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Karl Heinrich Marx

May 5, 1818 March 14, 1883 Economic Theory

 He

was a prolific writer, despite his personal life tragedies.  Here is a brief list of works by Karl Marx
– 1844: – A Contribution to the Critique of Hegel's Philosophy of Right. Introduction – Outlines of a Critique of Political Economy – Critical Notes on "The King of Prussia" – Economic and Philosophic Manuscript – 1845: Theses on Feuerbach

The Works of Marx

Additional Works by Marx
 He

also wrote many articles with F. Engels

– – – – –

Communist League (1847) The Communist Manifesto (1848) England's 17th c. Revolution (1850) The Alleged Splits in the International (1872) Reformists in Germany's Social-Democratic party (1879)

DAS KAPITAL
 The

most important work by Karl Marx is clearly Das Kapital which appeared in three volumes. Only volume I appeared while he was alive. Volumes II and III were edited by Engels and appeared after Karl Marx’s death in 1883

Georg Hegel 1770-1831 – Hegelian Philosophy Thesis Anti-thesis Synthesis .

paintings of GOD in the image of Man – Alienation “process and result of converting the product of the individual as a social activity into something that is part of themselves -both independent and dominant” .Ludwig Feuerbach  Doctrine of Materialism – Man is object of “conscious” rather than “unconscious” – For instance.

monotonous tasks .workers dehumanized by repetitive. Adam Smith had similar concerns in that he saw: – Social disadvantage .Dialectic Materialism  Marx agreed with Adam Smith on the importance of the division of labor to economic evolution.  He saw conflict will arise as a result from the division of labor  Recall.

 Resulting into socialism and communism Conflicts due to division of Labor . human’s labor becomes an alien power. opposed to them and enslaving them. conflict among the different types of labor  Eventually individual conflicts with society as workers become “enslaved” to their trade  Eventually. industry from commerce  Then. Next.

Urban – Worker vs. Owner – Innovation vs.Dialectic Materialism The Conflicts  For instance. Marx viewed with concern the opposing (conflicting) scenarios brough about by dialectic materialism – Rural vs. Status Quo . Industry and commerce separate from agriculture with resulting – conflict between city and rural areas  In general.

Dynamic Religion. Labor. Capital. Government Static Relations of Production Dynamic Social Superstructure Private Property. Law. and Technology . Wage System Factors of Production Land.Static vs.

Economic and Philosophic Manuscripts of 1844 (published in 1932)  Appears his thoughts were more consistent between early writings and Das Kapital than at first thought. Among the points: – Criticized political economist for only explaining the workings of the economy rather than the causes – Contradiction in that more wealth the worker produces the poorer they became .

5 Laws of Capitalist Motion  LAW I: Law of Accumulation and Failing Rate of Profit – K L p  II: due to p  in Law I then  Law of Concentration and Centralization of Industry  LAW – Concentration only way to keep p high .

)  LAW III  Because of the existence of Laws I and II there will result  The Law of a Growing Industrial Reserve Army – UNEMPLOYMENT .Laws of Accumulation (cont.

)  As a consequence of increased unemployment then  LAW IV: The Law of Increasing Misery of the Proletariat  LAW V: The Law of Crisis and Depressions .Laws of Accumulation (cont.

Communist Manifesto  Written in 1848 it was commissioned to Marx and Engels at the second Congress of the League of Communists in London .

. by degree.Communist Manifesto (cont. all capital from the bourgeoisie. the first step in the revolution by the working class is to raise the proletariat to the position of ruling class to win the battle of democracy  The proletariat will use its political supremacy to wrest.. . to centralize all instruments of production in the hands of the state.)  .

Communist Manifesto (cont.)  10 Points which. Abolition of all rights of inheritance. A heavy progressive or graduated income tax. in general. Abolition of property in land and application of all rents of land to public purposes. – 3. – 2. will be needed for the proletariat to take over: – 1. .

. Centralization of credit in the banks of the state. Centralization of the means of communication and transport in the hands of the state.) – 4. – 5. Confiscation of the property of all emigrants and rebels. by means of a national bank with state capital and an exclusive monopoly – 6.Communist Manifesto (cont.

) – 7. especially for agriculture. . – 8. the bringing into cultivation of waste lands. Equal obligation of all to work. Establishment of industrial armies. Extension of factories and instruments of production owned by the state.Communist Manifesto (cont. and the improvement of the soil generally in accordance with a common plan.

Free education for all children in public schools. etc.Communist Manifesto (cont. Combination of agriculture with manufacturing industries. gradual abolition of all the distinction between town and country by a more equable distribution of the populace over the country.) – 9. Combination of education with industrial production. – 10. . Abolition of children's factory labor in its present form.

The Great Contradiction  If the Exchange value of commodities is determined by the labor time they contain. how can these commodities frequently differ from their labor values?  In other words: Competition is supposed to produce equal profits across industries  Yet capital/labor ratios differ between industries .

)  Thus. he used the following formulas .The Great Contradiction (cont. according to Marx since labor is the sole source of surplus it must be that labor intensive industries should have the largest possible profits  In order to argue against the critics.

k .e. depreciation plus the cost of raw materials) – Variable Capital (v)  total wages paid to labor – Outlay (k)  cost of production • (excluding profits) or c + v – Surplus Value  Total Revenues .(c+v) • or Total Revenues .The Great Contradiction (cont.)  Definitions – Constant Capital (c)  charges on fixed capital • (i.

