I was born a year before the collapse of the Berlin Wall, which signified the end of the Cold War and our entry into the end of history. Capitalism was thought to have triumphed over all its competitors. From now on, questions about who should get what and how the economy should be organized would only be framed along capitalist lines. The course of politics would therefore run quite smooth. Liberals and left-wing parties would argue for a little more taxation and welfare, and then conservatives would come back into power and roll back those benefits as much as they could. But the system as a whole would persist unchanged, with only minor tweaking at its edges.
Unsurprisingly, Karl Marx’s reputation took a nosedive after the tyrannical Soviet empire associated with his name collapsed. Major journalists claimed that his analysis was outdated and would quickly be forgotten. Authors like Michel Foucault dismissed Marx’s work as little more than a relic of nineteenth-century economics. And even the remaining nominally communist states, like China and Vietnam, seemed to be gradually moving into the capitalist sphere of influence—albeit, often without the democratizing impulse many hoped would follow. Yet, strangely, the specter of Marx never went away. The rosy political and economic prognostics of commentators in the 1990s papered over the significant cracks in the neoliberal edifice: belying everything from growing levels of economic and political inequality to increasing precarity in major industries. Many of these tensions came to a head during the 2008 recession, since which time Marx’s work has enjoyed a renaissance of interest. Major films about his life and thought— including a cheeky animated biography—keep appearing year after year. On the eve of Marx’s 200th birthday in 2018, the New York Times and even the Economist published laudatory opinion pieces on his thinking. And, recently, Jordan Peterson and Slavoj Zizek held a major debate analyzing the merits of communism and capitalism, which was watched by thousands.
Despite this positive reappraisal, Marx’s reputation remains invariably tainted by its association with some of the most sinister political experiments of the twentieth century, including the totalitarian governments of the former Soviet Union—especially during its Stalinist period, when millions died—Maoist China and North Korea. For many, these failed experiments with communism decisively disprove all Marx’s arguments for all time and render any effort to find value in them “appalling and shameful.” However, it is possible to extract substantial insights from Marx’s work—without endorsing or lending credibility to the totalitarian movements that have invoked his intellectual legacy. There is a great deal of value in his critical analysis of capitalism.
Karl Marx and Communism
Karl Marx and Friedrich Engels are often considered the fathers of communism. In The Communist Manifesto, they call on the workers of the world to unite and overthrow an exploitative capitalist system—a call which retains its fiery power to this day. Marx never denied that revolutionary violence would one day bring an end to the capitalist system. He was under no illusion that capitalists—any more than feudal aristocrats prior to the French Revolution or the English Civil War—would simply cede control to the workers. They would use any means at their behest to hold onto power, meaning that only force could ultimately bring about transformative change.
This is strong stuff. But it is odd how little Marx had to say about the society that would emerge the day after the revolution. As the cliché goes, the father of communism had very little to say about his offspring—and a tremendous amount to say about capitalism. Throughout his work, there are tentative hints as to what a communist society would look like. Probably the most sustained analysis appears in his 1875 pamphlet, the Critique of the Gotha Program. This describes how the revolutionary period would be followed by a brief dictatorship of the workers, after which the state would gradually wither away. Resources would ultimately be distributed according to the principle of “from each according to his ability, to each according to his needs”:
In a higher phase of communist society, after the enslaving subordination of the individual to the division of labor, and therewith also the antithesis between mental and physical labor, has vanished; after labor has become not only a means of life but life’s prime want; after the productive forces have also increased with the all-round development of the individual, and all the springs of co-operative wealth flow more abundantly—only then can the narrow horizon of bourgeois right be crossed in its entirety and society inscribe on its banners: From each according to his ability, to each according to his needs!
It would be possible to apply this principle of distributive justice in communist societies, since they would only emerge once the social and technological conditions for a society of relative affluence had been met. Unfortunately, little detail is provided as to what the realization of this principle would entail in practice. By comparison with later theorists of distributive justice, from Rawls to Nozick, Marx provides scant intellectual guidance on how a society organized along such lines would look. He does not call for each individual to receive the same goods and resources, but strongly implies that any just distribution of goods and resources must correlate with the particular needs of each individual. What this means is ambiguous, though scholarship has provided some clarification. Finally, in Critique of the Gotha Program and pamphlets like The Civil War in France, Marx suggests that communist societies will be more democratic than their liberal capitalist counterparts. Unfortunately, most of his remarks consist of criticisms of liberal democracy, rather than outlining a program for its replacement.
