18,99 €
Mehr erfahren.
- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Sprache: Englisch
More and more people have turned to Marxian economics in recent years. But isn't it a defunct branch of the 'dismal science', disproven by the experience of the past 150 years, of no interest to anyone except historians? In this book, David Ruccio demonstrates why the answer to that question is a resounding 'no'. He offers a clear and accessible introduction to the basic concepts and theoretical strategies of Marxian economics, its key differences from mainstream economics, and its many applications to the real world. Focusing on Marx's critique of both mainstream economic theory and capitalism, Ruccio extends that analysis to contemporary topics--from inequality and economic crises to racial capitalism and the climate crisis--and outlines the key debates among Marxian economists. He concludes with a discussion of the ways Marxian economists today think about the possibility of moving beyond capitalism. The book is suitable for students and professors, as well as readers outside the academy interested in learning about Marxian economics. It will be useful both as a stand-alone text and as a companion to reading Capital.
Sie lesen das E-Book in den Legimi-Apps auf:
Seitenzahl: 569
Veröffentlichungsjahr: 2022
Ähnliche
Table of Contents
Cover
Title Page
Copyright Page
Figures
About the Author
Preface
Acknowledgments
Glossary
References
Variables
PART I RELEVANCE AND SOURCES
Chapter 1 Marxian Economics Today
Reading Marx
Five Themes
A Tale of Two Capitalisms
Beyond the Mainstream
Criticisms of Mainstream Economic Theory
Criticisms of Capitalism
Why Study Marxian Economics?
Marxian Economics Today
Is Marxian Economics Still Relevant?
This Book
Chapter 2: Marxian versus Mainstream Economics
Chapter 3: Origins of the Marxian Critique of Political Economy
Chapter 4: Commodities and Money
Chapter 5: Surplus-Value and Exploitation
Chapter 6: Profits, Wages, and Distribution of the Surplus
Chapter 7: Applications of Marxian Economics
Chapter 8: Debates in and around Marxian Economics
Chapter 9: Transitions to and from Capitalism
Before We Dive In
Suggested Readings
Notes
Chapter 2 Marxian Versus Mainstream Economics
Economic Theories and Systems
Mainstream Economics Today
Neoclassical Economics
Ethics
Keynesian Economics
Limits of Mainstream Economics Today
Classical Political Economy
Adam Smith
David Ricardo
Other Classicals
Marx’s Critique of Mainstream Economics
Looking Ahead
Suggested Readings
Notes
Chapter 3 Origins of the Marxian Critique of Political Economy
For a Ruthless Criticism of Everything Existing
Hegel
Utopian Socialism
Capitalism
Toward Marx’s Critique of Political Economy
Looking Ahead
Suggested Readings
Notes
PART II CONCEPTS AND METHOD
Chapter 4 Commodities and Money
The Wealth of Nations
The Commodity
Exchange-Value and Value
Concrete and Abstract Labor
Assumptions
Use-Value and Exchange-Value
Language of Commodities
Commodity Fetishism
Say’s Law
Sale and Purchase
Contradictions in Monetary Exchange
Problems in Commodity Exchange
Looking Ahead
Suggested Readings
Notes
Chapter 5 Surplus-Value and Exploitation
Credit and Debt
Money as Capital
Production
Labor and Labor Power
Exploitation
Surplus-Value
Capitalist Production
Value of Capitalist Commodities
Capitalism
Absolute Surplus-Value
Relative Surplus-Value
Capitalist Competition
Subsumption of Labor
Exploitation and Real Wages
Looking Ahead
Suggested Readings
Appendix 1: Notes on Absolute and Relative Surplus-Value
Absolute Surplus-Value
A. Lengthening of the workday
B. Increased proletarianization
Relative Surplus-Value
A. Firm whose workers purchase wage goods
B. Firm with increase in labor productivity, i.e., super-profits
Appendix 2: Real Wages and Exploitation
Notes
Chapter 6 Profits, Wages, and Distribution of the Surplus
Distribution of Income
Trinity Formula
Implications
Simple Reproduction
Accumulation of Capital
Productive and Unproductive Labor
Capitalist Enterprises
Struggles over Distributions of Surplus-Value
Expanded Reproduction
Generalized Crisis
Concentration and Centralization
Reserve Army
Production of Commodities by Means of Capital
Looking Ahead
Suggested Readings
Notes
PART III APPLICATIONS, DEBATES, AND CONSEQUENCES
Chapter 7 Applications of Marxian Economics
Crises
Class Structure
Class Consciousness and Class Struggle
Patriarchy
Racial Capitalism
Capitalism’s Others
Globalization
Capitalocene
Looking Ahead
Suggested Readings
Notes
Chapter 8 Debates in and around Marxian Economics
Labor Theory of Value
Monopolistic Finance Capital and Imperialism
Socialist Economics
Socialism in Russia
Socialist Calculation
Imperialism and Underdevelopment
Outside Economics
Back to Economics
Ethics
Other Economic Theories
Looking Ahead
Suggested Readings
Notes
Chapter 9 Transitions to and from Capitalism
Transition to Capitalism
Transition
Transition from Capitalism
Communist Manifesto
Critique of the Gotha Program
Marxian Economics and Utopia in the Twenty-First Century
Really Existing Socialism
Utopia and Critique Today
Suggested Readings
Notes
Index
End User License Agreement
List of Illustrations
Chapter 1
Figure 1.1
Productivity and hourly compensation growth, 1948–2020
Figure 1.2
Income inequality in the United States
Figure 1.3
Real gross domestic product per capita, 1970–2017
Figure 1.4
Capitalism does more harm than good
Figure 1.5
Alexandria Ocasio-Cortez on a living wage
Chapter 2
Figure 2.1
Market demand, supply, and equilibrium
Figure 2.2
Circular flow
Figure 2.3
Aggregate demand and supply
Figure 2.4
The middle view
Figure 2.5
Ricardo: wages, profits, and rents
Chapter 4
Figure 4.1
Two-fold nature of the commodity
Figure 4.2
Exchange-value and value
Figure 4.3
Two-fold nature of the commodity and labor
Figure 4.4
Relative and equivalent value
Figure 4.5
Internal and external opposition
Figure 4.6
Universal equivalent
Chapter 5
Figure 5.1
Value of labor power
Figure 5.2
Labor power as a commodity
Figure 5.3
Necessary and surplus labor
Figure 5.4
Capitalist production
Figure 5.5
Absolute surplus-value
Figure 5.6
