Note 979 — Chapter III · : MARXISM

We have indifferently employed the terms “profit” and “surplus value” simply because the former is a much more familiar word. But we must warn the reader against thinking that the two terms are synonymous. The surplus value is all that part of the value of the produce which is over and above the expenses of labour involved in its production—that enormous slice which becomes the property of every class in society except the workers, not merely the employers, but merchants, landlords, etc.; while profit is that part of the surplus value which the employers of labour keep for their own use. The rate of profit also is something quite different from the percentage of surplus value, as we shall see later.

We must call attention once more to the different interpretations which have been given of the term “profit.” Marx and the English economists take the word to comprise the whole revenue of capital under a régime of free competition, no distinction being drawn between profit properly so called and interest. To-day we understand by profit the income drawn by the entrepreneur—as distinct from the capitalist—as the result of certain favourable circumstances, notably imperfect competition.

It would be absurd to speak of a law of equality of profit, seeing that profit, as we have defined it, is, like rent, a differential revenue.