Karl Marx

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Karl MarxMarxism
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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.

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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.

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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.

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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

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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.

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Marxs role in history
History repeats itself, first as tragedy, second
as farce

• 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

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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.

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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

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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

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Cut-Throat Capitalism and the Internal
Contradiction

• Each firm in cut-throat competition for each
  others 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 innovators advantage

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• 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

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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 capitalists surplus

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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

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Overproduction

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

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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

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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.

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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