What's capital/surplus value?

[benhur]

Are they one and the same? Is it the same as profits? Some people say capital isn't money (but machinery, tools etc.), while others say otherwise. I am assuming this would be impossible without a monetary system, because if products were exchanged directly, then there'd be no surplus value?


Some explanation would help.

[zimmerwald1915]

Very simply, variable "capital" is the socially recognized universally equivalent commodity (the commodity in which the values of all other commodities are expressed, aka, money) in motion. "Fixed capital" is a commodity other than money which is brought together with raw materials and labor-powers in order to produce a new commodity out of the raw materials. "Surplus value" is value added to a commodity by a worker during the process of work, during time for which his wages do not compensate him for his expenditure of labor-power. Colloquially, in English, profit and surplus-value are the same. In Marxian economics, there's a totally different definition of profit that totally escapes me.

[mikelepore]

Surplus value isn't only profit. Surplus value is all the wealth that the workers produce but do not get back in the form of wages. It includes the capitalist's profit, the capitalist's taxes, the worker's taxes, and the capitalist's business expenses in the form of advertising, insurance, rent, brokerage, bond interest, etc.

[mikelepore]

"A cotton-spinning machine is a machine for spinning cotton -- only under certain conditions does it become capital." .... "The existence of a class which possess nothing but the ability to work is a necessary presupposition of capital. It is only the dominion of past, accumulated, materialized labor over immediate living labor that stamps the accumulated labor with the character of capital. Capital does not consist in the fact that accumulated labor serves living labor as a means for new production. It consists in the fact that living labor serves accumulated labor as the means of preserving and multiplying its exchange value."

-- Marx, in _Wage-Labor and Capital_

"The proletariat transforms the socialized means of production, slipping from the hands of the bourgeoisie into public property. By this act, the proletariat frees the means of production from the character of capital."

-- Engels, in _Socialism: Utopian and Scientific_

[Junius]

Gotta run, but


Are they one and the same?Nope.


Is it the same as profits?Nope.


Some people say capital isn't money (but machinery, tools etc.), while others say otherwise.Its neither; its a process.


I am assuming this would be impossible without a monetary system, because if products were exchanged directly, then there'd be no surplus value?Not according to Marx; since a monetary system is based off commodity exchange, surplus value doesn't suddenly come to existence because of money (see Chapter 5 of Capital)


Originally posted by Capital, Chapter 4
The independent form, i.e., the money-form, which the value of commodities assumes in the case of simple circulation, serves only one purpose, namely, their exchange, and vanishes in the final result of the movement. On the other hand, in the circulation M-C-M, both the money and the commodity represent only different modes of existence of value itself, the money its general mode, and the commodity its particular, or, so to say, disguised mode. It is constantly changing from one form to the other without thereby becoming lost, and thus assumes an automatically active character. If now we take in turn each of the two different forms which self-expanding value successively assumes in the course of its life, we then arrive at these two propositions: Capital is money: Capital is commodities.

In truth, however, value is here the active factor in a process, in which, while constantly assuming the form in turn of money and commodities, it at the same time changes in magnitude, differentiates itself by throwing off surplus-value from itself; the original value, in other words, expands spontaneously. For the movement, in the course of which it adds surplus-value, is its own movement, its expansion, therefore, is automatic expansion. Because it is value, it has acquired the occult quality of being able to add value to itself. It brings forth living offspring, or, at the least, lays golden eggs.

Value, therefore, being the active factor in such a process, and assuming at one time the form of money, at another that of commodities, but through all these changes preserving itself and expanding, it requires some independent form, by means of which its identity may at any time be established. And this form it possesses only in the shape of money. It is under the form of money that value begins and ends, and begins again, every act of its own spontaneous generation. It began by being £100, it is now £110, and so on. But the money itself is only one of the two forms of value. Unless it takes the form of some commodity, it does not become capital. There is here no antagonism, as in the case of hoarding, between the money and commodities. The capitalist knows that all commodities, however scurvy they may look, or however badly they may smell, are in faith and in truth money, inwardly circumcised Jews, and what is more, a wonderful means whereby out of money to make more money.

In simple circulation, C-M-C, the value of commodities attained at the most a form independent of their use-values, i.e., the form of money; but that same value now in the circulation M-C-M, or the circulation of capital, suddenly presents itself as an independent substance, endowed with a motion of its own, passing through a life-process of its own, in which money and commodities are mere forms which it assumes and casts off in turn. Nay, more: instead of simply representing the relations of commodities, it enters now, so to say, into private relations with itself. It differentiates itself as original value from itself as surplus-value; as the father differentiates himself from himself quâ the son, yet both are one and of one age: for only by the surplus-value of £10 does the £100 originally advanced become capital, and so soon as this takes place, so soon as the son, and by the son, the father, is begotten, so soon does their difference vanish, and they again become one, £110.

Value therefore now becomes value in process, money in process, and, as such, capital. It comes out of circulation, enters into it again, preserves and multiplies itself within its circuit, comes back out of it with expanded bulk, and begins the same round ever afresh. M-M', money which begets money, such is the description of Capital from the mouths of its first interpreters, the Mercantilists.

Buying in order to sell, or, more accurately, buying in order to sell dearer, M-C-M', appears certainly to be a form peculiar to one kind of capital alone, namely, merchants' capital. But industrial capital too is money, that is changed into commodities, and by the sale of these commodities, is re-converted into more money. The events that take place outside the sphere of circulation, in the interval between the buying and selling, do not affect the form of this movement. Lastly, in the case of interest-bearing capital, the circulation M-C-M' appears abridged. We have its result without the intermediate stage, in the form M-M', "en style lapidaire" so to say, money that is worth more money, value that is greater than itself. M-C-M' is therefore in reality the general formula of capital as it appears prima facie within the sphere of circulation.