All this amounts to a call for a brief dictatorship of the workers, to destroy coercive state apparatuses, followed by the enactment of a more democratic political form, which would implement an interesting but vague principle of distributive justice. This revolutionary transformation would become possible once society had reached a certain level of social and technological development. The revolution could then use these advances to create an even higher social form. Unfortunately, this is all frustratingly vague even at the level of theory, let alone when it comes to hammering out the practical details of how to create such a society. One can understand why Marx’s constructive positions have been interpreted in so many different ways—providing support for everything from totalitarian to anarchist movements. And, while this is no excuse for the poor critical evaluations of Marx that suggest he argued for a crude equality of outcome along every metric, these ambiguities definitely lend themselves to misinterpretation.
Karl Marx and Capitalism
Karl Marx had oddly little to say about communism—and most of that was interesting but undertheorized or primarily based on arguments by contrast. Most of his work centers on analyzing and critiquing the dynamics of capitalism, which is where his real intellectual contribution lies. The insights found there explain his renewed popularity. In our troubled times, many are increasingly skeptical of capitalism and its affiliated political institutions. Even privileged conservative politicians like Boris Johnson are taking an increasingly critical line towards big business and many intellectuals have been condemning capitalism for eroding traditional communities and values. This makes Marx a natural touchstone for our troubled times.
Marx’s critique of capitalism was developed throughout his life, and drew on a myriad of theoretical traditions, including the dialectical theory of history developed by German philosopher Georg Hegel; the socialist and anarchist tradition of political theory developed primarily in France; and English and French political economy. His thinking was never static: the differences between Marx’s earlier works, like the Contribution to the Critique of Political Economy, and the three volumes of Capital remain a point of considerable debate for experts like Louis Althusser and David Harvey. Marx’s complex argument is impossible to summarize in a brief article, but there are few primary insights we can take from his critique of capitalism.
1: Capitalism is a Historically Contingent Mode of Production
As far back as The Communist Manifesto, Marx and Engels hit upon one of their chief insights: that capitalism was a very new and very radical form of economic organization—or “mode of production,” as they put it. They contended that many “vulgar” economists and their simplistic followers reduced capitalism to any barter exchange in which small-scale buyers and sellers engage in mutually beneficial transactions: an idyllic vision of capitalism, which persists to this day. Marx pointed out that these economists ironically failed to see precisely why capitalism was so productive and why it generated so much affluence relative to earlier modes of production. Societies like Ancient Greece and Rome were primarily based on the slave labor of millions, while a small, affluent class of citizens and patricians reaped most of the benefits. Feudal communities were predicated on openly authoritarian institutions like serfdom, in which laborers worked for many months to provide tribute to aristocratic families. It was only within the past few centuries, starting at first within a few square kilometers around English cities like Manchester, that capitalism emerged as a uniquely powerful mode of production. Since it was far more efficient than slave-based or feudal forms of organization, these were quickly outcompeted and eliminated as capitalism spread. However, as Marx points out, if capitalism has not existed since the beginning of time, that strongly implies that it needn’t last forever. While Marx often points out the historicity of capitalism in order to sing its praises relative to earlier or competing modes of production, he is also insistent that we err in assuming it must always be with us. What came into the world at a specific point in history can also become historically outdated.
