The Whole and the Parts: The Early Development

of Marx’s Theory of the Distribution of Surplus-Value

in the Grundrisse
Fred Moseley

I have argued in several recent papers that Marx’s

theory is based on the fundamental quantitative prem-
ise that the total amount of surplus-value is deter-
mined logically prior its division into individual parts
(equal rates of profit, commercial profit, interest, and
rent).1 In other words, the production of surplus-value is

1. To clarify what I mean by the ‘prior determination of the total surplus-value’: in any
given period, the total surplus-value is determined prior to its division into individual
parts (the average profit of individual industries, commercial profit, interest, and rent).
In other words, the total surplus-value is not determined by first determining these indi-
vidual parts and then adding them up. The total surplus-value is determined by the total
surplus-labour of the given period, and is then divided into these individual parts accord-
ing to certain rules. It may be that the total surplus-value of a given period is affected
by the distribution of surplus-value in previous periods. For example, the division of the
total surplus-value in previous periods into profit and interest, or into industrial profit
and commercial profit, may amount to the investment of industrial capital invested,
and thus may affect the total surplus-labour and the total surplus-value produced in the
given period. However, it remains true that, in the given period, the total surplus-value is
not determined by adding up the individual parts mentioned above, but is instead deter-
mined by the total surplus-labour of that period, and the predetermined total surplus-
value is then divided analytically into these individual parts. Also, it is always possible
(and even likely) that some of the surplus-value produced in a given period may not
be realised due to insufficient demand. However, Marx generally assumes throughout
the three volumes of Capital that demand equals supply in all industries (in order to
analyse the production and distribution of surplus-value ‘in its pure form’). Under this
ruling assumption, all the surplus-value produced is realised. The long debate over the
‘transformation-problem’, with which I wish to engage, has always assumed that demand
equals supply in all industries. The controversial issue in this debate has been whether or
not the total surplus-value (or the total value) changes solely due to the transformation of
values into prices of production. I argue that the total value and the total surplus-value
do not change as a result of this transformation, and cannot change, due to the nature
of Marx’s logical method. The total surplus-value is first determined and then taken as
given in the theory of the division of this total amount into individual parts, including
the equalisation of profit-rates across industries and the transformation of values into
286   Fred Moseley

theorised prior to the distribution of surplus-value. There is a clear logical pro-

gression from the determination of the magnitude of the total surplus-value to
the determination of the individual parts. In modern economic terms, there is a
progression from the macro to the micro.
To take the most important example, in Marx’s theory of prices of production
in Part two of Volume III, the total surplus-value is taken as given, as already
determined in volumes I and II, and the total surplus-value is used to determine
the general rate of profit, which is turn is a determinant of prices of production.
As a result, the predetermined total surplus-value is distributed to individual
industries in such a way that all industries receive the same rate of profit.
This premise is very important for Marx because he wished to demonstrate
that all the particular forms of surplus-value (industrial profit, commercial profit,
interest, and rent) all come from the same source: which is surplus-labour.
Surplus-labour is the ‘inner substance’ of all these different forms of appearance
of surplus-value. This premise is repeated many times in all the drafts of Capital,
especially in the drafts of Volume III in the Manuscript of 1861–63 and the Manu-
script of 1864–65.2 Other authors who have also emphasised the prior determina-
tion of the total surplus-value in Marx’s theory include: Paul Mattick, Roman
Rosdolsky, Enrique Dussel, David Yaffe, and Duncan Foley.
I have argued further that this distinction between the production of surplus-
value and the distribution of surplus-value is the quantitative dimension of the
two basic levels of abstraction in Marx’s theory: capital in general and competi-
tion. Capital in general is defined by Marx as those properties which are common
to all capitals and which distinguish capital from simple commodities or money
and other forms of wealth. The most important common (or universal) property
of all capitals, which is analysed at the level of abstraction of capital in general,
is the production of surplus-value (including absolute and relative surplus-value).
Since this all-important property is shared by all capitals, the theory of the pro-
duction of surplus-value at the level of abstraction of capital in general is con-
cerned with the total surplus-value produced by the total capital of society as a
whole. Other common properties of all capitals that are analysed at the level of
abstraction of capital in general include various characteristics of capital in the
sphere of circulation (the turnover-time of capital, fixed and circulating capital,
etc.) and the appearance of surplus-value and the rate of surplus-value as profit
and the rate of profit (including the falling rate of profit).
The main question addressed at the level of abstraction of competition is
the distribution of surplus-value, or the division of the total surplus-value into

prices of production. The question of a possible ‘realisation-problem’ belongs to a lower

level of abstraction, beyond the three volumes of Capital.
2. Many of these passages are presented in Moseley 1997, 2002, and 2008.
 The Whole and the Parts   287

