Quote of the Day for October 25, 2014

298: From Senior: Political Economy, Chapter 4, Distribution of Wealth:

    "In manufacturing, as well as in agricultural industry, the profit of stock is distinct from the cost of production. The master manufacturer expends a certain quantity of raw material, of tools and implements of trade, and of subsistence for labourers, and obtains in return a given quantity of finished work. This finished work must possess a higher exchangeable value than the materials, tools, and subsistence, by the advance of which it was obtained; otherwise the master could have no inducement to continue his business. Manufacturing industry would cease if the value produced did not exceed the value expended. But it is the excess of value which the finished work possesses above the value of the materials, implements, and subsistence expended, that constitutes the master\'s profit; and therefore we cannot assert that the profit of his stock is included in the cost of production without affirming the gross absurdity, that the excess of value above expenditure constitutes a part of expenditure. Supposing that the materials, tools, and subsistence cost £300, and that the finished work is worth £360, then the difference will be the master\'s profit; and we cannot maintain that the annual profit is included in the amount of expenditure, or cost of production, without urging the contradiction that £300 are equal to £360.

    4.40 (paragraph number)

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