ing a certain long period, and if one subtracts the cases, in which the real value of commodities is altered by a change in the productivity of labor, and likewise the cases, in which the process of production has been previously disturbed by natural or social accidents, one will be surprised, in the first place, by the relatively narrow limits of the fluctuations, and, in the second place, by the regiilarity of their mutual compensation. The same domination of the regulating aver- ages will be found here, which Quetelet pointed out in the case of social phenomena. If the equalization of the values of commodities into prices of production does not meet any obstacles, then the rent resolves itself into differential rent, that is, it is limited to the equalization of the surplus-profits, which would be given to some of the capitalists by the regu- lating prices of production, but which are then appropriated by the landlords. Here, then, the rent has its definite limit of value in the fluctuations of the individual rates of profit, The Semblance of Coin-petition. 1003 which are caused by the regulation of the prices of produc- tion through the general rate of profit. If private owner- ship of land places obstacles in the way of the equalization of the values of commodities into prices of production, and appropriates absolute rent, then this absolute rent is limited by the excess of the value of the products of the soil over their prices of production, that is, by the excess of the sur- plus-value in them over the rate of profit assigned to the capitals by the average rate of profit. This difference then forms the limit of the rent, which is always but a certain por- tion of surplus-value produced and existing in the commodi- ties.
Finally, if the equalization of the surplus-value into aver- age profit meets with obstacles in the various spheres of pro- duction in the shape of artificial or natural monopolies, par- ticularly of monopoly in land, so that a monopoly price would be possible, which w^ould rise above the price of pro- duction and above the value of the commodities affected by such a monopoly, still the limits imposed by the value of commodities would not be abolished thereby. The monopoly price of certain commodities would merely transfer a por- tion of the profit of the other producers of commodities to the commodities with a monopoly price. A local disturb- ance in the distribution of the surplus-value among the vari- ous spheres of production would take place indirectly, but they would leave the boundaries of the surplus-value itself unaltered. If a commodity with a monopoly price should enter into the necessary consumption of the laborer, it would increase the wages and thereby reduce the surplus-value, if the laborer would receive the value of his labor-power, the same as before. But such a commodity might also depress wages below the value of labor-power, of course only to the extent that wages would be higher than the physical mini- mum of subsistence. In this case the monopoly price would be paid by a deduction from the real wages (that is, from the quantity of use-values received by the laborer for the same quantity of labor) and from the profit of the other cap- italists. The limits, within which the monopoly price would I004 Capitalist Production.
affect the normal regulation of the prices of commodities, would be accurately fixed and could be closely calculated.
Just as the division of the newly added value of commodi- ties into necessary and surplus labor, wages and surplus- value, and its general division between revenues, finds its given and regulating limits, so the division of the surplus- value itself into profit and ground-rent finds its limit in the laws regulating the equalization of the rate of profit. In the division into interest and profits of enterprise the aver- age profit itself forms the limit for both of them. It fur- nishes the given magnitude of value, which they may divide among themselves and which is the only one that they can so divide. The definite proportion of this division is here accidental, that is, it is determined exclusively by conditions of competition. Whereas in other cases the balancing of sup- ply and demand implies the cessation of the deviation of mar- ket prices from their regulating average prices, that is, the ces- sation of the influence of competition, it is here the only de- terminant. But why? Because the same factor in produc- tion, the capital, has to divide its share of the surplus-value between two owners of the same factor in production. But the fact that no definite, lawful, limit for the division of the average profit is found, does not do away with its limit as a part of the value of commodities, any more than the fact that two partners in a certain business, being under the in- fluence of different circumstances, divide their profit un- equally, affects the limits of this profit in any way.
Hence, although that portion of the value of commodities, in which the value of the new labor added to the means of production is incorporated, is divided into different parts, which assume independent forms as revenues, this is no rea- son why wages, profit and ground-rent should be considered as constituting elements, whose addition, or sum, would be the source of the regulating price of commodities (natural price, prix necessaire); it is no reason to think that not the value of commodities, after the subtraction of the constant portion of value, is the original unit separated into these three parts, but rather the price of each one of these three TJie Semblance of Competition. 1005 parts is independently determined, and that the price of com- modities is then formed by an addition of these three inde- pendent magnitudes. In reality the value of commodities is the magnitude which exists first, and it comprises the sum of the total values of wages, profit and rent, whatever may be tlieir relative magnitudes. In the wrong conception, wages, profit and rent are three independent magnitudes of value, whose total magnitude is supposed to produce the mag- nitude of the value of a commodity, to limit and to deter- mine it.
