Friday, June 09, 2006

Upon further Investigation...Marxism and Capitalism

Capitalism and Marxism are two very distinct theories and societal philosophies that have one very common thread; they are both inherently built around a system of class structure and the acquiring of capital. From the inception of these competing philosophies these two theories have shaped politics, philosophy, history, economics, social structures, and systems of governance in more ways than man can even fathom. In this regard I will define the terms were are speaking with, attempt to explain the origins of each theory, explore the differing tenets and precepts of these two belief systems, distinguish between the social and economic variations of the two conjectures, while examining the morality of each position, and finally provide criticisms of both philosophies. (Although explaining Marxism is a critique of capitalism)

It would be remiss of me to begin without defining both capitalism and Marxism in the broadest sense of terms, seeing as though there are schools of thought on both sides that project a certain magnitude to the actual belief systems. In Capitalism by David McCord Wright, capitalism is defined as "a system in which on average, much the greater portion of economic life, and particularly of net new investment, is carried on by private units under the conditions of active and substantially free competition, and avowedly, at least, under the incentive of a hope for profit." In short, capitalism presupposes that in an open society the ends are achieved by the individuals, or rather by voluntary organizations of individuals. Marxism is the reaction to such a system of capitalism, and advocates revolution of the proletariat in order to overthrow the capitalistic machinery of the state. Both systems have extreme complexities and components and each a reference point in history.

Where and when did capitalism begin? The earliest forms of capitalism were widely known as "mercantilism", which could be defined as the distribution of goods in order to realize a profit. This practice gradually evolved into an economic theory called capitalism.

Although the word itself did not come into existence until socialists coined it in the mid-nineteenth century, the principles of capitalism were first published in The National Gain, authored by Finnish parliamentarian Anders Chydenius in 1765, 11 years prior to Adam Smith’s Wealth of Nations. However, Adam Smith is widely known as the founder of capitalism today. Smith used the phrase "economic individualism" rather than capitalism to describe this philosophy. Capitalism was seen as "the obvious and simple system of natural liberty" and it began under the idea that the state was built solely to protect individual rights and freedoms. The ingenious of Smith was that he had already written a rationale for the economic system of capitalism well before the industrial revolution had even begun. Smith had uncovered a set of principles which accepted man as the "self-starter" that was good for any productive society.

The application of capitalism became present after the American Revolution commenced as the founders created a government built ideally for the economic system of capitalism. The government was there merely to protect the natural rights of man which were, "life, liberty, and property." After Smith died in 1790, the industrial revolution quickly swept America and Great Britain by storm, and the seeds of the early unfettered capitalism were taking shape. It was not until Karl Marx in 1848, with the publishing of Communist Manifesto that society had not seen such a serious and radical philosophical critique of capitalism.

As stated before, Marxism was a philosophical and economic system which was promoted as a reaction to the unfettered capitalism of the early 19th century. Writing in London in 1848 Marx published the Communist Manifesto which served as the rallying cry and justifications as to why revolution of the proletariat should soon commence. Before this publication, French intellectuals were criticizing capitalism and advocating socialism, which goes to show many that the radical ideas against the system were flourishing. The drive for Marx to publish his ideas was heavily influenced by his deep disdain for the "anarchic" economy which capitalism perpetuates, and his desire to initiate a "planned economy" for the state.

The history of Marxism does not translate into the wide misnomer of the history of communism; the system of government which failed in the USSR and China. Rather one must understand that Marxism was modified heavily by these two systems and arguably was distorted to the extremity of creating authoritarian monsters such as Stalin, Kruschev or Mao. The strictest interpretation of Marxism has really never been implemented thus there is no real empirical evidence to use to dispute Marxism as a theory of governance.

So what are the basic tenets of the economic faction of these two philosophies? The basic foundation for the economic theory of capitalism is that the accumulation of the means of production is placed into the hands of a few individuals. This accumulated wealth is called "capital" and the people who possess the capital are "capitalists." The next step in capitalism involves the productive labor of the worker to be transferred into wage labor. That is to say that the value the worker creates will not be for the product they are making, but for the wages they are given by the capitalist. The division of labor then enables capitalism to increase productivity as it lowers the skill and wages of the worker. As an economic theory, capitalism embraces the free markets and the freedom of the capitalist to attain a profit by arguing that the worker has no inherent risk involved in losing money. The capitalist takes a risk with his money; therefore he is entitled to make the profit that is owed to him.

Another support system for capitalism lies within the social philosophy and morality of such a theory. Wilhelm Ropke argues that the logic of capitalism is an intrinsically peaceful exchange between two consenting parties and because of this it is an exchange which exerts two moral parties. Within the free market, which capitalism embraces, people are able to put their ideas into practice and start a business if they wish, and it is up to the market if they succeed or fail. It promotes individual liberty and self-autonomy as the cornerstone of human existence. Capitalism offers the individual worker to attain high status in society and pursue their own goals and dreams with what they choose to make of their individual liberty. Robert Tracinski points out that "the fundamental characteristics that make capitalism practical, its respect for the freedom of the mind and for the sanctity of the individual, are also profound moral ideals."

