11

KnruMnnx
Rsvolr Acnrrusr CmssrcAl Ecorvorratcs

It would behard to find a more influential writer in the history of social thought
than Karl Marx. Despite the decline of Marxist-inspired economies around the world
today, the man and his system of thought remain fascinating to intellectuals the world
over. Marx influenced many fields: philosophy, sociology, psychology, and political
theory. But his major work, Das Kapital, is about economics, above all. What set him
apart from so many other economists was his ability to weave together the philosophical, historical, sociological, psychological, political, and economic threads of argoment into a coherent whole.
Marx was born in Trier, Prussia, in 1818. He was the son of middle-class Jewish
parents who later converted to Christianity. As a youth he was popular with his playmates and enjoyed an amicable relationship with his parents. At the age of seventeen,
he entered the University of Bonn as a law student, but despite a sharp mind, his studies suffered from the distractions of youth. He attended class rarely, showing instead a
aste for good times and the high jinx of college life. Disappointed with his son's aca.tremic performance,

Marx's father withdrew him from the University of Bonn after his

irst year and enrolled him

at the University of Berlin, where the "party-school" atmo:phere of Bonn was totally absent. During the continuance of his training in jurisprulence and political economy at Berlin, Marx came under the influence of Hegel and
Feuerbach, whose ideas helped shape his own views of history, religion, and society.
After completing his Ph.D. dissertation at the University of Jena in 1841, Marx
Bonn, hoping to secure ateachingposition at the university he had for=or.ed back to
:eerly attended. He abandoned this hope in 1842, at which point he assumed the edi:or:hip of the Rheinische Zeitung, a German newspaper in which he could air his
utrlewhzrt unorthodox ideas and indulge his taste for the literature of the French
-rialists. Strict censorship.imposed on the Rheinische Zeitung in 1843 led to Marx's
r::ignation as editor. Aftelilue wedding to his childhood sweetheart (Jenny von
i-estphalen), he moved to Paris and undertook the founding of a new journal-the
)-:tisch-Franzosische Jarbucher Al1 the while Marx continued to write, though mostly
- - nhilosophical topics. It was in Paris, however, that he began a systematic study of
::,:nomics, especially of Smith and Ricardo. There, too, he studied the materialist phi
-:>ophers, including Locke; he became acquainted with Proudhon; and he began to
243

jrur
244

Part Three

Challenges to Economic

Orthodoxy

'

distill most of his major ideas. His most active literary decade was yet to come, but in
l844Marx wrote a number of manuscripts, which were later coilected and published
as Economic and Philosophic Manuscripts of 1844.

In the meantime, Marx had become an outcast in his own country. The Prussian
governmentdeclaredhimguiltyoftreason inlS44forhisarticles intheJarbucher,thus
making it impossible for him to return to his homeland. The following year, prodded
by Prussia, France also expelled Marx. He fled to Brussels, where, in due course, his
Theses on Feuerbach (1845), The German ldeology (1846, with Engels), and The Powrty of
Philosophy (1841) were published-the last a scathing critique of Proudhon's earlier
Philosophy of Poverty. In l84l Marx gave a series of lectures, which were later published
as Wage Labour and Capital (1849). The Communist Manifesto followed in 1848, and in
1849 Marx and his family settled in London, where he remained for the rest of his life,
most of which was spent writing and studying economics in the library of the British
Museum. In 1851, Marx entered aten-year period as occasional contributor to the
New York Daily Tribune, whose fees helped to sustain his famiiy's meager existence.
Marx began a feverish period of writing and publishing in 1857. In that year alone
he prepared a lengthy critique of political economy that was to serve as an outline for his
later magnum opus. Now known as the Grundrisse, these manuscripts were undiscovered
and unpublished until World War II. A Conh.ibutionto the Critique of Political Economywas
begun in 1858 and finished the following year. By 1863, Marx had also completed Theories of Swrplus Value. The first volume of Capital appeared in 186l , but he had not completed the second and third volumes by his death in 1883. The latter appeared under the

editorship of Marx's lifetime f,riend and collaborator, Friedrich Engels, who died rn
1895, a year after the publication of the third and finai volume of Capial.
Marx's personal iife was marked by all kinds of adversity, including abject povertl
and cruel political exile. Certainly, Marx could be bitter about his personal trials. He
made no effort to hide his bitterness when, near the end of his life, he wrote acidly: "i
hope the bourgeoisie will remember my carbuncles all the rest of their livesl" It is nc
surprise, then, that Marx is frequently poflrayed as a sullen, brooding genius. But this
characterization obscures one of the most remarkable things about the man-h:
extraordinary success, despite adversiry in the personal relationships that matter mos:
His love for his wife, and hers for him, was enduring and uncompromising. His childre::
adored him, reflecting the same filial love that Marx had bestowed on his own fathel
Carbuncles notwithstanding, Karl Marx had, by several criteria, a very fruitful life.

Overview of the Marxian System

What one finds in Marx's mature thought is a theory of historical processes, bas. on material and economic forces and culminating in social and economic change the existing order. In contrast to the overt, intellectual specialization of a later d.Marx's thought ranged over philosophy, history, and economics. As a philosopher a::
lristcrian he was steeped in, but r'ot aparL of, the German tradition. As an econom ,
he was likewise steeped in, but not a part of, the British classical tradition.

Hegel, Feuerbaclr, and German Philosophy

The dominant figure in German philosophy during the nineteenth centurl.
Georg Hegel (1770-1831), whose ideas influenced not only Marx but also the
man historicists (see chapter 10). The aspect of Hegel's philosophy that proved

Chapter Eleven

Karl Marx

245

fascinating to Marx was his theory of progress. Hegel claimed that history holds the
key to thelcience of society. He viewed history not as a sequence of accidental occur."rr"., or a collection ofdisconnected stories but rather as an organic plocess guided
by the human spirit. It is not smoothly continuous but instead is the outcome of
opposiog forces. Progress obtains, according to Hegel, when one force is confronted
Uy^itr oiporite. In the struggle, both are annihilated and arc transcended by a third
force. This so-called dialectic has frequently been summarized, concepfually, by the
interplay of "thesis," "antithesis," and "synthesiS." Following Hegel, historical
p.ogr"ri occurs when an idea, or thesis, is confronted by an opposing idea, or antitherir. l" the battle of ideas, neither one remains intact, but both are synthesized into a
third; this is how all general knowledge, as well as history, advances.
Although Marx found fault with some elements of Hegel',s philosophy, he adopted
the Hegelian dialectic. He modified it, however, in light of Ludwig Feuerbach's doctrine
of materialism. Feuerbach, another leading German philosopher, was no less a Hege-

lian than Marx, but in his Essence of Christianity,written ten years after Hegel's death, he
extended Hegel's concept of "se1f-alienation" in a radical direction. Feuerbach added
"materialismi-the idea that humans are not only "species beings," as Hegel asserted,

but also sensuous beings; so that sense perception must therefore become the basis of all
to
science. Feuerbach maintained that all, history is the process of preparing humans
activity'
"unconscious"
than
rather
become the object of "conscious,"
According to Feuerbach, one area where unconscious activity predominates is
religion. Religlon is the mere projection of idealized human attributes onto an other*ortaty object (i.e., God). This supernatural object is then worshipped by humans as
all-powerful, all-knowing, and all-perfect. Proclaiming himself a "tealist," Feuerbach

argued that religion is unreal. He regarded the atffibutes of the divinity as nothing
more than the idealized attributes of humans, which, of course, cannbt be realized in'
this imperfect world. In other words, religion makes lifebearable Humans are willing
to accept their imperfect, earthly existence only because they unconsciously promise
themseives perfeciion in another wodd. Hence it was obvious to Feuerbach why religion is such a universal phenomenon.l
By Feuerbach's reckoning religion is a form of self-alienation. He and Marx both
used tire term "alienation" to refer to a process-and a result---of converting the products of individual and social activrty into something apart from themselves, both independent of them and dominant over them. However, Feuerbach confined his analysis to
the way in which humans alienate themselves in religion and in philosophy, whereas
Marx ipplied the concept to all manner of political and economic activiry including the
joins hands with God
very lnstitutions of capitalism. In Marx, for the first time, the state
,,alien,' being. The state derives its power and its existence from the fact that human
as an
beings are either iicapableor unwilling to face head-on the problems tlrat confront them
in aairy social interaition with one another. Over time, this monolithic structure called
the "state" increases its power over people's lives, simply because they allow it to do so'

Mafi's Economic Interpretation of History

With Hegel and Feuerbach providing the philosophical backdrop' we can now
to appreciate the innovational char{ter of Marx's thought. Grafting Feuerbach's materialism to Hegel's dialectic, Mhd-developed a "dialectical materialism,"
begin

I Marx,s

acceptance of this view underlies his description of religion as "the opiate of the masses."

-_

Part Three

Challenges to Economic Orthodoxy

whichhethenextendedtotheeconom,icrealm.Marxconsideredtheprimemoverof
way in which
individuai' *utt a living' that is' the
history to be the way t which
their material needs
This is l*po.,urr, t .causl unless
they satisfy their materJl needs.
"Men must be able
would cease to .";;;. i" Marx's words,
producare satisfied, human beings
,-ut. tirr,o.y.,,, Therefor., i{t . fi.rst historical act is ' ' ' the (Gennari
to live in order to
life itself"
tj,on of the means,o

rJrrv

irr"re needs, the production of material

one as well
a historical act but an economic
appreciated the
,iMarx that t. .i.-rv understood and
and it is part of the d;;;;r,
and expoand history. In faci, Marx's identification
interrelation, u.t*".rr..onomics
the mutually condiirr. ro.ur and drivinf ror.. rro1n among

"^iti;;:X:;1"Y!!#J;,nr;1tJl"',

sition of production u,
tioning forces of ptoal-"tiort' distribution'

othu"gt' and consumption

are what

distinguishedhisowneconomicsfromthatexistinguptohistime.InMatx,econom.
ics became lhe science of production'
activity into usefu1 ends
production o u ,oliur rorce insofar as it channels human
human natufe itself' In
shape
of producti"" rrap to
But Marx asserred ,h;;;;;h;s
one of his earlier works he wrote:

Thewayinwhichmenproducethefumeansofsubsistencedependsfirstofallonthenafur;
,eproduce. This mode of productior"
in existen..
of the actual means t1.rey find
";;;;;;;"
the physical existence of tl.i'
as u.*g tr-r. ,.froduction of
mlrst not rr" .or,,riJ"r.i simply
a definite form c.
ro16 or u.tirity of these individuals,
individuals. *"*.rli o u o.r.r-,i .
their life' sr
express
individuals
mode of lifeo"lr1"it pu.,. As
expressing tr-r.* rri.,'" J.?r"rt.
what the;.
with
both
production,
."i,.ia"' *i.1, their
they are. *n* *., ,*,.ir,.."r"*,
on the matert'
The nature of individuals thus depends
produce and*rtt-i;*ttey produce.
p' r2l)
(Crr*on ltleolog, in Marx, Precapbalist'
determining their productio n.
conditions

LikeAdamsmith,Marxrecognizedthatthedevelopmentofproductiveforcesilof labor is carried' Bu '

the d"g... ,o *ttl.t the division
every economy a.p*i, upon
of the progre'oi interests as the logical o,utcome
unlike Sm:ith, laurx uu* a conflict
of industrial an;
or tauo. t.oas first t; ttp111::"
sive division of lauo.. The division
town and courlabor, and hence to separation of
commercial labor fiom agricultural
labor, and finally to -'
of indusirl; r.o- commercial
ffy. Next it leacls to tir. ,."pu.ution
arises: inc-"
r.irra oi-iutor. Thus, further conflict
division among *"rr.rr, *ntin each
i"""*' and each worker becomes "chainec
vidual interests .o"i'u;it' community
to thei:
becomes an alien power, opposed
to a specific j"b. Er;;;;ily tr*urrr,-labor
Mai''
-t fil"J;ifli.llin,., between individual inrerests and communitv interests
:'
power aiv^or1;a from the real inte
as an independent powe.,.a
saw the rise of the state
the communitv.
ests of the individual and

v"t ih" ,ru,.

owes its being to the soct;'

classesalreadya.t.'-i*abythedivisionoflabor.Eachclassinpowerseekstopl-ccommunt'community interest- However, the

mote its o*r, inr"r.rf as the general
control'
no
has
it
alien force over which
perceives this class i"*"* as In
Thesituationbecomesintolerablewhentwoconditionsarefulfilled:First,t|..
p'op"*yit" in a wodd ofrvealth and culture'a Th:'
great mass of n mu"ity is rendered
I trlgr, i.u"r of productive power and hig
will only happen #.' p.ta".tio, ,eu"t "s
prr.
Second, the development of
matur.
degree of developm.rrr, u, under
of
""piiirir*.premise, the phenomenon tir'
As a-piu"tuut
ductive fbrces mux be universal.
ar.''proportions' other-wise' revolution
"propertylesr" .tu$ mqst be of wo'lawiJe

communism.ot'ritti'i["Iy

as 1oca1 events'

not as universal realities'

1ffiii

Chapter E1even

Karl

Marx

Static versus Dynamic Forces in Society

What Marx called the "forces of production," developed in the modern

247

age

through division of labor, are essentially dynamic. They consist of land, labor, capital,
and technolo gy, each of which is constantly changing in quantity and/ or quality as a
result of changes in population, discovery, innovation, education, and so on. During
the course of their social lives, however, humans enter into certain definite relations'
that are indispensable to their lives as productive beings but independent of their will.
These relations of production correspond to a particular stage of development of
wotkers' skill and productivity. These "rules of the capitalist game" are essentially
static and consist of two types: property relations and human relations. Property relations exist between people and things; human relations exist between people. According to Marx, it is the sum total of these relations that constitutes the economic
structure of society and upon which is superimposed a legal andpoliticalsuperstructure corresponding to definite forms of social consciousness. Every aspect of the
socioeconomic structure owes its origin to the relations of production simply because
institutions exist in order to make humans conform to the relations of production.

Figure 11-1 provides

simple schematic summary of

Marx's theory of society. As
the division of labor is pushed
to its logical conclusion, labor

becomes increasingly fragmented. The ensuing conflicts

of interest are further

aggra-

vatedby the institution of private propeffy, which ensures

Superstructure
(religion, law,
government)

the splitting up of accumulated

capital among different own-

ers and thus the

Relations of Production
(private property, wage system)

terms of figure 11-1, the

dynamic forces of production
come into conflict with the
staic relations of production.
Once this conflict reaches a

Forces of Production
(land, labor, capital, technology)

division
between capital and labor. In

suffrcient pitch, class struggle

and revolution occur, and the

pyramid

of

society tumbles,

from top to bottom.

Marx succinctly

Figure 11-l Max's "social pyramid," in which

the structure of society owes its origin to the
basic facts of economic production.

summa-

nzed the dynamic process of social change determined by the forces of production in
his preface to A Contribution to the Citique of Political Economy:

t
i
ts

,q

The mode of production of material life determines the character of the social, political,
and spiritual processes of 1ife. It is not the consciousness of men that determines their
existence, but on the conuary, their social existence that determines their consciousness.
At a certain stage of their development, the material forces of production in sociery come
in conflict with the existing relations of production, or-what is but a.[egal expression for
the same thing-with the property relations within which they have bEn-at work before.

