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115-877: Valencian Marxist Front ( Valencian : Front Marxista Valencià ), an underground communist group in the Valencian Community , Spain , founded in 1954 by youth active in Lo Rat Penat . It disappeared in 1962, when its members joined either the Valencian Socialist Party or the Communist Party of Spain (later forming the Communist Party of the Valencian Country ). FMV had a left-wing nationalist line, promoting Valencian identity. Leading members included Francesc Codonyer and Enric Tàrrega. This article about
230-577: A Communist party in Europe is a stub . You can help Misplaced Pages by expanding it . This article related to Valencian Community , Spain is a stub . You can help Misplaced Pages by expanding it . Marxism Marxism is a political philosophy and method of socioeconomic analysis. It uses a dialectical and materialist interpretation of historical development, better known as historical materialism , to analyse class relations, social conflict , and social transformation . Marxism originates with
345-522: A socialist revolution in contemporary society is inevitable. While the inevitability of an eventual socialist revolution is a controversial debate among many different Marxist schools of thought , all Marxists believe socialism is a necessity. Marxists argue that a socialist society is far better for most of the populace than its capitalist counterpart. Prior to the Russian Revolution , Vladimir Lenin wrote: "The socialisation of production
460-494: A Marxist perspective. Other developments include: The latest field of research examines and develops Marxist pedagogy in the postdigital era. Economics Economics ( / ˌ ɛ k ə ˈ n ɒ m ɪ k s , ˌ iː k ə -/ ) is a social science that studies the production , distribution , and consumption of goods and services . Economics focuses on the behaviour and interactions of economic agents and how economies work. Microeconomics analyses what
575-519: A Marxist would conclude that capitalism exploits and oppresses the proletariat; therefore, capitalism will inevitably lead to a proletarian revolution . In a socialist society, private property —as the means of production—would be replaced by cooperative ownership. A socialist economy would not base production on the creation of private profits but on the criteria of satisfying human needs—that is, production for use . Friedrich Engels explained that "the capitalist mode of appropriation, in which
690-479: A backlash against Marxist thought in post-communist states, such as Poland . However, it remains prominent in the sociological research sanctioned and supported by communist states, such as in China . Marxian economics is a school of economic thought tracing its foundations to the critique of classical political economy first expounded upon by Karl Marx and Friedrich Engels. Marxian economics concerns itself with
805-526: A certain stage of development, the material productive forces of society come into conflict with the existing relations of production or—this merely expresses the same thing in legal terms—with the property relations within the framework of which they have operated hitherto. From forms of development of the productive forces these relations turn into their fetters. Then begins an era of social revolution ." These inefficiencies manifest themselves as social contradictions in society which are, in turn, fought out at
920-498: A concrete study of the actual conditions in Europe. According to the Marxist theoretician and revolutionary socialist Vladimir Lenin, "the principal content of Marxism" was "Marx's economic doctrine." Marx demonstrated how the capitalist bourgeoisie and their economists were promoting what he saw as the lie that "the interests of the capitalist and of the worker are ... one and the same." He believed that they did this by purporting
1035-702: A definition of economics as a study of human behaviour, subject to and constrained by scarcity, which forces people to choose, allocate scarce resources to competing ends, and economise (seeking the greatest welfare while avoiding the wasting of scarce resources). According to Robbins: "Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses". Robbins' definition eventually became widely accepted by mainstream economists, and found its way into current textbooks. Although far from unanimous, most mainstream economists would accept some version of Robbins' definition, even though many have raised serious objections to
1150-451: A distinct field. The book focused on determinants of national income in the short run when prices are relatively inflexible. Keynes attempted to explain in broad theoretical detail why high labour-market unemployment might not be self-correcting due to low " effective demand " and why even price flexibility and monetary policy might be unavailing. The term "revolutionary" has been applied to the book in its impact on economic analysis. During
1265-413: A labourer—is synonymous with surplus labour, and capitalist exploitation is thus realised as deriving surplus value from the worker. In pre-capitalist economies , exploitation of the worker was achieved via physical coercion . Under the capitalist mode of production, workers do not own the means of production and must "voluntarily" enter into an exploitative work relationship with a capitalist to earn
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#17327908658861380-420: A lower relative cost of production, rather relying only on its own production. It has been termed a "fundamental analytical explanation" for gains from trade . Coming at the end of the classical tradition, John Stuart Mill (1848) parted company with the earlier classical economists on the inevitability of the distribution of income produced by the market system. Mill pointed to a distinct difference between
1495-501: A materialist theory of history, Marx did not claim to have produced a master key to history and that the materialist conception of history is not "an historico-philosophic theory of the marche générale , imposed by fate upon every people, whatever the historic circumstances in which it finds itself." In a letter to the editor of the Russian newspaper paper Otechestvennyje Zapiski (1877), he explained that his ideas were based upon
1610-449: A more comprehensive theory of costs on the supply side. In the 20th century, neoclassical theorists departed from an earlier idea that suggested measuring total utility for a society, opting instead for ordinal utility , which posits behaviour-based relations across individuals. In microeconomics , neoclassical economics represents incentives and costs as playing a pervasive role in shaping decision making . An immediate example of this
