Karl Marx: The Economic Nostradamas

"How long, not long. 'Cause what you reap is what you sow"

"Sell a man a fish, he eats for a day; teach a man to fish, and you ruin a wonderful business opportunity" (Marx).

The economic system of the United States of America was established according to Adam Smith’s conception of capitalism, which he set forth in his book, The Wealth of Nations. In The Wealth of Nations, Smith explains how the national economy benefits from each individual pursuing his own ends. As individuals work to store up wealth for themselves, and then, subsequently, redistribute that money into the economy, they help the economic prosperity of the nation while also enjoying their own individual prosperity. But because a laissez-faire market could always possibly lead to monopolies of business and disparities in social status’, Adam Smith assures his reader that the wealthy class will indirectly balance out class disparities by redistributing his wealth in the economy through consumption. He calls this indirect redistribution of wealth the invisible hand. In his book, The Theory of Moral Sentiments, Smith writes, “the rich … divide with the poor the produce of all their improvements. They are led by an invisible hand to make nearly the same distribution of the necessaries of life which would have been made, had the earth been divided into equal proportions among all its inhabitants” (Smith).

However, while the United States were beginning to espouse Adam Smith’s economic philosophy, Orestes Brownson, a New England Transcendental philosopher, foresaw grave problems with capitalism. He claimed that because capitalism transfers all work labor into commodities, such as material objects or money, the owning, or corporate class of society actually benefits more so than they would in a slave-trading society. He believes this is the case because while in a slave-trading society the owning class were obligated to pay the entire living expenses for all their slaves, in a capitalist society, where labor is returned to the laborer in the form of money, the owning class is obligated to simply pay the laborer a minimum wage, which many times is not enough for one person to live off of, let alone support a family. Orestes Brownson writes, “wages is a cunning device of the devil, for the benefits of tender consciences who would retain all the advantages of the slave system without the expense, trouble, and odium of being slaveholders” (Brownson).

Orestes Brownson could not have been more accurate. In the United States, as of 2005, the top ten percent of the nation’s wealthiest people retained roughly fifty percent of the nation’s wealth (USCCB). The working class, who produces the products that the owning class prospers from, works as much as a slave would, but they are only given a wage in return for their work, while the slave was given living quarters as well as food. As made clearly evident in the United States, the minimum wage does not provide the laborer with enough capital to afford living quarters and food – possibly one or the other, but not both, especially if one has a family to support (USSCB). Moreover, not only has United States capitalism created extremely wide gaps between the working and corporate class within America, but United States capitalism has also birthed extreme disparities of wealth between the United States government and the majority of all other nations in the world. Because modern capitalism works on a global scale, the working class within the United States is not the only group being exploited; the majority of third world nations also experience great poverty as a result of capitalist exploitation.

Similar to Orestes Brownson’s warnings of capitalism, Karl Marx also recognized these problems inherent in capitalism. However, Marx diverges from Brownson by claiming that the conflicts produced by a capitalist economy are necessary conflicts that must be endured for the development of a truly free society. To understand this, one must understand Karl Marx’s conception of history. Marx stated, “the history of all hitherto existing societies is the history of class struggles” (Marx). He believed that the movement of societies through time is built upon certain conflicts that lead to a progression of a new social order – one whereby more people are free (by freedom I mean the capacity to live a self-sufficient, fulfilling life), and there is less reason for conflict to be birthed. As developments towards universal freedom progress, the cause for conflicts are slowly dissolved until society reaches the culmination of universal freedom – a freedom that can only be achieved through the implementation of socialism. Marx writes, “revolutions are the locomotives of history,” because he understands that until an economical system is established that provides for all people the expenses necessary to live a complete, healthy life, revolutions will continue to occur (Marx). And it is rightly so that these revolutions do continue; for, every human has the right to a living wage – no one person has more dignity than another, and therefore no one person, by storing up excess wealth, should be permitted, however indirectly, to prevent another from living a healthy life. This is why conflicts start, and this is why revolutions occur. It is a constant striving towards universal freedom.

Yet, I have heard countless times before how ‘America is the land of the free;’ we are referred to by many as the ‘pinnacle of democracy and freedom.’ This issue must be addressed before proceeding because only by understanding the contrasting conceptions of liberty can one understand what Marx means by universal freedom in a socialist society. Here in the United States many people believe that liberty is unbridled economic opportunity; the ‘America Dream’ is built upon this notion, which suggests that anyone can climb the social ladder and become wealthy overnight. However, Marx’s conception of freedom is drastically different. Marx claims that freedom is the ability for all people to live decent, self-sufficient lives. Freedom is the end of inequality. Freedom is the ushering in of an economic order that provides for the whole population and not just for those blessed with the opportunities to succeed. Freedom can only be arrived at universally; while one nation may have freedom in a capitalist society, it comes at the expense of other, third-world nations. In the Declaration of Independence of the United States of America, it states that America is the land of “liberty and equality” (Declaration of Indepencdence). However, economic liberty and universal freedom are wholly incompatible. If there are x amount of dollars in an economy and ten percent of the population have the liberty to control fifty percent of the wealth, there is an inevitable and unavoidable disparity and inequality. Thus, capitalism can never usher in total freedom in the Marxist sense.

