Marxian economics
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- Note: "Marxian" is not restricted to "Marxian economics," as it includes those inspired by Marx's works who do not identify with "Marxism" as a political ideology.
Marxian economics refers to a body of economic thought stemming from the work of Karl Marx.
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[edit] Marxian versus Marxist
The adherents of Marxian economics, particularly in academia, distinguish it from Marxism as a political ideology, arguing that Marx's approach to understanding the economy is intellectually valuable per se, independent of Marx's advocacy for revolutionary socialism or the inevitability of proletarian revolution. It does not lean entirely upon the work of Marx and other widely known Marxists (Lenin, Trotsky, etc.), but may draw from a range of Marxist and non-Marxist sources. His work is seen as the basis for a viable analytic framework and an alternative to more conventional neoclassical economics.
[edit] Marx and classical economics
Marx's economics took as its starting point the work of the best-known economists of his day, the British classical economists. Among these economists were Adam Smith, Thomas Malthus, and David Ricardo.
Smith, in The Wealth of Nations, argued that the most important characteristic of a market economy was that it permitted a rapid growth in productive abilities. Smith claimed that a growing market stimulated a greater "division of labor" (i.e., specialization of businesses and/or workers) and this, in turn, led to greater productivity. Although Smith generally said little about laborers, he did note that an increased division of labor could at some point cause harm[citation needed] to those whose jobs became narrower and narrower as the division of labor expanded.
Marx followed Smith by claiming that the most important (and perhaps only) beneficial economic consequence of capitalism was a rapid growth in productivity abilities. Marx also expanded greatly on the notion that laborers could come to harm as capitalism became more productive.
Additionally, in Theories of Surplus Value, Marx noted, "We see the great advance made by Adam Smith beyond the Physiocrats in the analysis of surplus-value and hence of capital. In their view, it is only one definite kind of concrete labour—agricultural labour —that creates surplus-value....But to Adam Smith, it is general social labour—no matter in what use-values it manifests itself—the mere quantity of necessary labour, which creates value. Surplus-value, whether it takes the form of profit, rent, or the secondary form of interest, is nothing but a part of this labour, appropriated by the owners of the material conditions of labour in the exchange with living labour."
Malthus' claim, in "An Essay on the Principle of Population", that population growth was the primary cause of subsistence level wages for laborers provoked Marx to develop an alternative theory of wage determination. Whereas Malthus presented an ahistorical theory of population growth, Marx offered a theory of how a relative surplus population in capitalism tended to push wages to subsistence levels. Marx saw this relative surplus population as coming from economic causes and not from biological causes (as in Malthus). This economic-based theory of surplus population is often labeled as Marx's theory of the reserve army of labour.
Ricardo developed a theory of distribution within capitalism, that is, a theory of how the output of society is distributed to classes within society. The most mature version of his theory, presented in On the Principles of Political Economy and Taxation, was based on a labor theory of value in which the value of any produced object is equal to the labor embodied in the objected. (Adam Smith also presented a labor theory of value but it was only incompletely realized.) Also notable in Ricardo's economic theory was that profit was a deduction from society's output and that wages and profit were inversely related: an increase in profit came at the expense of a reduction in wages.
Marx built much of the formal economic analysis found in Capital on Ricardo's theory of the economy.
[edit] Marx's economic theories
Marx's major work on political economy was Capital: A Critique of Political Economy (better known by the German title Das Kapital), a three-volume work, of which only the first volume was published in his lifetime (the others were produced by Engels from Marx's notes). Marx wrote other treatises on economics: Critique of Political Economy, one of his early works, was mostly incorporated into Capital, especially the beginning of Volume I. Marx's notes made in preparing to write Capital were published years later under the title Grundrisse.
Marx begins his analysis of capitalism with an analysis of the commodity. The first sentence of Capital, Volume I states: "The wealth of those societies in which the capitalist mode of production prevails, presents itself as 'an immense accumulation of commodities,' its unit being a single commodity."
Under the labor theory of value, the direct value of a commodity stems solely from the socially necessary labor time invested in it. But commodities also have a use value (that is, the direct utility gained from an item) and an exchange value (roughly equivalent to its market price, though Marxian economics would measure it in labor time). For example, the use value of a carrot lies in eating it and no longer being hungry, while its exchange value might be found in the quantity of gold (whose true value also lies in the labor which extracted it) which it could be sold for.
However, capitalists do not pay workers the full value of the commodities they produce. The gap between the value a worker produces and his or her wages are a form of unpaid labor, known as surplus value. To Marx, this is wage slavery, a central feature of capitalism as a mode of production.
To understand surplus value, consider a widget that sells for $1,000 that takes a single worker, paid $10 per hour, ten hours to produce. The worker is being paid only $100 to produce the widget, so the remaining $900 is surplus value which is being appropriated by his or her employer. He is thus said to be working for himself for only one of every ten hours.
