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Q: The crisis of capitalism that Marx predicted has failed to materialize proving Marx wrong. Discuss. Karl Marx (1818-1883) was a revolutionary as well as a notable thinker; through out his life he worked on politics, economics, philosophy, sociology, class struggle and history but for the most part he dedicated his life to the overthrow of the capitalist order, which he accused as responsible for the degradation and enslavement of the vast mass of its population.
Marx was the Co-founder of??Marxism(with??Engels),??the Theory of Surplus Value,??alienation and exploitation of the worker,??The Communist Manifesto,??Das Kapital, Materialist conception of history. Marx worked on his intellectual work started under the influence of G. W. F. Hegel (1770-1831) who in the 19th Century Germany was the dominating philosophy. The Young Marx was, during this time, mostly concentrated on criticizing the ideas of political economists and analyzed things from a more humanistic and philosophical point of view.
The older Marx had a clear preoccupation with economic analysis and there was again arguably, a disappearance of Hegelian terms in his writings. Marx was straight forward in his approach to capitalism and argued that the capitalist system just like the previous socioeconomic system will inevitably produce internal tensions which will lead to its destruction. Just as??capitalism replaced feudalism, he believed socialism??will, in its turn, replace capitalism, and lead to a??stateless,??classless society??called??pure communism.
This would emerge after a transitional period called the “dictatorship of the proletariat”: a period sometimes referred to as the “workers state” or “workers’ democracy”. His views and stance could be better understand by his comments in section one of the Communist Manifesto of feudalism, capitalism, and the role internal social contradiction plays in the historical process; ??”We see then: the means of production and of exchange, on whose foundation the bourgeoisie built itself up, were generated in feudal society.
At a certain stage in the development of these means of production and of exchange, the conditions under which feudal society produced and exchanged… the feudal relations of property became no longer compatible with the already developed productive forces; they became so many fetters. They had to be burst asunder; they were burst asunder. Into their place stepped free competition, accompanied by a social and political constitution adapted in it, and the economic and political sway of the bourgeois class. A similar movement is going on before our own eyes….
The productive forces at the disposal of society no longer tend to further the development of the conditions of bourgeois property; on the contrary, they have become too powerful for these conditions, by which they are fettered, and so soon as they overcome these fetters, they bring disorder into the whole of bourgeois society, endanger the existence of bourgeois property. “[1] (Karl Marx) On the other hand, Marx believed that socioeconomic change occurred through an organized revolutionary action and argued that capitalism would end through the organized actions of an international working class. Communism is for us not a state of affairs which is to be established, an ideal to which reality [will] have to adjust itself. We call communism the real movement which abolishes the present state of things. The conditions of this movement result from the premises now in existence. ” (From??The German Ideology) This research paper focuses on the crises of capitalism that Marx predicted and discusses the reasons weather they have failed to materialize or not.
In order to fully understand what Marx meant we must first look at the capitalist system and the possible loop wholes of the system that made Marx associate crises with it. Capitalism??typically refers to an??economic??and??social system??in which the??means of production??(also known as??capital) are??privately controlled;??labor, goods and capital are??traded??in a??market;??profits??are distributed to owners or invested in new??technologies??and??industries; and wages are paid to labor. For Marx, the scientific understanding of the capitalist system consists in the discovery of the internal structure hidden behind is visible functioning.
The gathering of wealth by the ‘bourgeoisie’ would result to its dominance as a class over the production processes thus over the ‘proletariat’ and over society as a whole. The Capitalist society would be one in which the ‘bourgeoisie’, the owners sought and achieved a political and social power to commensurate its growing economic dominance. Marx was convinced that this new social relationships would result in the society being ruled by a few, exerting power on the masses. Through time the owners of production would get less and less through a process that can be similar to the ‘survival of the fittest’.
This would repeat itself numerous times, finally leading to the solution of the class conflict, by a revolution of the Proletariat. The hypothesis was that two classes would emerge, that of the few and powerful- owning the means of production, the Bourgeoisie and that of the ‘labor selling’ workers, the Proletariat. This would only come when Capitalism reached its peak and through the rationalized activities of its members. Marx defined money as simply the means of exchanging commodities of equivalent value and must not be seen as Capital.
In Capitalism though he realizes that the relationship is the other way around, so the economy is only the cycle of money in which commodities are only an exchange for money (money;commodities;money). He argued that through the rationalized activity to achieve more profit, capitalists are faced with two conflicts. One conflict would be with the workers, leading to their exploitation and the other between themselves, dooming capitalism as an economic and social system. Both these conflicts would lead Capitalism to its demise.
Marx associated capitalism with exploitation and used to argue that the dominance of private property is the major source of human alienation. People become dominated by things in the capitalist economy making the market seem more important than our needs and money more important than the commodities it was intended to buy in the first place. Marx even used the notion of God being replaced by Capital in his exploitation theory. According to Marx, people’s position in society is determined by their relationship to the means of production, i. e. the factory, the machines and anything apart from labor that is needed to produce goods.
