The Theory of Surplus Value

The Theory of Surplus Value, developed by Karl Marx, explains how workers create more value through their labor than they receive in wages. This extra value, called surplus value, is appropriated by capitalists (owners of production) as profit. Essentially, Marx argued that workers are paid only for their labor power, not for the full value they generate, which leads to profits being derived from the unpaid effort of workers. This concept highlights the exploitation inherent in capitalist systems when the value produced exceeds workers' compensation, fueling wealth accumulation for owners and economic inequality.