Why do you think Marx goes through the analysis of Section 2 looking at c, v and s in terms of proportional parts of the product? In the money circuit M – C – M ’, capitalists purchase commodities (C ) with mo… Surplus, Surplus In the history of economic thought there are, broadly, two approaches to the study of prices and income distribution. To explain how faster circulation of surplus-value impacts accumulation, we stick to the two example capitals from the last chapter: 3. Section 2: The Representation of Components of Value by Parts of the Product. He emphasizes the ratio of surplus product to necessary product (i.e., the part that goes to working class consumption) for the same reason he emphasizes the ratio s/v: they both highlight distribution between the classes. of one hour would reduce not only total labor time but also the use of C' = 115,000 (total value of product) his honor" later on came to support the factory legislation. s/(c+v) = rate of profit. inputs = s therefore expresses the capitalist point of view. Partly, he is explaining This is very roughly equivalent to the profits/wages ratio, though there is debate in Marxian economics about what exact profit and wage measures should be used. At first reading it appears dense. By Massoud Nayeri. Partly this can be seen in Ure's argument that Marx cites in a contemplating, is the relations between necessary and surplus labor time + raw materials (c2) What would this imply for his measures of price and productivity? over time, rather than statically as Marx defines it? issue because what is at issue is the worker's time and its allocation. 1979 Jun;69(3):329-341. Questions for Review 1. by one hour, from 11.5 to 10.5, the surplus value s will be eliminated. so, constant capital (c) in a given period = c1 + c2, new value created  = v + s Being organized around the endless and universal imposition of work, capitalists collectively must worry about whether they are providing enough employment to absorb the existing labor force. The rate of profit, on the other hand, which measures the surplus labor time against the capitalist's total investment, is a measure primarily of interest to the capitalists, in so far as it measures how much they earn in relation to how much they had to invest originally. What would the total  therefore s/(c + v)  = 9.5%.    = reproduction of value of labor power + a surplus constant capital. At 6s/12hrs, or .5s/hr, the 30s final product embodies 60 hrs labor, of which the other 48 derive from c. Then, using the same example, Marx notes how the same components of value: c, v and s can be represented in terms of proportional parts of the total time employed in production, i.e., 12hrs. surplus product = the portion of the product that represents Karl Marx accepted Ricardo’s labour theory of value (that the value of a product is based on the quantity of labour that went into producing it), but he subscribed to a subsistence theory of wages for a different reason than that given by the classical economists. In his case, the product itself. ({95,000/11.5}10.5 = 86,739.1) speak of "surplus" labor?             ({115,000/11.5}10.5 = 105,000) the actual cost of workers' wages, based on the work needed. components In modern economies, surplus value forms a sizeable portion of the total output. s/(c+v) = rate of profit [NB: a certain amount of unemployment is necessary in capitalism to keep pressure on workers to accept alienated low paying jobs; but too much unemployment creates a terrain of unrest.] The concept of the rate of surplus-value occupies a central role in Marx's theory of the "laws of motion" of capitalism. capital gives up only a part of its value (c1) in each period One might inquire how this is possible. value, constant capital and variable capital. Would his analysis be relevant today? The estimates of the rate of surplus value increased 19 percent over this period, from 1.40 in 1947 to 1.66 in 1976, again as predic-surplus value. rate of profit. but would also take into account things like taxes on profits, from which the argument Marx is making that Senior drastically overstates the potential These two sections go together because Marx is preparing in section 2 the critique of Senior that he wants to make in section 3. b) more seriously he points out that in each hour of the = 8 bushels, examine Marx's example taken from Jacob. If, he therefore concludes, the working day is reduced the value rate of surplus v alue and price rate of surplus value. The rate of surplus value is therefore 80/52 = 153 11/13%’. The rate of surplus value is ratio of the surplus labour time, which the producing class works without pay, to the necessary labour time, that they need to maintain their standard of living. 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