Superprofit

Superprofit, surplus profit or extra surplus-value (extra-Mehrwert) is a concept in Karl Marx's critique of political economy subsequently elaborated by Vladimir Lenin and other Marxist thinkers. The term superprofit (extra surplus-value) was first used by Marx in Das Kapital. It refers to above-average enterprise profits, arising in three main situations: Technologically advanced firms operating at above average productivity in a competitive growing market. Under conditions of declining demand, only firms with above-average productivity would obtain the previous socially average profit rate as the rest would book lower profits. Monopolies of resources or technologies, yielding what are effectively land rents, mining rents, or technological rents. Although Marx does not discuss this in detail (beyond referring to international productivity differentials in the world economy), there could be included a fourth case, namely superprofits arising from structural unequal exchange in the world economy. In this case, superprofit arises simply through buying products cheaply in one place and selling them at a much higher price elsewhere, yielding an above-average profit margin. This type of superprofit may not be attributable to extra productivity or monopoly conditions and represent only a transfer of value from one place to another. According to Leninism, 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, usually by means of reformist labor parties. 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. Superprofit in Marxist–Leninist theory is the result of unusually severe exploitation or superexploitation.