Monday, January 12, 2015

Lecture 4 - Marx and Liberalism

Marx Vs. Liberalism
* Marx criticizing capitalism as a whole
* Marx tells us capitalism won’t survive because of the way it works.
* Marx was trained to use dialectical logic.
* this is where you think about two forces crashing together to create something new. I.e. you have a thesis, and an antithesis, and when they clash it creates a synthesis.
* Contradictions are defined as logically identified inconsistencies which may or may not appear obvious.
* the point he’s going to use is that at the core of capitalism are people trying to accumulate capital. The very act of them trying to accumulate capital will cause them to do things which will destroy capitalism.
* Used the Labor Theory of Value (i.e. all value is created first by labor)
* Classical Marxism
Core assumption is that Social classes are the primary actors.
Different social classes constitute a hierarchy. Aristocrats are on top, having political rights that others do not have. You then have the middle class and the working class, and they are not all equal actors. Even later versions of marxism stress classes as the fundamental actor.
* Classes act in their own material interests.
* whats going on in Britain is a struggle between the aristocracy and the capitalists. They’re struggling over new liberal policies.
* Corn law: basically insured that there was a profit for people who grew wheat (the aristocracy) which was viewed as a policy to keep the rich, rich.
* Liberals aren’t trying to turn capitalism into more wealth for the working class, they are only trying to make themselves wealthier. Capitalists can always fire you and hire someone else, so wages will alway be just high enough for workers to survive.
* The expropriation of surplus value is exploitation.
* An evaluation of what’s going on more than an assumption.
* V=K+W+SV
* let v = value
* let k = capital
* let w = wages
* let sv = surplus value
* Liberals are fine with this and would call sv ‘p’ for profit, stressing that the entrepreneur capitalist should get returns. It’s a different moral spin on the same story. by using words such as ‘expropriation’ and ‘exploitation’ marx is painting profits in a very negative light.
* Marx’s model of capitalism
* Surplus value is created
* then concentration of capital per worker
basically, when surplus value is created, capitalists tend to invest more in machines and replace workers with them.
* then creation of “reserve army” of labor
just means high unemployment. This also keeps wages down.
* Together, this comes to a crisis of underconsumption.
* supply is going to outpace demand in the industrial world. More machinery and more productive assembly plants means you can produce a lot of goods, but high unemployment means people will not be able to afford those goods.
* The crisis of underconsumption then leads to
* falling rate of profit
* rise of class consciousness
* This would all lead to an economic crisis and revolution
* A crisis does come due largely to globalization, prices start collapsing in some places, competition is felt very severely in europe, manufactured and agricultural goods coming from the U.S.. Overproduction and underconsumption do take place, profits fall. Marxists are all waiting for the revolution but it never comes. No revolutions makes later marxist writers question what went wrong with the prediction. They realize that the European states are all engaged in a new bout of imperialism. Liberals were actually against imperialism, advocating that liberal capitalism would eliminate the need for colonies.
* They realize british savings are going out of the country. 1/4 of british savings are going outside of the country, and the money is going to places where you can make higher returns, places with less capital. This was relieving some of the pressure building up from economic crisis.
Imperialism is political coverage for foreign trade.
* Lenin comes along. “If you’re a marxist in Russia people are telling you to shutup and wait”. He can’t lead a revolution in an industrialized nation, as he’s russian. He has to do it in Russia. His opportunity comes during WW1. War creates an economic crisis in Russia, which he uses as his argument for marxism. He says imperialism can only go on for so long and then you’ll have a big war and crisis will come about int he most economically backwards country.
* Lenin tweaks marxism extensively to fit the russian model. This is the best known adaptation of Marxism.
* Lenin’s Extension
* Social classes are the primary action
* Classes act in their own material interests
* The expropriation of surplus value is exploitation
* Each state acts in the interests of its own national capitalist class.
* Here is where you see imperial competition. European powers want more colonies in order to secure trade for their capitalist class.
* The state is the servant of the capitalists. This is the basis of ‘instrumental marxism'
* Bismarck wants to prevent the rise of class consciousness. He promoted nationalism, promoted social democracy (pension, welfare, etc), imposed tariffs and cartels. Stressed that he wanted german workers to know they were german workers, as opposed to knowing they were workers and not managers etc..
* Contemporary Issues
* Karl Kautsky: Ultra-imperialism
* didn’t like lenins spin on marxism because he believed that you would have multinational corporations not tied to one state, and capitalists would cross borders easily. This is now thought of as structuralist marxism, states working together to insure the success of the capitalist class.
* Military-industrial complex
* pulling capital out of the production system and then setting it aside. It just insures that the corporations that make those things make profits.
* Capitalist crises - but capitalism survives...
* There have been many crises, and the fact that capitalism survives causes a lot of people to discard marxism.