him a profit (consisting of the surplus-value), of one hundred dollars, or 20 per cent. per week.
On such profits John Brown's business thrived, and he accumulated a fortune. He is now resting in peace with his forefathers, and his son and heir, John Brown, Jr., now conducts the business. John Brown, Jr., upholds the traditions of the old house for making profits. But entirely new methods and processes of manufacturing shoes are now being used by him, as well as by everybody else who is in the market to compete with him. New machinery has been invented since the days when his sire started the business. This machinery is "labor-saving" to a high degree. That is to say, it increases the productivity of labor, so that one man can do by its aid the work of several men working without its aid. This machinery, however, is very costly; and its employment requires a large outlay for raw materials, since a man employs more raw materials in the same proportion as the productivity of labor increases. The "composition" of his capital,—that is to say, the proportionate shares thereof used as "constant" and "variable" capital, respectively,—is, therefore, different from the composition of his father's capital, when the old man started in business. John Brown, Jr., employs a capital of twenty thousand dollars. Of this fully nineteen thousand are used as constant capital, and only one thousand to pay for the labor employed by him. This composition of capital, because it signifies a higher stage of the development of capitalism, we will call the higher composition, and the composition of the capital at the time the business was started we will call the lower composition. Now let us see what effect did the change in the composition of the capital have on the profits of the business.
Let us assume that the firm still retains the old scale of wages. Let us also assume that owing to the introduction of the improved machinery (and allowing for the cheapening of the product in consequence), the value of the product of a man's labor has increased two-fold. What will be the