248

Part Three

Challenges to Economic Orthodoxy

production these relations rurn into their fe-'

From forms of development of the forces of

ters.Thencomestheperiodofsocialrevolution.Withthechangeoftheeconomicfoulless rapidly transformed'

dation the entire immense supelstlucture is more or

Nosocialordereverdisappearsbeforealitheproductiveforces,lorwhichtherel.

of prodrrction never appe:.:

room in it, have been developed; and new higher relations

beforethemateriaiconditionsoftheire*isterrcehavematuredinthewombofthec:
sociery..,.Thebourgeoisrelationsofproductionarethelastantagonisticformoftl..
b

in the sense of individual antagonism' 'social process of prodirction-antagonisti.c not

lile of individuals in society; at the sai:-:
the
of one arising from conditions surrounding
of bourgeois society Create the ma :.
time the productive forces developing in the womb

rialconditionsforthesolutionofthatantagonism.(pp.20-21)
of economi'cs; it is-a theory of histo:.
A11 of this is, of course, more than a theory
greatest work' Capital' is clear1)' ''.
Marx's
politics, and sociology as well' However,

analysisofcapitalism,notofsocialismorcommunism'Nevertheless'afullunoe:
difficult were one I',t^rriirrg of the dynamics of that analysis would be extremely
about'
comes
first aware of the Marxian theory of how social change

Marx's Early Writings on Capitalist Production

into the laws of histcr
Das Kapitalwas the result of many years of investigation
study and contemplation produ"
economics, and sociology by Marx' These years of

u,rtllst or.e Marx launched his major work in

1867. Revisi:insig-l
provides
and
thought
mature
Marx's
to
Marx,s early writings adds dimension
irito the lntellectual path of his fertile mind'
gems that were all

TheEconomicandPhilosophicalManuscriptsof.lS44
a critical
Shortiy after he moved to Paris in 1843, Marx began

study of poii---

economy.InTS44,hecompletedseveralmanuscripts'whichwereapparentlyintel-r'
alized' howeve ''.
part of a forihcoming book. The book never materi
ta be a major

themanuscriptsremainedunpublishedformorethaneightyyears.Whenafulleo-'
the lrtle Economic and Philo' ' '
of these extant works was prt titt.a in :r32 under
Manuscriptsofts44,theoccasiongeneratedmuchexcitementamongMarxianschL,
contrary to some interpretatiorr '
and some reinterpretation of Marx's larer works.
and capital, although b"
writings
early
find a basic continuity berween Marx's
concepts that he
metaphysical
the
time he wrote the latter, Marx had abandoned
empirical ana"
more
a
of
in
favor
initiaily acquired tiom the German philosophers

under modern ca'-'

The central theme of the Manwsiripnisthat history, especially
that colrlfilul'' :
and
producers
as
ism, is the saga of alienation i.n people',s iives
from '''
escape
final
is
the
propeffy'
achieved through a revolution ugui"'t private
ai.
Marx
value,
of
theory
ation. Although he had not yet worked out the labor
H'
wealth'
all
of
source
the
expressed rn the Manuscriprs ihe idea lhat labor is
worker gets only a smal1 q '
the
that
observation
empirical
the
already acknowledged
lion s share of.the product o'
this wealth, barely enough to continue working' The
befween capital and labor i'
goes to the capitalist, a,J this leads to abitter struggle
keep wagc'
irrggt" the aim of the capitalist-who has all the advantages-is to
mere commodity and re 'l
minimum. Capitalism, Marx asserted, turns labor into a
the capitalist inevi::''
ail human relations to money relations. In these relations,
a subsistence-level existenc'
enriched at the expense of the worket, who settles into

iiI

Chapter Eleven

Karl

Marx

249

In an early analysis of profit, also found it the Manusffipts, Marx noted a trend
trend
toward monopoly concentration of capital into fewer and fewer hands' This

of the working

leads to an inirease in total profits and arr increase in the total misery
capitalist system
class. Marx theorized that eventually the contradictions within the

free' All
would lead to its demise, thus opening the way for humans to become truly
expected,
be
might
as
although,
these ideas reappear in Marx's more matufe works,
they areworked out with more precision and detall the second time around.
What the Manuscripts of tg,+q do not contain is a penetrating analysis of the real
a
contradictions of capitalism-one must look to Capital for that. But they do contain
The
political
economy.
fairly mature statement of methodological criticism aimed at
following passage is an examPle:
political economy starts with thefactof private property, but it does not explain it to us. It
private propexpresses in general, abstract formulas the mateial process through which
not
comprehendthese
It
does
for
laws.
takes
it
then
formulas
these
passes,
and
erry acfually

private property'
laws, i.e., it does not demonstrate how they arise from the very nalure of
and capital,
labor
between
the
division
of
political economy does not disclose the source
of wages to
relationship
the
it
defines
example,
for
and between capital atdland. When,
i.e.,
it takes for
cause;
ultimate
the
to
be
capitalists
the
of
interest
profit, it takes the
It is
grarfiedwhat it is supposed to explain. Similarly, competition comes in everywhere'
acciapparettly
a1ird
Ixplained from external cfucumstances. As to how far these external
politidental circumstances are but the expression of a necessary course of development,
fact'
an
accidental
be
to
it
to
itselfappears
.
.
exchange
.
cal economy teaches us nothing
the
The only wheels which political economy sets in motion are greed artdthe war amongst

greedy- -competition, (Manuscriprs,

pp' 1 06-1 07)

underlyClearly, Marx criticized economists for not explaining (understanding?) the

mere
the
to
understand
not
enough
ing causesof capitalism; in his view it was simply
about
came
mechanism
wJrkirrgs of markets. One must also know how the market
he put
and whire it is going. Marx felt it essential to grasp the connection between, as
,,private propefiy, greed, andthe separation of labor, capital, andlanded propeffy;
it:
and
befween exchange and competition, value and the devaluation of men, monopoly

competition, etc.-the connection between this whole estrangement and lhe

money

system" (ManuscriPts, P. 107).

the
Moreover, Marx ittempted in the Manuscriptsto uiticizepolitical economy on
The
basic
conlrabasis of real social contradictions that he had empirically observed'
diction identifled by Marx is that "The workel becomes all the poorer the more
wealth he produces . . . [he] becomes an evel cheaper commodity the more commodiproties he creates" (Manuscripts, p. 107). The devaluation of workefs, in othel words,
process
ceeds in direct proportion to the increasing value of commodities, and in the
themoutside
as
things
(commodities)
labor
their
of
the
objects
rvorkers confront
o{:-as
or
ownership
oYer
no
control
have
they
completed,
selves, things that, once

ilienthings, a powel independent of its producer. This idea, of course-that labor is

l.v its very nafure the externali zitg of a human capacity-Matx got from Hegel. But
he now critrcized economics for concealing the alienation inherent in the nature of
production. This
-abor by not considering the direct relation befween the worker and
economics and
Marxian
of
hallmark
the
is
Marx,
relation, so assiduously analyzedby
economics'
classical
:s the feafure that distinguishes it from

250

Part Three

Orthodoxy
Challenges to Economic

The Grundriilse

("1857

-1858)

,-:*:^1 c^uatr
ecofloflric criticism br
into ecc
Foray inrn
initial
tr :
of the tatet capital' But
n"Yt:nt.ry}:i;;;;;ss
not
'
t1o
clas..
the
Thev
from
vouns Marx'
tt,ut i-'. inherited
perfected tt.'. toot,,oiu;;;i'
collectr
viJ.^
that
y.u,,,
'
ensuing
of manuscripts

of

The Manuscripts

1844 r.eprcsent an

later use '.

u, ,Hg1;;rJ"*rrr*r",.al ""*rr.r
or'r't" technical arguments
u"a a'ut
e.
Politischen
to"iat'"i?;il;t
der
'J'Jo" o),naniu, cter Klirik
might be
:'
or pup.,, b",,, .h;;;i;."nl-.iio,1
Grundriss;
the
CapitaL.rr,is
oniv fra'sments of
raitna i*'*'l
c';:
in
(ourlines
included
ow.ie
things that ale not
'f-il*'A;';;;
English, b.ut.1hev ,.;;;i;;;"
the '
been translared inro
of t-he interrelations of
rrr,.ilu;;;;;y
precapitalo,
of
consumprr'
discussion
and
such as a
p'"d;;;;' ;;tribution' exchange'
ahistorical r.i;
ponent p""'
uusically
tt,."
ro,
,, .".,"I*i.,
"r;;;i;it';i;;
predec.,,o*
tris
the '
crltrcized
Marx
process of production to
he sooght to relate the

economisrs.

oT

,ritri*oi*iirirr,

production.
sociery,
of social development in

H.

Mi1l's postttor
prlri."L"rty toot issue with

p,,.g-i"t"*""#;;i,f

producrion-a,tf

'

;ffi J:!tf*q:ll
';";*ffi
ra'lr'
and
*a *i

at a et
du al s
g:,..Ill:; lifi : ffi";
:ffi
;'' "ti
.
CIeateS its own 1eg:-. '
*:U,
"XJ
.'",,-ioi-,"'*oduction
Moreover,
con'r'
general
of social development.
so-called
c

dons and

to.*lof

government.

M;'";;;l"JJtnut

onproductio"d;,";;4,gr-:1.-1rlif

tTr#fff
"

the

:tr,lit1Tii1":lii1i
ifiT:I;jffi
ror
u,^,1:i'*,
J r",,,,
"M

mi c s'l

o no
fi ::|'."J,*'$T;HI, h;;,,
j,..io.'. The rue nature of capitalist plo'f.':..
capitalist.p.o
L"''
,*,,"
'"
with the ,,,.
J" ^""Vtis of the historj'calbo;r
"f
as Uasii ,"?.'U"".n.,"'
i^fror
,*?,
'
between
conflict
involves ,fr. j11,"-,
"f
oi ttre zunaamentai

.,

ec

,ri .r"**"'J"
together these ide''
O:'u"
-'
tlt'e Grwnd.ris" i'ruo
l:
iYt
sie and r'""'"n^i^i"
ol-slrolus value anJ o1
theories
the
and
va'lue
ol
Mar'

capitalist 0r"

tr'"'iur'l"

perlected

'it""'v
\n A Conrribu,,r'j'lri, ii,,ru,,
The foltowing vear,''IT::T:3,;^'XTi..}"jt:""tff
opedthethe'?'f ffi

of Poliricat Econontl"

["}i:i:[1H$:"J""':i:

ffi :f ::f ":'.'"1'""1"*T1.-,^1",,H;i;ru;m'iJ;ffiTl*1?6'#;ln:,Ii

HTi;'*:ffifl:ffiil:''il'
il".noou*;*;;

t**ble

Hand or Hearry Fist?)

'J"'i"ur'
Ha.rd or hleavv Fist?

x
"H
asserts
slogan which

f ed gn n s- scrence'
on individuai
:lilH'::i
."tying
m ics was yet
vet a fledgling
1:'jla;;;;tiyr:1!:J'li
by
ui relying
economics
w h en econo
when
:]: 11:.i:'I.'I::
growrh and prosperity
I

econonry ,nr. i*,*"'

"?o,',-omic
oroducrive
Hl, implicit accePta.nce
rive and limired governm"n..

;.;;;;;;;"
ibout

.i'ti"t'*t'"'onary

o"*ll,,:jil[r;j:ffi:",Tffi"l+1l
",

in a marlcet econon
Marx argued .t,r. sn.,ij'n;"r,

jrr."."a

;,

wIc

class" whic
::i"rdna"n

capitalist
.t'," in**."i., of the ruling

:e'J'
*illfi I:::l"'ff
.,,J.i"0",,n.,:r.ri:h{il;,;]';"tS#::'l*;::ffi
p'':
of
anarchy
ln
uncoordinated sYStem'
i*t""=lit'on'"t* *tt

their purchase' n'tt"'aing

i"

*" *''"

'1"*
.,o'..i|:: o- -" de n o J nc"l caPrL4rrrqr
h e denounceo
M o r eov er, he
ticion."'
on, Moreover,
:.i: :T
med the exPioitdtion
a situation he ter
iljI ;""*

o{ their services'

'"luLe

;tl:

of lobor'
:#::l ;l;**.:m:[#v

avi

g'ch e

Chapter Eleven

Karl

Marx

251

To Marx, it made no sense to describe the market as organized economic activity because there
was no organizer. He maintained that coordination of economic activity required conscious, centralized control. Thus, he proposed an alternative social system whose goal would be to eliminate
exploitation and increase the efficiency of production. ln the end, all society would be turned into
one immense factory, directed by workers themselves, who would be liberated from the shackles
of capitalism. Marx denigrated Smith's "invisible hand" as a euphemism for the existing chaotic
order, in which "chance and caprice have full play in distributing the producers and their means of
production amont the various branches of industry."
At base, a fundamental point of method separates Smith from Marx. Whereas Smith reflected
the Enlightenment emphasis on the primacy of the individual, Marx mirrored the German ideology
of group supremacy. lt is as though, for Marx, the workers have no individual faces or interests;
instead they are defined by their membership in a common body, which Marx called theproletoriat.
ldentity does not exist apart from this group. Marx would not admit that any meaningful gains for
the proletariat could arise from economic growth in the existing capitalist regime. Thus, meaningful
revolutionary reform for Marx simply meant displacing one group of rulers (the bourgeoisie) with
another (the proletariat).
By not looking beyond the problems of collective decision making (no matter who the rulers),
Marx put a far greater burden than Smith on the innate goodness of mankind. Smith may not have
approved entirely of the human behavior he observed, but he took mankind as he found it. For his
part, Marx believed in the perfectibility of society because he believed in the perfectibility of human
nature. After almost a century of experience with Marxist schemes of collective organization, we
appear to be moving closer to Smith's view of human nature than to Marx's.

The Nature of Capitalism

The purpose of the previous section has been to establish that by the time Marx
$'as ready to write Capital, he had cefiair, clear-cut objectives in mind-objectives that

\r'ere consistent with his dialectical view of history. Specifically, he had to show (1)
how the commodity form of market exchange leads to class conflict and exploitation
of the labor force, (2) how the commodify system will eventually fail to operate
because of its own inherent contradictions, and (3) why the class conflict under capi-

talism, unlike class conflicts under earlier economic systems, should ultimately result
rn rule by the formerly exploited class rather than by a new ruling c1ass.
Marx understood capitalism to be an economic system in which people make a
hving by buying and selling things (i.e., commodities). According to Marx, four properties distinguish commodities. Commodities are (1) useful, (2) produced by human
labor, (3) offered for sale in the market, and (4) separable from the individual who
produced them. In Capital, Marx set outto analyze the production and distribution of
;ommodities. Such an explanation would indeed be empty without a theory of value,
ard Marx, who was well grounded in classical economics, turned to Smith and
R:cardo on this point.

The Labor Theory of Value

After a careful review of classical economic literature, Marx arrived at labor

as

-r e essence of all value. To him, value was an objectiue property of each and every com* oJiry. It therefore had to be rooted in something more substantial than the "superfi;:al" market forces of supply and demand. In fact, Marx could not have been

Part Three

Challenges to Economic Orthodoxy

impressed by purely subjective valuations (by utility comparisons, for example) sir:,
philosophically he was a materialist and therefore held that material relations a1c,.,
determine value. He also believed that these relations determine value prior to .
determination of price, so that price reflects merely a value caused by the purely ol' .
tive element common to all commodities-labor.

