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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.