Karl Marx Said Unbridled Capitalism Will Destroy itself, and He was Right

Karl Marx Said Unbridled Capitalism Will Destroy itself, and He was Right

The rich will do anything for the poor but get off their backs. – Karl Marx 

Bloomberg BusinessWeek has been extolling the works of Karl Marx over the past few weeks. One article, “Marx to Market” by the Bloomberg News Services economics editor Peter Coy, brought me to a reflection on my own studies in Karl Marx in the early 1970s at the University of Pittsburgh. Although my focus was on alienation themes in his treatises, one could not help but be captured by the breadth and depth of his writing. In 1999 the BBC did an extensive polling to determine who were considered the greatest men and women of the millennium. Karl Marx topped the list followed by Einstein, Newton, and Darwin.

My interest even led me to London where I ordered an ale from the same corner of The Museum Tavern in Bloomsbury where Marx revived himself after his efforts at the British Museum across the street. I also came to identify with Engels plea to Marx, “You just read, read, read. It’s time to stop reading and start writing.”

Even the Vatican signed in on Marx in 2009 when L’Osservatore Romano praised his diagnosis of income inequality—a phenomenon that is becoming increasing rampant in American society.

Marx argued that overproduction was in fact endemic to capitalism because the proletariat isn’t paid enough to buy the stuff that the capitalists produce. Again, that theory has lately been hard to dispute. The only way blue-collar Americans managed to maintain consumption in the last decade was by overborrowing, according to Coy.

That statement reminded me an encounter between Henry Ford and Walter Reuther decades ago. Ford, showing Reuther a new factory that was to open and noting all of the automated assembly machines, baited Reuther with “You won’t get many union members from those machines.” Reuther’s reply was prophetic, “And you won’t sell them many Fords.”

Because, as Marx noted, the wild excesses of capitalists tend to sow the seeds of their own complete destruction, deregulation is actually disastrous for capitalism in the long run.  Former Oxford professor David Harvey believes that “The Republican Party is en route to destroy capitalism and they may do a better job of it than the working class could.”

Marx predicted that companies would need fewer workers as they improved productivity, creating an “industrial reserve army” of the unemployed whose existence would keep downward pressure on wages for the employed.

Although Adam Smith is often cited as the first economist to describe capitalism, Smith fell short in his projections missing the growth of child labor sweatshops, the deliberate displacement of workers to keep pressure on workers to work for wages that were not commensurate with their productivity. Neither did he foresee the alienation of labor from its work product as assembly lines developed. Marx did.

Critics often point to the USSR as failures of Marxism but they did not exemplify the teachings of Marx either in concept or in the development of the proletariat. Both of them jumped from feudalism to socialism skipping the important step that Marx required: Going through a stage of capitalism first. That’s why the socialism of the Scandinavian countries is so effective.

Marx believed that societies follow laws of motion simple and all-encompassing enough to make long-range prediction fruitful. Second, he believed that these laws are exclusively economic in character: what shapes society, the only thing that shapes society, is the “material forces of production. Third, he believed that these laws must invariably express themselves, until the end of history, as a bitter struggle of class against class. Fourth, he believed that at the end of history, classes and the state (whose sole purpose is to represent the interests of the ruling class) must dissolve to yield a heaven on earth.

Evidence of stage three is all about us.

Marx was much more original in envisioning the productive power of capitalism. He saw that capitalism would spur innovation to a hitherto-unimagined degree. He was right that giant corporations would come to dominate the world’s industries. He rightly underlined the importance of economic cycles (although his accounts of their causes and consequences were wrong).

The central paradox that Marx emphasized, “namely, that its own colossal productivity would bring capitalism to its knees, by making socialism followed by communism both materially possible and logically necessary” has turned out to be false (so far). As Coy points out, Marx could lay claim to having sensed more clearly than others how far capitalism would change the material conditions of the world. And this in turn reflects something else that demands at least a grudging respect: the amazing reach and ambition of his thinking.

When one looks at the huge increase in families living in poverty, at the fact that the laboring class has not realized any increase in their true income in over 40 years and the fact that a small percentage of Fat Cats have nearly half of the total income in this country one can only wonder what the defenders of our form of capitalism can say to defend it.

They will probably sound like the slave holders of many years ago who proclaimed that they provided a wonderful life for their slaves who were much better off than if they were on their own. Not surprisingly that sentiment was repeated in a pledge that was signed by many of the Republican candidates this year when they agreed that the family structure of the slave family was preferable to the family structure of black families today. A blatantly false representation because families were torn apart as they were sold off. But don’t let facts get in the way.

That wonderful, C-minus student (in Animal Science at Texas A & M), Governor Perry, knows better than to trust science with its facts. (His statement of Galileo Galilei: namely that the scientists of his time didn’t believe him was 180 degrees off the mark. All the reputable scientists in Rome and elsewhere accepted a heliocentric universe. It was the church–e.g. the government–that wouldn’t accept his theory just as there are people today who make a political determination that man has no part in global warming.

One more example of capitalism working very hard at its own destruction.

