See discussions, stats, and author profiles for this publication at: https://www.researchgate.net/publication/321255666 Karl Marx and the Marxist School Working Paper · November 2017 DOI: 10.13140/RG.2.2.27320.03847 CITATIONS READS 0 15,446 1 author: Scott Carter University of Tulsa 19 PUBLICATIONS 59 CITATIONS SEE PROFILE Some of the authors of this publication are also working on these related projects: From Pool of Profits to Surplus and Deficit Industries View project All content following this page was uploaded by Scott Carter on 23 November 2017. The user has requested enhancement of the downloaded file. 1 Karl Marx and the Marxist School Scott Carter, The University of Tulsa ([email protected])1 • Marx was a working class revolutionary thinker whose economic theories were designed for a mass working class audience • Marx’s economic thought developed as a sustained critique of Classical Political Economy and addressed many of the short-comings in the labor theory of value of that approach • Marx’s method of historical materialism considers social formations as evolving and developing from earlier forms often through revolutionary struggle • Marx’s contribution to the Classical labor theory of value includes the notion of the value of labor power and theory of surplus-value defined as the exploitation of the unpaid labor of workers • Marx’s theory of surplus value expresses itself in an understanding of the division of the working-day into necessary and surplus labor time which serves as the foundation upon which his economic theories are built • Marx’s economic theories are rich and includes among other things theories of accumulation, circuits of revenue and capital, schemes of social reproduction, crisis theory and the falling rate of profit, the reserve army of labor, and the transformation of values into prices of production 0. Introductory Few figures in the history of economic thought have been the source of more controversy, ranging from complete scorn and vilification to sanctification and adulation, than Karl Heinrich Marx (1818- 1883). Marx was a philosopher, profoundly deep social thinker, political economist, and working- class intellectual and revolutionary. Marx was a mighty thinker with a very fertile mind of immense prowess and intellectual stature upon whose work the Marxist School is founded. But Marx’s impact is not limited to the School that bears his name, as many Schools of thought - friend and foe alike - owe a tremendous debt of gratitude to the Old Moor, as Marx was affectionately called by his friends, ostensibly due to his dark complexion and coarse hair. Marx’s economic theory as devised by the Master himself was intended to be revolutionary and written from the historical perspective of a class-conscious revolutionary proletariat and working- class. Whether or not this necessarily matters in terms of the analytics of Marx’s economic theory strictly-speaking is a subject of some debate, as there are certain authors that argue the “partisan political revolutionary” elements need to be separated from the “objective economic” in appraisals of Marx’s overall merit in terms of an economic theoretician (see for example Morishima 1973, pp.4-5). But for Marx the theory was explicitly developed through active struggle as a working-class 1 Associate Professor, Department of Economics, The University of Tulsa, Oklahoma, USA. Chapter to appear in Hassan Bougrine and Louis-Philippe Rochon A Short History Of Economic Thought: Major Contributions since Adam Smith, (forthcoming Edward Elgar). 2 perspective on, and understanding of, the capitalist mode of production. One commentator writes that: “Marx wrote his political economy for what he hoped would be a mass working-class audience; whatever its actual reception, it was intended as a weapon in the class struggle” (King 1980, p. 370). Marx considered his approach advancing the mantle of political economy as a science beyond what, in the Afterward to the Second German Edition of Das Kapital, he called the “bourgeois horizon” that had confounded the Classical Political Economy of his predecessors, namely Adam Smith (1723-90), David Ricardo (1772-1823), Thomas Robert Malthus (1766-1834), and John Stuart Mill (1806-73) to name some of the most important figures in that approach (MECW, Vol. 35, p. 14; Fowkes. p. 96). 2 It is important also to understand that although Marx is most associated with theories of socialism and communism, in fact the overwhelming majority of his inquiries concerned only capitalism. Marx and the school of thought he inspired approaches the study of capitalism through the lens of historic-specificity, by which is meant that capitalism as a mode of production has a lifespan of its own: it was born at a specific historical juncture, has matured since that time in ways that have often been remarkably transformative, and eventually it will die and give way to post-capitalist socio-economic formations. This is a unique feature of the Marxist School that as discussed below relies heavily on the Marxian method of historical materialism. 