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Karl Marx (1818-1883)

Capital (Das Kapital)

Volume 1 (1867)

Volume 2 (1885)

Volume 3 (1894)

The Communist Manifesto (1848)

by Karl Marx and Friedrich Engels

Hegel’s Dialectics

Dialectical philosophy provides the foundation and rationalization for the theory of Marx’s socialism. The dialectical approach is also viewed as central to modern-day “community organizing.” Hegel’s original intent was to devise a method to resolve disagreements and control outcomes. The Hegelian formula is expressed as follows: Thesis represents an idea or opinion, antithesis represents the counter-opinion or opposite idea, synthesis represents the domain where thesis and antithesis intersect and overlap. (The Hegelian formula: Thesis + Antithesis = Synthesis.) Marx applied Hegel’s dialectics to develop the revolutionary theory of historical (dialectical) materialism explaining the stages of human society driven by internal struggle and contradictions.

KARL MARX

Marx’s Dialectical Materialism

The three main ingredients of Marx’s theory are:
Productive forces: natural resources and technology. Productive forces can change when there are discoveries, inventions, and conquests of other countries and colonization of other lands.
Mode of production: economic system.
The most important thing in an economic system is the relation between and the distribution of power among the various classes.
Ideological superstructure: government, law, politics, religion, art, literature, philosophy, science.

KARL MARX

Modes of Production

1) Primitive communism

(primitive society, no classes, very low division of labor, all work together)

2) Ancient slavery

(ancient Greece and Rome, aristocracy and slaves, slaves do most of the work)

3) Feudalism

(medieval Europe, landlords and serfs (peasants), serfs do all the work)

4) Capitalism

5) Socialism/ Communism

KARL MARX

Productive Forces And Revolution

When productive forces change, the mode of production needs to change because for every set of productive forces there is a unique set of class relations that is appropriate.
When the productive forces keep changing but the mode of production stubbornly refuses to change, forces of change begin to build up.
When these forces gain enough strength, they unleash a revolution that forces a change in the ideological superstructure and thereby bring about the necessary change in the mode of production.

KARL MARX

Capitalism

When one kind of class inequality is replaced by another kind of class inequality, the process of change will continue.
Marx argued that a new form of class inequality, called capitalism, characterized the society at the time of his writing.
His theory predicted the inevitability of crises and the revolution that would destroy capitalism.
The eventual replacement would be communism.
Communism would create a classless society and, therefore, it would be the final and permanent state of society.

KARL MARX

Marx’s Theory of Capitalism

Marx argued that the only source of a firm’s profit is the labor that it employs.
Marx based his view on an application of the Labor Theory of Value by reasoning:
Machines without workers are useless.
Workers without machines, on the other hand, are not useless because in reality the workers make the machines that they need to do the work.
Therefore, all production is done by labor (currently and in the past). Income of capital is purely exploitation.

KARL MARX

The Exploitation of Labor

While workers use tools (the “means of production”) to produce things, they do not own these tools, capitalists do.
Because there are many workers but not that many capitalists, there always exists a “reserve army of the unemployed” (Marx’s expression) to scare workers who may wish to ask for more than subsistence.
Capitalists pay the workers for their “labor power” which is simply the ability to work. The payment for labor power is the subsistence wage, the bare minimum for labor to survive.

KARL MARX

The Surplus Value

The excess of labor time, which the capitalist takes from the worker, over what the capitalist pays to the worker, is the capitalist’s profit or “surplus value.”
Example: The capitalist may take 10 hours of a worker’s day (labor time) and pay him for 6 hours per day (labor power). Surplus value is 4 hours per worker per day.
This surplus value represents exploitation. It rises when the length of the working day (value of labor time) increases, and falls when the subsistence wage (value of labor power) increases.

KARL MARX

Crises

Historically, a great deal of the struggle between workers and bosses has been over the length of the work day.
Due to fierce competition, the rate of profit keeps falling. When the overall rate of profit is low, smaller firms are especially vulnerable to business crises.
As a result, they get taken over by larger firms. This concentrates power in the hands of fewer and fewer capitalists.
Moreover, the middle class capitalists who sell their small firms to the big firms eventually become new members of the “reserve army of unemployed.”

KARL MARX

The End of Capitalism

At some point, the growing but increasingly oppressed working class turns on their capitalist oppressors. This unleashes a revolution and brings about the end of capitalism.
Marx was not saying that capitalism would collapse because it was immoral or because it was inefficient. He was saying that capitalism would collapse because of the imminent rule of social change that destroys economic systems marked by class inequality.
This is why Marx used a special name for the final stage in the theory of dialectical materialism - scientific socialism.

KARL MARX

The Assessment

Marx’s predictions have not come true. Capitalism is alive and well.
The rate of profit shows no signs of falling over time; it is pretty stable.
Workers have not become worse off over time; wage incomes have risen at about the same rate as capital income.
Besides, the nature of capitalism has changed. Even workers own stocks and bonds nowadays and have an interest in the good health of capitalism.
Eventually evolutionary capitalist societies came to realize the need for a level of fairness. Democracy and its social welfare laws have tempered capitalism’s worst excesses.

KARL MARX