individual parts. Another related question addressed at the level of abstraction of

competition is ‘revenue and its sources’, or the critique of vulgar political econ-
omy’s explanation of these individual parts of surplus-value.
Therefore, I argue that the basic logical structure of Marx’s theory of capital in
the three volumes of Capital is as follows:
Marx’s theory in ‘Capital’
I. Capital in general
1. Production of surplus-value (Volume I)
2. Circulation of capital (turnover-time) (Volume II)
3. Capital and profit (including the falling rate of profit)
(Parts one and three of Volume III)
II. Competition, or the distribution of surplus-value
1. General rate of profit and prices of production (Part two of Volume III)
2. Commercial profit (Part four)
3. Interest (Part five)
4. Rent (Part six)
5. Revenue and its sources (critique of vulgar economics) (Part seven)
The Grundrisse are almost entirely at the level of abstraction of capital in gen-
eral. After an initial ‘Chapter on money’, the rest of the Grundrisse is the ‘Chapter
on capital’, which is divided into three sections: (1) ‘The production process of
capital’, (2) ‘The circulation process of capital’, and (3) a brief section (30 pages,
mainly about the falling rate of profit) on ‘Capital as fructiferous; capital and
profit’. These three sections of the ‘Chapter on capital’ correspond to the three
sublevels of capital in general in the outline above.
In addition, there are a number of passing comments and brief discussions
in sections two and three of the ‘Chapter on capital’ that have to do with the
distribution of surplus-value, mainly the equalisation of profit-rates across indus-
tries, the most important aspect of the distribution of surplus-value. In these
comments, Marx often stated something like the following: ‘this discussion of
the equalisation of profit-rates does not belong here, but belongs instead to the
later analysis of competition’. (see below)
After a brief summary of section one of the Grundrisse, this chapter will review
in detail these initial comments and discussions in sections two and three of the
Grundrisse about the equalisation of profit-rates and the other component parts
of the total surplus-value. It will also briefly review several important letters writ-
ten by Marx in 1858, during the time that he was finishing the Grundrisse. It
will be seen that Marx was already very clear at this early stage of his work on
Capital that the subsequent analysis of the equalisation of profit-rates (and the
distribution of surplus-value in general) would be based on the premise that the
288   Fred Moseley

total amount of surplus-value is determined prior to its distribution and is not

affected by its distribution.

1. Section one: the production-process of capital and the theory of

surplus-value
In section one of the Grundrisse, Marx develops for the first time his theory of
surplus-value.3 Marx had written a very brief and inadequate sketch of his theory
of surplus-value in Wage Labour and Capital (1847),4 but the Grundrisse were the
first time (in his published works) in which he worked out the theory in some
detail. He develops for the first time the crucial division of the working day into
necessary labour-time (labour-time objectified in the wage) and surplus labour-
time (the rest of the working day). According to Marx’s theory, surplus-value is
determined in the process of production by the amount of surplus labour-time
in excess of necessary labour-time. This theory applies to each and every worker
and therefore applies to the total surplus-value produced by the working class
as a whole.
In the Grundrisse, Marx also develops for the first time the distinction between
absolute surplus-value (extension of the working day) and relative surplus-value
(reduction of necessary labour-time through technological change and increas-
ing productivity), and the distinction between variable capital (which purchases
labour-power) and constant capital (which purchases means of production).
Marx’s theory of surplus-value – determined by surplus labour-time – is a
tremendous theoretical achievement, which has never been equalled before or
since. Ricardo’s labour-theory of value implied a ‘surplus-labour theory of sur-
plus-value’, but he did not explicitly develop this theory. The later ‘Ricardian
socialists’ did explicitly draw this conclusion, but they did not work it out in
anything like the rigor and comprehensiveness of Marx’s theory. The main alter-
native theory of profit of the other classical economists was Senior’s pathetic
‘abstinence’-theory of profit. And neoclassical economics has virtually no theory
of profit at all, after its marginal-productivity theory was devastated by the Cam-
bridge criticisms. Marx’s theory of profit towers over these other theories, both
in terms of logical rigor and explanatory power.

3. Dussel 2008 describes Marx’s ‘discovery’ of his theory of surplus-value in the

Grundrisse.
4. Marx 1975–2005g.
 The Whole and the Parts   289

2. Section two: the circulation-process of capital

In Section two on the circulation-process of capital, Marx develops the concepts
that have to do specifically with circulation: turnover-time, fixed capital, circu-
lating capital, annual surplus-value, etc. Much attention is given to fixed capital
as a characteristic feature of capitalism. The annual surplus-value produced by
a given capital is the surplus-value produced by that capital in one turnover-
period times the number of turnover-periods in a year.5 There is nothing in the
Grundrisse about the ‘reproduction-schemes’, which Marx discussed for the first
time in the Manuscript of 1861–3.

