its initial variable capital advanced , i . e . 2000 units of variable capital advanced only fetch 1000 units of surplus capital , that is , surplus value . Hence why department 2 produces more value than department 1 , since department 1 only produces 1000 units of surplus capital-value for each 2000 units of capital-value put to work , while department 2 produces 3000 units of surplus capital-value for each 1000 units of capitalvalue put to work . For Marx , this is attributed to the fact that each department utilizes at different ratios “ the sum of necessary labor and surplus labor , i . e . the sum period of time during which the worker respectively replaces the value of his labor-power [ i . e . necessary labor ] and [ in turn ] produces the surplus value [ i . e . surplus labor ]”[ 36 ]. The different ratios between necessary paid labor and surplus unpaid labor for department 1 and department 2 , i . e ., their different rates of surplus value , is the reason for their differing outputs of surplus value .
Likewise , the different ratios between department 1 and department 2 , pertaining to paid and unpaid labor , i . e ., necessary and surplus labor , results in different rates of profit between the two giant departments . According to Marx , “ profit , as we are originally faced with it , is … the same thing as surplus value , save in a mystified form … one that necessarily arises [ like surplus value ] from the capitalist mode of production ”[ 37 ]. Profit is surplus value articulated in price . And as Marx states ,
the value contained in a commodity is equal to the labor-time taken in making it , and this consists of both paid and unpaid labor … the capitalist ’ s profit , therefore , comes from the fact that he has something to sell which he has not paid . The surplus-value or profit consists precisely in the excess of … value over the cost price .[ 38 ]
Specifically , the cost price is the initial constant capital and variable capital put forward by the capitalist to initiate commodity production . The surplus value , or profit , is the sum above the cost of production . The constant capital and variable capital put forward to initiate production , by the capitalist , always stands in a certain ratio to the profit sum , or surplus-value , above the initial cost of production , and this ratio is the rate of profit , it is surplus value divided by the sum of the constant and variable capital added together as one . To quote Marx , “ we … obtain the rate of profit [ as ]
S __ C + V which is distinct from the rate of surplus value S / V ”[ 39 ].
The rate of surplus value is measured against the variable capital only , it is surplus value divided by the variable capital , while “ surplus value , as measured against the total capital , is known as the rate of profit . These are two different standards for measuring the same quantity , and as a result , are able to express the different relations in which the same quantity may stand . It is the transformation of surplus value into profit ”[ 40 ].
Returning to the simple reproduction model above , and adding three columns for production-cost , i . e . C + V or constant capital plus variable capital , the rate of surplus value and the rate of profit , this gives us different results , depending on department 1 and department 2 . The different costs of production , rates of surplus value and rates of profit , again are the result of the diverging organic compositions of capital between the two departments .
Constant + Variable + Surplus Value = Total Value | C + V | S / V | P = S / C + V | a ) Department 1 | 4000 | 2000 | 1000 | 7000 | 6000 | 50 % | 16.666 % | b ) Department 2 | 3000 | 1000 | 3000 | 7000 | 4000 | 300 % | 75 % | c ) Total Price | 7000 | 3000 | 4000 | 14000 | N / A | N / A | N / A |