Marxism as an economic theory takes upon a rather different approach. To fully understand the theory of Marxism, it is required that we first must understand Marx’s view of history. Marx views history as dialectical. That is to say that Marx views history as a "process of change that took place through the coexistence of two contradictory sides, their conflict and their fusion into a new category." Capitalism was a synthesis of the bourgeois fighting against the thesis of feudalism and for the antithesis of mercantilism.

Marxism argues that the value of a product being produced is nothing less than the amount of labor necessary for it to be manufactured. The capitalist in turn only pays the worker a wage and thus accumulates the surplus value, or profit, of what his laborer, according to Marx, has rightfully produced. This is the crux and main problem Marx has with capitalism; the class stratification produces an inequality amongst men and the bourgeois class is able to profit from the proletariat. For Marx, the accumulation of capital for some will often cause accumulation of poverty for many. Marx’s says the "accumulation at one pole is simultaneously accumulation of misery, work torture, slavery, ignorance, brutalization, and moral degeneracy at the other."

According to Marxism, the evolution of capitalism would lead to a dismal state of unemployment and exploitation and a severe economic crisis would ensue. Since Marx was writing Das Kapital in London, he envisioned the most advanced capitalist society to be the first system to be taken over by the proletariat. In fact, Marx’s ideal place for revolution was no other place but London. The finality of Marxism was to have a "dictatorship of the proletariat" that "was to centralize all instruments of production into the hands of the state" that would then increase productivity at a rapid rate. The endgame of Marxism is a kind of social and economic utopian ideal between the state and the workers producing the goods in harmony. As a result Marxism hopes to create a classless society in which the doctor gets paid the same as the janitor.

The interesting point about Marxism is that Marx’s himself never attempts to argue that capitalism is unjust. In fact, he even attempts to distance his scientific socialism with the utopian socialists of the day who argued that capitalism was unjust. Marx did however, use phrases such as "exploitation of the proletariat" which does have a connotative meaning of someone wronging someone else of their humanity. Yet Marx does acknowledge that "exchange is by no means an injustice." Thus many Marxists have argued that capitalism is simply not the best way for humankind to live, implying that humanity could be better served through a collective ownership that does not diminish freedom or abuse the men of society. The practice of such a society attempts to summon a utopian society where the synchronization of mankind is perfectly in tune and the eradication of poverty, unemployment, racism, sexism, and pollution will be the end result.

Since I have already outlined a Marxist critique of capitalism, I will now address the many criticisms of Marxism itself. One criticism of Marxism says that the problem of Marxism’s idea of history is that in thinks in terms of the material world and not the world of ideas, which ultimately "disvalues the idea of democracy." Using this criticism, many say that Marxism has given rise to totalitarian states. It is interesting to note that the implementation of Marxism by Lenin in the 1917 Bolshevik revolution was merely one interpretation of Marxism. That is to say that Lenin ultimately viewed the application of Marxism as the "dictatorial seizure of power by an exclusively revolutionary vanguard party of the proletariat, and taking the bourgeoisie’s and aristocracy’s property by expropriation, the denial of their political power and rights, and subsequently their death." Although it is clear that Marx would not have supported this, it does say something about the interpretation of such philosophy, and that maybe the practical application of Marxism is something which is unattainable.

If we examine Marxism from the Communist Manifesto’s perspective, we clearly see that Marx gives rather specific instructions as to how the dictator of the proletariat should govern the state. He says "the first step in the revolution by the working class is to raise the proletariat to the position of the ruling class, to win the battle for democracy." This is somewhat troubling for Lenin however. Lenin believes that since democracy was a state form, and Marx believed in the abolition of the state then democracy must perish as well. Thus a dictatorship of the proletariat commenced and soon gave rise to even more malcontent for the people then the system below. For example, the interpretation of Marxist thought has led to a restriction on personal freedom, expression of opinion, the free exchange of ideas only to achieve a utopian end of pure communism. With communism giving rise to dictators restricting these liberties, the application of Marxist thought is often seen as giving rise to a different form of dictatorship and oppression.

There is also a very interesting critique of the way in which Marx views history. If one were to apply the theory of dialectics to Marxism, then we would thus assume that the Hegelian theory of history was the thesis and the Marxist theory of history was its antithesis. But if the Hegelian theory views history as a change in ideas, and Marx argues that he is ignoring class struggle and economic order, then where is the synthesis between these two theories? If Marx truly support his own theory of dialectics then all evolving theories and change must be a synthesis of two other forms, therefore this could negate him from even believing that pure Marxism is correct.

In conclusion, capitalism and Marxism are philosophies which presuppose different tenets of human nature and from this they draw their differing conclusions as to how society should be run. Although they have much that is different, it is true to say that they have much in common with one another. Through the histories of each of these two concepts and the fundamental purposes for which they were composed, highlights, arguably, the two most influential philosophies of our day. Capitalism and Marxism are two theories that have stood the test of time in the relevance of intellectual discussion.


Commie Knight said...