'-

Contradiction in Classical Yalue Theory? We have seen that classical econc

contained not one but two theories of exchange value: the short-run determinat:rj
price by supply and demand and the long-run theory of "natural price," or cost Lr
duction. Marx sensed the contradiction in this. The theory of natural price holcs
price is invariant in the long run, whereas even casual observation reveals that n'.
prices fluctuate constantly. Now if such fluctuations are the result of mere ch''
then so too are economic crises. This admission would defeat Marx's theory of c:.,

i.t is no surprise that Marx rejected classical value theory ln

wfote: "It is solely in the course of these fluctuations that:
Capitalhe
and
Labour

ticalmater.alism. So

are determined by the cost of production. The total movement of this disorder.
order" (tn Marx-Engels Reader, p. 175)'
are puzz\ing
Such statements are characteristic of Marx's dialectic, but they
"
r''
uninitiated reader. "what does he mean?" we ask. The answer is that Marx
prices ;ntzed, as did the classical economists, that under competition market
pn"
fluctuate at random but must revolve around a deflnite point. If the selling
:"
is
forced
commodity fal1s below its cost of production for too long, its ploducer
''
arise.
profits
business. Iithe selling price exceeds the cost ofproduction, excess
.

price falls. C
attract competitors anileadtemporarily to overproduction, so that
cost of pr "
quently, the point around which competitive market price fluctuates is
determined :
tion, which to Marx meant labor costs. Thus, he saw value as being
the "laws of the market" but by production itself'
Wol:'
The matter has been summed up effectively in another way by Murray
(i'e', sul':i ideal
prices
are
market
that
notes
Wolfson
scholar.
prominent Marxian
erti-ut", of the ratios of exchange by potential buyers and sellers. But comp' :
the labor consuil-.
forces these ideal estimates to conform to the materi a7 reality of
by the interac:'
directly
prices
explain
course,
of
might,
production. one

their

Ho-' '
these ideal estimates until the subjective valuations are tn equilibrium'
c ''
causation
of
direction
The
explanation.
different
a
Marx's materialism requires
explanatior-.
A
scientific
ratio.
exchange
lhe
objective
to
be from the ideal valu^iion
go from materialto ideal. Marx',s labor theory of value is consequently distin5*
-from
philosophy
earlier labor theories because it is firmly rooted in materialist
of value, Mat '' '
wages and capital, Having settled on an objective iabor theory
essence of ex'--.
the
the same kind of problems that Ricardo faced: (1) If labor is
of goods prt' -value, what is the exchange value of labor, and (2) how is the value
determineJ? The answer to the first problem entails a theory oi'

by machinery
the answer to the second entails a theory of capital'
Marx approached the first problem this way. The value of labor power r:-o- :
divided into an amount necessary for the subsistence of labor arld an amount
detern:'above that. The former, which Marx called "socially necessaly labor,"
value," rs
exchange value of labor itself-its wage. The latter, termed "surplus
not
exist uu .
priated"by the capitalist. Marx made it cleat that capitalism coutrd
worker piodrrred u value greater than hrs or her own subsistence requirement'

==,.,+q

Chapter Eleven

Karl

Marx

253

If a day's labor

was required in order to keep a worker alive for a day, capital could not
exist, for the day's labor would be exchanged for its own product, ard capitalwould
not
be able to function as capital and consequently could not survive. . . . If, howeve t,
a mere
halflday's labor is enough to keep a worker alive during a whole day,s labor, then
surplus
value results automatically. (Grundrisw, p. 230)

This surplus value does not arise in exchange, but in production. Thus, the aim
of
production, from the capitalist's standpoint, is to get surplus value out of each
worker.
This is what Marx meant by the "exploitation of labor." Exploitation exists because
the extra value contributed by labor is expropriated by the capitalist. Surplus value
arises not because the worker is paid lessthanhe is worth but because he priduces
more
than he is worth. Since this extra amount is expropriated by the owners of land
and
capital, surplus value may be regarded as the sum of the nonlabor shares of
income
(i.e., rent, interest, and profit).
Marx considered the principle of surplus value to be his main achievement. Certainly it is an integral part of the central theme of class conflict and revolution.
Under
capitalism, two classes emerge, with one class being forced to sell its labor power
to
the other in order to earn a living. This contractual arrangement kansforms
labor into
a commodity alien to the worker. Without the difference between labor,s exchange
value (subsistence) and its use value (value of labor's output), the capitalist
would haie
no interest in buying labor power, and hence it would not be salable. So the ingredients
for social conflict-alienation andpolarizarion of classes-are inherent in caf,italism.
Ricardo hadprofferedlabor as the best measure of value, though not necessarily
as
the sole cause of vafue. Marx went further than Ricardo in this r.rp..t; he saw
labor as
both the measure and the cause of value. Moreover, he held tirat only labor_not
machines-can produce surplus value. How, then, does one value machinery? Marx,s
answer is that machines are "congealed labor" and therefore equal in value
to the cost
of the labor that produced them. This answer denies the fact ihat machines are productive in themselves and should therefore be valued in excess of the labor that
has
gone into their production. Nevertheless, Marx was so committed to
the labor theory
of value that he either ignored this objection or relegated it to minor importance.
The ttGrcat Contradiction," A more serious objection to the labor theory
was raised
by Marx's critics in the form of what has come to be known as the ,,great contradiction." The contradiction is posed as follows: If the exchange value of commodities is
determined by the labor time they contain, how can this be reconciled with
the empirically observedfact that the market prices of these commodities frequently differ from
their labor values? or to put it another way: we know that competition guarantees a
uniform rate of profit throughout the economy. yet even in a competitive economy
the
ratio of capitaltolabor differs among industries. With a Marxian theory of value (i.e.,
labor alone creates surplus value), profits should be higher in labor-intensive
industries; but empirically this is not the case. Thus, since cipital/labor ratios
differ while
the rate of profit remains uniform, it cannot be true (Marx's critics argued)
that value
is determined by payments to labor alone.
Marx may have anticipated this problem in his early writings, but his celebrated
answer to his critics is contained in the third volume of Capinl, published
posthu_
mously by Engels. Marx claimed that the theory of the competltion of capitals
resolves
this problem. This theory maintains that competition between firms and industries
will tend to establish a uniform rate of profit for all firms engaged in production.

254

Part Three

Challenges to Economic Orthodoxy

Whenthisaverageprofitisaddedtothe(different)costsofproductionindifferen'
tc
market prices from true (labor) values tend
industries. ttre intrviaual deviations of
of the
This is demonsirated below in the discussion
cancel out (rn the aggregate).
"But
terms
Marxian
peculiar
of
the solution requires the use
transformati.on prourlir.
SomeMgrxianDefi'nitions.BeforeanalyzlngMarx,ssolutiontothegleatcontradlc.
olnit technical terms' In solving the valudon in detail, it is necessary to clarify ,o-.
terminology:
ation problem, Marx employed the following
plus
= charges on fixed capital (i'e', depreci'ation
Constant caPital (c)
Variable caPital (r')

Outlay (ft)
Surplus value (s)

Rate of surPlus value (s')

Rate of profit

(p')

the cost of raw-material inPuts)

= total wages Paid to labor

profit)' or c + 1)
= cost of production (excluding
they are not
= contribution of workers for which
opaid, or excess ofgross receipts over the sum
constant and variable caPital
capttal
= ratio of surplus value to variable
s/r'
or
employed,
(c + v)
= ratio of surplus value to outlay' or s/

of capital to labor employed in productior

organic composition of capital (o) = tatio
6* | + sandNNP - v+s
Incontemporaryterms itcouldbe saidthatGNP =

to resolve the great contradiction b'

The Transformation Problem. Marx attempted
as table 11-1. His analysis and discussiormeans of an illustration replicated below
diffe:(1) different commodities are produced with
rest on three major assumptions:
coll'
up
use
(i..., diff.r.rrt capital/7abor ratios) and
ent organic composition, of .upuui
surplu'
of
(2) for convenience, the rate
stant capital at different rates ln production;
c
(3)
competition will tend to eqtalize the late
value is taken to be 100 pelcent; and
surplu'

is, the ratio of aggregate

profit among industries at l1,e "average rate,i' thal
value to aggtegate outlaY'
^:
Marxnotedthattlreorganiccompositionofcapitalinanysingleindustryu,L]:
dependonthetechnicalrelationoflaborpowertoothermeansofproduction.ButtLl]
capital intable 11-1 ar;
capitalto variable
purposes of illustration, the ratios of constant

arbttrai|ychosen'F*"diff.,",'tcommoditiesarerepresentedincolumnl,eachprcA, fol

as revealedin column 2. Commodity

duced with different capita|/|abor ratios,

example,isproducedwith80unitsofconstantcapitaland2}unitsofvariablecaptta.,
that the heterogeneou'

dollar expenditures so
For simpliciry assume itrat SO and20 are
of the fir'e
..labor,,
,,capital,, and
can be summed to determine outlay in each
units of
and tha'
industry
equals $100 rn each
industries. It can be noteJ, therefore,thatoutlay
of conunits
Column 3 shows the
t
the aggregateoutlay of the simple economy $soo.
dollar
The
process for each ofthe five industries'
stant capital used up in the production
capr(variable
in column 4by addingwage costs
cost of each commoaiav l, d",.r-ined
eascan
as a means of production but
tal) to column 3. Land is left out of the illustration

ilybeaccommodatedalongwithConstantcapital.Column5showssurplusvalueineach
6 reveals the
on variable capital' Column
industry, entered at 100 peicent of expenditures
The va1.
..true,, Value (labor value) of each commodity according to Marx,s labor theory.
(column 5)
cost (column 4) to surplus value
ues in thi.s column are determined by adding

Chapter Eleven

Table I l-l

(t)

Karl Marx

Transformation of Values into prices

(2)

(3)

(4)

(s)

(6)

(7)

(8)

Average

Sales

from

Price

Valuet

92
I03

+2

il3

-t8

77
37

+7
+17

422

Capital

Surpius Labor

Used

Commodity

Capitals Up

80c + 20v
70c + 30v
60c + 40v
85c + l5v
95c
5v

Totals

500*

c
D

255

Cost

Value Value

profit

50

70

5t
5t

8t
9I

20
30
40

40

55

t5

70

l0

t5
312

20

il0

22
22
22

422

ll0

202

90

ilt

r3t

22
22

(e)
Deviation
of Price

-8

Thistotalincludesacombinationof.,stocks',and..flows,,(c*,),n
-mn 7.
Aithough the sales price (column 8) and labor value (column 6) differ for each
commodity, column 9 shows the alge:raic sum of individual differences is zero.

According to Marx, the cost of a commodity differs liom its sales price by the average
amount of profit, which is added to cost (column 4) in order to determine the
sales prile
(column 8)' Column 7 is the ayerageprofit for each industuy and is uniform
across industries because of the law of competition. The profitrate in Marxian terms
is s/(c + v), or
110/500 = 0.22, which, when multiplied by the outlay in each industry ($100), yields
the
dollar amounts shown in column 7. Acompaison of columns 8 and 6 shows
that market
price differs from labor value for each commodity, as the critics contended,
but column 9
reveals that the algebraic sum of the individual differences is zero.
Marx concluded: ,,The
deviations of prices from values mutually balance one another by the uniform
distribution
ofthe surplus valve, orby the addition ofthe average profit of2ipercentofadvanced
capital to the respective cost-price of the commodities,, (Captal,I[, p. lS5).
This transformation of values into prices supports Marx's contention that in the
aggregate' labor is the true source of value, and in his preface to the third
volume of
Captal, Engels touted it as a triumph over Marx's critics. The truth is, however,
that
few economists today are willing to acceptthe transformation problem as
a valid substantiation of the labor theory of value. Ingenious as it is, Marx's solution denies that
machinery is productive oyer and above the amount of labor congealed in it, a
view
that modern economists refuse to accept.
Although much attention has been concentrated in this section on the mechanics
of value theory, it should be noted that this subject was of relatively minor importance
to Marx, who was more interested in the construction of a quasi-Ri cardianmodel
of
the development of an entire socioeconomic system. The narrower subject
of value
theory gained importance after Marx's death because of an emphasis on price
deter_
mination in neoclassical economics. It is interesting to note, liorr.u.r, that
debates
over the transformation problem have been more intense among
neoclassical economists than amongneo-Marxians.

The Laws of Capitalist Motion

we have yet to describe in detail the dynamics of Marx,s theory-what he called
"the laws of capitalist motion"-which would evenfuarly sound
ihe death knell

of

256

Part Three

capitalism.

Challenges to Economic Orthodoxy

major depaffure from classical economics is contained in Marx':

emphasis on technological change as the driving force of his social dynamics. Adarc
Smith was a preindustrial writer who understood progress in terms of rational humar

behavior rathet than in terms of technical advance. David Ricardo had very limitei
industrial experience; it was never his intention to recast political economy as a theon
of technological change. If anything, he saw the economic problem of society as ar
agricultural one. John Stuart Mill was more open to the prospects of technologicachange, and yet he did not al1ow it the central role in his theory that Marx did in his
Marx described five laws, or general tendencies, inherent in capitalism. EacL
stemmed from the dynamic nature of the economy, andeach was rooted in the conflic
befween the dynamic "forces of production" and the static "relations of production."
The Law of Accumulation and the Fslling Rate of Profit. Under capitalism,
all bu:rnesspeople try to acquire more surplus value in order to increase their profit.
By def;-

nition surplus value is derived from labor. Thus, we might expect capitalists to seeiout labor-intensive production methods in order to maximize their profits. In fac:

however, they continually strive to substitute capital for labor. The incentive to do so ,.
spelled out by Marx:
Like every other increase in the productiveness of labour, machinery is to cheapen co:modities, atd,by shortening the portion of the working day, in which the labouier worla
for himself, to lengthen the other portion that he gives, without equivalent, to the capira-.
ist. In short, it is a means for producing surplus vahrc. (Capital,I, p. 405)

The individual capitalist can profitably substitute capital for labor because it take.
time to adjust to new methods of production. The first capitalist to introduce labor-sa-,ing machinery will therefore be able to produce at lower costs than his or her rivals ar;

yet sell at a price determined in the market by the prevalence of less mech
anized firm:
However, what is true for the individual is not true for all. If every capitalist intr:duces more machinery, the organic composition of capital is increased; surplus vaiu.
falls, and so does the average rate of profit. (Verifii this from table 11-1.) Hence tr:
collective result of each capitalist's drive to accumulate more capital and more proi:
tends to drive down the average rate of profit.
Another reason why the rate of profit might fall over time is that workers ma..
push for higher wage rates. If realized, this prospect will drive up productiorr.or-.
while prices will still be determined by "socially necessary labor." Ricardo also recog-

nized this prospect, but he felt that such a development would be checked by r.
Malthusian population trap. But Marx was no Malthusian. Instead, he maintafue :
that population is culturally and socially determined. Therefore, higher wages will n,-:
necessarily be forced down again by rapidpopulation growth.
The Law of Increasing Concentration and the Centralization of Industry,
The dr:,,-.
for profit described above evenfually and inevitably leads to i grrut", substitution .:
capital for Tabor and transforms small-scale industry into large-scale enterprises
with ;
more marked division of labor and far greater capacity for output. This increase .*
production and productive capaciqr, Marx felt, would lead to generaloverproductic:
thus driving prices down to the point where only the most efficient producers wou_:
survive. The less efficient firms would be driven out of business by the above
circurstances, their assets being gobbled up by the survivors. As a result, industry
wou-:

