Value product

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The value product (VP) is an economic concept formulated by Karl Marx in his critique of political economy during the 1860s, and used in Marxian social accounting theory for capitalist economies. Its annual monetary value is approximately equal to the netted sum of six flows of income generated by production: wages and salaries of employees. profit including distributed and undistributed profit. interest paid by producing enterprises from current gross income rent paid by producing enterprises from current gross income, including land rents. tax on the production of new value, including income tax and indirect tax on producers. fees paid by producing enterprises from current gross income, including: royalties, certain honorariums and corporate officers' fees, various insurance charges, and certain leasing fees incurred in production and paid from current gross income. The last five money-incomes are components of realized surplus value. In principle, the value product also includes unsold inventories of new outputs. Marx's concept corresponds roughly with the concept of value added in national accounts, with some important differences (see below) and with the provision that it applies only to the net output of capitalist production, not to the valuation of all production in a society, part of which may of course not be commercial production at all.