1725-467: A more important role in mainstream economic theory. Also, heterogeneity among the economic agents, e.g. differences in income, plays an increasing role in recent economic research. Other schools or trends of thought referring to a particular style of economics practised at and disseminated from well-defined groups of academicians that have become known worldwide, include the Freiburg School ,
1840-403: A post-capitalist society—positive humanism, socialism, Communism, realm of free individuality, free association of producers, etc. He used these terms completely interchangeably. The notion that 'socialism' and 'Communism' are distinct historical stages is alien to his work and only entered the lexicon of Marxism after his death." According to orthodox Marxist theory, overthrowing capitalism by
1955-597: A proportion of the value their work had created. Marxian economics was further developed by Karl Kautsky (1854–1938)'s The Economic Doctrines of Karl Marx and The Class Struggle (Erfurt Program) , Rudolf Hilferding 's (1877–1941) Finance Capital , Vladimir Lenin (1870–1924)'s The Development of Capitalism in Russia and Imperialism, the Highest Stage of Capitalism , and Rosa Luxemburg (1871–1919)'s The Accumulation of Capital . At its inception as
2070-409: A rapidly growing population against a limited amount of land meant diminishing returns to labour. The result, he claimed, was chronically low wages, which prevented the standard of living for most of the population from rising above the subsistence level. Economist Julian Simon has criticised Malthus's conclusions. While Adam Smith emphasised production and income, David Ricardo (1817) focused on
2185-576: A school of thought, Marxism has had a profound effect on society and global academia. To date, it has influenced many fields, including anthropology , archaeology , art theory , criminology , cultural studies , economics , education , ethics , film theory , geography , historiography , literary criticism , media studies , philosophy , political science , political economy , psychoanalysis , science studies , sociology , urban planning , and theatre . Marxism seeks to explain social phenomena within any given society by analysing
2300-469: A set of stable preferences, a definite overall guiding objective, and the capability of making a choice. There exists an economic problem, subject to study by economic science, when a decision (choice) is made by one or more players to attain the best possible outcome. Keynesian economics derives from John Maynard Keynes , in particular his book The General Theory of Employment, Interest and Money (1936), which ushered in contemporary macroeconomics as
2415-409: A single tax on income of land owners. In reaction against copious mercantilist trade regulations, the physiocrats advocated a policy of laissez-faire , which called for minimal government intervention in the economy. Adam Smith (1723–1790) was an early economic theorist. Smith was harshly critical of the mercantilists but described the physiocratic system "with all its imperfections" as "perhaps
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#17327908658862530-452: A social science, economics was defined and discussed at length as the study of production, distribution, and consumption of wealth by Jean-Baptiste Say in his Treatise on Political Economy or, The Production, Distribution, and Consumption of Wealth (1803). These three items were considered only in relation to the increase or diminution of wealth, and not in reference to their processes of execution. Say's definition has survived in part up to
2645-435: A sought after end). Some subsequent comments criticised the definition as overly broad in failing to limit its subject matter to analysis of markets. From the 1960s, however, such comments abated as the economic theory of maximizing behaviour and rational-choice modelling expanded the domain of the subject to areas previously treated in other fields. There are other criticisms as well, such as in scarcity not accounting for
2760-442: A synthesis emerged by the 2000s, often given the name the new neoclassical synthesis . It integrated the rational expectations and optimizing framework of the new classical theory with a new Keynesian role for nominal rigidities and other market imperfections like imperfect information in goods, labour and credit markets. The monetarist importance of monetary policy in stabilizing the economy and in particular controlling inflation
2875-692: A word, oppressor and oppressed, stood in constant opposition to one another, carried on uninterrupted, now hidden, now open fight, a fight that each time ended, either in a revolutionary reconstitution of society at large, or in the common ruin of the contending classes." Marx considered recurring class conflicts as the driving force of human history as such conflicts have manifested as distinct transitional stages of development in Western Europe . Accordingly, Marx designated human history as encompassing four stages of development in relations of production: While historical materialism has been referred to as
2990-408: Is a process accomplished by the so-called thinker consciously, it is true, but with a false consciousness. The real motive forces impelling him remain unknown to him; otherwise it simply would not be an ideological process. Hence he imagines false or seeming motive forces." Because the ruling class controls the society's means of production, the superstructure of society (i.e. the ruling social ideas)
3105-453: Is a study of educational reform in the U.S. and its relationship to the reproduction of capitalism and the possibilities of utilising its contradictions in the revolutionary movement. The work of Peter McLaren , especially since the turn of the 21st century, has further developed Marxist educational theory by developing revolutionary critical pedagogy, as has the work of Glenn Rikowski, Dave Hill, and Paula Allman. Other Marxists have analysed
3220-421: Is a term for the "way (nomos) to run a household (oikos)", or in other words the know-how of an οἰκονομικός ( oikonomikos ), or "household or homestead manager". Derived terms such as "economy" can therefore often mean "frugal" or "thrifty". By extension then, "political economy" was the way to manage a polis or state. There are a variety of modern definitions of economics ; some reflect evolving views of