Chapter Eleven

Karl

Marx

ZS7

become more and more centralized, and economic power would be increasingly
conceltrated in the hands of a few.
The Law ofa Growing rndustrial Reserve Army, The dynamic change
that accom_
panies technological innovation and capitat-labor substitution has
a drastic effect on
the working class-unemployment. In the passage below, note how Marx
turns the
division of labor that smith hailed as an economic blessing into a curse:
The self-expansion of capital by means of machinery is directly proportional
to the number of workers whose means of livelihood have been destroyed by this machiaery.
The
whole system of capitalist production is based upon the tactthit the worker
selts his
labour power as a commodity. Thanks to the division of labour, this labour power
becomes specialised, is reduced to skill in handling apmticular tool.
As soon as the handling of this tool becomes the work of a machiae, the use-value and the
exchange-value of
the worker's labour power disappear. The worker becomes unsalable,
like paf,er money
which is no longer legal tender. That portion of the working class which .rru.t
ir..y t u,
thus rendered superfluous . . . either goes to the wall in the unequal
struggle of ttre old
handicraft and manufacturing industry against machine industry, or else floods
all the
more easily accessible branches of industry, swamps the labor market, and
siaks the price
of labour-power below its value. (Capital,I, p. 470)

This displacement of workers by machines creates a "growing industrial

army of
unemployed," one of the inherent contradictions Marx saw within capitalism.
As the
foregoing discussion illusftates, this unemployment is of two types: (i)
technological
unemployment (caused by the substitution of machinery ror iiuor;
and (2) cyc'iical
unemployment (caused by overproduction, which in turn is caused
by incrbasini concentration and cenfi alization).
The Lat of rncreasing Misery of the proletariat, As the industrial
reserve armv
grows, so does the misery of the proletariat. In addition, capitalists
generally seek to
offset a falling rate of profit by lowering wages, imposing longer *orkduyr,
introducing child and female labor, and so forth. Al1 this
tJ the absolute misery of
"ortribrt.r
the working class.
The first effect of widespread use of machinery is to bring women and
children
into the labor force, because slight muscular sffength canbe u-pm.a
by the use of
machines. Instead of selling only his own labor power, therefore, ihe
worker is forced
to se1l that of his wife and children. In Marx,s words, the worker ,,becomes
a slave
trader." Such exposure to the rigors of factory life leads to high child mortality
rates
and to moral degradation among women and children, andfi.arxsought
to confirm
these allegations by citations from public-health reports in Britain.
As the most powerful means for shortening the working time required
to produce
a commodiry the machine also becomes the most powerfui means
for prolonling the
workday, so that the capitalist cafl appropriate more surplus value.
Moieovea ,p."iut_
ized and costly machinery left idle even for short periodi is expensive
to capitalists, so
they strive to minimize the length of idle machine time. According
to Marx, the result
is longer workdays, less leisure time, and more misery for
the laborler. Longer workdays
and intensification of work effort sap the strength and longevity
of the working class.
From a historical standpoint, this seems the least ,utia or Marx,s arguments.
In
strictly economic terms, Marx's doomsday prophecy has not been
fulfiiled. of course
it is unclear whether the working class has made great economic strides because
of
Marx's influence or despite his prediction of increasing misery. At
any rate, his formu_

258

Part Three

Challenges to Economic Orthodoxy

lation of the increasing-misery doctrine does not lend itself readily to empirical
with this
ing. Some Marxians have attempted to reconciie actual working conditions
has
class
working
the
of
misery
relative
the
that
pit af Marx's theory by asserting
production'
automated
today's
of
effects
anizing
increased-they point to the dehum
ethnic minorities'
or to the increasing alienation andpolarization of workers and
test-

The Law of crises and Depressions,

In a very modern fashion, Marx linked

the

capitalists wiil
explanation of business cycies to investment spending. He noted that
grows and
unemployed
of
army
the
When
at
others.
invest more at some times than
ano
machinery
in
less
invest
and
labor
more
hi.re
to
wages fa11, capitalists wr1l tend
machines
substitute
will
capitalists
seen,
have
equipment. But when wages rise, as we
This causes periodrc
for workers, bringing aboit unemployment and depressed wages.
the increasing-misdemonstrate
to
crises. Marx's .rlris"th"ory is pari of his intention

he also had to show

ery doctrine. Thus, the mere occurrence of ctises was not enough;
He did this by stressing the
capitalism's susceptibility to crises of increasing severity.
never-ending drive of the capitalist to accumulate'

InMarx,seconomic,y,t"-,increasingmiseryisrelatedtounemployment,which
capital, as outlined
in turn o u .onr"lrr.r.. tf the capitalist's efforts to accumulale
as a major cause
well
as
self-contradictory
above. This drive to accumulate is, in turn,
quote
Marx:
To
overproduction of capital'
of economic crises because it leads to fi]Ie
Assoonascapitalwouldhaveglowntosuchaproportioncomparedwiththelabouring
population,that...theincreasedcapitalproducesnolarger,olevensmaller,quantities
ofsurpius-valuethanitdidbeforeitsincreasetherewouldbeanoverproductionofcapic + Acwould not produce any more profit there
ta1. That i. io ,uv, increased capital
rate o' profit . . . due to a change in the
would be ,;;; and sudden iall in the avetage

"
295)
composition of capital' {Capital'II1'pp 29a

Thisfallingayeragerateofprofitwouldsignaltheimpendingcrisis.overtime,these
of
that is, it .y *orta affect more people (because
crises would become more severe;
to Marx, there
increases

i,

according
pop.,ru,io,, over time) and last longer' Moreover,

wouldbeatendencyt-owardpermanentdepressionbecausethei.ndustrialreservearmy

getslargerasthecrisesbecome-o,.,.,,,,".Thelogicaloutcomeofsuchatendency
issocialrevolution.Eventuallytheproletariatmust-unite,throwofftheirchains,and
take over the means of Production'

The End of CaPitalism and BeYond

AccordingtoMa.x,theclassicaleconomistsmislepresentedtheeconomicsystem
insofarastheyconsideredmoneyameremediumofexchange'Commoditiesrarely
they are sold for money, which is then
ffade forother commoditres directly; instead,
usedtopurchaseothercommodities.symbolically,theclassicalrepresentationofproductionandexchangetsC-M-C,,whereCstandsforcommoditiesandMstandsfor
M',
economy, the process ts M-c-M' , where
money. grt lvlrr; nia tuut in a capitalist
>M.Irtotherwords,money(capital)isaccumulatedtopurchase(orproduce)commodities,whicharethensoldforu,'.u.,,greatersumofmoney.M,tsMplrusprofit
(surplusvalue),andultimatelythedrivetoaccumulate,aSwehaveseen,producesthe
the demise of the economic system'
kind of inter nar cintradictions that lead to
in a world revolution, although he
Marx,s *.iri"g, nr-ly establish this belief
rareiydiscusseath"enatureofthepostcapitalistworld.Weknowthatthenewsociery

ffirj

:.,+-i:'*:E,.

Chapter Eleven

was to be a communist one

exist. Marx speaks

b
E

Karl

Marx

ZSg

in which bourgeois private property would no ronger

communism as the positive transcendence of private property,

or human selfestrangement,
and therefore as the rear appropriation of the himan..r.*.
iy
ana torman; communism
therefore as the comprete refirrn of man to himserf
u, u ,Lrlot g.r., human) betng-,
return become conscious, and accomplished within the
entire wealt of previous development' This communism, as fuly developed nafurarism, equals
humanism, and as funy
developed humanism equals naturalism; it is the genui,
..*irr*loo of the conflict
between man an'd nattte and between man and man-the
true resolution of the strife
berween existence and essence, between objectification
u"a rarr-.orrn mation, befween
freedom and necessiry berween the individual and the
rp..i.r. co--rnism is the riddle
of history sorved, and ir knows itself to be this sorutio

F
3

of

" iMr";r;;;r,p.

135)

rn The communist Mqntfesto, Marx spoke of communism as

a revorutionary new
mode of production, and he described ihe general
characteristics applicable to this
new mode (pp.
3l-32):

' Abolition of property in tand and application of all rents

2. Ahea*y progressive or graduated income tax
1

of land to public purposes

3. Abolition of all right of inheritance

4. Confiscation of the property of all emigrants and rebels
5' Cent;ralization of credit in the hands of the state, by means
of a national bank with
state capital and an exclusive monopoly
6' Centralization of the means of communication and transport
in the hands of the state
7' Extension of factories and instruments of production
owned by the state, the bringing
into curtivation of wastelands, and the improvem.rt or
trr. ,oil generally in accor_
dance with a common plan
8' Equal obligation of all to work; establishment of industrial
armies, especially for agri
culture

!r
L
E

9' Combination of agriculture with manufacturiag industries;

gradualabolition of the
distinction

between town and country by a more equitable

distribution of the popula-

tion over the country

r'

10' Free education for all children in public schools;

abolition ofchildren,s factory labor
in its present form; combination of education with i"a"rt
iJp.oauction,
etc.

I
r

This ten-point program raises a number of questions

as to implementation and
operation, but Marx never broached the subject. obviously
he saw his task as the anal-

of capitalism and its internal contradictions, and apparently

he preferred to leave
the building of new societies to others. consequently,
aflerMarx,s death the door was
left ajar for considerable controversy and disagreement
over the apptied aspects of his
political economy. The bitter battle near the turn
of the century Let
moderate
ysis

Marxian revisionists, such as Eduard Bernstein, and

"eel Leninists
the more militant
a clear course ofaction deducible from

attests to the inability oflVlarx's theory to give

the theory itself. Bernstein admirably

writings this way:

r"m-ea

up the

g."i"r *Jtrr.

pitfalls of Marx,s

A dualism runs through the whore monumentar work of

Marx . . . tre work aims
a scientific

at being

inquiry and also at proving a theory raid down torrg

uefo.. its drafting. Marx
had accepted the solution of the utofians in essentials,
rut rr.'a.e"ognized their means
and proofs as inadequate. He therefore undertook
a revision of them, and this

with the

260

Part Three

Challenges to Economic Orthodoxy

zeal, the critical acutetress, and love of truth of

a scientific genius. . . . But as Marx
approaches a point when that finar aim enters
seriousry into que"stio.r, ha ba"o-., .rrr""._
tain and unreriable- - - . It thus appears that this great
scientific spirit was, in the end, a
slave to a doctrine. (Etolutionary Socialism, pp.
209_270)

The Legacy of Marx

Marx has had a profound inlluence on the twentieth
century, and it is a testimonial to his far-ranging intenect that this influence ,rrpurr.J
,hl'boundaries of eco_
nomics alone. Even within the disciprine of economics,iowever,
Marx,s influence has
reached far beyond the small group of economists
who are Marxist in the strict
sense-people such as paul sweezy, Maurice Dobb, paul
Baran,and
to name a few. Any economist who reasons from the primary Ernest Mandel,
of production in
explaining economic rerations may be said to
have felt trr. irnr.r"e of Marx. The
same can be said for those who embrace the
dialecticat mearoJ, wirether or not they
accept the

ultimate conclusions of Marx,s analysis.

rn Marx's time, the diarecticarmethod of thought,
especialry Hegerian, permeated
the Continent, whereas the Engrish-speaking *orta
*u, -or.-irn,r.nced by the
empiricism of Locke and Hume. The consequence
is that scientific thought in general
has been empiricar in nature while social, poriticar,
ana tleot,ogical thought, espe_
cially with its roots on the Continent, has iended
to be dialecti"uiirr ruror.. This has
led to very different perspectives, which explains
the observed lack of understanding
and tolerance between the different bodies of
thougtrt.
Modern Marxists have ostensibly rallied u.or-rd
the essential core of humanism
in Marx's thought. The complexities of mass production
and the ,,third world,, depivation of various groups and nations havemadethe
kind of alienation Marx described
seem very real to a large segment of society.
Even those who decry the necessity of
violent revolution for meaningful sociar
are often spurred by a Marx-rike
"irurrg.
humanism to seek alternative forms of sociar
reform. In the end, this may prove to be
the most durable part of Marx,s legary to the
world.

References
Bernstein, Eduard. Etolutionary socialism:
New York: Schocken Boofts, 1965.

A citicism and ffirmation, E. C. Harvey

(trans.).

Marx, Karl. A contibution to the critique of poriticar

Economy, s.

w Ryazanskaya (trans.). Mos_

cow: Progress publishers, 1970.
caphal' Ernest untermann (trans.) and F. Engels (ed.).
3 vols. Chicago: charles Kerr,
1906-1909.
Grundisse der Kitik der poritischen okonomie,2 vors.
Berrin: Dietz_yerrag, 1953.
Economic and ph,osophic Manus*ipts of rg44,
Martin Mifligan (trans.)

(ed.). New York: International publishers,

t904.
Precapitalist Economic Formations, J. Cohen (trans.)
and

and D. J. Struik

E. J. Hobsbawm (ed.). New

York: International publishers, 1965.
Witings of the young ylu:" phitosoplry and
Society, L. D. Easton and K. H. Guddat
(eds. and trans.). Garden Ciry l\ty: anchor
Sooks, Doubleday, Igt6i.and E Engels. The communist Manifesto, Samuer
H B;i;.;. New york: Appreton_
Century-Crofts, 1955.
The Marx-Engels R
-,
C. Tucker (ed.). New york .W W Norton,
1972.
1y,!.
wolfson, Mttttay' A Reappraisal
ofMamian Economics.New york: Columbia
press,

university

1966.