Relative surplus-value
Chapter 6
Figure 6.1
Income inequality in the United States
Figure 6.2
Wages, CEO salaries, and profits
Figure 6.3
Wage and profit shares
Figure 6.4
Industrial capitalist enterprise
Figure 6.5
Market for labor power: increases in demand and supply
Figure 6.6
Market for labor power: increases in demand outstrip supply
Figure 6.7
Unemployment in mainstream economics
Chapter 7
Figure 7.1
Triangular trade
Figure 7.2
Capitalist and noncapitalist iceberg
Figure 7.3
Elephant curve of global inequality, 1980–2016
Chapter 9
Figure 9.1
Market for labor power
Guide
Cover
Table of Contents
Begin Reading
Pages
iii
iv
vi
vii
viii
ix
x
xi
xii
xiii
xiv
xv
xvi
xvii
xviii
xix
xx
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
161
162
163
164
165
166
167
168
169
170
171
172
173
174
175
176
177
178
179
180
181
182
183
184
185
186
187
188
189
190
191
192
193
194
195
196
197
198
199
200
201
202
203
204
205
206
207
208
209
210
211
212
213
214
215
216
217
218
219
220
221
222
223
224
225
226
227
228
229
230
231
232
233
234
235
236
237
238
239
240
241
242
243
244
245
246
247
248
249
250
Marxian Economics
An Introduction
David F. Ruccio
polity
Copyright Page
Copyright © David F. Ruccio 2022
The right of David F. Ruccio to be identified as Author of this Work has been asserted in accordance with the UK Copyright, Designs and Patents Act 1988.
First published in 2022 by Polity Press
Polity Press
65 Bridge Street
Cambridge CB2 1UR, UK
Polity Press
101 Station Landing
Suite 300
Medford, MA 02155, USA
All rights reserved. Except for the quotation of short passages for the purpose of criticism and review, no part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher.
ISBN-13: 978-1-5095-4797-5
ISBN-13: 978-1-5095-4798-2 (pb)
A catalogue record for this book is available from the British Library.
Library of Congress Control Number: 2021953230
by Fakenham Prepress Solutions, Fakenham, Norfolk NR21 8NL
The publisher has used its best endeavours to ensure that the URLs for external websites referred to in this book are correct and active at the time of going to press. However, the publisher has no responsibility for the websites and can make no guarantee that a site will remain live or that the content is or will remain appropriate.
Every effort has been made to trace all copyright holders, but if any have been overlooked the publisher will be pleased to include any necessary credits in any subsequent reprint or edition.
For further information on Polity, visit our website: politybooks.com
Figures
1.1 Productivity and hourly compensation growth, 1948–2019
1.2 Income inequality in the United States
1.3 Real gross domestic product per capita, 1970–2017
1.4 Capitalism does more harm than good
1.5 Alexandria Ocasio-Cortez on a living wage
2.1 Market demand, supply, and equilibrium
2.2 Circular flow
2.3 Aggregate demand and supply
2.4 The middle view
2.5 Ricardo: wages, profits, and rents
4.1 Two-fold nature of the commodity
4.2 Exchange-value and value
4.3 Two-fold nature of the commodity and labor
4.4 Relative and equivalent value
4.5 Internal and external opposition
4.6 Universal equivalent
5.1 Value of labor power
5.2 Labor power as a commodity
5.3 Necessary and surplus labor
5.4 Capitalist production
5.5 Absolute surplus-value
5.6 Relative surplus-value
6.1 Income inequality in the United States
6.2 Wages, CEO salaries, and profits
6.3 Wage and profit shares
6.4 Industrial capitalist enterprise
6.5 Market for labor power: increases in demand and supply
6.6 Market for labor power: increases in demand outstrip supply
6.7 Unemployment in mainstream economics
7.1 Triangular trade
7.2 Capitalist and noncapitalist iceberg
7.3 Elephant curve of global inequality, 1980–2016
9.1 Market for labor power
About the Author
David F. Ruccio is Professor of Economics Emeritus at the University of Notre Dame, where he won college and university teaching awards. As a student, he studied economics at Bowdoin College (including a year at the Universidad Nacional del Centro, in Peru), and the University of Massachusetts Amherst. As a teacher, he taught many courses at both the undergraduate and graduate levels, including Introduction to Microeconomics, Economics for Noneconomists, Mathematics for Economists, Commodities: The Making of Market Society, and Marxian Economic Theory. He also spends his winters volunteering for Vermont Adaptive, teaching downhill skiing to people with various physical, cognitive, behavioral, and developmental disabilities.
Professor Ruccio is a prolific writer and a regular participant in academic and policy debates. His work has been published in scholarly journals, such as World Development and the Cambridge Journal of Economics, and in more popular forums, especially on his blog, Occasional Links & Commentary on Economics, Culture, and Society. He has published six books, the most recent of which is Development and Globalization: A Marxian Class Analysis.
In addition to teaching, research, and writing, Professor Ruccio has been a frequent speaker in interdisciplinary programs and conferences around the world and has been interviewed by a wide range of national and international media. He was one of the cofounders of the journal Rethinking Marxism, served as its editor for 12 years (from 1997 to 2009), and continues as a member of the international advisory board.
Preface
During my time as both a student and a professor, the course that excited me most was Marxian economics. In college, I had the opportunity to coteach a course on Marx’s Capital with one of my professors, David Vail. Later, in graduate school, at the University of Massachusetts Amherst, I had the pleasure of learning about new developments in Marxian theory from two of the greatest Marxian economists of the twentieth century: Stephen Resnick and Richard Wolff. And then, during almost four decades of teaching my own courses at the University of Notre Dame, I was challenged to prepare engaging lectures and to answer the questions students had about the basic concepts and contemporary relevance of Marxian economics.
