MARXIST THEORY: An Outline.

Ted Trainer

15.2.2017

        On approaching Marxism: a preliminary note.

Marx can be thought of as having offered two sets of ideas, the first of which we can accept if we wish to, without having to accept the second.

1. Marx gave us a theory of society, i.e., an explanation of how society works, including how and why history has unfolded, and especially of the nature of capitalism. Many see this as being of great value for the task of describing what is going on in the world and for understanding the problems and directions of our society today.

2. But Marx also regarded capitalism as extremely undesirable and he was very concerned with getting rid of it. He thought it’s contradictions would lead it to self-destruct, enabling the establishment of (a variety of) communist society. If you wish you can reject his values here…you can love capitalism and hate communism… while accepting the value of his ideas about how capitalism functions.

The following notes are intended to show the value of the first of these sets of ideas. One can accept Marx's concepts as being very useful for the purpose of understanding our society without accepting his condemnation of capitalism, his political values, his recommendations for political action or his vision of communism. In other words, if you do not agree with Marxist social ideals and implications for action, don't let this interfere with your evaluation of Marxist theory about how our society works.

It is important to note that at times followers of Marx have said and done things he didn’t agree with. (Thus he once said, “…I am not a Marxist.”)  “Marxism” now is best thought of as including ideas Engels and Lenin added to those of Marx.

The economic sub-structure

Marx argued that the economic situation, the “substructure”, that is, the form of the productive system, is the most important determinant of all other aspects of a society, such as its social institutions and ideas, the system of law, of morality and education. These are elements within the "superstructure" of society.

Hence Marx is said to be a "materialist". Marx reacted against Hegel's philosophy in which ideas were taken to be the important determinants of history. Marx argued that dominant ideas are the result of material or economic conditions and class relations and he was therefore strongly opposed to reformers who thought that mere change in ideas can change society.

The main types of society Marx distinguished were primitive, slave, feudal and capitalist. In a capitalist society capitalists own and control the productive capacity (i.e., capital, factories…), workers own only their labour and must work for capitalists, who then own the product and sell it at a profit.

The key to understanding a society at any point in history is to focus first on the “mode of production”, the way production is organised. In feudal society land was the crucial productive factor and the feudal lords owned and controlled it. In capitalist society capital, machinery, mines, factories etc. are the key productive factors and these are owned and controlled by capitalists (...as distinct from being owned by all members of society, which is the focal idea in varieties of socialism/communism.)

The "forces" of production and the "relations" of production.

Marx saw the relation between these two factors as the main determinant of the type of society existing and of social change.

The “forces of production” may be loosely regarded as the type of productive technology the society has; e.g., slave labour, machine technology...

The “relations of production” refers to the social organisation of production; i.e., basically who owns the productive forces, or how they are controlled. For instance in a slave society masters force slaves to do the work, and in a feudal society serfs are obliged to work for the lord a certain number of days each year. In capitalist society capitalists own society's productive resources and employ workers to operate these for a wage when capitalists think profits can be made.

At first the relation between new forces of production and new relations of production is progressive or beneficial to society in general. Marx stressed the great increase in human welfare that economic growth under capitalism had brought. However as time goes by the situation becomes less and less beneficial. The new social relations of production begin to hinder the full development and application of the new forces of production. For example in the late feudal era it was not in the interests of the lords to allow land to be sold or labourers to sell their labour freely to any employer. These practices were inhibited although they eventually became essential in the capitalist mode of production and therefore in the increase in production and benefits that capitalism brought. Similarly at present we are unable to apply powerful technology to doing useful things like designing longer-lasting goods and feeding hungry people, simply because of the existing social relations of production. That is, the relations of production take a form in which control over the application of productive forces is in the hands of capitalists and it is not in their interests to do these socially beneficial things.

This is a major contradiction in contemporary capitalist society. Such contradictions have been intrinsic in all class societies and its contradictions have become more and more glaring as each has developed, to the point where they lead to revolutionary change.

So the relation between the forces and the social relations of production and the consequences this generates is the major dynamic factor in history, the primary cause of social change. Marx thus gave us a theory of how history proceeds, how the contradictory class relations in one era gradually generate the conditions that eventually result in the replacement of that social system.

Classes, and class conflict.

The social relations of production involve different classes. The basic determinant of one's class is one's relationship to the means of production. For example in late capitalist society the two basic classes remaining are the owners of the means of production, i.e., capitalists, and those who own only their labour, i.e., the workers or proletariat.

So in any historical period dominant and subservient classes can be identified. Inequality in wealth and power was of fundamental concern to Marx. Some groups come to dominate others and to win for themselves a disproportionate share of the society’s wealth, power and privileges. The ultimate goal Marxists aim at is a classless society, i.e., a society in which all enjoy more or less equal wealth and power.

Marx said history is basically determined by the struggle between classes for dominance. "The history of all hitherto existing society is the history of class struggles".

Marxists stress that social analysis should focus on class structure and relations. In other words the most important questions to ask about a society are to do with what groups in society dominate or gain most benefit from the status quo, or whose interests does a situation or policy or proposal serve most?

In capitalist society the capitalist class benefits most; i.e., those who own and control the means of production receive a disproportionate share of wealth, power, privileges and status. There are other classes but as time goes on these are moved into either the small capitalist class or the large working class.

Note that there is an important distinction between big business, which includes the transnational corporations and banks, and small business (the “petite bourgeoisie”). Many small firms and family farms and shops are usually struggling, only providing their owners with low incomes. These people are not investing capital in order to make profits from enterprises in which they do not work, so they are more like peasants who own and work on their own farms.

It is also important to note that most people own some wealth, such as their house, but this is not capital that is invested to make profits.  They also have some savings in the bank, but the vast bulk of capital is owned by very few people. It is now claimed that half of the world’s wealth is owned by less than 1% of the world’s people.

