[OPE-L] my short reply to Keith Tribe

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Thu Aug 10 2006 - 09:17:55 EDT


I think Marx did have a good sense of how the volumes hung together.
This is shown in the letter to Engels that Grossman emphasized. Here Marx
very clearly reveals that he had tightly 
organized the materials in an effective way!

Yet in the following years, Marx used the excuse 
of new American and Russian materials
not to prepare for publication the next three 
volumes because he was not happy about the 
of the first volume. He waited--as a good 
materialist--for the propitious economic
conditions. He allowed himself to be diverted, 
and then it was too late, and he did
not have the energy to prepare himself the remaining volumes for publication.
Gareth Stedman Jones argues that Marx did not 
publish the remaining three volumes
because his studies indicated to him that 
socialism was not likely to be a more productive
economic formation and that there was no real limit to capital. And he argues
that Marx kept up the ruse of working on his 
magnum opus to keep the money flowing
from Engels. This is rubbish.

The letter is below.

Yours truly, Rakesh

Marx-Engels Correspondence 1868
Marx To Engels
In Manchester

Source: MECW, Volume 43, p. 20;
First published: in Der Briefwechsel zwischen F. 
Engels und K. Marx, Stuttgart, 1913.

London, 30 April 1868
Dear Fred,
For the case under discussion it is immaterial 
whether m (the surplus value) is quantitatively > 
or< than the surplus value created in the given 
branch of production itself. E.g., if 
100m/(400c+100v) = 20%, and this becomes, owing 
to a fall in the value of money by 11/10, = 
110m/(400c+100v) (assuming that the value of the 
constant capital sinks), it is immaterial if the 
capitalist producer pockets only half of the 
surplus value which he himself produces. For the 
rate of profit for him then = 55m/(400c+110v) > 
than the former. I retain m here in order to show 
qualitatively in the expression itself where the 
profit comes from.
But it is proper that you should know the method 
by which the rate of profit is developed. I shall 
therefore give you the process in the most 
general outline. In Book II, as you know, the 
process of circulation of capital is presented on 
the basis of the premisses developed in Book I. 
I.e. the new determinations of form which arise 
from the process of circulation, such as fixed 
and circulating capital, turnover of capital, 
etc. Finally, in Book I we content ourselves with 
the assumption that when, in the valorisation 
process,' £100 becomes £110, it finds the 
elements into which it is converted anew already 
in existence in the market. But now we 
investigate the conditions under which these 
elements are to be found in existence, that is to 
say, the social intertwining of the different 
capitals, of parts of capital and of revenue (=m).
In Book III we then come to the conversion of 
surplus value into its different forms and 
separate component parts.
I. Profit is for us, for the time being, only 
another name for or another category of surplus 
value. As, owing to the form of wages, the whole 
of labour appears to be paid for, the unpaid part 
of it seems necessarily to come not from labour 
but from capital, and not from the variable part 
of capital but from the total capital. As a 
result, surplus value assumes the form of profit, 
without there being any quantitative difference 
between the one and the other. It is only an 
illusory manifestation of surplus value.
Further, the part of capital consumed in the 
production of a commodity (the capital, constant 
and variable, advanced for its production, minus 
the utilised but not consumed part of fixed 
capital) now appears as the cost price of the 
commodity, since for the capitalist that part of 
the value of the commodity that it costs him is 
its cost price, while the unpaid labour contained 
in the commodity does not enter into its cost 
price, from his point of view. The surplus value 
= profit now appears as the excess of the selling 
price of the commodity over its cost price. Let 
us call the value of the commodity W and its cost 
price K; then W= K+m, therefore W-m = K, 
therefore W > K. This new category, cost price, 
is very necessary for the details of the later 
analysis. It is evident from the outset that the 
capitalist can sell a commodity at a profit below 
its value (as long as he sells it above its cost 
price), and this is the fundamental law for 
comprehending the equalisations effected by 
Therefore, while profit is at first only formally 
