Marxian Economics

Karl Marx is one of the most contentious and controversial men in Western history, having been one of the most outspoken critics of capitalism who ever lived. He inspired a global revolution with his theories and the promise of a congenial future of socialism. With the spread of communism, and the Bolshevik revolution, the theories and dreams of Karl Marx became firmly rooted during the early 1900s. Marxism spread throughout Eastern Europe with many countries such as Hungary, Bulgaria, Romania and Poland adopting the Marxist theories. Eventually, communism along with its Marxist theories collapsed and all those countries turned to the capitalist free market economy.

Marxian economy is based on Karl Marx's labor theory of value. The theory holds that the true value of an article or commodity is measured by "socially necessary labor time" that was invested to produce the article. Workers are paid just the amount of money necessary for bare essentials. For example, if it takes a worker twice as long to produce a hat as it does to produce a pair of shoes, then it follows that the hat is worth twice as much as the shoes. In the final analysis, regardless of the actual value of the physical investments, the price of the hat will be twice that of the shoes. Capitalism, on the other hand, compensates the workers not with the wage that they absolutely need to sustain themselves and their families, but with whatever wage the market will bear. At times, therefore workers in a capitalist system may not earn enough to sustain themselves.

Marx tried to test his theory against the theory of capitalism and claimed that his theory could explain the value of every article including the articles that laborers sell for their wage. He called it "labor power," meaning the power or value that labor has, which is the capacity of the worker to generate goods and services. Marx explained that the value of labor power is determined by the length of time or the number of hours that it takes society at large to clothe themselves, feed themselves and find shelter so that they have the ability to work. In other words, the amount of compensation that a worker receives depends on the amount of paid working hours it takes to produce a worker who is fit to work. For example, if six hours of work are required to clothe, feed and shelter a worker so that the worker can work again the next day, that is the amount of compensation the worker will receive. If one hour of work is worth one dollar, the worker will receive six dollars.

Marxian economics also includes the Marxist theory of alienation. He arrived at this theory by weaving philosophy, history and economics together in the hope of causing a major social change. The premise of the theory of alienation is that society is made up of people who are basically free and innovative and are capable of changing the world. However, Marx claimed that the advent of modern inventions and technology pushed the developed world out of control and spiraling toward disaster. As a proof for his axiom, Marx pointed to the phenomenon called "free market" and labeled it as ungoverned and anarchic. He claimed that the way that a free market economy operates, by the unplanned impromptu purchases and sales that are influenced by the laws of supply and demand, hinder our capabilities of taking control of ourselves and our impulses.

Marx also denounced the capitalist system as one that alienates the people. He reasoned that despite the fact that it is the simple worker who produces things for the market, it is not the simple workers who control things, but rather market forces. To his way of thinking, people have no control over their destiny under capitalism. He condemned the system where people must work for those capitalists who have all the power and control over the workplace. Working in such a system makes the work humiliating and degrading and is befitting more for machines than for creative and free people, he argued. By working under such conditions, people lose their identity and individuality and become like robots. People eventually lose touch with reality and with human nature and themselves and everything is decided strictly on a profit-and-loss basis with no regard for human value. Capitalism, said Marx, inhibits man's capacity to create a humane society.

Marxian Economics: Selected full-text books and articles

A Reappraisal of Marxian Economics By Murray Wolfson Columbia University Press, 1966
An Essay on Marxian Economics By Joan Robinson MacMillan, 1960
FREE! A Contribution to the Critique of Political Economy By Karl Marx; N. I. Stone Charles H. Kerr, 1904
Marx Versus Markets By Stanley Moore Pennsylvania State University Press, 1993
Radical Political Economy: Explorations in Alternative Economic Analysis By Victor D. Lippit M. E. Sharpe, 1996
Librarian’s tip: Chap. 8 "Marxian and Post Keynesian Developments in the Sphere of Money, Credit and Finance Building Alternative Perspectives in Monetary Macroeconornics"
Shorter Classics By Eugen von Böhm-Bawerk Libertarian Press, vol.1, 1962
Librarian’s tip: Part IV "Unresolved Contradiction in the Marxian Economic System"
Capitalism: A Treatise on Economics By George Reisman Jameson Books, 1990
Overdetermination, Totality, and Institutions: A Genealogy of a Marxist Institutionalist Economics By Cullenberg, Stephen Journal of Economic Issues, Vol. 33, No. 4, December 1999
The Economics of Feasible Socialism Revisited By Alec Nove HarperCollins Academic, 1991 (2nd edition)
Librarian’s tip: Part I "The Legacy of Marx"
Towards an Unknown Marx: A Commentary on the Manuscripts of 1861-63 By Yolanda Angulo; Enrique Dussel; Fred Moseley Routledge, 2001
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