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On the one hand, the commodity form of production is a social form of pro­ duction because in practice the exchange of products establishes an extensive social division of labor and makes every person highly dependent on a multitude of other people for means of subsis­ tence and means of production. The commodity form creates a vast web of cooperation and interdependence of people. On the other hand, the exchange process creates an illusion of privacy and individual self-reliance; it allows and forces people to construe their existence subjectively as a matter of relations between them­ selves and things rather than as a matter of relations between themselves and other people.

Once this agree­ ment has been reached, the worker has no claim to any part of the product or to any part of its value. The capitalist and the worker do face a further negotiation, however, which concerns the exact conditions under which the capitalist will ask the worker to ex­ pend labor: how hard the work will be, at how fast a tempo, how unsafe or toxic the work environment will be, and so on. It is all very well to show how labor-power has been determined theoretically to explain surplus value in capitalist production.

The capitalist expresses the surplus value as a percentage of the total capital advanced and calls this percentage the markup on costs. 7) which in this example is 1/3 = $50 million/$150 million. From the point of view of the labor theory of value, the capacity of the capitalist system to produce surplus value depends on the rate of surplus value, e = s/v (because that measures the amount by which variable capital expands in the production process), and on the composition of capital, k = vl(c + v) (because that number expresses the proportion of the total capital outlays that actually go to purchase labor-power and hence the proportion of each dollar of capital that actually expands in the production process).