6 thoughts on “Karl Marx Said Unbridled Capitalism Will Destroy itself, and He was Right

  1. Wow, Matt, do you really want me to expand on many more issues than I raised in my review of the Businessweek article on Marx: Smugness, arrogance, genetically modified crops, public education, technology’s sins and the miserable (according to you) state of society. That’s more than I’m willing to do in any fashion that may satisfy you.

    But let’s try. It seems that your major concern (apart from smugness and arrogance) was my comment that a world fully devoted to organic farming could not feed itself. This is a discussion that I have had with many friends and advocates of organic farming (whatever that really means today as large organic farms co-opted the federal definitions of organic food).

    If “smugness and arrogance” mean a preference for research findings over conventional wisdom then I plead guilty. I’ve looked at a lot of the research findings and I’ve read much from the organic food advocacy journals. So far, the evidence supports my statement that world-wide organic farming could not sustain the world’s increasing population. There is no quarrel with the premise that organic farming is far more beneficial to the environment but, it should be noted, that in many areas of Africa there is no access to adequate supplies of organic fertilizer—or fertilizer of any sort, for that matter—and there is, thus, long term degradation of the soil.

    Here are some findings:
    • One study found a 20% smaller yield from organic farms using 50% less fertilizer and 97% less pesticide. Science: Soil Fertility and Divesity in Organic Farming
    • One study from the Danish Environmental Protection Agency found that, area-for-area, organic farms of potatoes, sugar beet and seed grass produce as little as half the output of conventional farming
    • The Economist recently had a lengthy report. It focused on the Broadbalk research farm (for 166 years) and noted the wheat yield for organically farmed, African type soil was one tonne/hectare while the organically farmed land similar to India and Argentina produced four tonnes/hectare and the land that had the best seeds, fertilizers, fungicides, and husbandry produced ten tonnes/hectare. After a number of other reported studies The Economist concluded that “Traditional and organic farming could feed Europeans and Americans well. It cannot feed the world.”
    • In 2008 the USDA undertook the most comprehensive research in this dispute. It compared crop yields among farms in the same area. Organic yields were better in raspberries, hay, sweet potatoes, and squash but much worse in basic row crops and 40 percent lower for winter wheat, 29 percent lower for corn, 34 percent lower for soy, 53 percent lower for spring wheat, 41 percent lower for rice, 58 percent lower for sorghum, and 64 percent lower for millet. Canola was the only row-crop with greater yields with organic farming. The chief researcher noted, “On a land-area basis, the additional area required to make organic yields comparable to non-organic farming would be 97% the physical size of Spain or 71% the size of Texas.”

    To further upset you, I will note that the research shows no nutritional advantage to organic food and plant toxins are a greater risk than pesticide residue. That’s the research. Opinions of organic advocates may disagree but show me the numbers.

    A brief comment on GMF: I do have some personal awareness of the use of recombinant DNA at the University of California, San Diego where my late wife worked in that program. RDNA was nothing more than a speeded up version of what Malthus and other plant geneticists had been doing for centuries. You would not have organic corn except for the benefits of GMF. I do part ways with the gene splicing (fish genes into a plant) but that is an emotional response on my part and no research supports my rejection.

    I’m troubled that anti-GMF advocates seem unwilling to accept Golden Rice, a vitamin A enriched rice that prevents tens of thousands of cases of blindness which are related to vitamin A deficiency. Even though dietary fat, which is requisite for the full absorption of vitamin A, is lacking in the diets of Southeast Asia, 25 grams of rice/day will provide sufficient vitamin A to protect the child. And, Monsanto—for all of its avarice—provides the seed free to any farmer whose annual income is below $10,000. The naysayers on this issue sound like the Republicans who are willing to starve 90 needy families to make sure that 10 “unworthy” families are not fed.

    With regard public education, I do have 40 years of experience in that field, beginning in 1955, which provides a broad overview of significant changes—both for the better and for the worse. The major culprit in student performance is economic disparity. The reading scores of the children of the well-to-do (as a group, individuals may vary) improve over the summertime. The reverse is true for the children from poverty. Today’s curriculum—I still read in the field—focuses on higher level thinking skills, problem solving, estimation, and independent research. If you compare the test scores of students from our schools with less than 10% poverty levels with the scores of international tests, we are at or near the top.

    And don’t decry technology. Now when I go to the Seattle opera an electronic loop in the building automatically sends the full range of sounds electronically to my hearing aid. And our world has certainly benefitted from the eradication or reduction of a variety of diseases. You do get you inoculations don’t you? And, no, I won’t get into that debate except to say that I prefer to let science determine my decisions.

