HoPE notes: June 6 II

Marx and his System, Medema
He spends 4 lectures on post-Malthusian classical economics, roughly up to ~Say? Marx is the last of the great classical economists (Smith, Malthus, Ricard, Mill). 
"Save the world in your own time, don't bring that shit into the classroom".
Medema emphasizes the teaches history of theory, and as a theoretical system it has faults in it (e.g. the failure of the theory of value breaks down the rest).
For Marx, there are not really any ways to make the economic system 'better'. The other classical economists often set out to make policy recommendations to make the world a better place (however defined). Sees historical determinism, as 'economic' determinism. There are laws that govern the course of history.
Marx takes the Hegelian use of thesis, anthesis, and synthesis on the world to ideas, and applies it to the material world. Thesis: individual private property, antithesis: capitalism, synthesis: socialism. Individual private property is replaced by the capitalist who owns the tools of production.
Das Kapital:
* Aim: "to lay bare the economic law of motion of modern society"
* He begins with a critique of classical political economy. While he critiqued it, he also borrowed extensively from it (e.g. Ricardo's labor theory of value). Yet, rejection of the Malthusian theory of population. One of the inferences from Malthus is that the poor are to blame for their own misery by their inability to limit their own sexual drive and children-having, which to Malthus was a kind of law of nature and inevitable. 
* Marx kind of equations capitalists and landlords because their role/dynamics in the system are the same.
* The labor theory of value (labor is the only productive agent and source of all value, the price of a product is the amount of labor embodied in it). Here, basic unskilled labor is the base unit, more skilled labor has more labor hours embodied in them as training, and thus pays a higher wage. It is the 'socially necessary labor time', unnecessary labor time is not embodied in the price of a good. (cannot explain relative prices when K/L varies across production activities [why exactly? do numerical example with two goods]).
* Workers must sell labor time at at least the subsistence level income (otherwise why work/survive). 
* Worker must accept capitalists terms. E.g. the labor hours necessary to generate subsistence level output (e.g. 6 hours), but the capitalist demands more hours (e.g. 10 hours). This creates surplus value (4 hours) for the capitalist, this is the source of all profit and rent. This is the source of capitalist accumulation, capitalist development, and economic growth. This 'exploitation' was not a bad thing for Marx? Because it leads to socialism at the end of the road, it creates the source of violent overthrow/revolution of the capitalist system.
* Includes a bit of symbolic logic in the book. (see Medema's slide). Can express some of the Marx lingo in symbolic expressions. 
* Smith and Marx have in common that the capitalist system is highly competitive. In Marx's time there are more large firms/industry, Smith saw it more as atomistic competition (e.g. a new store opening if there's enough demand). 
* Accumulation of capital displaces workers, increasing the reserve army of the unemployed [whether the reserve army keeps growing or only fluctuates, there was discussion about in class]. Labor input per unit fall as machinery advances, prices fall. In the long run, prices will decrease.
* Another theoretical tension, #2: rate of profit = s/(v+c) should be decreasing since c/v is increasing, and s/v is constant at 100%. Employment falls as people are replaced with machines, which means real wages should increase. This contradicts his assert that real wages would fall in the long term. 
* Theory of Crisis
* didnt follow much, see slides
Classical economists conducted their analysis in terms of class theories. Modern economics totally lacks this. 
'monopsony power' coined by Joan Robinson (1943?? or 1934?? or smth?)
Make studnets read list of 10 demands by Marx.