere @as an ordinary panic
o! s%!!icient conseD%ences to excite alarm amongst
te man%!act%rers, so m%c as to @arrant te
collection o! similar statistics o! te state o! te cotton
trade as are no@ iss%ed @eekly0000 &n May 1828, te
proportion o! cotton operati8es o%t o! @ork in
Mancester o%t o! te @ole n%mber %s%ally
employed @as 1+ per cent, on sort time 1< per cent,
@ilst >= per cent @ere in !%ll @ork0 3n te <8t o!
May o! te present year, o! te @ole n%mber o!
persons %s%ally employed 1+ per cent @ere o%t o!
@ork, 3+ per cent @ere on sort time, and 2* per cent
@ere @orking !%ll time0000 &n some oter places,
$tockport !or example, te a8erages o! sort time and
o! non-employment are iger, @ilst tose o! !%ll
time are lessL, beca%se coarser n%mbers are sp%n tere
tan in Mancester Bp0 16C0
;<?F0 3ctober0
K& !ind by te last ret%rn to ,arliament tat tere @ere
<,88> cotton !actories in te (nited Kingdom in 1861,
<,1=* o! tem being in my district B'ancasire and
*8 ;apter 4&&
;esireC0 & @as a@are tat a 8ery large proportion o!
te <,1=* !actories in my district @ere small
establisments, gi8ing employment to !e@ persons,
b%t & a8e been s%rprised to !ind o@ large tat
proportion is0 &n 3*<, or 1* per cent, te steam-engine
or @ater@eel is %nder 1= orse-po@er# in 32+, or 16
per cent, te orsepo@er is abo8e 1= and %nder <=#
and in 1,3>< te po@er is <= orses and more0000 ?
8ery large proportion o! tese small man%!act%rers I
being more tan a tird o! te @ole n%mber I @ere
operati8es temsel8es at no distant period# tey are
men @ito%t command o! capital0 5e br%nt o! te
b%rden ten @o%ld a8e to be borne by te remaining
t@o-tirds0L B)eports o! &nsp0 o! Fact0, 3ct0 186<, pp0
18, 1*0C
?ccording to te same report, 2=,126, or 1103T, o! te cotton employees in 'ancasire and
;esire @ere ten @orking !%ll time# 132,>6>, or 38T, @ere @orking sort time# and 1>*,><1,
or +=0>T, @ere %nemployed0 ?!ter ded%cting te ret%rns !rom Mancester and Aolton, @ere
mainly !ine grades @ere sp%n, a line relati8ely little a!!ected by te cotton !amine, te 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 te operati8e0 &n te earlier part o! te
year, @en man%!act%rers @ere endea8o%ring to keep
teir mills at @ork by %sing %p all te moderately
priced cotton tey co%ld obtain, m%c bad cotton @as
bro%gt into mills in @ic good cotton @as
ordinarily %sed, and te di!!erence to te operati8es in
@ages @as so great tat many strikes took place on
te gro%nd tat tey co%ld not make a !air day"s @ages
at te old rates0000 &n some cases, alto%g @orking
!%ll time, te di!!erence in @ages !rom @orking bad
cotton @as as m%c as one-al!L Bp0 <>C0
;<?C0 ?pril0
K7%ring te present year tere @ill not be !%ll
employment !or m%c more tan one-al! o! te
** ;apter 4&&
cotton operati8es in te co%ntry0L B)eports o! &nsp0 o!
Fact0, ?pril 1863, p0 120C
K? 8ery serio%s obHection to te %se o! $%rat cotton, as
man%!act%rers are no@ compelled to %se it, is tat te
speed o! te macinery m%st be greatly red%ced in te
processes o! man%!act%re0 For some years past e8ery
e!!ort as been made to increase te speed o!
macinery, in order to make te same macinery
prod%ce more @ork# and te red%ction o! te speed
becomes tere!ore a D%estion @ic a!!ects te
operati8e as @ell as te man%!act%rer# !or te cie!
part o! te operati8es are paid by te @ork done# !or
instance, spinners are paid per lb0 !or te yarn sp%n,
@ea8ers per piece !or te n%mber o! pieces @o8en#
and e8en @it te oter classes o! operati8es paid by
te @eek tere @o%ld be a dimin%tion o! @ages in
consideration o! te less amo%nt o! goods prod%ced0
From inD%iries & a8e made, and statements placed in
my ands, o! te earnings o! cotton operati8es d%ring
te present year, & !ind tere is a dimin%tion a8eraging
<= per cent %pon teir !ormer earnings, in some
instances te dimin%tion as been as m%c as += per
cent, calc%lated %pon te same rate o! @ages as
pre8ailed in 1861L Bp0 13C0 K0005e s%m earned
depends %pon 000 te nat%re o! te material operated
%pon0000 5e position o! te operati8es in regard to te
amo%nt o! teir earnings is 8ery m%c better no@
B3ctober 1863C tan it @as tis time last year0
Macinery as impro8ed, te material is better
%nderstood, and te operati8es are able better to
o8ercome te di!!ic%lties tey ad to contend @it at
!irst0 & remember being in a se@ing scool Ba carity
instit%tion !or %nemployedC at ,reston last spring,
@en t@o yo%ng @omen, @o ad been sent to @ork
at a @ea8ing sed te day be!ore, %pon te
1== ;apter 4&&
representation o! te man%!act%rer tat tey co%ld
earn 2s0 per @eek, ret%rned to te scool to be
readmitted, complaining tat tey co%ld not a8e
earned 1s0 per @eek0 & a8e been in!ormed o! "sel!-
acting minders" 000 men @o manage a pair o! sel!-
acting m%les, earning at te end o! a !ortnigt"s !%ll
@ork 8s0 11d0, and tat !rom tis s%m @as ded%cted
te rent o! te o%se, te man%!act%rer, o@e8er,
ret%rning al! te rent as a gi!t0 B6o@ genero%sSC 5e
minders took a@ay te s%m o! 6s0 11d0 &n many places
te sel!-acting minders ranged !rom +s0 to *s0 per
@eek, and te @ea8ers !rom <s0 to 6s0 per @eek in te
last monts o! 186<0000 ?t te present time a m%c
more ealty state o! tings exists, alto%g tere is
still a great decrease in te earnings in most
districts0000 5ere are se8eral ca%ses @ic a8e
tended to te red%ction o! earnings, besides te
sorter staple o! te $%rat cotton and its dirty
condition# !or instance, it is no@ te practice to mix
"@aste" largely @it $%rat, @ic conseD%ently
increases te di!!ic%lties o! te spinner or minder0 5e
treads, !rom teir sortness o! !ibre, are more liable
to break in te dra@ing o%t o! te m%le and in te
t@isting o! te yarn, and te m%le cannot be kept so
contin%o%sly in motion0000 5en, !rom te great
attention reD%ired in @atcing te treads in @ea8ing,
many @ea8ers can only mind one loom, and 8ery !e@
can mind more tan t@o looms0000 5ere as been a
direct red%ction o! +, >Z and 1= per cent %pon te
@ages o! te operati8es0000 &n te maHority o! cases te
operati8e as to make te best o! is material, and to
earn te best @ages e can at te ordinary rates0000
?noter di!!ic%lty te @ea8ers a8e sometimes to
contend @it is, tat tey are expected to prod%ce
@ell-!inised clot !rom in!erior materials, and are
1=1 ;apter 4&&
s%bHect to !ine !or te !la@s in teir @ork0L B)eports
o! &nsp0 o! Fact0, 3ct0 1863, pp0 21-230C
Wages @ere miserable, e8en @ere @ork @as !%ll time0 5e cotton @orkers @illingly o!!ered
temsel8es !or all p%blic @orks s%c as drainage, road-b%ilding, stone-breaking and street-pa8ing,
in @ic tey @ere employed, to get teir keep !rom te a%torities Balto%g tis practically
amo%nted to assistance to te man%!act%rer0 $ee Aook &, $0 +*8N+8* /Englis edition: pp0 +>2->+0
I 0d01C0 5e @ole bo%rgeoisie stood g%ard o8er te labo%rers0 Were te @orst dog"s @ages
o!!ered, and a labo%rer re!%sed to accept tem, te )elie! ;ommittee @o%ld strike im !rom its
lists0 &t @as in a @ay a golden age !or te man%!act%rers, !or te labo%rers ad eiter to star8e or
@ork at a price most pro!itable !or te bo%rgeois0 5e )elie! ;ommittees acted as @atc-dogs0 ?t
te same time, te man%!act%rers acted in secret agreement @it te go8ernment to inder
emigration as m%c as possible, partly to retain in readiness te capital in8ested in te !les and
blood o! te labo%rers, and partly to sa!eg%ard te o%se-rent sD%eeEed o%t o! te labo%rers0
K5e )elie! ;ommittees acted @it great strictness
%pon tis point0 &! @ork @as o!!ered, te operati8es to
@om it @as proposed @ere str%ck o!! te lists, and
t%s compelled to accept te o!!er0 Wen tey
obHected to accept @ork000 te ca%se as been tat teir
earnings @o%ld a8e been merely nominal, and te
@ork exceedingly se8ere0L B)eports o! &nsp0 o! Fact0,
3ct0 1863, p0 *>0C
5e operati8es @ere @illing to per!orm any @ork gi8en to tem %nder te ,%blic Works ?ct0
K5e principle %pon @ic ind%strial employments
@ere organised 8aried considerably in di!!erent to@ns,
b%t in tose places e8en in @ic te o%tdoor @ork
@as not absol%tely a labo%r test te manner in @ic
labo%r @as rem%nerated by its being paid !or eiter at
te exact rate o! relie!, or closely approximating te
rate, it became in !act a labo%r testL Bp0 6*C0 K5e
,%blic Works ?ct o! 1863 @as intended to remedy
tis incon8enience, and to enable te operati8e to earn
is day"s @ages as an independent labo%rer0 5e
p%rpose o! tis ?ct @as tree-!old: !irstly, to enable
local a%torities to borro@ money o! te ExceD%er
'oan ;ommissioners B@it consent o! te ,resident o!
te ;entral )elie! ;ommitteeC# secondly, to !acilitate
te impro8ement o! te to@ns o! te cotton districts#
1=< ;apter 4&&
tirdly, to pro8ide @ork and rem%nerati8e @ages to
te %nemployed operati8es0L
'oans to te amo%nt o! V883,>== ad been granted %nder tis ?ct %p to te end o! 3ctober 1863
Bp0 >=C0 5e @orks %ndertaken @ere mainly canalisation, road-b%ilding, street-pa8ing, @ater-
@orks reser8oirs, etc0
Mr0 6enderson, president o! te committee in Alackb%rn, @rote @it re!erence to tis to !actory
inspector )edgra8e:
K-oting in my experience, d%ring te present period
o! s%!!ering and distress, as str%ck me more !orcibly
or gi8en me more satis!action, tan te ceer!%l
alacrity @it @ic te %nemployed operati8es o! tis
district a8e accepted o! te @ork o!!ered to tem
tro%g te adoption o! te ,%blic Works ?ct, by te
;orporation o! Alackb%rn0 ? greater contrast tan tat
presented bet@een te 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 te siEe o! is !amily, e earned 2 to 1<s0 per @eek, tis enormo%s amo%nt
pro8iding sometimes !or a !amily o! eigt0 5e to@ns-men deri8ed a do%ble pro!it !rom tis0 &n
te !irst place, tey sec%red money to impro8e teir smoky and neglected cities at exceptionally
lo@ interest rates0 &n te second place, tey paid te labo%rers !ar less tan te reg%lar @age0C
K?cc%stomed as e ad been to a temperat%re all b%t
tropical, to @ork at @ic agility and delicacy o!
manip%lation a8ailed im in!initely more tan
m%sc%lar strengt and to do%ble and sometimes treble
te rem%neration @ic it is possible !or im no@ to
obtain, is ready acceptance o! te pro!!ered
employment in8ol8ed an amo%nt o! sel!-denial and
consideration te exercise o! @ic is most creditable0
&n Alackb%rn te 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 tey are
standing in m%d and @ater to te dept o! 1= or 1<
inces, and in all tey are exposed to a climate @ic,
1=3 ;apter 4&&
!or cilly %midity is not s%rpassed & s%ppose, e8en i!
it is eD%alled, by tat o! any district in EnglandL Bpp0
*1-*<C0 K5e cond%ct o! te operati8es as been
almost blameless, and teir readiness to accept and
make te best o! o%tdoor labo%rL Bp0 6*C0
;<?=0 ?pril0
K;omplaints are occasionally made in di!!erent
districts at te scarcity o! ands, b%t tis de!iciency is
cie!ly !elt in partic%lar departments, as, !or instance
o! @ea8ers0000 5ese complaints a8e teir origin as
m%c !rom te lo@ rate o! @ages @ic te ands can
earn o@ing to te in!erior D%alities o! yarn %sed, as
!rom any positi8e scarcity o! @ork-people e8en in tat
partic%lar department0 -%mero%s di!!erences a8e
taken place d%ring te past mont bet@een te
masters o! partic%lar mills and teir operati8es in
respect o! te @ages0 $trikes, & am sorry to say, are
b%t too !reD%ently resorted to0 000 5e e!!ect o! te
,%blic Works ?ct is !elt as a competition by te mill-
o@ners0 5e local committee at Aac%p as s%spended
operations, !or alto%g all te 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 te man%!act%rers0 7%e to te ,%blic Works ?ct te demand !or
labo%r gre@ so strong tat many a !actory and @as earning 2 to + sillings daily in te D%arries
o! Aac%p0 ?nd so te p%blic @orks @ere grad%ally s%spended I tis ne@ edition o! te +teliers
nationau o! 1828, b%t tis time instit%ted in te interests o! te bo%rgeoisie0
Experiments in corpore vili
K?lto%g & a8e gi8en te act%al earnings o! te
operati8es B!%lly employedC in se8eral mills, it does
not !ollo@ tat tey earn te same amo%nt @eek by
@eek0 5e operati8es are s%bHect to great !l%ct%ation,
!rom te constant experimentalising o! te
man%!act%rers %pon di!!erent kinds and proportions o!
cotton and @aste in te same mill, te "mixings" as it is
called, being !reD%ently canged# and te earnings o!
1=2 ;apter 4&&
te operati8es rise and !all @it te D%ality o! te
cotton mixings# sometimes tey a8e been @itin 1+
per cent o! !ormer earnings, and ten in a @eek or
t@o, tey a8e !allen !rom += to 6= per cent0L
&nspector )edgra8e, @o makes tis report, ten proceeds to cite @age !ig%res taken !rom act%al
practice, o! @ic te !ollo@ing examples may s%!!ice:
?, @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:
K5e abo8e ret%rns are deser8ing o! consideration, !or
tey so@ tat @ork @o%ld become a mis!ort%ne in
many a !amily, as it not merely red%ces te income,
b%t brings it so lo@ as to be %tterly ins%!!icient to
pro8ide more tan a small portion o! te absol%te
@ants, @ere it not tat s%pplemental relie! is granted
to operati8es @en te @ages o! te !amily do not
reac te s%m tat @o%ld be gi8en to tem as relie!, i!
tey @ere all %nemployed0L B)eports o! &nsp0 o! Fact0,
3ct0 1863, pp0 +=-+30C
K&n no @eek since te +t o! P%ne last @as tere more
tan t@o days se8en o%rs and a !e@ min%tes
employment !or all te @orkers0L BDbid0, p0 1<10C
From te beginning o! te crisis to Marc <+, 1863, nearly tree million po%nds sterling @ere
expended by te g%ardians, te ;entral )elie! ;ommittee, and te Mansion 6o%se ;ommittee0
BDbid0, p0 130C
K&n a district in @ic te !inest yarn is sp%n 000 te
spinners s%!!er an indirect red%ction o! 1+ per cent in
conseD%ence o! te cange !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 te spinners a8e ad a red%ction o! + per
cent, and a8e lost !rom <= to 3= per cent in addition,
tro%g @orking $%rat and @aste0 5e @ea8ers are
red%ced !rom 2 looms to < looms0 &n 186=, tey
a8eraged +s0 >d0 per loom, in 1863, only 3s0 2d0 5e
!ines, @ic !ormerly 8aried !rom 3d0 to 6d0 B!or te
1=+ ;apter 4&&
@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
Kte a8erage o! te 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 te red%ction
o! te speed o! te m%le to p%t an extra amo%nt o!
t@ist in te yarn, @ic in ordinary times @o%ld be
paid !or according to listL Bpp0 23, 22C0 K?lto%g te
&ndian cotton may a8e been @orked to pro!it by te
man%!act%rer, it @ill be seen Bsee te @age list on p0
+3C tat te operati8es are s%!!erers compared @it
1861, and i! te %se o! $%rat be con!irmed, te
operati8es @ill @ant to earn te @ages o! 1861, @ic
@o%ld serio%sly a!!ect te pro!its o! te man%!act%rer,
%nless e obtain compensation eiter in te price o!
te ra@ cotton or o! is prod%ctsL Bp0 1=+C0
(ouse19ent0
K5e rent is !reD%ently ded%cted !rom te @ages o!
operati8es, e8en @en @orking sort time, by te
man%!act%rers @ose cottages tey may be
occ%pying0 -e8erteless te 8al%e o! tis class o!
property as diminised, and o%ses may be obtained
at a red%ction o! !rom <+ to += per cent %pon te rent
o! te o%ses in ordinary times# !or instance, a cottage
@ic @o%ld a8e cost 3s0 6d0 per @eek can no@ be
ad !or <s0 2d0 per @eek, and sometimes e8en !or
lessL Bp0 +>C0
0migration0 5e employers @ere nat%rally opposed to emigration o! labo%rers, beca%se, on te
one and,
Klooking !or@ard to te reco8ery o! te cotton trade
!rom its present depression, tey keep @itin teir
reac te means @ereby teir mills can be @orked in
te most ad8antageo%s mannerL0 3n te oter and,
Kmany man%!act%rers are o@ners o! te o%ses in
@ic operati8es employed in teir mills reside, and
1=6 ;apter 4&&
some %nD%estionably expect to obtain a portion o! te
back rent o@ingL Bp0 *6C0
Mr0 Aernall 3sborne said in a speec to is parliamentary constit%ents on 3ctober <<, 1862, tat
te labo%rers o! 'ancasire ad bea8ed like te ancient pilosopers I B$toicsC0 -ot like seepQ
Chapter 7. Supplementary Remarks
$%ppose, as is ass%med in tis part, te amo%nt o! pro!it in any partic%lar spere o! prod%ction
eD%als te s%m o! te s%rpl%s-8al%e prod%ced by te total capital in8ested in tat spere0 E8en
ten te 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 te !ollo@ing reasons:
1C &n te process o! circ%lation e !orgets te process o! prod%ction0 6e tinks tat s%rpl%s-8al%e
is made @en e realises te 8al%e o! commodities, @ic incl%des realisation o! teir s%rpl%s-
8al%e0 /? blank space @ic !ollo@s in te man%script, indicates tat Marx intended to d@ell in
greater detail on tis point0 I '. 0.1
<C ?ss%ming a %ni!orm degree o! exploitation, @e a8e seen tat regardless o! all modi!ications
originating in te credit system, regardless o! te capitalists" e!!orts to o%t@it and ceat one
anoter, and, lastly, regardless o! any !a8o%rable coice o! te market I te rate o! pro!it may
di!!er considerably, depending on te lo@ or ig prices o! ra@ materials and te experience o!
te b%yer, on te relati8e prod%cti8ity, e!!iciency and ceapness o! te macinery, on te greater
or lesser e!!iciency o! te aggregate arrangement in te 8ario%s stages o! te prod%cti8e process,
elimination o! @aste, te simplicity and e!!iciency o! management and s%per8ision, etc0 &n sort,
gi8en te s%rpl%s-8al%e !or a certain 8ariable capital, it still depends 8ery m%c on te indi8id%al
b%siness ac%men o! te capitalist, or o! is managers and salesmen, @eter tis same s%rpl%s-
8al%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 te same s%rpl%s-8al%e o! V1,===, te 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 5e total capital prod%ces
relati8ely more pro!it in enterprise ? tan in A, beca%se o! a iger rate o! pro!it, alto%g te
8ariable capital ad8anced in bot cases R V1,=== and te s%rpl%s-8al%e prod%ced by eac like@ise
R V1,===, so tat in bot cases tere exists te same degree o! exploitation o! te same n%mber o!
labo%rers0 5is di!!erence in te presentation o! te same mass o! s%rpl%s-8al%e, or te di!!erence
in te rates o! pro!it, and tere!ore in te pro!it itsel!, @ile te exploitation o! labo%r is te same,
may also be d%e to oter ca%ses0 $till, it may also be d%e @olly to a di!!erence in te b%siness
ac%men @it @ic bot establisments are r%n0 ?nd tis circ%mstance misleads te capitalist,
con8inces im tat is pro!its are not d%e to exploiting labo%r, b%t, at least in part, to oter
independent circ%mstances, and partic%larly is indi8id%al acti8ity0
5e analyses in tis !irst part demonstrate te incorrectness o! te 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, te area o! real estate remains
te same and yet te rent risesC a cange in te magnit%de o! an indi8id%al capital is s%pposed to
a8e no in!l%ence on te ratio o! pro!it to capital, and t%s on te rate o! pro!it, beca%se i! te
mass o! pro!it so%ld gro@, so does te mass o! capital %pon @ic it is calc%lated, and 8ice
8ersa0
5is is tr%e only in t@o cases0 First, @en I ass%ming tat all oter circ%mstances, especially te
rate o! s%rpl%s-8al%e, remain %ncanged I tere is a cange in te 8al%e o! tat commodity @ic
is a money-commodity0 B5e same occ%rs in a merely nominal cange o! 8al%e, te rise or !all o!
more tokens o! 8al%e, oter conditions being eD%al0C 'et te total capital R V1==, and te pro!it R
V<=, te rate o! pro!it being R <=T0 $o%ld gold !all by al!, or do%ble, te same capital
1=8 ;apter 4&&
pre8io%sly @ort only V1==, @ill be @ort V<== i! it !alls and te pro!it @ill be @ort V2=, i0 e0, it
@ill be expressed in so m%c money instead o! te !ormer V<=# i! it rises, te capital o! V1== @ill
be @ort only V+=, and te pro!it @ill be represented by a prod%ct, @ose 8al%e @ill be V1=0 A%t
in eiter case <==:2= R +=:1= R 1==:<= R <=T0 &n all tese examples tere @o%ld, o@e8er, a8e
been no act%al cange in te magnit%de o! capital-8al%e, and only in te money-expression o! te
same 8al%e and te same s%rpl%s-8al%e0 For tis reason sN;, or te rate o! pro!it, co%ld not be
a!!ected0
&n te second case tere is an act%al cange o! magnit%de in te 8al%e, b%t %naccompanied by a
cange in te ratio o! 8 to c# in oter @ords, @it a constant rate o! s%rpl%s-8al%e te relation o!
capital in8ested in labo%r-po@er B8ariable capital considered as an index o! te amo%nt o! labo%r-
po@er set in motionC to te capital in8ested in means o! prod%ction remains te same0 (nder
tese circ%mstances, no matter @eter @e a8e ;, or n;, or ;Nn, e0g0, 1,===, or <,===, or +==,
and te rate o! pro!it being <=T, te pro!it R <== in te !irst case, R 2== in te second, and R 1==
in te tird0 A%t <==:1,=== R 2==:<,=== R 1==:+== R <=T0 5at is to say, te rate o! pro!it is
%ncanged, beca%se te composition o! capital remains te same and is not a!!ected by te cange
in magnit%de0 5ere!ore, an increase or decrease in te amo%nt o! pro!it so@s merely an increase
or decrease in te magnit%de o! te in8ested capital0
&n te !irst case tere is, tere!ore, b%t te appearance o! a cange in te magnit%de o! te
employed capital, @ile in te second case tere is an act%al cange in magnit%de, b%t no cange
in te organic composition o! te capital, i0 e0, in te relati8e proportions o! its 8ariable and
constant portions0 A%t @it te exception o! tese t@o cases, a cange in te magnit%de o! te
employed capital is eiter te result o! a preceding cange in te 8al%e o! one o! its components,
and tere!ore o! a cange in te relati8e magnit%de o! tese components Bas long as te s%rpl%s-
8al%e itsel! does not cange @it te 8ariable capitalC# or, tis cange o! magnit%de Bas in labo%r-
processes on a large scale, introd%ction o! ne@ macinery, etc0C is te cause o! a cange in te
relati8e magnit%de o! its t@o organic components0 &n all tese cases, oter circ%mstances
remaining te same, a cange in te magnit%de o! te employed capital m%st tere!ore be
accompanied sim%ltaneo%sly by a cange in te rate o! pro!it0
? rise in te rate o! pro!it is al@ays d%e to a relati8e or absol%te increase o! te s%rpl%s-8al%e in
relation to its cost o! prod%ction, i0 e0, to te ad8anced total capital, or to a decrease in te
di!!erence bet@een te rate o! pro!it and te rate o! s%rpl%s-8al%e0
Fl%ct%ations in te rate o! pro!it may occ%r irrespecti8e o! canges in te organic components o!
te capital, or o! te absol%te magnit%de o! te capital, tro%g a rise or !all in te 8al%e o! te
!ixed or circ%lating ad8anced capital ca%sed by an increase or a red%ction o! te @orking-time
reD%ired !or its reprod%ction, tis increase or red%ction taking place independently o! te already
existing capital0 5e 8al%e o! e8ery commodity I t%s also o! te commodities making %p te
capital I is determined not by te necessary labo%r-time contained in it, b%t by te social labo%r-
time reD%ired !or its reprod%ction0 5is reprod%ction may take place %nder %n!a8o%rable or %nder
propitio%s circ%mstances, distinct !rom te conditions o! original prod%ction0 &!, %nder altered
conditions, it takes do%ble or, con8ersely, al! te time, to reprod%ce te same material capital,
and i! te 8al%e o! money remains %ncanged, a capital !ormerly @ort V1== @o%ld be @ort
V<==, or V+= respecti8ely0 $o%ld tis appreciation or depreciation a!!ect all parts o! capital
%ni!ormly, ten te pro!it @o%ld also be accordingly expressed in do%ble, or al!, te amo%nt o!
money0 A%t i! it in8ol8es a cange in te organic composition o! te capital, i! te ratio o! te
8ariable to te constant portion o! capital rises or !alls, ten, oter circ%mstances remaining te
same, te rate o! pro!it @ill rise @it a relati8ely rising 8ariable capital and !all @it a relati8ely
!alling one0 &! only te money-8al%e o! te ad8anced capital rises or !alls Bin conseD%ence o! a
1=* ;apter 4&&
cange in te 8al%e o! moneyC, ten te money-expression o! te s%rpl%s-8al%e rises, or !alls, in
te same proportion0 5e rate o! pro!it remains %ncanged0
Part II. Conversion of Proft into
Average Proft
Chapter 8. Diferent Compositions of Capitals in
Diferent Branches of Production and
Resulting Diferences in Rates of Proft
&n te preceding part @e demonstrated, among oter tings, tat te rate o! pro!it may 8ary I rise
or !all I @ile te rate o! s%rpl%s-8al%e remains te same0 &n te present capter @e ass%me tat
te intensity o! labor exploitation, and tere!ore te rate o! s%rpl%s-8al%e and te lengt o! te
@orking-day, are te same in all te speres o! prod%ction into @ic te social labor o! a gi8en
co%ntry is di8ided0 ?dam $mit as already compreensi8ely so@n tat te n%mero%s
di!!erences in te exploitation o! labor in 8ario%s speres o! prod%ction balance one anoter by
means o! all kinds o! existing compensations, or compensations accepted as s%c on te basis o!
c%rrent preH%dice, so tat tey are merely e8anescent distinctions and are o! no moment in a st%dy
o! te general relations0 3ter di!!erences, !or instance tose in te @age scale, rest largely on te
di!!erence bet@een simple and complicated labor mentioned in te beginning o! Aook & Bp0 1*C,
and a8e noting to do @it te intensity o! exploitation in te di!!erent speres o! prod%ction,
alto%g tey render te lot o! te laborer in tose speres 8ery %neD%al0 For instance, i! te labor
o! a goldsmit is better paid tan tat o! a day-laborer, te !ormer"s s%rpl%s-labor prod%ces
proportionately more s%rpl%s-8al%e tan te latter"s0 ?nd alto%g te eD%aliEing o! @ages and
@orking-days, and tereby o! te rates o! s%rpl%s-8al%e, among di!!erent speres o! prod%ction,
and e8en among di!!erent in8estments o! capital in te same spere o! prod%ction, is cecked by
all kinds o! local obstacles, it is ne8erteless taking place more and more @it te ad8ance o!
capitalist prod%ction and te s%bordination o! all economic conditions to tis mode o! prod%ction0
5e 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! tis kind it is %s%ally al@ays ass%med tat te act%al conditions correspond to teir
conception, or, @at is te same, tat act%al conditions are represented only to te extent tat tey
are typical o! teir o@n general case0
5e di!!erence in te rates o! s%rpl%s-8al%e in di!!erent co%ntries, and conseD%ently te national
di!!erences in te degree o! exploitation o! labor, are immaterial !or o%r present analysis0 Wat
@e @ant to so@ in tis part is precisely te @ay in @ic a general rate o! pro!it takes sape in
any gi8en co%ntry0 &t is e8ident, o@e8er, tat a comparison o! te 8ario%s national rates o! pro!it
reD%ires only a collation o! te pre8io%sly st%died @it tat @ic is ere to be st%died0 First one
so%ld consider te di!!erences in te national rates o! s%rpl%s-8al%e, and ten, on te basis o!
tese gi8en rates, a comparison so%ld be made o! te di!!erences in te national rates o! pro!it0
&n so !ar as tose di!!erences are not d%e to di!!erences in te national rates o! s%rpl%s-8al%e, tey
m%st be d%e to circ%mstances in @ic te s%rpl%s-8al%e is ass%med, H%st as in te analysis o! tis
capter, to be %ni8ersally te same, i0 e0, constant0
111 ;apter 4&&&
We demonstrated in te preceding capter tat, ass%ming te rate o! s%rpl%s-8al%e to be constant,
te rate o! pro!it obtaining !or a gi8en capital may rise or !all in conseD%ence o! circ%mstances
@ic raise or lo@er te 8al%e o! one or te oter portion o! constant capital, and so a!!ect te
proportion bet@een te 8ariable and constant components o! capital0 We !%rter obser8ed tat
circ%mstances @ic prolong or red%ce te time o! t%rno8er o! an indi8id%al capital may similarly
in!l%ence te rate o! pro!it0 $ince te mass o! te pro!it is identical @it te mass o! te s%rpl%s-
8al%e, and @it te s%rpl%s-8al%e itsel!, it @as also seen tat te mass o! te pro!it I as distinct
!rom te rate o! pro!it I is not a!!ected by te a!orementioned !l%ct%ations o! 8al%e0 5ey only
modi!y te rate in @ic a gi8en s%rpl%s-8al%e, and tere!ore a pro!it o! a gi8en magnit%de,
express temsel8es# in oter @ords, tey modi!y only te relati8e magnit%de o! pro!it, i0 e0, its
magnit%de compared @it te magnit%de o! te ad8anced capital0 &nasm%c as capital @as tied %p
or released by s%c !l%ct%ations o! 8al%e, it @as not only te rate o! pro!it, b%t te pro!it itsel!,
@ic @as likely to be a!!ected in tis indirect manner0 6o@e8er, tis as ten al@ays applied
only to s%c capital as @as already in8ested, and not to ne@ in8estments0 Aesides, te increase or
red%ction o! pro!it al@ays depended on te extent to @ic te same capital co%ld, in
conseD%ence o! s%c !l%ct%ation o! 8al%e, set in motion more or less labor# in oter @ords, it
depended on te extent to @ic te same capital co%ld, @it te rate o! s%rpl%s-8al%e remaining
te same, obtain a larger or smaller amo%nt o! s%rpl%s-8al%e0 Far !rom contradicting te general
r%le, or !rom being an exception to it, tis seeming exception @as really b%t a special case in te
application o! te general r%le0
&t @as seen in te preceding part tat, te degree o! exploitation remaining constant, canges in
te 8al%e o! te component parts o! constant capital and in te time o! t%rno8er o! capital are
attended by canges in te rate o! pro!it0 5e ob8io%s concl%sion is tat te rates o! pro!it in
di!!erent speres o! prod%ction existing side by side a8e to di!!er @en, oter circ%mstances
remaining %ncanged, te time o! t%rno8er o! capitals employed in te di!!erent speres di!!ers,
or @en te 8al%e-relation o! te organic components o! tese capitals di!!ers in te 8ario%s
brances o! prod%ction0 Wat @e pre8io%sly regarded as canges occ%rring s%ccessi8ely @it one
and te same capital is no@ to be regarded as sim%ltaneo%s di!!erences among capital in8estments
existing side by side in di!!erent speres o! prod%ction0
&n tese circ%mstances @e sall a8e to analyEe: 1C te di!!erence in te organic composition o!
capitals, and <C te di!!erence in teir period o! t%rno8er0
5e premise in tis entire analysis is nat%rally tat by speaking o! te composition or t%rno8er o!
a capital in a certain line o! prod%ction @e al@ays mean te a8erage normal proportions o! capital
in8ested in tis spere, and generally te a8erage in te total capital employed in tat partic%lar
spere, and not te accidental di!!erences o! te indi8id%al capitals0
$ince it is !%rter ass%med tat te rate o! s%rpl%s-8al%e and te @orking-day are constant, and
since tis 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 tere!ore a de!inite D%antity o! materialiEed
labor0 &!, tere!ore, V1== represent te @eekly @age o! 1== laborers, indicating 1== act%al labor-
po@ers, ten n times V1== indicate te labo%r-po@ers o! n times 1== laborers, and V1==Nn tose
o! 1==Nn laborers0 5e 8ariable capital t%s ser8es ere Bas is al@ays te case @en te @age is
gi8enC as an index o! te amo%nt o! labor set in motion by a de!inite total capital0 7i!!erences in
te magnit%de o! te employed 8ariable capitals ser8e, tere!ore, as indexes o! te di!!erence in
te 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, ten V<== represent 1<,===, and V+= only 3,===
@orking-o%rs0
Ay composition o! capital @e mean, as stated in Aook &, te proportion o! its acti8e and passi8e
components, i0 e0, o! 8ariable and constant capital0 5@o proportions enter into consideration %nder
tis eading0 5ey are not eD%ally important, alto%g tey may prod%ce similar e!!ects %nder
certain circ%mstances0
11< ;apter 4&&&
5e !irst proportion rests on a tecnical basis, and m%st be regarded as gi8en at a certain stage o!
de8elopment o! te 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 tereby to cons%me prod%cti8ely, i0 e0, to set in motion, a de!inite D%antity
o! means o! prod%ction, macinery, 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 5is proportion di!!ers greatly in
di!!erent speres o! prod%ction, and !reD%ently e8en in di!!erent brances o! one and te same
ind%stry, alto%g it may by coincidence be entirely or approximately te same in entirely
separate lines o! ind%stry0
5is proportion !orms te tecnical composition o! capital and is te real basis o! its organic
composition0
6o@e8er, it is also possible tat tis !irst proportion may be te 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! te mass o! means o! prod%ction set in motion by tis labor-po@er0 For instance,
certain @ork in copper and iron may reD%ire te same ratio o! labor-po@er to mass o! means o!
prod%ction0 A%t since copper is more expensi8e tan iron, te 8al%e-relation bet@een 8ariable and
constant capital is di!!erent in eac case, and ence also te 8al%e-composition o! te t@o total
capitals0 5e di!!erence bet@een te tecnical composition and te 8al%e composition is
mani!ested in eac branc o! ind%stry in tat te 8al%e-relation o! te t@o portions o! capital may
8ary @ile te tecnical composition is constant, and te 8al%e-relation may remain te same
@ile te tecnical composition 8aries0 5e latter case @ill, o! co%rse, be possible only i! te
cange in te ratio o! te employed masses o! means o! prod%ction and labor-po@er is
compensated by a re8erse cange in teir 8al%es0
5e 8al%e-composition o! capital, inasm%c as it is determined by, and re!lects, its tecnical
composition, is called te organic composition o! capital0
&n te case o! 8ariable capital, tere!ore, @e ass%me tat it is te 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 te preceding part tat a cange in te magnit%de o! te 8al%e o!
8ariable capital migt e8ent%ally indicate noting b%t a iger or lo@er price o! te same mass o!
labor0 A%t ere, @ere te rate o! s%rpl%s-8al%e and te @orking-day are taken to be constant, and
te @ages !or a de!inite @orking period are gi8en, tis is o%t o! te D%estion0 3n te oter and, a
di!!erence in te magnit%de o! te constant capital may like@ise be an index o! a cange in te
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 te means o! prod%ction set in motion in one spere and
tose o! anoter0 Aot points o! 8ie@ m%st tere!ore be examined ere0
Finally, @e m%st take note o! te !ollo@ing essential !acts:
'et V1== be te @eekly @age o! 1== laborers0 'et te @eekly @orking-o%rs R 6=0 F%rtermore,
let te rate o! s%rpl%s-8al%e R 1==T0 &n tis case, te laborers @ork 3= o! te 6= o%rs !or
temsel8es and 3= o%rs gratis !or te capitalist0 &n !act, te V1== o! @ages represent H%st te 3=
@orking-o%rs o! 1== laborers, or altogeter 3,=== @orking-o%rs, @ile te oter 3,=== o%rs
@orked by te laborers are incorporated in te V1== o! s%rpl%s-8al%e, or in te pro!it pocketed by
te capitalist0 ?lto%g te @age o! V1== does not, tere!ore, express te 8al%e in @ic te
@eekly labor o! te 1== laborers is materialiEed, it indicates ne8erteless Bsince te lengt o! te
@orking-day and te rate o! s%rpl%s-8al%e are gi8enC tat tis capital sets in motion 1== laborers
!or 6,=== @orking-o%rs0 5e capital o! V1== indicates tis, !irst, beca%se it indicates te n%mber
o! laborers set in motion, @it V1 R 1 laborer per @eek, ence V1== R 1== laborers# and, secondly,
beca%se, since te rate o! s%rpl%s-8al%e is gi8en as 1==T, eac o! tese laborers per!orms t@ice
as m%c @ork as is contained in is @ages, so tat V1, i0 e0, is @age, @ic is te expression o!
113 ;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, alto%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 te s%m o! @ages, i0 e0, as a certain amo%nt o!
materialised labo%r, is to be disting%ised !rom its 8al%e as a mere index o! te mass o! li8ing
labo%r @ic it sets in motion0 5e latter is al@ays greater tan te labo%r @ic it incorporates,
and is, tere!ore, represented by a greater 8al%e tan tat o! te 8ariable capital0 5is greater
8al%e is determined, on te one and, by te n%mber o! labo%rers set in motion by te 8ariable
capital and, on te oter, by te D%antity o! s%rpl%s-labo%r per!ormed by tem0
&t !ollo@s !rom tis manner o! looking %pon 8ariable capital tat:
Wen a capital in8ested in prod%ction spere ? expends only 1== in 8ariable capital !or eac >==
o! total capital, lea8ing 6== !or constant capital, @ile a capital in8ested in prod%ction spere A
expends 6== !or 8ariable and only 1== !or constant capital, ten capital ? o! >== sets in motion
only 1== o! labo%r-po@er, or, in te terms o! o%r pre8io%s ass%mption, 1== @eeks o! labo%r, or
6,=== o%rs o! li8ing labo%r, @ile te same amo%nt o! capital A @ill set in motion 6== @eeks o!
labo%r, or 36,=== o%rs o! li8ing labo%r0 5e capital in ? @o%ld ten appropriate only += @eeks o!
labo%r, or 3,=== o%rs o! s%rpl%s-labo%r, @ile te same amo%nt o! capital in A @o%ld appropriate
3== @eeks o! labo%r, or 18,=== o%rs0 4ariable capital is not only te index o! te labo%r
embodied in it0 Wen te rate o! s%rpl%s-8al%e is kno@n it is also an index o! te amo%nt o!
labo%r set in motion o8er and abo8e tat embodied in itsel!, i0 e0, o! s%rpl%s-labo%r0 ?ss%ming te
same intensity o! exploitation, te pro!it in te !irst case @o%ld be 1==N>== R 1N> R 12 <N>T, and
in te second case, 6==N>== R 6N> R 8+ +N>T, or a six-!old rate o! pro!it0 &n tis case, te pro!it
itsel! @o%ld act%ally be six times as great, 6== in A as against 1== in ?, beca%se te same capital
set in motion six times as m%c li8ing labo%r, @ic at te 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! te capital in8ested in ? @ere not >== b%t V>,===, @ile tat in8ested in A @ere only V>==,
and te organic composition o! bot @ere to remain te same, ten te capital in ? @o%ld employ
V1,=== o! te V>,=== as 8ariable capital, tat 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! te 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%s-
labo%r, as te capital in A, and @o%ld prod%ce only 1N6 as m%c pro!it0 &! @e consider te rate o!
pro!it, ten 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, te rates o! pro!it di!!er beca%se, o@ing to te di!!erent masses
o! li8ing labo%r set in motion, te masses o! s%rpl%s-8al%e, and t%s o! pro!it, di!!er, alto%g te
rates o! s%rpl%s-8al%e are te same0
We get practically te same res%lt i! te tecnical conditions are te same in bot speres o!
prod%ction, b%t te 8al%e o! te elements o! te employed constant capital is greater or smaller in
te one tan in te oter0 'et %s ass%me tat bot in8est V1== as 8ariable capital and tere!ore
employ 1== labo%rers per @eek to set in motion te same D%antity o! macinery and ra@
materials0 A%t let te latter be more expensi8e in A tan in ?0 For instance, let te V1== o!
8ariable capital set in motion V<== o! constant capital in ?, and V2== in A0 Wit te same rate o!
s%rpl%s-8al%e, o! 1==T, te s%rpl%s-8al%e prod%ced is in eiter case eD%al to V1==0 6ence, te
pro!it is also eD%al to V1== in bot0 A%t te 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! te
total capital in eiter case, @e !ind tat 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 tan ?0 5e di!!erence in te rates o! pro!it
t%s resol8es itsel! once more, in tis case, into a di!!erence o! te masses o! pro!it, beca%se o!
te masses o! s%rpl%s-8al%e, prod%ced by eac 1== o! in8ested capital0
5e di!!erence bet@een tis second example and te !irst is H%st tis: 5e eD%alisation bet@een ?
and A in te second case @o%ld reD%ire only a cange in te 8al%e o! te constant capital o! eiter
112 ;apter 4&&&
? or A, pro8ided te tecnical basis remained te same0 A%t in te !irst case te tecnical
composition itsel! is di!!erent in te t@o speres o! prod%ction and @o%ld a8e to be completely
canged to acie8e an eD%alisation0
5e di!!erent organic composition o! 8ario%s capitals is t%s independent o! teir 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 te same in tis
case, capitals o! te same magnit%de operating !or te same @orking-time and @it te same
degree o! exploitation may prod%ce 8ery m%c di!!erent amo%nts o! pro!it, beca%se o! s%rpl%s-
8al%e, !or te reason tat a di!!erence in te organic composition o! capital in di!!erent speres o!
prod%ction implies a di!!erence in teir 8ariable part, t%s a di!!erence in te D%antities o! li8ing
labo%r set in motion by tem, and tere!ore also a di!!erence in te D%antities o! s%rpl%s-labo%r
appropriated by tem0 ?nd tis s%rpl%s-labo%r is te s%bstance o! s%rpl%s-8al%e, and t%s o!
pro!it0 &n di!!erent speres o! prod%ction eD%al portions o! te total capital comprise %neD%al
so%rces o! s%rpl%s-8al%e, and te sole so%rce o! s%rpl%s-8al%e is li8ing labo%r0 ?ss%ming te same
degree o! labo%r exploitation, te mass o! labo%r set in motion by a capital o! 1==, and
conseD%ently te mass o! s%rpl%s-labo%r appropriated by it, depend on te magnit%de o! its
8ariable component0 &! a capital, consisting in per cent o! *=cU 1=8, prod%ced as m%c s%rpl%s-
8al%e, or pro!it, at te same degree o! exploitation as a capital consisting o! 1=c U *=8, it @o%ld be
as plain as day tat te s%rpl%s-8al%e, and t%s 8al%e in general, m%st a8e an entirely di!!erent
so%rce tan labo%r, and tat political economy @o%ld ten be depri8ed o! e8ery rational basis0 &!
@e are to ass%me all te time tat V1 stands !or te @eekly @age o! a labo%rer @orking 6= o%rs,
and tat te rate o! s%rpl%s-8al%e is 1==T, ten it is e8ident tat te total 8al%e prod%ct o! one
labo%rer in a @eek, is V<0 5en labo%rers @o%ld ten prod%ce no more tan V<=0 ?nd since V1= o!
te V<= replace te @ages, te ten labo%rers cannot prod%ce more s%rpl%s-8al%e tan V1=0 3n te
oter 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 5e rate o! pro!it in te !irst case @o%ld t%s be 1=T, and in te
oter *=T 0 &! tis @ere not so, ten 8al%e and s%rpl%s-8al%e @o%ld be someting else tan
materialised labo%r0 $ince capitals in di!!erent speres 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
tere!ore pro!its, it !ollo@s tat te rate o! pro!it, @ic consists precisely o! te ratio o! s%rpl%s-
8al%e to total capital in per cent, m%st also di!!er0
-o@, i! capitals in di!!erent speres 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! teir di!!erent organic composition, ten it
!ollo@s tat te pro!its o! %neD%al capitals in di!!erent speres o! prod%ction cannot be
proportional to teir respecti8e magnit%des, or tat pro!its in di!!erent speres o! prod%ction are
not proportional to te magnit%de o! te respecti8e capitals in8ested in tem0 For i! pro!its @ere
to gro@ pro rata to te magnit%de o! in8ested capital, it @o%ld mean tat in per cent te pro!its
@o%ld be te same, so tat in di!!erent speres o! prod%ction capitals o! eD%al magnit%de @o%ld
a8e eD%al rates o! pro!it, in spite o! teir di!!erent organic composition0 &t is only in te same
spere o! prod%ction, @ere @e a8e a gi8en organic composition o! capital, or in di!!erent
speres @it te same organic composition o! capital, tat te amo%nts o! pro!its are directly
proportional to te amo%nts o! in8ested capitals0 5o say tat te pro!its o! %neD%al capitals are
proportional to teir magnit%des @o%ld only mean tat capitals o! eD%al magnit%de yield eD%al
pro!its, or tat te rate o! pro!it is te same !or all capitals, @ate8er teir magnit%de and organic
composition0
5ese statements old good on te ass%mption tat te commodities are sold at teir 8al%es0 5e
8al%e o! a commodity is eD%al to te 8al%e o! te constant capital contained in it, pl%s te 8al%e o!
te 8ariable capital reprod%ced in it, pl%s te increment I te s%rpl%s-8al%e prod%ced I o! tis
11+ ;apter 4&&&
8ariable capital0 ?t te same rate o! s%rpl%s-8al%e, its D%antity e8idently depends on te D%antity
o! te 8ariable capital0 5e 8al%e o! te prod%ct o! an indi8id%al capital o! 1== is, in one case, *=c
U 1=8 U 1=s R 11=# and in te oter, 1=c U *=8 U *=s R l*=0 &! te commodities go at teir 8al%es,
te !irst prod%ct is sold at 11=, o! @ic 1= represent s%rpl%s-8al%e, or %npaid labo%r, and te
second at 1*=, o! @ic *= represent s%rpl%s-8al%e, or %npaid labo%r0
5is is partic%larly important in comparing rates o! pro!it in di!!erent co%ntries0 'et %s ass%me
tat te rate o! s%rpl%s-8al%e in one E%ropean co%ntry is 1==T, so tat te labo%rer @orks al! o!
te @orking-day !or imsel! and te oter al! !or is employer0 'et %s !%rter ass%me tat te
rate o! pro!it in an ?sian co%ntry is <+T, so tat te labo%rer @orks 2N+ o! te @orking-day !or
imsel!, and 1N+ !or is employer0 'et 82c U l68 be te composition o! te national capital in te
E%ropean co%ntry, and 16c U 828 in te ?sian co%ntry, @ere little macinery, 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 5en @e a8e te !ollo@ing calc%lation:
&n te E%ropean co%ntry te 8al%e o! te prod%ct R 82c U 168 U 16s R 116# rate o! pro!it R 16N1== R
16T0
&n te ?sian co%ntry te 8al%e o! te prod%ct R 16c U 828 U <1s R 1<1# rate o! pro!it R <1N1== R
<1T0
5e rate o! pro!it in te ?sian co%ntry is t%s more tan <+T iger tan in te E%ropean co%ntry,
alto%g te rate o! s%rpl%s-8al%e in te !ormer is one-!o%rt tat o! te latter0 Men like ;arey,
Aastiat, and tutti 3uanti, @o%ld arri8e at te 8ery opposite concl%sion0
Ay te @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 tis capter @e compare %neD%al rates o! pro!it deri8ed !rom te same rate
o! s%rpl%s-8al%e0
?side !rom di!!erences in te organic composition o! capitals, and tere!ore aside !rom te
di!!erent masses o! labo%r I and conseD%ently, oter circ%mstances remaining te same, !rom
di!!erent masses o! s%rpl%s-labo%r set in motion by capitals o! te same magnit%de in di!!erent
speres o! prod%ction, tere is yet anoter so%rce o! ineD%ality in rates o! pro!it0 5is is te
di!!erent period o! t%rno8er o! capital in di!!erent speres o! prod%ction0 We a8e seen in ;apter
&4 tat, oter conditions being eD%al, te rates o! pro!it o! capitals o! te same organic
composition are in8ersely proportional to teir periods o! t%rno8er0 We a8e also seen tat te
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 5e di!!erence in te periods o! t%rno8er is tere!ore anoter reason @y
capitals o! eD%al magnit%de in di!!erent speres o! prod%ction do not prod%ce eD%al pro!its in
eD%al periods, and @y, conseD%ently, te rates o! pro!it in tese di!!erent speres di!!er0
?s !ar as te ratio o! te !ixed and circ%lating capital in te composition o! capitals is concerned,
o@e8er, it does not in itsel! a!!ect te rate o! pro!it in te least0 &t can a!!ect te rate o! pro!it
only i! in one case, tis di!!erence in composition coincides @it a di!!erent ratio o! te 8ariable
and constant parts, so tat te di!!erence in te rate o! pro!it is d%e to tis latter di!!erence, and
not to te di!!erent ratio o! !ixed and circ%lating capital# and, in te oter case, i! te di!!erence in
te ratio o! te !ixed and circ%lating parts o! capital is responsible !or a di!!erence in te 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, tis @ill nat%rally al@ays in!l%ence te period o! t%rno8er and
ca%se di!!erences in it0 A%t tis does not imply tat te period o! t%rno8er, in @ic te same
capitals realise certain pro!its, is di!!erent0 For instance, ? may contin%ally a8e to con8ert te
greater part o! its prod%ct into ra@ materials, etc0, @ile A may %se te same macinery, 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! teir capital engaged, te one in ra@ materials, i0 e0, in circ%lating capital,
and te oter in macinery, etc0, or in !ixed capital0 ? contin%ally con8erts a portion o! its capital
!rom te !orm o! commodities into tat o! money, and te latter again into te !orm o! ra@
116 ;apter 4&&&
material, @ile A employs a portion o! its capital !or a longer time as an instr%ment o! labo%r
@ito%t any s%c con8ersions0 &! bot o! tem employ te same amo%nt o! labo%r, tey @ill
indeed sell D%antities o! prod%cts o! %neD%al 8al%e in te co%rse o! te year, b%t bot D%antities o!
prod%cts @ill contain eD%al amo%nts o! s%rpl%s-8al%e, and teir rates o! pro!it, calc%lated on te
entire capital in8ested, @ill be te same, alto%g teir composition o! !ixed and circ%lating
capital, and teir periods o! t%rno8er, are di!!erent0 Aot capitals realise eD%al pro!its in eD%al
periods, alto%g teir periods o! t%rno8er are di!!erent0
1
5e di!!erence in te period o! t%rno8er
is in itsel! o! no importance, except so !ar as it a!!ects te mass o! s%rpl%s-labo%r appropriated and
realised by te same capital in a gi8en time0 &!, tere!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 tat i! tere is any s%c di!!erence in te 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 rater to te !act
tat tis di!!erent ratio indicates an ineD%ality in te periods o! t%rno8er a!!ecting te rate o!
pro!it0
&t !ollo@s, tere!ore, tat te di!!erent composition o! constant capital in respect to its !ixed and
circ%lating portions in 8ario%s brances o! prod%ction as in itsel! no bearing on te rate o! pro!it,
since it is te ratio o! 8ariable to constant capital @ic decides tis D%estion, @ile te 8al%e o!
te constant capital, and tere!ore also its magnit%de in relation to te 8ariable is entirely
%nrelated to te !ixed or circ%lating nat%re o! its components0 .et it may be !o%nd I and tis o!ten
leads to incorrect concl%sions I tat @ere8er !ixed capital is considerably ad8anced tis b%t
expresses te !act tat prod%ction is on a large scale, so tat constant capital greatly o%t@eigs te
8ariable, or tat te li8ing labo%r-po@er it employs is small compared to te mass o! te means o!
prod%ction @ic it operates0
We a8e t%s demonstrated tat di!!erent lines o! ind%stry a8e di!!erent rates o! pro!it, @ic
correspond to di!!erences in te organic composition o! teir capitals and, @itin indicated limits,
also to teir di!!erent periods o! t%rno8er# gi8en te same time o! t%rno8er, te la@ Bas a general
tendencyC tat pro!its are related to one anoter as te magnit%des o! te capitals, and tat,
conseD%ently, capitals o! eD%al magnit%de yield eD%al pro!its in eD%al periods, applies only to
capitals o! te same organic composition, e8en @it te same rate o! s%rpl%s-8al%e0 5ese
statements old good on te ass%mption @ic as been te basis o! all o%r analyses so !ar,
namely tat te commodities are sold at teir 8al%es0 5ere is no do%bt, on te oter and, tat
aside !rom %nessential, incidental and m%t%ally compensating distinctions, di!!erences in te
a8erage rate o! pro!it in te 8ario%s brances o! ind%stry do not exist in reality, and co%ld not
exist @ito%t abolising te entire system o! capitalist prod%ction0 &t @o%ld seem, tere!ore, tat
ere te teory o! 8al%e is incompatible @it te act%al process, incompatible @it te real
penomena o! prod%ction, and tat !or tis reason any attempt to %nderstand tese penomena
so%ld be gi8en %p0
&t !ollo@s !rom te !irst part o! tis 8ol%me tat te cost-prices o! prod%cts in di!!erent speres o!
prod%ction are eD%al i! eD%al portions o! capital a8e been ad8anced !or teir prod%ction,
o@e8er di!!erent te organic composition o! s%c capitals0 5e distinction bet@een 8ariable and
constant capital escapes te capitalist in te cost-price0 ? commodity !or @ose prod%ction e
m%st ad8ance V1== costs im H%st as m%c, @eter e in8ests *=c U 1=8, or 1=c U *=80 &t costs im
V1== in eiter case I no more and no less0 5e cost-prices are te same !or eD%al capitals in
di!!erent speres, no matter o@ m%c te prod%ced 8al%es and s%rpl%s-8al%es may di!!er0 5e
eD%ality o! cost-prices is te basis !or competition among in8ested capitals, @ereby an a8erage
pro!it is bro%gt abo%t0
Chapter 9. Formation of a General Rate of Proft
(Average Rate of Proft) and Transformation of
the Values of Commodities into Prices of
Production
5e organic composition o! capital depends at any gi8en time on t@o circ%mstances: !irst, on te
tecnical relation o! labo%r po@er employed to te mass o! te means o! prod%ction employed#
secondly, on te price o! tese means o! prod%ction0 5is composition, as @e a8e seen, m%st be
examined on te basis o! percentage ratios0 We express te organic composition o! a certain
capital consisting 2N+ o! constant and 1N+ o! 8ariable capital, by te !orm%la 8=c U <=80 &t is
!%rtermore ass%med in tis comparison tat te rate o! s%rpl%s-8al%e is %ncangeable0 'et it be
any rate picked at random# say, 1==T0 5e capital o! 8=c U <=8 ten prod%ces a s%rpl%s-8al%e o!
<=s, and tis yields a rate o! pro!it o! <=T on te total capital0 5e magnit%de o! te act%al 8al%e
o! its prod%ct depends on te magnit%de o! te !ixed part o! te constant capital, and on te
portion @ic passes !rom it tro%g @ear and tear into te prod%ct0 A%t since tis circ%mstance
as absol%tely no bearing on te rate o! pro!it, and ence, in te present analysis, @e sall
ass%me, !or te sake o! simplicity, tat te constant capital is e8ery@ere %ni!ormly and entirely
trans!erred to te ann%al prod%ct o! te capitals0 &t is !%rter ass%med tat te capitals in te
di!!erent speres o! prod%ction ann%ally realise te same D%antities o! s%rpl%s-8al%e proportionate
to te magnit%de o! teir 8ariable parts0 For te present, tere!ore, @e disregard te di!!erence
@ic may be prod%ced in tis respect by 8ariations in te d%ration o! t%rno8ers0 5is point @ill
be disc%ssed later0
'et %s take !i8e di!!erent speres o! prod%ction, and let te capital in eac a8e a di!!erent organic
composition as !ollo@s:
;apitals )ate o!
$%rpl%s-
4al%e
$%rpl%s-
4al%e
4al%e
o!
,rod%ct
)ate
o!
,ro!it
&0 8=c U
<=8
1==T <= 1<= <=T
&&0 >=c U
3=8
1==T 3= 13= 3=T
&&&0 6=c
U 2=8
1==T 2= 12= 2=T
&40 8+c
U 1+8
1==T 1+ 11+ 1+T
118 ;apter &J
40 *+c U
+8
1==T + 1=+ +T
6ere, in di!!erent speres o! prod%ction @it te same degree o! exploitation, @e !ind
considerably di!!erent rates o! pro!it corresponding to te di!!erent organic composition o! tese
capitals0
5e s%m total o! te capitals in8ested in tese !i8e speres o! prod%ction R +==# te s%m total o!
te s%rpl%s-8al%e prod%ced by tem R 11=# te aggregate 8al%e o! te commodities prod%ced by
tem R 61=0 &! @e consider te +== 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 sops, and in @ic
te a8erage ratio !or te !actory as a @ole as still to be calc%latedC, te mean composition o!
tis capital o! +== @o%ld R 3*=c U 11=8, or, in per cent, R >8c U <<80 $o%ld eac o! te capitals o!
1== be regarded as 1N+ o! te total capital, its composition @o%ld eD%al tis a8erage o! >8c U <<8#
!or e8ery 1== tere @o%ld be an a8erage s%rpl%s-8al%e o! <<# t%s, te a8erage rate o! pro!it
@o%ld R <<T, and, !inally, te price o! e8ery !i!t o! te total prod%ct prod%ced by te +== @o%ld
R 1<<0 5e prod%ct o! eac !i!t o! te ad8anced total capital @o%ld ten a8e to be sold at 1<<0
A%t to a8oid entirely erroneo%s concl%sions it m%st not be ass%med tat all cost-prices R 1==0
Wit 8=c U <=8 and a rate o! s%rpl%s-8al%e R 1==T, te total 8al%e o! commodities prod%ced by
capital & R 1== @o%ld be 8=c U <=8 U <=s R 1<=, pro8ided te entire constant capital @ent into te
ann%al prod%ct0 -o@, tis may %nder certain circ%mstances be te case in some speres o!
prod%ction0 A%t ardly in cases @ere te proportion o! c : 8 R 2 : 10 We m%st, tere!ore,
remember in comparing te 8al%es prod%ced by eac 1== o! te di!!erent capitals, tat tey @ill
di!!er in accordance @it te di!!erent composition o! c as to its !ixed and circ%lating parts, and
tat, in t%rn, te !ixed portions o! eac o! te di!!erent capitals depreciate slo@ly or rapidly as te
case may be, t%s trans!erring %neD%al D%antities o! teir 8al%e to te prod%ct in eD%al periods o!
time0 A%t tis is immaterial to te rate o! pro!it0 -o matter @eter te 8=c gi8e %p a 8al%e o! 8=,
or +=, or +, to te ann%al prod%ct, and te 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 tese cases te red%ndance o! te prod%ct"s
8al%e o8er its cost-price R <=, and in calc%lating te rate o! pro!it tese <= are related to te
capital o! 1== in all o! tem0 5e rate o! pro!it o! capital &, tere!ore, is <=T in e8ery case0 5o
make tis still plainer, @e let di!!erent portions o! constant capital go into te 8al%e o! te prod%ct
o! te same !i8e capitals in te !ollo@ing table:
;apitals )ate o!
$%rpl%s-
4al%e
$%rpl%s-
4al%e
)ate
o!
,ro!it
(sed
%p c
4al%e o!
commodities
;ost-
,rice

&0 8=c U
<=8
1==T <= <=T += *= >=
&&0 >=c U
3=8
1==T 3= 3=T +1 111 81
&&&0 6=c
U 2=8
1==T 2= 2=T +1 131 *1
&40 8+c 1==T 1+ 1+T 2= >= ++
11* ;apter &J
U 1+8
40 *+c U
+8
1==T + +T 1= <= 1+
3*=c U
11=8
I 11= 11=T I I I 5otal
>8c U
<<8
I << <<T I I I ?8erage
&! @e no@ again consider capitals & to 4 as a single total capital, @e sall see tat, in tis case as
@ell, te composition o! te s%ms o! tese !i8e capitals R +== R 3*=c U 11=8, so tat @e get te
same a8erage composition R >8c U <<8, and, similarly, te a8erage s%rpl%s-8al%e remains <<0 &! @e
di8ide tis s%rpl%s-8al%e %ni!ormly among capitals & to 4, @e get te !ollo@ing commodity-
prices:
;apitals $%rpl%s-
4al%e
4al%e o!
;ommodities
;ost-,rice o!
