Groucho Marxism

Questions and answers on socialism, Marxism, and related topics

Category: Economics

  • Value, price and profit

    Value, Price and Profit is a transcript of a lecture series delivered in 1865 by Karl Marx. Having just finished reading it I thought I would provide a short summary. In this text, Marx sought to refute the theoretical basis for the economic policy of his contemporary John Weston, who argued: “(1) that a general…

  • Use value, exchange value, and labour value

    The labour theory of value, henceforth LTV, posits that the exchange value of a commodity is proportional to the socially necessary labour time required to produce it. In a 1993 article, the Australian economist Steve Keen launched an attack on the LTV. In this blog post I will summarize his argument. Keen begins by rightly…

  • Marxism and MMT

    Just over a week ago there was an online spat between two high-profile left-wing bloggers, Grace Blakeley and Richard Murphy. The disagreement began after Blakeley left a comment on one of Murphy’s blog posts and centred on the relationship between Marxism and Modern Monetary Theory, or MMT. (I won’t explain what MMT is here –…

  • Summarizing Das Kapital volume 1

    Das Kapital is the foundational theoretical text in Marxist philosophy, economics, and politics. It is one of the most influential works of social science ever written and represents the culmination of Karl Marx’s lifelong project to develop a comprehensive theory of capitalism. The central argument, which runs through all three volumes, is that capitalism necessarily…

  • The falling rate of profit

    The tendency of the rate of profit to fall, henceforth TRPF, is a theory according to which the rate of profit – the ratio of the profit to the amount of invested capital – decreases over time. The hypothesis is usually attributed to Marx, but economists as diverse as Adam Smith, John Stuart Mill, David…

  • Deciphering Das Kapital

    I have just finished slogging through Volume 1 of Das Kapital, Karl Marx’s magnum opus. I’ll be honest, I did not find it an easy read. Marx may have been a very clever chap who changed the course of history, but he was a dreadful writer. Or perhaps I’m being a bit harsh. It could…

  • Defending the labour theory of value

    The labour theory of value (henceforth LTV) posits that the exchange value of a commodity is proportional to the socially necessary labour time required to produce it. In a recent (2021) article, the economist Blair Fix criticised the LTV on the grounds that: 1) most proponents of the LTV simply define it to be true…

  • Where do profits come from?

    The most ubiquitous economic metric is Gross Domestic Product, or GDP, which is a measure of the total value of goods and services produced by a country. There are two ways of calculating GDP: the ‘income approach’ and the ‘expenditure approach’ (there is also a third way – the ‘production approach’ – but that need…

  • What is the labour theory of value?

    Labour plays a central role in Marxian economics. In this context, ‘labour’ refers specifically to the physical act of working by human beings – but, crucially, not by animals or machines. Almost all other concepts in Marxian economics are derived from this basic concept. For example, ‘labour time’ is defined as the period of time…

  • Socialists must embrace MMT

    What are taxes for? Everyone thinks they know the answer to this question: To pay for public services. In this blog post, I will put forward the idea that this answer is incorrect, and that taxes do not pay for public services at all. This idea comes from an economic school of thought known as…