The history of all hitherto existing society is the history of class struggles. Freeman and slave, patrician and plebeian, lord and serf, guild-master and journeyman, in a word, oppressor and oppressed, stood in constant opposition to one another, carried on an uninterrupted, now hidden, now open fight, a fight that each time ended, either in a revolutionary reconstitution of society at large, or in the common ruin of the contending classes. In the earlier epochs of history, we find almost everywhere a complicated arrangement of society into various orders, a manifold gradation of social rank. In ancient Rome we have patricians, knights, plebeians, slaves; in the Middle Ages, feudal lords, vassals, guild-masters, journeymen, apprentices, serfs; in almost all of these classes, again, subordinate gradations. The modern bourgeois society that has sprouted from the ruins of feudal society has not done away with class antagonisms. It has but established new classes, new conditions of oppression, new forms of struggle in place of the old ones.
Modern bourgeois society, with its relations of production, of exchange and of property, a society that has conjured up such gigantic means of production and of exchange, is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells. For many a decade past, the history of industry and commerce is but the history of the revolt of modern productive forces against modern conditions of production, against the property relations that are the conditions for the existence of the bourgeois and of its rule. It is enough to mention the commercial crises that, by their periodical return, put the existence of the entire bourgeois society on its trial, each time more threateningly. In these crises, a great part not only of the existing products, but also of the previously created productive forces, are periodically destroyed. In these crises, there breaks out an epidemic that, in all earlier epochs, would have seemed an absurdity – the epidemic of over-production. Society suddenly finds itself put back into a state of momentary barbarism; it appears as if a famine, a universal war of devastation, had cut off the supply of every means of subsistence; industry and commerce seem to be destroyed. And why? Because there is too much civilization, too much means of subsistence, too much industry, too much commerce. The productive forces at the disposal of society no longer tend to further the development of the conditions of bourgeois property; on the contrary, they have become too powerful for these conditions, by which they are fettered, and so soon as they overcome these fetters, they bring disorder into the whole of bourgeois society, endanger the existence of bourgeois property. The conditions of bourgeois society are too narrow to comprise the wealth created by them. And how does the bourgeoisie get over these crises? On the one hand, by enforced destruction of a mass of productive forces; on the other, by the conquest of new markets, and by the more thorough exploitation of the old ones. That is to say, by paving the way for more extensive and more destructive crises, and by diminishing the means whereby crises are prevented.
But not only has the bourgeoisie forged the weapons that bring death to itself; it has also called into existence the men who are to wield those weapons – the modern working class – the proletarians. In proportion as the bourgeoisie, i.e., capital, is developed, in the same proportion is the proletariat, the modern working class, developed – a class of laborers, who live only so long as they find work, and who find work only so long as their labor increases capital. These laborers, who must sell themselves piecemeal, are a commodity, like every other article of commerce, and are consequently exposed to all the vicissitudes of competition, to all the fluctuations of the market.
Of all the classes that stand face to face with the bourgeoisie today, the proletariat alone is a genuinely revolutionary class. The other classes decay and finally disappear in the face of Modern Industry; the proletariat is its special and essential product.
All the preceding classes that got the upper hand sought to fortify their already acquired status by subjecting society at large to their conditions of appropriation. The proletarians cannot become masters of the productive forces of society, except by abolishing their own previous mode of appropriation, and thereby also every other previous mode of appropriation. They have nothing of their own to secure and to fortify; their mission is to destroy all previous securities for, and insurances of, individual property.
All previous historical movements were movements of minorities, or in the interest of minorities. The proletarian movement is the self-conscious, independent movement of the immense majority, in the interest of the immense majority. The proletariat, the lowest stratum of our present society, cannot stir, cannot raise itself up, without the whole super incumbent strata of official society being sprung into the air.
Does it require deep intuition to comprehend that man's ideas, views, and conception, in one word, man's consciousness, changes with every change in the conditions of his material existence, in his social relations and in his social life?
