10) PROFIT IS MADE BY SELLING A COMMODITY 
AT ITS VALUE 

Suppose an average hour of labour to be realised in a value 
equal to sixpence, or twelve average hours of labour to be realised 
in six shillings. Suppose, further, the value of labour to be three 
shillings or the produce of six hours’ labour. If, then, in the raw 
material, machinery, and so forth, used up in a commodity, 
twenty-four hours of average labour were realised, its value would 
amount to twelve shillings. If, moreover, the workman employed 
by the capitalist added twelve hours of labour to those means of 
production, these twelve hours would be realised in an additional 
value of six shillings. The total value of the product would, 
therefore, amount to thirty-six hours of realised labour, and be 
equal to eighteen shillings. But as the value of labour, or the 
wages paid to the workman, would be three shillings only, no 
equivalent would have been paid by the capitalist for the six hours 
of surplus-labour worked by the workman, and realised in the 
value of the commodity. By selling this commodity at its value for 
eighteen shillings, the capitalist would, therefore, realise a value of 
three shillings, for which he had paid no equivalent. These three 
shillings would constitute the surplus-value or profit pocketed by 
him. The capitalist would consequently realise the profit of three 
shillings, not by selling his commodity at a price over and above its 
value, but by selling it at its real value. 

The value of a commodity is determined by the total quantity of 
labour contained in it. But part of that quantity of labour is 
realised in a value for which an equivalent has been paid in the 
form of wages; part of it is realised in a value for which no 

equivalent has been paid. Part of the labour contained in the 
commodity is paid labour; part is unpaid labour. By selling, 
therefore, the commodity at its value, that is, as the crystallisation 
of the total quantity of labour bestowed upon it, the capitalist must 
necessarily sell it at a profit. He sells not only what has cost him an 
equivalent, but he sells also what has cost him nothing, although it 
has cost his workman labour. The cost of the commodity to the 
capitalist and its real cost are different things. I repeat, therefore, 
that normal and average profits are made by selling commodities 
not above but at their real values. 

11) THE DIFFERENT PARTS 
INTO WHICH SURPLUS-VALUE IS DECOMPOSED 

The surplus-value, or that part of the total value of the 
commodity in which the surplus-labour or unpaid labour of the 
working man is realised, I call Profit. The whole of that profit is 
not pocketed by the,employing capitalist. The monopoly of land 
enables the landlord to take one part of that surplus-value, under 
the name of rent, whether the land is used for agriculture, 
buildings or railways, or for any other productive purpose. On the 
other hand, the very fact that the possession of the means of labour 
enables the employing capitalist to produce a surplus-value, or, 
what comes to the same, to appropriate to himself a certain amount of 
unpaid labour, enables the owner of the means of labour, which he 
lends wholly or partly to the employing capitalist— enables, in one 
word, the money-lending capitalist to claim for himself under the 
name of interest another part of that surplus-value, so that there 
remains to the employing capitalist as such only what is called 
industrial or commercial profit. 

By what laws this division of the total amount of surplus-value 
amongst the three categories of people is regulated is a question 
quite foreign to our subject. This much, however, results from 
what has been stated. 

Rent, Interest, and Industrial Profit are only different names for 
different parts of the surplus-value of the commodity, or the unpaid 
labour enclosed in it, and they are equally derived from this source, and 
from this source alone. They are not derived from land as such or 
from capital as such, but land and capital enable their owners to 
get their respective shares out of the surplus-value extracted by 
the employing capitalist from the labourer. For the labourer 
himself it is a matter of subordinate importance whether that 

Value, Price and Profit 135 

surplus-value, the result of his surplus-labour, or unpaid labour, is 
altogether pocketed by the employing capitalist, or whether the 
latter is obliged to pay portions of it, under the name of rent and 
interest, away to third parties. Suppose the employing capitalist to 
use only his own capital and to be his own landlord, then the 
whole surplus-value would go into his pocket. 

