Commercial Profit

Commercial Profit


the profit derived from the sale of commodities at prices above those paid by the merchant. With simple commodity production, commercial profit was based primarily on the nonequivalent exchange resulting from such factors as the backwardness of commodity circulation, the lack of communication between markets, and the multiplicity of prices for the same kind of product.

In capitalist commodity production, commercial profit constitutes the part of the aggregate surplus value, created by the labor of hired workers in the sphere of production, that is appropriated by capitalists functioning in trade. On the surface, the profit appears to result from the sale of commodities at prices higher than their value. In reality, however, the sphere of circulation can be an independent source of profit only to the degree in which the processes of production are continued. The act of circulation itself is linked not with a spontaneous increase in value but with a change in the form of value. Commercial profit results from the redistribution of surplus value between industrial capitalists and merchants. It is formed in accordance with the law of average profit. At the stage where produced output is sold, commercial capital is included in intersectorial competition. Excess capital in search of more profitable areas of investment ultimately leads to the formation of two sets of market prices. Industrial capitalists sell commodities to merchants at the price of production dictated by industrial capital, a price that is below the value of the commodities; the merchants then sell the commodities to consumers at the final or actual price of production. Thus, commercial profit represents the difference between the two levels of production prices and “is . . . reduced to that aliquot part of the total surplus value falling to the share of commercial capital as an aliquot part of the total capital engaged in the social process of reproduction” (K. Marx and F. Engels, Soch., 2nd ed., vol. 25, part 1, p. 315).

The specialization of merchants in the process wherein the form of the value is changed contributes to the relative decline in distribution costs and thereby increases the absolute amount and rate of profits for the capitalist class as a whole. Under the influence of intersectorial competition, the rate of commercial profit changes in accordance with the average rate of profit. Under capitalism, conditions are maintained for increasing commercial profits by means of nonequivalent exchange. Commercial capitalists artificially inflate the prices of consumer goods beyond their value and lower prices on goods obtained from small-scale commodity producers. Under imperialism, commercial monopolies are able to extract excess profits by means of monopoly prices. These same goals are also served by inflation and the redistribution of incomes in favor of the exploiting classes.

In socialist societies, the socioeconomic nature and character of the formation of commercial profits undergo a qualitative change. Socialist trade enterprises function within the framework of an integrated economic plan. Commercial profit forms part of the surplus product, and its formation occurs through a planned and balanced deviation of prices from value as implemented by the socialist state. Commercial profit is used to develop trade and pay for material incentives.


Marx, K. Kapital. In K. Marx and F. Engels, Soch., 2nd ed., vol. 25, part 1, ch. 17.
Lenin, V. I. Razvitie kapitalizma v Rossii. In Poln. sobr. soch., 5th ed., vol. 3.


References in periodicals archive ?
Under current FAA rules, unmanned aerial systems may not be flown for hire or commercial profit at any altitude unless the operator has received FAA authorization.
Sending electronic mail over the ARPANet for commercial profit or political purposes is both anti-social and illegal.
They of course seek out art-house films that possess artistic qualities marking them as different from mainstream films, movies that are, as the American Heritage Dictionary defines them, "made primarily for reasons other than commercial profit," say like Vittoria de Sica's Bicycle Thief, Gilo Ponticorvo's The Battle of Algiers, Ingmar Bergman's Wild Strawberries and Orson Wells's Citizen Kane.
Commercial profit was up by 15% and turnover of PS10.
But now, the hydrates are listed among the most important resources awaiting further technological development so they are exploitable at great commercial profit.
We invested in the airport as we believe it is a key gateway to Wales and plays a crucial role in our economy, but it has always been our long-term intention that it is operated for commercial profit.
It's offensive and makes fun of illness for commercial profit.
Beginning in the 1980s, US universities began to increase their activities in promoting technology transfer, licensing, and investments in new firms and in more recent years, this new "knowledge commercialization" mission of higher education began to be adopted across Europe as well, although many Europeans have adopted the conceptual term of "knowledge valorization" in order to emphasize the concept of "value" as a societal benchmark rather than just commercial profit.
The bank's commercial profit jumped by 69 percent, reaching 113.
The real issue is that everything in our food industry – from supply–line safeguards to simple respect for customers – has been broken on the anvil of commercial profit.
As is stated in the report, "The total tax rate measures the amount of taxes and mandatory contributions borne by the business, expressed as a share of commercial profit.
Congress General Secretary Janardhan Dwivedi had also on Saturday hit back at Swamy, and said reviving the National Herald, founded by Jawaharlal Nehru, was an emotional issue for it and no commercial profit accrued to the party from the loan.

Full browser ?