3335-438: Is also applied to such diverse subjects as crime , education , the family , feminism , law , philosophy , politics , religion , social institutions , war , science , and the environment . The earlier term for the discipline was "political economy", but since the late 19th century, it has commonly been called "economics". The term is ultimately derived from Ancient Greek οἰκονομία ( oikonomia ) which
3450-401: Is bound to lead to the conversion of the means of production into the property of society. ... This conversion will directly result in an immense increase in productivity of labour, a reduction of working hours, and the replacement of the remnants, the ruins of small-scale, primitive, disunited production by collective and improved labour." The failure of the 1905 Russian Revolution , along with
3565-403: Is certain and that is that I am not a Marxist." The discovery of the materialist conception of history, or rather, the consistent continuation and extension of materialism into the domain of social phenomenon, removed two chief defects of earlier historical theories. In the first place, they at best examined only the ideological motives of the historical activity of human beings, without grasping
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3680-402: Is determined by the best interests of the ruling class. In The German Ideology , Marx says that "[t]he ideas of the ruling class are in every epoch the ruling ideas, i.e. the class which is the ruling material force of society, is, at the same time, its ruling intellectual force." The term political economy initially referred to the study of the material conditions of economic production in
3795-449: Is divided between the rich and the poor, and that some people subjugate and exploit other people, you're lost in a forest, not knowing anything. — Cuban revolutionary and Marxist–Leninist politician Fidel Castro on discovering Marxism, 2009 This new way of thinking was invented because socialists believed that common ownership of the means of production (i.e. the industries , land, wealth of nature, trade apparatus and wealth of
3910-448: Is introduced. Because the surplus produced by the workers is the property of the society as a whole, there are no classes of producers and appropriators. Additionally, as the state originates in the bands of retainers hired by the first ruling classes to protect their economic privilege, it will wither away as its conditions of existence have disappeared. According to The Oxford Handbook of Karl Marx , "Marx used many terms to refer to
4025-476: Is necessary to understand his later works properly. Contrary to the official dialectical materialism of the Soviet Union and interpretations of Marx rooted in the structural Marxism of Louis Althusser , Marxist humanists argue that Marx's work was an extension or transcendence of enlightenment humanism . Whereas other Marxist philosophies see Marxism as natural science , Marxist humanism reaffirms
4140-465: Is not prerequisite. In addition to criticism, Marx has also praised some of the results of capitalism stating that it "has created more massive and more colossal productive forces than have all preceding generations together" and that it "has put an end to all feudal, patriarchal arrangements." Marx posited that the remaining feudalist societies in the world and forms of socialism that did not conform with his writings would be replaced by communism in
4255-561: Is often critical of reformist positions such as those held by social democrats . Libertarian Marxist currents often draw from Karl Marx and Friedrich Engels' later works, specifically the Grundrisse and The Civil War in France ; emphasising the Marxist belief in the ability of the working class to forge its destiny without the need for a vanguard party to mediate or aid its liberation. Along with anarchism , libertarian Marxism
4370-766: Is one of the main currents of libertarian socialism . Libertarian Marxism includes currents such as autonomism , council communism , De Leonism , Lettrism , parts of the New Left , Situationism , Freudo-Marxism (a form of psychoanalysis ), Socialisme ou Barbarie and workerism . Libertarian Marxism has often strongly influenced both post-left and social anarchists . Notable theorists of libertarian Marxism have included Maurice Brinton , Cornelius Castoriadis , Guy Debord , Raya Dunayevskaya , Daniel Guérin , C. L. R. James , Rosa Luxemburg , Antonio Negri , Anton Pannekoek , Fredy Perlman , Ernesto Screpanti , E. P. Thompson , Raoul Vaneigem , and Yanis Varoufakis ,
4485-413: Is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it
4600-598: Is the consumer theory of individual demand, which isolates how prices (as costs) and income affect quantity demanded. In macroeconomics it is reflected in an early and lasting neoclassical synthesis with Keynesian macroeconomics. Neoclassical economics is occasionally referred as orthodox economics whether by its critics or sympathisers. Modern mainstream economics builds on neoclassical economics but with many refinements that either supplement or generalise earlier analysis, such as econometrics , game theory , analysis of market failure and imperfect competition , and
4715-607: Is viewed as basic elements within economies , including individual agents and markets , their interactions, and the outcomes of interactions. Individual agents may include, for example, households, firms, buyers, and sellers. Macroeconomics analyses economies as systems where production, distribution, consumption, savings , and investment expenditure interact, and factors affecting it: factors of production , such as labour , capital , land , and enterprise , inflation , economic growth , and public policies that have impact on these elements . It also seeks to analyse and describe
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4830-780: The School of Lausanne , the Stockholm school and the Chicago school of economics . During the 1970s and 1980s mainstream economics was sometimes separated into the Saltwater approach of those universities along the Eastern and Western coasts of the US, and the Freshwater, or Chicago school approach. Within macroeconomics there is, in general order of their historical appearance in
4945-433: The macroeconomics of high unemployment. Gary Becker , a contributor to the expansion of economics into new areas, described the approach he favoured as "combin[ing the] assumptions of maximizing behaviour, stable preferences , and market equilibrium , used relentlessly and unflinchingly." One commentary characterises the remark as making economics an approach rather than a subject matter but with great specificity as to
