The Theory Of Money: Marx's Theory Of Value

According to Marx, surplus value is obtained in the form of profit in which the capitalist owns the means of production (private property), thus the workers have no choice but to sell their ability to work to the capitalists in order to live. This means that labor is the source of profit under capitalism. Capitalism has a historically specific relation of production, as capitalists pay for labor power (gained by paying wages) and get labor in return. The exploitation of worker’s potential through wages produces surplus value, which is the reason why capital tends to grow. Money put into capitalist relations will then grow; thereby, resulting in the creation of labor markets that give value to things we consider capital. For example, surplus value was extracted under feudalism in this order: commodities are produced (essentials of living) and then feudal lords extracted this surplus by charging rent to the serfs (sometimes through

One thing that Marx and Smith seems to have agreed upon is something economists call the Labor Theory of Value. While they would ultimately come to different conclusions on the use of the value, the basic assumption is this theory is that value is ultimate derived in an object from the labor necessary to produce it. ("Labor Theory", 2008) In chapter 5 of book I of The Wealth of Nations,

Marx’s wants factories and shops to exists, but not to be owned by the bourgeoisie. Marx’s explains that the average price of wage-labour only “produces the bare existence.” The proletariats, the working class, heavily rely on capitalism and exploitation in order to survive. Private property revolves around the antagonist the reduction of wages is implemented, and the products created by the proletariats turn into capital. Marx states, “does wage-labour create any property for the labourer? Not a bit. It creates capital, i.e., that kind of property which exploits wage-labour.” This implies that if wage labor continues to exists the bourgeois with only receive the benefits while the proletariat cannot attain any property. The more the proletariats worked for the bourgeoisie under wage labor the more their individuality diminishes. Marx wants to target the ruling class and abolish their rights and privileges to make equality for

Monetary values have changed throughout history because problems presented in each system of commerce. Bartering was among the earliest forms of commerce to present a problem. It did not establish monetary value in anything specific, allowing an individual’s wants or needs to be deemed monetary values. Each seller could make exchange requests based on different things. For example, a starving man could deem grain a commodity if he only manufactures luxury goods. Based on his hunger, the starving man can request to make an exchange of his luxury good with farmers for grain. Given that luxury goods are not a necessity, nor desired by everyone, the farmers can refuse his offer. The man would have to barter with a third party to acquire whatever the farmers were willing to make an exchange for. Inconsistent commodities in bartering made transactions inefficient because it could require multiple exchanges. Standards were established to combat the inefficiency of bartering through establishing value in one set commodity that all would accept. With a standard, the man could obtain grain directly from the farmers because it is mandated that the standard be accepted as debt payment. Therefore, it is more efficient to have a standard which only requires one transaction than to barter. For a matter of convenience, value transferred from virtually any object to specific resources. A common resource used for standards is metal. In early empires and recent nations, gold and/or silver

He states that material essentials have use-value. A thing will have use-value because it becomes a commodity and is produced for others. The price of a use-value item is not determined by how useful but what the thing does and how frequently it is used (Marx in Desfor Edles and Appelrouth 2012:65, 69).

Marx believed that machines were a sign of progress in society and he was not opposed to it. However, it has negatively influenced employees globally. According to Marx, these machines caused workers economic impoverishment as it impacted their wages.. The wage a worker received was influenced by the use value and exchange value of the workers labour. Marx claimed that the there is the labour commodity and the capitalist commodity. The workers exchanged their commodity, known as their labour power for the capitalist commodity, which is the money. The wages are the price of the labour that the workers put forth. Often times, they do not pay workers a quality price for what they earn or how much work they do. They are constantly looking for bargains and people who do not sell their work for much. Industry’s try their best to get inexpensive materials, enhanced machines, and cheaper wage workers in order for them to decrease the amount of money coming out of their pockets. Marx believed that due to the unavoidability of capitalism, business owners are basing their business activities solely on the attainment of profit. For that reason, workers will continue to be replaced with machines causing business owners to decrease their spending on a workers’ labor power, leading the unemployment rate to increase. Marx states that value of labour power decreases causing wages to decline.

