Marxian Approach & Marxian Approach & Neoclassical CritiqueNeoclassical Critique

Michael RoettgerMichael Roettger

Denise KallDenise Kall

February 9, 2004February 9, 2004

OverviewOverview

I. Biography of Karl Marx I. Biography of Karl Marx II. Marxist Theory by MarxII. Marxist Theory by Marx III. Critiques of MarxIII. Critiques of Marx IV. Neo-Marxist TheoryIV. Neo-Marxist Theory

I. Biography of Karl MarxI. Biography of Karl Marx

I. Marx: BackgroundI. Marx: BackgroundBorn to a Jewish family on May 5, Born to a Jewish family on May 5, 1818 to a middle-class family in 1818 to a middle-class family in Trier, Prussia. Marx’s father, facing Trier, Prussia. Marx’s father, facing religious persecution in his legal religious persecution in his legal practice, raised Marx in a Protestant practice, raised Marx in a Protestant home, despite coming from a long line home, despite coming from a long line of Rabbis. This background would later of Rabbis. This background would later influence Marx’s views on religion and influence Marx’s views on religion and history. history. Marx, a brilliant young scholar, Marx, a brilliant young scholar, enrolled at the age of 17 at the enrolled at the age of 17 at the University of Bonn and later at the University of Bonn and later at the University of Berlin, finally completing University of Berlin, finally completing a doctorate in philosophy in 1842.a doctorate in philosophy in 1842.

I. Marx: Background, cont.I. Marx: Background, cont. While at the University of Bonn, Marx became While at the University of Bonn, Marx became

engaged to Jenny von Westphalen. She was engaged to Jenny von Westphalen. She was the daughter of Baron von Westphalen , a the daughter of Baron von Westphalen , a prominent member of Trier society. She and prominent member of Trier society. She and Marx married in 1842 and had three children. Marx married in 1842 and had three children.

While a student, Marx became a member of While a student, Marx became a member of the Young Hegelian movement. This group, the Young Hegelian movement. This group, which included the theologians Bruno Bauer which included the theologians Bruno Bauer and David Friedrich Strauss, produced a and David Friedrich Strauss, produced a radical critique of Christianity which led to radical critique of Christianity which led to Marx becoming unable to find a university Marx becoming unable to find a university position in Prussia. position in Prussia.

I. Marx: Background, cont.I. Marx: Background, cont. Marx, unable to find university employment, Marx, unable to find university employment,

became editor of the influential paper the became editor of the influential paper the Rheinische ZeitungRheinische Zeitung. Marx’s political . Marx’s political commentary and questioning of the Prussian commentary and questioning of the Prussian government resulted in government closure of government resulted in government closure of the paper in 1843. Marx then immigrated to the paper in 1843. Marx then immigrated to Paris. Paris.

While in Paris, Marx encountered groups of German and French socialists. In attempting to unify socialism with the Young Hegelian movement, Marx began to formuate a humanistic communism. These writings became his Economic and Philosophical Manuscripts.

I. Marx: Background, cont.I. Marx: Background, cont.

While in Paris, Marx also became acquainted While in Paris, Marx also became acquainted with Freidrich Engels. Their activities and with Freidrich Engels. Their activities and writings led to their expulsion in 1844. Marx writings led to their expulsion in 1844. Marx and Engels proceeded to move to Brussels. and Engels proceeded to move to Brussels. While in Brussels, Marx formulated his While in Brussels, Marx formulated his “materialist concept” of history and the “materialist concept” of history and the eternal struggles between the Bourgeoisie eternal struggles between the Bourgeoisie and Proletariat. Marx also predicted the and Proletariat. Marx also predicted the demise of industrial societies and the demise of industrial societies and the eventual rise of communistic societies eventual rise of communistic societies through revolutions by exploited workers. through revolutions by exploited workers.

I. Marx: Background, cont.I. Marx: Background, cont.

In 1847, Marx and Engels became involved with In 1847, Marx and Engels became involved with the Communist League, a group of German the Communist League, a group of German dissidents based in London. Marx and Engels dissidents based in London. Marx and Engels were there commissioned to write were there commissioned to write The The Communist Manifesto, Communist Manifesto, published later in 1848. published later in 1848.

In 1848, after a revolution in France, Marx In 1848, after a revolution in France, Marx relocated to Paris and then Germany, where he relocated to Paris and then Germany, where he established the established the Neue Rheinische Zeitung.Neue Rheinische Zeitung. The The Prussian government suppressed Marx’s paper, Prussian government suppressed Marx’s paper, forcing Marx into permanent exile in London.forcing Marx into permanent exile in London.

