Free download: Marxist Economics -- A handbook of basic definitions

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This handbook is not, of course, a substitute for the study of Marxist political economy, but an aid to that study. It will perhaps prove most useful as an aid to review. It was first developed for the Fourth International’s cadre school in Europe. It was subsequently also used by the Democratic Socialist Party in its cadre school. Along the way, many of the definitions and explanations were modified to take account of students’ difficulties or further questions.

It may be asked, however, whether there is any longer any purpose in the study of Marxist economics. Is not Marx’s analysis discredited by the collapse of the “communist” states of Europe and China’s somewhat slower but no less determined path in the direction of capitalism? Have not Marxist economics been superseded by Keynesianism, or monetarism, or neo-liberalism?

In fact, Marx would have changed little if anything in the pages of Capital even if he had somehow been able to know of the fate of “communism” in the late 20th century. The founders of scientific socialism saw their primary function as providing the proletariat with the intellectual tools it needed in order to overthrow capitalism; predicting the course of that struggle in anything but the most general sense was no part of their project, because the outcome of the struggle was not predetermined.

Marx and Engels were well aware that the revolutionary surge may be followed by ebb: they studied carefully the lessons of the 1848 revolution and of the Paris Commune, as well as of countless lesser battles. The Commune — the first workers’ government in the world — lasted a mere 70 days before it was crushed by capitalist reaction. The second workers’ government, established by the October Revolution, lasted more than 70 years. There will be further revolutions, which will be the stronger for learning from those who have gone before.

We can be certain of more revolutionary outbreaks for the same reason that Marx’s political economy is still so relevant. The fundamental “laws of motion” of capital that Marx began investigating a century and a half ago continue to operate in modern capitalism, despite the myriad changes in capitalism’s surface features and the rare more substantive developments (the most important of which was the development of imperialism). Indeed, the student who approaches Capital for the first time is invariably struck by the insights it provides into modern phenomena; this is itself a testimony to how deeply and accurately Marx’s analysis penetrated.

As for alternative schools of economics, most do not rise above what Marx dismissively characterised as “vulgar economics”. This is the non-science that concerns itself, not with the explanation of underlying causes, but with systematising the impressions created in the mind of the capitalist by the surface features of the production process. It typically begins with eternal and a-social “factors of production” — or, even worse, with isolated individuals possessing only “needs” — and never gets beyond debating empirical rules for observed rates of wages, profits, interest and rents.

The enduring superficiality of modern non-Marxist economics is most clearly demonstrated by its inability to overcome the “micro-macro” divide: for individual and aggregate behaviour, this would-be science possesses two quite different sets of analysis and explanation, with no way of connecting the two. In Marx’s analysis, of course, there is no such divide.

It is worth recalling that Marx has been declared “outdated” for at least a century by economists most of whose names and ideas are now known only to specialists. It is a safe bet that Marx’s epochal work will also outlast the more recent fads.

-- Allen Myers, June 1998.

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