Karl Marx ‘Theory of Surplus Value’ Notes and Key Points

Heinrich Karl Marx was a renowned sociologist of the 19th century (1818-1883). He presented several theories, books and essays which later led to socialism. Marx was exponent supporter of creating a balance between the ‘Petit bourgeoisie’ and ‘Lumpen Proletariat.

theory of Surplus Value, Karl Marx

Karl Marx theories and the books revolutionised the world. His concepts on the equality for all gave birth to a new system of governance.

He overwhelmingly objected the capitalism. His work like The Communist Manifesto, Das Kapital and political economy revolutionised the whole world. Communist were all Marxist in nature.

The theory of Surplus Value is part of political economy, written by Karl Marx. Karl Marx’s theory of class conflict, theory of alienation and theory of surplus value are interrelated as all these theories speak against the capitalism or market economy.

The further detail will only illustrate the Marx theory of surplus value and its validity in the contemporary affairs.

Theory of Surplus Value

  • The price of commodity produced is determined by the labour involved in that commodity.
  • In the complex capitalist environment labourer provides his services to his boss in order to produce a commodity but in response to it he just gets a small chunk of the profit. The remaining profit goes to the boss or who is responsible to conducting that business.
  • The theory of surplus value says that this labourer, his efforts are helpful, meaningful to the owner of that business as the surplus amount goes to the boss instead of that labourer who is actually responsible for carrying out the whole business.
  • Thus, Karl Marx is of the view that a labourer and the person who is carrying out the business be treated on the equal grounds but the capitalist economy does not take care of this fact.

Labour is a domain between a man and the nature. The content of labour may remain the same at different stages of man’s history but the character of labour, however, undergoes revolutionary changes whenever one mode of production is superseded by another. Therefore, objectively to man’s vital activity, labour is his eternal companion. Labour is a most important factor in the evolution of world civilisation.

Understanding Labour under Capitalism

This means that the means of production are owned by the capitalist and the labour will have an association with the production of the commodity only. Furthermore, the product of the labour is capitalist property by all means. He is just contributing his efforts for the well- being of the capitalist.

Meaning of Surplus Value To understand the importance of value, it is important to brief about Marx’s theory of Surplus Value. According to this theory, the main postulates emphasised by Karl Marx are:

Commodity production is the outcome of a specific division of labour: “Only such products can become commodities with regard to each other, as result from different kinds of labour, each kind being carried on independently and for the account of private individuals.” The value of commodities expresses what private labours have in common: it is a socially necessary quantity of labour.


  • Karl Marx criticised this concept of dividing the class between the haves’ and ‘have-nots’.
  • In the Marx theory of class conflict he enunciated the impacts of theory of surplus value. Surplus value generates a handsome income for the owner’ however it gives the diminishing returns to the labour. Hence, this gives birth to petit bourgeois and lumpen proletariat.
  • The former are those who are rich, wealthy and influential in the society and the latter are those who are weak, poor and remain at the discretion of the influential persons.
  • Therefore, surplus value generates a class conflict between the different strata of the people.
Surplus value gives birth to alienation.

This means that a person who is capable and talented yet, he cannot impart his full abilities to the work, led him to alienation. The reason behind is that the boss is just concerned about his product regardless of the talent in the labour and on the other hand, the labour being at the mercy of poor environmental conditions, he is supposed to do the work under the wage system. The poor labourer does not have any other option to make his livelihood.

Polarization in the Society

 the theory of alienation, class conflict and surplus value give birth to the polarization in the society. The poor are getting poorer and the rich are getting richer. Thus, such kind of exploitation paralyses the society. So polarization creates a sense of deprivation amongst the members of the society.

Surplus value gives birth to wars and arm conflict

According to Marxist, surplus value gives birth to wars and arm conflict. The reason is that the additional amount or profit earned by the big cartels is utilized on the wars. Thus, gives birth to chaos and anarchy. Therefore, the Marxist school of thought believes in the closed economy.

Karl Marx theory of surplus value in the contemporary affairs Karl Marx theories and the books revolutionised the world. His concepts on the equality for all gave birth to a new system of governance, ie communism.

However, the communist could not refrain themselves from aggressive design as Marxist believe that the surplus money in the capitalism is utilised for fighting wars. But, history shows that the Russians also had an aggressive ideology. “Only such products can become commodities with regard to each other, as result from different kinds of labour, each kind being carried on independently and for the account of private individuals.”

Another point is that Marxist totally negates the liberalisation of the economy. It talks about the closed economy however, the capitalist economy is based upon the opening up the market for all.

Globalisation is the essence of the capitalist economy. In doing so, it is noteworthy well-established that China is second largest economy of the world. The growth rate of China is 8%. She has surpassed Germany. It is a fact that China was never been able to reach such an apogee prior to abolishing socialism. Now Chinese economy is open for the entire world.

Similarly, Indian economy was also a closed economy prior to bringing economic reforms by the then finance minister Manmohan Singh. Now, the country is making rapid progress in the economic field. America wants to capture the Indian market. Therefore, the future of the world lies in the globalisation. One cannot remain aloof from the entire world.


There is no doubt that the basis of capitalist earning is surplus value.

A labourer, if he does not produce more than what he is paid for, then the whole capitalist system will collapse. But at the same time he forgets that the labour of labourer is useless unless that is used by the capitalist.

He also forgets that the capitalist puts his money to risk, which, if not returned, will result in great loss. The labourer on the other hand has no such financial risks.

Sabine has said, ” All the initiative, skill and creative intelligence that workers put into production over and above what would keep them alive, goes to the capitalist, who at the same time is supposed to be paid precisely for his own superior enterprise, foresight, thrift and capacity to organize.”


In a nutshell, Karl Marx theories are right in the sense of giving relief to the labour. This was also good during that century.

Russian and the Chinese who were the greatest exponent of the communism also failed to convince the people for that economic system.

Competitive markets have made a rapid progress in the economic field. The competitive markets are making the things cheaper for the people. This is also a good example of the market economy.

The 21st century is facing many other challenges to make this planet a peaceful place to live. World has pledged to reduce poverty, improve maternal conditions and enhance global trade in the Millennium Development Goals during World Summit. This can only be achieved by globalization.

Karl Marx Theory of Surplus Value

About Rohit Chaudhary

Graduate, helping others to graduate

View all posts by Rohit Chaudhary →

Leave a Reply

Your email address will not be published. Required fields are marked *