Karl Marx

• Marx (1818 – 1883) formulated ideas, both

intellectual and prac=cal, which have had a
profound impact on poli=cal-economic
discourse.
• Marx’s intellectual system was complete,
consistent and integrated. It included
thorough, conceptualised descrip=ons of
human nature, society, the individual’s
rela=onship to the social whole, and the
nature of the process of social history.
• Marx’s analysis of capitalism was most fully
developed in his three volume work Capital
(Das Kapital), of which only he 1st volume was
published in his life=me (in 1867).
• His other wri=ngs, which were to have
cons=tuted volumes 2 and 3, were wriMen
mostly during the 1860’s (before the
comple=on of vol.1) and remained unOnished
when Marx died in 1883. They were collected,
collated, edited and published by Friedrich
Engels (vol.2 in 1885, vol.3 in 1894).
• Marx also wrote other books, pamphlets and
ar=cles examining the nature of capital. In
par=cular, he wrote a series of seven
notebooks in 1857 and 1858 which contained
topics he intended to include in an even larger
work, of which Capital was to be the Orst part.
• The English transla=on of these notebooks
were published under the =tle Grundrisse
(Founda=ons), which is a useful supplement to
Capital.
 Marx’s Cri=que of Classical Economics
• Marx was inXuenced by the theories of value and
proOts of Smith and Ricardo. His own theories
can, in many respects, be viewed as an extension,
reOnement and elabora=on of their ideas.
• He approved of certain ideas of Thompson and
Hodgskin, took Mill seriously as an intellectual
opponent, but was very cri=cal and
contemptuous of Malthus, Bentham, Senior, Say
and Bas=at.
• Marx’s fundamental cri=cism of most of these
writers was their lack of historical perspec=ve.
Had they studied history more thoroughly,
according to Marx, they would have understood
that produc=on is a social ac=vity that can assume
many forms, or modes depending on prevailing
social organisa=ons and their corresponding
techniques of produc=on.
• European society had passed through several
dis=nct epochs, including slave and feudal
socie=es, and was currently organised in a
historically speciOc form: capitalism.
• There were certain characteris=cs, or traits, of
produc=on which were common to all modes
of produc=on, and there were certain
characteris=cs speciOc to capitalism. Failure to
di]eren=ate between the two was the source
of confusion and distor=on.
• In Marx’s opinion, two of the confusions were
par=cularly important: (i) the belief that capital
was a universal element in all produc=on
processes and (ii) that all economic ac=vity
could be reduced to a series of exchanges.
• The Orst confusion, i.e. the misiden=Oca=on of Capital,
stemmed from the fact that capital had one feature
which was universal in all produc=on and one feature
par=cular to capitalism. Produc=on was not possible
without an instrument of produc=on or stored up past
labour.
• Capital possessed a speciOc quality: the power to yield
proOts to a special social class. As far as Marx was
concerned, there were innumerable forms of property,
each belonging to a par=cular mode of produc=on.
These di]erent forms determined distribu=on.
Produc=on and distribu=on were not independent of
each other.
• Marx did not accept the “bourgeois” view that
capitalist property rights were universal,
eternal and sacrosanct; neither did he accept
that exchange was the only capitalis=c
rela=on, as doing so would imply harmony and
ignore many contradic=ons inherent in
capitalism.
Commodi=es, Value, Use Value and Exchange
Value
• A commodity had two essen=al characteris=cs.
Firstly, it was a thing which, by virtue of its
proper=es, sa=sOed human wants. The
par=cular physical proper=es of the
commodity from which people derived u=lity
was the commodity’s USE VALUE.
• According to Marx, use value did not bear any
rela=on to the amount of labour required to
generate a commodity’s useful quali=es.
• Secondly, commodi=es were the material
depositories of EXCHANGE VALUE – the ra=o of
how much of a par=cular commodity one could
get in exchange for a given amount of some other
commodity or commodi=es.
• Exchange value was usually expressed in terms of
money price. Money being a special commodity
used as a numeraire.
• Since Marx rejected use value as a basis for
exchange it was only the labour =me required for
commodity produc=on which gave rise to
exchange value.
Useful Labour and Abstract Labour
• Marx dis=nguished between two di]erent
ways of viewing labour and the process of
working.
• Commodi=es having di]erent use values
required speci+c work processes having
speci+c characteris2cs which needed labour of
di]ering quali=es. This was useful labour
which gave rise to use value.
• Labour which determined exchange value was abstract
labour.
• Furthermore, it was only socially necessary labour =me
which was meaningful. This was the amount of =me it
took to produce an ar=cle under normal condi=ons of
produc=on, with the prevailing average degree of skill
and intensity.
• Certain kinds of produc=on necessitated the
expenditure of a considerable amount of =me in the
acquisi=on of special skills. Other kinds of produc=on
could be carried out by skilled workers.
• Skilled labour could be reduced to a mul=ple of
unskilled labour.
 Social Nature of Commodity Produc=on
• Products of human labour were commodi=es
only when they were produced for exchange
for money in the market and not for
immediate use by the producers.
• In Marx’s historical view, for a society to
primarily be a commodity–producing society
for any signiOcant length of =me, three
historical prerequisites were necessary
(i) A degree of specialisa=on such that each
individual producer con=nuously produced, in
part or whole, the same product,
(ii) Separa=on of use-value from exchange-value
(iii) An extensive, well developed market requiring the
pervasive use of money.
(•) In a commodity producing society, any given
producer worked in isola=on from other
producers.
(•) However, the producer was socially and
economically related to other producers since no
one producer was self sujcient.
• Each producer produced only for sale in the
market. The proceeds of the sale providing money
with which the producer bought the commodi=es
he or she needed.
• So, while there might be no personal rela=onship
between producers, they were connected via the
market.
• The market may come across merely as a set of
rela=onships between inanimate objects.
• However, it is s=ll useful labour which lies behind
the produc=on of the use value which creates
u=lity from consump=on.
• Bourgeois economists believed that u=lity was
derived from exchange alone.
• They failed to recognise the underlying role
which useful labour played in crea=ng use
value – the source of all u=lity.