History

It can be seen from the foregoing that Marx put forward a theory of history, or a principle which he thought explained the dynamic, the driving force in history. A basic element in this is the Hegelian idea of a "dialectical progression" whereby a) an original situation or idea or "thesis" exists, b) an "antithesis" develops in opposition to it, c) the two are resolved into a "synthesis”, which becomes the new thesis. In any historical era, e.g., feudalism, the inherent contradictions or class conflicts (e.g., between the dominant landowning lords and the commercial classes developing in the increasingly independent towns) come to a head in some sort of revolution and are resolved when a new social order stabilises (e.g., the early capitalist era). This “thesis-antithesis-synthesis” idea is sometimes referred to as the “dialectic”.

History is therefore primarily a function of material or economic conditions, i.e., of the productive situation. Hence Marxism is referred to by the terms "historical materialism" and "dialectical materialism". The relation between the types of productive technology in use and the social relations or organisation and control of those forms of production is what has determined the nature of primitive, slave, feudal and capitalist society, and what has moved society from one to the other.

As a system such as feudalism or capitalism “matures” it produces social processes and institutions that both undermine it and will be fundamental in the society that follows it.  For instance efforts by workers trying to get better conditions produce acceptance of voting for all (men), and unions. Thus capitalist society performs the historically essential function of creating the institutions that must come into existence before post-capitalist society becomes possible.

Marx is saying the advent of post-capitalist socialism is a more or less inevitable product of the way history works, of the “laws of history”.  Thus Marx opposed many rebellions, and the use of violence, because such initiatives failed to see that the possibility of establishing communism depended on whether the right social conditions had developed yet, i.e., been brought into existence by the maturing of capitalism.  He argued that capitalism would not be superseded until it had exhausted its potential, i.e., as difficulties and resistance arose it would turn to novel strategies to continue its domination, until all possibilities had all been exhausted. In the process it creates the new institutions that will undermine it – and that will be crucial elements in the system that will replace it.  Force and violence can’t establish communism (though they may occur at the time of revolution); the maturation of capitalist system must create the conditions, practices, institutions etc. (through the resistance in workers it causes) that must be in place before capitalism can be transcended.  For instance capitalism prompted the emergence of unions, universal suffrage, regulation of business. Marx said, “ … new, higher relations of production, never appear before the material conditions of their existence have matured in the womb of the old society itself.”

So Marx thought you could not at any old time just organise a violent revolution to eliminate the capitalist class by force; the system could only be transcended when it had matured (though, again force might be involved then.) This is why he was not surprised tat the French Revolution, and the Paris Commune, failed to initiate a socialist society. Some Marxists have tried to damp down revolutionary movements (Warren) on the grounds that conditions were not yet ripe. This is another area where we must be careful not to confuse what Marx thought with what some “Marists” have thought and done.

What is also crucial for revolutionary change is the emergence of class consciousness. In Marx’s terms, workers, a “class in itself” must become a “class for itself,” that is, aware of its situation and the need for action.

Eventually the thesis of capitalism and the antithesis of the revolutionary proletariat will issue into a synthesis which is communism and the dialectical process will have come to an end. This does not mean there would be no further change or progress in history, but it does seem Marx meant that there will be no further political conflict. Many would now say that just getting rid of capitalism would not put an end to problems involving class and power; just consider Russia under Stalin, or China.

The capitalist “mode of production”.

The forces of production in capitalist society include the use of factories (as distinct from production by family units within the home or by individual craftsmen, as was the case in earlier times), elaborate machine technology, and a working class. This mode requires large investments of capital to be made in plant, mines, etc., and it involves the extensive use of science and technology in developing more sophisticated processes.

The most important of the social relations of production in a capitalist society are, a) ownership and control of society's productive resources are in the hands of a few who invest their capital or put their factories into production only if they think profit can be made, and b) most members of society have to sell their labour to capitalists, have to accept orders in the workplace, and have no say or stake in production other than their pay packets.

Another crucial element is the fact that capitalists are locked in deadly competition with each other, and this produces a constant need to innovate, look for better technology, cut costs and drive wages down. Capitalists are trapped in the system too. It is a mistake to criticise them as individuals; what matters is the faulty nature of the system that forces everyone to play by its nasty rules.

Marxists also insist that only labour should be able to earn money and that money should not be able to earn money. In other words they do not think people who are rich should be able to receive an income as interest on their savings, loans or investments, especially as this means that the richer one is the more income one gets without having to work…while rich people consume goods made by people who must work for their income.

The labour theory of value.

Marxists argue that the value of things should be calculated in terms of the amount of labour that went into their production. Conventional economics does not do this; it regards the value as whatever will be paid in the market place. Lichtheim, (1961), says Marx was mistaken in putting so much emphasis on this attempt to develop an economic theory based on labour as the unit of value; it is difficult to explain various things this way, such as prices people pay for things, and it is not necessary for his basic critique of capitalism. A great deal of time has been wasted debating the notion. (Nevertheless in a good society we could still decide on incomes and prices by focusing on how much labour went into producing things.)

Profit vs need.

Conventional economic theory and practice today are based on the assumption that it is best if production and development is driven by profit. The theory is that only if capitalists produce what people demand will profits be maximised, and therefore the most efficient allocations be made. However Marxists and others emphasise that there can be and typically is a huge gulf between production for profit and production to meet needs. Profits are maximised by producing what relatively richer people want and can pay for. The result typically is that the urgent needs of poorer people, and the needs of the environment are seriously neglected. (See TSW: The Case Against the Market.)

