SOLUTION: Duke University Marxs Theory of Capitalism Discussion

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Sociology 356: ​Classical Sociological Theory
Instructor: ​Roberto J. Ortiz, PhD
​Fall 2020
Guidelines for Critical Interpretation Essay # 2
(​due ​Monday​, October 26 at 11:59 pm​)
Essay Subject: ​Marx’s Critique of Capital in the 21​st​ Century: Capitalism, Exploitation and
Possible Points: ​12.5
I. The Essay
We devoted weeks 6 to 9 of this course to Marx’s works. While we read part of the ​Communist
Manifesto ​he co-authored with Fredreich Engels, we also focused on his most accomplished
work, namely, ​Capital ​(we read only parts of vols. 1 and 3). Of all the theories covered in this
course, it is beyond question that Marx’s critique of capital has been the most influential—not
necessarily in academia, but surely in the real world. As a theory that contributed significantly to
the shaping of twentieth-century history, Marx’s account of capitalism deserves close study and
evaluation. Anticipating Durkheim’s rule that one must systematically discard all
preconceptions when examining social life, Marx’s own theory started as a systematic critique.
Marx’s work was influenced by Adam Smith’s labor theory of value. But Marx went beyond
Smith and developed a critique of both how capital was ideologically defended by bourgeois
economists and of how it was in fact underpinned by an unequal relationship of exploitation
between capitalists and workers. In ​Capital,​ he focused on the second aspect of the critique, that
is, on revealing the real workings of capital accumulation. This is where his theory of surplus
value is central: it shows the real foundation of the value accumulated by the capitalist class.
Moreover, his theory of crises forecasted that capitalism would periodically experience
accumulation crises. Marx’s theory is still contested today. While he has experienced a sort of
rehabilitation since 2008—when many economists rediscovered Marx’s significance—​most
social scientists outside of sociology, history and anthropology are very dismissive of Marx’s
work. In the end, however, reality does not care for academic trends and theories will be tested
by the unfolding of social, economic and political life itself. In other words, the extent to which
Marx’s theory is still useful is partly decided by how we interpret his writings, but mostly by the
unfolding of reality itself.
Considering all the above, where does Marx’s theory stand today? This is the starting
point of your essay. You should provide a general overview of Marx’s theory of capitalism and
evaluate the extent to which it is still relevant today. The essay, then, will focus on analyzing
Marx’s theory of capital. This means showing the elements of Marx’s critique, in particular: his
labor theory of value, his theory of accumulation ​and exploitation (or surplus value). Lastly, you
may also link his theory of accumulation/exploitation to his theory of crises. Secondly, you will
have the opportunity to evaluate Marx’s theory in light of contemporary society. Are we living in
a world which could be described with the tools Marx provided, or, do we live in a world that
outlived Marx’s analysis? In writing, you may follow the points listed below.
1. Introduction: Write a brief introduction for your essay where you simply outline what
the essay argues (remember that while the introduction is the first thing that shows in an
essay, it is better to write it ​after ​the main text and conclusion are completed).
1. Elaboration of Argument: This is the main body of your essay—you can be divided
into subsections ​with your own headings if you find that useful. Here you should explain
the basic elements of Marx’s theory. You ​may use all or some of the points below to help
you in framing/structuring your narrative.
a. First, you should explain what capitalism is, in the broad sense. You can focus
first on Marx’s perspective in the ​Communist Manifesto​, where there is a ​general
overview of capitalism and its place in history. That said, remember to use Marx’s
theoretical perspective which focuses on three core elements: classes,
commodities and, most important, ​the general formula of capital​—this last is
from ​Capital not from the ​Communist Manifesto​. The general formula ​is ​the
Marxist definition of capitalism. Explain what the formula represents. Important:
here you can work by describing how Marx’s theory draws on but also goes
beyond Adam Smith’s labor theory of value and of markets (remember my
argument that Marx describes capitalism as ​M-C-M​, while for Smith the whole
system is an undifferentiated ​C-M-C)​ .
b. Using quotes and/or examples from Marx’s capital, explain the basic elements of
Marx’s critique of capitalism. First, remember the parable of the Shmoo:
capitalism requires a sector of the population to have nothing but their labor to
That is, what is the relationship between capitalism and the class
structure? Who owns/controls the means of production?