5060-467: The neoclassical model of economic growth for analysing long-run variables affecting national income . Neoclassical economics studies the behaviour of individuals , households , and organisations (called economic actors, players, or agents), when they manage or use scarce resources, which have alternative uses, to achieve desired ends. Agents are assumed to act rationally, have multiple desirable ends in sight, limited resources to obtain these ends,
5175-415: The societal to the microeconomic level: Economics is a study of man in the ordinary business of life. It enquires how he gets his income and how he uses it. Thus, it is on the one side, the study of wealth and on the other and more important side, a part of the study of man. Lionel Robbins (1932) developed implications of what has been termed "[p]erhaps the most commonly accepted current definition of
5290-400: The "choice process and the type of social interaction that [such] analysis involves." The same source reviews a range of definitions included in principles of economics textbooks and concludes that the lack of agreement need not affect the subject-matter that the texts treat. Among economists more generally, it argues that a particular definition presented may reflect the direction toward which
5405-464: The "sum total of the forces of production accessible to men determines the condition of society" and forms a society's economic base. The base includes the material forces of production such as the labour , means of production and relations of production , i.e. the social and political arrangements that regulate production and distribution. From this base rises a superstructure of legal and political "forms of social consciousness " that derive from
5520-666: The 1940s, the Western Marxist school became accepted within Western academia, subsequently fracturing into several different perspectives, such as the Frankfurt School or critical theory . The legacy of Critical Theory as a major offshoot of Marxism is controversial. The common thread linking Marxism and Critical theory is an interest in struggles to dismantle structures of oppression, exclusion, and domination. Due to its former state-supported position, there has been
5635-486: The 1970s and 1980s, when several major central banks followed a monetarist-inspired policy, but was later abandoned because the results were unsatisfactory. A more fundamental challenge to the prevailing Keynesian paradigm came in the 1970s from new classical economists like Robert Lucas , Thomas Sargent and Edward Prescott . They introduced the notion of rational expectations in economics, which had profound implications for many economic discussions, among which were
5750-560: The Industrial Revolution which undermines the democratic agency of citizens. Marxists differ in their positions towards democracy. Types of democracy in Marxism include Soviet democracy , New Democracy , Whole-process people's democracy and can include voting on how surplus labour is to be organised. According to democratic centralism political decisions reached by voting in the party are binding for all members of
5865-567: The administration of General Secretary Joseph Stalin , a great emphasis was placed on the adoption of Marxist archaeology throughout the country. These theoretical developments were subsequently adopted by archaeologists working in capitalist states outside of the Leninist bloc, most notably by the Australian academic V. Gordon Childe , who used Marxist theory in his understandings of the development of human society. Marxist sociology, as
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#17327908658865980-514: The analysis of crisis in capitalism, the role and distribution of the surplus product and surplus value in various types of economic systems , the nature and origin of economic value , the impact of class and class struggle on economic and political processes, and the process of economic evolution . Although the Marxian school is considered heterodox , ideas that have come out of Marxian economics have contributed to mainstream understanding of
6095-407: The analysis of wealth: how wealth is created (production), distributed, and consumed; and how wealth can grow. But he said that economics can be used to study other things, such as war, that are outside its usual focus. This is because war has as the goal winning it (as a sought after end ), generates both cost and benefits; and, resources (human life and other costs) are used to attain the goal. If
6210-479: The area of inquiry or object of inquiry rather than the methodology. In the biology department, it is not said that all biology should be studied with DNA analysis. People study living organisms in many different ways, so some people will perform DNA analysis, others might analyse anatomy, and still others might build game theoretic models of animal behaviour. But they are all called biology because they all study living organisms. According to Ha Joon Chang, this view that
6325-443: The author believes economics is evolving, or should evolve. Many economists including nobel prize winners James M. Buchanan and Ronald Coase reject the method-based definition of Robbins and continue to prefer definitions like those of Say, in terms of its subject matter. Ha-Joon Chang has for example argued that the definition of Robbins would make economics very peculiar because all other sciences define themselves in terms of
6440-414: The awareness—of itself and the social world—that a social class possesses and its capacity to act rationally in its best interests. Class consciousness is required before a social class can effect a successful revolution and, thus, the dictatorship of the proletariat . Without defining ideology , Marx used the term to describe the production of images of social reality. According to Engels, "ideology
6555-417: The capitalist system. In Marxism, political economy is the study of the means of production, specifically of capital and how that manifests as economic activity. Marxism taught me what society was. I was like a blindfolded man in a forest, who doesn't even know where north or south is. If you don't eventually come to truly understand the history of the class struggle, or at least have a clear idea that society
6670-517: The colonies. Physiocrats , a group of 18th-century French thinkers and writers, developed the idea of the economy as a circular flow of income and output. Physiocrats believed that only agricultural production generated a clear surplus over cost, so that agriculture was the basis of all wealth. Thus, they opposed the mercantilist policy of promoting manufacturing and trade at the expense of agriculture, including import tariffs. Physiocrats advocated replacing administratively costly tax collections with