In the capitalist society an obvious division is of whether people are owners of production or whether they must sell their labor to survive. This idea leads to two different classes, one being the owners of the means of production and the second being the working class with only their own labor to sell. According to Marx the primary interest of the owners is the accumulation of profit, which is then being re-invested in order to generate even more profit. It is a fact, he argued and that the entire production and the source of the value of a commodity is the amount of human labor required for its production.
He criticized the structure as the owner has more power over the employee thus not paying him as much as the production but only a minimum wage. Due to this excess power the employer exploits the laborer, as I said, giving him only but a minimum wage. Another angle of the exploitation is the fact that the worker has no choice but to sell his labor. The working class therefore produces the entire value of goods, which are then sold by the owners who ‘creams off’ the profit, or ‘surplus value’. The surplus value is thus whatever part of value of material production is left after replacing that used up in production itself.
From Marx’s point of view this process exploits the working class since the workers never receive their share of profit, or the value they added to the product, however large or small a wage he gets in return. Marx rejects higher wages as a remedy for exploitation as he said; “nothing but better payment for the slave, and would not win…for the worker…human status and dignity” [3] Marx further linked exploitation with social divisive. Exploitation in Marx’s sense occurs whenever a class appropriates the surplus product of society, regardless of what they do with it. 4] Class societies have patterns of ownership which violate the fair and just principles of distribution of property, whatever they may be. Marx argues that in modern Capitalist societies ‘private property’ has reached its peak. As social production is turned into the appropriation of private property and then into the production of commodities for the market, there is an increasing separation between the interests of individuals and those of the community as a whole. In this sense ‘private property’ is not only the main reason of exploitation but also socially divisive.
In my sight the crises of capitalism that Marx predicted has more or less failed to materialize because the capitalist economy is still standing tall and strong in today’s world. The capitalist society Marx sketched out does not prevail but has changed over the course of time, in today’s world labor rights and labor laws govern the society that make sure they are not being exploited. If we take a look at the labor selling, working class we will identify lots of changes and improvements taken place.
Today, workers are increasingly asked to forward their ideas and recommendations concerning their work to improve productivity and job satisfaction. Management is communicating decisions to and discussing issues with its workforce. The formation and development of Trade Unions and hence collective bargaining has greatly increased the power of the workers. The introduction of working class voting rights, the welfare state and health care, pension and social security funds, and a changed working and job environment has led to establish Marx prediction wrong.
There has been a separation in ownership and control. There has been a development in finance capital because of which family businesses gave way to joint-stock companies, as an effect of this shift world has experienced a ‘managerial revolution’ in which, individual entrepreneurs which were both managers and owners of their own firms, gave way to salaried managers. The aim now has been from maximization of short-term profitability towards long- term prosperity of the firm, as this is important for a manager to secure their own career and prosperity.
The shift of ownership identified above and the new opportunities in our society lead to a development of a new middle class, which was not expected or anticipated by Marx. Today, the majority of people in most western industrialized countries consider themselves as belonging to the middle class, with a secured income and a relatively high standard of living. Most of these middle class members are white collared employees working either as salaried managers or in the service sector in various jobs such as bankers, investors, scientists, teachers, technicians and professionals.
This job sector did not exist in the current form at Marx’s time and can hardly be described as blue collar, manual worker job environment and therefore does not fit into Marx’s social theories, making it even harder to apply his ideas to modern society. It would not be wrong to say capitalism provides the most efficient means to run an economy and through the process of capitalism an economy realizes its true potential as it gets exposed to the conditions where the demand and supply solely determines what needs to be produced and thus resources are used in the best manner.
The economy in this state does not exert pressure on the state’s balance of payment deficit but in return add to the tax receipts collected from the privately owned businesses. On the other hand it may be argued that the Marx’s prediction may still be valid in today’s world not in absolute but in proportionate terms. Some raise the argument, defined as Dependency theory and World-systems theory that the working class in western societies has been improving its position at the expense of the working classes of the less fortunate countries which are being exploited and are responsible for the poverty and backwardness of the poor countries.
The exploitation predicted by Marx may only be seen materializing in the third world countries where the labour is still waived off of their basic rights and are exploited by the owners and the labour has no other option but to sell themselves. To conclude my essay I would say that the crises of capitalism that Marx predicted has failed to materialized, proving Marx wrong and to back my statement I would highlight the fall of Russia that was a communist society, based on the teachings of Karl Marx.
Also the case of China that has experienced a major boom once they opened their economy provides evidence that economy grow faster under capitalism. BIBLIOGRAPHY (1). Karl Marx “The Communist Manifesto”, chapter 1 http://www. marxists. org/archive/marx/works/1848/communist-manifesto/ch01. htm (2). Peter J. Martin, W. W. Sharrock, John A. Hughes, 1999, “Understanding Classical Sociology: Marx, Webber, Durkheim”, London: (3). Justin Schwartz, 7 December 1994, “What is wrong with exploitation? “, “Nous 29”, pp. 158-188. (4). John E. Roemer (5). Secondary sources: http://www. wikipedia. org/ http://www. docstoc. com/