It is no exaggeration to say that, at each stage, Marxian economics changed my life. I grew up in a time when politics and economics were often discussed – at the dinner table, among my North American friends, and during my time in Latin America (as an exchange student in Brazil). But I often found myself expressing doubts about whether the common sense at the time was actually sensible. The Vietnam War, poverty and civil rights in the United States, underdevelopment in Latin America, the despoiling of the natural environment around the world – what were the causes and how might we think about alternatives? The Marxian approach to economics helped me to make sense of these events, because it broke the logjam created by mainstream economics and opened up a whole range of other analyses and possible solutions. It encouraged me to ask new questions about history, class, capitalism, and much else.
Over time, Marxian economics became even more interesting for me. I went from reading articles and books about Marxian economic theory to actually studying the original texts. I learned about the rich Marxian tradition as well as new interpretations of Marxian economic and social theory. I engaged in scholarly debates about Marxism and discussed many of the finer points with colleagues and friends. And, since I taught both mainstream economics and Marxian economics for almost four decades, I developed a better sense of how different they truly are – in everything, from abstract theory through empirical analysis to concrete policies.
Perhaps most importantly, I accumulated a wealth of knowledge not only about the questions mainstream economists couldn’t answer, but also the untold damage mainstream economic theory and capitalism, the economic and social system celebrated by mainstream economists, have wrought in the world. Marxian economics was one of the nonmainstream or heterodox approaches I was able to turn to.
As I explain in more detail during the course of this book, Marxian theory plays a fascinating role in economics. Not only does it provide an alternative way of thinking about and doing economics; in a more general sense, Marxian economics demonstrates that mainstream economics is not the way capitalism works but only one story about what is going on in the world. And there are many other stories, including the one pioneered by Karl Marx (along with his good friend and frequent coauthor Friedrich Engels) and further elaborated and enriched by generations of Marxian economists.
Since Marxian economics represents a critique of and an alternative to mainstream economics, much of the book is set up as a dialogue between the two radically different approaches to economics – their dissimilar theories of capitalism, their contrasting ethical presumptions and promises, and their divergent consequences for the economy and wider society.
As it was passed on to me by my professors, and as I have explained to generations of my own students, the exciting thing about studying Marxian economics in this manner is readers get a “twofer”: you will learn Marxian economics and mainstream economics at the same time. Then, in the best tradition of education, your world will have become more, not less, complicated. That’s because, after reading this book, you’ll have to figure out which of the approaches you want to use to make sense of your lives and the larger world we live in.
Acknowledgments
Marxian Economics: An Introduction presents an approach to teaching economics, including the Marxian critique of political economy, that I developed during almost four decades at the University of Notre Dame. To the thousands of students, both undergraduate and graduate, whose suggestions, criticisms, and challenging questions have guided me, I owe special thanks.
I am indebted to Dwight Billings, who read every word of the first draft, and then offered a series of helpful comments and suggestions – along with a great deal of much-appreciated encouragement during the long process of imagining and writing this book. I also want to thank Jack Amariglio, Antonio Callari, and Peter Schneider for their generous advice on specific sections and chapters. Finally, since the first three chapters initially took form as public posts on my blog, I want to express my gratitude to the following (many of them known to me only by their screen names): antireifer, Magpie, Jose, Lucas, mjlovas, Ikonoclast, Robert Locke, Ken Zimmerman, James Webber, Jonathan Hoskins, Greg Hannsgen, and Tom Hickey.
I am grateful to Polity Press’s George Owers for his initial invitation to write this book, Julia Davies for her prompt responses to my many queries, and to the many other workers involved in the processing, production, and marketing of the manuscript. The anonymous reviewers of both the book proposal and the draft manuscript offered reassuring words, pointed concerns, and useful advice.
Last but not least, Lisa Markowitz was there for me every step of the way, with love, support, and understanding, even as working on the book got in the way of more pleasurable ways of spending our time together.
Glossary
This is a list of concepts that are specific to Marxian economics, along with brief definitions as the concepts are used in this book. (Other technical or unfamiliar concepts used in this book are defined either in the text or in footnotes.)
ABSOLUTE SURPLUS-VALUE.
An increase in the rate of exploitation by increasing the length of the workday, while keeping the portion representing necessary labor constant. It is based on the formal subsumption of labor, that is, the expropriation of the direct producers outside of production.
ABSTRACT.
The starting point for analysis, to which new determinations are added, leading to a concrete outcome or conclusion. The movement from (relatively) abstract to (relatively) concrete takes place entirely within the realm of theory.
ABSTRACT LABOR.
Human labor viewed as a homogeneous mass of labor, by analytically separating it from the concrete characteristics of the labor performed. This is accomplished, economically, when different kinds of labor are made commensurable through the exchange of commodities.
ACCUMULATION OF CAPITAL.
The use of a portion of surplus-value to purchase additional means of production and raw materials (using constant capital) and labor power (using variable capital), resulting in expanded reproduction.
ALIENATION.
The process, specific to capitalism, whereby the products of human labor are separated from the direct producers and represent an alien force, standing against them and used to reproduce capitalist exploitation.
ANARCHY OF PRODUCTION.
The result of the social division of labor, private property, and markets, in which the outcomes are often volatile and chaotic.
CAPITAL.
An economic and social relationship whereby capitalists are able to deploy money to obtain more money, by appropriating the surplus-value created by workers. It is not, as in mainstream economics, a thing that is considered productive and is rewarded with profits.
CAPITALISM.
An economic and social system defined by private property and markets (as it is in mainstream economics) and, in addition, the appropriation and distribution of surplus labor in the form of surplus-value (which is missing from mainstream economics).
CAPITALISTS.
A group of class positions defined by deploying money as capital to capture more money. They include “industrial capitalists,” “monopoly capitalists,” “financial capitalists,” and “merchant capitalists.”
CLASS.
The process whereby surplus labor is produced, appropriated, distributed, and received.
CLASS STRUGGLE.
An attempt to change the quantitative and/or qualitative dimensions of a class process.
COMMODITY.
