Karl Marx's Capital Meets 137 years of age, in fairly good health 
(*) Manuel Riesco (**)
(*) Manuel Riesco (**) Economics is a science with a vast subject complex study, and as in all sciences that deal with complex materials, there are different approaches to the subject of study. Naturally, since each approach the object of study was approached from an angle, is common in the various sciences that generate what are known schools of thought. schools of thought usually differ from each other in the interpretation of the object of study, however, is the same, and often these differences of interpretation are very controversial among themselves. At its edges, the different schools always hard fight and argue among themselves. However, those controversies not infrequently occur when each of the schools aims, from the specific angle, to respond to the whole object of study. It is in this attempt of each of those schools where they overlap and argue among themselves their different interpretations. It really is very difficult, when the materials are complex, capturing its entirety from an angle determined. In economics this is also true.
Indeed, the counterpart of what I'm saying is that each of the schools, from the angle of the observer, usually seen something that other schools do not rightly appreciate. Just because they've watched the thing from another side, or have not focused on looking at it from that side.
Usually, when scientists is honest and serious discrepancies between them often are due not so much that they are right in what they say about their specific angle, but originate in seeking to interpret since only one side of a whole which is much more complex than what is seen under angle. This is also in many discussions, where unilateralism is what is behind many times controversial.
This has nothing to do with the eclecticism in the sense of saying "take a little of this, a little bit of that, a little of this and the other thing" and armemos a shared vision as a kind of salad or tuti-fruity. No, things are a certain way, there are an average of the different visions are in a certain way. The problem is to understand correctly, and certainly there are views that are wrong. We must try to see the object as it is. However, many times when these materials are very complex as the science that deals with this, it have a very respectful of what the different schools of thought contributing to the knowledge of that object of study. While addressing merciless criticism of those aspects where the attempt to impose a unilateral view that ultimately impoverishes knowledge, where it is intended that a narrow view can determine what is a complex thing.
A serious problem we have, in my view, in our society, and one of the serious problems we have our ruling class, our bourgeoisie, it has taken to see things in the economy as a religion, the point of view of one of the schools more unilateral, extreme and narrow. Like all other schools, it also has a viewpoint that others had not watched, go with some precision an angle, and in that sense also its most serious thinkers deserve respect and what they say is a contribution, but it is unilateral, it is a very partial. Then, when trying from that angle very partial interpretation of the whole, and disqualify the rest of the visions, we are indeed facing a problem of anti-science.
I'll try now consider another of these schools of thought, and I will try to show how the other school of thought, which is the school of Marx's thought, showing angles of this field of study that are extremely important for understanding today's economy. Therefore, it appears to be quite short-sighted to claim that, for example, students of Economics plainly not study this school, as happens today in our universities, where we know that the thought of this great thinker was banned . His books were burned in our country.
I will try to show what I believe some of the significant contributions of this school of thought on the whole matter to the economy in general studies.
I'll start criticizing one of the weaknesses of the school which is mentioned before, and have adopted as a religion many of the economists of our country and, More seriously, as I said, members of the ruling class of our country. The so-called neoliberal school, but also the Neoclassical which is broader than the previous shared this point of view to which I will refer.
They analyze the economic behavior based on defining a set of axioms about individual behavior of people, which they defined or as consumers or producers. From these axioms that they postulate for the behavior of individuals, add the one hand the behavior of large masses of individuals, and optimization techniques applied to them to reach conclusions about the behavior of these clusters of individuals. These aggregates humans behave, involve them, optimizing what they axiomatically defined as individual behaviors. That is the starting point they take, and apply this angle lens on the subject we are studying is the economy. Viewed from the angle they observe, that kind of behavior that define axiomatically and processed in this way with mathematical optimization methods, do work at that angle and given certain conditions.
These conditions, however, are not checked for example in circumstances such as those experienced during periods of economic crisis, as you said Keynes. Keynes had this criticism of classical economics, as the call it. He said that the principles which are based on the analysis and conclusions of this school are a special case, he said. "Is not the case now live and therefore their conclusions pass become highly dangerous and harmful." That's what Keynes said, suggesting the same criticism that I'm saying: do not disqualify the result of that analysis to a particular case, but said - thinking about the crisis of '30 - that this case was not verified. Keynes develops then another broader, more general, encompassing the previous one, but responds to other aspects of the operation and movement the economic sphere.
