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How to Stop Capitalism in its Tracks January 12, 2015

Posted by rogerhollander in Capitalism, Marx and Marxism, Revolution.
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Roger’s note: it is, of course, a good thing that criticism of the capitalist economy has broken even into the mainstream.  And on the political left trashing capitalism has become pretty much the in thing.  Nevertheless, a critical understanding of what capitalism (or, for that matter, what capital is) is a rare occurrence, even in the so-called progressive Blogosphere.  Since the deepening of the word wide crises (war, economic disparity, environmental disaster, etc.) has become more and more evident, and because everyone knows that we live in a capitalist world (private, state and mixed), it takes no great leap of logic to realize there is something very much wrong with capitalism.

But what is almost universally lacking in analysis is a rigorous and historical understanding of what capitalist economy is, much less an understanding of the revolutionary nature of the struggle to go beyond capitalism, and even much less a philosophic context that takes into account the very nature of human existence and the notion of human freedom.  I am no great revolutionary scholar, but what I have learned I have learned through a lifetime of participation in the struggles for social, political and economic justice and informed by a study of capitalism via the writings of and organization formed by the founder of Marxism Humanism in North America, Raya Dunayevskaya (www.newsandletters.org).

The work of Stephanie McMillan, of which I became aware from the article below, is a welcome exception to the usual analyses of capitalism from the left, which tend to be either disappointingly reformist or corrupted by a nihilist and defeatist attitude, largely a result of the gross failures of the various 20th Century Marxist revolutions. 

When she became aware of flagrant injustice and felt the need to take action, McMillan was advised in essence to work “within the system,” to lobby and write letters to politicians.  She soon became aware of the futility of such a strategy and began to dig further.  Like most of us who have benefited by North American education and economic prosperity and who live relatively comfortable middle class lives, the truths that we discover when we are serious about investigating are difficult to adopt, “inconvenient,” if you will (for me, I was hit over the head with this reality as a 20 year old university student spending a summer in various Latin American countries).  It implies a break with a world view that has always served as an emotional safety net; that is, the notion that if we follow the rules and work hard at uncovering and exposing injustice, then our democracy has the capacity to adjust and correct.  The problem, of course, is that it doesn’t have that capacity because democracy in a capitalist economy is more symbolic than real, and it only serves to mask the deeper source of injustice.  We are left with no choice.  We either abandon our comfort zone in a revolutionary way, or we consciously or unconsciously rationalize a reformist strategy (Communism didn’t work, so we can only try to reform capitalism), one that is doomed from the beginning to fail, the kind of failure of imagination for which William Blake coined the phrase “mind forged manacles”.

My only criticism of McMillan, from what I have read in this article, is her use of the first person plural (we, our) in such a way that implies that those who come to a better understanding of the problem are the ones who are going to have to resolve it.  Naturally, activist philosophers are essential to revolutionary struggles, but the subjects of revolution are the various classes of oppressed peoples, and without them no amount of intellectual acuity or vanguard “leadership,” can lead to meaningful change; rather the notion of Praxis, the intertwining of thought and action.

One cannot deny how bleak things seem.  But the essential truth is not that there is no other option than cancerous capitalism, rather there is no other option than its destruction and replacement with a humanistic and democratic form of socialism.

Oscar Wilde wrote, “The cynic knows the price of everything and the value of nothing.”  He was discussing a personality type, but in doing so he came close, if unwittingly, to encapsulating the very essence of capitalism.

2013-05-01-may-day

Cartoonist and Journalist Stephanie McMillan Provides a User-Friendly Guide

by MARK HAND

If capitalism keeps chugging along, we’re all in big trouble. That’s the prognosis of Stephanie McMillan, an award-winning political cartoonist and author of the new book, Capitalism Must Die! A Basic Introduction to Capitalism: What It Is, Why It Sucks, and How to Crush It.

The most urgent reason to stop capitalism in its tracks, according to McMillan, is its prominent role in harming the planet. Capitalism possesses an inherent growth imperative. This means that the normal functioning of capitalism is causing water shortages, ailing oceans, destroyed forests and ruined topsoil.

