31 Marxian economics

Marxian economics, or the Marxian school of economics, is a heterodox school of political economic thought. Its foundations can be traced back to Marx critique of political economy. Unlike critics of political economy, the proclaimed marxian economists tend to accept the economy as a worthwhile concept of inquiry. Marxian economics comprises several different theories and includes multiple schools of thought, which are sometimes opposed to each other, and in many cases Marxian analysis is used to complement or supplement other economic approaches. Because one does not necessarily have to be politically Marxist to be economically Marxian, the two adjectives coexist in usage rather than being synonymous. They share a semantic field while also allowing connotative and denotative differences.

Abstract labour and concrete labour refer to a distinction made by Karl Marx in his critique of political economy. It refers to the difference between human labour in general as economically valuable worktime versus human labour as a particular activity that has a specific useful effect.

In Marxist theory, society consists of two parts: the base and superstructure. The base comprises the forces and relations of production into which people enter to produce the necessities and amenities of life. The superstructure determines society's other relationships and ideas to comprise its superstructure, including its culture, institutions, political power structures, roles, rituals, and state. The relation of the two parts is not strictly unidirectional, Marx and Engels warned against such economic determinism as the superstructure can affect the base. However the influence of the base is predominant.

In Karl Marx's critique of political economy, commodity fetishism is the perception of certain relationships not as relationships among people, but as social relationships among things. As a form of reification, commodity fetishism perceives value as something that arises from and resides within the commodity goods themselves, and not from the series of interpersonal relations that produce the commodity and evolve its value.

Constant capital (c), is a concept created by Karl Marx and used in Marxian political economy. It refers to one of the forms of capital invested in production, which contrasts with variable capital (v). The distinction between constant and variable refers to an aspect of the economic role of factors of production in creating a new value.

Consumption of fixed capital (CFC) is a term used in business accounts, tax assessments and national accounts for depreciation of fixed assets. CFC is used in preference to "depreciation" to emphasize that fixed capital is used up in the process of generating new output, and because unlike depreciation it is not valued at historic cost but at current market value ; CFC may also include other expenses incurred in using or installing fixed assets beyond actual depreciation charges. Normally the term applies only to producing enterprises, but sometimes it applies also to real estate assets.

Differential ground rent and absolute ground rent are concepts used by Karl Marx in the third volume of Das Kapital to explain how the capitalist mode of production would operate in agricultural production, under the condition where most agricultural land was owned by a social class of land-owners who obtained rent income from those who farmed the land. The farm work could be done by the landowner himself, the tenant of the landowner, or by hired farm workers. Rent as an economic category is regarded by Marx as one form of surplus value just like net interest income, net production taxes and industrial profits.

In political economy and especially Marxian economics, exchange value refers to one of four major attributes of a commodity, i.e., an item or service produced for, and sold on the market. The other three aspects are use value, economic value, and price. Thus, a commodity has:a value, represented by the socially necessary labour time to produce it. ; a use value ; an exchange value, which is the proportion at which a commodity can be exchanged for other commodities; a price.

Faux frais of production is a concept used by classical political economists and by Karl Marx in his critique of political economy. It refers to "incidental operating expenses" incurred in the productive investment of capital, which do not themselves add new value to output. In Marx's social accounting, the faux frais are a component of constant capital, or alternately are funded by a fraction of the new surplus value.

Fictitious capital is a concept used by Karl Marx in his critique of political economy. It is introduced in chapter 25 of the third volume of Capital. Fictitious capital contrasts with what Marx calls "real capital", which is capital actually invested in physical means of production and workers, and "money capital", which is actual funds being held. The market value of fictitious capital assets varies according to the expected return or yield of those assets in the future, which Marx felt was only indirectly related to the growth of real production. Effectively, fictitious capital represents "accumulated claims, legal titles, to future production" and more specifically claims to the income generated by that production.Fictitious capital could be defined as a capitalisation on property ownership. Such ownership is real and legally enforced, as are the profits made from it, but the capital involved is fictitious; it is "money that is thrown into circulation as capital without any material basis in commodities or productive activity". Fictitious capital could also be defined as "tradeable paper claims to wealth", although tangible assets may themselves under certain conditions also be vastly inflated in price.

Finance capitalism or financial capitalism is the subordination of processes of production to the accumulation of money profits in a financial system.

In Marxist theory and Marxian economics, the immiseration thesis, also referred to as emiseration thesis, is derived from Karl Marx's analysis of economic development in capitalism, implying that the nature of capitalist production stabilizes real wages, reducing wage growth relative to total value creation in the economy, leading to the increasing power of capital in society.

Imperialism is a policy or ideology of extending the rule over peoples and other countries, for extending political and economic access, power and control, often through employing hard power, especially military force, but also soft power. While related to the concepts of colonialism and empire, imperialism is a distinct concept that can apply to other forms of expansion and many forms of government.

Labour power is a key concept used by Karl Marx in his critique of capitalist political economy. Marx distinguished between the capacity to do work, labour power, from the physical act of working, labour. Labour power exists in any kind of society, but on what terms it is traded or combined with means of production to produce goods and services has historically varied greatly.

