Chapter 33: Problem 1070

Briefly describe Marx's theory of surplus value.

Short Answer

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Marx's theory of surplus value posits that the value of a product is determined by the labor required to produce it, and under a capitalist system, workers are paid less than the value of the goods they produce. This difference, termed surplus labor, leads to exploitation as capitalists extract surplus value from workers, accumulating profit and exacerbating wealth and class disparities. Thus, the theory of surplus value forms a core critique of capitalism, arguing that it is inherently exploitative and benefits a few at the expense of many.

Step by step solution

Understanding the labour value

According to Karl Marx, every good or service has a "value" which is determined by the amount of labour required to produce it. This is the labour value - the innate value of a product resulting from the total labour incorporated into it.

Explaining Surplus Labour

Under a capitalist economic system, Marx says, workers are paid a wage to produce goods or services. However, their wage is usually less than the value those goods or services have to the capitalist (owner of the means of production). The difference is known as surplus labour. This is basically the labour exerted by a worker that exceeds the amount of labour necessary to reproduce his or her capacity to work or their labour power.

Realizing the concept of Exploitation

Exploitation, for Marx, arises from the discrepancy between what the workers are paid and the value of what they produce. The capitalist extracts surplus value from the workers' labor, reaping profits while the workers struggle to sustain themselves, hence creating a class power dynamic.

Explaining Surplus Value

At its core, Marx’s theory of surplus value is an explanation of how capitalist exploitation occurs. Surplus value is the monetary expression of surplus labour. It is the amount by which the value of the product produced by the worker exceeds the value of the wages the worker is paid. In essence, it is the unpaid labor performed by workers beyond what is necessary to cover their own costs, which capitalists appropriate as their profit.

Understanding the implication of the theory & critique of capitalism

Marx's theory of surplus value is a critique of capitalism. It argues that capitalism is inherently exploitative, as it allows capitalists to derive profit from the surplus labour of workers, thus creating and exacerbating disparities in wealth and class power. As a result, Marx viewed the accumulation of surplus value by capitalists as a system that benefits the few at the expense of the many. This forms one of the central arguments for Marxists to advocate for a different economic system to replace capitalism.