An Introduction to Marxist - Reading from the Left

An Introduction to

Marxist

ECONOMIC THEORY

Ernest Mandel

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An Introduction to Marxist Economic Theory

Contents

Introduction by Doug Lorimer ................................................................................ 3 I.The Theory of Value and Surplus Value .................................................... 5 Social surplus product......................................................................................... 5 Commodities, use value and exchange value...................................................... 7 The Marxist theory of alienation......................................................................... 9 The law of value................................................................................................ 10 Determination of the exchange value of commodities...................................... 13 What is socially necessary labour?................................................................... 16 The origin and nature of surplus value.............................................................. 18 The validity of the labour theory of value......................................................... 20 II.Capital and Capitalism ................................................................................ 23 Capital in precapitalist society.......................................................................... 23 Origins of the capitalist mode of production..................................................... 24 Origins and definition of the modern proletariat............................................... 27 The fundamental mechanism of capitalist economy......................................... 30 The growth in the organic composition of capital............................................. 33 Competition leads to concentration and monopoly........................................... 36 Tendency of the average rate of profit to decline.............................................. 37 The fundamental contradiction in the capitalist system and the periodic crises of overproduction......................................................... 41

III.Neo-Capitalism .............................................................................................. 43 The origins of neo-capitalism............................................................................ 43 A permanent technological revolution.............................................................. 45 The importance of armament expenditures....................................................... 48 How crises are `amortised' in a recession......................................................... 50 The tendency to permanent inflation................................................................. 54 `Economic planning'......................................................................................... 55 The state guarantee of profit.............................................................................. 58

Copyright ? Resistance Books 2002 ISBN: 1876646306 Published by: Resistance Books, 23 Abercrombie St, Chippendale NSW 2008, Australia Printed by: El Faro Printing, 79 King St, Newtown NSW 2042, Australia

Introduction

By Doug Lorimer

Ernest Mandel (1923-95) was the most influential exponent of Marxist economic theory in the Western world during the second half of the 20th century, and is best known for his masterful two-volume work Marxist Economic Theory (1962) and his brilliant Late Capitalism (1972).

In the former, he demonstrated that it was possible, on the basis of the contemporary data, to reconstitute the whole economic system of Karl Marx 100 years after the first publication of Marx's Capital. In the latter work, Mandel provided an explanation of the causes of the 20-year "wave" of rapid growth of the world capitalist economy after World War II, which also demonstrated that it would soon be followed by an indeterminately "long wave" of much slower economic growth, and recurrent social and political crises in the developed capitalist countries.

Late Capitalism also provided the first comprehensive analysis of the new features of global capitalism that emerged in the post-war period and that are still with us today -- transnational corporations as the dominant form of capitalist business organisation, the enormous growth of the services sector, the crucial role of state expenditure in propping up an economic system marked by financial instability, long-term stagnation punctuated by speculative booms, mindless consumerism and accelerating environmental destruction.

This pamphlet, which was first published in French in 1964, provides a concise exposition of the elementary princples of Marxist economic theory. In the first section, Mandel elucidates the basic categories of Marx's economic doctrine from the emergence of the social surplus product to the labour theory of value. In the second section, he explains the basic laws of motion of capitalism and its inherent contradictions. In the final second, he applies these to some of the new features exhibited by the new stage of imperialist capitalism that emerged after the second world war, which at the time he termed "neo-capitalism".

In his more mature work Late Capitalism, Mandel abandoned this term in favour of the designation "late capitalism", explaining in the introduction to

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An Introduction to Marxist Economic Theory

that work that the designation "neo-capitalism" could be falsely "interpreted to imply either a radical continuity or discontinuity with traditional capitalism". Instead, Mandel stressed that the "era of late capitalism is not a new epoch of capitalist development [but] merely a further development of the imperialist, monopoly-capitalist epoch" with "the characteristics of the imperialist epoch enumerated by Lenin" at the beginning of the 20th century remaining "fully valid for late capitalism".

I. The Theory of Value and Surplus Value

In the last analysis, every step forward in the history of civilisation has been brought about by an increase in the productivity of labour. As long as a given group of men barely produced enough to keep itself alive, as long as there was no surplus over and above this necessary product, it was impossible for a division of labour to take place and for artisans, artists or scholars to make their appearance. Under these conditions, the technical prerequisites for such specialisation could not possibly be attained.

Social surplus product As long as the productivity of labour remains at a level where one man

can only produce enough for his own subsistence, social division does not take place and any social differentiation within society is impossible. Under these conditions, all men are producers and they are all on the same economic level.

Every increase in the productivity of labour beyond this low point makes a small surplus possible, and once there is a surplus of products, once man's two hands can produce more than is needed for his own subsistence, then the conditions have been set for a struggle over how this surplus will be shared.

From this point on, the total output of a social group no longer consists solely of labour necessary for the subsistence of the producers. Some of this labour output may now be used to release a section of society from having to work for its own subsistence.

Whenever this situation arises, a section of society can become a ruling class, whose outstanding characteristic is its emancipation from the need of

First presented at an educational weekend organised by the Paris Federation of the United Socialist Party in 1963 and subsequently published in Les Cahiers du Centre d'?tudes Socialistes, February 1964.

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