;ommodities
,rice o!
;ommodities
)ate
o!
,ro!it
7e8iation
o!
,rice !rom
4al%e
&0 8=c U
<=8
<= *= >= *< <<T U<
&&0 >=c U
3=8
3= 111 81 1=3 <<T -8
&&&0 6=c
U 2=8
2= 131 *1 113 <<T -18
&40 8+c
U 1+8
1+ >= ++ >> <<T U>
40 *+c U
+8
+ <= 1+ 3> <<T U1>
5aken togeter, te commodities are sold at < U > U 1> R <6 abo8e, and 8 U 18 R <6 belo@ teir
8al%e, so tat te de8iations o! price !rom 8al%e balance o%t one anoter tro%g te %ni!orm
distrib%tion o! s%rpl%s-8al%e, or tro%g addition o! te a8erage pro!it o! << per 1== %nits o!
ad8anced capital to te respecti8e cost-prices o! te commodities & to 40 3ne portion o! te
commodities is sold abo8e its 8al%e in te same proportion in @ic te oter is sold belo@ it0
?nd it is only te sale o! te commodities at s%c prices tat enables te rate o! pro!it !or capitals
& to 4 to be %ni!ormly <<T, regardless o! teir di!!erent organic composition0 5e prices @ic
obtain as te a8erage o! te 8ario%s rates o! pro!it in te di!!erent speres o! prod%ction added to
te cost-prices o! te di!!erent speres o! prod%ction, constit%te te prices o! prod%ction0 5ey
a8e as teir prereD%isite te existence o! a general rate o! pro!it, and tis, again, pres%pposes tat
te rates o! pro!it in e8ery indi8id%al spere o! prod%ction taken by itsel! a8e pre8io%sly been
red%ced to H%st as many a8erage rates0 5ese partic%lar rates o! pro!it R sNc in e8ery spere o!
1<= ;apter &J
prod%ction, and m%st, as occ%rs in ,art & o! tis book, be ded%ced o%t o! te 8al%es o! te
commodities0 Wito%t s%c ded%ction te general rate o! pro!it Band conseD%ently te price o!
prod%ction o! commoditiesC remains a 8ag%e and senseless conception0 6ence, te price o!
prod%ction o! a commodity is eD%al to its cost-price pl%s te pro!it, allotted to it in per cent, in
accordance @it te general rate o! pro!it, or, in oter @ords, to its cost-price pl%s te a8erage
pro!it0
3@ing to te di!!erent organic compositions o! capitals in8ested in di!!erent lines o! prod%ction,
and, ence, o@ing to te circ%mstance tat I depending on te di!!erent percentage @ic te
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, tey 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, te rates o!
pro!it pre8ailing in te 8ario%s brances o! prod%ction are originally 8ery di!!erent0 5ese
di!!erent rates o! pro!it are eD%aliEed by competition to a single general rate o! pro!it, @ic is te
a8erage o! all tese di!!erent rates o! pro!it0 5e pro!it accr%ing in accordance @it tis general
rate o! pro!it to any capital o! a gi8en magnit%de, @ate8er its organic composition, is called te
a8erage pro!it0 5e price o! a commodity, @ic is eD%al to its cost-price pl%s te sare o! te
ann%al a8erage pro!it on te total capital in8ested Bnot merely cons%medC in its prod%ction tat
!alls to it in accordance @it te 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! tis @ear o%t d%ring one
t%rno8er o! te circ%lating capital o! 2==0 'et te a8erage pro!it !or te period o! t%rno8er be
1=T0 &n tat case te cost-price o! te prod%ct created d%ring tis 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, alto%g in selling teir commodities te capitalists o! te 8ario%s speres o! prod%ction
reco8er te 8al%e o! te capital cons%med in teir prod%ction, tey do not sec%re te s%rpl%s-
8al%e, and conseD%ently te pro!it, created in teir o@n spere by te prod%ction o! tese
commodities0 Wat tey sec%re is only as m%c s%rpl%s-8al%e, and ence pro!it, as !alls, @en
%ni!ormly distrib%ted, to te sare o! e8ery aliD%ot part o! te total social capital !rom te total
social s%rpl%s-8al%e, or pro!it, prod%ced in a gi8en time by te social capital in all speres o!
prod%ction0 E8ery 1== o! an in8ested capital, @ate8er its composition, dra@s as m%c pro!it in a
year, or any oter period o! time, as !alls to te sare o! e8ery 1==, te -t part o! te total
capital, d%ring te same period0 $o !ar as pro!its are concerned, te 8ario%s capitalists are H%st so
many stockolders in a stock company in @ic te sares o! pro!it are %ni!ormly di8ided per
1==, so tat pro!its di!!er in te case o! te indi8id%al capitalists only in accordance @it te
amo%nt o! capital in8ested by eac in te aggregate enterprise, i0 e0, according to is in8estment
in social prod%ction as a @ole, according to te n%mber o! is sares0 5ere!ore, te portion o!
te price o! commodities @ic replaces te elements o! capital cons%med in te prod%ction o!
tese commodities, te portion, tere!ore, @ic @ill a8e to be %sed to b%y back tese cons%med
capital-8al%es, i0 e0, teir cost-price, depends entirely on te o%tlay o! capital @itin te respecti8e
speres o! prod%ction0 A%t te oter element o! te price o! commodities, te pro!it added to tis
cost-price, does not depend on te amo%nt o! pro!it prod%ced in a gi8en spere o! prod%ction by a
gi8en capital in a gi8en period o! time0 &t depends on te mass o! pro!it @ic !alls as an a8erage
!or any gi8en period to eac indi8id%al capital as an aliD%ot part o! te total social capital in8ested
in social prod%ction0
Wen a capitalist sells is commodities at teir price o! prod%ction, tere!ore, e reco8ers money
in proportion to te 8al%e o! te capital cons%med in teir prod%ction and sec%res pro!it in
proportion to tis ad8anced capital as te aliD%ot part in te total social capital0 6is cost-prices are
speci!ic0 A%t te pro!it added to tem is independent o! is partic%lar spere o! prod%ction, being
a simple a8erage per 1== %nits o! in8ested capital0
1<1 ;apter &J
'et %s ass%me tat te !i8e di!!erent in8estments & to 4 o! te !oregoing ill%stration belong to one
man0 5e D%antity o! 8ariable and constant capital cons%med per 1== o! te in8ested capital in
eac o! te departments & to 4 in te prod%ction o! commodities & to 4 @o%ld, needless to say,
make %p a part o! teir price, since at least tis price is reD%ired to reco8er te ad8anced and
cons%med portions o! te capital0 5ese cost-prices @o%ld tere!ore be di!!erent !or eac class o!
te commodities & to 4, and @o%ld as s%c be set di!!erently by te o@ner0 A%t as regards te
di!!erent D%antities o! s%rpl%s-8al%e, or pro!it, prod%ced by & to 4, tey migt easily be regarded
by te capitalist as pro!it on is ad8anced aggregate capital, so tat eac 1== %nits @o%ld get teir
de!inite aliD%ot part0 6ence, te cost-prices o! te commodities prod%ced in te 8ario%s
departments & to 4 @o%ld be di!!erent# b%t tat portion o! teir selling price deri8ed !rom te
pro!it added per 1== capital @o%ld be te same !or all tese commodities0 5e aggregate price o!
te commodities & to 4 @o%ld tere!ore eD%al teir aggregate 8al%e, i0 e0, te s%m o! te cost-
prices & to 4 pl%s te s%m o! te s%rpl%s-8al%es, or pro!its, prod%ced in & to 40 &t @o%ld ence
act%ally be te money-expression o! te total D%antity o! past and ne@ly applied labo%r
incorporated in commodities & to 40 ?nd in te same @ay te s%m o! te prices o! prod%ction o!
all commodities prod%ced in society I te totality o! all brances o! prod%ction I is eD%al to te
s%m o! teir 8al%es0
5is statement seems to con!lict @it te !act tat %nder capitalist prod%ction te elements o!
prod%cti8e capital are, as a r%le, bo%gt on te market, and tat !or tis reason teir prices incl%de
pro!it @ic as already been realised, ence, incl%de te price o! prod%ction o! te respecti8e
branc o! ind%stry togeter @it te pro!it contained in it, so tat te pro!it o! one branc o!
ind%stry goes into te cost-price o! anoter0 A%t i! @e place te s%m o! te cost-prices o! te
commodities o! an entire co%ntry on one side, and te s%m o! its s%rpl%s-8al%es, or pro!its, on te
oter, te calc%lation m%st e8idently be rigt0 For instance, take a certain commodity ?0 &ts cost-
price may contain te pro!its o! A, ;, 7, etc0, H%st as te cost-prices o! A, ;, 7, etc0, may contain
te pro!its o! ?0 -o@, as @e make o%r calc%lation te pro!it o! ? @ill not be incl%ded in its cost-
price, nor @ill te pro!its o! A, ;, 7, etc0, be incl%ded in teirs0 -obody e8er incl%des is o@n
pro!it in is cost-price0 &! tere are, tere!ore, n speres o! prod%ction, and i! eac makes a pro!it
amo%nting to p, ten teir aggregate cost-price R k - np0 ;onsidering te calc%lation as a @ole
@e see tat since te pro!its o! one spere o! prod%ction pass into te cost-price o! anoter, tey
are tere!ore incl%ded in te calc%lation as constit%ents o! te total price o! te end-prod%ct, and
so cannot appear a second time on te pro!it side0 &! any do appear on tis side, o@e8er, ten
only beca%se te commodity in D%estion is itsel! an %ltimate prod%ct, @ose price o! prod%ction
does not pass into te cost-price o! some oter commodity0
&! te cost-price o! a commodity incl%des a s%m R p, @ic stands !or te pro!its o! te prod%cers
o! te means o! prod%ction, and i! a pro!it R p1 is added to tis cost-price, te aggregate pro!it , R
p U p10 5e aggregate cost-price o! te commodity, considered @ito%t te pro!it portions, is ten
its o@n cost-price min%s ,0 'et tis cost-price be k0 5en, ob8io%sly, k U p R k U p U p10 &n dealing
@it s%rpl%s-8al%es, @e a8e seen in Aook & tat te prod%ct o! e8ery capital may be so treated,
as to%g a part o! it replaces only capital, @ile te oter part represents only s%rpl%s-8al%e0 &n
applying tis approac to te aggregate prod%ct o! society, @e m%st make some recti!ications0
'ooking %pon society as a @ole, te pro!it contained in, say, te price o! !lax cannot appear
t@ice I not bot as a portion o! te linen price and as te pro!it o! te !lax0
5ere 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 te 8al%e o! te commodities, @eter
te labo%r contained in tem is paid or %npaid0 5is merely so@s tat A pays !or ?"s s%rpl%s-
8al%e0 ?"s s%rpl%s-8al%e cannot be entered t@ice in te total calc%lation0
A%t te di!!erence is tis: ?side !rom te !act tat te price o! a partic%lar prod%ct, let %s say tat
o! capital A, di!!ers !rom its 8al%e beca%se te s%rpl%s-8al%e realised in A may be greater or
smaller tan te pro!it added to te price o! te prod%cts o! A, te same circ%mstance applies also
1<< ;apter &J
to tose commodities @ic !orm te constant part o! capital A, and indirectly also its 8ariable
part, as te labo%rers" necessities o! li!e0 $o !ar as te constant portion is concerned, it is itsel!
eD%al to te cost-price pl%s te s%rpl%s-8al%e, ere tere!ore eD%al to cost-price pl%s pro!it, and
tis pro!it may again be greater or smaller tan te s%rpl%s-8al%e !or @ic it stands0 ?s !or te
8ariable capital, te a8erage daily @age is indeed al@ays eD%al to te 8al%e prod%ced in te
n%mber o! o%rs te labo%rer m%st @ork to prod%ce te necessities o! li!e0 A%t tis n%mber o!
o%rs is in its t%rn obsc%red by te de8iation o! te prices o! prod%ction o! te necessities o! li!e
!rom teir 8al%es0 6o@e8er, tis al@ays resol8es itsel! to one commodity recei8ing too little o!
te s%rpl%s-8al%e @ile anoter recei8es too m%c, so tat te de8iations !rom te 8al%e @ic
are embodied in te prices o! prod%ction compensate one anoter0 (nder capitalist prod%ction, te
general la@ acts as te pre8ailing tendency only in a 8ery complicated and approximate manner,
as a ne8er ascertainable a8erage o! ceaseless !l%ct%ations0
$ince te general rate o! pro!it is !ormed by taking te a8erage o! te 8ario%s rates o! pro!it !or
eac 1== o! capital in8ested in a de!inite period, e0g0, a year, it !ollo@s tat in it te di!!erence
bro%gt abo%t by di!!erent periods o! t%rno8er o! di!!erent capitals is also e!!aced0 A%t tese
di!!erences a8e a decisi8e bearing on te di!!erent rates o! pro!it in te 8ario%s speres o!
prod%ction @ose a8erage !orms te general rate o! pro!it0
&n te preceding ill%stration concerning te !ormation o! te a8erage rate o! pro!it @e ass%med
eac capital in eac spere o! prod%ction R 1==, and @e did so to so@ te di!!erence in te rates
o! pro!it in per cent, and t%s also te di!!erence in te 8al%es o! commodities prod%ced by eD%al
amo%nts o! capital0 A%t it goes @ito%t saying tat te act%al amo%nts o! s%rpl%s-8al%e prod%ced
in eac spere o! prod%ction depend on te magnit%de o! te in8ested capitals, since te
composition o! capital is gi8en in eac spere o! prod%ction0 .et te act%al rate o! pro!it in any
partic%lar spere o! prod%ction is not a!!ected by te !act tat te capital in8ested is 1==, or m
times 1==, or xm times 1==0 5e rate o! pro!it remains 1=T, @eter te total pro!it is 1=:1==, or
1,===:1=,===0
6o@e8er, since te rates o! pro!it di!!er in te 8ario%s speres o! prod%ction, @it 8ery m%c
di!!erent D%antities o! s%rpl%s-8al%e, or pro!it, being prod%ced in tem, depending on te
proportion o! te 8ariable to te total capital, it is e8ident tat te a8erage pro!it per 1== o! te
social capital, and ence te a8erage, or general, rate o! pro!it, @ill di!!er considerably in
accordance @it te respecti8e magnit%des o! te capitals in8ested in te 8ario%s speres0 'et %s
take !o%r capitals ?, A, ;, 70 'et te rate o! s%rpl%s-8al%e !or all R 1==T0 'et te 8ariable capital
!or eac 1== o! te total be <+ in ?, 2= in A, 1+ in ;, and 1= in 70 5en eac 1== o! te 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 5is
@o%ld total *=, and i! tese !o%r capitals are o! te same magnit%de, te a8erage rate o! pro!it
@o%ld ten be *=N2 or <<ZT0
$%ppose, o@e8er, te total capitals are as !ollo@s: ? R <==, A R 3==, ; R 1,===, 7 R 2,===0 5e
pro!its prod%ced @o%ld ten respecti8ely R +=, 1<=, 1+=, and 2==0 5is makes a pro!it o! ><=, and
an a8erage rate o! pro!it o! 13 1N11T !or +,+==, te s%m o! te !o%r capitals0
5e masses o! te total 8al%e prod%ced di!!er in accordance @it te magnit%des o! te total
capitals in8ested in ?, A, ;, 7, respecti8ely0 5e !ormation o! te a8erage rate o! pro!it is,
tere!ore, not merely a matter o! obtaining te simple a8erage o! te di!!erent rates o! pro!it in te
8ario%s speres o! prod%ction, b%t rater one o! te relati8e @eigt @ic tese di!!erent rates o!
pro!it a8e in !orming tis a8erage0 5is, o@e8er, depends on te relati8e magnit%de o! te
capital in8ested in eac partic%lar spere, or on te aliD%ot part @ic te capital in8ested in eac
partic%lar spere !orms in te aggregate social capital0 5ere @ill nat%rally be a 8ery great
di!!erence, depending on @eter a greater or smaller part o! te total capital prod%ces a iger or
lo@er rate o! pro!it0 ?nd tis, again, depends on o@ m%c capital is in8ested in speres, in @ic
te 8ariable capital is relati8ely small or large compared to te total capital0 &t is H%st like te
a8erage interest obtained by a %s%rer @o lends 8ario%s D%antities o! capital at di!!erent interest
1<3 ;apter &J
rates# !or instance, at 2, +, 6, >T, etc0 5e a8erage rate @ill depend entirely on o@ m%c o! is
capital e as loaned o%t at eac o! te di!!erent rates o! interest0
5e general rate o! pro!it is, tere!ore, determined by t@o !actors:
1C 5e organic composition o! te capitals in te di!!erent speres o! prod%ction, and t%s, te
di!!erent rates o! pro!it in te indi8id%al speres0
<C 5e distrib%tion o! te total social capital in tese di!!erent speres, and t%s, te relati8e
magnit%de o! te capital in8ested in eac partic%lar spere at te speci!ic rate o! pro!it pre8ailing
in it# i0 e0, te relati8e sare o! te total social capital absorbed by eac indi8id%al spere o!
prod%ction0
&n Aooks & and && @e dealt only @it te value o! commodities0 3n te one and, te cost1price
as no@ been singled o%t as a part o! tis 8al%e, and, on te oter, te price of production o!
commodities as been de8eloped as its con8erted !orm0
$%ppose te composition o! te a8erage social capital is 8=c U <=8 and te ann%al rate o! s%rpl%s-
8al%e, s", is 1==T0 &n tat case te a8erage ann%al pro!it !or a capital o! 1== R <=, and te general
ann%al rate o! pro!it R <=T0 Wate8er te cost-price, k, o! te commodities ann%ally prod%ced by
a capital o! 1==, teir price o! prod%ction @o%ld ten be k U <=0 &n tose speres o! prod%ction in
@ic te composition o! capital @o%ld R B8= - xCc U B<= U xC8, te act%ally prod%ced s%rpl%s-
8al%e, or te ann%al pro!it prod%ced in tat partic%lar spere, @o%ld be <= U x, tat is, greater tan
<=, and te 8al%e o! te prod%ced commodities R k U <= U x, tat is, greater tan k U <=, or
greater tan teir price o! prod%ction0 &n tose speres, in @ic te composition o! te
capitalRB8= U xC c U B<= - xC8, te ann%ally prod%ced s%rpl%s-8al%e, or pro!it, @o%ld R <= - x, or
less tan <=, and conseD%ently te 8al%e o! te commodities k U <= - x less tan te price o!
prod%ction, @ic R k U <=0 ?side !rom possible di!!erences in te periods o! t%rno8er, te price
o! prod%ction o! te commodities @o%ld ten eD%al teir 8al%e only in speres, in @ic te
composition @o%ld appen to be 8=c U <=80
5e speci!ic de8elopment o! te social prod%cti8ity o! labo%r in eac partic%lar spere o!
prod%ction 8aries in degree, iger 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 tan te a8erage social capital are, tere!ore, called
capitals o! higher composition, and, con8ersely, tose capitals in @ic te constant is relati8ely
smaller, and te 8ariable relati8ely greater tan in te a8erage social capital, are called capitals o!
lowercomposition0 Finally, @e call tose capitals @ose composition coincides @it te a8erage,
capitals o! a8erage composition0 $o%ld te a8erage social capital be composed in per cent o! 8=c
U <=8, ten a capital o! *=c U 1=8 is higher, and a capital o! >=c U 3=8 lower tan te social
a8erage0 :enerally speaking, i! te composition o! te a8erage social capitalRmc U n8, in @ic
m and n are constant magnit%des and m U n R 1==, te !orm%la Bm U xCc U Bn - xC8represents te
iger composition, and Bm - xCc U Bn U xC8 te lo@er composition o! an indi8id%al capital or
gro%p o! capitals0 5e @ay in @ic tese capitals per!orm teir !%nctions a!ter establisment o!
an a8erage rate o! pro!it and ass%ming one t%rno8er per year, is so@n in te !ollo@ing
tab%lation, in @ic & represents te 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
1<2 ;apter &J
,rice o! prod%ct R 1<=0 4al%e R 13=0
5e 8al%e o! te commodities prod%ced by capital && @o%ld, tere!ore, be smaller tan teir price
o! prod%ction, te price o! prod%ction o! te commodities o! &&& smaller tan teir 8al%e, and only
in te case o! capital & in brances o! prod%ction in @ic te composition appens to coincide
@it te social a8erage, @o%ld 8al%e and price o! prod%ction be eD%al0 &n applying tese terms to
any partic%lar cases note m%st, o@e8er, be taken @eter a de8iation o! te ratio bet@een c and
8 is simply d%e to a cange in te 8al%e o! te elements o! constant capital, rater tan to a
di!!erence in te tecnical composition0
5e !oregoing statements a8e at any rate modi!ied te original ass%mption concerning te
determination o! te cost-price o! commodities0 We ad originally ass%med tat te cost-price o!
a commodity eD%alled te 8al%e o! te commodities cons%med in its prod%ction0 A%t !or te b%yer
te price o! prod%ction o! a speci!ic commodity is its cost-price, and may t%s pass as cost-price
into te prices o! oter commodities0 $ince te price o! prod%ction may di!!er !rom te 8al%e o! a
commodity, it !ollo@s tat te cost-price o! a commodity containing tis price o! prod%ction o!
anoter commodity may also stand abo8e or belo@ tat portion o! its total 8al%e deri8ed !rom te
8al%e o! te means o! prod%ction cons%med by it0 &t is necessary to remember tis modi!ied
signi!icance o! te cost-price, and to bear in mind tat tere is al@ays te possibility o! an error i!
te cost-price o! a commodity in any partic%lar spere is identi!ied @it te 8al%e o! te means o!
prod%ction cons%med by it0 3%r present analysis does not necessitate a closer examination o! tis
point0 &t remains tr%e, ne8erteless, tat te cost-price o! a commodity is al@ays smaller tan its
8al%e0 For no matter o@ m%c te cost-price o! a commodity may di!!er !rom te 8al%e o! te
means o! prod%ction cons%med by it, tis past mistake is immaterial to te capitalist0 5e cost-
price o! a partic%lar commodity is a de!inite condition @ic is gi8en, and independent o! te
prod%ction o! o%r capitalist, @ile te res%lt o! is prod%ction is a commodity containing s%rpl%s-
8al%e, tere!ore an excess o! 8al%e o8er and abo8e its cost-price0 For all oter p%rposes, te
statement tat te cost-price is smaller tan te 8al%e o! a commodity as no@ canged
practically into te statement tat te cost-price is smaller tan te price o! prod%ction0 ?s
concerns te total social capital, in @ic te price o! prod%ction is eD%al to te 8al%e, tis
statement is identical @it te !ormer, namely tat te cost-price is smaller tan te 8al%e0 ?nd
@ile it is modi!ied in te indi8id%al speres o! prod%ction, te !%ndamental !act al@ays remains
tat in te case o! te total social capital te cost-price o! te commodities prod%ced by it is
smaller tan teir 8al%e, or, in te case o! te total mass o! social commodities, smaller tan teir
price o! prod%ction, @ic is identical @it teir 8al%e0 5e cost-price o! a commodity re!ers only
to te D%antity o! paid labo%r contained in it, @ile its 8al%e re!ers to all te paid and %npaid
labo%r contained in it0 5e price o! prod%ction re!ers to te s%m o! te paid labo%r pl%s a certain
D%antity o! %npaid labo%r determined !or any partic%lar spere o! prod%ction by conditions o8er
@ic it as no control0
5e !orm%la tat te 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 te general rate o! pro!itC0 6ence te
price o! prod%ction R k U kp"0 &! k R 3== and p" R 1+T, ten te price o! prod%ction is k U kp" R
3== U 3== \ 1+N1==, or 32+0
5e price o! prod%ction o! te commodities in any partic%lar spere may cange in magnit%de:
1C &! te general rate o! pro!it canges independently o! tis partic%lar spere, @ile te 8al%e o!
te commodities remains te same Bte same D%antities o! congealed and li8ing labo%r being
cons%med in teir prod%ction as be!oreC0
<C &! tere is a cange o! 8al%e, eiter in tis partic%lar spere in conseD%ence o! tecnical
canges, or in conseD%ence o! a cange in te 8al%e o! tose commodities @ic !orm te
elements o! its constant capital, @ile te general rate o! pro!it remains %ncanged0
1<+ ;apter &J
3C Finally, i! a combination o! te t@o a!orementioned circ%mstances takes place0
&n spite o! te great canges occ%rring contin%ally, as @e sall see, in te act%al rates o! pro!it
@itin te indi8id%al speres o! prod%ction, any real cange in te general rate o! pro!it, %nless
bro%gt abo%t by @ay o! an exception by extraordinary economic e8ents, is te 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 anoter to bring abo%t a cange in te general rate o!
pro!it0 &n all sorter periods BD%ite aside !rom !l%ct%ations o! market-pricesC, a cange in te
prices o! prod%ction is, tere!ore, al@ays traceable prima facie to act%al canges in te 8al%e o!
commodities, i0 e0, to canges in te total amo%nt o! labo%r-time reD%ired !or teir prod%ction0
Mere canges in te money-expression o! te same 8al%es are, nat%rally, not at all considered
ere0
3n te oter and, it is e8ident tat !rom te point o! 8ie@ o! te total social capital te 8al%e o!
te commodities prod%ced by it Bor, expressed in money, teir priceC R 8al%e o! constant capital U
8al%e o! 8ariable capital U s%rpl%s-8al%e0 ?ss%ming te degree o! labo%r exploitation to be
constant, te rate o! pro!it cannot cange so long as te mass o! s%rpl%s-8al%e remains te same,
%nless tere is a cange in eiter te 8al%e o! te constant capital, te 8al%e o! te 8ariable capital,
or te 8al%e o! bot, so tat ; canges, and tereby sN;, @ic represents te general rate o!
pro!it0 &n eac case, tere!ore, a cange in te general rate o! pro!it implies a cange in te 8al%e
o! commodities @ic !orm te elements o! te constant or 8ariable capital, or o! bot0
3r, te general rate o! pro!it may cange, @ile te 8al%e o! te commodities remains te same,
@en te degree o! labo%r exploitation canges0
3r, i! te degree o! labo%r exploitation remains te same, te general rate o! pro!it may cange
tro%g a cange in te amo%nt o! labo%r employed relati8e to te constant capital as a res%lt o!
tecnical canges in te labo%r-process0 A%t s%c tecnical canges m%st al@ays so@
temsel8es in, and be attended by, a cange in te 8al%e o! te commodities, @ose prod%ction
@o%ld ten reD%ire more or less labo%r tan be!ore0
We sa@ in ,art & tat s%rpl%s-8al%e and pro!it are identical !rom te standpoint o! teir mass0 A%t
te rate o! pro!it is !rom te 8ery o%tset distinct !rom te rate o! s%rpl%s-8al%e, @ic appears at
!irst sigt as merely a di!!erent !orm o! calc%lating0 A%t at te same time tis ser8es, also !rom te
o%tset, to obsc%re and mysti!y te act%al origin o! s%rpl%s-8al%e, since te rate o! pro!it can rise or
!all @ile te rate o! s%rpl%s-8al%e remains te same, and 8ice 8ersa, and since te capitalist is in
practice solely interested in te rate o! pro!it0 .et tere @as di!!erence o! magnit%de only bet@een
te rate o! s%rpl%s-8al%e and te rate o! pro!it and not bet@een te s%rpl%s-8al%e itsel! and pro!it0
$ince in te rate o! pro!it te s%rpl%s-8al%e is calc%lated in relation to te total capital and te
latter is taken as its standard o! meas%rement, te s%rpl%s-8al%e itsel! appears to originate !rom
te total capital, %ni!ormly deri8ed !rom all its parts, so tat te organic di!!erence bet@een
constant and 8ariable capital is obliterated in te conception o! pro!it0 7isg%ised as pro!it,
s%rpl%s-8al%e act%ally denies its origin, loses its caracter, and becomes %nrecognisable0
6o@e8er, iterto te distinction bet@een pro!it and s%rpl%s-8al%e applied solely to a D%alitati8e
cange, or cange o! !orm, @ile tere @as no real di!!erence o! magnit%de in tis !irst stage o!
te cange bet@een s%rpl%s-8al%e and pro!it, b%t only bet@een te rate o! pro!it and te rate o!
s%rpl%s-8al%e0
A%t it is di!!erent, as soon as a general rate o! pro!it, and tereby an a8erage pro!it corresponding
to te magnit%de o! in8ested capital gi8en in te 8ario%s speres o! prod%ction, a8e been
establised0
&t is ten only an accident i! te s%rpl%s-8al%e, and t%s te pro!it, act%ally prod%ced in any
partic%lar spere o! prod%ction, coincides @it te pro!it contained in te selling price o! a
commodity0 ?s a r%le, s%rpl%s-8al%e and pro!it and not teir rates alone, are ten di!!erent
magnit%des0 ?t a gi8en degree o! exploitation, te mass o! s%rpl%s-8al%e prod%ced in a partic%lar
1<6 ;apter &J
spere o! prod%ction is ten more important !or te aggregate a8erage pro!it o! social capital, and
t%s !or te capitalist class in general, tan !or te indi8id%al capitalist in any speci!ic branc o!
prod%ction0 &t is o! importance to te latter only in so !ar as te D%antity o! s%rpl%s-8al%e
prod%ced in is branc elps to reg%late te a8erage pro!it0 A%t tis is a process @ic occ%rs
beind is back, one e does not see, nor %nderstand, and @ic indeed does not interest im0 5e
act%al di!!erence o! magnit%de bet@een pro!it and s%rpl%s-8al%e I not merely bet@een te rate o!
pro!it and te rate o! s%rpl%s-8al%e I in te 8ario%s speres o! prod%ction no@ completely
conceals te tr%e nat%re and origin o! pro!it not only !rom te capitalist, @o as a special interest
in decei8ing imsel! on tis score, b%t also !rom te labo%rer0 5e trans!ormation o! 8al%es into
prices o! prod%ction ser8es to obsc%re te basis !or determining 8al%e itsel!0 Finally, since te
mere trans!ormation o! s%rpl%s-8al%e into pro!it disting%ises te portion o! te 8al%e o! a
commodity !orming te pro!it !rom te portion !orming its cost-price, it is nat%ral tat te
conception o! 8al%e so%ld el%de te capitalist at tis H%nct%re, !or e does not see te total labo%r
p%t into te commodity, b%t only tat portion o! te total labo%r !or @ic e as paid in te sape
o! means o! prod%ction, be tey li8ing or not, so tat is pro!it appears to im as someting
o%tside te immanent 8al%e o! te commodity0 -o@ tis idea is !%lly con!irmed, !orti!ied, and
ossi!ied in tat, !rom te standpoint o! is partic%lar spere o! prod%ction, te pro!it added to te
cost-price is not act%ally determined by te limits o! te !ormation o! 8al%e @itin is o@n
spere, b%t tro%g completely o%tside in!l%ences0
5e !act tat tis intrinsic connection is ere re8ealed !or te !irst time# tat %p to te present time
political economy, as @e sall see in te !ollo@ing and in Aook &4, eiter !orcibly abstracted itsel!
!rom te distinctions bet@een s%rpl%s-8al%e and pro!it, and teir rates, so it co%ld retain 8al%e
determination as a basis, or else abandoned tis 8al%e determination and @it it all 8estiges o! a
scienti!ic approac, in order to cling to te di!!erences tat strike te eye in tis penomenon I
tis con!%sion o! te teorists best ill%strates te %tter incapacity o! te practical capitalist,
blinded by competition as e is, and incapable o! penetrating its penomena, to recognise te
inner essence and inner str%ct%re o! tis process beind its o%ter appearance0
&n !act, all te la@s e8ol8ed in ,art & concerning te rise and !all o! te rate o! pro!it a8e te
!ollo@ing t@o-!old meaning:
1C 3n te one and, tey are te la@s o! te general rate o! pro!it0 &n 8ie@ o! te many di!!erent
ca%ses @ic make te rate o! pro!it rise or !all one @o%ld tink, a!ter e8eryting tat as been
said and done, tat te general rate o! pro!it m%st cange e8ery day0 A%t a trend in one spere o!
prod%ction compensates !or tat in anoter, teir e!!ects cross and paralyse one anoter0 We sall
later examine to @ic side tese !l%ct%ations %ltimately gra8itate0 A%t tey are slo@0 5e
s%ddenness, m%ltiplicity, and di!!erent d%ration o! te !l%ct%ations in te indi8id%al speres o!
prod%ction make tem compensate !or one anoter in te order o! teir s%ccession in time, a !all
in prices !ollo@ing a rise, and 8ice 8ersa, so tat tey remain limited to local, i0 e0, indi8id%al,
speres0 Finally, te 8ario%s local !l%ct%ations ne%tralise one anoter0 Witin eac indi8id%al
spere o! prod%ction, tere take place canges, i0 e0, de8iations !rom te general rate o! pro!it,
@ic co%nterbalance one anoter in a de!inite time on te one and, and t%s a8e no in!l%ence
%pon te general rate o! pro!it, and @ic, on te oter, do not react %pon it, beca%se tey are
balanced by oter sim%ltaneo%s local !l%ct%ations0 $ince te general rate o! pro!it is not only
determined by te a8erage rate o! pro!it in eac spere, b%t also by te distrib%tion o! te total
social capital among te di!!erent indi8id%al speres, and since tis distrib%tion is contin%ally
canging, it becomes anoter constant ca%se o! cange in te general rate o! pro!it0 A%t it is a
ca%se o! cange @ic mostly paralyses itsel!, o@ing to te %ninterr%pted and many-sided nat%re
o! tis mo8ement0
<C Witin eac spere, tere is some room !or play !or a longer or sorter space o! time, in @ic
te rate o! pro!it o! tis spere may !l%ct%ate, be!ore tis !l%ct%ation consolidates s%!!iciently
a!ter rising or !alling to gain time !or in!l%encing te general rate o! pro!it and tere!ore ass%ming
1<> ;apter &J
more tan local importance0 5e la@s o! te rate o! pro!it, as de8eloped in ,art & o! tis book,
like@ise remain applicable @itin tese limits o! space and time0
5e teoretical conception concerning te !irst trans!ormation o! s%rpl%s-8al%e into pro!it, tat
e8ery part o! a capital yields a %ni!orm pro!it, expresses a practical !act0 Wate8er te
composition o! an ind%strial capital, @eter it sets in motion one D%arter o! congealed labo%r and
tree-D%arters o! li8ing labo%r, or tree-D%arters o! congealed labo%r and one-D%arter o! li8ing
labo%r, @eter in one case it absorbs tree times as m%c s%rpl%s-labo%r, or prod%ces tree times
as m%c s%rpl%s-8al%e tan in anoter I in eiter case it yields te same pro!it, gi8en te 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 te a8erage composition o! te entire spere
o! prod%ction0 5e indi8id%al capitalist Bor all te capitalists in eac indi8id%al spere o!
prod%ctionC, @ose o%tlook is limited, rigtly belie8es tat is pro!it is not deri8ed solely !rom
te labo%r employed by im, or in is line o! prod%ction0 5is is D%ite tr%e, as !ar as is a8erage
pro!it is concerned0 5o @at extent tis pro!it is d%e to te aggregate exploitation o! labo%r on te
part o! te total social capital, i0 e0, by all is capitalist colleag%es I tis interrelation is a complete
mystery to te indi8id%al capitalist# all te more so, since no bo%rgeois teorists, te 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 te n%mber o! employed labo%rers I and te employment o! more
congealed labo%r Bconstant capitalC, appear to be 8ery so%nd operations !rom te economic
standpoint and do not seem to exert te least in!l%ence on te general rate o! pro!it and te
a8erage pro!it0 6o@ co%ld li8ing labo%r be te sole so%rce o! pro!it, in 8ie@ o! te !act tat a
red%ction in te 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 te nearest so%rce o! an increase o!
pro!its, at least !or te indi8id%al capitalist0
&! in any partic%lar spere o! prod%ction tere is a rise or !all o! te portion o! te cost-price
@ic represents te 8al%e o! constant capital, tis portion comes !rom te circ%lation and, eiter
enlarged or red%ced, passes !rom te 8ery o%tset into te process o! prod%ction o! te commodity0
&!, on te oter and, te same n%mber o! labo%rers prod%ces more or less in te same time, so
tat te D%antity o! labo%r reD%ired !or te prod%ction o! a de!inite D%antity o! commodities 8aries
@ile te n%mber o! labo%rers remains te same, tat portion o! te cost-price @ic represents
te 8al%e o! te 8ariable capital may remain te same, i0 e0, contrib%te te same amo%nt to te
cost-price o! to total prod%ct0 A%t e8ery one o! te indi8id%al commodities @ose s%m makes %p
te total prod%ct, sares in more or less labo%r Bpaid and tere!ore also %npaidC, and sares
conseD%ently in te greater or smaller o%tlay !or tis labo%r, i0 e0, a 1arger or smaller portion o!
te @age0 5e total @ages paid by te capitalist remain te same, b%t @ages di!!er i! calc%lated
per piece o! te commodity0 5%s, tere is a cange in tis portion o! te cost-price o! te
commodity0 A%t no matter @eter te cost-price o! te indi8id%al commodity Bor, peraps, te
cost-price o! te s%m o! commodities prod%ced by a capital o! a gi8en magnit%deC rises or !alls,
be it d%e to s%c canges in its o@n 8al%e, or in tat o! its elements, te 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 te cange o! magnit%de ca%sed in te cost-price o! te indi8id%al commodity by
s%c canges o! 8al%e as @e a8e ass%med0
$o !ar as te 8ariable capital is concerned I and tis is most important, beca%se it is te so%rce o!
s%rpl%s-8al%e, and beca%se anyting @ic conceals its relation to te acc%m%lation o! @ealt by
te capitalist ser8es to mysti!y te entire system I matters get cr%der or appear to te capitalist in
te !ollo@ing ligt: ? 8ariable capital o! V1== represents te @eekly @age o!, say, 1== labo%rers0
&! tese 1== labo%rers @eekly prod%ce <== pieces o! a commodity R <==;, in a gi8en @orking-
time, ten 1; I abstracted !rom tat portion o! its cost-price @ic is added by te constant
capital, costs V1==N<== R 1= sillings, since V1== R <==;0 -o@ s%ppose tat a cange occ%rs in
te prod%cti8eness o! labo%r0 $%ppose it do%bles, so tat te same n%mber o! labo%rers no@
1<8 ;apter &J
prod%ces t@ice <==; in te time @ic it pre8io%sly took to prod%ce <==;0 &n tat case
Bconsidering only tat part o! te cost-price @ic consists o! @agesC 1; R V1==N2== R +
sillings, since no@ V1== R 2==;0 $o%ld te prod%cti8eness decrease one-al!, te same labo%r
@o%ld prod%ce only <==;N< and since V1== R <==;N<, 1; R V<==N< R V10 5e canges in te
labo%r-time reD%ired !or te prod%ction o! te commodities, and ence te canges in teir 8al%e,
t%s appear in regard to te cost-price, and ence to te price o! prod%ction, as a di!!erent
distrib%tion o! te same @age !or more or !e@er commodities, depending on te greater or
smaller D%antity o! commodities prod%ced in te same @orking-time !or te same @age0 Wat te
capitalist, and conseD%ently also te political economist, see is tat te part o! te paid labo%r per
piece o! commodity canges @it te prod%cti8ity o! labo%r, and tat te 8al%e o! eac piece also
canges accordingly0 Wat tey do not see is tat te same applies to %npaid labo%r contained in
8ery piece o! te commodity, and tis is percei8ed so m%c less since te a8erage pro!it act%ally
is only accidentally determined by te %npaid labo%r absorbed in te spere o! te indi8id%al
capitalist0 &t is only in s%c cr%de and meaningless !orm tat @e can glimpse tat te 8al%e o!
commodities is determined by te labo%r contained in tem0
Chapter 10. Equalisation of the General Rate of
Proft Through Competition.
Market-Prices and Market-Values. Surplus-
Proft
5e capital in8ested in some speres o! prod%ction as a mean, or a8erage, composition, tat is, it
as te same, or almost te same composition as te a8erage social capital0
&n tese speres te price o! prod%ction is exactly or almost te same as te 8al%e o! te prod%ced
commodity expressed in money0 &! tere @ere no oter @ay o! reacing a matematical limit, tis
@o%ld be te one0 ;ompetition so distrib%tes te social capital among te 8ario%s speres o!
prod%ction tat te prices o! prod%ction in eac spere take sape according to te model o! te
prices o! prod%ction in tese speres o! a8erage composition, i0e0, tey R k U kp" Bcost-price pl%s
te a8erage rate o! pro!it m%ltiplied by te cost priceC0 5is a8erage rate o! pro!it, o@e8er, is te
percentage o! pro!it in tat spere o! a8erage composition in @ic pro!it, tere!ore, coincides
@it s%rpl%s-8al%e0 6ence, te rate o! pro!it is te same in all speres o! prod%ction, !or it is
eD%aliEed on te basis o! tose a8erage speres o! prod%ction @ic as te a8erage composition
o! capital0 ;onseD%ently, te s%m o! te pro!its in all speres o! prod%ction m%st eD%al te s%m o!
te s%rpl%s-8al%es, and te s%m o! te prices o! prod%ction o! te total social prod%ct eD%al te
s%m o! its 8al%e0 A%t it is e8ident tat te balance among speres o! prod%ction o! di!!erent
composition m%st tend to eD%aliEe tem @it te speres o! a8erage composition, be it exactly or
only approximately te same as te social a8erage0 Aet@een te speres more or less
approximating te a8erage tere is again a tendency to@ard eD%aliEation, seeking te ideal
a8erage, i0e0, an a8erage tat does not really exist, i0e0, a tendency to take tis ideal as a standard0
&n tis @ay te tendency necessarily pre8ails to make te 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, tese are not
distrib%ted in proportion to te s%rpl%s-8al%e prod%ced in eac special spere o! prod%ction, b%t
rater in proportion to te mass o! capital employed in eac spere, so tat eD%al masses o!
capital, @ate8er teir composition, recei8e eD%al aliD%ot sares o! te total s%rpl%s-8al%e
prod%ced by te total social capital0
&n te case o! capitals o! a8erage, or approximately a8erage, composition, te price o! prod%ction
is t%s te same or almost te same as te 8al%e, and te pro!it te same as te s%rpl%s-8al%e
prod%ced by tem0 ?ll oter capitals, o! @ate8er composition, tend to@ard tis a8erage %nder
press%re o! competition0 A%t since te capitals o! a8erage composition are o! te same, or
approximately te same, str%ct%re as te a8erage social capital, all capitals a8e te tendency,
regardless o! te s%rpl%s-8al%e prod%ced by tem, to realiEe te a8erage pro!it, rater tan teir
o@n s%rpl%s-8al%e in te price o! teir commodity, i0e0, to realiEe te prices o! prod%ction0
3n te oter and, it may be said tat @ere8er an a8erage pro!it, and tere!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 anyting b%t te
pro!it on te a8erage social capital, @ose s%m is eD%al to te s%m o! s%rpl%s-8al%e0 Moreo8er,
te prices obtained by adding tis a8erage pro!it to te cost-prices cannot be anyting b%t te
8al%es transm%ted into prices o! prod%ction0 -oting @o%ld be altered i! capitals in certain
13= ;apter J
speres o! prod%ction @o%ld not, !or some reason, be s%bHect to te process o! eD%aliEation0 5e
a8erage pro!it @o%ld ten be comp%ted on tat portion o! te social capital @ic enters te
eD%aliEation process0 &t is e8ident tat te a8erage pro!it can be noting b%t te total mass o!
s%rpl%s-8al%es allotted to te 8ario%s D%antities o! capital proportionally to teir magnit%des in
teir di!!erent speres o! prod%ction0 &t is te total realiEed %npaid labo%r, and tis total mass, like
te paid, congealed or li8ing, labo%r, obtains in te total mass o! commodities and money tat
!alls to te capitalists0
5e really di!!ic%lt D%estion is tis: o@ is tis eD%aliEation o! pro!its into a general rate o! pro!it
bro%gt abo%t, since it is ob8io%sly a res%lt rater tan a point o! depart%reQ
5o begin @it, an estimate o! te 8al%es o! commodities, !or instance in terms o! money, can
ob8io%sly only be te res%lt o! teir excange0 &!, tere!ore, @e ass%me s%c an estimate, @e m%st
regard it as te o%tcome o! an act%al excange o! commodity-8al%e !or commodity-8al%e0 A%t
o@ does tis excange o! commodities at teir real 8al%e come abo%tQ
'et %s !irst ass%me tat all commodities in te di!!erent brances o! prod%ction are sold at teir
real 8al%es0 Wat @o%ld ten be te o%tcomeQ ?ccording to te !oregoing, 8ery di!!erent rates o!
pro!it @o%ld ten reign in te 8ario%s speres o! prod%ction0 &t is prima facie t@o entirely
di!!erent matters @eter commodities are sold at teir 8al%es Bi0e0, excanged in proportion to
te 8al%e contained in tem at prices corresponding to teir 8al%eC, or @eter tey are sold at
s%c prices tat teir sale yields eD%al pro!its !or eD%al masses o! te capital ad8anced !or teir
respecti8e prod%ction0
5e !act tat 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 tat te degree o! exploitation or te rate o!
s%rpl%s-8al%e are te same, or tat any existing di!!erences in tem are eD%aliEed by real or
imaginary Bcon8entionalC gro%nds o! compensation0 5is @o%ld ass%me competition among
labo%rers and eD%aliEation tro%g teir contin%al migration !rom one spere o! prod%ction to
anoter0 $%c a general rate o! s%rpl%s-8al%e I 8ie@ed as a tendency, like all oter economic la@s
I as been ass%med by %s !or te sake o! teoretical simpli!ication0 A%t in reality it is an act%al
premise o! te capitalist mode o! prod%ction, alto%g it is more or less obstr%cted by practical
!rictions ca%sing more or less considerable local di!!erences, s%c as te settlement la@s !or !arm-
labo%rers in Aritain0 A%t in teory it is ass%med tat te la@s o! capitalist prod%ction operate in
teir p%re !orm0 &n reality tere exists only approximation# b%t, tis approximation is te greater,
te more de8eloped te capitalist mode o! prod%ction and te less it is ad%lterated and
amalgamated @it s%r8i8als o! !ormer economic conditions0
5e @ole di!!ic%lty arises !rom te !act tat commodities are not excanged simply as
commodities, b%t as products of capitals, @ic claim participation in te total amo%nt o! s%rpl%s-
8al%e, proportional to teir magnit%de, or eD%al i! tey are o! eD%al magnit%de0 ?nd tis claim is
to be satis!ied by te total price !or commodities prod%ced by a gi8en capital in a certain space o!
time0 5is total price is, o@e8er, only te s%m o! te prices o! te indi8id%al commodities
prod%ced by tis capital0
5e punctum saliens @ill be best bro%gt i! @e approac te matter as !ollo@s: s%ppose, te
labo%rers temsel8es are in possession o! teir respecti8e means o! prod%ction and excange teir
commodities @it one anoter0 &n tat case tese commodities @o%ld not be prod%cts o! capital0
5e 8al%e o! te 8ario%s means o! labo%r and ra@ materials @o%ld di!!er in accordance @it te
tecnical nat%re o! te labo%rs per!ormed in te di!!erent brances o! prod%ction0 F%rtermore,
aside !rom te %neD%al 8al%e o! te means o! prod%ction employed by tem, tey @o%ld reD%ire
di!!erent D%antities o! means o! prod%ction !or gi8en D%antities o! labo%r, depending on @eter a
certain commodity can be !inised in one o%r, anoter in one day, and so !ort0 ?lso s%ppose te
labo%rers @ork an eD%al a8erage lengt o! time, allo@ing !or compensations tat arise !rom te
di!!erent labo%r intensities, etc0 &n s%c a case, t@o labo%rers @o%ld, !irst, bot a8e replaced teir
131 ;apter J
o%tlays, te cost-prices o! te cons%med means o! prod%ction, in te commodities @ic make %p
te prod%ct o! teir day"s @ork0 5ese o%tlays @o%ld di!!er, depending on te tecnical nat%re o!
teir labo%r0 $econdly, bot o! tem @o%ld a8e created eD%al amo%nts o! ne@ 8al%e, namely te
@orking-day added by tem to te means o! prod%ction0 5is @o%ld comprise teir @ages pl%s
te s%rpl%s-8al%e, te latter representing s%rpl%s-labo%r o8er and abo8e teir necessary @ants, te
prod%ct o! @ic @o%ld o@e8er belong to tem0 5o p%t it te capitalist @ay, bot o! tem
recei8e te same @ages pl%s te same pro!it, or te same 8al%e, expressed, say, by te prod%ct o!
a ten-o%r @orking-day0 A%t in te !irst place, te 8al%es o! teir commodities @o%ld a8e to
di!!er0 &n commodity &, !or instance, te portion o! 8al%e corresponding to te cons%med means o!
prod%ction migt be iger tan in commodity &&0 ?nd, to introd%ce all possible di!!erences, @e
migt ass%me rigt no@ tat commodity & absorbs more li8ing labo%r, and conseD%ently reD%ires
more labo%r-time to be prod%ced, tan commodity &&0 5e 8al%es o! commodities & and && are,
tere!ore, 8ery di!!erent0 $o are te s%ms o! te 8al%es o! te commodities, @ic represent te
prod%ct o! te labo%r per!ormed by labo%rers & and && in a gi8en time0 5e rates o! pro!it @o%ld
also di!!er considerably !or & and && i! @e take te rate o! pro!it to be te proportion o! te s%rpl%s-
8al%e to te total 8al%e o! te in8ested means o! prod%ction0 5e means o! s%bsistence daily
cons%med by & and && d%ring prod%ction, @ic take te place o! @ages, ere !orm te part o! te
in8ested means o! prod%ction ordinarily called 8ariable capital0 A%t !or eD%al @orking periods te
s%rpl%s 8al%es @o%ld be te same !or & and &&, or, more precisely, since & and && eac recei8e te
8al%e o! te prod%ct o! a day"s @ork, bot o! tem recei8e eD%al 8al%es a!ter te 8al%e o! te
in8ested KconstantL elements as been ded%cted, and one portion o! tose eD%al 8al%es may be
regarded as a s%bstit%te !or te means o! s%bsistence cons%med in prod%ction, and te oter as
s%rpl%s-8al%e in excess o! it0 &! labo%rer & as greater expenses, tey are made good by a greater
portion o! te 8al%e o! is commodity, @ic replaces tis Kconstant K part, and e tere!ore as
to recon8ert a larger portion o! te total 8al%e o! is prod%ct into te material elements o! tis
constant part, @ile labo%rer &&, to%g recei8ing less !or tis, as so m%c less to recon8ert0 &n
tese circ%mstances, a di!!erence in te rates o! pro!it @o%ld tere!ore be immaterial, H%st as it is
immaterial to te @age-labo%rer today @at rate o! pro!it may express te amo%nt o! s%rpl%s-
8al%e !ilced !rom im, and H%st as in international commerce te di!!erence in te 8ario%s
national rates o! pro!it is immaterial to commodity excange0
5e excange o! commodities at teir 8al%es, or approximately at teir 8al%es, t%s reD%ires a
m%c lo@er stage tan teir excange at teir prices o! prod%ction, @ic reD%ires a de!inite le8el
o! capitalist de8elopment0
Wate8er te manner in @ic te prices o! 8ario%s commodities are !irst m%t%ally !ixed or
reg%lated, teir mo8ements are al@ays go8erned by te la@ o! 8al%e0 &! te labo%r-time reD%ired
!or teir prod%ction appens to srink, prices !all# i! it increases, prices rise, pro8ided oter
conditions remain te same0
?part !rom te domination o! prices and price mo8ement by te la@ o! 8al%e, it is D%ite
appropriate to regard te 8al%es o! commodities as not only teoretically b%t also istorically
prius to te prices o! prod%ction0 5is applies to conditions in @ic te labo%rer o@ns is means
o! prod%ction, and tis is te condition o! te land-o@ning !armer li8ing o!! is o@n labo%r and
te cra!tsman, in te ancient as @ell as in te modern @orld0 5is agrees also @it te 8ie@ @e
expressed pre8io%sly tat te e8ol%tion o! prod%cts into commodities arises tro%g excange
bet@een di!!erent comm%nities, not bet@een te members o! te same comm%nity0 &t olds not
only !or tis primiti8e condition, b%t also !or s%bseD%ent conditions, based on sla8ery and
ser!dom, and !or te g%ild organisation o! andicra!ts, so long as te means o! prod%ction
in8ol8ed in eac branc o! prod%ction can be trans!erred !rom one spere to anoter only @it
di!!ic%lty and tere!ore te 8ario%s speres o! prod%ction are related to one anoter, @itin certain
limits, as !oreign co%ntries or comm%nist comm%nities0
13< ;apter J
For prices at @ic commodities are excanged to approximately correspond to teir 8al%es,
noting more is necessary tan 1C !or te excange o! te 8ario%s commodities to cease being
p%rely accidental or only occasional# <C so !ar as direct excange o! commodities is concerned,
!or tese commodities to be prod%ced on bot sides in approximately s%!!icient D%antities to meet
m%t%al reD%irements, someting learned !rom m%t%al experience in trading and tere!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 eiter o! te contracting sides to sell commodities abo8e teir 8al%e
or to compel tem to %ndersell0 Ay accidental monopoly @e mean a monopoly @ic a b%yer or
seller acD%ires tro%g an accidental state o! s%pply and demand0
5e ass%mption tat te commodities o! te 8ario%s speres o! prod%ction are sold at teir 8al%e
merely implies, o! co%rse, tat teir 8al%e is te centre o! gra8ity aro%nd @ic teir prices
!l%ct%ate, and teir contin%al rises and drops tend to eD%alise0 5ere is also te mar-et1value I o!
