Monday, December 29, 2025

John Stuart Mill Explains Profits As The Result Of The Exploitation Of Labor

I find this passage based on guidance from Samuel Hollander:

"The cause of profit is, that labour produces more than is required for its support. The reason why agricultural capital yields a profit, is because human beings can grow more food, than is necessary to feed them while it is being grown, including the time occupied in constructing the tools, and making all other needful preparations: from which it is a consequence, that ff a capitalist undertakes to feed the labourers on condition of receiving the produce, he has some of it remaining for himself after replacing his advances. To vary the form of the theorem: the reason why capital yields a profit, is because food, clothing, materials, and tools, last longer than the time which was required to produce them; so that if a capitalist supplies a party of labourers with these things, on condition of receiving all they produce, they will, in addition to reproducing their own necessaries and instruments, have a portion of their time remaining, to work for the capitalist. We thus see that profit arises, not from the incident of exchange, but from the productive power of labour; and the general profit of the country is always what the productive power of labour makes it, whether any exchange takes place or not. If there were no division of employments, there would be no buying or selling, but there would still be profit. If the labourers of the country collectively produce twenty per cent more than their wages, profits will be twenty per cent, whatever prices may or may not be. The accidents of price may for a time make one set of producers get more than the twenty per cent, and another less, the one commodity being rated above its natural value in relation to other commodities, and the other below, until prices have again adjusted themselves; but there will always be just twenty per cent divided among them all." -- John Stuart Mill, Principles of Political Economy, Book II, Chapter XV, Of Profits, Section 5.

I find the above close to Marx. At the start of the chapter, Mill says that profits are the sum of interest as a payment for abstinence, "indemnity for risk", and "remuneration for the labour and skill required for superintendence". Apparently, Mill regarded this disaggregation as consistent with describring profit as the result of laborers working for more time than needed to reproduce their own necessaries and instruments. For purposes of this post, I do not go into what is wrong with the account of interest as the sum of these components.

I do not draw a connection to Mill's avowal of socialism. But then, I do not read Marx's account of exploitation as an ethical argument for socialism either.

The above quotation is evidence for those who want to argue that Marx has a certain continuity with Ricardo's theory. I do not mean to assert that differences do not exist, as well.

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