Theory of Surplus Value

The Theory of Surplus Value, developed by Karl Marx, explains how capitalists profit from workers’ labor. Workers are paid wages that cover their basic needs, but their work often generates more value than their pay—this extra is called surplus value. Capitalists extract this surplus by paying workers less than the full value of what they produce. Essentially, surplus value is the profit made from the difference between the workers’ wages and the value of their output, highlighting how profit arises from unpaid labor and exploitation within a capitalist system.