To claim that today many of Marx’s ideas are no longer valid, it’s utter nonsense! Dr. Elliott Green, a professor at the London School of Economics, examined which authors and newspapers in history have had the highest impact on today’s academic world. What did he discover? Karl Marx’s Capital is the most quoted book in the world. It has been cited even more than Adam Smith’s Wealth of Nations (which is in second place with 36,000 citations). Other research has come to the same conclusion. The research by academics at Indiana University ranks Marx as the most influential scientist of all time. But Marx was also declared the thinker of the millennium in 1999, as well as the world’s greatest philosopher in 2005. This post refutes eight criticisms of Marx’s view of society put forward by ReviseSociology.com
1. The class structure today is more complex: In most Western Nations and increasingly in developing nations there is an extensive middle class who have stocks and shares invested in Corporations run by what Marxists would call the ‘Capitalist Class’. Also in Britain 70% of people own their own homes and see these homes (our private property) as ‘economic assets’ so many of us are, in a sense, petit-capitalists.
Counter-argument: Shareholding is highly unevenly distributed. The Royal Commission on the Distribution of Income and Wealth reported in 1975 that the poorest 80% of the population owned less than 4% of the shares. Even now, in a country with such a developed securities market as England, most workers do not own shares. Those who own often have several hundred pounds worth of them, so that the income from them is a small part of their total income – less than they pay interest on personal debts and mortgages on houses. Thus, they are exploited not only by their employers, but also by financial companies.
The unequal distribution of income is self-sustaining. A very small part of the population owns most of the shares. The Royal Commission reported that some 330,000 people held 55% of all shares and 58% of all land. This part of the population usually lives on income from property. Such people can also work and receive additional income as directors, etc. In any case, they have enough income to invest most of it in new stocks and other securities. Because they can afford to invest a much larger portion of their income than the average wage worker, their class continues, from generation to generation, to own the largest portion of the nation’s finance capital.
A privately owned home isn’t yet economic asset by itself, actually it means dead capital related to property which is informally held, is not legally recognized, and cannot be exchanged for financial capital. Around 4.6 million households were privately rented in England in 2021. The proportion of households occupied by the owners of the property in England generally decreased since 2000, from a share of 70.6 percent of households in 2000 to a share of 64.3 percent of households in 2022. The number of owner occupied households amounted to about 15.7 million households in that year. Therefore the actual percentage of valorisation of this kind of capital is only 29.2% which refutes the claim that the majority of population in Britain is made up of “petit-capitalists”. BTW, the former “communist” countries hold the highest homeownership rate in the world: Romania, Laos, Hungary, Slovakia, Lithuania, Cuba, Vietnam, and Croatia.
2. Capitalism today is less exploitative: Two historical examples of this are when Henry Ford, the famous car manufacturer, realised that paying his workers good wages would generate demand for the cars he produced – a process which lead to workers being less exploited and ‘buying into’ the Capitalist system. A second example is the move towards ‘Keynesian Economics’ in which the state came to play a more central role in regulating Capitalism to ensure that worst excesses of exploitation, inequality and insecurity that pure Capitalism generates were minimised. Part of this involved the introduction of the welfare state in many European Countries after the Second World War. In the United Kingdom the state now provides universal health care, education, pensions and social security, as well as guaranteeing a minimum wage. All of these things acts as a safety net to ensure that the worst excesses of Capitalist exploitation are ameliorated.
Counter-argument: Ford wasn’t a liberal champion. He didn’t particularly care about his workers’ individual economic situations. According to a former Ford worker’s testimony: “When the plants reopened in 1928, after the eight months’ layoff, and production began on Model A, thousands of older men who had been making $8 to $10 a day when they were laid off were hired again as new men at $5 a day. In many cases, the older men were not rehired-younger men were put in their places at lower wages. Beside this trick of rehiring a man at lower wages, Ford has a method of “transferring” men from department to department, their wages being cut as they are moved. I worked in 1929 with men making $6.40 who had been making $7.60 before the transfer. Then came the general wage-cut. In the fall of 1931 Ford officials admitted, after much evasion, that wages in their plants had been cut to $6 a day. This may sound like high wages to the innocent outsider. But most Ford workers now get only a day or two days’ work a week. And what Ford gets from them is more than just one or two days’ work, for a man working short time can be pushed harder for the day than if he worked all week. In 1930, when the wages of the Ford workers were figured at $7.60 a day, the average earnings were $959.20 for the year. This allows for the three-day week then in force and for the seven weeks of enforced idleness during the year. In 1931, while thousands of production men were being laid off twelve- or sixteen-year-old trade school boys, who get $11-$14 a week, were put on their jobs, and those who refused were either suspended or dismissed. For 1932, if we allow for two days’ work a week, and grant that the Ford plants will not be closed down any more than in 1930-which is doubtful-the average Ford worker will not make more than $540. So much for Ford’s “high wages”!”
