What was Marx’s problem with capitalism?

Is greater state control of the economy the solutuon to a post Covid recession?

Karl Marx (1818 – 1883) is best know as the father of Marxism. He was a philosopher, author, and economist and is renowned for his manifestos on capitalism and communism. In describing Marx’s objections to capitalism it is necessary to define “capitalism” in terms of how Marx viewed it. Marx saw capitalism as more of an economic system rather than a purely political ideology. He believed capitalism took hold in Europe in the 16th Century with the emergence of legal freedoms concerning free market economy, this being the private ownership and accumulation of materials, property and wealth (the means of production) and the freedom to buy and sell labour. The defining feature of a capitalist system as Marx saw it, is the division of society into two classes and the differences in function between them – the “bourgeoisie” (those that own the means of production) and the “proletariat” (those that have to sell their labour to the bourgeoisie in order to survive).

Marx’s main objections to capitalism can be grouped into three main topics: lack of freedom for the proletariat, alienation of the proletariat from the product, and exploitation of the proletariat by the bourgeoisie. Marx’s view point of “freedom” was from that of the worker who he believed had no real choice other than to sell his labour to the bourgeoisie. In order to survive, man needs the means of subsistence (food, clothing and shelter), and if he owns the means of production (land, farming tools, building materials, or raw materials) he can meet these primary needs. However, if he has the means of subsistence without the means of production then he can’t produce anything, and he has to sell his labour to someone that does – or perish. Marx further defined freedom into two categories – formal (or legal) freedom and substantial freedom. The former is concerned with the legal rights an individual has from the state or sovereign, and will include employment law and the right of an individual to withdraw his labour, own capital and employ others. The latter is what could be thought of as real freedom of choice. Marx considered whether the freedom to withdraw one’s labour was a real choice, if by doing so an individual can no longer provide the means of sustenance. So Marx made a distinction between the proletariat and the bourgeoisie, in that the former had no substantial freedom while the latter enjoyed both types of freedom, Marx thus surmising that freedom could only enjoyed by all if society was classless and the means of production was mutually (or communally) owned.

Marx argued that alienation of the workers from the product had a negative impact on their psychological health and well-being as he believed that workers had an inherent need to see their worth and creativity in the objects they produced. With the advent of the industrial revolution nearly a century earlier in Britain, mechanised production lines meant that employees were involved in piece work, and seldom, if ever, saw or worked on the whole completed product. Specialised jobs make the economy highly efficient but each person working on the production line could only gauge their individual input in that part of the product, but this was dissociated from the value and benefit of the completed product – put simply if you only made chair legs, and never saw the completed dining room suite, your sense of individual worth is divorced from the true value of finished articles. Marx considered that at the core of an individual’s psychological health was the ability to feel productive, and that meant having more than a financial “buy in” to the product, but also to be creative in the process. As with the chair leg production-line analogy, the worker did not own the chair, let alone the whole dining room suite, so any value he added to the chair leg felt alien to the finished product, and furthermore any monetary value he added was not reflected in his individual financial return because the profit went to the owner of the furniture factory. Making a non-standard, superior chair leg ran counter to a worker’s psychological and financial best interests.

In order to understand Marx’s objection to capitalism in terms of exploitation, it is necessary to establish who is being exploited and by whom, and how this exploitation takes place. Marx considered all products to have a production cost (derived from depreciation of capital set up costs, machinery and tools maintenance, wages, and raw materials) and an exchange value (what the product can be sold for). In a capitalist system, exchange value must necessarily be higher than the production costs. Factory owners will re-invest the income of their product sales on production costs, expanding production and their own personal use (profit). Capitalists pay their workers in exchange for the labour expended in producing that product but the pay to the worker is only sufficient for that worker to meet his means of subsistence for that day, compelling that worker to return to work the next day. Marx deduced that the bourgeoisie factory owner in taking the surplus value (profit) and leaving the worker just enough for his daily survival is exploitation. Private ownership and private property makes exploitation possible, and through this exploitation private property becomes profitable, ergo without private ownership there could be no exploitation.

