As Marx notes in Capital and elsewhere, if the idea is pursued that profit is simply firms adding it on to the value of commodities – whether as simply average profit, as set out above, or as a monopoly profit on top, as suggested by Michael Roberts – to arrive at a selling price, it would, in aggregate, cancel itself out. It would require, in order for profit to exist, at the end of it, for there to be some class of buyers who are not, also, sellers able to, similarly, add this profit on to the value of the commodity they sell. The only class of people in society that fulfil that criteria are wage workers. So, as Engels also discusses in Capital III, what this comes down to is just a more clumsy, and crude explanation of surplus value, as set out by Marx.
Rather than the need to explain the existence of profit by everyone in society, other than workers, selling their commodities at prices above their value, Marx's theory explains its existence even with all commodities being sold at their value, including labour-power. It is not in the realm of distribution and the exchange of commodities that profit is created, but in the realm of production. Firms, in aggregate, sell their commodities at their value, and this value, the social cost of production, already contains the surplus-value. It does so because the new value embodied in them, created by labour, is greater than the value of the labour-power which undertook that labour. The capitalist employs that labour-power, and pays its full value, in wages, to the worker. Having bought the labour-power, at its value, of, say, 5 hours labour, it is set to work for, say, 10 hours, creating 10 hours of new value, of which 5 hours is a surplus value appropriate by capital.
Engels quotes comments from Duhring in relation to monopoly and “distribution value” that are, again, similar to the ideas put forward by Michael Roberts to explain the recent inflation. Duhring says,
“Price formation as a result of individual competition must also be regarded as a form of economic distribution and of the mutual imposition of tribute... If the supply of any necessary commodity is suddenly and significantly reduced, this gives the seller a disproportionate power to exploit ... how colossal the increase in prices may be is shown particularly by those abnormal situations in which the supply of necessities is cut off for any length of time” and so on. Moreover, even in the normal course of things virtual monopolies exist which permit arbitrary price increases, as for example the railways, the companies supplying towns with water and gas, etc.” (p 243)
Again, no one has ever doubted that, throughout history, there have been such monopolies and monopoly pricing and profits. Similarly, even without monopoly, a sudden constriction of supply causes prices of commodities to rise. The point is that this has nothing to do with a systematic level of prices that is, in aggregate, higher than values. In other words, these monopoly profits, or profits in general, are not some addition to values, which produce a “distribution value” or selling price. The idea, Engels notes, that those opportunities for monopoly pricing are anything but exceptions, and are, instead, the basis of the determination of prices in general, is something that Duhring was proposing.
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