I. Marx: Background, cont.I. Marx: Background, cont.

While in London, Marx and his family While in London, Marx and his family (his wife and six children), lived in (his wife and six children), lived in great poverty. Marx was supported by great poverty. Marx was supported by Engels and a job as a foreign Engels and a job as a foreign correspondent for the correspondent for the New York Daily New York Daily TribuneTribune. During this period, Marx spent . During this period, Marx spent substantial time supporting communist substantial time supporting communist movements and preparing to write a movements and preparing to write a general critique of capitalism.general critique of capitalism.

I. Marx: Background, cont.I. Marx: Background, cont. In the early 1860’s, Marx commenced writing In the early 1860’s, Marx commenced writing

the three (incomplete) volumes of the three (incomplete) volumes of Das Capital. Das Capital. Das Capital Das Capital remains, along with theremains, along with the Communist Communist Manifesto, Manifesto, the hallmark of Marx’s writings and a the hallmark of Marx’s writings and a classic in philosophy, economics and sociology. classic in philosophy, economics and sociology.

Marx, in failing health and suffering from the Marx, in failing health and suffering from the loss of his eldest daughter and wife, began to loss of his eldest daughter and wife, began to slow in his political advocacy and writings in the slow in his political advocacy and writings in the 1870’s. Marx died quietly in 1882, 1870’s. Marx died quietly in 1882, impoverished but the father of one of the most impoverished but the father of one of the most influential social theories of the twentieth influential social theories of the twentieth century.century.

II. Marxist TheoryII. Marxist Theory

““Classes in Capitalism and Classes in Capitalism and Pre-Capitalism” (Marx)Pre-Capitalism” (Marx)

Class struggle has existed throughout Class struggle has existed throughout history in all types of societieshistory in all types of societies

Rise of the bourgeoisie Rise of the bourgeoisie Capitalist society- conflict of bourgeoisie Capitalist society- conflict of bourgeoisie

and proletariatand proletariat Middle-class will gradually sink into the Middle-class will gradually sink into the

proletariatproletariat Proletarian revolutionProletarian revolution Classless society Classless society

Alienation of man from:Alienation of man from:

1.1. the labor of products the labor of products

2.2. the processes of production the processes of production

3.3. man’s own nature man’s own nature

4.4. fellow man fellow man

Alienated labor Alienated labor Private propertyPrivate property

“Alienation and Social Class” (Marx)

““Value and Surplus Value and Surplus Value” (Marx)Value” (Marx)

Labor is the common Labor is the common social substance social substance of all of all commoditiescommodities

Commodity has value because it is a “crystallization Commodity has value because it is a “crystallization of social labor”of social labor”

Value of laboring power is determined by the value Value of laboring power is determined by the value of the necessaries required to maintain and of the necessaries required to maintain and perpetuate the workerperpetuate the worker

The rThe rate of surplus value depends on the proportion ate of surplus value depends on the proportion between the part of the day necessary to reproduce between the part of the day necessary to reproduce the value of the laboring power and the extra or the value of the laboring power and the extra or surplus labor performed while producing beyond surplus labor performed while producing beyond that which is necessary to maintain the worker. In a that which is necessary to maintain the worker. In a capitalist economy, this surplus value from capitalist economy, this surplus value from production goes solely to benefit the capitalist.production goes solely to benefit the capitalist.

  

““Ideology and Class” Ideology and Class” (Marx)(Marx)

““the class which is the ruling material the class which is the ruling material force of society, is at the same time force of society, is at the same time its ruling intellectual force”its ruling intellectual force”

III. Critiques of MarxIII. Critiques of Marx

A. LenskiA. Lenski B. SamuelsonB. Samuelson C. DahrendorfC. Dahrendorf

III. Critiques of Marxism, III. Critiques of Marxism, LenskiLenski

Comment on sociologist’s focus on Comment on sociologist’s focus on Western capitalist societies, failure to Western capitalist societies, failure to examine the fall of communism in examine the fall of communism in Eastern Europe and plight of existing Eastern Europe and plight of existing Communist societies in Asia.Communist societies in Asia.

Argues that a sufficient body of Argues that a sufficient body of evidence exists to analyze the nature evidence exists to analyze the nature of inequality in Communist societiesof inequality in Communist societies

III.III. Critiques of Marxism, Critiques of Marxism, Lenski, Lenski, cont.cont.

Analysis: Societies generally reduce general Analysis: Societies generally reduce general social inequality, but do so at the general social inequality, but do so at the general expense of economic productivity, economic expense of economic productivity, economic growth, and meeting the populations needs growth, and meeting the populations needs of goods and resources.of goods and resources.