6785-415: The complex dynamics of modern society." Influenced by the thought of Karl Marx , Marxist sociology emerged in the late 19th and early 20th centuries. With Marx, Max Weber and Émile Durkheim are considered seminal influences in early sociology . The first Marxist school of sociology was known as Austro-Marxism , of which Carl Grünberg and Antonio Labriola were among its most notable members. During
6900-399: The concept that "the fastest possible growth of productive capital " was best for wealthy capitalists and workers because it provided them with employment. Exploitation is a matter of surplus labour —the amount of labour performed beyond what is received in goods. Exploitation has been a socioeconomic feature of every class society and is one of the principal features distinguishing
7015-488: The design of modern monetary policy and are now standard workhorses in most central banks. After the 2007–2008 financial crisis , macroeconomic research has put greater emphasis on understanding and integrating the financial system into models of the general economy and shedding light on the ways in which problems in the financial sector can turn into major macroeconomic recessions. In this and other research branches, inspiration from behavioural economics has started playing
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#17327908658867130-506: The distribution of income among landowners, workers, and capitalists. Ricardo saw an inherent conflict between landowners on the one hand and labour and capital on the other. He posited that the growth of population and capital, pressing against a fixed supply of land, pushes up rents and holds down wages and profits. Ricardo was also the first to state and prove the principle of comparative advantage , according to which each country should specialise in producing and exporting goods in that it has
7245-493: The doctrine that "man is the measure of all things"—that humans are essentially different to the rest of the natural order and should be treated so by Marxist theory. According to a 2007 survey of American professors by Neil Gross and Solon Simmons, 17.6% of social science professors and 5.0% of humanities professors identify as Marxists, while between 0 and 2% of professors in all other disciplines identify as Marxists. The theoretical development of Marxist archaeology
7360-425: The economic base that conditions both the superstructure and the dominant ideology of a society. Conflicts between the development of material productive forces and the relations of production provoke social revolutions , whereby changes to the economic base lead to the superstructure's social transformation . This relationship is reflexive in that the base initially gives rise to the superstructure and remains
7475-469: The economy can and should be studied in only one way (for example by studying only rational choices), and going even one step further and basically redefining economics as a theory of everything, is peculiar. Questions regarding distribution of resources are found throughout the writings of the Boeotian poet Hesiod and several economic historians have described Hesiod as the "first economist". However,
7590-408: The end of class society, which Marx saw as the fundamental division of all hitherto existing history. Marx saw the fundamental nature of capitalist society as little different from that of a slave society in that one small group of society exploits the larger group. Through common ownership of the means of production, the profit motive is eliminated, and the motive of furthering human flourishing
7705-405: The failure of socialist movements to resist the outbreak of World War I , led to renewed theoretical effort and valuable contributions from Lenin and Rosa Luxemburg towards an appreciation of Marx's crisis theory and efforts to formulate a theory of imperialism . Karl Marx criticised liberal democracy as not democratic enough due to the unequal socio-economic situation of the workers during
7820-751: The first large-scale macroeconometric model , applying the Keynesian thinking systematically to the US economy . Immediately after World War II, Keynesian was the dominant economic view of the United States establishment and its allies, Marxian economics was the dominant economic view of the Soviet Union nomenklatura and its allies. Monetarism appeared in the 1950s and 1960s, its intellectual leader being Milton Friedman . Monetarists contended that monetary policy and other monetary shocks, as represented by
7935-540: The following decades, many economists followed Keynes' ideas and expanded on his works. John Hicks and Alvin Hansen developed the IS–LM model which was a simple formalisation of some of Keynes' insights on the economy's short-run equilibrium. Franco Modigliani and James Tobin developed important theories of private consumption and investment , respectively, two major components of aggregate demand . Lawrence Klein built
8050-496: The forms and pedagogical processes of capitalist and communist education, such as Tyson E. Lewis, Noah De Lissovoy, Gregory Bourassa, and Derek R. Ford. Curry Malott has developed a Marxist history of education in the U.S., and Marvin Gettleman examined the history of communist education. Sandy Grande has synthesised Marxist educational theory with Indigenous pedagogy, while others like John Holt analyse adult education from
8165-482: The foundation of a form of social organisation . Those newly formed social organisations can then act again upon both parts of the base and superstructure so that rather than being static, the relationship is dialectic , expressed and driven by conflicts and contradictions. Engels clarified: "The history of all hitherto existing society is the history of class struggles. Freeman and slave , patrician and plebeian , lord and serf , guild -master and journeyman , in
8280-405: The future in a similar manner as with capitalism. Marx distinguishes social classes based on two criteria, i.e. ownership of means of production and control over the labour power of others. Following this criterion of class based on property relations, Marx identified the social stratification of the capitalist mode of production with the following social groups: Class consciousness denotes
8395-509: The global economy . Other broad distinctions within economics include those between positive economics , describing "what is", and normative economics , advocating "what ought to be"; between economic theory and applied economics ; between rational and behavioural economics ; and between mainstream economics and heterodox economics . Economic analysis can be applied throughout society, including business , finance , cybersecurity , health care , engineering and government . It