2.1. The first time a topic related to competition and the distribution of surplus-
value is discussed is on Marx 1973, pp. 432–6. Marx first notes that capitalists
could sell their commodities below their value and still make a profit; the only
difference is that a part of the surplus-value would be received by the buyers of
the commodities, so there is a kind of sharing of surplus-value. Three pages later,
Marx writes:
A general rate of profit as such is possible only if . . . a part of the surplus-
value – which corresponds to surplus labour – is transferred from one capital-
ist to another . . . The capitalist class thus to a certain extent distributes the total
surplus-value so that, to a certain degree, it [shares in it] evenly in accordance
with the size of its capital, instead of in accordance with the surplus-values
actually created by the capitals in the various branches of business. The larger
profit – arising from the real surplus labour within a branch of production, the
really created surplus-value – is pushed down to the average by competition,
and the deficit of surplus-value in the other branch of business raised up to the
average level by withdrawal of capitals from it . . . Competition cannot lower this
level itself, but merely has the tendency to create such a level. Further develop-
ments belong in the section on competition.6
This is a very clear statement, and it is the first time in Marx’s published writings
(so far as I know) that Marx mentions the general rate of profit and the distri-
bution of surplus-value. But somehow Marx already had a clear idea of how he
would explain these important phenomena of competition.

2.2. 120 pages later, in a discussion of the relation between profit and wages,
Marx interjects another comment about competition and the distribution of sur-
plus-value: ‘Competition among capitals can change only the relation in which

5. See especially Marx 1973, pp. 652–67.

6. Marx 1973, pp. 435–6. In all the quotations in this paper, underlined emphasis is in
the original, and italicised emphasis is added.
290   Fred Moseley

they [capitalists; FM] share the total profit, but cannot alter the relation between
total profit and total wages’.7
In other words, competition affects the distribution of surplus-value, but it does
not affect the production of surplus-value, or the total amount of surplus-value.

2.3. 110 pages later, in a discussion of the effects of unequal turnover-time on the
production of surplus-value, Marx notes that this subject is related to the equali-
sation of profit-rates. ‘This question obviously belongs with the equalisation of
the profit rate’.8 And in a footnote to this sentence, Marx notes further that the
equalisation of profit-rates has to do with the distribution of surplus-value, not
its production (or ‘creation’): ‘It is clear that other aspects [besides unequal turn-
over-times, FM] also enter in with the equalisation of the rate of profit. Here,
however, the issue is not the distribution of surplus-value, but its creation’.9

2.4. The last comment about the general rate of profit and the distribution of
surplus-value in Section two comes 15 pages later, and is an important one. In
a discussion of the confusion of economists (such as Malthus), who think that
fixed and circulating capital somehow produce profit independently of surplus-
labour, Marx comments: ‘The greatest confusion and mystification has arisen
because the doctrine of surplus profit has not been examined in its pure form
by previous economists, but rather mixed in together with the doctrine of real
profit, which leads up to distribution, where the various capitals participate in
the general rate of profit. The profit of the capitalists as a class, or the profit of
capital as such, has to exist before it can be distributed, and it is extremely absurd
to try to explain its origin by its distribution’.10
Thus we can see that, according to Marx’s theory: (1) the theory of surplus-
value ‘in its pure form’ (namely, the theory of the production of surplus-value,
disregarding the distribution of surplus-value) should be carefully distinguished
from the theory of ‘real profit’ (namely, the theory of the distribution of sur-
plus-value, the most important aspect of which is the general rate of profit);
(2) surplus-value exists prior to its distribution (namely, the total amount of sur-
plus-value is determined prior to its distribution); and (3) one cannot explain the

7. Marx 1973, p. 557.

8. Marx 1973, p. 669.
9. Ibid.
10. Marx 1973, p. 684. Marx made a similar statement about the necessity to keep the
theory of surplus-value ‘as such, in its pure form’ separate from the theory of the ‘par-
ticular forms’ of surplus-value in his ‘general observation’ at the beginning of Theories of
Surplus-Value: ‘All economists share the error of examining surplus-value not as such, in
its pure form, but in the particular forms of profit and rent. What theoretical errors must
necessarily arise from this will be shown more fully in Chapter III, in the analysis of the
greatly changed form which surplus-value assumes as profit’ (Marx 1963b, p. 40).
 The Whole and the Parts   291

origin of surplus-value, i.e., the determination of the quantity of surplus-value,

by its distribution.
In a footnote to this passage, Marx comments further on the difference between
‘the study of capital as such’ (the study of capital in general or the production of
surplus-value) and ‘the study of capital in reality’, that is, ‘in relation to another
capital’ (the study of competition or the distribution of surplus-value):
Capitals have different sizes. But the size of each individual capital is equal to
itself, hence, in so far as only its quality as capital is concerned, any size. But
if we examine two capitals in comparison to each other, then the difference in
their size introduces a relation of a qualitative character. Size becomes itself
a distinguishing quality. This is an essential aspect, of which size is only one
single instance, of how the study of capital as such differs from the study of one
capital in relation to another capital, or the study of capital in its reality.11