A product of human labor that is bought and sold on a market. It is characterized by a use-value, exchange-value, and value. Commodities can be produced through a variety of class processes. Thus, there are capitalist commodities, communist commodities, feudal commodities, slave commodities, and so on.
COMMODITY FETISHISM.
The subject or identity of those who engage in commodity exchange, which is the result of historical and social forces. It is opposed to
homo economicus
, the view on the part of mainstream economists that commodity exchange corresponds to an essential and universal (transhistorical and transcultural) human nature.
COMMUNISM.
An economic and social system in which exploitation has been eliminated and the “commune,” constituted by or representing the direct producers, appropriates and distributes surplus labor.
COMPETITION.
A particular social interaction among capitalist enterprises to capture extra surplus-value, which involves an increase in productivity and results in a decrease in commodity values and exchange-values and a tendency for the rate of profit to fall.
CONCRETE.
The outcome of an analysis, in which the knowledge produced includes more determinations than in the initial, abstract starting point. The movement from (relatively) abstract to (relatively) concrete takes place entirely within the realm of theory.
CONCRETE LABOR.
Human labor when analyzed in terms of its concrete characteristics, as the source of different use-values (e.g., the concrete labor of teachers and carpenters is the source of education and chairs).
CONJUNCTURE.
The central concept of Marxian analyses of capitalist crises and other economic and social events, which denotes the contradictory forces at play at a moment in time.
CONSTANT CAPITAL.
The value of the raw materials and means of production that, combined with labor power, are used to produce capitalist commodities.
CONTRADICTION.
A term for how movement and change emerge from the way different economic and social forces constitute, through distinct pushes and pulls, any process or event.
CRISIS.
The ever-present possibility that capitalist commodity exchange is disrupted, thereby leading to changes within that system or the transition to another system. A common distinction is between a crisis
in
capitalism (when disruptions are resolved through capitalist solutions) and a crisis
of
capitalism (when the entire system is called into question).
CRITIQUE.
Marx’s project, first announced in his letter to Arnold Ruge (1843), which calls for a “
ruthless criticism
of all that exists, ruthless both in the sense of not being afraid of the results it arrives at and in the sense of being just as little afraid of conflict with the powers that be.”
CRITIQUE OF POLITICAL ECONOMY.
The Marxian critique of mainstream economic theory and of capitalism, the economic and social system celebrated by mainstream economists.
DEVELOPMENT.
Changes in the class structure of society. It is not, as in mainstream economics, the smaller or larger sum total of commodities exchanged in the form of gross domestic product.
ENTRY POINT.
A starting point for economic and social analysis. Class is used as one of the analytical entry points, but is not considered to be the causal determinant of everything else, in Marxian economics.
ETHICS.
The premise and promise, within either an economic system or an economic theory, of justice. The ethics of mainstream economics is “just deserts,” that everyone gets what they deserve under capitalism; the ethics of Marxian economics calls for the elimination of capitalist exploitation.
EXCHANGE-VALUE.
The amount of socially necessary abstract labor for which a commodity exchanges in a market.
EXPLOITATION.
The appropriation of surplus labor by one class from another. Capitalist exploitation is the appropriation of surplus labor in the form of surplus-value by capitalists from workers. The rate of capitalist exploitation is the ratio of surplus-value to variable capital.
FEUDALISM.
An economic and social system defined by the appropriation and distribution of surplus labor in the form of rent (in kind, labor, or money) by feudal lords from serfs.
FINANCE CAPITAL.
The group of capitalists who lend money to industrial capitalists and receive a distribution of surplus-value in the form of interest payments.
FORMAL SUBSUMPTION OF LABOR.
Defined in contrast to the real subsumption of labor. Formal subsumption occurs when capitalists take over the labor and production processes, after the expropriation of the direct producers outside production, without changing technology. It is therefore a condition, not a consequence, of the Industrial Revolution.
HEGEMONY.
A concept developed by Italian Marxist Antonio Gramsci, through which he analyzes the foundation of a ruling-class (such as the capitalist class) as being created through both force and consent.
INDUSTRIAL CAPITALISTS.
Capitalists who engage in exploitation, by extracting labor from labor power and appropriating surplus labor in the form of surplus-value. Capitalists use money to purchase commodities, to produce new commodities that contain surplus-value, and to sell those commodities to realize profits.
LABOR.
The work that is performed to produce commodities. The extraction of labor from labor power is the key to capitalist exploitation.
LABOR POWER.
The ability to expend mental and manual energy to produce commodities, which itself takes the form of a commodity within capitalism. Capitalists purchase labor power in the realm of exchange, and then extract labor from labor power during the course of production. The owners of labor power exchange their ability to work for a wage and then purchase commodities to reproduce their social existence as laborers.
MARKET.
The economic and social institution whereby the products of human labor take the form of commodities.
MARKET-PRICE.
The price of a commodity as determined by fluctuations of supply and demand, which may be above, below, or equal to the commodity’s exchange-value.
MEANS OF PRODUCTION.
The buildings and machinery that, combined with raw materials and labor power, make capitalist production possible.
MERCHANT CAPITAL.
Capitalists who purchase commodities from industrial capitalists at less than their value, sell those commodities at their value, and receive a distribution of surplus-value in the form of discounts.
MONEY.
The universal equivalent, which can be used in exchange for any and all commodities in a system of generalized commodity exchange. It is the only commodity whose use-value is equal to its value. It serves as unit of account, means of payment, store of value, and debt. The use of money serves to both expand and disrupt capitalist commodity exchange.
MONEY-PRICE.
The exchange-value of a commodity when converted into its price via the value of money.
MONOPOLY CAPITAL.
Capitalists who, in addition to being “industrial capitalists,” exercise market power and receive a distribution of the surplus-value appropriated by other “industrial capitalists” in the form of rents.
NECESSARY LABOR.
The amount of labor necessary to reproduce the social existence of the direct producers. In capitalism, necessary labor is equal to the value of labor power.
PLANNING.
The administration of the production and circulation of the products of human labor outside of markets. Capitalist planning (within corporations and countries, especially during wars) can be distinguished from socialist planning (which socialist and communist governments have attempted to use alongside or in place of markets).
