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Marxian Approach &
Neoclassical Critique
Michael Roettger
Denise Kall
February 9, 2004
Overview
I. Biography of Karl Marx
 II. Marxist Theory by Marx
 III. Critiques of Marx
 IV. Neo-Marxist Theory

I. Biography of Karl Marx
I. Marx: Background
Born
to a Jewish family on May 5, 1818 to
a middle-class family in Trier, Prussia.
Marx’s father, facing religious persecution in
his legal practice, raised Marx in a Protestant
home, despite coming from a long line of
Rabbis. This background would later
influence Marx’s views on religion and
history.
Marx, a brilliant young scholar, enrolled at
the age of 17 at the University of Bonn and
later at the University of Berlin, finally
completing a doctorate in philosophy in
1842.
I. Marx: Background, cont.
While at the University of Bonn, Marx became
engaged to Jenny von Westphalen. She was the
daughter of Baron von Westphalen , a prominent
member of Trier society. She and Marx married
in 1842 and had three children.
 While a student, Marx became a member of the
Young Hegelian movement. This group, which
included the theologians Bruno Bauer and David
Friedrich Strauss, produced a radical critique of
Christianity which led to Marx becoming unable
to find a university position in Prussia.

I. Marx: Background, cont.
Marx, unable to find university employment,
became editor of the influential paper the
Rheinische Zeitung. Marx’s political commentary
and questioning of the Prussian government
resulted in government closure of the paper in
1843. Marx then immigrated to Paris.
 While in Paris, Marx encountered groups of
German and French socialists. In attempting to
unify socialism with the Young Hegelian
movement, Marx began to formuate a
humanistic communism. These writings became
his Economic and Philosophical Manuscripts.

I. Marx: Background, cont.

While in Paris, Marx also became acquainted
with Freidrich Engels. Their activities and
writings led to their expulsion in 1844. Marx and
Engels proceeded to move to Brussels. While in
Brussels, Marx formulated his “materialist
concept” of history and the eternal struggles
between the Bourgeoisie and Proletariat. Marx
also predicted the demise of industrial societies
and the eventual rise of communistic societies
through revolutions by exploited workers.
I. Marx: Background, cont.
In 1847, Marx and Engels became involved with
the Communist League, a group of German
dissidents based in London. Marx and Engels
were there commissioned to write The
Communist Manifesto, published later in 1848.
 In 1848, after a revolution in France, Marx
relocated to Paris and then Germany, where he
established the Neue Rheinische Zeitung. The
Prussian government suppressed Marx’s paper,
forcing Marx into permanent exile in London.

I. Marx: Background, cont.

While in London, Marx and his family (his
wife and six children), lived in great
poverty. Marx was supported by Engels
and a job as a foreign correspondent for
the New York Daily Tribune. During this
period, Marx spent substantial time
supporting communist movements and
preparing to write a general critique of
capitalism.
I. Marx: Background, cont.
In the early 1860’s, Marx commenced writing
the three (incomplete) volumes of Das Capital.
Das Capital remains, along with the Communist
Manifesto, the hallmark of Marx’s writings and a
classic in philosophy, economics and sociology.
 Marx, in failing health and suffering from the
loss of his eldest daughter and wife, began to
slow in his political advocacy and writings in the
1870’s. Marx died quietly in 1882, impoverished
but the father of one of the most influential
social theories of the twentieth century.

II. Marxist Theory
“Classes in Capitalism and PreCapitalism” (Marx)






Class struggle has existed throughout history in
all types of societies
Rise of the bourgeoisie
Capitalist society- conflict of bourgeoisie and
proletariat
Middle-class will gradually sink into the
proletariat
Proletarian revolution
Classless society
“Alienation and Social Class”
(Marx)
Alienation of man from:
1. the labor of products
2. the processes of production
3. man’s own nature
4. fellow man
Alienated labor
property
Private
“Value and Surplus Value”
(Marx)



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Labor is the common social substance of all commodities
Commodity has value because it is a “crystallization of
social labor”
Value of laboring power is determined by the value of
the necessaries required to maintain and perpetuate the
worker
The rate of surplus value depends on the proportion
between the part of the day necessary to reproduce the
value of the laboring power and the extra or surplus
labor performed while producing beyond that which is
necessary to maintain the worker. In a capitalist
economy, this surplus value from production goes solely
to benefit the capitalist.
“Ideology and Class” (Marx)
“the class which is the ruling material force
of society, is at the same time its ruling
intellectual force”
III. Critiques of Marx
A. Lenski
 B. Samuelson
 C. Dahrendorf

