ECONOMIC ANALYSES – CHAPTER 4 KARL MARX

CAPITALISM Capitalism contains seeds of its own destruction. Focus on profits  Unemployment  Class consciousness  Revolution (social change)

3 BASE—SUPERSTRUCTURE RELATIONSHIP

CAPITALIST SUPERSTRUCTURE

BASE AND SUPERSTRUCTURE Relationship of superstructure and base Dialectical Interdependent

COMMODITIES Core element of capitalism Marx defined commodities as: External objects Capable of satisfying human needs

THE VALUE OF COMMODITIES Two features: 1.Use-value: Function of actual physical properties of a commodity Purpose to which it can be put

THE VALUE OF COMMODITIES 2. Exchange-value: Worth relative to other commodities Modern societies: Exchange- value expressed in monetary terms (money)

THE VALUE OF COMMODITIES com·mod·i·ty – noun. 1.A thing that exists “outside of us” that we exchange for something we want or need. 2.Something with use-value and exchange-value. USE VALUE = = Protect your feet when walking = $65 or $20 = (O f little use to the capitalist) (Potential profits for the capitalist) EXCHANGE VALUE

THE VALUE OF COMMODITIES Capitalism: Almost all production is directed at exchange-value rather than use-value Exchange value  Surplus value

THE VALUE OF COMMODITIES Surplus value= Profit Exchange value minus production costs Labor theory of value: Exchange value determined by labor time required for production

CAPITALISM & COMMODITIES Capitalism: Surplus value (profit) Dependent on individuals wanting more and more products To Generate profit: Expand markets Sell more commodities Commodification

COMMODIFICATION OF SOCIAL LIFE: More and more of social life: Relationships Institutions Desires Feelings Becomes commodified: Packaged and sold in marketplace for profit

LOVE IN CAPITALISM: “SHOPPING” FOR LOVE Commodification of Love and Relationships Commodification of Romance

THE CIRCULATION OF COMMODITIES Simplest form of exchange--Barter Economies became more complex and money was introduced Stages: People moved from role of buyer to seller and back again = Circulation of Commodities

THE FETISHISM OF COMMODITIES Detachment of objects from human efforts that created them. Money so worshiped that objects are evaluated in terms of monetary value Money is used to express the value of all commodities

ACCUMULATION OF CAPITAL Capital=Wealth in the form of money or other assets For particular purpose: Starting a company Investing

THE ACCUMULATION OF CAPITAL Marx described 2 functions of money. 1.Selling in order to buy A commodity (C) is transformed into money (M), then reconverted into a commodity (C) In summary C-M-C Money spent  Use-value to purchaser Commodity is consumed

THE ACCUMULATION OF CAPITAL 2.Buying in order to sell M-C-M: Money  Commodities  Money Motivating force is exchange value rather than use-value Result: Worthless products Dangerous products Waste

THE ACCUMULATION OF CAPITAL Money, unlike commodities, is distinguishable only in amount C-M-C transactions end M-C-M continues indefinitely M does not disappear “Money begets Money”

THE ARMY OF THE UNEMPLOYED The greater the size of army The more capitalists can force workers to: Increase production and Accept lower wages

CLASS THEORY: Under capitalism, there is antagonism between the buyers and sellers of labor power Between exploiters and the exploited

SOCIAL CHANGE Classes through history: Free men and slaves Patrician and plebian Baron and serf Nobility and bourgeoisie Bourgeoisie and proletariat Exploiters and exploited

SOCIAL CHANGE “The history of all hitherto existing society is the history of class struggles.” (Marx)