1. Sydney Ideas Key Thinkers Lecture Series
Karl Marx
Overheads used by John Buchanan
12 August 2009

2. Introduction The pleasure of ideas and thinking Arts revival
Consumer-driven approach
Question: Why is Marx still relevant and exciting?

3. The Challenge: Where do you begin?
Marx as historical figure
Marx as political influence
Academic ‘Marxism’ Industry
The two Marx’s
Revolutionary / activist
Researcher / analyst

4. Bases for evaluation Disciplines: history, law and economics
Outlook of an applied labour market researcher
Former environment, student and union activist
Understanding social reality
ie contributions to analysis/systematic thinking
Case studies from the world of work

5. Structure of Presentation
Essentials of his life and politics
The essentials of his analytical legacy
Social philosophy
Historical materialism
Political economy
Assessing his analytical legacy
analytical outlook (ie predisposition)
analytical leads (ie history and political economy)
analytical mode (ie epistemology)
analytical limits (ie closures)
Conclusion

6. Essentials of his life Remarkable career
Remarkable support (friend + wife)
Remarkably common weaknesses

7. Analytical Essentials (I) : Social Philosophy
Connoisseur of paradox + contradiction
=> grasping dialectal dynamics
Key human traits
- need to consume
- ability to produce
Key features of human existence
- scarcity
- surplus
Distinctiveness of human potential
- capable of so much more
- projective consciousness

8. Marx’s Essentials (II): Historical Materialism
Politics Ideology Law Culture
Superstructure
Social formation
Forces of production - materials - technology - labour
Relations of Production
ie property relations
Projective Consciousness Cooperates in setting of scarcity and surplus
Mode of production - Asiatic - Ancient - Feudal - Capitalist

9. Analytical Essentials (II): Historical Materialism
Example: Brenner on role of the peasantry – causality contingent

10. Analytical Essentials (III): Political Economy
Marx’s great project
Distinctiveness of capitalism: world of commodities
Three distinct dynamics of capitalism:
trade cycle [Capital Vol I]
growth dynamics [Capital Vol II]
falling rate of profit [Capital Vol III]

11. Distinctiveness of Capitalism: outwardly a world of commodity exchange
Markets long predate capitalism
but primarily for use values
C M C
Under capitalism markets predominate
Overwhelming for exchange value
M C M’

12. Trade Cycle: understanding booms/busts
[Capital Vol I]

13. Growth theory:
Understanding how output, income and expenditure rise (Capital Vol II)
Two Sector example: capital goods and consumption goods (ie Departments I+II)
→ Key issue: flow of capital, labour and surplus
investment, wages and profits
: provided capital and labour replenished +
profits ploughed back in necessary ratios
=> steady state growth possible

14. Growth theory: → But challenges are real
: differential rates of productivity growth between sectors
: consumption patterns don’t automatically adjust
: surplus can be misallocated
=> Potential for crisis of ‘structural adjustment’

15. Falling rate of profit: The Key Driver [Capital Vol III]
Capitalists ↑ investments to ↑ profit by ↓employment
- BUT: if surplus does not rise, profits fall
“Wages must not rise faster than growth in productivity”
=> Crisis in profitability is always potentially there

16. Falling rate of profit: The Key Driver [Capital Vol III]
This is a tendency, not a certainty. Counter trends include:
New inventions  cheaper goods + ↑ demand (Marx)
Mergers & acquisitions  concentrations of capital and scale economies (Marx)
Wages fall below subsistence level (Earned income tax Credits)
Foreign trade: export capital, import raw materials and consumer goods (“Globalisation”)
=> Crises can be avoided

17. Marx’s three cardinal facts of capitalist production
1. Concentration of means of production
 abolish private property
2. Labour constantly reorganised:
co-operation, re-divisions of labour + united with science
 abolish private labour
3. Creation of a world market
Capitalism grows but in a contradictory way via crises and cycles.
Whether crises are terminal is an empirical not conceptual question

18. Assessing the analytical legacy
Predisposition
Analytical leads
Mode of inquiry and presentation
Closures

19. Analytical Predisposition I
The power of paradoxes
non-linear thinking
Understanding dynamism/tendencies and countervailing tendencies

20. Analytical Predisposition
The great taboo: What is wrong with the private property system?
ie. Questioning of established social relations
Legacy - opens up space
: analytically
: politically/policy
Example Swedish union wages policy + Wage Earner Funds

