Marx's Political Economy
Marx today is remembered not for his political writings but for the keen observations about society, class structure, and the plight of the increasingly alienated individual. It might thus come as a surprise to learn that he considered economics to be the driving force responsible for all these phenomena, a force what's more beyond mankind's control. Or to be exact early nineteenth century economics which did not considered price a function of market supply and demand but rather of the amount of labor expended manufacturing a saleable commodity. Unlike free-market advocates who also subscribed to this idea, Marx thought that it would be abused and undermined by an exploitive capitalist system where the need for ever greater levels of investment would come out of the very pockets of the workers who give everything value.
Keywords Class Struggle; Commodity-Fetishism; Circulating Capital; Dialectic; Division of Labor; Exchange Value; Factors of Production; Fixed Capital; Labor Theory of Value; Means of Production; Rate of Exploitation; Reification; Relations of Production; Surplus Value; Use Value
Marx's Political Economy
During communism's heyday, nearly half the world knew his name. Philosopher, pamphleteer, social critic, and revolutionary, Karl Marx is remembered today for his writings on alienation and social class rather than his ideology. Certainly the realities of the Soviet Socialist States of the twentieth century turned out differently from what Marx himself envisioned and predicted in The Communist Manifesto: the revolution of the proletariat leading to the "withering away" of the state. In his defense, though, Marx was a man imbued with the ideas and grappling with the social realities of the nineteenth century, not those of the twentieth.
More to the point, perhaps, Marx did not see himself as a political thinker, much less as a sociologist, but rather first and foremost as an economist. Throughout his voluminous writings, he returned again and again to same basic themes: capital, landed property, wage labor, the state, foreign trade, and the world market (Freidheim, 1976). Well versed in the economic theory of his day, Marx's own work incorporated ideas from such leading proponents of free-market capitalism as Adam Smith and David Ricardo. Unlike Marx, though, these theorists studied economic matters in isolation to better understand their inner workings. Marx, on the other hand, saw economics as the well-spring and driving force of all the "social, political, and spiritual processes of life" (Brennan, 1998, p. 263).
Of course the classical economists before Marx did speculate on the effect market forces might have on politics and society and vice versa, but rarely did they assert formal causal relationships as Marx did. To do so would go against the grain of the scientific empiricism that had shaped the very nature of all their intellectual inquiry. All knowledge, they fervently believed, came from observation, and a theory was sound only as long as empirical evidence supported it. Marx, on the other hand, was deeply influenced by the German philosopher Hegel, an idealist who believed in an abstract force he called the Spirit which, by expressing itself via conflict, preordained all of history. Marx was also utterly committed to the nascent European labor movement and the socialist ideals it embraced. So great were these influences that Marx premised all of his analysis on them as articles of faith.
Marx held the modern industrial system accountable for destroying the social relations of production, or the interactions people have with things and each other as they work. Effectively disenfranchised, workers had no other option but to sell their labor as a commodity much like a mop or a shovel, Marx claimed (Bottormore & Outhwaite, 1993). And as mere commodities on the open market, workers neither earned a comfortable living from nor controlled any aspect of the production process. Worse still, so bleak were their prospects, these dispossessed workers eventually came to see themselves as just mere "things."
Marx called this dehumanizing process reification, and attributed it to capitalist economies' overdependence on cash. The precapitalist equation common to all transactions—consumer good exchanged for money which is then exchanged for another consumer good—was turned inside out by capitalism. The new, and in Marx's view the more sinister, formula was money exchanged for consumer goods which are again exchanged for money (Booth, n.d.). In this new formula people acquired things as a means to an end, the accumulation of wealth, not as ends unto themselves. Taken to extremes, Marx warned, humankind would increasingly fixate on objects per se, compulsively buy them, and so fall victim to a kind of commodity-fetishism
Consumption for consumption's sake, though, stimulates demand for wares, which, in turn, necessitates expansion of the means of production: the tools, machines, plants, and transportation infrastructure required to transform raw materials into finished goods. The purchase, upkeep, and profitable use of these means of production also all require investment funds, i.e., accumulated capital. And, since workers made only a subsistence wage at best, the requisite financing could only come from those with wealth in hand, or those who owned private property.
The disparity between the "have's" and "have not's" is as old as civilization. Marx was also not the first to write about class. He himself drew upon the ideas of near contemporaries like Saint-Simon and the British materialists in his own original analysis. However, Marx is unique for tracing the root causes of the class structure back to their economic origins, and showing how central the existence and preservation of private property was to it.
According to Marx, those who owned private property had social rank, a meaningful occupation or life of ease, and excellent prospects for the future. They were well-fed, well-clothed, and well-housed, and could afford luxuries and entertainments. Those who did not own private property went wanting, their number growing ever larger. Marx attributed this stratification to capitalism, which he believed to be inherently exploitive. Furthermore, he believed, with class divisions came class struggle. The middle class would prove no safe haven in this regard, Marx believed, because it too would eventually be pauperized. In true Hegelian fashion, Marx saw only rich and poor, and society itself as a dynamic synthesis of base and superstructure. The division of labor, the means of production, private ownership, and the economy as a whole belonged to the base, which spawns the superstructure comprising the political, legal, and social institutions. As long as the base supplies society with its material needs, Marx believed, the superstructure survives. As soon as it doesn't, the superstructure starts to buckle (Fulcher, 2003). In sum, Marx saw economics ultimately dictating all facets of society, yet he also believed that workers had the power to change the economy and thus the course of history.
It goes almost without saying that society is structured around the efficient allocation of resources to meet human needs. To one degree or another, then, social structure and economics are inextricably bound together. Marx had a very deterministic view of the primacy of economics as the organizing force of society. He was absolutely convinced that the combination of how commodities were innately valued, how the workforce was organized, and how investment capital was raised preordained everything else. Ironically, the basic economic theory he so fervently believed in has since been largely discredited and forgotten. However, other elements of his work have survived the test of time, despite his whole world view being premised on said theory, as can be seen in the following specific instances.
Unless individuals are totally self-sufficient, to meet their needs they must be prepared to meet others' in like measure. This exchange, however, can only proceed once they agree upon the intrinsic worth of the goods or service they offer and require. All economic activity ultimately hinges on this question of valuation. In modern-day free markets, people are said to buy things that are useful or pleasing. These countless individual decisions coalesce into an aggregate demand which profit-seeking suppliers then attempt to satisfy. Theoretically, the price of said goods is the exchange value set when supply exactly equals demand.
Not so in Marx's day: prevailing wisdom then held that only the amount of work that went...
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