In this post, I continue the draft of sections of my forthcoming book, “Marxian Economics: An Introduction.” This, like the previous three posts (here, here, and here), is written to serve as the basis for chapter 1, Marxian Economics Today.

Why study Marxian economics?

One of the best reasons for studying Marxian economics is to understand all those criticisms—the criticisms of mainstream economic theory and the criticisms of capitalism.

Students of economics (and, really, all citizens in the world today) need to have an understanding of where those criticisms came from and what implications they have.

Marx certainly took those criticisms seriously. As he carried out his in-depth study of both the mainstream economic theory and of the capitalist system of his day, his work was influenced by the criticisms that had been developed before he even turned his attention to economics. And then, in turn, Marx’s critique of political economy has influenced generations of economists, students, and activists. While certainly not the only critical theory that can be found within the discipline of economics, Marxian economics has served as a touchstone for many of those theories, not to mention public debates about both economics and capitalism around the world.

Understanding both the broad outlines and the specific steps of Marxian economics is therefore crucial to making sense of all those debates.

Consider a contemporary example. On 26 February 2019, Alexandiria Ocasio-Cortez responded to Ivanka Trump’s attack on her idea of a living wage by explaining that “A living wage isn’t a gift, it’s a right. Workers are often paid far less than the value they create.”

While there’s no evidence that Ocasio-Cortez ever studied Marxian economics (or, for that matter, considers herself a Marxist), certainly the idea that within capitalism workers are often paid less than the value they produce resonates with Marxian criticisms of both mainstream economic theory and capitalism.

Mainstream economists, as any student of contemporary mainstream microeconomics is aware, generally presume that workers’ wages are equal to their marginal contributions to production. The same is true of capitalists’ profits and landlords’ rents. Everyone within a market system, mainstream economists argue (after a great deal of theoretical work, involving lots of equations and graphs), gets what they deserve. Therefore, since capitalism delivers “just deserts,” it should be considered fair.

Not so quick, says Ocasio-Cortez, just like Marx decades before her. If workers are paid less than the value they create, then they are “exploited”—that is, they produce a surplus that goes not to them, but to their employers. And while Marxian economists argue a living wage wouldn’t by itself eliminate that exploitation, it would certainly lessen it and improve workers’ standard of living.

Much the same holds for alternatives to capitalism. They often take their name from some version of socialism (and sometimes communism). That’s why Ocasio-Cortez calls herself a “democratic socialist.” It’s also why so many people these days, especially young people, have positive views of socialism—even more so than capitalism. That represents a big break both from mainstream economists and from their parents and grandparents.

Moreover, many ideas and policies that were once labeled (and then quickly dismissed) as “Marxist” or “socialist” are now accepted parts of the contemporary economic and social landscape. Progressive income taxes, a social security system for retirees, public healthcare and health insurance, minimum wages, labor unions for workers in private industry and public services—all were at one time derided, and now they form part of the common sense of how we think about economic and social policy. Much the same kind of change may now be taking place—for example, with the Green New Deal and the links between contemporary capitalism and the history of slavery.

Marxian Economics Today

So, it’s a fascinating time to be studying Marxian economics. It’s a way of learning some of the main criticisms of mainstream economic theory and of capitalism, now as in the past. It also serves to lift the taboos and learn that there are in fact alternatives to how economics is often taught and used to celebrate the status quo and deny the possibility of other ways of organizing economic and social life.

In the most general sense, studying Marxian economics is a path to learn what it means to be an intellectual. Within modernity, intellectuals are necessarily critical thinkers. Whether professors in colleges and universities or people who work in research units of enterprises or government offices, or really anyone who has to think and make decisions on or off the job, as intellectuals, they have to follow ideas wherever they might go. That means not being afraid of the conclusions they reach or of conflict with the powers that be.

