Karl Marx: Heracles or Sisyphus - a Philosophic and Economic Interpretation Expert Mission October 27th to November 12th GIZ, Beijing

1
Karl Marx Heracles or Sisyphus- a Philosophic
and Economic InterpretationExpert
MissionOctober 27th to November 12thGIZ, Beijing
2
Reminder

• This lecture is based on a joint paper
• Karl Marx Heracles or Sisyphus, Discussion
  Paper, Department of Economics, University of
  Heidelberg, October 2011.by the
• philosopher Thomas Petersen Department of
  Philosophy, and
• the economist Malte Faber Department of
  Economics.

3
Heracles and Sisyphos

• Heracles and Sisyphos were both mythic figures.
• Heracles was the sun of Zeus and he is known for
  having fullfilled 12 extroadinary difficult
  tasks.
• Sisyphos was compelled to roll an immense boulder
  up a hill, only to watch it roll back down, and
  to repeat this throughout eternity.

4
Table of Contents

• 0. Summary
• Introduction
• Marx and Hegel
• Basics of Marx Economic Theory
• Historical Materialism
• Analysis of the Capitalistic Method of Production
• 5.1. Simple Reproduction
• 5.2. Basics of the Extended Reproduction
• 5.3. Capitalistic Society and Justice
• 5.4. The Real Capitalistic Exploitation
  Process the Production
• 6. Marx as Scientific Economist

5
(No Transcript)
6
Table of Contents

• 6. Marx as Scientific Economist
• 6.1. Labour Theory of Value and the
  Transformation Problem
• 6.2. The Law of the Falling Rate of Profit
• 6.3. Joint Production and its Repercussions on
• the Environment
• 6.4. The Dynamics of the Capitalistic System
• and the thereby effected Environmental and
  Resource
• Problems
• 6.5. Marx and the Socialism
• 6.6. Concluding Remarks

7
Table of Contents

• 7. Labour Theory of Value, Theory of the State
  and Income
• Distribution
• 7.1. Theory of the State
• 7.2. Income Distribution
• 8. Summary
• Literature

8
Summary

• During the last decades a new kind of debate
  concerning the work of Marx (1818-1883) has
  developed, which is much less ideological.
• Marxists and Nonmarxist have found a common
  language to discuss Marxian matters.
• Nevertehless there exists one deficit
  philosophers and economists do not talk to each
  other.

9
Summary

• A case in point is the role of the philosopher
• Friedrich Wilhelm Hegel (1770-1731) in Marx
  thinking.
• While
• philosophers emphasize Hegels role,
• economists tend to neglect it.
• We shall show that Marxs relationship to Hegel
  is
• central for his theory in general and
• for his economic theory in particular.

10
Summary

• The main task of this lecture is to give
• an overall appraisal of Marx work and
• thus to cut through ist numerous ambiguities.
• In detail we represent
• its relationship to Hegel and the historical
  materialism
• main statements of Marxian Economics are in
  respect to modern economic theory discussed.

11
Summary

• Characteristic of the dynamics of the
  capitalistic system represented
• Essential insights concerning present
  environmental and resource problems are
  explained.
• Implications for justice and the income
  distribution are highlighted.
• Finally, the notorious deficit of Marxtheory of
  politics is commneted.

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1. Introduction

• To understand the
• Work of Marx is for various reasons difficult.
• His stupendous ability to apply philosophical
  methods to economics. Thus one does not know
  wheter the first chapters of the 1. volume of the
  Capital is a philosophical or economic text.
• One never knows whether one is confronted with a
  scientific analysis of modern economy or a
  philosphical description as is offered by Hegel.
• His connection of cool scientific analysis and
  religiously coloured political agitation.scientifi
  c his manner to connect scientific analysis with
  prophecy.

13
1. Introduction

• His promosing first, a system of ultimate ends
  that embody the meaning of life and absolute
  standards by which to judge events and actions
  and secondly, a (scientific, M.F.) guide to those
  which implies a plan for salvation (Schumpeter
  1980 19).
• His promise of a scientific socialism.
• Marx employed an individualistic,
  functionalistic and holistic approaches.

