Have You Ever?
What comes to mind when you think about Marxism, socialism, or communism? Is it the failed regime of dictatorship in the Soviet Union? Is it a Robin Hood sense of equality that takes from the rich to give to the poor? Is it a utopian ideal of community that, once implemented, becomes flawed?
When the German philosopher Karl Marx came up with the concept, he certainly did not have either equality or the later totalitarian communist countries in mind. Well known for his relentless criticism of capitalism in Das Kapital, Marx was one of the most influential social scientists of his time. However, many mainstream economists later rejected his theories by showing the shaky assumptions underlying them.
Definition of Marxism
Marxism is a set of social, economic, and political theories that interprets the historical development of a society and predicts where it is headed. It was started by German philosophers Karl Marx and Friedrich Engels. Central to the thesis of Marxism is that class conflict between the capitalists and the working class is the driving force of history and will determine the direction of the future.
How It Works
For Marx, there are two components of society: base and superstructure. The base is everything that is directly related to economic production. It includes means of production, such as raw materials, tools, and machines, and relations of productions, like employer-employee relations, property relations, division of labor, or anyone that’s organized to produce the goods. Those who own the means of production are capitalists. Those who don’t and thus work for the capitalists are the working class. The superstructure includes things that are not directly related to production, such as culture and political structure. According to Marx, base determines and shapes superstructure. Class conflicts between the capitalists and the working class are thus the driving force of history.
Criticism of Capitalism
Born during the industrial revolution in 1818, Marx was especially concerned with social ills in capitalist society. He challenged the classical economic theory that focused on the positives of private property and free market and came up with the labor theory of value. Marx contended that in a free market, profit comes from the exploitation of workers.
He believed that the value of a commodity could only be developed through labor. Worth, he asserted, is thus determined by the amount of “socially necessary labor” to produce a good. A worker’s capacity to work, which Marx calls labor power, is also a commodity. Capitalists buy workers’ labor power with wages, and then exploit the workers by letting them work long hours. Since workers create more value than what they are paid, capitalists derive profits from the process. The more productive workers become, the more workers are exploited. Marx also pointed out the detrimental consequence of division of labor. He argued that as a worker became more specialized, they would lose control over their work, and thus become alienated from the work and the self, their “human nature.”
Marx believed that even though capitalism could generate wealth, it was fundamentally flawed. It would be eventually replaced by communism, or socialism (Marx himself did not make a distinction), where means of production are held by the public. He argued that competition in the free market would lead to monopoly and further exploitation of workers. The market and means of production would be controlled by a few capitalists. Capitalists who failed in the market competition would become part of the working class. The problem of underconsumption would arise as more commodities were produced and fewer people could afford them. As capitalism came to its advanced stage, a revolution of the working class was inevitable as workers became aware of the oppression.
Marxism provides some valuable insights into the power dynamics of the capitalist society. It motivated a series of communist revolutions in the 20th century and influenced later thinkers such as neo-marxists, who modified and extended the original theories. It even inspired Marxist feminist movements, which attributed gender inequality to the capitalist system.
However, his ambitious theories largely failed in their promise to predict. Working class revolutions have largely occurred in agrarian countries, not advanced capitalist ones. Even though Marx was partly correct about the problems of capitalism, such as monopolies and financial crises, he underestimated the role of institutions to solve them. For example, in a global financial crisis, governments often step up to save the economy by creating economic stimulus. His labor theory of value is also criticized as oversimplified. His contention that only labor creates value is arbitrary and without support, as we can pick any commodity, such as corn, to play a similar role and come up with a corn theory of value.
Studying Marxism can help us understand some of the problems within a capitalist system, such as income inequality and financial crises. Meanwhile, the failure in its remedies to those problems reminds us of the complexities it takes to solve them.