In discussing how convincing Marx’s objections to capitalism are, it is necessary to consider who is to be convinced and under what premise. Each of Marx’s objections have the potential to be emotive depending on an individual’s standpoint and bias, however, it is necessary to consider whether an objection will stand on its philosophical value and supporting premises. Marx’s major objections only seem valid for workers in the manufacturing industries or agriculture, but seem to have a more tenuous relevance to service (tertiary) industry workers (hospitality, banking, health, leisure, public service, etc) as no product was being produced. This sector accounted for 24% of the UK workforce in 1850 and stands at 84% today.

Marx objected to capitalism from the perceived perspective of a worker’s freedom within a capitalist society. When discussing freedom it is useful to think of freedom in two distinct ways – “freedom from” (something negative) and “freedom to” (do something beneficial). Contrary to Marx’s views on freedom, one could argue capitalism did, in Marx’s time (and certainly does today) provide freedom from starvation and lack of shelter. Conditions for the worker were at times meagre and pitiful, but a worker could exchange his labour for means of subsistence. Furthermore, a worker did have freedom to withdraw his labour and move his labour to another employer, unlike in times of feudalism that pre-dated capitalism. Marx would argue that this freedom was not substantial because in reality, in exercising this freedom the worker has entered into a double bind constructed by the bourgeoisie – work under these poor conditions, or leave and work in poorer conditions or potentially starve. Whilst the worker is free to make his choice, each outcome produces a negative consequence, so the scenario is loaded against him.

Marx’s critique on the alienation of the worker centres on the premise that producing a part-item is psychologically unsatisfying , therefore, the following premise that a person producing a whole item of finished product would not be alienated from his work must also stand. The simplicity of this follow-on premise seems compelling in that someone who produces whole items must be free from alienation, however, if a craftsman works on a whole process in isolation (away from a production line) he may well work in more solitary conditions and feel more socially alienated. And expanding this point further, it follows that if an individual works on a production line, there is a realistic possibility that he will feel part of a team working on a greater goal than he could have never achieved by himself, that it is to say, someone that can make a good chair leg cannot necessarily manufacture a good dining room suite, but he can feel pride and satisfaction in contributing to that suite. With the exception of small holding farmers, in the vast majority of production and service industries, workers do not consume, use or exchange the end products of their labour; it therefore follows that even if the chair leg maker could manufacture complete dining room suites he would only need one complete suite for his own needs, so all subsequent suites he produced would have an degree of alienation to him – their production could only serve the purpose of providing a means of subsistence.

Marx argued that for a capitalist economic regime to thrive, there was a necessity for workers to be exploited as the bourgeoisie could only generate profit on goods sold by adding value through the worker’s labour, whilst paying less for that labour than the value added. At face value this would appear to be exploitative, however, this relies on the premise that the worker is either unhappy or unaware of this inequity, or that the deal is so bad that it does not provide the worker with what he requires from the transaction. To collapse this critique it is therefore necessary to challenge the adequacy of the contract from the perspective of the worker. If a chair leg maker had enough raw product to produce an endless supply of chair legs, without those chair legs having an exchange value (ie monetary), it is unlikely that he will ever meet his means of subsistence just by making chair legs. Labour alone does not always produce goods which are tradeable or saleable. For a great proportion of the workforce, even given an endless and free supply of raw materials and tools for manufacture (which in itself seems implausible), their skill level may prohibit them from producing complete chairs, let alone dining room suites. Therefore, there would be the need to work co-operatively to achieve a return on their labour. The capitalist provides the environment for this shared labour to take place. The sum of the total products is greater than the sum of each individual product (through value added by labour) enabling the worker to have recompense for his contribution – an exchange value he could not have realised on his own merit.

Much of Marx’s objection to capitalism is based on ethical or psychological argument, and as such, it falls into the realms of subjectivity rather than objectivity, and can be judged from where one stands on their own political or philosophical compass.

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