@ic later I to be disting%ised !rom te indi8id%al 8al%e o! partic%lar commodities prod%ced by
di!!erent prod%cers0 5e indi8id%al 8al%e o! some o! tese commodities @ill be belo@ teir
market-8al%e Btat is, less labo%r time is reD%ired !or teir prod%ction tan expressed is te
market 8al%eC @ile tat o! oters @ill exceed te market-8al%e0 3n te one and, market-8al%e is
to be 8ie@ed as te a8erage 8al%e o! commodities prod%ced in a single spere, and, on te oter,
as te indi8id%al 8al%e o! te commodities prod%ced %nder a8erage conditions o! teir respecti8e
spere and !orming te b%lk o! te prod%cts o! tat spere0 &t is only in extraordinary
combinations tat commodities prod%ced %nder te @orst, or te most !a8o%rable, conditions
reg%late te market-8al%e, @ic, in t%rn, !orms te centre o! !l%ct%ation !or market-prices0 5e
latter, o@e8er, are te same !or commodities o! te same kind0 &! te ordinary demand is
satis!ied by te s%pply o! commodities o! a8erage 8al%e, ence o! a 8al%e mid@ay bet@een te
t@o extremes, ten te commodities @ose indi8id%al 8al%e is belo@ te market-8al%e realise an
extra s%rpl%s-8al%e, or s%rpl%s-pro!it, @ile tose, @ose indi8id%al 8al%e exceeds te market-
8al%e, are %nable to realise a portion o! te s%rpl%s-8al%e contained in tem0
&t does no good to say tat te sale o! commodities prod%ced %nder te least !a8o%rable
conditions pro8es tat tey are reD%ired to satis!y te demand0 &! in te ass%med case te price
@ere iger tan te a8erage market-8al%e, te demand @o%ld be smaller0 ?t a certain price, a
commodity occ%pies H%st so m%c place on te market0 5is place remains te same in case o! a
price cange only i! te iger price is accompanied by a drop in te s%pply o! te commodity,
and a lo@er price by an increase o! s%pply0 ?nd i! te demand is so great tat it does not contract
@en te price is reg%lated by te 8al%e o! commodities prod%ced %nder te least !a8o%rable
conditions, ten tese determine te market-8al%e0 5is is not possible %nless demand is greater
tan %s%al, or i! s%pply drops belo@ te %s%al le8el0 Finally, i! te mass o! te prod%ced
commodities exceeds te D%antity disposed o! at a8erage market-8al%es, te commodities
prod%ced %nder te most !a8o%rable conditions reg%late te market-8al%e0 5ey may, !or
example, be sold exactly or approximately at teir indi8id%al 8al%e, in @ic case te
commodities prod%ced %nder te least !a8o%rable conditions may not e8en realise teir cost-price,
@ile tose prod%ced %nder a8erage conditions realise only a portion o! te s%rpl%s-8al%e
contained in tem0 Wat as been said ere o! market-8al%e applies to te price o! prod%ction as
soon as it takes te place o! market-8al%e0 5e price o! prod%ction is reg%lated in eac spere,
and like@ise reg%lated by special circ%mstances0 ?nd tis price o! prod%ction is, in its t%rn, te
centre aro%nd @ic te daily market-prices !l%ct%ate and tend to eD%alise one anoter @itin
de!inite periods0 B$ee )icardo on determining te price o! prod%ction tro%g tose @orking
%nder te least !a8o%rable conditions0C
-o matter o@ te prices are reg%lated, @e arri8e at te !ollo@ing:
1C 5e la@ o! 8al%e dominates price mo8ements @it red%ctions or increases in reD%ired labo%r-
time making prices o! prod%ction !all or rise0 &t is in tis sense tat )icardo B@o do%btlessly
realised tat is prices o! prod%ction de8iated !rom te 8al%e o! commoditiesC says tat Kte
133 ;apter J
inD%iry to @ic & @is to dra@ te reader"s attention relates to te e!!ect o! te 8ariations in te
relati8e 8al%e o! commodities, and not in teir absol%te 8al%eL0
< C 5e a8erage pro!it determining te prices o! prod%ction m%st al@ays be approximately eD%al
to tat D%antity o! s%rpl%s-8al%e @ic !alls to te sare o! indi8id%al capital in its capacity o! an
aliD%ot part o! te total social capital0 $%ppose tat te general rate o! pro!it, and tere!ore te
a8erage pro!it, are expressed by money-8al%e greater tan te money-8al%e o! te act%al a8erage
s%rpl%s-8al%e0 $o !ar as te capitalists are concerned, it is ten immaterial @eter tey
reciprocally carge 1= or 1+T pro!it0 -eiter o! tese percentages co8ers more act%al
commodity-8al%e tan te oter, since te o8ercarge in money is m%t%al0 ?s !or te labo%rer Bte
ass%mption being tat e recei8es is normal @age and te rise in te a8erage pro!it does not
tere!ore imply an act%al ded%ction !rom is @age, i0e0, it expresses someting entirely di!!erent
!rom te normal s%rpl%s-8al%e o! te capitalistC, te rise in commodity-prices ca%sed by an
increase o! te a8erage pro!it m%st correspond to te rise o! te money-expression o! te 8ariable
capital0 $%c a general nominal increase in te rate o! pro!it and te a8erage pro!it abo8e te limit
pro8ided by te ratio o! te act%al s%rpl%s-8al%e to te total in8ested capital is not, in e!!ect,
possible @ito%t ca%sing an increase in @ages, and also an increase in te prices o! commodities
!orming te constant capital0 5e re8erse is tr%e in case o! a red%ction0 $ince te total 8al%e o! te
commodities reg%lates te total s%rpl%s-8al%e, and tis in t%rn reg%lates te le8el o! a8erage pro!it
and tereby te general rate o! pro!it I as a general la@ or a la@ go8erning !l%ct%ations I it
!ollo@s te la@ o! 8al%e reg%lates te prices o! prod%ction0
Wat competition, !irst in a single spere, acie8es is a single market-8al%e and market-price
deri8ed !rom te 8ario%s indi8id%al 8al%es o! commodities0 ?nd it is competition o! capitals in
di!!erent speres, @ic !irst brings o%t te price o! prod%ction eD%aliEing te rates o! pro!it in te
di!!erent speres0 5e latter process reD%ires a iger de8elopment o! capitalist prod%ction tat
te pre8io%s one0
For commodities o! te same spere o! prod%ction, te same kind, and approximately te same
D%ality, to be sold at teir 8al%es, te !ollo@ing t@o reD%irements are necessary:
'irst, te di!!erent indi8id%al 8al%es m%st be eD%aliEed at one social 8al%e, te abo8e-named
market 8al%e, and tis implies competition among prod%cers o! te same kind o! commodities
and, like@ise, te existence o! a common market in @ic tey o!!er teir articles !or sale0 For te
market-price o! identical commodities, eac, o@e8er, prod%ced %nder di!!erent indi8id%al
circ%mstances, to correspond to te market-8al%e and not to de8iate !rom it eiter by rising abo8e
or !alling belo@ it, it is necessary tat te press%re exerted by di!!erent sellers %pon one anoter
be s%!!icient to bring eno%g commodities to market to !ill te social reD%irements, i0e0, a D%antity
!or @ic society is capable o! paying te market-8al%e0 $o%ld te mass o! prod%cts exceed tis
demand, te commodities @o%ld a8e to be sold belo@ teir market-8al%e# and con8ersely, abo8e
teir market-8al%e i! te mass o! prod%cts @ere not large eno%g to meet te demand, or, @at
amo%nts to te same, i! te press%re o! competition among sellers @ere not strong eno%g to
bring tis mass o! prod%cts to market0 $o%ld te market-8al%e cange, tis @o%ld also entail a
cange in te conditions on @ic te total mass o! commodities co%ld be sold0 $o%ld te
market-8al%e !all, tis @o%ld entail a rise in te a8erage social demand Btis al@ays taken to mean
te e!!ecti8e demandC, @ic co%ld, @itin certain limits, absorb larger masses o! commodities0
$o%ld te market-8al%e rise, tis @o%ld entail a drop in te social demand, and a smaller mass o!
commodities @o%ld be absorbed0 6ence, i! s%pply and demand reg%late te market-price, or
rater te de8iations o! te market-price !rom te market-8al%e, ten, in t%rn, te market-8al%e
reg%lates te ratio o! s%pply to demand, or te centre ro%nd @ic !l%ct%ations o! s%pply and
demand ca%se market-prices to oscillate0
'ooking closer, @e !ind tat te conditions applicable to te 8al%e o! an indi8id%al commodity
are ere reprod%ced as conditions go8erning te 8al%e o! te aggregate o! a certain kind o!
commodity0 ;apitalist prod%ction is mass prod%ction !rom te 8ery o%tset0 A%t e8en in oter, less
132 ;apter J
de8eloped, modes o! prod%ction tat @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
I at least in te case o! te 8ital commodities I in te ands o! relati8ely !e@ mercants0 5e
latter acc%m%late tem and sell tem as te common prod%ct o! an entire branc o! prod%ction, or
o! a more or less considerable contingent o! it0
&t so%ld be ere noted in passing tat te Ksocial demand,L i0e0, te !actor @ic reg%lates te
principle o! demand, is essentially s%bHect to te m%t%al relationsip o! te di!!erent classes and
teir respecti8e economic position, notably tere!ore to, !irstly, te ratio o! total s%rpl%s-8al%e to
@ages, and, secondly, to te relation o! te 8ario%s parts into @ic s%rpl%s-8al%e is split %p
Bpro!it, interest, gro%nd-rent, taxes, etc0C0 ?nd tis t%s again so@s o@ absol%tely noting can
be explained by te relation o! s%pply to demand be!ore ascertaining te basis on @ic tis
relation rests0
?lto%g bot commodity and money represent a %nity o! excange-8al%e and %se-8al%e, @e
a8e already seen tat in b%ying and selling bot o! tese !%nctions are polarised at te t@o
extremes, te commodity BsellerC representing te %se-8al%e, and te money Bb%yerC representing
te excange-8al%e0 3ne o! te !irst premises o! selling @as tat a commodity so%ld a8e %se-
8al%e and so%ld tere!ore satis!y a social need0 5e oter premise @as tat te D%antity o! labo%r
contained in te commodity so%ld represent socially necessary labo%r, i0e0, its indi8id%al 8al%e
Band, @at amo%nts to te same %nder te present ass%mption, its selling priceC so%ld coincide
@it its social 8al%e0
'et %s apply tis to te mass o! commodities a8ailable in te market, @ic represents te
prod%ct o! a @ole spere0
5e matter @ill be most readily pict%red by regarding tis @ole mass o! commodities, prod%ced
by one branc o! ind%stry, as one commodity, and te s%m o! te prices o! te many identical
commodities as one price0 5en, @ate8er as been said o! a single commodity applies literally to
te mass o! commodities o! an entire branc o! prod%ction a8ailable in te market0 5e
reD%irement tat te indi8id%al 8al%e o! a commodity so%ld correspond to its social 8al%e is no@
realised, or !%rter determined, in tat te mass contains social labo%r necessary !or its
prod%ction, and tat te 8al%e o! tis mass is eD%al to its market-8al%e0
-o@ s%ppose tat te b%lk o! tese commodities is prod%ced %nder approximately similar normal
social conditions, so tat tis 8al%e is at te same time te indi8id%al 8al%e o! te indi8id%al
commodities @ic make %p tis mass0 &! a relati8ely small portion o! tese commodities may
no@ a8e been prod%ced belo@, and anoter abo8e, tese conditions, so tat te indi8id%al 8al%e
o! one portion is greater, and tat o! te oter smaller, tan te a8erage 8al%e o! te b%lk o! te
commodities, b%t in s%c proportions tat tese extremes balance one anoter, so tat te a8erage
8al%e o! te commodities at tese extremes is eD%al to te 8al%e o! commodities in te centre,
ten te market-8al%e is determined by te 8al%e o! te commodities prod%ced %nder a8erage
conditions0 5e 8al%e o! te entire mass o! commodities is eD%al to te act%al s%m o! te 8al%es
o! all indi8id%al commodities taken togeter, @eter prod%ced %nder a8erage conditions, or
%nder conditions abo8e or belo@ te a8erage0 &n tat case, te market-8al%e, or social 8al%e, o!
te mass o! commodities I te necessary labo%r-time contained in tem I is determined by te
8al%e o! te preponderant mean mass0
$%ppose, on te contrary, tat te total mass o! te commodities in D%estion bro%gt to market
remains te same, @ile te 8al%e o! te commodities prod%ced %nder less !a8o%rable conditions
!ails to balance o%t te 8al%e o! commodities prod%ced %nder more !a8o%rable conditions, so tat
te part o! te mass prod%ced %nder less !a8o%rable conditions !orms a relati8ely @eigty
D%antity as compared @it te a8erage mass and @it te oter extreme0 &n tat case, te mass
prod%ced %nder less !a8o%rable conditions reg%lates te market, or social, 8al%e0
13+ ;apter J
$%ppose, !inally, tat te mass o! commodities prod%ced %nder better tan a8erage conditions
considerably exceeds tat prod%ced %nder @orse conditions, and is large e8en compared @it tat
prod%ced %nder a8erage conditions0 &n tat case, te part prod%ced %nder te most !a8o%rable
conditions determines te market-8al%e0 We ignore ere te o8erstocked market, in @ic te part
prod%ced %nder most !a8o%rable conditions al@ays reg%lates te market-price0 We are not dealing
ere @it te market-price, in so !ar as it di!!ers !rom te market-8al%e, b%t @it te 8ario%s
determinations o! te 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
to%sand modi!icationsC te market-8al%e o! te entire mass, reg%lated as it is by te a8erage
8al%es, is in case & eD%al to te s%m o! teir indi8id%al 8al%es# alto%g in te case o! te
commodities prod%ced at te extremes, tis 8al%e is represented as an a8erage 8al%e @ic is
!orced %pon tem0 5ose @o prod%ce at te @orst extreme m%st ten sell teir commodities
belo@ te indi8id%al 8al%e# tose prod%cing at te best extreme sell tem abo8e it0
&n case && te indi8id%al lots o! commodity-8al%es prod%ced at te t@o extremes do not balance
one anoter0 )ater, te lot prod%ced %nder te @orse conditions decides te iss%e0 $trictly
speaking, te a8erage price, or te market-8al%e, o! eac indi8id%al commodity, or eac aliD%ot
part o! te total mass, @o%ld no@ be determined by te total 8al%e o! te mass as obtained by
adding %p te 8al%es o! te commodities prod%ced %nder di!!erent conditions, and in accordance
@it te aliD%ot part o! tis total 8al%e !alling to te sare o! eac indi8id%al commodity0 5e
market-8al%e t%s obtained @o%ld exceed te indi8id%al 8al%e not only o! te commodities
belonging to te !a8o%rable extreme, b%t also o! tose belonging to te a8erage lot0 .et it @o%ld
still be belo@ te indi8id%al 8al%e o! tose commodities prod%ced at te %n!a8o%rable extreme0
6o@ close te market-8al%e approaces, or !inally coincides @it, te latter @o%ld depend
entirely on te 8ol%me occ%pied by commodities prod%ced at te %n!a8o%rable extreme o! te
commodity spere in D%estion0 &! demand is only sligtly greater tan s%pply, te indi8id%al 8al%e
o! te %n!a8o%rably prod%ced commodities reg%lates te market-price0
Finally, i! te lot o! commodities prod%ced at te !a8o%rable extreme occ%pies greater place tan
te oter extreme, and also tan te a8erage lot, as it does in case &&&, ten te market-8al%e !alls
belo@ te a8erage 8al%e0 5e a8erage 8al%e, comp%ted by adding te s%ms o! 8al%es at te t@o
extremes and at te middle, stands ere belo@ te 8al%e o! te middle, @ic it approaces, or
8ice 8ersa, depending on te relati8e place occ%pied by te !a8o%rable extreme0 $o%ld demand
be @eaker tan s%pply, te !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 5e market-8al%e cannot e8er coincide
@it tis indi8id%al 8al%e o! te commodities prod%ced %nder te most !a8o%rable conditions,
except @en s%pply !ar exceeds demand0
5is mode o! determining market-8al%es, @ic @e a8e ere o%tlined abstractly, is promoted in
te real market by competition among te b%yers, pro8ided te demand is large eno%g to absorb
te mass o! commodities at 8al%es so !ixed0 ?nd tis brings %s to te oter point0
Second, to say tat a commodity as a %se-8al%e is merely to say tat it satis!ies some social
@ant0 $o long as @e dealt @it indi8id%al commodities only, @e co%ld ass%me tat tere @as a
need !or a partic%lar commodity I its D%antity already implied by its price @ito%t inD%iring
!%rter into te D%antity reD%ired to satis!y tis @ant0 5is D%antity is, o@e8er, o! essential
importance, as soon as te prod%ct o! an entire branc o! prod%ction is placed on one side, and
te social need !or it on te oter0 &t ten becomes necessary to consider te extent, i0e0, te
amo%nt o! tis social @ant0
&n te !oregoing determinations o! market-8al%e it @as ass%med tat te mass o! te prod%ced
commodities is gi8en, i0e0, remains te same, and tat tere is a cange only in te proportions o!
its constit%ent elements, @ic are prod%ced %nder di!!erent conditions, and tat, ence, te
market-8al%e o! te same mass o! commodities is di!!erently reg%lated0 $%ppose, tis mass
136 ;apter J
corresponds in siEe to te %s%al s%pply, lea8ing aside te possibility tat a portion o! te prod%ced
commodities may be temporarily @itdra@n !rom te market0 $o%ld demand !or tis mass no@
also remain te same, tis commodity @ill be sold at its market-8al%e, no matter @ic o! te
tree a!orementioned cases reg%lates tis market-8al%e0 5is mass o! commodities does not
merely satis!y a need, b%t satis!ies it to its !%ll social extent0 $o%ld teir D%antity be smaller or
greater, o@e8er, tan te demand !or tem, tere @ill be de8iations o! te market-price !rom te
market-8al%e0 ?nd te !irst de8iation is tat i! te s%pply is too small, te market-8al%e is al@ays
reg%lated by te commodities prod%ced %nder te least !a8o%rable circ%mstances and, i! te
s%pply is too large, al@ays by te commodities prod%ced %nder te most !a8o%rable conditions#
tat tere!ore it is one o! te extremes @ic determines te market-8al%e, in spite o! te !act tat
in accordance @it te mere proportion o! te commodity masses prod%ced %nder di!!erent
conditions, a di!!erent res%lt so%ld obtain0 &! te di!!erence bet@een demand and te a8ailable
D%antity o! te prod%ct is more considerable, te market-price @ill like@ise be considerably
abo8e or belo@ te market-8al%e0 -o@, te di!!erence bet@een te D%antity o! te prod%ced
commodities and tat D%antity o! tem at @ic tey are sold at market-8al%e may be d%e to t@o
reasons0 Eiter te D%antity itsel! canges, becoming too small or too large, so tat reprod%ction
@o%ld a8e taken place on a di!!erent scale tan tat @ic reg%lated te gi8en market-8al%e0 &n
tat case, te s%pply canged, alto%g demand remained te same, and tere @as, tere!ore,
relati8e o8er-prod%ction or %nder-prod%ction0 3r else reprod%ction, and t%s s%pply, remained te
same, @ile demand srank or increased, @ic may be d%e to se8eral reasons0 ?lto%g te
absol%te magnit%de o! te s%pply @as te same, its relati8e magnit%de, its magnit%de relati8e to,
or meas%red by, te demand, ad canged0 5e e!!ect is te same as in te !irst case, b%t in te
re8erse direction0 Finally, i! canges take place on bot sides, b%t eiter in re8erse directions, or,
i! in te same direction, ten not to te same extent, i! tere!ore tere are canges on bot sides,
b%t tese alter te !ormer proportion bet@een te t@o sides, ten te !inal res%lt m%st al@ays lead
to one o! te t@o abo8e-mentioned cases0
5e real di!!ic%lty in !orm%lating te general de!inition o! s%pply and demand is tat it seems to
take on te appearance o! a ta%tology0 First consider te s%pply I te prod%ct a8ailable in te
market, or tat @ic can be deli8ered to it0 5o a8oid d@elling %pon %seless detail, @e sall ere
consider only te mass ann%ally reprod%ced in e8ery gi8en branc o! prod%ction and ignore te
greater or lesser !ac%lty possessed by te di!!erent commodities to be @itdra@n !rom te market
and stored a@ay !or cons%mption, say, %ntil next year0 5is ann%al reprod%ction is expressed by a
certain D%antity I in @eigt or n%mbers I depending on @eter tis mass o! commodities is
meas%red in discrete elements or contin%o%sly0 5ey are not only %se-8al%es satis!ying %man
@ants, b%t tese %se-8al%es are a8ailable in te market in de!inite D%antities0 $econdly, o@e8er,
tis D%antity o! commodities as a speci!ic market-8al%e, @ic may be expressed by a m%ltiple
o! te market-8al%e o! te commodity, or o! its meas%re, @ic ser8es as %nit0 5%s, tere is no
necessary connection bet@een te D%antitati8e 8ol%me o! te commodities in te market and teir
market-8al%e, since, !or instance, many commodities a8e a speci!ically ig 8al%e, and oters a
speci!ically lo@ 8al%e, so tat 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! anoter0 5ere is only te !ollo@ing connection
bet@een te D%antity o! te articles a8ailable in te market and te market-8al%e o! tese articles:
3n a gi8en basis o! labo%r prod%cti8ity te prod%ction o! a certain D%antity o! articles in e8ery
partic%lar spere o! prod%ction reD%ires a de!inite D%antity o! social labo%r-time# alto%g tis
proportion 8aries in di!!erent speres o! prod%ction and as no inner relation to te %se!%lness o!
tese articles or te special nat%re o! teir %se-8al%es0 ?ss%ming all oter 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! te
same commodity @ill cost nb labo%r-time0 F%rter, i! society @ants to satis!y some @ant and a8e
an article prod%ced !or tis p%rpose, it m%st pay !or it0 &ndeed, since commodity-prod%ction
necessitates a di8ision o! labo%r, society pays !or tis article by de8oting a portion o! te a8ailable
13> ;apter J
labo%r-time to its prod%ction0 5ere!ore, society b%ys it @it a de!inite D%antity o! its disposable
labo%r-time0 5at part o! society @ic tro%g te di8ision o! labo%r appens to employ its
labo%r in prod%cing tis partic%lar article, m%st recei8e an eD%i8alent in social labo%r
incorporated in articles @ic satis!y its o@n @ants0 6o@e8er, tere exists an accidental rater
tan a necessary connection bet@een te total amo%nt o! social labo%r applied to a social article,
i0e0, bet@een te aliD%ot part o! society"s total labo%r-po@er allocated to prod%cing tis article, or
bet@een te 8ol%me @ic te prod%ction o! tis article occ%pies in total prod%ction, on te one
and, and te 8ol%me @ereby society seeks to satis!y te @ant grati!ied by te article in
D%estion, on te oter0 E8ery indi8id%al article, or e8ery de!inite D%antity o! a commodity may,
indeed, contain no more tan te social labo%r reD%ired !or its prod%ction, and !rom tis point o!
8ie@ te market-8al%e o! tis entire commodity represents only necessary labo%r, b%t i! tis
commodity as been prod%ced in excess o! te existing social needs, ten so m%c o! te social
labo%r-time is sD%andered and te mass o! te commodity comes to represent a m%c smaller
D%antity o! social labo%r in te market tan is act%ally incorporated in it0 B&t is only @ere
prod%ction is %nder te act%al, predetermining control o! society tat te latter establises a
relation bet@een te 8ol%me o! social labo%r-time applied in prod%cing de!inite articles, and te
8ol%me o! te social @ant to be satis!ied by tese articles0C For tis reason, tese commodities
m%st be sold belo@ teir market-8al%e, and a portion o! tem may e8en be altogeter %nsaleable0
5e re8erse applies i! te D%antity o! social labo%r employed in te prod%ction o! a certain kind o!
commodity is too small to meet te social demand !or tat commodity0 A%t i! te D%antity o!
social labo%r expended in te prod%ction o! a certain article corresponds to te social demand !or
tat article, so tat te prod%ced D%antity corresponds to te %s%al scale o! reprod%ction and te
demand remains %ncanged, ten te article is sold at its market-8al%e0 5e excange, or sale, o!
commodities at teir 8al%e is te rational state o! a!!airs, i0e0, te nat%ral la@ o! teir eD%ilibri%m0
&t is tis la@ tat explains te de8iations, and not 8ice 8ersa, te de8iations tat explain te la@0
-o@ let %s look at te oter side I te demand0
;ommodities are bo%gt eiter as means o! prod%ction or means o! s%bsistence to enter
prod%cti8e or indi8id%al cons%mption0 &t does not alter matters tat some commodities may ser8e
bot p%rposes0 5ere is, ten, a demand !or tem on te part o! prod%cers Bere capitalists, since
@e a8e ass%med tat means o! prod%ction a8e been trans!ormed into capitalC and o! cons%mers0
Aot appear at !irst sigt to pres%ppose a gi8en D%antity o! social @ant on te side o! demand,
corresponding on te oter side to a de!inite D%antity o! social o%tp%t in te 8ario%s lines o!
prod%ction0 &! te cotton ind%stry is to accomplis its ann%al reprod%ction on a gi8en scale, it
m%st a8e te %s%al s%pply o! cotton, and, oter circ%mstances remaining te same, an additional
amo%nt o! cotton corresponding to te ann%al extension o! reprod%ction ca%sed by te
acc%m%lation o! capital0 5is is eD%ally tr%e @it regard to means o! s%bsistence0 5e @orking-
class m%st !ind at least te same D%antity o! necessities on and i! it is to contin%e li8ing in its
acc%stomed a8erage @ay, alto%g tey may be more or less di!!erently distrib%ted among te
di!!erent kinds o! commodities0 Moreo8er, tere m%st be an additional D%antity to allo@ !or te
ann%al increase o! pop%lation0 5e same, @it more or less modi!ication, applies to oter classes0
&t @o%ld seem, ten, tat tere is on te side o! demand a certain magnit%de o! de!inite social
@ants @ic reD%ire !or teir satis!action a de!inite D%antity o! a commodity on te market0 A%t
D%antitati8ely, te de!inite social @ants are 8ery elastic and canging0 5eir !ixedness is only
apparent0 &! te means o! s%bsistence @ere ceaper, or money-@ages iger, te labo%rers @o%ld
b%y more o! tem, and a greater social need @o%ld arise !or tem, lea8ing aside te pa%pers, etc0,
@ose demand is e8en belo@ te narro@est limits o! teir pysical @ants0 3n te oter and, i!
cotton @ere ceaper, !or example, te capitalists" demand !or it @o%ld increase, more additional
capital @o%ld be tro@n into te cotton ind%stry, etc0 We m%st ne8er !orget tat te demand !or
prod%cti8e cons%mption is, %nder o%r ass%mption, a demand o! te capitalist, @ose essential
p%rpose is te prod%ction o! s%rpl%s-8al%e, so tat e prod%ces a partic%lar commodity to tis sole
138 ;apter J
end0 $till, tis does not inder te capitalist, so long as e appears in te market as a b%yer o!, say,
cotton, !rom representing te need !or tis cotton, H%st as it is immaterial to te seller o! cotton
@eter te b%yer con8erts it into sirting or g%n-cotton, or @eter e intends to t%rn it into
@ads !or is o@n, and te @orld"s, ears0 A%t tis does exert a considerable in!l%ence on te kind
o! b%yer te capitalist is0 6is demand !or cotton is s%bstantially modi!ied by te !act tat it
disg%ises is real need !or making pro!it0 5e limits @itin @ic te need !or commodities in te
mar-et, te demand, di!!ers D%antitati8ely !rom te actual social need, nat%rally 8ary
considerably !or di!!erent commodities# @at & mean is te di!!erence bet@een te demanded
D%antity o! commodities and te D%antity @ic @o%ld a8e been in demand at oter money-
prices or oter money or li8ing conditions o! te b%yers0
-oting is easier tan to realise te inconsistencies o! demand and s%pply, and te res%lting
de8iation o! market-prices !rom market-8al%es0 5e real di!!ic%lty consists in determining @at is
meant by te eD%ation o! s%pply and demand0
$%pply and demand coincide @en teir m%t%al proportions are s%c tat te mass o!
commodities o! a de!inite line o! prod%ction can be sold at teir market-8al%e, neiter abo8e nor
belo@ it0 5at is te !irst ting @e ear0
5e second is tis: &! commodities are sold at teir market-8al%es, s%pply and demand coincide0
&! s%pply eD%als demand, tey cease to act, and !or tis 8ery reason commodities are sold at teir
market-8al%es0 Wene8er t@o !orces operate eD%ally in opposite directions, tey balance one
anoter, exert no o%tside in!l%ence, and any penomena taking place in tese circ%mstances m%st
be explained by ca%ses oter tan te e!!ect o! tese t@o !orces0 &! s%pply and demand balance
one anoter, tey cease to explain anyting, do not a!!ect market-8al%es, and tere!ore lea8e %s so
m%c more in te dark abo%t te reasons @y te market-8al%e is expressed in H%st tis s%m o!
money and no oter0 &t is e8ident tat te real inner la@s o! capitalist prod%ction cannot be
explained by te interaction o! s%pply and demand BD%ite aside !rom a deeper analysis o! tese
t@o social moti8e !orces, @ic @o%ld be o%t o! place ereC, beca%se tese la@s cannot be
obser8ed in teir 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! tey 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 tat s%pply and
demand coincide @it one anoter0 WyQ 5o be able to st%dy penomena in teir !%ndamental
relations, in te !orm corresponding to teir conception, tat is, is to st%dy tem independent o!
te appearances ca%sed by te mo8ement o! s%pply and demand0 5e oter reason is to !ind te
act%al tendencies o! teir mo8ements and to some extent to record tem0 $ince te inconsistencies
are o! an antagonistic nat%re, and since tey contin%ally s%cceed one anoter, tey balance o%t
one anoter tro%g teir opposing mo8ements, and teir m%t%al contradiction0 $ince, tere!ore,
s%pply and demand ne8er eD%al one anoter in any gi8en case, teir di!!erences !ollo@ one
anoter in s%c a @ay I and te res%lt o! a de8iation in one direction is tat it calls !ort a
de8iation in te opposite direction I tat s%pply and demand are al@ays eD%ated @en te @ole
is 8ie@ed o8er a certain period, b%t only as an a8erage o! past mo8ements, and only as te
contin%o%s mo8ement o! teir contradiction0 &n tis @ay, te market-prices @ic a8e de8iated
!rom te market-8al%es adH%st temsel8es, as 8ie@ed !rom te standpoint o! teir a8erage n%mber,
to eD%al te market-8al%es, in tat de8iations !rom te latter cancel eac oter as pl%s and min%s0
?nd tis a8erage is not merely o! teoretical, b%t also o! practical importance to capital, @ose
in8estment is calc%lated on te !l%ct%ations and compensations o! a more or less !ixed period0
3n te one and, te relation o! demand and s%pply, tere!ore, only explains te de8iations o!
market-prices !rom market-8al%es0 3n te oter, it explains te tendency to eliminate tese
de8iations, i0e0, to eliminate te e!!ect o! te relation o! demand and s%pply0 B$%c exceptions as
commodities @ic a8e a price @ito%t a8ing a 8al%e are not considered ere0C $%pply and
demand may eliminate te e!!ect ca%sed by teir di!!erence in many di!!erent @ays0 For instance,
i! te demand, and conseD%ently te market-price, !all, capital may be @itdra@n, t%s ca%sing
13* ;apter J
s%pply to srink0 &t may also be tat te market-8al%e itsel! srinks and balances @it te market-
price as a res%lt o! in8entions @ic red%ce te necessary labo%r-time0 ;on8ersely, i! te demand
increases, and conseD%ently te market-price rises abo8e te market-8al%e, tis may lead to too
m%c capital !lo@ing into tis line o! prod%ction and prod%ction may s@ell to s%c an extent tat
te market-price @ill e8en !all belo@ te market-8al%e0 3r, it may lead to a price increase, @ic
c%ts te demand0 &n some lines o! prod%ction it may also bring abo%t a rise in te market-8al%e
itsel! !or a sorter or longer period, @it a portion o! te desired prod%cts a8ing to be prod%ced
%nder @orse conditions d%ring tis period0
$%pply and demand determine te market-price, and so does te market-price, and te market-
8al%e in te !%rter analysis, determine s%pply and demand0 5is is ob8io%s in te case o!
demand, since it mo8es in a direction opposite to prices, s@elling @en prices !all, and 8ice 8ersa0
A%t tis is also tr%e o! s%pply0 Aeca%se te prices o! means o! prod%ction incorporated in te
o!!ered commodities determine te demand !or tese means o! prod%ction, and t%s te s%pply o!
commodities @ose s%pply embraces te demand !or tese means o! prod%ction0 5e prices o!
cotton are determinants in te s%pply o! cotton goods0
5o tis con!%sion I determining prices tro%g demand and s%pply, and, at te same time,
determining s%pply and demand tro%g prices I m%st be added tat demand determines s%pply,
H%st as s%pply determines demand, and prod%ction determines te market, as @ell as te market
determines prod%ction0
<

E8en te ordinary economist Bsee !ootnoteC agrees tat te proportion bet@een s%pply and
demand may 8ary in conseD%ence o! a cange in te market-8al%e o! commodities, @ito%t a
cange being bro%gt abo%t in demand or s%pply by extraneo%s circ%mstances0 E8en e m%st
admit tat, @ate8er te market-8al%e, s%pply and demand m%st coincide in order !or it to be
establised0 &n oter @ords, te ratio o! s%pply to demand does not explain te market-8al%e, b%t
con8ersely, te latter rater explains te !l%ct%ations o! s%pply and demand0 5e a%tor o! te
:bservations contin%es a!ter te passage D%oted in te !ootnote:
K5is proportionL Bbet@een demand and s%pplyC,
Ko@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 te s%pply is eD%al to te e!!ect%al
demand, tat is, to tat demand @ic @ill neiter
more nor less tan pay te nat%ral price, tat te
nat%ral price is in !act paid# conseD%ently, tere may
be t@o 8ery di!!erent nat%ral prices, at di!!erent times,
!or te same commodity, and yet te proportion,
@ic te s%pply bears to te demand, be in bot
cases te same, namely, te proportion o! eD%ality0L
&t is admitted, ten, tat @it t@o di!!erent nat%ral prices o! te same commodity, at di!!erent
times, demand and s%pply are al@ays able to, and m%st, balance one anoter i! te commodity is
to be sold at its nat%ral price in bot instances0 $ince tere is no di!!erence in te ratio o! s%pply
to demand in eiter case, b%t a di!!erence in te magnit%de o! te nat%ral price itsel!, it !ollo@s
tat tis price is ob8io%sly determined independently o! demand and s%pply, and t%s tat it can
least o! all be determined by tem0
12= ;apter J
For a commodity to be sold at its market-8al%e, i0e0, proportionally to te necessary social labo%r
contained in it, te total D%antity o! social labo%r %sed in prod%cing te total mass o! tis
commodity m%st correspond to te D%antity o! te social @ant !or it, i0e0, te e!!ecti8e social @ant0
;ompetition, te !l%ct%ations o! market-prices @ic correspond to te !l%ct%ations o! demand
and s%pply, tend contin%ally to red%ce to tis scale te total D%antity o! labo%r de8oted to eac
kind o! commodity0
5e proportion o! s%pply and demand recapit%lates, !irst, te relation o! %se-8al%e to excange-
8al%e, o! commodity to money, and o! b%yer to seller# and, second, tat o! prod%cer to cons%mer,
alto%g bot o! tem may be represented by tird parties, te mercants0 &n considering b%yer
and seller, it s%!!ices to co%nterpose tem indi8id%ally in order to present teir relationsip0 5ree
indi8id%als are eno%g !or te complete metamorposis o! a commodity, and tere!ore !or te
process o! sale and p%rcase taken as a @ole0 ? con8erts is commodity into te money o! A, to
@om e sells is commodity, and recon8erts is money again into commodities, @en e %ses it
to make p%rcases !rom ;# te @ole process takes place among tese tree0 F%rter, in te st%dy
o! money it ad been ass%med tat te commodities are sold at teir 8al%es beca%se tere @as
absol%tely no reason to consider prices di8ergent !rom 8al%es, it being merely a matter o! canges
o! !orm @ic commodities %ndergo in teir trans!ormation into money and teir recon8ersion
!rom money into commodities0 ?s soon as a commodity as been sold and a ne@ commodity
bo%gt @it te receipts, @e a8e be!ore %s te entire metamorposis, and to tis process as s%c
it is immaterial @eter te price o! te commodity lies abo8e or belo@ its 8al%e0 5e 8al%e o!
te commodity remains important as a basis, beca%se te concept o! money cannot be de8eloped
on any oter !o%ndation, and price, in its general meaning, is b%t 8al%e in te !orm o! money0 ?t
any rate, it is ass%med in te st%dy o! money as a medi%m o! circ%lation tat tere is not H%st one
metamorposis o! a certain commodity0 &t is rater te social interrelation o! tese
metamorposes @ic is st%died0 3nly t%s do @e arri8e at te circ%lation o! money and te
de8elopment o! its !%nction as a medi%m o! circ%lation0 A%t o@e8er important tis connection
may be !or te con8ersion o! money into a circ%lating medi%m, and !or its res%lting cange o!
!orm, it is o! no moment to te transaction bet@een indi8id%al b%yers and sellers0
&n te case o! s%pply and demand, o@e8er, te s%pply is eD%al to te s%m o! sellers, or
prod%cers, o! a certain kind o! commodity, and te demand eD%als te s%m o! b%yers or
cons%mers Bbot prod%cti8e and indi8id%alC o! te same kind o! commodity0 5e s%ms react on
one anoter as %nits, as aggregate !orces0 5e indi8id%al co%nts ere only as part o! a social !orce,
as an atom o! te mass, and it is in tis !orm tat competition brings o%t te socialcaracter o!
prod%ction and cons%mption0
5e side o! competition @ic appens !or te moment to be @eaker is also te side in @ic te
indi8id%al acts independently o!, and o!ten directly against, te mass o! is competitors, and
precisely in tis manner is te dependence o! one %pon te oter impressed %pon tem, @ile te
stronger side acts al@ays more or less as a %nited @ole against its antagonist0 &! te demand !or
tis partic%lar kind o! commodity is greater tan te s%pply, one b%yer o%tbids anoter I @itin
certain limits I and so raises te price o! te commodity !or all o! tem abo8e te market-8al%e,
@ile on te oter and te sellers %nite in trying to sell at a ig market-price0 &!, con8ersely, te
s%pply exceeds te demand, one begins to dispose o! is goods at a ceaper rate and te oters
m%st !ollo@, @ile te b%yers %nite in teir e!!orts to depress te market-price as m%c as
possible belo@ te market-8al%e0 5e common interest is appreciated by eac only so long as e
gains more by it tan @ito%t it0 ?nd %nity o! action ceases te moment one or te oter side
becomes te @eaker, @en eac tries to extricate imsel! on is o@n as ad8antageo%sly as e
possibly can0 ?gain, i! one prod%ces more ceaply and can sell more goods, t%s possessing
imsel! o! a greater place in te market by selling belo@ te c%rrent market-price, or market-
8al%e, e @ill do so, and @ill tereby begin a mo8ement @ic grad%ally compels te oters to
introd%ce te ceaper mode o! prod%ction, and one @ic red%ces te socially necessary labo%r to
121 ;apter J
a ne@, and lo@er, le8el0 &! one side as te ad8antage, all belonging to it gain0 &t is as to%g tey
exerted teir common monopoly0 &! one side is @eaker, ten one may try on is o@n ook to
become te stronger B!or instance, one @o @orks @it lo@er costs o! prod%ctionC, or at least to
get o!! as ligtly as possible, and in s%c cases eac !or imsel! and te de8il take te indmost,
alto%g is actions a!!ect not only imsel!, b%t also all is boon companions0
3

7emand and s%pply imply te con8ersion o! 8al%e into market-8al%e, and so !ar as tey proceed
on a capitalist basis, so !ar as te commodities are prod%cts o! capital, tey are based on capitalist
prod%ction processes, i0e0, on D%ite di!!erent relationsips tan te mere p%rcase and sale o!
goods0 6ere it is not a D%estion o! te !ormal con8ersion o! te 8al%e o! commodities into prices,
i0e0, not o! a mere cange o! !orm0 &t is a D%estion o! de!inite de8iations in D%antity o! te market-
prices !rom te market-8al%es, and, !%rter, !rom te prices o! prod%ction0 &n simple p%rcase and
sale it s%!!ices to a8e te prod%cers o! commodities as s%c co%nterposed to one anoter0 &n
!%rter analysis s%pply and demand pres%ppose te existence o! di!!erent classes and sections o!
classes @ic di8ide te total re8en%e o! a society and cons%me it among temsel8es as re8en%e,
and, tere!ore, make %p te demand created by re8en%e0 Wile on te oter and it reD%ires an
insigt into te o8er-all str%ct%re o! te capitalist prod%ction process !or an %nderstanding o! te
s%pply and demand created among temsel8es by prod%cers as s%c0
(nder capitalist prod%ction it is not merely a matter o! obtaining an eD%al mass o! 8al%e in
anoter !orm I be it tat o! money or some oter commodity I !or a mass o! 8al%es tro@n into
circ%lation in te !orm o! a commodity, b%t it is rater a matter o! realising as m%c s%rpl%s-
8al%e, or pro!it, on capital ad8anced !or prod%ction, as any oter capital o! te same magnit%de,
or pro rata to its magnit%de in @ice8er line it is applied0 &t is, tere!ore, a matter, at least as a
minim%m, o! selling te commodities at prices @ic yield te a8erage pro!it, i0e0, at prices o!
prod%ction0 &n tis !orm capital becomes conscio%s o! itsel! as a social power in @ic e8ery
capitalist participates proportionally to is sare in te total social capital0
First, capitalist prod%ction is in itsel! indi!!erent to te partic%lar %se-8al%e, and distincti8e
!eat%res o! any commodity it prod%ces0 &n e8ery spere 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 te
prod%ct o! labo%r0 ?nd it is like@ise in te nat%re o! te @age-labo%r s%bordinated by capital tat
it is indi!!erent to te speci!ic caracter o! its labo%r and m%st s%bmit to being trans!ormed in
accordance @it te reD%irements o! capital and to being trans!erred !rom one spere o!
prod%ction to anoter0
$econd, one spere o! prod%ction is, in !act, H%st as good or H%st as bad as anoter0 E8ery one o!
tem yields te same pro!it, and e8ery one o! tem @o%ld be %seless i! te commodities it
prod%ced did not satis!y some social need0
-o@, i! te commodities are sold at teir 8al%es, ten, as @e a8e so@n, 8ery di!!erent rates o!
pro!it arise in te 8ario%s speres o! prod%ction, depending on te di!!erent organic composition
o! te masses o! capital in8ested in tem0 A%t capital @itdra@s !rom a spere @it a lo@ rate o!
pro!it and in8ades oters, @ic yield a iger pro!it0 5ro%g tis incessant o%t!lo@ and in!l%x,
or, brie!ly, tro%g its distrib%tion among te 8ario%s speres, @ic depends on o@ te rate o!
pro!it !alls ere and rises tere, it creates s%c a ratio o! s%pply to demand tat te a8erage pro!it
in te 8ario%s speres o! prod%ction becomes te same, and 8al%es are, tere!ore, con8erted into
prices o! prod%ction0 ;apital s%cceeds in tis eD%alisation, to a greater or lesser degree, depending
on te extent o! capitalist de8elopment in te gi8en nation# i0e0, on te extent te conditions in te
co%ntry in D%estion are adapted !or te capitalist mode o! prod%ction0 Wit te progress o!
capitalist prod%ction, it also de8elops its o@n conditions and s%bordinates to its speci!ic caracter
and its immanent la@s all te social prereD%isites on @ic te prod%ction process is based0
5e incessant eD%ilibration o! constant di8ergences is accomplised so m%c more D%ickly, 1C te
more mobile te capital, i0e0, te more easily it can be si!ted !rom one spere and !rom one place
12< ;apter J
to anoter# <C te more D%ickly labo%r-po@er can be trans!erred !rom one spere to anoter and
!rom one prod%ction locality to anoter0 5e !irst condition implies complete !reedom o! trade
@itin te society and te remo8al o! all monopolies @it te exception o! te nat%ral ones, tose,
tat is, @ic nat%rally arise o%t o! te capitalist mode o! prod%ction0 &t implies, !%rtermore, te
de8elopment o! te credit system, @ic concentrates te inorganic mass o! te disposable social
capital 8is-a-8is te indi8id%al capitalist0 Finally, it implies te s%bordination o! te 8ario%s
speres o! prod%ction to te control o! capitalists0 5is last implication is incl%ded in o%r
premises, since @e ass%med tat it @as a matter o! con8erting 8al%es into prices o! prod%ction in
all capitalistically exploited speres o! prod%ction0 A%t tis eD%ilibration itsel! r%ns into greater
obstacles, @ene8er n%mero%s and large speres o! prod%ction not operated on a capitalist basis
Bs%c as soil c%lti8ation by small !armersC, !ilter in bet@een te capitalist enterprises and become
linked @it tem0 ? great density o! pop%lation is anoter reD%irement0I 5e second condition
implies te abolition o! all la@s pre8enting te labo%rers !rom trans!erring !rom one spere o!
prod%ction to anoter and !rom one local centre o! prod%ction to anoter# indi!!erence o! te
labo%rer to te nat%re o! is labo%r# te greatest possible red%ction o! labo%r in all speres o!
prod%ction to simple labo%r# te elimination o! all 8ocational preH%dices among labo%rers# and
last b%t not least, a s%bH%gation o! te labo%rer to te capitalist mode o! prod%ction0 F%rter
re!erence to tis belongs to a special analysis o! competition0
&t !ollo@s !rom te !oregoing tat in eac partic%lar spere o! prod%ction te indi8id%al capitalist,
as @ell as te capitalists as a @ole, take direct part in te exploitation o! te total @orking-class
by te totality o! capital and in te degree o! tat exploitation, not only o%t o! general class
sympaty, b%t also !or direct economic reasons0 For, ass%ming all oter conditions I among tem
te 8al%e o! te total ad8anced constant capital I to be gi8en, te a8erage rate o! pro!it depends
on te intensity o! exploitation o! te s%m total o! labo%r by te s%m total o! capital0
5e a8erage pro!it coincides @it te a8erage s%rpl%s-8al%e prod%ced !or eac 1== o! capital, and
so !ar as te s%rpl%s-8al%e is concerned te !oregoing statements apply as a matter o! co%rse0 &n
te case o! te a8erage pro!it te 8al%e o! te ad8anced capital becomes an additional element
determining te rate o! pro!it0 &n !act, te direct interest taken by te capitalist, or te capital, o!
any indi8id%al spere o! prod%ction in te exploitation o! te labo%rers @o are directly
employed is con!ined to making an extra gain, a pro!it exceeding te a8erage, eiter tro%g
exceptional o8er@ork, or red%ction o! te @age belo@ te a8erage, or tro%g te exceptional
prod%cti8ity o! te labo%r employed0 ?side !rom tis, a capitalist @o @o%ld not in is line o!
prod%ction employ any 8ariable capital, and tere!ore any labo%rer Bin reality an exaggerated
ass%mptionC, @o%ld noneteless be as m%c interested in te exploitation o! te @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 Banoter exaggerationC, and @o @o%ld t%s in8est is
entire capital in @ages0 A%t te degree o! exploitation o! labo%r depends on te a8erage intensity
o! labo%r i! te @orking-day is gi8en, and on te lengt o! te @orking-day i! te intensity o!
exploitation is gi8en0 5e degree o! exploitation o! labo%r determines te rate o! s%rpl%s-8al%e,
and tere!ore te mass o! s%rpl%s-8al%e !or a gi8en total mass o! 8ariable capital, and
conseD%ently te magnit%de o! te pro!it0 5e indi8id%al capitalist, as distinct !rom is spere as a
@ole, as te same special interest in exploiting te labo%rers e personally employs as te
capital o! a partic%lar spere, as distinct !rom te total social capital, as in exploiting te
labo%rers directly employed in tat spere0
3n te oter and, e8ery partic%lar spere o! capital, and e8ery indi8id%al capitalist, a8e te
same interest in te prod%cti8ity o! te social labo%r employed by te s%m total o! capital0 For
t@o tings depend on tis prod%cti8ity: First, te mass o! %se-8al%es in @ic te a8erage pro!it is
expressed# and tis is do%bly important, since tis a8erage pro!it ser8es as a !%nd !or te
acc%m%lation o! ne@ capital and as a !%nd !or re8en%e to be spent !or cons%mption0 $econd, te
8al%e o! te total capital in8ested Bconstant and 8ariableC, @ic, te amo%nt o! s%rpl%s-8al%e, or
123 ;apter J
pro!it, !or te @ole capitalist class being gi8en, determines te rate o! pro!it, or te pro!it on a
certain D%antity o! capital0 5e special prod%cti8ity o! labo%r in any partic%lar spere, or in any
indi8id%al enterprise o! tis spere, is o! interest only to tose capitalists @o are directly
engaged in it, since it enables tat partic%lar spere, 8is-a-8is te total capital, or tat indi8id%al
capitalist, 8is-a-8is is spere, to make an extra pro!it0
6ere, ten, @e a8e a matematically precise proo! @y capitalists !orm a 8eritable !reemason
society 8is-a-8is te @ole @orking-class, @ile tere is little lo8e lost bet@een tem in
competition among temsel8es0
5e price o! prod%ction incl%des te 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
te pysiocrats call pri n7cessaire, beca%se in te long r%n it is a prereD%isite o! s%pply, o! te
reprod%ction o! commodities in e8ery indi8id%al spere0 A%t none o! tem as re8ealed te
di!!erence bet@een price o! prod%ction and 8al%e0 We can @ell %nderstand @y te same
economists @o oppose determining te 8al%e o! commodities by labo%r-time, i0e0, by te
D%antity o! labo%r contained in tem, @y tey al@ays speak o! prices o! prod%ction as centres
aro%nd @ic market-prices !l%ct%ate0 5ey can a!!ord to do it beca%se te price o! prod%ction is
an %tterly external and prima facie meaningless !orm o! te 8al%e o! commodities, a !orm as it
appears in competition, tere!ore in te mind o! te 8%lgar capitalist, and conseD%ently in tat o!
te 8%lgar economist0
3%r analysis as re8ealed o@ te market-8al%e Band e8eryting said concerning it applies @it
appropriate modi!ications to te price o! prod%ctionC embraces a s%rpl%s-pro!it !or tose @o
prod%ce in any partic%lar spere o! prod%ction %nder te most !a8o%rable conditions0 Wit te
exception o! crises, and o! o8erprod%ction in general, tis applies to all market-prices, no matter
o@ m%c tey may de8iate !rom market-8al%es or market-prices o! prod%ction0 For te market-
price signi!ies tat te same price is paid !or commodities o! te same kind, alto%g tey may
a8e been prod%ced %nder 8ery di!!erent indi8id%al conditions and ence may a8e di!!erent cost-
prices0 BWe do not speak at tis point o! any s%rpl%s-pro!its d%e to monopolies in te %s%al sense
o! te term, @eter nat%ral or arti!icial0C
? s%rpl%s-pro!it may also arise i! certain speres o! prod%ction are in a position to e8ade te
con8ersion o! te 8al%es o! teir commodities into prices o! prod%ction, and t%s te red%ction o!
teir pro!its to te a8erage pro!it0 We sall de8ote more attention to te !%rter modi!ications o!
tese t@o !orms o! s%rpl%s-pro!it in te part dealing @it gro%nd-rent0
Chapter 11. Efects of General Wage
Fluctuations on Prices of Production
'et te a8erage composition o! social capital be 8=c U <=8, and te pro!it <=T0 5e rate o!
s%rpl%s-8al%e is ten 1==T0 ? general increase o! @ages, all else remaining te same, is
tantamo%nt to a red%ction in te rate o! s%rpl%s-8al%e0 &n te case o! a8erage capital, pro!it and
s%rpl%s-8al%e are identical0 'et @ages rise <+T0 5en te same D%antity o! labo%r, !ormerly set in
motion @it <=, @ill cost <+0 We sall ten 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, te labo%r set in motion by te 8ariable capital prod%ces a 8al%e o! 2=0
&! 8 rises !rom <= to <+, te s%rpl%s s, or p, @ill amo%nt to only 1+0 5e pro!it o! 1+ on a capital o!
1=+ is 12 <N>T, and tis @o%ld be te ne@ a8erage rate o! pro!it0 $ince te price o! prod%ction o!
commodities prod%ced by te a8erage capital coincides @it teir 8al%e, te price o! prod%ction
o! tese commodities @o%ld a8e remained %ncanged0 ? @age increase @o%ld tere!ore a8e
ca%sed a drop in pro!it, b%t no cange in te 8al%e and price o! te commodities0 Formerly, as
long as te a8erage pro!it @as <=T, te price o! prod%ction o! commodities prod%ced in one
period o! t%rno8er @as eD%al to teir cost-price pl%s a pro!it o! <=T on tis cost-price, tere!ore R
k U kp" R k U <=kN1==0 &n tis !orm%la k is a 8ariable magnit%de, canging in accordance @it te
8al%e o! te means o! prod%ction tat go into te commodities, and @it te amo%nt o!
depreciation gi8en %p by te !ixed capital to te prod%ct0 5e price o! prod%ction @o%ld ten
amo%nt to k U 12 <N> kN1==0 'et %s no@ select a capital, @ose composition is lo@er tan te
original composition o! te a8erage social capital o! 8=c U <=8 B@ic as no@ canged into >6
2N<1c U <3 1>N<18C# say, +=c U +=80 &n tis case, te price o! prod%ction o! te ann%al prod%ct
be!ore te @age increase @o%ld a8e been +=c U +=8 U <=p R 1<=, ass%ming !or te sake o!
simplicity tat te entire !ixed capital passes tro%g depreciation into te prod%ct and tat te
period o! t%rno8er is te same as in te !irst case0 For te same D%antity o! labo%r set in motion a
@age increase o! <+T means an increase o! te 8ariable capital !rom += to 6<Z0 &! te ann%al
prod%ct @ere sold at te !ormer price o! prod%ction o! 1<=, tis @o%ld gi8e %s +=c U 6<Z8 U >Zp,
or a rate o! pro!it o! 6WT0 A%t te ne@ a8erage rate o! pro!it is 12 <N>T, and since @e ass%me all
oter circ%mstances to remain te same, te capital o! +=c U 6<Z 8 m%st also make tis 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 5ere!ore, te
price o! prod%ction o! te commodities prod%ced by tis capital is no@ +=c U 6<Z 8 U 16[p R 1<8
8N120 3@ing to a @age rise o! <++, te price o! prod%ction o! te same D%antity o! te same
commodities, tere!ore, as ere risen !rom 1<= to 1<8 8N12, or more tan >T0
;on8ersely, s%ppose @e take a spere o! prod%ction o! a iger composition tan te a8erage
capital# say, *<c U 880 5e original a8erage pro!it in tis case @o%ld still be <=, and i! @e again
ass%me tat te entire !ixed capital passes into te ann%al prod%ct and tat te period o! t%rno8er
is te same as in cases & and &&, te price o! prod%ction o! te commodity is ere also 1<=0
3@ing to te rise in @ages o! <+T te 8ariable capital !or te same D%antity o! labo%r rises !rom
8 to 1=, te cost-price o! te commodities !rom 1== to 1=<, @ile te a8erage rate o! pro!it !alls
!rom <=T to 12 <N>T0 A%t 1==:12 <N> R 1=<:12 2N>0 5e pro!it no@ !alling to te sare o! 1=< is
tere!ore 12 2N>0 For tis reason, te total prod%ct sells at k U kp" R 1=< U 12 2N> R 116 2N>0 5e
price o! prod%ction as tere!ore !allen !rom 1<= to 116 2N>, or 3 3N>0
;onseD%ently, i! @ages are raised <+T:
1C te price o! prod%ction o! te commodities o! a capital o! a8erage social composition does not
cange#
12+ ;apter J&
<C te price o! prod%ction o! te commodities o! a capital o! lo@er composition rises, b%t not in
proportion to te !all in pro!it#
3C te price o! prod%ction o! te commodities o! a capital o! iger composition !alls, b%t also not
in te same proportion as pro!it0
$ince te price o! prod%ction o! te commodities o! te a8erage capital remained te same, eD%al
to te 8al%e o! te prod%ct, te s%m o! te prices o! prod%ction o! te prod%cts o! all capitals
remained te same as @ell, and eD%al to te s%m total o! te 8al%es prod%ced by te aggregate
capital0 5e increase on one side and te decrease on te oter balance !or te aggregate capital
on te le8el o! te a8erage social capital0
&! te price o! prod%ction rises in case && and !alls in case &&&, tese opposite e!!ects alone, @ic
are bro%gt abo%t by a !all in te rate o! s%rpl%s-8al%e or by a general @age increase, so@ tat
tis cannot be a matter o! compensation in te price !or te rise in @ages, since te !all in te
price o! prod%ction in case &&& cannot compensate te capitalist !or te !all in pro!it, and since te
rise o! te price in case && does not pre8ent a !all in pro!it0 )ater, in eiter case, @eter te price
rises or !alls, te pro!it remains te same as tat o! te a8erage capital, in @ic case te price
remains %ncanged0 &t is te same a8erage pro!it @ic as !allen by + +N>, or some@at o8er
<+T, in te case o! && as @ell as &&&0 &t !ollo@s !rom tis tat i! te price did not rise in && and !all
in &&&, && @o%ld a8e to sell belo@ and &&& abo8e te ne@ red%ced a8erage pro!it0 &t is sel!-e8ident
tat, depending on @eter +=, <+, or 1= per 1== %nits o! capital are laid o%t !or @ages, te 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 tat on one @o as in8ested [ or Z0 ?n increase in te price o! prod%ction on te
one side, a !all on te oter, depending on a capital being belo@ or abo8e te a8erage social
composition, occ%rs solely by 8irt%e o! te process o! le8elling te pro!it to te ne@ red%ced
a8erage pro!it0
6o@ @o%ld a general red%ction in @ages, and a corresponding general rise o! te rate o! pro!it,
and t%s o! te a8erage pro!it, no@ a!!ect te prices o! prod%ction o! commodities prod%ced by
capitals de8iating in opposite directions !rom te a8erage social compositionQ We a8e b%t to
re8erse te !oregoing exposition to obtain te 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%rt0
5en te same constant capital is set in motion by 1+8, instead o! <=80 5en te 8al%e o!
commodities R 8=c U 1+8 U <+p R 1<=0 5e D%antity o! labo%r per!ormed by 8 remains %ncanged,
except tat te 8al%e ne@ly created by it is distrib%ted di!!erently bet@een te capitalist and te
labo%rer0 5e s%rpl%s-8al%e rises !rom <= to <+ and te rate o! s%rpl%s-8al%e !rom <=N<= to <+N1+,
or !rom 1==T to 166WT0 5e pro!it on *+ no@ R <+, so tat te rate o! pro!it per 1== R <6 6N1*0
5e ne@ composition o! te 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 te !all o! @ages by one-!o%rt 8 is
red%ced to 3>Z, and conseD%ently te ad8anced total capital to +=c U 3>Z 8 R 8>Z0 &! @e apply
te ne@ rate o! pro!it o! <6 6N1*T to tis, @e get 1==:<6 6N1* R 8>Z:<3 1N380 5e same mass o!
commodities @ic !ormerly cost 1<=, no@ costs 8>Z U <3 1N38 R 11= 1=N1*, tis being a price
red%ction o! almost 1=T0
&&&0 6iger composition0 3riginally *<c U 88 R 1==0 5e red%ction o! @ages by one-!o%rt red%ces
88 to 68, and te total capital to *80 ;onseD%ently, 1==:<6 6N1* R *8:<+ 16N1*0 5e price o!
prod%ction o! te commodity, !ormerly 1== U <= R 1<=, is no@, a!ter te !all in @ages, *8 U <+
1+N1* R 1<3 1+N1*, tis being a rise o! almost 20
&t is e8ident, tere!ore, tat @e a8e b%t to !ollo@ te same de8elopment in te opposite direction
@it te appropriate modi!ications# tat a general red%ction o! @ages is attended by a general rise
o! s%rpl%s-8al%e, o! te rate o! s%rpl%s-8al%e and, oter circ%mstances remaining te same, o! te
rate o! pro!it, e8en i! expressed in a di!!erent proportion# a !all in te prices o! prod%ction !or
126 ;apter J&
commodities prod%ced by capitals o! lo@er composition, and a rise in te prices o! prod%ction !or
commodities prod%ced by capitals o! iger composition0 5e res%lt is H%st te re8erse o! tat
obser8ed !or a general rise o! @ages0
1
&n bot cases I rise or !all o! @ages I it is ass%med tat te
@orking-day remains te same, and also te prices o! te means o! s%bsistence0 &n tese
circ%mstances a !all in @ages is possible only i! tey stood iger tan te normal price o! labo%r,
or i! tey are depressed belo@ tis price0 5e @ay in @ic te matter is modi!ied i! te rise or
!all o! @ages is d%e to a cange in 8al%e, and conseD%ently te price o! prod%ction o!
commodities %s%ally cons%med by te labo%rer, @ill be analysed at some lengt in te part
dealing @it gro%nd-rent0 ?t tis point, o@e8er, te !ollo@ing remarks are to be made once and
!or all:
$o%ld te rise or !all in @ages be d%e to a cange in te 8al%e o! te necessities o! li!e, a
modi!ication o! te !oregoing !indings can take place only to te extent tat commodities, @ose
cange o! price raises or lo@ers te 8ariable capital, also go into te constant capital as
constit%ent elements and tere!ore a!!ect more tan H%st te @ages alone0 A%t i! tey a!!ect only
@ages, te abo8e analysis contains all tat needs to be said0
&n tis entire capter, te establisment o! te general rate o! pro!it and te a8erage pro!it, and
conseD%ently, te transm%tation o! 8al%es into prices o! prod%ction, are ass%med as gi8en0 5e
D%estion merely @as, o@ a general rise or !all in @ages a!!ected te ass%med prices o!
prod%ction o! commodities0 5is is b%t a 8ery secondary D%estion compared @it te oter
important points analysed in tis part0 A%t it is te only rele8ant D%estion treated by )icardo, and,
as @e sall see, e treated it one-sidedly and %nsatis!actorily0
Chapter 12. Supplementary Remarks
I. Causes Impl#ing a Change in the Price of
Production
5ere are H%st t@o ca%ses tat can cange te price o! prod%ction o! a commodity:
'irst0 ? cange in te general rate o! pro!it0 5is can solely be d%e to a cange in te a8erage rate
o! s%rpl%s-8al%e, or, i! te a8erage rate o! s%rpl%s-8al%e remains te same, to a cange in te ratio
o! te s%m o! te appropriated s%rpl%s-8al%es to te s%m o! te ad8anced total social capital0
&! te cange in te rate o! s%rpl%s-8al%e is not d%e to a depression o! @ages belo@ normal, or
teir rise abo8e normal I and mo8ements o! tat kind are to be regarded merely as oscillations I
it can only occ%r eiter tro%g a rise, or !all, in te 8al%e o! labo%r-po@er, te one being H%st as
impossible as te oter %nless tere is a cange in te prod%cti8ity o! te labo%r prod%cing means
o! s%bsistence, i0e0, in te 8al%e o! commodities cons%med by te labo%rer0
3r, tro%g a cange in te proportion o! te s%m o! appropriated s%rpl%s-8al%es to te ad8anced
total capital o! society0 $ince te cange in tis case is not ca%sed by te rate o! s%rpl%s-8al%e, it
m%st be ca%sed by te total capital, or rater its constant part0 5e mass o! tis part, tecnically
considered, increases or decreases in proportion to te D%antity o! labo%r-po@er bo%gt by te
8ariable capital, and te mass o! its 8al%e t%s increases or decreases @it te increase or
decrease o! its o@n mass0 &t also increases or decreases, tere!ore, proportionately to te mass o!
te 8al%e o! te 8ariable capital0 &! te same labo%r sets more constant capital in motion, it as
become more prod%cti8e0 &! te re8erse, ten less prod%cti8e0 5%s, tere as been a cange in te
prod%cti8ity o! labo%r, and tere m%st a8e occ%rred a cange in te 8al%e o! certain
commodities0
5e !ollo@ing la@, ten, applies to bot cases: &! te price o! prod%ction o! a commodity canges
in conseD%ence o! a cange in te general rate o! pro!it, its o@n 8al%e may a8e remained
%ncanged0 6o@e8er, a cange m%st a8e occ%rred in te 8al%e o! oter commodities0
Second0 5e general rate o! pro!it remains %ncanged0 &n tis case te price o! prod%ction o! a
commodity can cange only i! its o@n 8al%e as canged0 5is may be d%e to more, or less,
labo%r being reD%ired to reprod%ce te commodity in D%estion, eiter beca%se o! a cange in te
prod%cti8ity o! labo%r @ic prod%ces tis commodity in its !inal !orm, or o! te labo%r @ic
prod%ces tose commodities tat go into its prod%ction0 5e price o! prod%ction o! cotton yarn
may !all, eiter beca%se ra@ cotton is prod%ced ceaper tan be!ore, or beca%se te labo%r o!
spinning as become more prod%cti8e d%e to impro8ed macinery0
5e price o! prod%ction, as @e a8e seen, R k U p, eD%al to cost-price pl%s pro!it0 5is, o@e8er, R
k U kp", in @ic k, te cost-price, is a 8ariable magnit%de, @ic canges !or di!!erent speres o!
prod%ction and is e8ery@ere eD%al to te 8al%e o! te constant and 8ariable capital cons%med in
te prod%ction o! te commodity, and p" is te a8erage rate o! pro!it in percentage !orm0 &! k R
<==, and p" R <=T, te price o! prod%ction k U kp" R <== U <== \ <=N1== R <== U 2= R <2=0 5is
price o! prod%ction may clearly remain te same, in spite o! a cange in te 8al%e o! te
commodities0
?ll canges in te price o! prod%ction o! commodities are red%ced, in te last analysis, to canges
in 8al%e0 A%t not all canges in te 8al%e o! commodities need express temsel8es in canges in
te price o! prod%ction0 5e price o! prod%ction is not determined by te 8al%e o! any one
commodity alone, b%t by te aggregate 8al%e o! all commodities0 ? cange in commodity ? may
128 ;apter J&&
tere!ore be balanced by an opposite cange in commodity A, so tat te general relation remains
te same0
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 te
a8erage pro!it instead o! te s%rpl%s-8al%e contained in a commodity to is cost-price# <C te price
o! prod%ction, @ic so de8iates !rom te 8al%e o! a commodity, entering into te cost-price o!
oter commodities as one o! its elements, so tat te cost-price o! a commodity may already
contain a de8iation !rom 8al%e in tose means o! prod%ction cons%med by it, D%ite aside !rom a
de8iation o! its o@n @ic may arise tro%g a di!!erence bet@een te a8erage pro!it and te
s%rpl%s-8al%e0
&t is tere!ore possible tat e8en te cost-price o! commodities prod%ced by capitals o! a8erage
composition may di!!er !rom te s%m o! te 8al%es o! te elements @ic make %p tis
component o! teir price o! prod%ction0 $%ppose, te a8erage composition is 8=c U <=80 -o@, it is
possible tat in te act%al capitals o! tis composition 8=c may be greater or smaller tan te
8al%e o! c, i0e0, te constant capital, beca%se tis c may be made %p o! commodities @ose price
o! prod%ction di!!ers !rom teir 8al%e0 &n te same @ay, <=8 migt di8erge !rom its 8al%e i! te
cons%mption o! te @age incl%des commodities @ose price o! prod%ction di8erges !rom teir
8al%e# in @ic case te labo%rer @o%ld @ork a longer, or sorter, time to b%y tem back Bto
replace temC and @o%ld t%s per!orm more, or less, necessary labo%r tan @o%ld be reD%ired i!
te price o! prod%ction o! s%c necessities o! li!e coincided @it teir 8al%e0
6o@e8er, tis possibility does not detract in te least !rom te correctness o! te teorems
demonstrated @ic old !or commodities o! a8erage composition0 5e D%antity o! pro!it !alling
to tese commodities is eD%al to te D%antity o! s%rpl%s-8al%e contained in tem0 For instance, in
a capital o! te gi8en composition 8=c U <=8, te most important ting in determining s%rpl%s-
8al%e is not @eter tese !ig%res are expressions o! act%al 8al%es, b%t o@ tey are related to one
anoter, i0e0, @eter 8 R lN+ o! te total capital, and c R 2N+0 Wene8er tis is te case, te
s%rpl%s-8al%e prod%ced by 8 is, as @as ass%med, eD%al to te a8erage pro!it0 3n te oter and,
since it eD%als te a8erage pro!it, te 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 te 8al%e o! te commodity0 5is implies tat a rise or !all in @ages
@o%ld not cange te price o! prod%ction, k U p, any more tan it @o%ld cange te 8al%e o! te
commodities, and @o%ld merely e!!ect a corresponding opposite mo8ement, a !all or a rise, in te
rate o! pro!it0 For i! a rise or !all o! @ages @ere ere to bring abo%t a cange in te price o!