A basic characteristic of the type of economic thinking that dominates today is its extreme abstraction, in the sense that they abstracted these individuals on which axiomatic postulate these behaviors, isolate them from - for example - social conditions in which it develops activity and life. Then, it gives exactly the same as this individual is Robinson Crusoe on his island alone, which indeed is the example we used before to explain the behavior of individuals and the economy. It can also be - and this is the example that is used today in the Catholic University of Chile to teach economics students - of individuals who are prisoners in a Nazi concentration camp in Italy during World War II. At Catholic University economists are finding it more attractive example of Robinson Crusoe to explain the modern economy. Since it appears that in this concentration camp, where people will give away a few packages with different elements, they begin to exchange them, and establishing a pricing system. Moreover, one of the elements, which are cigarettes, start off from the rest of the goods and becomes a coin. Thus, this society seems better, even more beautiful than the island of Robinson Crusoe, to describe the behavior modern economy.
The great contribution of Marx to the general economic theory is its ability to link economic behavior of individuals with social conditions in which they develop. That is the great contribution of the Marxist school of economic thought. Marx, curiously, not meant to solve all the problems of the economy in the Capital. For example, on competition, competitive market analysis, the formation of prices in the market, he devotes a chapter within the three volumes of Capital - is Chapter X, I think, the third book. It is a chapter devoted entirely to the price formation in a competitive capitalist market. According to Schumpeter, who is the master of Samuelson, the chapter on Marx is one of the most brilliant analysis of the formation of prices, and so Samuelson says. But what Marx himself said about the formation of prices? Says "that would require another treaty." And Samuelson escribeprecisamente that other treaty on the formation of prices. So, all equations Samuelson about the price formation are correct, and in this sense does not contradict, but complement the analysis of Marx
Incidentally, economic theory is much more connected to each other what one believes. Samuelson was a disciple of Schumpeter, but he was a disciple of Kaustky Schumpeter and Kaustky was secretary of Marx. That is, there is a ligation in the thinking of the great economic theorists are much richer than we are accustomed to seeing in the extreme and unilateral blindness that prevails in our country over the past 30 years.
Returning to more specific contribution of Marx in Capital. Why do we need to relate the conditions of economic behavior with social conditions that generated this activity?
social conditions are, indeed, historically determined - the result of a historical process. Therefore, economic behavior becomes for Marx not the result of the action of a man who has a nature designed by God or by the axioms of Arrow, which is similar to the way they behave in modern New York society. According to this gentleman capitalist economy will behave the same under any historical circumstances.
For Marx, no. By contrast, for Marx all economic categories depend on social reality in which they live actors, and since social reality is the product of historical development, all economic categories are being historical categories.
Here is a problem, because if all categories are an outcome of historical process and historical process has not stopped, but will continue, it is also time that the interest groups that dominate today's society will not last forever. So Marx's thought is difficult to accept for the upper classes, because if all the historical conditions so far have been changing, if the various interests depend on the historical, that maybe it can happen again that the current categories not remain for ever for all eternity. The world may keep moving forward. In this sense Marx's thought is compromising, because it assumes that society will not last forever. It seems very unlikely that if all the above companies have not lasted forever, the other will last to infinity. It would be very rare, seen this way.
Consider the first category that Marx used to start in Capital: value. Many times we spent as something that had to study, but really did not matter much, because he was not referring to capitalism as such but to the mercantile society in general. He was sacrificed as a chapter, he had to study, but did not have much importance. Had to arrive quickly at Third book, which studies the mechanism of crisis, or the second book which studies the whole mechanism of resource allocation across sectors. This category of value was about the prehistory of capitalism.
It takes place in 1989, one of the most important historical events that have occurred in the history of mankind, almost without resistance crumbles a social system that is regarded himself as coming to replace capitalism was dying. Hundreds of millions of people, a significant proportion of the whole of humanity suddenly shown by a historical process that goes in the direction exactly opposite of what everyone thought was they were walking. It is an extraordinary change. So as long as new phenomena occur, usually forced to watch the world with new concepts, or question the way you see the world. For thousands of years
official science established that the Earth was the center of the universe, the planets were disks that are held in concentric spheres, and suddenly someone looks at the moon through a telescope and seen to have hills, mountains. That fact, that back hand of nature, which shows one aspect of it which was not previously obvious, requires conceptual change all that men had about how they were planted in the universe.
Moreover, this historical event occurring in 1989 makes us all humanity, to rethink the way we appreciated the course of historical development. Since all we felt that the world was going on - from the Russian Revolution of 1917 - from capitalism to socialism. Suddenly we realize that where we thought we were building socialism, capitalism breaks instead. It seems that something was wrong with the way things were appreciating.