But even if an ecological catastrophe weren’t upon us, capitalism would still need to be dismantled because it’s based on exploitation, McMillan said in an interview. “There’s no reason why the social result of production needs to be in private hands and that only a few people should own what everybody produces,” she said.

McMillan uses her book to introduce and popularize basic concepts of revolutionary theory. “I wanted to provide something that was accessible to people, that people wouldn’t be afraid to pick up,” she said. But once they pick it up, readers will find a “doorway into deeper levels of theory because we always need to learn more about the system,” she explained.

Overturning capitalism, according to McMillan, will require getting as many people as possible — liberals, socialists, communists, anarchists, environmentalists and unlabeled people — on the anti-capitalist bandwagon. And once they’re aboard, the goal will be to educate them on the complex and long history of capitalism.

A serious weakness among activists in movements for social change has been a lack of understanding of the true nature of the system they live under. Instead of naming capitalism as the problem, McMillan writes, activists often use vague populist terms like “the 1%,” “the rich,” “banksters,” or “greedy corporations.” But the problem runs much deeper than the corruption of any particular individual or institution, according to McMillan. “It lies in the structural foundation of the entire way of life that currently dominates the globe,” she writes.

“Capitalism Must Die!” also serves as a guide to fighting back because, according to McMillan, now is a better time than ever to get organized. “Capitalism is in a huge crisis,” she said. “We need to understand how it works and what the nature of the crisis is and the nature of the different moments that it passes through so that we can identify its vulnerabilities and weaknesses.”

Something will inevitably happen to capitalism as the crisis deepens. “It will probably have to restructure itself and it could become fascism or it could lead to a civil war between the representatives of different factions of capital or some horrible things that don’t actually improve anything,” she said in the interview. “Or we can organize and get rid of them.”

Indeed, McMillan hopes people will use what they learn from the book to organize in their communities, workplaces and schools. “Theoretical clarity for its own sake is pointless intellectualism; instead, it should be a guide for action,” she writes.

CapitalismMustDie coverThere Is No Alternative

After decades of neoliberal supremacy, critiques of capitalism have sneaked into mainstream debates, with Thomas Piketty’s Capital in the Twenty-First Century and Naomi Klein’s This Changes Everything: Capitalism vs. the Climate as notable examples. Both authors, however, approach capitalism from a reformist stance and hold up social democratic versions of capitalism in Western Europe as viable alternatives.

McMillan doesn’t believe Western European capitalist models — the ones that offer stronger social safety nets and more enlightened views on environmental issues — are worth defending. Capitalism, in whatever form, is inherently destructive because it converts the natural world into commodities. And it’s inherently exploitative because profit always comes from the exploitation of workers. “It doesn’t matter if you give them healthcare or a higher salary; you’re still exploiting them for private gain,” she said.

While still exploitative, Europe’s form of capitalism may in fact be less harsh than in the U.S. because the rising capitalist class in Europe had to deal with a feudal class. “They had to make some concessions to the masses in order to get their system in place,” she said in the interview. “Whereas in the U.S., they came over here and slaughtered everyone and took the land. There was no concession made. There was no feudal class that they had to fight against or deal with.”

Even with the publication of the books by Piketty and Klein, the supremacy of capitalism still remains unquestioned in the mainstream media. “It’s the framework that everything else exists within. The debate has to be inside that framework. Nothing can exist outside. It’s like what Margaret Thatcher said, ‘There is no alternative,’” explained McMillan. “It’s hard for people to imagine that there could be any alternative. People think, ‘I guess this is all there is. This is the only way humans can behave.’ Capitalism is naturalized.”

Right now, the level of political consciousness within the working class is very low. And that didn’t happen by chance. “That is by design and it’s by indoctrination and conditioning,” she said. “But it is a problem that we have to deal with.” The capitalists and their representatives in government are adept at finding new ways to squash and tamp down threats to their control. “We have to keep evolving our tactics as well,” she added.