In the first place it is evident that, if wages, profit and rent constitute the price of commodities, this would apply as much to the constant portion of the value of commodities as to the other portion, in which variable capital and surplus- value are incorporated. This constant portion may here be left entirely out of consideration, since the value of the com- modities of which it is made up would likewise resolve it- self into wages, profit and rent. We have already shown that this conception denies the existence of such a constant portion of value.
It is furthermore evident that all meaning of value is here eliminated. Only the conception of price remains, in the sense that a certain amount of money is paid to the owners of labor-power, capital and land. But what is money? Money is not a thing, but a definite form of value, hence it is again conditioned upon value. Let us say, then, that a definite amount of gold or silver is paid for those elements of production, or that they are equalled in our minds to this amount. But gold and silver (and the enlightened econo- mist is proud of this understanding) are themselves com- modities, like all others. The price of gold and silver is therefore likewise determined by wages, profit and rent. Hence we cannot determine what wages, profit and rent are, by making them equal to a certain amount of gold or silver, for the value of this gold and silver, by which they are sup- posed to be estimated as equivalents, is precisely supposed to be determined by them, independently of gold and silver, that is, independently of the value of any commodity, for ioo6 Capitalist Production.
this value is supposed to be the product of those three. To saj that the value of wages, profit and rent consist in their being equivalent to a certain quantity of gold and silver, would merely be the same as saying that they are equal to a certain quantity of wages, profit and rent.
Take wages first. For it is necessary to make labor the point of departure, even in this view of the matter. How, then, is the regulating price of wages determined, the price around which its market prices oscillate?
Let us reply that it is determined by the demand and sup- ply of labor-power. But what sort of a demand is this? It is a demand made by capital. The demand for labor is therefore at the same time a supply of capital. In order to speak of a supply of capital, we should know above all what capital is. What is capital made of? If we select its sim- plest forms, it consists of money and commodities. But money is merely a form of commodities. Capital, then, consists of commodities. But the value of commodities, ac- cording to our assumption, is first determined by the price of the labor producing them, by wages. The existence of wages is here a prerequisite and is considered as a constituting ele- ment of the price of commodities. Now this price is to bo determined by the proportion of the supplied labor to cap- ital. The price of the capital itself is equal to the price of the commodities of which it is composed. The demand of capital for labor is equal to the supply of capital. And the supply of capital is equal to the supply of a quantity of com- modities of a given price, and this price is regulated in the first place by the price of labor, and the price of labor in its turn is equal to that portion of the price of commodities, which makes up the variable capital, which is transferred to the laborer in exchange for his labor; and the price of the commodities, of which this variable capital is composed, is in its turn primarily determined by the price of labor; for it is determined by the prices of wages, profit and rent. In order to determine wages, we cannot, therefore, assume the previous existence of capital, for the value of the capital is itself determined in part by wages.
The Semblatice of Competition. 1007 Besides, the dragging of competition into this problem does not help any. Competition makes the market prices of labor rise and fall. But suppose that the demand and sup- ply of labor are balanced. What determines wages in that case? Competition. But we have just assumed that com- petition ceases to act as a determinant, that it abolishes its effects by the equilibrium of its two opposing forces. We are precisely trying to find the natural price of wages, that is, the price of labor not regulated by competition, but which, on the contrary, regulates it.
Nothing remains but to determine the necessary price of labor by the necessary subsistence of the laborer. But these articles of food are commodities, which have a price. The price of labor is therefore determined by the price of the necessary means of existence, and the price of the means of existence, like that of all other commodities, is determined primarily by the price of labor. Therefore the price of la- bor determined by the price of the means of existence is de- termined by the price of labor. The price of labor is deter- mined by itself. In other words, we do not know by what the price of labor is determined. Labor in this case has any price at all, because it is considered as a commodity. In order, therefore, to speak of the price of labor, we must know what price itself means. But what price itself is, we do not learn in this way at all.
But let us assume, that the necessary price of labor had been determined in this agreeable manner. Then how is the average profit determined, the profit of every capital in nor- mal conditions, which forms the second element of the price of commodities? The average profit must be determined by an average rate of profit; how is this rate determined? By the competition between the capitalists? But this competi- tion itself is conditioned upon the existence of profit. It pre- supposes the existence of different rates of profit, and thus of different profits, either in the same, or in different spheres of production. Competition can influence the rate of profit only to the extent that it affects the prices of commodities. Competition can merely make the producers within the same ioo8 Capitalist Production.
