Characteristics of Surplus Theory

Abstract

The principal characteristic of this approach to economic theory is the concentration of analysis upon the surplus as it arises in different types of economic system. The notion of what comprises surplus differs between theorists but the essential idea remains the same. Surplus constitutes disposable resources. The output of any economic system is divided into two components. There is that which is required for the reproduction of the output, and thereby represents necessary costs of production or necessary costs of reproduction. The remaining component can then be regarded as disposable. The system’s output can be ensured irrespective of its utilisation. The economic theory which we are about to consider seeks to explain the nature of the surplus, its origin and determinants, its measurement and valuation, and its utilisation in different activities.