For the past few months I’ve been studying and reading Karl Marx’s most important work: Capital (Das Kapital). This thing is enormous. It’s three volumes, containing over 2000 pages. In it Marx attempted to figure out and explain how capitalism ‘works’… What he came up with is fascinating. It is a very detailed and intricate analysis. While Marx is commonly known for being the “father of communism” the reality is that his major accomplishment is his examination of capitalism.
In fact, this may surprise you, Marx never wrote about how communism ‘works,’ which is kind of strange for someone that is considered the father of it. Unfortunately, there is such a negative stigma attached to Marx that we, as a society, are missing out on a very interesting perspective for understanding capitalism. In this post, I will lay out the essence of what Marx was trying to tell us about capitalism. His book Capital is much, much, much more intricate and detailed. But the following is the big picture.
Throughout all of human history there is something that happens, no matter what kind of society, no matter when in human history, that we as humans fail to appreciate, consider and integrate into how we understand the world we live in: some people use their brains and their body to transform nature in a useful way, i. e. they do work, and some people do not. The easiest and most simple example is babies. They are not doing work. Often elderly people do not work. Very sick people do not work. Sometimes people who can work, i. e. they are mentally and physically capable of doing work, also do not work.
This raises a question: how is it possible for people who do not work to survive? In order for it to be possible for some people to not work and also survive, be it a baby or a capable adult, it must be true that those who do work, produce more stuff than they themselves consume. Otherwise, the people who do not work would die. For each person that works, the produce of their work that goes to maintaining themselves, Marx calls Necessary Labor, and the produce of their work that they do not consume themselves, Marx calls Surplus Labor.
So, Marx asks: how does any given society decide 1) who will work, how will they work, and how much of what they produce will go to them… 2) who will not work, but live off of the surplus labor of those who do work, and how much will they get? Marx says that how a society decides to deal with this issue shapes the society in various ways: culturally, politically, economically, etc… and if we don’t recognize how this shapes society, we are missing a very important part of understanding how and why our society is the way it is. Again: who works, who doesn’t, how much of the produce does each group get, and how is that decided.
Marx breaks the history of humans down into 5 types of arrangements based on how the Surplus is distributed to those who do not produce it. 1)) Communism – a community or a group of people work together, and they produce a surplus, maintain it, and themselves distribute it to those that do not work. For example, if a group of us grow some food, and we have more than we are going to consume, we decide how to distribute the extra. 2)) Ancient – the work is not done not by a group of people, but by individuals alone. This would be someone that is self-employed, and produces stuff on his or her own.
For example, if I grow some food, and I have more than I am going to consume, I decide how to distribute the extra. At this point, Marx makes a distinction. The following three types of arrangement have something in common that is different than the first two, and it is this: the people who do the work that produces the surplus are not in control of the surplus that they produce, and therefore are not in control of distributing it. Marx calls these systems exploitative. The producers of the surplus are exploited, and all this means is that the producers of the surplus do not maintain and distribute the extra. )) Slave – if the work is done by a person or a group of people and none of what that person or the group produces belongs to them. What they produce is maintained and distributed by the slave owner. For example, if a slave produces some food, the slave owner decides how much the slave gets, how much the slave owner gets, and how to distribute the extra. 4)) Feudalism – the work is done by a serfs, and some of the time is spent producing what is for them, and some other amount of time is spent producing what then belongs to the feudal lord. The lord maintains and distributes the surplus.
For example, if a serf produces some food, some of the food belongs to the serf, and the rest belongs to the feudal lord, and the feudal lord decides how to maintain and distribute the extra. 5)) Capitalist – the work is done by wage or salary earners, and they do not control, maintain, or distribute the surplus that they produce. They receive a wage or salary, and all of what they produce belongs to the capitalist/owner. For example, if some workers grow some food, they are paid a wage or salary equivalent to some of that food, but importantly not all of it, and the capitalist maintains control of and distributes the surplus/extra.
Marx claims, I think correctly, there is only one reason why a capitalist/owner/employer would pay a worker a wage or salary, and that is if he or she is going to get more out of the worker than the value of what worker contributes during his or her working hours. … What’s interesting is this relationship, between the capitalist/employer and the worker/employee, is that it is closest to the slave/slave owner relationship. Hence why sometimes capitalism is referred to as wage-slavery.
They are certainly not the same, but strangely they are more similar to each other than the capitalist and the ancient is. again, ancient refers to self-employed) Here’s an irony: in our modern day capitalist America, the American Dream for a lot of people is to be self-employed. According to Marx, self-employment is NOT capitalism. It is the “ancient” form of production. Capitalism, on the other hand, is a relationship where someone (a capitalist), pays someone else (a worker), to do work for them, and in this relationship the worker contributes MORE than they receive in the form of a wage or salary. It is precisely in paying workers less than they contribute that the capitalist/owner is able to make a profit.
The common objection to this Marxist perspective is: “But the capitalist/owner is risking his or her own money in the business, so they have to receive a profit, or why else would they invest their money in starting a business. ” Indeed, I don’t think Marx would disagree. That’s how capitalism ‘works’… This is Marx’s fundamental insight of capitalism: the profits of capitalists/owners come from the exploitation of workers, i. e. paying them less than the value they contribute to the business. This raises an nteresting question: is what’s best for our ‘Job-Creators’ in America (capitalists/owners)… also what’s best for the majority of Americans who live on wages and salaries? Is it any wonder that Marxism is a taboo subject in America? What if Marxism becomes common knowledge, and workers start thinking to themselves: do we really need the capitalists/owners? Could we collectively run businesses and make decisions as groups, i. e. communally (communist)? If so, wouldn’t we then get the full value of what we contribute in our working hours?