• Marxian Theory of Capitalist Development • Assessment of Marxian Theory • Dependency Theories Importance and Relevance • Marxian Theory of Development is unique and alternative theory/approach of development • Revealed the basic laws of motion of Capitalism • Marx’s theory has influenced critical and alternative thinking and has become the inspiration of new vision for a vast a section of working class and other exploited groups in the world. • Marxian ideas have influenced profound changes in the theory and practice of development Some Basic Works of Marx • Marx and Engels, Manifesto of the Communist Party (1848)
• Karl Marx, Capital: A Critique of Political
Economy (1867) Volume I, II III
• Works of Engels, Kautsky & Lenin
supplemented the works of Marx
• Commentary and Analysis by diverse scholars
Marxism • Marxism based on Marx’s work and principles comes up as :
i) Marxism as a historical methodology of
enquiry (dialectic materialism)
ii) Marxism as a Theory of Capitalist
Development
iii) Marxism as an ideology and practice
Marx’ methodology of dialectics and historical materialism • Marx presented his theory based on the method of dialectics: every thing is fluid and changing. • Any economic phenomenon is not to be viewed in isolation but in totality which relates to its origin and inevitable change and disappearance • In dialectical analysis, history moves from stage to stage of contradictions/conflicts and change: Thesis Feudalism
Anti-Thesis Capitalism
Synthesis Socialism • For Marx, Dialectics is materialism i.e. ideas or change is based on objective realities
• For Hegel (the profounder of dialectics)
dialectics is idealistic: Ideas come from brain (pure thought) not based on materialistic reality (like property, class, ecology, etc)
• Historical materialism uses natural and
historical (scientific) evidence for critical analysis Theory of Capitalist Development • The objective of this theory is to reveal the ‘economic laws of motion’ which govern the origin, rise & decline of capitalist mode of production. • The theory can be understood by Features of Capitalist Mode of Production Labour Theory of Value Law of Surplus Value and Capitalist Accumulation Inherent Contradiction of Capitalism Transcendence of Capitalism Basic features Capitalist Mode of Production • Capitalism is a system of generalised commodity production and exchange/market which has evolved from the ruins of feudalism • Commodity is the ‘embryonic cell’ of the capitalist system representing its inherent laws and contradictions • Capitalist mode of production has two core aspects: - The forces of production and - The relations of production • Forces of Production are the machinery, science and technology, skills, organisation of production which propel production • Relations of production: Social norms about appropriation and distribution of output, ownership property, standing of labour, socio- cultural set-up, etc • Conflict between the two determines the nature politics, law, religions (super structure) and ideas that prevail • Workers and capitalists are the two antagonistic classes in capitalism Labour theory of value • Labour is the basis of the value of commodity • A commodity has two values: Use value and Exchange value • Any object can have use value but only a commodity will have exchange value • Concrete (direct)labour is the basis of use value • Abstract labour is the basis of exchange value (measuring rod) • Abstract labour is the value of the ‘socially necessary labour time’ required to produce a commodity under average conditions. Law of surplus value • Marx discovered the secrete of surplus value • Labour itself is a commodity exchanged for meeting subsistence needs of worker & family • Labour time socially necessary is the value of worker’s labour power • Capitalist makes worker to produce more than his labour power (wage or cost of subsistence) • Surplus Value (s) is what workers produce over what they receive (Labour time–Labour Power) • Surplus Value is thus the source of profit and expropriation • Capitalists tries to maximise SV
• Higher the variable capital (labour) higher is the
profit P= s/(c+v) • Capitalists accumulates capital through surplus value and its reinvestment continuously.
• Capital is the product of social division labour
(capitalist and labour) Inherent Contradictions of Capitalism • Capitalism is ridden with many contradictions • There is alienation of worker who is detached from own labour and its product, and enslaved to machines and work. • Competition leads to ‘falling tendency of rate of profit’;and constant instability or crisis in system • Capitalist resort to wage reduction, save-labour, increase work-time, cheap-imports etc. • Industrial Reserve Army of unemployed gets created leading to inequality and conflict between labour and capital; • Poverty and misery prevails Destiny of Capitalism • Though Marx never predicted sudden collapse of capitalism, but his dialectics clearly portends a revolutionary transcendence of capitalism • Capitalism leads itself to its demise: expropriators will be expropriated • The inner contradictions makes the overthrow both necessary and possible (through active consciousness of labour) • The change is towards socialism where there will be a classless society without private property and with state subordinating itself to the society Criticisms of Marx’s Theory • Marxism created a strong influence and became rallying point for discontented people. • Marxism has become the basis of several parallel struggles:Feminism,Ecology,LDCs etc, • But Marxism is criticized on the following lines: - There cannot become an universal law - The tendency for profits to fall may not happen always. Increased capital investment, productivity and technology may increase rate of profit - The wage share also may not fall. - Role of trade unions is not clearly visualised - The changes in capitalism did not take place in predicted countries - Socialism and communism are not theorised and explicated clearly - Marx analysis ignored less developed countries. LDCs were visualised as pre- capitalist states. - Ignored influence of population pressure on poverty. Dependency Theories • Marx did not directly explore the problems of LDCs as they were treated as pre-capitalist • Lenin has tried to extend Marxism to global sphere by analysing the fallouts of Imperialism • In the post-colonial era many neo-marxians (Paul A Baran; A. G Frank; Samir Amir) tried to anlyse the underdevelopment of LDCs based on Marxian approach • They proposed a Dependency Theory of Development attributing underdevelopment of LDCs to expropriation by the developed world under colonialism Baran’s Theory • In The Political Economy of Growth (1956) Baran reflected as to why underdeveloped countries (UDCs) have not advanced in comparison to developed countries • Though UDCs also had faced feudalism and conditions of its decay; but the western countries grew more faster • The west colonised many parts of the world • In Asia, Africa and LA they engaged in more of self-seeking & predatory activities with outright plunder • There was unilateral transfer of wealth. • The methods destroyed self-sufficiency and handicrafts (esp. in rural areas) and hastened commoditisation in UDCs • Blocked the ripening of entrepreneurial class and industry • The expropriation jolted the UDCs; crippled their normal progress • The surplus extracted hastened concentrated capital accumulation in the west • LDCs remained backward having neither capital accumulation nor scientific advancement • India is the best example: British plundered (at the rate 10% of its NI per annum) Conclusion: • The Dependency theories clearly highlighted the contradiction of capitalism and imperialism at the global level