1. Marx, Lenin & Imperialism Week 3

2. Karl Marx (1818-1883) obscure author in his lifetime posthumuous fame Das Kapital lays out theory Communist Manifesto lays out action plan

3. Dialectic Method Thesis → Anti-thesis → Synthesis ↓ Thesis → …

4. Historical Materialism Applying the dialectical method to the study of history. Marx claimed history will follow a course determined by material conditions. Slavery → Feudalism → Capitalism → Communism

5. Marxian Economics Labor theory of value. Surplus value. Exploitation

6. Marx’s attitude towards capitalism Marx was critical of utopian socialists who romanticized a pre-industrialized society. He remarked that capitalism “rescued a considerable part of the population from the idiocy of rural life.” He saw capitalism as an engine of economic growth but believed stresses would eventually cause give way to communism.

7. Five laws of capitalism leading to its self-destruction 1.Falling rate of profit. 2.Increasing concentration. 3.Deepening crises. 4.Industrial reserve army of unemployed. 5.Increasing misery and alienation of the proletariate.

8. Origin of profit Exploitation or risk-taking?

9. Communist Manifesto, 1848 Written with Friedrich Engels. Intended to speed the transition to communism through inciting the proletariate to revolt.

10. Nature of capital But does wage-labour create any property for the labourer? Not a bit. It creates capital, i.e., that kind of property which exploits wage-labour, and which cannot increase except upon condition of begetting a new supply of wage-labour for fresh exploitation. Property, in its present form, is based on the antagonism of capital and wage-labour. Let us examine both sides of this antagonism. To be a capitalist, is to have not only a purely personal, but a social status in production. Capital is a collective product, and only by the united action of many members, nay, in the last resort, only by the united action of all members of society, can it be set in motion. Capital is, therefore, not a personal, it is a social power. When, therefore, capital is converted into common property, into the property of all members of society, personal property is not thereby transformed into social property. It is only the social character of the property that is changed. It loses its class-character.

11. Ten Point Plan 1.Abolition of property. 2.Highly progressive taxation. 3.Abolition of right of inheritance. 4.Confiscation of property of emigrants and rebels. 5.Centralization of credit in the hands of the state.

12. Ten Point Plan cont. … 6. Nationalize means of communication and transportation. 7.Extension of production controlled by the state. 8.Equal obligation of all to work. 9.Abolition of distinction between town and country—mix agriculture with industry 10.Free education for all children, eliminate child labor.

13. Socialist Calculation Debate Could a centrally planned system replace the market system? Walras modelled the economy as a system of simultaneous equations. A central planned could simply solve the model for the appropriate prices and quantities. Is it that simple?

14. Issues Informational role of prices Consumer sovereignty Incentives for innovation

15. Vladimir Lenin 1870-1924

16. Bolsheviks Early 20 th century Russian political party founded by Vladimir Lenin who seized power in Russia in 1917 and founded the Soviet Union. Revolutionary proletariate.

17. Fourth Law As capitalist economies mature, as capital accumulates, and as profit rates fall, the capitalist economies are compelled to seize colonies and create dependencies to serve as markets, investment outlets, and sources of food and raw materials. In competition with one another, they divide up the colonial world in accordance with their relative strengths.''

18. Lenin Imperialism:The Highest State of Capitalism 1917 Half a century ago, when Marx was writing Capital, free competition appeared to the overwhelming majority of economists to be a "natural law." Official science tried, by a conspiracy of silence, to kill the works of Marx, who by a theoretical and historical analysis of capitalism proved that free competition gives rise to the concentration of production, which, in turn, at a certain stage of development, leads to monopoly. Today, monopoly has become a fact. The economists are writing mountains of books in which they describe the diverse manifestations of monopoly, and continue to declare in chorus that "Marxism is refuted." But facts are stubborn things, as the English proverb says, and they have to be reckoned with, whether we like it or not. The facts show that differences between capitalist countries, e.g., in the matter of protection or free trade, only give rise to insignificant variations in the form of monopolies or in the moment of their appearance; and that the rise of monopolies, as the result of the concentration of production, is a general and fundamental law of the present stage of development of capitalism.

19. Lenin cont… The principal feature of the latest stage of capitalism is the domination of monopolist combines of the big capitalists. These monopolies are most firmly established when all the sources of raw materials are captured by one group, and we have seen with what zeal the international capitalist combines exert every effort to make it impossible for their rivals to compete with them by buying up, for example, iron ore fields, oil fields, etc. Colonial possession alone gives the monopolies complete guarantee against all contingencies in the struggle with competitors, including the contingency that the latter will defend themselves by means of a law establishing a state monopoly. The more capitalism is developed, the more strongly the shortage of raw materials is felt, the more intense the competition and the hunt for sources of raw materials throughout the whole world, the more desperate is the struggle for the acquisition of colonies.