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Lecture 7

IDSB01H3 Lecture Notes - Lecture 7: Constant Capital, Dual Role, Upper Class


Department
International Development Studies
Course Code
IDSB01H3
Professor
Ryan Isakson
Lecture
7

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IDSB01 Lecture 7 March 5, 2014
Marxian Political Economy Part II
Crises of Capitalism, Imperialism, Accumulation by Dispossesion (and Immiserizing growth)
Contradictions of Capitalism
Free, but unfree
Workplace cooperation, yet conflict over distribution of surplus
Tremendous wealth, yet widespread poverty
Innovative, yet tendency for single technology
Dynamic growth, yet tendency for crisis
Booms and busts cycles
Crises of Capitalism
Duration
oShort – term -> business cycle
oLong term -> depression
LT requires restructuring
Types of Crises
oCreation of surplus: C-C’…
Capitalist not able to create a commodity of greater value than the input
oRealization of surplus: .. C’-M’
Capitalist is able to create a commodity of greater value but not to sell it
Crisis Theory
oThree theories of crisis?
oMarx himself never defined these crises, were defined by economists in the
Marxian tradition
oUnderconsumption/Overaccumulation (Crisis of Realization)
Similar to Malthusian Gluts – Malthus argued that wages should be kept
low, so that working class wouldn’t reproduce as much and prevent the
collapse of society. The upper class was able to resist, somehow morally
superior and so should be able to hold on to more profit.
Dual role of wages:
Cost of production to capitalists
Source of demand/revenue
Low wages -> capitalists keep wages low to accumulate more surplus but
also decreased demand – consumers won’t be able to purchase because
their wages are low, or they’re unemployed. ->Economic downturn.
How does this differ from Say’s Law?
Say assumed that capitalists would reinvest profits in capital
goods
Practices for Avoiding:
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