Marx the Economist | Chapter 3

This video covers Chapter 3 of Capitalism, Socialism and Democracy by Joseph Schumpeter

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[richardfield]

Schumpeter's examination of Marx in Capitalism, Socialism, and Democracy is superficial in the extreme, bordering sometimes on the trivial. This has led to numerous errors and confusions in this video, especially concerning Marx's Value Theory (He never called it a Labour Theory of Value). Smith and Ricardo's analyses were founded on ideas that go back to Aristotle. Marx simply takes them up where they left off. Nevertheless Marx and Ricardo were light years apart in terms of their aims and purposes and in their points of focus. In Volume 3 of Capital Marx demonstates why Ricardo's Labour Theory of Value could not possibly be correct (Ricardo himself suspected this, but could not let go of his basic intuition). Marx was not intending to write a comprehensive account of capitalism, so critiquing him for his failure to do this is misplaced. His purpose was, as the subtitle of Capital explains, to critique the field of political eonomy itself, to show how capitalism exploits labour and to show how commodities become fetishised. The patronising attitude towards Marx shown in this video is probably not the presenter's fault as she doesn't appear to be offering a critical analysis of Schumpeter himself, but takes everything he claims at face value including his supercilious attitude. The description of Marx theory of surplus value, (which Shumpeter rejects, having misunderstood Marx's analysis), is presented here in very vague and confusing terms. And there are several errors. So for instance, Marx did not fail to demonstrate that Capital must expand. A good part of Capital is in fact devoted to explaining why it must. (Marx called capital 'self-expanding value'). Schumpeter was also wrong about Marx's theory of Immiseration. Marx makes it quite clear that such immiseration is relative, not absolute, a point which Schumpeter ignores. Increasing the share of wealth of workers and increasing their living standards are not the same thing.

And so on.

[ahmedtaha]

I have just discovered your Chanel last week, you are doing a marvellous job here ....
systematic, precise and enjoyable in a way .
You bring back my passion for reading again ...
Keep it going fellas

[tomspaghetti]

Point of clarity on Marx’s theory of immiseration:

Key to this theory is Marx’s concept of Relative Deprivation,
"A house may be large or small; as long as the neighboring houses are likewise small, it satisfies all social requirement for a residence. But let there arise next to the little house a palace, and the little house shrinks to a hut. The little house now makes it clear that its inmate has no social position at all to maintain, or but a very insignificant one; and however high it may shoot up in the course of civilization, if the neighboring palace rises in equal or even in greater measure, the occupant of the relatively little house will always find himself more uncomfortable, more dissatisfied, more cramped within his four walls” - Wage Labor and Capital (Karl Marx)

Even if the standard of living of the working class improves in absolute terms, the existence of vast disparities (such as the presence of a palace nearby) means that their relative position remains low, leading to feelings of discomfort and dissatisfaction.

[stephenhemingway]

Lina, such a pleasure to watch your videos. I enjoy your obvious intelligence as much as I enjoy your content. And I really like your content. I remember when I took a course on Marx as an economist, as opposed to studying him in sociology courses, and it really deepened my understanding of his analysis. P.S. Quesnay is pronounced Kenay. You and Raphi are doing great work. Thanks!

[jorgemachado]

Marx's theory of value is not what the video depicts. Marx does not think value is the labor contained in the commodity (he even conclude the exact opposite in the value form chapter in the very first chapter "The commodity", in the value form analysis). The value for Marx is produced by the abstract labor, not labor itself. Marx's theory of value is largely different then Smith and Ricardo's theory.

The theory of exploitation depicted in the video is not Marx's theory too. Marx never said workers are exploited because they are paid less then their works's value. Actually, work is not even a commodity according to Marx. Labor Force is the category he uses to describe the commodity which workers sell to capitalists. The labor force is the capacity to work, not work itself. When this commodity is consumed by the capitalist, it provides more value then it has when the capitalist bought it. Marx called it "the secret behind the capitalist wealth". The labor force is the only commodity in this society that produces more value when it is consumed instead of depreciate it's value. This is the process by which capitalists exploit workers. The quantitative aspect of it is meaningless. The important aspect is the qualitative aspect of the exploitation.

The theory of immiseration in Marxian words:

"Whilst the division of labour raises the productive power of labour and increases the wealth and refinement of society, it impoverishes the worker and reduces him to a machine. Whilst labour brings about the accumulation of capital and with this the increasing prosperity of society, it renders the worker ever more dependent on the capitalist, leads him into competition of a new intensity, and drives him into the headlong rush of overproduction, with its subsequent corresponding slump."

There is a couple other citations that provides the picture that Marx was trying to say that workers would get poorer. But that is, as far as i know, a bad translation - and sometimes a bad reading. Marx was not interested in the mass of wealth that capitalism can accumulate. He knows that capitalism can grow and the mass of wealth in society can increase. But he is talking about a qualitative "impoverishment" of the worker. The reduction of the worker to a machine, an alienated being that produces everything in this society and can't control anything.

I believe there was almost a falsification of Marx's analysis in this book

A good book about theory of value is "Marxist Theory of value" by Isaac Rubin. And a book that can help understand the structure of the dialectical exposition in the text is "The making of Marx's 'Capital" by Roman Rosdolsky - This last book is essential to a good understanding of capital

[Ulyssestnt]

If the value is derived from labour, then how do you value labour?(for the purpose of price discovery).

[ezequiel]

It's just so annoying to watch this videos of yourself making such a parcial analysis and also making fun of some of Marx's views. It's unserious. Planned to watch the whole series but this just ends it.

[yavuzkestane]

Haven't the interpretations of Karl Marx for the 21st century's world become old fashioned in the field of economic relationships, political thought and sociology?