Chapter IX.- The Rate of Surplus Value
The surplus value generated in the process of production by C, the capital advanced, or in other words, the self-expansion of the value of the capital C, presents itself for our consideration, in the first place, as a surplus, as the amount by which the value of the product exceeds the value of its constituent elements.
The capital C is made up of two components, one, the sum of money c laid out upon the means of production, and the other, the sum of money v expended upon the labour power; c represents the portion that has become constant capital, and v the portion that has become variable capital. At first then, G = c + v: for example, if £500 is the capital advanced, its components may be such that the £500 = £410 const. + £90 var. When the process of production is finished, we get a commodity whose value = (c + v) + s, where s is the surplus value; or taking our former figures, the value of this commodity may be (£410 const. + £90 var.) + £90 surpl. The original capital has now changed from C to C', from £500 to £590. The difference is s or a surplus value of £90. Since the value of the constituent elements of the product is equal to the value of the advanced capital, it is mere tautology to say, that the excess of the value of the product over the value of its constituent elements, is equal to the expansion of the capital advanced or to the surplus value produced.
Nevertheless, we must examine this tautology a little more closely. The two things compared are, the value of the product and the value of its constituents consumed in the process of production. Now we have seen how that portion of the constant capital which consists of the instruments of labour, transfers to the product only a fraction of its value, while the remainder of that value continues to reside in those instruments. Since this remainder plays no part in the formation of value, we may at present leave it on one side. To introduce it into the calculation would make no difference. For instance, taking our former example, c = £410: suppose this sum to consist of £312 value of raw material, £44 value of auxiliary material, and £54 value of the machinery worn away in the process; and suppose that the total value of the machinery employed is £1,054. Out of this latter sum, then, we reckon as advanced for the purpose of turning out the product, the sum of £54 alone, which the machinery loses by wear and tear in the process; for this is all it parts with to the product. Now if we also reckon the remaining £1,000, which still continues in the machinery, as transferred to the product, we ought also to reckon it as part of the value advanced, and thus make it appear on both sides of our calculation." We should, in this way, get & 1,500 on one side and £1,590 on the other. The difference of these two sums, or the surplus value, would still be £90. Throughout this Book therefore, by constant capital advanced for the production of value, we always mean, unless the context is repugnant thereto, the value of the means of production actually consumed in the process, and that value alone.
This being so, let us return to the formula C = c + v, which we saw was transformed into C = (c + v) + s, C becoming C . We know that the value of the constant capital is transferred to, and merely re-appears in the product. The new value actually created in the process, the value produced, or value product, is therefore not the same as the value of the product; it is not, as it would at first sight appear
" "If we reckon the value of the fixed capital employed as a part of the advances, we must reckon the remaining value of such capital at the end of the year as a part of the annual returns" (Malthus, Princ. of Pol. Econ., 2nd ed., London, 1836, p. 269).
(c + v) + s or £410 const. + £90 var. + £90 surpl.; but v + s or £90 var. + £90 surpl., not £590 but £180. If c = 0, or in other words, if there were branches of industry in which the capitalist could dispense with all means of production made by previous labour, whether they be raw material, auxiliary material, or instruments of labour, employing only labour power and materials supplied by Nature, in that case, there would be no constant capital to transfer to the product. This component of the value of the product, i.e., the £410 in our example, would be eliminated, but the sum of £180, the amount of new value created, or the value produced, which contains £90 of surplus value, would remain just as great as if c represented the highest value imaginable. We should have C = (0 + v) = v or C the expanded capital = v + s and therefore C — C = s as before. On the other hand, if s = 0, or in other words, if the labour power, whose value is advanced in the form of variable capital, were to produce only its equivalent, we should have C = c + v or C the value of the product = (c + v) + 0 or C = C . The capital advanced would, in this case, not have expanded its value.
From what has gone before, we know that surplus value is purely the result of a variation in the value of v, ofthat portion of the capital which is transformed into labour power; consequently, v + s = v + v' or v plus an increment of v. But the fact that it is v alone that varies, and the conditions of that variation, are obscured by the circumstance that in consequence of the increase in the variable component of the capital, there is also an increase in the sum total of the advanced capital. It was originally £500 and becomes £590. Therefore in order that our investigation may lead to accurate results, we must make abstraction from that portion of the value of the product, in which constant capital alone appears, and consequently must equate the constant capital to zero or make c = 0. This is merely an application of a mathematical rule, employed whenever we operate with constant and variable magnitudes, related to each other by the symbols of addition and subtraction only.