commodities, te rate o! pro!it in tese speres o! a8erage composition @o%ld rise abo8e, or !all
belo@, te le8el pre8ailing in oter speres0 5e spere o! a8erage composition maintains te
same le8el o! pro!it as te oter speres only so long as te price remains %ncanged0 5e
practical res%lt is tere!ore te same as it @o%ld be i! its prod%cts @ere sold at teir real 8al%e0
For i! commodities are sold at teir act%al 8al%es, it is e8ident tat, oter conditions being eD%al,
a rise, or !all, in @ages @ill ca%se a corresponding !all or rise in pro!it, b%t no cange in te 8al%e
o! commodities, and tat %nder all circ%mstances a rise or !all in @ages can ne8er a!!ect te 8al%e
o! commodities, b%t only te magnit%de o! te s%rpl%s-8al%e0
III. The Capitalist3s Grounds for Compensating
&t as been said tat competition le8els te rates o! pro!it o! te di!!erent speres o! prod%ction
into an a8erage rate o! pro!it and tereby t%rns te 8al%es o! te prod%cts o! tese di!!erent
speres into prices o! prod%ction0 5is occ%rs tro%g te contin%al trans!er o! capital !rom one
spere to anoter, in @ic, !or te moment, te pro!it appens to lie abo8e a8erage0 5e
12* ;apter J&&
!l%ct%ations o! pro!it ca%sed by te cycle o! !at and lean years s%cceeding one anoter in any
gi8en branc o! ind%stry @itin gi8en periods m%st, o@e8er, recei8e d%e consideration0 5is
incessant o%t!lo@ and in!lo@ o! capital bet@een te di!!erent speres o! prod%ction creates trends
o! rise and !all in te rate o! pro!it, @ic eD%alise one anoter more or less and t%s a8e a
tendency to red%ce te rate o! pro!it e8ery@ere to te same common and general le8el0
5is mo8ement o! capitals is primarily ca%sed by te le8el o! market-prices, @ic li!t pro!its
abo8e te general a8erage in one place and depress tem belo@ it in anoter0 Mercant"s capital is
le!t o%t o! consideration as it is irrele8ant at tis point, !or @e kno@ !rom te s%dden paroxysms
o! spec%lation appearing in certain pop%lar articles tat it can @itdra@ masses o! capital !rom
one line o! b%siness @it extraordinary rapidity and tro@ tem @it eD%al rapidity into anoter0
.et @it respect to eac spere o! act%al prod%ction I ind%stry, agric%lt%re, mining, etc0 I te
trans!er o! capital !rom one spere to anoter o!!ers considerable di!!ic%lties, partic%larly on
acco%nt o! te existing !ixed capital0 Experience so@s, moreo8er, tat i! a branc o! ind%stry,
s%c as, say, te 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 anoter, so tat in a certain cycle o! years te a8erage pro!it is
m%c te same as in oter brances0 ?nd capital soon learns to take tis experience into acco%nt0
Wat competition does not so@, o@e8er, is te determination o! 8al%e, @ic dominates te
mo8ement o! prod%ction# and te 8al%es tat lie beneat te prices o! prod%ction and tat
determine tem in te last instance0 ;ompetition, on te oter and, so@s: 1C te a8erage pro!its,
@ic are independent o! te organic composition o! capital in te di!!erent speres o!
prod%ction, and tere!ore also o! te mass o! li8ing labo%r appropriated by any gi8en capital in
any gi8en spere o! exploitation# <C te rise and !all o! prices o! prod%ction ca%sed by canges in
te le8el o! @ages, a penomenon @ic at !irst glance completely contradicts te 8al%e relation
o! commodities# 3C te !l%ct%ations o! market-prices, @ic red%ce te a8erage market-price o!
commodities in a gi8en period o! time, not to te market-value, b%t to a 8ery di!!erent market-
price o! prod%ction, @ic di8erges considerably !rom tis market-8al%e0 ?ll tese penomena
seem to contradict te determination o! 8al%e by labo%r-time as m%c as te nat%re o! s%rpl%s-
8al%e consisting o! %npaid s%rpl%s-labo%r04hus everything appears reversed in competition0 5e
!inal pattern o! economic relations as seen on te s%r!ace, in teir real existence and conseD%ently
in te conceptions by @ic te bearers and agents o! tese relations seek to %nderstand tem, is
8ery m%c di!!erent !rom, and indeed D%ite te re8erse o!, teir inner b%t concealed essential
pattern and te conception corresponding to it0
F%rter0 ?s soon as capitalist prod%ction reaces a certain le8el o! de8elopment, te eD%alisation
o! te di!!erent rates o! pro!it in indi8id%al speres to general rate o! pro!it no longer proceeds
solely tro%g te play o! attraction and rep%lsion, by @ic market-prices attract or repel capital0
?!ter a8erage prices, and teir corresponding market-prices, become stable !or a time it reaces
te consciousness o! te indi8id%al capitalists tat tis eD%alisation balances definite differences,
so tat tey incl%de tese in teir m%t%al calc%lations0 5e di!!erences exist in te mind o! te
capitalists and are taken into acco%nt as gro%nds !or compensating0
?8erage pro!it is te basic conception, te conception tat capitals o! eD%al magnit%de m%st yield
eD%al pro!its in eD%al time spans0 5is, again, is based on te conception tat te capital in eac
spere o! prod%ction m%st sare pro rata to its magnit%de in te total s%rpl%s-8al%e sD%eeEed o%t
o! te labo%rers by te total social capital# or, tat e8ery indi8id%al capital so%ld be regarded
merely as a part o! te total social capital, and e8ery capitalist act%ally as a sareolder in te
total social enterprise, eac saring in te total pro!it pro rata to te magnit%de o! is sare o!
capital0
5is conception ser8es as a basis !or te capitalist"s calc%lations, !or instance, tat a capital @ose
t%rno8er is slo@er tan anoter"s, beca%se its commodities take longer to be prod%ced, or beca%se
tey are sold in remoter markets, ne8erteless carges te pro!it it loses in tis @ay, and
compensates itsel! by raising te price0 3r else, tat in8estments o! capital in lines exposed to
1+= ;apter J&&
greater aEards, !or instance in sipping, are compensated by iger prices0 ?s soon as capitalist
prod%ction, and @it it te ins%rance b%siness, are de8eloped, te aEards are, in e!!ect, made
eD%al !or all speres o! prod%ction Bc!0 ;orbetC# b%t te more aEardo%s lines pay iger
ins%rance rates, and reco8er tem in te prices o! teir commodities0 &n practice all tis means
tat e8ery circ%mstance, @ic renders one line o! prod%ction I and all o! tem are considered
eD%ally necessary @itin certain limits I less pro!itable, and anoter more pro!itable, is taken into
acco%nt once and !or all as 8alid gro%nd !or compensation, @ito%t al@ays reD%iring te rene@ed
action o! competition to H%sti!y te moti8es or !actors !or calc%lating tis compensation0 5e
capitalist simply !orgets I or rater !ails to see, beca%se competition does not point it o%t to im I
tat all tese gro%nds !or compensation m%t%ally ad8anced by capitalists in calc%lating te prices
o! commodities o! di!!erent lines o! prod%ction merely come do@n to te !act tat tey all a8e
an eD%al claim, pro rata to te magnit%de o! teir respecti8e capitals, to te common loot, te
total s%rpl%s-8al%e0 &t rater seems to tem tat since te pro!it pocketed by tem di!!ers !rom te
s%rpl%s-8al%e tey appropriated, tese gro%nds !or compensation do not le8el o%t teir
participation in te total s%rpl%s-8al%e, b%t create the profit itself, @ic seems to be deri8ed !rom
te additions made on one or anoter gro%nd to te cost-price o! teir commodities0
&n oter respects te statements made in ;apter 4&& concerning te capitalists" ass%mptions as to
te so%rce o! s%rpl%s-8al%e, apply also to a8erage pro!it0 5e 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 te market-price o! commodities and te exploitation o! labo%r to be gi8en0
Part III. The Law of the Tendency
of the Rate of Proft to Fall
Chapter 13. The Law As 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 te index o! tis n%mber0 $%ppose V1== are te @ages
o! 1== labo%rers !or, say, one @eek0 &! tese labo%rers per!orm eD%al amo%nts o! necessary and
s%rpl%s-labo%r, i! tey @ork daily as many o%rs !or temsel8es, i.e., !or te reprod%ction o! teir
@age, as tey do !or te capitalist, i.e., !or te prod%ction o! s%rpl%s-8al%e, ten te 8al%e o! teir
total prod%ct R V<==, and te s%rpl%s-8al%e tey prod%ce @o%ld amo%nt to V1==0 5e rate o!
s%rpl%s-8al%e, sN8, @o%ld R 1==T0 A%t, as @e a8e seen, tis rate o! s%rpl%s-8al%e @o%ld
noneteless express itsel! in 8ery di!!erent rates o! pro!it, depending on te di!!erent 8ol%mes o!
constant capital c and conseD%ently o! te total capital ;, beca%se te rate o! pro!it R sN;0 5e rate
o! s%rpl%s-8al%e is 1==T:
&! c R +=, and 8 R 1==, ten p" R 1==N1+= R 66WT#
c R 1==, and 8 R 1==, ten p" R 1==N<== R +=T#
c R <==, and 8 R 1==, ten p" R 1==N3== R 33XT#
c R 3==, and 8 R 1==, ten p" R 1==N2== R <+T#
c R 2==, and 8 R 1==, ten p" R 1==N+== R <=T0
5is is o@ te same rate o! s%rpl%s-8al%e @o%ld express itsel! %nder te same degree o! labo%r
exploitation in a !alling rate o! pro!it, beca%se te material gro@t o! te constant capital implies
also a gro@t I albeit not in te same proportion I in its 8al%e, and conseD%ently in tat o! te
total capital0
&! it is !%rter ass%med tat tis grad%al cange in te composition o! capital is not con!ined only
to indi8id%al speres o! prod%ction, b%t tat it occ%rs more or less in all, or at least in te key
speres o! prod%ction, so tat it in8ol8es canges in te a8erage organic composition o! te total
capital o! a certain society, ten te 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 te rate o!
s%rpl%s-8al%e, or te intensity o! exploitation o! labo%r by capital, remain te same0 -o@ @e a8e
seen tat it is a la@ o! capitalist prod%ction tat its de8elopment is attended by a relati8e decrease
o! 8ariable in relation to constant capital, and conseD%ently to te total capital set in motion0 5is
is H%st anoter @ay o! saying tat o@ing to te distincti8e metods o! prod%ction de8eloping in
te capitalist system te same n%mber o! labo%rers, i.e., te 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 te
same time span an e8er-increasing D%antity o! means o! labo%r, macinery and !ixed capital o! all
sorts, ra@ and a%xiliary materials I and conseD%ently a constant capital o! an e8er-increasing
8al%e0 5is contin%al relati8e decrease o! te 8ariable capital 8is-a-8is te constant, and
conseD%ently te total capital, is identical @it te progressi8ely iger organic composition o!
te social capital in its a8erage0 &t is like@ise H%st anoter expression !or te progressi8e
de8elopment o! te social prod%cti8ity o! labo%r, @ic is demonstrated precisely by te !act tat
te same n%mber o! labo%rers, in te same time, i.e., @it less labo%r, con8ert an e8er-increasing
D%antity o! ra@ and a%xiliary materials into prod%cts, tanks to te gro@ing application o!
macinery and !ixed capital in general0 5o tis gro@ing D%antity o! 8al%e o! te constant capital I
1+< ;apter J&&&
alto%g indicating te gro@t o! te real mass o! %se-8al%es o! @ic te constant capital
materially consists only approximately I corresponds a progressi8e ceapening o! prod%cts0
E8ery indi8id%al prod%ct, considered by itsel!, contains a smaller D%antity o! labo%r tan it did on
a lo@er le8el o! prod%ction, @ere te capital in8ested in @ages occ%pies a !ar greater place
compared to te capital in8ested in means o! prod%ction0 5e ypotetical series dra@n %p at te
beginning o! tis capter expresses, tere!ore, te act%al tendency o! capitalist prod%ction0 5is
mode o! prod%ction prod%ces a progressi8e relati8e decrease o! te 8ariable capital as compared
to te constant capital, and conseD%ently a contin%o%sly rising organic composition o! te total
capital0 5e immediate res%lt o! tis is tat te rate o! s%rpl%s-8al%e, at te same, or e8en a rising,
degree o! labo%r exploitation, is represented by a contin%ally !alling general rate o! pro!it0 BWe
sall see later /,resent edition: ;0 J&40 I 0d01 @y tis !all does not mani!est itsel! in an
absol%te !orm, b%t rater as a tendency to@ard a progressi8e !all0C 5e progressi8e tendency o!
te general rate o! pro!it to !all is, tere!ore, H%st an epression peculiar to the capitalist mode of
production o! te progressi8e de8elopment o! te social prod%cti8ity o! labo%r0 5is does not
mean to say tat te rate o! pro!it may not !all temporarily !or oter reasons0 A%t proceeding !rom
te nat%re o! te capitalist mode o! prod%ction, it is tereby pro8ed logical necessity tat in its
de8elopment te general a8erage rate o! s%rpl%s-8al%e m%st express itsel! in a !alling general rate
o! pro!it0 $ince te mass o! te employed li8ing labo%r is contin%ally on te decline as compared
to te mass o! materialised labo%r set in motion by it, i.e., to te prod%cti8ely cons%med means o!
prod%ction, it !ollo@s tat te portion o! li8ing labo%r, %npaid and congealed in s%rpl%s-8al%e,
m%st also be contin%ally on te decrease compared to te amo%nt o! 8al%e represented by te
in8ested total capital0 $ince te ratio o! te mass o! s%rpl%s-8al%e to te 8al%e o! te in8ested total
capital !orms te rate o! pro!it, tis rate m%st constantly !all0
$imple as tis la@ appears !rom te !oregoing statements, all o! political economy as so !ar ad
little s%ccess in disco8ering it, as @e sall 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 5e economists
percei8ed te penomenon and c%dgelled teir brains in tort%o%s attempts to interpret it0 $ince
tis la@ is o! great importance to capitalist prod%ction, it may be said to be a mystery @ose
sol%tion as been te goal o! all political economy since ?dam $mit, te di!!erence bet@een te
8ario%s scools since ?dam $mit a8ing been in te di8ergent approaces to a sol%tion0 Wen
@e consider, on te oter and, tat %p to te present political economy as been r%nning in
circles ro%nd te distinction bet@een constant and 8ariable capital, b%t as ne8er kno@n o@ to
de!ine it acc%rately# tat 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# tat it as ne8er toro%gly
analysed te di!!erences in te organic composition o! capital, and, !or tis reason, as ne8er
to%gt o! analysing te !ormation o! te general rate o! pro!it I i! @e consider all tis, te !ail%re
to sol8e tis riddle is no longer s%rprising0
We intentionally present tis la@ be!ore going on to te di8ision o! pro!it into di!!erent
independent categories0 5e !act tat tis analysis is made independently o! te di8ision o! pro!it
into di!!erent parts, @ic !all to te sare o! di!!erent categories o! people, so@s !rom te o%tset
tat tis la@ is, in its entirety, independent o! tis di8ision, and H%st as independent o! te m%t%al
relations o! te res%ltant categories o! pro!it0 5e pro!it to @ic @e are ere re!erring is b%t
anoter name !or s%rpl%s-8al%e itsel!, @ic is presented only in its relation to total capital rater
tan to 8ariable capital, !rom @ic it arises0 5e drop in te rate o! pro!it, tere!ore, expresses
te !alling relation o! s%rpl%s-8al%e to ad8anced total capital, and is !or tis reason independent o!
any di8ision @atsoe8er o! tis s%rpl%s-8al%e among te 8ario%s categories0
We a8e seen tat at a certain stage o! capitalist de8elopment, @ere te 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 tat at a iger stage, @ere c : 8 @as 2== : 1==, te same rate o! s%rpl%s-8al%e @as
1+3 ;apter J&&&
expressed in a rate o! pro!it o! only <=T0 Wat is tr%e o! di!!erent s%ccessi8e stages o!
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 te !ormer composition o! capital is te a8erage,
te general rate o! pro!it @o%ld R 66WT, @ile in a co%ntry @it te latter composition and a
m%c iger stage o! de8elopment it @o%ld R <=T0
5e di!!erence bet@een te t@o national rates o! pro!it migt disappear, or e8en be re8ersed, i!
labo%r @ere less prod%cti8e in te less de8eloped co%ntry, so tat a larger D%antity o! labo%r @ere
to be represented in a smaller D%antity o! te same commodities, and a larger excange-8al%e
@ere represented in less %se-8al%e0 5e labo%rer @o%ld ten spend more o! is time in
reprod%cing is o@n means o! s%bsistence, or teir 8al%e, and less time in prod%cing s%rpl%s-
8al%e# conseD%ently, e @o%ld per!orm less s%rpl%s-labo%r, @it te res%lt tat te rate o! s%rpl%s-
8al%e @o%ld be lo@er0 $%ppose, te labo%rer o! te less de8eloped co%ntry @ere to @ork W o! te
@orking-day !or imsel! and X !or te capitalist# in accordance @it te abo8e ill%stration, te
same labo%r-po@er @o%ld ten 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 5e rate o! s%rpl%s-8al%e
@o%ld amo%nt to 66W : 133X R +=T, and te rate o! pro!it to 66W : 133X, or approximately 36T0
$ince @e a8e not so !ar analysed te di!!erent component parts o! pro!it, i.e., tey do not !or te
present exist !or %s, @e make te !ollo@ing remarks be!oreand 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 te le8el o! te national rate o! pro!it by, say, te le8el o! te 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, alto%g in reality te labo%rer is
exploited by te capitalist Bas, !or instance, in &ndia, @ere te ryot manages is !arm as an
independent prod%cer @ose prod%ction as s%c is not, tere!ore, as yet s%bordinated to capital,
alto%g te %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 5is interest comprises all te
pro!it, and more tan te pro!it, instead o! merely expressing an aliD%ot part o! te prod%ced
s%rpl%s-8al%e, or pro!it, as it does in co%ntries @it a de8eloped capitalist prod%ction0 3n te
oter and, te rate o! interest is, in tis case, mostly determined by relations Bloans granted by
%s%rers to o@ners o! larger estates @o dra@ gro%nd-rentC @ic a8e noting to do @it pro!it,
and rater 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 te normal @orking-day
is sorter tan anoter"s may a8e a iger rate o! s%rpl%s-8al%e Bone o! te !actors @ic
determines te rate o! pro!itC0 'irst, i! te Englis ten-o%r @orking-day is, on acco%nt o! its
iger intensity, eD%al to an ?%strian @orking-day o! 12 o%rs, ten, di8iding te @orking-day
eD%ally in bot instances, + o%rs o! Englis s%rpl%s-labo%r may represent a greater 8al%e on te
@orld-market tan > o%rs o! ?%strian s%rpl%s-labo%r0 Second, a larger portion o! te Englis
@orking-day tan o! te ?%strian may represent s%rpl%s-labo%r0
5e la@ o! te !alling rate o! pro!it, @ic expresses te same, or e8en a iger, rate o! s%rpl%s-
8al%e, states, in oter @ords, tat any D%antity o! te 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
5ere!ore, since te aggregate mass o! li8ing labo%r operating te means o! prod%ction decreases
in relation to te 8al%e o! tese means o! prod%ction, it !ollo@s tat te %npaid labo%r and te
portion o! 8al%e in @ic it is expressed m%st decline as compared to te 8al%e o! te ad8anced
total capital0 3r: ?n e8er smaller aliD%ot part o! in8ested total capital is con8erted into li8ing
labo%r, and tis total capital, tere!ore, absorbs in proportion to its magnit%de less and less
s%rpl%s-labo%r, alto%g te %npaid part o! te labo%r applied may at te same time gro@ in
relation to te paid part0 5e relati8e decrease o! te 8ariable and increase o! te constant capital,
1+2 ;apter J&&&
o@e8er m%c bot parts may gro@ in absol%te magnit%de, is, as @e a8e said, b%t anoter
expression !or greater prod%cti8ity o! labo%r0
'et a capital o! 1== consist o! 8=c U <=8, and te latter R <= labo%rers0 'et te rate o! s%rpl%s-
8al%e be 1==T, i.e., te labo%rers @ork al! te day !or temsel8es and te oter al! !or te
capitalist0 -o@ let te capital o! 1== in a less de8eloped co%ntry R <=c U 8=8, and let te latter R
8= labo%rers0 A%t tese labo%rers reD%ire <N3 o! te day !or temsel8es, and @ork only 1N3 !or te
capitalist0 E8eryting else being eD%al, te labo%rers in te !irst case prod%ce a 8al%e o! 2=, and in
te second o! 1<=0 5e !irst capital prod%ces 8=c U <=8 U <=s R 1<=# rate o! pro!it R <=T0 5e
second capital, <=c U 8=8 U 2=s R 12=# rate o! pro!it 2=T0 &n te second case te rate o! pro!it is,
tere!ore, do%ble te !irst, alto%g te rate o! s%rpl%s-8al%e in te !irst R 1==T, @ic is do%ble
tat o! te second, @ere it is only +=T0 A%t ten, a capital o! te same magnit%de appropriates
te s%rpl%s-labo%r o! only <= labo%rers in te !irst case, and o! 8= labo%rers in te second case0
5e la@ o! te progressi8e !alling o! te rate o! pro!it, or te relati8e decline o! appropriated
s%rpl%s-labo%r compared to te mass o! materialised labo%r set in motion by li8ing labo%r, does
not r%le o%t in any @ay tat te absol%te mass o! exploited labo%r set in motion by te social
capital, and conseD%ently te absol%te mass o! te s%rpl%s-labo%r it appropriates, may gro@# nor,
tat te capitals controlled by indi8id%al capitalists may dispose o! a gro@ing mass o! labo%r and,
ence, o! s%rpl%s-labo%r, te latter e8en to%g te n%mber o! labo%rers tey employ does not
increase0
5ake a certain @orking pop%lation o!, say, t@o million0 ?ss%me, !%rtermore, tat te lengt and
intensity o! te a8erage @orking-day, and te le8el o! @ages, and tereby te proportion bet@een
necessary and s%rpl%s-labo%r, are gi8en0 &n tat case te aggregate labo%r o! tese t@o million,
and teir s%rpl%s-labo%r expressed in s%rpl%s-8al%e, al@ays prod%ces te same magnit%de o!
8al%e0 A%t @it te gro@t o! te mass o! te constant B!ixed and circ%latingC capital set in motion
by tis labo%r, tis prod%ced D%antity o! 8al%e declines in relation to te 8al%e o! tis capital,
@ic 8al%e gro@s @it its mass, e8en i! not in D%ite te same proportion0 5is ratio, and
conseD%ently te rate o! pro!it, srinks in spite o! te !act tat te mass o! commanded li8ing
labo%r is te same as be!ore, and te same amo%nt o! s%rpl%s-labo%r is s%cked o%t o! it by te
capital0 &t canges beca%se te mass o! materialised labo%r set in motion by li8ing labo%r
increases, and not beca%se te mass o! li8ing labo%r as sr%nk0 &t is a relati8e decrease, not an
absol%te one, and as, in !act, noting to do @it te absol%te magnit%de o! te labo%r and
s%rpl%s-labo%r set in motion0 5e drop in te rate o! pro!it is not d%e to an absol%te, b%t only to a
relati8e decrease o! te 8ariable part o! te total capital, i.e., to its decrease in relation to te
constant part0
Wat 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 te abo8e ass%mption, to any gro@ing mass o! commanded labo%r in
general, and to its %npaid part, te s%rpl%s-labo%r, in partic%lar0 &! te @orking pop%lation
increases !rom t@o million to tree, and i! te 8ariable capital in8ested in @ages also rises to
tree million !rom its !ormer t@o million, @ile te constant capital rises !rom !o%r million to
!i!teen million, ten, %nder te abo8e ass%mption o! a constant @orking-day and a constant rate o!
s%rpl%s-8al%e, te 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 tree0 -e8erteless, in spite o! tis gro@t o! te absol%te mass o! s%rpl%s-labo%r,
and ence o! s%rpl%s-8al%e, by +=T, te ratio o! 8ariable to constant capital @o%ld !all !rom < : 2
to 3 : 1+, and te 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
Wile te mass o! s%rpl%s-8al%e as increased by one-al!, te rate o! pro!it as !allen by one-
al!0 6o@e8er, te pro!it is only te s%rpl%s-8al%e calc%lated in relation to te total social capital,
and te mass o! pro!it, its absol%te magnit%de, is socially eD%al to te absol%te magnit%de o! te
1++ ;apter J&&&
s%rpl%s-8al%e0 5e absol%te magnit%de o! te pro!it, its total amo%nt, @o%ld, tere!ore, a8e
gro@n by +=T, in spite o! its enormo%s relati8e decrease compared to te ad8anced total capital,
or in spite o! te enormo%s decrease in te general rate o! pro!it0 5e n%mber o! labo%rers
employed by capital, ence te absol%te mass o! te labo%r set in motion by it, and tere!ore te
absol%te mass o! s%rpl%s-labo%r absorbed by it, te mass o! te s%rpl%s-8al%e prod%ced by it, and
tere!ore te absol%te mass o! te pro!it prod%ced by it, can, conseD%ently, increase, and increase
progressi8ely, in spite o! te progressi8e drop in te rate o! pro!it0 ?nd tis not only can be so0
?side !rom temporary !l%ct%ations it must be so, on te basis o! capitalist prod%ction0
Essentially, te capitalist process o! prod%ction is sim%ltaneo%sly a process o! acc%m%lation0 We
a8e so@n tat @it te de8elopment o! capitalist prod%ction te mass o! 8al%es to be simply
reprod%ced, or maintained, increases as te prod%cti8ity o! labo%r gro@s, e8en i! te labo%r-
po@er employed so%ld remain constant0 A%t @it te de8elopment o! social prod%cti8ity o!
labo%r te mass o! prod%ced %se-8al%es, o! @ic te means o! prod%ction !orm a part, gro@s still
more0 ?nd te additional labo%r, tro%g @ose appropriation tis additional @ealt can be
recon8erted into capital, does not depend on te 8al%e, b%t on te mass o! tese means o!
prod%ction Bincl%ding means o! s%bsistenceC, beca%se in te prod%ction process te labo%rers
a8e noting to do @it te 8al%e, b%t @it te %se-8al%e, o! te means o! prod%ction0
?cc%m%lation itsel!, o@e8er, and te concentration o! capital tat goes @it it, is a material
means o! increasing prod%cti8eness0 -o@, tis gro@t o! te means o! prod%ction incl%des te
gro@t o! te @orking pop%lation, te creation o! a @orking pop%lation, @ic corresponds to te
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 te @orking pop%lation it as
commandeered, @o%ld a8e a t@o-!old e!!ect0 &t co%ld, on te one and, by raising @ages,
mitigate te ad8erse conditions @ic decimate te o!!spring o! te labo%rers and @o%ld make
marriages easier among tem, so as grad%ally to increase te pop%lation0 3n te oter and, by
applying metods @ic yield relati8e s%rpl%s-8al%e Bintrod%ction and impro8ement o!
macineryC 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! te pop%lation, since %nder
capitalist prod%ction misery prod%ces pop%lation0 &t tere!ore !ollo@s o! itsel! !rom te nat%re o!
te capitalist process o! acc%m%lation, @ic is b%t one !acet o! te capitalist prod%ction process,
tat te increased mass o! means o! prod%ction tat is to be con8erted into capital al@ays !inds a
correspondingly increased, e8en excessi8e, exploitable @orker pop%lation0 ?s te process o!
prod%ction and acc%m%lation ad8ances tere!ore, te mass o! a8ailable and appropriated s%rpl%s-
labo%r, and ence te absol%te mass o! pro!it appropriated by te social capital, must gro@0 ?long
@it te 8ol%me, o@e8er, te same la@s o! prod%ction and acc%m%lation increase also te 8al%e
o! te constant capital in a mo%nting progression more rapidly tan tat o! te 8ariable part o!
capital, in8ested as it is in li8ing labo%r0 6ence, te same la@s prod%ce !or te social capital a
gro@ing absol%te mass o! pro!it, and a !alling rate o! pro!it0
We sall entirely ignore ere tat @it te ad8ance o! capitalist prod%ction and te attendant
de8elopment o! te prod%cti8eness o! social labo%r and m%ltiplication o! prod%ction brances,
ence prod%cts, te same amo%nt o! 8al%e represents a progressi8ely increasing mass o! %se-
8al%es and enHoyments0
5e de8elopment o! capitalist prod%ction and acc%m%lation li!ts labo%r-processes to an
increasingly enlarged scale and t%s imparts to tem e8er greater dimensions, and in8ol8es
accordingly larger in8estments o! capital !or eac indi8id%al establisment0 ? mo%nting
concentration o! capitals Baccompanied, to%g on a smaller scale, by an increase in te n%mber
o! capitalistsC is, tere!ore, one o! its material reD%irements as @ell as one o! its res%lts0 6and in
and @it it, m%t%ally interacting, tere occ%rs a progressi8e expropriation o! te more or less
direct prod%cers0 &t is, ten, nat%ral !or te indi8id%al capitalists to command increasingly large
armies o! labo%rers Bno matter o@ m%c te 8ariable capital may decrease in relation to te
1+6 ;apter J&&&
constantC, and nat%ral, too, tat te mass o! s%rpl%s-8al%e, and ence pro!it, appropriated by tem,
so%ld gro@ sim%ltaneo%sly @it, and in spite o!, te !all in te rate o! pro!it0 5e ca%ses @ic
concentrate masses o! labo%rers %nder te command o! indi8id%al capitalists, are te 8ery same
tat s@ell te mass o! te in8ested !ixed capital, and a%xiliary and ra@ materials, in mo%nting
proportion as compared to te mass o! employed li8ing labo%r0
&t reD%ires no more tan a passing remark at tis point to indicate tat, gi8en a certain labo%ring
pop%lation, te mass o! s%rpl%s-8al%e, ence te absol%te mass o! pro!it, m%st gro@ i! te rate o!
s%rpl%s-8al%e increases, be it tro%g a lengtening or intensi!ication o! te @orking-day, or
tro%g a drop in te 8al%e o! @ages d%e to an increase in te prod%cti8eness o! labo%r, and tat it
m%st do so in spite o! te relati8e decrease o! 8ariable capital in respect to constant0
5e same de8elopment o! te prod%cti8eness o! social labo%r, te same la@s @ic express
temsel8es in a relati8e decrease o! 8ariable as compared to total capital, and in te tereby
!acilitated acc%m%lation, @ile tis acc%m%lation in its t%rn becomes a starting-point !or te
!%rter de8elopment o! te prod%cti8eness and !or a !%rter relati8e decrease o! 8ariable capital I
tis same de8elopment mani!ests itsel!, aside !rom temporary !l%ct%ations, in a progressi8e
increase o! te total employed labo%r-po@er and a progressi8e increase o! te absol%te mass o!
s%rpl%s-8al%e, and ence o! pro!it0
-o@, @at m%st be te !orm o! tis do%ble-edged la@ o! a decrease in te rate o! pro!it and a
sim%ltaneo%s increase in te absol%te mass o! pro!it arising !rom te same ca%sesQ ?s a la@ based
on te !act tat %nder gi8en conditions te appropriated mass o! s%rpl%s-labo%r, ence o! s%rpl%s-
8al%e, increases, and tat, so !ar as te total capital is concerned, or te indi8id%al capital as an
aliD%ot part o! te 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 te rate o! pro!it, e.g., 1==0 5ese
1== represent te a8erage composition o! te total capital, say, 8=c U <=80 We a8e seen in te
second part o! tis book tat te a8erage rate o! pro!it in te 8ario%s brances o! prod%ction is
determined not by te partic%lar composition o! eac indi8id%al capital, b%t by te a8erage social
composition0 ?s te 8ariable capital decreases relati8e to te constant, ence te total capital o!
1==, te rate o! pro!it, or te relati8e magnit%de o! s%rpl%s-8al%e, i.e., its ratio to te ad8anced
total capital o! 1==, !alls e8en to%g te intensity o! exploitation @ere to remain te same, or
e8en to increase0 A%t it is not tis relati8e magnit%de alone @ic !alls0 5e magnit%de o! te
s%rpl%s-8al%e or pro!it absorbed by te 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
te pro!it !alls to <=0 5is !alling applies to te mass o! s%rpl%s-8al%e, and ence o! pro!it, and is
d%e to te !act tat te total capital o! 1== employs less li8ing labo%r, and, te intensity o! labo%r
exploitation remaining te same, sets in motion less s%rpl%s-labo%r, and tere!ore prod%ces less
s%rpl%s-8al%e0 5aking any aliD%ot part o! te social capital, i.e., a capital o! a8erage composition,
as a standard by @ic to meas%re s%rpl%s-8al%e I and tis 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 te cases gi8en abo8e,
te rate o! pro!it sinks !rom 2=T to 3=T and to <=T, beca%se, in !act, te mass o! s%rpl%s-8al%e,
and ence o! pro!it, prod%ced by te same capital !alls absol%tely !rom 2= to 3= and to <=0 $ince
te magnit%de o! te 8al%e o! te capital, by @ic te s%rpl%s-8al%e is meas%red, is gi8en as 1==,
a !all in te proportion o! s%rpl%s-8al%e to tis gi8en magnit%de can be only anoter expression
!or te decrease o! te absol%te magnit%de o! s%rpl%s-8al%e and pro!it0 5is is, indeed, a
ta%tology0 A%t, as so@n, te !act tat tis decrease occ%rs at all, arises !rom te nat%re o! te
de8elopment o! te capitalist process o! prod%ction0
3n te oter and, o@e8er, te same ca%ses @ic bring abo%t an absol%te decrease o! s%rpl%s-
8al%e, and ence pro!it, on a gi8en capital, and conseD%ently o! te rate o! pro!it calc%lated in per
cent, prod%ce an increase in te absol%te mass o! s%rpl%s-8al%e, and ence o! pro!it, appropriated
by te social capital Bi.e., by all capitalists taken as a @oleC0 6o@ does tis occ%r, @at is te
1+> ;apter J&&&
only @ay in @ic tis can occ%r, or @at are te conditions obtaining in tis seeming
contradictionQ
&! any aliD%ot part R 1== o! te social capital, and ence any 1== o! a8erage social composition, is
a gi8en magnit%de, !or @ic tere!ore a !all in te rate o! pro!it coincides @it a !all in te
absol%te magnit%de o! te pro!it beca%se te capital @ic ere ser8es as a standard o!
meas%rement is a constant magnit%de, ten te magnit%de o! te social capital like tat o! te
capital in te ands o! indi8id%al capitalists, is 8ariable, and in keeping @it o%r ass%mptions it
m%st 8ary in8ersely @it te decrease o! its 8ariable portion0
&n o%r !ormer ill%stration, @en te percentage o! composition @as 6=c U 2=8, te corresponding
s%rpl%s-8al%e, or pro!it, @as 2=, and ence te rate o! pro!it 2=T0 $%ppose, te total capital in tis
stage o! composition @as one million0 5en te total s%rpl%s-8al%e, and ence te total pro!it,
amo%nted to 2==,===0 -o@, i! te composition later R 8=c U <=8, @ile te degree o! labo%r
exploitation remained te same, ten te s%rpl%s-8al%e or pro!it !or eac 1== R <=0 A%t since te
absol%te mass o! s%rpl%s-8al%e or pro!it increases, as demonstrated, in spite o! te decreasing rate
o! pro!it or te decreasing prod%ction o! s%rpl%s-8al%e by e8ery 1== o! capital I increases, say,
!rom 2==,=== to 22=,===, ten tis occ%rs solely beca%se te total capital @ic !ormed at te
time o! tis ne@ composition as risen to <,<==,===0 5e mass o! te total capital set in motion
as risen to <<=T, @ile te rate o! pro!it as !allen by +=T0 6ad te total capital no more tan
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 te old capital o! 1,===,=== prod%ced at 2=T0 6ad it gro@n to less tan do%ble, it @o%ld
a8e prod%ced less s%rpl%s-8al%e, or pro!it, tan te old capital o! 1,===,===, @ic, in its !ormer
composition, @o%ld a8e ad to gro@ !rom 1,===,=== to no more tan 1,1==,=== to raise its
s%rpl%s-8al%e !rom 2==,=== to 22=,===0
We again meet ere te pre8io%sly de!ined la@ tat te relati8e decrease o! te 8ariable capital,
ence te de8elopment o! te social prod%cti8eness o! labo%r, in8ol8es an increasingly large mass
o! total capital to set in motion te same D%antity o! labo%r-po@er and sD%eeEe o%t te same
D%antity o! s%rpl%s-labo%r0 ;onseD%ently, te possibility o! a relati8e s%rpl%s o! labo%ring people
de8elops proportionately to te ad8ances made by capitalist prod%ction not beca%se te
prod%cti8eness o! social labo%r decreases, b%t beca%se it increases0 &t does not tere!ore arise o%t
o! an absol%te disproportion bet@een labo%r and te means o! s%bsistence, or te means !or te
prod%ction o! tese means o! s%bsistence, b%t o%t o! a disproportion occasioned by capitalist
exploitation o! labo%r, a disproportion bet@een te progressi8e gro@t o! capital and its relati8ely
srinking need !or an increasing pop%lation0
$o%ld te rate o! pro!it !all by +=T, it @o%ld srink one-al!0 &! te mass o! pro!it is to remain
te same, te capital m%st be do%bled0 For te mass o! pro!it made at a declining rate o! pro!it to
remain te same, te m%ltiplier indicating te gro@t o! te total capital m%st be eD%al to te
di8isor indicating te !all o! te rate o! pro!it0 &! te rate o! pro!it !alls !rom 2= to <=, te total
capital m%st rise in8ersely at te rate o! <= : 2= to obtain te same res%lt0 &! te rate o! pro!it !alls
!rom 2= to 8, te capital @o%ld a8e to increase at te 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
5is applies i! @e @ant te res%lt to remain te same0 A%t i! te res%lt is to be iger, ten te
capital m%st gro@ at a greater rate tan te rate o! pro!it !alls0 &n oter @ords, !or te 8ariable
portion o! te total capital not to remain te same in absol%te terms, b%t to increase absol%tely in
spite o! its !alling in percentage o! te total capital, te total capital m%st gro@ at a !aster rate tan
te percentage o! te 8ariable capital !alls0 &t m%st gro@ so considerably tat in its ne@
composition it so%ld reD%ire more tan te old portion o! 8ariable capital to p%rcase labo%r-
po@er0 &! te 8ariable portion o! a capital R 1== so%ld !all !rom 2= to <=, te total capital m%st
rise iger tan <== to be able to employ a larger 8ariable capital tan 2=0
E8en i! te exploited mass o! te @orking pop%lation @ere to remain constant, and only te
lengt and intensity o! te @orking-day @ere to increase, te mass o! te in8ested capital @o%ld
1+8 ;apter J&&&
a8e to increase, since it @o%ld a8e to be greater in order to employ te same mass o! labo%r
%nder te old conditions o! exploitation a!ter te composition o! capital canges0
5%s, te same de8elopment o! te social prod%cti8eness o! labo%r expresses itsel! @it te
progress o! capitalist prod%ction on te one and in a tendency o! te rate o! pro!it to !all
progressi8ely and, on te oter, in a progressi8e gro@t o! te absol%te mass o! te appropriated
s%rpl%s-8al%e, or pro!it# so tat on te @ole a relati8e decrease o! 8ariable capital and pro!it is
accompanied by an absol%te increase o! bot0 5is t@o-!old e!!ect, as @e a8e seen, can express
itsel! only in a gro@t o! te total capital at a pace more rapid tan tat at @ic te rate o! pro!it
!alls0 For an absol%tely increased 8ariable capital to be employed in a capital o! iger
composition, or one in @ic te constant capital as increased relati8ely more, te total capital
m%st not only gro@ proportionately to its iger composition, b%t still more rapidly0 &t !ollo@s,
ten, tat as te capitalist mode o! prod%ction de8elops, an e8er larger D%antity o! capital is
reD%ired to employ te same, let alone an increased, amo%nt o! labo%r-po@er0 5%s, on a capitalist
!o%ndation, te increasing prod%cti8eness o! labo%r necessarily and permanently creates a
seeming o8er-pop%lation o! labo%ring people0 &! te 8ariable capital !orms H%st 1N6 o! te total
capital instead o! te !ormer Z, te total capital m%st be trebled to employ te same amo%nt o!
labo%r-po@er0 ?nd i! t@ice as m%c labo%r-po@er is to be employed, te total capital m%st
increase six-!old0
,olitical economy, @ic as %ntil no@ been %nable to explain te la@ o! te tendency o! te rate
o! pro!it to !all, pointed sel!-consolingly to te increasing mass o! pro!it, i.e., to te gro@t o! te
absol%te magnit%de o! pro!it, be it !or te indi8id%al capitalist or !or te social capital, b%t tis
@as also based on mere platit%de and spec%lation0
5o say tat te mass o! pro!it is determined by t@o !actors I !irst, te rate o! pro!it, and, secondly,
te mass o! capital in8ested at tis rate, is mere ta%tology0 &t is tere!ore b%t a corollary o! tis
ta%tology to say tat tere is a possibility !or te mass o! pro!it to gro@ e8en to%g te rate o!
pro!it may !all at te same time0 &t does not elp %s one step !arter, since it is H%st as possible !or
te capital to increase @ito%t te mass o! pro!it gro@ing, and !or it to increase e8en @ile te
mass o! pro!it !alls0 For 1== at <+T yields <+, and 2== at +T yields only <=0
1
A%t i! te same
ca%ses @ic make te rate o! pro!it !all, entail te acc%m%lation, i.e., te !ormation, o! additional
capital, and i! eac additional capital employs additional labo%r and prod%ces additional s%rpl%s-
8al%e# i!, on te oter and, te mere !all in te rate o! pro!it implies tat te constant capital, and
@it it te total old capital, a8e increased, ten tis process ceases to be mysterio%s0 We sall 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 teir calc%lations to
spirit a@ay te possibility o! an increase in te mass o! pro!it sim%ltaneo%s @it a decrease in te
rate o! pro!it0
We a8e so@n o@ te same ca%ses tat bring abo%t a tendency !or te general rate o! pro!it to
!all necessitate an accelerated acc%m%lation o! capital and, conseD%ently, an increase in te
absol%te magnit%de, or total mass, o! te s%rpl%s-labo%r Bs%rpl%s-8al%e, pro!itC appropriated by it0
P%st as e8eryting appears re8ersed in competition, and t%s in te conscio%sness o! te agents o!
competition, so also tis la@, tis inner and necessary connection bet@een t@o seeming
contradictions0 &t is e8ident tat @itin te proportions indicated abo8e a capitalist disposing o! a
large capital @ill recei8e a larger mass o! pro!it tan a small capitalist making seemingly ig
pro!its0 E8en a c%rsory examination o! competition so@s, !%rtermore, tat %nder certain
circ%mstances, @en te greater capitalist @ises to make room !or imsel! on te market, and to
cro@d o%t te smaller ones, as appens in times o! crises, e makes practical %se o! tis, i.e., e
deliberately lo@ers is rate o! pro!it in order to dri8e te smaller ones to te @all0 Mercants
capital, @ic @e sall describe in detail later, also notably exibits penomena @ic appear to
attrib%te a !all in pro!it to an expansion o! b%siness, and t%s o! capital0 5e scienti!ic expression
!or tis !alse conception @ill be gi8en later0 $imilar s%per!icial obser8ations res%lt !rom a
1+* ;apter J&&&
comparison o! rates o! pro!it in indi8id%al lines o! b%siness, disting%ised eiter as s%bHect to !ree
competition, or to monopoly0 5e %tterly sallo@ conception existing in te minds o! te agents
o! competition is !o%nd in )oscer, namely, tat a red%ction in te rate o! pro!it is Kmore pr%dent
and %maneL0 /)oscer, Die Grundlage der $ationalK-onomie, 3 ?%!lage, 18+8, 1=8, $0 1*<. J
0d.1 5e !all in te rate o! pro!it appears in tis case as an effect o! an increase in capital and o!
te concomitant calc%lation o! te capitalist tat te mass o! pro!its pocketed by im @ill be
greater at a smaller rate o! pro!it0 5is entire conception B@it te exception o! ?dam $mit"s,
@ic @e sall 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 misappreension o! @at te general rate o!
pro!it is, and on te cr%de notion tat prices are act%ally determined by adding a more or less
arbitrary D%ota o! pro!it to te tr%e 8al%e o! commodities0 ;r%de as tese ideas are, tey arise
necessarily o%t o! te in8erted aspect @ic te immanent la@s o! capitalist prod%ction represent
in competition0
5e la@ tat a !all in te rate o! pro!it d%e to te de8elopment o! prod%cti8eness is accompanied
by an increase in te mass o! pro!it, also expresses itsel! in te !act tat a !all in te price o!
commodities prod%ced by a capital is accompanied by a relati8e increase o! te masses o! pro!it
contained in tem and realised by teir sale0
$ince te de8elopment o! te prod%cti8eness and te correspondingly iger composition o!
capital sets in motion an e8er-increasing D%antity o! means o! prod%ction tro%g a constantly
decreasing D%antity o! labo%r, e8ery aliD%ot part o! te total prod%ct, i.e., e8ery single commodity,
or eac partic%lar lot o! commodities in te total mass o! prod%cts, absorbs less li8ing labo%r, and
also contains less materialised labo%r, bot in te depreciation o! te !ixed capital applied and in
te 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 5is
ca%ses te price o! te indi8id%al commodity to !all0 A%t te mass o! pro!its contained in te
indi8id%al commodities may ne8erteless increase i! te rate o! te absol%te or relati8e s%rpl%s-
8al%e gro@s0 5e commodity contains less ne@ly added labo%r, b%t its %npaid portion gro@s in
relation to its paid portion0 6o@e8er, tis is te case only @itin certain limits0 Wit te absol%te
amo%nt o! li8ing labo%r ne@ly incorporated in indi8id%al commodities decreasing enormo%sly as
prod%ction de8elops, te absol%te mass o! %npaid labo%r contained in tem @ill like@ise
decrease, o@e8er m%c it may a8e gro@n as compared to te paid portion0 5e mass o! pro!it
on eac indi8id%al commodity @ill srink considerably @it te de8elopment o! te
prod%cti8eness o! labo%r, in spite o! a gro@t in te rate o! s%rpl%s-8al%e0 ?nd tis red%ction, H%st
as te !all in te rate o! pro!it, is only delayed by te ceapening o! te elements o! constant
capital and by te oter circ%mstances set !ort in te !irst part o! tis book, @ic increase te
rate o! pro!it at a gi8en, or e8en !alling, rate o! s%rpl%s-8al%e0
5at te price o! indi8id%al commodities @ose s%m makes %p te total prod%ct o! capital !alls,
means simply tat a certain D%antity o! labo%r is realised in a larger D%antity o! commodities, so
tat eac indi8id%al commodity contains less labo%r tan be!ore0 5is is te case e8en i! te price
o! one part o! constant capital, s%c as ra@ material, etc0, so%ld rise0 3%tside o! a !e@ cases B!or
instance, i! te prod%cti8eness o! labo%r %ni!ormly ceapens all elements o! te constant, and te
8ariable, capitalC, te rate o! pro!it @ill !all, in spite o! te iger rate o! s%rpl%s-8al%e, 1C beca%se
e8en a larger %npaid portion o! te smaller total amo%nt o! ne@ly added labo%r is smaller tan a
smaller aliD%ot %npaid portion o! te !ormer larger amo%nt and <C beca%se te iger composition
o! capital is expressed in te indi8id%al commodity by te !act tat te portion o! its 8al%e in
@ic ne@ly added labo%r is materialised decreases in relation to te portion o! its 8al%e @ic
represents ra@ and a%xiliary material, and te @ear and tear o! !ixed capital0 5is cange in te
proportion o! te 8ario%s component parts in te price o! indi8id%al commodities, i.e., te
decrease o! tat portion o! te price in @ic ne@ly added li8ing labo%r is materialised, and te
increase o! tat portion o! it in @ic !ormerly materialised labo%r is represented, is te !orm
16= ;apter J&&&
@ic expresses te decrease o! te 8ariable in relation to te constant capital tro%g te price o!
te indi8id%al commodities0 P%st as tis decrease is absol%te !or a certain amo%nt o! capital, say o!
1==, it is also absol%te !or e8ery indi8id%al commodity as an aliD%ot part o! te reprod%ced
capital0 6o@e8er, te rate o! pro!it, i! calc%lated merely on te elements o! te price o! an
indi8id%al commodity, @o%ld be di!!erent !rom @at it act%ally is0 ?nd !or te !ollo@ing reason:
/5e rate o! pro!it is calc%lated on te total capital in8ested, b%t !or a de!inite time, act%ally a
year0 5e rate o! pro!it is te ratio o! te s%rpl%s-8al%e, or pro!it, prod%ced and realised in a year,
to te total capital calc%lated in per cent0 &t is, tere!ore, not necessarily eD%al to a rate o! pro!it
calc%lated !or te period o! t%rno8er o! te in8ested capital rater tan !or a year0 &t is only i! te
capital is t%rned o8er exactly in one year tat te t@o coincide0
3n te oter and, te pro!it made in te co%rse o! a year is merely te s%m o! pro!its on
commodities prod%ced and sold d%ring tat same year0 -o@, i! @e calc%late te pro!it on te cost-
price o! commodities, @e obtain a rate o! pro!it R pNk in @ic p stands !or te pro!it realised
d%ring one year, and k !or te s%m o! te cost-prices o! commodities prod%ced and sold @itin te
same period0 &t is e8ident tat tis rate o! pro!it pNk @ill not coincide @it te act%al rate o! pro!it
pN;, mass o! pro!it di8ided by total capital, %nless k R ;, tat is, %nless te capital is t%rned o8er
in exactly one year0
'et %s take tree 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, ten, contains <=s0 ad8anced capital and 1=s0 pro!it, so tat te rate o! pro!it
per piece is 1=N<= R +=T0 5e 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 te total capital
te rate o! pro!it pN; R <,+==N8,=== R 31[T
&&0 5e 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! te commodity at a cost-price o! <=s0 per piece0 $%ppose te
commodity is sold at a pro!it o! 2s0, ence at <2s0 per piece0 &n tat case te price o! te ann%al
prod%ct R V1<,===, o! @ic V1=,=== is ad8anced capital and V<,=== is pro!it0 5e rate o! pro!it
pNk R 2N<= per piece, and <,===N1=,=== !or te ann%al t%rno8er, or in bot cases R <=T0 ?nd since
te total capital is eD%al to te s%m o! te cost-prices, namely V1=,===, it !ollo@s tat pN;, te
act%al rate o! pro!it, is in tis case also <=T0
&&&0 'et te capital rise to V1+,=== o@ing to a constant gro@t o! te prod%cti8eness o! labo%r, and
let it ann%ally prod%ce 3=,=== pieces o! te commodity at a cost-price o! 13s0 per piece, eac
piece being sold at a pro!it o! <s0, or at 1+s0 5e ann%al t%rno8er tere!ore R 3=,===\1+s0 R
V<<,+==, o! @ic V1*,+== is ad8anced capital and V3,=== pro!it0 5e rate o! pro!it pNk ten R
<N13 R 3,===N1*,+== R 1+ +N13T0 A%t pN; R 3,===N1+,=== R <=T0
We see, tere!ore, tat only in case &&, @ere te t%rned-o8er capital-8al%e is eD%al to te total
capital, te rate o! pro!it per piece, or per total amo%nt o! t%rno8er, is te same as te rate o! pro!it
calc%lated on te total capital0 &n case &, in @ic te amo%nt o! te t%rno8er is smaller tan te
total capital, te rate o! pro!it calc%lated on te cost-price o! te commodity is iger# and in case
&&&, in @ic te total capital is smaller tan te amo%nt o! te t%rno8er, it is lo@er tan te act%al
rate calc%lated on te total capital0 5is is a general r%le0
&n commercial practice, te t%rno8er is generally calc%lated inacc%rately0 &t is ass%med tat te
capital as been t%rned o8er once as soon as te s%m o! te realised commodity-prices eD%als te
s%m o! te in8ested total capital0 A%t te capital can complete one @ole t%rno8er only @en te
s%m o! te cost1prices o! te realised commodities eD%als te s%m o! te total capital0 I '.0.1
5is again so@s o@ important it is in capitalist prod%ction to regard indi8id%al commodities, or
te commodity-prod%ct o! a certain period, as prod%cts o! ad8anced capital and in relation to te
total capital @ic prod%ces tem, rater tan in isolation, by temsel8es, as mere commodities0
161 ;apter J&&&
5e rate o! pro!it m%st be calc%lated by meas%ring te mass o! prod%ced and realised s%rpl%s-
8al%e not only in relation to te cons%med portion o! capital reappearing in te commodities, b%t
also to tis part pl%s tat portion o! %ncons%med b%t applied capital @ic contin%es to operate in
prod%ction0 6o@e8er, te mass o! pro!it cannot be eD%al to anyting b%t te mass o! pro!it or
s%rpl%s-8al%e, contained in te commodities temsel8es, and to be realised by teir sale0
&! te prod%cti8ity o! ind%stry increases, te price o! indi8id%al commodities !alls0 5ere is less
labo%r in tem, less paid and %npaid labo%r0 $%ppose, te same labo%r prod%ces, say, triple its
!ormer prod%ct0 5en W less labo%r yields indi8id%al prod%ct0 ?nd since pro!it can make %p b%t a
portion o! te amo%nt o! labo%r contained in an indi8id%al commodity, te mass o! pro!it in te
indi8id%al commodity m%st decrease, and tis takes place @itin certain limits, e8en i! te rate o!
s%rpl%s-8al%e so%ld rise0 &n any case, te mass o! pro!it on te total prod%ct does not !all belo@
te original mass o! pro!it so long as te capital employs te same n%mber o! labo%rers at te
same degree o! exploitation0 B5is may also occ%r i! !e@er labo%rers are employed at a iger rate
o! exploitation0C For te mass o! pro!it on te indi8id%al prod%ct decreases proportionately to te
increase in te n%mber o! prod%cts0 5e mass o! pro!it remains te same, b%t it is distrib%ted
di!!erently o8er te total amo%nt o! commodities0 -or does tis alter te distrib%tion bet@een te
labo%rers and capitalists o! te amo%nt o! 8al%e created by ne@ly added labo%r0 5e mass o!
pro!it cannot increase so long as te same amo%nt o! labo%r is employed, %nless te %npaid
s%rpl%s-labo%r increases, or, so%ld intensity o! exploitation remain te same, %nless te n%mber
o! labo%rers gro@s0 3r, bot tese ca%ses may combine to prod%ce tis res%lt0 &n all tese 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 te magnit%de o! total capital I te indi8id%al
commodity contains a smaller mass o! pro!it and te rate o! pro!it !alls e8en i! calc%lated on te
indi8id%al commodity0 ? gi8en D%antity o! ne@ly added labo%r materialises in a larger D%antity o!
commodities0 5e price o! te indi8id%al commodity !alls0 ;onsidered abstractly te rate o! pro!it
may remain te same, e8en to%g te price o! te indi8id%al commodity may !all as a res%lt o!
greater prod%cti8eness o! labo%r and a sim%ltaneo%s increase in te n%mber o! tis ceaper
commodity i!, !or instance, te increase in prod%cti8eness o! labo%r acts %ni!ormly and
sim%ltaneo%sly on all te elements o! te commodity, so tat its total price !alls in te same
proportion in @ic te prod%cti8ity o! labo%r increases, @ile, on te oter and, te m%t%al
relation o! te di!!erent elements o! te price o! te commodity remains te same0 5e rate o!
pro!it co%ld e8en rise i! a rise in te rate o! s%rpl%s-8al%e @ere accompanied by a s%bstantial
red%ction in te 8al%e o! te elements o! constant, and partic%larly o! !ixed, capital0
A%t in reality, as @e a8e seen, te rate o! pro!it @ill !all in te long r%n0 &n no case does a !all in
te price o! any indi8id%al commodity by itsel! gi8e a cl%e to te rate o! pro!it0 E8eryting
depends on te magnit%de o! te total capital in8ested in its prod%ction0 For instance, i! te price
o! one yard o! !abric !alls !rom 3s0 to 1Ws0, i! @e kno@ tat be!ore tis price red%ction it
contained 1Ws0 constant capital, yarn, etc0, Ws0 @ages, and Ws0 pro!it, @ile a!ter te red%ction it
contains 1s0 constant capital, ab8+31s0 @ages, and Xs0 pro!it, @e cannot tell i! te rate o! pro!it
as remained te same or not0 5is depends on @eter, and by o@ m%c, te ad8anced total
capital as increased, and o@ many yards more it prod%ces in a gi8en time0
5e penomenon, springing !rom te nat%re o! te capitalist mode o! prod%ction, tat increasing
prod%cti8ity o! labo%r implies a drop in te price o! te indi8id%al commodity, or o! a certain
mass o! commodities, an increase in te n%mber o! commodities, a red%ction in te mass o! pro!it
on te indi8id%al commodity and in te rate o! pro!it on te aggregate o! commodities, and an
increase in te mass o! pro!it on te total D%antity o! commodities I tis penomenon appears on
te s%r!ace only in a red%ction o! te mass o! pro!it on te indi8id%al commodity, a !all in its
price, an increase in te mass o! pro!it on te a%gmented total n%mber o! commodities prod%ced
by te total social capital or an indi8id%al capitalist0 &t ten appears as i! te capitalist adds less
pro!it to te price o! te indi8id%al commodity o! is o@n !ree @ill, and makes %p !or it tro%g
16< ;apter J&&&
te greater n%mber o! commodities e prod%ces0 5is conception rests %pon te notion o! pro!it
%pon alienation, @ic, in its t%rn, is ded%ced !rom te conception o! mercant capital0
We a8e pre8io%sly seen in Aook & B2 and > ?bscnittC /Englis edition: ,arts &4 and 4&&0 I 0d01
tat te mass o! commodities gro@ing along @it te prod%cti8ity o! labo%r and te ceapening
o! te indi8id%al commodity as s%c Bas long as tese commodities do not enter te price o!
labo%r-po@er as determinantsC I tat tis does not a!!ect te proportion bet@een paid and %npaid
labo%r in te indi8id%al commodity, in spite o! te !alling price0
$ince all tings appear distorted, namely, re8ersed in competition, te indi8id%al capitalist may
imagine: 1C tat e is red%cing is pro!it on te 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 tat e !ixes te price o!
te indi8id%al commodities and tat e determines te price o! te total prod%ct by m%ltiplication,
@ile te 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 tat di8ision0
5e 8%lgar economist does practically no more tan translate te sing%lar concepts o! te
capitalists, @o are in te trall o! competition, into a seemingly more teoretical and generalised
lang%age, and attempt to s%bstantiate te H%stice o! tose conceptions0
5e !all in commodity-prices and te rise in te mass o! pro!it on te a%gmented mass o! tese
ceapened commodities is, in !act, b%t anoter expression !or te la@ o! te !alling rate o! pro!it
attended by a sim%ltaneo%sly increasing mass o! pro!it0
5e analysis o! o@ !ar a !alling rate o! pro!it may coincide @it rising prices no more belongs
ere tan tat o! te 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 metods o! prod%ction sells belo@ te 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 tis eD%alisation
period te second reD%isite, expansion o! te in8ested capital, makes its appearance0 ?ccording to
te degree o! tis expansion te capitalist @ill be able to employ a part o! is !ormer labo%rers,
act%ally peraps all o! tem, or e8en more, %nder te ne@ conditions, and ence to prod%ce te
same, or a greater, mass o! pro!it0
Chapter 14. Counteracting Infuences
&! @e consider te enormo%s de8elopment o! te prod%cti8e !orces o! social labo%r in te last 3=
years alone as compared @it all preceding periods# i! @e consider, in partic%lar, te enormo%s
mass o! !ixed capital, aside !rom te act%al macinery, @ic goes into te process o! social
prod%ction as a @ole, ten te di!!ic%lty @ic as iterto tro%bled te economist, namely to
explain te !alling rate o! pro!it, gi8es place to its opposite, namely to explain @y tis !all is not
greater and more rapid0 5ere m%st be some co%nteracting in!l%ences at @ork, @ic cross and
ann%l te e!!ect o! te general la@, and @ic gi8e it merely te caracteristic o! a tendency, !or
@ic reason @e a8e re!erred to te !all o! te general rate o! pro!it as a tendency to !all0
5e !ollo@ing are te most general co%nterbalancing !orces:
I. Increasing Intensit# "f !ploitation
5e degree o! exploitation o! labo%r, te appropriation o! s%rpl%s-labo%r and s%rpl%s-8al%e, is
raised notably by lengtening te @orking-day and intensi!ying labo%r0 5ese t@o points a8e
been compreensi8ely treated in Aook & as incidental to te prod%ction o! absol%te and relati8e
s%rpl%s-8al%e0 5ere are many @ays o! intensi!ying labo%r @ic imply an increase o! constant,
as compared to 8ariable, capital, and ence a !all in te rate o! pro!it, s%c as compelling a
labo%rer to operate a larger n%mber o! macines0 &n s%c cases I and in most proced%res ser8ing
te prod%ction o! relati8e s%rpl%s-8al%es I te same ca%ses @ic increase te rate o! s%rpl%s-
8al%e, may also, !rom te standpoint o! gi8en D%antities o! in8ested total capital, in8ol8e a !all in
te mass o! s%rpl%s-8al%e0 A%t tere are oter aspects o! intensi!ication, s%c as te greater
8elocities o! macinery, @ic cons%me more ra@ material in te same time, b%t, so !ar as te
!ixed capital is concerned, @ear o%t te macinery so m%c !aster, and yet do not in any @ay
a!!ect te relation o! its 8al%e to te price o! te labo%r @ic sets it in motion0 A%t notably, it is
prolongation o! te @orking-day, tis in8ention o! modern ind%stry, @ic increases te mass o!
appropriated s%rpl%s-labo%r @ito%t essentially altering te proportion o! te employed labo%r-
po@er to te constant capital set in motion by it, and @ic rater tends to red%ce tis capital
relati8ely0 Moreo8er, it as already been demonstrated I and tis constit%tes te real secret o! te
tendency o! te rate o! pro!it to !all I tat te manip%lations to prod%ce relati8e s%rpl%s-8al%e
amo%nt, on te @ole, to trans!orming as m%c as possible o! a certain D%antity o! labo%r into
s%rpl%s-8al%e, on te one and, and employing as little labo%r as possible in proportion to te
in8ested capital, on te oter, so tat te same reasons @ic permit raising te intensity o!
