How convincing is Marx's critique of capitalism?
Throughout his work, Marx's primary concern was the intellectual destruction of capitalism. Despite his belief in a progressive history, and in the inevitable downfall of capitalism, Marx thought that in destroying capitalism's intellectual support he could hasten its real demise and usher in a socialist era. Many of his works can be seen as reactions to the growing status of the relatively new field of political economy, pioneered by figures like Adam Smith, David Ricardo and Thomas Malthus, whose increasingly laissez-faire theories promoted an extension of exactly the features of capitalism that Marx thought were most defective. Hence his critique ranges from attacks on the complacent liberal bases of capitalism to complex analyses of the economics of the day and of leading theorists.
Though he certainly didn't tackle these themes in any particular chronological order, I will tackle them thematically and logically, from the liberal foundations, through his theories of alienation, commodification, fetishism, exploitation and immiseration, ending with his empirical economics. In doing this I hope to show that many aspects of his critique of capitalism were extremely successful, and still pose difficult challenges to the economic and political orthodoxy in the western tradition today, but that he also made many false or contradictory statements, and finally that he lacked a viable positive alternative and a "road map" of how we might get their from capitalism.
The most fundamental assumption of Marx's moral system is a kind of moral materialism; he asserts that "the nature of individuals ... depends on the material conditions determining their production" (Marx, 2001c : 176) He thus frames any consideration of individuals in terms of their economic and productive circumstances, a move not foreign to many of his critics, but one that would conflict with many of the more idealistic notions entertained by many liberals. In his early writings, Marx deliberately distanced himself from Hegel's idealism, which saw the material world as the phenomenal manifestation of Ideas; "According to Hegel... it is not their own life process that unites them to the state, it is the life-process of the idea that has distinguished them from itself" (Marx, 2001a : 33).
Marx's next move, based upon his materialism, was to describe the nature of the relationship between an individual and society. No doubt reacting to the common liberal belief that all individuals enter freely into all economic arrangements by means of a (hopefully mutually beneficial) contract, Marx commented that "men enter into definite relations that are indispensable and independent of their will, relations of production" (Marx, 2001b : 425); whilst liberals like Locke focus on what ought to be the case in an ideal society, Marx made an obvious observation of 19th century European society, and saw something that is true of today also, that it is not our choice to work - work is a matter of survival - and so to an extent it is a matter of necessity rather than freedom of will that we enter into economic contracts. In fact, one could say that it is only the comparatively wealthy that have any choice in the matter, whilst the poorer members of society must take what work they can get. So Marx saw that, if we are determined by our mode of production, then our nature is determined by society, or by those who guide it, not by our own volition.
One could object that it is always our choice to work, and that we could simply chose to live the life of a beggar, or try to live off the land in another less densely populated land, or, in contemporary developed countries, to live off the welfare system. But a Marxist would claim that in not working, such a person isn't contributing to any society and is dehumanising themselves, giving no materialist basis for their nature and no right to consider himself a member of the society that is supporting him. In other words, it is a false choice. Even a non-Marxist with compassion would have to reply that a choice between undesirable work and a life of destitution is a false choice.
But Marx went further, to claim that it is "the mode of production [that] constitutes the economic structure of society and to which correspond definite forms of social consciousness" (Marx, 2001b : 425). To illustrate, a society that is predominantly based around farming will have an economy based on the seasons, markets, and definite social relations between farm owners and farm workers. If, as Marx claimed, it is the "social being [of men] that determines their consciousness", then it is the case that an individual's consciousness is determined by the forms of social consciousness, which are themselves determined by the modes of production in said society. In other words, Marx thought that it was in the economic superstructures that social and political strife have their origins, and so that political theory ought to concern itself with modes of production, rather than abstract ideas such as justice and liberty. And it was in the structures of capitalism that Marx found his major concern, and which he saw as both the source of all strife in the developed world, and as a necessary step in the development of society.
In fact, some Marxists claim that we should not criticise capitalism because it is unjust, but because "it crushes human potential, destroys fraternity, encourages the inhumane treatment of man by man, and has other grave defects generically different from justice" (Cohen : 139) Whether one accepts that interpretation or not, Marx's critique of capitalism can be seen as sidestepping the conventional debates that consume liberalism, conservatism and other political theories, and discussing not justice understood as individual liberty, but rather discussing social consciousness. It is the health of society that determines the efficacy of a given economic or political superstructure, irrespective of the justice of the superstructure.
Crucially though, despite his staunch attack on the assumptions of 19th century liberalism, he did share one foundational concept, that of the place of value in political theory, and in particular the concept of labour based value. Just as Locke thought that labour was the origin of property, where property can be understood as the currency of value upon which political superstructures are based, Marx constructed a labour theory of value, and went on to criticise capitalism based on its abuse of this value, and in particular of its commodification of labour, and its alienation and immiseration of the workers.
