ABSTRACT
This chapter examines the distribution in a system with fixed capital and depreciation and introduces a new surplus approach in the theory of distribution and capital. David Ricardo considers the wage for labourers as capital, and the rate of profit is defined as the ratio of profit to wage as capital. Marx defines the rate of profit as the ratio of the surplus value to the sum of variable and constant capital. Bhm-Bawerk treats the capital through his theory of the average period of production, where the rate of profit is the ratio of profit to wage as capital. The chapter explains the surplus rate and the shares in distribution, define the real wage and provide our formulation of the average period of production. It considers the relationship between the rate of profit and the real value of fixed capital.