Keynesian economics dominated economic theory and policy after World War II until the 1970s, when many advanced economies suffered both inflation and slow growth, a condition dubbed “stagflation.” Up to the 1960s, many Keynesian economists ignored the possibility of stagflation, because historical experience suggested that high unemployment was typically associated with low inflation, and vice versa (this relationship is called the Phillips curve). Keynesian theory’s popularity waned then because it had no appropriate policy response for stagflation. It failed to explain how high inflation and unemployment could coincide as they did at the end of that decade. Under the capitalists’ maid Thatcher – who was elected to the position in 1979, having led the Conservative Party since 1975, and won landslide re-elections in 1983 and 1987 – controls on capital were lifted, full employment was abandoned as the prime policy goal, trade union power was curbed, taxes for the better off were cut, inequality was allowed to widen, finance waxed as manufacturing waned.
In 1982, the share of surplus value received by energy workers was only 27%. This means that the worker only works 16 minutes of every hour for himself and 44 minutes for the employer’s profit. In the manufacturing industry, for example, about 75% goes to salaries. To calculate the average level of exploitation of employees for the economy as a whole, we first add up wages and profits in different industries. We see that only about 60% of the surplus value goes to the workers who produced it.
However, closer examination shows that this figure is exaggerated. The point is that banks and financial companies are not producers of wealth in the same sense as production and distribution. When we calculate the sum of all salaries in the private sector, we should only include the salaries of those bank employees who produce banking services; the rest of the bank salaries are included in profits. The refined result gives a slightly higher level of exploitation.
From this we can calculate how much of the income actually goes back to the wage earners who produce wealth. Using the adjusted wage and property income figures, we see that private sector workers get back only 53% of the surplus value created by their labor. As a result, they work 32 minutes every hour for themselves and 28 minutes to provide for various exploitative and parasitic sections of society.
3. Control of the Economic Base does not mean control of the Superstructure: Marx argued that those who control the economic base controlled the economic superstructure – yet many of our institutions today have at least relative autonomy from Bourgeois control – it is quite obvious, for example, that huge sections of the press are critical of the Elite and many popular music artists are extremely critical of the Capitalist system.
4. Criticisms of False Consciousness: Given the above three points, it seems ludicrous to argue that the superstructure is controlled by the Bourgeoisie and is used to create false consciousness. Firstly, post-modernists argue that culture (mainly the media) exists independently of Bourgeois control and is used by people in different for a variety of different purposes. If institutions are not controlled by the Bourgeois, then there can be no False Consciousness. What we really have in post-modern society according to Post-Modernists is free individuals who correctly see class as irrelevant and who do not feel exploited and who are happy to identify themselves through the products they buy – products that are themselves the final outcome of a successful Capitalist system of production.
Counter-argument: It is Milton Friedman’s own admission that those with vastly greater wealth will control access to the means of political expression. This effectively disenfranchises the poor who have no recourse but to appeal to the wealthy to finance their political causes. Jerry Brown was right when he argued in the 1992 Democratic presidential primaries that politicians in both major parties in the US are essentially bought and paid for by wealthy financial interests who pre-select which candidates can mount viable primary campaigns. Ralph Nader was right when he argued during the 2000 general election that both the Republican and Democratic parties had been effectively bought by corporations, and should be seen for what they are, two wings of a single party of business, the Republicrats. And Occupy is right when it points out that the Citizens United v. Federal Election Commission Supreme Court decision in 2010 opened the floodgates to corporate money in elections, and made a mockery of political democracy in the United States. The fact that Ross Perot and Steve Forbes Jr. could gain serious public consideration for their mostly harebrained political ideas by financing presidential bids out of their own deep pockets, whereas 99% of the population cannot pay for a single ad in the New York Times, much less finance a credible presidential campaign, is hardly evidence that capitalism makes it possible for all political opinions to get a hearing, much less evidence of equal political opportunities under capitalism.