The persistence of political inequality, The persistence of political inequality, corruption, and reforms of human nature corruption, and reforms of human nature failed to materialize, despite Marx’s forceful failed to materialize, despite Marx’s forceful arguments that these would disappear with arguments that these would disappear with the abolition of private property rights in a the abolition of private property rights in a communist society.communist society.

III.III. Critiques of Marxism, Critiques of Marxism, Lenski, Lenski, cont.cont.

Eastern European worker: “They pretend Eastern European worker: “They pretend to pay us, we pretend to work.” to pay us, we pretend to work.”

Findings that elimination of wage Findings that elimination of wage structures eliminated incentives for structures eliminated incentives for individuals to attain greater wealth.individuals to attain greater wealth.

Davis’ 1953 assertion that successful Davis’ 1953 assertion that successful incentive systems 1.) motivate the best incentive systems 1.) motivate the best qualified people to seek the most qualified people to seek the most important positions and 2.) motivate them important positions and 2.) motivate them to perform to the best of their ability once to perform to the best of their ability once they are in these positions. they are in these positions.

III.III. Critiques of Marxism, Critiques of Marxism, Lenski, Lenski, continued.continued.

Massive social inequality and Massive social inequality and inefficiencies were observed at an inefficiencies were observed at an unprecedented scale. unprecedented scale.

Nicolae Ceaucescu, Todor Zhikov, Erich Nicolae Ceaucescu, Todor Zhikov, Erich Honecker, and other Communist Honecker, and other Communist leaders accrued vast amounts of wealth leaders accrued vast amounts of wealth along with other party elites in almost along with other party elites in almost all Communist societies while extreme all Communist societies while extreme poverty existed among the population.poverty existed among the population.

III.III. Critiques of Marxism, Critiques of Marxism, Lenski, Lenski, continued.continued.

Leaders such as Stalin and China Leaders such as Stalin and China during the “Great Leap Forward” during the “Great Leap Forward” exercised totalitarian control over exercised totalitarian control over populations. Stalin’s Russian purges of populations. Stalin’s Russian purges of millions of political dissidents and millions of political dissidents and export of grain when approximately 30 export of grain when approximately 30 million citizens were dying of starvation million citizens were dying of starvation illustrate massive human rights illustrate massive human rights violations under guise of political rule.violations under guise of political rule.

III. Critiques of Marxism, III. Critiques of Marxism, Lenski, Lenski, continued continued Traditional criticisms of classical Traditional criticisms of classical

industrial economies hold, but do not industrial economies hold, but do not validate these systems as best forms validate these systems as best forms of social order.of social order.

Successful communist and Western Successful communist and Western democracies have practiced mixed democracies have practiced mixed economies, where adaptation of economies, where adaptation of market reforms and implementation of market reforms and implementation of government regulation and oversight government regulation and oversight offer best examples of government. offer best examples of government.

III.III. Critiques of Marxism, Critiques of Marxism, Lenski, Lenski, continuedcontinued

How does Michael Burawoy’s postulate How does Michael Burawoy’s postulate that Marxism may be viewed as a scientific that Marxism may be viewed as a scientific enterprise effect Lenski’s critique?enterprise effect Lenski’s critique?

Do the “laboratory” of former and current Do the “laboratory” of former and current Communist countries represent good Communist countries represent good models for evaluating Marxism?models for evaluating Marxism?

Is extension beyond classical Marxist Is extension beyond classical Marxist theory to incorporate class, power, race, theory to incorporate class, power, race, sex, and institutions of any value beyond sex, and institutions of any value beyond intellectual or theoretical pursuits? intellectual or theoretical pursuits?

III.III. Critiques of Marxism, Paul Critiques of Marxism, Paul SamuelsonSamuelson

Samuelson’s Background: 1970 Samuelson’s Background: 1970 Nobel Laureate in economics and Nobel Laureate in economics and widely viewed as a father of modern widely viewed as a father of modern economic theory. Work spans over economic theory. Work spans over five decades, beginning with a five decades, beginning with a dissertation in the late 1940’s. dissertation in the late 1940’s.

The selected text reading is from The selected text reading is from Samuelson’s introductory economic Samuelson’s introductory economic text widely used in introductory text widely used in introductory economic courses for two decades. economic courses for two decades.

III. Critiques of Marxism, Paul III. Critiques of Marxism, Paul Samuelson, cont. Samuelson, cont. Samuelson, in the selected readings, provides an overview Samuelson, in the selected readings, provides an overview

of modern economic theory. Key assumptions of this theory of modern economic theory. Key assumptions of this theory are that:are that:

1.1. Individuals act rationally to maximize their personal gains Individuals act rationally to maximize their personal gains from available resources.from available resources.

