Theories of the essence and source of profit in capitalist economics

Introduction:

Profit is another type of income arising from ownership besides interest and rent. The concept of profit for economists differs from the concept of profit for accountants. Profit, according to the accountants point of view, is the amount that remains for the capitalist after he pays wages, interest and rent, after he pays the value of inputs, and deducts a percentage equivalent to the depreciation of buildings and equipment. Economists differ in this from accountants because they believe that the costs of opportunity for work, capital and land contributed by the owner of the enterprise should be deducted.

Capitalist profit, regardless of the form in which it appears, is achieved through the exploitation of wage workers, this one category that creates all the material goods that are produced within the process of capitalist production.

The ambition of capitalist firms to make as much profit as possible is the main driver of the growth and development of production and exchange in the capitalist economy. This means that if we cannot clarify the essence and source of profit, we cannot fully understand the essence of the capitalist mode of production.

It seems at first glance that profit is achieved when a capitalist sells his goods at a price higher than the purchase price. This clarification is insufficient. That s because the exchange of goods doesn t create any new value. Indeed, the value added in the overall economy does not result from uneven exchange. When the sale is made above the value, this means that the profit is made to the seller against the loss suffered by the buyer, that is, the profits of the sellers will be equivalent to the loss of the buyers, and the value remains the same without any increase.

From the foregoing, we find that profit is not achieved in the field of goods circulation, but only in the field of production, and the means of production used in the production process cannot be a source of profit, because these means of production cannot be transferred to the final product with a new value greater than their value if used in the production process. Thus, the labour force used by workers in the production process is the only source of profit, because labour power can appear in the final product at a greater value than the value the worker sold to the capitalist during the production process. In other words, the worker receives a part of the value of the labor force sold by the capitalist, in the form of wages, and the rest goes to the pocket of the capitalist, in the form of surplus value, and this happens because the capitalist owns the means of production, while the worker has only his ability to work, and he is forced to rent them to the capitalist who owns the means of production in order to secure the means of subsistence for him and his family. Thus, the labor force in the capitalist system is the only commodity that has special characteristics that make it capable of creating new value that is distributed between the wage of the paid worker and the profit of the capitalist.


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Contents
I -  Factors of emergence of economic profit: 3
1 -  Innovations: 4
2 - Risk and uncertainty conditions: 4
3 - Monopoly Profits: 4

II - -function-s and role of profit: 5

III - Bourgeois theories in the interpretation of profit: 5
1 - Theory of Return on Capital: 6
2 - The theory of (profit for the work done by the capitalist): 7
3 - Theory (profit is a reward for risk borne by the capitalist): 7
4 - Theory (profit is the price of innovation): 7

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