How does owning the means of production facilitate the exploitation of
c. On the basis of the basis established by (i) and (ii) use chapters 9 and 10 to
explain what is surplus value and how it relates to the exploitation of labor.
Importantly, try to connect Marx’s concept of surplus value to his earlier concept
of the general formula of capital.
While it is not required, for this explanation you may use the example of
the iPhone in order to show how Marx’s theory of exploitation is
concretely reflected in commodities we consume today.
d. In addition to explaining exploitation, you are encouraged to describe briefly how
Marx connects the exploitation of labor to the recurrence of periodic economic
crises (here Harvey’s video, Mandel’s text and my own lecture should help—there
is also the recommended reading from Marx’s ​Capital Vol. 3​, fragments from
chapter 2 and chapter 13).
e. If capitalism is grounded in exploitation ​and ​creates recurrent crises, are we in a
fatal situation where no alternative is possible?
Here you can also discuss whether a universal grant as proposed by Erik
O. Wright would address the injustices embedded in capitalism.
2. Conclusion: After explaining the aspects of Marx’s theory that we discussed in class, by
way of a conclusion you should briefly discuss whether Marx’s theory is relevant
today–alternatively, you can do this discussion when addressing point e where the
question of universal income and other proposals might be mentioned. Here you should
use your own critical thinking skills.
II. Texts/Material you will/can use:
BBC’s ​Masters of Money​ (Episode on Karl Marx) (BBC, 2012).
Erik Olin Wright, “1.1 The Parable of the Shmoo” and “1.2 The Concept of Exploitation,” In Class
Counts: Student Edition​ (New York: Oxford University Press, 2000), 3–10.
Erik Olin Wright, “Two redistributive proposals—universal basic income and stakeholder grants.
Focus​, 24, no. 2 (2006): 5-7.
Ernest Mandel, “Marx’s Theory of Crises,” in ​John Eatwell, Murray Milgate & Peter Newman
(eds.)​, Marxian economics ​(Palgrave Macmillan: London 1990).
Karl Marx, “Capital (1867),” in Sociological Theory in the Classical Era: Texts and Readings
edited by Laura Desfor Edles and Scott Appelrouth (Los Angeles: Pine Forge Press,
2010), 65–80.
Karl Marx, ​Capital, Vol. 1 (​ New York: Penguin Books, [1867] 1976), Chapter 9, 320–329,
Chapter 10, 340–344.
Karl Marx and Frederick Engels, “The Communist Manifesto (1848),” in Sociological Theory in
the Classical Era: Texts and Readings edited by Laura Desfor Edles and Scott
Appelrouth (Los Angeles: Pine Forge Press, 2010), 51–65.
“RSA ANIMATE: Crises of Capitalism”​ (animated talk by David Harvey).
Tricontinental: Institute for Social Research, “The Rate of Exploitation (The Case of the
iPhone),” ​Notebook N°2 ​(2019).
III. Evaluation Criteria (Rubric)
Criteria 1.​ Student Understands Sociological Concepts
Explanatory note to Student: When a social scientist uses a term, for example, “capitalism,”
“surplus value,” “exploitation,” etc. it may not necessarily correspond to everyday life
definitions (i.e., “common sense” definitions) of those terms.
Excellent, 3.5 points: Student demonstrates an adequate understanding of the theory or
theories used in the essay. When referring to theoretical concepts—for example, capital, surplus
value, rate of exploitation, accumulation crises, etc.—in relation to a particular problem, the
student explains adequately what the social scientist or writer means when they talk about those
concepts. Moreover, she/he relates the concepts to appropriate authors. The student clearly
distinguishes between everyday use of terms and their social scientific and/or critical meanings.
Satisfactory, 2.5 points: Student demonstrates ​partial understanding of the theory or
theories used in the essay. When referring to theoretical concepts in relation to a particular
problem, the student explains some concepts but not others, and not always refers them to the
appropriate authors. The student distinguishes, but not clearly, between everyday use of terms
and their social scientific and/or critical meanings.
