Understanding Marxism

by Richard D. Wolff

Thus, they consider (1) what those people believe who like it, but also (2) what those people believe who don't like it.

So it is with understanding capitalism. It requires that we consider the system directly but also consider the assessments of critics as well as admirers or celebrants.

Marx and Marxism are as important on the side of criticizing capitalism as Adam Smith, David Ricardo, and John Maynard Keynes are on the side of those who celebrate capitalism.

What motivated Karl Marx, as a young man growing up in the middle of 19th century Europe, to become a critic of capitalism? The answer is partly the American and French revolutions of the late 18th century. Marx particularly embraced their key demands: in France, liberty, equality, brotherhood and in the US, democracy.

He discovered that the reason why capitalism failed to realize liberty, equality, fraternity and democracy, was that its own structure and social

effects were themselves obstacles to realizing those lofty goals. In making that discovery, Marx retained those goals as his own.

This result can be expressed by dividing the length of the slaves’ working days into two portions: one is the portion whose products are returned to the slaves for their consumption. Marx called this the slaves’ “necessary labor.” The second portion of the slaves’ labor yields products kept and used by the master; Marx called this “surplus labor.” It was labor done by slaves beyond that necessary for whatever level of reproduction masters allowed them.

Marx’s argument then hits home: capitalism remains like slavery and feudalism because (1) it too divides the participants producing and distributing goods and services into two groups (employers and employees), and (2) it too divides the laborer’s working day into necessary and surplus portions.

to work, say for a week, and to receive their pay Friday afternoon. During the week, the employee’s labor contributes to the total product sold by the employer at week’s end. The revenue from that total product sold is composed of one part that equals the cost of the inputs used up in producing that total product; that part is normally used to replace those used-up inputs.

The rest of the employer’s revenue is divided into two portions: one is given to the employee as wages, while the other is retained by the employer for their consumption or use. Wages are the products of the laborer’s necessary labor time; revenues retained by the employer are the products of the laborer’s surplus labor time.

The “free” laborer of capitalism – the person who sells his/her labor power in exchange for wages – is exploited just like the...

Capitalism, Marx said, never went beyond those economic models where a few dominate a majority. Capitalism just replaced the dichotomies of master/slave ...

and exploiting minority was still there, but it had a ne...

Marx then explains what most workers at least instinctively intuit. An employer will only pay a productive worker $20 per hour if during that hour more than $20 worth of sales revenue results. In that more, Marx tells us, lies the surplus in its capitalist form.

follows: to achieve liberty, equality, brotherhood and democracy in any society, any exploitative production relationship must be excluded.

For a minority to appropriate and distribute the surplus produced by a majority is inconsistent with and undermines the progressive social goals advocated by the French and American revolutions and given lip service everywhere ever since.

Marx argues that exploitative societies typically use their surpluses to maintain that exploitation.

In capitalism - a hundred years ago, fifty years ago, or right now - it’s the employer class that is socially dominant. Marx’s contribution was to locate in production the fundamental mechanism whereby this domination is secured.

There was the class of surplus producers, the class of surplus appropriators, and the class of those receiving shares of the surplus distributed to them by the appropriators. The conflicts among them undermined capitalists’ often-repeated commitments to liberty, equality, brotherhood and democracy.

“As in private life one differentiates between what a man thinks and says of himself and what he really is and does, so in historical struggles one must still more distinguish the language and the imaginary aspirations of parties from their real organism and their real interests, their conception of themselves from their reality.” – Karl Marx

A distinguishing sign of capitalism is that the ability to work – labor power – itself becomes a commodity to be bought and sold. Labor power was not a commodity in the slave and feudal economic systems.

The reasons for both pressures lie in the simple arithmetic of capitalist exploitation: the greater the value added by the laborers and the smaller the portion returned to them as wages, the greater the surplus acquired by the capitalist.

Class struggle is the unavoidable result of capitalism.

Just as earlier societies had made the inequalities resulting from slavery and feudalism matters caused rather by nature or God, in capitalism strong ideological tendencies make inherent individual variability (“human nature”) the cause. It too, like nature and God, cannot be changed by mere mortals.

In slavery, for example, field and house slaves exhibited varying relationships. So too did serfs assigned to agriculture versus crafts. Capitalism has had its blue and white collar employees.

Capitalists distribute portions of the surpluses they appropriate to fund whatever other conditions of existence that seem to them to need it.

No wonder capitalism develops unevenly – as Marx stressed. Each competing capitalist decides and functions around guesses about present and future realities. Each capitalist guesses differently because the circumstances of each and how these circumstances are assessed and understood vary. One succeeds and another fails giving capitalism its uneven development path. Deep suspicions of one another and even deeper suspicion of any state coordination keep capitalists from overcoming the systemic unevenness. Likewise, capitalism develops unevenly geographically as 'developed' and 'undeveloped' areas proliferate and even sometimes replace one another.

Greed is not the cause of capitalists’ behavior; it is a quality they acquire in accommodating to and internalizing the requirements of competitive survival within the capitalist system.

However, no sooner do capitalists succeed in paying lower wages and/or hiring fewer workers, than they may well face another contradiction. The workers may now have less income than they had before because wages fell or automation hit. Thus they will be less able to buy what capitalists need to sell. To benefit by lowering their outlays to workers, capitalists have inadvertently undermined the demand for their products. The virtually universal drive to economize on labor costs operates in contradiction to the parallel drive to sell all that is produced.