Profit and exploitation

A fundamental Marxist theme is that capitalist profit making constitutes exploitation of workers. When a capitalist sells something his workers made and he receives more for the item than he paid for the inputs including the workers’ wages he is taking a portion of the value that the worker created. The workers’ labour created the total value realised in the sale price but they only received a portion of this value, and they are therefore being exploited by the capitalist who controls the productive situation but does no work in the creation of the product.

The argument is clearest in the case of shareholders who have nothing to do with the factory except invest their money in it and who then receive an income without having to do any work for it. The capitalist's profits are not to be confused with any wages he might draw for his managerial effort. Often all managers are hired workers and are paid a wage for their labour, while all those who provide the capital do not work yet receive an income which is some proportion of the wealth created by the labour in the factory.

The conventional counterargument is that it takes capital as well as labour to produce things and wages are the return to labour while profit is the return to capital. Profit is the incentive that persuades those who hold capital to put it into production, which benefits the rest of us. However, the Marxist insists that it would be better to organise society in such a way that all people own and/or control society’s capital and no one gets an income without working for it. (Capital could still be privately owned but kept in public banks and invested in projects that society chooses, e.g., through elected public boards.)

Similarly, to argue that profit is the capitalist's reward for risking his capital is only to say that he takes the risk of losing it … and then having to work for an income like the rest of us!

The strongest argument for a profit-motivated economy in which firms are privately owned might be that unearned income is a consequence of the system that is the best alternative to the heavy handed, bureaucratic, inefficient and dictatorial planning socialism “inevitably” involves. However this is to overlook the possibility of a democratic, participatory socialism in which capital is not all owned or controlled by the state. Local cooperatives could own and control basic factories, and many of these might be privately owned but carefully regulated by the local community. Nevertheless among the biggest problems for socialism are how to set and adjust the huge number of prices of goods on sale, how to enable initiative and innovation, and how to phase out inefficient firms, when the market seems to do all this automatically, with no arguments.

The contradictions in capitalism.

Marx argued that at first capitalism released great progressive developments, especially large increases in production and therefore in the material wealth of people in general. However as time passed the forces of production and the social relations of production came increasingly into conflict, contradictions surfaced and the social relations of production began to thwart the full application of technology and productive potential to social needs. These internal contradictions will continue to increase in severity over time and ultimately they will result in the destruction of the capitalist system.

Unemployment provides a good example of a built-in contradiction.  As capitalists use more automated factories to cut labour costs, workers have fewer jobs and less income and so there is less demand for the products the factories make … leading the system towards bankrupt capitalists and starving workers, and system break down.

The central conflicts built into the structure of capitalism concern the process whereby capitalists accumulate profits. Capitalists are involved in savage competition with each other and therefore there is great pressure to develop more efficient production and better technology. There is a tendency over time for capitalists to increase the percentage of their capital investment that goes into machinery ("fixed capital") and to decrease the percentage put into buying labour. In other words there is a tendency for what Marx called the "organic composition" of capital to change. Consequently workers in general take home less pay and the capitalist's increasing accumulation of wealth is accompanied by the increasing "immiseration" of the proletariat. Consequently workers have less purchasing power and because they therefore cannot buy all the goods that the capitalists' factories can produce there is a tendency for capitalists profits to fall in the long run (…another contradiction built into the system.)

Critics have said that in the one hundred years since Marx's death there has been precisely the reverse of the predicted immiseration of the proletariat, because material living standards have risen enormously. This is a somewhat confused issue. Some people argue that Marx meant that workers will become poorer relative to the capitalist class, and it appears that this is now happening. The real incomes of American workers have more or less not increased, and might have actually fallen, over the last almost fifty years … while the 1% has grown much richer. Some people attribute the lingering Global Financial Crisis to declining capacity of ordinary people to purchase. Another argument is that increases in real incomes in rich countries have been at the expense of deteriorating conditions for the Third World’s poor. However it is commonly claimed that capitalism is now rapidly increasing Third World “living standards”.  But this is debatable too as the gains seem to have been mostly within China and perhaps India and one to three billion people have remained in squalor for many decades while the condition for the poorest billion probably have deteriorated. (Discussed in TSW: Third World Development.)

More importantly Marx had in mind more than just wages and material wealth; he was primarily concerned with the “spiritual” conditions of the worker and saw these becoming more and more impoverished under capitalism. Many would now say he got this right.

The important idea that capitalism has built into its nature forces and tendencies, contradictions, that will destroy it some day now also would seem to be evident in the way it impacts on the resource and ecological situation. The “limits to growth” argument is that ever-increasing levels of production and consumption are leading to collapse of the global ecosystem.  And the notion of an inevitably worsening contradiction can be seen in the apparently insoluble problems being generated by the global financial system, especially the fact that debt is now much higher than before the 2008 GFC.

Accumulation.

Marxists stress that the factor which determines what happens in our society is the drive to accumulate capital; i.e., the ceaseless quest to make profits, which are then reinvested, to make more profit, in an endless spiral of capital accumulation. This leads to innovation and change. Why is there now a McDonalds in your street? Why has so much manufacturing industry left Australia? These changes have come about because competing firms are always looking for ways of maximising their profits and accumulating more wealth.

Note that capitalists have no choice here. They must constantly seek more profitable fields for investment, because they are competing against each other and if they fall behind they will be killed off. It is important not to focus criticism on capitalists; it is the capitalist system that is the problem. Capitalists are locked into deadly competition. (Korten 1995, explains how executives who do socially noble things, such as preserve forest lands they own, will therefore not maximise profits and will thus be targeted for hostile takeover by firms who can see that the firm could make greater profits.)

The psychological and social effects of capitalism.

