4. Karl Marx, Joseph Schumpeter, and an Economic System Incapable of Coming to Rest

Capitalism: Success, Crisis and Reform (PLSC 270)
Professor Rae relates Marxist theories of monopoly capitalism to Schumpeter's theory of creative destruction. Both Marx and Schumpeter agree that capitalism is a system that is "incapable of standing still," and is always revising (or revolutionizing) itself. Professor Rae critiques Marxist determinism and other features of Marx's theories. To highlight Schumpeterian creative destruction, Professor Rae uses examples from technological revolutions in energy production since water-powered mills. Marx's labor theory of value is discussed. Professor Rae highlights aspects overlooked by Marx, including supply and demand for labor, labor quality, and the role of capital in economic growth. Professor Rae also notes problems with Marx's predictions, including the prediction that the revolution will occur in the most advanced capitalist economies. Professor Rae also discusses Marx's theory of the universal class, the end of exploitation, and the withering away of the state.
00:00 - Chapter 1: Introduction
06:30 - Chapter 2: Marxist Historicism
11:36 - Chapter 3: Monopoly Capitalism
27:31 - Chapter 4: Falling Rates of Profit
34:42 - Chapter 5: Immiseration of the Working Class in Late Capitalism
38:30 - Chapter 6: Inevitable Revolution in Advanced Capitalist Systems
42:06 - Chapter 7: Theory of the Universal Class
43:23 - Chapter 8: Withering Away of the State
Complete course materials are available at the Open Yale Courses website: open.yale.edu/courses
This course was recorded in Fall 2009.