The Genius of Marx

[RGacky3]

I don't call myself a Marxist because I think calling yourself a someguyanythingist is silly, nor do I think Marx was right about everything.

However I think if your a serious critic of Capitalism or anyone serious about wanting to understand Capitalism you NEED to have a basic understanding of Marxian economics.

What is great about Marxian economics is it grants all the assumptions of classical economics and works using all their basic models, unlike other critiques like Institutional or evolutionary economics and so on that focuses on aspects ignored by classical economics or uses different angles, Marx used the same models and assumptions.

Marx assumed a perfectly competative market, he assumed totally rational actors, he assumed individual action, he assumed no institutional interferance, all of which are valid critiques that other economic schools talk about, but Marx took the purest form of capitalism, the models of the classical economists, and showed the internal contradictions, and he did'nt show ONLY that it would lead to extreme poverty, alienation (loss of freedom), and so on, he showed that it simply would fall apart, that it would'nt work.

Now put on top of that all the market imperfections, the institutional interferances, the cartelizations, the irrational (non market) interferance and so on, its obvious that capitalism cannot work, and not only that it cannot work for hte majority of people, but that eventually it would'nt funtion at all as a system.

Keynes was a later guy that took a lot of these imperfections (basically stole them) and used neo-classical language nad models, problem with Keynes is he desperately did'nt want to be a critic of capitalism.

However TO THIS DAY, marx's analysis holds and the predictions that you can make with his analysis have always pulled through.

Now I totally advocate looking up institutional schools, left-keynsian schools, market-socialist schools, ricardian schools, evolutionary and developmental schools and so on, but to have a full picture of capitalism at its core, you NEED a basic understanding of Marxian economics.

[trivas7]

The critical flaw of classical economic was that it had attempted to analyze the economy in terms of “classes” rather than the actions of individuals. As a result, the classical economists could not find the correct explanation of the underlying forces determining the values and relative prices of goods and services; nor could they analyze the actions of consumers, the crucial determinants of the activities of producers in the economy. Looking at “classes” of goods, for example, the classical economists could never resolve the “paradox of value”: the fact that bread, while extremely useful and the “staff of life,” had a low value on the market; whereas diamonds, a luxury and hence a mere frippery in terms of human survival, had a very high value on the market.

Neither did the classical economists have a satisfactory explanation or justification for profit. Looking at classes rather than individuals, the classical economists not only had to abandon any analysis of consumption and were misled in explaining value and price; they could not even approach an explanation of the pricing of individual factors of production: of specific units of labor, land, or capital goods. As the nineteenth century passed its mid-mark, the defects and fallacies of Ricardian economics became glaring. Economics itself had come to a dead end.

[RGacky3]

The critical flaw of classical economic was that it had attempted to analyze the economy in terms of “classes” rather than the actions of individuals. As a result, the classical economists could not find the correct explanation of the underlying forces determining the values and relative prices of goods and services; nor could they analyze the actions of consumers, the crucial determinants of the activities of producers in the economy. Looking at “classes” of goods, for example, the classical economists could never resolve the “paradox of value”: the fact that bread, while extremely useful and the “staff of life,” had a low value on the market; whereas diamonds, a luxury and hence a mere frippery in terms of human survival, had a very high value on the market.


Supply and demand mixed with labor value, thats not a paradox, if you actually understood Marxist economics you'd realize that the "flaw" is totally irrelevant.


Neither did the classical economists have a satisfactory explanation or justification for profit. Looking at classes rather than individuals, the classical economists not only had to abandon any analysis of consumption and were misled in explaining value and price; they could not even approach an explanation of the pricing of individual factors of production: of specific units of labor, land, or capital goods. As the nineteenth century passed its mid-mark, the defects and fallacies of Ricardian economics became glaring. Economics itself had come to a dead end.

.... Surplus value ...

Marxian economics has been totally successful in its analysis and predictions.

Your obviously talking out of ignorance here.

[Dean]

The critical flaw of classical economic was that it had attempted to analyze the economy in terms of “classes” rather than the actions of individuals. As a result, the classical economists could not find the correct explanation of the underlying forces determining the values and relative prices of goods and services; nor could they analyze the actions of consumers, the crucial determinants of the activities of producers in the economy.
This is patently false and it betrays an apparent non-reading or mis-reading of Capital. In the first few Chapters, Marx specifically refers to consumers in the market helping to determine prices and goods produced, invoking Jeremy Bentham, and describing how each individual engages in market activity by purchasing goods at what Marx himself calls the "correct" price, or "value." This is important because it rejects the myth that Marx rejected market value as a model of value creation.

The difference is that Marx recognized that value created in the minds of human beings is directed at tangible objects and goods, and those goods seen as taking more energy to produce are themselves seen as more valuable.


Looking at “classes” of goods, for example, the classical economists could never resolve the “paradox of value”: the fact that bread, while extremely useful and the “staff of life,” had a low value on the market; whereas diamonds, a luxury and hence a mere frippery in terms of human survival, had a very high value on the market.

