What Is Surplus Economics?

Economic surplus as a whole reflects the sum of the results or benefits of various economic activities of a country or an economy in a certain period of time. It is a comprehensive indicator measuring the economic efficiency and development level of a country, sector or economy. Actively exploring and developing the theory of economic surplus is exactly what should be done in constructing a harmonious socialist society and building a socialist cause with Chinese characteristics. ^[1]

Economic surplus

(Economic term)

The theory of economic surplus (theory of economic surplus) refers to the difference between the results of various production or business activities and the cost it spends, referred to as the difference between output and input. The so-called economic activities here include not only the primary and secondary industries, but also the tertiary industry; the form of input and output can be tangible or material, it can also be intangible or intangible, and it can be value Or monetary.

Concerned by American contemporary radical economists PA Baran (1910 ~ 1964) and PM Sweezy (1910 ~)

The concept of "economic surplus" was first

Based on the concept of economic surplus, Balan and Sweezy put forward three main theoretical insights:

Economic surplus tends to grow not only in absolute terms but also as a share (percentage) of national income (or total output) throughout the period of monopoly capitalism.

The proportion of the total economic surplus that is looking for investment outlets is increasing throughout the period of monopoly capitalism.

(3) Monopoly capitalism is not capable of absorbing the surplus of the growing search for investment outlets.

Regarding the first insight, Baran and Sweezy are mainly based on the efficiency of large companies in reducing costs (continuously and faster to reduce costs) and market behavior under the large company system (monopoly prices, trying to find sales, advertising costs). Expansion, etc.) to demonstrate that there is a "law of residual growth" under monopoly capitalism. They affirm that the law of residual growth is not inconsistent with the law of Marx's downward trend in profitability. It is said that the latter is based on the theory under the assumption of the competition system, and that they use the law of surplus growth to replace the law of falling profit rates, which does not negate or modify a long-established principle in political economy. Rather, in the face of the structural change from competitive capitalism to monopoly capitalism, this substitution has gained its theoretical performance, that is, the important role of the law of surplus growth is actually affecting the issue of the distribution of national income.

Regarding the second opinion, Baran and Sweezy pointed out that monopoly capitalism always forms more and more surpluses, but it cannot provide what is needed to absorb the growing surplus and therefore what is needed to make this system work harmoniously. Consumption and investment outlets. It is said that because of the dividend policy of large companies (usually the dividend payment rate indicator is fixed at 50% of the company's income for a long time), there is a delay between the increased surplus accumulation (the company's undistributed profit) and this surplus distribution to disposable income For example, suppose the company made a profit of two dollars per share in a certain period, paid a dollar of dividends, and then increased the earnings per share to four dollars. Then the dividend will not increase to two dollars in one year but in several years. At this time, the actual dividend payout ratio will lag behind the company's target dividend payout ratio), so even if the capitalist uses the entire distribution of profits for consumption, the proportion of the remaining total that seeks an investment outlet (the portion that seeks an investment outlet) The remaining percentage of total income) also tends to increase. In this way, the paradoxical nature of monopolistic capitalism is formed-it has long been unable to absorb the surplus it can produce. As a result, the more difficult problem of residual absorption arises.

According to a third opinion, Baran and Sweezy asserted: "Since it is unwilling to produce unabsorbable surpluses, the normal state of a monopoly capitalist economy is of course stagnant." Monopoly capitalism does not have sufficient capacity to absorb surpluses. This is equivalent to a downward trend in the operating rate of all production capacity, that is, the existing human and material resources are often not fully utilized. Although it is possible to have the following investment options to help absorb the growing surplus:

Investment to meet the needs arising from population growth;

Investment in new production methods and new products;

Foreign investment.

But the conclusions drawn from Balan and Sweezy's analysis are not optimistic. They believe that population growth itself is not a decisive factor in creating some kind of investment outlet. If the population continues to grow at a higher rate while other investment outlets are decreasing, the result is likely to be an increase in unemployment rather than a sustained investment boom. ; Under monopoly capitalism, the speed of technological progress is rapid, but a large number of outdated equipment is still used. In short, in their view, under monopolistic capitalism, there is no inevitable correlation between the speed of technological progress and the size of investment outlets, as demonstrated under the competition system. "Technical progress tends to determine the form, rather than the amount, of an investment made over a certain period of time." As far as foreign investment is concerned, it is far from being a domestic way out of surplus. On the contrary, it is the most effective way to transfer the surplus formed overseas to the investing country. In this way, foreign investment makes the problem of surplus absorption more serious, rather than helping it to solve it. Therefore, if there is a lack of offsetting power (such as militarization, waste, etc.), monopoly capitalism will sink into the mire of long-term depression.

Balan and Sweezy also used the concept of "economic surplus" to try to indicate: "The size of the surplus is an indicator of productive capacity and wealth, an indicator of how much freedom a society enjoys to accomplish any goal it sets for itself. The composition of the surplus Partly shows how a society uses that freedom: how much it invests in expanding its productive energy, how much it consumes in various forms, how much it consumes, and how wasteful it is. "Based on this, they concluded that capitalist society Brings "irrational institutions". The term free enterprise has become a mantra and has no description or description. The masses without property can never determine their living conditions or government policies. Therefore, "this society has no faith, no morals-no ability to provide its members with a way to use their energy for purposes that are interesting and valuable from a human perspective".

The theory of economic surplus attempts to review the characteristics of monopoly capital and its economic laws based on the political and economic situation in the United States, and to expose and analyze the contradictions and decay of the political, economic, cultural, and social life of the United States. The United States fights against monopoly capitalism. The author's attempts and efforts have certain significance.

However, the concept of "economic surplus" is not based on the analysis of capitalist social production relations. It removes social relations in a specific historical period and obliterates the class essence of social production relations. How exactly the "surplus" was derived from the relationship between labor and capital was not fully explained by Baran and Sweezy. In this way, the so-called "economic surplus" obscures and obscures the opposition between wage labor and capital, and the sharp class struggle between the proletariat and the bourgeoisie. In response to this, some radical economists in the United States also pointed out: In the book "Monopoly Capital", the use of the concept of economic surplus raised the contradiction of monopoly capitalism, which is a rising upward trend, but this contradiction lacks the driving force to resolve it. Thereby moving in a vacuum.

The "stagnation theory" of the monopoly capitalist economy derived from the theory of economic surplus is essentially a departure from the "capital accumulation theory" proposed by Marx based on a direct examination of the capitalist production and labor process. Some radical economists in the West have pointed out that Baran and Sweezy's research methods on the stagnation trend of monopoly capitalist economy are similar to Keynesian theory of insufficient demand in several aspects. They argue that Balan and Sweezy's formulation of "residual absorption" is consistent with the Keynesian formula for maintaining aggregate demand.