With this moral basis in mind, we come to Marx's critique of the productive and social conditions created by capitalism, the three key concepts of which are alienation, exploitation and immiseration, which I shall tackle in order.
Marx saw the productive process as one of the workers creating commodities, largely for the property owners. In an ideal society, he said that each ought to be able to produce according to their nature through "free, creative labour, self-regulated work" (Houghton: 233), and that through this process men could become fulfilled, they could exercise and achieve their humanity. This idea, similar to Aristotle's eudaimonic moral framework, places importance on the outcome of the productive process, and so in Marx's system judges the political and economic superstructures according to the labour based value of their social outcomes.
In Marx's time, under capitalism, there were two distinct classes - those who owned property, and those who worked for the property owners - and the working class was in a majority. Yet, as I have briefly mentioned before, the working classes weren't able to express their nature through free, self-regulated, creative labour; rather they were coerced by necessity of survival into working for the property owners, and their labour was controlled by the property owners. In fact, the property owners, who according to Marx do no socially necessary labour at all, employ workers with dead labour, what Marx called congealed labour; capitalism turns Marx's theory of value on its head, and promotes the subjugation of valuable labour to valueless trading of congealed labour in the form of money.
Marx called this situation faces by the working classes alienation. As we produce, we are changing the material nature of the world, and so through our labour we objectify our nature. If our labour is only understood in terms of the production of some good for the property owner, rather than for ourselves, then our objectified nature is removed from ourselves; in other words, our nature becomes alien to our actions, and thus we are alienated from our labour.
The process of alienation, however, is not specific to capitalism. Marx identified three stages of development in the history of society: "oriental despotism, ancient slave-holding society, and feudalism" (Buchanan: 37). In each of these we can find, to some extent, alienation taking place; under despotism, men are arbitrarily coerced by the ruling despot, and so their production will not be under their control; in a slave-holding society, slaves are wholly alienated, neither having control over their productive processes, nor ownership of their products; under feudalism the serf is given some land, but either the entirety or a portion of the proceeds are taken by coercion by the land owner. So one could object that Marx's theory of alienation seems not to be a specific criticism of capitalism, but a general criticism of economics, and that alienation is an unfortunate result of the productive process in general. But Marx thought that not only was alienation not a necessary component of the economic superstructure, but also that it was in capitalism that humanity suffered the most profound form of alienation, when the bourgeois consolidate control over our labour and commodify it, and when the product of our labour becomes the commodity of the capitalist.
The concept of commodification is unique to capitalism. Whereas in the former three stages of development, the products of labour are either enjoyed by the worker or taken directly by the property owner for their own use, in capitalism the products of all labour become commodities, traded on an open market. Once on the market, commodities only have value insofar as they are useful, and so their labour-based value is forgotten or annulled, and the new basis for value becomes their utility for the bourgeois who happen to buy the particular product. Not only are products not valued according to their labour on the market, they aren't even valued according to their social utility. Marx thus developed a theory of labour value and price value, the former based on a sound moral system and the latter based upon the market utility of commodities, congealed labour.
Marx further complicated his understanding of value by introducing the notion of exchange value, understood as the subsistence level wage offered by property owners to their workers in return for the workers' labour. To create profit, the property owner must pay the worker an exchange value lower than the price value, and the difference he called the surplus value. In producing more value than he/she benefits from, the worker is exploited, and since the worker is forced into a contract by necessity in the capitalist system, the working classes are necessarily exploited by the capitalist system. To compound this fraud, capitalism emphasises individualism, and so in working against solidarity amongst workers it makes them more vulnerable to exploitation.
And once on the market, commodities are governed by the supra-human laws of economics, effectively out of the control of society. And in the minds of individuals, commodities take on metaphysical significance:
"... with commodities. ... it is a definite social relation between men, that assumes, in their eyes, the fantastic form of a relation between things. In order, therefore, to find an analogy, we must have recourse to the mist-enveloped regions of the religious world. In that world the productions of the human brain appear as independent beings endowed with life, and entering into relation both with one another and the human race. So it is in the world of commodities with the products of men's hands. This I call the Fetishism which attaches itself to the products of labour, so soon as they are produced as commodities, and which is therefore inseparable from the production of commodities." (Marx, Capital: 473-474)
In the marketplace, commodities can take on value that isn't even related to their utility to the bourgeois; the market works according to its own "mythical" laws, and despite our best efforts to guide it, fluctuations in the market can affect supply and demand even if, without those fluctuations, society still finds affected products necessary at the levels previous to the disruptions.
In the concepts of alienation, commodification and fetishism, Marx develops a profound sense of loss that is experienced in capitalism, more so than under any other economic superstructure in history. Add to that financial exploitation, and capitalism comes to be understood as an economic and political superstructure that systematically subjugates the working classes for the benefit of the bourgeois. The extent of the consumerism that the developed world has experienced since Marx's writings can in fact be seen as the consolidation and extension of the very things Marx noticed and criticised.
