We explain what capital gains are, the origin of this concept and how it is calculated. Also, differences between relative and absolute capital gains.
What is surplus value?
The surplus value, surplus value or surplus value It is a term typical of Marxist economic philosophy that is, proposed by Karl Marx (1818), and his criticism of classical economists such as Adam Smith (1723-1790) or David Ricardo (1772-1823), in whose works this concept was already stated, but not defined.
Surplus value can be understood as the monetary equivalent (that is, in money) of the additional value to his labor power that a worker produces, and that the bourgeois appropriates or “extracts” from him, with which the accumulation process can take place. capitalist.
In simpler terms, surplus value is the portion of production that is not remunerated to workers, but is part of the employer's profit. It is conceived as the difference between the value of the total produced and the salary received by the workers.
This is explained, according to Marxist theory, because capitalism is a system of production of surplus value, rather than a system of production of consumable goods.
Thus, when the worker in the factory works a certain number of hours, he receives in exchange a salary that is not equivalent to the production he carried out during his day, but to the value of his work. workforcethat is, what it costs to have him there working daily and guarantee his offspring (who will eventually replace him), which is necessarily less.
This way, The bosses benefit from that “extra” production that others worked for them. Eventually they receive it as money that accumulates for them and from which they can extract their profits, invest in new projects, etc.
Origin of the concept of surplus value
Goodwill is a term that Karl Marx draws from his readings of the work of David Ricardo. that is really going to develop and acquire importance in The capital (1867), perhaps Marx's best-known work. Since then, it has been a concept inseparable from Marxist language and criticism of the exploitative relationship of capitalism.
Calculation of capital gains
According to Marx's view, surplus value can be calculated mathematically. It is equal to the entrepreneur's income after deducting the company's production costs. The latter are divided into two:
- Constant capital (c) Where are the materials, supplies and production machinery. Marx calls it “dead capital.”
- Variable capital (v) What are personnel costs (workforce). According to Marx, only this last capital generates surplus value, and he calls it “living capital.”
The initial capital of the company (C1) is equal to the two previous capitals (C1 = c + v), while the final capital of the same (C2) is equal to the initial value, plus the capital gain (C2=C1 +p). Thus, the surplus value can be calculated as C2 –C1.
Furthermore, Marx introduces the Rate of surplus value, with which the degree of exploitation of a worker can be calculated, and which is the difference between surplus value (p) and the costs of labor power (v), taken to the percentage (TP = p/v .100). By calculating this, we can know how many hours a worker works in exchange for nothing, that is, to generate the surplus value that the capitalist will keep.
The latter is important because it allows us to exemplify the concept of capitalist exploitation: it consists of the worker produces through his work more than what would be needed for him and his people to subsist what Marx calls “the value of the replication of labor power.” Let's explain it in numbers:
A businessman has a chorizo factory, in which he has 5 employees manufacturing 100 chorizos per day (about 2,000 per month), which then go to the local market. To do so, he must buy the supplies, pay for the services and maintain the machinery, which causes him a total monthly expense of 2000 pesos (c), added to the payment of his five employees who earn a salary of 200 pesos per month each, that is , 1000 pesos per month in total (v). We have to C1 = 3000 pesos.
The chorizos are sold in their entirety, for 2 pesos each, so that at the end of the month, the factory earns 4,000 gross pesos. From that figure we will deduct C1 and we will obtain a capital gain of 1,000 pesos per month; which expressed in its rate of surplus value, would be TP = 1,000 / 1,000 .100 = 100%, that is, an exploitation of 100% of production.
The latter means, continuing the Marxist formulation, that of each hour worked by the worker, 50% is dedicated to producing the chorizos whose sale they will feed him, and 50% is dedicated to producing the chorizos for whose sale he will not receive anything. That means that, if the workday is 8 hours, 4 of them will be dedicated to manufacturing surplus value.
With this formulation, Marx explains that capitalism deepens social inequality by “stealing” production from the working class to give it to the capitalists.
Relative and absolute capital gain
These two concepts are, according to Marx, the two ways in which capitalism can increase its rate of exploitation and therefore the amount of surplus value it obtains. They are distinguished in:
- The absolute surplus value It is obtained when the rate of exploitation of workers increases, normally by lengthening the working day. Thus, more surplus value is obtained without increasing the value of labor power.
- The relative surplus value. On the other hand, it is obtained when the surplus value obtained through the increase in production is increased, so that the rate of exploitation increases without altering the hours of work.
Capital gain and loss
In the urban and real estate field the term surplus value and its opposite, handicap, are used with a different meaning than that of Marxist philosophy. In this case, “capital gain” denotes the increase in the value of a property or a piece of land, as a result of urban modifications or public works in its vicinity, without costing the owners anything.
For its part, handicap means the loss of value of the property or land as a result of events in its vicinity that deplete its market price.
Continue with: Class struggle
References
- “Plusvalor” on Wikipedia.
- “Absolute capital gain and relative capital gain” in Webdianoia.
- “Disability” in Economipedia.
- “Surplus value” in The Encyclopaedia Britannica.