The Occupy movement provided a glimpse at what’s possible. It made people realize they can rise up and take collective action. “It was very inspiring to people for that reason,” McMillan said. “There was a broad base of support for something like that. So many people got involved so quickly and there was so much discontent. It made people feel good that they weren’t alone and it showed the potential of what could happen.”

But Occupy also was a learning experience. “It showed the weakness and the need to be stronger. If we’re actually going to go up against the system, it can’t just be a spontaneous gathering of a bunch of people. It has to be organized — planned and strategic,” she emphasized.

It’s Our Only Shot

McMillan knows that eradicating capitalism is a long shot. “But I feel like it’s our only shot. The reason that I keep doing it is because there’s nothing else — the only other alternative is to give up and die or accept things the way they are and end up in a worse situation,” she said.

Anybody who really understands what’s going on cannot stand idle, according to McMillan. “It’s our historical responsibility,” she insists. “It’s a matter of human dignity.”

Accepting things the way they are would mean allowing 10 million children under the age of five to die annually because, under the normal functioning of global capitalism, it’s not profitable to save them, she writes in the book, citing a study by the nonprofit group Save the Children. It would mean continuing to accept racism, which has always been central to capitalism’s expansion and has been used to excuse the ultra-violent policies — from genocide of indigenous people to slavery and now the “war on terror” — that serve the accumulation of capital, she explains.

McMillan understood what’s going on when she was in high school and a relative urged her to read Jonathan Schell’s Fate of the Earth, a 1982 book about the destruction of life on Earth from nuclear war. She was reluctant to read the book. “I instinctively knew that if I read it, then I would have to then deal with the horrible issues that were going to be in there. I didn’t want to disrupt my comfortable existence. I understood that I would have to do a lot of hard things,” she remembered.

But the relative kept prodding her: “You’ve got to read this. It’s the biggest issue. Reagan is going to destroy the world. We can’t let this happen and you have to read this.” McMillan eventually relented and opened the book. As she expected, it was horrifying and upsetting. She realized humans couldn’t go on living with the possibility of nuclear war hanging over their heads, which seemed very possible at the time.

McMillan started going to meetings with peace and justice activists in her native South Florida. They would tell her to write letters to her congressperson, write letters to the editor of local newspapers and sign petitions. Even as a newcomer to political activism, McMillan knew these steps were not going to be sufficient. “And I would ask, ‘Is there anything else?’ and they would say, ‘No, that’s it.’”

But then McMillan met a guy wearing a purple hat who was talking about revolution. He was standing outside a screening of a movie about nuclear war. “It was like a light bulb, ‘We could actually have a revolution now.’ I thought it was just a historical thing that happened in the past, like the Declaration of Independence,” she recalled. “I didn’t know we could have another one.”

The guy with the purple hat gave McMillan a copy of a newspaper filled with words she didn’t understand: the proletariat, the bourgeoisie. “I came home really excited and told my dad, ‘I think I’m a communist! This is going to solve everything,’” she recalled. “And he pounded his fist on the table and he goes, ‘What’s the labor theory of value.’ And I said, ‘I don’t know.’ And he said, ‘How can you call yourself a communist if you don’t even know what the labor theory of value is, one of its basic concepts?’”

McMillan immersed herself in study and quickly learned that the labor theory of value means that the exchange value of a product is based on the socially necessary amount of labor power — measured in time — that is generally required to produce it. But under capitalism, one of the key ingredients is surplus value. And under capitalism, the buyer of labor power — the capitalist — appropriates the surplus value generated in the process of commodity production.

You Can’t Be Neutral

Mastering political theory is tough enough. But putting it into action is even harder. Along with decades of organizing and activism, McMillan has worked as a cartoonist, drawing the popular daily comic strip Minimum Security and the weekly editorial cartoon Code Green, where she seeks to propagate her ideas through crafty drawings and funny dialog. She has received numerous awards for her cartoons, the most notable being the Robert F. Kennedy Journalism Award for Editorial Cartoonists in 2012.