Chapter Eleven
-Eleven

Karl Marx
Marx

261

Notes for Further Reading

The standard source of biographical information on Marx is Franz Mehring's Kail Marx:
(London: G. AJlen, 1936). Two other sources
worthmentiotareE.H.Can'sKailMarx: AStudyinFanaticism(London:Dent, 1934)andRobert Payne's more recent Man Q\ew York: Simon & Schuster, 1968). The personal side of Marx
is explored by Edmund Wilson in To the Finland Station (Garden City, NY: Doubleday, 1940).
See also David Mcl-ellan, Karl Marx (New York: Viking, 1975).
Ernest Mandel has written several interpretative works on Marx's economics. An Introduction to Marxist Economic Theory Q\ewYork: Pathfinder Press, 1970) is a brief and highly readable
introduction to Marxian economics for sfudent and professor alike. Thomas Sowell, Marxism
(New York: William Morrow, 1985) presents another lucid and carefully reasoned accowt. The
Formation of the Economic Thought of Kail Marx, Brian Pearce (trans.) (New York: Monthly
Review Press, 1971), is more difficult but nevertheless very instructive. Finally, Mandel's rwovolume work, Marxist Economic Theory,BriatPearce (trans.) (New York: Monthly Review Press,
1968), challenges the most ardent Marx enthusiast. For another view on the development of
Marx's economics, see Roman Rosdolsky, The Making of Marx's ,,Capital,,(London: pluto press,
1977). The impact of Marx's ideas, both as originally propounded and as interpreted and reformulated down to the present time, is the subject of David Mclellan (ed.), Marx: The First 100
Iears (New York: St. Martin's Press, 1983).
The development and continuity of Marx's thought has been discussed by a number of
other writers, both in regardto Marx's overall thought and in regardto specific aspects of his
analytical system. See, for example, Murray wolfson, "Three Stages in Marx's Thorgltt," History of Political Economy, vol. 1 1 (Sprin g 1979), pp. 117-146, in which he argues that Marx was
successively an empiricist, a humanist, and a materralist, and that his conception of the ideal
society changed with each successive stage. The following articles stress Marx's early thought
on various aspects of his mature theory: J. E. Elliot, "Continuity and Change in the Evolution
of Marx's Theory of Alienation: Fromthe Manuscripts thro,,tghthe Grundrisse to Capital," History
of Political Economy, vol. 11 (Fall 1979), pp. 317-362: Allen oakley, 'Aspects of Marx's Grundrisse as Intellecrual Foundations for a Major Theme in Capital," History of Political Economy,
vol. 11 (Summer 1979),pp.286-302; and Arie Arnon, "Marx's Theory of Money: The Formative Years," History of Political Economy, vol. 16 (Winter 198Q, pp. 555-576. Arnon shows, for
example, how Marx's monetary theory evolved from a Ricardian starting point but wound up
on the side of Thomas Tooke, against Ricardo. Suzanne Brunhoff, Marx on Money,M. J. Goldbloom (trans.) (New York: Urizen Books, 1976), presents a mature view of Marx's monetary
theory, which Arnon supplements by his historical work. For more on the subject of Marx's
monetary theory, see Don Lavoie, "Marx, the Quantity Theory, and the Theory of yarue," History of Political Economy, vol. 18 (Spring 1986), pp. 155-170, who accuses Marx of being a
"closet" quantity theodst; and Murray Wolfson, "Comment: Marx, the euantity Theory, and
the Theory of Value," History of Political Economy, vol. 20 (Spring 1988), pp. 137-140, who elaborates the dualism in Marx's thought that underlies Lavoie's interpretation.
The influence of classical economics on Marx's thought and the extent to which his analysis
emulated earlier economists has been a subject of repeated attention. See G. S. L. Tucker,
"Ricardo and Marx," Economica, vol. 28 (August 1961), pp.252)69; and B. Belassa, ,,Karl Marx
and John Stuart Mi11," weltwirtschafiliches Archiu, vol. 83 (1959), pp. 147-163. Although the
answer seems obvious on the surface, the question of how close Marx's value theory was to
Ricardo's continues to crop up. One important source of ideas on Marx's theory of value is I. I.
Rubin, .Essays on Marx's Theory of Value (Toronto: Black Rose Books, 1972). The proposition that
labor alone is the source of surplus value is explored by S. Merrett, "Some Conceptual Relationships in captal," Hbtory of Political Economy, vo1.9 flMinter 1977), pp.490-503. S. Groll, "The
Active Role of 'use value' in Marx's Economic Analysis," History of political Economy, vol. 12
(Fall 1980), pp. 336-371, advances the unconventional view that demand played an important
role in Marx's theory of value and that Marx's concept of demand is closer to modern theory
The Story of His Life, Edward Fitzgerald (trans.)

...::==.::

262

:
,,,,:::'

Part Three

Challenges to Economic Orthodoxy

Exchange value, and the

than to Ricardo,s. on this subject, see also S. Keen, "Use-Yalue,
Thought' vol' 15
Economic
of
History
of the
Demise of Marx's Labor Theory of Value," Iournal
his own
in
applying
consistent
been
had
Marx
(',.* 1993), pp. |07_12I, who asserts that if
of MarxEvolution
"The
Dreyer,
J.
S'
value.
of
theory
labor
a
logic, he could not have advocated

istAttitudestowardMarginalistTechnique," HistorytofPoliticalEconomy,vol'6(1914)'pp'48-75'

explainshowmarginalisttechniquesofpricinghavecreptlntlMalxlT:conomics.Thesubject
For some recent
attention and to spur revision'
of value in Marxian economics cot ti.t rei to draw
Theory of value and Heterogeneous
Marxian
attempts, see S. Bowles and H. Gintis, "The

of Economics, vol' | (1977)' pp' 173Labour: A Critique and Reformul ation," Cambridge lournal
,,Heterogeneous Labour, Money wages, and Marx's Theory," History of Polit'
lg2;IatSteedman,
pp. 551-57 4, who concludes that Marx's concept of abstract
ical Economy,vol. 1 7 (Winter"1985),
is essentially no different from the classical
labor is oflittle or no use ana tnat nii concept ofvalue
"The Consistency of Marx's Categories of
adbeater,
concept of a quantity of labor; and David Le
Economy, vo1' 17 (Winter 1985)' pp'
Political
of
History
Labour,"
productive and unproductive
finds them consistent and effective for
591-618, who defends Marx's use of the categories and
accumulation' See also R' chernomas'
analyzirtgthe determinants and limitations of capitalist
in Malthus, Ricardo' and Marx"'
Profit
of
,,productive and Unproductive Labor and the Rate
(Spri'ng1990)'
12
np 8] 95 For another corrtpataJournal of the Historyi|Erono*ic Thought,vol'
"Different Divisions of Capital
Meacci,
F
see
instead,
capital
of
tive study employing divisions
17(December1989),pp'13-21'
inSmith,RicardoandMarx," AtlaniicEconomiclournal,vol.
Marxian, Marx drew free11'
uniquely
is
motion"
of
capitalist
"iaws
phrase
the
Aithough
re]atinS to the behavior of
those
"laws"
upon classical economics, especially in formuiating
..Karl Marx, the Falling Rate of
Walker,
Angus
see
p.or,t
theory,
profits and wages. on trla,*,s
197|),pp.362_377;M. A.
Profit and British Political Economy,,, Economica,,ot. sa lNou.mber
profit:
A Dialectical Yiew," canadian lournal of Economics.
Lebowitz,,,Marx's Falling Rate of
"Technical Progress and values
vol. g (May lg76),pp. Zzi_zsl;and S. Groll andZ.B. Orzech,
Approach"' History of Poln'
Exegetical
An
Profit:
of
in Marx's Theory of the Decline in the Rate

icalEconomy,vol'19(Winter1987),pp.5gl4l4,whichchallengesthe.dominantviewthat

the organic composition of capital' For a

Marx attributed the falling .ut" of p.ofri to changes in
of the rate of profit to fall is not
logical (not empirical) atiempt to show that the tendency
of Marx's Theory of the
Socialism
for
unique to capitalism, see E. i. Khalil, "The Implication
Thought, vol' 16 (Fal'
Economic
of
Hbtory
the
of
Tendency of the Rate of Profit to Fa11," lournal
1994), pp.292-309.
continuing debate'
Marx,s wage and employment theories afe mattels of

on

Marx',s con-

occulrence under capitalism' see B' Shoul'

viction that overproduction would be a frequent
,,Karl Marx and Say,s la*.,, guortrrty ,Iournil of Economics, vol. 71 (November 1957), pp' 671conditions of the proletariat) may spring
62g.ImmiserrzationQ\tlarx's term for the worsening
alienation, exploitation, anc
from a nurnber of causes: low wages, long hours, unemployment,
the.Depletion of Humar
and
Hanna, "Karl Marx
so forth. M. Wolfson, z. B. orzeih, and S.
(Fall 1986), pp 497-514'
Economy,vol.18
Capital as Open-Acce* R.roo...," History of Political
rathel than in telms o:
costs
external
of
terms
in
have explored the possibility of exploitation
labol theory of value' They conclude tha:
Marx,s main theoretical formulation based on the
in the latter' The causes of immiserizamay be more exploitation in the former sense than
there

that it will increase over time' are discussei

tion, and the historical acculacy of Marx's prophecy
,,Marx's ,Increasing Misery, Doctrine," American Economic Review,vol.^50 lMatcr
by T. Sowell,

1960),pp.111-120;l'.M'Gottheil,"IncreasingMiseryoftheProletariat:AnAnalysisc:
of Economics and Political Science'
Marx,s Wage and nmpfoym"* Theory," Canadiin lournal

vo1'

28(February1962),pp.tog-tta;R'L.Meek,..Marx,sDoctrineofIncreasingMisery,,'Scier;;

andsociety,vol.26(1962),pp'422441;andD'Furth'A'Heertje'andR'VanDerVeen"'O(July 1978), pp' 253-276'

vol. 30

Marx,s Theory oru.r.-iioy- efi," oxford Economic

Malthusian population problem is the
The possible llnt between immiserization and the
Iror
Economic Reviewt w' J' Baumol' "Marx and the
subiect of a series of papers fr the American
Papers,

ml

Chapter Eleven

V Karl Marx

263

rarr,' of wages," American Economic Rettiew, vor. 73 (May

19g3), pp. 303-30g, touched off the
:ebate by claiming that Marx did not subscribe to the view
tnui*ug"levels must fall toward
s.'rbsistence under mature capitalism, a position
rejelcted by sam Hollander,
''I'farx and Malthusianism:
Marx's Secuiar Path of-emphatically
Wage s," American Economic Review, vol. 74
i \'Iarch 1984), pp. 139-151; but
defencled by M. D. Ramirez, ,,Marx and Marrhusianism:
Com_
rnent," American Economic Reuiew, vol. 76 (June i9g6), pp.
543_547. Reacting to the Baumol,/

Ramirez versus Holrander debate, A. Cottrell and w. A.

Darity, J..- i.Mu.r, Malthus,

and
wages," History of poliical Economy, vor. 20 (summer 19gg), pp.
llsso6,have taken the middle
ground-they argue that Baumol/Ramtrez fatl to establish ihat
Ma.x rejected the falling-wage
doctrine but that Hollander went too far in ascribing to Marx
the consistent position that wages
must be driven downward. Cottreli and Daritv find that immiserization
of the proletariat need
not be linked to a secular de9-ri1e in real wages. ourside of
this debate, urr, on the same general
subiect, Michaer perelman, "Marx, Marthus, and the organic
co-poriiion of Capital,,, History

of Political Economy, vo1.17 (Fa11 19g5),

pp. 461490, advances the notion il#;;;;;;ffi:

"Malthusian problem" as merely one of the many internal
contradictions of capitalism. For
more on the nature ol'wages in the Marxian system, see Francis
Green, ,,The Relationship of
wages to the value of Labour-power in Marx,s Labour
Marker,,, co*ir;g, Jo*ral of Economics,
vol. 15 (June 1991), pp. 199-214.
The sparks ofcontroversy have been ignited once again by
sam Hollander, on yet another
issue, namely whether or not Marx's economics may
be chaiacterized as general equilibrium
theory' Hollander argues the affirmative in "Marxian Economics
as 'General Equilibrium, Theory," History of Politicar Economy, vol.13 (spring 19g1), pp.
121-155;but his claim has been challenged by Dusan Pokorny in "Kafl Marx and General
Equilibrium,,, Hisro,ry of poltical Economy,
vol' 17 (Spring 1985), pp. 109-132, who finds no textual evidence
in Mu., to supporr Hollander's claim.
The most famous critique of Marx's economics in the nineteenth
century, designed to be
the definitive repudiation of Marxian analysis, was launched
by the Austrian economist Eugen
Bohm-Bawerk, Karl Marx and rhe crose of His System, paur
Sweezy (ed.) (New york:

A. M.
Kelley l94g). Joining Bohm-Bawerk in his arLack on Marx *rr
r# d;;rir" economist Ladis_
laus von Bortkiewicz, "The Transforrnation of values
into prices in the Marxian
system,,,

reprinted in the volume by Bohm-Bawerk referred to above;

and same author, ,,value and price
in the Marxian System," International Economic papers, no.2 (1952).
Together, these works
touched off a long debate, which is still raging, on the validiry
oiuu.*,, soiurion to the ,,transformation prob1em." The following works represent a cross-section
of the issues in this protracted debate: J. winternitz, "values and Prices: A Solution
of the So-Cal]ed Transformation
Problern," Economic rournal, vol. 5g (June 194g), pp.276-2g0;
K. May, ,,vaiue and prices of
Production: A Note on winternitz's solution,,, Economic Journal,
vol. 5g (December l94g), pp.
596 599; F. Seton, "The Transformation problem,,, Rettiew of Economic'Studies,
vo1.24 (June
1957), pp. 149-160 and R. Meek, "Some Notes on the Transformation problem
,,, Economic
Journal, vol. 66 (March 1956), pp. 94_107 .
After a brief hiatus, the debate was revived rn 1971by paul Samuelson, ,,Understanding
the Marxian Notion of Exploitation: A summary of the
so-Called Transfbrmation problem
between Marxian varues and Competitive prices," Journar
of Economic Literature, vor. 9 (June
1971)' pp' 399-431. Samuelson's article drew additionai
colnment r.o- ioun Robinson and
Martin Bronfenbrenner in the December 1973 issue of the same joumal.
Furthermore, the
debate continued with interpretations and commentary
by william J. Baumol and Michio Morishima and a "final word" by samuelson in the March 1974
issue of the Journal of Economic Literature. Nevertheless, see the article by A11en
oakrey, .,Two Notes on Marx and the
'Transformation Problem.,,, Economica, vol. 43 (November
1976), pp. 41141g.
For an important, albeit analyticaliy complex attempt
to illuminate the basic Marxian premises concertling value, see Murray Wolfson, "The Transformation problem:
Exposition and
Appraisal," Journal of the History of Economic Thought, vor. 12 (Falr
1990), pp. 179-.195.

,.=*#-

264

Part Three

Challenges to Economic Orthodoxy

communism or about the relaSurprisingly little has been written about Marx',s vision of
Marxian perspective' Pera
strictly
from
tive economic merits of socialism versus competition
of capitalism than
weaknesses
the
analyzing
time
more
far
haps this is because Marx spent

sketchingoutthepo,,-.upioll,tsociety.Severalarticlesskirttheseissues.seeJ.E.Elliot.
vol'

8
,,Marx and Corrt.riporu.y 1tloa.t of iocialist Economy," History of Political Economy'
and
Scarciry
Communism,
on
Engels
and
"Marx
(Summer tvlo1, pp,.'tst-ig4; .u*" author,
pp. 275-292; and same author again'
Division of Labor,i' Economic Inquiry,vo;. i8 (April 1980),
,,Marx and Schumpeter on Caiitaiism's Creative Destruction: A Comparative Restatement'"
95 (August 1980)' pp' 45-68'
Quarterly lournal of Economics, vol'
Depressrot"' History of
M. C. Howard and J. E. King, "Marxian Ecoro-ittt and the Great

PoliticalEconomy,vo|.Zl(Spring1990),pp.81_100,detailhowtheGreatDepressionwas

Marxian EconomicTheory"' lourviewed by Marxists. T. W. Hutchison, "Friedrich Engels and

nalofPoliticalEcon**y,uot.86(April 1915),pp.303-32},suggeststhatEngels',scontributionsto
recogrtzed, specifically
Marx,s economics are much more importarri tt u., has been generally
see also o'
mechanism'
competitive-price
the
of
Engels,s account of the essential functions
,,Marx's view of Competition and Price Determination," Histor\ of Political Economy'
Horverak,
theory of competition_into
vol.20 (summer lggg), pp. 27i-2gg, who tries to bring Marx',s
Finatly' Joan Robcompetition'
of
sharper relief by .orrt urtirrg it with the neoclassical concept
Marxian
reconcile
to
attempts
1966),
(London:
Macmillan,
inson, Essay on Marxian Einomics
argument regarding
Marx's
that
contends
she
things,
other
Among
and orthodox ..orro-i.r.
theory ofvalue' But old habits die
the fate ofcapitalism does not depend crucialty on the labor
some new sparks in this
hard, atdthe debate over Marx',s labor theory of value rages on. For
Surplus Value: A Sugand
Exchange
of
Value,
old tinderbox, see J. Cartelier, "Marx's Theory
1991), pp' 257270:
(September
15
Economics,vol.
of
Journal
Camb,ridge
gested Reformul ation,"

Cambidge lournal of Economics'.vol.