8510-552: The global economy. Certain concepts of Marxian economics, especially those related to capital accumulation and the business cycle , such as creative destruction , have been fitted for use in capitalist systems. Marxist education develops Marx's works and those of the movements he influenced in various ways. In addition to the educational psychology of Lev Vygotsky and the pedagogy of Paulo Freire , Samuel Bowles and Herbert Gintis' Schooling in Capitalist America
8625-424: The growth in the money stock, was an important cause of economic fluctuations, and consequently that monetary policy was more important than fiscal policy for purposes of stabilisation . Friedman was also skeptical about the ability of central banks to conduct a sensible active monetary policy in practice, advocating instead using simple rules such as a steady rate of money growth. Monetarism rose to prominence in
8740-463: The importance of various market failures for the functioning of the economy, as had Keynes. Not least, they proposed various reasons that potentially explained the empirically observed features of price and wage rigidity , usually made to be endogenous features of the models, rather than simply assumed as in older Keynesian-style ones. After decades of often heated discussions between Keynesians, monetarists, new classical and new Keynesian economists,
8855-550: The latter claiming that Marx himself was a libertarian Marxist. Marxist humanism was born in 1932 with the publication of Marx's Economic and Philosophic Manuscripts of 1844 and reached a degree of prominence in the 1950s and 1960s. Marxist humanists contend that there is continuity between the early philosophical writings of Marx, in which he develops his theory of alienation , and the structural description of capitalist society found in his later works, such as Capital . They hold that grasping Marx's philosophical foundations
8970-426: The level of class struggle . Under the capitalist mode of production , this struggle materialises between the minority who own the means of production (the bourgeoisie ) and the vast majority of the population who produce goods and services (the proletariat ). Starting with the conjectural premise that social change occurs due to the struggle between different classes within society who contradict one another,
9085-449: The market's two roles: allocation of resources and distribution of income. The market might be efficient in allocating resources but not in distributing income, he wrote, making it necessary for society to intervene. Value theory was important in classical theory. Smith wrote that the "real price of every thing ... is the toil and trouble of acquiring it". Smith maintained that, with rent and profit, other costs besides wages also enter
9200-570: The material conditions and economic activities required to fulfill human material needs. It assumes that the form of economic organisation, or mode of production , influences all other social phenomena, including broader social relations, political institutions, legal systems, cultural systems, aesthetics and ideologies. These social relations and the economic system form a base and superstructure . As forces of production (i.e. technology ) improve, existing forms of organising production become obsolete and hinder further progress. Karl Marx wrote: "At
9315-437: The most famous passages in all economics," Smith represents every individual as trying to employ any capital they might command for their own advantage, not that of the society, and for the sake of profit, which is necessary at some level for employing capital in domestic industry, and positively related to the value of produce. In this: He generally, indeed, neither intends to promote the public interest, nor knows how much he
9430-407: The necessities of life. The worker's entry into such employment is voluntary because they choose which capitalist to work for. However, the worker must work or starve. Thus, exploitation is inevitable, and the voluntary nature of a worker participating in a capitalist society is illusory; it is production, not circulation, that causes exploitation. Marx emphasised that capitalism per se does not cheat
9545-511: The objective laws governing the development of the system of social relations. ... in the second place, the earlier theories did not cover the activities of the masses of the population, whereas historical materialism made it possible for the first time to study with scientific accuracy the social conditions of the life of the masses and the changes in these conditions. — Russian Marxist theoretician and revolutionary Vladimir Lenin , 1913 Society does not consist of individuals, but expresses
9660-530: The party. Classical Marxism denotes the collection of socio-eco-political theories expounded by Karl Marx and Friedrich Engels . As Ernest Mandel remarked, "Marxism is always open, always critical, always self-critical." Classical Marxism distinguishes Marxism as broadly perceived from "what Marx believed." In 1883, Marx wrote to his son-in-law Paul Lafargue and French labour leader Jules Guesde —both of whom claimed to represent Marxist principles—accusing them of "revolutionary phrase-mongering" and denying
9775-503: The pessimistic analysis of Malthus (1798). John Stuart Mill (1844) delimited the subject matter further: The science which traces the laws of such of the phenomena of society as arise from the combined operations of mankind for the production of wealth, in so far as those phenomena are not modified by the pursuit of any other object. Alfred Marshall provided a still widely cited definition in his textbook Principles of Economics (1890) that extended analysis beyond wealth and from
9890-434: The population's living standards due to its need to compensate for the falling rate of profit by cutting employees' wages and social benefits while pursuing military aggression. The socialist mode of production would succeed capitalism as humanity's mode of production through revolution by workers. According to Marxian crisis theory , socialism is not an inevitability but an economic necessity. The term Marxism
10005-487: The present, modified by substituting the word "wealth" for "goods and services" meaning that wealth may include non-material objects as well. One hundred and thirty years later, Lionel Robbins noticed that this definition no longer sufficed, because many economists were making theoretical and philosophical inroads in other areas of human activity. In his Essay on the Nature and Significance of Economic Science , he proposed