3. Section three: Capital and profit

3.1. The beginning of the short section three is a critical juncture in Marx’s the-
ory. It is the first draft of the beginning of Volume III of Capital, which is a key
transition from the analysis of circulation in section two to an analysis of pro-
duction and circulation together, and a consideration of profit and the relation
of profit to surplus-value. This section begins with the following very important
methodological comment:
Capital is now posited [nun gesetzt] as the unity of production and circu-
lation; and the surplus-value it creates in a given period of time [is also
posited, FM] . . . In a definite period of time, . . . capital produces a defi-
nite surplus-value . . . A capital of a certain value produces in a certain
period of time a certain surplus-value. Surplus-value thus measured by
the value of the presupposed capital, capital thus posited as ‘self-realiz-
ing value’ – is profit . . . 12
Thus we can see that, at this stage of the analysis (after an analysis of the pro-
duction-process of capital and the circulation-process of capital), a ‘definite’ or
‘certain’ quantity of surplus-value is now ‘posited’ (that is, has been determined
or explained by the prior analysis). The amount of surplus-value produced in a
given period is determined as a definite magnitude by the analysis of produc-
tion, and the analysis of circulation brings in the factor of turnover-time, which
determines how much surplus-value is produced in a year by a given capital.

11. Marx 1973, p. 684.

12.  Marx 1973, pp. 746–7.
292   Fred Moseley

This is what Marx’s theory has determined so far, in the first two sections of
the Grundrisse. And this is the prevailing presupposition for the rest of Marx’s
theory.
We can also see that profit is defined in terms of this already posited amount
of surplus-value. Profit is defined as this already posited amount of surplus-value
as it is related to the total capital (constant capital and variable capital), rather
than to the variable capital only (its real source, according to Marx’s theory).
Thus profit is a ‘mystifying’ form of appearance of this already posited amount
of surplus-value. Defined in this way, profit is obviously identically equal in mag-
nitude to the surplus-value. This definition of profit (equal in magnitude to sur-
plus-value) makes sense only if the surplus-value is itself already determined as
a definite magnitude by the prior analysis of production and circulation (annual
surplus-value equals surplus-value produced in one turnover-period times the
number of turnover-periods in a year).
The above statement of the prior determination of a definite amount of
surplus-value and the identity between profit and this predetermined amount
of surplus-value is expressed in terms of ‘a capital’. However, Marx’s theory of
surplus-value presented in sections one and two of the Grundrisse is obviously
not just about the surplus-value produced by a single individual capital, but is
instead about the surplus-value produced by each and every capital (‘capital
as such’ or ‘what all capitals have in common’), and hence also about the total
surplus-value produced by the total capital as a whole. Therefore, this statement
of the prior determination of surplus-value and the identity between profit and
the predetermined surplus-value also applies to the total surplus-value and the
total profit for the economy as a whole. This prior determination of the total
surplus-value is then the presupposition for Marx’s theory of the distribution of
surplus-value.
Since this point at the beginning of section three on ‘Capital and profit’ about
the already posited amount of surplus-value is so important, and later turned
out to be the beginning of Volume III of Capital, the Appendix to this chapter
discusses Marx’s two later drafts of this key point in Marx’s theory in the Manu-
script of 1861–3 and the Manuscript of 1864–5, and also discusses an important 1868
letter which summarises this starting point.

3.2. After this opening paragraph in section three, Marx next discusses the fall-
ing rate of profit (his theory and other theories) for about ten pages,13 and

13. It is in this section that Marx made the famous statement about the falling rate of
profit: ‘This is in every respect the most important law of modern political economy, and
the most essential for understanding the most difficult relations. It is the most impor-
tant law from an historical standpoint. It is a law which, despite its simplicity, has never
before been grasped and, even less, consciously articulated’ (Marx 1973, p. 748).
 The Whole and the Parts   293

then comments that, for an individual capital, profit may differ (either larger or
smaller) from the surplus-value produced by that individual capital (Marx would
later call this profit differing from surplus-value for individual capitals ‘average
profit’). However, this is possible, Marx states, only to the extent that these dif-
ferences are offset by opposite differences between profit and surplus-value
for other individual capitals. The total amount of surplus-value for all capitals
together is not affected by this redistribution of surplus-value (not ‘ever’). The
total surplus-value (equal to total profit) can neither increase or decrease by this
redistribution. Finally, Marx notes again that this subject of the distribution of
surplus-value belongs to the level of abstraction of competition (or ‘many capi-
tals’). This important passage is as follows: ‘The total surplus-value, as well as the
total profit, which is only the surplus-value itself, computed differently, can neither
grow nor decrease through this operation [the equalisation of profit-rates, FM],
ever; what is modified thereby is not it, but only its distribution among the differ-
ent capitals. However, this examination belongs only with that of the many capi-
tals, it does not yet belong here [i.e. in the analysis of capital in general, FM]’.14