As a working journalist, McMillan has learned that reporting is never objective. “There is no such thing. It’s never neutral. It’s never non-partisan. If somebody is involved in an issue and they acknowledge it in the article — you know where they are coming from — then it actually has more credibility because they have a deeper level of understanding of the issue because when you just dropping into something like a tourist, you can’t really understand it deeply,” she explained in the interview.

Many of the journalists who reported on the Occupy movement, for example, were unfamiliar with it. “They just observed the surface, the spectacle. They didn’t know all the dynamics. They didn’t know all the people, all the different political trends, all the different tendencies within it. They’re just reduced to describing the surface imagery,” she recalled.

McMillan also has written several books with political and environmental themes such as “As the World Burns: 50 Simple Things You Can Do to Stay in Denial” and “The Beginning of the American Fall.” Since the publication of “Capitalism Must Die!”, people have told McMillan that the book brought them clarity and a comprehensive understanding of capitalism. They also appreciated how the cartoons helped to make the concepts clearer.

Going forward, McMillan believes anti-capitalists will need to work with liberals and reformists, even if it often can be an exercise in frustration. Anti-capitalist organizations should only engage in common work with reformists, though, when they are organized enough to insist that their politics are represented, she writes.

If and when anti-capitalist groups make headway, the dominant class will respond with ever-increasing violence and, as it has repeatedly shown, will not hesitate at committing massacres on any scale using what McMillan describes as the “capitalists’ accumulated forces of lies, wealth and arms.”

“But we are potentially stronger than them,” McMillan writes. “We outnumber them, and we have right on our side.”

Mark Hand covers energy issues. You can reach him at markhand13@gmail.com , or follow him on Twitter at @MarkFHand.

 

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Putin’ it to Putin: the Russian Oligarchy and the Primitive Accumulation of Capital May 1, 2014

Posted by rogerhollander in Capitalism, Economic Crisis, Labor, Marx and Marxism, Russia, Socialism.
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BjCHxNICMAAaVSj.jpg largeMeet the 11 Putin cronies and Ukrainian officials facing U.S. sanctions: http://t.co/0WOAuGtABa http://t.co/30T2yhxH4p

 

I don’t intend to go into the politics and economics of the situation in the Ukraine other than to point out the fact that the threats coming from the U.S. president against the Russian government seem to center on economic sanctions against the friends, associates, colleagues – well, let’s use the correct term: cronies – of the Russian president, Vladimir Putin. In other words, the Russian Mafia/Oligarchy. The New York Times reports that Obama’s spies are hard at work to discover Putin’s own fortune. What this circus amounts to then is the government of the nation with the world’s largest collection of parasitic crony capitalists attacking its rival nation’s crony capitalists. Russian Billionaires, take cover!

What his begs, however, is a question that no one seems to be asking: to wit, how did these billionaires come to be billionaires in the first place in Russia’s transition from Soviet “Communism” to Reaganite “Capitalism?” Or, more importantly, what this implies theoretically and philosophically about the very nature of capitalism itself. It indeed takes us to the heart of the origins of capitalism, what is referred to as “primitive accumulation” of capital, which is what this article is all about.

First we have to backtrack with a short discussion of economics. I assert that, despite popular opinion, economics is indeed a science in the sense that its elements can be measured and independently verified. The problem with Economic’s bad reputation is that the vast majority of economists are of the same ilk as biological “Creationists” and atmospheric climate change deniers. What they fail to take into account are the very dynamics that make capitalism what it is (usually in the form of ignoring obvious class divisions or making a fetish of the market place instead of focusing on what is fundamental in any economy, i.e. production).

Definitions are important. A simple but scientifically accurate definition of capital: vast accumulations of wealth (value) that today come in various forms, real estate, industrial and other corporate wealth, high finance, etc. Capital ISM then is the system of producing goods and services based upon the relationship between those who own and manage capital and the rest of us, who do the work that is responsible for the increase in value in the first place; that is, the relationship between capital and labor. It is a relationship that is hierarchic and despotic; that is, inherently undemocratic. A simple, yet accurate definition of socialism (the antithesis to capitalism), then, would be not state ownership of the means of production (as we saw in the former Soviet Union), but economic democracy, that is, direct ownership and control by those who produce the value. Note: it was not Karl Marx, but rather Adam Smith who demonstrated that new value added to land and natural resources can only come from living human labor.

