Marxist economics

Marxist economics

Marxist economics is the study of the laws of motion of capitalist society. Why does capitalism perpetually go into crisis? Why does mass unemployment exist? Are commodity production, the domination of the market, and rich and poor natural, immutable states of being for humanity? Or are they merely the products of this specific mode of production - capitalism? If so, is there any way capitalism can exist without these problems, or by minimising them?

Marxist economics is a “holistic” way of analysing capitalist economy. It starts out by placing it in its real historical context (rather than dreaming up abstract idealisations of capitalism to justify it, as bourgeois economics does), studying all its interconnections and contradictions, rather than artificially isolating one aspect of it. In doing so, Marxist economics lays bare the functioning of capitalism; the exploitation and injustice inherent within it. Those who want to get to the essence of why, in the 21st Century, despite having a more advanced understanding of the world than ever before, humanity seems plunged into perpetual crisis it cannot get to grips with, should look no further than Marxist economics, beginning with the writings of Marx himself.

MMT has created a buzz on the left recently, with its supporters citing it as an answer to all our economic woes. Instead of trendy new ideas, however, we need the clear, scientific analysis of capitalism that Marxism provides – Adam Booth writes.

In this video from the 2018 Revolution Festival, Adam Booth - editor of www.socialist.net - provides an overview of the history of money, using a Marxist economic analysis to strip away the veil of mystery that surrounds it.

In this talk from a 2018 'Marx in a Day' event, celebrating Karl Marx's 200th birthday and discussing his key ideas, Rob Sewell (editor of Socialist Appeal) explains the fundamental concepts of Marxist economics.

Understanding Marx’s Capital: A reader’s guide

Marx's Capital was a book that revolutionised political economy and for the first time opened our eyes to the real workings of capitalism. It was, however, met with a wall of silence from the mainstream economists and the establishment. Despite this, Capital became regarded in the workers' movement as the Bible of the working class...

 "Today, in numerous areas, from automation to green energy to information technology, we are seeing a validation of Marx's assertion: that society's productive forces at a certain stage come into conflict with the way in which society is organised. These "economic singularities", as Adam Booth discusses, demonstrate clearly that the system has broken."

 

What is money? Where does it come from? And what does it represent?

In this video from a day school on Marxist economics, Ben Gliniecki of the Socialist Appeal Editorial Board discusses the development of Marx's theories on capitalism, examining the classical economists preceding Marx who were influential in shaping his ideas on questions such as the Labour Theory of Value.

In this video from a 2016 Socialist Appeal day school on Marxist economics, James Kilby compares and contrasts the economic theories of Karl Marx and John Maynard Keynes, and analyses the material conditions and historic factors that led to the "post-war boom" - the 25 year period of capitalism upswing that followed the end of the Second World War.

In this recording from Red October 2015, Adam Booth - editor of www.socialist.net - analyses the current crisis of capitalism and discusses Marx's theories about why capitalism enters into crisis.

In this talk from Revolution 2015 - hosted by the Marxist Student Federation in London - Adam Booth, editor of www.socialist.net, explains the historical origins, evolution, and development of money, banking, and the modern financial system under capitalism.

This book is aimed specifically at newcomers to Marxism. A bestseller now in its second edition, it comprises introductory pieces on the three component parts of Marxist theory, corresponding broadly to philosophy, social history and economics: dialectical materialism, historical materialism and Marxist economics. Complementing these introductions are key extracts from some of the great works of Marxism written by its most outstanding figures – Marx, Engels, Lenin and Trotsky.

In their desperate search for profitable fields of investment, the capitalist class, especially the financial oligarchy, has presided over an explosive growth of unproductive expenditure that today threatens to undermine the very edifice of capitalism. As more and more surplus value is siphoned off into unproductive activities, the issue of “productive” and “unproductive” labour has once again resurfaced as a factor contributing to, and a reflection of, the present terminal decline of world capitalism.