Could it be that perhaps the basic form from which we appreciated the historical development was wrong, What would happen if the fundamental way we appreciated how things were passing were not so? What What if we were actually living out what else?
And what was the basic form by which we appreciated us that things were lapsing? I have just read: the character of the time was the transition from capitalism to socialism. It took for capitalism born, raised and exhausted in a century - as a mode of production created just the nineteenth century. There were commercial capital, capital usurer, much earlier, but the capitalist mode of production from the nineteenth century. We took for granted all developments in that period, and although it was sending was in the process of decay, had been emerging as post-capitalism. This, by historical reasons, had arisen not in the more advanced nations, but in the most backward.
And what would happen if suddenly this huge historical event of the late twentieth century made us see that maybe that was what was wrong? What if it's an overly optimistic view we think that capitalism would do all its historical cycle in just one century? Feudalism had done V to the XV century, then absolutism lasted from the fifteenth to the nineteenth century, which are several hundred more of the same historical period. Slavery still lasts much longer these fourteen centuries. But according to our convictions, then, capitalism was so fast in his gestation in a century was full all its historical development. What if instead what was happening during the nineteenth century, have continued to occur during the twentieth century, another time to cover more people, more people?. That is, if indeed the nineteenth century capitalism, but it was not the gene, the embryo, the little infant of this production was coming to the world?
Born in addition to very small regions: a piece of England, northern France, then a piece of Western Europe after the end of the nineteenth century expanded to white colonies, North America, New Zealand and Australia, Rio de la Plata, etc., some other regions. During the twentieth century what happens with this new mode of production? Does it end? Or is expanding to other regions of the world?
What then, if what happened in Russia during the twentieth century would have been something more like what happened in France in the early nineteenth century? What if the historical process of the Russian Revolution had in fact been the peculiar way in which Russia did the same traffic as before France did feudalism to modernity, which is a capitalist?
The main questions of this tremendous historical problem I am talking about is the key to their answer in Chapter 1 of Capital, chapter of the goods. This huge problem is your best guess in what Marx said there where unravels what is the value, and does so in the simplest way. Marx's ideas have enough common sense. É
He says when you receive the value in society? Appears when you start to trade with each other communities that are far away, very far from each other. Because when the exchanges are in family, community or neighboring communities, everyone knows who works and who is not. The basic law of exchange is that no one would "fit" that no one lives at the expense of others. If we a society where family, I do something, else do something else, etc., and if someone weakens, they all say "Hey, feel free batteries." But that does not need the value, but simply put things in place, and no one will "fit" to anyone, but people exchange work and hours of work and effort in a more or less equally.
But what happens when I exchange, for example, this beret, who made perhaps in the Basque country, I do not know how much it cost the Basques do it! If there comes a Basque and tells me to change the beret for the book The Capital - it took a lifetime to Marx do, do not shift or change it? In these circumstances see this category as curious as the beret suddenly grabs a rare thing, a soul, courage. It is no longer just a beret, but something that is worth a certain amount of money. It is this basic law of labor exchange that generates the value. But what is the condition for which there is value?, There must be sharing much trade. And you have exchange has to be production for sale.
If not, no goods, are products of labor, not more. In families there is no value, because services are not sold within the family: she does not sell her children or her husband the service we provide. Working in rural life from sunrise to sunset. It's a hard life in the countryside, have to get up early, you should take the animals, etc. But in the traditional peasant family, most of the day is dedicated to producing things that are consumed within the same family. Recall that 30 years ago, near Santiago, had inquilinaje. The tenant had his own hojotas, ponchos are sometimes purchased but often wove, tools are often produced there. In the old hacienda is produced primarily in, there was little that was sold.
recently appeared in Business Week, a pretty good magazine, an article on the economics of the family inside China, its trade are reduced to selling some goats, buying seeds and some other things to add - says the journalist - about $ 200 a year for a family of five. That is, the value exchanged for a family of five inside China today, are $ 200 per year.
And suddenly one of the daughters of this family is going to Shanghai and she paid for their labor $ 200 a month, and she buys $ 200 a month. But what it produces is sold in China and international market and the product of its time I tell you it well over $ 200 a month - if not, do not hire. Do you realize from this example, the tremendous economic content of this historically determined fact that peasant girl leave the life to which she was subjected throughout his life in that town, and go to Shanghai today? Shanghai today is like the New York of the last century. It's a show, it's like being in New York in the 30's, with the difference that New York in the 30's had 4 million people, or probably a little more, and Shanghai now has nearly 20 million. Here is born the twenty-first century New York. Chinese and Chinese are migrating from the countryside to the city at 100 million in the last 5 years.
