Ben Fine – Introduction to Marxist Economics

via The Post-Crash Economics Society

On the 4th of February 2014 we were lucky to have the Marxist economist Ben Fine from SOAS University in London for the fifth instalment of the series. Fine is one of the UK’s best known Marxists and has authored and co-authored a number of books on the subject, including an introduction to Marx’s capital. Marxist economics is often misunderstood or even scoffed at because of its perceived political implications. However, with the global economy in crisis, some believe it’s now hard not to take seriously many of the things Marx wrote about capitalism’s systemic tendency toward catastrophe.

According to the Marxist analysis, labour is the sole source of ‘value’, and capitalists make a profit by paying labourers wages lower than the value the labourers produce. However, as technology develops, capitalists tend to substitute capital for labour to increase productivity. This has the perverse effect of lowering the amount of labour performed – and therefore the surplus produced – in the economy as a whole. As the rate of profit falls, this manifests itself in periodic crises as capitalists cut back to try and recover profits.

While neoclassical (and Austrian) economics tend to take the individual as the most important unit of economic analysis, Marxism groups people into classes depending on their relation to the economy. Workers (or the proletariat) are those who depend on wages for subsistence, while capitalists are those who own the ‘means of production’ and employ workers.

Please enjoy the video.