How is added value created

Surplus value theory

Doctrine developed by Karl Marx for a specific form of exploitation and self-destruction of capitalism. It is based on the following assumptions: (1) The "pure" labor value theory applies, according to which labor is the only source of added value. (2) The same law of value applies to labor as to any other commodity: The natural value of labor is equal to the costs of reproduction that are necessary to maintain labor. (3) The surplus value (m) arises as the surplus of the produced value (w) over the "constant capital" (c) for preliminary products and replacement investment as well as the "variable capital" (v) for the wage payments. It arises from the fact that the workers work longer than is necessary to reproduce their labor. Since labor is rewarded at its exchange value, the surplus value (m = w - c - v) falls to the capitalist as entrepreneurial profit and becomes for him the determining motive of production. From this Marx derives his hypothesis about the development of capitalism with the help of the following relations and assumptions: c / v = organic composition of capital, m / v = rate of surplus value or exploitation as the ratio of non-wage income to wage income, m / (c + v) = rate of profit. If the rate of surplus value remains constant and the organic composition of capital increases (as a result of the ongoing accumulation of surplus value caused by competition), the rate of profit would fall, whereby the driving force of capitalism would weaken and its disintegration would set in via a chain of worsening economic crises, beginning with a concentration-promoting capital intensification and displacement competition (monopoly) , in the wake of which an "industrial reserve army" was formed and increased exploitation ensued. The progressive intensification of class antagonisms ultimately led to the revolutionary explosion of the "capitalist shell". As various analyzes of long-term statistical series show, the law that the rate of profit tends to fall has not become effective. Marx obviously viewed one conceivable case as the only possible one. Whether the law of the tendency of the rate of profit to fall will ever acquire any real significance in view of the shortcomings of the labor theory. As Rosa Luxemburg observes, "... with the fall of capitalism due to the fall in the rate of profit, there is still a good way to go, for example until the sun goes out". Literature: Streissler, E., changes in the income structure in economic growth, in: wage policy and income distribution, writings of the Verein für Socialpolitik, NF, vol. 51 (1969), pp. 201 ff. Gutmann, G., criticism of basic posi - tionen der roimscnen v (Konomie vun ivari iviaiA, in: Mück,]. (Ed.), Politische Ökonomie, Frankfurt a. M., New York 1977, p. 216 ff.

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