That tradition of critical thinking is in fact what animated the work of Marx (along with Engels). He didn’t have a predetermined path. Instead, he worked his way through existing economic theory, carefully and critically engaging the process whereby mainstream economists produced their extreme conclusions. He then started from the same general premises they did—in a sense, offering mainstream economists their strongest possible case—and showed how it was simply impossible for capitalism to fulfill its stated promises.

For example, capitalism holds up “just deserts” as an ideal—everybody gets what they deserve—but it actually means that most people are forced to surrender the surplus they create to their employers, who are allowed to either keep it (and do with it what they want) or distribute it to still others (the tiny group at the top that manages the way those enterprises operate). Capitalism also pledges stable growth and full employment but then, precisely because of that private control over the surplus, regularly delivers boom-and-bust cycles and throws millions out of work.

So, Marx, following his critical procedure, arrived at quite different conclusions—conclusions that were at odds both with those of mainstream economics and of capitalism itself. And then he kept going—with more reading and more thinking and more political activity. He established some initial ideas, threads that were then picked up and extended by other Marxian economists, right on down to the present.

The implication, of course, is Marx didn’t provide a settled theory, to be simplistically or dogmatically applied, but instead a tradition of critical thinking and action.

And, as we will see over the course of this book, the effects of his work have been felt not just in economics, but in many other academic disciplines, from sociology and anthropology through political science and cultural studies to philosophy and biology. In fact, one of the most famous and influential historians of the nineteenth century, whose books are read by thousands of college and university students around the world every year, is the British Marxist Eric Hobsbawm.

Comments
  1. Magpie says:

    Prof. Ruccio,

    I think this part is just excellent.

    A few disjoint things.

    First.
    Your exposition of why studying Marxism is important for intellectuals is faultless. I also agree on your depiction of Marx and Engels as good “role models” — to use the expression popular nowadays. There’s an anecdote, sadly too short, about Marx’s studies at the British Museum’s reading room. You can find it in an old article by the late Christopher Hitchens (“The Revenge of Karl Marx”, April 2009) for The Atlantic (https://www.theatlantic.com/magazine/archive/2009/04/the-revenge-of-karl-marx/307317/).

    Hitchens starts by telling about an old librarian, who, beginning the 20th century, still remembered Marx. Perhaps that story could be useful to illustrate that Marx took his job as student of economics and capitalism seriously? Unlike modern talking heads who have no qualms criticising what they don’t understand, the “oldsters” (in August Bebel’s description) actually did their homework.

    What I think needs emphasis is that critical thinking is not only required of intellectuals, but also of citizens and workers. Although Marx did not dumb down his writing to make it appealing to the masses, he did not address himself only or even mainly to academics. I feel your book could also be useful to rank-and-file activists in many walks of life beyond academia.

    ———-

    Second.
    Re-reading Hitchens’ article I was also reminded of another quote, from an unexpected source, praising Marx. John Cassidy’s “The Return of Karl Marx” for The New Yorker (October 13, 1997) https://www.newyorker.com/magazine/1997/10/20/the-return-of-karl-marx. Note the year.

    ———-

    Third. Would it be convenient to make it clear here that the “just deserts” thing is due to people like John Bates Clark and Philip Wicksteed, second generation marginalists and founding lights of neoclassicism?

    I ask this because I’ve seen commentators advancing the very misleading notion that Clark and Wicksteed did not aim his theorising at Marxist exploitation and that neoclassical economics was instead a “conspiracy” against another heterodox school of thought contemporary to Marx but opposed to Marxism.

    ———-

    Eleanor Marx (Karl and Jenny’s youngest daugther) wrote a brief article shortly after his dad’s death. The second part of the article (https://www.marxists.org/archive/eleanor-marx/1883/06/karl-marx.htm) contains a numerical example illustrating how profits arise. Maybe you could find it useful?

    • David F. Ruccio says:

      Great suggestions. Thanks! I’ve already modified the text to expand the definition of intellectual. The others will probably make their way into the more detailed discussions of later chapters.

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