10120-409: The price of a commodity. Other classical economists presented variations on Smith, termed the ' labour theory of value '. Classical economics focused on the tendency of any market economy to settle in a final stationary state made up of a constant stock of physical wealth (capital) and a constant population size . Marxist (later, Marxian) economics descends from classical economics and it derives from
10235-500: The product enslaves first the producer, and then the appropriator, is replaced by the mode of appropriation of the products that is based upon the nature of the modern means of production; upon the one hand, direct social appropriation, as means to the maintenance and extension of production—on the other, direct individual appropriation, as means of subsistence and of enjoyment." Marxian economics and its proponents view capitalism as economically unsustainable and incapable of improving
10350-429: The purest approximation to the truth that has yet been published" on the subject. The publication of Adam Smith 's The Wealth of Nations in 1776, has been described as "the effective birth of economics as a separate discipline." The book identified land, labour, and capital as the three factors of production and the major contributors to a nation's wealth, as distinct from the physiocratic idea that only agriculture
10465-412: The scope and method of economics, emanating from that definition. A body of theory later termed "neoclassical economics" formed from about 1870 to 1910. The term "economics" was popularised by such neoclassical economists as Alfred Marshall and Mary Paley Marshall as a concise synonym for "economic science" and a substitute for the earlier " political economy ". This corresponded to the influence on
10580-486: The so-called Lucas critique and the presentation of real business cycle models . During the 1980s, a group of researchers appeared being called New Keynesian economists , including among others George Akerlof , Janet Yellen , Gregory Mankiw and Olivier Blanchard . They adopted the principle of rational expectations and other monetarist or new classical ideas such as building upon models employing micro foundations and optimizing behaviour, but simultaneously emphasised
10695-415: The social classes. The power of one social class to control the means of production enables its exploitation of other classes. Under capitalism, the labour theory of value is the operative concern, whereby the value of a commodity equals the socially necessary labour time required to produce it. Under such conditions, surplus value —the difference between the value produced and the value received by
10810-603: The society) would abolish the exploitative working conditions experienced under capitalism. Through working class revolution, the state (which Marxists saw as a weapon for the subjugation of one class by another) is seized and used to suppress the hitherto ruling class of capitalists and (by implementing a commonly owned, democratically controlled workplace) create the society of communism which Marxists see as true democracy. An economy based on cooperation on human need and social betterment, rather than competition for profit of many independently acting profit seekers, would also be
10925-444: The source of the word economy. Joseph Schumpeter described 16th and 17th century scholastic writers, including Tomás de Mercado , Luis de Molina , and Juan de Lugo , as "coming nearer than any other group to being the 'founders' of scientific economics" as to monetary , interest , and value theory within a natural-law perspective. Two groups, who later were called "mercantilists" and "physiocrats", more directly influenced
11040-406: The state or commonwealth with a revenue for the publick services. Jean-Baptiste Say (1803), distinguishing the subject matter from its public-policy uses, defined it as the science of production, distribution, and consumption of wealth . On the satirical side, Thomas Carlyle (1849) coined " the dismal science " as an epithet for classical economics , in this context, commonly linked to
11155-474: The study of sociology from a Marxist perspective, is "a form of conflict theory associated with ... Marxism's objective of developing a positive ( empirical ) science of capitalist society as part of the mobilisation of a revolutionary working class ." The American Sociological Association has a section dedicated to the issues of Marxist sociology that is "interested in examining how insights from Marxist methodology and Marxist analysis can help explain
11270-408: The subject of mathematical methods used in the natural sciences . Neoclassical economics systematically integrated supply and demand as joint determinants of both price and quantity in market equilibrium, influencing the allocation of output and income distribution. It rejected the classical economics' labour theory of value in favour of a marginal utility theory of value on the demand side and
11385-402: The subject or different views among economists. Scottish philosopher Adam Smith (1776) defined what was then called political economy as "an inquiry into the nature and causes of the wealth of nations", in particular as: a branch of the science of a statesman or legislator [with the twofold objectives of providing] a plentiful revenue or subsistence for the people ... [and] to supply
11500-471: The subject": Economics is the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses. Robbins described the definition as not classificatory in "pick[ing] out certain kinds of behaviour" but rather analytical in "focus[ing] attention on a particular aspect of behaviour, the form imposed by the influence of scarcity ." He affirmed that previous economists have usually centred their studies on
11615-773: The subsequent development of the subject. Both groups were associated with the rise of economic nationalism and modern capitalism in Europe. Mercantilism was an economic doctrine that flourished from the 16th to 18th century in a prolific pamphlet literature, whether of merchants or statesmen. It held that a nation's wealth depended on its accumulation of gold and silver. Nations without access to mines could obtain gold and silver from trade only by selling goods abroad and restricting imports other than of gold and silver. The doctrine called for importing inexpensive raw materials to be used in manufacturing goods, which could be exported, and for state regulation to impose protective tariffs on foreign manufactured goods and prohibit manufacturing in
