Page:Principles of Political Economy Vol 1.djvu/593

Rh else which must be provided before the immediate labour can commence, the more largely will profits enter into the cost of production. It is equally true, though not so obvious at first sight, that greater durability in the portion of capital which consists of machinery or buildings, has precisely the same effect as a greater amount of it. As we just supposed one extreme case, of a machine entirely worn out by a year's use, let us now suppose the opposite and still more extreme case of a machine which lasts for ever, and requires no repairs. In this case, which is as well suited for the purpose of illustration as if it were a possible one, it will be unnecessary that the manufacturer should ever be repaid the 500l. which he gave for the machine, since he has always the machine itself, worth 500l.; but he must be paid, as before, a profit on it. The commodity B, therefore, which in the case previously supposed was sold for 1200l. of which sum 1000l. were to replace the capital and 200l. were profit, can now be sold for 700l., being 500l. to replace wages, and 200l. profit on the entire capital. Profit, therefore, enters into the value of B in the ratio of 200l. out of 700l., being two-sevenths of the whole, or 28$4/7$ per cent, while in the case of A, as before, it enters only in the ratio of one-sixth, or 16$2/3$ per cent. The case is of course purely ideal, since no machinery or other fixed capital lasts for ever; but the more durable it is, the nearer it approaches to this ideal case, and the more largely does profit enter into the return. If, for instance, a machine worth 500l. loses one-fifth of its value by each year's use, 100l. must be added to the return to make up this loss, and the price of the commodity will be 800l. Profit therefore will enter into it in the ratio of 200l. to 800l., or one-fourth, which is still a much higher proportion than one-sixth, or 200l. in 1200l., as in case A.

From the unequal proportion in which, in different employments, profits enter into the advances of the capitalist, and therefore into the returns required by him, two consequences follow in regard to value. One is, that commodities