In Marxist theory surplus value is the value created by individual labour which is left over, or remains in the product or services produced, after the employer has paid the costs of hiring the worker. Surplus value is the additional value or surplus value which the worker produces but does not get paid for, allowing the capitalist owner to expand their capital. "Surplus value" is a translation of the German word "Mehrwert", which simply means value added. Karl Marx uses the term Mehrwert to describe the yield, profit or return on production capital invested. Marx's use of Mehrwert has always been translated as "surplus value", distinguishing it from "value-added".
Absolute Surplus Value and Relative Surplus Value
Absolute surplus value is the surplus value generated by increasing the length of the Working day, thus increasing the surplus labour time. Relative surplus value is the surplus value generated by cutting wages or reducing the cost of living, thus reducing workers Necessary labour time in proportion to the surplus value extracted.
The Counterfactual Method
of Marx's Theory of Surplus value - Author: Perri S.
Source: Review of Political Economy, Volume 15, Number 1, 1 January 2003.
Abstract: The aim of this paper is to show that Karl Marx supports his theory of surplus value by developing a counterfactual argument, that is, by comparing the 'normal' state of a capitalist economy against a hypothetical state in which no surplus is produced. Marx then divides his analysis of value into three successive steps.
The first deals with the production of new value in the sphere of production; the second with the process of creation of surplus value, both in the sphere of production and in the sphere of circulation; and the third with the process of equalisation of the rate of profit, which is accomplished via capitalist competition in the sphere of circulation.
Social process of production, pumps a definite quantity of surplus-labour out of the direct producers, or labourers; capital obtains this surplus-labour without an equivalent, and in essence it always remains forced labour. This surplus labour appears as surplus value, and this surplus value exists as a surplus product.
In a capitalist society, surplus value, or surplus product, is divided among capitalists as dividends proportionate to the share of the social capital each holds. In this form surplus value appears as average profit which falls to the share of capital, an average profit which in turn divides into profit of enterprise and interest, and which under these two categories may fall into the laps of different kinds of capitalists. - Abstract from: The Trinity Formula - marxists.orgEstimates of the Rate of Surplus-Value in the Postwar United States Economy
Absolute surplus-value. (a) Labour-process and the process of producing surplus-value.
(b) Constant capital and variable capital. (c) Absolute surplus-value. (d) Struggle for
the normal working-day. (e) Simultaneous working-days (number of simultaneously employed
labourers). Amount of surplus-value and rate of surplus-value (magnitude and height?).
Relative surplus-value. (a) Simple co-operation. (b) Division of labour. (c) Machinery. etc.
Combination of absolute and relative surplus-value. Relation (proportion) between wage-labour and surplus-value. Formal and real subsumption of labour under capital. Productivity of capital. Productive and unproductive labour.
Reconversion of surplus-value into capital. Primitive accumulation. Wakefields colonial theory.