What else does the history of ideas prove, than that intellectual production changes its character in proportion as material production is changed? The ruling ideas of each age have ever been the ideas of its ruling class.
We have seen above that the first step in the revolution by the working class is to raise the proletariat to the position of ruling class to win the battle of democracy. The proletariat will use its political supremacy to wrest, by degree, all capital from the bourgeoisie, to centralize all instruments of production in the hands of the state, i.e., of the proletariat organized as the ruling class; and to increase the total productive forces as rapidly as possible.
These measures will, of course, be different in different countries. Nevertheless, in most advanced countries, the following will be pretty generally applicable.
When, in the course of development, class distinctions have disappeared, and all production has been concentrated in the hands of a vast association of the whole nation, the public power will lose its political character. Political power, properly so called, is merely the organized power of one class for oppressing another. If the proletariat during its contest with the bourgeoisie is compelled, by the force of circumstances, to organize itself as a class; if, by means of a revolution, it makes itself the ruling class, and, as such, sweeps away by force the old conditions of production, then it will, along with these conditions, have swept away the conditions for the existence of class antagonisms and of classes generally, and will thereby have abolished its own supremacy as a class.
The simplest form of the circulation of commodities is C-M-C, the transformation of commodities into money, and the change of the money back again into commodities; or selling in order to buy. But alongside of this form we find another specifically different form: M-C-M, the transformation of money into commodities, and the change of commodities back again into money; or buying in order to sell. Money that circulates in the latter manner is thereby transformed into, becomes capital, and is already potentially capital.
Capitalist production only then really begins, as we have already seen, when each individual capital employs simultaneously a comparatively large number of labourers; when consequently the labour-process is carried on on an extensive scale and yields, relatively, large quantities of products. A greater number of labourers working together, at the same time, in one place (or, if you will, in the same field of labour), in order to produce the same sort of commodity under the mastership of one capitalist, constitutes, both historically and logically, the starting point of capitalist production. At first ... the difference is purely quantitative. [However, when] numerous labourers work together side by side, whether in one and the same process, or in different but connected processes, they are said to co-operate, or to work in cooperation.
Just as the offensive power of a squadron of cavalry, or the defensive power of a regiment of infantry, is essentially different from the sum of the offensive or defensive powers of the individual cavalry or infantry soldiers taken separately, so the sum total of the mechanical forces exerted by isolated workmen differs from the social force that is developed, when many hands take part simultaneously in one and the same undivided operation, such as raising a heavy weight, turning a winch, or removing an obstacle. Although a number of man may be occupied together at the same time on the same, or the same kind of work, yet the labour of each, as a part of the collective labour, may correspond to a distinct phase of the labour-process, through all whose phases, in consequence of co-operation, the subject of their labour passes with greater speed. If the work be complicated, then the mere number of the men who cooperate allows of the various operations being apportioned to different hands, and, consequently, of being carried on simultaneously. The time necessary for the completion of the whole work is thereby shortened.
All combined labour on a large scale requires, more or less, a directing authority, in order to secure the harmonious working of the individual activities, and to perform the general functions that have their origin in the action of the combined organism, as distinguished from the action of its separate organs. A single violin player is his own conductor; an orchestra requires a separate one. The work of directing, superintending, and adjusting, becomes one of the functions of capital, from the moment that the labour under the control of capital becomes cooperative. Once a function of capital, it acquires special characteristics.
Co-operation, such as we find it at the dawn of human development, among races who live by the chase, or say, in the agriculture of Indian communities, is based, on the one hand, on ownership in common of the means of production, and on the other hand, on the fact, that in those cases, each individual has no more torn himself off from the navel-string of his tribe or community, than each bee has freed itself from connexion with the hive. The sporadic application of co-operation on a large scale in ancient times, in the middle ages, and in modern colonies, reposes on relations of dominion and servitude, principally on slavery. The capitalistic form, on the contrary, presupposes from first to last, the free wage labourer, who sells his labour-power to capital.
