What do you understand by ‘surplus value’?

Surplus value, a crucial concept in Karl Marx's political economy, refers to the additional value created by workers during the production process that exceeds the value necessary to cover their wages. In a capitalist system, workers sell their labor power to capitalists for a wage, but the actual labor performed often results in the creation of more value than what is represented by their wages. The surplus value is appropriated by the capitalist as profit.

Marx argued that surplus value is the source of profit in capitalist economies. It arises from the exploitation of labor, where workers contribute more value to the production of goods and services than they receive in wages. This surplus value becomes a key mechanism driving the accumulation of capital and the perpetuation of class divisions within capitalist societies. The analysis of surplus value is central to understanding Marx's critique of capitalism, providing insights into the inherent inequalities and power dynamics embedded in the capitalist mode of production.