  2. Additionally, your last statement is beyond smug to the point that it sickens me. What has the 21st century brought outside of more exploitation and death from wars, more concentration of wealth than should ever be tolerated, more pollution from major industrial companies than ever before, more sickness and disease from your beloved GMO-crops and processed foods made from corn byproducts and trans-fats, an increasingly depreciating standard of living, and countless more offensive to the natural system than can be contained in a simple response? What has technology truly advanced other than complacency in the masses? The greatest mind control devices are all of these rectangular propaganda machines that people like you seem to eat up without using logic to dissect the information presented to you. And don’t even get me started on 21st century education- or should I say soviet style brainwashing. Reason and logic are no longer taught in school, but rather useless memorization and infinite tests geared towards values education. Please. Spare me your love for the 21st century. It is your own naivety of the importance of the past that needs education.

    blah, I am ranting. I permitted my emotions to get the best of me. It is my biggest weakness. Smugness and arrogance are my bitter enemy however, and I will fight it at every moment it presents itself

  3. Great response…until the last statement. 1/4 acre is needed to feed 4 humans per year, and how many people have overcrowded the suburbs with their multi thousand square foot energy wasting homes? way too many. You seem to be educated, but then you make such an egregiously false statement about organic farming that is tends to discredit the rest of your claims.

    Why don’t you look into actual urban farming techniques and see how cyclical systems, self sustaining organic personal production units output great amounts of calories for very little caloric expenditure. Our current farming system relies heavily on a finite resource and consumes vast amounts of water to the effect of 10 calories of energy to produce 1 calorie of food.

    You would do well to do more research on every topic before you tout your propaganda as fact

  4. Karl Marx argued that revolution was impossible in a society that lived on the family farm. He believed that urbanization and industrialization were both requirements for a Communist revolution. In the 1920s, half of all Americans lived on a farm. Family farms that remained free of debt, enjoyed full-employment during the 1930s. Those that used debt to expand, were destroyed.

    The Federal Reserve Bank is a Marxist and Fascist institution. It creates the debt necessary to enslave a Republic, and the politics that are required to increase our indebtedness. Whether this country spends money on social programs (Socialism), or military expansion (Fascism), we end up borrowing money from the Federal Reserve. As an added bonus, the privately owned corporation also charges us interest to use its Federal Reserve Notes as our currency!

    1. First, to suggest that the Federal Reserve is privately owned is to ignore the complexity of the Federal Reserve. It’s a three-tiered entity. At the bottom, with no power to set fiscal policy, are all nationally chartered and many state chartered banks. The second tier is composed of the regional Federal Reserve Banks, which are privately owned but they are controlled by the Board of Governors — a federal agency whose members are appointed by the President and confirmed by the Senate. The Board sets monetary policy and the Federal Reserve Banks execute it. In addition, the Fed does not use any taxpayer money to fund its operations. While the Fed does collect interest on government bonds, the Treasury would have had to make such payment even if the Fed did not hold any bonds. Moreover, the Fed rebates a significant share of its net income to the Treasury each year, revenues the government would not have at all if the Fed owned no government bonds. Terms such as socialism and fascism serve no productive purpose in analyzing the Federal Reserve which is charged with determining open market policies: Setting the required reserve ratio for member banks; Setting the Discount Rate; Deciding how much new currency to print; and monitor the health of the U.S. economy.

      It’s interesting to note that there seems to be this surge in animosity toward the Federal Reserve while in Europe the Central Bank is revered and recognized as essential to a function market and to protecting sovereign stability. But then conspiracy theories seem to abound in this country than elsewhere.

      The reference to family farms free of debt during the run-up to the great depression leaves me short of breath. Farmers were routinely in debt. They borrowed to buy crop seed and repaid the loan when harvest was over. And they borrowed to get tractors, harvesters, etc as we moved into an age of technology in agriculture. My own grandparents gave testimony to the disasters that befell them and their farming neighbors in Scandia, Alberta when a hail storm destroyed their grain fields and eliminated any possibility of repaying the debt and forced them off the land.

      The 1920s afforded unprecedented economic opportunities for many Americans, but not for the nation’s farmers. They had enjoyed unusual prosperity during World War I, owing to the increased demand for American agricultural products in war-torn Europe, but in the 1920s they were plagued by low prices for agricultural products, high costs for producing these goods, and heavy debt. Increases in the American farmers’ productivity created surpluses that drove commodity prices down and lowered their income. While prices for agricultural products remained low, costs for land, machinery, equipment, labor, transportation, and taxes were rising, creating greater disparity between a farmer’s costs and income. Any web search will confirm that the farmers were the canary in the coal mine with regard to the collapse of our economy in 1929.

      My guess is that you are visualizing the subsistence farm family which had a corner garden, a milk cow, pigs and chickens. It was no accident that a popular song of the 1920s was “How are you going to keep them down on the farm after they’ve seen Paree.”

      As for your comments regarding Marx’s suggestion that there would be no revolution if everyone lived on a farm. If my aunt had balls she’d be my uncle—a rather unlikely “if”. Not everyone is going to live on the farm when the city beckons with its Siren call of good wages and fast living. It is the exploitation of that industrial worker that led to the alienation that Marx writes about so cogently.

      This idealization of an agrarian society discounts the hardships of the farmers through history. Today it gets exaggerated in the demand that all agriculture pursue the tenets of organic farming. If that practice were mandated there would not be enough land on this earth to produce the amount of food that is produced today—and we still have people starving. Uncounted millions would starve under the rules of organic farming—but it remains a wonderful ideal for the naïve who have difficulty adjusting to the 21st Century.

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