Marxs Concept of Money


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Labor Theory of Value

Essentially he attempts to apply a Hegelian deduction of categories to economics, trying to demonstrate that all the categories of bourgeois economics — wages, rent, exchange, profit, etc. Consequently each category of alienated labour is supposed to be deducible from the previous one. However, Marx gets no further than deducing categories of alienated labour from each other. Quite possibly in the course of writing he came to understand that a different methodology is required for approaching economic issues.

Nevertheless we are left with a very rich text on the nature of alienated labour. Both sides of our species essence are revealed here: our individual human powers and our membership in the human community. It is important to understand that for Marx alienation is not merely a matter of subjective feeling, or confusion. In our daily lives we take decisions that have unintended consequences, which then combine to create large-scale social forces which may have an utterly unpredicted, and highly damaging, effect.

For example, for as long as a capitalist intends to stay in business he must exploit his workers to the legal limit. Whether or not wracked by guilt the capitalist must act as a ruthless exploiter.

Marx's Concept of Money: The God of Commodities

Similarly the worker must take the best job on offer; there is simply no other sane option. But by doing this we reinforce the very structures that oppress us. Several of these have been touched on already for example, the discussions of religion in theses 4, 6 and 7, and revolution in thesis 3 so here I will concentrate only on the first, most overtly philosophical, thesis. Materialism is complimented for understanding the physical reality of the world, but is criticised for ignoring the active role of the human subject in creating the world we perceive. Idealism, at least as developed by Hegel, understands the active nature of the human subject, but confines it to thought or contemplation: the world is created through the categories we impose upon it.

Marx combines the insights of both traditions to propose a view in which human beings do indeed create — or at least transform — the world they find themselves in, but this transformation happens not in thought but through actual material activity; not through the imposition of sublime concepts but through the sweat of their brow, with picks and shovels. Capital Volume 1 begins with an analysis of the idea of commodity production.

A commodity is defined as a useful external object, produced for exchange on a market.

Thus two necessary conditions for commodity production are the existence of a market, in which exchange can take place, and a social division of labour, in which different people produce different products, without which there would be no motivation for exchange. Marx suggests that commodities have both use-value — a use, in other words — and an exchange-value — initially to be understood as their price. Use value can easily be understood, so Marx says, but he insists that exchange value is a puzzling phenomenon, and relative exchange values need to be explained.

Why does a quantity of one commodity exchange for a given quantity of another commodity?

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His explanation is in terms of the labour input required to produce the commodity, or rather, the socially necessary labour, which is labour exerted at the average level of intensity and productivity for that branch of activity within the economy. Thus the labour theory of value asserts that the value of a commodity is determined by the quantity of socially necessary labour time required to produce it.

Marx provides a two stage argument for the labour theory of value. As commodities can be exchanged against each other, there must, Marx argues, be a third thing that they have in common.

Both steps of the argument are, of course, highly contestable. Capitalism is distinctive, Marx argues, in that it involves not merely the exchange of commodities, but the advancement of capital, in the form of money, with the purpose of generating profit through the purchase of commodities and their transformation into other commodities which can command a higher price, and thus yield a profit. Marx claims that no previous theorist has been able adequately to explain how capitalism as a whole can make a profit.

The cost of this commodity is determined in the same way as the cost of every other; i. Suppose that such commodities take four hours to produce. Thus the first four hours of the working day is spent on producing value equivalent to the value of the wages the worker will be paid. This is known as necessary labour. Any work the worker does above this is known as surplus labour, producing surplus value for the capitalist.

Surplus value, according to Marx, is the source of all profit.

Abstract Labour and Value in Marx's System by I. I. Rubin

Other commodities simply pass their value on to the finished commodities, but do not create any extra value. They are known as constant capital. Profit, then, is the result of the labour performed by the worker beyond that necessary to create the value of his or her wages. This is the surplus value theory of profit. It appears to follow from this analysis that as industry becomes more mechanised, using more constant capital and less variable capital, the rate of profit ought to fall.

For as a proportion less capital will be advanced on labour, and only labour can create value.