14
1. Introduction

• As Elster (986 103) noted concerning Marx
  perception of history Marx had both an
  empirical theory of history and a speculative
  philosophy of history.. Hence the reader does not
  know whether the Marxian historical materialism
  is an analytical theory of history or rather a
  version of world history as salvific history
  (Löwith 1979)
• It is something completely new the
  transformation of philosophy and economics.
• The philosophers have only interpreted the
  world, in various ways the point is to change
  it (Marx, MEW3, 7, Theses on Feuerbach)

15
1. Introduction

• According to Marx this change of the world has
  to occur in economic terms, because the
  fundamental structure of the social world is
  economic.
• This implies one has first to pursue economic
  research.
• For this reason Marx considered himself not to be
  a philosopher but a political economist.
• Hence, his main work, his magnum opus, Capital,
  was a contribution to Political Economy.
• Thus, economics became an executor of the last
  will of philosophy.

16
1. Introduction

• What aims did Marx pursue?
• He wanted to develop a uniformly social science,
  into which philosphy was transformed.
• He wanted to revolutionize society.
• Both aims have something Herculian
• A new theory of economics, which contains
  essential elements of practical philosophy,
• a sociological theory of
• classes,
• knowledge and
• consciousness
• as well as a concept of ideology.

17
1. Introduction

• But his efforts often seem rather in vain this
  can perhaps be
• best recognized in his economic work, where he
  once and again attempts to d evelop a theory of
  prices on the basis of labour values.
• This makes Marx less Hercules but rather
  Sisyphos.
• In addtion, much of his work is rather sketchy.
  Even well minde interpreters of his work like
• Jon Elster and
• John Roemer (19988 2)
• Joseph A. Schumpeter
• their dismay concerning his lack of
  argumentatiove consistency.

18
1. Introduction

• Marxs intellectual energy was not matched by a
  comparable level of intellectual discipline. His
  intellectual profile is a complex blend of
  relentless search for truth, wishful thinking,
  and polemic intent (Elster 1986 2).
• As always when reading Marx, one is struck by
  admiration for the brilliance of his intellect
  and dumbfounded by his lack for consistency.
  (ibid. 138)
• His utopian attitude and lack of intellectual
  control prevented him from carrying out the
  theoretical and practical tasks he had set for
  himself, but without theses qualities he would
  not even have tried. He suffered the cost we are
  the beneficiaries. (ibid. 200)

19
1. Introduction
in order to forge such weapons for the arena of
social strife Marx had to occasionally to bend or
to deviate from, the opinions that would
logically follow from his system.(Schumpeter
1980 21) Marx also often wakened expectations
which he did not fulfil. Desais quote on the
Marxian paper A Contribution to the Critique of
Hegels Philosophy of Right applies also to many
other other attempts
20
1. Introduction
Marx also often called up expectations which he
did not fulfil. Desais quote on the Marxian
paper A Contribution to the Critique of Hegels
Philosophy of Right applies also to many other
other attempts
21
1. Introduction

• On his marriage to Jenny von Westphalia, he
  managed to write his first major work, but like
  many of his other works, it was unpublished in
  his lifetime a critique of Hegels Philosophy of
  Right, the Masters last complete publication. It
  is a fragment, but Marx had promised his friends
  an earth-shattering critique of Hegel that would
  settle scores once and for all. And as often in
  his later life, he promised more than he could
  deliver.
• Thus Marx picture alternates in history.
• But we should not forget Elsters remark Marx
  suffered the cost we are the beneficiaries.

22
2. Marx and Hegel

• There exists one serious deficit in the modern
  presentation of the Marxian work.
• The reason is
• Philosophers and economists do not talk to each
  other.

23
2. Marx an Hegel

• A case in point is the role of the philosopher
• Friedrich Wilhelm Hegel (1770-1731) in Marx
  thinking.
• While
• philosophers emphasize Hegels role,
• economists tend to neglect it.
• We shall show that Marxs relationship to Hegel
  is
• central for his theory in general and
• for his economic theory in particular.

24
2. Marx and Hegel

• We explain
• the influence of Hegel on Marx,
• Marx's position concerning the young Hegelians
  (Junghegelianer) and
• how he differs from Marx.

