LECTURE 5. MARXIST POLITICAL ECONOMY

1. Economic views of K. Marx

One of the most interesting trends in economic thought of the nineteenth century is Marxism, which can be considered as a unique development of classical political economy in that part where the foundations of the labor theory of value are considered. The founder of this doctrine is K. Marx (1818-1883), a German economist and philosopher. Taking as the starting point of his research the statements of Smith and Ricardo that the value of all goods is based on the amount of labor spent on their production, Marx created a fairly coherent theory describing the laws of the functioning and development of the capitalist economic system. He showed how from simple commodity production, the goal of which is consumption and where money is only an intermediary in exchange, capitalist production flows quite logically, where the goal is to increase money and make profit. If we recall Aristotle, then the first type of economy corresponds to the concept of “economy”, and the second - to the concept of “chrematistics”. Why does chrematistics inevitably grow out of economics? Marx begins his study of this process with an investigation of the nature of commodity production. Like representatives of classical political economy, Marx distinguishes between two aspects of a commodity: use value and exchange value. The first refers to the ability of a thing to satisfy any human need, regardless of whether it is caused by “stomach or imagination”; the second refers to the ability of a thing to be exchanged in certain proportions for another product. But what makes goods comparable and comparable? Following Ricardo, Marx argues that the proportions of exchange are based on labor costs, which determine the value of the product. But it is quite obvious that a homogeneous product is produced by different groups of commodity producers and each of them spends a different amount of time on the production of a unit of goods. However, the proportion of exchange of this product for others on the market will be the same. The costs of which group of commodity producers will determine the proportions of exchange? Marx answers that the value of a commodity will be determined by socially necessary labor costs or the costs of that group of commodity producers that produces the commodity at the average level of skill and intensity of labor for a given society. In other words, the costs of the group that produces the vast majority of products. To illustrate this point, the following example can be given. Suppose there are three groups of commodity producers who produce a certain product at different costs:

Group 1 - the cost of producing a unit of goods - 4 hours;

group 2 - the cost of producing a unit of goods - 6 hours;

Group 3 - the cost of producing a unit of goods - 10 hours.

Let us assume that the group producing the vast majority of products is the second group of commodity producers, whose costs are equal to 6 hours, and it is their costs that will determine the proportions of exchange of this product for other goods. What will happen to the first and second groups of commodity producers? The first will receive in exchange more than they spent, that is, they will get rich, the second will receive less, that is, they will go bankrupt. Next, we need to turn to the logic of A. Smith, to his concept of self-interest as the main engine of economic development and the condition for the prosperity of a nation. The natural desire to receive additional income will push commodity producers of the second and third groups to reduce labor costs for the production of goods, that is, to increase labor productivity. How? Better organization of labor, introduction of new processing methods, etc. Let's assume that this was successful. But what is the result? The overwhelming majority of production will be produced at a cost equal to 4 hours, and it is they who will determine the proportions of exchange. This means nothing more than a reduction in price of this product relative to others. What better illustration could there be of Smith's point about the beneficence of self-interest? After all, it is he who forces people to improve production and contributes to the development of the productive forces of society. But this is only one side of the coin. The downside is the stratification of commodity producers. In our example, the third group of commodity producers, whose costs exceed socially necessary ones, go bankrupt. Critics of the capitalist mode of production, in particular S. Sismondi, drew attention to this process. However, it should be noted that this is an inevitable price to pay for technological progress. It was Marx who was the first to clearly formulate this position.

Having examined the nature of the commodity and formulated the law of value, Marx then moves on to examine the nature of money. This problem interested many economists, in particular Aristotle, who believed that money is a product of agreement between people. The same position was held by A. Smith, who wrote that money is a technical instrument that facilitates exchange and for this purpose different goods were selected and used in succession. Marx’s view of the nature of money is that money is a commodity that spontaneously stood out from the entire mass of goods and began to play the role of a universal equivalent, an expression of the value of all other goods. At the same time, he also answered the question of why money has such power over people, why in all centuries “people died for metal.” To explain, Marx introduces the concept of abstract labor as a form of expression of social labor, but due to the sufficient complexity of these categories, we will try to understand the logic of Marx’s reasoning without resorting to such complex constructions. The starting premise is that in conditions of private property and isolation of commodity producers, each individual producer works for an unknown market, deciding for himself what to produce, in what quantities, by what means. He certainly expects, hopes, but is never sure that his products will be needed by society. It is the moment of purchase that will be for him the moment of recognition that his work and product have received public recognition by society in the person of the buyer. But how does this statement help explain the power of money?

