Marxist Economics: Key Concepts Explained
Marxist Economics: Key Concepts
Work is the activity by which humans transform reality to meet their physical and spiritual needs. In operating companies, work experience is often seen as alienated rather than a means of self-realization. For Marx, work becomes an anthropological category. He posits that humans possess an inherent drive to transform reality. Humans are an asset, and work is the expression of their mental capacities. Work can be an end in itself, sought and enjoyed for its own sake.
Infrastructure and Superstructure
The material base of society determines its social structure and development. The infrastructure of a company invariably shapes its superstructure. Marx argued that societal study should focus on how material goods are produced, not merely on what people say. The infrastructure ultimately determines the superstructure. The superstructure generally encompasses legal, political, and ideological institutions.
Social Formation
Social formation is the totality of social structures, encompassing the economic, legal, political, and ideological structures, along with the prevailing beliefs and values.
Alienation
Dimensions of alienation:
- In relation to the work product: The capitalist purchases the worker’s labor for wages, and the product ceases to belong to the employee. The surplus value from the product accrues to the capitalist.
- In relation to the activity that the worker performs: The worker fails to find fulfillment in their work, participating in only a fraction of the process, leading to feelings of alienation.
- The relationship between human beings: Humans are treated as mere components of the production process, creating a division between exploiters and exploited. Alienation arises because neither class fulfills the essence of humanity.
- The relationship between man and nature: Factory work alienates humans from nature.
Value
The value of an asset is determined by the amount of socially necessary labor required to produce it. This is measured by the socially necessary labor time spent on its production. The value fluctuates with changes in the productive capacity of labor. A useless object has no value, while useful objects may exist without value. The value of a good comprises the value of raw materials, depreciation, wages, and improvements.
Capital
Capital is expanding value. The initial form of capital is a sum of money used in the capitalist production process to generate a larger sum. This money is used to purchase machinery, raw materials, and labor, representing constant and variable capital, respectively. When all constant and variable capital has been spent, the money from the sale of the produce must exceed the original investment.
Surplus Value (Appreciation)
The difference between the wage paid to workers and the value they add to the product is called surplus value. In Marxism, labor is the sole source of surplus value, which represents the capitalist’s profit. Without this profit, capitalist society could not exist.
We can represent this as follows:
Force Performance: Value in use: produces goods (e.g., a table) X = Exchange rate (salary)
Trade 1: Use value (profits from the table) value change…
Gain = Y = Y – (X + Z)
Marxism proposes the elimination of surplus value.