Abstract
This chapter introduces two key characteristics of capitalism as analysed by Karl Marx in his book Capital. The first is the accumulation principle, driven by the fact that in capitalist markets money is not merely a means of exchange but means and end in one, for the sake of capitalist firms’ profit maximalization in competitive markets. The second key feature of capitalism that Marx observed was the asymmetry in the relationship between capital and labour: capital hires labour and not the other way around. The lesson is that both features can be changed in a market-based economy, for example through cooperative firms and a larger role for the community economy next to markets.
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Notes
- 1.
The Troika was the name used for the three institutions responsible for managing the euro crisis with emergency loans, austerity packages, and other policy measures forced upon the southern Eurozone countries in trouble. The Troika consisted of the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF).
- 2.
GDP measured in USD: https://data.worldbank.org/country/greece. Accessed on July 7, 2019.
- 3.
Servaas Storm and C.W.M. Naastepad, “Myths, Mix-ups and Mishandlings – Understanding the Eurozone Crisis.” International Journal of Political Economy 45, 1 (2016): 46–71, Table 2.
- 4.
Jörg Rocholl and Axel Stahmer, “Where did the Greek Bailout Money go?” ESMT White Paper (Berlin: European School of Management and Technology, 2016).
- 5.
Rocholl and Stamer, “Where did the Greek Bailout Money go?”
- 6.
Rocholl and Stamer, “Where did the Greek Bailout Money go?”
- 7.
Eurostat, unemployment by sex and age, annual average: https://ec.europa.eu/eurostat/web/lfs/data/database.
- 8.
https://nos.nl/artikel/607005-staatssteun-spekt-de-staatskas.html. Accessed on July 14, 2019.
- 9.
CBS, “Nederland langs de Europese meetlat” (Den Haag: Centraal Bureau voor de Statistiek, 2019). https://www.cbs.nl/nl-nl/publicatie/2019/20/nederland-langs-de-europese-meetlat-2019. Accessed on July 15, 2020. ECB, “The State of the Housing Market in the Euro Area.” Economic Bulletin no. 7. 2018 (Frankfurt: European Central Bank, 2018). https://www.ecb.europa.eu/pub/economic-bulletin/articles/2018/html/ecb.ebart201807_02.en.html#toc1. Accessed on July 11, 2019.
- 10.
CBS, “Nederland langs de Europese meetlat.”
- 11.
My own house was for sale for four years in this period and I had to reduce the offer price twice before I could finally sell it—luckily without a loss because I had lived there long enough to pay off half the mortgage debt.
- 12.
CBS Statline: https://opendata.cbs.nl/statline. Accessed on July 9, 2019.
- 13.
Frederic Mishkin and Tryggvi Herbertsson, ‘Financial Stability in Iceland’ (Rykjavík: Iceland Chamber of Commerce, 2006).
- 14.
The pamphlet was published on February 13th, 1997, by a major Dutch newspaper, De Volkskrant and signed by 70 Dutch economists, including myself. The title appeared to be an accurate prediction twelve years later: “With this EMU, Europe is on the wrong path”. https://www.volkskrant.nl/economie/met-deze-emu-kiest-europa-verkeerde-weg~bf1ca466/. Accessed on July 22, 2019.
- 15.
They wrote this manifest quite hastily in the revolutionary year 1848, hoping that it would provide the guideline for building a new society after the revolutions that spread throughout Europe at the time. But the uprisings of the labour movement were halted by armed forces in France, Germany, Belgium and other countries. The manifesto was first published in German. For the English translation, see: https://www.marxists.org/archive/marx/works/download/pdf/Manifesto.pdf. Accessed on July 22, 2019.
- 16.
Karl Marx, Capital – A critical analysis of capitalist production, Vol. I & II (Hertfordshire: Wordsworth, 2013 [1867]).
- 17.
“Besides, the new landed aristocracy was the natural ally of the new bankocracy, of the newly-hatched haute finance , and of the large manufacturers, then depending on protective duties” (Marx, Capital , 508).
- 18.
“Ce qu’il y a de certain, c’est que moi je ne suis pas marxist” (Friedrich Engels, “Lettre à E. Bernstein,” 2 novembre 1882. https://www.marxists.org/francais/engels/works/1882/11/fe18821102.htm. Accessed on July 15, 2020. Marx wrote this, probably in 1880, because he disagreed with the revolutionaries who denied any reforms in favour of labour rights within the current system.
- 19.
Karl Marx, Rheinische Zeitung 135, 15 May 1842.
- 20.
He added that this also led to VOC’s role as “one of the most extraordinary relations of treachery, bribery, massacre, and meanness.” (Marx, Capital , 526).
- 21.
De Nederlandsche Bank, “Labour Market Flexibilisation linked to Fall in Labour Income Share” Amsterdam: DNBulletin, 1 February 2018. https://www.dnb.nl/en/news/news-and-archive/DNBulletin2018/dnb372062.jsp. Accessed on July 24, 2019.
- 22.
See, a recent analysis of this with US data: Jared Bernstein and Keith Bentele, “The Increasing Benefits and Diminished Costs of Running a High-Pressure Labour Market” (Washington D.C.: Center on Budget and Policy Priorities, 2019). https://www.cbpp.org/sites/default/files/atoms/files/5-15-19fe.pdf. Accessed on July 24, 2019.
- 23.
Thomas Piketty, Capital in the Twenty-First Century (Cambridge (MA): Harvard University Press, 2014).
- 24.
