MIA: Encyclopedia of Marxism: Glossary of Terms




Racism is the systematic persecution and stereotyping of people according to their race. The source of modern racism is colonialism, the slave trade and imperialism and is most rampart in the “settler” countries – South Africa, the U.S., etc. While the english word was put into the written language in the United States in 1862 (around the time of the Civil War), the practice has been around since the creation of class society itself.

See Also: US Civil Rights Movement
Further Reading: Malcolm X was one of the most lucid and outspoken fighters against racism, and played a major role not only in shaping the civil rights, then the black liberation struggles to follow, but also established a thorough frame work of what is racism. See the Malcolm X Reference Archive.



Radicalism is the holding of extreme positions. In politics, “radicalism” usually refers to some kind of left-wing politics, but the word can be used in reference to right-wing politics as well.

For example, in the 1930s, the Radical Party in France was the main bourgeois party, similar to the Democrats in the U.S. In mid-19th century Germany “radical” was a term used in relation to Young Germany, the Young Hegelians and other left-bourgeois groupings, and radicalism remains in general a label frequently used in relation to student political groups. “Radical Feminism” is the strand of feminism which holds gender to be the most significant social determinant, in opposition to both Socialist Feminism and Liberal Feminism which would both concede that nationality, race, class and epoch overshadow gender at least from time to time. (See Kate Millett’s Sexual Politics).


Rate of Profit

“Rate of profit” is a term introduced by Marx in Volume III of Capital for the ratio of profit to total capital invested in a given cycle of reproduction, or the proportion of value in any given commodity which constitutes profit for the capitalist.

In bourgeois economics, “rate of profit” means the proportion of the total capital invested accruing to the capitalist as profit per annum.

For a given period of circulation, or cycle of reproduction, the two definitions are equivalent. The circulation time of capital is the time that elapses between a capitalist making an initial investment and when the products are sold and the original capital plus a profit are recovered. This cycle of reproduction is a major factor in the development of capitalism, and much of Volume II of Capital is concerned with circulation of capital and the problems of Realisation.

Keeping in mind the distinction between the Marxist and conventional uses of the term “rate of profit”, the following issues are of importance.

Surplus Value and Profit

If a certain quantity of constant and variable capital are invested in a productive process, then at the end of a cycle of reproduction these values will have renewed themselves, but in addition, if the labour power of the employees has used to at least the social average of usefulness, there will a surplus-value.

Marx expresses this symbolically: c + v -> c + v + s, where c is the constant capital, v the variable capital (wages) and s is the surplus value, and the value of every product can be seen as composed of these parts.

On the basis of this conception, the rate of profit for the individual capitalist who got into the game of profiteering by investing (c + v) at the beginning of the cycle of reproduction, makes a ‘profit’ of s and therefore the rate of profit is s/(c + v). The individual capitalist is unlikely to see this surplus value in its entirety however, for the landlord, the state, the bank and everyone else will all demand a cut of this surplus: the productive worker must maintain not only “their own” capitalist, but all manner of hangers-on as well.

This rate of profit, s/(c + v), which is the ratio which affects the individual unit of capital, is different from the rate of surplus value, s/v.

The rate of surplus value expresses the proportion of unpaid labour that workers donate to the capitalist (s) over to the necessary labour time, v, that the workers spend reproducing their own needs, and is paid as wages, or variable capital.

Tendency of Rate of Profit to Fall

Marx believed that there was an historic tendency for the rate of profit to fall as a result of the growing socialisation and complexity of the labour process, and the growing productivity of labour. Each capitalist employs less labour and spends more on machinery and materials to produce the same value. Marx characterised this process as an increasing “organic composition of capital”. Since employing workers is the only source of profit, Marx believed that the rate of profit would fall.

The tendency of the rate of profit to fall, Marx believed is one of the main contributors to the historic crisis of capitalism.

Formation of General Rate of Profit

All political economists have begun from the fact that a single, general rate of profit applies in every industry across an economy, even though it fluctuates from year to year and may achieve higher or lower levels in different countries. Marx differed in his approach from all the political economists in that he began with the concepts of necessary and surplus labour time, concepts which actually contradict the existence of a general rate of profit, and only came to rate of profit later.

The formula for the rate of profit, (s/v)/(c/v + 1), leads to the result that the rate of profit is higher in those industries where the organic composition of capital is lower, i.e., labour intensive industries. This contradicts the empirically given fact that the rate of profit is constant across all industries. Marx had to explain how this phenomenon of the general rate of profit comes about.

One of the achievements of bourgeois society is that capital provides the means by which a greater or lesser proportion of the social labour may be devoted to this or that task by a seemingly objective process, independently of the opinion of any individual, via the Stock Exchange for example. The free movement of capital from one industry to another is a vital part of the labour process in bourgeois society.

The movement of capital from one industry to another is driven by differing rates of profit, which depends, among other things, on the organic composition of capital and varies from industry to industry.

It is a simple question of supply and demand: if at any given moment, for whatever reason, there is a super-profit to be made in a particular branch of industry, then capital flows into that industry. Companies engaged in the given branch of industry may enjoy a rise in the price of their stock, or capitalists in other industries may shift capital into the new area. Workers employed in the given industry find themselves much in demand, overtime is abundant and their wages rise, and more workers flood to work in the new trade. The rush of capital into the newly profitable activity leads to an oversupply of capital, the flood of workers to fill the shortfall eventually brings wages down again. Overproduction of the commodity brings about a fall in its price, with the result that the higher rate of profit which arose as a result of the lowering of the organic composition of capital (e.g., cheaper materials) disappears and the average rate of profit is restored. A recent example of this process has been seen in the boom in IT shares: the highest rates of profit attract high wages and high investment, but once everyone and their dog has set up in the IT business, over-inflated share prices crash, bankruptcies and unemployment follow.

Rate of Profit vs. Rate of Surplus Value

Thus, a general rate of profit and a general rate of surplus value may coexist in a given society, despite the fact that the two measures appear incompatible. The rate of surplus value reflects the proportion of the total social product appropriated by the capitalist class, and the rate of profit reflects the proportion of any given product appropriated by an individual capitalist producer.


Rate of Surplus Value

The rate of surplus value is ratio of the surplus labour time, which the producing class works without pay, to the necessary labour time, that they need to maintain their standard of living.

Expressed algebraically, if v is the necessary labour time (or value of labour power), and s is the surplus labour time, then the rate of surplus value is s/v.

Extending the surplus labour time is called absolute surplus value, while reducing the necessary labour time is called Relative surplus labour.

The rate of surplus value reflects the overall rate of exploitation of labour in a given society, and is distinct from the general rate of profit.

The rate of surplus value is a concept whose sense is not limited to capitalist production. For example, a serf may be required to work for a certain number of days per annum on land belonging to the nobility, making the proportion of surplus to necessary labour-time quite explicit.



Rationalism emphasises the role of Reason in arriving at true knowledge, as opposed to Empiricism, which emphasises the role of Experience and sense perception in knowledge. There are both idealist and materialist trends in both Rationalism and Empiricism.

Further Reading: Descartes, Spinoza, Leibnitz, Kant and Fichte.