Karl Marx & Marxism

1. Karl Marx&Marxism

2. biography • Born 1818 in French/German town of Trier • Jewish extraction • Studied philosophy and economics in Berlin • Married Jenny von Westphalen • Largely lived off of her inheritance • Earned his living (badly) as a journalist • Died 1883 in London having only written 3 of the planned 8 volumes of Das Kapital.

3. Politics • Marx was a communist. • He wrote The Communist Manifesto with his friend, Friedrich Engels in 1848. • He had three kinds of writing: • Journalism • Political polemic • Analysis of society and culture.

4. Marxism • Socialism states that the resources should be in the hands of the workforce, not the few rich people there are • The true duty of the government is to place the ‘national property’ under the control of the “common” person. • Communism is a political philosophy which argues that men should have equal rights to wealth • Marxism is a way of understanding and analysing the organisation and structure of society • It is also a way of understanding how societies develop and change.

5. Theory of Dialectical Materialism • Social and economic change through conflict • Emerging classes associated with economic innovations come into conflict with the old • Replacement of an old economic order with a superior one • Capitalism is a qualitative leap over feudalism • Socialism is a qualitative leap over capitalism

6. Dialectical materialism • Material, or physical, conditions are what historical changes are made of. • All history is history of the class struggle. • Everything depends upon historical circumstances and material conditions of the time.

7. Marx’s role in history • When Marx died, he was not well known except in revolutionary circles. • After his death, his writing prompted a number of politicians to lead revolutions in his name. • Many of these societies were totalitarian. • His philosophy underlies the thinking of many political parties “History repeats itself, first as tragedy, second as farce”

8. Conflict theory • All societies are divided into two groups: • Owners • Workers • Our society is capitalist • Owners are bourgeoisie • Workers are proletarians • “The history of all hitherto existing society is the history of class struggle.”

9. Owners and workers • Owners exploit workers and live off the money which the workers earn • Workers put up with this inequality because: • They are oppressed wage slaves and cannot fight the system • They are indoctrinated by ideology and religion into believing what they are told by the powerful • “In bourgeois society capital is independent and has individuality, while the living person is dependent and has no individuality”

10. Capitalism • Inefficient feudalism replaced by far more efficient capitalism • As capitalism emerges, there is an accumulation of capital (wealth) by the bourgeoisie (the capitalists) and the creation of a free (i.e., not serf) labor force, the proletariat • Extreme dichotomy between capital and labor • Sets up two classes which must eventually conflict

11. Cut-Throat Capitalism and the Internal Contradiction • Each firm in cut-throat competition for each other’s business • Driven to gain temporary competitive advantage over others • The way to do this is to introduce labor saving innovations • that is, replace labor with capital • But innovation diffuses quickly through economy, dissipating innovator’s advantage

12. Thus, throughout the economy, capitalists are driven to accumulate capital in order to replace labor with capital • But as labor is replaced with capital, the organic composition of capital rises • As the organic composition of capital rises, the rate of profit falls • Capitalists try to keep up rate of profit by exploiting labor more and more • More and more firms fall behind and fail • bankrupt capitalists lose their capital and join the swelling ranks of the proletariat

13. Value Theory of Labor • Marx models an internal contradiction which sets up the conflict between classes • Proposes a “labor theory of value” • Long run value determined by three things • amount of labor used to produce the good • indirect embodiment of labor through capital and intermediate inputs • the capitalist’s surplus

14. Surplus Value • Where does this surplus value come from? • Workers are paid a subsistence wage • Employers compel workers to produce a value above that needed to generate subsistence wage • The workers get the subsistence wage, the capitalist gets the surplus • the “Reserve Army of the Unemployed” keeps wages at subsistence level • exploitation of labor

15. Overproduction • Tendency toward overproduction • workers too poor to buy much • capitalists too busy saving (accumulating capital) • economic depressions become more and more severe

16. Revolution • The stage is set for revolution • proletariat swelling and becoming increasingly exploited • bourgeoisie shrinking and becoming increasingly cut-throat • the proletariat rises up in revolt, replacing the bourgeoisie as the dominant class and creating the new socialist order

17. Marx and The Revolution • Marx predicted that wealth would belong to fewer and fewer people. • The workers would eventually realise their position and overthrow the bourgeoisie • There would be an armed revolution which would begin in Britain. • It would happen in the very near future.

18. Implication of the Model • Revolution will occur in most advanced (i.e., ripest) capitalist economy • Germany • UK • Did it? NO • Revolution occurs in Russia • hardly a mature capitalist economy