3.3. On the next page, Marx briefly mentions again the equalisation of profit-
rates brought about by competition, and comments that the amount of surplus-
value produced by individual capitals is the ‘presupposition’ of this equalisation.
‘The inequality of profit in different branches of industry with capitals of equal
magnitudes is the condition and presupposition for their equalisation through
competition’.15

3.4. Marx then returns to the subject of the falling rate of profit, and six pages
later emphasises again that the total profit of the capitalist class as a whole is
identically equal to the predetermined total surplus-value: ‘Profit as we still
regard it here, i.e. as the profit of capital as such, not of an individual capital at
the expense of another, but rather as the profit of the capitalist class, concretely
expressed, can never be greater that the sum of the surplus-value . . . In its immedi-
ate form, profit is nothing but the sum of the surplus-value expressed as a propor-
tion of the total value of the capital’.16

4. Interest, rent, and commercial profit in the Grundrisse

Marx’s treatment of interest in the Grundrisse is somewhat complicated and
requires careful examination. It is necessary first of all to understand that there

14. Marx 1973, p. 760.

15. Marx 1973, p. 761.
16. Marx 1973, p. 767.
294   Fred Moseley

are two main aspects of Marx’s theory of interest: (1) interest as an ‘illusionary
form of appearance’ of surplus-value and (2) interest as a magnitude or quantity,
as one part of the total surplus-value.
In the Grundrisse, Marx discussed both aspects of interest, but seemed to
be thinking mainly of the first ‘illusionary form of appearance’ aspect. In the
first respect, interest is similar to profit, and could be considered at the level
of abstraction of capital in general, as profit is. Profit is an ‘illusionary form of
appearance of surplus-value’, in that the surplus-value actually produced by
labour, and hence intrinsically related to variable capital only, is seen by capi-
talists and economists as the result of the total capital, both constant capital
and variable capital. The concept of profit is prior to the equalisation of the
profit-rate or the determination of the average profit (the profit of each capital
is assumed to be equal to the surplus-value actually produced by that capital),
and thus belongs to the level of abstraction of capital in general. Interest is even
more illusionary than profit, because interest appears to come from money-
capital itself, without any relation to production at all (‘money begats money’).
Therefore, in two early outlines of his theory at the beginning of the Grundrisse,17
interest is located immediately after profit, and in the title of Section III, interest
is mentioned before profit (‘Capital as bearing fruit. Interest. Profit’).
On the other hand, in the second aspect, as a quantity, interest is a fractional
part of the total surplus-value, and is an element of the distribution of surplus-
value, which belongs to the level of abstraction of competition, along with equal
rates of profit and prices of production, commercial profit, and rent. This quan-
titative aspect of interest is briefly discussed several times in the Grundrisse.18 In
one such passage, Marx criticises the American economist Carey for his miscon-
ceptions about interest (confusing interest in pre-capitalist societies with inter-
est in capitalism). In the process, he emphasises that interest under capitalism is
one part of the total surplus-value: ‘Historically, . . . profit thus appears originally
determined by interest. But in the bourgeois economy, interest [is] determined
by profit, and only one of the latter’s parts’.19
Two pages later, Marx comments that he is not here concerned with this
quantitative aspect of interest, and that it would be considered later in relation
to ‘credit relations’.20
Therefore, it appears that Marx was not entirely clear at this point exactly
where the analysis of interest should be located in his theory, but he was very