2: Problems With the Labor Theory of Value
Marx followed the more sophisticated classical political economists like David Ricardo—and to a lesser extent Adam Smith—in analyzing whether labor was the basis of economic value. His argument about the extent to which labor is a source of economic value is highly complex, and needs to be approached dialectically. Marx claims that vulgar economists focus far too much on micro-economic transactions as the basis of value—acting as though capitalist societies were still barter societies. We can see this, for instance, in the claim that the price of a commodity is primarily determined by the supply of commodities in a given market and consumer demand for those commodities. While these factors play a role, commodities only appear on the market as the result of an immense process involving the labor of hundreds of people. Even something as simple as a loaf of bread involves the labor of farmers sowing and harvesting grains, of transport workers, who move the grain to industrial centers, where it can be turned into flour, and efforts by bakers, who actually make the bread and, finally, by the retailers who sell it. Given the importance of this productive process, Marx often seems to argue that it is the “socially necessary labor time” which regulates how much commodities sell for. Though, as David Harvey points out, this is highly problematic given some of Marx’s later claims and is unconvincing given recent developments in economic theory.
One practical take-away from all this is Marx’s criticism of the still popular claim that the rich get rich because they work harder and smarter. This iteration of the labor theory of value was theorized by figures like John Locke, and is still invoked by contemporary defenders of inequality like Ayn Rand. Marx points out that, if you take the labor theory of value seriously, it quickly becomes abundantly clear that there is a huge discrepancy between the compensation given to the employees who do most of the actual work of producing commodities, and the huge gains enjoyed by employers and capitalists. Marx observes that, if you really believe labor should be correlated with reward, capitalism is a highly immoral mode of production. Many of his claims about exploitation stem from this insight. This poses a serious problem for those who want to argue that the rich get rich because they work harder, since a critic can always point to the vast segments of the population who do most of the work and receive very little.
3: Capitalism and Contradictory Tendencies
Marx’s thought is philosophically quite rich, especially in his treatment of the contradictions latent within capitalism. Here, he is clearly drawing on the work of Georg Hegel, who also argued that history progresses through contradictory dynamics working themselves towards some form of resolution. But Marx differed from Hegel in his materialist insistence that there is no such resolution to the contradictions of capitalism. At best, capitalism can try to paper over its contradictions through partial fixes. But these only exacerbate the problem, which will return in a more acute form and potentially lead to crisis and depression.
Consider the problem of effective demand for commodities. Capitalists have an interest in trying to get consumers to buy their products. But, in order to do this, consumers need money. Yet, under capitalist conditions, many firms pay their employees too little to allow them to actually consume very much. This makes sense for each individual firm, since low wages mean higher profits. But, in the long run, a society of low-wage earners will become characterized by chronic low consumption. Capitalists can try to resolve this contradiction between the desire for consumers and the desire to pay low wages in several ways. One of the most obvious is by making cheap credit available to all. But, of course, this means that people will spend far more than they earn, which can lead to serious problems down the line, since it results in a population that is both poor and up to its eyeballs in debt. Some Marxist scholars argue that this is precisely what happened in the lead-up to the 2008 recession, during which many people were no longer able to borrow against the increasing value of their homes, which precipitated a crisis.
Marx’s account of what a communist society might look like is suggestive. But it is also infuriatingly vague and open to eclectic misinterpretations. His critique of capitalism, however, is exactly the opposite: rich, illuminating, often mistaken, but always insightful and creative. In a contemporary environment in which concerns about the concentration of wealth and power in the hands of the few have returned to the political agenda, Marx seems like a thinker for our time.
I have come to the conclusion that comment sections are rarely for the critical thinkers, and merely for the doctrinaire ideologues. Discourse is discourse. Face the facts as they are, and look for alternative explanations, even opposing ones. Holy shit, the idiots in these comments. The whole lot of them.
I can’t tell how invested the author here is, and whether the 3 points are affirmations or merely summaries. Since the article is about Marx’s relevance, I suppose affirmation is more likely. Then if we take it as the author’s opinion (of Marx and truly held:) that Capitalism is historically contingent, that a certain labor value theory is problematic, and that Capitalism has(?) contradictory tendencies, I have the following criticism: The assertion that Capitalism is a historically contingent means of production is begging the question. Insofar as there are essential features of Capitalism, they are mainly negative with respect to the application of coercive power: private property, voluntary exchange (of goods and labor,) open markets. Therefore, the recipe for Capitalism in nearly any society is: protection of private property (most effectively by rule of law, but this may be accidental rather than essential,) and protection of certain individual rights (to… Read more »
The author is essentially correct in blowing apart the conservative canard that Marx’s theory about capitalism should be judged on the basis of his interpreters, Lenin and Trotsky, et alia’s attempt to create the communism Marx only vaguely envisioned himself, under circumstances already extremely difficult (semi-feudal Russia) and made even more difficult by the betrayals of the European social democrats, the invasion by 17 imperialist armies, and the economic sanctions placed upon the fledgling Sovie republic. I have a problem, however, with the author’s implication that Marx’s economic theory amounted to an underconsumption theory. He ignores Marx’s theory that the rate, and then finally the mass, of profit falls due to the rising organic composition of capital. This is in Volume III of Das Kapital.