exploitation r%le o%t exploiting te same D%antity o! labo%r as be!ore by te same capital0 5ese
are te co%nteracting tendencies, @ic, @ile e!!ecting a rise in te rate o! s%rpl%s-8al%e, also
tend to decrease te mass o! s%rpl%s-8al%e, and ence te rate o! pro!it prod%ced by a certain
capital0 Mention so%ld also be made ere o! te @idespread introd%ction o! !emale and cild
labo%r, in so !ar as te @ole !amily m%st no@ per!orm more s%rpl%s-labo%r !or capital tan
be!ore, e8en @en te total amo%nt o! teir @ages increases, @ic is by no means al@ays te
case0 I E8eryting tat promotes te prod%ction o! relati8e s%rpl%s-8al%e by mere impro8ement
in metods, as in agric%lt%re, @ito%t altering te magnit%de o! te in8ested capital, as te same
e!!ect0 5e constant capital, it is tr%e, does not, in s%c cases, increase in relation to te 8ariable,
inasm%c as @e regard te 8ariable capital as an index o! te amo%nt o! labo%r-po@er employed,
b%t te mass o! te prod%ct does increase in proportion to te labo%r-po@er employed0 5e same
occ%rs, i! te prod%cti8eness o! labo%r Bno matter, @eter its prod%ct goes into te labo%rer"s
cons%mption or into te elements o! constant capitalC is !reed !rom indrances in
comm%nications, !rom arbitrary or oter restrictions @ic a8e become obstacles in te co%rse
162 ;apter J&4
o! time# !rom !etters o! all kinds, @ito%t directly a!!ecting te ratio o! 8ariable to constant
capital0
&t migt be asked @eter te !actors tat ceck te !all o! te rate o! pro!it, b%t tat al@ays
asten its !all in te last analysis, @eter tese incl%de te temporary, b%t al@ays rec%rring,
ele8ations in s%rpl%s-8al%e abo8e te general le8el, @ic keep occ%rring no@ in tis and no@ in
tat line o! prod%ction redo%nding to te bene!it o! tose indi8id%al capitalists, @o make %se o!
in8entions, etc0, be!ore tese are introd%ced else@ere0 5is D%estion m%st be ans@ered in te
a!!irmati8e0
5e mass o! s%rpl%s-8al%e prod%ced by a capital o! a gi8en magnit%de is te prod%ct o! t@o
!actors I te rate o! s%rpl%s-8al%e m%ltiplied by te n%mber o! labo%rers employed at tis rate0 ?t
a gi8en rate o! s%rpl%s-8al%e it tere!ore depends on te n%mber o! labo%rers, and it depends on
te rate o! s%rpl%s-8al%e @en te n%mber o! labo%rers is gi8en0 :enerally, tere!ore, it depends
on te composite ratio o! te absol%te magnit%des o! te 8ariable capital and te rate o! s%rpl%s-
8al%e0 -o@ @e a8e seen tat, on te a8erage, te same !actors @ic raise te rate o! relati8e
s%rpl%s-8al%e lo@er te mass o! te employed labo%r-po@er0 &t is e8ident, o@e8er, tat tis @ill
occ%r to a greater or lesser extent, depending on te de!inite proportion in @ic tis con!licting
mo8ement obtains, and tat te tendency to@ards a red%ction in te rate o! pro!it is notably
@eakened by a rise in te rate o! absol%te s%rpl%s-8al%e, @ic originates @it te lengtening o!
te @orking-day0
We sa@ in te case o! te rate o! pro!it tat a drop in te rate @as generally accompanied by an
increase in te mass o! pro!it, d%e to te increasing mass o! total capital employed0 From te
standpoint o! te total 8ariable capital o! society, te s%rpl%s-8al%e it as prod%ced is eD%al to te
pro!it it as prod%ced0 Aot te absol%te mass and te rate o! s%rpl%s-8al%e a8e increased# te
one beca%se te D%antity o! labo%r-po@er employed by society as gro@n, and te oter, beca%se
te intensity o! exploitation o! tis labo%r-po@er as increased0 A%t in te case o! a capital o! a
gi8en magnit%de, e.g., 1==, te rate o! s%rpl%s-8al%e may increase, @ile te a8erage mass may
decrease# !or te rate is determined by te proportion, in @ic te 8ariable capital prod%ces
8al%e, @ile te mass is determined by te proportion o! 8ariable capital to te total capital0
5e rise in te rate o! s%rpl%s-8al%e is a !actor @ic determines te mass o! s%rpl%s-8al%e, and
ence also te rate o! pro!it, !or it takes place especially %nder conditions, in @ic, as @e a8e
pre8io%sly seen, te constant capital is eiter not increased at all, or not proportionately increased,
in relation to te 8ariable capital0 5is !actor does not abolis te general la@0 A%t it ca%ses tat
la@ to act rater as a tendency, i.e., as a la@ @ose absol%te action is cecked, retarded, and
@eakened, by co%nteracting circ%mstances0 A%t since te same in!l%ences @ic raise te rate o!
s%rpl%s-8al%e Be8en a lengtening o! te @orking-time is a res%lt o! large-scale ind%stryC tend to
decrease te labo%r-po@er employed by a certain capital, it !ollo@s tat tey also tend to red%ce
te rate o! pro!it and to retard tis 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! tis is done %nder circ%mstances in
@ic tis one labo%rer can replace tree, ten tis one labo%rer @ill per!orm as m%c s%rpl%s-
labo%r as @as !ormerly per!ormed by t@o, and te rate o! s%rpl%s-8al%e @ill a8e risen
accordingly0 A%t e @ill not per!orm as m%c as tree ad per!ormed, and te mass o! s%rpl%s-
8al%e @ill a8e decreased accordingly0 A%t tis red%ction in mass @ill be compensated, or
limited, by te rise in te rate o! s%rpl%s-8al%e0 &! te entire pop%lation is employed at a iger
rate o! s%rpl%s-8al%e, te mass o! s%rpl%s-8al%e @ill increase, in spite o! te pop%lation remaining
te same0 &t @ill increase still more i! te pop%lation increases0 ?nd alto%g tis is tied %p @it a
relati8e red%ction o! te n%mber o! employed labo%rers in proportion to te magnit%de o! te total
capital, tis red%ction is moderated, or cecked, by te rise in te rate o! s%rpl%s-8al%e0
Ae!ore lea8ing tis point, it is to be empasised once more tat @it a capital o! a gi8en
magnit%de te rate o! s%rpl%s-8al%e may rise, @ile its mass is decreasing, and 8ice 8ersa0 5e
mass o! s%rpl%s-8al%e is eD%al to te rate m%ltiplied by te n%mber o! labo%rers# o@e8er, te rate
16+ ;apter J&4
is ne8er calc%lated on te total, b%t only on te 8ariable capital, act%ally only !or e8ery @orking-
day0 3n te oter and, @it a gi8en magnit%de o! capital-8al%e, te rate of profit can neiter rise
nor !all @ito%t te mass of surplus1value also rising or !alling0
II. +epression "f Wages &elo$ The Value "f
Labour.Po$er
5is is mentioned ere only empirically, since, like many oter tings @ic migt be
en%merated, it as noting to do @it te general analysis o! capital, b%t belongs in an analysis o!
competition, @ic is not presented in tis @ork0 6o@e8er, it is one o! te most important !actors
cecking te tendency o! te rate o! pro!it to !all0
III. Cheapening "f lements "f Constant
Capital
E8eryting said in ,art & o! tis book abo%t !actors @ic raise te rate o! pro!it @ile te rate o!
s%rpl%s-8al%e remains te same, or regardless o! te rate o! s%rpl%s-8al%e, belongs ere0 6ence
also, @it respect to te total capital, tat te 8al%e o! te constant capital does not increase in te
same proportion as its material 8ol%me0 For instance, te D%antity o! cotton @orked %p by a single
E%ropean spinner in a modern !actory as gro@n tremendo%sly compared to te D%antity !ormerly
@orked %p by a E%ropean spinner @it a spinning-@eel0 .et te 8al%e o! te @orked-%p cotton
as not gro@n in te same proportion as its mass0 5e same applies to macinery and oter !ixed
capital0 &n sort, te same de8elopment @ic increases te mass o! te constant capital in
relation to te 8ariable red%ces te 8al%e o! its elements as a res%lt o! te increased prod%cti8ity
o! labo%r, and tere!ore pre8ents te 8al%e o! constant capital, alto%g it contin%ally increases,
!rom increasing at te same rate as its material 8ol%me, i.e., te material 8ol%me o! te means o!
prod%ction set in motion by te same amo%nt o! labo%r-po@er0 &n isolated cases te mass o! te
elements o! constant capital may e8en increase, @ile its 8al%e remains te same, or !alls0
5e !oregoing is bo%nd %p @it te depreciation o! existing capital Btat is, o! its material
elementsC, @ic occ%rs @it te de8elopment o! ind%stry0 5is is anoter contin%ally operating
!actor @ic cecks te !all o! te rate o! pro!it, alto%g it may %nder certain circ%mstances
encroac on te mass o! pro!it by red%cing te mass o! te capital yielding a pro!it0 5is again
so@s tat te same in!l%ences @ic tend to make te rate o! pro!it !all, also moderate te
e!!ects o! tis tendency0
IV. )elative "ver.Population
&ts propagation is inseparable !rom, and astened by, te de8elopment o! te prod%cti8ity o!
labo%r as expressed by a !all in te rate o! pro!it0 5e relati8e o8er-pop%lation becomes so m%c
more apparent in a co%ntry, te more te capitalist mode o! prod%ction is de8eloped in it0 5is,
again, is te reason @y, on te one and, te more or less imper!ect s%bordination o! labo%r to
capital contin%es in many brances o! prod%ction, and contin%es longer tan seems at !irst glance
compatible @it te general stage o! de8elopment0 5is is d%e to te ceapness and ab%ndance o!
disposable or %nemployed @age-labo%rers, and to te greater resistance, @ic some brances o!
prod%ction, by teir 8ery nat%re, render to te trans!ormation o! man%al @ork into macine
prod%ction0 3n te oter and, ne@ lines o! prod%ction are opened %p, especially !or te
prod%ction o! l%x%ries, and it is tese tat take as teir basis tis relati8e o8er-pop%lation, o!ten
set !ree in oter lines o! prod%ction tro%g te increase o! teir constant capital0 5ese ne@ lines
start o%t predominantly @it li8ing labo%r, and by degrees pass tro%g te same e8ol%tion as te
oter lines o! prod%ction0 &n eiter case te 8ariable capital makes %p a considerable portion o!
te total capital and @ages are belo@ te a8erage, so tat bot te rate and mass o! s%rpl%s-8al%e
166 ;apter J&4
in tese lines o! prod%ction are %n%s%ally ig0 $ince te general rate o! pro!it is !ormed by
le8elling te rates o! pro!it in te indi8id%al brances o! prod%ction, o@e8er, te same !actor
@ic brings abo%t te tendency in te rate o! pro!it to !all, again prod%ces a co%nterbalance to
tis tendency and more or less paralyses its e!!ects0
V. (oreign Trade
$ince !oreign trade partly ceapens te elements o! constant capital, and partly te necessities o!
li!e !or @ic te 8ariable capital is excanged, it tends to raise te rate o! pro!it by increasing te
rate o! s%rpl%s-8al%e and lo@ering te 8al%e o! constant capital0 &t generally acts in tis direction
by permitting an expansion o! te scale o! prod%ction0 &t tereby astens te process o!
acc%m%lation, on te one and, b%t ca%ses te 8ariable capital to srink in relation to te constant
capital, on te oter, and t%s astens a !all in te rate o! pro!it0 &n te same @ay, te expansion o!
!oreign trade, alto%g te basis o! te capitalist mode o! prod%ction in its in!ancy, as become its
o@n prod%ct, o@e8er, @it te !%rter progress o! te capitalist mode o! prod%ction, tro%g te
innate necessity o! tis mode o! prod%ction, its need !or an e8er-expanding market0 6ere @e see
once more te d%al nat%re o! tis e!!ect0 B)icardo as entirely o8erlooked tis side o! !oreign
trade0 /70 )icardo, :n the &rinciples of &olitical 0conomy, and 4aation, 4hird edition, ,ondon,
;<F=, Ch. LDD. J 0d.M*
?noter D%estion I really beyond te scope o! o%r analysis beca%se o! its special nat%re I is tis:
&s te general rate o! pro!it raised by te iger rate o! pro!it prod%ced by capital in8ested in
!oreign, and partic%larly colonial, tradeQ
;apitals in8ested in !oreign trade can yield a iger rate o! pro!it, beca%se, in te !irst place, tere
is competition @it commodities prod%ced in oter co%ntries @it in!erior prod%ction !acilities,
so tat te more ad8anced co%ntry sells its goods abo8e teir 8al%e e8en to%g ceaper tan te
competing co%ntries0 &n so !ar as te labo%r o! te more ad8anced co%ntry is ere realised as
labo%r o! a iger speci!ic @eigt, te rate o! pro!it rises, beca%se labo%r @ic as not been paid
as being o! a iger D%ality is sold as s%c0 5e same may obtain in relation to te co%ntry, to
@ic commodities are exported and to tat !rom @ic commodities are imported# namely, te
latter may o!!er more materialised labo%r in -ind tan it recei8es, and yet tereby recei8e
commodities ceaper tan it co%ld prod%ce tem0 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, tat is, realises te speci!ically iger prod%cti8eness o!
te 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 te oter and, tey may yield iger rates o! pro!it !or te simple
reason tat te rate o! pro!it is iger tere d%e to back@ard de8elopment, and like@ise te
exploitation o! labo%r, beca%se o! te %se o! sla8es, coolies, etc0 Wy so%ld not tese iger
rates o! pro!it, realised by capitals in8ested in certain lines and sent ome by tem, enter into te
eD%alisation o! te general rate o! pro!it and t%s tend, pro tanto, to raise it, %nless it is te
monopolies tat stand in te @ay0
1
5ere is so m%c less reason !or it, since tese speres o!
in8estment o! capital are s%bHect to te la@s o! !ree competition0 Wat )icardo !ancies is mainly
tis: @it te iger prices realised abroad commodities are bo%gt tere in ret%rn and sent ome0
5ese commodities are t%s sold on te ome market, @ic !act can at best be b%t a temporary
extra disad8antage o! tese !a8o%red speres o! prod%ction o8er oters0 5is ill%sion !alls a@ay as
soon as it is di8ested o! its money-!orm0 5e !a8o%red co%ntry reco8ers more labo%r in excange
!or less labo%r, alto%g tis di!!erence, tis excess is pocketed, as in any excange bet@een
labo%r and capital, by a certain class0 $ince te rate o! pro!it is iger, tere!ore, beca%se it is
generally iger 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 te old le8el, as
)icardo !eels0
16> ;apter J&4
5is same !oreign trade de8elops te capitalist mode o! prod%ction in te ome co%ntry, @ic
implies te decrease o! 8ariable capital in relation to constant, and, on te oter and, ca%ses
o8er-prod%ction in respect to !oreign markets, so tat in te long r%n it again as an opposite
e!!ect0
We a8e t%s seen in a general @ay tat te same in!l%ences @ic prod%ce a tendency in te
general rate o! pro!it to !all, also call !ort co%nter-e!!ects, @ic amper, retard, and partly
paralyse tis !all0 5e latter do not do a@ay @it te la@, b%t impair its e!!ect0 3ter@ise, it @o%ld
not be te !all o! te general rate o! pro!it, b%t rater its relati8e slo@ness, tat @o%ld be
incompreensible0 5%s, te la@ acts only as a tendency0 ?nd it is only %nder certain
circ%mstances and only a!ter long periods tat its e!!ects become strikingly prono%nced0
Ae!ore @e go on, in order to a8oid mis%nderstandings, @e so%ld recall t@o, repeatedly treated,
points0
'irst: 5e same process @ic brings abo%t a ceapening o! commodities in te co%rse o! te
de8elopment o! te capitalist mode o! prod%ction, ca%ses a cange in te organic composition o!
te social capital in8ested in te prod%ction o! commodities, and conseD%ently lo@ers te rate o!
pro!it0 We m%st be care!%l, tere!ore, not to identi!y te red%ction in te relati8e cost o! an
indi8id%al commodity, incl%ding tat portion o! it @ic represents @ear and tear o! macinery,
@it te rise in te 8al%e o! te constant in relation to 8ariable capital, alto%g, con8ersely, e8ery
red%ction in te relati8e cost o! te constant capital ass%ming te 8ol%me o! its material elements
remains te same, or increases, tends to raise te rate o! pro!it, i.e., to red%ce pro tanto te 8al%e
o! te constant capital in relation to te srinking proportions o! te employed 8ariable capital0
Second: 5e !act tat te ne@ly added li8ing labo%r contained in te indi8id%al commodities,
@ic taken togeter make %p te prod%ct o! capital, decreases in relation to te materials tey
contain and te means o! labo%r cons%med by tem# te !act, tere!ore, tat an e8er-decreasing
D%antity o! additional li8ing labo%r is materialised in tem, beca%se teir prod%ction reD%ires less
labo%r @it te de8elopment o! te social prod%cti8eness I tis !act does not a!!ect te ratio, in
@ic te li8ing labo%r contained in te commodities breaks %p into paid and %npaid labo%r0
M%ite te contrary0 ?lto%g te total D%antity o! additional li8ing labo%r contained in te
commodities decreases, te %npaid portion increases in relation to te paid portion, eiter by an
absol%te or a relati8e srinking o! te paid portion# !or te same mode o! prod%ction @ic
red%ces te total D%antity o! additional li8ing labo%r in a commodity is accompanied by a rise in
te absol%te and relati8e s%rpl%s-8al%e0 5e tendency o! te rate o! pro!it to !all is bo%nd %p @it
a tendency o! te rate o! s%rpl%s-8al%e to rise, ence @it a tendency !or te rate o! labo%r
exploitation to rise0 -oting is more abs%rd, !or tis reason, tan to explain te !all in te rate o!
pro!it by a rise in te rate o! @ages, alto%g tis may be te case by @ay o! an exception0
$tatistics is not able to make act%al analyses o! te rates o! @ages in di!!erent epocs and
co%ntries, %ntil te conditions @ic sape te rate o! pro!it are toro%gly %nderstood0 5e 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 te rise in te rate o! s%rpl%s-8al%e and te !all in te rate o! pro!it are b%t
speci!ic !orms tro%g @ic gro@ing prod%cti8ity o! labo%r is expressed %nder capitalism0
VI. The Increase "f Stoc4 Capital
5e !oregoing !i8e points may still be s%pplemented by te !ollo@ing, @ic, o@e8er, cannot be
more !%lly treated !or te present0 Wit te 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 interest-
bearing capital0 -ot in te sense in @ic e8ery capitalist @o lends o%t capital is satis!ied @it
interest, @ile te ind%strial capitalist pockets te in8estor"s pro!it0 5is as no bearing on te
le8el o! te general rate o! pro!it, beca%se !or te latter pro!it R interest U pro!it o! all kinds U
gro%nd rent, te di8ision into tese partic%lar categories being immaterial to it0 A%t in te sense
168 ;apter J&4
tat tese capitals, alto%g in8ested in large prod%cti8e enterprises, yield only large or small
amo%nts o! interest, so-called di8idends, a!ter all costs a8e been ded%cted0 &n rail@ays, !or
instance0 5ese do not tere!ore go into le8elling te general rate o! pro!it, beca%se tey yield a
lo@er tan a8erage rate o! pro!it0 &! tey did enter into it, te general rate o! pro!it @o%ld !all
m%c lo@er0 5eoretically, tey may be incl%ded in te calc%lation, and te res%lt @o%ld ten be a
lo@er rate o! pro!it tan te seemingly existing rate, @ic is decisi8e !or te capitalists# it @o%ld
be lo@er, beca%se te constant capital partic%larly in tese enterprises is largest in its relation to
te 8ariable capital0
Chapter 15. Exposition of the Internal
Contradictions of the Law
I. General
We a8e seen in te !irst part o! tis book tat te rate o! pro!it expresses te rate o! s%rpl%s-8al%e
al@ays lo@er tan it act%ally is0 We a8e H%st seen tat e8en a rising rate o! s%rpl%s-8al%e as a
tendency to express itsel! in a !alling rate o! pro!it0 5e rate o! pro!it @o%ld eD%al te rate o!
s%rpl%s-8al%e only i! c R =, i.e. , i! te 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 te proportion o! te 8al%e o! te constant
capital to te D%antity o! labo%r-po@er @ic sets it in motion remains %ncanged or te amo%nt
o! labo%r-po@er increases in relation to te 8al%e o! te constant capital0
3n te plea o! analysing te rate o! pro!it, )icardo act%ally analyses te rate o! s%rpl%s-8al%e
alone, and tis only on te ass%mption tat te @orking-day is intensi8ely and extensi8ely a
constant magnit%de0
? !all in te rate o! pro!it and accelerated acc%m%lation are di!!erent expressions o! te same
process only in so !ar as bot re!lect te de8elopment o! prod%cti8eness0 ?cc%m%lation, in t%rn,
astens te !all o! te rate o! pro!it, inasm%c as it implies concentration o! labo%r on a large
scale, and t%s a iger composition o! capital0 3n te oter and, a !all in te rate o! pro!it again
astens te concentration o! capital and its centralisation tro%g expropriation o! minor
capitalists, te !e@ direct prod%cers @o still a8e anyting le!t to be expropriated0 5is
accelerates acc%m%lation @it regard to mass, alto%g te rate o! acc%m%lation !alls @it te
rate o! pro!it0
3n te oter and, te rate o! sel!-expansion o! te total capital, or te rate o! pro!it, being te
goad o! capitalist prod%ction BH%st as sel!-expansion o! capital is its only p%rposeC, its !all cecks
te !ormation o! ne@ independent capitals and t%s appears as a treat to te de8elopment o! te
capitalist prod%ction process0 &t breeds o8er-prod%ction, spec%lation, crises, and s%rpl%s-capital
alongside s%rpl%s-pop%lation0 5ose economists, tere!ore, @o, like )icardo, regard te
capitalist mode o! prod%ction as absol%te, !eel at tis point tat it creates a barrier itsel!, and !or
tis reason attrib%te te barrier to -at%re Bin te teory o! rentC, not to prod%ction0 A%t te main
ting abo%t teir orror o! te !alling rate o! pro!it is te !eeling tat capitalist prod%ction meets
in te de8elopment o! its prod%cti8e !orces a barrier @ic as noting to do @it te prod%ction
o! @ealt as s%c# and tis pec%liar barrier testi!ies to te limitations and to te merely istorical,
transitory caracter o! te capitalist mode o! prod%ction# testi!ies tat !or te prod%ction o!
@ealt, it is not an absol%te mode, moreo8er, tat at a certain stage it rater con!licts @it its
!%rter de8elopment0
5r%e, )icardo and is scool considered only ind%strial pro!it, @ic incl%des interest0 A%t te
rate o! gro%nd-rent like@ise as a tendency to !all, alto%g its absol%te mass increases, and may
also increase proportionately more tan ind%strial pro!it0 BE0 West, /0ssay on the +pplication of
Capital to ,and,'ondon, 181+. J 0d1 @o de8eloped te la@ o! gro%nd-rent before )icardo0C &!
@e consider te total social capital ;, and %se p1 !or te ind%strial pro!it tat remains a!ter
ded%cting interest and gro%nd-rent, i !or interest, and r !or gro%nd-rent, ten sN; R pN; R p1 U i U
rN; R p1N; U iN; U rN;0 We a8e seen tat @ile s, te total amo%nt o! s%rpl%s-8al%e, is contin%ally
increasing in te co%rse o! capitalist de8elopment, sN; is H%st as steadily declining, beca%se ;
gro@s still more rapidly tan s0 5ere!ore it is by no means a contradiction !or p1, i, and r to be
1>= ;apter J4
steadily increasing, eac indi8id%ally, @ile sN; R pN;, as @ell as p1N;, iN;, and rN;, so%ld eac
by itsel! be steadily srinking, or tat p1 so%ld increase in relation to i, or r in relation to p1 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;, te proportions o! te parts p1, i, and r, @ic make %p s R p, may cange at @ill @itin
te limits set by te total amo%nt o! s @ito%t tereby a!!ecting te magnit%de o! s or sN;0
5e 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;, te rate o! indi8id%al ind%strial pro!it, te rate o! interest, and te
ratio o! gro%nd-rent to te total capital, may rise in relation to one anoter, @ile sN;, te general
rate o! pro!it, !alls0 5e only condition is tat te s%m o! all tree R sN;0 &! te rate o! pro!it !alls
!rom +=T to <+T, beca%se te composition o! a certain capital @it, say, a rate o! s%rpl%s-8al%e R
1==T as canged !rom +=c U +=8 to >+c U <+8, ten a capital o! 1,=== @ill yield a pro!it o! +== in
te !irst case, and in te second a ;apital o! 2,=== @ill yield a pro!it o! 1,===0 We see tat s or p
a8e do%bled, @ile p" as !allen by one-al!0 ?nd i! tat +=T @as !ormerly di8ided into <=
pro!it, 1= interest, and <= rent, ten p1N; R <=T, iN; R 1=T, and rN; R <=T0 &! te proportions ad
remained te same a!ter te cange !rom +=T to <+T, ten p1N; R 1=T, iN; R +T, and rN; R
1=T0 &!, o@e8er, p1N; so%ld !all to 8T and iN; to 2T, ten rN; @o%ld rise to 13T0 5e relati8e
magnit%de o! r @o%ld a8e risen as against p1 and i, @ile p @o%ld a8e remained te same0
(nder bot ass%mptions, te s%m o! p1, i, and r @o%ld a8e increased, beca%se prod%ced by a
capital !o%r times as large0 F%rtermore, )icardo"s ass%mption tat originally ind%strial pro!it
Bpl%s interestC contains te entire s%rpl%s-8al%e is istorically and logically !alse0 &t is rater te
progress o! capitalist prod%ction @ic 1C gi8es te @ole pro!it directly to te ind%strial and
commercial capitalists !or !%rter distrib%tion, and <C red%ces rent to te excess o8er te pro!it0
3n tis capitalist basis, again, te rent gro@s, being a portion o! pro!it Bi.e., o! te s%rpl%s-8al%e
8ie@ed as te prod%ct o! te total capitalC, b%t not tat speci!ic portion o! te prod%ct, @ic te
capitalist pockets0
:i8en te necessary means o! prod%ction, i.e. , a s%!!icient acc%m%lation o! capital, te creation
o! s%rpl%s-8al%e is only limited by te labo%ring pop%lation i! te rate o! s%rpl%s-8al%e, i.e. , te
intensity o! exploitation, is gi8en# and no oter limit b%t te intensity o! exploitation i! te
labo%ring pop%lation is gi8en0 ?nd te capitalist process o! prod%ction consists essentially o! te
prod%ction o! s%rpl%s-8al%e, represented in te s%rpl%s-prod%ct or tat aliD%ot portion o! te
prod%ced commodities materialising %npaid labo%r0 &t m%st ne8er be !orgotten tat te prod%ction
o! tis s%rpl%s-8al%e I and te recon8ersion o! a portion o! it into capital, or te acc%m%lation,
!orms an integrate part o! tis prod%ction o! s%rpl%s-8al%e I is te immediate p%rpose and
compelling moti8e o! capitalist prod%ction0 &t @ill ne8er do, tere!ore, to represent capitalist
prod%ction as someting @ic it is not, namely as prod%ction @ose immediate p%rpose is
enHoyment or te man%!act%re o! te means o! enHoyment !or te capitalist0 5is @o%ld be
o8erlooking its speci!ic caracter, @ic is re8ealed in all its inner essence0
5e creation o! tis s%rpl%s-8al%e makes %p te direct process o! prod%ction, @ic, as @e a8e
said, as no oter limits b%t tose mentioned abo8e0 ?s soon as all te 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
tis prod%ction o! s%rpl%s-8al%e completes b%t te !irst act o! te capitalist process o! prod%ction
I te direct prod%ction process0 ;apital as absorbed so and so m%c %npaid labo%r0 Wit te
de8elopment o! te process, @ic expresses itsel! in a drop in te rate o! pro!it, te mass o!
s%rpl%s-8al%e t%s prod%ced s@ells to immense dimensions0 -o@ comes te second act o! te
process0 5e entire mass o! commodities, i.e. , te total prod%ct, incl%ding te portion @ic
replaces te constant and 8ariable capital, and tat representing s%rpl%s-8al%e, m%st be sold0 &!
tis is not done, or done only in part, or only at prices belo@ te prices o! prod%ction, te labo%rer
as been indeed exploited, b%t is exploitation is not realised as s%c !or te capitalist, and tis
can be bo%nd %p @it a total or partial !ail%re to realise te s%rpl%s-8al%e pressed o%t o! im,
indeed e8en @it te partial or total loss o! te capital0 5e conditions o! direct exploitation, and
1>1 ;apter J4
tose o! realising it, are not identical0 5ey di8erge not only in place and time, b%t also logically0
5e !irst are only limited by te prod%cti8e po@er o! society, te latter by te proportional
relation o! te 8ario%s brances o! prod%ction and te cons%mer po@er o! society0 A%t tis last-
named is not determined eiter by te absol%te prod%cti8e po@er, or by te absol%te cons%mer
po@er, b%t by te cons%mer po@er based on antagonistic conditions o! distrib%tion, @ic red%ce
te cons%mption o! te b%lk o! society to a minim%m 8arying @itin more or less narro@ limits0 &t
is !%rtermore restricted by te tendency to acc%m%late, te dri8e to expand capital and prod%ce
s%rpl%s-8al%e on an extended scale0 5is is la@ !or capitalist prod%ction, imposed by incessant
re8ol%tions in te metods o! prod%ction temsel8es, by te depreciation o! existing capital
al@ays bo%nd %p @it tem, by te general competiti8e str%ggle and te need to impro8e
prod%ction and expand its scale merely as a means o! sel!-preser8ation and %nder penalty o! r%in0
5e market m%st, tere!ore, be contin%ally extended, so tat its interrelations and te conditions
reg%lating tem ass%me more and more te !orm o! a nat%ral la@ @orking independently o! te
prod%cer, and become e8er more %ncontrollable0 5is internal contradiction seeks to resol8e itsel!
tro%g expansion o! te o%tlying !ield o! prod%ction0 A%t te more prod%cti8eness de8elops, te
more it !inds itsel! at 8ariance @it te narro@ basis on @ic te conditions o! cons%mption rest0
&t is no contradiction at all on tis sel!-contradictory basis tat tere so%ld be an excess o! capital
sim%ltaneo%sly @it a gro@ing s%rpl%s o! pop%lation0 For @ile a combination o! tese t@o
@o%ld, indeed, increase te mass o! prod%ced s%rpl%s-8al%e, it @o%ld at te same time intensi!y
te contradiction bet@een te conditions %nder @ic tis s%rpl%s-8al%e is prod%ced and tose
%nder @ic it is realised0
&! a certain rate o! pro!it is gi8en, te mass o! pro!it @ill al@ays depend on te magnit%de o! te
ad8anced capital0 5e acc%m%lation, o@e8er, is ten determined by tat portion o! tis mass
@ic is recon8erted into capital0 ?s !or tis portion, being eD%al to te pro!it min%s te re8en%e
cons%med by te capitalists, it @ill depend not merely on te 8al%e o! tis mass, b%t also on te
ceapness o! te commodities @ic te 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
5e mass o! capital set in motion by te labo%rer, @ose 8al%e e preser8es by is labo%r and
reprod%ces in is prod%ct, is D%ite di!!erent !rom te 8al%e @ic e adds to it0 &! te mass o! te
capital R 1,=== and te added labo%r R 1==, te reprod%ced capital R 1,1==0 &! te mass R 1== and
te added labo%r R <=, te reprod%ced capital R 1<=0 &n te !irst case te rate o! pro!it R 1=T, in
te second R <=T0 ?nd yet more can be acc%m%lated o%t o! 1== tan o%t o! <=0 ?nd t%s te ri8er
o! capital rolls on Baside !rom its depreciation tro%g increase o! te prod%cti8enessC, or its
acc%m%lation does, not in proportion to te rate o! pro!it, b%t in proportion to te impet%s it
already possesses0 $o !ar as it is based on a ig rate o! s%rpl%s-8al%e, a ig rate o! pro!it is
possible @en te @orking-day is 8ery long, alto%g labo%r is not igly prod%cti8e0 &t is
possible, beca%se te @ants o! te labo%rers are 8ery small, ence a8erage @ages 8ery lo@,
alto%g te labo%r itsel! is %nprod%cti8e0 5e lo@ @ages @ill correspond to te labo%rers" lack o!
energy0 ;apital ten acc%m%lates slo@ly, in spite o! te ig rate o! pro!it0 ,op%lation is stagnant
and te @orking-time @ic te prod%ct costs, is great, @ile te @ages paid to te labo%rer etare
small0
5e rate o! pro!it does not sink beca%se te labo%rer is exploited any less, b%t beca%se generally
less labo%r is employed in proportion to te employed capital0
&!, as so@n, a !alling rate o! pro!it is bo%nd %p @it an increase in te mass o! pro!it, a larger
portion o! te ann%al prod%ct o! labo%r is appropriated by te capitalist %nder te category o!
capital Bas a replacement !or cons%med capitalC and a relati8ely smaller portion %nder te
category o! pro!it0 6ence te !antastic idea o! priest ;almers, /50 ;almers, :n &olitical
0conomy in Conneion with the Moral State and Moral &rospects of Society,$econd edition,
:lasgo@, 183<, p0 <<. J 0d1 tat te less o! te ann%al prod%ct is expended by capitalists as
1>< ;apter J4
capital, te greater te pro!its tey pocket0 &n @ic case te state c%rc comes to teir
assistance, to care !or te cons%mption o! te greater part o! te s%rpl%s-prod%ct, rater tan
a8ing it %sed as capital0 5e preacer con!o%nds ca%se @it e!!ect0 F%rtermore, te mass o!
pro!it increases in spite o! its slo@er rate @it te gro@t o! te in8ested capital0 6o@e8er, tis
reD%ires a sim%ltaneo%s concentration o! capital, since te conditions o! prod%ction ten demand
employment o! capital on a larger scale0 &t also reD%ires its centralisation, i.e. , te s@allo@ing %p
o! te small capitalists by te big and teir depri8ation o! capital0 &t is again b%t an instance o!
separating I raised to te second po@er I te conditions o! prod%ction !rom te prod%cers to
@ose n%mber tese small capitalists still belong, since teir o@n labo%r contin%es to play a role
in teir case0 5e labo%r o! a capitalist stands altogeter in in8erse proportion to te siEe o! is
capital, i.e. , to te degree in @ic e is a capitalist0 &t is tis same se8erance o! te conditions o!
prod%ction, on te one and, !rom te prod%cers, on te oter, tat !orms te 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 te 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! teir capital Bto @ic expropriation is no@ cangedC0 5is process @o%ld soon bring
abo%t te collapse o! capitalist prod%ction i! it @ere not !or co%nteracting tendencies, @ic a8e
a contin%o%s decentralising e!!ect alongside te centripetal one0
II. Con5ict &et$een !pansion "f Production
And Production "f Surplus.Value
5e de8elopment o! te social prod%cti8eness o! labo%r is mani!ested in t@o @ays: !irst, in te
magnit%de o! te already prod%ced prod%cti8e !orces, te 8al%e and mass o! te conditions o!
prod%ction %nder @ic ne@ prod%ction is carried on, and in te absol%te magnit%de o! te
already acc%m%lated prod%cti8e capital# secondly, in te relati8e smallness o! te portion o! total
capital laid o%t in @ages, i.e. , in te relati8ely small D%antity o! li8ing labo%r reD%ired !or te
reprod%ction and sel!-expansion o! a gi8en capital, !or mass prod%ction0 5is also implies
concentration o! capital0
&n relation to employed labo%r-po@er te de8elopment o! te prod%cti8ity again re8eals itsel! in
t@o @ays: First, in te increase o! s%rpl%s-labo%r, i.e. , te red%ction o! te necessary labo%r-time
reD%ired !or te reprod%ction o! labo%r-po@er0 $econdly, in te decrease o! te D%antity o! labo%r-
po@er Bte n%mber o! labo%rersC generally employed to set in motion a gi8en capital0
5e t@o mo8ements not only go and in and, b%t m%t%ally in!l%ence one anoter and are
penomena in @ic te same la@ expresses itsel!0 .et tey a!!ect te rate o! pro!it in opposite
@ays0 5e total mass o! pro!it is eD%al to te total mass o! s%rpl%s-8al%e, te rate o! pro!it R sN; R
s%rpl%s-8al%eNad8anced total capital0 5e s%rpl%s-8al%e, o@e8er, as a total, is determined !irst by
its rate, and second by te mass o! labo%r sim%ltaneo%sly employed at tis rate, or, @at amo%nts
to te same, by te magnit%de o! te 8ariable capital0 3ne o! tese !actors, te rate o! s%rpl%s-
8al%e, rises, and te oter, te n%mber o! labo%rers, !alls Brelati8ely or absol%telyC0 &nasm%c as
te de8elopment o! te prod%cti8e !orces red%ces te paid portion o! employed labo%r, it raises
te s%rpl%s-8al%e, beca%se it raises its rate# b%t inasm%c as it red%ces te total mass o! labo%r
employed by a gi8en capital, it red%ces te !actor o! te n%mber by @ic te rate o! s%rpl%s-
8al%e is m%ltiplied to obtain its mass0 5@o labo%rers, eac @orking 1< o%rs daily, cannot
prod%ce te same mass o! s%rpl%s-8al%e as <2 @o @ork only < o%rs, e8en i! tey co%ld li8e on
air and ence did not a8e to @ork !or temsel8es at all0 &n tis respect, ten, te compensation o!
te red%ced n%mber o! labo%rers by intensi!ying te degree o! exploitation as certain
ins%rmo%ntable limits0 &t may, !or tis reason, @ell ceck te !all in te rate o! pro!it, b%t cannot
pre8ent it altogeter0
1>3 ;apter J4
Wit te de8elopment o! te capitalist mode o! prod%ction, tere!ore, te rate o! pro!it !alls, @ile
its mass increases @it te gro@ing mass o! te capital employed0 :i8en te rate, te absol%te
increase in te mass o! capital depends on its existing magnit%de0 A%t, on te oter and, i! tis
magnit%de is gi8en, te proportion o! its gro@t, i.e. , te rate o! its increment, depends on te
rate o! pro!it0 5e increase in te prod%cti8eness B@ic, moreo8er, @e repeat, al@ays goes and
in and @it a depreciation o! te a8ailable capitalC can directly only increase te 8al%e o! te
existing capital i! by raising te rate o! pro!it it increases tat portion o! te 8al%e o! te ann%al
prod%ct @ic is recon8erted into capital0 ?s concerns te prod%cti8ity o! labo%r, tis can only
occ%r Bsince tis prod%cti8ity as noting direct to do @it te value o! te existing capitalC by
raising te relati8e s%rpl%s-8al%e, or red%cing te 8al%e o! te constant capital, so tat te
commodities @ic enter eiter te reprod%ction o! labo%r-po@er, or te elements o! constant
capital, are ceapened0 Aot imply a depreciation o! te existing capital, and bot go and in
and @it a red%ction o! te 8ariable capital in relation to te constant0 Aot ca%se a !all in te
rate o! pro!it, and bot slo@ it do@n0 F%rtermore, inasm%c as an increased rate o! pro!it ca%ses
a greater demand !or labo%r, it tends to increase te @orking pop%lation and t%s te material,
@ose exploitation makes real capital o%t o! capital0
&ndirectly, o@e8er, te de8elopment o! te prod%cti8ity o! labo%r contrib%tes to te increase o!
te 8al%e o! te existing capital by increasing te mass and 8ariety o! %se-8al%es in @ic te
same excange-8al%e is represented and @ic !orm te material s%bstance, i.e. , te material
elements o! capital, te material obHects making %p te constant capital directly, and te 8ariable
capital at least indirectly0 More prod%cts @ic may be con8erted into capital, @ate8er teir
excange-8al%e, are created @it te same capital and te same labo%r0 5ese prod%cts may ser8e
to absorb additional labo%r, ence also additional s%rpl%s-labo%r, and tere!ore create additional
capital0 5e amo%nt o! labo%r @ic a capital can command does not depend on its 8al%e, b%t on
te mass o! ra@ and a%xiliary materials, macinery and elements o! !ixed capital and necessities
o! li!e, all o! @ic it comprises, @ate8er teir 8al%e may be0 ?s te mass o! te labo%r
employed, and t%s o! s%rpl%s-labo%r increases, tere is also a gro@t in te 8al%e o! te
reprod%ced capital and in te s%rpl%s-8al%e ne@ly added to it0
5ese t@o elements embraced by te process o! acc%m%lation, o@e8er, are not to be regarded
merely as existing side by side in repose, as )icardo does0 5ey contain a contradiction @ic
mani!ests itsel! in contradictory tendencies and penomena0 5ese antagonistic agencies
co%nteract eac oter sim%ltaneo%sly0
?longside te stim%lants o! an act%al increase o! te labo%ring pop%lation, @ic spring !rom te
increase o! te portion o! te total social prod%ct ser8ing as capital, tere are agencies @ic
create a merely relati8e o8er-pop%lation0
?longside te !all in te rate o! pro!it mass o! capitals gro@s, and and in and @it tis tere
occ%rs a depreciation o! existing capitals @ic cecks te !all and gi8es an accelerating motion
to te acc%m%lation o! capital-8al%es0
?longside te de8elopment o! prod%cti8ity tere de8elops a iger composition o! capital, i.e.,
te relati8e decrease o! te ratio o! 8ariable to constant capital0
5ese di!!erent in!l%ences may at one time operate predominantly side by side in space, and at
anoter s%cceed eac oter in time0 From time to time te con!lict o! antagonistic agencies !inds
8ent in crises0 5e crises are al@ays b%t momentary and !orcible sol%tions o! te existing
contradictions0 5ey are 8iolent er%ptions @ic !or a time restore te dist%rbed eD%ilibri%m0
5e contradiction, to p%t it in a 8ery general @ay, consists in tat te capitalist mode o!
prod%ction in8ol8es a tendency to@ards absol%te de8elopment o! te prod%cti8e !orces,
regardless o! te 8al%e and s%rpl%s-8al%e it contains, and regardless o! te social conditions %nder
@ic capitalist prod%ction takes place# @ile, on te oter and, its aim is to preser8e te 8al%e
o! te existing capital and promote its sel!-expansion to te igest limit Bi.e., to promote an e8er
1>2 ;apter J4
more rapid gro@t o! tis 8al%eC0 5e speci!ic !eat%re abo%t it is tat it %ses te existing 8al%e o!
capital as a means o! increasing tis 8al%e to te %tmost0 5e metods by @ic it accomplises
tis incl%de te !all o! te rate o! pro!it, depreciation o! existing capital, and de8elopment o! te
prod%cti8e !orces o! labo%r at te expense o! already created prod%cti8e !orces0
5e periodical depreciation o! existing capital I one o! te means immanent in capitalist
prod%ction to ceck te !all o! te rate o! pro!it and asten acc%m%lation o! capital-8al%e tro%g
!ormation o! ne@ capital I dist%rbs te gi8en conditions, @itin @ic te process o! circ%lation
and reprod%ction o! capital takes place, and is tere!ore accompanied by s%dden stoppages and
crises in te prod%ction process0
5e decrease o! 8ariable in relation to constant capital, @ic goes and in and @it te
de8elopment o! te prod%cti8e !orces, stim%lates te gro@t o! te labo%ring pop%lation, @ile
contin%ally creating an arti!icial o8er-pop%lation0 5e acc%m%lation o! capital in terms o! 8al%e is
slo@ed do@n by te !alling rate o! pro!it, to asten still more te acc%m%lation o! %se-8al%es,
@ile tis, 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 tese immanent barriers, b%t o8ercomes
tem only by means @ic again place tese barriers in its @ay and on a more !ormidable scale0
5e real barrier o! capitalist prod%ction is capital itself0 &t is tat capital and its sel!-expansion
appear as te starting and te closing point, te moti8e and te p%rpose o! prod%ction# tat
prod%ction is only prod%ction !or capital and not 8ice 8ersa, te means o! prod%ction are not mere
means !or a constant expansion o! te li8ing process o! te society o! prod%cers0 5e limits @itin
@ic te preser8ation and sel!-expansion o! te 8al%e o! capital resting on te expropriation and
pa%perisation o! te great mass o! prod%cers can alone mo8e I tese limits come contin%ally into
con!lict @it te metods 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! te social prod%cti8ity o! labo%r0 5e means I %nconditional
de8elopment o! te prod%cti8e !orces o! society I comes contin%ally into con!lict @it te limited
p%rpose, te sel!-expansion o! te existing capital0 5e capitalist mode o! prod%ction is, !or tis
reason, a istorical means o! de8eloping te material !orces o! prod%ction and creating an
appropriate @orld-market and is, at te same time, a contin%al con!lict bet@een tis its istorical
task and its o@n corresponding relations o! social prod%ction0
III. !cess Capital And !cess Population
? drop in te rate o! pro!it is attended by a rise in te minim%m capital reD%ired by an indi8id%al
capitalist !or te prod%cti8e employment o! labo%r# reD%ired bot !or its exploitation generally,
and !or making te cons%med labo%r-time s%!!ice as te labo%r-time necessary !or te prod%ction
o! te commodities, so tat it does not exceed te a8erage social labo%r-time reD%ired !or te
prod%ction o! te 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 tan a small capital @it a large
rate o! pro!it0 ?t a certain ig point tis increasing concentration in its t%rn ca%ses a ne@ !all in
te rate o! pro!it0 5e mass o! small dispersed capitals is tereby dri8en along te ad8ent%ro%s
road o! spec%lation, credit !ra%ds, stock s@indles, and crises0 5e so-called pletora o! capital
al@ays applies essentially to a pletora o! te capital !or @ic te !all in te rate o! pro!it is not
compensated tro%g te mass o! pro!it I tis is al@ays tr%e o! ne@ly de8eloping !res o!!soots
o! capital I or to a pletora @ic places capitals incapable o! action on teir o@n at te disposal
o! te managers o! large enterprises in te !orm o! credit0 5is pletora o! capital arises !rom te
same ca%ses as tose @ic call !ort relati8e o8er-pop%lation, and is, tere!ore, a penomenon
s%pplementing te latter, alto%g tey stand at opposite poles I %nemployed capital at one pole,
and %nemployed @orker pop%lation at te oter0
1>+ ;apter J4
38er-prod%ction o! capital, not o! indi8id%al commodities I alto%g o8er-prod%ction o! capital
al@ays incl%des o8er-prod%ction o! commodities I is tere!ore simply o8er-acc%m%lation o!
capital0 5o appreciate @at tis o8er-acc%m%lation is Bits closer analysis !ollo@s laterC, one need
only ass%me it to be absol%te0 Wen @o%ld o8er-prod%ction o! capital be absol%teQ
38erprod%ction @ic @o%ld a!!ect not H%st one or anoter, or a !e@ important speres o!
prod%ction, b%t @o%ld be absol%te in its !%ll scope, ence @o%ld extend to all !ields o!
prod%ctionQ
5ere @o%ld be absol%te o8er-prod%ction o! capital as soon as additional capital !or p%rposes o!
capitalist prod%ction R =0 5e 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, tere!ore, a8e gro@n in s%c a ratio to te labo%ring pop%lation tat neiter te
absol%te @orking-time s%pplied by tis pop%lation, nor te relati8e s%rpl%s @orking-time, co%ld
be expanded any !%rter Btis last @o%ld not be !easible at any rate in te case @en te demand
!or labo%r @ere so strong tat tere @ere a tendency !or @ages to riseC# at a point, tere!ore, @en
te increased capital prod%ced H%st as m%c, or e8en less, s%rpl%s-8al%e tan it did be!ore its
increase, tere @o%ld be absol%te o8er-prod%ction o! capital# i.e., te increased capital ; U c;
@o%ld prod%ce no more, or e8en less, pro!it tan capital ; be!ore its expansion by c;0 &n bot
cases tere @o%ld be a steep and s%dden !all in te general rate o! pro!it, b%t tis time d%e to a
cange in te composition o! capital not ca%sed by te de8elopment o! te prod%cti8e !orces, b%t
rater by a rise in te money-8al%e o! te 8ariable capital Bbeca%se o! increased @agesC and te
corresponding red%ction in te proportion o! s%rpl%s-labo%r to necessary labo%r0
&n reality, it @o%ld appear tat a portion o! te capital @o%ld lie completely or partially idle
Bbeca%se it @o%ld a8e to cro@d o%t some o! te acti8e capital be!ore it co%ld expand its o@n
8al%eC, and te oter portion @o%ld prod%ce 8al%es at a lo@er rate o! pro!it, o@ing to te press%re
o! %nemployed or b%t partly employed capital0 &t @o%ld be immaterial in tis respect i! a part o!
te additional capital @ere to take te place o! te old capital, and te latter @ere to take its
position in te additional capital0 We so%ld still al@ays a8e te old s%m o! capital on one side,
and te s%m o! additional capital on te oter0 5e !all in te rate o! pro!it @o%ld ten be
accompanied by an absol%te decrease in te mass o! pro!it, since te mass o! employed labo%r-
po@er co%ld not be increased and te rate o! s%rpl%s-8al%e raised %nder te conditions @e ad
ass%med, so tat te mass o! s%rpl%s-8al%e co%ld not be increased eiter0 ?nd te 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 tat te
employed capital contin%es to sel!-expand at te old rate o! pro!it, and te mass o! pro!it ence
remains te same, tis mass @o%ld still e calc%lated on an increased total capital, tis like@ise
implying a !all in te 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==, ten, in te second case, 1,=== @o%ld yield only 66W0
$el!-expansion o! te old capital, in te absol%te sense, @o%ld a8e been red%ced0 5e capital R
1,=== @o%ld yield no more %nder te ne@ circ%mstances tan !ormerly a capital R 666W0
&t is e8ident, o@e8er, tat tis act%al depreciation o! te old capital co%ld not occ%r @ito%t a
str%ggle, and tat te additional capital c; co%ld not ass%me te !%nctions o! capital @ito%t a
str%ggle0 5e rate o! pro!it @o%ld not !all %nder te e!!ect o! competition d%e to o8er-prod%ction
o! capital0 &t @o%ld rater be te re8erse# it @o%ld be te competiti8e str%ggle @ic @o%ld begin
beca%se te !allen rate o! pro!it and o8er-prod%ction o! capital originate !rom te same
conditions0 5e part o! c; in te ands o! old !%nctioning capitalists @o%ld be allo@ed to remain
more or less idle to pre8ent a depreciation o! teir o@n original capital and not to narro@ its place
in te !ield o! prod%ction0 3r tey @o%ld employ it, e8en at a momentary loss, to si!t te need o!
keeping additional capital idle on ne@comers and on teir competitors in general0
5at portion o! c; @ic is in ne@ ands @o%ld seek to ass%me a place !or itsel! at te expense
o! te old capital, and @o%ld accomplis tis in part by !orcing a portion o! te old capital to lie
1>6 ;apter J4
idle0 &t @o%ld compel te old capital to gi8e %p its old place and @itdra@ to Hoin completely or
partially %nemployed additional capital0
? portion o! te old capital as to lie %n%sed %nder all circ%mstances# it as to gi8e %p its
caracteristic D%ality as capital, so !ar as acting as s%c and prod%cing 8al%e is concerned0 5e
competiti8e str%ggle @o%ld decide @at part o! it @o%ld be partic%larly a!!ected0 $o long as
tings go @ell, competition e!!ects an operating !raternity o! te capitalist class, as @e a8e seen
in te case o! te eD%alisation o! te general rate o! pro!it, so tat eac sares in te common loot
in proportion to te siEe o! is respecti8e in8estment0 A%t as soon as it no longer is a D%estion o!
saring pro!its, b%t o! saring losses, e8eryone tries to red%ce is o@n sare to a minim%m and to
so8e it o!! %pon anoter0 5e class, as s%c, m%st ine8itably lose0 6o@ m%c te indi8id%al
capitalist m%st bear o! te loss, i.e., to @at extent e m%st sare in it at all, is decided by strengt
and c%nning, and competition ten becomes a !igt among ostile broters0 5e antagonism
bet@een eac indi8id%al capitalist"s interests and tose o! te capitalist class as a @ole, ten
comes to te s%r!ace, H%st as pre8io%sly te identity o! tese interests operated in practice tro%g
competition0
6o@ is tis con!lict settled and te conditions restored @ic correspond to te Kso%ndL operation
o! capitalist prod%ctionQ 5e mode o! settlement is already indicated in te 8ery emergence o! te
con!lict @ose settlement is %nder disc%ssion0 &t implies te @itdra@al and e8en te partial
destr%ction o! capital amo%nting to te !%ll 8al%e o! additional capital c;, or at least a part o! it0
?lto%g, as te description o! tis con!lict so@s, te loss is by no means eD%ally distrib%ted
among indi8id%al capitals, its distrib%tion being rater decided tro%g a competiti8e str%ggle in
@ic te loss is distrib%ted in 8ery di!!erent proportions and !orms, depending on special
ad8antages or pre8io%sly capt%red positions, so tat one capital is le!t %n%sed, anoter is
destroyed, and a tird s%!!ers b%t a relati8e loss, or is H%st temporarily depreciated, etc0
A%t te eD%ilibri%m @o%ld be restored %nder all circ%mstances tro%g te @itdra@al or e8en te
destr%ction o! more or less capital0 5is @o%ld extend partly to te material s%bstance o! capital,
i.e., a part o! te means o! prod%ction, o! !ixed and circ%lating capital, @o%ld not operate, not act
as capital# some o! te operating establisments @o%ld ten be bro%gt to a standstill0 ?lto%g,
in tis respect, time attacks and @orsens all means o! prod%ction Bexcept landC, te stoppage
@o%ld in reality ca%se !ar greater damage to te means o! prod%ction0 6o@e8er, te main e!!ect in
tis case @o%ld be tat tese means o! prod%ction @o%ld cease to !%nction as s%c, tat teir
!%nction as means o! prod%ction @o%ld be dist%rbed !or a sorter or longer period0
5e main damage, and tat o! te most ac%te nat%re, @o%ld occ%r in respect to capital, and in so
!ar as te latter possesses te caracteristic o! 8al%e it @o%ld occ%r in respect to te values o!
capitals0 5at portion o! te 8al%e o! a capital @ic exists only in te !orm o! claims on
prospecti8e sares o! s%rpl%s-8al%e, i.e., pro!it, in !act in te !orm o! promissory notes on
prod%ction in 8ario%s !orms, is immediately depreciated by te red%ction o! te receipts on @ic
it is calc%lated0 ? part o! te gold and sil8er lies %n%sed, i.e., does not !%nction as capital0 ,art o!
te commodities on te market can complete teir process o! circ%lation and reprod%ction only
tro%g an immense contraction o! teir prices, ence tro%g a depreciation o! te capital @ic
tey represent0 5e elements o! !ixed capital are depreciated to a greater or lesser degree in H%st
te same @ay0 &t m%st be added tat de!inite, pres%pposed, price relations go8ern te process o!
reprod%ction, so tat te latter is alted and tro@n into con!%sion by a general drop in prices0
5is con!%sion and stagnation paralyses te !%nction o! money as a medi%m o! payment, @ose
de8elopment is geared to te de8elopment o! capital and is based on tose pres%pposed price
relations0 5e cain o! payment obligations d%e at speci!ic dates is broken in a %ndred places0
5e con!%sion is a%gmented by te attendant collapse o! te credit system, @ic de8elops
sim%ltaneo%sly @it capital, and leads to 8iolent and ac%te crises, to s%dden and !orcible
depreciations, to te act%al stagnation and disr%ption o! te process o! reprod%ction, and t%s to a
real !alling o!! in reprod%ction0
1>> ;apter J4
A%t tere @o%ld a8e been still oter agencies at @ork at te same time0 5e stagnation o!
prod%ction @o%ld a8e laid o!! a part o! te @orking-class and @o%ld tereby a8e placed te
employed part in a sit%ation, @ere it @o%ld a8e to s%bmit to a red%ction o! @ages e8en belo@
te a8erage0 5is as te 8ery same e!!ect on capital as an increase o! te relati8e or absol%te
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 te decimation o! o!!spring0 Wile implying a real increase in
pop%lation, tis does not signi!y an increase in te act%al @orking pop%lation0 A%t it a!!ects te
relations o! te labo%rer to capital in te same @ay as an increase o! te n%mber o! act%ally
@orking labo%rers @o%ld a8e a!!ected tem0 3n te oter and, te !all in prices and te
competiti8e str%ggle @o%ld a8e dri8en e8ery capitalist to lo@er te indi8id%al 8al%e o! is total
prod%ct belo@ its general 8al%e by means o! ne@ macines, ne@ and impro8ed @orking metods,
ne@ combinations, i.e., to increase te prod%cti8ity o! a gi8en D%antity o! labo%r, to lo@er te
proportion o! 8ariable to constant capital, and tereby to release some labo%rers# in sort, to
create an arti!icial o8er-pop%lation0 (ltimately, te depreciation o! te elements o! constant
capital @o%ld itsel! tend to raise te rate o! pro!it0 5e mass o! employed constant capital @o%ld
a8e increased in relation to 8ariable, b%t its 8al%e co%ld a8e !allen0 5e ens%ing stagnation o!
prod%ction @o%ld a8e prepared I @itin capitalistic limits I a s%bseD%ent expansion o!
prod%ction0
?nd t%s te cycle @o%ld r%n its co%rse ane@0 ,art o! te capital, depreciated by its !%nctional
stagnation, @o%ld reco8er its old 8al%e0 For te rest, te 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 te extreme conditions ass%med by %s tis 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 te 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
te increased mass0
.et it @o%ld still be o8er-prod%ction, beca%se capital @o%ld be %nable to exploit labo%r to te
degree reD%ired by a Kso%ndL, KnormalL de8elopment o! te process o! capitalist prod%ction, to a
degree @ic @o%ld at least increase te mass o! pro!it along @it te gro@ing mass o! te
employed capital# to a degree @ic @o%ld, tere!ore, pre8ent te rate o! pro!it !rom !alling as
m%c as te capital gro@s, or e8en more rapidly0
38er-prod%ction o! capital is ne8er anyting more tan 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 te intensity o! exploitation belo@ a certain
point, o@e8er, calls !ort dist%rbances, and stoppages in te capitalist prod%ction process, crises,
and destr%ction o! capital0 &t is no contradiction tat tis o8er-prod%ction o! capital is
accompanied by more or less considerable relati8e o8er-pop%lation0 5e circ%mstances @ic
increased te prod%cti8eness o! labo%r, a%gmented te 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
te rate o! pro!it I tese 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 te s%rpl%s-capital o@ing to te
lo@ degree o! exploitation at @ic alone tey co%ld be employed, or at least o@ing to te lo@
rate o! pro!it @ic tey @o%ld yield at te gi8en degree o! exploitation0
&! capital is sent abroad, tis 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 iger rate o! pro!it in a !oreign co%ntry0 A%t s%c capital is
absol%te excess capital !or te employed labo%ring pop%lation and !or te ome co%ntry in
general0 &t exists as s%c alongside te relati8e o8er-pop%lation, and tis is an ill%stration o! o@
bot o! tem exist side by side, and m%t%ally in!l%ence one anoter0
1>8 ;apter J4
3n te oter and, a !all in te rate o! pro!it connected @it acc%m%lation necessarily calls !ort a
competiti8e str%ggle0 ;ompensation o! a !all in te rate o! pro!it by a rise in te mass o! pro!it
applies only to te total social capital and to te big, !irmly placed capitalists0 5e ne@ additional
capital operating independently does not enHoy any s%c compensating conditions0 &t m%st still
@in tem, and so it is tat a !all in te rate o! pro!it calls !ort a competiti8e str%ggle among
capitalists, not 8ice 8ersa0 5o be s%re, te competiti8e str%ggle is accompanied by a temporary
rise in @ages and a res%ltant !%rter temporary !all o! te rate o! pro!it0 5e same occ%rs @en
tere is an o8er-prod%ction o! commodities, @en markets are o8erstocked0 $ince te aim o!
capital is not to minister to certain @ants, b%t to prod%ce pro!it, and since it accomplises tis
p%rpose by metods @ic adapt te mass o! prod%ction to te scale o! prod%ction, not 8ice
8ersa, a ri!t m%st contin%ally ens%e bet@een te limited dimensions o! cons%mption %nder
capitalism and a prod%ction @ic !ore8er tends to exceed tis immanent barrier0 F%rtermore,
capital consists o! commodities, and tere!ore o8er-prod%ction o! capital implies o8er-prod%ction
o! commodities0 6ence te pec%liar penomenon o! economists @o deny o8er-prod%ction o!
commodities, admitting o8er-prod%ction o! capital0 5o say tat tere is no general o8er-
prod%ction, b%t rater a disproportion @itin te 8ario%s brances o! prod%ction, is no more tan
to say tat %nder capitalist prod%ction te proportionality o! te indi8id%al brances o! prod%ction
springs as a contin%al process !rom disproportionality, beca%se te coesion o! te aggregate
prod%ction imposes itsel! as a blind la@ %pon te agents o! prod%ction, and not as a la@ @ic,
being %nderstood and ence controlled by teir common mind, brings te prod%cti8e process
%nder teir Hoint control0 &t amo%nts !%rtermore to demanding tat co%ntries in @ic capitalist
prod%ction is not de8eloped, so%ld cons%me and prod%ce at a rate @ic s%its te co%ntries @it
capitalist prod%ction0 &! it is said tat o8er-prod%ction is only relati8e, tis is D%ite correct# b%t te
entire capitalist mode o! prod%ction is only a relati8e one, @ose barriers are not absol%te0 5ey
are absol%te only !or tis mode, i.e., on its basis0 6o@ co%ld tere oter@ise be a sortage o!
demand !or te 8ery commodities @ic te mass o! te people lack, and o@ @o%ld it be
possible !or tis demand to be so%gt abroad, in !oreign markets, to pay te labo%rers at ome te
a8erage amo%nt o! necessities o! li!eQ 5is is possible only beca%se in tis speci!ic capitalist
interrelation te 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 tat te
capitalists a8e only to excange and cons%me teir commodities among temsel8es, ten te
entire nat%re o! te capitalist mode o! prod%ction is lost sigt o!# and also !orgotten is te !act tat
it is a matter o! expanding te 8al%e o! te capital, not cons%ming it0 &n sort, all tese obHections
to te ob8io%s penomena o! o8er-prod%ction Bpenomena @ic pay no eed to tese
obHectionsC amo%nt to te contention tat te barriers o! capitalist prod%ction are not barriers o!
production generally, and tere!ore not barriers o! tis speci!ic, capitalist mode o! prod%ction0
5e contradiction o! te capitalist mode o! prod%ction, o@e8er, lies precisely in its tendency
to@ards an absol%te de8elopment o! te prod%cti8e !orces, @ic contin%ally come into con!lict
@it te speci!ic conditions o! prod%ction in @ic capital mo8es, and alone can mo8e0
5ere are not too many necessities o! li!e prod%ced, in proportion to te existing pop%lation0
M%ite te re8erse0 5oo little is prod%ced to decently and %manely satis!y te @ants o! te great
mass0
5ere are not too many means o! prod%ction prod%ced to employ te able-bodied portion o! te
pop%lation0 M%ite te re8erse0 &n te !irst place, too large a portion o! te prod%ced pop%lation is
not really capable o! @orking, and is tro%g !orce o! circ%mstances made dependent on
exploiting te labo%r o! oters, or on labo%r @ic can pass %nder tis name only %nder a
miserable mode o! prod%ction0 &n te second place, not eno%g means o! prod%ction are prod%ced
to permit te employment o! te entire able-bodied pop%lation %nder te most prod%cti8e
conditions, so tat teir absol%te @orking period co%ld be sortened by te mass and
e!!ecti8eness o! te constant capital employed d%ring @orking-o%rs0
1>* ;apter J4
3n te oter and, too many means o! labo%r and necessities o! li!e are prod%ced at times to
permit o! teir ser8ing as means !or te 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! te
8al%e and s%rpl%s-8al%e contained in tem %nder te conditions o! distrib%tion and cons%mption
pec%liar to capitalist prod%ction, i.e., too many to permit o! te cons%mmation o! tis process
@ito%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
5e limitations o! te capitalist mode o! prod%ction come to te s%r!ace:
1C &n tat te de8elopment o! te prod%cti8ity o! labo%r creates o%t o! te !alling rate o! pro!it a
la@ @ic at a certain point comes into antagonistic con!lict @it tis de8elopment and m%st be
o8ercome constantly tro%g crises0
<C &n tat te expansion or contraction o! prod%ction are determined by te appropriation o!
