Rate of Surplus-Value

The ratio of surplus-value to variable capital, which is calculated by the formula:

In the process of capitalist production, the aggregate capital advanced by the capitalist includes the capital used to buy the means of production and labor-power, of which the constant capital used for the means of production, the value of which is transferred in its entirety to the new product in the production process, and there is no change in the magnitude of value; instead, the value of variable capital used for labor-power achieves a valorization in the production process, i.e., yields a surplus-value. The rate of surplus-value is thus the relative magnitude of the variable capital to the increase in value or the surplus-value it produces, and this ratio can indicate what proportion of the value created by wage-laborer is exploited and what proportion is appropriated by them, and shows the degree to which the capitalist exploits the wage-laborer. Therefore, the rate of surplus-value is also called the “rate of exploitation”, and Marx pointed out that the rate of surplus-value is an exact expression for the degree of exploitation of labor by capital, or of the laborer by the capitalist.

Analyzed from the perspective of living labor, the rate of surplus-value will depend on the proportion between that part of the working day necessary to reproduce the value of the labor-power and the surplus time or surplus labor performed for the capitalist. It will, therefore, depend on the ratio in which the working-day is prolonged over and above that extent, by working which the working man would only reproduce the value of his labor-power, or replace his wages. Thus, another formula for the rate of surplus-value can be listed as: