The capitalist economy is the economy which seeks profit.  This profit cannot be produced in the circulation process, but only in the production process and only by means of labor power.  Therefore, the capital invested for the means of production (machinery) is regarded as constant capital. (It does not multiply value.)

Profit is produced as surplus value in the production process, through surplus labor.  Surplus labor means unpaid labor which is performed during surplus working hours.

Surplus hours are the hours by which total working hours exceed necessary working hours.  Necessary working hours are the working hours for which wages are paid.

Wages are the price of labor power. Since labor power is a kind of commodity, it needs certain quantity of labor to be produced.  This labor quantity is equal to the amount of labor needed to produce the necessities of life required to sustain life such as food, clothing and medicine.  Therefore, the price of daily necessities of life equals the price of labor power, that is, wages.

Therefore, the term "necessary working hours which corresponds to wages" is defined as the working hours necessary for the production of daily living materials.

What is relative surplus value?

Marx said, "The surplus value gained by prolongation of the working hours, I call absolute surplus value. On the other hand, the surplus value gained from curtailment of the necessary working hours, I call relative surplus value."

Relative surplus value can be explained as follows: By the introduction of new machinery many commodities of good quality are produced.  As a result, the price of daily necessities of life decreases.  This brings down the value of labor and therefore causes a decrease in wages.  The reduction in wages by definition means a shortening of necessary working hours; and yet, surplus working hours remain as before.  The surplus value gained by these surplus working hours is called relative surplus value.

For this reason, even though capitalist society may make great progress and may improve the life of laborers, the deprivation of surplus value, or exploitation, remains.  Thus the logic that capitalism must be overthrown is established.

Criticism of the theory of surplus value.

The theory of surplus value can be established only on the assumption that necessary working hours really exist.  If there is no such concept as necessary working hours, and if it is only a fictitious concept, then surplus working hours cannot exist, either.  Therefore, the concept of surplus value itself cannot be established.

Marx says necessary working hours are the hours in which the laborer offers the labor worthy of wages.  Wages are the price of labor power.  The price of labor force as a commodity is determined by the labor quantity existing in the daily living materials (necessities of life) which are necessary for the reproduction of labor power.  "Labor quantity of daily living materials" is defined as the working hours which are required for the production of daily necessity's of life. Therefore, necessary working hours are the working hours required for the production of daily necessities of life for the laborer.

If that is true, the introduction of new machinery should be able to reduce wages.  Since new machines can produce much more inexpensive commodities of better quality, the hours required for the production of daily living materials, that is, necessary working hours are shortened.  Therefore. wages also should be reduced.

But today, unlike the age of Marx, wages are seldom reduced, but are more likely to increase.  This means that it is not appropriate to say that as newer machinery is introduced, wages are reduced and necessary working hours are shortened.  In reality, the hours which correspond to wages cannot exist.  The concept of "necessary working hours" is not established.  In this way, the working hours which have the value equal to wages (necessary working hours) do not really exist.  It is a deceptive artifice based upon fictitious concepts.

Therefore, the theory of surplus value which was established upon the concept of necessary working hours is nothing but false logic.

A counterproposal to the theory of surplus value.

Profit is gain based upon use value. Gains cannot exist apart from the concept of use value.  In reality gain (profit) is obtained in the market.  Therefore, profit has both the aspect of value produced during the production process and the aspect of gain formed in the circulation process.

But the aspect of value itself means nothing but the use value of a commodity.  This is not produced by surplus labor, but by the give-and-take action between the various elements including machinery in the production process. (Therefore, machinery is a kind of variable capital which produces profit.)

And the aspect of profit is gained by the give-and-take action with consumers (customers) in the circulation process. When producers supply consumers with value, they are given profit as their reward.  That is actual profit.

Profit is the social reward for the activity of creating value, through investment.  Here, value means use value, that is, the commodity itself, whereas the activity of creating value means those creative activities of production, transportation and storage, etc.  After producers or merchants produce, transport and store commodities, they supply and display them for the convenience of consumers' purchase.  The reward which consumers return to producers or merchants is profit.

Thus, the counterproposal of Unification Thought to the theory of surplus value is the "theory of social reward " or the "theory of reward for creation."