Very few books, apart from some works in fiction, are relevant in the 21st century, so the worldwide commemorations of the publication of Karl Marx’s “Das Capital” 150 years ago in 1867, is testament to its remarkable impact. While most would have thought the “fall of communism” in 1989 in the USSR and its “Eastern Bloc” would be the death knell of Marx’s relevance, the 2008 collapse of the neo-liberal paradigm – which was supposed to have done the job – in accordance of Marx’s theory, gave Das Capital a new relevance.
We have to note that Marx wrote Das Capital long after his famous pamphlet “The Communist Manifesto” and other revolutionary works from his youthful days. Das Capital was supposed to give rigour to his earlier, more polemical, rhetoric, by grounding his theory of capitalism onto an excruciatingly detailed development of the English working class. But this fact, in and of itself, should signal that with the passage of time and the historical development of capitalism, some of Marx’s conclusions might not necessarily be wrong as much as, irrelevant, in the present.
One of the fundamental Marxian ideas developed in Das Capital is his particular interpretation “labour theory of value”, which was proposed earlier by the economists Adam Smith and David Ricardo to explain the different prices at which goods were bought and sold. These pioneering economists proposed that the value of a commodity could be measured objectively by the average number of labour hours necessary to produce it.
Marx contribution was to query if this were so, then where do “profits” come from? His simple answer was that workers were being paid less that the true worth of their labour and profits were therefore squeezed from the latter. This was the essential exploitative relationship between those who own “capital” – “capitalists” – and those who provided their labour to produce commodities – “the proletariat”. He said, “Capital cares nothing for the length of life of labour power. All that concerns it is simply and solely the maximum of labour power that can be rendered fluent in a workday.” But in so doing the “labour” of persons becomes a commodity like any other that is sold and bought like any other.
In its urge to extract increasing amount of profits, Marx proposed that capitalists would always seek to reduce the price of labour and those who are most successful at this manoeuvre can sell more commodities and acquire more profits. This results in the number of capitalists decreasing as the fittest (most exploitative of labour) survives while the number of unemployed or underemployed increases. But that also sets the seed of inevitable crises in this “capitalist mode of production”: with the increasing unemployed, there are less customers to purchase the commodities and with the piled-up surpluses, the market periodically “crashes”.
“Along with the constantly diminishing number of the magnates of capital, who usurp and monopolize all advantages of this process of transformation, grows the mass of misery, oppression, slavery, degradation, exploitation; but with this too grows the revolt of the working class, a class always increasing in numbers, and disciplined, united, organized by the very mechanism of the process of capitalist production itself.”
After Marx, trade unions were formed in the “developed capitalist economies”, which improved the wages of workers. However, the capitalists began to move to underdeveloped countries (eg China) where they could pay labour at a much lesser rates than in their own countries. This was the beginning of the “outsourcing” of manufacturing and services which led, among other factors, to the 2008 collapse. At present, according to Oxfam, the richest one per cent owns as much wealth as the rest of the world combined and in fact just 62 persons have as much wealth as the poorest half of the world’s population.
Marx’s fatal flaw was his prediction that the working class would overthrow the capitalists and establish a communist utopia. It has been called his “sin of optimism”.