Anyone who has ever had a job knows that the boss is the boss (be it the actual owner or his/her designates). You do not get to vote on what you do. You do what you are told, or you are shown the door (only union organization has mitigated this phenomenon to a degree). There are others waiting to take your place if you don’t like it. You do not get to decide what is produced (be it goods or services), how it is produced, or under what conditions (e.g. safety). But most importantly, you are paid for your creative effort as little as your owner/boss can get away with, and the rest of the value you create goes into his or her pocket (the pockets of heirs, stock holders, bankers, etc., i.e. capitalism’s parasites). This is what Karl Marx called surplus value (and what capitalists call profit), and it is the reason for the reality that we have always been aware of but are coming to see in greater relief more and more every day: the rich getting richer and the poor getting poorer. One example: the geometric increase in the proportion of CEO salary in relation to worker salary (according to the Washington Post, “The ratio of CEO pay to average worker pay is 273-1, down from a high of 383-1 in 2000, but up from 20-1 in 1965.” http://www.washingtonpost.com/blogs/wonkblog/wp/2013/06/26/congrats-ceos-youre-making-273-times-the-pay-of-the-average-worker/). In other words, the average worker has to put in about six weeks of eight hour days to earn what your typical CEO earns in one hour.

 
Forget all the crap that has been that has been shoved down your throat since you came off your mother’s breast (or the bottle) about the wonders of capitalism: the miracle of free enterprise, the invisible hand that makes everything just, the value of competition, capitalists taking all the risk, capitalists creating jobs – as if without capitalists we would all stop working to produce what we need to survive and thrive. Forget about free markets: there haven’t been free markets since Jesus threw the money changers out of the Temple. The deck (the economy) is stacked in favor of capital; capital essentially owns government and uses it to maintain its strangle hold on the rest of us – economically and militarily. And this was true long before the US Supreme Court made corporations into people.

So now let’s go back to “primitive accumulation.” How did there come to be such huge fortunes, such accumulated wealth in the first place; in other words, how did the feudal economy become a capitalist economy?

Here are the contrasting explanations from Adam Smith and Karl Marx:

“In the midst of all the exactions of government, capital has been silently and gradually accumulated by the private frugality and good conduct of individuals, by their universal, continual, and uninterrupted effort to better their own condition. It is this effort, protected by law and allowed by liberty to exert itself in the manner that is most advantageous, which has maintained the progress of England towards opulence and improvement in almost all former times. …

“It is the highest impertinence and presumption, therefore, in kings and ministers, to pretend to watch over the economy of private people, and to restrain their expense. … They are themselves always, and without any exception, the greatest spendthrifts in the society. Let them look well after their own expense, and they may safely trust private people with theirs. If their own extravagance does not ruin the state, that of their subjects never will.”

Adam Smith, Wealth of Nations, Book II, Chapter II
(cited in Toronto Globe and Mail, April 5, 2008)

 
“The discovery of gold and silver in America, the extirpation, enslavement and entombment in mines of the aboriginal population, the beginning of the conquest and looting of the East Indies, the turning of Africa into a warren for the commercial hunting of black-skins, signalled the rosy dawn of the era of capitalist production. These idyllic proceedings are the chief moments of primitive accumulation. On their heels treads the commercial war of the European nations, with the globe for a theatre. It begins with the revolt of the Netherlands from Spain, assumes giant dimensions in England’s Anti-Jacobin War, and is still going on in the opium wars against China, &c. The different moments of primitive accumulation distribute themselves now, more or less in chronological order, particularly over Spain, Portugal, Holland, France, and England. In England at the end of the 17th century, they arrive in a systematic combination, embracing the colonies, the national debt, the modern mode of taxation, and the protectionist system. These methods depend in part on brute force, e.g., the colonial system. But they all employ the power of the State, the concentrated and organised force of society, to hasten, hot-house fashion, the process of transformation of the feudal mode of production into the capitalist mode, and to shorten the transition. Force is the midwife of every old society pregnant with the new one. It is itself an economic power.”