Just as the social productive power of labour that is developed by co-operation, appears to be the productive power of capital, so co-operation itself, contrasted with the process of production carried on by isolated independent labourers, or even by small employers, appears to be a specific form of the capitalist process of production. It is the first change experienced by the actual labour-process, when subjected to capital. This change takes place spontaneously. The simultaneous employment of a large number of wage-labourers, in one and the same process, which is a necessary condition of this change, also forms the starting point of capitalist production. This point coincides with the birth of capital itself. If then, on the one hand, the capitalist mode of production presents itself to us historically as a necessary condition to the transformation of the labour process into a social process, so, on the other hand, this social form of the labour process presents itself as a method employed by capital for the more profitable exploitation of labour, by increasing that labour's productiveness.
Cooperation ever constitutes the fundamental form of the capitalist mode of production; nevertheless, the elementary form of cooperation continues to subsist as a particular form of capitalist production, side by side with the more developed forms of that mode of production.
If we examine the whole [capitalist] process from the point of view of its result, ... a use-value, in the form of a product, issues from the labour-process, yet other use-values, products of previous labour, enter into it as means of production. The same use-value is both the product of a previous process, and a means of production in a later process. Products are therefore not only results, but also essential conditions of labour.
Labour uses up its material factors, its subject and its instruments, consumes them, and is therefore a process of consumption. Such productive consumption is distinguished from individual consumption by this, that the latter uses up products, as means of subsistence for the living individual; the former, as means whereby alone, labour, the labour-power of the living individual, is enabled to act. The product, therefore, of individual consumption, is the consumer himself; the result of productive consumption, is a product distinct from the consumer.
The labour-process, turned into the process by which the capitalist consumes labour-power, exhibits two characteristic phenomena. First, the labourer works under the control of the capitalist to whom his labour belongs; the capitalist taking good care that the work is done in a proper manner, and that the means of production are used with intelligence, so that there is no unnecessary waste of raw material, and no wear and tear of the implements beyond what is necessarily caused by the work.
Secondly, the product is the property of the capitalist and not that of the labourer, its immediate producer. Suppose that a capitalist pays for a day's labour-power at its value; then the right to use that power for a day belongs to him, just as much as the right to use any other commodity, such as a horse that he has hired for the day. Our capitalist has two objects in view: in the first place, he wants to produce a use-value that has a value in exchange, that is to say, an article destined to be sold, a commodity; and secondly, he desires to produce a commodity whose value shall be greater than the sum of the values of the commodities used in its production, that is, of the means of production and the labour-power, that he purchased with his good money in the open market. His aim is to produce not only a use-value, but a commodity also; not only use-value, but value; not only value, but at the same time surplus-value.
In the process we are now considering it is of extreme importance, that no more time be consumed in the work of transforming the cotton into yarn than is necessary under the given social conditions. If under normal, i.e., average social conditions of production, a pounds of cotton ought to be made into b pounds of yarn by one hour's labour, then a day's labour does not count as 12 hours' labour unless 12 a pounds of cotton have been made into 12 b pounds of yarn; for in the creation of value, the time that is socially necessary alone counts.
[We assume] ... that the value of a day's labour-power is three shillings, and that six hours' labour is incorporated in that sum; and consequently that this amount of labour is requisite to produce the necessaries of life daily required on an average by the labourer. If now our spinner by working for one hour, can convert 1 2/3 lbs. of cotton into 1 2/3 lbs. of yarn, it follows that in six hours he will convert 10 lbs. of cotton into 10 lbs. of yarn. Hence, during the spinning process, the cotton absorbs six hours' labour. The same quantity of labour is also embodied in a piece of gold of the value of three shillings. Consequently by the mere labour of spinning, a value of three shillings is added to the cotton.
