In a capitalist system, like the one that exists in the United States, there is only one and only purpose of almost all entrepreneurial activity: to make profits for the owner(s). Surplus appropriation, therefore, refers to the profit that a business owner makes and keeps on the labor power of his/her workers in a capitalist system (like the one that exists in United States). And since capitalism is a highly competitive system in which businesses compete with each other to make as much profit as they can one of the iron laws of capitalism is profit maximization. But what is profit? It is the price of the product in the market place minus the cost of its production: which covers all these things: the worker’s wages (which includes any fringe benefits that may be provided—such as health insurance); the boss’s salary; the cost of raw materials; the cost of machinery; the rent for the building; interest payments on loans used to set up the business; the cost of utilities; the cost of advertising; any taxes that are paid; and so on. The more profit the business owner makes, the greater the surplus appropriation. Needless to say, through the process of surplus appropriation the business owner gets ever more richer, while the worker is always at a standstill in terms of accumulation of wealth. Exploitation, in other words, is the name of the game. In the final analysis, not surprisingly, all class struggles between the capitalist class and the lower classes is over the quantity of surplus appropriation because there is an inverse relationship between wages and surplus appropriation—the lower the surplus appropriation the higher the wages; and vice versa. This scenario, by the way, applies both to personal wages paid to individual workers as well as public wages paid to society as a whole (via taxes) to finance such needs as health care, schools, roads, bridges, parks, environmental protection, etc., etc.).
One should also note that in today’s world of globalized capitalism profit maximization has also included taking advantage of workers overseas through the mechanism of the supply chain. An employer can increase profits by subcontracting parts or all of the production/services to others overseas in places where the rule of law is weak that allow the subcontractors there to pay workers sub-minimum wages and making them work long hours in unsafe conditions, etc., thereby considerably lowering production costs. Another method for maximizing profits involves reducing production costs by lowering the cost of raw materials illegally—by, for example, purchasing them in places where slave labor or semi-slave labor is being employed (yes, slavery still exists today, mainly in parts of Africa and Asia), or where it is illegal to produce these raw materials because of threats to the environment, or because government regulations are being bypassed, etc. At the end of the day, regardless of the form(s) the profits take, it is the labor power of the workers that produces profits which are not shared with them but are instead appropriated by the owner(s) exclusively. (One can also argue that, in addition, the many undeserved tax-breaks the capitalist class often receives under various guises and pretexts or the refusal to pay for negative externalities are also forms of surplus appropriation.) See also Capitalism; Class; Globalization; Public Wages.