The Political Economy of Marx

1. The Political Economy of Marx Labour Theory of Value and Power

2. Introduction • Marx built on the existing CPE labour theory of value • Marx saw LToV as exclusive to capitalism • He saw value as more than just an economic measure; for him it expressed a social relationship • He added the idea of surplus value

3. The Theory • The value of a commodity is determined by the socially necessary labour time expended in its production • Value thus expresses relations between producers: ‘commodity fetishism’ • Capitalism => generalised commodity production • Labour power becomes a commodity • Capitalists own all the means of production • Labour has no choice but to sell its labour power (‘alienation’)

4. Surplus Value 1 • Circulation: • I C - M - C (simple commodity exchange) • II M - C - M (capitalist exchange?) • III M - C - M’ (capitalist exchange!) • where M’ > M, M’ – M = surplus value

5. Surplus Value 2 • Surplus value is realised in circulation • Surplus value is created in production • The only commodity that can contribute more than its own value to the value of a commodity is labour power: • M - C … P … C’ - M’

6. Tendencies in Capitalism • Tendency for the rate of profit to fall • Increasing ‘organic composition of capital’ • Decline in contribution of labour power • Labour power is the only commodity that adds to the value… • Therefore…

7. Implications • ‘Capitals’ will get bigger and bigger • ‘Forces of production’ and ‘social relations of production’ will become incompatible • Transformation in the ‘mode of production’ is inevitable

8. Critique • LToV is a subjective philosophy; it does not describe the way the economy actually operates • The predictions have not been realised • ‘Communism’ has failed