Unsatisfactory, 0 points: Student does not demonstrate an understanding of the theory or
theories used in the essay. The student fails to explain the concepts. The student does not refer
them to the appropriate authors. The student fails to distinguish between everyday use of terms
and their social scientific meanings.
Criteria 2.​ Student Evaluates Social Problems and/or Historical Processes Critically
Excellent, 3.5 points: Student evaluates social problems and/or historical process critically.
Moreover, the criticism is developed in a nuanced manner that avoids reducing complex issues
to simplicities.
Satisfactory, 2.5 points: Student evaluates social problems and/or historical processes
critically. However, he/she fails to develop a nuanced argument.
Unsatisfactory, 0 points: ​Student fails to develop either a critical or nuanced argument.
Criteria 3​. Student Compares and Contrasts Different Social Theories
Explanatory Note to Student: Remember that social scientific notions may have different
meanings in the conceptual systems of different sociologists, historians and other social
scientists and, of course, journalists.
Excellent, 2.5 points: When referring to more than one author, the student adequately
highlights the key points of similarity and contrast between the arguments of the different
Satisfactory, 1.5 points: When referring to more than one author, the student adequately
highlights points of similarity and contrast between the arguments of the different authors.
However, he/she misses some key points.
Unsatisfactory, 0 points: When referring to more than one author, the student fails to
highlight points of similarity and contrast between the arguments of the different authors.
Criteria 4. ​Student Follows Formatting Instructions​ ​and Writes Clearly and Coherently
Formatting Instructions (Worth: 1 point)
Essay length: between 5 to 10 pages (not including the bibliography or reference list).
Format: Double spaced, Times New Roman, 12 pt.
Bibliography format: Use an academic referencing style consistently, I recommend the Chicago
Manual of Style (guidelines for citing using the CMS are found freely online).
Writing Quality Expectation (Worth: 2 points)
I expect the essay to be written in a clear and coherent narrative. Spelling should be checked and
the sentences should be grammatically correct. Writing that is unclear or difficult to follow
affects the message being delivered.
Excellent, 3 points: Student follows instructions provided for the essay’s length/formatting.
The writing present in the essay is clear, coherent and carefully edited.
Satisfactory, 2 points: Student ​partially f​ ollows instructions—some of the instructions
regarding length/format above are missing. The writing present in the essay is clear and
coherent, but the essay is not edited (errors are found throughout).
Unsatisfactory, 0 points: Student fails to follow instructions provided for the essay’s length
and/or format. The writing is unclear, incoherent and full of errors.
Focus, vol. 24, núm. 2, 2006, pp. 5-7.
Two redistributive
proposals universal basic
income and stakeholder
Wright, Erik Olin.
Cita: Wright, Erik Olin (2006). Two redistributive proposals
income and stakeholder grants. Focus, 24 (2) 5-7.
universal basic
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abierto. Acta Académica fue creado para facilitar a investigadores de todo el mundo el compartir su
producción académica. Para crear un perfil gratuitamente o acceder a otros trabajos visite:
Two redistributive proposals—universal basic income
and stakeholder grants
Erik Olin Wright
Erik Olin Wright is Vilas Professor of Sociology at the
University of Wisconsin-Madison and an IRP affiliate.
His comments are adapted from his Introduction and his
chapter, “Basic Income, Stakeholders Grants, and Class
Analysis,” pp. 79–81, in Redesigning Redistribution: Basic Income and Stakeholder Grants as Cornerstones for a
More Egalitarian Capitalism (2006), volume 5 in The
Real Utopias project (
There was a time, not so long ago, when the issue of the
state’s positive role in shaping income distribution was at
the center of political debate. In Europe, Social Democratic parties argued for the desirability of an activist,
affirmative state engaged in policies that would generate
income distribution far more egalitarian than those produced through market forces and a passive state. Even in
the United States, advocating such a role for the state was
part of the spectrum of ordinary political debate. In the
early 1970s in the United States, in the aftermath of the
major expansion of welfare state programs of the previous decade, there was a lively political debate over
whether or not a negative income tax should be adopted
as a centerpiece of policies designed to alleviate poverty
and reduce inequality. In the end the Family Assistance
Plan, as the proposal was known, was narrowly defeated
in the U.S. Congress, and so the existing welfare mechanism of Aid to Families with Dependent Children remained intact. But still, in that debate of 30 years ago the
issue was what sort of state intervention into patterns of
income distribution would best serve broader social and
economic goals, not whether the state should get out of
the business of trying to affect distribution altogether.