Two somewhat distinct strands can be distinguished in Marx's writings. One is focused on economics, and the way history works, i.e., the way change and development follows a dialectic pattern to do with productive relations, which will end with socialist revolution and the eventual emergence of communism. However it was only in the Twentieth century that Marx's early writings on more philosophical and social themes were discovered. Marx discussed the damaging effects capitalism has on the psychological situation of the individual and on community.

a) “Alienation”. (Later he used the term “fetishism of commodities” for this theme; his discussion of it is obscure.)

Marx said that workers in a capitalist society are typically obliged to perform only a few limited and routine operations, they rarely make the whole item nor see the final product, work is often boring, workers have no say in what happens to the product because it is not their property, they do not own their tools, they have no say in the planning or organisation of work, they just do what they are told, they must work within strict rules, especially regarding time, under conditions of intense division of labour. They have little or no opportunity for the exercise of initiative. Their only interest in the entire work process is the money they get for working. In general work is not enjoyable and it is not “fulfilling”; it makes no contribution to the individual’s growth or enjoyment of life.

By contrast the primitive" tribesman, medieval craftsman or subsistence farmer could decide what he would work on at any moment, at what pace he'd work, how to do the job, and when to take a break. He could control and plan and vary the whole process, and he could enjoy making a beautiful object.  He knew that the product of his work would be his to use or exchange or give away.

Marx regarded these kinds of factors as being very important for a person's emotional or spiritual welfare. Humans are somehow incomplete or deprived of something important if they cannot engage in worthwhile and satisfying effort to produce things for themselves and their communities, and capitalism destroys any possibility of the sort of self-sufficient, self-controlled and intrinsically rewarding work Marx valued.

Marx’s argued that in this work situation the objects the worker produces become things that are not only separated from him  (“alien”), but become sources of his oppression. The worker’s labour has created the world he lives in, including the economic system, but those things then dominate and exploit him, because they are elements in the capitalist system which does not treat him well.

b) “Money and commodification”.  Marx argued that capitalism tends to eliminate almost all non-monetary considerations and values and to replace these with a mere "cash nexus". It makes the market and therefore considerations of monetary profit and loss the only criteria of value, action and exchange. Capitalism turns almost all things into commodities for sale, especially labour. In feudal times labour, land and money were not commodities for sale. One can now talk of personalities, behaviour and education as commodities that are bought and sold for a price. All that matters is the price of things.  However in feudal times, whether or not one would work for another or buy or sell something depended on many important moral, religious and traditional rules and values, not just on the prospects for personal economic gain. The development of capitalism tore most of these considerations away and made the overriding criterion the question of economic advantage. Hence it became acceptable to buy and sell labour and land, to eave some unemployed, to close a business people depend on, and to drive a rival into bankruptcy.

Marx saw the use of money as something which enabled this undesirable, alienating process, and some Marxists today insist that a good post-capitalist society must be designed to operate without use of money.

c) The destruction of community and social cohesion. The market and the capitalist’s need for mobile workers broke up the ties people previously had to place, community, traditions, and support networks. Large numbers were torn from their land and villages and forced into the slums of industrial cities. Many sociologists argue that this basic process continues today, causing decreasing connectedness, cohesion, and community. The “neo-liberal triumph” since 1970 is seen as accelerating the trend to a society that forces us to focus on individual, competitive “winner-take-all” self interest. This feeds into the breakdown of social connectedness and mutual support, and tends to increase family breakdown, suicide, crime, alcoholism, drug abuse, etc., and the rising incidence of anxiety and loneliness.

(For a discussion of the historical transition to capitalist social relations, and the need to "embed" market relations in social relations, see TSW: Religion and the emergence of market dominated society, and TSW: Polanyi. Polanyi’s important discussion of these themes is in Dalton, 1968.)

The state.

Marxists argue that the state rules primarily in the interest of the capitalist class. The state is "the executive committee of the bourgeoisie". For example the state takes as its top priority increasing economic (i.e., business) activity, when it is clear that increasing the GDP is now accompanied by a falling quality of life, resource depletion and environmental destruction.  The state's most important characteristic is its power. It has the power to rule, to force members of society to obey, to jail, fine or execute, and to make war. (

Marx claimed that the state as an authoritarian, coercive ruling agency will cease to exist when society becomes classless. Some centralised functions will remain necessary but the coercive power of the police and army will not be necessary to deal with problems caused by class inequality and domination, because these will have been overcome. (However “Marxist” regimes have been willing to exercise state power, typically in an authoritarian way, although Marx thought that eventually in communist society this would not be the situation.) 

Ideology; false consciousness.

Dominated and exploited classes typically do not understand their situation or their interests. They do not realise that the way they are treated is unjust. This is usually due to the acceptance of ideas which cast the status quo as being legitimate; e.g., peasants might believe that kings have a divine right to rule and that God ordains that the poor should accept their lot with good grace, or that a miserable life in this world does not matter and is not worth trying to change because the important thing is to prepare one's soul for the next world. In our era Marxists stress the role of the media in reinforcing the dominant ideology, especially by not giving space to fundamental criticisms of capitalist society.

In any class society there will be a dominant ideology, which will mostly be made up of the ideas which it suits the dominant class for people to hold. The acceptance of these perspectives and values by the working class is also referred to as "bourgeois hegemony".

Marx thought that late in the history of capitalism workers will develop clearer awareness of their situation and their interests, i.e., class consciousness will emerge. Workers will come to see that the prevailing social relations of production are not in their interests.

However, even in Marx's time there was considerable debate as to whether workers will develop sufficient class consciousness on their own to bring about revolution, or whether this will only rise to a "trade union" mentality, which looks no further than winning gains within the capitalist system. Lenin argued for the need for a secret and dedicated communist party, a vanguard to lead the workers to revolt. Marx was at lrast not comfortable with this.  Remember his theory of history and of the need for capitalism to mature. If force had to be used to take state power to make people follow the proposed new ways this meant that conditions were not yet ripe for transition to socialism.  That’s why the French revolution ended in terror.

