Marxism Economics: Karl Marx’s Das Kapital

I was encouraged by one of my professors to read a book by Karl Marx, Das Kapital. I am a self proclaimed capitalist and this reading along with The Communist Manifesto was supposed to help me be more objective in my views. I do believe that Karl Marx whom lived during the industrial revolution saw a different capitalism than I know today. In fact the capitalism I see today in many ways could be viewed as a socialist capitalism to Karl Marx who wanted a progressive income tax and public education among other things in his ideal communist society.

One of the most important parts of Karl Marx’s economics is to describe value and how money works in this system of assigning prices/values to objects. Money serves society by performing various tasks. Namely it provides the means by which exchanges of goods can be made in an efficient manner. I believe that when a price is given to a good or, as Karl Marx would say a commodity, it represents the value that the market is willing to pay for such a good or service. This is a free enterprise and capitalistic way of looking at the value of a good/commodity and one which Karl Marx opposes. Rather his is the view that, “but what is the value of a commodity…the objective form of the social labor expended in its production. And how do we measure the quantity of this value…by the quantity of the labor contained in it” (Marx Das 255). Simply put in Karl Marx’s terms, “price is the money-name of the labor realized in a commodity” (Marx Das 79). Especially, in today’s automated manufacturing and service oriented businesses the price of a good or service definitely doesn’t represent the labor that goes into it. I think this is one aspect of economics that Karl Marx got very wrong.

Nevertheless, Karl Marx did use his thoughts on the exploitation of labor to identify how capitalists use such labor to create surplus value and combined with greed establish a wealthy class in society. I have attempted to piece together Karl Marx’s idea of how capitalism works in the following; “the capitalist buys labor-power…that…labor may reappear in a commodity… capable of satisfying a want of some sort” (Marx Das 143). This object of want which needs to be sold for a profit, or rather at a surplus value above the capitalists expenses, so “the rate of surplus value… (Is) the degree of exploitation of the labor-power” (Marx Das 174). This surplus value adds to the profits of capitalists “who extracts unpaid labor directly from the laborers, and fixes it in commodities” (Marx Das 280). Then the capitalist becomes greedy and “becomes a hoarder of money…gold and silver thus become of themselves social expressions for superfluity of wealth” (Marx Das 109). This social class of the wealthy becomes ever more lustfully greedy, “the expansion of value… becomes his subjective aim…ever more and more wealth in the abstract becomes the sole motive of his operations” (Marx Das 124-125). I agree that this cycle does take place in capitalist societies, but I disagree that it becomes each capitalists’ sole purpose and driving force in life. Bill Gates, Warren Buffet, and other wealthy capitalists whom start and fund charitable foundations that benefit society and humanity are examples of the utopia that can come from capitalism. Karl Marx would have never have fathomed such benevolent philanthropy from the wealthy capitalist class of society.


Kimball said...

FYI: Marx did, in fact, explain how his theory of labor value holds true when manufacturing with machinery. Marx explains that the amount of labor that is exerted to create the machine transfers to the labor value of the commodity. Over the life of the machine the labor value continually decreases because the effort to create the machine is being spread out over an increasing amount of commodities. Thus, in automated manufacturing, the price of commodities is lower than that of non-automated manufacturing.

The fundamental point that I believe Marx misses is the necessity in any organization to "exploit" labor. This is true at the corporate level or at the state level. Marx, throughout his book, tries desperately to show how labor surplus accumulated to the capitalist is a bad thing.

If an organization has the goal to grow or be strong, than surplus labor is necessary for the sustainment and strengthening of that organization. Even at the state level, a country must continue to maintain its strength at the rate other countries are in order to not be vulnerable to potential takeover. The issue of labor surplus being good or bad is an invalid arguement. The arguement is who is going to be the exploiter of that surplus value.

Because governments can impose checks and balances on the corporation, it is the capitalist who should benefit from the surplus labor. If the government is the beneficiary of surplus labor there is noone who can impose any regulations on how the labor is exploited. With this power all that is required for the communistic state to turn sour is someone with less than moral values to rise in power...Hitler, etc.

This is the reason why communism is simply unsustainable, because that non-conventional leader will surely come at some point.

Dave said...

-1 on Baden and Kimball for poor grammar.

I am not sure you were well served by this reading assignment.

History of thought is fine, but you need to have some sort of companion piece to explain the issues in the context of the times.

Marx is best seen as an inadequate and incorrect attempt at the solution of an outstanding problem that we now take for granted: why things have value. Marx offered a solution, and it's been repeated found to be inferior to that offered by the marginalists of the late 19th century. If you weren't assigned Marshall, Menger, Walras or Clark to contrast with Marx, you probably had your time wasted.

But ... that's just the opinion of an economist talking about economics. For the last century, Marx's popularity has been maintained by non-economists who are insufficiently familiar with what economists have learned since then. It's no different than trying to get information about combustion by reading up on 18th century theories of phlogiston.