Imagine reading the first chapter of Capital, which means that changing these 100 million Chinese economy $ 200 per year for five people, an economy of perhaps how ... which produces each year in the city. Imagine the boost to GDP means that the work of these farmers, which was and still is from sun to sun, and in Shanghai may work fewer hours but more intense, in Shanghai probably live worse and spend more hungry than before, since then there are much more volatile in their jobs. However, his work has acquired the Midas touch turns to gold and everything they touch. For now beginning to appear in national accounts of China and the world. So, how much mystery that China will grow 10% annually, growth China is this. The concept of measuring GDP is the concept of value, and measures it quite correctly, because what it measures is the concept of added value, not the total sale value, not what you add up all the prices. The GDP is all prices totaling less than that caused by inputs and services that are paid. From another angle is the sum of wages and capital gains, plus depreciation, that is GDP.
So what is unusual about China's GDP to grow at 10% and England grow just 3%? When they grow to 3% England or Germany, they start to shiver, say the economy is overheated and the interest rate rise next day. Such as economies mature, they have this huge migration of these people who did not produce value and suddenly start producing value. So, it appears that this well-known phenomenon that when countries are rural, agrarian and backward, produce very little and they grow very slowly, and suddenly there is a period that explode and start to grow at a phenomenal rate. Brazil, for example, grew by 7% for nearly 50 years during the twentieth century. In the same period in 1930, 30% of its population was urban and 70% were peasants. Today is the reverse: they have 20% of rural population and 80% of urban population. Imagine the epic tragedy of the passing of these tens of millions human from the way they and their ancestors lived in the countryside, and suddenly, over a period of just 50 years, moved to urban life, and all the uncertainties of modern life.
Imagine the economic impact of this step, from the point of view the first chapter of Capital. Means that previously did not produce to sell, and therefore did not produce value, now all we produce are commodities, because everything they produce is for sale.
You realize then that is quite important to consider for the most crucial problems of economic behavior which are the historical conditions in which such activity takes producers and consumers alleged profit maximizers?. Because the Chinese peasant is as maximizing their users as their daughter who went to work in Shanghai, but its economy remains mired in $ 200 per year, while the daughter is now producing several times that amount every month.
The same is true today with Chilean old farmer has a plot in the south, where pine trees are wrapped, and we are also putting restrictions on what you can do: it can not cut, you can not do this or the other, nor beyond. Finally, someone comes and buys the land for the farmer, and he moved to the uncertainty of life in the village of Tirúa, for example.
Did you know that Chile is now one of the countries where the basic process of transition to modernity is still evolving to some of the highest rates in the world? Did you know that our work force, which was 40% rural in the '60s, today is only 13% rural? And we're going down the rural population at a rate of 1% per year?. That we do not realize. The labor force are 6 million people, 1% are 60 thousand people, say 50 000 to simplify the calculation. That is, 50 000 workers spend each year of the traditional peasant life, a modern urban uncertain. Each year in Chile today. Multiply by four or five, the family, and reached 200, 250 000 people, and 4 or 5 years to reach one million, and it turns out we are 15 million or in the last 5 years 1 / 15 of our population Epic has taken this step. Step
that means giving up a form of economics, history, traditional drop everything that took place in the world until the nineteenth century. And what lived on in the world until the twentieth century. A mid-nineteenth century, in 1850 the world had 62 cities with more than 100 thousand inhabitants, today is full of cities and towns with more than 100 thousand inhabitants. In those cities, only 7 had more than 500 000 inhabitants, and only 2 had more than one million inhabitants: Paris and London. And in 1800 there was only one city with more than one million inhabitants, London. Of the 62 cities alluded to in 1850, 18 were in the stretch between the River Thames and the line between Edinburgh and Glasgow, which is a tiny fraction of the area and population of the planet. For some reason this different way of life was born in this remote corner of the planet.
This process, however, has continued to live the rest of the world. Slowly, in the most bizarre and impervious to geographical vicinity, and for the strangest reasons. For example, Albania is so close northern Italy, which is a region where it first developed this new form of social relations, that one can go boating, rowing. But you liked on television now, when was the war, Albanian farmers and how they live today, just as the Chileans were living in 1930, but Milan are next.
