Groucho Marxism
Questions and answers on socialism, Marxism, and related topics
Category: Marxism
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The so-called Fundamental Marxian Theorem (FMT) was first proven by the Japanese economist Nubuo Okishio in 1963 and was developed further by the Japanese economist Michio Morishima in 1973 and 1974. The theorem asserts that, in Miroshima’s words, “the exploitation of labourers by capitalists is necessary and sufficient for the existence of a price-wage set…
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In Marxian economics, the ‘transformation problem’ refers to the problem of finding a general rule by which to transform the values of commodities – based on their socially necessary labour content, according to Marx’s labour theory of value – into the prices of commodities seen in the marketplace. Here I will provide a mathematical treatment…
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The labour theory of value (LTV) posits that the exchange value of a commodity is proportional to the socially necessary labour time required to produce it. Marx was the greatest champion of the LTV but many Marxists have since abandoned it, raising the question of whether the LTV is a necessary component of Marxism or…
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A central question of Marx’s Das Capital is: why is capitalism profitable and productive? Marx’s answer to this question boils down to: because capitalists exploit workers. But why does worker exploitation result in positive profits and positive growth? To tackle this problem scientifically, Marx had to go it alone as much of the mathematical apparatus…
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Consider an economy with m sectors that each specialize in the production of one commodity type. The economy is determined by an m×m input-output matrix of inter-sector coefficients A = (aij), where aij ≥ 0 is the quantity of commodity i required to produce one unit of commodity j; a 1xm vector of direct labour coefficients…
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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…
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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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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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Marxists often claim that workers are exploited under capitalism. In fact this is usually considered a central tenet of Marxism. But what exactly do we mean by ‘exploited’? In this blog post I will attempt to provide a rigorous definition (actually three rigorous definitions). To kick things off, consider an economy which produces m commodities…
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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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