Our next inquiry is: Where does the capitalist look for his profit? He has bought machinery; he has bought labor-force; whence comes the gain he is seeking? The profit of the capitalist must arise from the difference between the price he pays for labor-force and the wealth produced by it; out of this difference must be paid his rent, the loss incurred by wear-and-tear, and the price of the raw material on which his machinery works; these provided for, the remainder of the difference is his "profit". The analysis of the way in which this profit arises is, then, the task that comes next.
In Karl Marx's "Das Capital" may be found a carefully elaborated exposition of "surplus-value". The term is a convenient one, and the student will do well to read his 7th chapter, on the "production of use-value and surplus-value"; in reading, he must remember Marx's definitions of value and use-value, which of course govern the whole. Value is human labor incorporated in a commodity; use-value is that which in a commodity satisfies some human want. The "use-value" of Marx is identical with the "intrinsic natural worth" of Locke. Locke says: "The intrinsic, natural worth of any thing, consists in its fitness to supply the necessities, or serve the conveniences of human life" ("Considerations of the Lowering of Interest," etc., Locke's Works, vol. ii., p. 28, ed. 1777). As an instance of the production of surplus-value—that is of the difference between the capital which the capitalist expends in production and that which he possesses when the production is complete—Marx takes the case of the manufacture of ten pounds of thread. The capitalist buys ten pounds of cotton at 10s.; wear-and-tear of machinery in the spinning of the cotton into thread raises his expenditure to 12s.; further, six hours of work are necessary to turn the ten pounds of cotton into ten pounds of thread.
Now suppose that a man in six hours is able to produce sufficient to maintain himself for a day;—that is that he produces as much as might be exchanged for a day's consumption of the necessaries of life. Let us value this at 3s. in money. That 3s. which is the monetary equivalent of his six hours' labor must be added to the cost of production of the thread; its value has therefore risen finally to 15s. If the capitalist now sells his ten pounds of thread for 15s., he will only receive back as much as he has
