MARX

CONTENTS
1.Effect of Karl Marx on world
2.Biography
3.Publication
4.Influences
5.General approach & Basic Concepts
6.Labour Theory of Value
7.Theory of Value
8.Theory of Surplus Value
9.Theory of Rent
10.Theory of Money
11.Marx in his own words
12.Implication of the Model
Sherko Soltanpanahi sherko2003@gmail.com
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 Effect of Karl Marx on world
The effect of Karl Marx on the political and
economic life of the twentieth century has been
profound.

No other economist had such an impact on the lives

of billions of people.

His theories on economics and social engineering

eventually led to:
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 Effect of Karl Marx on world

1. the division of the world between communist and

noncommunist nations

4
Effect of Karl Marx on world
2. many wars between and within nations

direct killing of 50 million people by Stalin in the Soviet

Union and 100 million by Mao in China

5
Effect of Karl Marx on world
3. the nuclear arms race which brought humanity to
the threshold of total destruction

6
 Effect of Karl Marx on world
4. and, last but not least, environmental abuse
which has no parallel in human history.
5. more….

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WHO IS THIS MAN?!

8
 Biography of KARL MARX
Born on 5 May 1818

Came from a middle class Jewish family

University of Berlin
PhD University of Jena 1841

Edited socialist newspapers and magazines

Moved to Paris 1843
Prussian government declared him guilty of treason 1844
9
Contd...
Expelled from France 1845

went to Brussels and later to London 1849

Supported in London by Friedrich Engels

Began serious study of economics in 1843/44

Communist Manifesto 1848
Capital volume 1 1867

 Died in March 14, 1883

Volumes 2 and 3 completed by Engels 10

 Publication
1."The Difference Between the Democritean and Epicurean
Philosophy of Nature", 1841 (first published 1902)
2."On Freedom of the Press", 1842,
3."On the Law on the Theft of Wood", 1842,
4."Communism and the Augsburg Allgemeine Zeitung", 1842,
5."Comments on the Latest Prussian Censorship Instruction", 1843,
6.Critique of Hegel’s Philosophy of Right, 1843
7."Introduction to a Contribution to the Critique of Hegel's Philosophy
of Right", 1844,
8."On The Jewish Question", 1844,
9."Critical Notes on the "The King of Prussia"", 1844,
10.Economic and Philosophic Manuscripts, 1844
11
 Contd.
11."Comments on James Mill's Elements of Political Economy", (written
1844, published 1932) 
12.The Holy Family -- or a Critique of Critical Critique, 1844
13."Theses on Feuerbach", 1845, publ. 1886 in Engels,
14.A Critique of the German Ideology, with F. Engels 1846
15.The Poverty of Philosophy, 1847.
16.Manifesto of the Communist Party with F. Engels, 1848. Copy
17."On the Question of Free Trade", 1848, speech in Brussels
18."Communism, Revolution and a Free Poland", 1848, speech in Brussels
19."The Demands of the Communist Party in Germany", with F. Engels,
1848 - pamphlet
20."Addresses to the Central Committee of the Communist League" with F.
Engels, 1850 - March, June
12
 Contd.
21. Articles in Die Neue Reinische Zeitung, 1848-49.
22. Reviews in Die Neue Reinische Zeitung Revue, with F. Engels, 1850
23. "Wage Labor and Capital", 1849,
24. "England's 17th Century Revolution" with F. Engels, 1850,
25. Articles on the Class Struggle in France, 1848 to 1850, 1850,
26. "Revolution and Counter-Revolution in Germany", 1851
27. "The Eighteenth Brumaire of Louis Bonaparte", 1852,
28. Heroes of the Exile with F. Engels, 1852 (first publ. 1930)
29. Articles from the New York Daily Tribune, 1852-1861
30. Articles on China War from New York Daily Tribune, 1853-1860

