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The organic composition of capital (OCC) is a concept created by Karl Marx in his critique of...

The organic composition of capital (OCC) is a concept created by Karl Marx in his critique of political economy and used in Marxian economics as a theoretical alternative to neo-classical concepts of factors of production, production functions, capital productivity and capital-output ratios. Marx first referred to the idea in 1847 and discussed it in detail in Capital Vol. 1, chapter 25 ("The General law of Capitalist Accumulation"). The concept does not apply to all capital assets, only to capital invested in production (i.e. production capital). It is normally defined as the ratio of constant capital to variable capital. According to Marx, the OCC expresses the specific form which the capitalist mode of production gives to the relationship between means of production and labor power, determining the productivity of labor and the creation of a surplus product. This relationship has both technical and social aspects, reflecting the fact that simultaneously consumable use values and commercial exchange-values are being produced. Marx calls this capital composition "organic", because it refers to the relationship between "living" and "dead" (or inert) elements in a capital