Capitalism is a chaotic system of production beyond the contol of humanity. It is doomed to plunge society into ever greater crises. But why does it enter a crisis and what is the alternative?

The world economy has been mired in a deep crisis since 2007. The bourgeois have tried everything to climb out of the crisis, from quantitative easing, to zero interest rates, to the socialization of banking losses, but all to no avail. Why is it that a modern-day version of Keynesianism cannot work?

What is value? This question has perplexed the human mind for more than 2,000 years. The classical bourgeois economists grappled with the question, as did Marx. After much deliberation, they correctly concluded that labour was the source of value. This idea then became a cornerstone of bourgeois political economy, beginning with Adam Smith. On this question, there was common ground between Marx and the classical bourgeois economists.

The Marxist analysis of history – that is, the dialectical and materialist analysis of history – explains that the main motor force in history is the need for society to develop the productive forces: to increase our knowledge of and mastery over nature; to reduce the socially necessary labour time needed to produce and reproduce the conditions of life; to improve lifestyles and raise the standards of living.

[The following article was originally published in the summer issue of our theoretical magazine In Defence of Marxism] In the last issue of the In Defence of Marxism magazine we polemicized against the theory of “under-consumption” as an explanation of capitalist crisis. In this issue, we wish to look at Marx’s law of the tendency of the rate of profit to fall.

A recent BBC documentary series entitled “Masters of Money” examined the ideas of three historical giants in economics: Keynes, Hayek, and Marx. In this article, we compare and contrast their ideas in the context of the current crisis of capitalism, to see if any of these figures and their writings really do have the answers to solve the problems facing society today.

Marx & Engels

“What did Marx mean by the contradictions of capitalism?” asks Samuel Brittan, the right-wing economist writing in the Financial Times. “Basically, that the system produced an ever-expanding flow of goods and services, which an impoverished proletarianised population could not afford to buy. Some 20 years ago, following the crumbling of the Soviet system, this would have seemed outmoded. But it needs another look, following the increase in the concentration of wealth and income.” 1

Assistant Secretary, U.S. Treasury, Harry Dexter White (left) and John Maynard Keynes, honorary advisor to the U.K. Treasury at the inaugural meeting of the International Monetary Fund's Board of Governors in Savannah, Georgia, U.S., March 8, 1946.

“We are all Keynesians now.” So said Richard Nixon, the Republican and former President of the USA, in 1971. Forty years later, it seems that John Maynard Keynes is back in fashion, especially amongst the leaders of the British Labour movement. The reformist leaderships of the Labour Party and the trade unions cling to the Keynesian idea that the economy can simply be “stimulated” back in growing. But as the Marxists have explained before, the current economic crisis is not just part of some boom-and-slump, but is an organic crisis of capitalism, and growth cannot simply be created at will.

The crisis that has shaken the world economy since 2008 has pushed bourgeois ideologists to desperately seek a solution. They are looking for alternative ways of running their system, seeking to square the circle and maintain capitalism without its inevitable contradictions. As Asia, and China in particular, is doing so well, there is a burgeoning literature about the Chinese model, just as in the past there was so much made of the “Japanese miracle”. In Part One of this article Luca Lombardi looks at the experience of Taiwan.

When the 1929 Crash broke out it affected the Italian economy dramatically. Italy had just been through a serious monetary crisis, from which it had not yet recovered when the world crisis broke out. In this situation the capitalists desperately turned to the State for help.

The classical view of how capitalism develops is that within feudal society a class emerges made up of merchants, bankers, early industrialists, i.e. the bourgeoisie, and that for this class to be able to develop its full potential a bourgeois revolution is required to break the limits imposed by the landed feudal aristocracy. That is how things developed, more or less, in countries like France and England, but not in Japan.

