Capital III, Chapter 2 - Part 2

What is significant here? The end result must be “to preserve the capital or to reproduce it in its original magnitude.” But, in this regard, Marx distinguishes clearly, twice, between the value of that capital (capital-value), and what the capitalist paid for it. So, the value of the commodity includes “... all the elements of its value paid by the capitalist OR for which he has thrown an equivalent into production.” (emphasis added) In other words, the capitalist may have paid £10 for the constant capital used in production, but if its value changes, prior to the commodity being sold, it is not what was paid, but what the VALUE was that was thrown into production that counts. Why, because it is this capital-value that has to be reproduced. And, he makes that distinction again. On the one hand, if the capital-value has not changed, then it is preserved, but if it has, then it is this new value that is reproduced, precisely in order that the capital is once more thrown back into production “in its original magnitude.”

The value of a commodity is determined by the labour-time required for its production, that required to produce the machines, materials etc., as well as that currently required to process it. But, the capitalist only pays out for the value of the commodities he uses in the process. The value of the labour-power is less than the value it creates, and so the capitalist obtains an amount of unpaid labour, even though it appears to him that he has paid the full value of the commodity.

“The capitalist's profit is derived from the fact that he has something to sell for which he has paid nothing. The surplus-value, or profit, consists precisely in the excess value of a commodity over its cost-price, i.e., the excess of the total labour embodied in the commodity over the paid labour embodied in it. The surplus-value, whatever its origin, is thus a surplus over the advanced total capital. The proportion of this surplus to the total capital is therefore expressed by the fraction s/C, in which C stands for total capital. We thus obtain the rate of profit s/C=s/(c+v), as distinct from the rate of surplus-value s/v.” (p 42) 

As defined in Volume I, the surplus value, measured against the variable capital, is the rate of surplus value. Now, we have the first, preliminary, statement of the rate of profit, as the surplus value measured against the total capital. In Volume II, we saw that the rate of surplus value has to be modified to take account of the rate of turnover of the variable capital. Here, we will see later, that the rate of profit has to be similarly modified to take account of the rate of turnover of the advanced circulating capital.

“The transformation of surplus-value into profit must be deduced from the transformation of the rate of surplus-value into the rate of profit, not vice versa. And in fact it was rate of profit which was the historical point of departure. Surplus-value and rate of surplus-value are, relatively, the invisible and unknown essence that wants investigating, while rate of profit and therefore the appearance of surplus-value in the form of profit are revealed on the surface of the phenomenon.” (p 43)

The capitalist is only interested in the rate of profit, not the rate of surplus value, because he is only interested in the return on his total capital, how much he can make from employing it in this way as opposed to some other. But, also, from the perspective of the capital itself, of which the capitalist is merely the personification, the rate of profit sets the limit for how rapidly it can be accumulated, if we set aside the role of credit etc.

Moreover, to the extent that the capitalist is aware of the true nature of surplus value, it is in his interest to say nothing about it.

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