Groucho Marxism
Questions and answers on socialism, Marxism, and related topics
Category: Economics
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By bombing Iran and spreading carnage across the Middle East, the US and Israel have put the cost of living crisis back in the headlines. (Has there ever been a more dystopian phrase than ‘cost of living’?) When prices skyrocketed following Russia’s invasion of Ukraine in 2022 we were told it was a one-off; but…
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It is generally agreed now by all but the most zealous capitalist apologists that conditions have not improved for ordinary people in the UK for some time. Recently I have been wondering if there is any data to back up this claim. And it turns out, there is. In this blog post I will go…
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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…
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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 –…
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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…
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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…
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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…
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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…
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In a previous blog post, I derived the following simple expression for the price level: p = vw(1+H/wu), where v is the value of labour (that is, the inverse of labour productivity), w is the average wage, H is total profits, and u is the level of employment. I also derived the following expression for…
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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…
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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…
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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…
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