A further difficulty is caused by the original form of the variable capital. In our example, C = £410 const. + £90 var. + £90 surpl.; but £90 is a given and therefore a constant quantity; hence it appears absurd to treat it as variable. But in fact, the term £90 var. is here merely a symbol to show that this value undergoes a process. The portion of the capital invested in the purchase of labour power is a definite quantity of materialised labour, a constant value like the value of the labour power purchased. But in the process of production the place of the £90 is taken by the labour power in action, dead labour is replaced by living labour, something stagnant by something flowing, a constant by a variable. The result is the reproduction of v plus an increment of v. From the point of view then of capitalist production, the whole process appears as the spontaneous variation of the originally constant value, which is transformed into labour power. Both the process and its result, appear to be owing to this value. If, therefore, such expressions as "£90 variable capital", or "so much self-expanding value", appear contradictory, this is only because they bring to the surface a contradiction immanent in capitalist production.
At first sight it appears a strange proceeding, to equate the constant capital to zero. Yet it is what we do every day. If, for example, we wish to calculate the amount of England's profits from the cotton industry, we first of all deduct the sums paid for cotton to the United States, India, Egypt and other countries; in other words, the value of the capital that merely re-appears in the value of the product, is put = 0.
Of course the ratio of surplus value, not only to that portion of the capital from which it immediately springs, and whose change of value it represents, but also to the sum total of the capital advanced, is economically of very great importance. We shall, therefore, in the third book, ' [6] ' treat of this ratio exhaustively. In order to enable one portion of a capital to expand its value by being converted into labour power, it is necessary that another portion be converted into means of production. In order that variable capital may perform its function, constant capital must be advanced in proper proportion, a proportion given by the special technical conditions of each labour process. The circumstance, however, that retorts and other vessels are necessary to a chemical process, does not compel the chemist to notice them in the result of his analysis. If we look at the means of production, in their relation to the creation of value, and to the variation in the quantity of value, apart from anything else, they appear simply as the material in which labour power, the value creator, incorporates itself. Neither the nature, nor the value of this material is of any importance. The only requisite is that there be a sufficient supply to absorb the labour expended in the process of production. That supply once given, the material may rise or fall in value, or even be, as land and the sea, without any value in itself; but this will have no influence on the creation of value or on the variation in the quantity of value. ''
In the first place then we equate the constant capital to zero. The capital advanced is consequently reduced from c + v to v, and instead of the value of the product (c + v) + s we have now the value produced (v + s). Given the new value produced = £180, which sum consequently represents the whole labour expended during the process, then subtracting from it £90, the value of the variable capital, we have remaining £90, the amount of the surplus value. This sum of £90 or s expresses the absolute quantity of surplus value produced. The relative quantity produced, or the increase per cent of the variable capital, is determined, it is plain, by the ratio of the surplus value to the variable capital, or is expressed b y ^ . In our example this ratio is 95 , which gives an increase of 100%. This relative increase in the value of the variable capital, or the relative magnitude of the surplus value, I call, "The rate of surplus value."[2]'
We have seen that the labourer, during one portion of the labour process, produces only the value of his labour power, that is, the value of his means of subsistence. Now since his work forms part of a system, based on the social division of labour, he does not directly produce the actual necessaries which he himself consumes; he produces instead a particular commodity, yarn for example, whose value is equal to the value of those necessaries or of the money with which they can be bought. The portion of his day's labour devoted to this purpose, will be greater or less, in proportion to the value of the necessaries that he daily requires on an average, or, what amounts to the same thing, in proportion to the labour time required on an average to produce them. If the value of those necessaries represent on an average the expenditure of six hours' labour, the workman must on an average work for six hours to produce that value. If instead of working for the capitalist, he worked independently on his own account, he would, other things being equal, still be obliged to labour for the same number of
" What Lucretius says is self-evident: "nil posse creari de nihilo," out of nothing, nothing can be created. ' [6] [2] Creation of value is transformation of labour power into labour. Labour power itself is energy transferred to a human organism by means of nourishing matter.