Inflation was persistently high throughout 2010, with an average RPI of 4.6% - the highest since 1991. Meanwhile, the CPI has been above 3% for the last 15 months, a whole percentage point above the Bank of England’s 2% target, prompting Mervyn King, the governor of the Bank of England, to write a total of four letters to George Osborne, the Chancellor of the Exchequer, explaining the causes for such consistently high inflation.

Marxists have long since been conscious of the nature of the state, its industrious defence of the capitalist class, and its prejudice against working people. But much of the public are unaware of just how incestuous the capitalists and governments really are. Will Roche continues with his second in a series of three articles on monopoly capitalism.

To mark the 60th anniversary of Trotsky’s death we published a series of articles on our Trotsky.net website in the year 2000, among them this article on capitalist development. The purpose then was to underline the fact that although capitalism was experiencing a boom, the period we had entered was actually one of overall capitalist decline. As we explained in the introduction “Rather than a new upswing, capitalism is heading for a new slump and a downward curve of development similar to the interwar period.”

There has been no levelling off of the global economy, as economists predicted. Although industrialisation has expanded to lesser-developed countries, it has generally been along lines determined by global corporations based in advanced capitalist countries. From colonialism, we have moved into the age of multinational corporate domination.

“Now we must expect the opposite: profound, long, and painful crises, while the upward movements are weak and short-lived. If the old cycles were the mechanism of a broad upward movement, the new ones can only be the mechanism of capitalist decay.” Written almost 80 years ago, but extremely relevant to today’s situation.

Before we examine the economic theories of comrade Dieterich, we will attempt to provide the reader with a brief summary of the basic economic laws of capitalism, which Marx explained long ago.

Marxists approach economics from a particular perspective. We have to accept that wealth is concentrated in the hands of a very small number of people, the capitalist class. The overwhelming majority of people have no wealth. All in essence they have is themselves and their ability to work, which they have to sell on the open market. Marx called these people the proletariat. Steve Jones, of the Socialist Appeal editorial board, talks on the basics of Marxists economics.

At a Youth School of the Socialist Appeal late last year Mick Brooks introduced a discussion on 'What is money?'. Given the current financial turmoil many are asking what is behind the jargon given by economic commentators today. This serves as a useful introduction to the idea and concept of money.

In the 1980s there was a debate within the Marxist tendency about productive and unproductive labour. Here we provide a contribution to that debate by Mick Brooks. Although this is archive material, we believe it will help today’s generation to better understand capitalism in order to overthrow it.

We are publishing two old documents on the tendency of the rate of profit to fall, which were part of a debate in the early 1980s within the then Militant Tendency. Marx had predicted a tendency for the rate of profit to fall as a result of what he called the rising organic composition of capital. In his document, AG disagreed with Marx. He saw the fall in profits as being fundamentally caused by rising real wages biting into the surplus. This had serious implications as it led him to cast doubts on Marx’s theory. MB’s reply is mainly concerned with pointing out that Marx’s theory was fundamentally correct and that it is still a useful guide to understanding reality.

In his document, AG disagreed with Marx. He saw the fall in profits as being fundamentally caused by rising real wages biting into the surplus. This had serious implications as it led him to cast doubts on Marx’s theory. MB’s reply is mainly concerned with pointing out that Marx’s theory was fundamentally correct and that it is still a useful guide to understanding reality.

It is fashionable these days for bourgeois economists and sociologists to refute the dialectical materialist method of analysis developed by Karl Marx. One of the basic ideas of Karl Marx that is constantly being denied by the bourgeois is his theory of value. This is understandable because from this very theory flow all the other conclusions of Marx, in particular that of the need to overthrow capitalism if we are to put an end to all the contradictions of this unjust system which condemns millions of human beings to abject poverty, mass unemployment, periodic economic crises and wars. In this article (divided into two parts) Mick Brooks, using up to date facts and figures, shows how

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In the recent period the theories of Kondratiev have enjoyed new popularity with bourgeois economists and some people who consider themselves Marxists. It is one of those ironies of which history is so rich that Kondratiev's ideas are being used by bourgeois economists to justify the idea that the capitalist system can go on indefinitely in a never-ending series of "long waves" in which long periods of downswing are automatically followed by long periods of upswing and vice versa. It is rather like an economic version of the "perpetual motion machine" which people have endeavoured to discover for centuries, but which so far has not been found anywhere under the sun.