2.2. Individuals and employers act independently to both supply Individuals and employers act independently to both supply and purchase labor. Market equilibriums occur when supply and purchase labor. Market equilibriums occur when supply and demand for labor are equal. Suppliers have a right to and demand for labor are equal. Suppliers have a right to hire at a given wage and workers have a right to choose to hire at a given wage and workers have a right to choose to work. work.

3.3. Firms act to maximize profits, of which labor and capital are Firms act to maximize profits, of which labor and capital are traditionally viewed as key components.traditionally viewed as key components.

4.4. Market forces move towards equilibrium and operate Market forces move towards equilibrium and operate efficiently. The “invisible hand” sets social equilibriums.efficiently. The “invisible hand” sets social equilibriums.

5.5. Models typically assume perfect competition and full Models typically assume perfect competition and full knowledge of agents in maximizing utility. Monopolies knowledge of agents in maximizing utility. Monopolies exploit individuals, but this does not occur under ordinary exploit individuals, but this does not occur under ordinary circumstances. circumstances.

III. Critiques of Marxism, Paul III. Critiques of Marxism, Paul Samuelson, cont.Samuelson, cont.

In the traditional market, the firm attempts to In the traditional market, the firm attempts to maximize revenue and minimize costs. Thus, the maximize revenue and minimize costs. Thus, the firm often negotiates wages. Marxism often firm often negotiates wages. Marxism often assumes that capitalists control production of assumes that capitalists control production of resources, but ignores the role of the firm in setting resources, but ignores the role of the firm in setting wages and values. wages and values.

Marx’s “Iron Law of Wages,” e.g., that wages are Marx’s “Iron Law of Wages,” e.g., that wages are kept to the minimum necessary to maintain kept to the minimum necessary to maintain subsistence living, fails to take into account subsistence living, fails to take into account variables such as ability, education, training, and variables such as ability, education, training, and work ethic. In the sense that “Malthusian work ethic. In the sense that “Malthusian economics” may come into play, production must economics” may come into play, production must outpace population growth and needs before outpace population growth and needs before starvation may occur. starvation may occur.

In a system where a society faces unlimited wants In a system where a society faces unlimited wants and limited resources, inequality is natural. and limited resources, inequality is natural.

III. Critiques of Marxism, Paul III. Critiques of Marxism, Paul Samuelson, cont.Samuelson, cont.

Government intervention and Government intervention and involvement often helps to alleviate involvement often helps to alleviate poverty and inequality, ensuring that poverty and inequality, ensuring that basic standards of living are met. basic standards of living are met.

The economic theory illustrated in The economic theory illustrated in Samuelson’s article provides Samuelson’s article provides evidence for how markets naturally evidence for how markets naturally reach equilibrium and do not reach equilibrium and do not separate into Marx’s ruling elites and separate into Marx’s ruling elites and working classes. working classes.

III. Critiques of Marxism, III. Critiques of Marxism, DahrendorfDahrendorf

Focus on limitations of traditional Marxist Focus on limitations of traditional Marxist theory, emphasizing more complex theory, emphasizing more complex structures of class, types of labor, and the structures of class, types of labor, and the general nature of authority.general nature of authority.

Inequality, as a byproduct of the authority Inequality, as a byproduct of the authority given to employers, creates natural tension given to employers, creates natural tension between workers and employers. These between workers and employers. These tensions do not lead to revolution, but tensions do not lead to revolution, but rather to union and classes of workers that rather to union and classes of workers that bargain with employers. This tension is bargain with employers. This tension is hence accounted and alleviated in market hence accounted and alleviated in market economies. economies.

IV. Neo-Marxist TheoryIV. Neo-Marxist Theory

WrightWright WallersteinWallerstein BurawoyBurawoy

The embarrassment The embarrassment of the middle classof the middle class

Dahrendorf – Authority

Wright – take 1 - 3 interconnected dimensions of domination and subordination within production: money capital, physical capital, and labor

Wright – take 2 - inequalities in distributions of productive assets

““Class and Class Conflict in Class and Class Conflict in Industrial Society”Industrial Society”

(Dahrendorf)(Dahrendorf)Rejects Marx’s material basis for class Rejects Marx’s material basis for class

– the means of production– the means of production

Distribution of authority in associations Distribution of authority in associations is: is:

1.1. the cause of the formation of the cause of the formation of conflict groupsconflict groups

2.2. the cause of the formation of two, the cause of the formation of two, and only two, conflict groups.and only two, conflict groups.