Let us now consider the total value of the product, the 10 lbs. of yarn. Two and a half days' labour has been embodied in it, of which two days were contained in the cotton and in the substance of the spindle worn away, and half a day was absorbed during the process of spinning. This two and a half days' labour is also represented by a piece of gold of the value of fifteen shillings. Hence, fifteen shillings is an adequate price for the 10 lbs. of yarn, or the price of one pound is eighteenpence. ... The value of the product is exactly equaI to the value of the capital advanced.
The labourer therefore finds, in the workshop, the means of production necessary for working, not only during six, but during twelve hours. Just as during the six hours' process our 10 lbs. of cotton absorbed six hours' labour, and became 10 lbs. of yarn, so now, 20 lbs. of cotton will absorb 12 hours' labour and be changed into 20 lbs. of yarn. Let us now examine the product of this prolonged process. There is now materialised in this 20 lbs. of yarn the labour of five days, of which four days are due to the cotton and the lost steel of the spindle, the remaining day having been absorbed by the cotton during the spinning process. Expressed in gold, the labour of five days is thirty shillings. This is therefore the price of the 20 lbs. of yarn, giving, as before, eighteenpence as the price of a pound. But the sum of the values of the commodities that entered into the process amounts to 27 shillings. The value of the yarn is 30 shillings. Therefore the value of the product is 1/9 greater than the value advanced for its production; 27 shillings have been transformed into 30 shillings; a surplus-value of 3 shillings has been created. The trick has at last succeeded; money has been converted into capital.
Every condition of the problem is satisfied, while the laws that regulate the exchange of commodities, have been in no way violated. Equivalent has been exchanged for equivalent. For the capitalist as buyer paid for each commodity, for the cotton, the spindle and the labour-power, its full value. He then did what is done by every purchaser of commodities; he consumed their use-value. The consumption of the labour-power, which was also the process of producing commodities, resulted in 20 lbs. of yarn, having a value of 30 shillings. The capitalist, formerly a buyer, now returns to market as a seller, of commodities. He sells his yarn at eighteenpence a pound, which is its exact value. Yet for all that he withdraws 3 shillings more from circulation than he originally threw into it. This metamorphosis, this conversion of money into capital, takes place both within the sphere of circulation and also outside it; within the circulation, because conditioned by the purchase of the labour-power in the market; outside the circulation, because what is done within it is only a stepping-stone to the production of surplus-value, a process which is entirely confined to the sphere of production.
The labourer adds fresh value to the subject of fiis labour by expending upon it a given amount of additional labour, no matter what the specific character and utility of that labour may be. On the other hand, the values of the means of production used up in the process are preserved, and present themselves afresh as constituent parts of the value of the product; the values of the cotton and the spindle, for instance, re-appear again in the value of the yarn. The value of the means of production is therefore preserved, by being transferred to the product. This transfer takes place during the conversion of those means into a product, or in other words, during the labour-process.
It is thus strikingly clear, that means of production never transfer more value to the product than they themselves lose during the labour-process by the destruction of their own use-value. If such an instrument has no value to lose, if, in other words, it is not the product of human labour, it transfers no value to the product. It helps to create use-value without contributing to the formation of exchange-value. In this class are included all means of production supplied by Nature without human assistance, such as land, wind, water, metals in situ, and timber in virgin forests.
It is otherwise with the subjective factor of the labour-process, with labour-power in action. While the labourer, by virtue of his labour being of a specialised kind that has a special object, preserves and transfers to the product the value of the means of production, he at the same time, by the mere act of working, creates each instant an additional or new value. Suppose the process of production to be stopped just when the workman has produced an equivalent for the value of his own, labour-power, when, for example, by six hours' labour, he has added a value of three shillings. This value is the surplus, of the total value of the product, over the portion of its value that is due to the means of production. It is the only original bit of value formed during this process, the only portion of the value of the product created by this process.
We know, however, from what has gone before, that the labour-process may continue beyond the time necessary to reproduce and incorporate in the product a mere equivalent for the value of the labour-power. Instead of the six hours that are sufficient for the latter purpose, the process may continue for twelve hours. The action of labour-power, therefore, not only reproduces its own value, but produces value over and above it. This surplus-value is the difference between the value of the product and the value of the elements consumed in the formation of that product, in other words, of the means of production and the labour-power.