25
3. Basics of Marx Economic Theory

• Basics of Marxs economic theory are sketched in
  this section.
• He delivers a critique of political economy,
• but at the same time he wants to give an
  explicative theory of the modern economy,
• which together stands in the service of
  revolutionizing the world.

26
3. Basics of Marx Economic Theory

• Difficulty
• One never knows when dealing with the economist
  Marx whether he is
• a scientist
• a political agitator or finally only a
• a philosopher, who has erred into fields which
  are align to him.

27
3. Basics of Marx Economic Theory

• Marx contributed little concretely to a theory of
  socialism.
• He did not understand himself as a theoretician
  of socialism, but rather as
• a critic and
• analyst
• of the capitalistic system.
• His attempt to surpass the bourgeois economic
  theory by a superior one failed. The main reason
  for this failure was his inadequate instrument,
  the theory of value.

28
3. Basics of Marx Economic Theory

• Labor theory of value the value of a good, which
  is exchanged as a commodity, is determined by its
  labor value.
• Marx learned this approach from one of the great
  classical economists, David Riccardo (1772-1823).
• In contrast to Ricardo, Marx applied this theory
  also to labor itself, insofar as the capability
  to create value.

29
3. Basics of Marx Economic Theory

• Marx
• The value of labor is equal to the labor value
  which is necessary for the reproduction of labor
  (i.e. all the goods which a labor needs to
  reproduce himself and his family, in particular
  his off springs).
• The value of goods is higher than the labor value
  necessary to produce it.
• The difference is called surplus value.

30
3. Basics of Marx Economic Theory

• Buying the manpower of a laborer and
• using it for his purpose the entrepreneur
  acquires the surplus value in form of profits
• The problem of this value analysis is, that
  profit can only be realized
• in an exchange economy
• in which prices are paid.

31
3. Basics of Marx Economic Theory

• The value is an inner quality of the commodity
• The price is an externally recognizable
  information.
• Marx has to assert that the value determines the
  price.
• As will be shown in section 6.1 below.
• This statement is true only
• under very restrictive conditions
• which in reality never hold.

32
3. Basics of Marx Economic Theory

• Marx has attempted in the third volume of Capital
  which was published by Friedrich Engels only
  after his death to solve, or perhaps correctly
  said, to conceal it.
• This endeavor has lead
• to many ambiguities and
• great confusion and
• extremely complicated the understanding of his
  work.
• As shown in section 5 and 6 below, this
  contradiction cannot be solved.

33
3. Basics of Marx Economic Theory
Conclusion Marx theoretical approach is not
suited to give a quantitative analysis of the
economy and a scientifically satisfying
description of the economy. While the disparity
between value analysis and price theory and Marx
attempts to cover the tension between the two of
them, the lecture of his texts vary cumbersome
matters get even more complicated by an actually
ambiguity of Marx concept of value or as Petry
(1916 28) said by the Janus face of the Marxian
theory of value.
34
3. Basics of Marx Economic Theory

35
4. Historical Materialism

• Marxs And Engels ,materialistic conception of
  history or historical materialism is outlined.
• Central concepts are
• forces of production
• relations of production
• mode of production.

36
4. Historical Materialism

• Marxs And Engels ,materialistic conception of
  history or historical materialism is outlined.
• Central concepts are
• forces of production
• relations of production
• mode of production.

37
4. Historical Materialism

• forces of production

38
4. Historical Materialism

• relations of production

39
4. Historical Materialism

• Mode of production

40
5. Analysis of the Capitalistic Method of
Production

• 5.1. Simple Reproduction

41
5.2. Basics of the Extended Reproduction
42
5.3. Capitalistic Society and Justice
43
5.4. The Real Capitalistic Exploitation Process
the Production
44
6. Marx as Scientific Economist

• The main merit of Marx is presumably what
  Schumpeter called (198026) the economic
  conception of history
• The economy is not an isolated subarea of human
  living as Aristotle conceived his Oikos in which
  the economy has its limited space.
• In stead the economy penetrates the whole life
  and stands in near connection with the mental and
  intellectual life, philosophy, science and all
  other parts of culture.

45
6. Marx as Scientific Economist

• The economy forms our perception of the world
  much stronger than philosophy assumed it until
  that time.
• However, this implies, that the economic
  conception of history of Marx is rather
• sociological than a
• scientifically economic perspective.
• Marx is strongest whenever he is
• on the ground of philosophy and
• where he argues qualitatively in the economy.
• .

