e constant and usual profits of different trades, spring from the prices of commodities, or selling them at a price over and above their value...
"To explain the general nature of profits, you must start from the theorem that, on an average, commodities are sold at their real values, and that profits are derived from selling them at their values that is, in proportion to the quantity of labor realized (or contained) in them.
"If you cannot explain profit upon this supposition, you cannot explain it at all." (From value, Price and Profit, pages 68, 69 and 70.)
Why does skilled labor-power sell (or exchange) at a higher price (for more gold) than unskilled labor? Does the fact that it requires more LABOR to produce a skilled laborer, that it takes more years of feeding, clothing and shelter to PREPARE a skilled workman, have anything to do with the VALUE of their labor-power?
Mining experts tell us that it takes much less labor-power to produce the commodity–gold, than it did a few years ago. Have you noticed that your gold (or money) exchanges for fewer commodities nowadays than it did ten years ago?
Wheat is produced for a world market. Do you think wheat has decreased much in value in the past ten years as compared to the decrease in value (or social labor necessary) of steel?
We believe it takes very nearly as much labor-power to produce a bushel of wheat (on the AVERAGE) as it did in 1900; hence its value must have remained nearly the same.
Why then will a hundred bushels of wheat today exchange for MORE gold dollars than it did in 1900?
If the VALUE of both commodities had remained the same and no monopolist controlled the world's wheat or gold supply, they would exchange upon the same basis as formerly. That is, the same amount of gold would exchange for (or buy) the same amount of wheat.
Does the decreased value of GOLD result in the farmer getting a higher price (or more gold) in exchange for his wheat crop?
(Do not forget that, as Marx says, if we cannot explain profits upon the basis that all commodities exchange at their values, we cannot explain them at all.)
Our next lesson will take up Surplus Value, which explains how capitalists make profits even though all commodities exchange at their values.
Remember that we do not sell our labor. We sell our strength to work or our laboring power, our labor power. Labor is the expenditure of labor-power. See Value, Price and Profit, pages 71, 72 and 73. When we apply for a job, we do not offer to sell our WORK, but our strength to WORK. The commodities we make are crystallizations of our work or of our LABOR, but it is our strength to labor, or laboring power–our labor power which we sell to the boss.
Many of us have been accustomed to think that profits are made from graft, from special privileges or from monopoly. We have talked so much of the thieving among capitalists that we have altogether overlooked the great, main method of profit taking.
As Marx says, if you cannot explain profits on the supposition that commodities exchange at their values, you cannot explain them at all.
And so we shall assume (as in truth they generally do) that commodities on the average, exchange at their value.
Suppose that it takes two hours of necessary labor to produce the necessaries of life for a workingman–or, in other words, two hours of labor a day to produce laboring-power.
Suppose too (as is very likely the case), that $2.00 in gold represents two hours of labor.
Now the value of labor-power (which the workingman sells) is determined (as the value of all commodities are determined), by the social labor contained in it. It is represented by the necessities of life, produced by two hours of necessary labor a day.
If the workman sells his labor-power at its value, he will receive in return a commodity containing two hours of necessary social labor. In the case we mention above, he would receive $2.00 a day.
In other words, a day's labor-power represents two hours of labor, embodied in the food, clothing and shelter that produce it, just as the two dollars in gold (or an equivalent