That part of capital then, which is represented by the means of production, by the raw material, auxiliary material and the instruments of labour does not, in the process of production, undergo any quantitative alteration of value. I therefore call it the constant part of capital, or, more shortly, constant capital.
On the other hand, that part of capital, represented by labour-power, does, in the process of production, undergo an alteration of value. It both reproduces the equivalent of its own value, and also produces an excess, a surplus-value, which may itself vary, may be more or less according to circumstances. This part of capital is continually being transformed from a constant into a variable magnitude. I therefore call it the variable part of capital, or, shortly, variable capital.
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, C = 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 surplusvalue 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.
In the first place ... 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 by s/v. In our example this ratio is 90/90, 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."
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 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 [4] by the capitalist; 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 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 only in the mode in which this surplus-labour is in each case extracted from the actual producer, the labourer.
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
Both ratios, s/v and surplus-labour/necessary-labour, express the same thing in different ways; 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.
We retain the designations used in Books I and II. Total capital C consists of constant capital c and variable capital v, and produces a surplus-value s. The ratio of this surplus-value to the advanced variable capital, or s/v, is called the rate of surplus-value and designated s'. Therefore s/v=s', and consequently s=s'v. If this surplus-value is related to the total capital instead of the variable capital, it is called profit, p, and the ratio of the surplus-value s to the total capital C, or s/C, is called the rate of profit, p'. Accordingly,
Now, substituting for s its equivalent s'v, we find
which equation may also be expressed by the proportion
p':s'=v:C;
the rate of profit is related to the rate of surplus-value as the
variable capital
is to the total capital.
It follows from this proportion that the rate of profit, p', is always
smaller than
s', the rate of surplus-value, because v, the variable capital, is
always smaller
than C, the sum of v+c, or the variable plus the constant capital; the
only, practically
impossible case excepted, in which v=C, that is, no constant capital at
all, no means
of production, but only wages are advanced by the capitalist.
I. c' constant, v/C variable
This case, which embraces a number of subordinate cases, may be covered
by a general
formula. Take two capitals, C and C1, with their respective variable
components,
v and v1, with a common rate of surplus-value, s', and rates of profit
p' and p1'.
Then:
Taking any two capitals operating with the same rate of
surplus-value, the rates
of profit are to each other as the variable portions of the capitals
calculated as
percentages of their respective total capitals.
We have observed earlier in the variations of v/C that one and the same
rate of surplus-value
may be expressed in very much different rates of profit. Now we see
that one and
the same rate of profit may be based on very much different rates of
surplus-value.
But while any change in the proportion of v to C is sufficient to
produce a difference
in the rate of profit so long as s is constant, a change in the
magnitude of s must
lead to a corresponding inverse change of v/C in order that the rate of
profit remain
the same.
The rates of profit of two different capitals, or of one and the same
capital in
two successive different conditions,
are equal
1) if the per cent composition of the capitals is the same and their
rates of surplus-value
are equal;
2) if their per cent composition is not the same, and the rates of
surplus-value
are unequal, provided the products of the rates of surplus-value by the
percentages
of the variable portions of capitals (s' by v) are the same, i.e., if
the masses
of surplus-value (s=s'v) calculated in per cent of the total capital
are equal; in
other words, if the factors s' and v are inversely proportional to one
another in
both cases.
They are unequal
1) if the per cent composition is equal and the rates of surplus-value
are unequal,
in which case they are related as the rates of surplus-value;
2) if the rates of surplus-value are the same and the per cent
composition is unequal,
in which case they are related as the variable portions of the capitals;
3) if the rates of surplus-value are unequal and the per cent
composition not the
same, in which case they are related as the products s'v, i.e., as the
quantities
of surplus-value calculated in per cent of the total capital.
