Marxian Theory

and
Dependency Theories of Development

• Importance and Relevance

• Marxian Theory of Capitalist Development
• Assessment of Marxian Theory
• Dependency Theories
 Importance and Relevance
• Marxian Theory of Development is unique and
alternative theory/approach of development
• Revealed the basic laws of motion of Capitalism
• Marx’s theory has influenced critical and
alternative thinking and has become the
inspiration of new vision for a vast a section of
working class and other exploited groups in the
world.
• Marxian ideas have influenced profound
changes in the theory and practice of
development
 Some Basic Works of Marx
• Marx and Engels, Manifesto of the
Communist Party (1848)

• Karl Marx, Capital: A Critique of Political

Economy (1867) Volume I, II III

• Works of Engels, Kautsky & Lenin

supplemented the works of Marx

• Commentary and Analysis by diverse scholars

 Marxism
• Marxism based on Marx’s work and principles
comes up as :

i) Marxism as a historical methodology of

enquiry (dialectic materialism)

ii) Marxism as a Theory of Capitalist

Development

iii) Marxism as an ideology and practice

 Marx’ methodology of dialectics and
historical materialism
• Marx presented his theory based on the method
of dialectics: every thing is fluid and changing.
• Any economic phenomenon is not to be viewed
in isolation but in totality which relates to its
origin and inevitable change and disappearance
• In dialectical analysis, history moves from stage
to stage of contradictions/conflicts and change:
Thesis Feudalism

Anti-Thesis Capitalism

Synthesis Socialism
• For Marx, Dialectics is materialism i.e. ideas
or change is based on objective realities

• For Hegel (the profounder of dialectics)

dialectics is idealistic: Ideas come from brain
(pure thought) not based on materialistic
reality (like property, class, ecology, etc)

• Historical materialism uses natural and

historical (scientific) evidence for critical
analysis
 Theory of Capitalist Development
• The objective of this theory is to reveal the
‘economic laws of motion’ which govern the
origin, rise & decline of capitalist mode of
production.
• The theory can be understood by
 Features of Capitalist Mode of Production
 Labour Theory of Value
 Law of Surplus Value and
 Capitalist Accumulation
 Inherent Contradiction of Capitalism
 Transcendence of Capitalism
 Basic features Capitalist Mode of Production
• Capitalism is a system of generalised
commodity production and exchange/market
which has evolved from the ruins of feudalism
• Commodity is the ‘embryonic cell’ of the
capitalist system representing its inherent laws
and contradictions
• Capitalist mode of production has two core
aspects:
- The forces of production and
- The relations of production
• Forces of Production are the machinery,
science and technology, skills, organisation of
production which propel production
• Relations of production: Social norms about
appropriation and distribution of output,
ownership property, standing of labour, socio-
cultural set-up, etc
• Conflict between the two determines the nature
politics, law, religions (super structure) and
ideas that prevail
• Workers and capitalists are the two
antagonistic classes in capitalism
 Labour theory of value
• Labour is the basis of the value of commodity
• A commodity has two values: Use value and
Exchange value
• Any object can have use value but only a
commodity will have exchange value
• Concrete (direct)labour is the basis of use value
• Abstract labour is the basis of exchange value
(measuring rod)
• Abstract labour is the value of the ‘socially
necessary labour time’ required to produce a
commodity under average conditions.
 Law of surplus value
• Marx discovered the secrete of surplus value
• Labour itself is a commodity exchanged for
meeting subsistence needs of worker & family
• Labour time socially necessary is the value of
worker’s labour power
• Capitalist makes worker to produce more than
his labour power (wage or cost of subsistence)
• Surplus Value (s) is what workers produce over
what they receive (Labour time–Labour Power)
• Surplus Value is thus the source of profit and
expropriation
• Capitalists tries to maximise SV

• Higher the variable capital (labour) higher is the

profit
P= s/(c+v)
• Capitalists accumulates capital through surplus
value and its reinvestment continuously.

• Capital is the product of social division labour

(capitalist and labour)
 Inherent Contradictions of Capitalism
• Capitalism is ridden with many contradictions
• There is alienation of worker who is detached
from own labour and its product, and
enslaved to machines and work.
• Competition leads to ‘falling tendency of rate of
profit’;and constant instability or crisis in system
• Capitalist resort to wage reduction, save-labour,
increase work-time, cheap-imports etc.
• Industrial Reserve Army of unemployed gets
created leading to inequality and conflict
between labour and capital;
• Poverty and misery prevails
 Destiny of Capitalism
• Though Marx never predicted sudden collapse
of capitalism, but his dialectics clearly portends
a revolutionary transcendence of capitalism
• Capitalism leads itself to its demise:
expropriators will be expropriated
• The inner contradictions makes the overthrow
both necessary and possible (through active
consciousness of labour)
• The change is towards socialism where there
will be a classless society without private
property and with state subordinating itself to the
society
 Criticisms of Marx’s Theory
• Marxism created a strong influence and
became rallying point for discontented people.
• Marxism has become the basis of several
parallel struggles:Feminism,Ecology,LDCs etc,
• But Marxism is criticized on the following lines:
- There cannot become an universal law
- The tendency for profits to fall may not happen
always. Increased capital investment,
productivity and technology may increase rate
of profit
- The wage share also may not fall.
- Role of trade unions is not clearly visualised
- The changes in capitalism did not take place in
predicted countries
- Socialism and communism are not theorised
and explicated clearly
- Marx analysis ignored less developed
countries. LDCs were visualised as pre-
capitalist states.
- Ignored influence of population pressure on
poverty.
 Dependency Theories
• Marx did not directly explore the problems of
LDCs as they were treated as pre-capitalist
• Lenin has tried to extend Marxism to global
sphere by analysing the fallouts of Imperialism
• In the post-colonial era many neo-marxians
(Paul A Baran; A. G Frank; Samir Amir) tried
to anlyse the underdevelopment of LDCs based
on Marxian approach
• They proposed a Dependency Theory of
Development attributing underdevelopment of
LDCs to expropriation by the developed world
under colonialism
 Baran’s Theory
• In The Political Economy of Growth (1956)
Baran reflected as to why underdeveloped
countries (UDCs) have not advanced in
comparison to developed countries
• Though UDCs also had faced feudalism and
conditions of its decay; but the western
countries grew more faster
• The west colonised many parts of the world
• In Asia, Africa and LA they engaged in more of
self-seeking & predatory activities with outright
plunder
• There was unilateral transfer of wealth.
• The methods destroyed self-sufficiency and
handicrafts (esp. in rural areas) and hastened
commoditisation in UDCs
• Blocked the ripening of entrepreneurial class
and industry
• The expropriation jolted the UDCs; crippled
their normal progress
• The surplus extracted hastened concentrated
capital accumulation in the west
• LDCs remained backward having neither capital
accumulation nor scientific advancement
• India is the best example: British plundered (at
the rate 10% of its NI per annum)
Conclusion:
• The Dependency theories clearly highlighted
the contradiction of capitalism and imperialism
at the global level

• They brought out the divide between the core

and the periphery through unequal exchange

• Advocated that LDCs chart their own path by

ending dependency for their development.