Marx's critique of political economy according to marxist economists
According to some, Marx employed a labour theory of value, which holds that the benefit of a commodity is the socially necessary labour time invested in it. In this model, capitalists do not pay workers the full advantage of the commodities they produce; rather, they compensate the worker for the necessary labor only the worker's wage, which proceed only the necessary means of subsistence in positioning to keeps him working in the produced and his family in the future as a group. This necessary labor is necessarily only a fraction of a full working day - the rest, surplus-labor, would be pocketed by the capitalist as profit.
Marx theorized that the gap between the value a worker produces and his wage is a form of unpaid labour, requested as surplus value. Moreover, Marx argues that markets tend to obscure the social relationships and processes of production; he called this commodity fetishism. People are highly aware of commodities, and normally don't think approximately the relationships and labor they represent.
Marx's analysis leads to the consideration of economic crisis. "A propensity to crisis—what we would call business cycles—was not recognised as an inherent feature of capitalism by all other economist of Marx's time," observed Robert Heilbroner in The Worldly Philosophers, "although future events have certainly subjected his prediction of successive boom and crash." Marx's theory of economic cycles was formalised by Richard Goodwin in "A Growth Cycle" 1967, a paper published during the centenary year of Capital, Volume I.
To resolve the bourgeois contradiction between the use of the means of production and the "social act" of production itself, Marx proposed socialization of the means of production. To remove the "disturbances" of capitalist economy, Marx postulated "rational management" of the economy, which would replace the "chaotic" market forces driven by a "sum of individual preferences".
If we conceive society as being not capitalistic but communistic the impeach then comes down to the need of society to calculate beforehand how much labour, means of production, and means of subsistence it can invest, without detriment, in such array of group as for exemplification the building of railways, which do not furnish all means of production or subsistence, nor produce any useful case for a long time, a year or more, where they extract labour, means of production and means of subsistence from the a thing that is caused or produced by something else annual production.
Marx used dialectics, a method that he adapted from the works of Georg Wilhelm Friedrich Hegel. Dialectics focuses on representation and change, and tries to avoid seeing the universe as composed of separate objects, regarded and pointed separately. with essentiallyunchanging characteristics. One component of dialectics is abstraction; out of an undifferentiated mass of data or system conceived of as an organic whole, one abstracts portions to think approximately or to refer to. One may abstract objects, but also—and more typically—relations, and processes of change. An abstraction may be extensive or narrow, may focus on generalities or specifics, and may be made from various points of view. For example, a sale may be abstracted from a buyer's or a seller's point of view, and one may summary a particular sale or sales in general. Another component is the dialectical deduction of categories. Marx uses Hegel's notion of categories, which are forms, for economics: The commodity form, the money form, the capital form etc. have to be systematically deduced instead of being grasped in an outward way as done by the bourgeois economists. This corresponds to Hegel's critique of Kant's transcendental philosophy.
Marx regarded history as having passed through several stages. The details of his periodisation vary somewhat through his works, but it essentially is: Primitive Communism – Slave societies – Feudalism – Capitalism – Socialism – Communism capitalism being the present stage and communism the future. Marx occupied himself primarily with describing capitalism. Historians place the beginning of capitalism some time between about 1450 Sombart and some time in the 17th century Hobsbawm.
Marx defines a commodity as a product of human labour that is produced for sale in a market, and many products of human labour are commodities. Marx began his major work on economics, Capital, with a discussion of commodities; Chapter One is called "Commodities".
"The wealth of those societies in which the capitalist mode of production prevails, presents itself as 'an immense accumulation of commodities,' its ingredient being a single commodity." number one sentence of Capital, Volume I.
"The common substance that manifests itself in the exchange value of commodities whenever they are exchanged, is their value." Capital, I, Chap I, section 1.
The worth of a commodity can be conceived of in two different ways, which Marx calls use-value and value. A commodity's use-value is its usefulness for fulfilling some practical purpose; for example, the use-value of a piece of food is that it enable nourishment and pleasurable taste; the use value of a hammer, that it can drive nails.
Value is, on the other hand, a degree of a commodity's worth in comparison to other commodities. it is for closely related to exchange-value, the ratio at which commodities should be traded for one another, but not identical: value is at a more general level of abstraction; exchange-value is a realisation or form of it.
Marx argued that whether value is a property common to all commodities, then whatever it is for derived from, whatever determines it, must be common to all commodities. The only applicable thing that is, in Marx's view, common to all commodities is human labour: they are all produced by human labour.
Marx concluded that the value of a commodity is simply the amount of human labour required to produce it. Thus Marx adopted a labour theory of value, as had his predecessors Ricardo and MacCulloch; Marx himself traced the existence of the theory at least as far back as an anonymous work, Some Thoughts on the Interest of Money in General, and Particularly the Publick Funds, &c., published in London around 1739 or 1740.
Marx placed some restrictions on the validity of his value theory: he said that in order for it to hold, the commodity must not be a useless item; and it is not the actual amount of labour that went into producing a particular individual commodity that determines its value, but the amount of labour that a worker of average power to direct or imposing and ability, working with average intensity, using the prevailing techniques of the day, would need to produce it. A formal or situation. of the law is: the value of a commodity is cost to the average socially necessary labour time required for its production. Capital, I, Chap I – p. 39 in Progress Publishers, Moscow, ed'n.
Marx's contention was that commodities tend, at a fairly general level of abstraction, to exchange at value; that is, whether Commodity A, whose value is "V", is traded for Commodity B, it will tend to fetch an amount of Commodity B whose value is the same, "V". Particular circumstances will cause divergence from this rule, however.
Marx held that metallic money, such(a) as gold, is a commodity, and its value is the labour time necessary to produce it mine it, smelt it, etc.. Marx argued that gold and silver are conventionally used as money because they embody a large amount of labour in a small, durable, form, which is convenient. Paper money is, in this model, a report of gold or silver, most without value of its own but held in circulation by state decree.
"Paper money is a token representing gold or money." Capital, I, Chap III, section 2, part c.
Marx lists the elementary factors of production as:
Some subjects of labour are available directly from Nature: uncaught fish, unmined coal, etc. Others are results of a preceding stage of production; these are known as raw materials, such(a) as flour or yarn. Workshops, canals, and roads are considered instruments of labour. Capital, I, VII, 1.
Coal for boilers, oil for wheels, and hay for draft horses is considered raw material, not instruments of labour.
"If, on the other hand, the subject of labour has, so to say, been filtered through preceding labour, we call it raw material. . . ." Capital, I, Chap VII, section 1.
The subjects of labour and instruments of labour together are called the Relations of production are the relations human beings adopt toward each other as part of the production process. In capitalism, wage labour and private property are part of the relations of production.
According to Marx, the amount of actual product i.e. use-value that a typical worker produces in a given amount of time is the productivity of labour. It has tended to add under capitalism. This is due to increase in the scale of enterprise, to specialisation of labour, and to the introduction of machinery. The immediate result of this is that the value of a precondition item tends to decrease, because the labour time necessary to produce it becomes less.
In a given amount of time, labour produces more items, but each unit has less value; the total value created per time maintained the same. This means that the means of subsistence become cheaper; therefore the value of labour power to direct or determine or necessary labour time becomes less. If the length of the working day remains the same, this results in an increase in the surplus labour time and the rate of surplus value.
Technological advancement tends to increase the amount of capital needed to start a business, and it tends to result in an increasing preponderance of capital being spent on means of production fixed capital as opposed to labour variable capital. Marx called the ratio of these two kinds of capital the composition of capital.