Money (the commodity which serves as an equivalent for expressing the value of all commodities) is the only commodity for which it is not necessary to prove its necessity, for it is the universal means of payment and purchase, and therefore everyone strives for its possession. In the course of the development of commodity production, many commodities "claimed" for the role of money, but as a result, this role was assigned to precious metals. It should be emphasized that money cannot exist outside a certain system of economic relations, namely the relations of commodity exchange.

Money is the end product of the development of simple commodity production and at the same time the first form of existence of capital. As already mentioned, its initial form is trading and usurious capital. Capital, according to Marx, is not just money, it is money that brings additional money, it is "a value that brings surplus value." But is the capacity of capital to produce income really as natural as the capacity of a pear tree to produce pears?

Both Smith and Ricardo believed (albeit the first with certain reservations) that the only source of value of a commodity is labor. But then it is logical to assume that the source of profit or self-expansion of capital is the appropriation of part of the worker’s labor and it remains to recognize that under the conditions of a capitalist economy the worker receives a value that is less than what he produces with his labor. Only two conclusions can follow from this: either the basic law of commodity production (equivalence of exchange) is violated, or other factors of production take part in the creation of value along with labor (ultimately A. Smith took this position). Marx tried to solve this problem in the following way. In his opinion, the commodity is not labor, as Smith and Ricardo believed, but labor power (the ability to work). Like any other product, labor has cost and use value (utility). The first is determined by the labor costs necessary for the reproduction of labor power, that is, the cost of a certain set of goods and services necessary for the life of a worker. But not only. The worker is mortal, and in order to maintain the level of at least simple reproduction, it is necessary that the cost of labor power include the cost of the means of subsistence of the worker’s family (wife and two children). In other words, the value of labor power is determined by the value of the means of subsistence necessary to “produce, develop, maintain and perpetuate labor power.” Note that the category of the value of labor power in Marx is synonymous with wages in Smith and Ricardo, but unlike them, in Marx this category is associated with the labor theory of value and explains the possibility of the simultaneous existence of the equivalence of exchange and exploitation. In the production process, the worker creates a value greater than the value of his labor power, which comes down to the cost of the means of subsistence (this is precisely the use value of the commodity labor power, its usefulness for the capitalist). This is possible because the value of labor power is determined by the amount of labor necessary for its preservation and reproduction, and the use of labor power is limited only by the working capacity and physical strength of the worker. That is, even under conditions of equivalent exchange (the worker receives wages equal to the value of his labor power), the existence of profit and rent is natural, which, nevertheless, are nothing more than the appropriation of the worker’s unpaid labor, essentially exploitative income. Hence, it is quite logical to assert that capital is the accumulated unpaid labor of hired workers.

Marx pays much attention to the principles of distribution of the results of unpaid labor of workers (what he calls surplus value) between different classes of capitalists, and to the analysis of specific forms of surplus value: profit, interest, rent. At the same time, he constantly emphasizes that rent, interest and industrial profit are only different names for different parts of the surplus value of a commodity, or the unpaid labor embodied in it, and they are all equally drawn from this source, and from this source alone. Neither rent nor interest is generated by land and capital as such. Developing the theory of rent of D. Ricardo, Marx proves that rent exists even on lands of the worst quality (this rent was called absolute rent by Marx).

It is interesting for Marx to resolve a contradiction that Ricardo could not resolve, namely: to explain why the rate of return on capital is determined not by the amount of labor involved (which would be absolutely logical in the framework of the labor theory of value), but by the amount of capital. Marx described the mechanism for the formation of average profit, showing that in the real processes of capitalist production there is a redistribution of the surplus value created by all wage workers among the capitalists in proportion to the size of their capital. The logic of Marx's reasoning can be shown using his own example, where three industries are taken with the same amount of capital, but with a different technical (organic - in Marx's terminology) structure:

where К - the amount of capital in cash;

V - wage fund (according to Marx's terminology "variable capital");

С - all other elements of capital (according to Marx's terminology "constant capital");

М - the amount of surplus value;

W - the value of the cost;

Р - rate of return.

