Marx propounded the theory of surplus value in order to explain the structure of the existing capitalist society, the nature of class antagonism and war and the reason why it will change into a socialist society of the future. Labour, says Marx, is a commodity, whose value is determined in the same way as that of other commodities. Its exchange-value is the amount of labour spent to produce it and maintain it, that is, the amount of the commodities required to feed, clothe and maintain the labourer. But the labour docs not receive exact amount of the exchange-value of his labour in the capitalist system. This is because he possesses only his labour power, but docs not own the means and methods of production, the tools and machines, raw materials and the like to expend his labour on them and produce commodities.
They are possessed by a small class of the capitalists. They employ the labourers to work in their factories and workshops. The labourers know that they have to work or starve. The employers know that labour is a perishable commodity; either the workers must expend it or it is wasted. Hence they work under the conditions determined by their employers, who pay them only so much wages as are sufficient to maintain them. In other words; they pay them only subsistence wages. But they sell the commodity produced by them at its exchange-value. The subsistence- wage is less than the actual amount of value which the worker has added to the commodity.
This difference is the surplus value. It is that amount which results from the difference between the exchange value of the manufactured commodity and the price or actual wage paid to the worker for his labour. The capitalist has pocketed it due to the laws of property in the capitalist State, although it was the right of the labourer to get it, for it was his unpaid labour. Marx has characterised it as pure and simple exploitation of the labouring class by the capitalist class.
This appropriation of the surplus value by the capitalist classes is the fundamental injustice of the modern capitalism and the basic cause of the hostility and antagonism between the capitalists and the working classes. This makes the workers poor and the capitalists rich. But this process does not end here. It leads to the accumulation of capital. It is, however, the aim and ideal of socialism to put an end to the exploitation and injustice to the workers. This will be achieved in the Socialist State, “where collective capital will replace private capital, both capitalists and wage-eamers disappear, and all persons become cooperating producers.”