Marxist Socialism
Marxist Socialism refer to a Marxian school of economics which emerged soon after Marx's death, led by his companions and co-writers, Friedrick Engels and Karl Kautsky.
The questioning of the status quo of the economic system was not a new idea; Jean-Jacques Rousseu sowed its first seeds and was followed by a plethora of thinkers whose ideas are better described in the article Economic Heterodox Tradition. Each one of those philosopher-economists, during the XVIII-th and early XIX-th centuries, pointed out some of the flaws they identified in the prevailing economic system. Their rethoric was strong and gathered some large audiences; from time to time they would succeed in promoting big riots and even some short lived revolutions. But none of those thinkers developed a systematic and encompassing political economy theory framework which had the strenght to possibly change the world.
Some of them were too inconsistent, or too utopic; some were too romantic, or too idealistic, or even "half-mad". Most of the experiments which tried to implement their theories in the real world did not last long. Even those which succeeded, like Robert Owen's (1771-1858) example of the viability of co-operative factory communities, the New Lanark Mills in Scotland, represented only punctual local experiments, unable to influence the economic activities beyond the limits of their own nearby village.
On October 1st, 1867 the publication of the first volume of a single book would change that situation. The book was Karl Marx's Das Kapital - Kritik der Politschen Ökonomie [1]. A very long, dense, complex, logical, sometimes tedious, but a very systematic work Das Kapital, since its publication in 1867, has been read by very few but has been discussed by all. Marx died before he could complete the work; his friend and sometimes co-writer Friedrich Engels edited Das Kapital 's second and third volumes, based on Marx's notes.
The marxian economists have been able to inovate and modify most of Economics but in one aspect: the "natural propensity" of economists to disagree among themselves. Immediately after its birth, marxian economics splat in two main currents: the orthodox, led by Friedrich Engels (1820-95), Karl Kautsky, Rosa Luxemburg, Georgy Plekhanov and others and the revisionists, led by Bernstein (1850-1932), Jean Jaurès (1859-1914), G.D.H. Cole (1890-1959), Sidney Webb and the Fabian Socialists, Mikhail Ivanovich Tugan-Baranovsky (1865-1919), Werner Sombart and the (Youngest) German Historical School, among others.
Karl Marx work suggested that the number of conditions required for steady-state growth were too numerous for capitalism to avoid its own breakdown. This "inevitablibilty" of the capitalism failure was challenged by Bernstein (1899) who thought that if socialism is to exist, it must be a conscious choice.
The ortodox marxian economics
Marxist, neoclassical, and Keynesian economics all have their roots in the "Classical Political Economy" of the early XIXth century. One key point to understand is that Marxist economics is an economic theory of capitalism. Another important point to have always in mind is that the "soviet-type" of marxism, that is to say, the implementaion of "marxism" by the governments of the Soviet Union and other communist contemporary coutries bear little relation to the system as devised by Marx; they only represent the "soviet" interpretation of marxism.
The essence of Karl Marx's work is centered on the labour theory of value. Adam Smith thought the amount of labor required to produce the goods would determine the rate at which they could be exchanged for one another. However Smith's theory of value was sometimes inconsistent. David Ricardo elaborated on Smith's theory. Ricardo's ideas, tightly reasoned and complex, were much more than a reconsideration of the Smith's labor theory. They gave directions to economics that it is still following today. A good grasp of David Ricardo's theory of value will prove to be an essential pre-requisite for those willing to understand the principles of marxian economics.
David Ricardo, in his Principles of Political Economy and Taxation [2] cleared Smith's early inconsistencies on the theory of value: "The value of a commodity, or the quantity of any other commodity for which it will exchange, depends on the relative quantity of labour which is necessary for its production, and not as the greater or less compensation which is paid for that labour". This has been the starting point of Marx's critique.
A second ricardian discovery would also drive Marx's analysis further; this had to do with land rent. Land rent seems to be a cost of production. So shouldn't the "natural price" of an agricultural product (for example, potatoes) depend on the rent of land? But labor will be more productive on land that is more fertile. Crops grown on fertile land will cost less labor. Does that mean those potatoes will have less value?
Ricardo discovered that the rent of land would be just enough to offset the differences in labor cost, so that the value of agricultural products (potatoes) would be the same regardless of the fertility of the land where they were produced. That is because rent is based on differential productivity.
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References
- ↑ MARX, Karl. Das Kapital - Kritik der Politschen Ökonomie. 1867. First english edition of 1887 (4th German edition changes included as indicated). Translated by Samuel Moore and Edward Aveling, edited by Frederick Engels
- ↑ RICARDO, David. The Principles of Political Economy and Taxation. 1815 (third ed. 1821). Hamilton, Ontario: McMaster University.