Ideas from Marx and Lenin
Lecture 4

Ideas of Karl Marx

1. Karl Marx (1818-1883) – imposing figures in history and economics.
   1. Collapse of communism in Russia and Eastern Europe
      1. Conclude "Marx is dead"
      2. Communism is very much alive
      3. Szulczyk – gov. of many countries “over” regulate their markets and institutions
   2. Marx – born in Trier, Germany
      1. Problem – prolific writer; not always consist
      2. Readers give different interpretations
      3. Studied poor working conditions in British factories
         1. Adults and children worked under poor conditions
         2. Lived in poverty
2. Power is rooted in the ownership of production capital
   1. The means of production
   2. Types of production determines social and ethical structure of society
      1. Technological change occurs quickly; social structure changes slowly
      2. Ruling class and exploited class
      1. Lead to tension
      2. Then revolution
   3. Examples
      1. Roman times – slave owners and slaves
      2. Middle Ages - lords and serfs.
      3. Capitalism – owners of factories and land (bourgeoisie) and laborers (proletariat)
   4. Chain of events
      1. feudalism => capitalism => socialism => communism
      2. Capitalism is a necessary step in development; builds wealth and capital
3. Capitalism is flawed
   1. Law of the falling rate of profit
      1. Capitalists invest in new labor-saving and productive technologies
      2. Gain competitive advantage
      3. Unemployment increase
      4. Workers are laid off
      5. Rate of profit decreases – unemployed workers cannot buy factories’ products
   2. Law of disproportionality – capitalistic systems are prone to instability
      1. Sometimes overproduction or underconsumption.
         1. Capitalists cannot sell everything they produce at a profit
         2. Workers cannot afford to buy what they make
      2. Gov. created large military-industrial complexes to reduce this problem.
   3. Law of concentration – leads to inequality in income and wealth.
      1. Strong capitalists swallow the smaller and weaker capitalists
      2. Corporations – merge with smaller companies to become monopolies and trusts
      3. Trust – a parent corporation controls smaller corporations through holding of stock
      1. Trust account – kids cannot have bank accounts; enter into contracts, etc.
      2. They inherit wealth which is placed into trust accounts
4. Culture
   1. Marx shows up in art, books, and movies
   2. Middle Ages – lords could only afford art
      1. Saints were drawn 11 feet tall
      2. Lords were drawn 8 feet tall
      3. Serfs were tiny
   3. United States
      1. Movie – Titanic
      1. Class struggle between rich and the poor
      2. Rich – mean and nasty
      3. Romance between two classes
      2. Movie – Lion King
         1. Lions are the ruling elite, monarchy
         2. Monarchy – king controls country and power is inherited
         3. Simba becomes King, sustaining the monarchy

Ideas of Vladimir Lenin

1. Lenin (1870-1924) — role in the Russian Revolution of 1917
   1. Imperialism – highest stage of capitalism
      1. Capitalistic countries avoided revolution and crisis through imperialism
      2. Imperialism – the domination of industrializing nations over dependent colonial possessions
   2. Capitalist countries uses colonies
      1. Ship their unconsumed goods
         1. Expand markets
      2. Acquire cheap resources
         1. Food and raw materials
   3. Sell surplus capital
      1. Investment outlets
   4. Capitalism has two parts – production and finance
      1. Production
         1. Decline of national economic competition
         2. Growth of monopolies
         3. Monopolies concentration capital, like machines and equipment
         4. As they decrease output, some capital becomes idle
         5. Sell excess capital to colonies
            1. Search for profits
      2. Finance
         1. Banks are able to manipulate millions of people
2. Capitalistic societies – inherently unequal
   1. Within a country
      1. Some classes prosper, like the capitalists
      2. Some classes mired in poverty, like the workers
   2. Imperialistic country
      1. Home country becomes richer
      2. Colony becomes poorer and dependent on home country
   3. Capitalism always expands to create world markets
      1. Modern times
         1. Capitalist countries – control access to technology
         2. Less developed countries tend to acquire low-end technology
            1. Limits their productivity and growth
            2. Become dependent on the developed countries
         3. Interesting
            1. China is acquiring technology
               1. U.S. factories are shutting down
                  1. Can’t compete with China
                  2. Machines and equipment are shipped to China
               2. Scrap metal is shipped from U.S. to China to produce products

Dependency Theory

1. Dependency Theory
   1. North countries – north of equator are rich and capitalistic
   2. South countries – south of the equator are poor
   3. The North countries enslaved the South countries
      1. Three eras
         1. Colonial dependence – many south countries were colonies
            1. 1500s to 1800s
            2. Exported raw materials, food, and resources
            3. Vulnerable to volatility in the international markets
            4. Imported manufactured goods
            5. Creates a trade imbalance because manufactured goods have a higher value
               1. Money flows out of LDCs
               2. Keeps colonies in poverty
         2. Financial-industrial dependence
            1. 19 ^th and 20 ^th centuries
            2. Manufactured products made in the North
         3. Current
            1. Multinational corporations dominate international trade
            2. Corporations are based in North countries
            3. Have financial power
            4. Profits are transferred out of South Countries
            5. Circumvent regulations in South Countries
2. Why study Marx?

1. Marx – first political economist to present a theory of the development of society
   1. Explain politics, economics, and social relationships
2. Communism is not the same as Marxism
   1. Communism is an economic, political, and social organization
   2. Didn’t apply Marx’s ideas in practice
   3. Lenin and Stalin instituted polices that differ from Marx
      1. Shortcuts to build a modern, industrial state
3. Globalization – creating a world that Marx and Lenin wrote about
   1. Desire to produce more and more for less and less in search of profit
   2. Competition is destructive to all parties
   3. Vicious cycle of greater output, surplus, lower prices, lower wages, and falling profits