*WEEKLY RANT – FOOD FOR THOUGHT* WHAT KARL MARX REALLY MEANT AND HOW HE PREDICTED THINGS AS THEY ARE TODAY Many people think of Karl Marx as that guy who invented communism. Actually, that was not at all what he was doing when he wrote his treatise on economic theory entitled Capital: Critique of Political Economy in 1867, more commonly and erroneously known as Das Kapital. While he was indeed arguing against what he considered the inherently evil forces of capitalism when pitted against the working class people, he was not extolling Communism, in fact it didn’t even exist at the time. The purpose of Capital: Critique of Political Economy (1867) was a scientific foundation for the politics of the modern labor movement and unionization. Marx’s ideas and his principles were taken out of context by the Bolsheviks and others of a like mind and bastardized as representing Communism, when they could not have done so, since Communism was nonexistent when Marx wrote his thesis. Marx was actually complaining about the poor working conditions and treatment of their employees by the factory owners and in mining operations during the Victorian era, much the same as Charles Dickens was in his novels during the same time period. Such things as child labor laws, a living wage, regulated maximum daily and weekly hours of work, overtime pay, sick leave and vacation benefits, and other labor practices we now hold as commonplace were completely unheard of at that time. Those were just some of the things that Karl Marx was advocating. Theres a lot of talk with reference to Karl Marx in the air these days, from Rush Limbaugh accusing Pope Francis of promoting pure Marxism to a Washington Times writer claiming that New York City’s new Mayor, Bill de Blasio, is an unrepentant Marxist. But few people actually understand Karl Marxs scathing critique of capitalism. Most people are vaguely aware of the radical economists prediction that capitalism would certainly be replaced by a form of socialism, but they often misunderstand why he believed this to be true. And while Marx was wrong about some things, as most prognosticators are from time to time, his writings (many of which pre-date the American Civil War) accurately predicted several aspects of contemporary capitalism. Here are five facts of life as we know it in 2014 that Karl Marxs analysis of capitalism correctly predicted more than a century ago. 1. The Great Recession (Capitalisms Chaotic Nature): The inherently chaotic, crisis-prone nature of capitalism was a key part of Marxs writings. He argued that the relentless drive for profits would lead companies to mechanize their workplaces, producing more and more goods while squeezing workers wages until they could no longer afford to purchase the products they themselves had created with their work. Sure enough, modern historical events from the Great Depression to the dot-com bubble can be traced back to what Marx termed fictitious capital, financial instruments like credit-default swaps. We produce and produce until there is simply no one left to purchase our goods and no new markets. The cycle is still playing out before your very eyes. Broadly speaking, its what caused the housing market crash in 2008. Decades of deepening inequality reduced incomes, which led more and more Americans to take on increased debt they would never be able to afford to repay. When there were no subprime borrowers left to scheme and ream, the whole façade fell apart, just as Marx said it would. 2. The iPhone (Imaginary Appetites): Marx warned that capitalisms tendency to concentrate high value on essentially arbitrary products would lead over time to what he called a contriving and ever-calculating subservience to inhuman, sophisticated, unnatural and imaginary appetites. Its a harsh but accurate way of describing contemporary America, where we enjoy incredible luxury and yet are driven by a seemingly constant need for more and more stuff to buy, the bigger and more expensive, the better. Consider the iPhone you now own. Is it really that much better than the iPhone you had last year, or the other iPhone a year before that? Is it a real need, or an imaginary, invented one? Mega-corporations are creating entire advertising campaigns around the idea that we should destroy or replace perfectly good products for no reason other than Joe Blow might have it before you do. If Marx could see this kind of thing, hed nod in recognition. 3. The International Monetary Fund, World Bank, etc. (The Globalization of Capitalism): Marxs ideas about overproduction led him to predict what is now called globalization, the spread of capitalism across the planet in search of new markets. The need of a constantly expanding market for its products chases the bourgeoisie over the entire surface of the globe, he wrote. It must nestle everywhere, settle everywhere, establish connections everywhere. While this may seem like an obvious point now, Marx wrote those words in 1848, when globalization and omnipresent corporations like Starbucks, McDonald’s or Coca-Cola were over a century away. And he wasnt just right about what ended up happening in the late 20th century, he was right about why it happened. The relentless search for new markets, as well as the incessant demand for more natural resources, are beasts that demand constant feeding. The demand for cheap labor is what caused downsizing and outsourcing and why when you call customer service, you will more than likely be connected to someone in India, more often than not. 4. Walmart (Monopoly): The classical theory of economics assumed that competition was natural and therefore self-sustaining. Marx, however, argued that market power would actually be centralized in large monopoly firms as businesses increasingly preyed upon each other. This might have struck his 19th-century readers as odd. It was only later, in the 20th century, when the trend Marx foresaw began to accelerate. Today, mom-and-pop shops have been replaced by monolithic big-box stores like Walmart, small community banks have been replaced by global banks like J.P. Morgan Chase and small family farmers have been replaced by the likes of Archer Daniels Midland. The tech world, too, is already becoming centralized, with the big major corporations like Microsoft and Google sucking up start-ups as fast as they can. Politicians give lip service to what minimal small-business lobby remains and reluctantly prosecute only the most flagrant of antitrust abuses, but for the most part, we know big business is here to stay. 5. Low Wages, Big Profits (The Reserve Army of Industrial Labor): Marx believed that wages would be held down by a reserve army of labor, which he explained simply using classical economic techniques. Capitalists wish to pay as little as possible for labor, and this is easiest to do when there are too many workers floating around. Thus, after a recession, using a Marxist analysis, we would predict that high unemployment would keep wages stagnant as profits soared, because workers are too scared of unemployment to quit their terrible, exploitative jobs. And what do you know? No less an authority than the Wall Street Journal recently warned, Lately, the U.S. recovery has been displaying some Marxian traits. Corporate profits are on a tear, and rising productivity has allowed companies to grow without doing much to reduce the vast ranks of the unemployed. Thats because workers are terrified to leave their jobs and therefore lack bargaining power. Its no surprise that the best time for equitable growth is during times of full employment, when unemployment is low and workers can threaten to take another job. Marx was wrong about many things. Most of his writing focuses on a critique of capitalism rather than a proposal of what to replace it with, which left it open to misinterpretation by madmen like Lenin, Stalin and Mao in the 20th century. But his work still shapes our world in a positive way as well. When he argued for a progressive income tax, no country had one. Now, there is scarcely a country without a progressive income tax, and its one small way that the U.S. tries to fight income inequality. Marxs moral critique of capitalism and his keen insights into its inner workings and historical context are still worth paying attention to. As Robert L. Heilbroner writes, We turn to Marx, therefore, not because he is infallible, but because he is inescapable. Today, in a world of both unheard-of wealth and abject poverty, where the richest 85 people have more wealth than the poorest 3 billion, the famous cry, Workers of the world unite; you have nothing to lose but your chains, has yet to lose its potency.
Posted on: Wed, 05 Feb 2014 01:18:47 +0000
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