III. Critiques of Marxism, Lenski
Comment on sociologist’s focus on
Western capitalist societies, failure to
examine the fall of communism in Eastern
Europe and plight of existing Communist
societies in Asia.
 Argues that a sufficient body of evidence
exists to analyze the nature of inequality
in Communist societies

III. Critiques of Marxism, Lenski,
cont.
Analysis: Societies generally reduce general
social inequality, but do so at the general
expense of economic productivity, economic
growth, and meeting the populations needs of
goods and resources.
 The persistence of political inequality, corruption,
and reforms of human nature failed to
materialize, despite Marx’s forceful arguments
that these would disappear with the abolition of
private property rights in a communist society.

III. Critiques of Marxism, Lenski,
cont.
Eastern European worker: “They pretend to pay
us, we pretend to work.”
 Findings that elimination of wage structures
eliminated incentives for individuals to attain
greater wealth.
 Davis’ 1953 assertion that successful incentive
systems 1.) motivate the best qualified people
to seek the most important positions and 2.)
motivate them to perform to the best of their
ability once they are in these positions.

III. Critiques of Marxism, Lenski,
continued.
Massive social inequality and inefficiencies
were observed at an unprecedented scale.
 Nicolae Ceaucescu, Todor Zhikov, Erich
Honecker, and other Communist leaders
accrued vast amounts of wealth along
with other party elites in almost all
Communist societies while extreme
poverty existed among the population.

III. Critiques of Marxism, Lenski,
continued.

Leaders such as Stalin and China during
the “Great Leap Forward” exercised
totalitarian control over populations.
Stalin’s Russian purges of millions of
political dissidents and export of grain
when approximately 30 million citizens
were dying of starvation illustrate massive
human rights violations under guise of
political rule.
III. Critiques of Marxism, Lenski,
continued
Traditional criticisms of classical industrial
economies hold, but do not validate these
systems as best forms of social order.
 Successful communist and Western
democracies have practiced mixed
economies, where adaptation of market
reforms and implementation of
government regulation and oversight offer
best examples of government.

III. Critiques of Marxism, Lenski,
continued
How does Michael Burawoy’s postulate that
Marxism may be viewed as a scientific enterprise
effect Lenski’s critique?
 Do the “laboratory” of former and current
Communist countries represent good models for
evaluating Marxism?
 Is extension beyond classical Marxist theory to
incorporate class, power, race, sex, and
institutions of any value beyond intellectual or
theoretical pursuits?

III. Critiques of Marxism, Paul
Samuelson
Samuelson’s Background: 1970 Nobel
Laureate in economics and widely viewed
as a father of modern economic theory.
Work spans over five decades, beginning
with a dissertation in the late 1940’s.
 The selected text reading is from
Samuelson’s introductory economic text
widely used in introductory economic
courses for two decades.

III. Critiques of Marxism, Paul
Samuelson, cont.

1.
2.
3.
4.
5.
Samuelson, in the selected readings, provides an overview of
modern economic theory. Key assumptions of this theory are that:
Individuals act rationally to maximize their personal gains from
available resources.
Individuals and employers act independently to both supply and
purchase labor. Market equilibriums occur when supply and
demand for labor are equal. Suppliers have a right to hire at a
given wage and workers have a right to choose to work.
Firms act to maximize profits, of which labor and capital are
traditionally viewed as key components.
Market forces move towards equilibrium and operate efficiently.
The “invisible hand” sets social equilibriums.
Models typically assume perfect competition and full knowledge of
agents in maximizing utility. Monopolies exploit individuals, but
this does not occur under ordinary circumstances.
III. Critiques of Marxism, Paul
Samuelson, cont.



In the traditional market, the firm attempts to maximize
revenue and minimize costs. Thus, the firm often
negotiates wages. Marxism often assumes that
capitalists control production of resources, but ignores
the role of the firm in setting wages and values.
Marx’s “Iron Law of Wages,” e.g., that wages are kept to
the minimum necessary to maintain subsistence living,
fails to take into account variables such as ability,
education, training, and work ethic. In the sense that
“Malthusian economics” may come into play, production
must outpace population growth and needs before
starvation may occur.
In a system where a society faces unlimited wants and
limited resources, inequality is natural.
III. Critiques of Marxism, Paul
Samuelson, cont.
Government intervention and involvement
often helps to alleviate poverty and
inequality, ensuring that basic standards of
living are met.
 The economic theory illustrated in
Samuelson’s article provides evidence for
how markets naturally reach equilibrium
and do not separate into Marx’s ruling
elites and working classes.