What also characterizes market society is the emergence of the concept of “fictitious commodities”. Fictitious commodities refer to labor, land, and money (Polanyi 72). “fictitious” implies that they are actually not commodities (Polanyi 72). They are turned into commodities for the effective operation of market society (Polanyi 72). In market society, everything is provided as a commodity. As the major elements of industry, labor, land , and money need to be provided for maintaining productivity and they can only be provided when they are on the market for sale (Polanyi 72). Differently, “Under the feudalism and the gild system land and labor formed part of the social organization itself ” (Polanyi 69). Land were crucial for feudal order, status and function of which “were determined by legal and customary

Today people have many possessions. Possessions range from cell phones to property to even people’s individual selves. There are also many laws that protect their property and rules that govern the transfer of property as well. But how did society get private property? Karl Marx argues that private property initially began through theft, violence, or other unjust mechanisms. Does this mean that people should not have private property since it was based on unjust methods? I believe that Hume would still defend individual property ownership, despite Marx’s critique of its origins because the origins do not damage people or society when Hume’s theory of justice is applied. Hume’s theory requires justice when people have individual property, justice in turn provides stability, and finally, this stability allows for everyone to forget the past and forge their own future.

Marx viewed the ‘commodity’ as the most elementary form of modern wealth. The essence of the commodity is the

Marx’s analysis of capitalism begins with an investigation of the commodity because the wealth of capitalist nations is essentially “an immense collection of commodities” (Chapter 1). Marx differentiates between the use-value and the exchange-value of any given commodity. The use-value of a commodity refers to its qualitative ability to satisfy a human need, while its exchange-value is the “quantitative relation… in which use-values of one kind exchange for use-values of another kind” (Chapter 1). Therefore, exchange-value is not an intrinsic quality of a commodity; it is only discovered in comparing a fixed quantity of commodity A to a fixed quantity B. Since differing quantities of these two commodities appear to have the same value,

The specialised critique of capitalism found in the Communist Manifesto (written by Karl Marx and Fredrick Engels), provides a basis for the analysis and critique of the capitalist system. Marx and Engels wrote about economical in relation to the means or mode of production, ideology, alienation and most fundamentally, class relations (particularly between the bourgeoisie and the proletariat). Collectively, these two men created the theory of Marxism. There are multiple critiques of Marxism that attack the fundamental tenants of their argument. Several historical events have fueled such criticisms, such as the fall of the Soviet Union, where Marxism was significantly invalidated and condemned. On the flip side, Marxism has been widely supported in times of capitalist hardships. What viewpoint a person will hold towards Marxism is largely dependable on the economical environment in which they live. Further, it is also important to remember that Marx and Engels lived in a very different era than today’s society, and the concept of capitalism may have arguably changed quite a lot over time. Therefore, the principles found in the Manifesto may often have to be refurnished and reapplied to fit different economic environments.

Communism has been regarded as the opposite to capitalism; however it was capitalism that gave rise to communism. During the Gilded Age capitalism influenced the growth of the industrial revolution in Europe and in the United States. The Gilded Age was the period of 1870-1910, where there was great economic growth in the United States. People like Andrew Carnegie and John D. Rockefeller were entrepreneurs who made their fortunes in this age of industrialization. Although this period brought technological advances and economic growth, it also was a period of disparity and poverty.

The definition of utopia is an ideally perfect place especially in its social, political, and moral aspects (dictionary.com). This paper will discuss the changes in capitalism since Marx’s critique in 1848. Marx’s fundamental critique remains correct today. Marx is still correct about his critique of capitalism because even though there have been changes made to capitalism to prevent some abuses, capitalism still produces inequality, reduces the family relationship, destroys small business, and enslaves.

Next I would like to define and connect means of production and capital. The means of production refers to institutions or establishments, such as: factories, offices, or any places of business that are privately owned. Marx sees financial interest in these foundations as deficient in relation to the return on investment created by the workers who make them valuable. Under Marx’s theory of value, these establishments are only valuable as a result of the workers’ labor and not the financial or capitalistic investment. Capital can therefore be defined as the money

Marx’s opinion of capitalism can simply be reduced to one formula and theory, the Theory of Surplus Value. This formula is SV=PC-SW. Spelled out this means that surplus value equals the price of the commodity minus a subsistence wage. Marx believes that this theory serves as the foundation of economic structures. However, this one formula is not Marx’s entire theory. Marx continues his theory beyond this formula to discuss the interaction between the actors in society. Marx determines that there are three actors in society. These actors are government, capital, and workers. In his theory marx discusses how private