Profit

From Infoshop OpenWiki

Profit is the unpaid labor expropriated from workers by a capitalist and distributed by various means among the capitalist class, measured in proportion to the total capital invested.

The notion of profit is closely related to that of surplus-value.

Surplus value is the unpaid labor expropriated from the working class as a whole. Surplus value is taken in proportion to the value of labor-power. In general, it is difficult to relate the concept of surplus value to single unit of capital, since the necessary labor time which determines the level of wages is socially determined according to the cost of living.

The rate of surplus value is the ratio of surplus labor to wages — the workers’ costs of production.

The rate of profit, on the other hand, is the ratio of surplus labor to necessary labor plus the value of components and materials used in production — the capitalist’s costs of production.

Because of the complexity of the labor process, the individual unit of capital must invest in purchasing means of production, so they are never able to realize the full rate of surplus value as profit. In fact, production becomes more and more socialized, the rate of profit must fall.

The notion of profit pertains to the position of the individual unit of capital, and no capitalist is ever able to retain the full value of the profit they extract from the process of production — the landlord, the tax-collector, the bank, all demand their share. So too does the wholesaler and the retailer, each taking their margin as the goods pass from hand-to-hand through all the middlemen until it reaches the ultimate consumer. The workers have to support all these parasites with their surplus value; and only a small portion is retained by “their own” capitalist in the form of profit.