Definitions

Abstract

Marx divides the net product of industry into two parts: variable capital and surplus. Variable capital (v) is the wages bill.¹ Surplus (s), which covers net profit, interest and rent,² is the excess of net product over wages. The difference between gross and net product is constant capital (c), which consists of plant and raw materials. It is constant in the sense that it adds no more to the value of output than it loses in the process of production, new value added being due to the labour-power purchased by variable capital.³ Fixed plant contributes to c only in respect to its rate of wear and tear and depreciation.⁴ Thus c consists of depreciation plus raw materials. The total product for any period, say a year, is then represented by c + v + s. These quantities are measured in value, or socially necessary labour-time. ⁵ This concept involves some problems which will be discussed in the next chapter.