IV.
How Profits Are Made.
Many of us have been accustomed to think that profits are made from graft, from special privileges or from monopoly. We have talked so much of thieving among capitalists that we have altogether overlooked the great, main method of profit taking.
As Marx says, if you cannot explain profits on the supposition that commodities exchange at their values, you cannot explain them at all.
And so we shall assume (as in truth they generally do) that commodities, on the average, exchange at their value.
Suppose that it takes two hours of necessary labor to produce the necessaries of life for a workingman—or, in other words, two hours of labor a day to produce laboring-power.
Suppose too (as is very likely the case), that $2.00 in gold represents two hours of labor.
Now the value of labor-power (which the working-man sells) is determined (as the values of all commodities are determined), by the social labor contained in it. It is represented by the necessities of life, produced by two hours of necessary labor a day.
If the workman sells his labor-power at its value, he will receive in return a commodity containing two
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