The law of the value of commodities, known simply as the law of value, is a central concept in Karl Marx's critique of political economy first expounded in his polemic The Poverty of Philosophy (1847) against Pierre-Joseph Proudhon with reference to David Ricardo's economics. Most generally, it refers to a regulative principle of the economic exchange of the products of human work, namely that the relative exchange-values of those products in trade, usually expressed by money-prices, are proportional to the average amounts of human labor-time which are currently socially necessary to produce them.

The Means of labor is a concept in Marxist political economy that refers to "all those things with the aid of which man acts upon the subject of his labor, and transforms it." Means of labor include tools and machinery, as well as buildings and land used for production purposes and infrastructure like roads and communications networks and so forth. Labor, Itself defines "work, especially hard physical work."

In the writings of Karl Marx and the Marxist theory of historical materialism, a mode of production is a specific combination of the following:Productive forces: these include human labour power and means of production. Social and technical relations of production: these include the property, power and control relations governing society's productive assets, cooperative work relations and forms of association, relations between people and the objects of their work and the relations between social classes.

Prices of production is a concept in Karl Marx's critique of political economy, defined as "cost-price + average profit". A production price can be thought of as a type of supply price for products; it refers to the price levels at which newly produced goods and services would have to be sold by the producers, in order to reach a normal, average profit rate on the capital invested to produce the products.

Reserve army of labour is a concept in Karl Marx's critique of political economy. It refers to the unemployed and underemployed in capitalist society. It is synonymous with "industrial reserve army" or "relative surplus population", except that the unemployed can be defined as those actually looking for work and that the relative surplus population also includes people unable to work. The use of the word "army" refers to the workers being conscripted and regimented in the workplace in a hierarchy under the command or authority of the owners of capital.

Socialist self-management or Self-governing socialism was a form of workers' self-management used as a social and economic model formulated by the Communist Party of Yugoslavia. It was instituted by law in 1950 and lasted in the Socialist Federal Republic of Yugoslavia until 1990, just prior to its breakup in 1992.

Socially necessary labour time in Marx's critique of political economy is what regulates the exchange value of commodities in trade and consequently constrains producers in their attempt to economise on labour. It does not 'guide' them, as it can only be determined after the event and is thus inaccessible to forward planning.

Subject of labor, or object of labor, is a concept in Marxist political economy that refers to "everything to which man's labor is applied." The subject of labor may be materials provided directly by nature like timber or coal, or materials that have been modified by labor. In the latter case, the subject of labor are called raw materials.

Superprofit, surplus profit or extra surplus-value is a concept in Karl Marx's critique of political economy subsequently elaborated by Vladimir Lenin and other Marxist thinkers.

Surplus labour is a concept used by Karl Marx in his critique of political economy. It means labour performed in excess of the labour necessary to produce the means of livelihood of the worker. The "surplus" in this context means the additional labour a worker has to do in their job, beyond earning their keep. According to Marxian economics, surplus labour is usually uncompensated (unpaid) labour.

Surplus product is an economic concept explicitly theorised by Karl Marx in his critique of political economy. Roughly speaking, it is the extra goods produced above the amount needed for a community of workers to survive at its current standard of living. Marx first began to work out his idea of surplus product in his 1844 notes on James Mill's Elements of political economy.

Underconsumption is a theory in economics that recessions and stagnation arise from an inadequate consumer demand, relative to the amount produced. In other words, there is a problem of overproduction and overinvestment during a demand crisis. The theory formed the basis for the development of Keynesian economics and the theory of aggregate demand after the 1930s.

In Marxism, the valorisation or valorization of capital is the increase in the value of capital assets through the application of value-forming labour in production. The German original term is "Verwertung" but this is difficult to translate. The first translation of Capital by Samuel Moore and Edward Aveling, under Engels' editorship, renders "Verwertung" in different ways depending on the context, for example as "creation of surplus-value", "self-expanding value", "increase in value" and similar expressions. These renderings were also used in the US Untermann revised edition, and the Eden and Cedar Paul translation. It has also been wrongly rendered as "realisation of capital".

The value product (VP) is an economic concept formulated by Karl Marx in his critique of political economy during the 1860s, and used in Marxian social accounting theory for capitalist economies. Its annual monetary value is approximately equal to the netted sum of six flows of income generated by production:wages and salaries of employees. profit including distributed and undistributed profit. interest paid by producing enterprises from current gross income rent paid by producing enterprises from current gross income, including land rents. tax on the production of new value, including income tax and indirect tax on producers. fees paid by producing enterprises from current gross income, including: royalties, certain honorariums and corporate officers' fees, various insurance charges, and certain leasing fees incurred in production and paid from current gross income.

The value-form or form of value is a concept in Karl Marx's critique of political economy. Marx's account of the value-form is differently adopted in later forms Marxism, in the Frankfurt School and in post-Marxism. When social labor is split up into independent enterprises and organized capitalistically, its products take the form of an ensemble of commodities of diverse types, which face one another on the market.

There are five main lines of scholarly criticism of Marx's idea of the form of value.

Wage labour, usually referred to as paid work, paid employment, or paid labour, refers to the socioeconomic relationship between a worker and an employer in which the worker sells their labour power under a formal or informal employment contract. These transactions usually occur in a labour market where wages or salaries are market-determined.