Profit rates depend jointly on exploitation rate and organic composition of capital

Evidence

In Marxist economic analysis, the rate of profit is determined by the rate of exploitation (the ratio of unpaid, surplus labour to paid, necessary labour) and by the organic composition of capital (the ratio of capital expended on materials, use of machinery, etc., to capital expended on wages). As the rate of exploitation rises the rate of profit tends to rise, but as the organic composition of capital rises the rate of profit tends to fall. — Antonio Gramsci, Selections from the Prison Notebooks, 2376

Categorization

• DEFINE: Defines the two core variables of Marx’s falling-rate-of-profit schema: rate of exploitation as unpaid surplus to paid necessary labour, and organic composition as dead to living labour.
• XREF: Grounds the critical-theory vocabulary the reader is assembling: capital accumulation, exploitation, and crisis tendencies recur throughout political-economy critiques of empire and racialized labor.