[2] In the same way that the English use the terms "rate of profit", "rate of interest".. We shall see, in Book III, that the rate of profit is no mystery, so soon as we know the laws of surplus value. If we reverse the process, we cannot comprehend either the one or the other.
hours, in order to produce the value of his labour power, and thereby to gain the means of subsistence necessary for his conservation or continued reproduction. But as we have seen, during that portion of his day's labour in which he produces the value of his labour power, say three shillings, he produces only an equivalent for the value of his labour power already advanced by the capitalistlj; the new value created only replaces the variable capital advanced. It is owing to this fact, that the production of the new value of three shillings takes the semblance of a mere reproduction. That portion of the working day, then, during which this reproduction takes place, I call "necessary" labour time, and the labour expended during that time I call "necessary" labour.[21] Necessary, as regards the labourer, because independent of the particular social form of his labour; necessary, as regards capital, and the world of capitalists, because on the continued existence of the labourer depends their existence also.
During the second period of the labour process, that in which his labour is no longer necessary labour, the workman, it is true, labours, expends labour power; but his labour, being no longer necessary labour, he creates no value for himself. He creates surplus value which, for the capitalist, has all the charms of a creation out of nothing. This portion of the working day, I name surplus labour time, and to the labour expended during that time, I give the name of surplus labour. It is every bit as important, for a correct understanding of surplus value, to conceive it as a mere congelation of surplus labour time, as nothing but materialised surplus labour, as it is, for a proper comprehension of value, to conceive it as a mere congelation of so many hours of labour, as nothing but materialised labour. The essential difference between the various economic forms of society, between, for instance, a society based on slave labour, and one based on wage labour, lies
[11] jjNote added in the 3rd German edition.— The author resorts here to the economic language in current use. It will be remembered that on p. 152 (present edition, p. 184) it was shown that in reality the labourer "advances" to the capitalist and not the capitalist to the labourer.— F.E.jj
''• In this work, we have, up to now, employed the term "necessary labour time", to designate the time necessary under given social conditions for the production of any commodity. Henceforward we use it to designate also the time necessary for the production of the particular commodity labour power. The use of one and the same technical term in different senses is inconvenient, but in no science can it be altogether avoided. Compare, for instance, the higher with the lower branches of mathematics.
only in the mode in which this surplus labour is in each case extracted from the actual producer, the labourer.[1]'
Since, on the one hand, the values of the variable capital and of the labour power purchased by that capital are equal, and the value of this labour power determines the necessary portion of the working day; and since, on the other hand, the surplus value is determined by the surplus portion of the working day, it follows that surplus value bears the same ratio to variable capital, that surplus labour does to necessary labour, or in other words, the rate of surplus value
s surplus labour -n , s , surplus labour l t ^ = . Both ratios,— and -, express the same necessary labour necessary labour thing in different waysj in the one case by reference to materialised, incorporated labour, in the other by reference to living, fluent labour.
The rate of surplus value is therefore an exact expression for the degree of exploitation of labour power by capital, or of the labourer by the capitalist.2)
We assumed in our example, that the value of the product = £410 const. + £90 var. + £90 surpl., and that the capital advanced = £500. Since the surplus value = £90, and the advanced capital = £500, we should, according to the usual way of reckoning, get as the rate of surplus value (generally confounded with rate of profits) 18%, a rate so low as possibly to cause a pleasant surprise to Mr. Carey and other harmonisers.[164] But in truth, the rate of surplus value is not equal to Q or ^p^but to ^: thus it is not 355 but §5 or 100%, which is more than five times the apparent degree of exploitation. Although,
" Herr Wilhelm Thucydides Röscher ' [6 3] has found a mare's nest. He has made the important discovery that if, on the one hand, the formation of surplus value, or surplus produce, and the consequent accumulation of capital, is now-a-days due to the thrift of the capitalist, on the other hand, in the lowest stages of civilisation it is the strong who compel the weak to economise (I.e., [p] p. [77,] 78). To economise what? Labour? Or superfluous wealth that does not exist? What is it that makes such men as Roscher account for the origin of surplus value, by a mere réchauffe of the more or less plausible excuses by the capitalist, for his appropriation of surplus value? It is, besides their real ignorance, their apologetic dread of a scientific analysis of value and surplus value, and of obtaining a result, possibly not altogether palatable to the powers that be.
