‘Even Marx respected the rich more than Reeves’ was the headline of an article by Sunday Telegraph columnist Michael Mosbacher (18 May). He accused Reeves of putting up taxes on the rich because she believes it immoral to be too rich. And quoted Marx as having written in the Communist Manifesto of 1848 that ‘the bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together’.
It is true that Marx did regard capitalism as historically necessary and, for a while, progressive. He respected – if that’s the word – the bourgeoisie not because they were rich (their opponents, the landed aristocracy, were too, even more so in fact) but for when they had played a revolutionary role. Capitalism has long since fulfilled its role of developing the material basis for a world socialist society, so capitalists are no longer revolutionary or necessary.
More generally in his analysis of capitalism, Marx regarded capitalists as essentially personifications of capital whose role was to accumulate more and more capital for re-investment and from which their life of luxury was a deviation. As he put in the Preface to the first German edition of Das Kapital:
‘I paint the capitalist and the landlord in no sense couleur de rose. But here individuals are dealt with only in so far as they are the personifications of economic categories, embodiments of particular class-relations and class-interests’.
Mosbacher went on to say about Marx:
‘Marx believed that capitalism’s overthrow would come about through its own success. The market – and this is where old Charlie got it spectacularly wrong – would eventually satiate all bourgeois demand. Overproduction, and counter-intuitively mechanisation (he was also quite wrong about this), would reduce the capitalists’ profits. Marx’s adoption of the labour theory of value – the idea that the worth of any good is determined by the amount of work put into it (…) – meant that the bourgeoisie would only have one option to maintain their riches. And that is scalping a larger share of what the workers’ labour has produced. The eventual result of the proletariat’s consequent immiseration would be world revolution’.
Did ‘Old Charlie’ hold that ‘the market… would satiate all bourgeois demand’? Mosbacher is not expressing himself very clearly here. He probably meant that production will eventually exceed what can be sold under capitalist conditions, whether to workers or capitalists, and so capitalism comes to suffer a permanent crisis of overproduction.
Marx never held that capitalism would end up in that situation. He did, however, hold that capitalism would overproduce in relation to market demand from time to time, though not for the reason Mosbacher gives. It was because, when the market was expanding, competing capitalists all plan to benefit from it and end up by producing in total more than the market can absorb. But this would not bring capitalism to an impasse, just to a temporary slump in production, which would eventually create the conditions for a recovery. It was cyclical not terminal.
Did Marx say that ‘mechanisation … would reduce the capitalists’ profits’? Here Mosbacher seems to be referring to what Marx called the tendency of the rate of profit to fall. This was connected to mechanisation insofar as mechanisation resulted in proportionately more capital being invested in machinery than in employing wage labour. This would tend to reduce the rate of profit as only the part of the capital invested in wage-labour yielded a surplus value whereas the rate of profit was calculated on total capital.
Marx called this a ‘tendency’ because there were also counter-tendencies which might prove stronger at times and pointed out that a fall in the rate of profit did not necessarily mean a fall in the amount of profits. It wasn’t the iron law that Mosbacher makes it. Capitalism is not going to break down from lack of profits any more than from lack of markets.