different from surplus value, the rate of profit 
is, by contrast, at once really different from 
the rate of surplus value, for in one case we 
have m/v and in the other m/(c+v), from which it 
follows from the outset, since m/v > m/(c+v), 
that the rate of profit < than the rate of 
surplus value, unless c=0.
In view of what has been developed in Book II, it 
follows, however, that we cannot compute the rate 
of profit on the commodity product of any period 
we select, e.g. that of a week, but that m/(c+v) 
denotes here the surplus value produced during 
the year in relation to the capital advanced 
during the year (as distinct from the capital 
turned over). Therefore, m/(c+v) stands here for 
the annual rate of profit.
Then we shall first examine how variations in the 
turnover of capital (partly depending on the 
relation of the circulating to the fixed portions 
of capital, partly on the number of times the 
circulating capital turns over in a year, etc., 
etc.) modify the rate of profit while the rate of 
surplus value remains the same.
Now, taking the turnover as given, and m/(c+v) as 
the annual rate of profit, we examine how the 
latter can change, independently of changes in 
the rate of surplus value, and even of its total 
Since m, the total amount of surplus value, = the 
rate of surplus value multiplied by the variable 
capital, then, if we call the rate of surplus 
value r and the rate of profit p', p'= r.v/(c+v) 
.Here we have the 4 quantities p', r, v, c with 
any 3 of which we can work, always seeking the 
4th as unknown. This covers all possible cases of 
movements in the rate of profit, in so far as 
they are distinct from the movements In the rate 
of surplus value and, to a certain extent, even 
in its total amount. This has, of course, 
hitherto been inexplicable to everybody.
The laws thus found - very important, e.g., for 
understanding how the price of the raw material 
influences the rate of proflt - hold good no 
matter how the surplus value is later divided 
among the producer, etc. This can only change the 
form of appearance. Moreover, they remain 
directly applicable if m/(c+v) is treated as the 
relation of the socially produced surplus value 
to the social capital.
II. What were treated in I as movements, whether 
of capital in a particular branch of production 
or of social capital - movements changing its 
composition, etc. - are now conceived as 
differences of the various masses of capital 
invested in the different branches of production.
Then it turns out that, assuming the rate of 
surplus value, i.e. the exploitation of labour, 
as equal, the production of value and therefore 
the production of surplus value and therefore the 
rate of profit are different in different 
branches of production. But from these varying 
rates of profit a mean or general rate of profit 
is formed by competition. This rate of profit, 
expressed absolutely, can be nothing but the 
surplus value produced (annually) by the 
capitalist class in relation to the total of 
social capital advanced. E.g., if the social 
capital = 400c+100v, and the surplus value 
annually produced by it = 100m, the composition 
of the social capital = 80c+20v, and that of the 
product (in percentages) = 80c+20v | +20m = 20% 
rate of profit. This is the general rate of 
What the competition among the various masses of 
capital - invested in different spheres of 
production and differently composed - is striving 
for is capitalist communism, namely that the mass 
of capital employed in each sphere of production 
should get a fractional part of the total surplus 
value proportionate to the part of the total 
social capital that it forms.
This can only be achieved if in each sphere of 
production (assuming as above that the total 
capital = 80c+20v and the social rate of profit= 
20m/(80c+20v)) the annual commodity product is 
sold at cost price + 20% profit on the value of 
the capital advanced (it is immaterial how much 
of the advanced fixed capital enters into the 
annual cost price or not). But this means that 
the price determination of the commodities must 
deviate from their values.
Only in those branches of production where the 
percentual composition of capital is 80c+20v will 
the price K (cost price) + 20% on the capital 
advanced coincide with the value of the 
commodities. Where the composition is higher 
(e.g. 90c + 10v), the price is above their value; 
where the composition is lower (e.g. 70c+30v), 
the price is below their value.
The price thus equalised, which divides up the 