21. Analytical Leads The importance of production and social surplus
Legacy
- offers powerful leads for inquiry
Example
- rising non-standard employment
+ accumulation based on inequality

22. (adjusted for indirect business taxes)
US net profit rates,
(adjusted for indirect business taxes)
0.35
NONFARM
0.3
NONFARM NONMFGR
MFGR
0.25
0.2
profit rates
0.15
0.1
0.05
1948
1950
1952
1954
1956
1958
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
years
Source: Robert Brenner (UCLA) "The Boom and the "Bubble" (Verso 2002)

23. Distribution of US profits in manufacturing
Retained earnings, interest and dividends
(%) 75 25
0.01
(%) 40 36 24
Retained Earnings
Dividends
Interest
Source: Robert Brenner, The Economics of Global Turbulence, New Left Review, No 299, June, 1990

24. Macro circuits: households and firms
Composition of Demand
Distribution of income
Tastes
Distribution System
Firms by Sector
Manufacturing
Services
Public
Households by Type:
Size/no. of persons
Economically active
Welfare/private pension
Composition of Employment
Manufacturing/services/government
Full-time/part-time
Temporary/permanent
Male/female
Manual/non-manual
Source: Froud etal 1997, ‘From Social Settlement to Household Lottery: Economy and Society’, Vol 26, No 3, 1997 pp340-72

25. Analytical Mode (epistemology)
Pragmatic realism
Legacy
- conceptual precision: historical + logical
- immense appetite for the empirical
- validation through practice
Example
- skill formation problems in Victorian manufacturing

26. Marx’s method of inquiry
2. Historical analysis
3. Structural analysis
1. Research Presentation
5. Validation

27. The Challenge for Victorian Manufacturing: Deployment Crushing Development of Labour
Fuels new revitalised growth path
Scenario A: Upward Spiral
‘Turning the tide’
Building new capacity
Modernising existing capacity
“Farmers eating their seeds”
Implications: (i) limited capacity to handle:
New skill requirements
Established skill requirements
(ii) Victorian innovation provide future pointers
Breakdown in on + off job training
Skill impacts
Direct
indirect
Excess capacity
Intense competition
Scenario B: Downward Spiral: steady slide of manufacturing
Changing role of large workplaces
New organisational forms

28. Method of presentation
Drew on all realms of human understanding to grasp the dynamism of capitalism
- Combined both ‘science’ and art
‘Capital’ as a work that captures all facets of social complexity
- Interest in the ‘artistic whole’

29. Analytical Closures Technicist and reductionist (tendencies)
- problem shared with liberals (eg Adam Smith)
Legacy
- limits analytical and political possibilities in the current situation
- neglected dynamics of consumption
Examples - labour as a commodity (Biernacki 1995)
- consumption and status anxiety (Schor, Frank, de Botton)

30. Why is Marx still relevant and exciting?
Conclusion
Why is Marx still relevant and exciting?
Analytical predisposition ► opens up space
Analytical categories ► powerful leads in inquiry
Analytical approach ► links theory, data and practice
Analytical closures: can be transcended

31. Conclusion Basically:
Marx offers powerful pointers for understanding the past and present to better guide the struggle for a more just future

32. References: Commentaries:
K.Marx & F.Engels:The Communist Manifesto, originally published 1848
K.Marx: Contribution to a Critique of Political Economy, originally published in 1859 (especially preface and introduction)
Commentaries:
General overview
Francis Wheen, Karl Marx. A Life, Fourth Estate, London, 2000
Jonathan Wolff, Why read Marx today?, Oxford UP, 2002
(b) Historical materialism
John McMurtry, Structure of Marx World View, Princeton UP, 1978
(c) Political economy
Michael Lebowitz, ‘Karl Marx: The Needs of Capital vs. the Needs of Human Beings’ in Douglas Dowd (ed), Understanding Capitalism. Critical Analysis from Karl Marx to Amartya Sen, Pluto Press, London, 2002 pp
Francis Wheen, Marx’s Das Kapital. A Biography, Allen and Unwin, Sydney, 2006
(d) Marxian Analysis of the current situation
Meghnad Desai, Marx’s Revenge. The Resurgence of Capitalism and the Death of Statist Socialism, Verso, London 2002
Robert Brenner, ‘Towards the Precipice’, London Review of Books, Volume 25, No 3, 2003.
Robert Brenner, JeongSeong-jin, ‘Overproduction not Financial Collapse is the Heart of the Crisis: The US, East Asia and the World’, The Asia-Pacific Journal, Vol , February 7, 2009 [