The intervening three decades have witnessed a massive
shift in the ideological coordinates of public policy discussions in the United States and elsewhere. By the early
1990s, particularly in the United States, defenders of
traditional income support policies of the affirmative
state were on the defensive and virtually no one in the
public debate argued that shaping the income distribution
was a worthy political goal. Instead of a political ethos in
which the basic well-being of all citizens was seen as part
of a collective responsibility, the vision was one in which
each person took full “personal responsibility” for their
own well-being. The nearly universal call was to “end
welfare as we know it,” replacing it with a much reduced
welfare state that at most would provide a minimal safety
Focus Vol. 24, No. 2, Spring-Summer 2006
net only for those people clearly incapable of taking care
of themselves.
Given this ideological climate, it might seem like an
unpropitious time to propose radical strategies for reducing inequality through new programs of income and
wealth transfers. Government intervention to generate
more egalitarian income distribution is now broadly regarded as antithetical to economic efficiency and thus
ultimately self-defeating; there is no vocal political coalition demanding new efforts at egalitarian distribution;
and talk of raising taxes and dramatically expanding the
activities of the state are seen by most analysts as off the
political agenda. The Real Utopias Project that generated
this volume is based on the belief that it is important to
engage in rigorous analysis of alternative visions of institutional change even when there seems to be little support
for such ideas, since posing clear designs for alternatives
may contribute to creating the conditions in which such
support can be built.
In this spirit, two provocative proposals for radical redesigns of distributive institutions are discussed in the volume. They are the Universal Basic Income, as elaborated
by Philippe van Parijs, and Stakeholder Grants, as elaborated by Bruce Ackerman and Anne Alstott. While both
of these proposals contain a range of complex details, as
ideals they are both based on very simple principles.
Basic Income. All citizens are given a monthly stipend
sufficiently high to provide them with a standard of living
above the poverty line. This monthly income is universal
rather than means-tested—it is given automatically to all
citizens regardless of their individual economic circumstances. And it is unconditional—receiving the basic income does not depend upon performing any labor services or satisfying other conditions. In this way basic
income is like publicly financed universal health insurance: in a universal health care system, medical care is
provided both to citizens who exercise and eat healthy
diets and to those who do not. It is not a condition of
getting medical care that one be “responsible” with respect to one’s health. Unconditional, universal basic income takes the same stance about basic needs: as a matter
of basic rights, no one should live in poverty in an affluent society.
Stakeholder Grants. All citizens, upon reaching the age
of early adulthood—say twenty-one—receive a substantial one-time lump-sum grant sufficiently large so that all
young adults would be significant wealth holders.
Ackerman and Alstott propose that this grant be in the
vicinity of $80,000 and be financed by an annual wealth
tax of roughly 2 percent. In the absence of such grants,
children of wealthy parents are able to get lump-sum
stakes for education, housing, business start-ups, investments, and so on, whereas children of parents who are not
wealthy are not. This situation fundamentally violates
values of equal opportunity. A system of stakeholder
grants, they argue, “expresses a fundamental responsibility: every American has an obligation to contribute to a
fair starting point for all.”
In some ways, basic income and stakeholder grants are not
completely different kinds of proposals. After all, if one
invests a stakeholder grant in a relatively low-risk investment and waits a number of years, then it will eventually
generate a permanent stream of income equivalent to an
above-poverty basic income. Similarly, if one continues to
work for earnings in the labor market while receiving a basic
income and one saves the basic income, after a number of
years it will become the equivalent of a stakeholder grant.
Nevertheless, the two proposals reflect quite distinct visions
of what kind of system of redistribution would be morally
and pragmatically optimal in developed market economies.
Stakeholder grants emphasize individual responsibility and
what is sometimes called “starting gate equality of opportunity.” Individuals get a stake, and if they blow it on conspicuous consumption rather than long-term plans, then this
is their responsibility. Basic income envisions a system of
redistribution that permanently guarantees everyone freedom from poverty and a certain kin …
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