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 Contd.
31. "The Duchess of Sutherland and Slavery", 1853, People's Paper
32."Anti-Church Movement: Demonstration in Hyde Park", 1855,
33."Speech at anniversary of the People's Paper", 1856,
34."Pre-Capitalist Economic Formations", 1857 (publ. 1939)
35.Contribution to a Critique of Political Economy, 1859. - Preface (1857)
36.Outlines for a Critique of Political Economy (Grundrisse), 1859 
37.Theories of Surplus Value -
Volume 1 (written 1861-3, published 
Volume 2
Volume 3
38. Articles on the American Civil War in Die Presse, 1861
39. Speeches and Communications re. International Workingmen's
Association, with F. Engels, 1864-1874.
40. "Value, Prices and Profit - Address to the IWMA, 1865. 14
 Contd.
41. Capital: Critique of political economy -
Volume One: The Process of Production of Capital , 1867.
Volume Two: The Process of Circulation of Capital, 1885.
Volume Three: The Process of Capitalist Production as a Whole, 1894.
42. "The Abolition of Private Property", 1869
43. "The Civil War in France", 1871.
44. Fictitious Splits in the (First) International, with F. Engels 1872
45. Documents, etc. on the Hague Congress of the IWMA, with F. Engels,
1872
46. "Political Indifferentism", 1874,
47. "Conspectus on Bakunin", 1875,
48. "For Poland", with F. Engels, 1875,
49. Critique of the Gotha Program, 1875.
50. "Strategy and Tactics of the Class Struggle", with F. Engels, 1879, letter
51. "A Worker's Inquiry", 1880, 15
 Major publication
 Communist Manifesto 1848

 Capital: Critique of political economy

Volume One: The Process of Production of Capital , 1867.
Volume Two: The Process of Circulation of Capital, 1885.
Volume Three: The Process of Capitalist Production as a Whole,
1894.

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 Influences
I. Theory:
German Philosophy

Hegel:social change comes through social struggles

and conflicts (dialectics)

Feuerbach: deal with the “real” world, not just ideas

about it (materialism)
17
 Contd...
II. Analysing economy:
British political economy
Adam Smith: study the division of labour

III. Politics:
French Socialism
- Saint-Simon: must create a new society, based on
cooperation between classes, not conflict

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 General approach & Basic Concepts

1. Aim of ‘sociology’
2. Human nature
3. Historical Materialism
4. Class and class struggle

19
Contd.
1. Aim of ‘sociology’ (Historical Materialism):
Create knowledge critical of existing society

Inform the working classes of their oppression

Encourage revolution – abolition of capitalist

society

Build new socialist, then communist society

20
 Contd...
2. Human nature
 Human being is fundamentally a social animal
(agreement with Durkheim)

 Human nature changes over time:

- shaped by particular societies
- (e.g. human nature in capitalism: selfish
human nature in communism: cooperative)

21
 Contd...
Part of human nature remains constant:

-Humans creative / creativity in making things

-Making things creatively allows self-expression

-Humans like working (if allowed to do so freely

& creatively; but not if forced to)
-Good society: allows creativity in work
-Bad society: forced to work, work uncreative
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 Contd...
3. Historical Materialism
-Always see the ‘material’ aspects of society
as the most important

-The ‘ideal’ elements of society are less

important
- (Contrast with Durkheim and, partly, Weber)

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 Contd...
Historical Materialism
Materialism:
-looks at material factors in society
-emphasises production and labour over ‘ideal’ factors

Historical:
-looks at changes over time in material factors
-social change produced by changes in material
factors
-Human history = changes in how people work &
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 Contd...
4. Class and class struggle
Two basic types of society:
-Class-less societies (e.g. communism)
-Class-based societies (e.g. capitalism)

Within class-based societies:

-Classes are the most important social groups
-Different classes are antagonistic to each
other 25
Contd...
Classes are antagonistic to each other as each class
has its own interests

Class interest: to be the most powerful group in

society (especially in terms of wealth)

Class struggle: classes always in conflict with

each other to be the most powerful
Human history – driven by conflicts between
classes; classes win, classes lose

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Contd...
Dominant class(es) Subordinate class(es)
Rulers Ruled
Leaders Followers

Power: Powerless:
political & economic politically/economically

Political;
Control the government Ruled by government

Economic:
Control production Carry out production
Controllers of economy Workers
Economy benefits them Exploited
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 Marx’s Labor Theory of Value
“Capital is dead labour, which, vampire-like, lives only by sucking
living labour, and lives the more, the more labour it sucks.” (Das
Kapital, 1867)

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 Marx’s Labor Theory of Value
 Marx inherited the labor theory of value from the
classical school. Here the continuity is even more
pronounced; but there is also a radical break.

 For Ricardo, labor is essentially a numeraire,

which enables a common computation of labor
and capital as basic elements of production costs.

 For Marx, labor is value.!!!

29
Contd.
 according to Marx, all commodities must contain one
element in common that must exist in certain
measurable quantities.

 Marx considered use value, or utility, as a common

element

 He then turned to labor as the common element and

concluded that:
 the common element= the amount of labor time
necessary to produce commodities that governs their
relative prices. 30
Contd.
 To Marx, the only social cost of producing commodities
was labor.