An essential characteristic of class society is that it separates labor and pleasure. The class that does not work enjoys, and the class that works is deprived of the opportunities for enjoyment. This separation of labor and enjoyment is rooted in the division of labor itself. “The division of labour implies the possibility, nay the fact that intellectual and material activity – enjoyment and labour, production and consumption – devolve on different individuals” (Marx, The German Ideology, 1845) Members of the working classes have the opportunity to satisfy only the crudest needs, while the owner and non-working classes satisfy and develop often refined, and therefore alienated, needs. In general, capitalist commodity production, in which the race for profit is the basic impulse, encourages people to speculate on the weaknesses of other people, to invent the most diverse means to deepen and satisfy insignificant and artificial needs, in order to get money more easily. This tendency is visible especially in the current capitalist and consumer society (we only need to remember the publication of pornographic literature and pictures, photos of naked women, which have long covered the walls of our public places). That tendency was manifested even in the bourgeois society of Marx’s time, so Marx wrote in his Economic and Philosophical Manuscripts of 1844: “Every person speculates on creating a new need in another, so as to drive him to fresh sacrifice, to place him in a new dependence and to seduce him into a new mode of enjoyment and therefore economic ruin. Each tries to establish over the other an alien power, so as thereby to find satisfaction of his own selfish need.” Marx, therefore, a hundred and more years ago posed not only the basic problem of the entire modern epoch, that is, the problem of the liberation and humanization of labor, but also the problem of the structure and character of human needs, which is posed even more acutely today.
5. There is less Alienation today: There is much less Alienation in modern companies. Workers have a lot more say, partly due to unionisation and partly due to enlightened management techniques. In addition, there are four million self employed people who directly control the terms and conditions of their working lives.
Counter-argument: Classes are the basic form of social alienation, and alienation occurs in the form of class antagonism and class struggle. Labour unrest and aggressive wage bargaining was a significant cause of the displacement especially in Britain but also in the United States. For about the first 15 years of the Keynesian age, labour relations were generally peaceful. But by the late 1960s, labour unions became increasingly militant in pushing for wage increases. The abolition of wage slavery – replacing the roles of employer and employee with self-management for all – is better than even the least objectionable system of private enterprise. As Marx himself puts it in his Speech to the First International Working Men’s Association, 1865: “Trades Unions work well as centers of resistance against the encroachments of capital. They fail partially from an injudicious use of their power. They fail generally from limiting themselves to a guerilla war against the effects of the existing system, instead of simultaneously trying to change it, instead of using their organized forces as a lever for the final emancipation of the working class that is to say the ultimate abolition of the wages system.”
The father of economics, Adam Smith wrote that money was power, the power to command others. Capitalist society dispenses with the direct power of command over bodies that past ruling classes had. Instead of the whip, cash that selective lash. A woman with a million in shares is in a very different position from a self employed prostitute. Legally both are free, but who is really the free woman?
Not all people have, or could ever have, an equal opportunity to become employers rather than employees. In real capitalist economies a few will become employers, the vast majority will work for someone else, and some will be self-employed. Moreover, who will be employers, employees, or self-employed is determined for the most part neither randomly nor by people’s relative preferences for self-managed versus other-directed work. Under inegalitarian distributions those with more seed corn become employers and those with less become employees irrespective of people’s relative preferences for self-management or aversions to being bossed around. One of the most profound insights provided by the simple corn model is that while it is true, in a sense, that employees “choose” alienated labor, they do not necessarily do so because they have a weaker desire for self-management than those they go to work for. The distribution of wealth “tilts” the private enterprise playing field so that some will benefit more by becoming employers and others will benefit more by becoming employees independent of work preferences.
6. Capitalism has changed and works for many: Classic Marxist theory has been criticised for being economically deterministic. Marx argued that ‘economic laws’ determined not only the shape of society but also the direction of history itself. On reflection, however, it is clearly the case that other factors shape history too – different societies have responded differently to the global spread of Capitalism – some have pushed neo-liberalism (America and Britain under Thatcher and Bliare) others have taken a social democratic line and used the state as a buffer to protect citizens from the worst excesses of Capitalist exploitation (Scandanavian countries); China has developed a form of autocratic- capitalism and other countries (Cuba and more recently Venezuala) have rejected it in favour of a Socialist dictatorship.
Counter-argument: In the mixed economies that have existed until today, the socialist elements have remained subordinate to the capitalist elements. That is, commodity and wage forms remained the primary forms of organization of production and payment of labor. It turns out that the USSR, Yugoslavia, all other countries from Eastern Europe, the People’s Republic of China, Cuba, North Korea were/are “mixed economies”, i.e. social democratic, not socialist, because the commodity production in these countries was/is the economic basis. “Vulgar socialism (and from it in turn a section of the democrats) has taken over from the bourgeois economists the consideration and treatment of distribution as independent of the mode of production and hence the presentation of socialism as turning principally on distribution. After the real relation has long been made clear, why retrogress again?” (Marx, Critique of the Gotha Programme, 1875)
It is not true that Scandanavian countries have taken a social democratic line and used the state as a buffer to protect citizens from the worst excesses of Capitalist exploitation. Wealth inequalities are relatively high in Sweden. The top one percent of the wealthiest Americans own about 35% of society’s wealth, while the top one percent of the richest Swedes own between 25 and 40% of total wealth, not far from the levels of inequality in the United States, and whose share is increasing. At the same time, the intergenerational mobility of wealth in that top one percent is startlingly low. A recent study reveals that a remarkable 80-90% of the wealth inequality of the richest is passed on to the next generation in Sweden! According to another study, the share of the richest Swedes who inherited their wealth is about 2/3 with 1/3 being entrepreneurs, while in the United States the opposite happened, with 1/3 of the richest inheriting their wealth while about 2/3 are entrepreneurs. Therefore, at the top of the classes of Swedish society there are a small number of aristocratic families who control most of the wealth. Mobility in this group is rare, possibly less so than in the United States.