PRICE OF PRODUCTION.
The form exchange-value takes when capital is mobile between industries and the rate of profit is equalized across the economy.
PRIMITIVE ACCUMULATION OF CAPITAL.
The historic emergence of the conditions of existence of capitalism (and thus of the accumulation of capital) where capitalism doesn’t yet exist.
PRODUCTIVE LABOR.
Labor that is productive of surplus-value, which means that labor power is exchanged against the variable part of capital.
PROFITS.
The source of profits is surplus-value, the capitalist form of unpaid or surplus labor.
REAL SUBSUMPTION OF LABOR.
Defined in contrast to the formal subsumption of labor. Real subsumption occurs when capitalists take over the labor and production processes through the expropriation of the direct producers inside production, by making workers appendages of the machines. It therefore coincides with the series of Industrial Revolutions.
RELATIVE SURPLUS-VALUE.
An increase in the rate of exploitation by decreasing the portion of the workday representing necessary labor and increasing the portion that is surplus labor. It is based on the real subsumption of labor, that is, the expropriation of the direct producers within production.
REPRODUCTION.
The securing of the conditions of existence of capitalism. Simple reproduction refers to the securing of those conditions of existence at the same level (when surplus-value is consumed, not invested); expanded reproduction involves reproduction on a larger scale (when surplus-value is used for the accumulation of capital).
SLAVERY.
The extraction of surplus labor by slaveowners from slaves, in a system in which the workers are owned as human chattel.
SOCIAL DIVISION OF LABOR.
The distribution of production among different producers, which is both a condition and consequence of markets, leading to the anarchy of production. It denotes the interdependence of producers in a system characterized by commodity production.
SOCIALISM.
An economic and social system in which economic and social changes are made to create a transition from capitalism to communism.
SOCIALLY NECESSARY.
The modifier attached to value and exchange-value, according to which the amount of abstract labor is not dictated by a technical minimum but instead considers the entire range of economic and social determinants (from technologies and types of markets to advertising and government regulations). It is therefore the amount of abstract labor that is “recognized” by society.
SURPLUS.
The sum total of surplus labor at the level of society as a whole (and therefore the difference between the net total output and consumption).
SURPLUS LABOR.
The amount of labor performed by workers which is the difference between total labor and necessary labor. In capitalism, surplus labor is unpaid labor and is equal to surplus-value.
SURPLUS-VALUE.
The form of surplus labor in capitalism.
TECHNICAL DIVISION OF LABOR.
The distribution of different jobs or activities within individual enterprises, which is both a condition and consequence of the despotism exercised by capitalists within those enterprises.
TRANSITION.
The movement from the social predominance of one class process to another (such as the transition from feudalism to capitalism and from capitalism to communism). Transition is neither inevitable (there is no necessary plan or path of economic and social change) nor unitary (the social predominance of one class process, such as capitalism, does not mean that other class processes do not also exist within such a society).
UNEQUAL EXCHANGE.
The exchange of unequal amounts of abstract labor embodied in commodities.
UNPRODUCTIVE LABOR.
Labor that is not productive of surplus-value, which means that labor power is not exchanged against the variable part of capital; instead, it is often exchanged against a portion of surplus-value. This does not mean that unproductive labor is unimportant, both because unproductive laborers may be, and often are, exploited and because unproductive labor often creates the conditions for exploitation.
USE-VALUE.
The social usefulness of a commodity, which is realized in the act of consumption.
VALUE.
The amount of socially necessary abstract labor that is embodied in the commodity during the course of production.
VALUE OF LABOR POWER.
The value of the elements of the wage bundle of sellers of labor power, which has a “historical and moral element” and thus represents workers’ customary standard of living.
VARIABLE CAPITAL.
The portion of capital capitalists use to purchase labor power that, combined with the elements of constant capital, is used to produce capitalist commodities.
WORKING-CLASS.
The owners of labor power, who are forced to have the freedom to sell their ability to work to their employers. Members of the working-class perform both necessary and surplus labor.
References
The two principal sets of writings of Karl Marx (and Friedrich Engels) referred to in this book are The Marx-Engels Reader, edited by Robert C. Tucker, and the three volumes of Capital.
I give parenthetical page references to both sources throughout this book. To keep things simple, I have used the following conventions: specific pages in the Marx-Engels reader are ME, x (so, ME, 143–5 refers to pages 143 to 145 of the reader); pages in each of the three volumes of Capital are Ky, x (so, KI, 163–77 refers to pages 163 to 177 of volume 1 of Capital, KII to volume 2, and KIII to volume 3).
I have chosen the more recent (second) edition of the Tucker reader (published in 1978 by W.W. Norton & Company in New York). It is the one with the red, not blue, cover.
As for Capital, all references are to the latest edition, published by Penguin Books in association with New Left Review. Volume 1 was translated by Ben Fowkes, the appendix to volume 1 by Rodney Livingstone, and the other two volumes by David Fernbach. (A new English-translation of Capital is currently being prepared by Paul Reitter and Paul North.) There is also an earlier English-language translation of Capital, by Samuel Moore and Edward Aveling, which was published in 1909 in Chicago by Charles H. Kerr & Company (and is commonly referred to as the Kerr edition). I prefer the more recent published translation because, while not perfect, it does a better job rendering the original German manuscript into contemporary English. Therefore, all page references to Capital in this book are to the Penguin edition.
Interested readers can also consult the Marx/Engels Collected Works, which runs to 50 volumes and is the largest existing collection of English translations of many of the works of Marx and Engels. They were published between 1975 and 2004 by Progress Publishers (in Moscow), in association with Lawrence and Wishart (in London) and International Publishers (in New York).
All other references in this book are included in footnotes or listed, under the heading Suggested Readings, at the end of each chapter.
PART IRELEVANCE AND SOURCES
Chapter 1MARXIAN ECONOMICS TODAY
As you open this textbook, you may be wondering, why should I study Marxian economics?