1. Marx in the history of economic thought The history of economic thought is unlike the history of most other sciences in that the development of ideas does not proceed in a linear fashion where early notions once shown to be “wrong” are jettisoned in favor of newer ones that are shown to be “right”. Economic thought instead proceeds zig-zag like, with starts and stops such that many years later (sometimes decades and/or centuries), ideas thought to be long dead are revived and given modern polish and relevance. This attribute arises because some of the most fundamental foundational building blocks of economic science still to this day remain unresolved. Nowhere is this more obvious than the theory of value and price, and it is from that perch the present study of Marx and the Marxist school begins. By theory of value we mean the theory or explanation that underlies the exchange relation observed in social formations governed by the market mechanism, where goods and services are produced for 2 To facilitate study of the original material which readers are strongly encouraged to do, quotes by Marx from Capital Volume I are cited from two alternative sources: (i) Marx-Engels Collected Works (MECW) Vol. 35 where Volume I falls; and (ii) citation from the Ben Fowkes translation originally published in 1976 by Vintage Press and later picked up by Penguin Classics. The Fowkes translation is the edition studied by the present writer in graduate school, etc., although the trend lately is to cite from the Collected Works so as to facilitate study across the corpus the writings of Marx and Engels. All citations in the present essay are from MECW. The Marx-Engels Collected Works (complied between 1975 and 2005) is a 50-volume set of the works of Marx and Engels translated from original German Marx-Engels-Gesamtausgabe (MEGA) into English originally arranged by the Institute of Marxism-Leninism in Moscow and published by Lawrence & Wishart in the UK in collaboration with International Publishers in the USA under the auspice of an international commission of scholars from the then-USSR and later Russian Republic, USA, and UK. Interested readers can find freely available online versions and transcriptions of the entire MECW as well as a plethora of other resources at the Marxist Internet Archive (https://www.marxists.org/). 3 exchange thereby fetching a unit-price, and whose allocation is garnered through exchange of commodities for money (“buying”) and money for commodities (“selling”). It is important to emphasize that the exchange relation is an objective condition faced in market societies, and the role of economic science is (or at least should be) to provide cogent, logically-consistent, and robust explanations for this objective fact. To illustrate consider the following heuristic example. Let there be two different goods, A and B. Suppose that in the market it is observed that 2 units of A (2A) costs the same as 1 unit of B (1B), and that for simplicity that cost is $1. This says that for one dollar buyers can purchase 2 units of A and for the same dollar they can alternatively purchase 1 unit of B. The question any theory of value must try to answer is, why? What is it about 2A that makes it equal in value to 1B, such that for the same $1 buyers can purchase these very different quantities of these very different things? To this question economic thought has forwarded broadly speaking at least two different underlying mechanisms. For the earlier Classical Political Economy approach beginning around the 1700s until 1870, it was posited that 2A = 1B due to equal expenditure in production for the different quantities of the different goods, with that cost being reduced to labor-time objectively expended or bestowed in production according to the socially average level of technology of the day. For the later approach of Neoclassical Economics beginning in 1870 until the present, the selfsame exchange relation is explained as a function of the equal amounts of utility or satisfaction the subjective individual receives when consuming 2A as he/she does when consuming 1B, with the further caveat that this occurs at the margin of constrained choice. Both theories contain a similar methodological character in that sought for in explaining the exchange between any two objects for sale is a “common third” (Kurz 2013, p. 46). In the early labor theory of value (LTV) this “common third” is commensurable quantities of socially-necessary labor time in production, and in the later marginal utility theory of value (MUTV) the “common third” is commensurable quantities of utility at the margin of constrained choice. To illustrate this, a brief account of the history of thought is shown in Figure 1 below.