A Theory of Exploitation

In Capital Volume 3 Marx does indeed make the prediction that the rate of profit will fall over time, and this is one of the factors which leads to the downfall of capitalism. A further consequence of this analysis is a difficulty for the theory that Marx did recognise, and tried, albeit unsuccessfully, to meet also in Capital Volume 3. It follows from the analysis so far that labour intensive industries ought to have a higher rate of profit than those which use less labour. Not only is this empirically false, it is theoretically unacceptable.

Accordingly, Marx argued that in real economic life prices vary in a systematic way from values. Although there are known techniques for solving this problem now albeit with unwelcome side consequences , we should recall that the labour theory of value was initially motivated as an intuitively plausible theory of price. But when the connection between price and value is rendered as indirect as it is in the final theory, the intuitive motivation of the theory drains away. Any commodity can be picked to play a similar role.

Consequently with equal justification one could set out a corn theory of value, arguing that corn has the unique power of creating more value than it costs.

Marx's Theory of Money - ed. Fred Moseley

Formally this would be identical to the labour theory of value. Nevertheless, the claims that somehow labour is responsible for the creation of value, and that profit is the consequence of exploitation, remain intuitively powerful, even if they are difficult to establish in detail. However, even if the labour theory of value is considered discredited, there are elements of his theory that remain of worth.

Both provide a salutary corrective to aspects of orthodox economic theory. Marx did not set out his theory of history in great detail. Accordingly, it has to be constructed from a variety of texts, both those where he attempts to apply a theoretical analysis to past and future historical events, and those of a more purely theoretical nature. However, The German Ideology , co-written with Engels in , is a vital early source in which Marx first sets out the basics of the outlook of historical materialism.

Cohen, who builds on the interpretation of the early Russian Marxist Plekhanov. However, some scholars believe that the interpretation that we shall focus on is faulty precisely for its lack of attention to the dialectic. Hence it does not follow that Marx himself thought that the concept of class struggle was relatively unimportant. Furthermore, when A Critique of Political Economy was replaced by Capital , Marx made no attempt to keep the Preface in print, and its content is reproduced just as a very much abridged footnote in Capital.

In The German Ideology Marx and Engels contrast their new materialist method with the idealism that had characterised previous German thought. The satisfaction of needs engenders new needs of both a material and social kind, and forms of society arise corresponding to the state of development of human productive forces. This is the thesis that the productive forces tend to develop, in the sense of becoming more powerful, over time.

This states not that they always do develop, but that there is a tendency for them to do so. The productive forces are the means of production, together with productively applicable knowledge: technology, in other words. The next thesis is the primacy thesis, which has two aspects. The first states that the nature of the economic structure is explained by the level of development of the productive forces, and the second that the nature of the superstructure — the political and legal institutions of society— is explained by the nature of the economic structure.

Indeed many activities may well combine aspects of both the superstructure and ideology: a religion is constituted by both institutions and a set of beliefs. Revolution and epoch change is understood as the consequence of an economic structure no longer being able to continue to develop the forces of production. In outline, then, the theory has a pleasing simplicity and power.

It seems plausible that human productive power develops over time, and plausible too that economic structures exist for as long as they develop the productive forces, but will be replaced when they are no longer capable of doing this.

Yet severe problems emerge when we attempt to put more flesh on these bones. The antipathy is well summed up with the closing words of H. One difficulty taken particularly seriously by Cohen is an alleged inconsistency between the explanatory primacy of the forces of production, and certain claims made elsewhere by Marx which appear to give the economic structure primacy in explaining the development of the productive forces.

Cohen accepts that, on the surface at least, this generates a contradiction. Both the economic structure and the development of the productive forces seem to have explanatory priority over each other. The essential move is cheerfully to admit that the economic structure does indeed develop the productive forces, but to add that this, according to the theory, is precisely why we have capitalism when we do.

That is, if capitalism failed to develop the productive forces it would disappear. And, indeed, this fits beautifully with historical materialism.

Marxs Concept of Money Marxs Concept of Money
Marxs Concept of Money Marxs Concept of Money
Marxs Concept of Money Marxs Concept of Money
Marxs Concept of Money Marxs Concept of Money
Marxs Concept of Money Marxs Concept of Money
Marxs Concept of Money Marxs Concept of Money
Marxs Concept of Money Marxs Concept of Money
Marxs Concept of Money Marxs Concept of Money

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