Because there is the unavoidable inequality inherent in capitalism conflicts begin to arise in response to the inhibited freedom and opportunity of the working class. Marx refers to the initial stages of conflict as the alienation of the worker. Marx writes, “the alienation of the worker in his product means not only that his labor becomes an object, an external existence, but that it exists outside of him, independently, as something alien to him” (Marx). This alienation of the worker in the Marxist sense is very similar to Orestes Brownson’s criticisms of capitalism insofar as the laborer is detached from the products that he produces. Marx writes:

In the social production of their life, men enter into definite relations that are indispensable and independent of their will, relations of production which correspond to a definite stage of development of their material productive forces … [and] at a certain stage of development, the material productive forces of society come in conflict with the existing relations of production. (Marx).

Because the laborer works to produce something that another, wealthier person benefits from, the worker becomes alienated from his work; this detachment of the worker from his work is the seed of conflict.

Applying this notion of progress through conflict to capitalism, it becomes evident to see how the laborer can become detached from his work. Marx states, “the development of Modern Industry, therefore, cuts from under its feet the very foundation on which the bourgeoisie produces and appropriates products. What the bourgeoisie therefore produces, above all, are its own grave-diggers. Its fall and the victory of the proletariat are equally inevitable” (Marx). Marx states this because the worker in capitalism is given only a meager wage in return for what is, essentially, slave labor. For example, according to several human rights organizations as well as the United States Conference of Catholic Bishops, the minimum wage is far from a living wage. The minimum wage is $5.15 per hour as of May 2, 2007, and this is less than five hundred dollars above the poverty line. In no way does this provide the contemporary worker with a living wage. Because the minimum wage does not offer enough money to the worker to ‘save’ money, their family becomes victim to an endless cycle of poverty. He also writes, “in bourgeois society capital is independent and has individuality, while the living person is dependent and has no individuality” (Marx). In a capitalist economy, the corporate class reaps profits through the exploitation of the laborer, and this is the beginning of conflict, which is, subsequently, the beginning of revolutions.

But what is both most significant and most commonly overlooked is that fact that the revolutions arising out of conflicts must be natural processes. They cannot be forceful implementations of socialism, because doing so would be no more than authoritarian dictatorship. Although capitalism has inherent, inevitable problems, it cannot simply be passed over. What capitalism does is produce the necessary federal capital needed to implement and sustain a socialist economy. Thus, the problems with Russian Communism were the result of the misapplication of Marx’s theories. Rather than moving through democratic capitalism and the conflicts it produces, the Russians simply moved from a feudal economy to one of socialism.

Marx was an extremely insightful, intelligent man who understood the movements of history. Over one hundred years ago, he foresaw the problems that capitalism would cause. Furthermore, he understood what reactions it would cause and what governmental institutions it would lead to – socialism. When we examine the politics of the world today, Marx’s ideas resonate with fervor. For example, in Latin America, Socialist presidents have been elected in Chile, Bolivia, Brazil, and Venezuela, while Argentina, Ecuador, Peru, and Uruguay have radical leftist presidents with socialist agendas. What is going on here is a fundamental phenomenon of Marxist theory: in our global economy, the United States is now becoming the bourgeois while third world countries is the proletariat. As United States capitalism built capital through the exploitation of Latin America (through imbalanced programs such as the IMF and the World Bank, as well as through sweatshop factories), the workers of Latin America became increasingly detached from the products of their labor. As a result, a conflict between Latin America and the United States has been birthed; citizens of Latin America are now responding to that conflict by democratically electing socialist presidents who establish programs that return wealth to the laboerers. Marx once said, “democracy is the road to socialism,” and as these countries elect socialist presidents they are working towards the universal freedom Marx proclaimed. Even within the cities of the United States reactions to capitalism are beginning to gain speed, as the Green Party, which holds a close relation to socialism, and the radical leftists, which have socialist programs, are gaining more and more popularity. It will not be long before United States capitalism falls as a result of breaking the own legs that which it stands tall upon.

Marx’s socialism is not an idea that seeks to help people out from within capitalism. No, it is a response to the injustices that capitalism births. It is the transformation of an unjust system. It is a movement towards universal freedom. As the workers of South America elect Socialist leaders, they are working towards a more universal freedom – one that values not only the dignity of the corporate class who redistributes wealth in capitalism, but also the dignity of the worker who produces this wealth. Thus, what we see in our political world today is the new revolution; the revolt against what is unjust and exploitative. What we are seeing is the movement Marx foresaw – the movement towards universal human rights and freedom, which can only be achieved by a rebellion against capitalism.