Karl Marx, Capital, Vol . I, Chapter 31

Karl Marx was a philosopher, whose primary concern was human freedom. In order to understand the un-freedom that was obvious to him in his age as well as it is to us in our own, he had to and did become a full-fledged historian and economist. He read, digested, analyzed and critiqued not only the famous economists like Adam Smith, Malthus and Ricardo, but the entire body of political economy of his day. Needless to say, with respect to the primitive accumulation of capital, he was aware and demonstrated how it was ongoing; and we see the unbelievably gigantic proportions it has taken in our own time.

The political economists like Adam Smith, showed us how only human labor can create value, then they proceeded to ignore human labor as they obsessed on the market placed and the distribution of goods and services. Karl Marx corrected the fundamental error by show us scientifically the inherent inequality and un-freedom of capitalist economy. It is ironic that Marxism is often criticized for ignoring the individual in favour of the community, whereas it was Marx who demonstrated how capitalist productive relationship created misery for individuals within their community. It was Marx, for example, who showed us that even if a nation’s economy may be thriving, suffering and injustice can abound for the majority of its citizens. It is the notion of the “economy” that is abstract and ignores the individual, not the notion of community. This is a fact that the vast majority of economists ignore completely.

And anyone who believes that “democratic” political institutions in the form of periodic elections can tame this insane and out of control Monster known as capitalism, is either naïve or uninformed (for which we can thank our bought and paid for mass media and institutions of higher learning).

Now we are ready to go back to Boris Yeltsin, Putin and the collapse of the Soviet Union. Under Stalin, the Soviet Union had become the opposite of its revolutionary class destroying origins. The Soviet State (brutally tyrannical under Stalin, then reformed and softened under Khrushchev) became the single owner of value, i.e. capital, in what is almost universally recognized theoretically as State Capitalism. With the collapse of the Soviet empire, which resulted from massive popular uprisings (aided and abetted by the democratic and progressive reforms of Gorbachev), things could have gone either one of two ways. All of Soviet capital, all that enormous wealth (value) could have been democratized, that is decentralized and put democratically into the hands of those who worked in the various industries (and who create the wealth in the first place). Any genuine Marxist left in Russia would have reminded the angry masses that the original soviets were democratic organizations made up respectively of industrial workers, peasant workers, and soldiers. With the theoretical and organizational backing of the Bolshevik Party, they were the impulse that overthrew the Tsar and established a union of soviets, which for a few years before the Stalin coup was striving for worker democracy at the same time as it was at war with the rest of the capitalist world, fighting for its very survival.

Alas, things didn’t go in that direction. They went instead in the direction of looting of the state’s enormous resources by those Adam Smith like industrious Communist apparatchiks cum Mafia. We see them everywhere today, as they have moved their newly gained capital around the world. We saw them at the Sochi Olympics and we see them as owners of American professional sports teams.

As with the Spanish Conquistadores and the slave traders of African skin, their wealth is stolen. That is what is meant by the slogan “property is theft.” Hegelian Marxism talks of continuing negations, ongoing revolution, if you will. The overthrow of the former Soviet Union was a first negation; the second one did not happen at the same time. We see the same phenomenon with the Ukraine’s “Orange Revolution,” Egypt’s “Arab Spring,” the Sandinistas in Nicaragua, etc.

But some day, if the capitalists do not destroy the earth first with nuclear or environmental catastrophe, it will happen. The capitalist way of creating and sharing wealth will come crumbling down simply because it is not sustainable. Capital will no longer exist, just working people producing and owning outright what they produce. When and how this will happen no one can say. But if it doesn’t, we are surely doomed.

