10/07/15 09:43:37 OBQPOdYZ0
Capitalism is distinctive, Marx argues, in that it involves not merely the exchange of commodities, but
the advancement of capital, in the form of money, with the purpose of generating profit through the purchase
of commodities and their transformation into other commodities which can command a higher price, and thus
yield a profit. Marx claims that no previous theorist has been able adequately to explain how capitalism as a
whole can make a profit. Marx's own solution relies on the idea of exploitation of the worker. In setting up conditions
of production the capitalist purchases the worker's labour power ― his ability to labour ― for the day.
The cost of this commodity is determined in the same way as the cost of every other; i.e. in terms of the amount
of socially necessary labour power required to produce it. In this case the value of a day's labour power is the value
of the commodities necessary to keep the worker alive for a day. Suppose that such commodities take four hours to
produce. Thus the first four hours of the working day is spent on producing value equivalent to the value of the wages
the worker will be paid. This is known as necessary labour. Any work the worker does above this is known as surplus
labour, producing surplus value for the capitalist. Surplus value, according to Marx, is the source of all profit. In Marx's
analysis labour power is the only commodity which can produce more value than it is worth, and for this reason it is known
as variable capital. Other commodities simply pass their value on to the finished commodities, but do not create any extra
value. They are known as constant capital. Profit, then, is the result of the labour performed by the worker beyond that
necessary to create the value of his or her wages. This is the surplus value theory of profit.