Very well, we meet again! I wonder if my dissent inspired you to further argue this issue... Anyways, you summed up the issue very well. You even seemed to give a somewhat balanced account. (Your first post seemed to be almost a rant in places...) I don't know where to start. Well first off, I think that despite its length, the post seemed limited, the history of socialism before Marx, including alternative forms of socialism and collectivism to both Marxian communism and capitalism, and the details on how exactly the merchants overturned their overlords in the transition from feudalism to capitalism were not included, but I understand that given the detail in these subjects, you probably could not fit an examination of every possible economic system into your constraints, so the focus was on two facets, capitalism (exemplified by the free market), and Marxism.

There are too many things for me to comment on, so I am only going to comment the most pressing, that of Marx's theory of history, dialectical materialism. Dialectical materialism eventually became the foundational metaphysics of the Soviet state religion, and (combined with Daoist mysticism) the state religion of the Peoples' Republic of China. My problem with Marx was that he was a Hegelian for much of his career. Both Karl Marx and Friedrich Engels were members of Young Hegelians, and I am not sure if one or both of them recanted their dialectical worldview or not. IMO, Hegel was a loon. To see the sheer lunacy and idiocy of Hegelian philosophy, I recommend reading any of J.M.E. McTaggart's (John McTaggart? not sure of his name) papers, particularly "The Unreality of Time". It is debatable whether dialectical materialism (DM) is even necessary for Marxism to be a viable theory. Many Marxist scholars argue that the theory works without DM. Here is the link:

I originally found the link at Comrade RedStar's Page, who said the following on dialectical materialism: "...Marx should have ditched dialectics and just stuck to materialism..." (paraphrase).

On to other points: I think it is interesting to note that Marx expected the Revolution to begin in London. Perhaps the number one reason why "Communism" failed was because its seeds were sown in third world, ackward-bass Russia, which in 1917 was a Medieval Kingdom utilizing cavalry when other Eurasian nations were experimenting with aircraft, submarines, and tanks. Marxism-Leninism, was basically a modified totalitarian version of Marxian Communism, adapted to pre-industrial nations.

Another point, I don't see how in the hell interpreting history in materialist terms as opposed to idealist terms leads to authoritarianism. The wider tradition of historical studies to which Marx subscribes (disregarding Hegelian dialectics) would view historical processes as having an origin in natural-material causes. In other terms:
Material Conditions -> Societal Systems -> Ideologies
This view seems more related to a modern scientific study of history than anything else, seeing as most sociologists for over a century thought that the ideals of a society stem from socio-environmental conditions.
If anything, the alternative, that society is shaped by ideology and not vice versa, seems to be a rather reactionary position. In fact, more racism, imperialism, and other anti-democratic beliefs and actions seem to stem from a view of history in which ideals seem to precede the societal system. In other terms, rather than believing that one's culture is derived from nature, such people often believe that the foundational principles come from God or "enlightened authorities". For instance, this same mentality might say "Look at those non-whites with their different culture (form of government, religion, etc.). We must be the better people because God likes us more," or alternately, "those people have a different form of government and worship. They thus must be too stupid to come up with our system of civilization!" Anyways, I still do not understand how Lenin's opposition to democracy has anything to do with Marx's opposition to the state. If anything how could opposition to the state, not include opposition to all forms of totalitarianism and authoritarianism, in other words, very, very big, powerful, centralized states? I think Lenin's authoritarianism had more to do from the influence of the Kaiser, and other Prussian and Austrian autocrats when he lived and traveled through Germany, Austria, and Switzerland, then did any of the writings of Marx. It was this same political tradition that inspired Adolf Hitler.

Finally, I would like to explore capitalism from a different angle. Naturally, the critique on capitalism exemplified was the Marxist/Communist one, but let's take some time to examine an account of the origin of capitalism different from both the standard bourgois and Marxist theories (which are almost the same). You may have read The World is Flat by Thomas Friedman, but if not I recommend it! If you haven't read it, you would love it! Essentially he gave the history of capitalism in three phases of globalization. The first, a transitional phase, and the final two, genuinely capitalist phases.
Globalization 1.0: Early state capitalism. (Transitional)
Globalization 2.0: Corporatism
Globalization 3.0: Individual free enterprise.
The form of capitalism in G3 seems interesting enough. How would a post-corporate capitalism work? It seems somewhat naive to me however.

Aside from the usual anti-capitalist rhetoric that capitalism is not stable enough or it is a morally inferior mode of production what with greed and exploitation and all. A question to ponder is, whether there is an internal conflict within capitalism between group power and individual prosperity. In other words, could anyone ever succeed in capitalism outside of the elite or the conglomerates? This surely requires further discussion.

Red Menace said...

I am not too sure whether to be pleased or annoyed finding a link to my site on your blog, but you need to know that in recent Essays I have shown (and will show more fully in later ones) that Marx progressively abandoned Hegel's philosophy -- as he said in Capital, Hegel's influence was confined merely to a few examples of terminology with which he 'coquetted', and only in one chapter of that book.

You also need to note that dialectical materialism was not Marx's philosophy; the term and the theory were invented after he died, by Plekhanov.

Rosa L

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Rosa Lichtenstein said...

Thanks for that Anonymous -- now, where have I heard that name before?