On Marx's Definition of Economics.
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Cheers Comrades,
I have a new question for you all.
While we do have a host of definitions of economics from Adam Smith, to Marshal, to Robbins, to Keynes etc, I was wondering how did Karl Marx define this subject.
What in his view is to be called economics?
What is the scope of economics according to Marx? What is subject matter of economics for him?
In Short, what is definition of economics by Karl Marx?
David David wrote: “In Short, what is definition of economics by Karl Marx?”
I think that the shortest and most accurate answer is ‘social production’.
But this covers much more than the narrow bourgeois discipline of ‘economics’, or ‘the market’, and involves ‘social production’ in its widest meaning, covering both ‘stuff’ and ideas, and being inherently political, involving democracy if we are talking about ‘social production’ within communism (unlike ‘economics’, which pretends to be ‘non-political’ and ‘non-ideological’).
Another short answer would be “economic democracy.”
Besides communist Marx employed four other words to describe future society: associated, socialised, collective and co-operative. All these words convey a similar meaning and bring out the contrast with capitalist society where not only the ownership and control of production but life generally is isolated and atomised.
Natural resources and the man-made instruments of production would be held in common: Marx speaks of “a community of free individuals, carrying on their work with the means of production in common” (Vol. I) and, in his Critique of the Gotha Programme, of “the co-operative society based on the common ownership of the means of production” and of “the material conditions of production” being “the cooperative property of the workers themselves”.
It is significant that Marx never defined communist society in terms of the ownership and control of the means of production by the State, but rather in terms of ownership and control by a voluntary association of the producers themselves. He did not equate what is now called “nationalisation” with socialism. Socialism is an economic system based upon conscious planning of production by associated producers (nowhere does Marx say: by the state), made possible by the abolition of private property of the means of production. As soon as that private property is completely abolished, goods produced cease to be commodities. Value and exchange value disappear. Production becomes production for use, for the satisfaction of needs, determined by conscious choice
In the Communist Manifesto, Marx wrote of future society as “an association which will exclude classes and their antagonism” and “an association, in which the free development of each is the condition for the free development of all.”
In Volume III of Capital Marx writes three or four times of production in future society being controlled by the “associated producers.”
Association was a word used in working class circles in England to mean a voluntary union of workers to overcome the effects of competition. This was Marx’s sense too: in future society, the producers would voluntarily co-operate to further their own common interest; they would cease to be “the working class” and become a class-free community.
Marx himself didn’t use the word “economics”. He wrote of “political economy” as in the subtitle of Das Kapital: “A Critique of Political Economy”. By this he meant the study of the impersonal economic forces that came into operation when production was carried on for sale on a market with a view to profit.
The “Classical” Political Economists Adam Smith, David Ricardo and the others believed that these forces were natural forces i.e. that production for sale on a market with a view to profit was the natural way to organise the production and distribution of wealth. Marx “critique” was that it wasn’t but was only a passing phase in the development of human society
The next stage would be socialism based on the common ownership of the means of life which would allow production to be geared to meeting needs not sale and profit. On this basis the economic forces that “political economy” studied would cease to operate and there would be nothing for such a branch of science to study.
in other words, “political economy” and “economics” only exist under capitalism and there is no such thing as “socialist economics”. It’s a contradiction in terms as socialism will not be an economy.
The term “Marxian economics” refers to the analysis of capitalism that Marx pioneered. It is not about how production and distribution will be organised in a socialist society.
In other words, “political economy” and “economics” only exist under capitalism and there is no such thing as “socialist economics”. It’s a contradiction in terms as socialism will not be an economy.
I fail to see how socialism will not be economising on scarce resources.
To be fair, Brian, economising and economics, are two completely different things.
I agree with Adam, the phrase Political Economy most succinctly sums up Marx’s definition of the discipline he studied.
Whether the also rans that call themselves economists nowadays are worthy of that title, or are even have the intellectual integrity of the likes of Smith and Ricardo is a whole new different debate.
I am frequently amazed at the lack of basic understanding that the “economics experts” on TV display so regularly, with no sense of shame.
I heard one a few years ago who stated that the aim of economics was for all countries in the world to have a positive balance of trades, where they exported more than they imported, I mean, for crying out loud!!
This is my understanding, for what it’s worth
Socialism is more than just not an exchange economy; it is not an economy at all, not even a planned economy. Economics, or political economy as it was originally called, grew up as the study of the forces which came into operation when capitalism, as a system of generalised commodity production, began to become the predominant mode of producing and distributing wealth. The production of wealth under capitalism, instead of being a direct interaction between human beings and nature, in which humans change nature to provide themselves with the useful things they need to live, becomes a process of production of wealth in the form of exchange value. Under this system, production is governed by forces which operate independently of human will and which impose themselves as external, coercive laws when men and women make decisions about the production and distribution of wealth. In other words, the social process of the production and the distribution of wealth becomes under capitalism an economy governed by economic laws and studied by a special discipline, economics.
