As a result , for department 1 , the cost of production is 6000 units of capital-value , with a rate of surplus value numbering 50 %, and a rate of profit numbering 16-17 %. For department 2 , the cost of production is 4000 units of capital-value , with a rate of surplus value numbering 300 %, and a rate of profit numbering 75 %. There is a difference between profit rate and the rate of surplus value , pertaining to the manner in which surplus value is calculated , moreover , there is a difference between profit rates and rates of surplus value between the two departments due to their different individual organic compositions .
According to Marx , “ the rate of profit and hence the form of surplus value as profit [ is ] only [ a ] visible surface phenomena ”[ 41 ] in the sense that the rate of profit conceals or veils the rate of real exploitation / surplus value behind its structure , which is directly linked to the exploitation of the worker and his or her labor-power within the capitalist production process . The profit rate conceals this fact within its abstract formulation and design . Moreover , according to Marx , “ the rate of profit is … determined by two major factors : the rate of surplus value and the value [ i . e . organic ] composition of capital ”[ 42 ], which are , themselves , sheathed within the rate of profit . Not delving too deep into the specific reasons how the rate of surplus value and the organic composition are influenced and , ultimately , influence the rate of profit , as this takes us away from Marx ’ s economic model , Marx lists six factors that can influence the rate of surplus value and the organic composition of capital . Marx describes that variations in the value of money , turnover time , productivity of labor ( efficiency , division of labor , constant and variable capital investment etc .), length of the working day , intensity of labor ( introduction of machines ) and wages , all have effects on the organic composition of capital and the rate of surplus value , which , in turn , influence the rate of profit .
Notwithstanding , according to Marx , via competition , rates of profit in different spheres of production have a tendency over an extended period of time to equalize into a general rate of profit between the various spheres of production , “ as long as everything goes well , competition acts , as is always the case [ as a mechanism for a ] general rate of profit ”[ 43 ]. The general rate of profit is an average median between the individual rates of profit embodied in the different spheres of production , or departments , which over time , via competition , tend to revolve around a generalized rate , which is applicable to all spheres of production . In the above simple reproduction economic model , the general rate of surplus value , the general rate of profit and the general production-cost for the two departments combined are indicated by N / A , as not applicable , so as to not confuse understanding . However , it is time to determine these general rates :
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 | 10000 | 133 % | 40 % |
Foremost , the general rate of surplus value is calculated by adding the surplus value from department 1 and 2 and dividing this number by the combined variable capital from both department 1 and 2 ; in this case , the general rate of surplus value equals 4000 units of surplus capital-value divided by 3000 units of variable capital-value , providing a general rate of surplus value of 133 %. Likewise , the general rate of profit between the two departments is calculated by adding the total sum of constant and variable capital between the two departments and dividing this by their combined surplus value , i . e ., 4000 units of surplus capital-value divided by 10000 units of total capital-value . This gives a general rate of profit of 40 %, for the total social capital of the two departments combined , described in this particular simple reproduction economic model .
It is important to note here that a general rate of profit applied to all spheres of production or departments , means that any new capital-value investment in either / or of the individual departments can expect to receive a return on investment of 40 %, even though individual departments may produce less