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on December 22, 2005
The earliest political economists, including Smith, Ricardo and Marx, viewed economics quite differently than popular opinion sees it today. For one thing, they believed social & political institutions had profound impacts on markets. Their debate was over HOW, not if, social class, political institutions, religious and cultural institutions would effect economic growth and national development.

Today, neoclassical economics refers to a general approach (a "metatheory") to economics based on supply and demand. It rests on the assumption that individuals operate rationally: i.e. each person seeks to maximize his/her individual utility or profit by making choices based on only available information given by prices. More importantly, this is the only factor that matters. Altruism does not exist, making decisions based on social customs or religious beliefs do not fit (these are not economically `rationale'), and being a farmer versus a bank CEO gives no advantage to a person. Ben Fine terms this "ahistorical and asocial" economics. That is to say, the same economic principles work in every society, in every culture, and at every stage in a society's development with absolutely no need to take into account historical, political or social factors.

Marx starts off differently, with economics firmly rooted on a broader study of how society works, including social classes, historical trends and cultural values. For example, Marx used a value-led theory of production where the form of production determined the value of output, in his case, the labour put into making an item. The labour theory of value equates the "value" of an exchangeable good or service {i.e., a commodity} with the total amount of labour required to produce all the components that went in to its production.

This is opposed to the neoclassical theory that everything is reducible to maximising personal pleasure (called utility). Demand is `derived' only (and this is the critical point) from an Individual's single-minded desire to wring out the most utility from a given budget. Supply is determined solely by the production costs. The price comes from the point where the supply and demand lines intersect; i.e. price is based only on the value given to a good's exchange in the market. The idea of value coming from any other cause simply has no place in neoclassical economic models.

Interestingly, while neoclassic models dominate MBA programs, they are promptly thrown out the window in marketing classes, where brand loyalty, brand positioning and all sorts of irrational factors have been proven to be of fundamental importance to demand.

Much is made of Marx's atheistic slant, but this ignores the real issue. Marx thought religion and religious institutions have a great deal of impact on a person's demand for a given item, as did one's social ties and the political institutions of a nation. It is neoclassical, free-market capitalism that completely dismisses the relevance of God or any other factor outside influencing a person's demand for a good, outside of the all-consuming drive to maximise individual pleasure.

So it is ironic to see many self-labelled `Christian fundamentalists' so eager to embrace a neoclassical economic theory that is based on the assumption that God does not matter to decision-making in the market! One recalls the discomfort of many people with the "would Jesus drive an SUV?" campaign. It assessed the essentially amoral (as in lacking a reference to morals, different from immoral) nature of free-market capitalism against Christian beliefs of altruism, compassion, so beautifully by Christ: "it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God."

If you wish a short, but intellectually stimulating attempt to present a rigorous and careful alternative view to how value and other elements of economic theory can be defined, this book fills the need very, very well. Highly recommended.
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on November 21, 2011
Over the last summer, I decided that I finally needed to get around to reading Das Kapital. I've had an interest in the Marxist paradigm for several years now, and I'm seeking to pursue further education in political thought.

However, one look at Kapital made me realize how daunting of a task this is. The first volume alone is almost 1,000 pages long, and my first attempt at reading the first two chapters cold turkey didn't go so well. So, I figured that I needed to better prepare myself before trying again. I've spend the last year trying to familiarize myself with modern Marxist social analysis and political critique, and hopefully I can take on the big K itself soon.

As part of my last stage of preparation before reading Kapital alongside A Companion to Marx's Capital, I read this handy little introduction. This book is a condensation of each of Kapital's core concepts, with each chapter focusing on a different area of thought covered in the three volumes of Kapital. It is slim, broad, clear, and fulfills its purpose very well. Reading this book corrected many of my own misconceptions about Marx's socio-economic ideas, and it also demonstrated the holistic aspect of Marx's thought, something which I had never fully grasped before.

Each chapter picks 2-3 concepts found in Kapital, explains them, clarifies their implications, and demonstrates their connections to other Marxian concepts. Each chapter summarizes various critiques of these concepts (particularly neo-classical and neo-Ricardian critiques), different interpretations of Marx's ideas, the authors' own responses to these critiques and interpretations, and suggestions for secondary reading. The topics covered here include Marxian value theory, Marx's economic historiography, the law of the tendency of the rate of profit to fall, exploitation, compositions of capital, Marxian monetary theory, and others.

Although I think that this guide is about as good as can be, it won't allow you to instantly understand all the content of Kapital. It doesn't just summarize vol. 1 of Kapital, it summarizes the other two volumes. Actually, it also incorporates many other Marx & Engels texts ranging from the Gundrisse, the Critique of the Gotha Program, and Theories of Surplus Value. For example: Despite the book's thoroughness in treating the differences between the technical and organic compositions of capital, I still don't entirely grasp these concepts, and I suspect that I won't unless I get around to reading vol. 2 of Kapital. This, to be fair, is an inherent problem with any summary introduction, and is not the fault of the authors.

Ultimately, if you read this book, you will gain many important insights about political economy, even if you don't intend to read Capital itself. All of the childish criticisms of Marxian economics you probably heard in your economics and political science classes back in college are thoroughly debunked by Fine & Saad-Filho. The later sections will help you understand the nature of capitalist crisis, which is especially relevant for obvious reasons. Perhaps most importantly, the authors provide an excellent defense of the Labor Theory of Value, and also show that the LTV actually has greater explanatory power than marginal theories of value and the neo-Ricardian LTV.

If you want to use this book as an introduction to Marxism itself, it would best be paried with Anti-Capitalism: A Marxist Introduction, which contains contributions from Saad-Filho and Fine. Anti-Capitalism shows how Marxian analysis can be used to elucidate capitalist society in the modern world, while this book is more purely theoretical in nature. Together, they would make excellent compliments for anyone who wants to foster a serious understanding of Marxism.
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on June 19, 2014
I was very excited when I first opened this book. I thought I had finally found a simple, concise introduction to Das Kapital, which I have hitherto not discovered. I found this work to be extremely ponderous and difficult. I don't understand how this work is described as being concise and simple. The chapters were short, I concede, but difficult. The editorial reviews made it sound appealing: "recommended for beginners," and "accessible to non-specialist readers," as well as a good introduction for undergrads.

I had an extremely difficult time reading this work, and can't really tell you what I retained. The work even used algebraic equations, which Marx avoided. Stick with reading Marx's Capital for yourself. I have yet to find a simple, concise introduction to Das Kapital. I am still looking for it. This is not it.
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