““Varieties of Marxist Varieties of Marxist Conceptions of Class Conceptions of Class Structure” (Wright)Structure” (Wright)

contradictory locations within class relationscontradictory locations within class relations 3 interconnected dimensions of domination 3 interconnected dimensions of domination

and subordination within production:and subordination within production:money capital money capital physical capital physical capital labor labor

capitalist class – dominant position in these 3 capitalist class – dominant position in these 3 social relationssocial relations

working class- subordinate position in these 3 working class- subordinate position in these 3 social relationssocial relations

CAPITALIST MODE OF PRODCUTION

SIMPLE COMMODITY PRODUCTION

The basic class relations of capitalist society (p. 115)

BOURGEOISIE

Managers and Supervisors

PROLETARIAT

Small Employees

Semi-autonomousWage-earners

PETTY BOURGEOISIE

““A General Framework for the A General Framework for the Analysis of Class Structure” Analysis of Class Structure”

(Wright)(Wright) ““the embarrassment of the middle the embarrassment of the middle

class”class” Rejects his earlier theory of Rejects his earlier theory of

contradictory locations within class contradictory locations within class relations because: relations because:

a.a. it tends to shift the analysis of class it tends to shift the analysis of class relations from exploitation to dominationrelations from exploitation to domination

b.b. implicitly regards socialism as the only implicitly regards socialism as the only possible alternative to capitalismpossible alternative to capitalism

Exploitation (Wright)Exploitation (Wright)

John Roemer - Wright’s basis for his re-John Roemer - Wright’s basis for his re-conceptualization of class using an conceptualization of class using an exploitation-centered approachexploitation-centered approach

Exploitation – “implies both economic Exploitation – “implies both economic oppression and appropriation of at least oppression and appropriation of at least part of the social surplus by the part of the social surplus by the oppressor”oppressor”

““the material basis of exploitation is the material basis of exploitation is inequalities in distributions of productive inequalities in distributions of productive assets” (property relations)assets” (property relations)

Classes – “positions within the social Classes – “positions within the social relations of production derived from these relations of production derived from these relations of exploitation”relations of exploitation”

Table 1. Assets, Exploitation, and Classes (p. 124 and 127) Type of class structure

Principal asset that is unequally distributed

 

Mechanism of exploitation

  

ClassesPrincipal contradictory location

Feudalism 

Labor power Coercive extraction of surplus labor 

Lords and serfs

Bourgeoisie

Capitalism 

Means of production

Market exchanges of labor power and commodities 

Capitalists and Workers

Managers/bureaucrats

State bureaucratic socialism  

Organization Planned appropriation and distribution of surplus based on hierarchy 

Managers/bureaucrats and nonmanagement

Intelligentsia/experts

Socialism 

Skills Negotiated redistribution of surplus from workers to experts 

Experts and workers

 

 

““Class Conflict in the Class Conflict in the Capitalist World Capitalist World

Economy” (Wallerstein)Economy” (Wallerstein) World Systems TheoryWorld Systems Theory core is to periphery as bourgeoisie is to core is to periphery as bourgeoisie is to

proletariatproletariat state represents the interests of the state represents the interests of the

bourgeoisiebourgeoisie states interfere with the flow of factors of states interfere with the flow of factors of

production production core states have a higher percentage of core states have a higher percentage of

bourgeoisie than peripheral statesbourgeoisie than peripheral states Semi periphery? middle class?Semi periphery? middle class?

IV. Neo-Marxian Theory, IV. Neo-Marxian Theory, BurawoyBurawoy

Marxism falls into a theoretical construct that Marxism falls into a theoretical construct that constitutes a form of science.constitutes a form of science.

Marxist theory is progressive, examining anomalies Marxist theory is progressive, examining anomalies and failures in observed practice and then and failures in observed practice and then proceeding to reevaluate and evolve to better fit proceeding to reevaluate and evolve to better fit empirical data.empirical data.

Marxist societies have a historical context that limits Marxist societies have a historical context that limits their potential review as “true” Marxist states.their potential review as “true” Marxist states.

Marxist theory is testable and should be evaluated in Marxist theory is testable and should be evaluated in terms of current world trends, events, and terms of current world trends, events, and circumstances.circumstances.

The prosperity of capitalism does not invalidate The prosperity of capitalism does not invalidate Marxist theory, rather Marxist theory and capitalism Marxist theory, rather Marxist theory and capitalism are dichotomies that naturally exist alongside one are dichotomies that naturally exist alongside one another. another.