Full text: Policy Implications of Surplus Approach

Surplus and Department Scheme in Marx 
While surplus in the classical sense is the excess of the 
product over the subsistence wage, it can be conceived 
also as the excess of the production of a sector over its 
own needs. In this form it occurs in the department scheme of 
Marx: The consumption goods sector, for example, produces 
a surplus which has to alimentate the workers of the 
investment goods sector. This surplus is at the same time 
also the profit of the consumption goods sector, 
but xtxHMad the two concepts need not always be related in 
this simple way. With Quesnay who first systematically 
worked on this idea the surplus of the agricultural sector 
has to cover not only the demands of the eigneur, the courrt 
and the church, it also covers the needs of the artisan 
whose goods the peasants purchase. 
The coincidence of two surplus concepts appears in 
Joan Robinsons golden age rule ( investment equals profits ) 
( see also v. Neumann ) or in Kalecki's identity 
profits equals investment plus capitalist consumption. 
The interest of the agricultural surplus for Quesnay 
is connected with the conditions of his time. 
In the earliest civilisations ( Sumer, Akkad, Babylon ) 
the agricultural surplus had to feed the whole town 
with its nobles, priests, savants and artisans. 
In the Quesnay case above it becomes evident that the 
position of the peasants will depend also on their terms 
of trade. This fact does not appear in the classical 
surplus approach; it has hardly any room in Ricardian system 
of price wage determination nor in his theory of foreign trade. 
But in reality it plays a large role for the less developed 
countries. The terms of trade depend on monopoly elements and 

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