Organic composition of capital

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. It is normally defined as the ratio of constant capital (capital invested in plant, equipment and materials) to variable capital (capital invested in the labour-costs involved in hiring employees). The concept does not apply to all capital assets, only to capital invested in production (i.e. production capital). The neoclassical concept synonymous to increasing organic composition of capital is capital deepening.