What determines this transition from pre commercial economy to full trading economy and modern? When this happens Marx called original accumulation of capital? As we see, there is accumulation of money, build workers, people willing and forced to sell their labor.
This is the decisive historical process of the nineteenth and twentieth century and will continue to be the decisive historical process of much of the century. Because even today more than half of humanity does not know modern social relations, but on television, if you have television. 65% of Chinese still live with "old" in the field, with an economy of $ 200 per year, and 75% of Indians still live with "old", and 85% of Africans still live "old." And the Chinese and Indians are more than a billion each, and the Africans walk around one billion. So between that 65% and 75% and 85% of the population is half of humanity that still lives today as people lived in England in the sixteenth century, or living in France in the seventeenth or eighteenth century, or Germany in the early nineteenth century, or how people lived in Chile for much of the twentieth century.
These processes do not exist alone, but in the midst of huge convulsions and revolutions. These new companies are born and mud dripping blood from every pore as Marx.
And this is what happened in Chile in the last 40 years. Things today in Chile there was 50 years ago. We had many farmers, many had been engaged to work in salt or coal. However, 7 years ago when closed the coal mines of Lota, there appeared a special report in the Saturday Review of El Mercurio, where the most notable was that the reading seemed to be closing rather than the first Chile capitalist enterprise, looked like he was closing the last landowners. Because social relationships within Lota, or salt, or mining camps, was more like modern estates that labor market that Marx described. It seemed I stood as a transitional phenomenon, was a nascent working class in transition.
Only now we see operating in Chile the categories of Capital. And half the world still does not operate. Goods moving faster and for two centuries capitalist goods are invading the world, and - as Marx said - leaving the bones of Indian weavers whitening roads of India. However, much slower than has been the movement of social relationships behind those goods. That is none other than the massive appearance of people who have been expropriated from their means of production, land, and have entered the job market forced to sell their labor power which is all they have. This process, which is described in The Capital, is the basic process that we are living two centuries ago and we're going to continue living in the next 50 years.
This historical process will continue to change the face of economic and political and geopolitical and military in the world. What happens for example in Latin America? It is still a very backward continent, much of its 560 million people still live and work in the countryside, "old" more than a quarter, nearly 150 million peasants. However, this reality is changing very fast, the old agrarian society is giving way to new social structure. Twenty million people live in early transition countries, Bolivia and Haiti, where just under half the population is still rural. Another 40 million live moderate transition countries, mainly in Central America and Paraguay, also half the population is still rural. Most Latin Americans, 400 million including Brazil and Mexico, living in countries undergoing a transition, where the proportion of farmers is about a quarter of the population. Finally, some 40 million live in advanced transition countries, including River Plate, the Chileans, Cubans, among others, with about 15% of rural population. Recall that advanced societies have come to 2% of rural population, England has a 3% of farmers for a hundred years.
This process will continue to change all the balances of power. Because what happens when you set these new ways of relating to people, where the masses are willing to sell their labor power and appear whom they buy and make it produce? Buyers of salaried work force are the capitalists, that is another category that appears in Section II of Capital. It happens that countries begin to change very quickly. We have all come Santiago today and see we are in the process of capitalist development. You're going to Amsterdam or New York, returning 10 years later and is very similar. But if they go down a street in Santiago and return to spend two months does not give anything because everything is changing, and in every neighborhood is the same. Shanghai is also amazing what happens in this sense of transformation.
This is due to the enormous economic power generated by this new social relationship, historically determined, and produced from revolutions. Because at some point people simply decide not to continue living as before. And people simply did the French Revolution, made the Russian revolution and the Chilean revolution. Everything changes in a moment. Liquid revolution forever kings and czars and stealing Chilean landowners, never to exist again either.
By changing the social structure in our country due to the revolution, it creates the potential for the Chilean miracle, which owes much more to the reforms of the 60s and the revolution led by President Allende. Because those processes are changing the social structure, and give rise to a modern social structure. Which is why the Chilean miracle much more than to have lowered tariffs or other administrative action taken by the Pinochet economic model. If tariffs were lowered in this country many times before, at least two had prolonged periods with low tariffs and operation of the markets!
The change is much more complicated and painful to make three or four economic recipes. The new company is born covered with blood and mud.
