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I = S - M

The modern way of thinking about economics has been I = M - S Where I is the I as in me, M is what is 'mine' and S is what ...

2/6/06

The most powerful operational use of sacrifice in economics is Marx’s concept of Surplus Value. It is the ultimate sacrifice made by that invention of industrial-capitalist society: wage labor.

Labor in a capitalist society earns a fraction of what it creates. Most products and services command their value-in-exchange. Hence a product utilizing twice as many resources will usually cost twice as much. However labor only commands its value-in-use. It is paid what is needed to reproduce itself, what Marx called the subsistence wage. The remainder, which is the bulk of the value created, is what Marx called Surplus Value, all of which flows to the owners of capital.

From a letter written by Abhay for the Four More Years of Economics correspondence project with Matthew Goulish.  See www.year-of-economics.blogspot.com

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