Valorisation - Valorisation and The Realisation of Capital

Valorisation and The Realisation of Capital

Valorisation of capital is for Marx not at all the same as the "realisation of capital". Value may be added in the production process, but this additional value may not be realised as an additional sum of money, unless the outputs are sold at a favourable price.

At an unfavourable price, output is sold without increasing capital assets. So, the new value added in production may be lost to the producer or owner, when the new product is traded. The capital is "valorized", but the value-increase is not (fully) realized by its owner.

In reality, Marx argues, the valorisation of capital in one enterprise is dependent on the valorisation of many related enterprises, since they all influence each other with respect to costs, values and prices. When all is said, the preservation and increase of capital value is a purely social phenomenon.