Market in Marxist Political Economy Essay

  • Length: 13 pages
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  • Subject: Economics
  • Type: Essay
  • Paper: #95015033

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An important contribution to the market ideology is that the authors recognized the existence of a relationship between employment and the market. This relationship was based on that the employment, the division of labor and the "human material progress had proceed in parallel with the growth of the market." Otherwise put, there existed a direct relationship between the market and the employment, with the market being the feature which set the tone. An increase of the market would generate an increase in employment and vice versa. However, an increase or decrease in employment would not affect the market as the relationship between the two is unilateral.

Engels, Moore and Jones believed that the future successful implementation of the communist policies would see no major use of the market; "in the society of the future, there would be no mediation through the market. Wealth would satisfy needs directly. It would be the restoration of the natural relationship between things and men." The market made it more difficult for the individuals to become detached from the need of wealth simply because it allowed the accumulation of wealth; ergo, to reach socialism and communism, the market had to be eliminated.

The Manifesto also dealt with the industrial revolution and the consequent changes it brought along. Relative to this, the authors stated that mechanized work was coming to replace human labor and in the context of the market, the skills and abilities of the individual workers were being undervalued and improperly measured. Ergo, the working class was once again disconsidered in the face of political and economic forces.

The book presents the idea according to which the market suppresses the actions of purposive individuals. "Freed from the constraints imposed by custom or traditional authority, producers and traders had to calculate for themselves how the market might receive what they had to offer. But the market only corrected imbalances between production and the satisfaction of need retrospectively - or if need did not coincide with what the market recognized as effective demand, not at all."

The negative take on the market was extremely popular in the socialist agenda, but Marx found it rather difficult to subject to it mostly since he saw the market as a vital component in the process of change, towards the achievement of a perfect communist society. "A denunciation of the injustices of the market came easy to socialists, but for Marx, it posed a problem. His communism had supposedly started from the dynamism of the modern exchange economy and its capacity to satisfy the needs of the all-round human personality. To remove the market as the means whereby needs were harmonized with resources was to remove the central dynamic feature of this economy."

The Manifesto is without a doubt different from the previous works and one reason in support of this statement is the way in which the authors address the market. Previous works have barely recognized it. Also, previous economic model were flawed in that they based the resource allocation on other features, rather than the market. The Manifesto, however it reveals several negative ideas on the market, it takes an important step in recognizing its role within the society and for economic wealth.

In Capital, Marx, Ernest Mandel, David Fernbach and Ben Fowkes focus on financial issues and make fewer references to the market. The book is however relevant for the current research as it looks at the market through the lens of financial issues. In this order of ideas, Marx and the co-authors address the matter of price fluctuation within the market and relate it to the fluctuations in terms of production costs and profits. "Fluctuations of market prices [...] may always be the result of a dual movement: the changes in the value of a commodity and the changes in the value of the money-commodity, gold."

Marx's view of the financial theory is rather ambiguous, and just like in the case of the Manifesto, the author shares a sometimes different view from his socialist collaborators. He believes the market to be the basis of an efficient economy and this is generally because the market regulates offer and demand and in turn, sets the prices for the commodities. Otherwise put, Marx's view is that prices should be set by the market, rather than the production costs and the desires for profits. In achieving this, a two stage strategy would have to be employed. First of all, the values should be transformed into prices of production and the prices of production should then be turned into market prices. The method was extremely complex at the time and generated numerous monetary challenges.

Another issues addressed by the authors of Capital is that of profit. In alignment with the socialist and communist views, Marx, Mandel, Fernbach and Fowkes believe in a unification of profits. In other words, they believe that there should be an established profit rate and all entrepreneurs should register similar revenues, within a calculated mathematical limit. They have described this rate as an average of the social capital. Also, they argue that the limit should be based on the competition encountered within the market and the market value of the employed commodities. They have also addressed the matters of demand and supply in terms of market value, and stated that if the retail price is larger than the market value, the demand for that product or commodity will decrease, whereas the supply of the product will be reduced; if on the other hand, the price goes below the market value, the item will register a higher demand, but a lower supply. "Thus, if supply and demand regulate market price, or rather the departures of market price from market value, the market value in turn regulates the relationship between demand and supply, or the center around which fluctuations of demand and supply make the market price oscillate."

Another important work of Karl Marx is the Critique to Hegel's 'Philosophy of Right', written in collaboration with Joseph O'Malley and Annette Jolin. The book however does not address the issues of market, but simply acknowledges the fluctuation which occur within it, as well as fact that market operations are guided by both independent individual needs, as well as governmental interferences.

In Grundrisse, Marx and Martin Nicolaus point out the contradictory and even conflicting ideas of the socialists of the time. Some representatives of the era strongly believe that the market has to be eliminated in order to achieve a perfect model of socialism, and then communism, with all social, political and economic ideas communists promote. Others however argue that the free market is the very core of a successful socialist model and a sustained economic growth. "The contradictions within this mental construct are the contradictions within the ideology of radical bourgeois democracy, as typified to the highest degree and with the most socialist coloration [...] by the Proudhonists. They wish to make bourgeois liberty and bourgeois equality more perfect, to realize them fully and completely, and to that end rail and rant about the tyranny of money and the venality of the market-place, not knowing that this very market-place is the real foundation of the bourgeois liberty and equality they wish to perfect. The opponents of the bourgeois radicals among the bourgeoisie, namely the political economists, have a sounder understanding of this particular question to the extent that they understand what are the real relations between bourgeois freedom and the market-place." Marx belonged to the latter category, that of political economists who understood and militated for the real role of the market.

The book continues by detailing several monetary aspects and, similar to Capital, it looks at the market through the lens of the monetary issues. It also deals with the already familiar issues of market value and states that the market value will adjust to the real value through the means of continuous market oscillations, rather than artificial interventions.

Grundrisse also contains excerpts from a letter sent by Marx to Engels, in which he states his future purposes of further analyzing the international market and writing a book entitled World Market. The author had already begun his analysis of the international market and had found that it is influenced by private and public operations on the money market, by the trade of commodities and by the exchange rates established privately or publicly. He concluded with the existence of a relationship between individual and global market and he believed that the size and importance of such a market would increase along the years to come. "In the case of the world market, the connection of the individual with all, but at the same time also the independence of this connection from the individual, have developed to such a high level that the formation of the world market already at the same time contains the conditions for going beyond it."

The analysis of Marx's theories on market is far…

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