17. Marx 1973, pp. 264 and 275.

18. Marx 1973, pp. 318–19, 758–60, 851–4.
19. Marx 1973, p. 852.
20. Marx 1973, p. 854.
 The Whole and the Parts   295

clear about these two aspects of interest, including the quantitative aspect,
according to which interest is one part of the total surplus-value.
In the Manuscript of 1861–3, Marx discussed both of these aspects of interest in
much greater detail.21 Toward the end of this manuscript, Marx wrote an almost-
final outline of what later became Volume III of Capital. In this outline, interest
is located along with the other individual parts of surplus-value (the general rate
of profit, commercial profit, and rent), all of which belong to the level of abstrac-
tion of competition. And in the Manuscript of 1864–5 (the final draft of Volume
III), this is where Part five on interest is located.
Marx’s theory of rent is hardly discussed at all in the Grundrisse. The reason
for this is that Marx was planning at the time to discuss rent along with landed
property in the second book of his ‘six book plan’, after the first book on capital.
Later, while working on the Manuscript of 1861–3, Marx discovered the connec-
tion between rent and the equalisation of the profit-rate across industries, and
began to understand rent more clearly as one part of the total surplus-value,
along with industrial profit, commercial profit, and interest. Therefore, in the
outline of Volume III at the end of the Manuscript of 1861–3 (mentioned in the
previous paragraph), rent is included along with these other individual parts of
surplus-value, at the level of abstraction of competition.22
Commercial profit, the final individual part of the total surplus-value is not
discussed at all in the Grundrisse. Marx discussed this form of surplus-value for
the first time in the Manuscript of 1861–3. Commercial profit is also included in
the outline of Volume III at the end of this manuscript, at the level of abstraction
of competition.
The clearest statement in the Grundrisse about these individual parts of the
total surplus-value together is in section three, in a discussion of the expenditure
of profit as revenue:
This is of course important, since capital exchanges not only for capital, but
also for revenue, and each capital can itself be eaten up as revenue. Still this
does not affect the determination of profit in general. Under the various forms
of profit, interest, rent, pensions, taxes, etc., it may be distributed . . . under dif-
ferent titles among different classes of the population. They can never divide up
among themselves more than the total surplus-value of the total surplus prod-
uct. The ratio in which they distribute it is of course economically important;
but does not affect the question before us.23

21. See Moseley 2008.

22.  See Moseley 2008.
23. Marx 1973, p. 788.
296   Fred Moseley

Thus we can see that Marx was clear that these individual parts of surplus-
value belong to the distribution of surplus-value, which does not affect the total
amount of surplus-value to be distributed.

5. Outlines at the beginning and the end of the Grundrisse

Early in the Grundrisse, Marx wrote two outlines of his theory of capital, which
were organised in terms of the Hegelian triad of generality, particularity, and
singularity (the second outline is clearer than the first).24 It could be argued
that ‘generality’ corresponds roughly to capital in general, and that ‘particular-
ity’ corresponds roughly to competition (‘competition of capitals’ is one of the
three points under ‘particularity’, along with accumulation and concentration).
‘Singularity’ consists of the credit-system, share-capital and the money-market.
About the time Marx was finishing the Grundrisse (April 1858), he wrote a
letter to Engels in which he first outlined his ‘six book plan’, the first book of
which was ‘Capital’.25 Marx then went on to say that the first book on capital
would be divided into four parts: (1) capital in general, (2) competition, (3) the
credit-system, and (4) share-capital.
Thus, it could be argued that, although Marx no longer used the terms of the
Hegelian triad, the broad structure of his theory was similar to these earlier out-
lines, but with greater clarity and precision, especially about competition. We
have seen above that, after writing these earlier outlines, Marx referred repeat-
edly to a ‘later analysis of competition’, which would include the equalisation
of profit-rates. The first two parts in this later outline (capital in general and
competition) are the most important parts (by far), and the only ones that Marx
worked on in his later manuscripts (except for a few very initial and exploratory
notes on the credit system in Part Five of Volume III, which could be considered
as belonging to the third part of this outline).
Three weeks prior to this letter, Marx wrote another letter to Lassalle, in
which he divided the first part of his theory of capital on capital in general into
three sections: (1) the production-process of capital, (2) the circulation-process of
capital, and (3) the unity of the two, or capital and profit; interest.26
We can see that these are the same three sections of the Grundrisse discussed
above. However, these sections are now sections of capital in general, rather
than sections of the ‘Chapter on capital’. Thus, Marx appears to have realised
more clearly as a result of his work on the Grundrisse that his theory of capital
should be divided into capital in general and competition, and so on, and that his

