Define the terms constant capital, variable capital, and surplus Essay

Define the terms constant capital, variable capital, and surplus value. What role do these three factors play in the process of capital accumulation - Essay Example Moreover, capital can never exist not unless it is produced. Thus, to create capital, it must be combined with labor; in exchange with money and skill (Brewer, 1984). Capital can be claimed and its ownership transferred to a different individual. Hence, most governments have restrictions or rather regulations that limit how capital is used. Thus, this paper presents different forms of capital; constant capital and variable capital. In addition, it will discuss the surplus value in relation to capital accumulation. According to Marx (2004) constant capital refers to the part of capital that is fully represented by all the means of production, the raw materials, the auxiliary materials and labor instruments which do not undergo value alteration in the process of production. Thus, it includes the money outlay on fixed assets such as buildings, machinery and land, raw materials such as the externally purchased services and incident expenses. In addition, constant capital can be described as the proportion of capital which is invested and includes the circulating constant capital and the fixed capital. Fixed capital is a portion of constant capital that has been advanced and functions as the factors of production, in the labor category. Hence, a finished product alongside the materials that were used to create it are brought out from the production process and passed into circulation (Marx, 2004). However, the labor instruments remain intact in the sphere of production since their function expects them to be static. These static instruments that remain behind after a production procedure is complete are thus referred to as fixed capital which passes part of its value to the final product due to wear and tear. The value of fixed capital steadily decreases to a point where the labor instrument is completely worn out as a result of repeated series of production processes. The