Revolution.

Again Marx thought that capitalism contains contradictions, forces and processes which cannot help but increase its internal difficulties to the point where it is inevitably overthrown. Through the deteriorating alignment between the forces and the relations of production contradictions become more glaring, there is polarisation into capitalists and proletarian classes, the class consciousness of the proletariat increases and in time a revolutionary change of system occurs. Bourgeois revolutions overthrew feudal society in which landed aristocrats ruled, e.g., the French Revolution. Marxists insist that dominant classes will not voluntarily give up power, wealth and privilege. Their control has to be taken away from them, and this might have to involve violence.

This is one of the areas where some notable later Marxists differed from Marx.  Remember that his theory of history held that as capitalism matured it would inevitably generate not just difficulties for itself but also generate the ways, institutions, practices etc. that would become basic elements in the system that replaced it.  This is why he did not advocate use of violence to take power.  As noted above, he criticised many revolutionaries, including the Jacobins in the French Revolution, for not understanding that conditions must be right before a new system can come into existence and that if resort has to be made to force, violence and terror this just means that the revolution is only “political”, only about transfer of power,  and will only install a new class in power, and cannot result in communism.

Lenin went well beyond Marx here, arguing that workers will not rise to revolutionary consciousness on their own and a disciplined and ruthless communist party must lead the workers. Marx was in general opposed to a vanguard which might operate as far beyond the workers as Lenin's party did and was willing to use violence. Marx had a long history of opposition to the idea of a vanguard prepared to take power and be ruthless, and Lenin had accepted Marx’s view on this until just before the Russian revolution. (Avineri, 1968, p. 257.)

This issue has been referred to as the choice between a "minimum" program, i.e., to assist capitalism to move towards maturity and subsequent self-destruction, or a "maximum" program, i.e., to strive directly to engineer revolution. Some Marxists (e.g., Warren) have actually recommended against revolts In the Third World because they did not think capitalism had matured sufficiently.

However, there were times, especially towards the end of his life, when Marx seemed to think that a non-violent path to socialism might be possible in pre-industrial communities, notably via development of the traditional collective Russian village, the Mir. That is, he wondered whether it might be possible to avoid going through the long and arduous period of industrialisation and development of a working class. This is remarkable because it seems to contradict his entire theory of history. (Many Anarchists think it is possible to begin building a new, post-capitalist society now, based on existing communities, without having to wait for or work for the destruction of capitalism. This is called "prefiguring"; see TSW: Anarchism).

After the revolution.

Marx said very little about the form society would take after capitalism. Eventually a communist society would come into existence, free of classes, political conflicts, coercion, domination and exploitation, and the state.

Marxists generally say that immediately after the revolution when the proletariat had gained control there would have to be a period of "dictatorship of the proletariat". (Avineri says Marx almost never used this term.) This would be necessary to remove all elements of capitalism, especially the ideas and values making up bourgeois ideology. In this early period of what he called “crude communism”, (commonly referred to as socialism now), privately owned productive property, capital, would become public property, but various undesirable aspects of capitalism would remain for some time.  People would still be motivated to work by differential wages and there would have to be a strong state, in the hands of the worker's party, which ran a planned economy. People would work for wages, there would be division of labour, and they would work for a boss, the state.  They would still have strong materialist values, in Avineri’s terms, possessions and ”greed” would still drive them. (1968.) This first stage is called “distributive communism.”

However, Marx thought that in time a pure communist society would emerge from which the mistaken ideas and values of bourgeois society had disappeared. The coercive state would have “withered” away, intense division of labour and specialisation would have ceased, the outlook and motivation of individuals would have changed from competitive to collective and cooperative, and people would have much greater opportunity to develop and fulfil their potential than they had under capitalism. Marx was optimistic about the capacity of humans to do these things, seeing greed, competition and conflict as distortions produced by class domination.

Perhaps the best clue to the nature of communist society as Marx envisaged it is given by the well-known statement, "From each according to his ability, to each according to his needs". This means that all would contribute as best they could, with those more able doing more, but all would be rewarded not according to their output, skill or status but in proportion to their needs. So we would all do a reasonable day’s work although some would be able to produce more than others, but if one person who couldn't do as much as the rest had greater needs that person would receive more. This is the way a good family works. It is obviously a noble principle but could we organise large systems, like a national economy this way? Anarchists think the chances of a society following this principle are best when societies are mostly quite small, making familiarity and cooperation on local tasks more likely. Anarchists and Marxists more or less agree on the nature of the ultimate good society to be worked for (See TSW: Anarchism), but they differ on transition strategy.(See TSW: Transition.)

Marx believed that the revolution would liberate people from the alienation capitalism imposed, including intense division of labour and specialisation in work. We would be able to do many varied things in our normal day.  He didn’t explain how this might be realised in a complex, high-tech industrial society. (Advocates of The Simpler Way do think a very diverse, and relaxed and enjoyable, “work” situation is possible and desirable.)

THE VALUE OF THE THEORY FOR UNDERTSTANDING THE WORLD TODAY.

Much of what is wrong with the world today is explicable in terms of Marx’s account of capitalism. When a few are allowed to own most of a society’s capital, and to determine economic activity according to what will maximise their wealth, the inevitable result is production of the most profitable things, not the most needed things. In a world where there is enormous inequality this means investment goes into producing consumer goods and luxuries for people in rich countries, while the needs of billions of people are more or less ignored. It means the rich few take most of the available resources because they can pay more for them (i.e., it is more profitable for capitalists to sell to the relatively rich), it means that much Third World productive capacity, especially land, goes into producing for export to rich countries when it should be producing food for hungry people, and it means that the environment will be damaged, because there is no profit incentive for the owners of capital to protect it.