It is the employing capitalist who immediately extracts from the 
labourer this surplus-value, whatever part of it he may ultimately 
be able to keep for himself. Upon this relation, therefore, between 
the employing capitalist and the wages labourer the whole wages 
system and the whole present system of production hinge. Some 
of the citizens who took part in our debate were, therefore, wrong 
in trying to mince matters, and to treat this fundamental relation 
between the employing capitalist and the working man as a 
secondary question, although they were right in stating that, under 
given circumstances, a rise of prices might affect in very unequal 
degrees the employing capitalist, the landlord, the moneyed 
capitalist, and, if you please, the tax-gatherer. 

Another consequence follows from what has been stated. 

That part of the value of the commodity which represents only 
the value of the raw materials, the machinery, in one word, the 
value of the means of production used up, forms no revenue at all, 
but replaces only capital. But, apart from this, it is false that the 
other part of the value of the commodity which forms revenue, or 
may be spent in the form of wages, profits, rent, interest, is 
constituted by the value of wages, the value of rent, the value of 
profits, and so forth. We shall, in the first instance, discard wages, 
and only treat industrial profits, interest, and rent. We have just 
seen that the surplus-value contained in the commodity or that part 
of its value in which unpaid labour is realised, dissolves itself into 
different fractions, bearing three different names. But it would be 
quite the reverse of the truth to say that its value is composed of, or 
formed by, the addition of the independent values of these three 
constituents. 

If one hour of labour realises itself in a value of sixpence, if the 
working day of the labourer comprises twelve hours, if half of this 
time is unpaid labour, that surplus-labour will add to the 
commodity a surplus-value of three shillings, that is, a value for 
which no equivalent has been paid. This surplus-value of three 
shillings constitutes the whole fund which the employing capitalist 
may divide, in whatever proportions, with the landlord and the 
money-lender. The value of these three shillings constitutes the 
limit of the value they have to divide amongst them. But it is not 

the employing capitalist who adds to the value of the commodity 
an arbitrary value for his profit, to which another value is added 
for the landlord and so forth, so that the addition of these 
arbitrarily fixed values would constitute the total value. You see, 
therefore, the fallacy of the popular notion, which confounds the 
decomposition of a given value into three parts, with the formation of 
that value by the addition of three independent values, thus 
converting the aggregate value, from which rent, profit, and 
interest are derived, into an arbitrary magnitude. 

If the total profit realised by a capitalist be equal to £100, we 
call this sum, considered as absolute magnitude, the amount of 
profit. But if we calculate the ratio which those £100 bear to the 
capital advanced, we call this relative magnitude, the rate of profit. 
It is evident that this rate of profit may be expressed in a double 
way. | 

Suppose £100 to be the capital advanced in wages. If. the surplus 
value created is also £100—and this would show us that half the 
working day of the labourer consists of unpaid labour—and if we 
measured this profit by the value of the capital advanced in wages, 
we should say that the rate of profit amounted to one hundred per 
cent., because the value advanced would be one hundred and the 
value realised would be two hundred. 

If, on the other hand, we should not only consider the capital 
advanced in wages, but the total capital advanced, say for example 
£500, of which £400 represented the value of raw materials, 
machinery, and so forth, we should say that the rate of profit 
amounted only to twenty per cent., because the profit of one 
hundred would be but the fifth part of the total capital advanced. 

The first mode of expressing the rate of profit is the only one 
which shows you the real ratio between paid and unpaid labour, 
the real degree of the exploitation (you must allow me this French 
word) of labour. The other mode of expression is that in common 
use, and is, indeed, appropriate for certain purposes. At all events, 
it is very useful for concealing the degree in which the capitalist 
extracts gratuitous labour from the workman. 

In the remarks I have still to make I shall use the word Profit 
for the whole amount of the surplus-value extracted by the 
capitalist without any regard to the division of the surplus-value 
between different parties, and in using the words Rate of Profit, I 
shall always measure profits by the value of the capital advanced 
in wages. 