Socialism is not an economy, because, in re-establishing conscious human control over production, it would restore to the social process of wealth production its original character of simply being a direct interaction between human beings and nature. Wealth in socialism would be produced directly as such, i. e. as useful articles needed for human survival and enjoyment; resources and labour would be allocated for this purpose by conscious decisions, not through the operation of economic laws acting with the same coercive force as laws of nature. Although their effect is similar, the economic laws which come into operation in an exchange economy such as capitalism are not natural laws, since they arise out of a specific set of social relationships existing between human beings. By changing these social relationships through bringing production under conscious human control, socialism would abolish these laws and so also the economy as the field of human activity governed by their operation. Hence socialism would make economics redundant.
What we are saying, in effect, is that the term exchange economy is a tautology in that an economy only comes into existence when wealth is produced for exchange. It is now clear why the term planned economy is unacceptable as a definition of socialism. Socialism is not the planned production of wealth as exchange value, nor the planned production of commodities, nor the planned accumulation of capital. That is what state capitalism aims to be. Planning is indeed central to the idea of socialism, but socialism is the planned (consciously coordinated) production of useful things to satisfy human needs precisely instead of the production, planned or otherwise, of wealth as exchange value, commodities and capital. In socialism wealth would have simply a specific use value (which would be different under different conditions and for different individuals and groups of individuals) but it would not have any exchange, or economic, value.
Economising is simply about the rational allocation of resources and applies to all societies based on various general principles such as opportunity costs etc.
The book published by Adam titled. Alternative to capitalism will answer those questions Marx used the term political economy and economic is a modern term. Socialism is not going to be an economic system or a Marxist economic as the leftists have propagated it is going to be a social production
On the question of Marx’s definition of Marx’s definition of economics its worth reading Louis Dumont’s work From Mandeville to Marx: Genesis and Triumph of Economic Ideology
Dumont’s basic argument is that prior to capitalism, it was difficult if not impossible to distinguish a particular field of human activity one could label the “economy”. Everything was mixed up. We see this in the case of gift transactions which is often misconstrued to be “trade” when in fact it is more a moral transaction. The dynamic of the gift transaction is the complete opposite of a market transaction. It is about cementing social relationships not separating (atomising) individuals into buyers and sellers having opposing interests with respect to the price of the thing being sold
The rise of capitalism represented also the “disentanglement” and freeing up of the “economic category” from other dimensions of social reality. In so called mercantile capitalism we still see the subordination of the economic realm to the political realm. It is only with the emergence of classical political economy and the idea of the free market that you get a sense of economic realm as something separate and distinct from any other realm and subject to its own distinctive laws that define economics as a discipline. This was also coincident with the rise of individualism and Dumont’s more controversial thesis is that Marx took as his basic point of departure an individualist standpoint by positing the economic base as the decisive determining factor as far as the nature of society is concerned insofar as it presupposes the economy as a separate realm of activity subject to its own inner laws.
After all, you can’t posit a causal connection between base and superstructure unless the base is in some sense autonomous. But then again this is a rather crude and misleading characterisation of historical materialism which does not deny that the superstructure can impact on the base even if the base is decisive
So no I dont think one can talk about a “socialist economy”. In socialism, we will return to a state of affairs in which the different aspects of human relationships will all be seamlessly intertwined . Terms like “moral economy” or “gift economy” hint at this but even these are not quite satisfactory since they still seem to imply of some sort of “economy” as the basis of society
“I fail to see how socialism will not be economising on scarce resources.“
Brian, to see economics as being about “economising on scarce resources” is accept precisely the basic assumption of academic bourgeois economics. All their textbooks define economics as the study of how societies allocate scarce resources between competing uses. On this assumption, economics will always exist whereas Marx’s position was that it was the study of the impersonal forces governing the production and distribution of wealth that arose when items of wealth were produced to be sold on a market with a view to profit. So, what is being studied is an “economy”. Since in socialism there is no production for sale or profit it is not an “economy”.
Of course socialism will not want to waste scarce resources but the way they are used will be decided by conscious decision not market forces. Production will be under human control. Which is what socialism is all about, so that it can be directed at satisfying human needs.
Bourgeois economists are the ones who have developed the theory of scarcity
Yes, and what they mean by scarcity isn’t the normal meaning, i.e a shortage of something, but the non-existence of “sheer abundance” (of everything growing on trees). So, for them, “scarcity” will always exist with some form of market system the best way to deal with it.
ALB wrote: “Yes, and what they mean by scarcity isn’t the normal meaning, i.e a shortage of something, but the non-existence of “sheer abundance” (of everything growing on trees). So, for them, “scarcity” will always exist with some form of market system the best way to deal with it.”
This is quite possibly the single most important ideological lesson for democratic communists to take note of – the meaning of ‘scarcity’.
The critical challenge to this ‘normal meaning’ is a lesson in challenging other ‘normal meanings’ throughout any discussions with bourgeois ideologists, including within physics, maths or logic, and not just ‘economics’.
