State Economy Society Flashcards
What did Smith believe are the true measures of wealth?
Value and productivity
How does Smith’s law of accumulation work?
All about self interest, regulated by competition which drives reinvestment to gain more profit
What did Smith think about planning?
No planning, we need to be free from the interference of the state to allow the invisible hand to work
What is Smith’s system of perfect liberty?
We are free to leave to go to other jobs, this prevents employers dropping wages (natural price through competition). Supply of labour will adjust to meet the demand
What is Smith’s law of population?
- Higher wages increases the number of workers (more born and more survive)
- In turn excess labour pushes the wages down (less people survive)
- Poverty is the mechanism of labour supply
What is the paradox about Smith’s worker?
Rational homoecomicus but still keen to reproduce
What role does Smith envisage for the state?
State shouldn’t interfere in the workings of the market. State should be made of experts who will take advice.
- Legal protection for all -Protect private property
- Invest in necessary but unprofitable works (Education)
- Anti monopoly -Resolve capital labour struggles?
Critique of Smith’s wealth and state ideas?
- Are we always rational beings?
- Market isn’t harmonious but crisis ridden
- Conflict exists between workers, landowners and owners of the means of production, leads to a social struggle
- How can the state resolve capital labour struggles but retain a free market?
How did Smith justify a society based on market principles?
Offered a systematic account of how society could operate on market principles using rational and moral justifications through the invisible hand
What ideas did Smith reject?
- Mercantilism (Gold symbolizing wealth)
- Divine right of Kings
What did Smith see political economy as?
“Branch of Science of the statesman or legislator”
What is Smith’s idea about the division of labour? (from the Wealth of Nations)
Break down large tasks into smaller ones. This increases dexterity (practise), saves time switching tasks, will find machines to aid with tasks (lazy) and keeps people focused.
What did Smith believe about human nature?
-Truck barter and exchange (not human wisdom that leads to division of labour).
What is Smith’s view on natural talents?
Difference in natural talents in reality is less than people think. Habit, custom and education are not from nature and this shapes childhood development. Utilise other strengths to enhance society
What did Smith seek to do with capitalism and human nature?
Sought to rationalise capitalism by making it appear as an organic development of human nature
Did Smith think Capitalism could go on forever?
He was doubtful of Capitalism’s ability to keep expanding, stagnation and collapse possible. Sees Capitalism as a totality (all or nothing)
What was Smith’s problem with profit?
Greatest problem was explaining profit (growth), in perfect competition can profit even exist? If profit is deducted from costs then labour is short changed- function of the price becomes exploitation
What did Marx argue about Smith and profit?
Argued Smith could see the contradiction of profit in his model which proved social antagonism was inherent to capitalism
What did Smith think the political economy was?
Logic of interdependence of the state and market in the context of their separation
What did Hegel’s dialectics argue?
- Critique of Western logic which emphasises the importance of rationality (master and slave mutual dependance).
- System a totality with elements in contradictions or negation.
- History is a whole, not a series of discrete events
What did Hegel think about change?
Change unfolds due to dynamic movement of contradictions
What did Marx think about Hegel?
- Fascinated by his ideas
- Criticised idealism for misrecognizing the social genesis of its concepts and categories
- Didn’t agree an idealised “World Spirit” was emerging, wanted a materialist interpretation
What is Marx’s idea of historical materialism?
- Not just describing things or basing ideas on principles/assumptions (like human nature which change through time)
- Knowledge is gained from unravelling contradictions in how society appear to the people who inhabit it
What is the central contradiction for Marx in society?
The commodity itself
Problems, for Marx, with commodities under Capitalism?
- Capitalism only produces items for exchange value. (Smith ignores profit, as exchange is based on wages)
- The labour in the good becomes abstract and only judged by time, not use
What did Marx believe about wages?
Determined by the cost to reproduce the labour (not what the labour produces). Profit is the extraction of unpaid labour time
Marx quote on capital and labour
“Capital, therefore, is not only the command over labour… it is the command over unpaid labour”
What is Marx’s principle of doubly free?
Free to sell labour, but free from the means of production. Expropriation of labour as workers would otherwise pay themselves more or only worked when they needed to
Marx quote on history of society?
“The history of all hitherto existing society is the history of class struggle”
Marx quote on change
“Philosophers have only interpreted the world in various ways, the point is to change it”
Marx quote on capitalists
“As a capitalist, he is only capital, personified”
Marx quote on the state/executive committee?
“Executive committee of the modern state is nothing but a committee for managing the common affairs of the whole bourgeoisie”
What is Marx’s view on the Fetishism of the state?