%npaid labo%r and te proportion o! tis %npaid labo%r to materialised labo%r in general, or, to
speak te lang%age o! te capitalists, by pro!it and te proportion o! tis pro!it to te employed
capital, t%s by a de!inite rate o! pro!it, rater tan te relation o! prod%ction to social
reD%irements, i.e., to te reD%irements o!" socially de8eloped %man beings0 &t is !or tis reason
tat te capitalist mode o! prod%ction meets @it barriers at a certain expanded stage o!
prod%ction @ic, i! 8ie@ed !rom te oter premise, @o%ld re8ersely a8e been altogeter
inadeD%ate0 &t comes to a standstill at a point !ixed by te prod%ction and realisation o! pro!it, and
not te satis!action o! reD%irements0
&! te rate o! pro!it !alls, tere !ollo@s, on te one and, an exertion o! capital in order tat te
indi8id%al capitalists, tro%g impro8ed metods, etc0, may depress te 8al%e o! teir indi8id%al
commodity belo@ te social a8erage 8al%e and tereby realise an extra pro!it at te pre8ailing
market-price0 3n te oter and, tere appears s@indling and a general promotion o! s@indling
by reco%rse to !renEied 8ent%res @it ne@ metods o! prod%ction, ne@ in8estments o! capital,
ne@ ad8ent%res, all !or te sake o! sec%ring a sred o! extra pro!it @ic is independent o! te
general a8erage and rises abo8e it0
5e rate o! pro!it, i.e., te relati8e increment o! capital, is abo8e all important to all ne@ o!!soots
o! capital seeking to !ind an independent place !or temsel8es0 ?nd as soon as !ormation o!
capital @ere to !all into te ands o! a !e@ establised big capitals, !or @ic te mass o! pro!it
compensates !or te !alling rate o! pro!it, te 8ital !lame o! prod%ction @o%ld be altogeter
exting%ised0 &t @o%ld die o%t0 5e rate o! pro!it is te moti8e po@er o! capitalist prod%ction0
5ings are prod%ced only so long as tey can be prod%ced @it a pro!it0 6ence te concern o! te
Englis economists o8er te decline o! te rate o! pro!it0 5e !act tat te bare possibility o! tis
appening so%ld @orry )icardo, so@s is pro!o%nd %nderstanding o! te conditions o!
capitalist prod%ction0 &t is tat @ic is eld against im, it is is %nconcern abo%t K%man
beings,L and is a8ing an eye solely !or te de8elopment o! te prod%cti8e !orces, @ate8er te
cost in %man beings and capital-values I it is precisely tat @ic is te important ting abo%t
im0 7e8elopment o! te prod%cti8e !orces o! social labo%r is te istorical task and H%sti!ication
o! capital0 5is is H%st te @ay in @ic it %nconscio%sly creates te material reD%irements o! a
iger mode o! prod%ction0 Wat @orries )icardo is te !act tat te rate o! pro!it, te stim%lating
principle o! capitalist prod%ction, te !%ndamental premise and dri8ing !orce o! acc%m%lation,
so%ld be endangered by te de8elopment o! prod%ction itsel!0 ?nd ere te D%antitati8e
proportion means e8eryting0 5ere is, indeed, someting deeper beind it, o! @ic e is only
8ag%ely a@are0 &t comes to te s%r!ace ere in a p%rely economic @ay I i.e., !rom te bo%rgeois
point o! 8ie@, @itin te limitations o! capitalist %nderstanding, !rom te standpoint o! capitalist
prod%ction itsel! I tat it as its barrier, tat it is relati8e, tat it is not an absol%te, b%t only a
18= ;apter J4
istorical mode o! prod%ction corresponding to a de!inite limited epoc in te de8elopment o! te
material reD%irements o! prod%ction0
IV. Supplementar# )emar4s
$ince te de8elopment o! te prod%cti8ity o! labo%r proceeds 8ery disproportionately in te
8ario%s lines o! ind%stry, and not only disproportionately in degree b%t !reD%ently also in opposite
directions, it !ollo@s tat te mass o! a8erage pro!it BR s%rpl%s-8al%eC m%st be s%bstantially belo@
te le8el one @o%ld nat%rally expect a!ter te de8elopment o! te prod%cti8eness in te most
ad8anced brances o! ind%stry0 5e !act tat te de8elopment o! te 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 te anarcy o! competition and te pec%liarity o! te 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 te latter depends on social
conditions0 6ence te opposite mo8ements in tese di!!erent speres I progress ere, and
retrogression tere0 ;onsider te mere in!l%ence o! te seasons, !or instance, on @ic te b%lk o!
ra@ materials depends !or its mass, te exa%stion o! !orest lands, coal and iron mines, etc0
Wile te circ%lating part o! constant capital, s%c as ra@ materials, etc0, contin%ally increases its
mass in proportion to te prod%cti8ity o! labo%r, tis is not te case @it !ixed capital, s%c as
b%ildings, macinery, and ligting and eating !acilities, etc0 ?lto%g in absol%te terms a
macine becomes dearer @it te gro@t o! its bodily mass, it becomes relati8ely ceaper0 &! !i8e
labo%rers prod%ce ten times as m%c o! a commodity as be!ore, tis does not increase te o%tlay
!or !ixed capital ten-!old# alto%g te 8al%e o! tis part o! constant capital increases @it te
de8elopment o! te prod%cti8eness, it does not by any means increase in te same proportion0 We
a8e !reD%ently pointed o%t te di!!erence in te ratio o! constant to 8ariable capital as expressed
in te !all o! te rate o! pro!it, and te di!!erence in te same ratio as expressed in relation to te
indi8id%al commodity and its price @it te de8elopment o! te prod%cti8ity o! labo%r0
/5e 8al%e o! a commodity is determined by te total labo%r-time o! past and li8ing labo%r
incorporated in it0 5e increase in labo%r prod%cti8ity consists precisely in tat te sare o! li8ing
labo%r is red%ced @ile tat o! past labo%r is increased, b%t in s%c a @ay tat te total D%antity o!
labo%r incorporated in tat commodity declines# in s%c a @ay, tere!ore, tat li8ing labo%r
decreases more tan past labo%r increases0 5e past labo%r contained in te 8al%e o! a commodity
I te constant part o! capital I consists partly o! te @ear and tear o! !ixed, partly o! circ%lating,
constant capital entirely cons%med by tat commodity, s%c as ra@ and a%xiliary materials0 5e
portion o! 8al%e deri8ing !rom ra@ and a%xiliary materials m%st decrease @it te increased
prod%cti8ity o! labo%r, beca%se @it regard to tese materials te prod%cti8ity expresses itsel!
precisely by red%cing teir 8al%e0 3n te oter and, it is most caracteristic o! rising labo%r
prod%cti8ity tat te !ixed part o! constant capital is strongly a%gmented, and @it it tat portion
o! its 8al%e @ic is trans!erred by @ear and tear to te commodities0 For a ne@ metod o!
prod%ction to represent a real increase in prod%cti8ity, it m%st trans!er a smaller additional portion
o! te 8al%e o! !ixed capital to eac %nit o! te commodity in @ear and tear tan te portion o!
8al%e ded%cted !rom it tro%g te sa8ing in li8ing labo%r# in sort, it m%st red%ce te 8al%e o!
te commodity0 &t m%st ob8io%sly do so e8en i!, as it occ%rs in some cases, an additional 8al%e
goes into te 8al%e o! te commodity !or more or dearer ra@ or a%xiliary materials o8er and
abo8e te additional portion !or @ear and tear o! te !ixed capital0 ?ll additions to te 8al%e m%st
be more tan o!!set by te red%ction in 8al%e res%lting !rom te decrease in li8ing labo%r0
5is red%ction o! te total D%antity o! labo%r going into a commodity seems, accordingly, to be
te 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 tis
standard in a society, in @ic prod%cers reg%late teir prod%ction according to a preconcei8ed
181 ;apter J4
plan, or e8en %nder simple commodity-prod%ction0 A%t o@ does te matter stand %nder capitalist
prod%ctionQ
$%ppose, a certain line o! capitalist ind%stry prod%ces a normal %nit o! its commodity %nder te
!ollo@ing conditions: 5e @ear and tear o! !ixed capital amo%nts to Z silling per piece# ra@ and
a%xiliary materials go into it to te amo%nt o! 1>Z sillings per piece# @ages, < sillings# and
s%rpl%s-8al%e, < sillings at a rate o! s%rpl%s-8al%e o! 1==T0 5otal 8al%e R << sillings0 We
ass%me !or te sake o! simplicity tat te capital in tis line o! prod%ction as te a8erage
composition o! social capital, so tat te price o! prod%ction o! te commodity is identical @it its
8al%e, and te pro!it o! te capitalist @it te created s%rpl%s-8al%e0 5en te cost-price o! te
commodity R Z U 1>Z U < R <=s0, te a8erage rate o! pro!it <N<= R 1=T, and te price o!
prod%ction per piece o! te commodity, like its 8al%e R <<s0
$%ppose a macine is in8ented @ic red%ces by al! te li8ing labo%r reD%ired per piece o! te
commodity, b%t trebles tat portion o! its 8al%e acco%nted !or by te @ear and tear o! te !ixed
capital0 &n tat case, te 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 5e commodity ten !alls 1s0 in 8al%e# te
ne@ macine as certainly increased te prod%cti8ity o! labo%r0 A%t te capitalist sees te 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 te rate o! pro!it is not immediately altered by te ne@
macine, e @ill recei8e 1=T o8er is cost-price, tat is, <s0 5e price o! prod%ction, ten,
remains %naltered R <<s0, b%t is 1s0 abo8e te 8al%e0 For a society prod%cing %nder capitalist
conditions te commodity as not ceapened0 5e ne@ macine is no impro8ement !or it0 5e
capitalist is, tere!ore, not interested in introd%cing it0 ?nd since its introd%ction @o%ld make is
present, not as yet @orn-o%t, macinery simply @ortless, @o%ld t%rn it into scrap-iron, ence
@o%ld ca%se a positi8e loss, e takes good care not to commit tis, @at is !or im a %topian,
mistake0
5e la@ o! increased prod%cti8ity o! labo%r is not, tere!ore, absol%tely 8alid !or capital0 $o !ar as
capital is concerned, prod%cti8eness does not increase tro%g a sa8ing in li8ing labo%r in
general, b%t only tro%g a sa8ing in te paid portion o! li8ing labo%r, as compared to labo%r
expended in te past, as @e a8e already indicated in passing in Aook & BKap0 J& &&, <, +0
2=*N3*8C0 /Englis edition: ;0 J4, <. J 0d.1 6ere te capitalist mode o! prod%ction is beset @it
anoter contradiction0 &ts istorical mission is %nconstrained de8elopment in geometrical
progression o! te prod%cti8ity o! %man labo%r0 &t goes back on its mission @ene8er, as ere, it
cecks te de8elopment o! prod%cti8ity0 &t t%s demonstrates again tat it is becoming senile and
tat it is more and more o%tli8ed01
1

(nder competition, te increasing minim%m o! capital reD%ired @it te increase in prod%cti8ity
!or te s%ccess!%l operation o! an independent ind%strial establisment, ass%mes te !ollo@ing
aspect: ?s soon as te ne@, more expensi8e eD%ipment as become %ni8ersally establised,
smaller capitals are ence!ort excl%ded !rom tis ind%stry0 $maller capitals can carry on
independently in te 8ario%s speres o! ind%stry only in te in!ancy o! mecanical in8entions0
4ery large %ndertakings, s%c as rail@ays, on te oter and, @ic a8e an %n%s%ally ig
proportion o! constant capital, do not yield te a8erage rate o! pro!it, b%t only a portion o! it, only
an interest0 3ter@ise te general rate o! pro!it @o%ld a8e !allen still lo@er0 A%t tis o!!ers direct
employment to large concentrations o! capital in te !orm o! stocks0
:ro@t o! capital, ence acc%m%lation o! capital, does not imply a !all in te rate o! pro!it, %nless
it is accompanied by te a!orementioned canges in te proportion o! te organic constit%ents o!
capital0 -o@ it so appens tat in spite o! te constant daily re8ol%tions in te mode o!
prod%ction, no@ tis and no@ tat larger or smaller portion o! te total capital contin%es to
acc%m%late !or certain periods on te basis o! a gi8en a8erage proportion o! tose constit%ents, so
18< ;apter J4
tat tere is no organic cange @it its gro@t, and conseD%ently no ca%se !or a !all in te rate o!
pro!it0 5is constant expansion o! capital, ence also an expansion o! prod%ction, on te basis o!
te old metod o! prod%ction @ic goes D%ietly on @ile ne@ metods are already being
introd%ced at its side, is anoter reason, @y te rate o! pro!it does not decline as m%c as te
total capital o! society gro@s0
5e increase in te absol%te n%mber o! labo%rers does not occ%r in all brances o! prod%ction,
and not %ni!ormly in all, in spite o! te relati8e decrease o! 8ariable capital laid o%t in @ages0 &n
agric%lt%re, te decrease o! te element o! li8ing labo%r may be absol%te0
?t any rate, it is b%t a reD%irement o! te capitalist mode o! prod%ction tat te n%mber o! @age-
@orkers so%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 te absol%te n%mber o! labo%rers, i.e.,
enable te entire nation to accomplis its total prod%ction in a sorter time span, @o%ld ca%se a
re8ol%tion, beca%se it @o%ld p%t te b%lk o! te pop%lation o%t o! te r%nning0 5is is anoter
mani!estation o! te speci!ic barrier o! capitalist prod%ction, so@ing also tat capitalist
prod%ction is by no means an absol%te !orm !or te de8elopment o! te prod%cti8e !orces and !or
te creation o! @ealt, b%t rater tat at a certain point it comes into collision @it tis
de8elopment0 5is collision appears partly in periodical crises, @ic arise !rom te circ%mstance
tat no@ tis and no@ tat portion o! te labo%ring pop%lation becomes red%ndant %nder its old
mode o! employment0 5e limit o! capitalist prod%ction is te excess time o! te labo%rers0 5e
absol%te spare time gained by society does not concern it0 5e de8elopment o! prod%cti8ity
concerns it only in so !ar as it increases te s%rpl%s labo%r-time o! te @orking-class, not beca%se
it decreases te labo%r-time !or material prod%ction in general0 &t mo8es t%s in a contradiction0
We a8e seen tat te gro@ing acc%m%lation o! capital implies its gro@ing concentration0 5%s
gro@s te po@er o! capital, te alienation o! te conditions o! social prod%ction personi!ied in te
capitalist !rom te real prod%cers0 ;apital comes more and more to te !ore as a social po@er,
@ose agent is te capitalist0 5is social po@er no longer stands in any possible relation to tat
@ic te 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 tat is te capitalist"s so%rce
o! po@er0 5e contradiction bet@een te general social po@er into @ic capital de8elops, on te
one and, and te pri8ate po@er o! te indi8id%al capitalists o8er tese social conditions o!
prod%ction, on te oter, becomes e8er more irreconcilable, and yet contains te sol%tion o! te
problem, beca%se it implies at te same time te trans!ormation o! te conditions o! prod%ction
into general, common, social, conditions0 5is trans!ormation stems !rom te de8elopment o! te
prod%cti8e !orces %nder capitalist prod%ction, and !rom te @ays and means by @ic tis
de8elopment takes place0
-o capitalist e8er 8ol%ntarily introd%ces a ne@ metod o! prod%ction, no matter o@ m%c more
prod%cti8e it may be, and o@ m%c it may increase te rate o! s%rpl%s-8al%e, so long as it
red%ces te rate o! pro!it0 .et e8ery s%c ne@ metod o! prod%ction ceapens te commodities0
6ence, te capitalist sells tem originally abo8e teir prices o! prod%ction, or, peraps, abo8e
teir 8al%e0 6e pockets te di!!erence bet@een teir costs o! prod%ction and te market-prices o!
te same commodities prod%ced at iger costs o! prod%ction0 6e can do tis, beca%se te
a8erage labo%r-time reD%ired socially !or te prod%ction o! tese latter commodities is iger tan
te labo%r-time reD%ired !or te ne@ metods o! prod%ction0 6is metod o! prod%ction stands
abo8e te social a8erage0 A%t competition makes it general and s%bHect to te general la@0 5ere
!ollo@s a !all in te rate o! pro!it I peraps !irst in tis spere o! prod%ction, and e8ent%ally it
acie8es a balance @it te rest I @ic is, tere!ore, @olly independent o! te @ill o! te
capitalist0
183 ;apter J4
&t is still to be added to tis point, tat tis same la@ also go8erns tose speres o! prod%ction,
@ose prod%ct passes neiter directly nor indirectly into te cons%mption o! te labo%rers, or into
te conditions %nder @ic teir necessities are prod%ced# it applies, tere!ore, also to tose
speres o! prod%ction, in @ic tere is no ceapening o! commodities to increase te relati8e
s%rpl%s-8al%e or ceapen labo%r-po@er0 B?t any rate, a ceapening o! constant capital in all tese
lines may increase te rate o! pro!it, @it te exploitation o! labo%r remaining te same0C ?s soon
as te ne@ prod%ction metod begins to spread, and tereby to !%rnis tangible proo! tat tese
commodities can act%ally be prod%ced more ceaply, te capitalists @orking @it te old metods
o! prod%ction m%st sell teir prod%ct belo@ its !%ll price o! prod%ction, beca%se te 8al%e o! tis
commodity as !allen, and beca%se te labo%r-time reD%ired by tem to prod%ce it is greater tan
te social a8erage0 &n one @ord I and tis appears as an e!!ect o! competition I tese capitalists
m%st also introd%ce te ne@ metod o! prod%ction, in @ic te proportion o! 8ariable to constant
capital as been red%ced0
?ll te circ%mstances @ic lead to te %se o! macinery ceapening te price o! a commodity
prod%ced by it, come do@n in te last analysis to a red%ction o! te D%antity o! labo%r absorbed
by a single piece o! te commodity# and secondly, to a red%ction in te @ear-and-tear portion o!
te macinery, @ose 8al%e goes into a single piece o! te commodity0 5e less rapid te @ear o!
macinery, te more te commodities o8er @ic it is distrib%ted, and te more li8ing labo%r it
replaces be!ore its term o! reprod%ction arri8es0 &n bot cases te D%antity and 8al%e o! te !ixed
constant capital increase in relation to te 8ariable0
K?ll oter tings being eD%al, te po@er o! a nation to
sa8e !rom its pro!its 8aries @it te rate o! pro!its: is
great @en tey are ig, less, @en lo@# b%t as te
rate o! pro!its declines, all oter tings do not remain
eD%al0000 ? lo@ rate o! pro!its is ordinarily
accompanied by a rapid rate o! acc%m%lation,
relati8ely to te n%mbers o! te people, as in
England 000 a ig rate o! pro!it by a slo@er rate o!
acc%m%lation, relati8ely to te n%mbers o! te people0
Examples: ,oland, )%ssia, &ndia, etc0L B)icard Pones,
+n Dntroductory ,ecture on &olitical 0conomy,
'ondon, 1833, p0 += !!0C
Pones empasises correctly tat in spite o! te !alling rate o! pro!it te ind%cements and !ac%lties
to acc%m%late are a%gmented# !irst, on acco%nt o! te gro@ing relati8e o8erpop%lation# second,
beca%se te gro@ing prod%cti8ity o! labo%r is accompanied by an increase in te mass o! %se-
8al%es represented by te same excange-8al%e, ence in te material elements o! capital# tird,
beca%se te brances o! prod%ction become more 8aried# !o%rt, d%e to te de8elopment o! te
credit system, te stock companies, etc0, and te res%ltant case o! con8erting money into capital
@ito%t becoming an ind%strial capitalist# !i!t, beca%se te @ants and te greed !or @ealt
increase# and, sixt, beca%se te mass o! in8estments in !ixed capital gro@s, etc0
5ree cardinal !acts o! capitalist prod%ction:
1C ;oncentration o! means o! prod%ction in !e@ ands, @ereby tey cease to appear as te
property o! te immediate labo%rers and t%rn into social prod%ction capacities0 E8en i! initially
182 ;apter J4
tey are te pri8ate property o! capitalists0 5ese are te tr%stees o! bo%rgeois society, b%t tey
pocket all te proceeds o! tis tr%steesip0
<C 3rganisation o! labo%r itsel! into social labo%r: tro%g co-operation, di8ision o! labo%r, and
te %niting o! labo%r @it te nat%ral sciences0
&n tese t@o senses, te capitalist mode o! prod%ction abolises pri8ate property and pri8ate
labo%r, e8en to%g in contradictory !orms0
3C ;reation o! te @orld-market0
5e st%pendo%s prod%cti8ity de8eloping %nder te capitalist mode o! prod%ction relati8e to
pop%lation, and te increase, i! not in te same proportion, o! capital-8al%es Bnot H%st o! teir
material s%bstanceC, @ic gro@ m%c more rapidly tan te pop%lation, contradict te basis,
@ic constantly narro@s in relation to te expanding @ealt, and !or @ic all tis immense
prod%cti8eness @orks0 5ey also contradict te conditions %nder @ic tis s@elling capital
a%gments its 8al%e0 6ence te crises0
Part IV. Conversion of
Commodity-Capital and Money-
Capital into Commercial Capital
and Money-Dealing Capital
(Merchant's Capital)
Chapter 16. Commercial Capital
Mercant"s, or trading, capital breaks %p into t@o !orms or s%b-di8isions, namely, commercial
capital and money-dealing capital, @ic @e sall no@ de!ine more closely, in so !ar as tis is
necessary !or o%r analysis o! capital in its basic str%ct%re0 5is is all te more necessary, beca%se
modern political economy, e8en in te persons o! its best exponents, tro@s trading capital and
ind%strial capital indiscriminately togeter and, in e!!ect, @olly o8erlooks te caracteristic
pec%liarities o! te !ormer0
5e mo8ements o! commodity-capital a8e been analysed in Aook &&0 5o take te total capital o!
society, one part o! it I al@ays made %p o! di!!erent elements and e8en canging in magnit%de I
al@ays exists in te !orm o! commodities on te market, to be con8erted into money0 ?noter part
exists on te market in te !orm o! money, to be con8erted into commodities0 &t is al@ays in te
process o! tis transition, o! tis !ormal metamorposis0 &nasm%c as tis !%nction o! capital in
te process o! circ%lation is at all set apart as a special !%nction o! a special capital, as a !%nction
establised by 8irt%e o! te di8ision o! labo%r to a special gro%p o! capitalists, commodity-capital
becomes commercial capital0
We a8e explained BAook &&, ;apter 4&, K5e ;osts o! ;irc%lation,LC to @at extent te transport
ind%stry, storage and distrib%tion o! commodities in a distrib%table !orm, may be regarded as
prod%ction processes contin%ing @itin te process o! circ%lation0 5ese episodes incidental to
te circ%lation o! commodity-capital are sometimes con!%sed @it te distinct !%nctions o!
mercant"s or commercial capital0 $ometimes tey are, indeed, practically bo%nd %p @it tese
distinct, speci!ic !%nctions, alto%g @it te de8elopment o! te social di8ision o! labo%r te
!%nction o! mercant"s capital e8ol8es in a p%re !orm,i.e., di8orced !rom tose real !%nctions, and
independent o! tem0 5ose !%nctions are tere!ore irrele8ant to o%r p%rpose, @ic is to de!ine
te speci!ic di!!erence o! tis special !orm o! capital0 &n so !ar as capital solely employed in te
circ%lation process, special commercial capital, partly combines tose !%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 tese
incidental !%nctions0
We a8e seen tat te existence o! capital as commodity-capital and te metamorposis it
%ndergoes @itin te spere o! circ%lation in te market as commodity-capital I a metamorposis
186 ;apter J4&
@ic resol8es itsel! into b%ying and selling, con8erting commodity-capital into money-capital
and money-capital into commodity-capital I tat tis !orms a pase in te reprod%ction process o!
ind%strial capital, ence in its process o! prod%ction as a @ole0 We a8e also seen, o@e8er, tat
it is disting%ised in its !%nction as a capital o! circ%lation !rom its !%nction as prod%cti8e capital0
5ese are t@o di!!erent and separate !orms o! existence o! te same capital0 3ne portion o! te
total social capital is contin%ally on te market in te !orm o! capital o! circ%lation, passing
tro%g tis process o! transm%tation, alto%g !or eac indi8id%al capital its existence as
commodity-capital, and its metamorposis as s%c, merely represent e8er-8anising and e8er
rene@ed nodal points I i.e., stages o! transition in te contin%ity o! its prod%ction process, and
alto%g te elements o! commodity-capital in te market 8ary contin%o%sly !or tis reason,
being constantly @itdra@n !rom te commodity-market and eD%ally periodically ret%rned to it as
ne@ prod%cts o! te process o! prod%ction0
;ommercial capital is noting b%t a transm%ted !orm o! a part o! tis capital o! circ%lation
constantly to be !o%nd in te market, e8er in te process o! its metamorposis, and al@ays
encompassed by te spere o! circ%lation0 We say a part, beca%se a part o! te selling and b%ying
o! commodities al@ays takes place directly bet@een ind%strial capitalists0 We lea8e tis part
entirely o%t o! consideration in tis analysis, beca%se it contrib%tes noting to de!ining te
conception, or to %nderstanding te speci!ic nat%re o! mercant"s capital, and beca%se it as
!%rtermore been exa%sti8ely treated !or o%r p%rpose in Aook &&0
5e dealer in commodities, as a capitalist generally, appears on te market primarily as te
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 Bte 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 rater a special dealer in commodities I tat is
capital m%st !irst enter te market in te !orm o! money-capital, !or e does not prod%ce
commodities0 6e merely trades in tem, expedites teir mo8ement, and to operate @it tem e
m%st !irst b%y tem, and, tere!ore, m%st be in possession o! money-capital0
$%ppose tat a dealer in commodities o@ns V3,=== @ic e in8ests as a trading capital0 Wit
tese V3,=== e b%ys, say, 3=,=== yards o! linen !rom some linen man%!act%rer at <s0 per yard0 6e
ten sells te 3=,=== yards0 &! te 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, ten by te end o! te year e as con8erted
is V3,=== into V3,3==0 6o@ e makes tis pro!it is a D%estion @ic @e sall disc%ss later0 ?t
present, @e intend to consider solely te !orm o! te mo8ements o! is capital0 Wit is V3,=== e
keeps b%ying linen and selling it# e constantly repeats tis operation o! b%ying in order to sell, M
I ; I M", te simple !orm o! capital as it obtains entirely in te process o! circ%lation,
%ninterr%pted by te prod%ction process, @ic lies o%tside its o@n mo8ement and !%nction0
Wat is no@ te relation o! tis commercial capital to commodity-capital as a mere !orm o!
existence o! ind%strial capitalQ $o !ar as te linen man%!act%rer is concerned, e as realised te
8al%e o! is linen @it te mercant"s money and tereby completed te !irst pase in te
metamorposis o! is commodity-capital I its con8ersion into money0 3ter conditions being
eD%al, e can no@ proceed to recon8ert tis money into yarn, coal, @ages, etc0, and into means o!
existence, etc0, !or te cons%mption o! is re8en%e0 6ence, lea8ing aside te re8en%e expendit%re,
e can go on @it is process o! reprod%ction0
A%t @ile te sale o! te linen, its metamorposis into money, as taken place !or im, as
prod%cer, it as not yet taken place !or te linen itsel!0 &t is still on te market as commodity-
capital a@aiting to %ndergo its !irst metamorposis I to be sold0 -oting as appened to tis
linen besides a cange in te person o! its o@ner0 ?s concerns its p%rpose, as concerns its place in
te process, it is still commodity-capital, a saleable commodity, @it te only di!!erence tat it is
no@ in te mercant"s ands instead o! te man%!act%rer"s0 5e !%nction o! selling it, o! e!!ecting
te !irst pase o! its metamorposis, as passed !rom te man%!act%rer to te mercant, as
18> ;apter J4&
become te special b%siness o! te mercant, @ereas pre8io%sly it @as a !%nction @ic te
prod%cer ad to per!orm imsel! a!ter a8ing completed te !%nction o! its prod%ction0
'et %s ass%me tat te mercant !ails to sell te 3=,=== yards o! linen d%ring te inter8al reD%ired
by te linen man%!act%rer to bring anoter 3=,=== yards to market at a 8al%e o! V3,===0 5e
mercant cannot b%y tem again, beca%se e still as in stock te %nsold 3=,=== yards @ic
a8e not as yet been recon8erted into money-capital0 ? stoppage ens%es, i.e., an interr%ption o!
reprod%ction0 5e linen prod%cer migt, o! co%rse, a8e additional money-capital at is disposal,
@ic e co%ld con8ert into prod%cti8e capital, regardless o! te sale o! te 3=,=== yards, in order
to contin%e te prod%ction process0 A%t tis @o%ld not alter te sit%ation0 $o !ar as te capital tied
%p in te 3=,=== yards o! linen is concerned, its process o! reprod%ction is, and remains,
interr%pted0 &t is, indeed, easily seen ere tat te mercant"s operations are really noting b%t
operations tat m%st be per!ormed at all e8ents to con8ert te prod%cer"s commodity-capital into
money0 5ey are operations @ic e!!ect te !%nctions o! commodity-capital in te circ%lation
and reprod%ction processes0 &! it de8ol8ed %pon te prod%cer"s clerk to attend excl%si8ely to te
sale, and also te p%rcase, instead o! an independent mercant, tis connection @o%ld not be
obsc%red !or a single moment0
;ommercial capital is, tere!ore, noting b%t te prod%cer"s commodity I capital @ic as to
%ndergo te process o! con8ersion into money I to per!orm its !%nction o! commodity-capital on
te market I te only di!!erence being tat instead o! representing an incidental !%nction o! te
prod%cer, it is no@ te excl%si8e operation o! a special kind o! capitalist, te mercant, and is set
apart as te b%siness o! a special in8estment o! capital0
5is becomes e8ident, !%rtermore, in te speci!ic !orm o! circ%lation o! commercial capital 5e
mercant b%ys a commodity and ten sells it: M I ; I M"0 &n te simple circ%lation o!
commodities, or e8en in te circ%lation o! commodities as it appears in te circ%lation process o!
ind%strial capital, ;" I M I ;, circ%lation is e!!ected by eac piece o! money canging ands
t@ice0 5e linen man%!act%rer sells is commodity-linen, con8erting it into money# te b%yer"s
money passes into is ands0 Wit tis same money e b%ys yarn, coal, labo%r, etc0 I expends te
money !or recon8erting te 8al%e o! linen into te commodities @ic make %p its prod%ction
elements0 5e commodity e b%ys is not te same commodity, not te same kind o! commodity
@ic e sells0 6e as sold prod%cts and bo%gt means o! prod%ction0 A%t it is di!!erent @it
respect to te mo8ements o! mercant"s capital0 Wit is V3,=== te linen mercant b%ys 3=,===
yards o! linen# e sells te same 3=,=== yards o! linen in order to retrie8e is money-capital
BV3,=== and te pro!itC !rom circ%lation0 &t is not te same pieces o! money, b%t rater te same
commodity @ic ere canges places t@ice# te commodity passes !rom te seller into te ands
o! te b%yer, and !rom te ands o! te b%yer, @o no@ becomes seller, into tose o! anoter
b%yer0 &t is sold t@ice, and may be sold repeatedly tro%g te medi%m o! a series o! mercants0
?nd it is precisely tro%g tis repeated sale, tro%g tis t@o-!old cange o! place o! te same
commodity, tat te money ad8anced !or its p%rcase by te !irst b%yer is retrie8ed, its re!l%x to
im e!!ected0 &n one case, ;" I M I ; e!!ects te t@o-!old cange o! place o! te same money, te
sale o! a commodity in one !orm and te p%rcase o! a commodity in anoter0 &n te oter case,
M I ; I M" e!!ects te t@o-!old cange o! place o! te same commodity, te @itdra@al o!
ad8anced money !rom circ%lation0 &t is e8ident tat te commodity as not been !inally sold @en
it passes !rom te prod%cer into te ands o! te mercant, in tat te latter merely carries on te
operation o! selling I or e!!ects te !%nction o! commodity-capital0 A%t at te same time it is
e8ident tat @at is ; I M, a mere !%nction o! is capital in its transient !orm o! commodity-
capital !or te prod%cti8e capitalist, is M I ; I M", a speci!ic increase in te 8al%e o! is ad8anced
money-capital, !or te mercant0 3ne pase o! te metamorposis o! commodities appears ere in
respect to te mercant in te !orm o! M I ; I M", ence as e8ol%tion o! a distinct kind o! capital0
5e mercant !inally sells is commodity, tat is, te linen, to te cons%mer, be it a prod%cti8e
cons%mer B!or instance, a bleacerC, or an indi8id%al @o acD%ires te linen !or is pri8ate %se0
188 ;apter J4&
5e mercant tereby reco8ers is ad8anced capital B@it a pro!itC, and can repeat is operation
ane@0 6ad te money ser8ed merely as a means o! payment in p%rcasing te linen, so tat te
mercant @o%ld a8e ad to pay only a!ter six @eeks, and ad e s%cceeded in selling be!ore tis
term @as o%t, e co%ld a8e paid te linen man%!act%rer @ito%t ad8ancing any money-capital o!
is o@n0 6ad e not sold it, e @o%ld a8e ad to ad8ance is V3,=== on te date o! expiration,
instead o! on deli8ery o! te linen0 ?nd i! a drop in te market-prices ad compelled im to sell
belo@ te p%rcase price, e @o%ld a8e ad to make good te sortage o%t o! is o@n capital0
Wat is it, ten, tat lends to commercial capital te caracter o! an independently operating
capital, @ereas in te ands o! te prod%cer @o does is o@n selling it is ob8io%sly merely a
special !orm o! is capital in a speci!ic pase o! te reprod%ction process d%ring its soHo%rn in te
spere o! circ%lationQ
'irst: 5e !act tat commodity-capital is !inally con8erted into money, tat it per!orms its initial
metamorposis, i.e., its appropriate !%nction on te market D%a commodity-capital @ile in te
ands o! an agent oter tan te prod%cer, and tat tis !%nction o! commodity-capital is e!!ected
by te mercant in is operations, is b%ying and selling, so tat tese operations ass%me te
appearance o! a separate %ndertaking distinct !rom te oter !%nctions o! ind%strial capital I and
ence o! an independent %ndertaking0 &t is a distinct !orm o! te social di8ision o! labo%r, so tat
part o! te !%nction ordinarily per!ormed as a special pase o! te reprod%ction process o! capital,
in tis case I circ%lation, appears as te excl%si8e !%nction o! speci!ic circ%lation agent distinct
!rom te prod%cer0 A%t tis alone @o%ld by no means gi8e tis partic%lar b%siness te aspect o! a
!%nction o! a speci!ic capital distinct !rom, and independent o!, ind%strial capital engaged in te
process o! reprod%ction# indeed, it does not so appear in cases @ere trade is carried on by
tra8elling salesmen or oter direct agents o! te ind%strial capitalist0 5ere!ore, tere m%st be a
second element in8ol8ed0
Second: 5is arises !rom te !act tat in is capacity as an independent circ%lation agent, te
mercant ad8ances money-capital Bis o@n or borro@edC0 5e transaction @ic !or ind%strial
capital in te reprod%ction process amo%nts merely to ; I M, i.e., con8erting commodity-capital
into money-capital, or mere sale, ass%mes !or te mercant te !orm o! M I ; I M", or p%rcase
and sale o! te same commodity, and t%s o! a re!l%x o! money-capital @ic lea8es im in te
p%rcase, and ret%rns to im in te sale0
&t is al@ays ; I M, te con8ersion o! commodity-capital into money-capital, @ic !or te
mercant ass%mes te !orm o! M I ; I M, inasm%c as e ad8ances capital to p%rcase
commodities !rom teir prod%cers# it is al@ays te !irst metamorposis o! commodity-capital,
alto%g !or a prod%cer, or !or ind%strial capital in process o! reprod%ction, te same transaction
may amo%nt to M I ;, to a recon8ersion o! money into commodities Bmeans o! prod%ctionC, to
te second pase o! te metamorposis0 For te linen prod%cer, te !irst metamorposis @as ; I
M, te con8ersion o! is commodity-capital into money-capital0 For te mercant te same act
appears as M I ;, as a con8ersion o! is money-capital into commodity-capital0 -o@, i! e sells
tis linen to a bleacer, it @ill mean M I ;, i.e., te con8ersion o! money capital into prod%cti8e
capital, tis being te second metamorposis o! is commodity-capital !or te bleacer, @ile !or
te mercant it means ; I M, te sale o! te linen e ad bo%gt0 A%t in !act it is only at tis
point tat te commodity-capital prod%ced by te linen man%!act%rer as been !inally sold0 &n
oter @ords, tis M I ; I M o! te mercant represents no more tan a middleman"s !%nction !or
; I M bet@een t@o man%!act%rers0 3r let %s ass%me tat te linen man%!act%rer b%ys yarn !rom a
yarn dealer @it a portion o! te 8al%e o! te sold linen0 5is is M I ; !or im0 A%t !or te
mercant selling te yarn it is ; I M, te resale o! te yarn0 ?s concerning te yarn in its capacity
o! commodity-capital, it is no more tan its !inal sale, @ereby it passes !rom te spere o!
circ%lation into tat o! cons%mption# it is ; I M, te cons%mmation o! its !irst metamorposis0
Weter te mercant b%ys, or sells to te ind%strial capitalist, is M I ; I M, te circ%it o!
mercant"s capital, al@ays expresses @at is H%st ; I M, or simply te completion o! its !irst
18* ;apter J4&
metamorposis, @it regard to te commodity-capital, a transient !orm o! ind%strial capital in
process o! reprod%ction0 5e M I ; o! mercant"s capital is ; I M only !or te ind%strial
capitalist, not !or te commodity-capital prod%ced by im0 &t is b%t te trans!er o! commodity-
capital !rom te ind%strial capitalist to te circ%lation agent0 &t is not %ntil te mercant"s capital
closes ; I M tat !%nctioning commodity-capital per!orms its !inal ; I M0 M I ; I M amo%nts
solely to t@o ; I M"s o! te 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 te !orm o! an independent type o!
capital beca%se te mercant ad8ances money-capital, @ic is realised and !%nctions as capital
only by ser8ing excl%si8ely to mediate te metamorposis o! commodity-capital, its !%nction as
commodity-capital, i.e., its con8ersion into money, and it accomplises tis by te contin%al
p%rcase and sale o! commodities0 5is is its excl%si8e operation0 5is acti8ity o! e!!ecting te
circ%lation process o! ind%strial capital is te excl%si8e !%nction o! te money-capital @it @ic
te mercant operates0 Ay means o! tis !%nction e con8erts is money into money-capital,
mo%lds is M into M I ; I M, and by te same process con8erts commodity-capital into
commercial capital0
$o long and so !ar as commercial capital exists in te !orm o! commodity-capital, it is ob8io%sly
noting else I !rom te standpoint o! te reprod%ction process o! te total social capital I b%t a
portion o! ind%strial capital in te market in process o! metamorposis, @ic exists and
!%nctions as commodity-capital0 &t is tere!ore only te money-capital ad8anced by te mercant
@ic is excl%si8ely destined !or p%rcase and sale and !or tis reason ne8er ass%mes any oter
!orm b%t tat o! commodity-capital and money-capital, ne8er tat o! prod%cti8e capital, and is
al@ays con!ined to te spere o! circ%lation o! capital I it is only tis money-capital @ic is no@
to be regarded @it re!erence to te entire reprod%ction process o! capital0
?s soon as te prod%cer, te linen man%!act%rer, as sold is 3=,=== yards to te mercant !or
V3,===, e %ses te money so obtained to b%y te necessary means o! prod%ction, so tat is
capital ret%rns to te prod%ction process0 6is process o! prod%ction contin%es @ito%t
interr%ption0 $o !ar as e is concerned, te con8ersion o! is commodity into money is
accomplised0 A%t !or te linen itsel!, as @e a8e seen, its metamorposis as not yet taken place0
&t as not yet been !inally recon8erted into money, as not yet passed as a %se-8al%e into eiter
prod%cti8e or indi8id%al cons%mption0 &t is no@ te linen mercant @o represents on te market
te same commodity-capital originally represented by te linen man%!act%rer0 For te latter te
process o! trans!ormation as been c%rtailed, only to be contin%ed in te mercant"s ands0
6ad te linen prod%cer been obliged to @ait %ntil is linen ad really ceased being a commodity,
%ntil it as passed into te 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 sort, into te elements o! prod%cti8e capital, and to retain a larger portion o! it as a money
reser8e, so tat @it one portion o! is capital on te market in te sape o! commodities, anoter
@o%ld contin%e te process o! prod%ction# one portion @o%ld be on te market in te !orm o!
commodities, @ile te oter ret%rned in te !orm o! money0 5is di8ision o! is capital is not
abolised by te mercant"s inter8ention0 A%t @ito%t it te portion o! money reser8e in te
capital o! circ%lation @o%ld al@ays a8e to be greater in relation to te part employed in te !orm
o! prod%cti8e capital, and te scale o! reprod%ction @o%ld a8e to be restricted accordingly0
&nstead, o@e8er, te man%!act%rer is enabled to constantly employ a larger portion o! is capital
in te act%al process o! prod%ction, and a smaller portion as money reser8e0
3n te oter and, o@e8er, anoter portion o! te social capital, in te !orm o! mercant"s
capital, is kept contin%ally @itin te spere o! circ%lation0 &t is employed all te time !or te sole
p%rpose o! b%ying and selling0 6ence tere seems to a8e been no more tan a replacement o!
persons olding tis capital in teir ands0
1*= ;apter J4&
&!, instead o! b%ying V3,=== @ort o! linen @it te p%rpose o! selling it again, te mercant ad
applied tese V3,=== prod%cti8ely, te prod%cti8e capital o! society @o%ld a8e increased0 5r%e,
te linen man%!act%rer @o%ld ten a8e been obliged to old back a larger portion o! is capital
as money reser8e, and like@ise te mercant, no@ trans!ormed into an ind%strial capitalist0 3n
te oter and, i! te mercant remains mercant, te man%!act%rer sa8es time in selling, @ic
e can de8ote to s%per8ising te prod%ction process, @ile te mercant m%st apply all is time to
selling0
&! mercant"s capital does not o8erstep its necessary proportions, it is to be in!erred,
1C tat as a res%lt o! te di8ision o! labo%r te capital de8oted excl%si8ely to b%ying and selling
Band tis incl%des not only te money reD%ired to b%y commodities, b%t also te money @ic
m%st be in8ested in labo%r to maintain te mercant"s establisment, and in is constant capital-
te storeo%ses, transport, etc0C is smaller tan it @o%ld be i! te ind%strial capitalist @ere
constrained to carry on te entire commercial part o! is b%siness on is o@n#
<C tat beca%se te mercant de8otes all is time excl%si8ely to tis b%siness, te prod%cer is able
to con8ert is commodities more rapidly into money, and, moreo8er, te commodity-capital itsel!
passes more rapidly tro%g its metamorposis tan it @o%ld in te ands o! te prod%cer#
3C tat in 8ie@ing te aggregate mercant"s capital in its relation to ind%strial capital, one t%rno8er
o! mercant"s capital may represent not only te t%rno8ers o! many capitals in one spere o!
prod%ction, b%t te t%rno8ers o! a n%mber o! capitals in di!!erent speres o! prod%ction0 5e
!ormer is te case @en, !or instance, te linen mercant, a!ter b%ying te prod%ct o! some linen
man%!act%rer @it is V3,===, sells it be!ore te same man%!act%rer brings anoter lot o! te same
D%antity to market, and b%ys, and again sells, te prod%ct o! anoter, or se8eral oter, linen
man%!act%rers, t%s e!!ecting te t%rno8ers o! di!!erent capitals in te same spere o! prod%ction0
5e latter is te case i!, !or example, te mercant a!ter selling is linen b%ys silk, t%s e!!ecting
te t%rno8er o! a capital in a di!!erent spere o! prod%ction0
&n general, it may be noted tat te t%rno8er o! ind%strial capital is limited not by te time o!
circ%lation alone, b%t also by te time o! prod%ction0 5e t%rno8er o! mercant"s capital dealing in
one kind o! commodity is not merely limited by te t%rno8er o! a single ind%strial capital, b%t by
tat o! all ind%strial capitals in te same branc o! prod%ction0 ?!ter te mercant as bo%gt and
sold te linen o! one prod%cer e can b%y and sell tat o! anoter, be!ore te !irst brings anoter
lot to te market0 5e same mercant"s capital may, tere!ore, s%ccessi8ely promote te di!!erent
t%rno8ers o! capitals in8ested in a certain branc o! prod%ction, @it te e!!ect tat its t%rno8er is
not identical @it te t%rno8ers o! a sole ind%strial capital, and does not tere!ore replace H%st te
single money reser8e @ic tat one ind%strial capitalist @o%ld a8e ad to old in petto0 5e
t%rno8er o! mercant"s capital in one spere o! prod%ction is nat%rally restricted by te total
prod%ction o! tat spere0 A%t it is not restricted by te scale o! prod%ction, or te period o!
t%rno8er, o! any one capital o! te same spere, 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 tree monts !or its prod%ction0
?!ter te mercant as bo%gt and sold it, say, in one mont, e can b%y and sell te same
prod%ct o! some oter man%!act%rer0 3r a!ter e as sold, say, te corn o! one !armer, e can b%y
and sell tat o! anoter @it te same money, etc0 5e t%rno8er o! is capital is restricted by te
mass o! corn e is able to b%y and sell s%ccessi8ely @itin a certain period, !or instance, in one
year, @ile te t%rno8er o! te !armer"s capital is, regardless o! te time o! t%rno8er, restricted by
te time o! prod%ction, @ic lasts one year0
6o@e8er, te t%rno8er o! te same mercant"s capital may eD%ally @ell e!!ect te t%rno8ers o!
capitals in di!!erent brances o! prod%ction0
&n so !ar as te same mercant"s capital ser8es in di!!erent t%rno8ers to trans!orm di!!erent
commodity-capitals s%ccessi8ely into money, b%ying and selling tem one a!ter anoter, it
per!orms te same !%nction in its capacity o! money-capital @it regard to commodity-capital,
1*1 ;apter J4&
@ic money in general per!orms by means o! te n%mber o! its t%rno8ers in a gi8en period @it
regard to commodities0
5e t%rno8er o! mercant"s capital is not identical @it te t%rno8er, or a single reprod%ction, o!
an ind%strial capital o! eD%al siEe# it is rater eD%al to te s%m o! te t%rno8ers o! a n%mber o!
s%c capitals, @eter in te same or in di!!erent speres o! prod%ction0 5e more D%ickly
mercant"s capital is t%rned o8er, te smaller te portion o! total money-capital ser8ing as
mercant"s capital# and con8ersely, te more slo@ly it is t%rned o8er, te larger tis portion0 5e
less de8eloped prod%ction, te larger te s%m o! mercant"s capital in its relation to te s%m o! te
commodities tro@n into circ%lation# b%t te smaller in absol%te terms, or in comparison @it
more de8eloped conditions, and 8ice 8ersa0 &n s%c %nde8eloped conditions, tere!ore, te greater
part o! te act%al money-capital is in te ands o! mercants, @ose !ort%ne constit%tes money
@ealt 8is-O-8is te oters0
5e 8elocity o! circ%lation o! te money-capital ad8anced by te mercant depends 1C on te
speed @it @ic te process o! prod%ction is rene@ed and te di!!erent processes o! prod%ction
are linked togeter# and <C on te 8elocity o! cons%mption0
5o accomplis te t%rno8er @e a8e examined abo8e, mercant"s capital does not !irst a8e to
b%y commodities !or its !%ll amo%nt o! 8al%e, and ten to sell tem0 &nstead, te mercant
per!orms bot mo8ements sim%ltaneo%sly0 6is capital ten breaks %p into t@o parts0 3ne o! tem
consists o! commodity-capital, and te oter o! money-capital0 6e b%ys and con8erts is money
into commodities at one place0 Else@ere, e sells and con8erts anoter part o! is commodity-
capital into money0 3n one side, is capital ret%rns to im in te !orm o! money-capital, @ile on
te oter e gets commodity-capital0 5e larger te portion in one !orm, te smaller te portion in
te oter0 5is alternates and balances itsel!0 &! te %se o! money as a medi%m o! circ%lation
combines @it its %se as a means o! payment and te attendant de8elopment o! te credit system,
ten te money-capital part o! mercant"s capital is red%ced still more in relation to te 8ol%me o!
te transactions tis mercant"s capital e!!ects0 &! & b%y V3,=== @ort o! @ine on tree monts"
credit and sell all te @ine !or cas be!ore tis term expires, & do not need to ad8ance a single
penny !or tese transactions0 &n tis case it is also D%ite ob8io%s tat te money-capital, @ic
ere acts as mercant"s capital, is noting more tan ind%strial capital in its money-capital !orm,
in its process o! re!l%x in te !orm o! money0 B5e !act tat te man%!act%rer @o sold V3,===
@ort o! @ine on tree monts" credit may disco%nt is promissory note at te banker"s does not
alter te matter at all and as noting to do @it te mercant"s capital0C &! market-prices so%ld
!all in te meantime by, say, 1N1=, te mercant, !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 5ese V3==
@o%ld ser8e merely as a reser8e to balance te di!!erence in price0 A%t te same applies to te
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 te same scale @ito%t reser8e capital0
5e linen mercant b%ys V3,=== @ort o! linen !rom te man%!act%rer0 5e latter pays, say,
V<,=== o! te V3,=== !or yarn0 6e b%ys tis yarn !rom a yarn dealer0 5e money @ic te
man%!act%rer pays to te yarn dealer is not te linen dealer"s money, !or te latter as recei8ed
commodities to tis amo%nt0 &t is te money-!orm o! te man%!act%rer"s o@n capital0 -o@ in te
ands o! te yarn dealer tese V<,=== appear as ret%rned money-capital0 A%t to @at extent are
tey tat as distinct !rom te V<,=== representing te discarded money-!orm o! te linen and te
ass%med money-!orm o! te yarnQ &! te yarn dealer bo%gt on credit and sold !or cas be!ore te
expiration o! is term o! payment, ten tese V<,=== do not contain one penny o! mercant"s
capital as distinct !rom te money-!orm @ic te ind%strial capital itsel! ass%mes in te co%rse o!
its circ%it0 &n so !ar as commercial capital is not, tere!ore, H%st a !orm o! ind%strial capital in te
mercant"s ands as commodity- or money-capital, it is noting b%t tat portion o! money-capital
@ic belongs directly to te mercant and circ%lates in te p%rcase and sale o! commodities0
3n a red%ced scale tis portion represents tat part o! capital ad8anced !or prod%ction @ic
1*< ;apter J4&
so%ld al@ays a8e to be in te ands o! te ind%strialist as money reser8e and means o!
p%rcase, and @ic so%ld al@ays a8e to circ%late as is money-capital0 5is portion, on a
red%ced scale, is no@ in te ands o! mercant capitalists and per!orms its !%nctions as s%c in
te process o! circ%lation0 &t is tat portion o! te total capital @ic, aside !rom @at is expended
as re8en%e, m%st contin%ally circ%late on te market as a means o! p%rcase in order to maintain
te contin%ity o! te process o! reprod%ction0 5e more rapid te process o! reprod%ction, and te
more de8eloped te !%nction o! money as a means o! payment, i.e., te more de8eloped te credit
system,
1
te smaller tat portion is in relation to te total capital0
Mercant"s capital is simply capital !%nctioning in te spere o! circ%lation0 5e process o!
circ%lation is a pase o! te total process o! reprod%ction0 A%t no 8al%e is prod%ced in te process
o! circ%lation, and, tere!ore, no s%rpl%s-8al%e0 3nly canges o! !orm o! te same mass o! 8al%e
take place0 &n !act, noting occ%rs tere o%tside te metamorposis o! commodities, and tis as
noting to do as s%c eiter @it te creation or cange o! 8al%es0 &! a s%rpl%s-8al%e is realised in
te sale o! prod%ced commodities, ten tis is only beca%se it already existed in tem0 &n te
second act, te re-excange o! money-capital against commodities Belements o! prod%ctionC, te
b%yer tere!ore does not realise any s%rpl%s-8al%e eiter0 6e merely initiates te prod%ction o!
s%rpl%s-8al%e tro%g excanging is money !or means o! prod%ction and labo%r-po@er0 A%t so
!ar as tese metamorposes 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 te creation o! 8al%es, and te s%rpl%s-8al%e expresses
itsel! tro%g te rate o! pro!it in in8erse ratio to te d%ration o! te circ%lation period0 Mercant"s
capital, tere!ore, does not create eiter 8al%e or s%rpl%s-8al%e, at least not directly0 &n so !ar as it
contrib%tes to sortening te time o! circ%lation, it may elp indirectly to increase te s%rpl%s-
8al%e prod%ced by te ind%strial capitalists0 &n so !ar as it elps to expand te market and e!!ects
te di8ision o! labo%r bet@een capitals, ence enabling capital to operate on a larger scale, its
!%nction promotes te prod%cti8ity o! ind%strial capital, and its acc%m%lation0 &n so !ar as it
sortens circ%lation time, it raises te ratio o! s%rpl%s-8al%e to ad8anced capital, ence te rate o!
pro!it0 ?nd to te extent tat it con!ines a smaller portion o! capital to te spere o! circ%lation in
te !orm o! money-capital, it increases tat portion o! capital @ic is engaged directly in
prod%ction0
Chapter 17. Commercial Proft
We a8e seen in Aook && tat te p%re !%nctions o! capital in te spere o! ;irc%lation I te
operations @ic te ind%strial capitalist m%st per!orm, !irst, to realise te 8al%e o! is
commodities, and second, to recon8ert tis 8al%e into elements o! prod%ction, operations
e!!ecting te metamorposis o! commodity-capital, ;" I M I ;, ence te acts o! selling and
b%ying-prod%ce neiter 8al%e nor s%rpl%s-8al%e0 &t @as rater seen tat te time reD%ired !or tis
p%rpose, obHecti8ely in regard to commodities and s%bHecti8ely in regard to te capitalist, sets te
limit to te prod%ction o! 8al%e and s%rpl%s-8al%e0 Wat is tr%e o! te metamorposis o!
commodity-capital in general, is, o! co%rse, not in te least altered by te !act tat a part o! it may
ass%me te sape o! commercial capital, or tat te operations, e!!ecting te metamorposis o!
commodity-capital, appear as te special concern o! a special gro%p o! capitalists, or as te
excl%si8e !%nction o! a portion o! te money-capital0 &! selling and b%ying commodities I and tat
is @at te metamorposis o! commodity-capital ;" I M I ; amo%nts to I by ind%strial capitalists
temsel8es are not operations @ic create 8al%e or s%rpl%s-8al%e, tey @ill certainly not create
eiter o! tese @en carried o%t by persons oter tan te ind%strial capitalists0 F%rtermore, i!
tat portion o! te total social capital, @ic m%st contin%ally be on and as money-capital, in
order tat te process o! reprod%ction is not interr%pted by te process o! circ%lation and proceeds
contin%o%sly I i! tis money-capital creates neiter 8al%e nor s%rpl%s-8al%e, it cannot acD%ire te
properties o! creating tem by being contin%ally tro@n into circ%lation by some section o!
capitalists oter tan te ind%strial capitalists, to per!orm te same !%nction0 We a8e already
indicated to @at extent mercant"s capital may be indirectly prod%cti8e, and @e sall later
disc%ss tis point at greater lengt0
;ommercial capital, tere!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 neiter 8al%e nor s%rpl%s-8al%e, b%t acts as
middleman in teir realisation and tereby sim%ltaneo%sly in te act%al excange o! commodities,
i.e., in teir trans!er !rom and to and, in te social metabolism0 -e8erteless, since te
circ%lation pase o! ind%strial capital is H%st as m%c a pase o! te reprod%ction process as
prod%ction is, te capital operating independently in te process o! circ%lation m%st yield te
a8erage ann%al pro!it H%st as @ell as capital operating in te 8ario%s brances o! prod%ction0
$o%ld mercant"s capital yield a iger percentage o! a8erage pro!it tan ind%strial capital, ten
a portion o! te latter @o%ld trans!orm itsel! into mercant"s capital0 $o%ld it yield a lo@er
a8erage pro!it, ten te con8erse @o%ld res%lt0 ? portion o! te mercant"s capital @o%ld ten be
trans!ormed into ind%strial capital0 -o species o! capital canges its p%rpose, or !%nction, @it
greater ease tan mercant"s capital0
$ince mercant"s capital does not itsel! prod%ce s%rpl%s-8al%e, it is e8ident tat te s%rpl%s-8al%e
@ic it pockets in te !orm o! a8erage pro!it m%st be a portion o! te s%rpl%s-8al%e prod%ced by
te total prod%cti8e capital0 A%t no@ te D%estion arises: 6o@ does mercant"s capital attract its
sare o! te s%rpl%s-8al%e or pro!it prod%ced by te prod%cti8e capitalQ
&t is H%st an ill%sion tat commercial pro!it is a mere addition to, or a nominal rise o!, te prices o!
commodities in excess o! teir 8al%e0
&t is plain tat te mercant can dra@ is pro!it only o%t o! te price o! te commodities e sells,
and plainer still tat te pro!it e makes in selling is commodities m%st be eD%al to te
di!!erence bet@een is p%rcase price and is selling price, i.e., eD%al to te excess o! te latter
o8er te !ormer0
1*2 ;apter J4&&
&t is possible tat additional costs Bcosts o! circ%lationC may enter into te commodities a!ter teir
p%rcase and be!ore teir sale, and it is also possible tat tis may not appen0 &! s%c costs
so%ld occ%r, it is plain tat te excess o! te selling price o8er te p%rcase price @o%ld not be
all pro!it0 5o simpli!y te analysis, @e sall ass%me at tis point tat no s%c costs occ%r0
For te ind%strial capitalist te di!!erence bet@een te selling price and te p%rcase price o! is
commodities is eD%al to te di!!erence bet@een teir price o! prod%ction and teir cost-price, or,
!rom te standpoint o! te total social capital, eD%al to te di!!erence bet@een te 8al%e o! te
commodities and teir cost-price !or te capitalists, @ic again comes do@n to te di!!erence
bet@een te total D%antity o! labo%r and te D%antity o! paid labo%r incorporated in tem0 Ae!ore
te commodities bo%gt by te ind%strial capitalist are tro@n back on te market as saleable
commodities, tey pass tro%g te process o! prod%ction, in @ic alone te portion o! teir
price to be realised as pro!it is created0 A%t it is di!!erent @it te mercant0 5e commodities are
in is ands only so long as tey are in te process o! circ%lation0 6e merely contin%es teir sale,
te realisation o! teir price @ic @as beg%n by te prod%cti8e capitalist, and tere!ore does not
ca%se tem to pass tro%g any intermediate process in @ic tey co%ld again absorb s%rpl%s-
8al%e0 Wile te ind%strial capitalist merely realises te pre8io%sly prod%ced s%rpl%s-8al%e, or
pro!it, in te process o! circ%lation, te mercant as not only to realise is pro!it d%ring and
tro%g circ%lation, b%t m%st !irst make it0 5ere appears to be no oter @ay o! doing tis o%tside
o! selling te commodities bo%gt by im !rom te ind%strial capitalist at teir prices o!
prod%ction, or, !rom te standpoint o! te total commodity-capital, at teir 8al%es in excess o!
