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Sydney Ideas Key Thinkers Lecture Series

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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 [

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