) – Rate of surplus value (s)  s/v – Rate of profit (p)  s/ k – Organic composition of capital (O)  ratio of capital to labor  In contemporary terms – GNP = c + v + s = k + s – NNP = v + s .The Great Contradiction (cont.

)  ASSUMPTIONS: – Different commodities are produced at different organic composition of capital – rate of surplus is taken to be 100% (for simplicity) – Competition will equalize the average profit .The Great Contradiction (cont.

Transformation of Values to Prices (1) Commodity A B C D E Total (2) c+v 80+20 70+30 60+40 85+15 95+5 500 (3) c used 50 51 51 40 10 202 (4) cost 70 81 91 55 15 312 (5) s 20 30 40 15 5 110 (6) v 90 111 131 70 20 422 (7) profit 22 22 22 22 22 22 (8) sale 92 103 113 77 37 422 (9) deviation +2 -8 -18 +7 +17 0 .

Explanation of Table  Column 1: represents five different commodities  Column 2: capital/labor ratios with outlay being a $100 per industry and $500 for entire economy  Column 3: Amount of constant capital (c) used .

Transformation of Values to Prices (1) Commodity A B C D E Total (2) c+v 80+20 70+30 60+40 85+15 95+5 500 (3) c used 50 51 51 40 10 202 (4) cost 70 81 91 55 15 312 (5) s 20 30 40 15 5 110 (6) v 90 111 131 70 20 422 (7) profit 22 22 22 22 22 22 (8) sale 92 103 113 77 37 422 (9) deviation +2 -8 -18 +7 +17 0 .

)  Column 4: Cost of product (c+v)  Column 5: Surplus value (since a 100% is assumed that implies that s=v  Column 6: TRUE value of product according to Marx (4)+(5) .Explanation of Table (cont.

Transformation of Values to Prices (1) Commodity A B C D E Total (2) c+v 80+20 70+30 60+40 85+15 95+5 500 (3) c used 50 51 51 40 10 202 (4) cost 70 81 91 55 15 312 (5) s 20 30 40 15 5 110 (6) v 90 111 131 70 20 422 (7) profit 22 22 22 22 22 22 (8) sale 92 103 113 77 37 422 (9) deviation +2 -8 -18 +7 +17 0 .

)  Column 7: Average profits (recall that p= s/ k or 110/500=.Explanation of Table (cont.22)  Column 8: Sale price (4) + (7)  Column 9: Deviation of Price from Value (8)-(6) .

Transformation of Values to Prices (1) Commodity A B C D E Total (2) (3) c+v c used 80c+20c 50 70c+30v 51 60c+40v 51 85c+15v 40 95c+5v 10 500 202 (4) cost 70 81 91 55 15 312 (5) s 20 30 40 15 5 110 (6) v 90 111 131 70 20 422 (7) profit 22 22 22 22 22 22 (8) sale 92 103 113 77 37 422 (9) deviation +2 -8 -18 +7 +17 0 On average the difference is zero .

Those who used Marx  Vladmir Ilyich Lenin  Indicated that the movement towards communism could be shortened in order to be applicable in Russia .

.. during the transition from capitalism to communism suppression is still necessary.Lenin on How to Achieve Communism  ... but it is now the suppression of the exploiting minority by the exploited majority..

a special machine for suppression.A special apparatus. but this is now a transitional state. . the "state". simple and natural a task that it will entail far less bloodshed than the oppression of the rising of slaves. is still necessary. It is no longer a state in the proper sense of the word. serfs or wage-laborers. for the suppression of the minority of exploiters by the majority of the wage slaves of yesterday is comparatively so easy. and it will cost mankind far less.

The development of capitalism proceeds extremely unevenly in different countries. It cannot be otherwise under commodity production. it presupposes wars. From this it follows irrefutably that socialism cannot achieve victory simultaneously in all countries.Why Russia needs to be ready for War  the victory of socialism in one country does not at one stroke eliminate all wars in general. On the contrary. .

This is bound to create not only friction. while the others will for some time remain bourgeois or pre-bourgeois. In such cases. a war on our part would be a legitimate and just war .It will achieve victory first in one or several countries. but a direct attempt on the part of the bourgeoisie of other countries to crush the socialist state's victorious proletariat.

 In 1940.murdered by assassin.  .  Architect of the Red Army. deported from the USSR by Stalinists.  In 1929. Commissar of foreign affairs between 1917-1924.Leon Trotsky Leader of the Russian Revolution.

1976 .MAO TSE-TUNG 1893 .

MAO TSE-TUNG  The transition to communism is based on:  the numerous types of state system in the world can be reduced to three basic kinds according to the class character of their political power: – (1) republics under bourgeois dictatorship. . and – (3) republics under the joint dictatorship of several revolutionary classes. – (2) republics under the dictatorship of the proletariat.

and the conditions for its birth are ripening in capitalist countries. . In the future.MAO TSE-TUNG  The first kind comprises the old democratic states  The second kind exists in the Soviet Union. it will be the dominant form throughout the world for a certain period.

but these will be minor variations on a general theme . Each of these revolutions will necessarily have specific characteristics of its own.MAO TSE-TUNG  The third kind is the transitional form of state to be adopted in the revolutions of the colonial and semi-colonial countries.

On why democracy is not needed to evolve to Communism  The so-called democratic system in modern states is usually monopolized by the bourgeoisie and has become simply an instrument for oppressing the common people. . the Kuomintang's Principle of Democracy means a democratic system shared by all the common people and not privately owned by the few. On the other hand.