46
6. Marx as Scientific Economist

• Similar as the mythological figure Antaios, Marx
  is invincible as long as he is standing on the
  ground of philosophy.
• But as Antaios,
• he is losing his power
• as soon as he leaves the ground of philosophy
• and
• does not anymore argue qualitatively
• but economically quantitatively.

47
6. Marx as Scientific Economist

• His quantifications are notoriously weak and the
  deficits
• in the explaining of prices via the labor theory
  of values as well as
• in the law of the fall of the rate of profit
• are incurable.
• It is not possible to extend
• the Marxian economics to a theory which is
  comparable
• to the theory of a general equilibrium of
  neoclassical economics.

48
6. Marx as Scientific Economist

• Elster (1986) summarizes Marx achievement in the
  following way
• It is
• strongest in history and sociology and
• weakest in economics and politics.

49
6.1 Labour Theory of Value and the Transformation
Problem

• Marx orientates himself in on classical economics
  of Smith and Ricardo.
• While Smith sees mainly the social and
  communicative dimensions, Marx is immediately
  fascinated of the object which is exchanged, the
  commodity.
• While Smith sees immediately the coordination
  which the exchange effects, namely that goods are
  allocated and reach to where they are needed,
  Marx is not interested in the coordinative
  function of the market.

50
6.1 Labour Theory of Value and the
Transformation Problem

• As stated above in Section 3 Marx
• Marx delivers a critique of political economy,
• but at the same time he wants to give an
  explicative theory of the modern economy,
• which together stands in the service of
  revolutionizing the world.

51
6.1 Labour Theory of Value and the
Transformation Problem

• We want to ask whether Marx developed in his
  monograph Capital an economic theory of the
  modern economy which is superior or at least
  equal to modern Nonmarxian economics?
• Marx argues that modern economy is an exchange
  economy. The value of each commodity is equal to
  the human labor which is embodied in it. This is
  the nucleus of the labor theory of value.

52
6.1 Labour Theory of Value and the Transformation
Problem

• Marx learned this approach from one of the great
  classical economists, David Riccardo (1772-1823).
• In contrast to Ricardo, Marx applied this theory
  also to labor itself, insofar as the capability
  to create value.

53
6.1 Labour Theory of Value and the Transformation
Problem

• The value of labor is equal to the labor value
  which is necessary for the reproduction of labor
  (i.e. all the goods which a labor needs to
  reproduce himself and his family, in particular
  his off springs).
• But a worker produces more than its value is
  worth
• A worker laboring 10 hours and producing a
  corresponding worth, can reproduce himself with
  goods for which only 6 hours labor are needed.
• The difference between 10 6 4 is called
  surplus value.

54
6.1 Labour Theory of Value and the Transformation
Problem

• Buying the manpower of a laborer and
• using it for his purpose the entrepreneur
  acquires the surplus value in form of profits.
• Result This argumentation explains the origin of
  profits.
• The problem of this value analysis is that profit
  can only be realized
• in an exchange economy
• in which prices are paid.

55
6.1 Labour Theory of Value and the Transformation
Problem

• The value is an inner quality of the commodity
• The price is an externally recognizable
  information.
• Marx has to assert that the value determines the
  price.
• The transformation of values of commodities into
  market prices of the commodities is known as the
  transformation problem.
• The transformation problem can only be solved
• under very restrictive conditions
• which in reality never hold.

56
6.1 Labour Theory of Value and the Transformation
Problem

• These conditions are
• Labor is the only scarce factor of production.
• There is no joint production,
• There is no technical progress.
• The market structure is characterized by perfect
  competition.
• In addition, the folllowing conditions have to
  hold
• The growth of the population is constant
  (Weizsäcker und Samuelson 1971/1974).
• The time preference and the distribution of
  income have has to fulfil restrictive conditions.
• Nonrenewable and recnewable natural resources
  have to be not scarce.

57
6.1 Labour Theory of Value and the Transformation
Problem

• Marx has attempted to solve the transformation
  problem in his third volume of Capital which was
  published by Friedrich Engels only after his
  death, or perhaps correctly said, to conceal it.
• This endeavor has lead
• to many ambiguities and
• great confusion and
• extremely complicated the understanding of his
  work.

