1. Karl Marx & Marxism

2. biography  Born 1818 in French/German town of Trier  Jewish extraction  Studied philosophy and economics in Berlin  Married Jenny von Westphalen  Largely lived off of her inheritance  Earned his living (badly) as a journalist  Died 1883 in London having only written 3 of the planned 8 volumes of Das Kapital.

3. Politics  Marx was a communist.  He wrote The Communist Manifesto with his friend, Friedrich Engels in 1848.  He had three kinds of writing:  Journalism  Political polemic  Analysis of society and culture.

4. Marxism  Socialism states that the resources should be in the hands of the workforce, not the few rich people there are  The true duty of the government is to place the ‘national property’ under the control of the “common” person.  Communism is a political philosophy which argues that men should have equal rights to wealth  Marxism is a way of understanding and analysing the organisation and structure of society  It is also a way of understanding how societies develop and change.

5. Theory of Dialectical Materialism  Social and economic change through conflict  Emerging classes associated with economic innovations come into conflict with the old  Replacement of an old economic order with a superior one  Capitalism is a qualitative leap over feudalism  Socialism is a qualitative leap over capitalism

6.  Material, or physical, conditions are what historical changes are made of.  All history is history of the class struggle  All history is history of the class struggle.  Everything depends upon historical circumstances and material conditions of the time. Dialectical materialism

7. Marx’s role in history  When Marx died, he was not well known except in revolutionary circles.  After his death, his writing prompted a number of politicians to lead revolutions in his name.  Many of these societies were totalitarian.  His philosophy underlies the thinking of many political parties “History repeats itself, first as tragedy, second as farce”

8. Conflict theory  All societies are divided into two groups:  Owners  Workers  Our society is capitalist  Owners are bourgeoisie  Workers are proletarians  “The history of all hitherto existing society is the history of class struggle.”

9. Owners and workers  Owners exploit workers and live off the money which the workers earn  Workers put up with this inequality because:  They are oppressed wage slaves and cannot fight the system  They are indoctrinated by ideology and religion into believing what they are told by the powerful  “In bourgeois society capital is independent and has individuality, while the living person is dependent and has no individuality”

10. Capitalism  Inefficient feudalism replaced by far more efficient capitalism  As capitalism emerges, there is an accumulation of capital (wealth) by the bourgeoisie (the capitalists) and the creation of a free (i.e., not serf) labor force, the proletariat  Extreme dichotomy between capital and labor  Sets up two classes which must eventually conflict

11. Cut-Throat Capitalism and the Internal Contradiction  Each firm in cut-throat competition for each other’s business  Driven to gain temporary competitive advantage over others  The way to do this is to introduce labor saving innovations  that is, replace labor with capital  But innovation diffuses quickly through economy, dissipating innovator’s advantage

12.  Thus, throughout the economy, capitalists are driven to accumulate capital in order to replace labor with capital  But as labor is replaced with capital, the organic composition of capital rises  As the organic composition of capital rises, the rate of profit falls  Capitalists try to keep up rate of profit by exploiting labor more and more  More and more firms fall behind and fail  bankrupt capitalists lose their capital and join the swelling ranks of the proletariat

13. Value Theory of Labor  Marx models an internal contradiction which sets up the conflict between classes  Proposes a “labor theory of value”  Long run value determined by three things  amount of labor used to produce the good  indirect embodiment of labor through capital and intermediate inputs  the capitalist’s surplus

14. Surplus Value  Where does this surplus value come from?  Workers are paid a subsistence wage  Employers compel workers to produce a value above that needed to generate subsistence wage  The workers get the subsistence wage, the capitalist gets the surplus  the “Reserve Army of the Unemployed” keeps wages at subsistence level  exploitation of labor

15. Overproduction  Tendency toward overproduction  workers too poor to buy much  capitalists too busy saving (accumulating capital)  economic depressions become more and more severe

16. Revolution  The stage is set for revolution  proletariat swelling and becoming increasingly exploited  bourgeoisie shrinking and becoming increasingly cut-throat  the proletariat rises up in revolt, replacing the bourgeoisie as the dominant class and creating the new socialist order

17. Marx and The Revolution  Marx predicted that wealth would belong to fewer and fewer people.  The workers would eventually realise their position and overthrow the bourgeoisie  There would be an armed revolution which would begin in Britain.  It would happen in the very near future.

18. Implication of the Model  Revolution will occur in most advanced (i.e., ripest) capitalist economy  Germany  UK NO  Did it? NO  Revolution occurs in Russia  hardly a mature capitalist economy