In other words, in a capitalist system there is development of the wrong things (development in the interests of the rich) because what is done is that which is most profitable. We have great need for the production of many specific things, such as cheap housing, but these are not produced yet there is excessive production of many luxuries and trivial items -- because this is what maximises return on private capital. Conventional development theory says that in time this approach will result in "trickle down" of wealth to all. There is a tendency for this to happen, but there are also many other undesirable tendencies, most obviously to the emergence of extreme inequality. (On “trickle down” development, see within TSW: Third World Development.)

We have an economy in which there is enormous waste, especially via production of items that are not necessary, or that will not last, trinkets and luxuries. The global environment and resource depletion problems and the bad distribution of resources between rich and poor nations indicates that we should greatly reduce this volume of production -- but this is not possible in a capitalist economy. There would be a huge jump in unemployment and bankruptcy. Indeed it is an economy in which there is continual pressure to increase production and consumption all the time because capitalists always want to increase their factories, their sales and their income. The last thing they want is to see reduced business turnover. So there is a serious contradiction between the dynamic within capitalism and ecological sustainability.

Unemployment and automation occur in this economy simply because capital is privately owned. If a better machine is invented the capitalist who owns the factory receives all the benefit, while the workers lose their jobs. So of course there is a problem. In a socialist economy the machine could be adopted without these effects. All would share in more free time or cheaper goods. In a capitalist economy labour is just another commodity that a capitalist will hire only if he thinks he can make profits, otherwise people have to suffer unemployment. Similarly the only way a capitalist society can solve the unemployment problem is to find more things for displaced workers to produce, when there is already much more productive activity than we need.

These phenomena are well described by the Marxist term "contradictions". Capitalist society inevitably involves huge contradictions and conflicts of interest,  because the forces of production clash with the relations of production. Another  good example is that the world could easily feed all people yet hundreds of millions are hungry while one third of the world's grain production is fed to animals in rich countries. We have the productive capacity (forces of production, technology) to solve this problem but this is not done because it is not in the interests of those who control capital. They make more money selling the grain for feedlot beef production (i.e., there are capitalist relations of production, a capitalist organisation of production). In other words, if you allow society's capital to be privately owned then you will inevitably run into this sort of contradiction because often what is most profitable for capitalists to invest in is not what most needs doing. (An alternative economy might not necessarily eliminate all free enterprise or private capital, but it would involve control and monitoring of private enterprise to ensure that most investment goes where it is most needed.)

Understanding Globalisation

The development of the world economy in the years since 1970 would seem to further illustrate the value of the Marxist approach to analysing society. Around that time capitalists began to experience great difficulty finding profitable investment outlets for all the capital they were constantly accumulating. This has fuelled the now huge push for globalisation; i.e., the move towards a unified global economy in which there is great freedom for market forces, because this gives capitalists more opportunities for profitable investment. (See the Globalisation section, in TSW: Our Economic System.) The big corporations and banks have much more freedom than before to go where they wish and trade, invest and develop as they wish. Previously there were many laws and regulations restricting the entry of foreign investors, the capacity of corporations to come in and take the business opportunities (sending local small firms bankrupt) and restricting the right of financial institutions to lend recklessly. These were the rules governments once set and used to protect their citizens, industries and ecosystems. These rules set standards corporations had to meet regarding labour conditions, health, environmental impacts, and human rights, and they enabled governments to control corporations and get them to locate in disadvantaged areas etc.

Globalisation represents enormous success on the part of the corporations and banks in having many of these regulations and restrictions to their freedom eliminated, in the name of increasing the freedom of enterprise and trade. All governments have eagerly facilitated these processes, which does not surprise Marxists because they see the state as always ruling in the interests of capital.

Above all globalisation involves deregulation; i.e., governments removing controls on what corporations can do and increasing the scope for market forces to operate, freeing foreign investment, trade, labour markets etc. from controls by the state. Globalisation also involves privatisation; i.e., governments selling public enterprises to corporations, thereby increasing the amount of business for corporations to do.

In the Third World the Structural Adjustment Packages the World Bank has imposed on indebted countries have been major forces for globalisation. Poor countries are given desperately needed loans on condition that they open their economies to foreign investors, sell national assets to them, reduce state spending especially on assistance to the poor, and increase dependence on exportation of commodities.

In Marxist terms globalisation can be seen as the situation to which capitalism inevitably leads, i.e., where the ceaseless drive to accumulate more and more capital leads the capitalist class to try to break down all remaining impediments to its access to investment, markets, resources, cheap labour and profitable business opportunities. Globalisation is about capitalists being able to get into and take over business opportunities which they were previously kept out of by government regulation, especially protection of local industries against cheap imports. Hundreds of millions of poor people in the Third World have been further impoverished because transnational corporations are now able to come in and take over the markets and resources that used to be preserved for the benefit of locals.

Globalisation makes clear the great conflict of interest between capitalists and the rest. Thus analysis in terms of class is crucial. Globalisation should be analysed in terms of winners and losers. There are relatively few winners, mostly the corporate shareholders, those who do the managerial and professional work for corporations, and people who shop in rich world supermarkets. Thus the recent history of the world is primarily explicable in terms of this class conflict. The capitalist class has enjoyed triumphant success, it is rapidly becoming richer (1% of people are now estimated to own more than half the world’s wealth) and is dramatically restructuring the world in its interests. Workers, unions and the Left are very weak and large numbers of people are being completely excluded and dumped, including the long term unemployed, and about one billion hungry people in the Fourth World.  There is increasing polarisation. Extremes of wealth and poverty are now accelerating in even the richest countries. Globalisation and the neo-liberal agenda are gutting society, destroying the conditions which are crucial for cohesion, such as valuing the public good, concern for the under dog and for society, and concern for the environment.