Owing to the different organic compositions of capitals invested in
different lines
of production, and, hence, owing to the circumstance that -- depending
on the different
percentage which the variable part makes up in a total capital of a
given magnitude
-- capitals of equal magnitude put into motion very different
quantities of labour,
they also appropriate very different quantities of surplus-labour or
produce very
different quantities of surplus-value. Accordingly, the rates of profit
prevailing
in the various branches of production are originally very different.
These different
rates of profit are equalized by competition to a single general rate
of profit,
which is the average of all these different rates of profit. The profit
accruing
in accordance with this general rate of profit to any capital of a
given magnitude,
whatever its organic composition, is called the average profit. The
price of a commodity,
which is equal to its cost-price plus the share of the annual average
profit on the
total capital invested (not merely consumed) in its production that
falls to it in
accordance with the conditions of turnover, is called its price of
production. Take,
for example, a capital of 500, of which 100 is fixed capital, and let
10% of this
wear out during one turnover of the circulating capital of 400. Let the
average profit
for the period of turnover be 10%. In that case the cost-price of the
product created
during this turnover will be 10c for wear plus 400 (c+v) circulating
capital = 410,
and its price of production will be 410 cost-price plus (10% profit on
500) 50=460.
This statement seems to conflict with the fact that under capitalist
production the
elements of productive capital are, as a rule, bought on the market,
and that for
this reason their prices include profit which has already been
realised, hence, include
the price of production of the respective branch of industry together
with the profit
contained in it, so that the profit of one branch of industry goes into
the cost-price
of another. But if we place the sum of the cost-prices of the
commodities of an entire
country on one side, and the sum of its surplus-values, or profits, on
the other,
the calculation must evidently be right.
Assuming a given wage and working-day, a variable capital, for instance of 100, represents a certain number of employed labourers. It is the index of this number. Suppose £100 are the wages of 100 labourers for, say, one week. If these labourers perform equal amounts of necessary and surplus-labour, if they work daily as many hours for themselves, i.e., for the reproduction of their wage, as they do for the capitalist, i.e., for the production of surplus-value, then the value of their total product = £200, and the surplus-value they produce would amount to £100. The rate of surplus-value, s/v, would = 100%. But, as we have seen, this rate of surplus-value would nonetheless express itself in very different rates of profit, depending on the different volumes of constant capital c and consequently of the total capital C, because the rate of profit = s/C. The rate of surplus-value is 100%:
If c = 50, and v = 100, then p' = 100/150 = 662/3%;
c = 100, and v = 100, then p' = 100/200 = 50%;
c = 200, and v = 100, then p' = 100/300 = 331/3%;
c = 300, and v = 100, then p' = 100/400 = 25%;
c = 400, and v = 100, then p' = 100/500 = 20%.
This is how the same rate of surplus-value would express itself under
the same degree
of labour exploitation in a falling rate of profit, because the
material growth of
the constant capital implies also a growth -- albeit not in the same
proportion --
in its value, and consequently in that of the total capital.
If it is further assumed that this gradual change in the composition of
capital is
not confined only to individual spheres of production, but that it
occurs more or
less in all, or at least in the key spheres of production, so that it
involves changes
in the average organic composition of the total capital of a certain
society, then
the gradual growth of constant capital in relation to variable capital
must necessarily
lead to a gradual fall of the general rate of profit, so long as the
rate of surplus-value,
or the intensity of exploitation of labour by capital, remain the same.
The capitalist mode of production has brought matters to a point where
the work of
supervision, entirely divorced from the ownership of capital, is always
readily obtainable.
