Beruflich Dokumente
Kultur Dokumente
CAPITALISM
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• Karl Marx (1818-1883)
• Marx’s dialectical materialism
– economic evolution
• Rise and fall of capitalism
– labor theory of value
– surplus
– crisis and socialist revolution
Karl Marx (1818-1883)
• Born in Prussia of Jewish family converted
to Christianity
• Influenced by the philosopher Hegel
• Much of his work in London in
collaboration with Friedrich Engels
– concept of dialectical materialism
– The Communist Manifesto
Marx’s Theory of Dialectical
Materialism
• Social and economic change through
conflict
• Emerging classes associated with economic
innovations come into conflict with the old
• Replacement of an old economic order with
a superior one
• Capitalism is a qualitative leap over
feudalism
• Socialism is a qualitative leap over
capitalism
Capitalism
• Inefficient feudalism replaced by far more
efficient capitalism
• As capitalism emerges, there is an
accumulation of capital (wealth) by the
bourgeoisie (the capitalists) and the creation
of a free (i.e., not serf) labor force, the
proletariat
• Extreme dichotomy between capital and
labor
• Sets up two classes which must eventually
conflict
The Model
• Marx models an internal contradiction
which sets up the conflict between
classes
• Proposes a “labor theory of value”
– Long run value determined by three
things
• amount of labor used to produce the good
• indirect embodiment of labor through capital
and intermediate inputs
• the capitalist’s surplus
• C=c+v+s
• where
– C is value
– c is indirect labor through capital (fixed
capital)
– v is direct labor cost (variable capital)
– s is surplus value or profit
Surplus Value
• Where does this surplus value come from?
– Workers are paid a subsistence wage
– Employers compel workers to produce a value
above that needed to generate subsistence wage
– The workers get the subsistence wage, the
capitalist gets the surplus
• the “Reserve Army of the Unemployed” keeps
wages at subsistence level
• exploitation of labor
Setting up the Internal
Contradiction
• Let the “Rate of Labor Exploitation” (s') be
• s' = s/v
• q = c/(c+v)
• p = s/(c+v)
• p = s'(1 - q)