The success of his attacks on the liberal foundations and political reality of capitalism notwithstanding, it is in his critiques of the economics of capitalism, and his understanding of the role of the political economy in the downfall of capitalism, that has drawn most criticism.
Marx's first empirical economic claim was that the working classes would become poorer with time, a process known as immiseration. This theory was in fact first developed by the laissez-faire economist Malthus (in Essay on Population, 1798), who thought that the population would grow faster than production, and so increasing poverty would become inevitable. Marx held this theory in contempt, pointing out that technological innovation under capitalism allows production to grow very rapidly indeed. Instead, Marx suggested that technology would begin to replace workers leading to growing unemployment. And the unemployed, Marx suggested, were used by the capitalist as a tool to keep wages low, since the worker must always compete with someone who earns nothing, and to whom earning anything up to a subsistence wage would be an improvement. Thus, so long as unemployment remained and technology progressed, the working class would get poorer and poorer.
Of course, understood as a theory of absolute immiseration, time has shown Marx to be wrong. Wages have more or less continually increased, in parallel with the quality of life of the working classes. Moreover, there is no longer a clear class divide. One could move to say that in fact this has happened, but that the working class has been displaced into the third world, and so whilst wages in Britain, for example, have increased, the wages of those on the bottom of the economy have fallen in dramatic steps. But still, wages in most parts of the third world continue to rise on average. Immiseration is better understood as a relative phenomenon, since, relative to the wages of the richest, the wages of the poorest members of the global society have continually fallen, especially in periods of economic liberalisation.
Marx also noted fluctuating unemployment, and saw periodic economic crises as symptoms of deep-seated flaws within the capitalist system. He thought that the accumulation of wealth would lead to falling profits, and that in time, as growing production levels outstrip consumption, markets would begin to fail, reliant as they are on continual growth. Again, when one looks at these predictions, central as they are to his critique of the capitalist system, it looks as though he was completely wrong. Markets have continued to appear and grow, and production has met demand, resulting in an increasingly wealthy society. With a few notable exceptions, economic crises have been controlled and economies have recovered. The welfare systems of the developed world have soaked up the damage wrought by these crises, and welfare systems, often combined with minimum wage schemes, have stopped unemployment leading to absolute immiseration.
But this success could still be the precursor to Marx's predicted decline. Markets have only been able to grow because of intense marketing, expansion into third world markets (which some Marxists, notably Antonio Negri in Empire, have described as "imperialist"), manufactured and socially engineered commodity obsolescence (e.g. the need for the new mobile phone model), and ever-increasing state and consumer debts. It may be that, once third world markets are saturated, marketing won't be able to push demand up as quickly as production increases, and so capitalism will begin to fail.
But Marx also related his empirical analysis back to his political and social analyses. Cox has noted that capital has taken on a "structural power" (Cox, 1997 : 160) that now determines relations between businesses, trade unions and governments. As capitalism has evolved, as world markets become ever more complex and less regulated by states, this structural power has been consolidated. "Finance has become decoupled from production" and "as the production of state revenue going into debt service rises governments have become more effectively accountable to external bond markets than to their own publics" (Cox, 1997 : 161).
So although many of Marx's empirical economic claims seem flawed, they do still seem to hold relevance today. The massive depth of contemporary literature on Marxist thought stands as testament to the fact that, even if, analysed as a whole, Marx's critique of capitalism seems flawed and riddled with contradictions, it is still a powerful critique. And his attacks on the liberal foundations of capitalism, and of the political and social material realities of capitalism, seem to be relevant in his time through to the present day. And so in conclusion, without the space and scope to discuss his lack of viable positive alternatives, I have to conclude that Marx's critique of capitalism is extremely convincing, and holds compelling questions that we have yet to answer today, and perhaps some that we won't be able to answer for decades to come.
Buchanan, A. (1982), Marx and Justice, Methuen
Cohen, Nagel, Scanlon (1980), Marx, Justice and History, Princeton
Cox, R.W. (1997). Global Perestroika. In Crane, G. & Amawi, A. (eds). The Theoretical Evolution of International Political Economy A reader
Houghton, D (1996), Marx and Lenin on Communism. In Bellamy & Ross, A Textual Introduction to Social and Political Theory, Manchester
Marx, K. (2001a), Critique of Hegel's 'Philosophy of Right'. In McLellan, D, Karl Marx Selected Writings 2nd ed., Oxford
Marx, K. (2001b), Preface to A Critique of Political Economy. In McLellan, D, Karl Marx Selected Writings 2nd ed., Oxford
Marx, K. (2001c), The German Ideology. In McLellan, D, Karl Marx Selected Writings 2nd ed., Oxford