Chai-on Lee, "Marx's Labour Theory of Value Revisited,"
,,Structure, Agency, and Marx's Analysis oi
pratten,
17 (December tsgii), pp. 46347g; and S.
political Economy, vol. 5 (October 1993), pp. 403426.
the Labour p.o..rr,;; feview of
retreat. several yeatsTater a
The fall of the Berlin wall in lggg sent many Marxists into
economics in disarray as a
minisymposiu mwas orgarized around the question: "With Marxian
Union' etc')' is it norv
Soviet
touchstone for actual economies (in Eastern Europe, the former
See the keynote paper
Marx?"
Karl
in
interest
time for historians of economics to reclaim their
Samuel Hollander'
Foley,
Duncan
Elliot,
John
from
comments
by Anthony Brewer and ensuing
Schabas, and Iar
Margaret
Roncaglia,
Alessandro
Negishi,
Tak;shi
King,
M. C. Howard, J. E.
109-206'
in History of PJticat Economy,vol' 27 (Spring 1995)'pp'
Steedman

Chapter 10
Marx and Engels on the Nature of Communism

.'

Max (1818-1883), like some other important economists of the nineteenth and

=rtieth centuries, did not consider himself merely an economist, pure and simple. His

:-:eption of "historical materialism" is really an attempt to unite all social sciences into
' ' rgle science of society. Although he did not totally succeed in this quest, one
*::sure
of his relative success is the fact that his ideas affected many other social
." -:rces, e.9., anthropology, history, sociology, psychology, etc. still, his greatest work,
":: lal, is first and foremost an analysis of economic ielations and inltitutions. For
. -r there are no universal economic laws that are valid in every historical epoch.
: i :- mode of production has its own specific economic laws which become irrelevant
" the general social framework changes. Marx's economics, therefore, focused
=
- : st exclusively on the capitalist mode of production.

-:
"-

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I

.$-.

": -

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.:

Communist Manifesfo, excerpted here, Max and Engels combined to present a

blueprint of the post-capitalist society. lt is as close as Max ever came to
, + : '7ing his vision of a better society. The Manifesfo is a political document as well as
i::nomic one, for although it describes the economic features of capitalism, it also
:s the aims of the Communist Party: to form the proletariat into a class; to
i --row the bourgeois; and to grasp political power. Marx's venom for the bourgeoisie
: : ,'ooZs through these pages. But it is also interesting to note that despite Marx's
'' . - ation as a revolutionary, he concludes with a proclamation of gradualism. He and
: ' - s write, for example: "The proletariat will use its political supremacy to wrest, by
=
-. "ies, all capital from the bourgeoisie, to centralize all instruments of production in
-", - ands of the State..., and to increase the total of productive forces
as rapidly as
'i! : e." Their ten-point program, unveiled at the very last, may therefore be seen as
- :: rint for creeping socialism rather a revolutionary call to arms.

.:
::

Karl Marx: Essential writings, edited by Fredric L. Bender. New

Torchbooks, 1972. Pages 240-263

,lllll

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-:tl

97

york

Harper

25. The Manifesto

This selection comprises the first two parts of The Manifesto
of the Communist party,
written by Marx and Engels in January, 1848. It remains the ctassic
popular expression of
their program and must be counted as among the handful of most
influential books ever
published. For our purpose it illustrates Marx's position
on the development and
significance of modern industry and of the historical ioles played
by the bourgeoisie and
the proletariat. one should carefully note the dialectical relationship
described as holding
between these two classes, for a great deal of Marr's political
argument depends upon the
thesis that as capitalism develops so too must the pioletariat
necessarily develop along
with it. The second part of the Manifesto, concerned with the progru,
of the infant
Communist party of Germany in 1848, has served as a model
for all subsequent

Communist movements.
A SPECTER is haunting Europe-the specter of Communism. All the powers
of old
Europe have entered into a holy attiance to exorcise this
specter: pope and Czar,
Metternich and Guizot, French Radicals and German police
spies.
Where is the party in opposition that has not been decried
as Communistic by its
opponents in power? Where the Opposition that has not
hurled back the branding
reproach of Communism, against the more advanced opposition
parties, as well as against
its reactionary adversaries ?
Two things result from this fact.
Communism is already acknowledged by all European powers
to be itself a power.
It is high time that Communists should openly, in the face of the whole world.
publish their views, their aims, their tendencies, and meet
this nursery tale of the Specter
of Communism with a Manifesto of the party itself.
To this end, Communists of various nutionuliti.s have assembled in
London, and sketched
the following Manifesto, to be published in the English, French,
German, Italian, Flemish
and Danish languages.

L
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From The Manifesto of the communist Party, Eans. By samuel Moore (Moscow:
Foreign Languages publishing
House, n.d.).

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Bourgeois and proletarians

The history of all hitherto existing society is the history
of class struggles.
Freeman and slave, patrician and plebeian, lord and
s#, guild-master and journeyman.
in a word, oppressor and oppressed, stood in constant opposition
to one another, carried
on an unintemrpted, now hidden, now open fight, a nghithat
each time ended, either in a
98

'

lutionary reconstitution of society at latge, or in the common ruin of the contending

-r -ieS.

Lr the earlier epochs of history, we find aknost everywhere a complicated arrangement

, ,ciety into various orders, a manifold gradation of social rank. In ancient Rome we
- : patricians, lnights, plebeians, slaves; in the Middle Ages, feudal lords, vassals, guildsubordinate
-,..rr, journeymen, apprentices, serfs; in almost all of these classes, again,
of feudal
ruins
from
the
"-::rions. The mode6 bootg"ois society that has sprouted
new classes, new
" ,:v has not done away with class antagonisms. It has but established
old
ones.
the
place
of
' -r,ionr of oppression, new forms of struggle in
l,ur epoch, ihe epoch of the bourgeoisie, possesses, however, this distinctive feature:
:,s simplified the class antagonisms. Society as a whole is more and more splitting up

.',\'o great hostile camps,

into two great classes directly facing each other: Bourgeoisie

r . -::oletariat.
. : tm the serfs of the Middle Ages sprang the chartered burghers of the earliest towns-- :hese burgesses the first elements of the bourgeoisie were developed'
ground for the
, :e discovery of America, the rounding of the Cape, opened up fresh
-. bourgeoisil. the East Indian and Chinese markets, the colonization of America,
": ii,ith the colonies, the increase in the means of exchange and in commodities
:Jiy, gave to commerce, to navigation, to industry, an impulse never before known,
to the revolutionary element in the tottering feudal society, a rapid

=.rr6y,

rll : , llTlOllt.
-,.. f'.udut system of industry, under which industrial production was monopolized by
The
. - zuilds, now no longer sufficed for the growing wants of the new markets.
by
the
side
--.;turing system took its place. The guild-masters were pushed on one
m"."-,,cruring rniOOfr class; division of labor betrveen the different corporate guilds
-:d rn the face of division of labor in each single workshop'
i:antime the markets kept ever growing, the demand ever rising. Even manufacture
- i,-r sufficed. Thereupon, steam and machinery revolutionized industrial production.
...ce of manufacturs was taken by the giant, Modern Industry, the place of the
the leaders of whole industrial armies, the
-*."1 middle class, by industrial millionaires,
*bourgeois.
",
America
: :ern industry has established the world market, for which the discovery of
development to commerce, to
".-le way. This market has given an immense
: -:,,n, to communication by land. This development has, in its turn, reacted on the
of industry; and in proportion as industry, commerce, navigation, railways
-.:-. in the same proportion the bourgeoisie developed, increased its capital, and
1,, ,, . r.io the background every class handed down from the Middle Ages'
.:. therefori how the modern bourgeoisie is itself the product of a long course of
and of exchange.
. --:nt. of a series of revolutions in the modes of production

,,

.:

i,

99

Each step in the development of the bourgeoisie was accompanied by a correspondir.

political advance of that class. An oppressed class under the sway of the feudal nobility. .
armed and self-governing association in the medieval commune; here independent urL,.
republic (as in Italy and Germany), there taxable "third estate" of the monarchy (as :
France), afterward, in the period of manufacture proper, serving either the semifeudal
the absolute monarchy as a counterpoise against the nobility, and, in fact, cornerstone
the great monarchies in general, the bourgeoisie has at last, since the establishment
Modern lndustry and of the world market, conquered for itself, in the mode:representative State, exclusive politicai sway. The executive of the modern State is bu:
committee for managing the common affairs of the whole bourgeoisie.
The bourgeoisie, historically, has played a most revolutionary part.
The bourgeoisie, wherever it has got the upper hand, has put an end to all feud;
patriarchal, idyllic relations. It has pitilessly torn asunder the motley feudal ties that bou: man to his "natural superiors," and has left remaining no other nexus between man a; man than naked self-interest, than callous'tash payment." It has drowned the mc,
heavenly ecstasies of religious fervor, of chivalrous enthusiasm, of philistrr.
sentimentalism, in the icy water of egotistical calculation. It has resolved personal wor '
into exchange value, and in place of the numberless indefeasible chartered freedoms, h.
set up that single, unconscionable freedom-Free Trade. In one word, for exploitatic.
veiled by religious and political illusions, it has substituted naked, shameless, direct, brur,
exploitation.
The bourgeoisie has stripped of its halo every occupation hitherto honored and looke up to with reverent awe. It has converted the physician, the lawyer, the priest, the poe
the man of science, into its paid wage laborers.
The bourgeoisie has torn away from the family its sentimental veil, and has reduced tl.
family relation to a mere money relation.
The bourgeoisie has disclosed how it came to pass that the brutal display of vigor the Middle Ages, which Reactionists so much admire, found its fitting complement in tL"
most slothful indolence. It has been the frst to show what man's activity can bring abor,
It has accomplished wonders far surpassing Egyptian pyramids, Roman aqueducts, ar Gothic cathedrals; it has conducted expeditions that put in the shade all former Exoduse
of nations and crusades.
The bourgeoisie cannot exist without constantly revolutionizing the instruments r
production, and thereby the relations of production, and with them the whole relations c
society. Conservation of the old modes of production in unaltered form was, or th:
contrary, the first condition of existence for all earlier industrial classes. Constar
revolutionizing of production, uninterrupted disturbance of atl social condition.,
everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier one..
All fixed, fast-frozen relations, with their train of ancient and venerable prejudices an.
opinions are swept away, all new-formed ones become antiquated before they can ossifr
"

100

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profaned,-and man is at last compelled to

is solid melts into air, all that is holy is
,,rith sober senses his real conditions of iife, and his relations with his kind.
,",
chases the bourgeoisie
.e need of u ,orrtuntfy expanding market for its products
everywhere'
;: the whole surface of the globe- It must nestle everywhere' settle
,*: -rsh connections everywhere'
its exploitation of the world market given a cosmopolitan
- ie bourgeoisie tras-ttrrough
country. To the great chagrin of
-::;ter to p,oduction and consurnption in every
f."t of industry the national ground on which it
: -:.:onists, it has Oru*n from under ih"
destroyed or afe daily being
:, A11 old-established national industries have beenintroduction
becomes a life and
r: r-\,ed. They are Arfoag.O by new industries, whose
rriina nations, by industries that no longer work up indigenous
,Lr --. question for all ci
zones; industries *n"t",xj::":,t:
. ';, --.ratfi&I, but raw material drawn from the remotest
place of the old
home, but in every quarter of the globe' In
,
of the ,ountry, we find new wants' requiring for their
-:---i. satisfied by d;;roductions
climes. In place of the old local and national
,, - ,.rcdon the productls of distant lands and
rorool
'
universal
"J#-lJn i"n we have intercoursa in every direction, "-i.
production' The
I :::3pendence of nations. RnO u, in material, so also in intellectual National oneproperty'
I;-3rru&1 creations of individual nations become common
from the
become more and more impossible, and
'-;; -]3SS and narrow-mindedness
literature'
*: ;:ous national and local literature's' there arises a world
..-.tr

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r,

-.-,ebourgeoisie,bytherapidimprovementofallinstrumentsofproduction'bythe
draws all, even the most barbarian' nations
:t-:sely facilitated ,n"un, of communication,
which it
: ;:r-ilization. The,t"up prices of its commodities are the heavy artillery with obstinate
which it forces the barbarians'intensely
,: r::! down all Chinese walls, with
nations, on pain of extinction' to adopt the
. .:.: of foreigners to capitutate. It compels all
.:,:eoismodeofproduction;itcompelsthemtointroducewhatitcallscivilizationinto
In one word, it creates a world after its
t] I : :iifut, i.e., to become bourgeois themselves.
towns. It has created
has subjected the counrry to the rule of the
the rural'
-::ous cities, h* ;;;;ily'irrr."*.d the urban population as compared with
the population from the idiocy of rural life'
,ii : -:-i thus rescued a considerable part of
the towns, so it has made barbarian and
..-i it has made ,rr" .ourrry dependent on
of peasants on nations of
::rbarianroort i", Oependent on the civilized ones, nations
.: ":ois, the East on the West.
of the
l:e bourgeoisie keeps more and more doing away with the scattered state
population'
It has agglomerated
,rion, of the means of production, and of pioperty'
-":,rzed means oi p.oOo.rion, and has concenirated property in a few hands' The
or but loosely
Llr : , i
.onr.qo.nr" of ,f,it was political centralization' Independent'
.=,;ed, provinces *i,h,"p*ute interests, laws, governments and Systems of taxation,

-ltilrrreoisie

-inents
'=-itions
:..