It has, therefore, come to be useless for the capitalist to perform it
himself. An
orchestra conductor need not own the instruments of his orchestra, nor
is it within
the scope of his duties as conductor to have anything to do with the
"wages"
of the other musicians. Co-operative factories furnish proof that the
capitalist
has become no less redundant as a functionary in production as he
himself, looking
down from his high perch, finds the big landowner redundant. Inasmuch
as the capitalist's
work does not originate in the purely capitalistic process of
production, and hence
does not cease on its own when capital ceases; inasmuch as it does not
confine itself
solely to the function of exploiting the labour of others; inasmuch as
it therefore
originates from the social form of the labour-process, from combination
and co-operation
of many in pursuance of a common result, it is just as independent of
capital as
that form itself as soon as it has burst its capitalistic shell. To say
that this
labour is necessary as capitalistic labour, or as a function of the
capitalist, only
means that the vulgus is unable to conceive the forms developed in the
lap of capitalist
production, separate and free from their antithetical capitalist
character. The industrial
capitalist is a worker, compared to the money-capitalist, but a worker
in the sense
of capitalist, i.e., an exploiter of the labour of others. The wage
which he claims
and pockets for this labour is exactly equal to the appropriated
quantity of another's
labour and depends directly upon the rate of exploitation of this
labour, in so far
as he undertakes the effort required for exploitation; it does not,
however, depend
on the degree of exertion that such exploitation demands, and which he
can shift
to a manager for moderate pay. After every crisis there are enough
ex-manufacturers
in the English factory districts who will supervise, for low wages,
what wore formerly
their own factories in the capacity of managers of the new owners, who
are frequently
their creditors.
The wages of management both for the commercial and industrial
manager are completely
isolated from the profits of enterprise in the co-operative factories
of labourers,
as well as in capitalist stock companies. The separation of wages of
management from
profits of enterprise, purely accidental at other times, is here
constant. In a co-operative
factory the antagonistic nature of the labour of supervision
disappears, because
the manager is paid by the labourers instead of representing capital
counterposed
to them. Stock companies in general -- developed with the credit system
-- have an
increasing tendency to separate this work of management as a function
from the ownership
of capital, be it self-owned or borrowed. Just as the development of
bourgeois society
witnessed a separation of the functions of judges and administrators
from land-ownership,
whose attributes they were in feudal times. But since, on the one hand,
the mere
owner of capital, the money-capitalist, has to face the functioning
capitalist, while
money-capital itself assumes a social character with the advance of
credit, being
concentrated in banks and loaned out by them instead of its original
owners, and
since, on the other hand, the mere manager who has no title whatever to
the capital,
whether through borrowing it or otherwise, performs all the real
functions pertaining
to the functioning capitalist as such, only the functionary remains and
the capitalist
disappears as superfluous from the production process.
It is manifest from the public accounts of the co-operative factories
in England
that -- after deducting the manager's wages, which form a part of the
invested variable
capital much the same as wages of other labourers -- the profit was
higher than the
average profit, although at times they paid a much higher interest than
did private
manufacturers. The source of greater profits in all these cases was
greater economy
in the application of constant capital. What interests us in this,
however, is the
fact that here the average profit (=interest+profit of enterprise)
presents itself
actually and palpably as a magnitude wholly independent of the wages of
management.
Since the profit was higher here than average profit, the profit of
enterprise was
also higher than usual.
The co-operative factories of the labourers themselves represent within the old form the first sprouts of the new, although they naturally reproduce, and must reproduce, everywhere in their actual organisation all the shortcomings of the prevailing system. But the antithesis between capital and labour is overcome within them, if at first only by way of making the associated labourers into their own capitalist, i.e., by enabling them to use the means of production for the employment of their own labour. They show how a new mode of production naturally grows out of an old one, when the development of the material forces of production and of the corresponding forms of social production have reached a particular stage. Without the factory system arising out of the capitalist mode of production there could have been no co-operative factories. Nor could these have developed without the credit system arising out of the same mode of production. The credit system is not only the principal basis for the gradual transformation of capitalist private enterprises into capitalist stock companies, but equally offers the means for the gradual extension of co-operative enterprises on a more or less national scale. The capitalist stock companies, as much as the co-operative factories, should be considered as transitional forms from the capitalist mode of production to the associated one, with the only distinction that the antagonism is resolved negatively in the one and positively in the other.