Profit Upon Expropriation

Political Economy What is 'Profit upon expropriation?' Why can it not account for the existence of positive profits across the economy? Profit upon expropriation is juxtaposed against profit by production, where the profit derives from a specific production process. Marx saw profit from expropriation as that which arises from a share of existing cash flows. Thus, owning shares in a company would qualify. For example, Ford makes cars -- that is profit from production. A shareholder in Ford is paid a dividend -- they produced nothing.

That is profit upon expropriation (Lapavitsas & Levina, 2011). This cannot account for the existence of positive profits across the economy, because this is profit that derives from passivity. Profit accrues through the actual production of goods and services, wherein resources are converted into economic activity. The issue with profit upon expropriation is that it does not constitute activity, therefore nothing of value of produced. That somebody can earn profit without producing anything of value is, in fact, not profit at all.

It is not a positive profit because nothing positive has been done to earn it. Some might argue that the provision of capital is a service, but Marx rejects this. Even someone who accepts this would have to evaluate whether this service is being compensated appropriately by the market system. If not, it still would not be producing positive profit across the economy. However, as noted, Marx rejects the idea that expropriation is true profit because nothing is being produced -- there is no genuine benefit to the economy.

Positive profits across the economy can be generated in a number of ways. This includes the exploitation of natural resources, the provision of services, and the production of goods. All of these reflect some form of labor, and some manner of transformation that results from that labor, to deliver a tangible benefit. Profit upon expropriation simply does not fit this understanding of the nature of profit across the economy. What are the three types of control capitalist employers can exert over production process? Capitalist control over production is fundamentally important.

In a production process capitalist employers can exert three different ways of control: simple control, technical control and bureaucratic control. The first type of control capitalist employers can exert over production process is simple control. This type of control is when employers directly supervise workers. Employers motivate workers both by giving rewards and penalties, rewarding positive performance and punishing poor performance. For example, the promise of a higher wage may motivate employees to work harder, executing the job at a higher level and increasing the employer's success.

Simple control comes has the advantage of being direct, where all parties can easily understand the consequences of performance. However, it may lack power when the employee is motivated by other things, in particular when the positive incentive is not attractive to the employee. Technical control is a system of control that incorporates a work pace designed into the machinery of production. The machinery used motivates the employees to work at a rapid pace, which may appear to be dictated not by the employer, but by the machine.

This form of control may be challenging as the employee will usually have to adapt to working at a higher pace, but employees will typically become acclimated to it, or they will have to be removed from that post because they will slow down the system. Bureaucratic control is a system of control where workers are judged according to how well they perform the work required in their particular job. There are specific measures and objectives, and the.