This is what living most of humanity, and is actually happening in places on the planet, which are the places where most of humanity. When this new social structure to settle in those places, in China, India, Russia, or Latin America, another rooster will sing. For places to play with the same team, the same training and on the same court, I assure you that the team that has billions against the team that has 400 million. As happened when the U.S. developed. England was the owner of the world because it was the only one with this new form of social structure related in the first chapter of Capital, and there had been a pioneer completed the process of primitive accumulation described in Chapter XXIV of The Capital. However, the United States acquired in the early twentieth century, these same social relations, and were much more than the English. The result is that England today is hopefully a second-rate power, compared with U.S.
The frenzy of the neocons is, like the frenzy of the Nazis, seek world domination through military power only. Today shows the folly of trying to dominate the world from a country of 80 million inhabitants. U.S.
can continue to be important, but if the side are other countries that have the same social relations, very soon they will generate the same kind of economic development and we are going to "make weight." A U.S. bank recently estimated that in 2025 what they call the BRICs are Brazil, Russia, India and China taken together will weigh as much as the European Union or the United States. And by 2050, calculated the same bank, will weigh as much as the United States and the European Union, each of these countries separately.
is not unusual, because the Latin Americans, for example, we will be 700 million in 2025, and we will have a social structure with less than 20% of farmers as early as 2015, and down very fast. In 2050, we will have 5% of farmers and more or less the same social structure that the United States, but we will be around 850 million people, while they will be around 400 million. At that time, each of our producers will weigh more or less similar to each of them, and as a region we will weigh the same as them in terms of economies.
could go to the category of capital, with more manpower, we could continue with more of accumulation. Remember you
it is for Marx the capitalist accumulation? The idea of \u200b\u200bthe chapter on accumulation Capital accumulation is not money, but workers, ie, the accumulation of capitalist social relations.
reproduction of capitalism is not expanding production, but the reproduction of social conditions that allow capitalism to work. And capitalism works because many people are forced to sell their labor.
But nobody sells its work force because they want to, but because he has nothing to sell and if it sells some are dying of hunger. And therefore, to be played capitalism have to reproduce the workers, and that workers have to remain out of the production process as well as entered. In other words, they must be conditions such that the working class is still working class.
We're talking about working class understood as the broad set of employees. You, mining engineers, are modern working class. I myself have been a part of my life when I worked as an engineer wage modern working class. The working class are all employees in general and in Chile this class is an overwhelming majority. Today in our country 55% of the workforce are employed in companies with more than 5 workers, who can be considered capitalist enterprises.
all employees are not working class, of course. When I am an officer of the state, for example, as about 10% of the Chilean work force today, I'm paid, but does not value any capital. The worker is one employee that values \u200b\u200bthe capital and it has to work under the direction of private capital. There are many types of employees who do not value a capital, as domestic workers, for example, in Chile are about 5% of the workforce. Since Roman times, of course, soldiers are employed but are not workers.
expanded reproduction "And what is it? Is the expanded reproduction of social relations that allow capitalism to work. Social relationships that allow capitalism to work are the existence of millions of people willing to sell their labor and capitalists willing to buy them. However, people do not sell their labor power because he wants to, but because it is required, because it has nothing else to sell and if it sells some are dying of hunger and cold. That is, the expanded reproduction of employees who value a capital.
There are men who say the modern trend is towards the end of work. Whenever there is crisis and unemployment appears, there are gentlemen with theories that are the most bizarre. How capitalism will liquidate the goose that lays the golden egg, the conditions are precisely those that feed to work? On the contrary, it must employed to make dough rise!
Employees have grown a lot. Do you know how many employees were at the time of Marx, when he wrote Capital? Marx quotes figures from the social structure of England in those days: There were 6 million, and around the world had so many more employees than those 6 million. So the English economy in 1867, dominating the world, was as the Chilean economy in 2004. Today there are 1500 million employees worldwide, according to ILO figures about 5 years ago. And the Chinese are adding every 5 years 100 million more, the Indians do the same and the Latin Americans the same. And we add a modest Chilean a percentage.
remarkable thing is that in the embryo of a capitalist economy than 6 million workers who studied Marx, demonstrated almost all the laws that operate today in the enlarged market.
Quite frankly, we do not take capitalism as a religion, Marx was not a God, and I wrote what I wrote in when the phenomenon was in its infancy. It would make sense that things had changed enough today. However, the truth is that every year when we do these courses in the Capital, we challenge the students and say: try to see which of these categories are not operating today. However, in all sincerity, I could not say - and without prejudice - which we have not found categories of Capital not operate today.