This was reported by the New York Times, 1st April, 2019. https://www.nytimes.com/2019/04/01/business/saudi-aramco-profit.html. Accessed on July 24, 2019.
- 25.
See for example the annual list of the top-100 cooperatives in the US, published by National Cooperative Bank which was set up by Congress to provide funding to cooperatives: NCB. “The 2018 NCB Coop Top 100.” New York: National Cooperative Bank, 2018. https://impact.ncb.coop/hubfs/assets/resources/NCB_Co-op_100_2018_WEB.pdf. Accessed on August 30, 2019.
- 26.
https://www.thenews.coop/49090/sector/view-top-300-co-operatives-around-world/. Accessed on August 28, 2019.
- 27.
https://www.ilo.org/global/topics/cooperatives/lang%2D%2Den/index.htm. Accessed on August 30, 2019.
- 28.
https://www.rabobank.com/en/about-rabobank/results-and-reports/index.html. Accessed on June 18, 2020.
- 29.
Rabobank was fined one billion US dollar for its involvement in the manipulation of LIBOR (London Inter Bank Offered rate): https://www.reuters.com/article/us-rabobank-libor-idUSBRE99S0L520131029. Accessed on August 30, 2019.
- 30.
https://www.mondragon-corporation.com/en/co-operative-experience/our-principles/. Accessed on August 30, 2019.
- 31.
https://www.amsterdam.nl/en/housing/holiday-rentals/. Accessed on June 18, 2020. In addition, Amsterdam has prohibited buying newly built houses for rent: buyers are obliged to live in the house themselves: https://www.amsterdam.nl/bestuur-organisatie/college/wethouder/laurens-ivens/persberichten/amsterdam-beschermt-koopmarkt-duur/. Accessed on June 18, 2020.
- 32.
https://vooruitproject.nl/. Accessed on August 30, 2019.
- 33.
https://bundles.nl/en/miele-washing-machine-subscriptions/. Accessed on August 30, 2019.
- 34.
See, for example, the Circular Economy Toolkit developed by the University of Cambridge: http://circulareconomytoolkit.org/Assessmenttool.html. Accessed July 15, 2020. See also a guideline by the Ellen MacArthur Foundation, “Towards a circular economy: business rationale for an accelerated transition.” https://www.ellenmacarthurfoundation.org/assets/downloads/TCE_Ellen-MacArthur-Foundation-9-Dec-2015.pdf. Accessed on August 30, 2019.
Bibliography
Bernstein, Jared, and Keith Bentele. “The Increasing Benefits and Diminished Costs of Running a High-Pressure Labour Market.” Washington D.C.: Center on Budget and Policy Priorities, 15 May, 2019. https://www.cbpp.org/sites/default/files/atoms/files/5-15-19fe.pdf. Accessed on July 15, 2020.
CBS. “Nederland langs de Europese meetlat.” Den Haag: Centraal Bureau voor de Statistiek, 2019. https://www.cbs.nl/nl-nl/publicatie/2019/20/nederland-langs-de-europese-meetlat-2019. Accessed on July 15, 2020.
De Nederlandsche Bank. “Labour Market Flexibilisation linked to Fall in Labour Income Share.” Amsterdam: DNBulletin, 1 February 2018. https://www.dnb.nl/en/news/news-and-archive/DNBulletin2018/dnb372062.jsp. Accessed on July 15, 2020.
ECB. “The State of the Housing Market in the Euro Area.” Economic Bulletin no. 7. 2018. Frankfurt: European Central Bank, 2018. https://www.ecb.europa.eu/pub/economic-bulletin/articles/2018/html/ecb.ebart201807_02.en.html#toc1. Accessed on July 15, 2020.
Engels, Friedrich. “Lettre à E. Bernstein. 2 novembre 1882.” Marxists Internet Archive (Marxists.org), 2010. https://www.marxists.org/francais/engels/works/1882/11/fe18821102.htm. Accessed on July 15, 2020.
Marx, Karl. Rheinische Zeitung 135, 15 May 1842.
———. Capital – A critical analysis of capitalist production Vol. I & II. Hertfordshire: Wordsworth, 2013 [1867].
Marx, Karl, and Friedrich Engels. “Manifesto of the Communist Party.” Marxists Internet Archive (Marxists.org), 2010. English translation: 1888. https://www.marxists.org/archive/marx/works/download/pdf/Manifesto.pdf. Accessed on July 15, 2020.
Mishkin, Frederic, and Tryggvi Herbertsson. “Financial Stability in Iceland.” Rykjavík: Iceland Chamber of Commerce, 2006.
Piketty, Thomas. Capital in the Twenty-First Century. Cambridge (MA): Harvard University Press, 2014.
Rocholl, Jörg, and Axel Stahmer. “Where did the Greek Bailout Money go?” ESMT White Paper. Berlin: European School of Management and Technology, 2016.
Storm, Servaas, and C.W.M. Naastepad. “Myths, Mix-ups and Mishandlings – Understanding the Eurozone Crisis.” International Journal of Political Economy 45, 1 (2016): 46–71.
“With this EMU, Europe is on the wrong path.” Volkskrant, 13 February 1997. https://www.volkskrant.nl/economie/met-deze-emu-kiest-europa-verkeerde-weg~bf1ca466/. Accessed on July 15, 2020.
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van Staveren, I. (2021). Chapter 1: Karl Marx on Capitalism. In: Alternative Ideas from 10 (Almost) Forgotten Economists . Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-57609-7_2
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