Marxist economics and the crisis of capitalism

In this third talk from our 'Marx in a Day' event, celebrating Karl Marx's 200th birthday and discussing his key ideas, Rob Sewell (editor of Socialist Appeal) explains the fundamental concepts of Marxist economics.

Rob touches upon the developments made by Marx from the ideas of his classical predecessors, such as Adam Smith and David Ricardo.

In particular, Rob elaborates upon the labour theory of value and the origins of surplus value: the unpaid labour of the working class.

By taking these theories to their logical conclusion, Rob outlines how Marx was able to explain the cause of capitalist crisis.

One decade on from the 2008 crash, Marx's economic analysis remains more relevant than ever. Capitalism has been proven to be an intrinsically crisis-ridden system. It must be overthrown.

[lucasimagery]

With so much confusion around socialism it's refreshing listening to someone with answers, thanks!

[ukulayme]

This is a great overview of Marxism. All tendencies can agree. Thank you

[eriknelson]

"Value is not price... Price is determined by _supply and demand_ ...There's a great demand for cabbages and the supply is not as great, it forces the price up of cabbages" (22:00)

*Value = cost of labor to the capitalists (wages)
*Price = cost of the final product to consumers

*Value = expense to the business
*Price = revenue for the business

*Value is a relationship between workers and businesses
*Price is another relationship between businesses and consumers

"If you had a manufacturer who produced cloth, and over a one hour period they produced ten yards of cloth, but then you had another manufacturer who used out of date machinery and very bad techniques and they produced the cloth, not in an hour but two hours... If they both take their bales of cloth to market, you've got one bale produced in one hour and another bale produced in two hours, the one-hour will be cheaper than the two-hours, and the two-hours will not be sold. _The market decides_ ...The market will reject commodities which have more than the socially necessary labor involved in their production" (8:00)

"If they reduce costs, they can undercut their competitors by reducing price... They steal the market from their competitors by undercutting them by producing commodities at a lower price" (20:00)

"Each capitalist is in competition and therefore will reduce its costs by different means. They can reduce costs by cutting the living standards of their workers [lowering wages], introducing a more advanced method of machines [constant fixed capital] or technique which allows them to reduce their costs. Then...the workers, because the work is more intensified, the value they produce is more spread among more commodities. They're producing more commodities so the value that's gone into those commodities is spread more evenly, it reduces the cost of every individual item or every individual commodity" (19:00)

"A continual process through competition of trying to reduce the value of each commodity by spreading the value to more commodities... because more commodities are produced by the machines [labor using capital] that have been introduced" (21:00)

"Enormous increase in automation lightens the burden of work" (40:00)

[theriversexitsense]

omg. i can't believe people still think labor creates value. don't realize you value just a product of bourgeious magic?

[wy]

is there an episode somewhere that can explain the concept of " super-profit" ??

[metu]

So when their is not enough working class, who can afford the product... We have what you call poverty... Homelessness, or a purge

[AB-kgrk]

Good words minus the lip smacking noises.

[criztu]

41:55 is where he finally destroys that cheeky bastard

[thisaccountisdead]

I thought this was a great video. Thanks. I have watched quite a few on this channel, and this was the one for me. Yeh, sorry, I don't agree with everything in other videos (including this one). I am not an expert or anything. I think dismissive remarks about 'identity/sexuality' ect and post-modernism are going to turn a lot of peopl off watching these videos. To me, the way I justify the importance of economics is through a bit of understanding of network theory - i.e. what is it that networks people in society most? There's this concept of the "80/20 rule" - this gives you 50% of wealth in the hands of the top 1% (Jordan Peterson talks about it all the time). I can't say what the principle is behind it as this comment will get censored automatically (based on previosu experience) so I'll just call it ""The Potato Principle" as it rhymes with the prinicple I am referring to (but can't).



However, there is also a formulation by Paul Erdos that looks at "degrees of separation" - for example "six degrees of Kevin Bacon". This is where the idea came from that on average everyone on the planet is separated by six friendship connections - it is thought that social media has now reduced this to three or four degrees of separation. This can be used to look at social networks - for example concentrations in social networks where a few people may have many more connections to others than anyone else (for example in leadership roles).


"The Potato Principle" and Paul Erdos's formulations, in their most basic form, are exactley the same - they are both just fractions made up of one natural log devided by another, and so they are analogous to each other. It is not straight forward, but pretty much you can compare the "80/20 rule" with "The six degrees of separation". And what I found was that for the "80/20 rule" the degrees of separation was as low as 1.161. And for "six degrees of separation" there was a "99/1 rule".


This is very basic back of the envolope stuff but basically I concluded that we are far more connected through economics than through social activities. And in fact (considering television and media - which is owned by a small few powerful people) those in power do seem to have far more social power than they do economic power - having 99% of the social power compared with 80% of the wealth (if you don't consider the "virtual economy" I guess - which is ridiculously big).


Maybe social media has reduced social power to 90% from 99%. But it is not yet 80%. However, to get a socail degrees of separation of 1.161 (like the 80/20 rule) would require everyone to have 300 million friends each. Six degrees of separation is based on just 30 friends each. On the other hand though, if everyone jus lived in small isolated communities of just 50 people with 30 friends each then the degrees of separation would be 1.161 - but still the top 1% would have 50% of the wealth. Only if everyone was equally friends with everyone else - i.e. 30 friends in communities of 30 people would there be a chance of a 100/100 rule wealth relationship.


So yeh. Waste of time typing that I guess.

[proximaism]

This is exactly what would happen if you skip economics classes back in school.

[syourke]

The labor theory of value is dimply wrong. First, Marx himself acknowledges that value is created by labor plus nature. Nature creates value, too, not just human labor. More importantly, machinery creates surplus value, and hence, profits, and Marx is simply wrong when he denies this. Any source of energy can create value. Not just human labor. I think that this is a critical error in Marx’s theory. This guy is obviously wrong. The human worker is just a machine made out of flesh and blood to the capitalist. He can replaced by machinery entirely and it wouldn’t diminish the profit return. And that’s what we witness over the last 150 years.

[fatpotatoe]

I've only watched 2 minutes and already he's making an argument which is based on factually incorrect information. The peasantry were not "wiped out" and driven off the land. Cottagers were driven off the land by enclosure but the number of people working in agriculture increased by 1 million - its just that the number working in industry increased by millions more. This indicates that industry was preferable and continued to pay higher real wages rather than that workers were systematically forced into lower living conditions in the cities. The real wages of the working class doubled during the mid-19th century, increasing at a faster rate than in many developed or developing countries today - despite weak union presence and non-existent minimum wage laws. Moronic Marxism at play once more. One need read the ideas of Eugen von Bohm-Bawerk to understand the errors of their theory of exploitation and see through their untruly rigid class distinctions and immobilities which are uncharacteristic of capitalism.

[julianblake]

Oh please. I listen to these people and it feels like listening to a religious fanatic.