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Theories of Surplus Value (German: Theorien über den Mehrwert) is a draft manuscript written by Karl Marx between January 1862 and July 1863. [1] It is mainly concerned with the Western European theorizing about Mehrwert (added value or surplus value ) from about 1750, critically examining the ideas of British, French and German political ...
Hence, Marx's use of Mehrwert has always been translated as "surplus value", distinguishing it from "value-added". According to Marx's theory, surplus value is equal to the new value created by workers in excess of their own labor-cost, which is appropriated by the capitalist as profit when products are sold.
Marx concludes that as value is determined by labour, and as profit is the appropriated surplus value remaining after paying wages, that the maximum profit is set by the minimum wage necessary to sustain labour, but is in turn adjusted by the overall productive powers of labour using given tools and machines, the length of the workday, the ...
Marx's first analysis of what surplus labour means appeared in The Poverty of Philosophy (1847), a polemic against the philosophy of Pierre-Joseph Proudhon. [1] A much more detailed analysis is presented in the volumes of Theories of Surplus Value and Das Kapital.
The value of labor, in this view, covered not just the value of wages (what Marx called the value of labor power), but the value of the entire product created by labor. [ 18 ] Ricardo's theory was a predecessor of the modern theory that equilibrium prices are determined solely by production costs associated with Neo-Ricardianism .
Surplus value is therefore the [Marxist] disguise of profit which must be removed before the real nature of profit can be discovered. [7] Samuelson not only dismissed the labour theory of value because of the transformation problem, but provided himself, in cooperation with economists like Carl Christian von Weizsäcker, solutions.
Marx examined surplus value and showed it to be a necessity in capitalism. This surplus value is derived from the difference between the value the worker creates and the wage he earns. Chapter 16 looked into the ways in which the capitalist is able to increase surplus-value and takes a direct attack against economists Ricardo and Mill.
Marx's Theories of Surplus Value was edited by Karl Kautsky. The Marxian value theory and the Perron–Frobenius theorem on the positive eigenvector of a positive matrix [17] are fundamental to mathematical treatments of Marxian economics. The relation between exploitation (surplus labour) and profit has been modeled with increased sophistication.