Superprofit
Superprofit (or surplus profit or extra surplus-value; in German: extra-Mehrwert) is a term used by Karl Marx in Das Kapital. It refers basically to above-average enterprise profits arising in three main situations: (1) technologically advanced firms operating at above average productivity in a competitive, growing market. (2) under conditions of declining demand, only firms with above-average productivity will obtain the socially average profit rate. (3) monopolies of resources or technologies, yielding what are effectively land rents, mineral rents, or technological rents. We could - although Marx does not discuss this in detail - also include a fourth case, namely superprofits arising from structural unequal exchange.
In latter-day Marxist theory, superprofits are specifically the result of unusually severe exploitation. All capitalist profit, it is argued, is based on exploitation (the business owners extract surplus value from the workers), but superprofit is achieved by taking exploitation above and beyond its normal level. Political repression of workers allows capitalists to extract superprofits, while normally negotiated contract labor only allows them to extract normal profits. Howvever, superprofits may have nothing to do with production conditions and originate only out of advantageous selling conditions.
According to Lenin, superprofits are extracted from the workers in colonial (or "third world") countries by the imperialist powers in the "first world". Part of these superprofits are then distributed (in the form of increased living standards) to the workers in the imperialists' home countries, in order to buy their loyalty, achieve political stability and avoid a workers' revolution. The workers who receive a large enough share of the superprofits have an interest to defend the capitalist system, so they become a labor aristocracy.
Critics of Lenin's theory however charge that it is a form of economic reductionism which cannot be reconciled with the facts; among other things, the rate of surplus-value is typically higher in rich countries because of higher productivity; high-paid, skilled workers can be very militant and class conscious; and it is not clear that workers in the imperialist country share in repatriated profits from overseas dominions.
References
- Karl Marx, Capital Volume 3.
- Ernest Mandel, Late Capitalism.
- Makoto Itoh, Value and Crisis.
- Victor Perlo, The Empire of High Finance.
- Victor Perlo, Militarism and Industry.
- Michael Barratt-Brown, After Imperialism.
- Michael Barrat-Brown, The Economics of Imperialism.
See also: Leninism