Matt McManus would do well to read Paresh Chattopadhyay’s “The Marxian Concept of Capital and the Soviet Experience” (downloadable at https://libcom.org/library/paresh-chattopadhyay-marxian-concept-capital-soviet-experience) . It would demonstrate pretty conclusively just how wide of the mark many of his observations about Marx and Marxism (not to be conflated with Leninism) are. Chattopadhyay’s convincingly demonstrates that in terms of original Marxian categories, the Soviet Union was fundamentally capitalist in its economic orientation Indeed, there were Marxist organisations at the time of the Bolshevik Revolution – notably the Socialist Party of Great Britain (formed in 1904) – that correctly predicted that the so called USSR was set to consolidate capitalism in the guise of a brutal anti working class state capitalist regime . The SPGB today contains an enormous database of articles that future historians of the various state capitalist regimes from the Soviet Union to the present day (North Korea, China etc ) will… Read more »
Most of people commenting does not know anything about Marx thought and all their knowledge is from capitalist propaganda from various sources. The truth that socialism as a transient system never existed and that the conditions for communism still do not exist. They forgot that Lenin never called system in Soviet union socialism. That system was called the state capitalism by him. It was called socialism by Stalin. Socialism means democratic control of all society including economy which means there is no socialism without democracy in every aspect of social life. Base on that it is easy conclude if some country is socialist or not and it is obvious that Cuba or Venezuela or North Korea are far from socialist. Regarding communism in Marx thought is total disregard of his thought ( communism means disappearing of the state , free association of free producers where the free development of each… Read more »
You don’t kill millions with the Communism you want, you kill millions with the Communism you have.
Great food for thought, Matt. Yes, Marx is tainted by those who applied some of their ideas in their own ways. He was probably better on analysis (the processes of capitalism) than on the constructive side, as you say. But hard to say he’s irrelevant, even in prediction, as some of his theories are still playing out. Income inequality increases worldwide, one step toward the revolution he foresaw. Even capitalist encroachment in China and elsewhere fit the pattern, as Marx also said that capitalism’s collapse was unlikely so long as there was a workforce in other countries to exploit; worldwide capitalism was a precondition for revolution, at least in some of his writings (don’t ask me to go back and find them though 😊 ). Then again, that “brief dictatorship” – there’s the rub, as I believe Bakunin so wittily pointed out when predicting that the dictators of the “proletarian… Read more »
As the Polish ex Marxist dissident Leszek Kolakowski has pointed out, Marxism was effective only to the extent that it was an ideological construct which motivated and maintained some of the greatest humanitarian disasters of the 20th century, beyond that it should be studied only in the sense that we study historical curios to gain some idea of a particular time period – like we perhaps might study the mass sacrifice of Aztec captives to make the sun rise each morning. His work is and always has been a secular religion masquerading as a science, and if evaluated in the terms it applies to itself on the basis of it’s predictive power it is almost useless beyond an ideological edifice which somehow managed to grip a large portion of the world. Marx’s predictions as to how society would develop after his work have almost all been proven worthless – he… Read more »
This article is inexcusable. Karl Marx was a worthless, contemptible human being who was too shiftless to get a job, allowed his family to live in poverty, impregnated his maidservant and tossed her and his bastard child into the street to fend for themselves.. despite his pretensions he was an incompetent with money, knew nothing of the real situation of working men of his time, he never in his life entered a factory! You can read his Magnum Opus, “Capital” and NOWHERE, in that fatuous tome, is there any discussion of money creation, of fractional-reserve banking, of the nature of inflation. Most of his so called theory was his own wishful thinking based on absolutely nothing. In short, he was an abusive, incompetent fool who hadn’t a clue what he was talking about. Meanwhile everywhere Marxism has been attempted, the results are always the same: Massive destruction of the infrastructure,… Read more »
“Marx observes that, if you really believe labor should be correlated with reward, capitalism is a highly immoral mode of production. ”
But what if you happen to believe that ~productive~ labor should be correlated with reward? Say, poorly designed wares require more frequent replacement compared to better designed ones, thus in the end, they consume more labor, increasing their own value viewed in aggregate. Should that be rewarded?