In the United States and in many other countries, Marxian theory, including Marxian economics, is a controversial topic. That’s certainly been true for the past few decades, when the topic was all but taboo. But beginning with the crash of 2007–8 – the Second Great Depression or what some have called the Great Recession – the climate has dramatically changed. More and more people, especially young people, have become interested both in Marxian criticisms of mainstream economics and in possible alternatives to capitalism.
Here’s Nouriel Roubini, professor of economics at New York University’s Stern School of Business and the chairperson of Roubini Global Economics, an economic consultancy firm: “So Karl Marx, it seems, was partly right in arguing that globalization, financial intermediation run amok, and redistribution of income and wealth from labor to capital could lead capitalism to self-destruct.”1
And then, from the other side of the Atlantic, there’s George Magnus, Senior Economic Adviser to the UBS Investment Bank: “Policy makers struggling to understand the barrage of financial panics, protests and other ills afflicting the world would do well to study the works of a long-dead economist: Karl Marx. The sooner they recognize we are facing a once-in-a-lifetime crisis of capitalism, the better equipped they will be to manage a way out of it.”2
Many of us were surprised, even those of us who have spent decades studying and teaching Marxian economics. I did so at the University of Notre Dame for almost four decades.
Living and working in the United States, we had just been through a 30-year period in which Marx and Marxian ideas had been attacked and marginalized, in the discipline of economics and in the wider society. Marx was declared either dangerous or irrelevant (or, often, both).
Capitalism was humming along (with, of course, the usual ups and downs) until … the crash of 2008, when the world economy was brought to the brink of collapse. And Marx, almost in the blink of an eye, was relevant again.
To be honest, it wasn’t that Marxists could take all, or even much of, the credit (or, for that matter, blame). It was actually the spectacular failure of mainstream economics that led to this dramatic change.
Mainstream economists were caught completely unawares. For all their claims to hard science and accurate forecasting, they failed to predict the crash. Even more, they didn’t consider a crash to be even a remote possibility. The chance of a crisis starting with the housing and banking sectors didn’t even exist in their theoretical framework.
And, once the crash happened, mainstream economists didn’t really have much to offer. The policies that stemmed from their models suggested letting the banks sort out the problems on their own, without any kind of government supervision or intervention. Until, of course, the panic that set in with the failure of Lehman Brothers, which brought first the American economy and then the world economy to the brink of collapse.
The kinds of problems building up for decades simply didn’t figure prominently in mainstream economic models and empirical analyses. They paid scant attention to the kinds of problems many others were increasingly worried about, such as:
the deregulation of banks and the spectacular growth of the financial sector within the US and world economies
the housing bubble that was supported by subprime bank loans, and then sliced and diced into collateralized debt obligations and other financial derivatives
the outsourcing of jobs and the decline of labor unions, which if they paid attention at all were seen as freeing up national and global markets.
The result of these and other changes in the US economy created, for the first time in American history, a growing gap between productivity and workers’ wages. According to the data illustrated in figure 1.1, productivity and wages grew at roughly the same rate during the immediate post-World War II period. But, from the late 1970s onward, that changed: while productivity continued to grow (increasing by more than 70 percent), wages increased by much less (only 17.2 percent).
Figure 1.1 Productivity and hourly compensation growth, 1948–2020
Source: Economic Policy Institute
The other result was an increasingly unequal distribution of income, reminiscent of the period just before the first Great Depression, when (as can be seen in figure 1.2) the share of income captured by the richest 10 percent of Americans (the dotted line) approached 50 percent of total income, and that of the bottom half of the population (the dashed line) hovered in the low teens.
Figure 1.2 Income inequality in the United States
Source: World Inequality Database
Mainstream economists – both neoclassical and Keynesian economists, microeconomists as well as macroeconomists – either ignored these issues or explained them away as the necessary conditions for and outcomes of economic growth under capitalism.
The financial sector needed no oversight or regulation, because of the idea of efficient markets, which meant that participants had all the relevant information, and the risks faced by bankers and investors were already contained in market prices and interest rates. As for inequality, it was either catalyst for growth or, if seen as a problem, it was the inevitable result of technology and globalization, which could be handled by encouraging workers to acquire better skills and more education to compete in the labor market. Moreover, both economic history and the history of economic thought – the history of capitalism and the history of thinking about capitalism – had disappeared as relevant areas of training for mainstream economists. As a result, not only had they never read any Marx; they’d never read Adam Smith, John Maynard Keynes, or Hyman Minsky.3
Then things changed, especially as the problems cited above never really disappeared, even as stock markets entered another boom period. Marxian criticisms of both mainstream economic theory and capitalism became appropriate topics of discussion and debate again.
Reading Marx
While references to Marxian economics have increased in recent years, there is no indication commentators have actually read the works of Karl Marx. Perhaps they remember reading the Communist Manifesto at some point in their education but not Marx’s magnum opus Capital. And they certainly have not read the scholarly work on Marxian theory. Perhaps they were afraid to or didn’t know how to, or were just too caught up in their own theories and models. But the fact remains, the time is ripe for a new reading of Marx’s Capital.
If they did such a reading, what would they find?
They would encounter something quite different from what they – and perhaps you, reading this book – expect. For example, they would not discover a set of predictions about when or how the crises of capitalism would inevitably occur. Nor would they find a blueprint for socialism or communism. In fact, many of the ideas that are regularly attributed to Marx or considered as defining characteristics of Marxian economics simply aren’t there.
What readers would find is a critique of political economy, in two senses: a critique of mainstream economic theory; and a critique of capitalism, the economic system celebrated by mainstream economists. That’s what Marx came up with after spending all those hours reading the classical political economists and the factory reports in the British Museum. In fact, Christopher Hitchens relates the story of a retiree who had worked in the British Museum’s reading room during the Victorian period:
Asked if he could remember a certain Karl Marx, the wheezing old pensioner at first came up empty. But when primed with different prompts about the once-diligent attendee (monopolizing the same seat number, always there between opening and closing time, heavily bearded, suffering from carbuncles, tending to lunch in the Museum Tavern, very much interested in works on political economy), he let the fount of memory be unsealed. “Oh Mr. Marx, yes, to be sure. Gave us a lot of work ’e did, with all ’is calls for books and papers”.4
The critiques Marx developed during the course of working his way through all those books and papers are what generations of Marxian economists have been discussing, debating, and further developing ever since.