 Marx disregarded the differing skills of labor and

conceived of the total labor available to society for
commodity production as a homogeneous quantity,
which he called abstract labor.

 Marx sidestepped the entire issue by assuming that

differences in labor skills are measured not by wages but
by differences in physical productivity.
31
Contd.
• The Value of a commodity depends on the
amount of labour time involved in its
production

• The labour time must be socially necessary

• Labour time is measured in abstract

homogeneous units
Contd.
• Exchange values involve comparability

• To have exchange values something must have

• use value, but use values are non-comparable

• What all commodities have in common is that

they are the products of labour

• Exchange values based on labour time

 Contd.
• According to this theory all goods can be exchanged in
accordance with their inherent units of labour.

• Marx believed that the labour theory of value could also be

applied to the highly developed economic system of
capitalism.

• However, he refined this theory into his famous theory of

surplus value, which says that in the long run every
commodity will only fetch the price that is equal to its cost of
production.
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 Marx’s Labor Theory of Value and surplas
 Value is nothing but that fragment of the total
labor potential existing in a given society in a
certain period (e.g. a year or a month) which is
used for the output of a given commodity.
 at the average social productivity of labor
existing then and there, divided by the total
number of these commodities produced and
expressed in hours (or minutes), days, weeks,
months of labor.

35
Contd.
 Value is essentially a social, objective and
historically relative category

 The materiality of value not physical but it

is social.
 value is a social substance that appears in
a series of material forms (labor-selling
people, commoditized things, money).

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 Surplus Value
Marx believed that the bourgeoisie
basically bought the products of the
laborers at a cheap price, and then sold
those same products back to them at a
high price, in effect stealing the surplus
value as their profit.

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Contd. Defined three key variables

◦ v: Value of labour-power
 v for “variable” since labour alone,
according to Marx, added new value

 If worker’s weekly means of subsistence take

20 hours to make, and a chair takes a working
week to make, then the chair contains 20 hours
of v
 Contd.
◦ c: value of machinery used up in production
 c for “constant”, since according to Marx,
machinery merely transfers its value to
output

 If machinery which took 10 hours to make

wears out in making the chair, then the chair
contains 10 hours of c
 Contd.
◦s: Surplus-value
difference between what worker is paid (v)
and the number of hours worker actually
works

If working week is 60 hours (common in

Marx’s day), then s=60-(v+c)=30
Contd.
• Three variables determine rate of surplus value and rate
of profit:
s proportional to v

s Surplus-value
 Rate of profit
cv

value of machinery used up in

Value of labour-power only source production
of surplus contributes nothing to profit

s
Rate of surplus value
v
 Marx’s Theory of Rent
Marx regarded such as land as a gift of nature

In Marxist thought there are four possible theories

of rent:
1. Monopoly theory
2. differential rent theory
3. capital theory of rent
4. Marx’s own theory

42
 Contd.
In Monopoly theory:

rent comes about from the monopoly price of

agricultural commodities and the monopoly price from
the land ownership.

The price of agricultural produce is higher than its

value because its supply is below the demand. This arises
due to the law of diminishing returns and thus the supply
cannot keep up with demand.
43
 Contd.
differential rent theory:
coincides with the first one in that differentials in rent
are due to the variations in land fertility.

capital theory of rent:

relates to the use of capital on land in order to improve
its fertility. Here, rent is linked to the interest on capital
equipment used to enhance productivity. However, this
theory is incapable of explaining the rent of land on
which no capital has been used
44
 Contd.
Marx’s own theory:
rent is linked with private ownership of land which, according to
him, does not invalidate the labour theory of value. Rent is a form
of surplus profit.

Competition creates a single price for the produce regardless of

whether it comes from highly fertile or less fertile land. If the
market price turns out to be favourable for the capitalist because
he happens to own fertile land, then he will obtain a surplus above
the average rate of profit.

The lower the cost of production the higher the surplus profit.
45
 Contd.

 Marx’s theory of rent is the most difficult part of his economic

theory, the one which has witnessed fewer comments and
developments, by followers and critics alike, than other major
parts of his ’system’.

46
 Marx’s Theory of Money
Marx’s theory of money is in the first place a commodity
theory of money.

A given commodity can play the role of universal medium of

exchange, as well as fulfil all the other functions of money, precisely
because it is a commodity, i.e. because it is itself the product of
socially necessary labour.

This applies to the precious metals in the same way it applies to

all the various commodities which, throughout history, have played
the role of money. It follows that strong upheavals in the ’intrinsic’
value of the money-commodity will cause strong upheavals in the
general price level.
47
Contd.
In Marx’s theory of money, (market) prices are
nothing but the expression of the value of
commodities in the value of the money commodity
chosen as a monetary standard.

