Essay on "What Is the Place of the Market in Marxist Political Economy?"

Essay 13 pages (3905 words) Sources: 12 Style: Harvard

[EXCERPT] . . . .

Market in Marxist Political Economy

Today's individual has an unlimited access to information, which is generally due to the burst of the dot-com era, but also due to several process of social emancipation. We are now only one click away from finding out the types of data we need for barely almost any kind of research. In the field of economics, the specialized literature is extremely vast, detailing the basic principles of the market place, the macro and microeconomic forces, labor force characteristics, the contemporaneous economic crisis and so on. And the wide access the individual has to this information is not only due to the technological appliances and the social developments, but mostly to the economists who played a vital role in setting the basis of the modern economic systems.

Introduction to Economic Thought

The world had functioned on the basis of economic principles ever since its beginnings and references to these exist in antiquity (Greek philosopher Aristotle) or even in the Bible, with the most relevant one being the truck practiced. Chronologically addressing the issue, the first economic thinkers were the mercantilists, who set the basis for a market on which shareholders would be able to collect and invest their money. Jean Baptiste Colbert, France's Minister on Finance throughout the reign of King Louis the XIV, developed the first policies relative to taxation and a state budget. John Locke argued the rights of the population to be the owners of their goods, and in more specific terms, he addressed the issues of private and public goods.

Society can however only discuss modern economics starting with the 18th century, and due to the contributions of British economist Adam Smith. His Wealth of Nations (full title: An Inquiry into the Nature and Causes of the Wealth of Nations) is considered the first book on modern economics and the author is seen as the father of modern economics. In this, Smith argued the theory of the invisible hand, by which he emphasized the need for a reduced governmental intervention within the market, which is able to regulate itself (Groenewegen, 2003).

Numerous other economists followed and made major contributions to the field. David Ricardo is for instance most renowned for his theory of comparative advantages, an issue highly used in today's modern international trade. He said that each country should recognize its limitations and only produce those goods for which they held a comparative advantage (such as natural resources or skilled labor force). They would then exchange them on the market for the items they cannot produce.

Other classic economists include Thomas Mathus, who argued for a minimal governmental interference in economy, or John Stuart Mill, who was the advocate of a balance between supply and demand. This balance and the limited political interference in the economic life are the primary concepts at the basis of the classic economic thought.

Karl Marx is yet another key representative in the history of economic thought, and he is the founder of the Marxists trend. He used political theories to condemn the capitalist models and promote the socialist ones. What is remarkable about the Marxist trend is that its representatives were equally focused on politics and economics. Several of Marx's followers, such as Beatrice Webb or Karl Kautsky managed to influence the political approaches to economics.

The second half of the nineteenth century brought in a revolution of the economic thought - it introduced the notion of marginalism to identify the utility of one item, instead of the whole product line (Seligman, 1990). This was the moment that the door to the contemporaneous economics was opened. The works that followed that time, coming from the neoclassics or the Keynesians, all deal with modern economics issues, such as macroeconomic forces, labor market and employment theories, or financial policies.

Despite the fact that all these individuals and groups make for an interesting topic, the aim of this paper is not to present their contributions, but simply those of Marxists in the field of setting a place for the market. Such an endeavour is only possible however after a background has been set for the Marxists theory.

3. The Marxist Theory

Marxism is the name given to the doctrines of Karl Marx and it has played a crucial role in the establishment of modern economics. Marx is often assimilated with a founder of modern socialism and several contemporaneous models of socialism and communism are based on his ideas. The economic and political philosophy is known as scientific, as opposed to utopian, and it has generated numerous effects in the field of academics and disciplines such as history, literature, economics, philosophy or politics (the Columbia Encyclopedia, 2007).

Formation of the Marxist Ideology

Karl Marx was born on May 5, 1818 in Trier, Germany, in a Jewish family, with numerous rabbis in its past. In order to avoid exile, the family changed religions and its name from Mordechai, to Markus and then Marx. Karl received a liberal education with basis on the classic theories. During his high school years, he discovered and enjoyed the works of Homer and Shakespeare, on which he would later on base some of his ideas.

Marx attended the Bonn and Berlin Universities to studies law, but he soon turned to philosophy. While at first he despised the ideology of Georg Hegel, he soon became its adept. He received his doctoral degree for the paper Difference between the Democritean and Epicurean Philosophy of Nature, which revealed high Hegelian ideas. In 1841 he returned to Trier and began a career in political journalism, featuring various articles of communist nature. While doing this, Marx became interested in situations arousing economic features, alongside with political ones, leading then to his formation as a socialist. He came to address the role of the working class within the overall economic context and stated that, unlike Hegel's beliefs, the state was not above the classes. Marx revealed ideas of a revolution centred on the population as the main agent, with the aim of social emancipation and the achievement of a full democracy; he engaged in collaborations with French and German communist societies.

Marx's ideas changed after a thorough study of Adam Smith and David Ricardo, due to which he understood the working class in terms of economic role, rather than revolutionary power. In June 1844, the German workers rebelled against their capitalist owners; the revolution was extinguished by the military forces and its effects were reduced, but it opened the most important ideological door for Marx. "He regarded the working class no longer as the passive but as the 'dynamic element' of the German revolution. Marx the revolutionary communist had finally emerged" (Callinicos, 2004).

Marxists Ideas

However the Marxists ideology is extremely complex, its essence can be captured by the following points:

The economic classes are the most important components of the society; the economic class is defined in terms of the relations between members and the means of production

The capitalist ideologies promote the ideas of owners, landowners, workers and peasants, reducing the roles of the working classes

All history is due to the struggles of the classes and the stages of history are: primitive communism, barbarism, the slave society, feudalism, capitalism, socialism and communism

The feudal class is replaced by the capitalist one as it removes the feudal personal relations and introduces the cash nexus

Capitalists exploit the difference between retail price and actual value of the products to get rich; the lack of a balance generates economic recessions

The introduction of mechanized work generates job loses and the minimum wages lead to poverty and even bankruptcy for the small entrepreneurs

Capitalism throws the working classes into proletariat, which wins through a violent revolution

The state represents the formation in which the ruling class controls the other classes; the rules are overthrown through revolutions

Revolutions can be replaced by a revisionistic approach - winning power by elections and without violence

The proletariat will establish a socialist society, which will peacefully evolve into communism

The final result, communism, is a classless society, in which the state fades away in socialism, the means of production are publicly owned

The socialist motto is "From each according to his ability, to each according to his work"; the communist slogan is "From each according to his ability, to each according to his needs" (Formal Reasoning Group, 1995)

4. The Market in the Marxist Political Economy

The study of the Marxists ideas relative to the market is based directly on the works of Karl Marx and his followers and the references they make in their books to the market.

In the Communist Manifesto (2002), Karl Marx, Friederich Engels, Samuel Moore and Gareth Stedman Jones recognize the emergence of a world market and the growing importance of international trade. They refer to the market as "a system on unequal change, of the war of all against all or of buying cheap and selling dear." In their vision, the market was based on consumption and demand… READ MORE

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