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()11
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101

became lumped together into one nation, with one government, one code of laws,
national class-interest, one frontier and one customs tariff.
The bourgeoisie, during its rule of scarce one hundred years, has created more

t:

massr.,

iilut

and more colossal productive forces than have all preceding generations togeth;:
Sub.jection of Nature's forces to man, machinery, application of ctremistry to industry
a::

agriculture, steam navigation, railways, electric telegraphs, clearing of whole continer

for cultivation, canalization of rivers, whole populations conjured out of the ground-

what earlier century had even a presentiment that such productive forces slumbered in tl-..
lap of social labor?
We see then: the means of production and of exchange, on whose foundation th.
bourgeoisie built itself up, were generated in feudal society. At a certain stage in
th.
development of these means of production and of exchange, the conditions under
whic:.
feudal society produced and exchanged, the feudal organization of agriculture an;
manufacturing industry, in one word, the feudal relations of property becime no
longe:
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 to it, and by the economical and political sway of the bourgeoii class.
A similar movement is going on before our own eyes. Modern bourgeois society with
its relations of production, of exchange and of property, a society that has conjuied up
such gigantic means of production and of exchange, is like the sorcerer, who is no longei
able to control the powers of the nether world whom he has called up by his spells.
For
many a decade past, the history of industry and commerce is but the history
of the revolt
of modern productive forces against modern conditions of production, against the
property relations that are the conditions for the existence of the bourgeoisie
and of its
rule. It is enough to mention the commercial crises that by their periodical return put
on its
ffial, each time more threateningly, the existence of the entire bourgeois society. In these
crises a great part not only of the existing products, but also tie previously
created
productive forces, are periodically destroyed. In these crises there breaks out
an epidemic
that, in atl earlier epochs, would have seemed an absurdity-the epidemic of
overproduction. Society suddenly finds itself put back into a state of momentary
barbarism; it appears as if a famine, a universal war of devastation had cut off
the supply
of every means of subsistence; industry and commerce seem to be destroyed; and whyi
Because there is too much civilization, too much means of subsisten.",'
too much
industry, too much commerce. The productive forces at the disposal of socieiy
no longer
tend to further the development of the conditions of bourgeois property;
on the contrary,
they have become too powerful for these conditions, fy wnicn-tn.y ui. fettered,
and so
soon as they overcome these fetters, they bring disorder into the whole
of bourgeois
society, endanger the existence of bourgeois property. The conditions of
bourgeois society
are too narrow to comprise the wealth created by them. And how does
the bourgeoisie get
102

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destruction of a mass of productive forces;

I'er these crises? On the one hand by enforced
exploitation of

and by the more thorough

the other, by the conquest of new markets,
and more destructive
say, by paving the way for more extensive
":.e old ones. That is to
whereby crises areprevented'
,ir.r, *O by diminishing iht
feled feudalism to the ground are now
The weapons with i,tirf, the bourgeoisie
:rned against the bourgeoisie itself'
weapons that bring death to itself; it has
But nor only tras-ilie Lourgeoisie forged the.
modern working
the ien who ui" to wield those weapons-the
existence
into
called
-io
. r----1^-^r r*
--ass-the proletarians.
oofra nrr
proportlon $
the same
in +r.^
bourgeoisie, i.e., capital, is developed'
ln proportion
^-it"
o"raoped-a class of laborers, who live only so
.:.: proletariat, the *oJ.* *oit ing ,tass,
long as their labor increases capital'
tg as they find *ork, and who nro *ott only so
are a commodity' like every other
l:ese laborers,,who must se1l themselves piecemeal,
to all the vicissitudes of competition'
consequ"nrry
-:-:cle of commerce, and are
"*posed
a1l the fluctuations of the market'
to division of labor' the work of the
owing to the extensive use of machinery and
and, consequently' all charm for the
:: -,letarians has losi all individual characier,
machine' and it is only the most simple' most
,- -rkman. He becomes an appendage of the
tnu.rt that is required of him' Hence' the cost of
-^ -notonous, and most easily acquired
that he
almost entird, to the means of subsistence
: :_,duction of a workman is restricted,
of a
price
of his race' But the
maintenance, and tor itre propugution
his
for
=,:uires
of production' In proportion'
.iO iir"r"r"re also of labor, is equar to itt tott
in
work increases, the wage decreases' Nay more'
the
of
repulsiveness
the
as
"--:efore,
labor increases, in the same proportion
:: lortion as the ri" or machinery and division ofprolongation
of the working hours, by
*h.tt,er by
":,. burden of toil also increa,,,,
etc'
given time or-by increased speed of the machinery,
.- ::ease of the work exacted in a
of the patriarchal master into the
\Iodern irdrst y hus convertJO the little workshop
crowded into the factory' are
.:..r factory of tfre'inOostrial capitalist. Masses of laborers' they are placed under the
';.nized like soldiers. As privates of the industrial array
Not only are they slaves of the
:mand of a perfect hierarchy of officers and sergeants'
by the
" *:geois class, anJ of the bourgeois State; ttrey are daily and hourly enslaved
*.:hineo by the overlooker, and, above all, by-the individual bourgeois manufacturer
aim' the more
this despotism proclaimf Sain to be its end and
---,,rlf. The more
::;. the more hateful ,nd tt't more embittering it is'
labor, in other words, the
lle less the skill and exertion of strength iirplied inismanual
,- :: modern i"d*ry;;mes developei, the mgre the labor of men superseded by
any distinctive social validity for
: -. : f women. Differences of age and sex ha,e no longer
or less expensive to use' according to
A11 are instruments of labor, more
,
,

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-,-idcal
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r'"'ith

-:ed up
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1l-". For
: revolt

-:sr the
:; of its

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;reated
::idemic
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supply
why?
:,: much

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-'.,ntraq',
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:.-urgeois
:s socieq

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tf$ng

class.
.t :9e and Sex.

:--,.rsie ge:
it l-'

No sooner is the exploitation of the laborer by the manufacturer, so far, at an end, th.
he receives his wages in cash, than he is set upon by the other portions of the bourgeois::
the landlord, the shopkeeper, the pawnbroker, etc.
The lower strata of the middle class-the small tradespeople, shopkeepers, and retir. ti,
tradesmen generally, the handicraftsmen and peasants-all these sink gradually into
proletariat, partly because their diminutive capital does not suffice for the scale on whic
ivtodem Industry is carried on, and is swamped in the competition with the lar5 capitalists, partli because their speciatzed skill is rendered worthless by new methods '
production. Thus the proletariat is recruited from all classes of the population.
The proletariat goes through various stages of development. With its birth begins i-,
the:
struggle with the bourgeoisie. At flrst the contest is carried on by individual laborers,
agains
locality,
bV 6. workpeople of i factory, then by the operatives of one trade, in one
the individual bourgeois who directly exploits them. They direct their attacks not agains:
the bourgeois conditions of production, but against the instruments of productio:
themselves; they destroy imported wares that compete with their labor, they smash tc
pieces machinery, they set factories ablaze, they seek to restore by force the vanishec
status of the workman of the Middle Ages.
At this stage the laborers still form an incoherent mass scattered over the whole
country, and broken up by their mutual competition. If anywhere they unite to form more
.o*pult bodies, this is not yet the consequence of their own active union, but of the union
of the bourgeoisie, which class, in order to attain its own political ends, is compelled to set
the whole lroletariat in motion, and is moreover yet, for a time, able to do so. At this
stage, therefore, the proletarians do not fight ttreir enemies, but the enemies of their
enemies, the remnants of absolute monarchy, the landowners, the nonindustrial bourgeois.
hands of
the petty bourgeoisie. Thus the whole historical movement is concentrated in the
the iouigeoisie; every victory so obtained is a victory for the bourgeoisie'
gut with the devllopment of industry the proletariat not only increases in number; it
becomes concentrated in greater masses, its strength grows, and it feels that strength
more. The various interests and conditions of life within the ranks of the proletariat are
more and more equalized, in proportion as machinery obliterates all distinctions of labor,
and nearly everywhere reduces wages to the same low level. The growing competition
among thl bourgeois, and the resulting commercial crises, make the wages of the workers
ever more fluctuating. The unceasing improvement of machinery, ever more rapidly
developing, makes their livelihood more and more precarious; the collisions between
individuat workmen and individual bourgeois take more and more the character of
collisions between two classes. Thereupon the workers begin to form combinations
(Trades' Unions) against the bourgeois; they club together in order to keep up the rate of
wages; they found permanent associations in order to make provision beforehand for these
occasional revolts. Here and there the contest breaks out into riots.

104

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6.

: an end, tha.
bourgeoisie

',

and retire;

-il1v into th:r.e On whiC:

.:: the lars;
,r methods .,

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begins i-,
-rl.lfefs, the:
.. rn', agairi
.i lrlt agail:!
- productr,-:

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.;- lJUfgS,.
-- - L^- r.--l llJtLu'

Now and then the workers are victorious, but only tor a dme. The real fruit of their
":rrles lies, not in the immediate result, but in the ever-expanding union of the workers.
-:is union is helped on by the improved means of communication that are created by
*
-'dern industry and that place the workers of different localities in contact with one
-:,,ther. It was just this contact that was needed to centralize the numerous local
, "rggles, all of the same chiuacter, into one national struggle between classes. But every
:-is strugglo is a political struggle. And that union, to attain which the burghers of the
r jdle Ages, with their miserable highways, required centuries, the modem proletarians
: .:ks to railways, achieve in a few years.
This organization of the proletarians into a class, and consequently into a political
-::\', is continually being upset again by the competition between the workers themselves.
: - it ever rises up again, stronger, firmer, mightier. It compels legislative recognition of
--icular interests of the workers, by taking advantage of the divisions among the
-:seoisie itself. Thus the ten-hours'billin England was carried.
.{itogether collisions between the classes of the old society further, in many ways, the
-:se of development of the proletariat. The bourgeoisie finds itself involved in a
srant battle. At first with the aristocracy; later on, with those portions of the
-:geoisie itself, whose interests have become antagonistic to the progress of industry; at
, :mes, with the bourgeoisie of foreign countries. In all these battles it sees itseH
*.:elled to appeal to the proletariat, to ask for its help, and thus, to drag it into the
,:cal arena. The bourgeoisie itself, therefore, supplies the proletariat with its own
. r.3rlts of political and general education, in other words, it furnishes the proletariat with
: :rorls for fighting the bourgeoisie.
. urther, as we have already seen, entire sections of the ruling classes are, by the
,L --lce of industry, precipitated into the proletariat, or are at least threatened in their
---ilons of existence. These also supply the proletariat with fresh elements of
; :.tenment and progress.
. raliy, in times when the class struggle nears the decisive hour, the process of
r ..udon going on within the ruling class, in fact within the whole range of old society,
.-::s such a violent, glaring character that a small section of the ruling class cuts itself
- . and joins the revolutionary class, the class that holds the future in its hands. Just as,
, :. -'re ; at an earlier period, a section of the nobility went over to the bourgeoisie, so
. portion of the bourgeoisie goes over to the proletariat, and in particular, a portion
'- bourgeois ideologists, who have raised themselves to the level of comprehending
rL :-'-ically the historical movement as a whole.
- - all the classes that stand face to face with the bourgeoisie today, the proletariat
',: .S a really revolutionary class. The other classes decay and finally disappear in the
: modern industry; the proletariat is its special and essential product.
-.-: lower middle class, the small manufacturer, the shopkeeper, the artisan, the
" --.:. all these fight against the bourgeoisie. to save tiom extinction their existence as
105

fractions of the middle class. They are therefore not revolutionary,

but conservative. N.
more, they are reactionary, for they try to roll back the
wheel of history. tf by
,,
are revolutionary, they are so only in view of their impending
transfer into the"hur..
proletathey thus defend not their present, but their ruturl interests,
they desert their L
standpoint to place themselves at that of the proletariat.
The "dangerous class," the social scum, ihat passively
rotting mass thrown off br
lowest layers of ord society, may, here and there,
be swept into the
proletarian revolution; its conditions of life, however,
prepare it far more ror ri"'iur,',
bribed tool of reactionary intrigue.
In the conditions of the proletariat, those of old society atlarge
are already virtu,
swamped- The proletarian is without property; his relation
to his wife and children has longer anything in common with the bourgetis family
Jations; modern industrial lab
modern subjection to capital, the same in England u.
i, F.*.e, in America as in Germa:
has stripped him of every trace of national character.
Law, morality, religion, are to hi*
many bourgeois prejudices, behind which lurk in ambush just
as many bourgeois interes:,
All the preceding- classes that got the upper hand sought to for-rif!
their alre;acquired 'status by subjecting society at large io their
condilions of app.opriation. Tproletarians cannot become masters of the productive
forces of society, except
abolishing their own previous mode of appropriation,
and thereby also every otl-.
previous mode of appropriation. They have nothing
of their own to secure
their mission is to destroy all previous securities for, and insurance,s and to fortl
trd;;i;:
property.
"f,
All previous historical movemen8 were movements of minorities,
or in the interest
minorities' The proletarian movement is the self-conscious,
independent movement of r:
immense majority, in the interest of the immense
ma3ority. The proletariat, the lou...
stratum of our present society, cannot stir, cannot
*ir" itself up, without the whr
superincumbent strata of official society being sprung into
the air.
Though not in substance, yet in
in"
of the proretariat with r:
bourgeoisie is at frst a national struggle. The proletariaj"of
"rrggleeach count"y ;,,,, of cours.
first of all settle matters with its o*n bou.geoisie.
In depicting the most general phases of the development
of the proletariat, we traci
the more or less veiled civil war, raging within existing'society,
up to the point where th*
war breaks out into open revolution, and where the riiolent
overthrow of the bourgeois.
lays the foundation for the sway of the proletariat.
Hitherto, every form of society has been based, as
we have already seen, on ti::
antagonism of oppressing and oppressed classes. But
in order to oppress u .iurr, certar:
conditions must be assured to it under which it can,
at least, continue its slavish existenc;
The serf, in the period of serfdom, raised himself ,o
,.rb.rship in the commune, just a
the petty bourgeois, under the yoke of feudal absolutism,
managed to develop into
bourgeois' The modern laborer, on the contrary, instead
of rising with the progress c
.

,r##;;'i

fo*]

106

j justry, sinks deeper and deeper below the conditions of existence of his own class' He
"riorros a paupef, *O puop"titm develops more rapidly tt-ran population and wealth' And
".re it becomes evident that the bourgeoisie is unfit any longer to be the ruling class in
law' It is

as an overriding
:iety, and to impose its conditions of existence upon society
to assure an existence to its slave within his slavery'
-" -it to rule because it is incompetent
a state, that it has to feed him, instead of
.
:...ause it cannot nefp i"tting him sink into such
its
,:g fed by him. Soclety .in no longer live under this bourgeoisie, in other words'
: ,->ience is no longer compatible with society'
of the bourgeois class' is
The essentiat condition for the existence, and for the sway
wage labor' wage
... formation and uogln"nt tion of capital; the condition for capital is
the laborers. The advance of industry'
-:.-rr rests e*ctosireiy on competition b"rn."n
the laborers, due
, -.tse involuntary pro,,ot",. is itre bourgeoisie, replaces the isolation of
association' The development
;ompetition, by their revolutionary combination, due to
iro* under its feet the very foundation on which the
\lodern Industry, therefore,
"ut,
products. what the bourgeoisie' therefore'
-:geoisie produces and appropriates
are
' '. luces, above all, is its own graveAiggers. Its fall and the victory of the proletariat
. -r11y

inevitable.

