El capital (III)

The first one who really attempted to answ^er this question was Dr. Konrad Schmidt in his pamphlet entitled. The Average Rate of Profit, Based on Marx's Theory of Value, Stuttgart, Dietz, 1889. Schmidt seeks to reconcile the details of the formation of commodity prices with the theory of value and with an average rate of profit. The industrial capitalist receives in his product, first, an equivalent for the capital advanced by him, and second, a surplus-product for which he has not paid anything. But in order to earn his surplus-product, he must advance capital for its production. He must employ a certain quantity of materialized labor for the purpose of appropriating this surplusproduct. For the capitalist, the capital advanced by him represents the quantity of materialized labor which is socially necessary for the production of his surplus-product. This applies to every industrial capitalist. Now, since commodities, according to the theory of value, are exchanged for one another in proportion to the social labor required for their production, and since the labor necessary for the manufacture 22 Preface. 22 Preface. of the capitalist's surplus-product is accumulated in the capital of the capitalist, it follows that surplus-products are exchanged in proportion to the capitals required for their production, and not in proportion to the labor actually incorporated in them. Hence the share of each unit of capital is equal to the sum of all produced surplus-values divided by the sum of the capitals employed in production. Accordingly, equal capitals yield equal profits in equal times, and this is accomplished by adding the cost price of the surplus-product figured on the basis of the average profit to the cost price of the paid product and selling both the paid and unpaid product at this increased price. Thus the average rate of profit arises in spite of the fact that, according to Schmidt, the average prices of commodities are determined by the law of value.