If £1 sterling = 1/10 ounce of gold, the formula

’the price of 10 quarters of wheat is f 1’ means that
10 quarters of wheat have been produced in the
same socially necessary labour times as 1/10 ounce
of gold.
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Contd.
As gold has an intrinsic value, like all other commodities,
there can be no ’gold inflation ’, as little as there can be a
’steel inflation’.

 An abstraction made of short-term price fluctuations

caused by fluctuations between supply and demand, a
persistent decline of the value of gold (exactly as for all
other commodities) can only be the result of a persistent
increase in the average productivity of labour in gold
mining and not of an ’excess’ of circulation in gold.

49
Contd.
Paper money, banks notes, are a money sign representing
a given quantity of the money-commodity. example, a
banknote of £1 represents 1/10 ounce of gold. This is an
objective ’fact of life’, which no government or monetary
authority can arbitrarily alter.

 It follows that any emission of paper money in excess of

that given proportion will automatically lead to an increase
in the general price level, always other things remaining
equal.

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 MARX IN HIS OWN WORDS
‘History repeats itself, first as tragedy,
second as farce.’

51
 MARX IN HIS OWN WORDS
Thewriter may very well serve a movement of
history as its mouthpiece, but he cannot
ofcourse create it.’

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 MARX IN HIS OWN WORDS
‘Inbourgeois society capital is independent
and has individuality, while the living person is
dependent and has no individuality’.

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 MARX IN HIS OWN WORDS
‘The worker becomes all the poorer the
more wealth he produces, the more his
production increases in power and range.’

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 MARX IN HIS OWN WORDS

“Religion is the opiate of the masses…”

55
 MARX IN HIS OWN WORDS

To proletariat: “You have nothing to lose

but your chains…”

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IMPLICATION OF THE MODEL
 Revolution will occur in most advanced (i.e.,
ripest) capitalist economy
 Germany
 UK
 Did it?
 NO
 Revolution occurs in Russia
 hardly a mature capitalist economy
 Why?!
THE SOCIALIST COUNTRIES IN 1987

 1. Soviet Union 1917 Internal

 2. Mongolia 1921 External
 3. Albania 1944 Internal
 4. Yugoslavia 1945 Internal
 5. Bulgaria 1947 External
 6. Czechoslovakia 1948 External
 7. Hungary 1948 External
 8. Poland 1948 External
 9. Romania 1948 External
 10. North Korea 1948 External
 11. China 1949 Internal
 12. East Germany 1949 External
 13. Vietnam 1954 Internal
THE SOCIALIST COUNTRIES (CONT.)

 14. Cuba 1959 Internal

 15. Congo 1963 Internal
 16. Somalia 1969 Internal
 17. South Yemen 1969 Internal
 18. Benin 1972 Internal
 19. Ethiopia 1974 Internal
 20. Angola 1975 External
 21. Kampuchea 1975 External
 22. Laos 1975 External
 23. Mozambique 1975 Internal
 24. Afghanistan 1978 External
 25. Nicaragua 1979 Internal
 26. Zimbabwe 1980 Internal
Answer + more
 1- self-Knowledge, Self-conscious, is necessary
for Proletarian Revolution
 Answer + more
 2-information and communication instrument is in
hands of capitalist
Answer + more
 3-relationships between capitalist is strong than
relationships between laborers
Answer + more
 4- industrialism is not completed In the world
 Answer + more
 5-capitalist is like Octopus or liquid, change its color
and Shape
 Answer + more
 6- capitalists can delay Proletariat Revolution but
not for ever and Proletarian Revolution is
Unavoidable
References
1. Israel , M. Kirzner, 2000. The Economic Point of View: An Essay in the History of
Economic Thought , Institute for Humane Studies, USA.
2. Henderson P. James, 2004. THE STATE OF THE HISTORY OF ECONOMICS, Pluto
Press, USA.
3. Kula,E. 2003. HISTORY OF ENVIRONMENTAL ECONOMIC THOUGHT,
Routledge, USA.
4. Medema, G. Steven and Warren J.Samuels,2005.Historians of Economics and
Economic Thought, Routledge ,London .
5. Chitty, Andrew, 2009.Karl Marx and Contemporary Philosophy, PALGRAVE
MACMILLAN , USA.

6. MEDEMA, G. STEVEN AND WARREN J. SAMUELS, 2000. A History of

Economic Thought Fifth printing, Princeton University Press, USA

7. http://www.internationalviewpoint.org/
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THANK
S

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