As a disclaimer, I only made it through a few chapters of Capital before I gave it away.
This distinction was not invented by Marx. In fact a lot of Marxism was invented by Marx; most of it was an extension of the prevailing classical economics. He read Smith and Ricardo.
The key problem with original Marxism, as it was with classical economics, was relying on the labor theory of value. Marx runs with that to come up with a theory that says some people are systematically skimming the value generated by others and that a series of cyclical crises will cause the total collapse of capitalism at some future date.
Every time there's a market crash or a recession, Marxists bestir themselves to tell us all "I told you so!". The problem is the same as the Rothbardian Austrians blaming it all on the Federal Reserve or Keynesians saying it's a slump in demand. Too simplistic. (I'm a Hayekian, an economist who put "I can't explain particular examples and neither can anybody else" at the centre of his theory of economics).
Complex, chaotic systems naturally move around their phase space, often with large oscillations. That's the bottom line. You can't eliminate the boom/bust cycle. It exists in every industry and always will. Sometimes bigger industries go through the cycle and everyone feels it.
Sure, I didn't say that Marx invented it, just that it's from studying Marx that I remember it.
> He read Smith and Ricardo.
Absolutely. The subtitle of Capital I is "a critique of political economy" for a reason. Marx's innovation being, among other things, the 'socially necessary' component of 'socially necessary labor time.'
Also, economics is only a small part of Marxism overall. (1/3 if you ask Lenin.)
> The key problem with original Marxism, as it was with classical economics, was relying on the labor theory of value.
We can get into a big argument about how the LTV is not predictive, it'd descriptive, or maybe about how some studies have shown the LTV is just as descriptive as the STV is. That's not really what's important here, though.
> That's the bottom line.
Your comment has a lot of these assertions without a lot to back it up. Ideology can always shore up weaknesses in theory. ;)
That said, I'm not an orthodox Marxist by any means.
Hand waving is pretty much the one currency every school of political economy deals in.
I used to be a fully dressed libertard. But the world is too complex for any one humanly comprehensible theory to completely explain. Writing software for a living brought that home. When I got around to reading Hayek, I felt like I was revisiting familiar territory.
I realised that I was doing the same thing as the various lefties I'd mocked during student politics were doing: replacing reality with purity. The cornercase arguments for any strict ideology are always hilarious.
I fully expect that if Rothbardian libertarians were given dictatorial powers tomorrow, they'd buggerise it as much as the communists did.
Interesting Rothbard is actually a fascist, like a real fascist of the old school. He just usually dresses his fascism up in the pretty colors of capitalism but he choose not to do so in the following essay in which he:
* "dog whistles" racism and sexism,
* advocates a police state beyond the rule of law "Cops must be unleashed, and allowed to administer instant punishment, subject of course to liability when they are in error.",
I have plenty of issues with Rothbard... but, a fascist? His capitalism is a very different capitalism than what most of us would associate with the word capitalism. Even your quote of requiring police to be liable for their faults isn't something that any police force in the United States is subject to.
The key to improving liberty is trying to find allies, not trying to find enemies.
>Even your quote of requiring police to be liable for their faults isn't something that any police force in the United States is subject to.
Police are still subject to the law at least in theory in the US and in actual practice police are charged with crimes on a regular basis. Police in the US are not allowed to be "administer instant punishment". Notice that he is saying "unleash" as in decrease the checks against police abuses. He is writing this directly after the Rodney King beatings in support of the presidential bid of a White Supremacists.
Read his essay, it is a laundry list of fascist polices.
You say that the modern economic system as it runs has large oscillations and busts, and you are perturbed that Marxists say "I told you so" when a bust happens. But US mainstream economists through the twentieth century did not say that the economy came with large oscillations and busts. How many US economists even in the late 1990s said that the economy would run into big busts in the future? The people who predict correctly are marginalized by a media controlled by capital, and the Jim Cramers of the world are free to continue their panglossian bromides and predictions, no matter how often they turn up false.
Five hundred years ago, the HN class equivalents would be clergy and lower (and some upper) nobles. The majority of people would be praising feudalism, saying that feudalism was common sense etc. Now we are five centuries later, in a different economic system, and the majority of people here praise the economic system they are in as the best one, saying it makes sense etc. In 1935, the intelligentsia in the USSR praised their economic system, said it was common sense etc. - why shouldn't they have? The western world was in a depression while their economy went full steam ahead. Despite the world having seen four economic systems (hunting-gathering, slavery, feudalism, capitalism), and the sparks of a possible fifth one (socialism), it's not surprising that the majority of people under the current economic system see it as being, unlike its three predecessors, as permanent, lasting forever, as being common sense etc. The majority of people felt the same way about serfdom centuries ago. Many felt this way even one century ago, when most of Europe was run by kings.
This distinction was not invented by Marx. In fact a lot of Marxism was invented by Marx; most of it was an extension of the prevailing classical economics. He read Smith and Ricardo.
The key problem with original Marxism, as it was with classical economics, was relying on the labor theory of value. Marx runs with that to come up with a theory that says some people are systematically skimming the value generated by others and that a series of cyclical crises will cause the total collapse of capitalism at some future date.
Every time there's a market crash or a recession, Marxists bestir themselves to tell us all "I told you so!". The problem is the same as the Rothbardian Austrians blaming it all on the Federal Reserve or Keynesians saying it's a slump in demand. Too simplistic. (I'm a Hayekian, an economist who put "I can't explain particular examples and neither can anybody else" at the centre of his theory of economics).
Complex, chaotic systems naturally move around their phase space, often with large oscillations. That's the bottom line. You can't eliminate the boom/bust cycle. It exists in every industry and always will. Sometimes bigger industries go through the cycle and everyone feels it.