Brief definitions:
Commodity: A product manufactured primarily for its exchange value (secondarily for its use value, which it requires only enough to make it sellable). Commodities are fungible, which means they are standardized for the purposes of exchange, and have little or no qualitative difference. Examples: grains, lumber, ipods, fuels, currencies, unskilled labor power, Big Macs.
Surplus value: The social process of capital production, which manifests as the theft of labor power (exploitation) during the conversion of nature (extraction of raw materials) into commodities. Surplus value is the essence and purpose of capitalism.
Surplus value is the portion of exchange value of commodities that is appropriated by the capitalist after underpaying for the labor power it took to make them, plus paying fixed costs such as machinery and inputs. For example, if a worker is paid $2 to produce t-shirts that are sold for $100, and fixed costs associated with their production are $8, then the surplus value is $90.
Capitalists can pay less than labor power is worth because of their private ownership and control over the means of production. They pay less for the raw materials than they are worth, or steal them outright, by conquering and dominating land and other resources (called “primitive accumulation”).
Capital: Re-invested surplus value.
Profit: The revenue left after input costs. It can be the material manifestation of surplus value, or it can be the result of the circulation of capital (for example, through selling services or making unequal trades, buying low and selling high).
Surplus value and profit are not identical. Surplus value can only be generated through commodity production. Profit can be generated in other ways that do not involve commodity production or surplus value. Capitalism rests on surplus value; other forms of profit are considered false or toxic value.
What about purely automated production? If you cut out the exploited worker and replace him with equipment, what ethical failings remain?
Someone still had to make the machinery. Someone still has to turn it on and off, effect maintenance and repair, etc. Someone still has to gather the raw materials. Someone still has to transport the commodities to market. Someone has to sell it once its in the market. All of those things are labor. The true value of any commodity is in the combined labor of all those people past and present who brought that good out of the earth and into a market. This is the Labor Theory of Value, which I expect will be explained in a coming installment.