Even the law of accumulation, which is the most debatable, is one thing to turn it from several sides and is not as clear that the apparent increase of welfare in the countries as they develop deny the law of accumulation. Since then his strong internal logic - the employees should leave the production process as they entered, ie, as employees, ie as people who do not have much more to sell than its workforce, and increasingly must be People in this condition - it has only been confirmed strongly by history. The relative impoverishment is also confirmed by figures of concentration of wealth, not income but wealth, for example in the U.S. What is more questionable is the assertion of absolute impoverishment, which obviously has not been verified.
We go to book II, the great discovery that the capitalist market are the capitalists themselves. It's great, because it goes against common sense. As most people are not capitalist, we all think that the economy works as it does the economy in our house and it is not.
Who does the majority of purchases in Chile, people or capitalists? Have out the fact that everything we buy, before you purchased a business? They have taken the fact that, in addition to buying the things we buy, companies need to buy other things that we are never going to buy, such as machinery and buildings?
It turns out that companies buy everything and then process it and sell it. But with a difference, that our consumption will decrease costs us, sometimes we go into debt to maintain consumption when it comes to a recession.
Also, notice what a curious thing: the recessions start when people are consuming at the top, because the boom comes just before the crisis and then into the boom, people consume More than ever, has more jobs than ever and have higher wages than ever and borrowing more than ever, then the people's consumption is maximum and then comes the crisis.
How do you explain this? Marx in Book II of Capital is the answer to a very simple way, from the point of view why it is possible that crisis occurs, companies buy the majority and they themselves are flexible in order to reduce the half or zero consumption. For a mining project if I'm going to eat and if I delay it two years do not eat anything. Then the consumption can drop to zero for a decision. That is what creates the possibility that in a moment the crisis occurs.
The need of the crisis, because crises are cyclical, why operate well ... this is explained in Book III. They discover that key Marx fantastic Keynes after making identically: they both say that crises are necessary because there is a plethora of capital, Keynes says that the marginal utility of capital is negative. Companies invest to increase their profits, but as in the boom economies begin to tighten, with so much activity after the crisis, there is a moment which will further increase production, raise prices even more labor , land, etc., and earnings are less than before. Then, for what they will invest if they will win less, and stop investing, spending, and at that time the crisis occurs.
The crisis ends, however, when people are eating less than ever and even less if you follow Keynesian fiscal policies, as it has taken the Lagos government. People do not consume, companies not because it is bad business and the only one who can consume the Treasury, that's what I discovered Keynes - but in Chile has not happened because the Treasury will also be restricted or indeed in the case of Lagos has been neutral and so we got to 9.5% of unemployment to 5 years into the crisis.
And if the crisis eventually ends, this happens when again the capitalists realize that if they invest will earn more if they stop, and that the economy is recovering, despite the people's consumption is low.
We can not conclude this meeting without talking about income, because we are reviewing some of the contributions of this school of economic theory in general. The theory of Marx income strictly speaking is not different from the classical or neoclassical. It is the idea that if demand increases firms try to produce more, but in this particular industry there is a small factor - such as minerals, water irrigation and salmon farming, urban land, etc.. - Can not produce more. Then the price begins to rise, and rise in the market that factor low, what happens is that is generated on the usefulness, above the normal return on capital in other industries do not have these scarce factors . So, seeing this, other capitalists are interested in entering the prime market. In markets where they operate there is about profit, because there are no scarce factors of production, ie they can not reproduce.
the scarce factor is the originator of about profit. However, what to do a capitalist who wants to enter this market? You must have access to this scarce factor. which can be a field, a mineral, etc. .. It is likely that the scarce factor has an owner, a landlord, whom interested in entering this market offers to pay rent. "I pay you rent and you let me go." The newcomer will be willing to pay up utility that is on there there is the whole give the owner of the resource. That is income.
This concept is the same as the classical and neoclassical. Marx makes an important contribution, which is the subject of absolute rent that Ricardo did not know, speaking only differential rent. Marx shows that there is an absolute rent plus the rent differential, which the neoclassical taken after and recognized. Then there is no contradiction between these theories.
