KARL MARX ECONOMIC ANALYSES CHAPTER 4

KARL MARX ECONOMIC ANALYSES – CHAPTER 4

ECONOMIC ANALYSES • Marx’s theories of economy and society are presented primarily in Das Kapital • Theories continue to influence sociology

BASE—SUPERSTRUCTURE RELATIONSHIP Ideological Superstructure religion, politics, the state, culture, art, the family Economic Base (eg. Feudalism, capitalism, communism) 3

BASE-SUPERSTRUCTURE: CAPITALIST IDEOLOGIES Choosing to Marry for Love Democratic Liberties Religious Freedom Belief: Meritocracy. American Dream Consumer Freedom to Buy We are self-interested actors. Economic Relations in Free Market Capitalism 4

BASE AND SUPERSTRUCTURE • Relationship of superstructure and base • Dialectical • Mutual interdependence • Marx wanted to analyze the core elements of capitalist societies • Commodities (items bought and sold)

COMMODITIES • Marx defined commodities as: • External objects • Capable of satisfying human needs

THE VALUE OF COMMODITIES • Two important criteria – Use-value: a function of the actual physical properties of a commodity • The purpose to which it can be put • Its value in consumption – Exchange-value: • The worth of the commodity relative to other commodities • In modern societies, exchange-value is expressed in monetary terms (money) – Use value equals the qualitative value – Exchange-value equals the quantitative value

THE VALUE OF COMMODITIES com·mod·i·ty – noun. 1. A thing that exists “outside of us” that we exchange for something we want or need. 2. Something with use-value and exchange-value. = = Protect your feet when walking $65 or $20 = = USE VALUE (Of little use to the capitalist) EXCHANGE VALUE (Potential profits for the capitalist)

THE VALUE OF COMMODITIES • According to Marx, in capitalist societies • Almost all production is directed at exchange-value rather than use-value

THE VALUE OF COMMODITIES • Surplus value: • The difference between the exchange value of a commodity and the cost of producing it – including the raw materials, tools, and labor. • Marx focused on labor • He claimed that the exchange value of any item was determined by the socially necessary labor time required for its production

THE VALUE OF COMMODITIES • Labor time & length of the work day • The greater the number of hours employees are routinely expected to work for a given wage, • The cheaper the commodities and • The greater the potential benefit for the capitalist

THE COMMODIFICATION OF SOCIAL LIFE • Capitalism is dependent on individuals wanting more and more products • Capitalists generate more profit by expanding markets and selling more commodities

COMMODIFICATION OF SOCIAL LIFE: • More and more of social life: • Relationships • Institutions • Desires • Feelings • Becomes commodified: Packaged and sold in the marketplace for profit

LOVE IN CAPITALISM: “SHOPPING” FOR LOVE Commodification of Love and Relationships Commodification of Romance

THE CIRCULATION OF COMMODITIES • Marx: Societies are an evolutionary process • In nomadic societies, people owned little property • Most items they created had use-value to people who produced them • As societies evolved, exchange value became more important than use value

THE CIRCULATION OF COMMODITIES • Simplest form of exchange was barter system • Economies became more complex and money was introduced • Process went through stages in which people continuously moved from the role of buyer to seller and back again (Circulation of Commodities).

THE FETISHISM OF COMMODITIES • Detachment of objects from human efforts that created them. • Money is so worshiped that objects are evaluated in terms of monetary value • Money is used to express the value of all commodities

THE ACCUMULATION OF CAPITAL • Marx described 2 functions of money. 1. Selling in order to buy A commodity (C) is transformed into money (M), then reconverted into a commodity (C) • In summary C-M-C • In this form, money is spent • Resulting in use-value to the purchaser • The commodity is consumed

THE ACCUMULATION OF CAPITAL 2. Buying in order to sell • Money can become capital • Accumulated goods for the production of other goods • M-C-M: Motivating force is exchange value rather than use-value • Result: 2. 3. 4. Worthless products Dangerous products Waste

THE ACCUMULATION OF CAPITAL • Money, unlike commodities, is distinguishable only in amount • The C-M-C transaction has a finite end • By contrast, the M-C-M continues indefinitely because the M does not disappear • Its magnitude increases as profit-making continuously expands • “Money begets Money. ”

THE ARMY OF THE UNEMPLOYED • The greater the size of army • The more capitalists can force workers to: • Increase production and • Accept lower wages

THE ARMY OF THE UNEMPLOYED • The army of the unemployed also reduces class solidarity by • Creating conflict (competition for jobs) within the proletariat • Making it less likely that the proletariat will organize against the capitalists

PURCHASING LABOR-POWER • Capitalism brought together • Owners of the means of production • and • Workers who could sell their laborpower

PURCHASING LABOR-POWER • Marx: In order to maintain a fresh supply of labor-power in the market • Workers must be able to raise their children • Food, clothing, fuel, training and so on necessary to enable the workers’ children to replace current generation of workers

CLASS THEORY: • Under capitalism, there is antagonism between the buyers and sellers of labor power • Between exploiters and the exploited

SOCIAL CHANGE Classes through history: • Free men and slaves • Patrician and plebian • Baron and serf • Nobility and bourgeoisie • Bourgeoisie and proletariat • Exploiters and exploited

SOCIAL CHANGE “The history of all hitherto existing society is the history of class struggles. ” (Marx)