sphere of production sell their commodities at the same prices, and make them sell their commodities in different spheres of production at prices which will give them the same profit, will give them the same proportional addition to the price of commodities, which has already been' partially determined by wages. Hence competition cannot balance anything but inequalities in the rate of profit. In order to balance unequal rates of profit, the profit as an element in the price of compiodities must already exist. Competition does not create it. It lowers or raises its level, but it does not create this level, which appears whenever the balance has been struck. And ^ when we speak of a necessary rate of profit, we wish precisely to know the rate of profit which is independent of the movements of competition, and which rather regulates these movements. The average rate of profit appears, when the forces of the competing capitalists balance each other. Competition may bring about this bal- ance, but cannot create the rate of profit which appears when- ever this balance is found. As soon as the equilibrium is reached, why is the rate of profit 10, or 20, or 100%? On account of competition? ]Mo, on the contrary, competition has done away with the causes, which produced deviations from the rate of 10, or 20, or 100%. It has brought about a price of commodities, by which every capital yields the same profit in proportion to its magnitude. The magnitude of this profit itself is independent of it. It merely reduces all deviations to this magnitude. One man competes with another, and competition compels him to sell his commodi- ties at the same price as the other. But why is this price N^othing remains under these circumstances but to declare that the rate of profit, and with it the profit itself arises in some unaccountable manner by a certain addition to the price of commodities, which to that extent was determined by the wages. The only thing which competition tells us is that this rate of profit must have a certain figure. But we knew that before, when we spoke of an average rate of profit and of a " necessary price " of profit.
The Semblance of Competition. 1009 It is quite unnecessary to thrash this absurd process over in the case of ground-rent. It is evident, even so, that it, logically pursued, makes profit and rent appear as additions made by unaccountable laws to the price of commodities, which is primarily determined by wages. In short, compe- tition has to shoulder the duty of explaining all inexplicable ideas of the economists, whereas the economists should rather explain competition.
Xow, if we leave aside the illusion of a profit and rent created by the circulation, that is of parts of price arising through sale — for circulation can never give what it did not first receive — the matter simply amounts to this: Let the price of a commodity determined by wages be 100; let the rate of profit be 10% of the wages, and the rent 15% of the wages. Then the price of the commodity determined by wages, profit and rent is 125. These added 25 cannot come from the sale of this commodity. For all sellers sell to each other at 125 what has actually cost only 100 in wages, and the result is the same as though they had all sold at 100. The operation must rather be studied independently of the process of circulation.
If the three revenues share the commodity itself, which now costs 125 — and it does not alter the matter, if the cap- italist should first sell at 125, then pay 100 to the laborer, 10 to himself, and 15 to the landlord — then the laborer re- ceives f, equal to 100, of the value and of the product. The capitalist receives -^-^ of the value and of the product, and the landlord -jV- When the capitalist sells at 125, instead of at 100, he merely gives to the laborer f of the product, in which his labor is incorporated. This would be the same, if he had given 80 to the laborer and kept back 20, of which he would share 8 and the landlord 12. In this case he would have sold the commodity at its value, since in fact the additions to the price of the commodity are made independently of the value of the commodity, which is assumed to be determined here by the value of labor-power. This amounts in a roundabout way. to saying that in this conception the term wages, here 100, is equal 3L loio Capitalist Production.
to the value of the product, that is, equal to that sum of money, in which the same definite quantity of labor is represented; but that this value again differs from the real wages and therefore leaves a surplus. Only, in the pres- ent case, this is obtained nominally by an addition to the price. Hence, if the wages were 110 instead of 100, the profit would have to be 11 and the ground-rent 16^, so that the price of the commodity would be 137|. This would leave the proportion unaltered. But as the division would always be obtained by a nominal addition of definite per- centages to the wages, the price would rise and fall with the wages. The wages are here first assumed as equal to the value of the commodity, and then again separated from it. In fact, however, the matter amounts in a roundabout and meaningless way to this, that the value of the commodity is determined by the quantity of labor contained in it, whereas the value of wages is determined by the price of the necessi- ties of life, and the surplus of value above the wages forms profit and rent.
The separation of the value of commodities, after the sub- traction of the value of the means of production consumed in their creation, this separation of this given quantity of value determined by the quantity of labor incorporated in the pro- duced commodities into three parts, namely into wages, profit and rent, which assume the shape of independent and mutu- ally unrelated revenues, this same separation appears on the surface of capitalist production, and consequently in the minds of the agents bounded by it, in an inverted form.