58
6.1 Labour Theory of Value and the Transformation
Problem

• Desai (2002 264) explains the problems of the
  labour theory of value in case of the
  circumstance that the production needs tiem
• A classic example is winemaking. When grapes are
  harvested and crushed, labour is used. But then
  the grape juice is left to ferment for some time
  before we have wine. The value of the wine
  exceeds that of the grape juice by a large
  factor, yet labour contributes nothing to the
  extra value. Thus, value and surplus could arise
  from factors other than labour.

59
6.1 Labour Theory of Value and the Transformation
Problem
Conclusion Marx theoretical approach is not
suited to give a quantitative analysis of the
economy and a scientifically satisfying empirical
description of the economy. While the disparity
between value analysis and price theory and Marx
attempts to cover the tension between the two of
them, the lecture of his texts vary cumbersome
matters get even more complicated by an actually
ambiguity of Marx concept of value or as Petry
(1916 28) said by the Janus face of the Marxian
theory of value.
60
6.1 Labour Theory of Value and the Transformation
Problem
The main deficit of the labour theory of value is
that the scarcity problem and thus the demand
side is not taken care of. Roemer (1988 49)
The labor theory of value is a supply-side
theory The correct theory of market price
must take both supply and demand into
account. During the last decades, most Marxian
economists have agreed to the conclusion, that
the labour theory of value can neither be a
theoretical nor a empirical the basis of the
explanation of market prices (Brody 1970,
Morishima 1973,Cohen 1978, Roemer 1981, Elster
1985). In particular it can be shown that it is
possible to study problems as for example the
exploitation and the conflict of classes
successfully without employing the labour theory
of value.
61
6.1 Labour Theory of Value and the Transformation
Problem

• Can we definitely say that labour theory of value
  is disproved?
• Strict proofs do not exist concerning questions
  like this one.
• We also cannot exclude the possibility that the
  labour theory of value might once be employed for
  relevantly quantitative analysis, even if we
  consider this to be highly improbable.

62
6.2. The Law of the Falling Rate of Profit

• One of the central integral parts of Marxian
  Economics is the law of the falling rate of
  profit.
• Marx considered it to be the most essential law
  of motion of the capitalistic system.
• It says
• The profit per unit of employed capital is
  falling in the long run.
• Marx only systemized an insight of classical
  economists like Ricardo (1772-1823) and Malthus
  (1768-1834).
• While the latter assumed that land became more
  scarce, Marx saw the increasing amount of capital
  as the main cause.

63
6.2. The Law of the Falling Rate of Profit

• Marx differentiate between variable capital v
  (labour) ND constant capital k (machines, tools,
  houses, shades, ships etc.).
• Marx assumes that the constant capital always
  grows faster than the variable capital. From this
  follows , i.e. that the organic composition of
  capital which is the relation between constant
  capital c and total capital v c always grows
  (Sweezy 1942 chapter 6).
• Marx concludes that the rate of profit has to
  fall, because he considers the variable capital
  as the only source of profit.
• Technical progress can increase the rate of
  surplus, but not the tendency of fall compensate.

64
6.2. The Law of the Falling Rate of Profit

• The Law of the Falling Rate of Profit was
  controversially debated for a long time, but
  during the second half of the 20th century there
  developed a consensus between Marxist and
  Neoclassical economists that this law is not
  valid.
• (Sweezy 194 Chapter 6, Okishio 1961, Samuelson
  1972, Morishima 1973, Roemer 1981 Chapters 4 und
  5, Elster, 1986 192-193)
• A proof for this consensus is given on the next
  slide.
• For a critical assessment of those authors who
  are of different opinion see Roemer 1981 117-8,
  123-4.

65
6.2. The Law of the Falling Rate of Profit

• Let e be the rate of exploitation or rate of
  surplus value,
• which is defined by the relation of surplus
  value to variable capital and
• let v be the variable and k the constant capital.
• Then the rate of profit p is defined by p e
  v/(vk).
• Let the variable capital be the numeraire, i.e.
  the value of one unit of labour is equal to 1,
• then we can express the value of the constant
  capital in units of the variable capital, Hence,
  the rate of proftio p simplifies to p e/(1k).
• We see imediately that there does not exist a
  nonambigious tendency for p, bedause the rate of
  exploitation e does not need to increase as much
  as the constant capital, in oder to keep the rate
  of profit p constant (see Roemer 1981 117-8 and
  123-4).

