Surplus of consumer goods and how it can be turned into a profit

Abstract

The capitalist economy is divided into social classes of workers and capitalists earning wages and profits. Production is undertaken in this economy in order to obtain profits. But the surplus of goods produced over and above the value of wages paid has to be sold in order for money profits to accrue to the owner of a capitalist enterprise. From this is derived the fundamental theory of profits showing how profits are determined by the expenditure of capitalists on investment and consumption. The problem of saving is that it prevents the realization of profits. This underlines the importance of securing an equality between intended saving and planned investment.