I have a paper appearing in latest issue of the Review of Political Economy that explores some implications of Marx's theory of the circulation of capital and commodities in capitalist economies, or what is often referred to as his circuit of capital. The paper is titled "Surplus Value Production and Realization in Marxian Theory - Applications to the U.S., 1990-2015".
The main upshot of the paper is that Marx's Capital shows that surplus value can be produced in one industry and realized as profit and revenue by other industries over the course of circulation, and that the differentials between surplus value production and realization at the industry level yield insight on the processes of capitalist competition, while also pointing to a source of economic instability. This is briefly explained below.
Over the course of any given working day (or other duration of time) workers perform labor and create value (typically measured in money). A portion of the money value created by workers covers their wages, and the other portion is considered surplus value. Thus, surplus value is the money value added created by workers beyond their wages. The existence of surplus value means that workers, on the whole, are exploited. The class of capitalists compete with each other for claims on the surplus value created through the exploitation of labor and surplus value is realized in the form of profit, rent, and interest.
Competition between capitalists within and across different industries shifts surplus value around from places where it is created to others where it did not originate. These are transfers of surplus value.
When adopting Marx's notion of productive and unproductive activities, some of these transfers of surplus value wind up being the source of revenue for industries that do not create value, i.e. industries like Finance, Insurance, and Real Estate (FIRE) and Professional Business Services (PBS). Although the activities undertaken by these kinds of industries may not produce value, they fulfill a necessary role in the overall functioning of capitalist economies. However, it is still possible for these industries and the transfers of surplus value they need to function to create problems for the economy.
The paper shows that if the transfers of surplus value from productive to unproductive industries do not continue smoothly then the circuit of capital can be disrupted and lead to economic downturns or crises. Similarly, if the transfers of surplus value to the unproductive industries grow too large, unproductive activities create a drain on accumulation and foster instability. Seeing all of this in terms of transfers of surplus value highlights the importance of understanding exploitation as the source of surplus value, and helps shed some light on the landscape of capitalist competition.