66
6.2. The Law of the Falling Rate of Profit

• Marx had assumed that the steady fall of the rate
  of profit would lead to complete collapse of the
  capitalistic system.
• This expectations has yet not confirmed.

67
6.3. Joint Production and its Repercussions on
the Environment
Marx was the only classical economist who dealt
extensively with the environmental and resource
problem (Kurz 1986, Baumgärtner 1999 104-107).
He even conceived them as problems of joint
production. What does this mean? To give an
example
68
6.3. Joint Production and its Repercussions on
the Environment

• Example of Joint Production
• A two-person household needs yearly
• 4000 kwh electrical energy to produce this
• amount with lignite (brown coal).
• 6000 l water steam,
• 21600 m3 air emissions,
• 3200 l waste water,
• 288 kg ashes are generated as by-products

69
6.3. Joint Production and its Repercussions on
the Environment

• He even discussed recycling of waste and to
  regain resources from recycling processes.
  (Baumgärtner, Faber, Schiller 2006, 114-116)
• However, he thought that all environmental and
  resource problems would finally be solved because
  of human creativity to transform all waste
  products into valuable goods.
• It is noteworthy that Marx perspective was
  singular and unique at his time. His awareness of
  this issue demonstrates Marx extraordinary
  ability to analyze the dynamics of the
  capitalistic system. But Marx didnt integrate
  his view into his economic theory and downplayed
  it.

70
6.3. Joint Production and its Repercussions on
the Environment

• As proved by Baumgärtner, Faber, Schiller (2006,
  Chapter 3) Marx view is not valid
• From a thermodynamic point of view, every
  production yields joint products.
• Every industrial production is characterized by
  joint products in form of waste and emissions.

71
Typical Industrial Production ProcessExample
Iron Manufacturing
Thermodynamics ? every industrial production
is joint production
72
6.3. Joint Production and its Repercussions on
the Environment

• One may as well ask why Marx believed so much in
  progress. This may as well be a consequence of
  the great admiration he had for the capitalistic
  bourgeoisie, which is documented in his Communist
  Manifesto (jointly published with Friedrich
  Engels in 1848 62)
• It (the bourgeoisie, M.F.) has been the first to
  show what man's activity can bring about. It has
  accomplished wonders far surpassing Egyptian
  pyramids, Roman aqueducts, and Gothic cathedrals
  it has conducted expeditions that put in the
  shade all former exoduses of nations and
  crusades.

73
6.3. Joint Production and its Repercussions on
the Environment

• The bourgeoisie, during its rule of scarce one
  hundred years, has created more massive and more
  colossal productive forces than have all
  preceding generations together.
• (Marx and Engels 1848 63)

74
6.4. The Dynamics of the Capitalistic System
and the thereby effected Environmental
and Resource Problems

• Why did Marx understand so well the dynamics of
  the capitalistic system?
• Marx had the ability to see unintended
  consequences of our actions.
• Two areas in which these unintended organize
  themselves and become to a determining factor.
  These areas are
•  
• the economy and
• nature

75
6.4. The Dynamics of the Capitalistic System
and the thereby effected Environmental
and Resource Problems

Marxs View on the Economy Marx recognized that
the production of wealth always goes hand in hand
with the creation of poorness and that this
happens although the actors do not intend this
production of pauperism. The poorness does not
arise by the fact that people rob so others, but
poorness is an unavoidable consequence of the
capitalistic system and its dynamics. This was
already observed by the philosopher F.W. Hegel
(1821/1970) in his Philosophy of Right. But Marx
analyzed this connectivity more in detail than
Hegel, for he developed this idea to a precision
tool for the study of social change (Elster
1986 38-39).
76
6.4. The Dynamics of the Capitalistic System
and the thereby effected Environmental
and Resource Problems

Marxs View on the Environment But on the other
side this Marxian analytical instrument may also
be fruitfully employed to study the unintended
consequences of the repercussions of the
capitalistic market system on nature. Marx dealt
extensively with environmental and resource
problems.
77
6.4. The Dynamics of the Capitalistic System
and the thereby effected Environmental
and Resource Problems

• Capitalism had survived not only survived, but
  become a dynamic worldwide phenomenon yet again,
  the first time since 1914. It showed a capacity
  for technological advance with promises of more
  to come. Across the world people abandoned
  socialism as a cure for their problems. Warts and
  all, it was capitalism they wanted. Capitalism
  had still a lot of potential it was not yet
  ready to lie down and die.

