Surplus value on Karl Marx - Essay Example

This paper seeks to discuss Karl max’s definition of surplus value and how he attempted to solve the puzzle of surplus value. The paper will further discuss why Marx believed that his solution to the puzzle gave him insight into some of the general dynamics of capitalism. The Surplus Value Karl Marx argued that capitalists manage to use laborers to produce the value of a commodity but the laborers get a portion of that value. The portion of the value that gets left with capitalists is the surplus value according to Marx (Foley 100).

Marx sought to establish the secret used by capitalists to convince laborers to provide their labor at a relatively lower wage than the value they create with their labor. Max got puzzled by how these capitalists manage to do so more so in a political capitalist system. These political systems seemed to champion for equal legal and civil rights to workers and capitalists. In one of his analysis to establish the source of surplus value, Marx establishes that the cost of goods sold is the money used by a capitalist to buy commodities to start production.

He further establishes sales revenue as the larger sum of money that the capitalist ends up with while the gross profit is the surplus value (Foley 100). This was according to Marx, the source of surplus value. . When buyers pay more for a commodity than the value of the labor used to produced it, that value can be passed to the buyer, but the seller’s gain becomes the buyer’s loss. Although some economists argue that surplus value is the reward awarded to capitalists for their contribution to production, Marx argues that the magnitude of this reward is too significant to be justified.

This enabled Karl Marx to address the exploitation imposed on laborers by the capitalists. Marx’s solution to the puzzle of surplus value gave him an insight into other dynamics of capitalism. One such dynamic is the exploitation capitalism imposes on the laborers. Capitalism entails that the surplus value consistently increases with time (Foley 138). In order to increase surplus value, the capitalists would be required to engage laborers more in their work. Capitalists continue to live a lavish life due to the increasing surplus value.

The living standards of the laborers, on the other hand, either stagnate or decline. This, according to Marx, would create a society with a wide range between the capitalists and the laborers. The laborers would be confronted with an ever rising power of production and their diminishing control on the fruits of this production (Foley 100). This could lead consequently to laborers protesting for an increase in their wage. When the capitalists get to increase the wages of the laborers, they increase the price of the goods they produce so as to ‘cover’ for the extra wages given to laborers.

Marx saw this is a circular flow which in its very essence would still exploit the laborers. Marx, however, fails to address the vital role played by the surplus value in the growth and development of a society. Capitalists use this value to reinvest in their