Five Themes
When all is said and done, Marxian economics is organized around five key ideas: critique, history, society, theories, and class. These are themes readers will encounter many times over the course of this book.
CRITIQUE.
Capital
(and the many other economic texts Marx wrote) are less a fully worked-out theory of capitalism than a critique of the ideas – the concepts, methods, and models – that are central to mainstream economics. In other words, Marx carefully studied the works of the most influential classical economists, such as Adam Smith and David Ricardo. He used them as his starting-point but then ended up in a very different place, challenging much of what was taken then as the “common sense” within economics. Following his example, readers may find themselves questioning some of the key ideas within contemporary mainstream economics while reading this book.
HISTORY. Much of mainstream economics is based on models of a world that never really changes. Marxian economics is different; it is focused on history – both the history of economic systems and the history of economic ideas – that change over time. Thus, for example, within Marxian economics, capitalism has a history: it didn’t always exist; once it came into existence, it has continued to change; and, at least in principle, capitalism can come to an end, replaced by a fundamentally different way of organizing economic and social life.
SOCIETY. Marx’s approach was always about an economy
within
society, both affecting and being affected by everything else – social rules, political power, cultural norms, and much else. Therefore, different societies (and, for that matter, different parts of specific societies) have different ways of arranging economic life, now as in the past. This means they have radically different ways of allocating labor, organizing production, exchanging goods and services, distributing incomes, and so on.
THEORIES. Not only are there different economies and societies; there are also different economic theories. Marxian economics is one, mainstream economics is another. (And there are many other theories or approaches readers may have encountered or heard about: radical, Post Keynesian, feminist, postcolonial, green, and the list goes on.) Moreover, economic theories are not the same as economic systems. For example, Marxian and mainstream economists have different theories – they tell different stories, they arrive at different conclusions – about the same economic system. So, as readers will see over the course of this book, the Marxian theory of capitalism is very different from the mainstream theory of capitalism.
CLASS. One of the particular interests or entry points of Marx and Marxian economists is class, the specific way workers (e.g., wage-laborers under capitalism or serfs within feudalism) perform more labor than they receive to sustain their lives. The rest, the extra or surplus labor, is appropriated and controlled by another, much smaller group (e.g., the class of capitalists or feudal lords). Marx created a special name for this: class exploitation.Different societies have different class structures, which have been transformed historically and continue to change today – without, however, getting rid of that crucial element, class exploitation. Marx was therefore critical of both the mainstream economic theories that deny the existence of exploitation as well as the economic systems in which the class of workers who perform the surplus labor are excluded from making decisions about the surplus they create.
Readers can therefore see how there would be, from the very beginning, an animated debate between mainstream and Marxian economists.
A Tale of Two Capitalisms
Marxian economists recognize, just like mainstream economists, that capitalism has revolutionized the world in recent decades, continuing, and in some cases accelerating, long-term trends. For example, the world has experienced spectacular growth in the amount and kinds of goods and services available to consumers. Everything, it seems, can be purchased either in small retail shops, big-box stores, or increasingly online. Every year, more and more of the goods and services we consume are being produced for and purchased in markets.
What this means is that the wealth of nations has climbed sharply. Thus, technically, real gross domestic product per capita has risen since 1970 in countries as diverse as the United States (where it has more than doubled), Japan (more than tripled), China (risen almost ten-fold), and Botswana (where it has increased by a factor of more than 22) (see figure 1.3).5
Figure 1.3 Real gross domestic product per capita, 1970–2017
Source: Feenstra et al. (2015) Penn World Table 9.1. OurWorldInData.org/econonomic-growth/CC BY
International trade has also soared during the same period. Goods and services that are produced in once-remote corners of the world find their way to customers in other regions. Both physical commodities – such as smart phones, automobiles, and fruits and vegetables – and services – like banking, insurance, and communications – are being traded on an increasing basis between residents of different national economies. To put some numbers on it, merchandise trade grew from US$322.7 billion in 1970 to US$17.22 trillion in 2020. And exports of services have become a larger and larger share of total exports – for the world as a whole (now 23.5 percent, up from 15 percent) and especially for certain countries (such as the United Kingdom, where services account for about 45 percent of all exports, and the Bahamas, where almost all exports are services).6
The world’s cities are the hubs of all that commerce and transportation. It should come as no surprise that the urbanization of the global population has also expanded rapidly in recent decades, from about one third to now over half. In 2018, 1.7 billion people – 23 per cent of the world’s population – lived in a city with at least 1 million inhabitants. And while only a small minority currently reside in cities with more than 10 million inhabitants, by 2030 a projected 752 million people will live in so-called megacities, many of them located in the Global South.7
We are all also aware that, during recent decades, many new technologies have been invented – for producing and distributing goods and services as well as in consuming them. Think of robotics, artificial intelligence, and digital media. And, with them, new industries and giant firms have been formed and taken off. Consider the so-called Big Four technology companies: Amazon, Google, Apple, and Facebook. They were only founded in the last few decades but, as they have continued to grow, they have become inextricably intertwined with the strategies of millions of companies and the lives of billions of people around the world.
The profits of those tech companies have, to no one’s amazement, skyrocketed. And their owners are all billionaires. When the first Forbes World Billionaires List was published in 1987, it included only 140 billionaires. Today, they number 2,825 and their combined wealth is about US$9.4 trillion. That works out to be about US$3,300,000,000 per billionaire. Their wealth certainly represents one of the great success stories of capitalism in recent decades.8
Finally, capitalism has grown in more countries and expanded into more parts of more countries’ economies and societies over the course of the past 40 years. Both large nations and small ones (from Russia, India, and China to El Salvador, Algeria, and Vietnam) are more capitalist than ever before. As we look around the world, we can see that the economies of rural areas have also been increasingly transformed by and connected to capitalist ways of producing and exchanging goods and services. Global value chains have incorporated and fundamentally altered the lives of millions and millions of workers around the world. Meanwhile, areas of the economy that had formerly been outside of capitalism – for example, goods and services provided by households and governments – can now be bought and sold on markets and are the source of profits for a growing number of companies.
