An Essay on Marxian Economics

By Joan Robinson | Go to book overview

CHAPTER II
DEFINITIONS

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.

Marx conducts his argument in terms of three ratios:

,the rate of exploitation,6, the organic composition of capital,7 and, the rate of profit.8 The rate of exploitation, is, the ratio of surplus (net profit, interest and rent) to wages, and indicates the share of labour in net output. Marx often expresses it as a

____________________
1
Vol. I, p. 192(1).
2
Vol. I, p. 194(2) and Vol. III, p. 993(3).
3
Vol. I, p. 191(4). See also below, p. 13.
4
Vol. I, p. 195(5).
5
Vol. I, p. 5(6).
6
Vol. I, p. 198(7).
7
Vol. I, p. 625(8).
8
Vol. III, p. 55(9).

-6-

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An Essay on Marxian Economics
Table of contents

Table of contents

  • Books by Joan Robinson ii
  • Title Page iii
  • Foreword v
  • Contents ix
  • Chapter I - Introduction 1
  • Chapter II - Definitions 6
  • Chapter III - The Labour Theory of Value 10
  • Appendix - Value in a Socialist Economy 23
  • Chapter IV - The Long-Period Theory Of Employment 29
  • Chapter V - The Falling Rate of Profit 35
  • Chapter VI - Effective Demand 43
  • Chapter VII - The Orthodox Theory of Profit 52
  • Chapter VIII - The General Theory Of Employment 63
  • Chapter IX - Imperfect Competition 73
  • Chapter X - Real and Money Wages 82
  • Chapter XI - Dynamic Analysis 92
  • References to "Capital" 96
  • Index 103
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