Third, Marxists assume that the basis of the capitalist economy is the exploitation of labor by capital. Marx's analysis began with the labor theory of value, which holds that the value of any product is by the amount of past and present labor used to produce it. Marx believed that under capitalism the value of any product could be broken down into three components: constant capital, or past labor as embodied in plant and equipment or the raw materials necessary to produce the good: variable capital, the wages paid to present labor to produce the item; and surplus value defined as profits, rents, and interest- which was expropriated by or paid to the capitalist. The capitalists' expropriation of surplus value, according to Marx,denies labor the full return for its efforts.