INTRODUCTION TO MARX THEORY OF ECONOMY

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from the producer of
How to choose a good clock (basically Mach
Einstein)
a new IFAE adaptation of a german classic...
INTRODUCTION TO MARX THEORY OF ECONOMY
Physicists of IFAE, unite! February 8, 1500
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Disclaimer

• I present Marx theory I do not investigate
  weather this theory is true or false
• The theory is about our economic system I do not
  talk about communism.
• I present the scientific side of the model,
  neglecting a lot of humanistic considerations
  (politics, philosophy, sociology...)
• The theory has two main laws and many collateral
  results.
• Law of plus-value (analogous to Newtons eq.)
• Law of the fall of profit rate (analogous to II
  principle of thermodynamics)
• I only present the first law and no side-results
  (reasons of time).

the phenomenon we study
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The plusvalue
The capitalist invests a capital C, gets from it
goods G, which he sells, and at the end of the
cycle he has acquired a bigger capital C C
G C, C gt C The difference is
called plusvalue pv C C Where does the
plusvalue come from?
sheep
wool
cloth
the good
zip
work
iron
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The goods
A good is a thing that is useful. It can be sold
and bought. It has a value.
value oscillations
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The value
Prices fluctuate from time to time, from place to
place. Its easy to explain this
fluctuation. But its a second order problem,
that hides the main one what determines the
central value of prices? Usefuleness?
usefuleness and value
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Value of use and value of echange
Value of use

• Is subjective
• Is qualitative
• Depends on sensible properties of the good

A good
Value of exchange

• Is objective
• Is quantitative
• Abstracts from sensible properties of the good

Air has value of use, but value of exchange 0.
postulate on value
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Postulate value
The value of exchange of a good is a measurement
of the time of social human work needed in this
moment to produce it.

• Note
• human work work made by animals is exluded
  work by machines is also excluded.
• social its not an absolute property it
  depends on social conditions. It changes with
  changes in the system of production.

Alienation Feticism Dracula (1897)
money
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Money
Money is a good (ex. gold, silver) that is chosen
by convention as a unit of measurement for the
value of exchange of the other goods. The value
of money is still given by the time of work
crystallized in it. (Money is time)
working force
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Working force

• Working force is a special good, because it
  produces value.
• Capitalism is that system of production in which
  working force is bought and sold.
• In slavery, working force is not sold its
  property of the master.
• In handcraft system, the artesan is not selling
  his working force he remains the owner of it.

C 100 M ------------------ material 50
work 50 M ------------------ M
------------------- cloth 100 C 100 ?
Marx paradox
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Marx paradox
If one class always sells overprice and one
always buys overprice, then the plus-value is
just a flux of money from one class to the
other. Then the buying class will rapidly run
out of money, so the system stops working.

• We assume that goods are always sold at their
  correct values.
• This hypothesis is later relaxed by Marx.
• Its necessary to consider the mechanism of
  capitalism in its purity, neglecting at first
  side-phenomena like overpricing.

value of work
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Value of use it makes work.
Working force
Value of exchange the price of those things that
the worker needs to be able to work. Food, house,
clothes, education... This changes with
historical habits, so as to include more luxuries.
law of plusvalue
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Law of plusvalue
The capitalist pays the working force at its
value of exchange v time of work needed to
create the means of survival Then, he applys the
working force for a time and thus produces new
value v time for which the working force is
applied The difference is the plusvalue
C - C
v v

• Note
• The process is legal and legitimate (historical
  materialism)
• Capitalism does need the circulation of goods,
  but the gain is never created in the circulation
  it always comes from the production.