CRITICISMS OF MARX’S THEORY.

Following are criticisms that are commonly made.

- Too much emphasis is given to the economic factor in explaining social order and change. Culture seemed to be explained as part of the “superstructure”, derived from the economic "substructure". It would seem to be difficult to explain the advent of gay liberation in terms of productive or economic or class relations. (However Marx’s early writings were about philosophical and social themes, notably alienation.)

- Even if you get rid of capitalism you might still have enormous problems of conflict and domination in society. State bureaucracies as well as capitalists can dominate -- ask the Russians and Chinese.

- Marx’s theory of history is contradicted by the fact that industrialised countries have not moved closer to revolution as they “matured”. The recent revolutions have been in peasant societies, such as China. The richest capitalist societies seem to have become more secure from threat of revolution throughout the 20th century.

-  Many would say there are no “laws of history” and that Marx was mistaken in thinking he had discovered them, and thus in thinking that his theory was scientific. (This is more a criticism of Engels and Kautsly than of Marx.)

- Anarchists say Marxists fail to grasp the unacceptable dangers in their readiness to take an authoritarian-centralist approach. Marxists are willing to use the authoritarian state to run society after the revolution and to be ruthless in this. This is extremely dangerous; those in control can’t be trusted and are very likely to become an entrenched dictatorship, as with Stalinism.  (As has been pointed out this is not really true of Marx, but it is evident in many who call themselves Marxists.)

- Many if not all Anarchists would also reject conventional Marxist theory of how capitalism can or will be replaced, which involves confronting capitalism, class conflict, seizing the state and taking power from the capitalist class, and destroying capitalism, a process which will probably involve violence. (Note again that these Marxists are going beyond Marx on some of these themes.) Alternatively some anarchists believe the change could come more or less peacefully via increasing awareness and disenchantment, the building of alternative communities based on anti-capitalist principles, and thus an increase in the numbers who have come to realise capitalism is unacceptable. However socialists are inclined to say the capitalist class will not give way but will have to be pushed aside.

-   Marx (and most Marxists today) failed to take ecological sustainability into account. They are strong believers in industrial development and "progress", rising material "living standards" and economic growth. They think that capitalism is responsible for all problems and that when it has been eliminated we can release the previously restricted power of industry to enrich everyone. In other words, Marxism has no concept of “limits to growth” and affluence and economic growth are regarded as desirable and possible. We can’t blame Marx for not realising there would be a limits to growth problem, but it is fair to criticise many Marxists today for being ”productivists“.  It is increasingly being realised that a good, post-capitalist society cannot be a growth society and it cannot have high per capita levels of resource consumption or “living standards”. This means that getting rid of capitalism is not enough; there is an even bigger problem, set by the commitment to industrialism, growth and affluence. (However Marx was sensitive to the ecological damage capitalism caused, referring to a “metabolic rift”.)

From the perspective of “The Simpler Way" a high quality of life for all is achievable without high material "living standards" or much modern technology, let alone industrialisation and IT etc.  We do not agree that human emancipation and a good sustainable and just society cannot be achieved before technical advance delivers material abundance. We see the Marxist concept of development as actually the same as capitalist “modernisation”, mainly because it assumes capital is crucial for development. Marx was contemptuous of peasant ways and Marxists today are not sympathetic to the notion of "appropriate development" defined mainly in terms of "subsistence” and low/intermediate technology and cooperative ways focused on local economic self-sufficiency...which is a Gandhian way. (See TSW: Third World Development..)

- In other words advocates of The Simpler Way claim Marx was quite mistaken in thinking that socialism would not be possible without modern technology, industrialisation and material affluence. Achieving a good society does not require elaborate technology nor material abundance. It depends on whether or not the right values are held. There have been societies, and there are societies today in which people live well with very humble material lifestyles and without modern technology. (See TSW: Ladakh; Notes on an Inspiring Society.)

- Marxist ideas on how to change society, i.e., on the strategy for transition from capitalism, are also strongly criticised by the Anarchists.  Marxists think capitalism must be fought and overthrown through violent revolution, because the capitalist class will never voluntary give up any of its power or privileges.  There must be leadership by a vanguard party prepared to be ruthless and to use violence, and to rule in an authoritarian way after the revolution. (Again this is Lenin rather  than Marx.) Eventually when people have developed the right ideas and values the state can dissolve and there will be a communist society. The Simpler Way version of Anarchism on the other hand focuses its transition theory on “prefiguring”, i.e., on building elements of the post-capitalist society here and now, in a slow process of developing the awareness that will in time lead to the big structural changes at the level of the state (such as getting rid of growth and market forces), possibly in a peaceful way.

-       Lichtheim argues that Marx was seriously mistaken to focus on the labour theory of value, i.e., that the value of a product is determine by the labour it took to make it. Because Marx wanted to base his account on the productive situation he tried to show that the basic fault in capitalism is that the worker is paid less than the value his work produces, and the difference is the capitalist’s profit.  This left him, and generations of scholars, with the problem of explaining how prices paid in exchange of a product are related to the labour that went into making it.  Often little labour goes into producing something for which a very high price is paid. As Lichtheim says, Marx could have put forward a powerful analysis of capitalism in other terms. (For instance, one could focus on the fact that because the capitalist owns the means of production he can decide what to produce, and he only produces what is most profitable, which inevitably means he does not produce what is most needed in society…and thus the rich get richer, and social problems increase…)

