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Stilwell – Marx on capitalism

Neoclassical economics presents perfect competition as an ideal, against which markets may ‘fail’. This ideal arises in a theoretical structure with ‘atomistic’ individuals maximising their utility from consumption of goods and services in a world were resources are allocated through markets. Politics and government are absent from the ideal, and people are perfectly informed, with there being no false information.

In contrast, economists working in the critical analytical tradition pioneered by Marx emphasise perceived problems with the organisation of capitalist societies.

In the following extract, Frank Stilwell describes some of the concerns raised by Marxist economists. It is from pp.103-104 of Stilwell, F. J. B. (2012). Political economy : the contest of economic ideas (3rd ed.). Australia: Oxford University Press.

The scope of Marxism

The following nine themes illustrate the broad range of concerns.

The study of social classes
The emphasis is on people, how the economy structures their interests, and how their conflicting interests are expressed. Marxists deride the tendency for other currents of economic analysis to focus on things, rather than people, as commodity fetishism.

The analysis of exploitation
The relationship between classes under capitalism is not symmetrical. Because capital hires labour, and not vice versa, there is the possibility—indeed, the inevitability—of exploitation. Marxist analysis treats this as a systemic feature, dependent not on the rapacious inclinations of individual employers, but rather on the structural imperatives of the capitalist economy.

The growth of monopoly power
Competitive markets are sometimes held to be the essence of capitalism, but Marxists emphasise the tendency for them to be supplanted by monopolistic enterprises. This further accentuates the disparities of economic power as ‘the big fish eat the little fish’.

The expansionary nature of capitalism
Marxist analysis focuses on the reproduction and growth of the economy, emphasising the dynamism of the capital accumulation process. This directs attention to the process of imperialism and, in modern capitalism, to the role of transnational corporations in driving the globalisation of capital.

Uneven development
Capitalism has always been characterised by great variability—spatially and temporally. Its uneven development over space is manifest in the contrast between rapidly expanding cities and economically stagnant regions. Its uneven development over time is manifest in alternating periods of boom and slump. These, too, are focal points of Marxist analysis.

The commodification of social life
It is important to understand how economic forces shape and reshape our social activities. According to Marxists, the expansionary character of capitalism tends, little by little, to transform social pursuits into marketable commodities. Sport, popular music, and education are pertinent contemporary examples.

Here, too, is a tendency that Marxists see embedded in the economic structures of capitalism. Alienation arises because workers have no control over their own labour or the products of their labour. However, alienation is not limited to the workplace. According to radical political economists, it extends into other forms: economic, social, political, arid environmental.

The role of the state
…[C]apitalism is not, in practice, a purely free-market economy. The state plays a major role in relation to competing class interests. In general, Marxists take the view that the state serves capitalist class interests, although there are many variations on that theme.

Social change
The Marxian approach emphasises the processes causing economic and social transformation, sometimes evolutionary and sometimes revolutionary in nature. Capitalism followed other systems of economic organisation, arid can be expected, eventually, to be replaced by other arrangements.

Commentary added, 20th October 2014

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