Workers and the Economy Essay Example | Topics and Well Written Essays - 1250 words - 2

Workers and the Economy - Essay Example Therefore, capital is a very critical aspect of socioeconomic resource because it influences the production, transformation of natural resources, consumption and plays a significant role in the creation of the by-products thus an important aspect of pollution. There are two major types of capital variable and constant capital. On the other hand, investment of these capitals creates or reduces the value of production, and this is the basis of the term surplus value. The assignment aims to discuss constant capital, variable capital, and surplus-value with an illustration of how they lead to capital accumulation. Marx defined constant capital as the materials and materials that production of a certain commodity requires (Evans, 2013). In this case, constant capital is the capital proportion that investors channel on the materials as well as the purchased components. On the other hand, the value forms part cost of selling the product thus constant capital remains the same until a product is sold to the market. Constant capital includes the cost of using materials, machinery, and tools since they are all inclusive of the production process. For instance, if the production process involves using a million dollar worth of machinery in producing 10,000 cars then each car will have $100 of the machinery. However, constant capital is measurable when a commodity or a product has now worn out or depreciated. Therefore, constant capital sums up both unit and fixed costs implying that no matter how amount of materials, machines, and components are brought into the production and sold, they do not add a ny new value to the product. The implication is that whether the factors of productions undergo prolonged storage in the warehouse, or used in the production, there is no difference in the amount of capital. Marx concluded that whatever value the materials add when capitalists buy them for production purposes, they assume the same value even