'" Although the rate of surplus value is an exact expression for the degree of exploitation of labour power, it is, in no sense, an expression for the absolute amount of exploitation. For example, if the necessary labour = 5 hours and the surplus labour = 5 hours, the degree of exploitation is 100%. The amount of exploitation is here measured by 5 hours. If, on the other hand, the necessary labour = 6 hours and the surplus labour = 6 hours, the degree of exploitation remains, as before, 100%, while the actual amount of exploitation has increased 20%, namely from five hours to six.
in the case we have supposed, we are ignorant of the actual length of the working day, and of the duration in days or weeks of the labour process, as also of the number of labourers employed, yet the rate of surplus value -| accurately discloses to us, by means of its equivalent
expression, surP us ^ t r i e relation between the two parts of the necessary labour working day. This relation is here one of equality, the rate being 100%. Hence, it is plain, the labourer, in our example, works one half of the day for himself, the other half for the capitalist.
The method of calculating the rate of surplus value is therefore, shortly, as follows. We take the total value of the product and put the constant capital which merely re-appears in it, equal to zero. What remains, is the only value that has, in the process of producing the commodity, been actually created. If the amount of surplus value be given, we have only to deduct it from this remainder, to find the variable capital. And vice versa, if the latter be given, and we require to find the surplus value. If both be given, we have only to perform the concluding operation, viz., to calculate -|, the ratio of the surplus value to the variable capital.
Though the method is so simple, yet it may not be amiss, by means of a few examples, to exercise the reader in the application of the novel principles underlying it.
First we will take the case of a spinning mill containing 10,000 mule spindles, spinning No. 32 yarn from American cotton, and producing 1 lb of yarn weekly per spindle. We assume the waste to be 6%: under these circumstances 10,600 lbs of cotton are consumed weekly, of which 600 lbs go to waste. The price of the cotton in April, 1871, was 7f d. per lb; the raw material therefore costs in round numbers £342. The 10,000 spindles, including preparation machinery, and motive power, cost, we will assume, £1 per spindle, amounting to a total of £10,000. The wear and tear we put at 10%, or £1,000 yearly = £20 weekly. The rent of the building we suppose to be £300 a year, or £6 a week. Coal consumed (for 100 horse power indicated, at 4 lbs of coal per horse power per hour during 60 hours, and inclusive ofthat consumed in heating the mill), 11 tons a week at 8s. 6 d. a ton, amounts to about £4-j a week: gas, £1 a week, oil, &c, £ 4 ^ a week. Total cost of the above auxiliary materials, £10 weekly. Therefore the constant portion of the value of the week's product is £378. Wages amount to £52 a week. The price of the yarn is 12^:d. per lb which gives for the value of 10,000 lbs the sum of £510. The surplus value is therefore in this case £510 — £430 = £80. We put the constant part of the value of the product = 0, as it plays no part in the creation of value. There remains £132 as the weekly value created, which = £52 var. + £80 surpl. The rate of surplus value is therefore ^ = 153 j | % . In a working day of 10 hours with average labour the result is: necessary labour = 3j§ hours, and surplus labour = 6^.'>
One more example. Jacob gives the following calculation for the year 1815.[166] Owing to the previous adjustment of several items it is very imperfect; nevertheless for our purpose it is sufficient. In it he assumes the price of wheat to be 80s. a quarter, and the average yield per acre to be 22 bushels.
VALUE PRODUCED PER ACRE
Seed £1 9 0 Tithes, Rates, and Taxes . . £ 1 1 0
Manure 2 10 0 Rent 1 8 0 Wages 3 10 0 Farmer's Profit and Interest 1 2 0
Total £7 9 0 Total £ 3 1 1 0
Assuming that the price of the product is the same as its value, we here find the surplus value distributed under the various heads of profit, interest, rent, &c. We have nothing to do with these in detail; we simply add them together, and the sum is a surplus value of £ 3 lis. Od. The sum of £3 19s. Od., paid for seed and manure, is constant capital, and we put it equal to zero. There is left the sum of £ 3 10s. Od., which is the variable capital advanced: and we see that a new value of £ 3 10s. Od + £ 3 lis. Od. has been produced in its place.