24. Marx 1973, p. 264 and p. 275.

25. Marx and Engels 1983, p. 298.
26. Marx and Engels 1983, p. 287.
 The Whole and the Parts   297

theory in the Grundrisse was really about capital in general only; it was not a
complete theory of capital. The theory of competition would come later. Marx
began to develop his theory of competition in the Manuscript of 1861–3, and
developed it much more thoroughly in the Manuscript of 1864–5, and this theory
includes the general rate of profit and other particular forms of surplus-value
that have to do with the distribution of surplus-value.
Evidently, Marx’s work on the Grundrisse on his theory of the production of
surplus-value, at the level of abstraction of capital in general, and the brief dis-
cussions of the general rate of profit which he realised ‘must be analysed later in
the section on competition’, had given him sufficient clarity about the relation
between capital in general and competition (essentially the production and dis-
tribution of surplus-value), and about the overall logical structure of his theory,
that he was able to write down these new improved outlines.
In another important and well-known letter from Marx to Engels in January
1858 (in the middle of the Grundrisse), Marx explains that by chance he had
reviewed Hegel’s Logic, and this had been ‘of great service’ for his own theory,
and in particular for his theory of profit and the method of dealing with his the-
ory of profit.27
By the way, I am discovering some nice arguments. For instance, I have over-
thrown the whole doctrine of profit as it existed up to now. The fact that by
mere accident I again glanced through Hegel’s Logik . . . has been of great ser-
vice to me as regards the method of dealing with the material.28
Many commentators have noted Marx’s acknowledgment of his debt to Hegel in
this letter, but no one (in my view) has adequately explained specifically which
elements of Hegel’s vast logic that Marx had in mind in this letter, nor how these
specific elements helped Marx explain profit (surplus-value).
I think the explanation of this important puzzle is what I have said above –
the specific elements of Hegel’s logic that Marx found helpful in his theory of
profit were the moments of the concept of universality and particularity. This
helped Marx to see that the proper logical method of explaining profit (surplus-
value) is to begin with the universal – the theory of capital in general and the

27. Marx had developed his concept of surplus-value only a few weeks before writing
this letter (the word surplus-value appears for the first time in Marx’s published writings
in Marx 1973, p. 321, written in November-December), and Engels was of course unfamil-
iar with this concept. So Marx used the usual term of profit in the letter, but what he
really meant was his new concept of surplus-value.
28. Marx and Engels 1975b, p. 93.
298   Fred Moseley

total surplus-value – and then to proceed to the particulars – the theory of com-
petition and the individual parts of surplus-value.29

6. Conclusion
I think it should concluded from this investigation that, even though there are
only these few brief comments and discussions about the general rate of profit
and the distribution of surplus-value in the Grundrisse, Marx was already clear
at this early stage of the development of his theory about the following method-
ological aspects of his theory of capital:

(1) The theory of capital would be divided into two main parts: capital in gen-
eral and competition.
(2) The main question analysed at the level of abstraction of capital in general is
the production of surplus-value (or the determination of the total amount of
surplus-value), and the main question analysed at the level of abstraction of
competition is the distribution of surplus-value (or the division of the total
surplus-value into individual parts).
(3) It is essential that the production of surplus-value be theorised prior to the
distribution of surplus-value because the former theory determines the total
amount of surplus-value that is to be distributed or divided up.
(4) The total amount of surplus-value is taken as given in the subsequent analy-
sis of the distribution of surplus-value at the level of abstraction of competi-
tion, and is not affected by this distribution.

I have shown in previous papers that Marx consistently maintained and devel-
oped this logical structure of his theory in all the later drafts of Capital. In the
Manuscript of 1861–3, Marx began to develop in greater detail his theory of the
general rate of profit and other forms of the distribution of surplus-value (rent,
interest, commercial profit), inspired by his critique of Rodbertus’s theory of rent.
In the Manuscript of 1864–5 (which was later edited by Engels as Volume III of
Capital), Marx developed much more thoroughly his theory of these individual
forms of surplus-value. In both of these manuscripts, Marx stated many times the
key quantitative premise that the total amount of surplus-value is determined
prior to its division into individual parts.
Therefore, I think it has to be concluded that this quantitative premise is an
essential aspect of the logical structure of Marx’s theory in Capital.

29. Oh how I wish Marx would have written the ‘accessible’ introduction to Hegel’s
method that Marx mentioned writing in the rest of the paragraph quoted above ‘if there
should ever be time’. That would have helped to avoid a century of misinterpretations.
 The Whole and the Parts   299

Appendix: Later drafts of the beginning of ‘Capital and profit’

Manuscript of 1861–3
Marx’s second draft of the beginning of ‘Capital and profit’ is toward the end of
the Manuscript of 1861–3 (this section of the manuscript was published for the
first time in English in 1988), and it begins with a similar methodological com-
ment as in the Grundrisse:
Considered in its totality . . . the movement of capital is a unity of the process of
production and the process of circulation . . . The surplus-value produced within
a given period of circulation . . . when measured against the total capital which
has been advanced is called – profit . . . Considered with respect to its material,
profit is absolutely nothing but surplus-value itself. Considered with respect
to its absolute magnitude, it therefore does not differ from the surplus-value
produced by capital over a particular turnover time. It is surplus-value itself,
but calculated differently.30
Marx does not use the term ‘posited’ here, but he does define profit as the same
magnitude of surplus-value, as in the Grundrisse. It seems clear that Marx’s logic
with respect to the determination of the magnitudes of surplus-value and profit
is the same in this manuscript as in the Grundrisse – that is, the magnitude of
surplus-value has already been ‘posited’, and the magnitude of profit is defined
to be identically equal to this already posited magnitude of surplus-value.
A few pages later in this manuscript, Marx states explicitly that the identity
between profit and the already determined surplus-value also applies to the total
surplus-value of the total social capital: ‘Just as the surplus-value of the individual
capital in each sphere of production is the measure of the absolute magnitude
of the profit – merely a converted form of surplus-value – so is the total surplus-
value produced by the total capital the absolute measure of the total profit of the
total capital, whereby profit should be understood to include all forms of surplus-
value, such as rent, interest, and so on. It is, therefore, the absolute magnitude
of value . . . which the capitalist class can divide among itself in various headings’.31

