Variable Capital, part of the capital that the entrepreneur spends to purchase labour power; its amount changes in the process of production. A worker at a capitalist enterprise creates value whose amount exceeds what the owner pays him in wages, i. e., he creates surplus value insofar as he works more than is necessary to produce the value of his labour power. Consequently, the value of the capital advanced to purchase labour power is not only retained in the process of creating new value, but increases by the magnitude of surplus value. The division of capital into constant capital and variable capital was first introduced by Marx. He showed that the worker, through his concrete labour, transfers the value of the expended means of production to the new product, and with his abstract labour creates new value containing the equivalent of the value of his labour power and surplus value which is appropriated without compensation by the capitalist. Surplus value is accretion of variable capital alone. In this way Marx revealed the real source of surplus value, the essence of capitalist exploitation and the immediate objective of capitalist production.