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week 2 : Marxism continued (1818-1883) (Law of motion of capitalist…
week 2 :
Marxism continued
(1818-1883)
Law of motion of capitalist society -1:
capital accumulation
Capitalist economy: M-C-M’
*Profit: M’ - M
Capitalists’ profits are used to further accumulate capital
Traditional economy: C-M-C
Law of motion of capitalist society -1:
Falling rate of profit
due to drive for efficiency -mechanization and labor-saving inventions
Organic composition of capital: more constant capital (machinery) relative to variable capital (wages)
Since labor is only source of value, profit rate
(= surplus / (labor + capital)) falls
Law of motion of capitalist society -1:
Business crises
Depression lowers monetary value of fixed capital
Factory closures, prices fall
Lower profit rate , lowers expansion.
Law of motion of capitalist society -1:
Technological unemployment
Labor employment substituted by capital
Law of motion of capitalist society -1:
Centralization of capital and concentration of wealth
due to dynamics of capital accumulation and tendency for recurring business crises
Law of motion of capitalist society -1:
Reserve army of unemployed and immiserization of proletariat
Due to crises and capital/labor- substitution more people became unemployed.
With more unemployed, wages would be further depressed
Law of motion of capitalist society -1:
Class conflict
State ownership of means of production replaces private ownership
Exploitation of workers ends
Workers unite and revolt