none of those who attempted it gave the correct solution, although some of them came pretty near it, notably Dr. Conrad Schmidt in his work on the subject which appeared in 1889. The correct solution, Engels says, is contained only in the third volume of Capital itself.
The solution of this problem, as given by Marx himself, in the third volume of Capital, and which is supposed to explain the great contradiction, is as follows:—
Assuming that the rate of exploitation of labor is the same in all the spheres of production in society, producing an equal rate of surplus-value in all these spheres; that the capitals employed in the different spheres of production are of different degrees of composition, that is, of different character as to their division into constant and variable capital; and that nevertheless the rate of profit is equal in all the spheres of production, the problem is:—how does this come about, if the laws of value are as laid down by Marx. If two capitals, one whose composition is 90 c. plus 10 v. (90 per cent. constant and 10 per cent. variable), and one whose composition is 10 c. and 90 v. (10 per cent. constant and 90 per cent. variable), the rate of exploitation being the same, produce the same rate of surplus-value or profit, it is quite evident that the surplus-value, and therefore, all value, must have some source entirely different from labor. But that is just what is claimed by all political economists. It is assumed to be an established fact that the rate of profits is equal at any given time in all spheres of production or circulation of commodities, no matter what the degree of the composition of the capital employed in their production. In other words, that at any given time equal capitals will give equal returns, irrespective of the particular branch of industry in which they are employed and of the composition of the capital employed in that branch. But, says Marx, the supposed fact that equal amounts of capital bring equal returns, no matter how employed, gives no indication whatever as to the source of this profit. This, however, is really where the
