What do you mean by organic composition of capital?
Organic Composition of Capital. The “organic composition of capital” is the ratio of the value of the materials and fixed costs (constant capital) embodied in production of a commodity to the value of the labour-power (variable capital) used in making it.
What assertion is made in Marx’s conception of organic composition of capital?
Marx argues that a rising organic composition of capital is a necessary effect of capital accumulation and competition in the sphere of production, at least in the long term. This means that the share of constant capital in the total capital outlay increases, and that labor input per product unit declines.
What do you mean by variable capital?
Variable capital is “variable” because its value changes (varies) within the production process, as the worker can produce value over and above what he needs to live (the “necessary labor time”), which is paid in wages. As the worker produces more than he is paid in wages, he thus creates new value.
What is a commodity to Marx?
Definition: Commodity. COMMODITY: “an external object, a thing which through its qualities satisfies human needs of whatever kind” (Marx, Capital 125) and is then exchanged for something else.
What is Marxist political economy?
Marxist Political Economy (MPE) denotes a range of political economy perspectives that are broadly connected to and in the tradition of the writings (notably The Communist Manifesto, Grundrisse and Capital) and insights of Karl Marx. Generally, MPE comprises an integrative analysis of the economy, society and politics.
What is variable capital by Karl Marx?
Constant capital is the value of goods and materials required to produce a commodity, while variable capital is the wages paid for the production of a commodity. Marx introduced this distinction because it is only labour-power which creates new value.
What is surplus value according to Marx?
According to Marx’s theory, surplus value is equal to the new value created by workers in excess of their own labor-cost, which is appropriated by the capitalist as profit when products are sold.
What is commodity in capitalism?
In capitalism, Marx argues, commodity values are commercially expressed as the prices of production of commodities (cost-price + average profit). But what prices of production simultaneously hide is the social nature of the valorisation process, i.e. how an increase in capital-value occurs through production.
Is Marx against capitalism?
Marx condemned capitalism as a system that alienates the masses. His reasoning was as follows: although workers produce things for the market, market forces, not workers, control things. People are required to work for capitalists who have full control over the means of production and maintain power in the workplace.