Marx makes the assumption that the value of labor power is the same in all three industries, as is the rate of exploitation, which is 100%. In this case, according to the labor theory of value, the value (and the price, considered as a monetary expression of value) of the output of the first branch will be 130 units, the second - 120 units, the third - 110 units. And then the rate of profit, calculated as the ratio of surplus value to capital, will be 30% in the first branch, 20% in the second, and 10% in the third. It is not difficult to assume that such "injustice" will not suit the capitalists of the second and third industries and there will be a flight of capital to the first industry (we consider the case of a free market, when there are no obstacles to this process). As a result of this process, an excess of capital in the first branch, leading to an increase in the production of this branch, in accordance with the laws of supply and demand, will lower prices and reduce profits. In the third branch, the reverse process will occur: as a result of the flight of capital, the quantity of output will decrease, prices will rise, and profits will increase. The process will continue until an equal profit on equal capitals is reached. In our case, it will be 20%. This assumes that goods will be sold not at cost but at a price (from Marx it was called the price of production), which will ensure such a profit, that is, at a price equal to the sum of production costs and average profit. In our case, 120 units. But what is the price equal to the cost of production and the average profit? Nothing but the "natural price" in Ricardo's theory. Was it worth then so much time to devote to consideration of the mechanism of its formation? However, one should not forget that Marx's task was not only to show the mechanism for the formation of average profit, but also to prove that the sale of goods at the "price of production" does not reject the law of value (the exchange of goods takes place in accordance with the costs of socially necessary labor), but only modifies it. What is the modification? In the fact, according to Marx, that although the prices of individual commodities deviate from the value, but on the scale of the entire national economy, the sum of the prices of commodities is equal to the sum of their values ​​(in our example, this value is equal to 360 units). Thus, in the process of competition, there is only a redistribution of the surplus value created by all wage workers among the capitalists in proportion to the size of their capitals (if such a comparison is appropriate, then the loot is divided in proportion to the strength of the weapons). And an equal rate of profit on capitals of equal size is by no means proof that capital participates in the process of creating (increasing) value, leaving in force the position that the only source of value for commodities is labor.

The logic of Marx's reasoning leads him to the conclusion that the rate of profit on capital decreases with the development of capitalism. The desire to increase profits forces the entrepreneur to reduce costs (in this case, a situation of perfect competition is taken, when the company does not have the opportunity to influence the price level), and the main factor in reducing costs is the increase in labor productivity due to the introduction of new equipment and technology. As a consequence, the technical structure of capital increases (in modern terms, the capital-labor ratio), which leads, other things being equal, to a decrease in the total mass of surplus value and a decrease in the rate of profit within the entire national economy. In essence, the mechanism described by Marx is somewhat reminiscent of the mechanism of the “invisible hand” of A. Smith. However, for Smith, selfish interest, the desire for profit leads to an increase in social wealth, and for Marx, the desire for profit ultimately destroys this profit, which in Marx’s theory is another evidence of the limitations of the capitalist mode of production.

From the development of labor-saving technologies, Marx also derives a mechanism that does not allow the price of the commodity "labor power" to rise in the long run above its value, determined by the cost of the means of subsistence. It is the existence of a chronic army of unemployed due to the displacement of labor by machines that provides an effective mechanism for restraining wages.

It is interesting to note that for Marx, as for Smith, the process of capital accumulation does not depend on external conditions (the amount of profit, the rate of interest on loans), but is an automatic process. In other words, the desire for accumulation, for the relentless pursuit of profit is in the blood of the capitalist. Shares Marx and the concept of representatives of classical political economy of productive and unproductive labor. Like Smith, Marx considers only labor employed in the sphere of material production to be productive, while he considers the income of unproductive persons as the result of a process of redistribution of the national income created exclusively in the sphere of material production.

But where the difference between Marx's views and the representatives of classical political economy manifests itself rather sharply is in the question of the possibility of general crises of overproduction. As you remember, both Smith and Ricardo denied the possibility of such crises. For Marx, the economic crises of overproduction act as an element of the cyclical development of the capitalist economy and a consequence of the violation of the conditions of macroeconomic equilibrium. It should be said that it was Marx who was the first in the history of economic thought (if we do not take into account the attempt of the physiocrats) to formulate the conditions for macroeconomic equilibrium, the conditions for the realization of the total social product in value and in-kind form under conditions of simple and expanded reproduction. Marx saw the cause of economic crises of overproduction in the fact that the expansion of production does not automatically generate a proportional increase in effective demand. However, he denied the permanence of this condition and disagreed with the doctrine of permanent underconsumption associated with low wages of workers, noting that it was in the periods immediately preceding the crisis that wages were highest. Rather, according to Marx, the real wages of workers, embodied in the means of subsistence, do not increase as rapidly as the output per person, and this is the immediate cause of crises.