Value, Price and Profit 137 

12) GENERAL RELATION OF PROFITS, 
WAGES AND PRICES 

Deduct from the value of a commodity the value replacing the 
value of the raw materials and other means of production used 
upon it, that is to say, deduct the value representing the past 
labour contained in it, and the remainder of its value will dissolve 
into the quantity of labour added by the working man_ last 
employed. If that working man works twelve hours daily, if twelve 
hours of average labour crystallise themselves in an amount of 
gold equal to six shillings, this additional value of six shillings is 
the only value his labour will have created. This given value, 
determined by the time of his labour, is the only fund from which 
both he and the capitalist have to draw their respective shares or 
dividends, the only value to be divided into wages and profits. It is 
evident that this value itself will not be altered by the variable 
proportions in which it may be divided amongst the two parties. 
There will also be nothing changed if in the place of one working 
man you put the whole working population, twelve million 
working days, for example, instead of one. 

Since the capitalist and workman have only to divide this limited 
value, that is, the value measured by the total labour of the 
working man, the more the one gets the less will the other get, 
and vice versa. Whenever a quantity is given, one part of it will 
increase inversely as the other decreases. If the wages change, 
profits will change in an opposite direction. If wages fall, profits 
will rise; and if wages rise, profits will fall. If the working man, on 
our former supposition, gets three shillings, equal to one half of 
the value he has created, or if his whole working day consists half 
of paid, half of unpaid labour, the rate of profit will be 100 per 
cent., because the capitalist would also get three shillings. If the 
working man receives only two shillings, or works only one-third 
of the whole day for himself, the capitalist will get four shillings, 
and the rate of profit will be 200 per cent. If the working man 
receives four shillings, the capitalist will only receive two, and the 
rate of profit would sink to 50 per cent., but all these variations 
will not affect the value of the commodity. A general rise of wages 
would, therefore, result in a fall of the general rate of profit, but 
not affect values. 

But although the values of commodities, which must ultimately 
regulate their market prices, are exclusively determined by the 
total quantities of labour fixed in them, and not by the division of 
that quantity into paid and unpaid labour, it by no means follows 

that the values of the single commodities, or lots of commodities, 
produced during twelve hours, for example, will remain constant. 
The number or mass of commodities produced in a given time of 
labour, or by a given quantity of labour, depends upon the 
productive power of the labour employed, and not upon its extent or 
length. With one degree of the productive power of spinning 
labour, for example, a working day of twelve hours may produce 
twelve pounds of yarn, with a lesser degree of productive power 
only two pounds. If then twelve hours’ average labour were 
realised in the value of six shillings, in the one case the twelve 
pounds of yarn would cost six shillings, in the other case the two 
pounds of yarn would also cost six shillings. One pound of yarn 
would, therefore, cost sixpence in the one case, and three shillings 
in the other. This difference of price would result from the 
difference in the productive powers of the labour employed. One 
hour of labour would be realised in one pound of yarn with the 
greater productive power, while with the smaller productive 
power, six hours of labour would be realised in one pound of 
yarn. The price of a pound of yarn would, in the one instance, be 
only sixpence, although wages were relatively high and the rate of 
profit low; it would be three shillings in the other instance, 
although wages were low and the rate of profit high. This would 
be so because the price of the pound of yarn is regulated by the 
total amount of labour worked up in it, and not by the proportional 
division of that total amount into paid and unpaid labour. The fact I 
have before mentioned that high-priced labour may produce 
cheap, and low-priced labour may produce dear commodities, 
loses, therefore, its paradoxical appearance. It is only the 
expression of the general law that the value of a commodity is 
regulated by the quantity of labour worked up in it, and that the 
quantity of labour worked up in it depends altogether upon the 
productive powers of the labour employed, and will, therefore, 
vary with every variation in the productivity of labour.