II
Proletarians and Communists
as a whole?
what relation do the Communists stand to the proletarians
working-class parties'
other
to
fte communists do not form a separate party opposed
proletariat as a whole'
They have no interests separate urO upurt from those of the
and mold
lhey do not set up any sectarian principles of their own, by which to shape
; :rolet&rian movement.
parties by this only: 1'
he Communists are distinguished from ttre other working-class
the different countries, they point out and
--.: national strulghs of thJ proletarians of
-j . ro the front Ih" .o*rnon interests of the entire proletariat, independently of all
development which the struggle of the working
- - :ality. 2. In the various stages of
always and everywhere represent
- , ,guirrt the bourgeoisie has to pass through, they
I ;: .iiixosts of the movement as a whole'
.:e Communists, therefore, are on the one hand, practically, the most advanced and
every country, that section which pushes
-:e section of the working-class parties of
the
.:d ail others; on the othei hand, theoretically, they have over the great mass of
clearly understanding the line of march, the conditions' and
=."riat the advantage of
- .mate general results of the proletarian movement'
l-.: immediate aim of the Communists is the same as that of all the other proletarian
-_,. iormation of the proletariat into a class, overthrorv of the bourgeois supremacy,
"
- -;il of political power by the proletariat'
Ln

"
:

10-

The theoretical conclusions of the Communists are in no way based on ideas

or
principles that have been invented, or discovered, by this or that would-be
universal

reformer.
They merely express, in general terms, actual relations springing from
an existing class
struggle, from a historical movement going on under our very eyes. The
abolition of
existing properfy relations is not at all a distinctive feature of communism.
All property relations in the past have continually been subject to historical change
consequent upon the change in historical conditions.
The French Revolution, for example, abolished feudal property in favor
of bourgeois
property.
The distinguishing feature of Communism is not the abolition of property generally,
but the abolition of bourgeois property. But modern bourgeois private p.op"ny
is the final
and most complete expression of the system of producing and appropriating
products, that
is based on class antagonisms, on the exploitation of the .rny uy-trre rew. - ^
In this sense' the theory of the Communists may be summed up in the single
sentence:
Abolition of privare property.
We Communists have been reproached with the desire of abolishing the right
of
personally acquiring property as the fruit of a man's own labor,
which prop"erty is alleged
to be the groundwork of all personal freedom, activity and independence.
Hard-won, self-acquired, self-eamed property! Do you mean the property
of the petty
artisan and of the small peasant, a form of property that precedea ine^uourgeois
form?
There is no need to abolish that; the development of industry has to great
a
already
destroyed it, and is still destroying it daily.
"*t"n,
Or do you mean modern bourgeois private property?
But does wage labor create any property for the laborer? Not a bit. It creates
capital,
i.e., that kind of property which exploits wage labor, and which cannot increase
except
upon condition of beetting a new supply of wage labor for fresh exploitation. proper.ty,
in
its present form, is based on the antagonism of capital and wage iabor. Let us examine
both sides of this antagonism.

To be a capitalist is to have not only a purely personal, but a social status n

production. Capital is a collective product, and only- by the united
action of many
members, nay, in the last resort, only by the united action oi u[ ,rrnbers
of society, .un it
be set in motion.
Capital is, therefore, not a personal, it is a social power.
When, therefore, capital is converted into common property, into
the property of all
members of society, personal property is not thereby transformed
into sociai prop"rty. tt l,
only the social character of the property that is changed. It loses its
class character.
Let us now take wage labor.
The average price of wage labor is the minimum wage, i.e.,
that quantum of the means
of subsistence, which is absolutely requisite to keep tle laborer in bare existence
as a
108

:,

appropriates by means of his labor' merely

no means intend to abolish this
-.:-rces to prolong and reproduce ; bare existence. we by
. rsnnl aipropriation of the products of labor, an appropriation that is made for the
-..t.nunC" and reproduction of human life, and that leaves no sulplus wherewith to
:.mafld the labor of others. All that we want to do away with is the miserable character
iris appropriation, under which the laborer lives merely to increase capital, and is
only in so far as the interest of the ruling class requires it'
-- ,.r'ed to
In bourgeois society, living labor is but a means to increase accumulated labor. In
:munist society, accumulated labor is but a means to widen, to enrich, to promote the
,!=nce of the laborer.
In bourgeois society, therefore, the past dominates the present; in Communist society,
has
tresert- dominates the past. In bourgeois society capital is independent and
..'riOuutity, while the living person is dependent and has no individuality'
{xd rh; abolition of tfrii state of things is called by the bourgeois, abolition of
r: ,-rduality and freedom! And rightly so. The abolition of bourgeois individuality,
at'
-::eois independence, and bourgeois freedom is undoubtedly aimed
free trade,
:-1, freedom is meant, under the present bourgeois conditions of production,
:: seliing and buying.
f ut if-selling and buying disappears, free selling and buying disappears also. This talk
bourgeoisie about
-r tree seling and buying, *d all the other "brave words" of our
*y, onty in contrast with restricted selling and
:; -rrrrl in general, have a meaning,
. :g, with the fettered traders of the Middle Ages, but have no meaning when opposed
-.e Communistic abolition of buying and selling, of the bourgeois conditions of
.
:;ction, and of the bourgeoisie itself.
'r 0u are horrified ut oot intending to do away with private property' But in your
,:rg society, private property is already done away with for nine-tenths of the
of those
, -^.tion; its exiitence for the few is solely due to its nonexistence in the hands
of
form
a
with
:.:enths. You reproach us, therefore, with intending to do away
:::ty, the necessary condition for whose existence is the nonexistence of any property
--.-' immense majority of society.
us with intending to do away with your property' Precisely
--. one word, you ,"prouth
.::t is just what we intend.
::,tm the moment when labor can no longer be converted into capital, money, or rent,
: -cocial power capable of being monopolized, i.e., from the moment when individual
:;:1y carno longer be transformed into bourgeois property, into capital, from that
*;:1t, you say, individuality vanishes.
:' ,u must, therefore, confess that by "individual" you mean no other person than the
-"":ois, than the middle-class owner of property. This person must, indeed, be swept
-

trer. What, therefore, the wage laborer

trl

i.-

gi-

::)r -i:a
\

-1,

: ihe way, and made imPossible.

Communism deprives no man of the power to appropriate the products of society; alJ
that it does is to deprive him of the power to subjugate the labor of others by means ot
such appropriation.
It has been objected that upon the abolition of private property all work will cease, and
universal laziness will overtake us.
According to this, bourgeois society ought long ago to have gone to the dogs through
sheer idleness; for those of its members who work acquire nothing, and those who acquire
anything do not work. The whole of this objection is but another expression of the
tautology: that there can no longer be any wage labor when there is no longer any capital.
A11 objections urged against the Communistic mode of producing and appropriating
material products, have, in the same way, been urged against the Communistic modes of
producing and appropriating intellectual products. Just &s, to the bourgeois, the
disappearance of class property is the disappearance of production itseH, so the
disappearance of class culture is to him identical with the disappearance of all culture.
That culture, the loss of which he laments, is, for the enormous majority, a mere
training to act as a machine.
But don't wrangle with us so long as you apply, ro our intended abolition of bourgeois
property, the standard of your bourgeois notions of freedom, culture, law, etc. Your very
ideas are but the outgrowth of the conditions of your bourgeois procluction and bourgeois
property, just as your jurisprudence is but the will of your class made into a law for all, a
will whose essential character and direction are determined by the economical conditions
of existence of your class.
The selfish misconception that induces you to transform into eternal laws of nature and
of reason, the social forms springing from your present mode of production and form of
property-historical relations that rise and disappear in the progre.ss of production-this
misconception you share with every nrling class that has preceded you. What you see
clearly in the case of ancient property, what you admit in the case of feudal property, you
are of course forbidden to admit in the case of your own bourgeois form of property.
Abolition of the family! Even the most radical flare up at this infamous proposal of the
Communists.
On what foundation is the present family, the bourgeois family, based? On capital, on
private gain. [n its completely developed form this family exists only among the
bourgeoisie. But this state of things finds its complement in the practical absence of the
family among the proletarians, and in public prostitution.
The boutgeois famity will vanish as a matter of course when its complement vanishes,
and both will vanish with the vanishing of capital.
Do you charge us with wanting to stop the exploitation of children by their parents?
To this crime we plead guilty.
But, you will say, we destroy the most hallowed of relations, when we replace home
education by social.
110

{nd your education! Is not that also social, and determined by the social conditions
,r, *hi.h you educate, by the intervention, direct or indirect, of society, by mems of
: . -ris, etc.?The Communists have not invented the intervention of society in education;
from
I : Jo but seek to alter the character of that intervention, and to rescue education
-

: :t-iuence of the ruling class.

bourgeois clap-trap about the family and education, about the hallowed
-:iation of parent and child, becomes all the more disgusting, the more, by the action of
children
-:rn Indusiry, ull family ties among the proletarians are torn asunder, and their
"
of
labor.
instruments
-:*.:ormed into simple articles of commerce and
3ut you Communists would intoduce community of women, screams the whole
-:::oisie in chorus.
.;1e bourgeois sees in his wife a mere instrument of production. He hears that the
:-nents of production are to be exploited in common, and, naturally, can come to no
.
.: ;onclusion than that the lot of being common to all will likewise fall to the women.
::: has not even a suspicion that the real point aimed at is to do away with the status
. nlen as mere instruments of production.
. -,r the rest, nothing is more ridiculous than the virtuous indignation of our bourgeois
, "-: community of *o."n which, they pretend, is to be openly and officially established
--: Communists. The Communists have no need to introduce community of women; it
,- :risted almost from time immemorial.
li.rr bourgeois, not content with having the wives and daughters of their proletarians
in
--.:ir d.isposal, not to speak of common prostitutes, take the greatest pleasure
, . -:rng each other's wives.
is in reality a system of wives in common and thus, at the most,
=:uigeois marriage
to introduce,
-: :he Communists might possibly be reproached with, is that they desire
. -:stitution for a hypocritically concealed, an openly legalized community of women'
of the present system of production must
-:.e rest, it is sef-Lvident that the abolition
."- : ',i,ith it the abottion of the community of women springing from that system, i.e., of
" *:ution both Public and Private.
L:e Communists are further reproached with desiring to abolish countries and
. - -ality.
.:e working men have no country. We cannot take from them what they have not got.
". the prolelariat must first of all acquire political supremacy, must rise to be the
: ..*---"g class of the nation, must constitute itse[ the natton, it is, so far, itself national,
-:n not in the bourgeois sense of the word.
Iu-arional differences and antagonisms between peoples are daily more and more
,-.--'lirg, owing to the development of the bourgeoisie, to freedom of commerce, to the
- : market, to uniformity in the mode of production and in the conditions of life

Ite

-=sponding thereto.
111

The supremacy of the proletariat will cause them to vanish

still faster. United actic:
of the leading civilized countries at least, is one of the first conditions
tbr the emancipaticof the proletariat.
In proportion as the exploitation of one individual by another is put an
end to, ti-..
exploitation of one nation by another will also be put an end to.
In proportion .s ri:
antagonism between classes within the nation vaniihes, the hostility
of one nation .
another will come to an end.
The charges against Communism made from a religious, a philosophical,
an;
generally, from an ideological standpoint, are not deserving
of serious eiamination.
Does it require deep intuition to comprehend that **', ideas,
views and conception,
in one word, man's consciousness, changes with every change in the
conditions of 1_
material existence, in his social relations and in his sociai life?
What else does the history of ideas prove, than that intellectual production
changes i:
character in proportion as material production is changed? The
ruling ideas of each ag'
have ever been the ideas of its ruling class.
When people speak of ideas that revolutionize society, they
do but express the fa;
that within the old society, the elements of a new one have been
created, and that th.
dissolution of the old ideas keeps even pace with the dissolution
of the old conditions c.

existence.

When the ancient world was in its last throes, the ancient religions
were overcome b,
Christianity. when christian ideas succumbed in the eighteenth."itury,o
.urion[i*la-.",
feudal society fought its death battle with the then revJlutionary
bourgeoisie. The ideas c.
religious liberry and freedom of conscience merely gave expression
to the sway of fre.
competition within the domain of knowledge.
"undoubtedly," it will be said, "religious, moral, philosophical
and juridical ideas har..
been modified in the course of historical development. But ieligion,
mirality, philosophr
political science, and law constantly survived this change.,'
"There are, besides, eternal truths, such as Freedom, Justice, etc.,
that are common t.
all states of society. But Communism abolishes eternal truths, it
abolishes all religion, an;
all morality, instead of constituting them on a new basis; it therefore
acts in contradictior
to all past historical experience.,'
What does this accusation reduce itself to? The history of all past society
has consiste;
in the development of class antagonisms, antagonirrn, ihut assumed different
forms a.
different epochs.
But whatever form they may have taken, one fact is common to
all past ages, vle., the

exploitation

of one part of

society by the other. No wonder, then, thai ttre socia.

consciousness of past ages, despite all the multiplicity and variety

it displays, moves withir
certain common forms, or general ideas, which cannot completely
.*""pt with the
total disappearance of class antagonisms.

,*irh

t12

l:ll

Lti

The Communist revolution is the most radical rupture with traditional property
: :rions; no wonder that its development involves the most radical rupture with
-.:idonal ideas.
But let us have done with the bourgeois objections to Communism.
to raise
We have seen above that the first step in the revolution by the working class is
:; Droletariat to the position of ruling class, to win the battle of democracy.
from the
The proletariut *iil use its political supremacy to wrest, by degrees, all capital
in the hands of the State, i.e., of
-:_eeoisie, to centralize all instruments of production
forces
- :-roletariat organized as the ruling class; and to increase the total of productive
::pidly

as possible.

Cf .turrl, in the beginning, this cannot be effected except by means of despotic

rights of property, and on the conditions of bourgeois production; by means

:easures, therefore, which appear economically insufficient and untenable, but which, in
; Jourse of the movement, outstrip themselves, necessitate further inroads upon the old
: .l order, and are unavoidable as a means of entirely revolutionizing the mode of
:uction.
These measures will of course be different in different countries.
\evertheless in the most advanced countries, the following will be pretty generally
_._

i.: :

ads on the

-;able.
Abolition of properly in land and application of all rents of land to public purposes.
A heavy progressive or graduated income tax'
Abolition of all right of inheritance.
Confiscation of ttre property of all emigran8 and rebels'
bank with
Centralization of rr"Oif ir, the hands of the State, by means of a national
State capital and an exclusive monopoly'
:. Centraliiation of the means of communication and transport in the hands of the

.
.

State.

the
Extension of factories and instruments of production owned by the State;
generally
soil
the
of
bringing into cultivation of wastelands, and the improvement
in accordance with a common Plan.
r. Equal liability of all to labor. Establishment of industrial armies, especially for
agriculture.
of the
Combination of agriculture with manufacturing industries; gradual abolition
distinction between town and country, by a more equable distribution of the
population over the countryFree education for all children in public schools. Abolition of children's factory
labor in its present form. Combination of education with industrial production,
etc., etc.
ihen, in the course of development, class distinctions have disappeared, and all
:-rction has been concentrated in the hanfu of a vast association of the whole nation,

_-.

I i-.

the public power will lose its political character. Political power, properly so called, h
merely the organized power of one class for oppressing another. If the-proletariat during
its contest with the bourgeoisie is compelled, by the force of circumstances, to organire
itself as a class, if, by means of a revolution, it makes itself the ruling class, and, as such
sweeps away by force the old conditions of production, then it will, along with these
conditions, have swept away the conditions for the existence of class antagonisms and of
classes generally, and will thereby have abolished its own supremacy as a class.
In place of the old bourgeois society, with its classes and class antagonisms, we shafl
have an association in which the free development of each is the .ordition for the free
development of all.

llffi

lffi
:lffi

t14