Lecture 4 - Jan. 14th, 2019
Marxism
Rudolf Hilferding, Finance Capital, 1910, ch. 25
3 different versions of Marxism:
Karl Marx - originator of the core principles
Rudolf Hilferding - applies Marx’s ideas in new ways, deals with new questions
Vladimir Levin - led revolution in Russia
Marx observed what was happening in Britain in the late 1840s/50s.
Marx vs Liberalism
- Liberals argued for free choice and voluntary exchange
- Marx criticized liberal policies for failing to deliver the promised results.
- In Britain, you could receive charity by showing proof of birth. This was stripped
away in 1840, and people were encouraged to enter the labour market.
- Marx felt that the markets were not fulfilling their promise
- His arguments use dialectical logic (i.e. events are driven by contradiction) (there is a
thesis, counter thesis, synthesis, etc)
- He uses this logic to explain how society evolves into a capitalist system.
- Contradictions are logically identified inconsistencies which may or may not appear
obvious.
Marx used the Labour Theory of Value (i.e. all value originates from labour)
V = K + W + SV
^Where V stands for value, K stands for capital, W stands for wages, and SV stands for surplus
value.
V: what someone is willing to pay for something; SV the return to the entrepreneur (i.e. profit)
Is SV really the product of labour? It is the product of the entrepreneur and their ideas.
Through a Marxist lens, however, the
V should equal W , so what about SV? This is the contradictory element of capitalism that Marx
build his argument around.
Core Assumptions of Classical Marxism
1. Social classes are the primary actors. The bourgeois, the working class, landowners, etc.
Individuals are not key actors unlike liberalism.
Marxism
Rudolf Hilferding, Finance Capital, 1910, ch. 25
3 different versions of Marxism:
Karl Marx - originator of the core principles
Rudolf Hilferding - applies Marx’s ideas in new ways, deals with new questions
Vladimir Levin - led revolution in Russia
Marx observed what was happening in Britain in the late 1840s/50s.
Marx vs Liberalism
- Liberals argued for free choice and voluntary exchange
- Marx criticized liberal policies for failing to deliver the promised results.
- In Britain, you could receive charity by showing proof of birth. This was stripped
away in 1840, and people were encouraged to enter the labour market.
- Marx felt that the markets were not fulfilling their promise
- His arguments use dialectical logic (i.e. events are driven by contradiction) (there is a
thesis, counter thesis, synthesis, etc)
- He uses this logic to explain how society evolves into a capitalist system.
- Contradictions are logically identified inconsistencies which may or may not appear
obvious.
Marx used the Labour Theory of Value (i.e. all value originates from labour)
V = K + W + SV
^Where V stands for value, K stands for capital, W stands for wages, and SV stands for surplus
value.
V: what someone is willing to pay for something; SV the return to the entrepreneur (i.e. profit)
Is SV really the product of labour? It is the product of the entrepreneur and their ideas.
Through a Marxist lens, however, the
V should equal W , so what about SV? This is the contradictory element of capitalism that Marx
build his argument around.
Core Assumptions of Classical Marxism
1. Social classes are the primary actors. The bourgeois, the working class, landowners, etc.
Individuals are not key actors unlike liberalism.
