Where does surplus collide?

In welfare economics, surplus is the net gain a party captures from a transaction: consumer surplus is what a buyer would have been willing to pay above the price actually paid, and producer surplus is what a seller receives above the lowest price they would have accepted. Alfred Marshall's 1890 Principles of Economics developed the idea graphically as the area between a demand or supply curve and the market price, a measure of the benefit that trade confers beyond the money that changes hands. Here surplus is a benefit to the individuals on each side of an exchange, estimated from curves of willingness to pay, and it is not the profit that labor is said to yield to an employer, an equity balance on the books, or a fish stock's harvestable growth.[1]

Unit

One party's monetary gain from a trade, the gap between willingness to pay or accept and the price

Recovery means

Not applicable

Measured by

Estimated as the area between a demand or supply curve and the market price, using data on quantities and willingness to pay

In marxian political economy, surplus value is the part of the new value created by labor that exceeds the wage paid for that labor and that the employer retains: a worker is held to produce more value in a working day than the cost of the labor power hired for it, and that difference is treated as the source of profit. Karl Marx set this out in Capital, Volume I (1867), where surplus value, rather than exchange in the market, is the origin of the return to capital. This referent is a quantity of value said to be created in production and weighed against wages, a near opposite of the neoclassical meaning in which surplus is a mutual gain that both buyer and seller enjoy from voluntary trade, and it is unrelated to an accounting balance or a fishery's yield.[2]

Unit

The value added by labor beyond the wage, in the same units as value or price

Recovery means

Not applicable

Measured by

Inferred from the difference between the value a worker produces and the wage paid, often summarised as a rate of surplus value

In financial accounting, surplus is the part of a company's net worth that sits above its stated or par capital: earned surplus is accumulated profit retained rather than paid out (now usually called retained earnings), and capital or paid-in surplus is the amount shareholders contributed above the par value of their shares. Paton and Littleton's 1940 An Introduction to Corporate Accounting Standards treated these residual equity balances as a matter of classification within owners' equity. Here surplus is a stock of recorded equity on the books at a moment in time, not a flow of benefit from a single trade, a claim about profit arising in labor, or a rate of biological growth.[3]

Unit

A balance of equity above par capital, in currency, at a reporting date

Recovery means

Not applicable

Measured by

Read from the equity section of the balance sheet as retained earnings and additional paid-in capital

In fisheries ecology, surplus production is the growth a fish stock generates beyond what is needed to replace natural losses, the part that can in principle be harvested each year while leaving the stock intact: it is largest at intermediate stock sizes and defines the maximum sustainable yield. Milner Schaefer's 1957 model in the Journal of the Fisheries Research Board of Canada expressed this surplus as a function of stock size and used it to guide catch limits. This referent is a biological rate of net growth in a wild population, counted in mass of fish, and it has nothing in common with a buyer's welfare gain, the value labor is said to add beyond its wage, or an equity balance on a company's books.[4]

Unit

A stock's net annual growth available for harvest, in mass of fish

Recovery means

The stock rebuilds this surplus each year through growth and recruitment when it is not overfished

Measured by

Estimated from stock-size and catch data by fitting a surplus production model to find the maximum sustainable yield