In Chile there has been a great distortion to not recognize this fact and instead be guided by the madness (or neoliberal frescura0 assume that here was to give to the mining of raw materials, when no other industry gives him his raw material. As the Minister Insulza, if someone wants to have to buy a furniture wood, no one is going to give away. However, if you want to put a mine, he was given the deposit and on top of optimal quality. As minerals in Chile are very abundant, and best quality, this massive subsidy to the production of the mining sector, is a subsidy on production in a country that has significant relevance in determining the world price. This has led to the case Bhagwati called "misery-creating growth" or "impoverishing growth 'as the concept has led Orlando Caputo, who was who dusted this theorem, 1958, in the sense that this could go on so much stimulus ultimately expanded production is sold for less money than the previous low production. That's what happened in Chile: the 2002, we sold 4.6 million tonnes of copper in 7.022 billion dollars, while in 1995 we sold 4.5 million tons in 7.542 billion dollars (U.S. $ 2002). Fewer dollars for almost twice as copper. We impoverishing growth. We made crazy. Fortunately
is resetting the sound theory of Marx, Ricardo, Smith, Samuelson, in Bhagwati, the new draft Royalty, though so little they charge that little editing, but in the end .. . at least is a start.
Thank you, dear colleagues, for their patient care. Manuel Riesco
mriesco@cep.cl
July 31, 2004 Statement by Professor
Alejandro Yáñez (***)
A double thanks: first to Manuel Riesco and you. Roberto Muñoz well presented this event at the beginning: adult entertainment. My dream is to become too youth entertainment, and I say very seriously, although it is emerging more than a young man in this meeting, they ask for applause. Economics and politics
go very close, very interrelated. Mainly influences the economy in research, science. And from that point of view Marx is making a very substantial contribution to human thought. There is a saying peasant more people see the speck in your neighbor's eye a beam in their own. Humans are able to investigate more deeply the nature, the cosmos, in short, everything that is around you and it has moved much, much more than look at itself as humanity.
Cuesta and one of the reasons it costs to look at himself is what Marx says in the preface to Capital: here interferes with scientific research on economic, the lowest passions of man: the private interest. When private interests played an investigation, its results are disseminated. So here is something special about the dissemination of knowledge in the economic field. If you are affected by certain dominant interests no media, no press, and, for example, suddenly appear lobystas who invent arguments to deny the royalty and do not for scientific reasons, but for private interests.
Economy has to do with consciousness, science has to do with consciousness. The policy has much more to the subconscious, is much closer to art, religion, everyday relationships.
Do some research and get in depth requires a great intellectual effort as Marx did, as Manuel has done today.
For me Marx is the great theorist of the capitalist system is not theoretical or revolution, or communism or socialism. Is one that has further come to understand this society and I am convinced that until we can deepen understanding and being able to predict this society, it will be impossible for us to overcome or help to overcome it. And that has to do with knowledge, with awareness.
This is making this group the Institute of Mining Engineers or group of Providence and we have at the university.
How to transfer it to politics, where the subconscious acts? I think Manuel has given us a very good example, not only scientifically, but with a message understood by any layman like us and that is to make policy on economic grounds.
I'm sure we can contribute to that and the invitation has made Roberto, advancing to the celebration of 140 years of Karl Marx's Capital 2007, I think it will attract many more people.
that this is done, is also a nonpartisan political fact
our country. From my own experiences, I believe we must start thinking in politics is not party but of the whole. I think this was the whole character, as was also the university reform and anything else to interpret a lot of people.
much I appreciate and value what the group of the Institute of Mining Engineers, which makes it interests them no more, without regard to any particular political sector. But they are studying and growing Capital group and think that will increase the people who will be studying the Capital.
way that I read something last year responded to a graduate student in economics, who communicated with Manuel saying he wanted to re-examine Capital, and Manuel I referred him to me. This also applies to you:
If studying is your desire,
give that satisfaction to your soul, so you'll only
calm to read what I read. I see no other way
which has the final
which gives water and salt
coming to the knowledge of a work is entitled wonder
Capital.
Santiago, July 31, 2004 Alejandro Yañez
(*) Lecture at the Institute of Mining Engineers of Chile, Santiago, Chile, on July 31, 2004. Transcribed by Mireya Chavez Calderon
, edited by Leonidas Robespierre
Burgos Chávez.
(**) engineer and economist, former Vice President Student Federation of Chile (1970-72), vice president CENDA Consultant, United Nations, a disciple of Anastasio Mansilla and Ph.D. candidate in Political Economy at the Institute of Social Sciences Academy of Sciences of the USSR, Moscow. (***)
mriesco@cep.cl Electrical Engineer Professor of Economics at the University ARCIS, former President of the Students Federation of State Technical University (1966-1970), disciple of Anastasio Mansilla and Ph.D. candidate in Political Economy at the Institute of Social Sciences Academy of Sciences of the USSR, Moscow. Alejandro Yañez
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