“We shall see how further on Adam Smith even more explicitly derives profit from the labour performed by the workman over and above the quantity of labour with which he pays for his wages, that is to say, replaces it by an equivalent. Thereby he has recognised the true origin of surplus-value. At the same time he has expressly stated that it does not arise from the advanced funds, whose value —however useful they may be in the real labour-process —merely reappears in the product; but that it arises exclusively from the new labour which the workmen add to the materials in the new process of production, in which those funds figure as means of labour or instruments of labour.” (p 80)
If the capitalist sells a commodity, the profit they obtain does not stem from the sale. It arises in production, from the fact that they have bought labour-power at its value, and that labour-power has created a greater value. The sale of the commodity, which represents this greater value, only thereby realises this surplus value, i.e. it realises the fact that the capitalist is obtaining from the sale not a greater sum of value than the commodity represents, but a greater sum of value than they have paid for.
“Adam Smith therefore must not put the exchange either for money or for other goods on the same footing as the exchange of the complete manufacture for labour. For in the first exchange the surplus-value originates from the fact that the commodities are exchanged at their value, for the labour-time contained in them, which however is in part unpaid for. Here it is assumed that the capitalist does not exchange an equal quantity of past labour for an equal quantity of living labour; that the quantity of living labour appropriated by him is greater than the quantity of living labour he has paid for.” (p 80)
In other words, the commodity they sell possesses the same value as the commodity they obtain in return, be it money or other commodities. The surplus value does not arise from any unequal exchange, but from the fact that the value of labour-power is less than the value of the product of that labour.
“Otherwise the workman’s wage would be equal to the value of his product.” (p 80)
If we take any commodity, therefore, it has a value equal to the value of the material used in its production (including the value of the wear and tear of fixed capital), and an additional value equal to the new value created by living labour, which processes this material.
“Adam Smith rightly points out that only the part of the labour (value) which the workman newly adds to the material resolves itself into wages and profit, that is to say, the newly-created surplus-value in itself has nothing to do with the part of the capital which has been advanced (as materials and instruments).” (p 81)
One of the apologist justifications of this appropriation is that the capitalist undertakes the labour of supervision etc. But, Smith refutes this apologism, and the idea that the profit appropriated by capital is nothing more than a wage received for this labour. It is quite clear that, in every enterprise, where a developed system of division of labour exists, some labour is required to perform this function of organisation and superintendence. In early capitalist production, it is the small capitalist producer that undertakes it. But, even as private capitalist production develops, and becomes much bigger, the individual capitalist is forced to pass on this function to a stratum of professional managers, administrators and technicians, who are paid a wage for doing so.
Yet, even when this function is undertaken by these professional workers, the owner of the business continues to receive a profit. The situation is most clear in the case of the worker-owned co-operatives where these managers are employed by the workers themselves, and where, after all these wages have been paid, a surplus value remains. In the case of the joint stock companies, even after the wages of the professional managers have been paid out, and even after the exorbitant stipends paid to the directors, who sit above them, have been deducted, a large surplus still remains, out of which is funded not only the accumulation of productive-capital, but also the interest paid to shareholders, as dividends, and to bondholders and other money lenders.