A PHILOSOPHY THAT CHANGED THE WORLD: MARXISM (PART 2)

THE SYSTEM OF A CLASS 

A Russian Propaganda Poster depicting the Capitalist Class
System. (Around the time of the first Russian Revolution)

In this post, Marx's economic theory will be discussed, but before this can be done, it is important to understand how Marx understood the working of the class system. 

Marx felt that every person belongs to certain socio-economic group within society, known as a class. The system of classes that a given culture has is completely determined by the economic means and conditions of production in that culture. Capitalism is thus an economic system with three main social classes: those who own or control the means of production, the capitalists; those who are entirely dependent upon the earnings they get while working for the owners, the working class; finally we have the middle classes such as business people.

This is an important point to understand. In the previous blogpost I had mentioned the logical process of the dialectic and Marx's interpretation of the same. According to him, the thesis (in the struggle between the classes) is the presence of capitalist upper classes exploiting the lower classes economically. The anti-thesis is the working classes who, fed up of their conditions and lack of proper pay will rise up, and the synthesis will eventually be a classless society. Let us now examine Marx's economic theories to see how this happens.

LABOUR THEORY OF VALUE

This theory, though not unique to Marx*, is used in his ideas. The theory of Labour value attempts to define what is meant by 'economic value'. He distinguishes between 'use value' of a commodity and its 'exchange value'. While a commodity might be useful for us, it may not have any worth if we try to exchange it for something else. The air might be useful to us, but we could not exchange it for something else. Something has exchange value, if it needs to obtain at a cost, for example buying a book using money. Marx termed this cost its 'economic value'.

What makes a commodity costly is the amount of labour power that goes into its production. So 'economic value' is defined in terms of the quantity of labour necessary for its production. Marx went on to say that the worker is forced to sell his/her labour and thus is a commodity themselves. the amount of money which the employer pays to the worker is an estimation of the economic value of the labourer. We now move on to what Marx called 'The Theory of Surplus Value'

THE THEORY OF SURPLUS VALUE 

The labourer is said to produce goods which have a higher economic value than those wages the worker receives. There is a difference between the economic value of the product and the amount the worker receives for their efforts. Marx termed this difference the 'surplus value'. The employer does not pay them for this, instead they take the surplus value and utilise it in various ways, mainly profit. According to him, the workers actually produce the wealth through the amount of labour they contribute, but the capitalists take a considerable amount of it without rewarding the worker. This is how they make their profit. 

This is a crucial point, because it allows us to examine the source of the conflict between the classes. Whilst the capitalist wishes to accumulate the maximum profit, the worker demands a higher way and to buy good as cheaply as possible. Marxists see this inconsistency leading to an unavoidable conflict.

THE COMING OF SOCIALISM

The aim of the capitalists is to maximise profit. This involves engaging in constant competition with other business people, since making profits depends on the number of goods sold. To sell the most number of goods also means selling them as cheaply as possible. In the long run, the easiest way to do this is to use the cheapest labour possible. As the capitalist gains more profit in this way, getting the cheapest labour possible is vital. Ultimately, they will drive smaller businesses out of competition and will remain in competition with a few large scale producers. To keep maximising their profit, the capitalist must pay the workers less and less, and so on. 

This tendency according to Marx will eventually ensure that the workers will keep getting poorer and the capitalists richer. Tension will develop as the workers get tired of being exploited (they become 'class conscious') and finally conflict will break out. The outcome of the conflict is that the worker will take over the means of production, and a new thesis will be inaugurated- the age of the classless society, or socialism.

What will be discussed in the next part of this blog post is what Marx highlighted as something ethically wrong with this drive towards profits, caused by the economic system of  capitalism. 

*This theory owes much to the works of economists such as David Ricardo and Adam Smith.