Let the total value of a certain commodity be 300, of which 200 may be the value of the means of production, or elements of constant capital, consumed in its production. This leaves 100 as the amount of the new value added to this commodity in its process of production. This new value of 100 is all that is available for division among these three forms of revenue. Let us place the figure for wages at x, for profit at y, for ground-rent at z, then the sum of x -f- y + z will always be 100 in our present case. Tn the conception of the industrials, merchants and bankers, as in that of the The Semblance of Competition. loii vulgar economists, matters are supposed to pass in an en- tirely different way. According to them it is not the value of the commodity, which equals 100 after subtracting the value of the means of production consumed in it, nor is it this 100 which is divided into x, y and z. According to them it is rather the price of the commodity, which is composed of wages, profit and rent, whose figures of value are deter- mined independently of the value of this commodity and in- dependently of each other, so that x, y and z exist independ- ently, each by itself and is so determined, while the sum of these magnitudes, which may be larger or smaller than 100, makes up the value of the commodity by adding these three different values together. This case of mistaken identity is necessary: 1) Because the component parts of value in the commodi- ties face each other as independent revenues, which are re- ferred back as such to three very dissimilar agencies in pro- duction, namely to labor, capital and land, and which then seem to arise out of these. The owmership of labor-power, of capital, of land, is the cause, which assigns these differ- ent parts of the value of commodities to these respective owners, and transforms these parts into revenue for them. But the value does not arise from a transformation of its parts into revenue, it must rather exist before it can be con- verted into revenue, before it can assume this form. The appearance of the reverse must fortify itself so much the more, as the determination of the relative magnitude of these three parts follows different laws, whose connection with and limitation by the value of commodities themselves does not show itself on the surface by any means.
2) We have seen that a general rise or fall of wages, by causing a movement in the opposite direction on the part of the average rate of profit, so long as other circumstances re- main the same, changes the prices of production of the dif- ferent commodities, raises some and lowers others, according to the average composition of the capital in the respective spheres of production. There is no doubt that at least in some spheres of production the experience is made, that the IOI2 Capitalist Production.
average price of a commodity rises, because wages have risen, and falls, because wages bave fallen. Wbat is not '' experi- enced " is the secret regulation of this change by the value of commodities, which is independent of wages. But if the rise of wages is local, if it takes jDlace only in particular spheres of production in consequence of peculiar circum- stances, then a corresponding nominal raise of prices may oc- cur in the case of these commodities. The rise of the rela- tive value of one kind of commodities as against others, which have been produced with an unchanged scale of wages, is then merely a reaction against the local disturbance of a uniform distribution of surplus-value among the various spheres of production, a means of leveling particular rates of profit into an average rate. The " experience," which is met in that case, is once more the determination of the price by the wages. In both these cases, the same experience shows that the wages determine the prices of commodities. What is not " experienced," is the bidden cause of this in- terrelation. Furthermore: The average price of labor, that is, the value of labor-power, is determined by the price of production of the necessary articles of subsistence. If iJie price of these falls, so does that of those. What is once more experienced here, is the existence of a connection between wages and the price of commodities. But the cause may seem to be an effect, and the effect a cause, as is also the case in the movements of market prices, where a rise of wages above its average corresponds to the rise of the market prices above the prices of production during periods of prosperity, and subsequent fall of wages below their average corre- sponds to a fall of market prices below the prices of produc- tion. Owing to the dependence of prices of production upon the values of commodities, the primary experience, aside from the oscillating movements of the market prices, should always be that the rate of profit falls whenever wages rise, and vice versa. But we have seen that the rate of profit may be determined by the movements of the value of constant capital; independently of the movements of wages; so that wages and the rate of profit, instead of moving in opposite The Semblance of Competition. 1013 directions, move in the same direction, and may rise or f/iU together. If the rate of surplus-value were directly identi- cal with the rate of profit, then this could not happen. Even if wages should rise as a result of a rise in the prices of food- stuffs, the rate of profit may remain the same, or may even rise, owing to a greater intensity of labor or a prolongation of the working day. All these experiences corroborate the il- lusion created by the apparently independent and reversed form of the parts of value, as though either the wages alone, or wages and profit together determined the value of commodi- ties. As soon as this seems to be the case with referencrt to wages, so that the price of labor and the value created b;* la- bor seem to coincide, the same applies as a matter of co irse to profit and rent. Their prices, that is, their express \on in money, must then seem to be regulated independently of labor and of the value produced by it.
3) Let us assume that the values of commodities, or the apparently independent prices of production, coincide st em- ingly directly and continually with the market prices of com- modities, instead of merely enforcing themselves as the regu- lating average prices by the continual balancing of the fluc- tuations of market prices. Let us assume, furthermore, tl. it reproduction always takes place under the same unaltered conditions, so that the productivity of labor remains con- stant in all elements of capital. Finally, let us assume that that portion of the value of the produced commodities, which is formed in every sphere of production by the addition of a new quantity of labor, or by the addition of a newly pro- duced value to the value of the means of production, is al- ways divided according to the same unaltered proportion into wages, profit and rent, so that the actually paid wages, the actually realized profit, and the actual rent always directly coincides with the value of labor-power, with that portion of the total surplus-value which falls to the share of every active part of total capital by means of the average rate of profit, and with the limits, in which ground-rent is normally held upon this basis. In one word, let us assume that the