State appears neutral to separate and abstract characteristics of the economics of capital-labour relations
How does Marx view capitalism?
Dynamic antagonism of conflicting interests. Contradictions within push it towards crisis (conflicting interests) but workers together may realise they need to destroy the system itself
What does Marx view as the capital accumulation problem?
Rate of profit falls with investment
Crisis of accumulation- limits to how much capital will raise growth.
What is commodity fetishism ? (Marx)
Capital is dead labour (Removing human element from the commodity)
How does Marx view social relations under Capitalism?
Social is subsumed by the accumulation of capital “impersonal exchange” (not merely producers/consumers). There is a volatile but submerged class struggle
Marx quote on the exploited relations under Capitalism?
“Capitalism encrypts exploited relationship to make it appear as a free and equal exchange of commodities”
Marx quote on capacity of labour?
“Capacity of labour is nothing unless it is sold”
Marx view on class?
Not discrete groupings, class precedes how people think/act about their social roles. Antagonism between capital and labour underpins capitalism. (Movement can only be analysed historically)
Form behind social relations? (Struggle)
Colonialism, legal framework, social, academia, the state, art, class, politics, institutions etc
What do instrumentalist Marxists argue about the state?
Miliband: State independent of the economy, captured by the powerful and used as a tool to further their interests. Bourgeois power, internal to the state. S
-Short termism, self destruct, in fighting
What do structuralist Marxists argue about the state?
Poulantzas: Autonomous but functional to the interests of capitalism. State necessary to prevent self-destruction of capitalism. Politics is the interplay of interests (hegemony)
What do Open Marxists argue about the state?
Bonefeld: State not an agent of capitalism, it is a historically developed form of the capital-labour relations. State emerged from abstract labour. State is universal and abstract (equality, legal rights etc)
What did Marx argue about value?
Value is not fixed, relative to other commodities e.g. wheat =/ iron (independant of each other)
Barker 1978 on capitalist state?
“Capitalist state takes the form of the nation state”
Holloway on globalisation and the state?
“Globalisation didn’t cause global capital”
What did Polanyi think about Keynes?
Sympathetic to Keynes but didn’t believe the elusive search for equilibrium would tame the market
Why did he publish The Great Transformation in 1944 (aim of the book)
To change the way we thought about capitalism, market and the state (Not a Marxist)
What did Polanyi think about Marx?
Averse to private property but not convinced by economic determinism of Marx and the reduction of histories into universal law. He thought state played a leading role in society
What did Polanyi argue caused WW1?
Anglo-Saxon doctrine of laissez-faire and self-regulation
What is Polanyi’s double movement?
The assault on traditional jobs, beliefs and exchange produces a counter reaction- push back against the inhuman rule of the market
What was the Speenhamland system?
It was a system of poor relied seen as a subsidy for employers who pay proper wages
Who is involved in Polanyi’s double movement?
Not just working class, also small business owners, politicians, newspapers etc
What is the link between Marx and Polanyi on the double movement?
Links to Marx’s idea of contradictions in the market however Polanyi doesn’t think the outcomes will be progressive
Why did Polanyi argue Fascism emerged?
From globalism (gold standard, colonialism etc). Negative double movement aiming to take back control through ultra nationalism
Problems caused by the gold standard?
Trade imbalances/deficits, drained gold reserves- deflation! Reduced demand and employment.
Stiglitz on Polanyi quote?
His greatest contribution was to demonstrate self-regulating markets never work
Polanyi on the gold standard quote?
“Most other institutions had been sacrificed to try and save it”
What did Polanyi in GT say about self-regulation?
“Demands nothing less than the institutional separation of society into an economic and political sphere”
When did Polanyi say a market economy could exist?
“A market economy can only exist in a market society”
What did Polanyi say about the role of propaganda?
Market economies require violence, natural or created. In order to maintain control there has been a battle to misrepresent facts to show market failures as a sign of success e.g. inequality
Polanyi quote on the “stark utopia” of the self regulating market?
“Such institution couldn’t even exist for any length of time without annihilating the human and natural substance of society”
Polanyi’s view on commodities?
Land, labour and money are fictitious commodities because none are produced explicitly for sale (this lies in the tragedy of market failure)
Examples of “push back” against fictitious commodities (Polanyi)?
Sale of fictitious commodities increased as global trade increased, seen a push back with trade unions, political movements e.g. chartism
How did Polanyi disagree with Hayek about money?
IR has become condition to try and maintain the value of money. He argued the equilibrium cannot be reached naturally
How did Polanyi conceptualise the market?
Economy is not interlocking markets regulated by the price. Markets have always been embedded into human society, subordinate to politics, social, religious relations and values