Moreover, Marx notes that markets tend to obscure the social relationships and processes of production, a phenomenon he termed commodity fetishism. Consumers see a commodity only in market terms. In looking to obtain something as private property, they consider only its exchange value, rather than its labor value.
[edit] Criticisms
Ladislaus von Bortkiewicz and subsequent critics have alleged for over 100 years that Marx's value theory and law of the [[tendency of the rate of profit to fall] are internally inconsistent. The inconsistency allegations have been a prominent feature of Marxian economics and the debate surrounding it since the 1970s. Since internally inconsistent theories cannot possibly be right, the inconsistency charges serve to legitimate the suppression of Marx's critique of political economy and current-day research based upon it, as well as the "correction" of Marx's alleged inconsistencies. A great many of the critics who allege that Marx has been proved internally inconsistent, such as Paul Sweezy, Nobuo Okishio, John Roemer, and David Laibman, are Marxian and/or Sraffian economists who wish the field to be grounded in their "correct" versions of Marxian economics instead of Marx's original critique of political economy. Proponents of the Temporal Single System Interpretation (TSSI) of Marx's value theory claim that the supposed inconsistencies are actually the result of misinterpretation; when Marx's theories are understood as "temporal" and "single-system," the alleged internal inconsistencies disappear. Even critics of Marx and/or the TSSI have come to accept, implicitly or explicitly, that it eliminates the apparent internal inconsistencies in Marx's value theory. (See Andrew Kliman, Reclaiming Marx's "Capital": A Refutation of the Myth of Inconsistency, (Lanham, MD: Lexington Books, 2007), pp. 132-36, p. 152, pp. 165-68, pp. 207-08.)
The internal inconsistency allegations are distinct from the critique put forward by Eugen von Böhm-Bawerk, a prominent member of the Austrian School, though the two are sometimes confused and conflated. Allegations of a "transformation problem" in Marx's argument that all profit under capitalism derives from the exploitation of workers may refer either to Bortkiewicz's allegation of an internal inconsistency in Chapter 9 of Volume III of Das Kapital or to Böhm-Bawerk's charge that the price theories of Volumes I and III are incompatible.
The Austrian School was the first group of liberal economists to systematically challenge Marxian economics. This was partly a reaction to the Methodenstreit, an attack on the Hegelian doctrines of the Historical School. Some Marxist authors have attempted to portray the Austrian school as a "bourgeois reaction" to Marx[citation needed] However, opponents argue that it could not have been a reaction, since Carl Menger wrote his Principles of Economics at almost the same time as Marx was completing Das Kapital.
The Austrian economists were, however, the first to clash directly with Marxism, since both dealt with such subjects as money, capital, business cycles, and economic processes. Böhm-Bawerk wrote extensive critiques of Marx in the 1880s and 1890s, and several prominent Marxists, including Rudolf Hilferding, attended Böhm-Bawerk's seminar in 1905-06.
In contrast, the classical economists had shown little interest in such topics, and many of them did not even gain familiarity with Marx's ideas until well into the twentieth century.
[edit] Current theorizing in Marxian economics
Marxian economics has been built upon by many others, beginning almost at the moment of Marx's death. The second and third volumes of Das Kapital were edited by his close associate Friedrich Engels, based on Marx's notes. Marx's Theories of Surplus value was edited by Karl Kautsky.
More recent economists who have made significant contributions in the Marxian vein include among others Isaak Illich Rubin, Kozo Uno, Thomas T. Sekine, Makoto Itoh, Hans-Georg Backhaus, Helmut Reichelt, Paul Sweezy, Paul A. Baran, Michal Kalecki, Harry Magdoff, Anwar Shaikh, Samuel Bowles, Thomas Weisskopf, E.K. Hunt, Nobuo Okishio, Robert Pollin, Ernest Mandel, Roman Rosdolsky, Samir Amin, Richard Wolff, Robert Rowthorn, Riccardo Bellofiore, Ben Fine, John Weeks, Guglielmo Carchedi, Elmar Altvater, Michael Lebowitz, Alan Freeman, Alfredo Saad Filho,Graham Dyer, Costas Lapavitsas and Stephen Resnick.
In the United States, the leading academic department for Marxian economics (and heterodox economics more generally) is at the University of Massachusetts Amherst.[citations needed]
English-language journals include Capital & Class, Critique of Political Economy, Historical Materialism, Monthly Review, and Rethinking Marxism.
[edit] See also
- Das Kapital
- Capitalist mode of production
- Capital accumulation
- Surplus value
- Surplus product
- Surplus labour
- Labour power
- Law of value
- Unequal exchange
- Value product
- Productive and unproductive labour
- Socialist economics
[edit] References
- J.E. Roemer (1987). "Marxian value analysis," The New Palgrave: A Dictionary of Economics, v. 3, pp. 383-87.
- Andrew Glyn (1987). "Marxist economics," The New Palgrave: A Dictionary of Economics, v. 3, pp. 390-95.