social surplus value equally among the various 
masses of capital in proportion to their sizes, 
is the price of production of commodities, the 
centre around which the oscillation of the market 
prices moves.
Those branches of production which constitute a 
natural monopoly are exempted from this 
equalisation process, even if their rate of 
profit is higher than the social rate. This is 
important later for the development of rent.
In this chapter, there must be further developed 
the various causes of equalisation of the various 
capital investments, which appear to the vulgar 
conception as so many sources of profit.
Also to be developed: the changed form of 
manifestation that the previously developed and 
still valid laws of value and surplus value 
assume now, after the transformation of values 
into prices of production.
III. The tendency of the rate of profit to fall 
as society progresses. This already follows from 
what was developed in Book I on the change in the 
composition of capital with the development of 
the social productive power. This is one of the 
greatest triumphs over the pons asini of all 
previous political economy.
IV. Until now we have only dealt with productive 
capital. Now there enters modification through 
merchant capital.
According to our previous assumption the 
productive capital of society = 500 (millions or 
billions, n'importe). And the formula was 400c+ 
100v | + 100m. The general rate of profit, p', = 
20%. Now let the merchant capital=100.
So, the 100m has now to be calculated on 600 
instead of 500. The general rate of profit is 
thus reduced from 20% to 16 2/3%. The price of 
production (for the sake of simplicity we will 
assume here that all of the 400c, i.e. the whole 
fixed capital, enters into the cost price of the 
annual output of commodities) now = 583 1/3. The 
merchant sells at 600 and therefore realises, if 
we ignore the fixed portion of his capital, 16 
2/3% on his 100, as much as the productive 
capitalists; or, in other words, he appropriates 
1/6 of the social surplus value. The commodities 
- en masse and on a social scale - are sold at 
their value. His £100 (apart from the fixed 
portion) only serve him as circulating money 
capital. Whatever the merchant swallows over and 
above that, he gets either simply by trickery, or 
by speculation on the oscillation of commodity 
prices, or, in the case of the actual retailer, 
as wages for labour - wretched unproductive 
labour that it is - in the form of profit.
V. We have now reduced profit to the form in 
which it appears in practice, according to our 
assumptions 16 2/3%. Next comes the division of 
this profit into entrepreneur's gain and 
interest. Interest-bearing capital. The credit 
VI. Transformation of surplus profit into rent.
VII. At last we have arrived at the forms of 
manifestation which serve as the starting point 
in the vulgar conception: rent, coming from the 
land; profit (interest), from capital; wages, 
from labour. But from our standpoint things now 
look different. The apparent movement is 
explained. Furthermore, A. Smith's nonsense, 
which has become the main pillar of all political 
economy hitherto, the contention that the price 
of the commodity consists of those three 
revenues, i.e. only of variable capital (wages) 
and surplus value (rent, profit (interest)), is 
overthrown. The entire movement in this apparent 
form. Finally, since those 3 items (wages, rent, 
profit (interest)) constitute the sources of 
income of the 3 classes of landowners, 
capitalists and wage labourers, we have the class 
struggle, as the conclusion in which the movement 
and disintegration of the whole shit resolves 

Our young couple back again since last week, very 
love-sick. Apartment for them near Primrose Hill, 
where they moved in this evening.
Enclosed letters from Kugelmann, etc. I have sent 
Schily what he wanted, but not in the childish 
way he requested. In a few days I shall be 50. As 
that Prussian lieutenant said to you: '20 years 
of service and still lieutenant', I can say: half 
a century on my shoulders, and still a pauper. 
How right my mother was: 'If only Karell had made 
capital instead of etc.'
K. Marx
Of carbuncles only a very small trace on the 
right thigh, but will probably vanish without 
Ernest Jones has made a fool of himself by his 
lukewarm and nisi prius way of defending Burke. 
Burke has at least won a victory in forcing the 
old jackass Bramwell to abandon the hypocrisy of 
temper, and allowing his mean dog's soul to 
rampage free of carrière.

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