III. Critiques of Marxism,
Dahrendorf
Focus on limitations of traditional Marxist theory,
emphasizing more complex structures of class,
types of labor, and the general nature of
authority.
 Inequality, as a byproduct of the authority given
to employers, creates natural tension between
workers and employers. These tensions do not
lead to revolution, but rather to union and
classes of workers that bargain with employers.
This tension is hence accounted and alleviated in
market economies.

IV. Neo-Marxist Theory
Wright
 Wallerstein
 Burawoy

The embarrassment of
the middle class
Dahrendorf – Authority
Wright – take 1 - 3 interconnected dimensions of
domination and subordination within production:
money capital, physical capital, and labor
Wright – take 2 - inequalities in distributions of
productive assets
“Class and Class Conflict in
Industrial Society” (Dahrendorf)
Rejects Marx’s material basis for class – the
means of production
Distribution of authority in associations is:
1. the cause of the formation of conflict
groups
2. the cause of the formation of two, and
only two, conflict groups.
“Varieties of Marxist Conceptions
of Class Structure” (Wright)
contradictory locations within class relations
 3 interconnected dimensions of domination and
subordination within production:

money capital
physical capital
labor
capitalist class – dominant position in these 3
social relations
 working class- subordinate position in these 3
social relations

The basic class relations of capitalist society (p. 115)
SIMPLE
COMMODITY
PRODUCTION
CAPITALIST
MODE OF
PRODCUTION
BOURGEOISIE
Managers and
Supervisors
PROLETARIAT
Small Employees
Semi-autonomous
Wage-earners
PETTY
BOURGEOISIE


“A General Framework for the
Analysis of Class Structure”
(Wright)
“the embarrassment of the middle class”
Rejects his earlier theory of contradictory
locations within class relations because:
a. it tends to shift the analysis of class relations
from exploitation to domination
b. implicitly regards socialism as the only possible
alternative to capitalism
Exploitation (Wright)
John Roemer - Wright’s basis for his reconceptualization of class using an
exploitation-centered approach
 Exploitation – “implies both economic
oppression and appropriation of at least part
of the social surplus by the oppressor”
 “the material basis of exploitation is
inequalities in distributions of productive
assets” (property relations)
 Classes – “positions within the social relations
of production derived from these relations of
exploitation”

Table 1. Assets, Exploitation, and Classes (p. 124 and 127)
Type of
class
structure
Principal asset
that is unequally
distributed
Feudalism
Labor power
Coercive
extraction of
surplus labor
Lords and
serfs
Bourgeoisie
Capitalism
Means of
production
Market exchanges
of labor power
and commodities
Capitalists
and
Workers
Managers/
bureaucrats
State
bureaucrat
ic
socialism
Organization
Planned
appropriation and
distribution of
surplus based on
hierarchy
Managers/
bureaucrats
and
nonmanage
ment
Intelligentsia/
experts
Socialism
Skills
Negotiated
redistribution of
surplus from
workers to experts
Experts
and
workers
Mechanism of
exploitation
Classes
Principal
contradictory location
“Class Conflict in the
Capitalist World Economy”
(Wallerstein)
 World Systems Theory
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core is to periphery as bourgeoisie is to
proletariat
state represents the interests of the bourgeoisie
states interfere with the flow of factors of
production
core states have a higher percentage of
bourgeoisie than peripheral states
Semi periphery? middle class?
IV. Neo-Marxian Theory, Burawoy
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Marxism falls into a theoretical construct that constitutes
a form of science.
Marxist theory is progressive, examining anomalies and
failures in observed practice and then proceeding to
reevaluate and evolve to better fit empirical data.
Marxist societies have a historical context that limits their
potential review as “true” Marxist states.
Marxist theory is testable and should be evaluated in
terms of current world trends, events, and
circumstances.
The prosperity of capitalism does not invalidate Marxist
theory, rather Marxist theory and capitalism are
dichotomies that naturally exist alongside one another.