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| Karl Marx in 1859. |
From the March 2018 issue of the Socialist Standard
5th May 2018 marks the two hundredth anniversary of the birth of Karl Marx in Trier, in what was then Prussia and is now Germany. Marx went on to become a major figure in the founding of the modern socialist movement and many will be marking the event with reverence. But so what, you might ask? Surely Marx isn’t relevant today? Why do socialists today want to read and talk about the ideas of a nineteenth-century philosopher?
Marx has two main legacies for socialists today. Firstly, Marx helped us to understand the economics of capitalism by explaining that it is a system based on the exploitation of workers by capitalists that occurs during the process of the production of commodities, as opposed to the point of sale. Secondly, he developed a view of history that placed people and their social and economic development at its centre and not religion or any other notion of an ideal society that floats apart from real life. Today this is more or less how most people think of and understand history and the world around them, although many people simultaneously hold religious views and some argue for secular, ‘postmodern’, diluted versions of idealism.
Critique of political economy
Marx’s major work, Capital, was a critique of economic thought up to that time (1867). The classical political economists, such as Adam Smith and David Ricardo (who Marx regarded as the last of the scientific investigators of capitalist political economy) had argued that labour was the source of value. Following on from this conclusion, critics of capitalist competition like John Gray, Thomas Hodgskin, William Thompson, and John Francis Bray reasoned that what was wrong with capitalism was that an unequal act of exchange was taking place outside of the process of production – workers were not receiving the full value of their labour. From the working class perspective this infant labour theory of value was a great stride forward in understanding the relation of labour to capital. The claim that labour was the source of value and that workers therefore had the right to the value that they created was a bold step towards explaining why it was that capitalists, who did not work and so created no value, were getting richer; whilst those who laboured, and so created value, were getting poorer (often absolutely, always relatively). From the capitalist standpoint this was the Achilles heel of classical political economy, and the reason why it was abandoned in favour of a view of economics as the study of the competition of choices for the allocation of scarce resources, which is still the basis of modern mainstream economics.
The enduring legacy of Karl Marx was that he developed the arguments of the classical political economists to their conclusion (which they themselves had avoided) and was able to develop a withering criticism of capitalism. Classical political economy had been unable to explain profit convincingly. After all, how could profit be accounted for if the value of a commodity was the labour embodied in it and labour had been sold at its value by the worker? This was why the early critics of capitalism placed so much emphasis on the idea that a portion of the value of their labour was being corruptly usurped by capitalists, merchants, bankers and the like who were taking over from the landed aristocracy and the ‘old corruption’ of court politics to become the wealthiest members of an increasingly industrial society.
Marx argued that the classical political economists had missed a crucial link in understanding how capitalism works and what profit actually is. Rather than workers being paid for their labour, Marx argued, they were in fact paid for their labour-power. The value of this labour-power varies according to (1) the cost of reproducing labour-power (in other words the cost of feeding and housing workers and their dependants) and (2) the amount of labour embodied in the labour-power of a given worker (in other words the value of a doctor’s labour is more than an unskilled machinist because the many hours of education and training received by the doctor are bound up in their labour, unlike the machinist who performs only simple labour). The crucial point is that the difference between the value of what workers produce and what they are paid in exchange for their labour-power is the source of surplus-value, otherwise known as profit. This was the source of increasing capitalist wealth and not unequal exchange. Workers are paid an equivalent; not for their labour, the product of which is owned by the capitalist, but for their labour-power which they sell at a price around its value (sometimes more sometimes less depending on the given state of the labour market in a given branch of industry).
Materialist Conception of History
Marx’s view on history can be gathered from different parts of other critiques and historical works he put together. They can be summed up by the first line of the Communist Manifesto (1848) ‘The history of all hitherto existing society is the history of class struggles’ and in the Preface to A Contribution to the Critique of Political Economy (1859):
“In the social production of their existence, men inevitably enter into definite relations, which are independent of their will, namely relations of production appropriate to a given stage in the development of their material forces of production. The totality of these relations of production constitutes the economic structure of society, the real foundation, on which arises a legal and political superstructure and to which correspond definite forms of social consciousness. The mode of production of material life conditions the general process of social, political and intellectual life. It is not the consciousness of men that determines their existence, but their social existence that determines their consciousness.”
An awful lot has been written about what became known as ‘historical materialism’, particularly in the second half of the twentieth century when it became fashionable among Marxist academics. It is not determinist as it critics insist – it does not suggest that change happens automatically, that ideas mechanically reflect technological and economic change, after all these changes often require new ideas and political interventions. Marx is merely arguing a rather simple point, that ultimately the material world provides the limits of our perception. Our thoughts must always relate to the real world, to the necessity for food and shelter and social production and to current social and economic relationships and the struggles associated with them. Although thought obviously feeds back into how we perceive the world and therefore act, thought itself does not exist independently of material reality. Marxian socialists accept the importance of ideas in creating social change but reject the notion that ideas can come from outside experience, as a vision, and transcend it to establish a new social reality.
Marx was challenging the religious views prevalent in the nineteenth century that the material world was shaped by our ideas, which ultimately were derived from God. Marx countered this by asserting that, on the contrary, our ideas emerge from our experience of the material world. These ideas then feed back into our experience by acting to re-shape it through social and political struggle. Limits are placed on the actions of individuals by their social and economic context – so changing the social and economic basis of society is therefore, for Marx, the fundamental point of political action. This is what industrial capitalists in the nineteenth century were doing to displace landed capitalists as the dominant power amongst their class – in the process creating a new theory of society (modern economics) to further propel it and justify it. It is also, crucially, what Marx thought that socialists needed to do to create a new society. Ideas without a change in the economic basis of society could not result in a socialist society. This economic change is not pre-determined and requires class conscious political action to make it a reality – capitalism would not collapse on its own or evolve itself into a new form of society.
For Marx, capitalist production involved the production of commodities for exchange, wages, and profit. Its opposite was a society with rational, planned production for use, with co-operative labour under conditions of free association. In other words, there would be no need for exchange in socialism and therefore no reason for money to exist – given that its reason for existence was as a facilitator of exchange. But socialist revolution won’t happen by itself – we need to make it happen.
Among the dead-end political movements that followed in the century after Marx’s death in 1883 were Labour governments and nationalised industries and the Bolshevik revolution and other so-called ‘Marxist’ regimes around the world. These political projects attempted to create a fairer world, which they called ‘socialism’. Marx – read in his own words – helps us to understand that they could not deliver the societies they sought because they left the capitalist process of production intact. The lesson for the supporters of Corbyn’s Labour party should be obvious.
Colin Skelly