What an economy should actually reward are clever applications of labor to niches that require them and not just the volume of work done. That lesson staying unlearned is probably why most (ex)communist places are mired in corruption and all have had trouble running economies of sufficient complexity that markets such as consumer electronics were underdeveloped and copied western know-how for the most part.
capitalism is nothing more and nothing less than an inevitable expression of human nature. it is neither intrinsically good nor intrinsically bad, it is simply us, and what we do in the reasonable absence of top-down dictation of what we should and shouldn’t do.
and if history teaches us anything, it’s that they who stand in the way of human nature shall be trampled by humans.
feudalism. lasted a thousand years and change.
wasn’t any good for anyone but the aristocracy, but it lasted a real long time, and that’s all that matters.
The appearance that capitalism is less bloody and violent is because the capitalist have very successfully hiddedn these things from masses. They keep workers engaged in a meaningless RAT RACE so that they dont recognise that they are being exploited and fooled. It has just whitewashed its sins. Beneath that its as ugly as dictatorship.
Capitalism is most productive system is a half truth. Its true only within short sighted onesided history. Capitalist think history started with them is wrong. There have been much more successful systems.
Good summary of a few of Marx’s key insights (I especially liked the commonsense takeaway from the Labor Theory of Value). Just a couple tweaks I would suggest: Re this: “Marx never denied that revolutionary violence would one day bring an end to the capitalist system…..only force could ultimately bring about transformative change”. Yes, he foresaw force as necessary “on the continent” (and, as far as I can tell, he was right). But he was not committed to the idea that “force” is always and everywhere necessary, as these words indicate: “…we have not asserted that the ways to achieve that goal are everywhere the same. You know that the institutions, mores, and traditions of various countries must be taken into consideration, and we do not deny that there are countries — such as America, England, and if I were more familiar with your institutions, I would perhaps also add… Read more »
If the workers add as much value as you claim they do, why not organize collectively and leverage their power to restructure the organization (or simply ask for significantly higher wages) rather than begin a violent revolution that would likely kill thousands if not millions nationally? I acknowledge this level of organization would be difficult, but that doesn’t excuse defaulting to a violent revolution when a peaceful one is on the table. This default to violence seems inexcusable considering Marxism holds itself as the more moral system. Also, your characterization of Peterson’s characterization of Marxism seems off. In the video you linked, he doesn’t say Marx argued for equality along every metric. He asked, why stop at economic equality. My understanding of his work is that Peterson rejects the idea of looking at outcomes as a measure of inequality in the first place. Another thing Peterson (or at least my… Read more »
«Marx seems like a thinker for our time.» – I hoped that this plague was defeated. I was wrong.
1. Capitalism is indeed a “historically contingent mode of production” — it’s also, by orders of magnitude, the most productive mode of production the human race has ever seen, raising billions from starvation, disease, and misery. Which means that it’s contingency should be protected against those anxious to dismantle it — e.g., fascists, communists, and socialists. 2. The labor theory of value is not just “unconvincing”, it’s wrong, and in being so it undermines the whole theory of exploitation that Marx takes three heavy tomes to promote. And nobody uses the labor theory of value to defend the rich or their entitlement to their possessions. 3. An elementary book on economics would explain the error contained in the imagined “contradictory tendencies” of capitalism, and a child’s knowledge of history would see that, far from keeping people immiserated and indebted, capitalism has vastly enlarged consumption, an expansion over the last one… Read more »