Manuscript of 1864–5
Engels’s edition of Chapter One of Volume III does not include a similar meth-
odological comment about the prior determination of surplus-value, to which
profit is equated in magnitude. However, a similar comment is made by Marx

30. Marx and Engels 1988, p. 69.

31. Marx 1988, p. 98.
300   Fred Moseley

in his Manuscript of 1864–5, which Engels edited to produce the Volume III
that we know. Marx’s manuscript begins with a paragraph similar to Engels’s
first paragraph, but then there are several paragraphs, which were omitted by
Engels (for some reason) and which are similar to the opening paragraphs in
the earlier drafts quoted above. Excerpts from these paragraphs are as follows
(translated from the German by Janna Busse; very unfortunately, this volume
of the MEGA is not included in the 50-volume English translation Marx-Engels
Collected Works):
. . . in a year capital produces a certain magnitude of surplus-value. . . . The rate
of profit is a ratio of the annual surplus-value to the total capital, commonly
expressed in per cent. For example, the capital consists of $400 constant capi-
tal and $100 variable capital, and the surplus-value amounts to $100. If the
$100 of surplus-value is regarded as an offspring of the total advanced capital
of $500, thus 20%, then it is considered as – profit. . . . 
In terms of its content profit is (in the form in which it concerns us here) by
all means nothing else but surplus-value itself. Its absolute magnitude is there-
fore also not different from the magnitude of surplus-value that the capital
has created in a certain period of time. It is surplus-value itself but calculated
differently, and looked at differently subjectively.32
It seems obvious that Marx’s logic is the same in all three of these drafts. The
prior analysis of production and circulation has determined or posited the mag-
nitude of surplus-value produced in a given year, both for each and every indi-
vidual capital and also for the total social capital. And profit is defined as this
same predetermined amount of surplus-value, measured in relation to the total
capital, rather than to variable capital alone.

1868 letter
There is another important piece of textual evidence concerning the beginning
of Volume III: a letter that Marx wrote to Engels in April 1868, three years after
he had written the full draft of Volume III (in the Manuscript of 1864–5) and one
year after the publication of Volume I. In this letter, Marx explained to Engels
what Volume III is all about. By this time in his life and theoretical development,
Marx had a very clear idea of the subject-matter and the overall logical structure
of Volume III, and its relation to Volumes I and II. Therefore, this letter provides
important evidence concerning the logic of Volume III.
Marx began his summary of ‘Book III’ by clearly stating its main overall subject:
‘In Book III, we then come to the conversion of surplus-value into its different

32. Marx and Engels 1992a, pp. 7–8.

 The Whole and the Parts   301

forms and separate component parts’.33 In other words, we come to the distribu-
tion of surplus-value.
The letter then summarises each of the seven parts of Volume III, which cor-
respond exactly to the seven parts of Marx’s draft of Volume III in the Manuscript
of 1864–5, which Marx no doubt had in front of him as he wrote the letter to
Engels.
The summary of Part One begins with the main points emphasised above: that
profit is only ‘another name’ for surplus-value, and that there is no quantitative
difference between profit and surplus-value:
Profit is for us first of all only another name or another category of surplus-
value. As owing to the form of wages, the whole of labour appears to be paid
for, the unpaid part of labour seems necessarily to come not from labour but
from capital, and not from the variable part of capital but from capital as a
whole. As a result, surplus-value assumes the form of profit, without there
being any quantitative differentiation between the one and the other. This is
only its illusionary manifestation.34
After discussing the important concept of cost-price, Marx then summarised his
analysis of the determination of the rate of profit by the rate of surplus-value
and the composition of capital, which Marx said ‘has of course been hitherto
inexplicable to everybody’. Then Marx made the following important comment
with respect to individual capitals and the total social capital:
The laws thus discovered . . . hold good no matter how the surplus-value may later
be divided among the producer, etc. This can only change the form in which it
appears. Moreover, they remain directly applicable if s/(c+v) is treated as the
relation of the socially produced surplus-value to the social capital.35

33. Marx and Engels 1975b, p. 191.

34. Marx and Engels 1975b, pp. 191–2.
35. Marx and Engels 1975b, p. 193.