teir prices o! prod%ction, making a nominal extra carge to teir prices, ence, selling tem,
!rom te standpoint o! te total commodity-capital, abo8e teir 8al%e, and pocketing tis excess
o! teir nominal 8al%e o8er teir real 8al%e# in sort, selling tem !or more tan tey are @ort0
5is metod o! adding an extra carge 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 te price, ence sell te yard at <s0
< <N+ d0 5e di!!erence bet@een its act%al price o! prod%ction and its selling price is ten R <
<N+d0, and tis represents a pro!it o! 1=T on <s0 5is amo%nts to my selling te yard to te b%yer
at a price @ic is in reality te price o! 1 1N1= yard0 3r, @at amo%nts to te same, it is as to%g
& sold to te 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 te price o! <s0 < <N+d0 per yard0 5is @o%ld, tere!ore, be
H%st a ro%ndabo%t @ay o! saring in te s%rpl%s-8al%e and s%rpl%s-prod%ct by a nominal rise in te
price o! commodities0
5is is realisation o! commercial pro!it by raising te price o! commodities, as it appears at !irst
glance0 ?nd, indeed, tis @ole notion tat pro!it originates !rom a nominal rise in te price o!
commodities, or !rom teir sale abo8e teir 8al%e, springs !rom te obser8ations o! commercial
capital0
A%t it is D%ickly apparent on closer inspection tat tis is mere ill%sion0 ?ss%ming capitalist
prod%ction to be predominant, commercial pro!it cannot be realised in tis manner0 B&t is ere
al@ays a D%estion o! a8erages, not o! isolated cases0C Wy do @e ass%me tat te mercant can
realise a pro!it o! no more tan, say, 1=T on is commodities by selling tem 1=T abo8e teir
price o! prod%ctionQ Aeca%se @e ass%me tat te prod%cer o! tese commodities, te ind%strial
capitalist B@o appears as Kthe producerL be!ore te o%tside @orld, being te personi!ication o!
ind%strial capitalC, ad sold tem to te dealer at teir prices o! prod%ction0 &! te p%rcase price
o! commodities paid by te dealer is eD%al to teir price o! prod%ction, or, in te last instance,
eD%al to teir 8al%e, so tat te price o! prod%ction or, in te last instance, te 8al%e, represent te
mercant"s cost-price, ten, indeed, te excess o! is selling price o8er is p%rcase price I and
tis di!!erence alone is te so%rce o! is pro!it I m%st be an excess o! teir commercial price o8er
teir price o! prod%ction, so tat in te !inal analysis te mercant sells all commodities abo8e
teir 8al%es0 A%t @y @as it ass%med tat te ind%strial capitalist sells is commodities to te
mercant at teir prices o! prod%ctionQ 3r rater, @at @as taken !or granted in tat ass%mptionQ
1*+ ;apter J4&&
&t @as tat mercant"s capital did not go into !orming te general rate o! pro!it B@e are dealing
@it it as yet only in its capacity o! commercial capitalC0 We proceeded necessarily !rom tis
premise in disc%ssing te general rate o! pro!it, !irst, beca%se mercant"s capital as s%c did not
exist !or %s at te time, and, second, beca%se a8erage pro!it, and ence te 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 te
ind%strial capitals in te di!!erent speres o! prod%ction0 A%t in te case o! mercant"s capital @e
are dealing @it a capital @ic sares in te pro!it @ito%t participating in its prod%ction0 6ence,
it is no@ necessary to s%pplement o%r earlier exposition0
$%ppose, te total ind%strial capital ad8anced in te co%rse o! te year R ><=c U 18=8 R *== Bsay
million VC, and tat s" R 1==T0 5e prod%ct tere!ore R ><=c U 18=8 U 18=s0 'et %s call tis prod%ct
or te prod%ced commodity-capital, ;, @ose 8al%e, or price o! prod%ction Bsince bot are
identical !or te totality o! commoditiesC R 1,=8=, and te rate o! pro!it !or te total social capital
o! *== R <=T0 5ese <=T are, according to o%r earlier analyses, te a8erage rate o! pro!it, since
te s%rpl%s-8al%e is not calc%lated ere on tis or tat capital o! any partic%lar composition, b%t
on te total ind%strial capital o! a8erage composition0 5%s, ; R 1,=8=, and te rate o! pro!it R
<=T0 'et %s no@ ass%me, o@e8er, tat aside !rom tese V*== o! ind%strial capital, tere are still
V1== o! mercant"s capital, @ic sares in te pro!it pro rata to its magnit%de H%st as te !ormer0
?ccording to o%r ass%mption, it is 1N1= o! te total capital o! 1,===0 5ere!ore, it participates to
te extent o! 1N1= in te total s%rpl%s-8al%e o! 18=, and t%s sec%res a pro!it o! 18T0 ?ct%ally,
ten, te pro!it to be distrib%ted among te oter 1N1= o! te total capital is only R 16<, or on te
capital o! *== like@ise R 18T0 6ence, te price at @ic ; is sold by te o@ners o! te ind%strial
capital o! *== to te mercants R ><=c U 18=8 U 16<s R 1,=6<0 &! te dealer ten adds te a8erage
pro!it o! 18T to is capital o! 1==, e sells te commodities at 1,=6< U 18 R 1,=8=, i.e., at teir
price o! prod%ction, or, !rom te standpoint o! te total commodity-capital, at teir 8al%e,
alto%g e makes is pro!it only d%ring and tro%g te circ%lation process, and only !rom an
excess o! is selling price o8er is p%rcase price0 .et e does not sell te commodities abo8e
teir 8al%e, or abo8e teir price o! prod%ction, precisely beca%se e as bo%gt tem !rom te
ind%strial capitalist belo@ teir 8al%e, or belo@ teir price o! prod%ction0
5%s, mercant"s capital enters te !ormation o! te general rate o! pro!it as a determinant pro
rata to its part in te total capital0 6ence, i! @e say in te gi8en case tat te a8erage rate o! pro!it
R 18T, it @o%ld R <=T, i! it @ere not tat 1N1= o! te total capital @as mercant"s capital and te
general rate o! pro!it tereby lo@ered by 1N1=0 5is leads to a closer and more compreensi8e
de!inition o! te price o! prod%ction0 Ay price o! prod%ction @e mean, H%st as be!ore, te price o!
a commodity R its costs Bte 8al%e o! te constant U 8ariable capital contained in itC U te a8erage
pro!it0 A%t tis a8erage pro!it is no@ determined di!!erently0 &t is determined by te total pro!it
prod%ced by te total prod%cti8e capital# b%t not as calc%lated on te total prod%cti8e capital
alone, so tat i! tis R *==, as ass%med abo8e, and te pro!it R 18=, ten te a8erage rate o! pro!it
R 18=N*== R <=T0 A%t, rater, as calc%lated on te total prod%cti8e U mercant"s capital, so tat
@it *== prod%cti8e and 1== mercant"s capital, te a8erage rate o! pro!it R 18=N1,=== R 18T0
5e price o! prod%ction is, tere!ore R k Bte costsC U 18, instead o! k U <=0 5e sare o! te total
pro!it !alling to mercant"s capital is t%s incl%ded in te a8erage rate o! pro!it0 5e act%al 8al%e,
or price o! prod%ction, o! te total commodity-capital is tere!ore R k U p U m B@ere m is
commercial pro!itC0 5e price o! prod%ction, or te price at @ic te ind%strial capitalist as s%c
sells is commodities, is t%s smaller tan te act%al price o! prod%ction o! te commodity# or in
terms o! all commodities taken togeter, te prices at @ic te class o! ind%strial capitalists sell
teir commodities are lo@er tan teir 8al%e0 6ence, in te abo8e case, *== BcostsC U 18T on *==,
or *== U 16<R 1,=6<0 &t !ollo@s, ten, tat in selling a commodity at 118 !or @ic e paid 1==
te mercant does, indeed, add 18T to te price0 A%t since tis commodity, !or @ic e paid
1==, is really @ort 118, e does not sell it abo8e its 8al%e0 We sall ence!ort %se te term price
o! prod%ction in tis, its more precise, sense0 &t is e8ident, tere!ore, tat te pro!it o! te
1*6 ;apter J4&&
ind%strial capitalist eD%als te excess o! te price o! prod%ction o! te commodity o8er its cost-
price, and tat commercial pro!it, as distinct !rom tis ind%strial pro!it, eD%als te excess o! te
selling price o8er te price o! prod%ction o! te commodity @ic, !or te mercant, is its
p%rcase price# b%t tat te act%al price o! te commodity R its price o! prod%ction U te
commercial pro!it0 P%st as ind%strial capital realises only s%c pro!its as already exist in te 8al%e
o! commodities as s%rpl%s-8al%e, so mercant"s capital realises pro!its only beca%se te entire
s%rpl%s-8al%e, or pro!it, as not as yet been !%lly realised in te price carged !or te commodities
by te ind%strial capitalist0
1
5e mercant"s selling price t%s exceeds te p%rcase price not
beca%se te !ormer exceeds te total 8al%e, b%t beca%se te latter is belo@ tis 8al%e0
Mercant"s capital, tere!ore, participates in le8elling s%rpl%s-8al%e to a8erage pro!it, alto%g it
does not take part in its prod%ction0 5%s, te general rate o! pro!it contains a ded%ction !rom
s%rpl%s-8al%e d%e to mercant"s capital, ence a ded%ction !rom te pro!it o! ind%strial capital0
&t !ollo@s !rom te !oregoing:
1C 5e larger te mercant"s capital in proportion to te ind%strial capital, te smaller te rate o!
ind%strial pro!it, and 8ice 8ersa0
<C &t @as demonstrated in te !irst part tat te rate o! pro!it is al@ays lo@er tan te rate o! te
act%al s%rpl%s-8al%e, i.e., it al@ays %nderstates te intensity o! exploitation, as in te abo8e case,
><=c U 18=8 U 18=s, te rate o! s%rpl%s-8al%e o! 1==T and a rate o! pro!it o! only <=T0 ?nd te
di!!erence becomes still greater, inasm%c as te a8erage rate o! pro!it appears smaller again,
dropping !rom <=T to 18T, i! te sare !alling to mercant"s capital is also taken into acco%nt0
5e a8erage rate o! pro!it o! te direct capitalist exploiter, tere!ore, expresses a rate o! pro!it
smaller tan it act%ally is0
?ss%ming all oter circ%mstances remaining te same, te relati8e 8ol%me o! mercant"s capital
B@it te exception o! te small dealer @o represents a ybrid !ormC is in in8erse proportion to
te 8elocity o! its t%rno8er, ence in in8erse proportion to te energy o! te process o!
reprod%ction in general0 &n te co%rse o! scienti!ic analysis, te !ormation o! a general rate o!
pro!it appears to res%lt !rom ind%strial capitals and teir competition, and is only later corrected,
s%pplemented, and modi!ied by te inter8ention o! mercant"s capital0 &n te co%rse o! its
istorical de8elopment, o@e8er, te process is really re8ersed0 &t is te commercial capital @ic
!irst determines te prices o! commodities more or less in accordance @it teir 8al%es, and it is
te spere o! circ%lation, te spere tat promotes te process o! reprod%ction, in @ic a general
rate o! pro!it initially takes sape0 &t is originally te commercial pro!it @ic determines te
ind%strial pro!it0 -ot %ntil te capitalist mode o! prod%ction as asserted itsel! and te prod%cer
imsel! as become mercant, is commercial pro!it red%ced to tat aliD%ot part o! te total
s%rpl%s-8al%e !alling to te sare o! mercant"s capital as an aliD%ot part o! te total capital
engaged in te social process o! reprod%ction0
&t @as seen in te s%pplementary eD%alisation o! pro!it tro%g te inter8ention o! mercant"s
capital tat no additional element entered te 8al%e o! commodities @it te mercant"s ad8anced
money-capital, and tat te extra carge to te price, @ereby te mercant makes is pro!it, @as
merely eD%al to tat portion o! te 8al%e o! te commodities, @ic prod%cti8e capital ad not
calc%lated in te price o! prod%ction, i.e., ad le!t o%t0 5e case o! tis money-capital is similar to
tat o! te ind%strial capitalist"s !ixed capital, since it is not cons%med and its 8al%e, tere!ore,
does not make %p an element o! te 8al%e o! commodity0 &t is in te p%rcase price o! commodity-
capital tat te mercant replaces its price o! prod%ction R M, in money0 6is o@n selling price, as
pre8io%sly so@n, is R M U M, @ere M stands !or te addition to te price o! commodities
determined by te general rate o! pro!it0 3nce e sells te commodities, is original money-
capital, @ic e ad8anced !or teir p%rcase, ret%rns to im togeter @it tis M0 We see once
more tat is money-capital is noting b%t te ind%strial capitalist"s commodity-capital
trans!ormed into money-capital, @ic a!!ects te magnit%de o! te 8al%e o! tis commodity-
1*> ;apter J4&&
capital no more tan @o%ld a direct sale o! te latter to te %ltimate cons%mer, instead o! to te
mercant0 &t, act%ally, merely anticipates te payment o! te cons%mer0 6o@e8er, tis is correct
only on te condition iterto ass%med, tat te mercant as no o8eread expenses, or tat aside
!rom te money-capital @ic e m%st ad8ance to b%y commodities !rom te prod%cer e need
not ad8ance any oter capital, circ%lating or !ixed, in te process o! commodity metamorposis0,
te process o! b%ying and selling0 A%t tis is not so in reality, as @e a8e seen in te analysis o!
te costs o! circ%lation BAook &&, ;ap0 4&C0 5ese costs o! circ%lation are partly expenses @ic
te mercant as to reclaim !rom oter agents o! circ%lation, and partly expenses arising directly
!rom is speci!ic b%siness0
-o matter @at te nat%re o! tese costs o! circ%lation I @eter tey arise !rom te p%rely
commercial nat%re o! te mercant"s establisment as s%c and ence belong to te mercant"s
speci!ic costs o! circ%lation, or represent items @ic are carges !or s%bseD%ent processes o!
prod%ction added in te process o! circ%lation, s%c as expressage, transport, storage, etc0 I tey
al@ays reD%ire o! te mercant, aside !rom is money-capital, ad8anced to te p%rcase o!
commodities, some additional capital !or te p%rcase and payment o! s%c means o! circ%lation0
?s m%c o! tis element o! cost as consists o! circ%lating capital passes @olly as an additional
element into te selling price o! te commodities# and as m%c o! it as consists o! !ixed capital
only to te extent o! its @ear and tear0 A%t only as an element @ic !orms a nominal 8al%e, e8en
i! as te p%rely commercial costs o! circ%lation, it does not add any real 8al%e to te commodities0
A%t @eter !ixed or circ%lating, tis entire additional capital participates in !orming te general
rate o! pro!it0
5e p%rely commercial costs o! circ%lation Bence, excl%ding costs o! expressage, sipping,
storage, etc0C resol8e temsel8es into costs reD%ired to realise te 8al%e o! commodities, to
trans!orm it !rom commodities into money, or !rom money into commodities, to e!!ect teir
excange0 We lea8e entirely o%t o! consideration all possible processes o! prod%ction @ic may
contin%e in te process o! circ%lation, and !rom @ic te mercant"s b%siness can be altogeter
separated# as, in !act, te act%al transport ind%stry and expressage may be, and are, ind%strial
brances entirely distinct !rom commercial# and p%rcaseable and saleable commodities may be
stored in docks or in oter p%blic premises, @it te res%ltant cost o! storage being carged to te
mercant by tird persons inasm%c as e as to ad8ance it0 ?ll tis takes place in act%al
@olesale commerce, @ere mercant"s capital appears in its p%rest !orm, %nmixed @it oter
!%nctions0 5e express company o@ner, te rail@ay director, and te sipo@ner, are not
Kmercants0L 5e costs @ic @e consider ere are tose o! b%ying and selling0 We a8e already
remarked earlier tat tese resol8e temsel8es into acco%nting, book-keeping, marketing,
correspondence, etc0 5e constant capital reD%ired !or tis p%rpose consists o! o!!ices, paper,
postage, etc0 5e oter costs break %p into 8ariable capital ad8anced !or te employment o!
mercantile @age-@orkers0 BExpressage, transport costs, ad8ances !or c%stoms d%ties, etc0, may
partly be considered as being ad8anced by te mercant in p%rcasing commodities and t%s
enter te p%rcase price as !ar as e is concerned0C
?ll tese costs are not inc%rred in prod%cing te %se-8al%e o! commodities, b%t in realising teir
8al%e0 5ey are p%re costs o! circ%lation0 5ey do not enter into te immediate process o!
prod%ction, b%t since tey are part o! te process o! circ%lation tey are also part o! te total
process o! reprod%ction0
5e only portion o! tese costs o! interest to %s at tis point is tat ad8anced as 8ariable capital0
B5e !ollo@ing D%estions so%ld also be analysed: First, o@ does te la@ tat only necessary
labo%r enters te 8al%e o! commodities operate in te process o! circ%lationQ $econd, o@ does
acc%m%lation obtain in mercant"s capitalQ 5ird, o@ does mercant"s capital !%nction in te
act%al aggregate reprod%ction process o! societyQC
5ese costs arise d%e to te prod%ct a8ing te economic !orm o! a commodity0
1*8 ;apter J4&&
&! te labo%r-time @ic te ind%strial capitalists temsel8es lose @ile directly selling
commodities to one anoter I ence, speaking obHecti8ely, te circ%lation time o! te
commodities I does not add 8al%e to tese commodities, it is e8ident tat tis labo%r-time does
not cange its nat%re in te least by !alling to te mercant instead o! te ind%strial capitalist0 5e
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, tere!ore, a necessary operation o!
te 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 tese !%nctions neiter create 8al%e, nor prod%ce s%rpl%s-8al%e0 Ay per!orming
tese operations and carrying on te !%nctions o! capital in te spere o! circ%lation a!ter te
prod%cti8e capitalist as ceased to be in8ol8ed te mercant merely takes te place o! te
ind%strial capitalist0 5e labo%r-time reD%ired in tese operations is de8oted to certain necessary
operations o! te reprod%ction process o! capital, b%t yields no additional 8al%e0 &! te mercant
did not per!orm tese operations Bence, did not expend te 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 ten be contin%ing
te interr%pted !%nction o! te ind%strial capitalist, and conseD%ently co%ld not participate as a
capitalist pro rata to is ad8anced capital, in te mass o! pro!it prod%ced by ind%strial capitalists0
&n order to sare in te mass o! s%rpl%s-8al%e, to expand te 8al%e o! is ad8ance as capital, te
commercial capitalist need not employ @age-@orkers0 &! is b%siness and capital are small, e
may be te only @orker in it0 6e is paid @it tat portion o! te pro!it @ic !alls to im tro%g
te di!!erence bet@een te p%rcase price paid by im !or commodities and teir act%al price o!
prod%ction0
A%t, on te oter and, te pro!it realised by te mercant on a small amo%nt o! ad8anced capital
may be no larger, or may e8en be smaller, tan te @ages o! one o! te better-paid skilled @age-
@orkers0 &n !act, e br%ses so%lders @it many direct commercial agents o! te prod%cti8e
capitalist, s%c as b%yers, sellers, tra8ellers, @o enHoy te same or a iger income eiter in te
!orm o! @ages, or in te !orm o! a sare in te pro!it Bpercentages, bon%sesC made !rom eac sale0
&n te !irst case, te mercant pockets te mercantile pro!it as an independent capitalist# in te
oter, te salesman, te ind%strial capitalist"s @age-labo%rer, recei8es a portion o! te pro!it eiter
in te !orm o! @ages, or as a proportional sare in te pro!it o! te ind%strial capitalist, @ose
direct agent e is, @ile is employer pockets bot te ind%strial and te commercial pro!it0 A%t
in all tese cases, alto%g is income may appear to te circ%lation agent as an ordinary @age, as
payment !or @ork per!ormed, and alto%g, @ere it does not so appear, te pro!it may be no
larger tan te @age o! a better-paid labo%rer, is income is deri8ed solely !rom te mercantile
pro!it0 5is !ollo@s !rom is labo%r not being labo%r @ic prod%ces 8al%e0
5e lengtening o! te act o! circ%lation represents !or te ind%strial capitalist 1C a personal loss
o! time, since it pre8ents im !rom per!orming in person is !%nction as manager o! te
prod%cti8e process# <C a longer stay o! is prod%ct in money- or commodity-!orm, in te
circ%lation process, ence in a process @ere it does not expand 8al%e and @ere te direct
prod%ction process is interr%pted0 &! tis process is not to be interr%pted, prod%ction m%st eiter
be c%rtailed, or more money-capital m%st be ad8anced to maintain te process o! prod%ction on
te same scale0 5is means tat eac time eiter a smaller pro!it is made on te capital iterto
in8ested, or tat additional money-capital m%st be ad8anced to make te pre8io%s pro!it0 ?ll tis
remains %ncanged @en te mercant takes te place o! te ind%strial capitalist0 &nstead o! te
ind%strial capitalist de8oting more time to te process o! circ%lation, it is te mercant @o is so
engaged# instead o! te ind%strial capitalist it is te mercant @o ad8ances additional capital !or
circ%lation# or, @at amo%nts to te same ting, instead o! a large portion o! te ind%strial capital
being contin%ally di8erted into te process o! circ%lation, it is te mercant"s capital @ic is
@olly tied %p in it# and instead o! making a smaller pro!it, te ind%strial capitalist m%st yield a
portion o! is pro!it @olly to te mercant0 $o long as mercant"s capital remains @itin te
bo%nds in @ic it is necessary, te only di!!erence is tat tis di8ision o! te !%nctions o! capital
1** ;apter J4&&
red%ces te time excl%si8ely %sed %p in te process o! circ%lation, tat less additional capital is
ad8anced !or tis p%rpose, and tat te loss in total pro!it, represented by mercantile pro!it, is
smaller tan it @o%ld oter@ise a8e been0 &! in te abo8e example, ><=c U 18=8 U 18=s, assisted
by a mercant"s capital o! 1==, prod%ces a pro!it o! 16<, or 18T, !or te ind%strial capitalist,
ence implying a ded%ction o! 18, ten, b%t !or tis independent mercant"s capital, te additional
capital reD%ired @o%ld probably be <==, and @e so%ld a8e a total ad8ance by te 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
&! te ind%strial capitalist @o acts as is o@n mercant ad8ances not only te additional capital
to b%y ne@ commodities be!ore is prod%ct in te process o! circ%lation as been recon8erted into
money, b%t also capital Bo!!ice expenses and @ages !or commercial employeesC to realise te
8al%e o! is commodity-capital, or, in oter @ords, !or te process o! circ%lation, ten tese
s%pplements !orm additional capital, b%t do not create s%rpl%s-8al%e0 5ey m%st be made good
o%t o! te 8al%e o! te commodities, beca%se a portion o! te 8al%e o! tese commodities m%st be
recon8erted into tese circ%lation costs0 A%t no additional s%rpl%s-8al%e is created tereby0 $o !ar
as tis concerns te total capital o! society, it means in !act tat a portion o! it m%st be set aside
!or secondary operations @ic are no part o! te sel!-expansion process, and tat tis portion o!
te social capital m%st be contin%ally reprod%ced !or tis p%rpose0 5is red%ces te rate o! pro!it
!or te indi8id%al capitalist and !or te 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 te
same mass o! 8ariable capital0
&n so !ar as tese additional costs connected @it te b%siness o! circ%lation are trans!erred !rom
te ind%strial to te commercial capitalist, tere takes place a similar red%ction in te rate o!
pro!it, b%t to a lesser degree and in a di!!erent @ay0 &t no@ de8elops tat te mercant ad8ances
more capital tan @o%ld be necessary i! tese costs did not exist, and tat te pro!it on tis
additional capital increases te amo%nt o! te commercial pro!it, so tat more o! te mercant"s
capital Hoins ind%strial capital in le8elling te a8erage rate o! pro!it and tereby te a8erage pro!it
!alls0 &! in o%r abo8e example an additional capital o! += is ad8anced besides te mercant"s
capital o! 1== to co8er te costs in D%estion, ten te total s%rpl%s-8al%e o! 18= is distrib%ted @it
respect to a prod%cti8e capital o! *== pl%s a mercant"s capital o! 1+=, togeter R 1,=+=0 5e
a8erage rate o! pro!it, tere!ore, sinks to 1> 1N>T 5e ind%strial capitalist sells is commodities
to te mercant at *== U 1+2 <N> R 1,=+2< 1N>, and te mercant sells tem at 1,13= B1,=8= U +=
!or costs @ic e m%st reco8erC0 Moreo8er, it m%st be admitted tat te di8ision bet@een
mercant"s and ind%strial capital is accompanied by a centralisation o! te commercial expenses
and, conseD%ently, by teir red%ction0
5e D%estion no@ arises: Wat abo%t te commercial @age-@orkers employed by te commercial
capitalist, ere te mercantQ
&n one respect, s%c a commercial employee is a @age-@orker like any oter0 &n te !irst place, is
labo%r-po@er is bo%gt @it te 8ariable capital o! te mercant, not @it money expended as
re8en%e, and conseD%ently it is not bo%gt !or pri8ate ser8ice, b%t !or te p%rpose o! expanding
te 8al%e o! te capital ad8anced !or it0 &n te second place, te 8al%e o! is labo%r-po@er, and
t%s is @ages, are determined as tose o! oter @age-@orkers, i.e., by te cost o! prod%ction and
reprod%ction o! is speci!ic labo%r-po@er, not by te prod%ct o! is labo%r0
6o@e8er, @e m%st make te same distinction bet@een im and te @age-@orkers directly
employed by ind%strial capital @ic exists bet@een ind%strial capital and mercant"s capital, and
t%s bet@een te ind%strial capitalist and te mercant0 $ince te mercant, as a mere agent o!
circ%lation, prod%ces neiter 8al%e nor s%rpl%s-8al%e B!or te additional 8al%e @ic e adds to
te commodities tro%g is expenses resol8es itsel! into an addition o! pre8io%sly existing
8al%es, alto%g te D%estion ere poses itsel!, o@ e preser8es tis 8al%e o! is constant
capitalQC it !ollo@s tat te mercantile @orkers employed by im in tese same !%nctions cannot
<== ;apter J4&&
directly create s%rpl%s-8al%e !or im0 6ere, as in te case o! prod%cti8e labo%rers, @e ass%me tat
@ages are determined by te 8al%e o! te labo%r-po@er, and tat, ence, te mercant does not
enric imsel! by depressing @ages, so tat e does not enter into is cost acco%nt an ad8ance !or
labo%r @ic e as paid only in part# in oter @ords, tat e does not enric imsel! tro%g
ceating is clerks, etc0
5e di!!ic%lty as concerns mercantile @age-@orkers is by no means to explain o@ tey prod%ce
direct pro!its !or teir employer @ito%t creating any direct s%rpl%s-8al%e Bo! @ic pro!it is b%t a
transm%ted !ormC0 5is D%estion as, indeed, already been sol8ed in te 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 mercant"s capital deri8es pro!it !rom
not paying in !%ll to prod%cti8e capital !or all te %npaid labo%r contained in te commodities Bin
commodities, in so !ar as capital in8ested in teir prod%ction !%nctions as an aliD%ot part o! te
total ind%strial capitalC, and by demanding payment !or tis %npaid portion still contained in te
commodities @en making a sale0 5e relation o! mercant"s capital to s%rpl%s-8al%e is di!!erent
!rom tat o! ind%strial capital0 5e latter prod%ces s%rpl%s-8al%e by directly appropriating te
%npaid labo%r o! oters0 5e !ormer appropriates a portion o! tis s%rpl%s-8al%e by a8ing tis
portion trans!erred !rom ind%strial capital to itsel!0
&t is only tro%g its !%nction o! realising 8al%es tat mercant"s capital acts as capital in te
process o! reprod%ction, and ence dra@s on te s%rpl%s-8al%e prod%ced by te total capital0 5e
mass o! te indi8id%al mercant"s pro!its depends on te mass o! capital tat e can apply in tis
process, and e can apply so m%c more o! it in b%ying and selling, te more te %npaid labo%r o!
is clerks0 5e 8ery !%nction, by 8irt%e o! @ic te mercant"s money becomes capital, is largely
done tro%g is employees0 5e %npaid labo%r o! tese clerks, @ile it does not create s%rpl%s-
8al%e, enables im to appropriate s%rpl%s-8al%e, @ic, in e!!ect, amo%nts to te same ting @it
respect to is capital0 &t is, tere!ore, a so%rce o! pro!it !or im0 3ter@ise commerce co%ld ne8er
be cond%cted on a large scale, capitalistically0
P%st as te labo%rer"s %npaid labo%r directly creates s%rpl%s-8al%e !or prod%cti8e capital, so te
%npaid labo%r o! te commercial @age-@orker sec%res a sare o! tis s%rpl%s-8al%e !or mercant"s
capital0
5e di!!ic%lty lies ere: $ince te mercant"s labo%r-time and labo%r do not create 8al%e, alto%g
tey sec%re !or im a sare o! already prod%ced s%rpl%s-8al%e, o@ does te matter stand @it te
8ariable capital @ic e lays o%t in p%rcasing commercial labo%r-po@erQ &s tis 8ariable capital
to be incl%ded in te cost o%tlays o! te ad8anced mercant"s capitalQ &! not, tis appears to
con!lict @it te la@ o! eD%alisation o! te rate o! pro!it# @at capitalist @o%ld ad8ance 1+= i! e
co%ld carge only 1== to ad8anced capitalQ &! so, it seems to con!lict @it te nat%re o!
mercant"s capital, since tis kind o! capital does not act as capital by setting in motion te labo%r
o! oters, as ind%strial capital does, b%t rater by doing its o@n @ork, i.e., per!orming te
!%nctions o! b%ying and selling, tis being precisely te means and te reason @y it recei8es a
portion o! te s%rpl%s-8al%e prod%ced by te ind%strial capital0
BWe m%st tere!ore analyse te !ollo@ing points: te mercant"s 8ariable capital# te la@ o!
necessary labo%r in te spere o! circ%lation# o@ te mercant"s labo%r maintains te 8al%e o! is
constant capital# te part played by mercant"s capital in te process o! reprod%ction as a @ole#
and, !inally, te d%plication in commodity-capital and money-capital, on te one and, and in
commercial capital and money-dealing capital on te oter0C
&! e8ery mercant ad only as m%c capital as e imsel! @ere able to t%rn o8er by is o@n
labo%r, tere @o%ld be in!inite !ragmentation o! mercant"s capital0 5is !ragmentation @o%ld
increase in te same proportion as prod%cti8e capital raised prod%ction and operated @it greater
masses in te !or@ard marc o! te capitalist mode o! prod%ction0 6ence, an increasing
disproportion o! te t@o0 ;apital in te spere o! circ%lation @o%ld become decentralised in te
<=1 ;apter J4&&
same proportion as it became centralised in te spere o! prod%ction0 5e p%rely commercial
b%siness o! te ind%strial capitalist, and t%s is p%rely commercial expenses, @o%ld expand
in!initely tereby, !or e @o%ld a8e to deal @it, say, 1,=== mercants, instead o! 1==0 5%s, te
ad8antages o! independently operating mercant"s capital @o%ld largely be lost0 ?nd not te
p%rely commercial expenses alone, b%t also te oter costs o! circ%lation, s%c as sorting,
expressage, etc0, @o%ld gro@0 5is, as !ar as te ind%strial capital is concerned0 -o@ let %s
consider mercant"s capital0 Firstly, te p%rely commercial operations0 &t does not take more time
to deal @it large !ig%res tan @it small ones0 &t takes ten times as m%c time to make 1=
p%rcases at V1== eac as it does to make one p%rcase at V1,===0 &t takes ten times as m%c
correspondence, paper, and postage, to correspond @it 1= small mercants as it does @it one
large mercant0 5e clearly de!ined di8ision o! labo%r in a commercial o!!ice, in @ic one keeps
te books, anoter looks a!ter money matters, a tird as carge o! correspondence, one b%ys,
anoter sells, a tird tra8els, etc0, sa8es immense D%antities o! labo%r-time, so tat te n%mber o!
@orkers employed in @olesale commerce are in no @ay related to te comparati8e siEe o! te
establisment0 5is is so, beca%se in commerce m%c more tan in ind%stry te same !%nction
reD%ires te same labo%r-time, @eter per!ormed on a large or a small scale0 5is is te reason
@y concentration appears earlier istorically in te mercant"s b%siness tan in te ind%strial
@orksop0 F%rter, regarding o%tlays in constant capital0 3ne %ndred small o!!ices cost
incomparably more tan one large o!!ice, 1== small @areo%ses more tan a large one, etc0 5e
costs o! transport, @ic enter te acco%nts o! a commercial establisment at least as costs to be
ad8anced, gro@ @it te !ragmentation0
5e ind%strial capitalist @o%ld a8e to lay o%t more in labo%r and in circ%lation costs in te
commercial part o! is b%siness0 5e same mercant"s capital, @en di8ided among many small
capitalists, @o%ld, o@ing to tis !ragmentation, reD%ire more labo%rers to per!orm its !%nctions,
and more mercant"s capital @o%ld, !%rtermore, be needed to t%rn o8er te same commodity-
capital0
$%ppose A is te entire mercant"s capital directly applied in b%ying and selling commodities, and
b te corresponding 8ariable capital paid o%t in @ages to te commercial employees0 5en A U b
is smaller tan te total mercant"s capital, A, @o%ld be i! e8ery mercant ad to get along
@ito%t assistants, ence @o%ld in8est noting in b0 6o@e8er, @e a8e not yet o8ercome te
di!!ic%lty0
5e selling price o! te commodities m%st s%!!ice 1C to pay te a8erage pro!it on A U b0 5is is
explained i! only by te !act tat A U b is generally a red%ction o! te original A, representing a
smaller mercant"s capital tan @o%ld be reD%ired @ito%t b0 A%t tis selling price m%st s%!!ice <C
to co8er not only te additional pro!it on b, b%t to replace also te paid @ages, te mercant"s
8ariable capital R b0 5is last consideration gi8es rise to te di!!ic%lty0 7oes b represent a ne@
constit%ent o! te price, or is it merely a part o! te pro!it made by means o! A U b, @ic appears
as @ages only so !ar as te mercantile @age-@orker is concerned, and as concerns te mercant
simply replaces 8ariable capitalQ &n te latter case, te mercant"s pro!it on is ad8anced capital A
U b @o%ld H%st eD%al te pro!it d%e to A by 8irt%e o! te general rate, pl%s b, @ic e pays o%t in
te !orm o! @ages, b%t @ic does not itsel! yield a pro!it0
5e cr%x o! te matter is, indeed, to !ind te limits Bmatematically speakingC o! b0 'et %s !irst
acc%rately de!ine te problem0 'et A stand !or capital in8ested directly in b%ying and selling
commodities, K !or te constant capital Bact%al andling costsC cons%med in tis !%nction, and b
!or te 8ariable capital in8ested by te mercant0
)eco8ering A o!!ers no di!!ic%lties at all0 For te mercant it is simply te realised p%rcase
price, and te price o! prod%ction !or te man%!act%rer0 &t is te price paid by te mercant, and in
reselling e reco8ers A as part o! is selling price# in addition to tis A, e makes a pro!it on A, as
pre8io%sly explained0 For example, let te commodity cost V1==0 $%ppose te pro!it is 1=T0 &n
<=< ;apter J4&&
tat case, te commodity is sold at 11=0 5e commodity pre8io%sly cost 1==, and te mercant"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 tan, te portion o! constant
capital @ic te prod%cer @o%ld %se %p in b%ying and selling, b%t ten it @o%ld !orm an addition
to te constant capital e reD%ires directly in prod%ction0 5is portion, noneteless, m%st be
contin%ally reco8ered in te price o! te commodity, or, @at amo%nts to te same, a
corresponding portion o! te commodity m%st be contin%ally expended in tis !orm, or, !rom te
standpoint o! te total capital o! society, m%st be contin%ally reprod%ced in tis !orm0 5is portion
o! te ad8anced constant capital @o%ld a8e a limiting e!!ect on te rate o! pro!it, H%st as te
entire mass o! it directly in8ested in prod%ction0 &n so !ar as te ind%strial capitalist lea8es te
commercial part o! is b%siness to te mercant, e need not ad8ance tis part o! te capital0 5e
mercant ad8ances it in is stead0 &n a @ay, e does tis b%t nominally, since a mercant neiter
prod%ces, nor reprod%ces, te constant capital cons%med by im Bte act%al andling costsC0 &ts
prod%ction appears a separate b%siness, or at least a part o! te b%siness, o! some ind%strial
capitalists @o t%s play a role similar to tose @o s%pply constant capital to prod%cers o!
necessities o! li!e0 First, tere!ore, te mercant as tis constant capital reco8ered !or im and,
secondly, recei8es is pro!it on it0 5ro%g bot o! tese, tere!ore, te 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 srinks less tan it @o%ld i! e imsel! ad to ad8ance tis capital0 5e red%ction in
te rate o! pro!it is less, beca%se te capital t%s ad8anced is less0
$o !ar, ten, te selling price is made %p o! A U K U te pro!it on A U K0 5is portion o! it o!!ers
no !%rter di!!ic%lties0 A%t no@ b, te 8ariable capital ad8anced by te mercant, enters into it0
5e res%ltant selling price is A U K U b U te pro!it on A U K U te pro!it on b0
A merely reco8ers te p%rcase price and adds noting to it b%t te pro!it on A0 K adds te pro!it
on K, and K itsel!# b%t K U te pro!it on K, te part o! te circ%lation costs ad8anced in te !orm
o! constant capital U te corresponding a8erage pro!it, @o%ld be larger in te ands o! te
ind%strial capitalist tan in te mercant"s0 5e srinking o! te a8erage pro!it appears in te !orm
o! te !%ll a8erage pro!it calc%lated a!ter ded%cting A U K !rom te ad8anced ind%strial capital,
@it te ded%ction !rom te a8erage pro!it on A U K paid to te mercant, so tat tis ded%ction
appears as te pro!it o! a speci!ic capital, mercant"s capital0
A%t te sit%ation is di!!erent @it respect to b U te pro!it on b, or, in te present case, @ere te
rate o! pro!it is ass%med R 1=T, @it b U 1N1= b0 ?nd te real di!!ic%lty lies ere0
Wat te mercant b%ys @it b is, according to o%r ass%mption, noting b%t commercial labo%r,
ence labo%r reD%ired to per!orm te !%nctions o! circ%lating capital, ; I M and M I ;0 A%t
commercial labo%r is te labo%r generally necessary !or a capital to operate as mercant"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 tese !%nctions I ence a
capitalist per!orms tese operations, or tis @ork @it is capital I does it ser8e as mercant"s
capital and participate in reg%lating te general rate o! pro!it, i.e., dra@ its di8idends o%t o! te
total pro!it0 A%t Bb U te pro!it on bC appears to incl%de, !irst, payment !or labo%r B!or it makes no
di!!erence @eter te ind%strial capitalist pays te mercant !or is o@n labo%r, or te labo%r o!
te clerks paid by te mercantC, and, secondly, te pro!it on te payment !or tis labo%r, @ic
te mercant @o%ld a8e to per!orm in person0 First, mercant"s capital gets its b re!%nded, and,
secondly, e makes te pro!it on it0 5is arises !rom te !act, tere!ore, tat, !irst, it reD%ires
payment !or te @ork @ereby it operates as merchant5s capital, and tat, secondly, it demands
te 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 5is is, tere!ore, te D%estion to be sol8ed0
'et %s ass%me tat A R 1==, b R 1=, and te rate o! pro!it R 1=T0 We take it tat K R =, in order to
lea8e o%t o! consideration tis element o! te p%rcase price, @ic does not belong ere and as
<=3 ;apter J4&&
already been acco%nted !or0 6ence, te selling price @o%ld R A U p U b U p BR A U Ap" U b U bp"#
@ere p stands !or te rate o! pro!itC R 1== U 2= U 1= U 1R1<10
A%t i! b @ere not in8ested by te mercant in @ages I since b is paid only !or commercial labo%r,
ence labo%r reD%ired, to realise te 8al%e o! te commodity I capital tro@n on te market by
ind%strial capital I te matter @o%ld stand as !ollo@s: to b%y or sell !or A R 1==, te mercant
@o%ld de8ote is time, and @e @is to ass%me tat tis is te only time at is disposal0 5e
commercial labo%r represented by b, or 1=, i! paid !or by pro!it instead o! @ages, @o%ld
pres%ppose anoter mercant"s capital R 1==, since at 1=T tis makes b R 1=0 5is second A R
1== @o%ld not additionally go into te price o! commodities, b%t te 1=T @o%ld0 5ere @o%ld,
ence, be t@o operations at 1== R <==, tat @o%ld b%y commodities at <== U <= R <<=0
$ince mercant"s capital is absol%tely noting b%t an indi8id%alised !orm o! a portion o! ind%strial
capital engaged in te process o! circ%lation, all D%estions re!erring to it m%st be sol8ed by
representing te problem primarily in a !orm# in @ic te penomena pec%liar to mercant"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 @orksop, mercantile capital operates contin%ally in te
circ%lation process0 &t is ere I in te o!!ice o! te ind%strial capitalist imsel! I tat @e m%st !irst
analyse te b no@ %nder consideration0
5e o!!ice is !rom te o%tset al@ays in!initesimally small compared to te ind%strial @orksop0
?s !or te rest, it is clear tat as te scale o! prod%ction is extended, commercial operations
reD%ired constantly !or te circ%lation o! ind%strial capital, in order to sell te prod%ct existing as
commodity-capital, to recon8ert te money so recei8ed into means o! prod%ction, and to keep
acco%nt o! te @ole process, m%ltiply accordingly0 ;alc%lation o! prices, book-keeping,
managing !%nds, correspondence I all belong %nder tis ead0 5e more de8eloped te scale o!
prod%ction, te greater, e8en i! not proportionately greater, te commercial operations o! te
ind%strial capital, and conseD%ently te labo%r and oter costs o! circ%lation in8ol8ed in realising
8al%e and s%rpl%s-8al%e0 5is necessitates te employment o! commercial @age-@orkers @o
make %p te act%al o!!ice sta!!0 5e o%tlay !or tese, alto%g made in te !orm o! @ages, di!!ers
!rom te 8ariable capital laid o%t in p%rcasing prod%cti8e labo%r0 &t increases te o%tlay o! te
ind%strial capitalist, te mass o! te capital to be ad8anced, @ito%t directly increasing s%rpl%s-
8al%e0 Aeca%se it is an o%tlay !or labo%r employed solely in realising 8al%e already created0 'ike
e8ery oter o%tlay o! tis kind, it red%ces te rate o! pro!it be-ca%se te ad8anced capital
increases, b%t not te s%rpl%s-8al%e0 &! s%rpl%s-8al%e s remains constant @ile ad8anced capital ;
increases to ; U ;, ten te rate o! pro!it sN; is replaced by te smaller rate o! pro!it sN; U ;0
5e ind%strial capitalist endea8o%rs, tere!ore, to c%t tese 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 te
same attit%de to its commercial @age-labo%rers as it does to its prod%cti8e @age-labo%rers0 5e
more prod%cti8e @age-labo%rers it employs %nder oter@ise eD%al circ%mstances, te greater te
o%tp%t, and te greater te s%rpl%s-8al%e, or pro!it0 ;on8ersely, o@e8er, te larger te scale o!
prod%ction, te greater te D%antity o! 8al%e and s%rpl%s-8al%e to be realised, te greater te
prod%ced commodity-capital, te greater are te absol%te, i! not relati8e, o!!ice costs, gi8ing rise
to a kind o! di8ision o! labo%r0 5o @at extent pro!it is te precondition !or tese o%tlays, is seen,
among oter tings, !rom te !act tat @it te increase o! commercial salaries, a part o! tem is
!reD%ently paid by a sare in te pro!it0 &t is in te nat%re o! tings tat labo%r consisting merely
o! intermediate operations connected partly @it calc%lating 8al%es, partly @it realising tem,
and partly @it recon8erting te realised money into means o! prod%ction, is a labo%r @ose
magnit%de tere!ore depends on te D%antity o! te prod%ced 8al%es tat a8e to e realised, and
does not act as te ca%se, like directly prod%cti8e labo%r, b%t rater as an e!!ect, o! te respecti8e
magnit%des and masses o! tese 8al%es0 5e same applies to te oter costs o! circ%lation0 5o do
m%c meas%ring, @eiging, packing, and transporting, m%c m%st be on and0 5e amo%nt o!
<=2 ;apter J4&&
packing, transporting, etc0, depends on te D%antity o! commodities @ic are te obHects o! tis
acti8ity, not 8ice 8ersa0
5e commercial @orker prod%ces no s%rpl%s-8al%e directly0 A%t te price o! is labo%r is
determined by te 8al%e o! is labo%r-po@er, ence by its costs o! prod%ction, @ile te
application o! tis labo%r-po@er, its exertion, expendit%re o! energy, and @ear and tear, is as in te
ease o! e8ery oter @age-labo%rer by no means limited by its 8al%e0 6is @age, tere!ore, is not
necessarily proportionate to te mass o! pro!it @ic e elps te capitalist to realise0 Wat e
costs te capitalist and @at e brings in !or im, are t@o di!!erent tings0 6e creates no direct
s%rpl%s-8al%e, b%t adds to te capitalist"s income by elping im to red%ce te cost o! realising
s%rpl%s-8al%e, inasm%c as e per!orms partly %npaid labo%r0 5e commercial @orker, in te strict
sense o! te term, belongs to te better-paid class o! @age-@orkers I to tose @ose labo%r is
classed as skilled and stands abo8e a8erage labo%r0 .et te @age tends to !all, e8en in relation to
a8erage labo%r, @it te ad8ance o! te capitalist mode o! prod%ction0 5is is d%e partly to te
di8ision o! labo%r in te o!!ice, implying a one-sided de8elopment o! te labo%r capacity, te cost
o! @ic does not !all entirely on te capitalist, since te labo%rer"s skill de8elops by itsel!
tro%g te exercise o! is !%nction, and all te more rapidly as di8ision o! labo%r makes it more
one-sided0 $econdly, beca%se te necessary training, kno@ledge o! commercial practices,
lang%ages, etc0, is more and more rapidly, easily, %ni8ersally and ceaply reprod%ced @it te
progress o! science and p%blic ed%cation te more te capitalist mode o! prod%ction directs
teacing metods, etc0, to@ards practical p%rposes0 5e %ni8ersality o! p%blic ed%cation enables
capitalists to recr%it s%c labo%rers !rom classes tat !ormerly ad no access to s%c trades and
@ere acc%stomed to a lo@er standard o! li8ing0 Moreo8er, tis increases s%pply, and ence
competition0 Wit !e@ exceptions, te labo%r-po@er o! tese people is tere!ore de8al%ated @it
te progress o! capitalist prod%ction0 5eir @age !alls, @ile teir labo%r capacity increases0 5e
capitalist increases te n%mber o! tese labo%rers @ene8er e as more 8al%e and pro!its to
realise0 5e increase o! tis labo%r is al@ays a res%lt, ne8er a ca%se o! more s%rpl%s-8al%e0
<

5ere is d%plication, tere!ore0 3n te one and, te !%nctions as commodity-capital and money-
capital Bence !%rter designated as mercant"s capitalC are general de!inite !orms ass%med by
ind%strial capital0 3n te oter and, speci!ic capitals, and tere!ore speci!ic gro%ps o! capitalists,
are excl%si8ely de8oted to tese !%nctions# and tese !%nctions t%s de8elop into speci!ic speres
o! sel!-expansion o! capital0
&n te case o! mercantile capital, te commercial !%nctions and circ%lation costs are !o%nd only in
indi8id%alised !orm0 5at side o! ind%strial capital @ic is de8oted to circ%lation, contin%o%sly
exists not only in te sape o! commodity-capital and money-capital, b%t also in te o!!ice
alongside te @orksop0 A%t it becomes independent in te case o! mercantile capital0 &n te
latter"s case, te o!!ice is its only @orksop0 5e portion o! capital employed in te !orm o!
circ%lation costs appears m%c larger in te case o! te big mercant tan in tat o! te
ind%strialist, beca%se besides teir o@n o!!ices connected @it e8ery ind%strial @orksop, tat
part o! capital @ic @o%ld a8e to be so applied by te entire class o! ind%strial capitalists is
concentrated in te ands o! a !e@ mercants, @o in carrying o%t te !%nctions o! circ%lation
also pro8ide !or te gro@ing expenses incidental to teir contin%ation0
5o ind%strial capital te costs o! circ%lation appear as %nprod%cti8e expenses, and so tey are0 5o
te mercant tey appear as a so%rce o! is pro!it, proportional, gi8en te general rate o! pro!it, to
teir siEe0 5e o%tlay to be made !or tese circ%lation costs is, tere!ore, a prod%cti8e in8estment
!or mercantile capital0 ?nd !or tis reason, te commercial labo%r @ic it b%ys is like@ise
immediately prod%cti8e !or it0
Chapter 18. The Turnover of Merchant's Capital.
Prices.
5e t%rno8er o! ind%strial capital is a combination o! its period o! prod%ction and time o!
circ%lation, and tere!ore embraces te entire process o! prod%ction0 5e t%rno8er o! mercant"s
capital, on te oter and, being in reality noting b%t an alienated mo8ement o! commodity-
capital, represents only te !irst pase in te metamorposis o! a commodity, ; I M, as te
re!l%ent mo8ement o! a speci!ic capital# M I ;, ; I M, is, !rom te mercantile point o! 8ie@, te
t%rno8er o! mercant"s capital0 5e mercant b%ys, con8erting is money into commodities, ten
sells, con8erting te latter back into money, and so !ort in constant repetition0 Witin circ%lation,
te metamorposis o! ind%strial capital al@ays presents itsel! in te !orm o! ;1 I M I ;<# te
money realised by te sale o! te prod%ced commodity ;1 is %sed to p%rcase ne@ means o!
prod%ction, ;<0 5is amo%nts to a practical excange o! ;1 !or ;<, and te same money t%s
canges ands t@ice0 &ts mo8ement mediates te excange o! t@o di!!erent kinds o! commodities,
;1 and ;<0 A%t in te case o! te mercant, it is, con8ersely, te same commodity @ic canges
ands t@ice in M I ; I M"0 &t merely promotes te re!l%x o! is money0
&!, !or example, a certain mercant"s capital is V1==, and !or tese V1== te mercant b%ys
commodities and sells tem !or V11=, ten is capital o! V1== as completed one t%rno8er, and
te n%mber o! s%c t%rno8ers per year depends on te n%mber o! times tis mo8ement M I ; I
M" is repeated0
We ere lea8e entirely o%t o! consideration te costs @ic may be concealed in te di!!erence
bet@een te p%rcase price and te selling price, since tese do not alter in any @ay te !orm,
@ic @e are no@ analysing0
5e n%mber o! t%rno8ers o! a gi8en mercant"s capital, tere!ore, is analogo%s in tis case to te
repeated cycles o! money as a mere medi%m o! circ%lation0 P%st as te same taler b%ys ten times
its 8al%e in commodities in making ten cycles, so te same money-capital o! te mercant, @en
t%rned o8er ten times, b%ys ten times its 8al%e in commodities, or realises a total commodity-
capital o! ten times its 8al%e# a mercant"s capital o! 1==, !or instance, a ten-!old 8al%e R 1,===0
A%t tere is tis di!!erence: &n te cycle o! money as a medi%m o! circ%lation it is te same piece
o! money tat passes tro%g di!!erent ands, t%s repeatedly per!orming te same !%nction and
ence making %p !or te mass o! te circ%lating pieces o! money by its 8elocity0 A%t in te
mercant"s case it is te same money capital, te same money-8al%e, regardless o! @at pieces o!
money it may be composed, @ic repeatedly b%ys and sells commodity-capital to te amo%nt o!
its 8al%e and @ic tere!ore ret%rns to te same ands, te same point o! depart%re as M U M,
i.e., 8al%e pl%s s%rpl%s-8al%e0 5is caracterises its t%rno8er as a capital t%rno8er0 &t al@ays
@itdra@s more money !rom circ%lation tan it tro@s in0 &t is sel!-e8ident, at any rate, tat an
accelerated t%rno8er o! mercant"s capital Bgi8en a de8eloped credit system, te !%nction o!
money as a means o! payment predominatesC implies a more rapid circ%lation o! te same
D%antity o! money0
? repeated t%rno8er o! commercial capital, o@e8er, ne8er connotes more tan repeated b%ying
and selling# @ile a repeated t%rno8er o! ind%strial capital connotes te periodicity and reno8ation
o! te entire reprod%ction process B@ic incl%des te process o! cons%mptionC0 For mercant"s
capital tis appears merely as an external condition0 &nd%strial capital m%st contin%ally bring
commodities to te market and @itdra@ tem !rom it, in order tat rapid t%rno8er o! mercant"s
capital may remain possible0 &! te process o! reprod%ction is slo@, ten so is te t%rno8er o!
<=6 ;apter J4&&&
mercant"s capital0 5r%e, mercant"s capital promotes te t%rno8er o! prod%cti8e capital, b%t only
in so !ar as it sortens its time o! circ%lation0 &t as no direct in!l%ence on te time o! prod%ction,
@ic is also a barrier to te period o! t%rno8er o! ind%strial capital0 5is is te !irst barrier !or te
t%rno8er o! mercant"s capital0 $econdly, aside !rom te barrier !ormed by reprod%cti8e
cons%mption, te t%rno8er o! mercant"s capital is %ltimately limited by te 8elocity and 8ol%me
o! te total indi8id%al cons%mption, since all te commodity-capital @ic is part o! te
cons%mption-!%nd depends on it0
6o@e8er Baside !rom te t%rno8ers in te @orld o! commerce, in @ic one mercant al@ays
sells te same commodity to anoter, and tis sort o! circ%lation may appear igly prospero%s in
times o! spec%lationC, te mercant"s capital, in te !irst place, c%rtails pase ; I M !or prod%cti8e
capital0 $econdly, %nder te modern credit system it disposes o! a large portion o! te total social
money-capital, so tat it can repeat its p%rcases e8en be!ore it as de!initely sold @at as
pre8io%sly been p%rcased0 ?nd it is immaterial in tis case, @eter o%r mercant sells directly
to te %ltimate cons%mer, or tere are a doEen oter intermediate mercants bet@een tem0 3@ing
to te immense elasticity o! te reprod%ction process, @ic may al@ays be p%sed 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 te separation o! ; I M and M I ;, @ic !ollo@s !rom te nat%re o! te
commodities, a !ictitio%s demand is ten created0 &n spite o! its independent stat%s, te mo8ement
o! mercant"s capital is ne8er more tan te mo8ement o! ind%strial capital @itin te spere o!
circ%lation0 A%t by 8irt%e o! its independent stat%s it mo8es, @itin certain limits, independently
o! te bo%nds o! te reprod%ction process and tereby e8en dri8es te latter beyond its bo%nds0
5is internal dependence and external independence p%s mercant"s capital to a point @ere te
internal connection is 8iolently restored tro%g a crisis0
6ence te penomenon tat crises do not come to te s%r!ace, do not break o%t, in te retail
b%siness !irst, @ic deals @it direct cons%mption, b%t in te speres o! @olesale trade, and o!
banking, @ic places te money-capital o! society at te disposal o! te !ormer0
5e man%!act%rer may act%ally sell to te exporter, and te exporter, in is t%rn, to is !oreign
c%stomer# te importer may sell is ra@ materials to te man%!act%rer, and te latter may sell is
prod%cts to te @olesale mercant, etc0 A%t at some partic%lar imperceptible point te goods lie
%nsold, or else, again, all prod%cers and middlemen may grad%ally become o8erstocked0
;ons%mption is ten generally at its igest, eiter beca%se one ind%strial capitalist sets a
s%ccession o! oters in motion# or beca%se te labo%rers employed by tem are !%lly employed
and a8e more to spend tan %s%al0 5e capitalists" expendit%res increase togeter @it teir
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 te latter0 A%t tis
cons%mption de!initely limits it ne8erteless, since constant capital is ne8er prod%ced !or its o@n
sake b%t solely beca%se more o! it is needed in speres o! prod%ction @ose prod%cts go into
indi8id%al cons%mption0 6o@e8er, tis may go on %ndist%rbed !or some time, stim%lated by
prospecti8e demand, and in s%c brances, tere!ore, te b%siness o! mercants and ind%strialists
goes briskly !ort0 5e crisis occ%rs @en te ret%rns o! mercants @o sell in distant markets Bor
@ose s%pplies a8e also acc%m%lated on te ome marketC become so slo@ and meagre tat te
banks press !or payment, or promissory notes !or p%rcased commodities become d%e be!ore te
latter a8e been resold0 5en !orced sales take place, sales in order to meet payments0 5en
comes te cras, @ic brings te ill%sory prosperity to an abr%pt end0
A%t te s%per!iciality and meaninglessness o! te t%rno8er o! mercant"s capital are still greater,
beca%se te t%rno8er o! one and te same mercant"s capital may sim%ltaneo%sly or s%ccessi8ely
promote te t%rno8ers o! se8eral prod%cti8e capitals0
5e t%rno8er o! mercant"s capital does not H%st promote te t%rno8ers o! se8eral ind%strial
capitals, it can also expedite te opposite pases o! te metamorposis o! commodity-capital0 For
<=> ;apter J4&&&
instance, te mercant b%ys linen !rom te man%!act%rer and sells it to te bleacer0 &n tis case,
tere!ore te t%rno8er o! te same mercant"s capital I in !act, te same ; I M, a realisation o!
te linen I represents t@o opposite pases !or t@o di!!erent ind%strial capitals0 &nasm%c as te
mercant 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 anoter ind%strial capitalist0
&! @e lea8e o%t K, te circ%lation costs, as @e do in tis capter, i!, in oter @ords, @e lea8e aside
tat portion o! capital @ic te mercant ad8ances along @it te money reD%ired to p%rcase
commodities, it !ollo@s tat @e also omit K, te additional pro!it made on tis additional
capital0 5is is t%s te strictly logical and matematically correct mode o! analysis i! @e @ant to
see o@ pro!it and t%rno8er o! mercant"s capital a!!ect prices0
&! te price o! prod%ction o! 1 lb0 o! s%gar @ere V1, te mercant co%ld b%y 1== lbs0 o! s%gar @it
V1==0 &! e b%ys and sells tis D%antity in te co%rse o! te year, and i! te a8erage ann%al rate o!
pro!it is 1+T, e @o%ld add V1+ to te V1==, and 3s0 to V1, te price o! prod%ction o! 1 lb0 o!
s%gar0 5at is, e @o%ld sell 1 lb0 o! s%gar at V103s0 A%t i! te price o! prod%ction o! 1 lb0 o! s%gar
so%ld !all to 1s0, te mercant co%ld b%y <,=== lbs0 o! s%gar @it V1==, and sell te s%gar at 1s0 1
2N+d0 per lb0 5e ann%al pro!it on capital in8ested in te s%gar b%siness @o%ld still be V1+ on eac
V1==0 A%t te mercant as to sell 1== lbs0 in te !irst case, and <,=== lbs0 in te second0 5e ig
or lo@ le8el o! te price o! prod%ction as noting to do @it te rate o! pro!it0 A%t it @o%ld
greatly and decisi8ely a!!ect tat aliD%ot part o! te selling price o! eac lb0 o! s%gar, @ic
resol8es itsel! in mercantile pro!it, i.e., te addition to te price @ic te mercant makes on a
certain D%antity o! commodities or prod%cts0 &! te price o! prod%ction o! a commodity is small,
so, too, te amo%nt te mercant ad8ances in its p%rcase price, i.e., !or a certain D%antity o! it0
6ence, @it a gi8en rate o! pro!it, te amo%nt o! pro!it e makes on tis D%antity o! ceap
commodities is small as @ell0 3r, @at amo%nts to te same, e can ten b%y @it a certain
amo%nt o! capital, say, 1==, a larger D%antity o! tese ceap commodities, and te total pro!it o!