‘Definitions’ are a critical battleground, prior to the content of any discussion.
Terminology is important to discussion and bandying words around without fully comprehending their meanings won’t be fruitful.
Let us define scarcity and abundance. It is limited supply – versus – boundless demand . Our wants are essentially “infinite” and the resources to meet them “limited” is the usual claim. According to this argument, scarcity is an unavoidable fact of life. It applies to any goods where the decision to use a unit of that good entails giving up some other potential use. In other words, whatever one decides to do has an “opportunity cost” — that is the opportunity to do something else which one thereby forgoes; economics is concerned with the allocation of scarce resources.
However, abundance is not a situation where an infinite amount of every good could be produced. Similarly, scarcity is not the situation which exists in the absence of this impossible total or sheer abundance. Abundance is a situation where productive resources are sufficient to produce enough wealth to satisfy human needs, while scarcity is a situation where productive resources are insufficient for this purpose. Abundance is a relationship between supply and demand, where the former exceeds the latter. In socialism a buffer of surplus stock for any particular item, whether a consumer or a producer good, can be produced, to allow for future fluctuations in the demand for that item, and to provide an adequate response time for any necessary adjustments. Thus achieving abundance can be understood as the maintenance of an adequate buffer of stock in the light of extrapolated trends in demand. The relative abundance or scarcity of a good would be indicated by how easy or difficult it was to maintain such an adequate buffer stock in the face of a demand trend (upward, static, or downward). It will thus be possible to choose how to combine different factors for production, and whether to use one rather than another, on the basis of their relative abundance/scarcity.
How do we tell when something is becoming scarce, and how do you pass this information on to others?” Well, we use the tools and systems that capitalism bequeathes us, which will be suitably modified and adapted and transformed for the new conditions. There is stock or inventory control systems and logistics. The key to good stock management is the stock turnover rate – how rapidly stock is removed from the shelves – and the point at which it may need to be re-ordered. This will also be affected by considerations such as lead times – how long it takes for fresh stock to arrive – and the need to anticipate possible changes in demand. The Just-In-Time systems are another well tried and trusted method of warehousing and linking up supply chains which can be utilised. If requirements are low in relation to a build-up of stock , then this would an automatic indication to a production unit that its production should be reduced . If requirements are high in relation to stock then this would be an automatic indication that its production should be increased. And there will be the existence of buffer stocks to provides for a period of re-adjustment.
The modern world is a society of scarcity, but with a difference. Today’s shortages are unnecessary; today’s scarcity is artificial. More than that: scarcity achieved at the expense of strenuous effort, ingenious organisation and the most sophisticated planning. The world is haunted by a spectre – the spectre of abundance. Socialism means plenty for all. We do not preach a gospel of want and scarcity, but of abundance. If the assumption of abundance is not regarded as far-fetched (which, we say it is not) then there is a “better method of ensuring individual consumer choice than voting with vouchers/money: free accessOur critics have fallen into the same erroneous way of looking at the matter as the bourgeois economists with their taken-for-granted assumptions about human nature being inherently lazy or greedy and have fallen hook, line and sinker for Garett Hardin’s ‘Tragedy of the Commons’ that if people get free things, they’ll act like locusts. Likewise, many on the Left have aligned themselves with the argument of the arch pro-capitalist Ludwig von Mises in asserting the need for a common universal unit of accounting. According to this argument, only by means of such a unit can we directly compare different bundles of inputs and thus supposedly select the “least cost “combination. For Mises this unit is money; for some so-called leftists, labour-values. The purpose of a common unit of account is to expedite economic exchange – what communism will lack – rather than the actual efficient deployment of resources as such. Having a common unit of account has nothing to do with the technical organisation of production itself and everything to do with capitalism’s own priorities such as the need to determine profitability and the rate of exploitation.
Socialism will not be about “setting prices at zero”. It is about doing away with the whole notion of price and exchange value so that the very concept of “setting prices at zero” is a meaningless one. To talk of setting prices at any level presupposes still a capitalist framework. If supermarkets tomorrow said, ‘All cans of beans are free’ the shelves would be cleared in hours. But if they said the same the next day, and the next, it would become pointless to go and fill your arms with cans of beans, and easier to just go and take a reasonable stock to keep close to hand. Money and prices are not abolished, but their need is rendered redundant. Just because individuals in a free access economy are not restricted by money from taking what they want, does not mean they will want to take everything they can possibly lay their hands on. The point about a communist society is that there is no objective or external economic mechanism like money or prices mediating between the individual and his or her wants.
Wow it seems my question has stimulated a flurry denials that socialism will be confronted with scarcity. “I fail to see how socialism will not be economising on scarce resources.“ With many of them conflating scarcity with artificial scarcity.
If this is the case how do we explain that finite resources is not a problem when its a fact of life that all modes of production, even when a value relationship has been abandoned and replaced with production for use and free access, are confronted with scarcity. And there will still be occasions when not all needs and wants will be met?
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