One more theoretical point. It never ceases to amaze me how otherwise intelligent academics and pundits fail to understand the obvious contradiction between political democracy and capitalist economics. It is as if democratic institutions, however primitive, can somehow ensure freedom and justice, while at the same time working people are being systematically bilked by the capitalist Behemoth. Democracy, which is in fact the most highly advanced political notion, is just that, i.e. political. Capitalist economy is just that, i.e. economy. They are two entirely different animals, notwithstanding the fact that they are intimately entwined. Failing to understand this, leftists, progressives, liberals, etc., make a fetish out of the concept of democracy, ignore the economic implications of capital, and end up being entirely irrelevant. Note: capitalism cannot be reformed because it is inherently unjust and undemocratic.

For those who are interested in a truly scientific understanding of capitalist economic relations as outlined in Marx’s Capital, I recommend the first four chapters of Raya Dunayevskaya’s “Marxism and Freedom: from 1776 until Today,” Humanity Books, 2000. Of course, there is no substitute for reading Marx in the original, which I acknowledge is not an easy task. I recommend beginning with the so-called Early Writings or Economic Manuscripts.

 

Marx Was Right: Five Surprising Ways Karl Marx Predicted 2014 February 2, 2014

Posted by rogerhollander in Marx and Marxism, Revolution.
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Roger’s note: I find it interesting that journalists cannot write positive things about Marx with a caveat to show, I guess, that they are not slavish ideological Marxists.  Marx did not consider himself to be a prophet or a maker of blueprints for the future.  If so much of what he projected has come to be true it is because of his profound intellectual and analytic digging and not because he was some kind of a seer into the future.  First of all Marx was a philosopher, not an economist.  More specifically a philosopher of human liberation.  He realized that he needed a complete understanding of the history of human development and economics (he read and absorbed every one of the political economists of his day, from Adam Smith and Ricardo and Malthus to names you and I have never heard of) in order to develop a philosophy that contained the theory and practice for human individual and social liberation.  Furthermore, it is not untrue but rather misleading to state that “Most of his writing focuses on a critique of capitalism rather than a proposal of what to replace it with.”  With a particular reference to the Paris Commune, he often wrote of a future of “freely associated labor.”  He wrote about the “withering away of the state” and, of course, his most profound “vision” of a future classless world was described in his classic: “from each according to his/her need; to each according to his/her ability” (I added the gender neutrality of which Marx would have approved).  I found the best introduction to Marx was through his so-called “early writings” or “economic manuscripts” (I have the old Bottomore edition); and for a deeper understanding of Marx, the writings of Raya Dunayevskaya, the founder of Marxist-Humanism.

From the iPhone 5S to corporate globalization, modern life is full of evidence of Marx’s foresight

January 30, 2014 12:30 PM ET, Rolling Stone
Karl Marx
Karl Marx
Roger Viollet Collection/Getty Images

There’s a lot of talk of Karl Marx in the air these days – from Rush Limbaugh accusing Pope Francis of promoting “pure Marxism” to a Washington Times writer claiming that New York City Mayor Bill de Blasio is an “unrepentant Marxist.” But few people actually understand Marx’s trenchant critique of capitalism. Most people are vaguely aware of the radical economist’s prediction that capitalism would inevitably be replaced by communism, but they often misunderstand why he believed this to be true. And while Marx was wrong about some things, his writings (many of which pre-date the American Civil War) accurately predicted several aspects of contemporary capitalism, from the Great Recession to the iPhone 5S in your pocket.

Here are five facts of life in 2014 that Marx’s analysis of capitalism correctly predicted more than a century ago:

1. The Great Recession (Capitalism’s Chaotic Nature)

The inherently chaotic, crisis-prone nature of capitalism was a key part of Marx’s writings. He argued that the relentless drive for profits would lead companies to mechanize their workplaces, producing more and more goods while squeezing workers’ wages until they could no longer purchase the products they created. Sure enough, modern historical events from the Great Depression to the dot-com bubble can be traced back to what Marx termed “fictitious capital” – financial instruments like stocks and credit-default swaps. We produce and produce until there is simply no one left to purchase our goods, no new markets, no new debts. The cycle is still playing out before our eyes: Broadly speaking, it’s what made the housing market crash in 2008. Decades of deepening inequality reduced incomes, which led more and more Americans to take on debt. When there were no subprime borrows left to scheme, the whole façade fell apart, just as Marx knew it would.