78
6.4. The Dynamics of the Capitalistic System
and the thereby effected Environmental
and Resource Problems

• Desai was inspired to his diagnosis by a central
  thesis of Marx (1959/0421)
• No social order ever disappears before all the
  productive forces for which there is room in it
  have been developed and the new higher relations
  of production never appear before the material
  conditions of their existence have matured in the
  womb of the old society itself. Therefore,
  mankind always sets itself only such tasks as it
  can solve since looking at the matter more
  closely, we will always find that the task itself
  arises only when the material conditions
  necessary for the solution already exist, or are
  at least in the process of formation

79
6.4. The Dynamics of the Capitalistic System
and the thereby effected Environmental
and Resource Problems

• Desai is correct in taking the development of
  the world after 1989 as an indication that Marx
  assertion concerning the dynamics of the method
  of production is appropriate If this is true,
  then the capitalism would have a splendid future
  still to come
• it has not yet reached its limits in the
  developed countries and
• more and more countries and economies are
  globally captured by capitalism.
• However in the past, this dynamic has been linked
  with
• an ever growing demand of environmental services
  and
• resource capacities.

80
6.4. The Dynamics of the Capitalistic System
and the thereby effected Environmental
and Resource Problems

• Empirical evidence for this hypothesis is the
• increase of consumption of energy and
• the corresponding increase of CO2.
• Since the environmental conference in Rio in 1992
  both quantities grew
• by 40 percent and
• this tendency is still unbowed until the recent
  present.

81
6.4. The Dynamics of the Capitalistic System
and the thereby effected Environmental
and Resource Problems

• Consequence
• perspective for the future safeguard of the
  natural environmental conditions looks somber
  the reasons are
• at least 3 billions human beings of the world
  population have a backlog demand to satisfy
  basic need, such as food, clothing, housing,
  clean water, health services and education. Even
  in China many of its inhabitants are in need of
  these goods and services
• in addition, we have to recognize that the world
  population will grow by another 3 billions people
  until 2050.

82
6.4. The Dynamics of the Capitalistic System
and the thereby effected Environmental
and Resource Problems

• Consequences
• words it does not seem possible
•  to conserve globally the intake capacity of the
  environment for pollutants and
• to make available sufficient amounts of resources
  for the production and consumption of 9 billions
  people
• The resulting damages of nature and the shortages
  of natural resources would be disastrous not only
  to nature, but would also be a permanent source
  of conflicts.
•  
•  

83
6.4. The Dynamics of the Capitalistic System
and the Thereby Effected Environmental
and Resource Problems

• Policy recommendation
• Decoupling of economic growth and
• the use of exhaustible and nonrenewable resources
  as well as
• the depletion of the environmental capacity of
  disposing and cleaning up waste.

84
6.4. The Dynamics of the Capitalistic System
and the thereby effected Environmental
and Resource Problems

• If
• the decoupling of economic growth and
• the environmental strain
• cannot be achieved then it may well be that Karl
  Marx is right with his prediction that
• the capitalistic system will collapse,
• although in quite a different manner was as he
  had thought (see also Desai 2002 9f).

85
6.5 Marx and Socialism

• It is not quite clear, what Marxs contribution
  to socialism and communism has been.
• Friedrich Engels maintained that Marx brought
  socialism from utopia to science.
• Thus he insinuated that Marx had develop a theory
  of socialism. Such a theory had to deliver
  insights into the economic structure of
  socialism.

