Theoretical Background:

Marx and Marxism

04 Feb 2014
Dr Ashley Frawley
Objectives
By the end of this session you should:

Be more familiar with what Marxism means as a theory
of economics, history and society

Be able to identify the functions of the welfare state from
a Marxist perspective

Question

What do you think Karl Marx would think of the
modern welfare state?
What is Marxism?
Developed by Karl Marx (1818-1883) and Friedrich
Engels (1820-1895)
Since then, Marxism has come to mean many different
things, but lets stick with Marx
An economic theory of how capitalism works
Descriptive not prescriptive
How things do work, not how they should work
Continuation of classical economics of Smith and Ricardo
A theory of history and the development of society
Historical materialism (see Jakubowski, 1976)
Typically expressed as base-superstructure
Social reality (superstructure) a reflection of the material relations of
production (the economic base of society)
Dialectical, not deterministic

Marxism An economic theory
What is capitalism?
A system in which commodities are
produced for exchange (rather than use)
Step 1. Invest Step 2. ???? Step 3.
PROFIT!!!
How is this possible?
Exploitation of workers
Impossible to live without workingpeople
must sell labour to capitalists who own
means of production (factories, etc.)
Workers produce more than paid in wages
Profit = difference between price of
commodity and wages paid to workers
Capitalists live on unpaid labour of working
class
Not a moral argumenteven relatively
wealthy wage earners exploited
What is a
commodity?
Satisfies needs
(use value)
Can be sold
(exchange value)
Made with
human labour
(labour value)
Marxian Economics still relevant?
Notice that Marx avoided definitions
Concepts described in terms of their relationships
Nature of work may change, nature of capitalism
may change but some central relationships remain
the same:
Commodity still central
Still governed by money commodity more money
Most people do not own the means to reproduce their
existence, (workers)
Those who do own the means of subsistence are able to
live on profits (capitalists)
Marxs theory of crisis
The falling rate of profitsome argue this is happening
today (see also Kliman, 2012)
Marxism A theory of history
Historical Materialism
Starting point: basic reality of human existence:
In order to survive from generation to generation must
reproduce material requirements of lifemust work on
the world

The mode of production of material life conditions the
general process of social, political and intellectual life.
It is not the consciousness of men that determines
their existence, but their social existence that
determines their consciousness.
(Marx, 1859)

Marxism A theory of history
Capitalism once a revolutionary force, becomes a conservative
force:
the feudal relations of property became no longer compatible
with the already developed productive forces; they became so
many fetters. They had to be burst asunder; they were burst
asunder.

Modern bourgeois societyis like the sorcerer who is no longer
able to control the powers of the nether world whom he has called
up by his spells[In crisis] there breaks out an epidemic that, in all
earlier epochs, would have seemed an absurdity the epidemic of
over-production The conditions of bourgeois society are too
narrow to comprise the wealth created by them.

Capitalism produces wealth that has capacity to free
human beings from need and toil
But capitalism must periodically destroy this wealth and
enforce scarcity
Must free productive forces from capitalism

Marxist perspective on the state
The product of irreconcilable class antagonisms
Organised oppression of one class by another
Special bodies of armed men; monopoly on
violence

it became necessary to have a power, seemingly
standing above society, that would alleviate the
conflict and keep it within the bounds of 'order'; and
this power, arisen out of society but placing itself
above it, and alienating itself more and more from it,
is the state.
(Engels in Lenin, 1917)

The state as an ideologylike religionthat
keeps people from realising their oppression
Vision: withering away of the statestateless
society
Marxist perspective on the welfare state
Neo-Marxists argue that the welfare state serves two
main functions (O'Connor, 1973 in Cousins, 2005, p.
21):
Accumulation
Legitimisation

Accumulation
Ensuring opportunity for accumulation, i.e. ability of firms to
make profit
e.g. builds infrastructure needed by capital, educates workers,
ensures healthy workforce
Legitimisation
Introduces measures that encourage belief in possibility of
reform; engenders acceptance of system as fair/representative
Sometimes saves capital from itself (labour laws, etc.)
Encourages belief all problems can be solved through welfare
state when many are intrinsic to capitalism (e.g.
unemployment)

Criticisms
Deterministic (Hill, 2006:24-25)

Too general to explain any one development (Cousins,
2005:22)

Can analysis be applied to different countries and
contexts? (Kennett, 2013, p. 187)

Capitalism more complex now, not simple dichotomy of
buyers and sellers of labour (Hill, 2006:184)

Others? What do you think?
Summing Up
Marxism is a theory about the economic base
(capitalism) of society and the effect that this has on
the development of the superstructureideas,
laws, policies, etc.

Neo-Marxists are critical of the welfare state for
serving the interests of capitalists and pulling the
wool over peoples eyes

Welfare state appears to serve the interests of the
working class, but only does this to a minimum to
ensure social stability




Highly Recommended
Kapitalism101 on YouTube:
Very clear explanation of Marxs theories of economics
and history
http://www.youtube.com/user/brendanmcooney/videos?flo
w=grid&view=1
Diet Soap Podcast
Many discussions with contemporary Marxist economists
and social theorists on contemporary social issues
http://dietsoap.podomatic.com/

References
Cousins, M. (2005). European Welfare States. Comparative Perspectives.
London: Sage Publications.
Hill, M. (2006). Social Policy in the Modern World. A Comparative Text. MA,
USA: Blackwell Publishing.
Jakubowski, F. (1976). Ideology and superstructure in historical materialism.
London: Allison and Busby.
Kennett, P. (2013). A Handbook of Comparative Social Policy. Cheltenham:
Edward Elgar.
Kliman, A. (2012). The Failure of Capitalist Production: Underlying Causes of
the Great Recession. New York: Pluto Press.
Lenin, V. I. (1917). The State and Revolution. Available at:
http://www.marxists.org/archive/lenin/works/1917/staterev/ch01.htm
Marx, K. , and Engels, F. (1848). The Manifesto of the Communist Party.
Available at: http://www.marxists.org/archive/marx/works/1848/communist-
manifesto/ch01.htm
Marx, K. (1859). A Contribution to the Critique of Political Economy. Available
at: http://www.marxists.org/archive/marx/works/1859/critique-pol-
economy/preface.htm