Therefore-rr= , eivina: a rate of surplus value of more than v £3 10s Od. ' [6] [8] v 100%. The labourer employs more than one half of his working day in producing the surplus value, which different persons, under different pretexts, share amongst themselves.[2]'
,! The above data, which may be relied upon, were given me by a Manchester spinner.[165] In England the horse power of an engine was formerly calculated from the diameter of its cylinder, now the actual horse power shown by the indicator is taken.
2i The calculations given in the text are intended merely as illustrations. We have in fact assumed that price = values. We shall, however, see, in Book III, ' [6] ' that even in the case of average prices the assumption cannot be made in this very simple manner.
Endnotes
[21] The Anti-Corn Law League was founded in 1838 by the Manchester factory owners Cobden and Bright. Defending the interests of manufacturers, the League secured the repeal of the Corn Laws which provided for the limitation and prohibition of grain imports, which served the interests of the landed aristocracy. The Corn Law adopted in 1815 prohibited the import of corn while the price of bread in England itself remained less than 80 sh. per quarter. In 1822 this law was slightly altered, and in 1828 a sliding scale was introduced, according to which there was a rise in import duties on corn when its price fell on the home market and vice versa. Trying to achieve the repeal of corn laws and to establish trade in corn, the League aimed at reducing domestic prices for corn and thus at reducing wages for wage-workers.The slogan of free trade was widely used by the League in its advocacy of the unity of interests of workers and manufacturers. The Corn Laws were repealed in 1846.'— 15, 296, 458, 462, 667, 703
[11] 1 ' The plan outlined here was not realised by Marx. The work referred to here as Book II, was published by Engels as Volume II of Capital (1885) after Marx's death, and Book III as Volume III of Capital (1894). Book IV was not published in Marx's or Engels' lifetime. See also Note 2.— 11, 565
[1] Capital—Marx's major work to which he devoted four decades (from the early 1840s till the end of his life). Marx started studying political economy at the end of 1843 in Paris. His aim was to write a treatise containing a critical analysis of political economy. As a result of his research in this field appeared such works as the Economic and Philosophic Manuscripts of 1844, The German Ideology, The Poverty of Philosophy, Wage Labour and Capital, Manifesto of the Communist Party and others. After an interval caused by the 1848-49 revolution, Marx continued his economic studies in London, where he lived as a refugee from August 1849. Here he studied the works of different economists, the history of economic development and the economics of his time in various countries, especially in England which was then a classic example of a capitalist country. He investigated theories of money, credit and the causes of economic crises, the history of landownership and the theory of ground rent, the socio-economic condition of the working class and questions of population, the history of technology and other problems. -By 1857 he had completed his enormous preparatory work and then proceeded to the final stage — the systématisation and generalisation of the collected material. From January 1857 to June 1858, Marx wrote a manuscript containing 50 signatures, which was, in fact, the first rough draft of Capital. In the present edition it was published in vols 28 and 29. At first Marx intended to publish his work in separate instalments, and the first instalment, as he wrote, "should form a relative whole" (see present edition, Vol. 40, p. 287), which embraces only the first section of Book I — the section consisting of 3 chapters: 1) The Commodity; 2) Money or Simple Circulation and 3) Capital. However, the final variant of the first instalment — A Contribution to the Critique of Political Economy — does not contain the third chapter. Marx wrote the chapter on commodity especially. He wrote the chapter on money for "the first instalment" on the basis of the manuscript of 1857-58. A Contribution to the Critique of Political Economy. Part One was published in 1859 (present edition, Vol. 29). It was to be followed by "the second instalment", i. e. by the chapter on capital. However, soon afterwards, Marx had to postpone this work for a year and a half as he was occupied in writing the pamphlet Herr Vogt (present edition, Vol. 17) and in other urgent matters. Only in August 1861, did he begin work on "the second instalment". By the middle of 1863, he had written a new rough draft which was considerably longer than the manuscript of 1857-58 — 23 notebooks, having a total volume of about 200 signatures. The complete manuscript of 1861-63, which is considered to be the second rough draft of Capital, is reproduced in vols 30-34 of the present edition. Later on Marx decided to divide the theoretical part of the work on capital into 3 parts. The historico-critical section was to be the fourth and concluding part, and was to be based on the part of the 1861-63 manuscript entitled "Theories of Surplus Value". In his letter to