- It could be argued that Marx’s theory greatly hindered the Russian revolution, and indeed prevented it from achieving a non-authoritarian, localised, democratic society based on the traditional village. In the 1870 – 90 period Russian intellectuals embraced Marxist theory in their struggles against the Tsar’s regime.  Because the theory asserted that socialism can only come from mature capitalism they were confused about what to do, given that Russia had barely moved from feudalism. (They asked Marx, who wrote three different draft replies, an ended up saying ... you decide.) Kautsky was specially influential in promoting a very mechanical account of Marx, whereby the “laws of history” Marx was supposed to have discovered determined that nothing could be done until capitalism matured in Russia.  Some factions insisted that the revolution should install capitalism so it could mature and eventually enable the emergence of socialism. Howrever, remarkably Marx was actually attracted to the possibility that the traditional Russian village, the Mir, might be a base for the direct transition to a socialist society.  But because of strong adherence to the “laws of history” view among many Russians this possibility was not taken seriously.  Even in 1917 there was confusion about strategy. Lenin shifted his position fairly suddenly and the Bolsheviks managed to take centralised control of the revolution that had been generated by massive discontent with the Tsar’s regime. Many blame this adoption of centralised control (which Marx had long argued against) as the origins of Stalinism etc., and regard Lenin as having hijacked the revolution.  Anarchists and TSW advocates deeply regret that the focus had not been put on strengthening the enormous number of “soviets", i.e., worker’s democratic councils” that had emerged to run factories etc., and making the self-governing Mir the basic element in the new society.These could have been the foundation for a thoroughly participatory democracy involving workers, peasants and citizens in running their own communities in classically anarchist ways.

-  Marx seems to have been inconsistent in arguing that the maturing of capitalism produces social institutions and processes that will both undermine it and be basic in the post revolutionary synthesis, while believing that in the immediate aftermath of the revolution, the period of “crude communism”, several core elements of consumer society would remain, such as working at a specialism for wages, working for a boss (the state), and being focused on property and acquisition.  From The Simpler Way perspective these are the most important faults in the consumer-capitalist mentality and revolutionary change in social structure, class and power cannot take place until after there has been radical change in these cultural and ideological factors. (This is a classical Anarchist view.) This change is to be worked for through the long Stage 1 process whereby local economies are developed.  Marx did not seem to entertain this notion of deliberately working to “prefigure.” He thought the necessary post-capitalist institutions would fairly automatically and inevitably develop as capitalism matured, and didn’t stress any need to focus on “educational” effort to encourage their emergence. He thought that the right ideas and values could be developed in stage 2 of the revolution. The anarchists put the sequence the other way around, and you could say that they regard the development of the right ideas and values as being the revolution.

-  Marx thought that “industrial” capital would prevail over “finance” capital; i.e., investment would be predominantly about channelling savings into creating productive firms, and industrialists would be in control of this kind of activity.  But now the overwhelmingly dominant sector of the economy is that which lends money (mostly just created by banks; see TSW: Money…) in order to get interest back, and to benefit from rises in asset prices, repossessions, bankruptcies, fees etc. This sector makes about 40% of all corporate profit now, and is to a large extent predatory … and gave us the GFC.

- Much of Marx’s writing is somewhere between very difficult and impossible to understand!  It is strongly advised that he should not be read until you know what he is saying; i.e., read introductory and summary material first and when you feel you know what the essentials are, have a go at him.  You have been warned.

Appendix: Where a “Simpler Way critique differs from that of Marx.

The basic Simpler Way analysis of the global situation owes much to Marx but on some crucial issues differs significantly.   Marx’s analysis focused on the productive process and argued that the fundamental fault in capitalism was to be found there.  In addition his theory of how history changed was in terms of the “forces” and the “social relations” of production.  These are important themes, but TSW critique of capitalism focuses on the market system not the productive system, and on consumption (overconsumption) rather than production.  The market creates ever-increasing and terminal problems, primarily of unequal distribution and inappropriate development.

Marx’s theory of value claimed that the value of a product corresponded to the amount of labour in it. Workers create that value but don’t get it all in their wages, then the capitalist sells the product for more than he pays them and thus takes part of the value they created.  Thus to Marx the essential fault in capitalism is this injustice, theft, or exploitation built into the mode of production.

However from The Simpler Way perspective the core fault is different, and obvious and easily understood. The capitalist owns the goods produced and he sells them for the highest price he can get, meaning that the system inevitably distributes products mostly to the rich and that development will mainly be of those industries, factories etc. that produce what richer people want to buy. Thus inevitably production is not geared to meeting the needs of most people, and the development that takes place is not of industries that will produce what they need, let alone industries using local resources and run by local people.  This is a critique in terms of exchange relations, not productrive relations. Only local economies which prevent market forces from determining what happens, and motivated by happy acceptance of simpler lifestyles, can defuse the limits to growth problem and enable ecological sustainability. Fixing the exploitative productive relationship Marx focused on is of course important, but to achieve TSW vision much more than that must be done

 

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Avineri, S., (1968) The Social and Political Thought of Karl Marx, Cambridge, Cambridge University Press.

Dalton, G., (1968), Archaic, Primitive and Modern Economies; Essays of Karl Polanyi,

Korten, D. C., (1995), When Corporations Rule the World, West Hartford, Kumarian Press.

Lichtheim, G., (1961), Marxism, London, Routledge and Kegan Paul.

TSW: The Case Against the Market. thesimplerwaylinfo/MARKET.htm

TSW: Third World Development, thesimplerway.info/DEV.LONG.htm

TSW: Transition. thesimplerway.info/TRANSITION.htm

TSW: Anarchism. thesimplerway.info/ANARCHISM.Intro.htm

TSW: Religion and the emergence of market dominated society. thesimplerwaylinfo/Religion&markert.html

TSW: Polanyi. thesimplerway.linfo/Polanyi.html