7. Communism didn’t work: The Communist Revolutions in Eastern Europe did not lead to greater equality and freedom as Marx would have hoped. Given the failures of communism it is difficult to see what the alternative to Capitalism might be. NB – As a counter critique, contemporary Marxists would argue that the state communism of Eastern Europe was hardly true communism.
Counter-argument: To say that nationalisation leads to all this suppression of individual rights is on a level with Churchill’s silly scaremongering when he said that Atlee’s nationalisations would lead to a Gestapo in Britain. These surely relate to the Bolshevik political system rather than to having a nationalised economy.
Living standards in the USSR and Eastern Europe certainly plunged when the economy was denationalised. But living standards were rising very fast during the 1950s and 60s and then at a modest rate thereafter. Some might argue that with different economic policies it might have been possible for the rapid improvement of the 50s and 60s to have continued longer, but any such claim has to be treated with caution. The pro-market reformers claimmed that getting rid of nationalised property and dissolving GOSPLAN would lead to a huge economic leap forward, in fact the reverse occured.
The western economists who had criticised the socialist system as inefficient had anticipated that the inauguration of a market economy would lead to accelerated economic growth in the USSR. Instead it regressed from a super-power to an economic basket case. It became dominated by gangsterism. Its industries collapsed and it experienced untold millions of premature deaths, revealed in the statistics of a shocking drop in life expectancy. Excess deaths following Hayekian policies in Russia total 6,711,200.
The failure of the Soviet model cannot be considered synonymous with the failure of socialism: what failed in the S.S.S.R. was one form of planning, while, as Cockshott and Cottrell have shown in their book Towards a New Socialism (1993), other, superior forms of planning are socially possible.
8. Traditional Marxism was a Metanarraitve: Finally, many sociologists today would argue that Marx’s ‘grand theorising’ about the world is no longer relevant – rather than researching with the intention of creating the perfect society, we should really be focussing our attention of much more specific and localised social issues.
Counter-argument: Discoveries in Marx’s Capital recognized by Keynesians too are (1) the use of a proto-effective demand theory by Marx; (2) endogenous money theory; (3) Marx’s rejection of Say’s law; (4) the notion of a monetary production economy (also developed as a theory by Keynes); and (5) a conflict theory of the distribution of income, and the recognition that workers and capitalists have unequal power.
Marat, L’Ami du Peuple
Reference
1. Eight Criticisms of the Traditional Marxist View of Society, https://revisesociology.com/
2. The end of the Ford myth, by Robert L. Cruden, https://www.marxists.org/
3. Against Hayek, by Cottrell, Allin and Cockshott, W. Paul, https://mpra.ub.uni-muenchen.de/
4. What are the Useful Insights in Marx’s Capital?, by Lord Keynes, http://socialdemocracy21stcentury.blogspot.com/
5. Critique of the Gotha Programme, by Marx, https://www.marxists.org/
6. Milton’s Myths, by Robin Eric Hahnel, https://www.socialisteconomist.com/
7. Towards a New Socialism, by Allin Cottrell and Paul Cockshott, http://users.wfu.edu/
8. Against Jack Conrad, Mike Macnair and Nick Rogers, by Paul Cockshott, https://www.scribd.com/
9. Apasiev’s resignation from communism, by Marat, https://narodenprijatel.wordpress.com/
10. Value, Price and Profit, by Marx, https://www.marxists.org/
11. Economic & Philosophic Manuscripts of 1844, by Marx, https://www.marxists.org/
12. The German Ideology, by Marx&Engels, https://www.marxists.org/
13. Home Ownership by Country 2023, https://worldpopulationreview.com/
14. Share of households occupied by private renters in England from 2000 to 2022, https://www.statista.com/
15. English Housing Survey, by Ministry of Housing, https://assets.publishing.service.gov.uk/
L'AMI DU PEUPLE 