11730-412: The sum of interrelations, the relations within which these individuals stand. Marxism uses a materialist methodology, referred to by Marx and Engels as the materialist conception of history and later better known as historical materialism, to analyse the underlying causes of societal development and change from the perspective of the collective ways in which humans make their living. Marx's account of
11845-613: The theory is in The German Ideology (1845) and the preface A Contribution to the Critique of Political Economy (1859). All constituent features of a society ( social classes , political pyramid and ideologies ) are assumed to stem from economic activity, forming what is considered the base and superstructure . The base and superstructure metaphor describes the totality of social relations by which humans produce and re-produce their social existence. According to Marx,
11960-484: The value of reformist struggle. From Marx's letter derives Marx's famous remark that, if their politics represented Marxism, ' ce qu'il y a de certain c'est que moi, je ne suis pas Marxiste ' ('what is certain is that I myself am not a Marxist')." Libertarian Marxism emphasises the anti-authoritarian and libertarian aspects of Marxism. Early currents of libertarian Marxism, such as left communism , emerged in opposition to Marxism–Leninism . Libertarian Marxism
12075-538: The various schools of thought , which emphasise or modify elements of classical Marxism , several Marxian concepts have been incorporated into an array of social theories . This has led to widely varying conclusions. Alongside Marx's critique of political economy , the defining characteristics of Marxism have often been described using the terms " dialectical materialism " and "historical materialism", though these terms were coined after Marx's death and their tenets have been challenged by some self-described Marxists. As
12190-467: The war is not winnable or if the expected costs outweigh the benefits, the deciding actors (assuming they are rational) may never go to war (a decision ) but rather explore other alternatives. Economics cannot be defined as the science that studies wealth, war, crime, education, and any other field economic analysis can be applied to; but, as the science that studies a particular common aspect of each of those subjects (they all use scarce resources to attain
12305-515: The word Oikos , the Greek word from which the word economy derives, was used for issues regarding how to manage a household (which was understood to be the landowner, his family, and his slaves ) rather than to refer to some normative societal system of distribution of resources, which is a more recent phenomenon. Xenophon , the author of the Oeconomicus , is credited by philologues for being
12420-460: The work of Karl Marx . The first volume of Marx's major work, Das Kapital , was published in 1867. Marx focused on the labour theory of value and theory of surplus value . Marx wrote that they were mechanisms used by capital to exploit labour. The labour theory of value held that the value of an exchanged commodity was determined by the labour that went into its production, and the theory of surplus value demonstrated how workers were only paid
12535-432: The worker. Alienation ( German : Entfremdung ) is the estrangement of people from their humanity and a systematic result of capitalism. Under capitalism, the fruits of production belong to employers, who expropriate the surplus created by others and generate alienated labourers. In Marx's view, alienation is an objective characterisation of the worker's situation in capitalism—his or her self-awareness of this condition
12650-428: The works of 19th-century German philosophers Karl Marx and Friedrich Engels . Marxism has developed over time into various branches and schools of thought , and as a result, there is no single, definitive " Marxist theory ". Marxism has had a profound effect in shaping the modern world, with various left-wing and far-left political movements taking inspiration from it in varying local contexts. In addition to
12765-401: Was first developed in the Soviet Union in 1929, when a young archaeologist named Vladislav I. Ravdonikas published a report entitled "For a Soviet history of material culture"; within this work, the very discipline of archaeology as it then stood was criticised as being inherently bourgeois, therefore anti-socialist and so, as a part of the academic reforms instituted in the Soviet Union under
12880-421: Was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. The Reverend Thomas Robert Malthus (1798) used the concept of diminishing returns to explain low living standards. Human population , he argued, tended to increase geometrically, outstripping the production of food, which increased arithmetically. The force of
12995-693: Was popularised by Karl Kautsky , who considered himself an orthodox Marxist during the dispute between Marx's orthodox and revisionist followers. Kautsky's revisionist rival Eduard Bernstein also later adopted the term. Engels did not support using Marxism to describe either Marx's or his views. He claimed that the term was being abusively used as a rhetorical qualifier by those attempting to cast themselves as genuine followers of Marx while casting others in different terms, such as Lassallians . In 1882, Engels claimed that Marx had criticised self-proclaimed Marxist Paul Lafargue by saying that if Lafargue's views were considered Marxist, then "one thing
13110-892: Was productive. Smith discusses potential benefits of specialisation by division of labour , including increased labour productivity and gains from trade , whether between town and country or across countries. His "theorem" that "the division of labor is limited by the extent of the market" has been described as the "core of a theory of the functions of firm and industry " and a "fundamental principle of economic organization." To Smith has also been ascribed "the most important substantive proposition in all of economics" and foundation of resource-allocation theory—that, under competition , resource owners (of labour, land, and capital) seek their most profitable uses, resulting in an equal rate of return for all uses in equilibrium (adjusted for apparent differences arising from such factors as training and unemployment). In an argument that includes "one of
13225-437: Was recognised as well as the traditional Keynesian insistence that fiscal policy could also play an influential role in affecting aggregate demand . Methodologically, the synthesis led to a new class of applied models, known as dynamic stochastic general equilibrium or DSGE models, descending from real business cycles models, but extended with several new Keynesian and other features. These models proved useful and influential in
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