Marx is also interested in describing the mechanism for overcoming economic crises on the basis of a massive renewal of capital. Briefly describing this mechanism, it boils down to the following. The economic crisis of overproduction manifests itself, among other things, in overstocking, which results in lower prices. In an effort to adapt to low prices, the capitalist seeks to reduce costs by introducing new high-performance equipment. There is a demand for this equipment and the latest technologies, which entails an increase in demand for a workforce of appropriate qualifications; the latter, receiving wages, in turn demand consumer goods. Employment of the second, third, etc. orders arises. This process is very similar to the mechanism of the multiplier, described in detail by J. Keynes.

These, as well as a number of other ideas, Marx outlined in his famous work “Capital”, which he wrote over the course of 40 years, and only the first volume was published during the author’s lifetime (1864), the remaining volumes were edited by Marx’s friend and comrade-in-arms F. Engels .

2. Social and philosophical views of K. Marx

It must be said that the interest in Marxism is due not only to the purely economic aspects of his theory. As you know, Marx was not only an economist, but also a philosopher. He created a system that covered all social sciences and there is a certain consistency between all aspects of Marxism. Therefore, it would be wrong not to dwell at least briefly on those socio-philosophical views of Marx that are most directly related to his economic theory.

Marx set his goal not just to study the laws governing the production, distribution and exchange of material goods, but to discover the laws of development of socio-economic formations, in a broader sense - the laws of the development of human society. In contrast to the representatives of classical political economy, who considered the capitalist mode of production as eternal and unchanging, Marx pointed to its transitory nature and it was from these positions that he studied it in his works, in particular, in Capital.

As already mentioned, capital, according to Marx, is nothing more than the accumulated unpaid labor of workers, the result of the appropriation of surplus value by capitalists. But it was not the moral condemnation of the injustice of capitalism, which was so characteristic of representatives of utopian socialism from T. More (1478-1535) to R. Owen (1771-1858), that led Marx to the conclusion about the necessity and inevitability of replacing capitalism with another social system. Considering contradictions to be the source of movement and development of any system, Marx tries to find the source of development and change of socio-economic formations. And this source, in his opinion, is the contradiction between the productive forces of society and production (economic) relations. Capitalism, according to Marx’s ideas, will exhaust itself only when existing economic relations, the core of which are property relations, cannot make it possible to fully utilize the productive forces of society. As evidence that capitalism was already entering the final stage of its development, Marx pointed to periodically recurring economic crises. Marx outlined the historical trend in the development of capitalism in one of the chapters of the first volume of Capital, where in a condensed form he gave the process of development of the capitalist system: from enterprises based on small private property to monopolistic enterprises with a high degree of concentration of social production and capital, which require , according to Marx's concept of social management and control. And only then must private property be transformed and workers united on the basis of joint management, ownership and use of the means of production. The implementation of the latter means a transition to another socio-economic system, a system based on public ownership of the means of production.

As we see, Marx’s prospects for the development of the capitalist system are not connected with his labor theory of value, however, it is the latter, due to its social attractiveness, that Marxism owes for the spread of its socio-economic ideas. Arguing that capital is the accumulated unpaid labor of hired workers, Marx provided an ideological basis for the spontaneous protest of the proletariat. The essence of the protest is to restore justice, which would consist in the worker receiving the full product of his labor. In particular, the idea of ​​a worker’s right to an unreduced product of labor formed the basis of the program developed by German Social Democrats, whose ideologist was F. Lassalle (1825-1864). However, this demand was utopian from the very beginning: in no society can workers receive the full product for their personal consumption, since then there would be no funds left for accumulation, public needs, maintenance of the administrative apparatus, etc. And the only question is who appropriates part of the product created by the worker - the state or private individuals.

Marx was the last of the major economists to adhere to the labor theory of value. The rejection of this theory by subsequent generations of economists was not least due to the conclusions that directly followed from this theory.

Moreover, the problem of the distribution of the created product, which was the key problem of classical political economy, also fades into the background precisely because of its acuteness. And the central problem for political economy from the last third of the nineteenth century for several decades has been the study of the behavior of an isolated subject in the process of making economic decisions.

Author: Agapova I. I.

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