The capitalist system moves in a never-ending cycle of booms and slumps. That has been the case for the last two hundred years. The cycle of booms and slumps, however, does not have a fixed and regular character. To begin with, the length of the cycle has always been somewhat flexible. In Marx's day it was an average of 10 years, but in the years of upswing after the second world war it was considerably less, something like 5-6 years, or even less. The exact length of the cycle is therefore not a principled question for Marxists. What is necessary is to analyse concretely the nature of the cycle, and try to establish how it will most likely evolve. The prolongation of the boom

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We are reproducing a slightly edited version of What is Marxism? by Rob Sewell and Alan Woods, last published in 1983 to celebrate the centenary of the death of Karl Marx. The three articles on the fundamental aspects of Marxism, Marxist Economics, Dialectical Materialism and Historical Materialism were originally published separately in the 1970s. These articles are a good, brief introduction to the basic methods of Marxism and can serve as a first approach to the ideas developed by Marx and Engels.

At the time of the struggle against pit closures in Britain in 1992/93 the old argument in favour of import controls to save British Coal was raised. Phil Mitchinson explains why this is not an "alternative" that socialists would put forward.

In 1971, the economy was growing sluggishly and was rife with inflationary problems. Ted Grant disproves the bourgeois myth that an increase in the wages of the working class causes price increases and examines the real causes of inflation.

Ted Grant's perspective that the seemingly endless boom of the post 2nd World War period would actually end and 'be followed by a catastrophic downswing, which cannot but have a profound effect on the political thinking of the enormously strengthened ranks of the labour movement' must have seen like madness to some at the time. However, as we have seen, the Marxist analysis has been proven to be more than correct in predicting the continuing crisis of capitalism over the last few decades. The text of 'Will there be a slump?' remains even today an excellent riposte to all those who thought that capitalism could by magic avoid crisis and enter a period of non-stop plenty.

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In 1958 there were fears of a slump spreading from the US economy. British CP leader Campbell started a campaign in consonance with Russian foreign policy to put the blame for the slump on the "Americans" and protested against the bankers' behaviour and the shortsighted British government's attempt to "create a slump" in the UK. Ted Grant argued against this nonsense that it is not the "obsessions" of the bankers nor the "stupidity" of the capitalists and their representatives which cause them to act in a certain way, but the economic laws of the capitalist system.

It was in [the post-war] period of upswing that the right wing of the labour movement – who always base themselves on the capitalist system, as opposed to socialist ideas – were given a new lease of confidence. The theoreticians of the right wing, in the Fabian Society, for example, fell over themselves to announce that class struggle was at an end and that the very concept of 'class' was losing its meaning. Slumps and mass unemployment were the horrors of the past that would never be repeated, society had learnt to overcome past conflicts and from now on, they argued, there would be a gradual and unbroken increase in living standards. The leadership of the Labour Party, around Hugh

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Throughout the civilized world the teachings of Marx evoke the utmost hostility and hatred of all bourgeois science (both official and liberal), which regards Marxism as a kind of "pernicious sect." And no other attitude is to be expected, for there can be no "impartial" social science in a society based on class struggle. In one way or another, all official and liberal science defends wage slavery, where Marxism has declared relentless war on wage slavery. To expect science to be impartial in a wageslave society is as silly and naive as to expect impartiality from manufacturers on the question of whether workers' wages should be increased by decreasing the profits of

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Value, Price and Profit was produced at a time when the labour theory of value had already matured in Marx’s brain. It was first delivered as a speech delivered by Marx to the International Working Men's Association (The First International) in June 1865, while he was working on the first volume of Capital that was published two years later.

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