By virtue of positive law. (Say, t. II, p. 4.) What does one acquire with capital, with the inheritance of a large fortune, for instance? Later we shall see first how the capitalist, by means of capital, exercises his governing power over labour, then, however, we shall see the governing power of capital over the capitalist himself. What is capital? (2) Fonds, or stock, is any accumulation of products of the soil or of manufacture. Stock is called capital only when it yields to its owner a revenue or profit. (Adam Smith, op. cit., p. 243) What proportion, then, does profit bear to capital? The proportion which the usual market rate of interest ought to bear to the rate of clear profit, necessarily varies as profit rises or falls. Double interest is in Great Britain reckoned what the merchants call a good, moderate, reasonable profit, terms which mean no more than a common and usual profit. (Adam Smith, op. cit., Vol. I, p. 87.) What is the lowest rate of profit? And what the highest? Besides all the advantages of limited competition which the capitalist may exploit in this case, he can keep the market price above the natural price by quite decorous means. Other fortuitous causes which can raise the profit on capital: Thus the advance made by human labour in converting the product of nature into the manufactured product of nature increases, not the wages of labour, but in part the number of profitable capital investments, and in part the size of every subsequent capital in comparison with the foregoing. More about the advantages which the capitalist derives from the division of labour, later. He profits doubly first, by the division of labour; and secondly, in general, by the advance which human labour makes on the natural product. The greater the human share in a commodity, the greater the profit of dead capital. The plans and speculations of the employers of capitals regulate and direct all the most important operations of labour, and profit is the end proposed by all those plans and projects. But the rate of profit does not, like rent and wages, rise with the prosperity and fall with the decline of the society. On the contrary, it is naturally low in rich and high in poor countries, and it is always highest in the countries which are going fastest to ruin. The interest of this class, therefore, has not the same connection with the general interest of the society as that of the other two.... The particular interest of the dealers in any particular branch of trade or manufactures is always in some respects different from, and frequently even in sharp opposition to, that of the public. To widen the market and to narrow the sellers' competition is always the interest of the dealer.... This is a class of people whose interest is never exactly the same as that of society, a class of people who have generally an interest to deceive and to oppress the public. (Adam Smith, op. cit., Vol. I, pp. 231-32) Since we already know that monopoly prices are as high as possible, since the interest of the capitalists, even from the point of view commonly held by political economists, stands in hostile opposition to society, and since a rise of profit operates like compound interest on the price of the commodity (Adam Smith, op. cit., Vol. I, pp. 87-88), it follows that the sole defence against the capitalists is competition, which according to the evidence of political economy acts beneficently by both raising wages and lowering the prices of commodities to the advantage of the consuming public. But competition is only possible if capital multiplies, and is held in many hands. The formation of many capital investments is only possible as a result of multilateral accumulation, since capital comes into being only by accumulation; and multilateral accumulation necessarily turns into unilateral accumulation. Competition among capitalists increases the accumulation of capital. Accumulation, where private property prevails, is the concentration of capital in the hands of a few, it is in general an inevitable consequence if capital is left to follow its natural course, and it is precisely through competition that the way is cleared for this natural disposition of capital. We have been told that the profit on capital is in proportion to the size of the capital. A large capital therefore accumulates more quickly than a small capital in proportion to its size, even if we disregard for the time being deliberate competition.|VI|| ||VIII, 2|  Accordingly, the accumulation of large capital proceeds much more rapidly than that of smaller capital, quite irrespective of competition. But let us follow this process further. With the increase of capital the profit on capital diminishes, because of competition. The first to suffer, therefore, is the small capitalist. The increase of capitals and a large number of capital investments presuppose, further, a condition of advancing wealth in the country. Furthermore: the big capitalist always buys cheaper than the small one, because he buys bigger quantities. He can therefore well afford to sell cheaper. But if a fall in the rate of interest turns the middle capitalists from rentiers into businessmen, the increase in business capital and the resulting smaller profit produce conversely a fall in the rate of interest. The necessary result of this competition is a general deterioration of commodities, adulteration, fake production and universal poisoning, evident in large towns. ||X, 2| An important circumstance in the competition of large and small capital is, furthermore, the relation between fixed capital and circulating capital. It is generally true that the accumulation of large capital is also accompanied by a proportional concentration and simplification of fixed capital, as compared to the smaller capitalists. The big capitalist introduces for himself some kind of organisation of the instruments of labour.||XI, 2| So does the interest obtained from the vices of the ruined proletarians. (Prostitution, drunkenness, pawnbroking.) The accumulation of capital increases and the competition between capitalists decreases, when capital and landed property are united in the same hand, also when capital is enabled by its size to combine different branches of production. Indifference towards men. Smith's twenty lottery-tickets. Say's net and gross revenue.|XVI||
Marx 1844: Profit of Capital