is the substance within all commodities , i . e . value , price and / or capital , which enables scientific measurement , scientific comparability and scientific hierarchical classification to transpire , based on the quantities of socially necessary labor-time embodied in each constituent .
Notwithstanding , for Marx , it is through the constant fluctuations of market prices in relation to prices of production , i . e . market values , that a vast generalized equalization process between all spheres of production is set in motion , unwittingly , by the capitalist search for maximum profit , i . e . surplus profit , which is , as well , a consequence of the influence of the overarching law of value . Surplus profits provide the incentive for massive capital investments and for expanding capitalist production in the sense that surplus profits consist “ the excess of individual profit over and above the average profit ”[ 67 ], namely , price of production . Surplus profits are derived from market prices that exceed market values , i . e . their prices of production , within and across spheres of production . Surplus profits are mega-profits lying above the average profit of a specific sphere of production , meaning that all capital investments within this particular sphere of production will in effect receive a higher return on investments due to the fact that market prices are above prices of production . A surplus profit stimulates production and capital investments in a particular sphere of production , due to the fact that a greater than average profits can be had . In contrast to other spheres of production , where market prices more accurately reflect and / or are lower than prices of production and average profits , within spheres of production where market prices exceed prices of production , there is opportunity for surplus profit , that is , above average profits .
According to Marx , normal surplus profit “ is determined by the difference between the individual production price of commodities produced … and the general production price which governs the market prices of commodities … across [ a ] sphere of production ”[ 68 ]. For Marx , surplus profits are derived from both market prices exceeding prices of production and individual prices of production exceeding general prices of production , that is , the general production price of one overall sphere of production and / or the general production price of all capitalist spheres of production combined . As Marx states , “ the general social price of production in the sphere of production as a whole … governs the [ total capitalist ] market ”[ 69 ]; consequently , this overall general price of production provides a base by which all prices of production within and between all spheres of production can be compared , evaluated and ranked in relation to profit rates , profit gains and , more importantly , the production and realization of surplus profits . As a result , surplus profits are a matter of both fluctuating market prices and the productive conditions involved in the formation of an individual price of production , pertaining to the specific production of an individual commodity , whereupon a “ reduction in the cost price …[ may generate ] surplus profit ”[ 70 ]. A reduction in the production-cost of a commodity may generate a surplus profit by lowering the individual price of production of a commodity in relation to the general price of production for this specific species of commodity , whose general production price determines the range that all market prices , pertaining to this species of commodities , will oscillate around . Consequently , the difference between individual prices of production and the general price of production for an overall sphere and / or all spheres of production combine , dictates if there is a surplus profit or not . This pertains only to the attainment of surplus profit through the production of commodities .
Albeit , in addition , surplus profits are also created via monopolies , where the capitalist , himself or herself , can set the market prices artificially above market values . Secondly , according to Marx , surplus profits are created via supply and demand , which is the mechanism that increases and / or decreases market prices . When effective demand is high market prices rise and when effective demand is so high that it drives market prices above their market values , i . e . prices of production , surplus profits are available . Finally , for Marx , surplus profits are created via technological innovations , which permit capitalists in specific spheres of production to produce below the socially necessary labor-time governing these specific spheres , which ultimately translates into surplus profits due to the advantages of time-savingtechnology . As a result , these cost-efficient capitalists reap higher profits , namely surplus profits , in