Marx and Modern Capitalism

Most of us in the US could hardly imagine an existence without capitalism, we rush without question to buy the latest cell phone, or shell out hundreds on a pair of jeans. All without even contemplating just what had to happen to produce it. Yet it is in that process of production that we find Marx still has something to say about our system, and where it may eventually lead us.

According to Marx there exist inherent in capitalism a set of apparently irreconcilable contradictions and conflicts which will over time lead to its downfall. As the capitalist extracts surplus value or "profit" from the workers he is able to amass property in the form of what we call wealth. The problem as Marx sees it is that overtime those workers will realize that they are being exploited and demand their proper share of the products value in the form of higher wages. As they receive higher wages though, the profit for the capitalist shrinks thus preventing further growth in the market. In order to increase profits the capitalist tries to develop more efficient material forces of production through better technology and more automated machines. This in turn leads to a surplus of goods in the market, with masses of workers who are unemployed due to lack of manpower need in the more efficient factories. The workers are then in constant conflict not just with the bourgeoisie who exploits them, but also with the very machines that reduce their labor. This is the inherent conflict between the relations of production (labor) and the material forces of production (technology) which eventually leads to depression - "The enormous power, inherent in the factory system, of expanding by jumps, and the dependence of that system on the markets of the world, necessarily beget feverish production, followed by over-filling of the markets, whereupon contraction of the markets brings on crippling of production. " (Das Kapital Vol I Ch 15)

For Marx this cycle will at some point lead to the total collapse of capitalism because the surplus of goods will be almost infinite making them super-cheap and therefore not allowing the capitalists to make a profit. However, as this process takes place Marx proposes that they will attempt to implement certain measures to try and reconcile the conflict and promote growth. One of these measures is the necessary precursor for the recovery after the depression described previously. Here the excess goods are either destroyed or dumped into new markets in order to increase demand and kick start the economy. -"The conditions of bourgeois society are too narrow to comprise the wealth created by them. And how does the bourgeoisie get over these crises? On the one hand, by enforced destruction of a mass of productive forces; on the other, by the conquest of new markets, and by the more thorough exploitation of the old ones" (Communist Manifesto)

One can also see in last part of the quote almost prophetic allusion to the excessive advertising that fills our daily life, and the built-in obsolescence that dominates our economy. In addition to those clearcut measures imposed by capitalists, Marx points to those he calls "bourgeoisie socialists" attempting to promote workers rights, protections, and increased charity to mitigate the harmful effects of the system on the workers and thus cool their revolutionary temper. Mandel expands on this further by pointing out how programs like social security, government subsidies, the creation of guarantees on banking systems and reserves have all helped to sustain a longer period of growth than the system alone would normally create.-"The possibility has thus been created for strengthening the system on the basis of granting concessions to the workers, a policy which is being practiced on an international scale in Western Europe and North America"

Mandel also explains that since 1945 there has been a process of continuous technological revolution based on the need for new and better weapons to fight the cold war that has provided an extra source for economic growth-"In fact, if you carefully examine the origin of 99 per cent of the technological changes applied to production, you will see that they are military; you will see that these changes are by-products of new techniques which first found their application in the military sphere."(Intro Marx Eco. Theory Ch 3). For Mandel we are currently in a state which he calls "neo-capitalism"where continued growth is dependent on constant state intervention in the economy, and a sustained military buildup. All of which works to guarantee for the bourgeoisie.

Mendel argues that due to this need for constant intervention the system will eventually produce a large enough crisis that causes workers to seize power. But rather than intervene to save capitalism they will opt for a socialist form of economy. In this he is in sync with Marx and his view that despite capitalism's inherent contradictions it must be toppled in the end by the workers themselves who after analyzing those contradictions will naturally seek something better. This idea seems almost like wishful thinking, or determinism, but it fits clearly within the concept of the dialectic where the result of communism is an evolving loop formed by the failures of capitalism and the actions of the proletariat.

-"Crises are the clearest manifestation of the fundamental contradiction in the system and a periodic reminder that it is condemned to die sooner or later. But it will never die automatically. It will always be necessary to give it a conscious little push to effect its demise, and it is our job, the job of the working-class movement, to do the pushing."

(Mandel Marx Intro Eco. Ch 2)