How strange that you would say this, since Smith, Marx, and (I believe) Ricardo all agreed that labor itself produced value. Marx uses mining as an example, in fact, and if I recall correctly, he is actually talking about diamond mining in Chile! The simple fact is that it takes more energy (labor) to get diamonds out of a mine, and you may go through 100 times as much material to get an ounce of diamond as it takes to get an ounce of gold, for instance. If they were worth the same, I can tell you that nobody who freely owned their labor would be mining diamonds for 1/10th the pay!

In fact, the bread-diamond "problem" seems to be a failing of "individualist economics" such as the type you propose here, at least more than it hinders Marx et al. If value comes solely from human desire, it makes more sense that bread would ultimately have more value, as it would in any case where food became scarce. The relative scarcity of a particular jewel should not drive people as much as the value of having food, even in abundance, such as for food security. But here we are - the scarcity and subsequent labor cost (coupled with the social value and ubiquitous nature of precious metals and minerals) is the real determinant of value.


Neither did the classical economists have a satisfactory explanation or justification for profit. Looking at classes rather than individuals, the classical economists not only had to abandon any analysis of consumption and were misled in explaining value and price; they could not even approach an explanation of the pricing of individual factors of production: of specific units of labor, land, or capital goods. As the nineteenth century passed its mid-mark, the defects and fallacies of Ricardian economics became glaring. Economics itself had come to a dead end.

Again, absurd. Smith and Marx both engaged in determining the position of capital, land and labor in the production process, as well as the process of profit. While it is laid out plainly, in arithmetical form in Marx's Capital, with smith, he describes profit as the surplus labor value that is withheld from the worker - deserved, he claims, by the "risk" taken by the capitalist.

I'm not really sure where you got these "flaws" from, but they sound like a completely speculative gesture. Even the likes of Mises, Friedman and Keynes acknowledge the above points, and I don't think any of them have repeated these speculative errors...

[Brosa Luxemburg]

The critical flaw of classical economic was that it had attempted to analyze the economy in terms of “classes” rather than the actions of individuals. As a result, the classical economists could not find the correct explanation of the underlying forces determining the values and relative prices of goods and services; nor could they analyze the actions of consumers, the crucial determinants of the activities of producers in the economy. Looking at “classes” of goods, for example, the classical economists could never resolve the “paradox of value”: the fact that bread, while extremely useful and the “staff of life,” had a low value on the market; whereas diamonds, a luxury and hence a mere frippery in terms of human survival, had a very high value on the market.

Neither did the classical economists have a satisfactory explanation or justification for profit. Looking at classes rather than individuals, the classical economists not only had to abandon any analysis of consumption and were misled in explaining value and price; they could not even approach an explanation of the pricing of individual factors of production: of specific units of labor, land, or capital goods. As the nineteenth century passed its mid-mark, the defects and fallacies of Ricardian economics became glaring. Economics itself had come to a dead end.

...are you joking?

[trivas7]

I'm not really sure where you got these "flaws" from, but they sound like a completely speculative gesture. Even the likes of Mises, Friedman and Keynes acknowledge the above points, and I don't think any of them have repeated these speculative errors...
The flaws of Marxian economics were recognized as early as 1896 by Böhm-Bawerk here (http://mises.org/document/996).

[RGacky3]

The flaws of Marxian economics were recognized as early as 1896 by Böhm-Bawerk here (http://www.anonym.to/?http://mises.org/document/996).

except those flaws are not flaws at all, they are just talking about different things, again the predictions of marx as far as capitalism is concerned have all worked out, austrian economics failed EVERY SINGLE TIME.

The flaws you talk about simple come from a missunderstanding of the analysis.

[Dean]

The flaws of Marxian economics were recognized as early as 1896 by Böhm-Bawerk here (http://mises.org/document/996).

Despite some relevant criticisms contained in Bawerk's work, this does nothing to address my comprehensive criticism of your post. Do you simply resign those points?

[trivas7]

Despite some relevant criticisms contained in Bawerk's work, this does nothing to address my comprehensive criticism of your post. Do you simply resign those points?
Despite some irrevelant criticism contained in your post, Böhm-Bawerk's and other Austrians' criticisms of Marxian economics stand.

[RGacky3]

Despite some irrevelant criticism contained in your post, Böhm-Bawerk's and other Austrians' criticisms of Marxian economics stand.

Present those critiques, in post form (i.e. don't copy and paste, write in your own words, what you understand the critique to be).

[Revolution starts with U]

Despite some irrevelant criticism contained in your post, Böhm-Bawerk's and other Austrians' criticisms of Marxian economics stand.

Weakssuce brow. You're not even trying anymore.

[Dean]

Despite some irrevelant criticism contained in your post, Böhm-Bawerk's and other Austrians' criticisms of Marxian economics stand.

I'm not talking about them. I'm talking about you. Your hyperbole does nothing to refute my criticism. It would seem that you are simply unable or unwilling to acknowledge the extent of Marx's criticism of capitalism - which is fine, but its rather strange that you would bring up "problems" in his thinking that are simply too shallow to have even been problems. He already addresses these "problems," and perhaps there is some deeper problem you could find in his criticism, but your failure to acknowledge his own writings specifically referring to these issues reflects on the weakness of your criticism, not his.