Surplus Value

Surplus value is a concept written about by Karl Marx. Although Marx did not himself invent the term, he developed the concept. It refers roughly to the new value created by workers that is in excess of their own labour-cost and which is therefore available to be appropriated by the capitalist, according to Marx; it allows then for profit and in so doing is the basis of capital accumulation.

"Surplus-value and the rate of surplus-value are... the invisible essence to be investigated, whereas the rate of profit and hence the form of surplus-value as profit are visible surface phenomena" - Karl Marx, Capital Vol. 3, Pelican edition, p. 134

For Marx, the gigantic increase in wealth and population from the 19th century onwards was mainly due to the competitive striving to obtain maximum surplus-value from the employment of labor, resulting in an equally gigantic increase of productivity and capital resources. To the extent that increasingly the economic surplus is convertible into money and expressed in money, the amassment of wealth is possible on a larger and larger scale (see capital accumulation and surplus product).