Surplus value

Surplus value (German: Mehrwert) is the term used by Karl Marx in his economic writings for the value of surplus labour, usually expressed in money.

Surplus value arises from the difference between the price of labour power and the final sale price of the commodity produced, and it is a key element of Marx's critique of political economy and capitalism as a whole. In other words, surplus value is the main source of profit for the capitalist.

Quotes

In "An Introduction to Marxist Economic Theory," Marxist economist Ernest Mandel argues: "Surplus value is simply the monetary form of the social surplus product, that is to say, it is the monetary form of that part of the worker’s production which he surrenders to the owner of the means of production without receiving anything in return."

In his work "Karl Marx" he further elaborates: "The capitalist mode of production thus presupposes that the producers’ labour power has become a commodity. Like all other commodities, the commodity labour power has an exchange value and a use value. The exchange value of labour power, like the exchange value of all other commodities, is the amount of socially necessary labour embodied in it, i.e. its reproduction costs. This means concretely the value of all the consumer goods and services necessary for a labourer to work day after day, week after week, month after month, at approximately the same level of intensity, and for the members of the labouring classes to remain approximately stable in number and skill (i.e. for a certain number of working-class children to be fed, kept and schooled, so as to replace their parents when they are unable to work any more, or die). But the use value of the commodity labour power is precisely its capacity to create new value, including its potential to create more value than its own reproduction costs. Surplus-value is but that difference between the total new value created by the commodity labour power, and its own value, its own reproduction costs. The whole marxian theory of surplus-value is therefore based upon that subtle distinction between ‘labour power’ and ‘labour’ (or value). But there is nothing ‘metaphysical’ about this distinction. It is simply an explanation (demystification) of a process which occurs daily in millions of cases."