2. The iPhone 5S (Imaginary Appetites)

Marx warned that capitalism’s tendency to concentrate high value on essentially arbitrary products would, over time, lead to what he called “a contriving and ever-calculating subservience to inhuman, sophisticated, unnatural and imaginary appetites.” It’s a harsh but accurate way of describing contemporary America, where we enjoy incredible luxury and yet are driven by a constant need for more and more stuff to buy. Consider the iPhone 5S you may own. Is it really that much better than the iPhone 5 you had last year, or the iPhone 4S a year before that? Is it a real need, or an invented one? While Chinese families fall sick with cancer from our e-waste, megacorporations are creating entire advertising campaigns around the idea that we should destroy perfectly good products for no reason. If Marx could see this kind of thing, he’d nod in recognition.

3. The IMF (The Globalization of Capitalism)

Marx’s ideas about overproduction led him to predict what is now called globalization – the spread of capitalism across the planet in search of new markets. “The need of a constantly expanding market for its products chases the bourgeoisie over the entire surface of the globe,” he wrote. “It must nestle everywhere, settle everywhere, establish connections everywhere.” While this may seem like an obvious point now, Marx wrote those words in 1848, when globalization was over a century away. And he wasn’t just right about what ended up happening in the late 20th century – he was right about why it happened: The relentless search for new markets and cheap labor, as well as the incessant demand for more natural resources, are beasts that demand constant feeding.

4. Walmart (Monopoly)

The classical theory of economics assumed that competition was natural and therefore self-sustaining. Marx, however, argued that market power would actually be centralized in large monopoly firms as businesses increasingly preyed upon each other. This might have struck his 19th-century readers as odd: As Richard Hofstadter writes, “Americans came to take it for granted that property would be widely diffused, that economic and political power would decentralized.” It was only later, in the 20th century, that the trend Marx foresaw began to accelerate. Today, mom-and-pop shops have been replaced by monolithic big-box stores like Walmart, small community banks have been replaced by global banks like J.P. Morgan Chase and small famers have been replaced by the likes of Archer Daniels Midland. The tech world, too, is already becoming centralized, with big corporations sucking up start-ups as fast as they can. Politicians give lip service to what minimal small-business lobby remains and prosecute the most violent of antitrust abuses – but for the most part, we know big business is here to stay.

5. Low Wages, Big Profits (The Reserve Army of Industrial Labor)

Marx believed that wages would be held down by a “reserve army of labor,” which he explained simply using classical economic techniques: Capitalists wish to pay as little as possible for labor, and this is easiest to do when there are too many workers floating around. Thus, after a recession, using a Marxist analysis, we would predict that high unemployment would keep wages stagnant as profits soared, because workers are too scared of unemployment to quit their terrible, exploitative jobs. And what do you know? No less an authority than the Wall Street Journal warns, “Lately, the U.S. recovery has been displaying some Marxian traits. Corporate profits are on a tear, and rising productivity has allowed companies to grow without doing much to reduce the vast ranks of the unemployed.” That’s because workers are terrified to leave their jobs and therefore lack bargaining power. It’s no surprise that the best time for equitable growth is during times of “full employment,” when unemployment is low and workers can threaten to take another job.

In Conclusion:

Marx was wrong about many things. Most of his writing focuses on a critique of capitalism rather than a proposal of what to replace it with – which left it open to misinterpretation by madmen like Stalin in the 20th century. But his work still shapes our world in a positive way as well. When he argued for a progressive income tax in the Communist Manifesto, no country had one. Now, there is scarcely a country without a progressive income tax, and it’s one small way that the U.S. tries to fight income inequality. Marx’s moral critique of capitalism and his keen insights into its inner workings and historical context are still worth paying attention to. As Robert L. Heilbroner writes, “We turn to Marx, therefore, not because he is infallible, but because he is inescapable.” Today, in a world of both unheard-of wealth and abject poverty, where the richest 85 people have more wealth than the poorest 3 billion, the famous cry, “Workers of the world uniteyou have nothing to lose but your chains,” has yet to lose its potency.