86
6.5 Marx and Socialism

• Engels suggestion led
• many to attempt to develop such an economic
  theory of socialism.
• Further, the Soviet Union and other socialist
  countries had attempted to develop a socialism
  according to the principles of Marx until 1989.
• After 1989 many thought that the failure of the
  socialistic experiment disproved a theory of
  socialism, too.
• Not few even thought that not only Marx analysis
  was in totally confuted, but also that he was
  responsible for the failure of the socialistic
  experiment.

87
6.5 Marx and Socialism

• However, it is emphasized in the scientific
  debate on socialism that the failure of the
  soviet socialistic experiment does not imply that
  another experiment might not be successful (see
  e.g. Roemer 1994).
• It is expedient to recognize that there does not
  exist a theoretical framework which is comparable
  with the neoclassical framework, warts and all of
  it given.
• Desai (2002.3-4) noted that Marx did not attempt
  to supply such a theory, for he considered
  himself not as a theorist of socialism, but as a
  critique of capitalism.

88
6.6 Concluding Remarks

• Sometimes Marx is called the last classical
  economist. But this connotation does not seem
  justified.
• Das wird Marx jedoch nicht ganz gerecht, da er
  eine neue Richtung ökonomischer Forschung
  geschaffen hat die marxistische Ökonomie. Diese
  hat sich sowohl in Auseinandersetzung mit der
  herrschenden Wirtschaftswissenschaft als auch
  eigenständig entwickelt. Darüber hinaus gilt Marx
  als Begründer des Zwei-Faktoren-Zwei-Sektoren
  Wachstumsmodelles und damit der Wachstumstheorie
  (Krelle 1979 460-1) sowie mit seinen
  Ausführungen im 2. Band des Kapitals (MEW 24
  391-518) als Vorläufer der von Wassily Leontief
  (1905-1999) entwickelten Input-Output-Analyse
  (Leontief 1951). Beide sind im Laufe des 20.
  Jahrhunderts zu wichtigen Bereichen der
  herkömmlichen Wirtschaftswissenschaften geworden.
  Auch haben seine Ideen einen der wichtigsten
  Ökonomen des 20. Jahrhunderts, Joseph Schumpeter,
  in dessen Theorie der wirtschaftlichen
  Entwicklung beeinflusst, die wiederum zur
  Entstehung eines neuen Zweiges der
  Wirtschaftswissenschaften im letzten Viertel des
  20. Jahrhunderts, der Evolutorischen Ökonomie,
  geführt hat. Marx Beitrag zur Umwelt- und
  Rohstoffökonomik haben wir bereits oben
  gewürdigt. Marx hat viele neue Fragen gestellt.
  Dieses Verdienst wird auch nicht dadurch
  geschmälert, dass er oft keine zufriedenstellenden
  , sondern nur unzureichende oder sogar falsche
  Antworten auf diese Fragen gegeben hat. Man kann
  daher durchaus sagen, wenige Ökonomen haben so
  nachhaltig die Wirtschaftswissenschaften
  beeinflusst, wie das Karl Marx getan hat.
• Vgl. Desai (2002 56f) und Samuelson (1971 242).
  Einschränkend meint Elster (1986 10) the
  schemes of simple and extended reproduction,
  which anticipate modern input-output analysis,
  although the gist of Marx analysis can be stated
  in one page whereas he uses more than hundred.
• Siehe Haustein (1998) und Weise (1998), die aus
  zwei unterschiedlichen Perspektiven den Einfluss
  von Marx auf die Evolutorische Ökonomie zeigen.

89
7. Labour Theory of Value, Theory of the State
and Income Distribution7.1. Theory of the
State

• Marx considered himself as a political economist,
  but did he dispose over a theory of the state?
  Desai (2002 8) has no doubt concerning the lack
  of such a theory. (But) now his lack of a theory
  of the state, of classes, of agency in political
  were all pointed out.
• Marx, certainly has never developed
  systematically a theory of the state there
  exist, however, hints in his work (Elster 1986
  2, 143).
• Thus Elster speaks of an abdication theory
  which states that capitalists abstain from
  political power because they find their interests
  better served this way. Elster argues that if
  certain alterations are taken care of then the
  Marxian conception of the state is that that the
  state is an independent actor in the social
  arena, of which Marx assumes that the interests
  of the capitalist class serve as constraints
  rather than goals for its actions.

90
7.2. Income Distribution
91
8. Summary
92
(No Transcript)
93
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