We have already seen that the formula Marx gives for the rate of profit is r = s/ (c + v) (in which r equals the rate, s stands for the visible surplus, or profit, c stands for what Marx calls ‘constant capital’, the cost of reproducing the enterprise, and v stands for what Marx called ‘variable capital’ or wages). The formula for the rate of surplus value, on the other hand, is simply r = s/v. These two formulae are therefore distinguished solely by the fact that, while Marx includes the cost of renewing constant capital (c) in his calculation of the rate of profit, he does not include this factor in his calculation of the rate of surplus value. Chapter 5 of this study explains the reason why he does this. It is because, while the cost of renewing worn-out constant capital is undoubtedly a loss to the capitalist when considered from the point of view of the capitalist's profit, and although the cost of reproducing constant capital is clearly a loss to the capitalist when viewed from the perspective of the absolute profit capitalists might otherwise take if they were to liquidate their capital entirely, Marx regarded the actual expense of reproducing the worn-out constant capital not as a cost to the capitalist but as a loss to the labourer.