1+, @ic e makes per 1==, breaks %p into small !ractions o8er eac indi8id%al piece or portion
belonging to tis mass o! commodities0 &! te opposite takes place, ten te re8erse is tr%e0 5is
depends entirely on te greater or smaller prod%cti8ity o! te ind%strial capital in @ose prod%cts
e trades0 &! @e except te cases in @ic te mercant is a monopolist and sim%ltaneo%sly
monopolises prod%ction, as did te 7%tc East &ndia ;ompany in its day, noting can be more
ridic%lo%s tan te c%rrent idea tat it depends on te mercant @eter e sells many
commodities at a small pro!it or !e@ commodities at a large pro!it on eac indi8id%al piece o! te
commodities0 5e t@o limits o! is selling price are: on te one and, te price o! prod%ction o!
te commodities, o8er @ic e as no control# on te oter and, te a8erage rate o! pro!it, o8er
@ic e as H%st as little control0 5e only ting %p to im to decide is @eter e @ants to deal
in dear or in ceap commodities, and e8en ere te siEe o! is a8ailable capital and oter
circ%mstances also a8e teir e!!ect0 5ere!ore, it depends @olly on te degree o! de8elopment
o! te capitalist mode o! prod%ction, not on te mercant"s good@ill, @at co%rse e sall !ollo@0
? p%rely commercial company like te old 7%tc East &ndia ;ompany, @ic ad a monopoly o!
prod%ction, co%ld !ancy tat it co%ld contin%e a metod adapted at best to te beginnings o!
capitalist prod%ction, %nder entirely canged conditions0
1
5e !ollo@ing circ%mstances, among oters, elp to maintain tat pop%lar preH%dice, @ic, like
all !alse conceptions o! pro!it, etc0, arises !rom te obser8ation o! p%re commerce and mercants"
preH%dice:
'irst: penomena o! competition, @ic, o@e8er, apply merely to te distrib%tion o! mercantile
pro!it among indi8id%al mercants, te sareolders o! te total mercant"s capital# i! one, !or
example, sells ceaper, in order to dri8e is competitors o!! te !ield0
Secondly: an economist o! te calibre o! ,ro!essor )oscer may still imagine in 'eipEig tat it
@as Kcommon sense and %manitarianL /)oscer, Die Grundlagen der $ationalK-onomie, 30
<=8 ;apter J4&&&
?%!lage, 18+8, $0 1*<0 I 0d.1 gro%nds, @ic prod%ced te cange in selling prices, and tat 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
te same reason, te demand, and @it it te market-prices, o!ten rise e8en !aster tan te s%pply,
so tat selling prices yield more tan te a8erage pro!it0
'ourthly: a mercant may red%ce is selling price B@ic is ne8er more tan a red%ction o! te
%s%al pro!it tat e adds to te priceC so as to t%rn o8er a larger capital more rapidly0 ?ll tese are
matters tat only concern competition bet@een te mercants temsel8es0
We a8e already so@n in Aook & /Englis edition: 4ol0 1, pp0 +1*-<=0 I 0d10 tat ig or lo@
commodity-prices do not determine eiter te mass o! s%rpl%s-8al%e prod%ced by a gi8en capital,
or te rate o! s%rpl%s-8al%e# alto%g te price o! a commodity, and @it it te sare o! s%rpl%s-
8al%e in tis price, are greater or smaller, depending on te relati8e D%antity o! commodities
prod%ced by a gi8en D%antity o! labo%r0 5e prices o! e8ery speci!ied D%antity o! a commodity
are, so !ar as tey correspond to te 8al%es, determined by te total D%antity o! labo%r
incorporated in tis commodity0 &! little labo%r is incorporated in m%c commodity, te %nit price
o! te commodity is lo@ and te s%rpl%s-8al%e in it is small0 6o@ tis labo%r incorporated in a
commodity breaks %p into paid and %npaid labo%r and @at portion o! its price, tere!ore,
represents s%rpl%s-8al%e, as noting to do @it tis total D%antity o! labo%r, nor, conseD%ently,
@it te price o! te commodity0 A%t te rate o! s%rpl%s-8al%e does not depend on te absol%te
magnit%de o! te s%rpl%s-8al%e contained in te %nit price o! te commodity0 &t depends on its
relati8e magnit%de, its proportion to te @ages contained in te same commodity0 5e rate o!
s%rpl%s-8al%e may tere!ore be large, @ile te absol%te magnit%de o! s%rpl%s-8al%e in eac %nit
o! te commodity is small0 5is absol%te magnit%de o! s%rpl%s-8al%e in eac piece o! te
commodity depends primarily on te prod%cti8ity o! labo%r, and only secondarily on its di8ision
into paid and %npaid labo%r0
-o@, in te case o! te commercial selling price, te price o! prod%ction is a gi8en external
precondition0
5e ig commercial commodity-prices in !ormer times @ere d%e 1C to te ig prices o!
prod%ction, i.e., te %nprod%cti8eness o! labo%r# <C to te absence o! a general rate o! pro!it, @it
mercant"s capital absorbing a m%c larger D%ota o! s%rpl%s-8al%e tan @o%ld a8e !allen to its
sare i! capitals enHoyed greater general mobility0 5e ending o! tis sit%ation, in bot its aspects,
is tere!ore te res%lt o! te de8elopment o! te capitalist mode o! prod%ction0
5e t%rno8ers o! mercant"s capital 8ary in d%ration, teir ann%al n%mber conseD%ently being
greater or smaller, in di!!erent brances o! commerce0 Witin te same branc te t%rno8er is
more or less rapid in te di!!erent pases o! te economic cycle0 .et tere is an a8erage n%mber o!
t%rno8ers, determined by experience0
We a8e already seen tat te t%rno8er o! mercant"s capital di!!ers !rom tat o! ind%strial capital0
5is is in te nat%re o! tings0 3ne single pase in te t%rno8er o! ind%strial capital appears as a
complete t%rno8er o! an independently constit%ted mercant"s capital, or yet o! its part0 &t also
stands in a di!!erent relation to pro!it and price determination0
&n te case o! ind%strial capital, its t%rno8er expresses, on te one and, te periodicity o!
reprod%ction, and, tere!ore, te mass o! commodities tro@n on te market in a certain period
depends on it0 3n te oter and, its time o! circ%lation creates a barrier, an extensible one, and
exerts more or less o! a restraint on te creation o! 8al%e and s%rpl%s-8al%e, beca%se it a!!ects te
8ol%me o! te prod%ction process0 5e t%rno8er, tere!ore, acts as a determining element on te
mass o! ann%ally prod%ced s%rpl%s-8al%e, and ence on te !ormation o! te general rate o! pro!it,
b%t it acts as a limiting, rater tan positi8e, element0 For mercant"s capital, on te contrary, te
a8erage rate o! pro!it is a gi8en magnit%de0 5e mercant"s capital does not directly participate in
creating pro!it or s%rpl%s-8al%e, and Hoins in saping te general rate o! pro!it only in so !ar as it
<=* ;apter J4&&&
dra@s a di8idend proportionate to its sare in te total capital, o%t o! te mass o! pro!it prod%ced
by ind%strial capital0
5e greater te n%mber o! t%rno8ers o! an ind%strial capital %nder conditions described in Aook
&&, ,art &&, te greater te mass o! pro!it it creates0 5r%e, tro%g te !ormation o! a general rate o!
pro!it, te total pro!it is distrib%ted among te di!!erent capitals not in proportion to teir act%al
part in its prod%ction, b%t in proportion to te aliD%ot part tey make %p o! te total capital, i.e., in
proportion to teir magnit%de0 A%t tis does not alter te essence o! te matter0 5e greater te
n%mber o! t%rno8ers o! te total ind%strial capital, te greater te mass o! pro!its, te mass o!
ann%ally prod%ced s%rpl%s-8al%e, and, tere!ore, oter circ%mstances remaining %ncanged, te
rate o! pro!it0 &t is di!!erent @it mercant"s capital0 5e rate o! pro!it is a gi8en magnit%de @it
respect to it, determined on te one and by te mass o! pro!it prod%ced by ind%strial capital, and
on te oter by te relati8e magnit%de o! te total mercant"s capital, by its D%antitati8e relation to
te s%m o! capital ad8anced in te processes o! prod%ction and circ%lation0 5e n%mber o! its
t%rno8ers does, indeed, decisi8ely a!!ect its relation to te total capital, or te relati8e magnit%de
o! mercant"s capital reD%ired !or te circ%lation, !or it is e8ident tat te absol%te magnit%de o!
te reD%ired mercant"s capital and te 8elocity o! its t%rno8ers stand in in8erse proportion0 A%t,
all oter conditions remaining eD%al, te relati8e magnit%de o! mercant"s capital, or te part it
makes %p o! te total capital, is determined by its absol%te magnit%de0 &! te total capital is
1=,===, and te mercant"s capital 1N1= o! tat s%m, it is R 1,===# i! te total capital is 1,===, ten
1N1= o! it R 1==0 5e absol%te magnit%de o! mercant"s capital 8aries, depending on te
magnit%de o! te total capital, alto%g its relati8e magnit%de remains te same0 A%t ere @e
ass%me tat its relati8e magnit%de, say, 1N1= o! te total capital, is gi8en0 5is relati8e magnit%de,
o@e8er, is again determined by te t%rno8er0 &! it is t%rned o8er rapidly, its absol%te magnit%de,
!or example, @ill R V1,=== in te !irst case, R 1== in te 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 te !irst case, and R <==
in te second0 &ts relati8e magnit%de @ill ten a8e increased !rom 1N1= to 1N+ o! te total capital0
;irc%mstances @ic red%ce te a8erage t%rno8er o! mercant"s capital, like te de8elopment o!
means o! transportation, !or instance, red%ce pro tanto te absol%te magnit%de o! mercant"s
capital, and tereby increase te general rate o! pro!it0 &! te opposite takes place, ten te re8erse
is tr%e0 ? de8eloped capitalist mode o! prod%ction, compared @it earlier conditions, exerts a
t@o-!old in!l%ence on mercant"s capital0 3n te one and, te same D%antity o! commodities is
t%rned o8er @it a smaller mass o! act%ally !%nctioning mercant"s capital# o@ing to te more
rapid t%rno8er o! mercant"s capital, and te more rapid reprod%ction process, on @ic tis
depends, te relation o! mercant"s capital to ind%strial capital diminises0 3n te oter and,
@it te de8elopment o! te capitalist mode o! prod%ction all prod%ction becomes te prod%ction
o! commodities, @ic places all prod%cts into te ands o! agents o! circ%lation0 &t is to be added
tat %nder te pre8io%s mode o! prod%ction, @ic prod%ced on a small scale, a 8ery large portion
o! te prod%cers sold teir goods directly to te cons%mers, or @orked on teir personal orders,
sa8e !or te mass o! prod%cts cons%med directly, in kind, by te prod%cer imsel!, and te mass
o! ser8ices per!ormed in kind0 Wile, tere!ore, %nder !ormer modes o! prod%ction commercial
capital @as greater in relation to te commodity-capital @ic it t%rned o8er, it @as:
1C absol%tely smaller, beca%se a disproportionately smaller part o! te total prod%ct @as prod%ced
as commodities, and passed as commodity-capital into circ%lation, !alling into te ands o!
mercants0 &t @as smaller, beca%se te commodity-capital @as smaller0 A%t at te same time it
@as proportionately larger, not only beca%se its t%rno8er @as slo@er and not only in relation to
te mass o! commodities t%rned o8er by it0 &t @as larger also beca%se te price o! tis mass o!
commodities, and ence te mercant"s capital to be ad8anced !or it, @ere greater tan %nder
capitalist prod%ction on acco%nt o! a lo@er prod%cti8ity o! labo%r, so tat te same 8al%e @as
incorporated in a smaller mass o! commodities0
<1= ;apter J4&&&
<C &t is not only tat a larger mass o! commodities is prod%ced on te basis o! capitalist
prod%ction Btaking into acco%nt also te red%ced 8al%e o! tis mass o! commoditiesC, b%t te 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, tere is an increase not only o! te mass
o! mercant"s capital, b%t o! all capital applied in circ%lation, s%c as in marine sipping,
rail@ays, telegrap, etc0
3C 6o@e8er, and tis is an aspect @ic belongs to te disc%ssion o! Kcompetition among
capitalsL: idle or only al!-!%nctioning mercant"s capital gro@s @it te progress o! te capitalist
mode o! prod%ction, @it te ease o! entering retail trade, @it spec%lation, and te red%ndance o!
released capital0
A%t, ass%ming te relati8e magnit%de o! mercant"s capital to total capital to be gi8en, te
di!!erence o! t%rno8ers in te 8ario%s brances o! commerce does not a!!ect eiter te magnit%de
o! te total pro!it !alling to te sare o! mercant"s capital, or te general rate o! pro!it0 5e
mercant"s pro!it is not determined by te mass o! commodity-capital t%rned o8er by im, b%t by
te dimensions o! te money-capital ad8anced by im to promote tis t%rno8er0 &! te general
ann%al rate o! pro!it is 1+T, and te mercant 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%gt at 1== at 1=3 !i8e times a year, ence in a year a commodity-capital
o! +== at +1+0 5is gi8es te same ann%al pro!it o! 1+ on is ad8anced capital o! 1==0 &! tis @ere
not so, mercant"s capital @o%ld yield a m%c iger pro!it, proportionate to te n%mber o! its
t%rno8ers, tan ind%strial capital, @ic @o%ld be in con!lict @it te la@ o! te general rate o!
pro!it0
6ence, te n%mber o! t%rno8ers o! mercant"s capital in te 8ario%s brances o! commerce as a
direct in!l%ence on te mercantile prices o! commodities0 5e amo%nt added to te mercantile
price, te aliD%ot part o! mercantile pro!it o! a gi8en capital, @ic !alls %pon te price o!
prod%ction o! a commodity, is in in8erse proportion to te n%mber o! t%rno8ers, or te 8elocity o!
t%rno8er, o! mercants" capitals in te 8ario%s lines o! commerce0 &! a certain mercant"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
anoter mercant"s capital, @ic t%rns o8er H%st once a year, adds to a commodity-capital o!
eD%al 8al%e0
5e modi!ication o! selling prices by te a8erage period o! t%rno8er o! capitals in di!!erent
brances o! commerce amo%nts to tis: 5e same mass o! pro!its, determined !or any gi8en
magnit%de o! mercant"s capital by te general ann%al rate o! pro!it, ence determined
independently o! te speci!ic caracter o! te commercial operations o! tis capital, is di!!erently
distrib%ted I proportionately to te rate o! t%rno8er I o8er masses o! commodities o! eD%al 8al%e,
so tat, !or instance, i! a mercant"s capital is t%rned o8er !i8e times a year, 1+N+ R 3T i! once a
year, 1+T, is added to te price o! te commodities0
5e same percentage o! commercial pro!it in di!!erent brances o! commerce, tere!ore, increases
te selling prices o! commodities by D%ite di!!erent percentages o! teir 8al%es, all depending on
teir periods o! t%rno8er0
3n te oter and, in te case o! ind%strial capital, te period o! t%rno8er does not in any @ay
a!!ect te magnit%de o! te 8al%e o! indi8id%al commodities prod%ced, alto%g it does a!!ect te
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
te mass o! exploited labo%r0 5is is concealed, to be s%re, and seems to be oter@ise as soon as
one t%rns to prices o! prod%ction0 A%t tis is d%e solely to te !act tat, according to pre8io%sly
analysed la@s, te prices o! prod%ction o! 8ario%s commodities de8iate !rom teir 8al%es0 &! @e
look %pon te process o! prod%ction as a @ole, and %pon te mass o! commodities prod%ced by
te total ind%strial capital, @e sall at once !ind te general la@ 8indicated0
<11 ;apter J4&&&
Wile, tere!ore, a closer inspection o! te in!l%ence o! te period o! t%rno8er on te !ormation o!
8al%es by ind%strial capital leads %s back to te general la@ and to te basis o! political economy,
tat te 8al%es o! commodities are determined by te labo%r-time contained in tem, te in!l%ence
o! te t%rno8ers o! mercant"s capital on mercantile prices re8eals penomena @ic, @ito%t
bene!it o! a 8ery !ar-reacing analysis o! te connecting links, seem to point to a p%rely arbitrary
determination o! prices# namely, tat tey are !ixed by a capital simply bent %pon pocketing a
certain D%antity o! pro!it in a year0 7%e partic%larly to tis in!l%ence o! t%rno8ers, it appears tat
@itin certain limits te process o! circ%lation as s%c determines commodity-prices
independently o! te process o! prod%ction0 ?ll s%per!icial and !alse conceptions o! te process o!
reprod%ction as a @ole are deri8ed !rom examinations o! mercant"s capital and !rom te
conceptions @ic its pec%liar mo8ements call !ort in te minds o! circ%lation agents0
&!, as te reader @ill a8e realised to is great dismay, te analysis o! te act%al intrinsic relations
o! te capitalist process o! prod%ction is a 8ery complicated matter and 8ery extensi8e# i! it is a
@ork o! science to resol8e te 8isible, merely external mo8ement into te tr%e intrinsic
mo8ement, it is sel!-e8ident tat conceptions @ic arise abo%t te la@s o! prod%ction in te
minds o! agents o! capitalist prod%ction and circ%lation @ill di8erge drastically !rom tese real
la@s and @ill merely be te conscio%s expression o! te 8isible mo8ements0 5e conceptions o!
te mercant, stockbroker, and banker, are necessarily D%ite distorted0 5ose o! te man%!act%rers
are 8itiated by te acts o! circ%lation to @ic teir capital is s%bHect, and by te le8elling o! te
general rate o! pro!it0
<
;ompetition like@ise ass%mes a completely distorted role in teir minds0
&! te 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 !%rter into mercantile prices, and s%rpl%s-8al%e
into a8erage pro!it0 A%t @ito%t tese limits, it is absol%tely %nintelligible @y competition
so%ld red%ce te general rate o! pro!it to one le8el instead o! anoter, e.g., make it 1+T instead
o! 1,+==T0 ;ompetition can at best only red%ce te general rate o! pro!it to one le8el0 A%t it
contains no element by @ic it co%ld determine tis le8el itsel!0
From te standpoint o! mercant"s capital, tere!ore, it is te t%rno8er @ic appears to determine
prices0 3n te oter and, @ile te 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 te
mass o! pro!it, and t%s on te general rate o! pro!it, tis rate o! pro!it obtains !or mercant"s
capital as an external !act, its internal connection @it te prod%ction o! s%rpl%s-8al%e being
entirely obliterated0 &!, %nder oter@ise eD%al circ%mstances and partic%larly te same organic
composition, te 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 tis is apparent as soon, and
as long, as tis capital as a monopoly on an impro8ed metod o! prod%ction, @ic makes tis
accelerated t%rno8er possible0 ;on8ersely, di!!erences in te periods o! t%rno8er in di!!erent
brances o! commerce mani!est temsel8es in te !act tat pro!it made on te t%rno8er o! a gi8en
commodity-capital is in in8erse proportion to te n%mber o! times te money-capital t%rns o8er
tis commodity-capital0 $mall pro!its and D%ick ret%rns appear to te sopkeeper to be te
principle @ic e !ollo@s o%t o! seer principle0
For te rest, it is sel!-e8ident tat regardless o! alternating, m%t%ally compensating, speedier and
slo@er t%rno8ers, tis la@ o! t%rno8er o! mercant"s capital olds good in eac branc o!
commerce only !or te a8erage t%rno8ers made by te entire mercant"s capital in8ested in eac
partic%lar branc0 5e capital o! ?, @o deals in te same branc as A, may make more or less
tan te a8erage n%mber o! t%rno8ers0 &n tis case te oters make less or more0 5is does not
alter te t%rno8er o! te total mass o! mercant"s capital in8ested in tis line0 A%t it is o! decisi8e
moment !or te indi8id%al mercant or sopkeeper0 &n tis case e makes an extra pro!it, H%st as
ind%strial capitalists make extra pro!its i! tey prod%ce %nder better tan a8erage conditions0 &!
competition compels im, e can sell ceaper tan is competitors @ito%t lo@ering is pro!it
belo@ te a8erage0 &! te conditions @ic @o%ld enable im to t%rn o8er is capital more rapidly,
<1< ;apter J4&&&
are temsel8es !or sale, s%c as a !a8o%rable sop 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 19. Money-Dealing Capital
5e p%rely tecnical mo8ements per!ormed by money in te circ%lation process o! ind%strial,
and, as @e may no@ add, o! commercial capital Bsince it takes o8er a part o! te 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 tese, and only tese, operations as its speci!ic operations,
con8ert tis capital into money-dealing capital0 ? portion o! ind%strial capital, and, more
precisely, also o! commercial capital, not only obtains all te time in te !orm o! money, as
money-capital in general, b%t as money-capital engaged precisely in tese tecnical !%nctions0 ?
de!inite part o! te total capital dissociates itsel! !rom te rest and stands apart in te !orm o!
money-capital, @ose capitalist !%nction consists excl%si8ely in per!orming tese operations !or
te entire class o! ind%strial and commercial capitalists0 ?s in te case o! commercial capital, a
portion o! ind%strial capital engaged in te circ%lation process in te !orm o! money-capital
separates !rom te rest and per!orms tese operations o! te reprod%ction process !or all te oter
capital0 5e mo8ements o! tis money-capital are, tere!ore, once more merely mo8ements o! an
indi8id%alised part o! ind%strial capital engaged in te 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
tat capital in money-!orm appears as te starting-point and te end res%lt o! te mo8ement0 A%t
!or all capitals already engaged in te process, tese !irst and last points appear merely as points
o! transit0 $ince, as already seen in te case o! simple commodity-circ%lation, !rom te moment
o! lea8ing te spere o! prod%ction to te moment o! its re-entry ind%strial capital %ndergoes te
metamorposis ;" I M I ;, M in !act represents te end res%lt o! one pase o! te
metamorposis, H%st to become te starting-point o! te re8erse pase, @ic s%pplements it0 ?nd
alto%g te ; I M o! ind%strial capital is al@ays M I ; I M !or mercant"s capital, te act%al
process !or te latter is contin%ally also ; I M I ; once it as beg%n to !%nction0 A%t it per!orms
te acts ; I M and M I ; sim%ltaneo%sly0 5is is to say tat tere is not H%st one capital in te
stage ; I M @ile anoter is in te stage M I ;, b%t tat te same capital b%ys contin%ally and
sells contin%ally at one and te same time beca%se o! te contin%ity o! te prod%ction process0 &t
is to be !o%nd al@ays in bot stages at one and te same time0 Wile one o! its parts t%rns into
money, later to be recon8erted into commodities, anoter t%rns sim%ltaneo%sly into commodities,
to be recon8erted into money0
&t all depends on te !orm o! te commodity excange @eter te money ser8es ere as a means
o! circ%lation or o! payment0 &n bot cases te capitalist as to pay o%t money constantly to many
persons, and to recei8e money contin%ally !rom many persons0 5is p%rely tecnical operation o!
disb%rsing and recei8ing money is in itsel! labo%r @ic, as long as te money ser8es as a means
o! payment, necessitates dra@ing %p payment balances and acts o! balancing acco%nts0 5is
labo%r is a cost o! circ%lation, i.e., not labo%r creating 8al%e0 &t is sortened in being carried o%t
by a special section o! agents, or capitalists, !or te rest o! te capitalist class0
? de!inite portion o! te capital m%st be on and constantly as a oard, as potential money-capital
I a reser8e o! means o! p%rcase, a reser8e o! means o! payment, and idle capital in te !orm o!
money @aiting to be p%t to @ork0 ?noter portion streams back contin%ally in tis !orm0 ?side
!rom collecting, paying, and book-keeping, tis entails sa!ekeeping te oard, @ic is an
operation all in itsel!0 &t is, indeed, a contin%o%s con8ersion o! te oard into means o! circ%lation
and means o! payment, and its restoration by means o! money sec%red tro%g sales and !rom
payments d%e0 5is constant mo8ement o! te part o! capital existing as money, dissociated !rom
te !%nction o! capital itsel!, tis p%rely tecnical !%nction, ca%ses its o@n labo%r and expense,
classi!ied as costs o! circ%lation0
<12 ;apter J&J
5e di8ision o! labo%r brings it abo%t tat tese tecnical operations, dependent %pon te
!%nctions o! capital, so%ld be per!ormed !or te entire capitalist class as m%c as possible by a
special section o! agents or capitalists as teir excl%si8e !%nction I or tat tese operations so%ld
be concentrated in teir ands0 We a8e ere, as in mercant"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
te money-mecanism o! te @ole class, it is concentrated and cond%cted on a large scale0 ?
!%rter di8ision o! labo%r takes place @itin it, bot tro%g di8ision into 8ario%s independent
brances, and tro%g segmentation o! @ork @itin tese brances Blarge o!!ices, n%mero%s
book-keepers and casiers, and !ar-reacing di8ision o! labo%rC0 ,aying and recei8ing money,
settling acco%nts, keeping c%rrent acco%nts, storing money, etc0 I all tis, dissociated !rom te
acts necessitating tese tecnical operations, makes money-dealing capital o! te capital ad8anced
!or tese !%nctions0
5e 8ario%s operations, @ose indi8id%alisation into speci!ic b%sinesses gi8es rise to te money
trade, spring !rom te di!!erent p%rposes o! money itsel! and !rom its !%nctions, @ic capital in
its money-!orm m%st tere!ore like@ise carry o%t0
& a8e pointed o%t earlier tat !inance de8eloped originally !rom te excange o! prod%cts
bet@een di!!erent comm%nities0
1

5rading in money, commerce in te money-commodity, !irst de8eloped tere!ore o%t o!
international commerce0 E8er since di!!erent national coins a8e existed mercants b%ying in
!oreign co%ntries a8e ad to excange teir national coins !or local coins, and 8ice 8ersa, or to
excange di!!erent coins !or %ncoined p%re sil8er or gold I te @orld-money0 6ence te excange
b%siness @ic is to be regarded as one o! te nat%ral !o%ndations o! modern !inance0
<
3%t o! it
de8eloped banks o! excange, in @ic sil8er Bor goldC ser8es as @orld-money I no@ called bank
money or commercial money I as distinct !rom c%rrency0 Excange transactions, in te sense o!
mere notes o! payment to tra8ellers !rom a money-canger in one co%ntry to a canger in anoter
co%ntry, de8eloped back in )ome and :reece o%t o! te act%al money-canging0
5rading in gold and sil8er as commodities Bra@ materials !or te making o! l%x%ry articlesC is te
nat%ral basis o! te b%llion trade, or te trade @ic acts as a medi%m !or te !%nctions o! money
as %ni8ersal money0 5ese !%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 te
8ario%s national speres o! circ%lation in order to balance international payments and in
connection @it te migrations o! capital in D%est o! interest# sim%ltaneo%sly, !lo@ o! precio%s
metals !rom teir so%rces o! prod%ction 8ia te @orld-market and teir distrib%tion among te
8ario%s national speres o! circ%lation0 :oldsmits acted as bankers still d%ring te greater part o!
te 1>t cent%ry in England0 We sall completely disregard te @ay in @ic te balancing o!
international acco%nts de8eloped !%rter in te bill Hobbing, etc0, and e8eryting re!erring to
transactions in 8al%able papers# in sort, @e sall lea8e o%t o! consideration all special !orms o!
te credit system, @ic do not as yet concern %s ere0
-ational money discards its local caracter in te capacity o! %ni8ersal money# one national
c%rrency is expressed in anoter, and t%s all o! tem are !inally red%ced to teir content o! gold
or sil8er, @ile te latter, being te t@o commodities circ%lating as @orld-money, are
sim%ltaneo%sly red%ced to teir reciprocal 8al%e-ratio, @ic canges contin%ally0 &t is tis
intermediate operation @ic te money trader makes is special occ%pation0 Money-canging
and te b%llion trade are t%s te original !orms o! te money trade, and spring !rom te t@o-!old
!%nctions o! money I as national money and @orld-money0
5e capitalist process o! prod%ction, H%st as commerce in general, e8en %nder pre-capitalist
metods, imply:
'irst, te acc%m%lation o! money as a oard, i.e., ere as tat part o! capital @ic m%st al@ays
be on and in te !orm o! money as a reser8e !%nd o! means o! payment and p%rcase0 5is is te
<1+ ;apter J&J
!irst !orm o! a oard, as it reappears %nder te capitalist mode o! prod%ction, and as it appears
generally @it te de8elopment o! mercant"s capital, at least !or te p%rposes o! tis capital0
Aot remarks apply to national, as @ell as international, circ%lation0 5e oard is in contin%o%s
!l%x, po%rs ceaselessly into circ%lation, and ret%rns ceaselessly !rom it0 5e second !orm o! a
oard is tat o! idle, temporarily %nemployed capital in te sape o! money, incl%ding ne@ly
acc%m%lated and not yet in8ested money-capital0 5e !%nctions entailed by tis !ormation o! a
oard are primarily tose o! sa!ekeeping, bookkeeping, etc0
Secondly, o@e8er, tis in8ol8es o%tlays o! money !or p%rcases, collecting money !rom sales,
making and recei8ing payments, balancing payments, etc0 5e money-dealer per!orms all tese
ser8ices at !irst as a simple cashier o! te mercants and ind%strial capitalists0
3

5e 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! tis more in te next part,
@ic deals @it interest-bearing capital0
5e b%llion trade itsel!, te trans!er o! gold or sil8er !rom one co%ntry to anoter, is merely te
res%lt o! trading in commodities0 &t is determined by te rate o! excange @ic expresses te
standing o! international payments and te interest rates in te di!!erent markets0 5e b%llion
trader as s%c acts merely as an intermediary o! te res%lts0
&n disc%ssing money and te @ay its mo8ements and !orms de8elop o%t o! simple commodity-
circ%lation, @e sa@ BAook 1 ;0 &&&C tat te mo8ements o! te mass o! money circ%lating as
means o! p%rcase and payment depend on te metamorposis o! commodities, on te 8ol%me
and 8elocity o! tis metamorposis, @ic @e no@ kno@ to be b%t a pase in te entire process o!
reprod%ction0 ?s !or sec%ring te money materials I gold and sil8er I !rom teir so%rces o!
prod%ction, tis resol8es itsel! into a direct excange o! commodities, an excange o! gold and
sil8er as commodities !or oter commodities0 6ence, it is itsel! as m%c a pase o! te excange
o! commodities as te sec%ring o! iron or oter metals0 6o@e8er, so !ar as te mo8ement o!
precio%s metals on te @orld-market is concerned B@e ere lea8e aside mo8ements expressing te
trans!er o! capital by loans I a type o! trans!er @ic also obtains in te sape o! commodity-
capitalC, it is D%ite as m%c determined by te international excange o! commodities as te
mo8ement o! money as a national means o! p%rcase and payment is determined by te excange
o! commodities in te ome market0 5e in!lo@ and o%t!lo@ o! precio%s metals !rom one national
spere o! circ%lation to anoter, inasm%c as tis is ca%sed merely by a depreciation o! te
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%gt abo%t arbitrarily by state decrees0 Finally, as concerns
te !ormations o! oards @ic constit%te reser8e !%nds !or means o! p%rcase and payment, be it
!or ome or !oreign trade, and @ic also merely represent a !orm o! temporarily idle capital,
tey are in bot cases necessary precipitates o! te circ%lation process0
&! te entire circ%lation o! money is in 8ol%me, !orm and mo8ement p%rely a res%lt o! commodity-
circ%lation, @ic, in its t%rn, !rom te capitalist point o! 8ie@, is only te circ%lation process o!
capital Balso embracing te excange o! capital !or re8en%e, and o! re8en%e !or re8en%e, so !ar as
o%tlay o! re8en%e is e!!ected tro%g retail tradeC, it is sel!-e8ident tat dealing in money does not
merely promote te circ%lation o! money, a mere res%lt and penomenon o! commodity-
circ%lation0 5is circ%lation o! money itsel!, a pase in commodity-circ%lation, is taken !or
granted in money-dealing0 Wat te latter promotes is merely te tecnical operations o! money
circ%lation @ic it concentrates, sortens, and simpli!ies0 7ealing in money does not !orm te
oards0 &t pro8ides te tecnical means by @ic te !ormation o! oards may, so !ar as it is
8ol%ntary Bence, not an expression o! %nemployed capital or o! dist%rbances in te reprod%ction
processC, be red%ced to its economic minim%m beca%se, i! managed !or te capitalist class as a
@ole, te reser8e !%nds o! means o! p%rcase and payment need not be as large as tey @o%ld
a8e to be i! eac capitalist @ere to manage is o@n0 5e money-dealers do not b%y te precio%s
metals0 5ey merely andle teir distrib%tion as soon as te commodity trade as bo%gt tem0
<16 ;apter J&J
5ey !acilitate te settling o! balances, inasm%c as money ser8es as te means o! payment, and
red%ce tro%g te arti!icial mecanism o! tese settlements te amo%nt o! money reD%ired !or
tis p%rpose0 A%t tey do not determine eiter te connections, or te 8ol%me, o! te m%t%al
payments0 5e bills o! excange and te ceD%es, !or instance, @ic are excanged !or one
anoter in banks and clearing o%ses, represent D%ite independent transactions and are te res%lts
o! gi8en operations, and it is merely a D%estion o! a better tecnical settlement o! tese res%lts0 $o
!ar as money circ%lates as a means o! p%rcase, te 8ol%me and n%mber o! p%rcases and sales
a8e no connection @ate8er @it money-dealing0 5e latter can do no more tan sorten te
tecnical operations tat go @it b%ying and selling, and t%s red%ce te amo%nt o! cas money
reD%ired to t%rn o8er te commodities0
Money-dealing in its p%re !orm, @ic @e consider ere, i.e0, set apart !rom te credit system, is
t%s concerned only @it te tecniD%e o! a certain pase o! commodity-circ%lation, namely, tat
o! money circ%lation and te di!!erent !%nctions o! money arising in its circ%lation0
5is s%bstantially disting%ises dealing in money !rom te dealing in commodities, @ic
promotes te metamorposis o! commodities and teir excange, or e8en gi8es tis process o! te
commodity-capital te appearance o! a process o! a capital set apart !rom ind%strial capital0
Wile, tere!ore, commercial capital as its o@n !orm o! circ%lation, M I ; I M, in @ic te
commodity canges ands t@ice and t%s pro8ides a re!l%x o! money, as distinct !rom ; I M I ;,
in @ic money canges ands t@ice and t%s promotes commodity excange, tere is no s%c
special !orm in te case o! money-dealing capital0
&n so !ar as money-capital is ad8anced by a separate class o! capitalists in tis tecnical
promotion o! money circ%lation I a capital @ic on a red%ced scale represents te additional
capital te mercants and ind%strial capitalists @o%ld oter@ise a8e to ad8ance temsel8es !or
tese p%rposes I te general !orm o! capital, M I M", occ%rs ere as @ell0 Ay ad8ancing M, te
ad8ancing capitalist sec%res M U cM0 A%t promotion o! M I M" does not ere concern te
material, b%t only te tecnical, processes o! te metamorposis0
&t is e8ident tat te mass o! money-capital @it @ic te money-dealers operate is te money-
capital o! mercants and ind%strial capitalists in te process o! circ%lation, and tat te money-
dealers" operations are act%ally operations o! mercants and ind%strial capitalists, in @ic tey
act as middlemen0
&t is eD%ally e8ident tat te money-dealers" pro!it is noting b%t a ded%ction !rom te s%rpl%s-
8al%e, since tey operate @it already realised 8al%es Be8en @en realised in te !orm o! creditors"
claimsC0
P%st as in te commodity trade, tere is a d%plication o! !%nctions, beca%se a part o! te tecnical
operations connected @it money circ%lation m%st be carried o%t by te dealers and prod%cers o!
commodities temsel8es0
Chapter 20. Historical Facts about Merchant's
Capital
5e partic%lar !orm in @ic commercial and money-dealing capitals acc%m%late money @ill be
disc%ssed in te next part0
&t is sel!-e8ident !rom @at as gone be!ore tat noting co%ld be more abs%rd tan to regard
mercant"s capital, @eter in te sape 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 te di8ision
o! social labo%r, and ence di!!erent speres o! in8estment0 5e simple obser8ation tat in te
circ%lation pase o! its reprod%ction process e8ery ind%strial capital per!orms as commodity-
capital and as money-capital te 8ery !%nctions @ic appear as te excl%si8e !%nctions o! te
t@o !orms o! mercant"s capital, so%ld r%le o%t s%c a cr%de notion0 3n te oter and, in
commercial and money-dealing capital te di!!erences bet@een ind%strial capital as prod%cti8e
capital and te same capital in te spere o! circ%lation are indi8id%alised tro%g te !act tat te
de!inite !orms and !%nctions @ic capital ass%mes !or te moment appear as independent !orms
and !%nctions o! a separate portion o! te capital and are excl%si8ely bo%nd %p @it it0 5e
transm%ted !orm o! ind%strial capital and te material di!!erences bet@een prod%cti8e capitals
applied in di!!erent brances o! ind%stry, @ic arise !rom te nat%re o! tese 8ario%s brances,
are @orlds apart0
?side !rom te cr%dity @it @ic te economist generally considers distinctions o! !orm, @ic
really concern im only !rom teir s%bstanti8e side, tis misconception by te 8%lgar economist is
explained on t@o additional co%nts0 First, is inability to explain te 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 te
process o! prod%ction as s%c, @ereas tey are d%e to te speci!ic !orm o! te capitalist mode o!
prod%ction, @ic abo8e all pres%pposes te 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
tan tis di!!ers !rom cattle-raising and man%!act%ring, it is plain as day tat prod%ction and
capitalist prod%ction are altogeter identical, and tat, among oter tings, te distrib%tion o! te
social prod%cts among te members o! a society, be it !or prod%cti8e or indi8id%al cons%mption,
m%st H%st as consistently be andled by mercants and bankers as te cons%mption o! meat by
cattle-raising and tat o! cloting by teir man%!act%re0
1

5e great economists, s%c as $mit, )icardo, etc0, are perplexed o8er mercantile capital being a
special 8ariety, since tey consider te basic !orm o! capital, capital as ind%strial capital, and
circ%lation capital Bcommodity-capital and money-capitalC solely beca%se it is a pase in te
reprod%ction process o! e8ery capital0 5e r%les concerning te !ormation o! 8al%e, pro!it, etc0,
immediately ded%ced by tem !rom teir st%dy o! ind%strial capital, do not extend directly to
mercant"s capital0 For tis reason, tey lea8e mercant"s capital entirely aside and mention it
only as a kind o! ind%strial capital0 Were8er tey make a special analysis o! it, as )icardo does
in dealing @it !oreign trade, tey seek to demonstrate tat 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
<18 ;apter JJ
6iterto @e a8e considered mercant"s capital merely !rom te standpoint, and @itin te limits,
o! te capitalist mode o! prod%ction0 6o@e8er, not commerce alone, b%t also mercant"s capital,
is older tan te capitalist mode o! prod%ction, is, in !act, istorically te oldest !ree state o!
existence o! capital0
$ince @e a8e already seen tat money-dealing and te capital ad8anced !or it reD%ire noting
more !or teir de8elopment tan te existence o! @olesale commerce, and !%rter o! commercial
capital, it is only te latter @ic @e m%st occ%py o%rsel8es @it ere0
$ince mercant"s capital is penned in te spere o! circ%lation, and since its !%nction consists
excl%si8ely o! promoting te excange o! commodities, it reD%ires no oter conditions !or its
existence I aside !rom te %nde8eloped !orms arising !rom direct barter I o%tside tose necessary
!or te simple circ%lation o! commodities and money0 3r rater, te latter is te condition o! its
existence0 -o matter @at te basis on @ic prod%cts are prod%ced, @ic are tro@n into
circ%lation as commodities I @eter te basis o! te primiti8e comm%nity, o! sla8e prod%ction,
o! small peasant and petty bo%rgeois, or te capitalist basis, te caracter o! prod%cts as
commodities is not altered, and as commodities tey m%st pass tro%g te process o! excange
and its attendant canges o! !orm0 5e extremes bet@een @ic mercant"s capital acts as
mediator exist !or it as gi8en, H%st as tey are gi8en !or money and !or its mo8ements0 5e only
necessary ting is tat tese extremes so%ld be on and as commodities, regardless o! @eter
prod%ction is @olly a prod%ction o! commodities, or @eter only te s%rpl%s o! te independent
prod%cers" immediate needs, satis!ied by teir o@n prod%ction, is tro@n on te market0
Mercant"s capital promotes only te mo8ements o! tese extremes, o! tese commodities, @ic
are preconditions o! its o@n existence0
5e extent to @ic prod%cts enter trade and go tro%g te mercants" ands depends on te
mode o! prod%ction, and reaces its maxim%m in te %ltimate de8elopment o! capitalist
prod%ction, @ere te prod%ct is prod%ced solely as a commodity, and not as a direct means o!
s%bsistence0 3n te oter and, on te basis o! e8ery mode o! prod%ction, trade !acilitates te
prod%ction o! s%rpl%s-prod%cts destined !or excange, in order to increase te enHoyments, or te
@ealt, o! te prod%cers Bere meant are te o@ners o! te prod%ctsC0 6ence, commerce imparts
to prod%ction a caracter directed more and more to@ards excange-8al%e0
5e metamorposis o! commodities, teir mo8ement, consists 1C materially, o! te excange o!
di!!erent commodities !or one anoter, and <C !ormally, o! te con8ersion o! commodities into
money by sale, and o! money into commodities by p%rcase0 ?nd te !%nction o! mercant"s
capital resol8es itsel! into tese 8ery acts o! b%ying and selling commodities0 &t tere!ore merely
promotes te excange o! commodities# yet tis excange is not to be concei8ed at te o%tset as a
bare excange o! commodities bet@een direct prod%cers0 (nder sla8ery, !e%dalism and 8assalage
Bso !ar as primiti8e comm%nities are concernedC it is te sla8e-o@ner, te !e%dal lord, te trib%te-
collecting state, @o are te o@ners, ence sellers, o! te prod%cts0 5e mercant b%ys and sells
!or many0 ,%rcases and sales are concentrated in is ands and conseD%ently are no longer
bo%nd to te direct reD%irements o! te b%yer Bas mercantC0
A%t @ate8er te social organisation o! te speres o! prod%ction @ose commodity excange te
mercant promotes, is @ealt exists al@ays in te !orm o! money, and is money al@ays ser8es
as capital0 &ts !orm is al@ays M I ; I M"0 Money, te independent !orm o! excange-8al%e, is te
point o! depart%re, and increasing te excange-8al%e an end in itsel!0 ;ommodity excange as
s%c and te 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 excange-8al%e0 5e compelling moti8e and determining p%rpose are te
con8ersion o! M into M U cM0 5e transactions M I ; and ; I M", @ic promote M I M",
appear merely as stages o! transition in tis con8ersion o! M into M U cM0 5is M I ; I M", te
caracteristic mo8ement o! mercant"s capital, disting%ises it !rom ; I M I ;, trade in
<1* ;apter JJ
commodities directly bet@een prod%cers, @ic as !or its %ltimate end te excange o! %se-
8al%es0
5e less de8eloped te prod%ction, te more @ealt in money is concentrated in te ands o!
mercants or appears in te speci!ic !orm o! mercants" @ealt0
Witin te capitalist mode o! prod%ction I i.e., as soon as capital as establised its s@ay o8er
prod%ction and imparted to it a @olly canged and speci!ic !orm I mercant"s capital appears
merely as a capital @it a specific !%nction0 &n all pre8io%s modes o! prod%ction, and all te more,
@ere8er prod%ction ministers to te immediate @ants o! te prod%cer, mercant"s capital appears
to per!orm te !%nction par ecellence o! capital0
5ere is, tere!ore, not te least di!!ic%lty in %nderstanding @y mercant"s capital appears as te
istorical !orm o! capital long be!ore capital establised its o@n domination o8er prod%ction0 &ts
existence and de8elopment to a certain le8el are in temsel8es istorical premises !or te
de8elopment o! capitalist prod%ction 1C as premises !or te concentration o! money @ealt, and <C
beca%se te capitalist mode o! prod%ction pres%pposes prod%ction !or trade, selling on a large
scale, and not to te indi8id%al c%stomer, ence also a mercant @o does not b%y to satis!y is
personal @ants b%t concentrates te p%rcases o! many b%yers in is one p%rcase0 3n te oter
and, all de8elopment o! mercant"s capital tends to gi8e prod%ction more and more te caracter
o! prod%ction !or excange-8al%e and to t%rn prod%cts more and more into commodities0 .et its
de8elopment, as @e sall presently see, is incapable by itsel! o! promoting and explaining te
transition !rom one mode o! prod%ction to anoter0
Witin capitalist prod%ction mercant"s capital is red%ced !rom its !ormer independent existence
to a special pase in te in8estment o! capital, and te le8elling o! pro!its red%ces its rate o! pro!it
to te general a8erage0 &t !%nctions only as an agent o! prod%cti8e capital0 5e special social
conditions tat take sape @it te de8elopment o! mercant"s capital, are ere no longer
paramo%nt0 3n te contrary, @ere8er mercant"s capital still predominates @e !ind back@ard
conditions0 5is is tr%e e8en @itin one and te same co%ntry, in @ic, !or instance, te
speci!ically mercant to@ns present !ar more striking analogies @it past conditions tan
ind%strial to@ns0
<

5e independent and predominant de8elopment o! capital as mercant"s capital is tantamo%nt to
te non-s%bHection o! prod%ction to capital, and ence to capital de8eloping on te basis o! an
alien social mode o! prod%ction @ic is also independent o! it0 5e independent de8elopment o!
mercant"s capital, tere!ore, stands in in8erse proportion to te general economic de8elopment
o! society0
&ndependent mercantile @ealt as a predominant !orm o! capital represents te separation o! te
circ%lation process !rom its extremes, and tese extremes are te excanging prod%cers
temsel8es0 5ey remain independent o! te circ%lation process, H%st as te latter remains
independent o! tem0 5e prod%ct becomes a commodity by @ay o! commerce0 &t is commerce
@ic ere t%rns prod%cts into commodities, not te prod%ced commodity @ic by its
mo8ements gi8es rise to commerce0 5%s, capital appears ere !irst as capital in te process o!
circ%lation0 &t is in te circ%lation process tat money de8elops into capital0 &t is in circ%lation tat
prod%cts !irst de8elop as excange-8al%es, as commodities and as money0 ;apital can, and m%st,
!orm in te process o! circ%lation, be!ore it learns to control its extremes I te 8ario%s speres o!
prod%ction bet@een @ic circ%lation mediates0 Money and commodity circ%lation can mediate
bet@een speres o! prod%ction o! @idely di!!erent organisation, @ose internal str%ct%re is still
cie!ly adH%sted to te o%tp%t o! %se-8al%es0 5is indi8id%alisation o! te circ%lation process, in
@ic speres o! prod%ction are interconnected by means o! a tird, as a t@o-!old signi!icance0
3n te one and, tat circ%lation as not as yet establised a old on prod%ction, b%t is related to
it as to a gi8en premise0 3n te oter and, tat te prod%ction process as not as yet absorbed
circ%lation as a mere pase o! prod%ction0 Aot, o@e8er, are te case in capitalist prod%ction0
<<= ;apter JJ
5e prod%ction process rests @olly %pon circ%lation, and circ%lation is a mere transitional pase
o! prod%ction, in @ic te prod%ct created as a commodity is realised and its elements o!
prod%ction, like@ise created as commodities, are replaced0 5at !orm o! capital I mercant"s
capital I @ic de8eloped directly o%t o! circ%lation appears ere merely as one o! te !orms o!
capital occ%rring in its reprod%ction process0
5e la@ tat te independent de8elopment o! mercant"s capital is in8ersely proportional to te
degree o! de8elopment o! capitalist prod%ction is partic%larly e8ident in te istory o! te
carrying trade, as among te 4enetians, :enoese, 7%tc, etc0, @ere te principal gains @ere not
t%s made by exporting domestic prod%cts, b%t by promoting te excange o! prod%cts o!
commercially and oter@ise economically %nde8eloped societies, and by exploiting bot
prod%cing co%ntries0
3
6ere, mercant"s capital is in its p%re !orm, separated !rom te extremes I
te speres o! prod%ction bet@een @ic it mediates0 5is is te main so%rce o! its de8elopment0
A%t tis monopoly o! te carrying trade disintegrates, and @it it tis trade itsel!, proportionately
to te economic de8elopment o! te peoples, @om it exploits at bot ends o! its co%rse, and
@ose lack o! de8elopment @as te basis o! its existence0 &n te case o! te carrying trade tis
appears not only as te decline o! a special branc o! commerce, b%t also tat o! te
predominance o! te p%rely trading nations, and o! teir commercial @ealt in general, @ic
rested %pon te carrying trade0 5is is b%t a special !orm, in @ic is expressed te s%bordination
o! mercants to ind%strial capital @it te ad8ance o! capitalist prod%ction0 5e bea8io%r o!
mercant"s capital @ere8er it r%les o8er prod%ction is strikingly ill%strated not only by te
colonial economy Bte so-called colonial systemC in general, b%t D%ite speci!ically by te metods
o! te old 7%tc East &ndia ;ompany0
$ince te mo8ement o! mercant"s capital is M I ; I M", te mercant"s pro!it is made, !irst, in
acts @ic occ%r only @itin te circ%lation process, ence in te t@o acts o! b%ying and selling#
and, secondly, it is realised in te last act, te sale0 &t is tere!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
teir 8al%e0 5o b%y ceap in order to sell dear is te r%le o! trade0 6ence, not te excange o!
eD%i8alents0 5e conception o! 8al%e is incl%ded in it in so !ar as te 8ario%s commodities are all
8al%es, and tere!ore money0 &n respect to D%ality tey are all expressions o! social labo%r0 A%t
tey are not 8al%es o! eD%al magnit%de0 5e D%antitati8e ratio in @ic prod%cts are excanged is
at !irst D%ite arbitrary0 5ey ass%me te !orm o! commodities inasm%c as tey are
excangeables, i.e., expressions o! one and te same tird0 ;ontin%ed excange and more reg%lar
reprod%ction !or excange red%ces tis arbitrariness more and more0 A%t at !irst not !or te
prod%cer and cons%mer, b%t !or teir go-bet@een, te mercant, @o compares money-prices and
pockets te di!!erence0 &t is tro%g is o@n mo8ements tat e establises eD%i8alence0
Mercant"s capital is originally merely te 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 te 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 te absol%te !orm o! commodity, and
ence o! @ealt, or oard, so tat its conser8ation and acc%m%lation as money becomes an end in
itsel!, so, too, does money, te oard, as someting tat preser8es and increases itsel! tro%g
mere alienation, originate !rom te bare !orm o! te circ%lation o! mercant"s capital, M I ; I M"0
5e trading nations o! ancient times existed like te gods o! Epic%r%s in te intermediate @orlds
o! te %ni8erse, or rater like te Pe@s in te pores o! ,olis society0 5e trade o! te !irst
independent !lo%rising mercant to@ns and trading nations rested as a p%re carrying trade %pon
te barbarism o! te prod%cing nations, bet@een @om tey acted te middleman0
&n te pre-capitalist stages o! society commerce r%led ind%stry0 &n modern society te re8erse is
tr%e0 3! co%rse, commerce @ill a8e more or less o! a co%nter-e!!ect on te comm%nities bet@een
@ic it is carried on0 &t @ill s%bordinate prod%ction more and more to excange-8al%e by making
<<1 ;apter JJ
l%x%ries and s%bsistence more dependent on sale tan on te immediate %se o! te prod%cts0
5ereby it dissol8es te old relationsips0 &t m%ltiplies money circ%lation0 &t encompasses no
longer merely te s%rpl%s o! prod%ction, b%t bites deeper and deeper into te latter, and makes
entire brances o! prod%ction dependent %pon it0 -e8erteless tis disintegrating e!!ect depends
8ery m%c on te nat%re o! te prod%cing comm%nity0
$o long as mercant"s capital promotes te excange o! prod%cts bet@een %nde8eloped societies,
commercial pro!it not only appears as o%t-bargaining and ceating, b%t also largely originates
!rom tem0 ?side !rom te !act tat it exploits te di!!erence bet@een te prices o! prod%ction o!
8ario%s co%ntries Band in tis respect it tends to le8el and !ix te 8al%es o! commoditiesC, tose
modes o! prod%ction bring it abo%t tat mercant"s capital appropriates an o8er@elming portion
o! te 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 te sale o! te portion o! teir prod%ct
entering circ%lation, or !or tat matter any sale o! prod%cts at teir 8al%e, is o! secondary
importance# and partly, beca%se %nder tose earlier modes o! prod%ction te principal o@ners o!
te s%rpl%s-prod%ct @it @om te mercant dealt, namely, te sla8e-o@ner, te !e%dal lord, and
te state B!or instance, te oriental despotC represent te cons%ming @ealt and l%x%ry @ic te
mercant seeks to trap, as ?dam $mit correctly scented in te passage on !e%dal times D%oted
earlier0 Mercant"s capital, @en it olds a position o! dominance, stands e8ery@ere !or a system
o! robbery,
2
so tat its de8elopment among te trading nations o! old and modern times is al@ays
directly connected @it pl%ndering, piracy, kidnapping sla8es, and colonial conD%est# as in
;artage, )ome, and later among te 4enetians, ,ort%g%ese, 7%tc, etc0
5e de8elopment o! commerce and mercant"s capital gi8es rise e8ery@ere to te tendency
to@ards prod%ction o! excange-8al%es, increases its 8ol%me, m%ltiplies it, makes it
cosmopolitan, and de8elops money into @orld-money0 ;ommerce, tere!ore, as a more or less
dissol8ing in!l%ence e8ery@ere on te 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! te old mode o! prod%ction depends on its solidity and internal str%ct%re0 ?nd
@iter tis process o! dissol%tion @ill lead, in oter @ords, @at ne@ mode o! prod%ction @ill
replace te old, does not depend on commerce, b%t on te caracter o! te old mode o! prod%ction
itsel!0 &n te ancient @orld te e!!ect o! commerce and te de8elopment o! mercant"s capital
al@ays res%lted in a sla8e economy# depending on te point o! depart%re, only in te
trans!ormation o! patriarcal sla8e system de8oted to te prod%ction o! immediate means o!
s%bsistence into one de8oted to te prod%ction o! s%rpl%s-8al%e0 6o@e8er, in te modern @orld, it
res%lts in te capitalist mode o! prod%ction0 &t !ollo@s tere!rom tat tese res%lts spring in
temsel8es !rom circ%mstances oter tan te de8elopment o! mercant"s capital0
&t is in te nat%re o! tings tat as soon as to@n ind%stry as s%c separates !rom agric%lt%ral
ind%stry, its prod%cts are !rom te o%tset commodities and t%s reD%ire te mediation o!
commerce !or teir sale0 5e leaning o! commerce to@ards te de8elopment o! to@ns, and, on te
oter and, te dependence o! to@ns %pon commerce, are so !ar nat%ral0 6o@e8er, it depends on
altogeter di!!erent circ%mstances to @at meas%re ind%strial de8elopment @ill go and in and
@it tis de8elopment0 ?ncient )ome, in its later rep%blican days, de8eloped mercant"s capital
to a iger degree tan e8er be!ore in te ancient @orld, @ito%t so@ing any progress in te
de8elopment o! cra!ts, @ile in ;orint and oter :recian to@ns in E%rope and ?sia Minor te
de8elopment o! commerce @as accompanied by igly de8eloped cra!ts0 3n te oter and, D%ite
contrary to te gro@t o! to@ns and attendant conditions, te trading spirit and te de8elopment
o! mercant"s capital occ%r !reD%ently among %nsettled nomadic peoples0
5ere is no do%bt I and it is precisely tis !act @ic as led to @olly erroneo%s conceptions I
tat in te 16t and 1>t cent%ries te great re8ol%tions, @ic took place in commerce @it te
geograpical disco8eries and speeded te de8elopment o! mercant"s capital, constit%te one o! te
principal elements in !%rtering te transition !rom !e%dal to capitalist mode o! prod%ction0 5e
<<< ;apter JJ
s%dden expansion o! te @orld-market, te m%ltiplication o! circ%lating commodities, te
competiti8e Eeal o! te E%ropean nations to possess temsel8es o! te prod%cts o! ?sia and te
treas%res o! ?merica, and te colonial system I all contrib%ted materially to@ard destroying te
!e%dal !etters on prod%ction0 6o@e8er, in its !irst period I te man%!act%ring period I te modern
mode o! prod%ction de8eloped only @ere te conditions !or it ad taken sape @itin te Middle
?ges0 ;ompare, !or instance, 6olland @it ,ort%gal0
+
?nd @en in te 16t, and partially still in
te 1>t, cent%ry te s%dden expansion o! commerce and emergence o! a ne@ @orld-market
o8er@elmingly contrib%ted to te !all o! te old mode o! prod%ction and te rise o! capitalist
prod%ction, tis @as accomplised con8ersely on te basis o! te already existing capitalist mode
o! prod%ction0 5e @orld-market itsel! !orms te basis !or tis mode o! prod%ction0 3n te oter
and, te immanent necessity o! tis mode o! prod%ction to prod%ce on an e8er-enlarged scale
tends to extend te @orld-market contin%ally, so tat it is not commerce in tis case @ic
re8ol%tionises ind%stry, b%t ind%stry @ic constantly re8ol%tionises commerce0 ;ommercial
s%premacy itsel! is no@ linked @it te pre8alence to a greater or lesser degree o! conditions !or a
large ind%stry0 ;ompare, !or instance, England and 6olland0 5e istory o! te decline o! 6olland
as te r%ling trading nation is te istory o! te s%bordination o! mercant"s capital to ind%strial
capital0 5e obstacles presented by te internal solidity and organisation o! pre-capitalistic,
national modes o! prod%ction to te corrosi8e in!l%ence o! commerce are strikingly ill%strated in
te interco%rse o! te Englis @it &ndia and ;ina0 5e broad basis o! te mode o! prod%ction
ere is !ormed by te %nity o! small-scale agric%lt%re and ome ind%stry, to @ic in &ndia @e
so%ld add te !orm o! 8illage comm%nities b%ilt %pon te common o@nersip o! land, @ic,
incidentally, @as te original !orm in ;ina as @ell0 &n &ndia te Englis lost no time in exercising
teir direct political and economic po@er, as r%lers and landlords, to disr%pt tese small economic
comm%nities0
6
Englis commerce exerted a re8ol%tionary in!l%ence on tese comm%nities and
tore tem apart only in so !ar as te lo@ prices o! its goods ser8ed to destroy te spinning and
@ea8ing ind%stries, @ic @ere an ancient integrating element o! tis %nity o! ind%strial and
agric%lt%ral prod%ction0 ?nd e8en so tis @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 5e s%bstantial
economy and sa8ing in time a!!orded by te association o! agric%lt%re @it man%!act%re p%t %p a
st%bborn resistance to te prod%cts o! te big ind%stries, @ose prices incl%de te fau frais o! te
circ%lation process @ic per8ades tem0 (nlike te Englis, )%ssian commerce, on te oter
and, lea8es te economic gro%nd@ork o! ?siatic prod%ction %nto%ced0
>

5e transition !rom te !e%dal mode o! prod%ction is t@o-!old0 5e prod%cer becomes mercant
and capitalist, in contrast to te nat%ral agric%lt%ral economy and te g%ild-bo%nd andicra!ts o!
te medie8al %rban ind%stries0 5is is te really re8ol%tionising pat0 3r else, te mercant
establises direct s@ay o8er prod%ction0 6o@e8er m%c tis ser8es istorically as a stepping-
stone I @itness te Englis 1>t-cent%ry clotier, @o brings te @ea8ers, independent as tey
are, %nder is control by selling teir @ool to tem and b%ying teir clot I it cannot by itsel!
contrib%te to te o8ertro@ o! te old mode o! prod%ction, b%t tends rater to preser8e and retain
it as its precondition0 5e man%!act%rer in te Frenc silk ind%stry and in te Englis osiery and
lace ind%stries, !or example, @as t%s mostly b%t nominally a man%!act%rer %ntil te middle o! te
1*t cent%ry0 &n point o! !act, e @as merely a mercant, @o let te @ea8ers carry on in teir old
%norganised @ay and exerted only a mercant"s control, !or tat @as !or @om tey really
@orked0
8
5is system presents e8ery@ere an obstacle to te real capitalist mode o! prod%ction
and goes %nder @it its de8elopment0 Wito%t re8ol%tionising te mode o! prod%ction, it only
@orsens te condition o! te direct prod%cers, t%rns tem into mere @age-@orkers and
proletarians %nder conditions @orse tan tose %nder te immediate control o! capital, and
appropriates teir s%rpl%s-labo%r on te basis o! te old mode o! prod%ction0 5e same conditions
exist in some@at modi!ied !orm in part o! te 'ondon andicra!t !%rnit%re ind%stry0 &t is
practised notably in te 5o@er 6amlets on a 8ery large scale0 5e @ole prod%ction is di8ided
<<3 ;apter JJ
into 8ery n%mero%s separate brances o! b%siness independent o! one anoter0 3ne establisment
makes only cairs, anoter only tables, a tird only b%rea%s, etc0 A%t tese establisments
temsel8es are r%n more or less like andicra!ts by a single minor master and a !e@ Ho%rneymen0
-e8erteless, prod%ction is too large to @ork directly !or pri8ate persons0 5e b%yers are te
o@ners o! !%rnit%re stores0 3n $at%rdays te master 8isits tem and sells is prod%ct, te
transaction being closed @it as m%c aggling as in a pa@nsop o8er a loan0 5e masters
depend on tis @eekly sale, i! !or no oter reason tan to be able to b%y ra@ materials !or te
!ollo@ing @eek and to pay o%t @ages0 (nder tese circ%mstances, tey are really only middlemen
bet@een te mercant and teir o@n labo%rers0 5e mercant is te act%al capitalist @o pockets
te lion"s sare o! te s%rpl%s-8al%e0
*
?lmost te same applies in te transition to man%!act%re o!
brances !ormerly carried on as andicra!ts or side lines to r%ral ind%stries0 5e transition to
large-scale ind%stry depends on te tecnical de8elopment o! tese small o@ner-operated
establisments I @ere8er tey employ macinery tat admits o! a andicra!t-like operation0 5e
macine is dri8en by steam, instead o! by and0 5is is o! late te case, !or instance, in te
Englis osiery ind%stry0
5ere is, conseD%ently, a tree-!old transition0 'irst, te mercant becomes directly an ind%strial
capitalist0 5is is tr%e in cra!ts based on trade, especially cra!ts prod%cing l%x%ries and imported
by mercants togeter @it te ra@ materials and labo%rers !rom !oreign lands, as in &taly !rom
;onstantinople in te 1+t cent%ry0 Second, te mercant t%rns te small masters into is
middlemen, or b%ys directly !rom te independent prod%cer, lea8ing im nominally independent
and is mode o! prod%ction %ncanged0 4hird, te ind%strialist becomes mercant and prod%ces
directly !or te @olesale market0
&n te Middle ?ges, te mercant @as merely one @o, as ,oppe rigtly says, Ktrans!erredL te
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 5e mercant becomes ind%strialist, or rater, makes cra!tsmen,
partic%larly te small r%ral prod%cers, @ork !or im0 ;on8ersely, te prod%cer becomes mercant0
5e master @ea8er, !or instance, b%ys is @ool or yarn imsel! and sells is clot to te
mercant, instead o! recei8ing is @ool !rom te mercant piecemeal and @orking !or im
togeter @it is Ho%rneymen0 5e elements o! prod%ction pass into te prod%ction process as
commodities bo%gt by imsel!0 ?nd instead o! prod%cing !or some indi8id%al mercant, or !or
speci!ied c%stomers, e prod%ces !or te @orld o! trade0 5e prod%cer is imsel! a mercant0
Mercant"s capital does no more tan carry on te process o! circ%lation0 3riginally, commerce
@as te precondition !or te trans!ormation o! te cra!ts, te r%ral domestic ind%stries, and !e%dal
agric%lt%re, into capitalist enterprises0 &t de8elops te 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, tereby opening ne@ brances o! prod%ction
based !rom te !irst %pon commerce, bot as concerns prod%ction !or te ome and @orld-market,
and as concerns conditions o! prod%ction originating in te @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 tro%g its commodities0 ?t tis point commerce becomes te
ser8ant o! ind%strial prod%ction, !or @ic contin%ed expansion o! te market becomes a 8ital
necessity0 E8er more extended mass prod%ction !loods te existing market and tereby @orks
contin%ally !or a still greater expansion o! tis market !or breaking o%t o! its limits0 Wat restricts