Kugelmann dated October 13, 1866, Marx writes, "The whole work is thus divided into the following parts: Book I. The Process of Production of Capital. Book II. The Process of Circulation of Capital. Book III. Structure of the Process as a Whole. Book IV. On the History of the Theory" (see present edition, Vol. 42, p. 328). Marx also gave up his plan to publish the work in separate instalments and decided first to complete the whole work and then to publish it. Marx continued his work, concentrating mainly on those parts that were not sufficiently elaborated in the 1861-63 manuscript. He studied an enormous quantity of economic and technical literature, including books on agriculture, on credit and money and turnover. He also studied statistical material, various parliamentary documents, official reports on child labour in industry, on housing conditions of the British working class, etc. Marx then wrote a new manuscript (from August 1863 to the end of 1865), which constituted a more detailed variant of the three theoretical volumes of Capital. Only after the whole work was completed (January 1866), did Marx begin preparing it for the press, having decided, on Engels' advice, not to prepare the whole work but only Volume I of Capital. The final touches were made by Marx with great thoroughness and, in fact, became yet another recasting of Volume I of Capital as a whole. To ensure the integrity, completeness and clarity of the exposition, Marx thought it necessary to reproduce in a comparatively short form the major problems dealt with in A Contribution to the Critique of Political Economy (published in 1859) at the beginning of Volume I of Capital—they now constitute the whole of the first part "Commodities and Money" (in the first edition which was not yet subdivided into parts the first chapter bore this title). After the publication of Volume I of Capital (September 1867), Marx continued work on it in preparation for publication in German and translation into foreign lan-guages. For the second edition (1872) he made more subdivisions and also a lot of changes in the text (see this volume, pp. 12-13), gave important instructions for the Russian edition, published in Petersburg in 1872 and the first foreign translation of Capital, once more changed the book's structure and thoroughly edited the French edition (1872-75). Marx intended to take into consideration most of the changes made in the French edition when preparing the third German edition of Volume I. At the same time, after the publication of Volume I of Capital Marx continued his work on the subsequent volumes, intending to finish the whole edition as soon as possible. However, he was unable to do so. A lot of time was taken up by his activities in the General Council of the First International, and his work was increasingly hampered by poor health. After Marx's death, Engels finished preparing the third (1883) German edition of Volume I of Capital for press, which was taken as the basis for the translation into English made by Samuel Moore and Eduard Aveling and edited by Engels (1887).— 1,311
[164] See K. Marx, "The Original Text of the Second and the Beginning of the Third Chapter of A Contribution to the Critique of Political Economy" (present edition, Vol.29, pp. 475-77).—227
[63] A reference to the review of Bailey's book A Critical Dissertation... In: Westminster Review, Vol. 5, No. 9, January, 1826, Art. VIII, pp. 157-72, apparently written by James Mill. The views of Ricardo's followers (the Ricardian school) were examined in detail by Marx in the Economic Manuscript of 1861-63 (see present edition, Vol. 31, pp. 35-77; Vol. 32, pp. 258-373).—73, 311
[166] \Y Jacob, A Letter to Samuel Whitbread, Esq. M.P., Being a Sequel to Considerations on the Protection Required by British Agriculture. London, 1815, p. 33.— 229
[8] The Established Church — the state national church in England, the Church of England. The Thirty-Nine Articles, which enunciated the articles of faith of the Church of England, were worked out during the reign of Elizabeth I (1558-1603) and approved by the British Parliament in 1571.— 10
[165] The reference is to Engels. When preparing the second German edition of Volume I ofCapital, published in 1872, Marx used additional information supplied by Engels, cited exact data and corrected a number of factual mistakes in the first edition. See Marx's letters to Engels of 7 and 16 May 1868 (present edition, Vol. 43, pp. 30-31, 36).—229
[6] The American War of Independence (1775-1783) — a revolutionary war fought by 13 British colonies in North America. As a result of their victory an independent state was formed, the United States of America. This war had a great impact on the development of the European revolutionary-democratic movement, in particular on the French revolution of the end of the 18th century.—9, 748
[2] Marx is referring to the sections "Historical Notes on the Analysis of Commodities" and "Theories of the Medium of Circulation and of Money" in A Contribution to the Critique of Political Economy. Part One (present edition, Vol. 29, pp. 292-302, 389-417), which he later abandoned as he intended to prepare a special historico-critical concluding volume of Capital (see Note 1).— 7, 532