But, unlike mainstream economists, Marxists recognize that capitalism’s extraordinary successes in recent decades have also come with tremendous economic and social costs.
All that new wealth of nations? From a Marxian perspective, it has been produced by workers who receive in wages and salaries only a portion of the total value they have created. The rest, the surplus, has been captured in corporate profits and handed over to those at the top of the economic pyramid. So, it should come as no surprise that the distribution of income has become increasingly unequal over time – both within countries and for the world economy as a whole.
According to the latest World Inequality Report, income inequality has increased in nearly all countries, especially in the United States, China, India, and Russia. In other countries (e.g., in the Middle East, sub-Saharan Africa, and Brazil), income inequality has been relatively stable but remains at extremely high – some would say, obscene – levels.9
At a global level, inequality has also worsened. Thus, for example, the top 1 percent of the richest individuals in the world has captured more than twice as much of the growth in income as the bottom 50 percent since 1980. Basically, the share of income going to the bottom half has mostly stagnated (at around 9 percent), while the share captured by the top 1 percent has risen dramatically (from around 16 percent to more than 20 percent).
And it is no accident. Inequality has increased precisely because the surplus labor performed by workers, in both rich and poor countries, has not been kept by them but has gone to a small group who stand at the top of the national and world economies.
So, we really are talking about a tale of two capitalisms: one that is celebrated by mainstream economists, but only benefits those in the top 1 or 10 percent; and another that is recognized by Marxian economists, who emphasize the idea that the growing wealth of nations and increasing inequality are characteristics of the same economic system.
But that’s not the end of the story. All that capitalist growth has been anything but steady. The two most severe economic downturns since the Great Depression of the 1930s have happened in the new millennium: the Second Great Depression (after the crash of 2007–8) and the Pandemic Depression (with the outbreak and spread of the novel coronavirus). In both cases, hundreds of millions of workers around the world were laid off or had their pay cut. Many of them were already struggling to get by, with stagnant wages and precarious jobs, even before economic conditions took a turn for the worse. And then those same workers had to look up and see one part of the economy recovering – for example, the profits of their employers and shares in the stock market that fueled the wealth of the billionaires – while the one in which they earned their livelihoods barely improved, and in many cases became even more difficult.
Meanwhile, those stunning global cities and urban centers, the likes of which the world has never seen, also include vast slums and informal settlements – parking lots for the working poor. According to the United Nations, over 1 billion people now live in dense neighborhoods with limited and unreliable access to basic services like water, sanitation, and electricity.10 Many don’t have bank accounts, basic employment contracts, or insurance. Their incomes and workplaces are not on any government agency’s radar.
They are not so much left out as, just like their counterparts in the poor neighborhoods of rich countries, incorporated into capitalism on a profoundly unequal basis. They are forced to compete with one another for substandard housing and low-paying jobs while suffering from much higher rates of crime and environmental pollution than those who live in the wealthy neighborhoods. In countries like the United States and the United Kingdom (and many others), a disproportionate number are ethnic and racial minorities and recent immigrants.
The working poor in both urban and rural areas are also the ones most affected by the climate crisis. A product of capitalism’s growth, not only in recent decades, but since its inception, global warming has created a world that is crossing temperature barriers which, within a decade, threaten ecosystem collapse, ocean acidification, mass desertification, and coastal areas being flooded into uninhabitability.
Meanwhile, the democratic principles, practices, and institutions that people have traditionally relied on to make their voices heard are being challenged by political elites and movements that are fueled by and taking advantage of the resentments created by decades of capitalist growth. The irony, of course, is many of them call for more, not less, unbridled capitalism as the way forward.
Clearly, the other side of the coin of capitalism’s tremendous successes has been its spectacular failures.
It should come as no surprise that there’s more interest these days in both criticisms of and alternatives to capitalism. According to the Edelman Trust Barometer 2020 (a survey conducted during 2019, the results of which are illustrated in figure 1.4), 48 percent of respondents said that capitalism was failing them and 56 percent that “capitalism as it exists today does more harm than good in the world.”11 Marxian economics is one of the key sources for both: for ways of analyzing capitalism that point to these and other failures not as accidents, but as intrinsic to the way capitalism operates as a system; and for ideas about how to imagine and create other institutions, fundamentally different ways of organizing economic and social life.
Figure 1.4 Capitalism does more harm than good
Source: 2020 Edelman Trust Barometer Global Report
Young people, especially, have become interested in the tradition of Marxian economics. They are trying to pay for their schooling, find decent jobs, and start rewarding careers but they are increasingly dissatisfied with the effects of the economic system they are inheriting. Mainstream economics seems to offer less and less to them, especially since it has mostly celebrated and offered policies to strengthen that same economic system.
For them, Marxian economics offers a real alternative – in terms of both criticizing capitalism and helping them to imagine changes to the current economic system that can deliver on the longstanding promises of freedom, fairness, and justice.
Beyond the Mainstream
This is certainly not the first time people have looked beyond mainstream economics. There is a long history of criticisms of both mainstream economic theory and capitalism from the very beginning, although they typically don’t appear in traditional economics textbooks. Those texts are generally written with the presumption there’s only one economic theory and one economic system. The existence of Marxian economics opens up the debate, creating space for both multiple ways of thinking about economics and a variety of different economic systems.
Criticisms of Mainstream Economic Theory
In the history of economic thought, criticisms of the mainstream approach were formulated early on.
The first group of mainstream economists – Adam Smith, David Ricardo, and others (such as Jean-Baptiste Say, Thomas Robert Malthus, and John Stuart Mill) – developed classical political economy in the late-eighteenth and early-nineteenth centuries, when the new economic system we now call capitalism was just getting off the ground. They developed, as we will see in chapter 2, a labor theory of value to analyze the value of commodities, the goods and services that were bought and sold on markets. They then utilized that theory of value to argue that capitalism, based on increasing productivity and free international trade, would lead to the growth of industry, higher productivity, and an increase in the wealth of nations.
