Q.Explain Marx's theory of surplus value.

Marx's theory of surplus value is the specifically economic argument underlying his broader critique of capitalism.

Karl Marx's theory of surplus value builds on the classical labour theory of value — the idea, also held by Smith and Ricardo, that the value of a good is determined by the amount of labour needed to produce it. Marx applied this idea specifically to the wage relationship between workers and capitalists under capitalism. A worker is paid a wage that, in Marx's analysis, covers only what is needed for the worker's subsistence and reproduction (food, shelter, raising the next generation of workers). However, the capitalist requires the worker to work for a full working day, during which the worker produces value considerably greater than the value of that subsistence wage. The difference between the value the worker actually creates and the wage the worker is actually paid is what Marx called 'surplus value,' and this surplus value is retained by the capitalist as profit. Marx argued this was not an occasional unfairness correctable within capitalism, but a structural feature of the system itself — capitalists, in competition with one another, are driven to extract as much surplus value as possible (by lengthening the working day or intensifying work), which …