01 April, 2006

Marx and Us..#1


I've started a new series called Marx and Us. I would attempt to take snippets from Marxist theory and examine their relevance in the current scenario. I feel that it is as important to review the basic tenets of Marxism , as it is to apply leftist interpretation to review any present ocuurance.

Here goes part # 1 of the series. It starts from the very basics indeed.


(1) Capitalism, Bourgeoisie and Proleteriat:
According to Karl Marx, a a capitalist mode of production developed in Europe when labor itself became a commodity — when peasants became free to sell their own labor-power, and needed to do so because they no longer possessed their own land or tools necessary to produce. People sell their labor-power when they accept compensation in return for whatever work they do in a given period of time (in other words, they are not selling the product of their labor, but their capacity to work). In return for selling their labor power they receive money, which allows them to survive. Prior to capitalism, markets existed in Europe where producers and merchants bought and sold commodities. Those who must sell their labor power to live are "proleterians." The person who buys the labor power, generally someone who does own the land and technology to produce, is a "capitalist" or "bourgeois." (Marx considered this an objective description of capitalism, distinct from any one of a variety of ideological claims of or about capitalism). The proletarians inevitably outnumber the capitalists.

Surplus Value =Output Costs - Input Costs. Input Cost includes the cost of human labour. So Suplus value is derived from surplus human labour. In marketing and finance text books of today , following is represented as :

Profit (often Income)= Revenue from Sales - Cost of production and other expenses. So, what we call as Profits ( or Profits before taxes) are nothing but surplus value.

Note: Marx did distinguish between industrial capitalists and merchant capitalists...we will revisit these differences some other time

(2) Capitalism has a "lifecycle":

Well as most products have a "lifecycle", so does capitalism. (Remember the bell shaped curve, as shown in school text books?). Capitalism has its own peak and trough. The capitalist mode of production is capable of tremendous growth because the capitalist can, and has an incentive to, reinvest profits in new technologies. Marx considered the capitalist class to be the most revolutionary in history, because it constantly revolutionized the means of production. But Marx argued that capitalism was prone to periodic crises. He suggested that over time, capitalists would invest more and more in new technologies, and less and less in labor. Since Marx believed that surplus value appropriated from labor is the source of profits, he concluded that the rate of profit would fall even as the economy grew. When the rate of profit falls below a certain point, the result would be a recession or depression in which certain sectors of the economy would collapse. Marx understood that during such a crisis the price of labor would also fall, and eventually make possible the investment in new technologies and the growth of new sectors of the economy. Marx believed that this cycle of growth, collapse, and growth would be punctuated by increasingly severe crises. Moreover, he believed that the long-term consequence of this process was necessarily the enrichment and empowerment of the capitalist class and the impoverishment of the proletariat.

(3) Marxist Revolution:

Marx believed that were the proletariat to seize the means of production, they would encourage social relations that would benefit everyone equally, and a system of production less vulnerable to periodic crises. In general, Marx thought that peaceful negotiation of this problem was impracticable, and that a massive, well-organized and violent revolution would in general be required, because the ruling class would not give up power without violence. He theorized that to establish the socialist system, a dictatorship of the proletariat - a period where the needs of the working-class, not of capital, will be the common deciding factor - must be created on a temporary basis. Between capitalist and communist society there lies the period of the revolutionary transformation of the one into the other. Corresponding to this is also a political transition period in which the state can be nothing but the revolutionary dictatorship of the proletariat


Well I divided the fundamentals of Marxism into the above three divisions on purpose. If we notice carefully the first two constructs are very much valid in the present world. The differences bewteen the "rich man" and the "poor man" is increasig day by day..and it is no fluke that the rich man always belong to the bourgeios class and ther poor man to the proleterait. Call it Marx's extraordinary analytical genius and the bad fate of mankind--the rich have always been the ones wh have usurped the means of production and made others to work for them, accumulating wealth out of the latter's surplus labour to generate profits.

On the other hand , the gradual shifting of economies--say, from the old manufacturing economy to the new service economy or the knowledge economy only goes on to prove Marx's second aspect. Let us not forget, how capitalists invested in iron and steel companies and automobile companies that employed huge number of blue collar workers. But when the profit per unit of car decreased, most of the capitalists repatriated their profits into new technologies--say Information Technology, Telecommunication etc. Today, the IT sector is any capitalist's golden goose. But a quick look at it shows that how billing rates have fallen and how IT salaries are on the decline or at least plateauing out. Very soon the capitalists will move on to newer sectors to Biotechnology and what not. Capitalism will try to save itself on new grounds --either in new technological paradigms or new grounds (read new markets). I hope you, my reader, will largely agree with me till now.

Once we are in agreement that capitalist mode of production will face crisis in one sector and shift to another to save itself--we are indirectly agreeing that the revolution , as Marx saw it , is in the offing. Pl. don't raise an eyebrow over this statement of mine. When capitalists exit one sector they leave behind a badly bruised masses from the working class, who are left to rot--as they cannot reinvent themselves and learn to cope with the new technological paradigms so easily. A miner cannot become a mechanic in the assembly line of a car factory. A car mechanic cannot become an software developer, overnight. Each time, large number of people are left behind by capitalists,the seeds of the revolution is already sown. To orchestrate a revolution one needs will, and such will comes out of anger , rejection of the existing social system and fraternal feelings towards another struggling person. Then why is there no revelution happening? What is lacking today is a proper strategy and technique is educate the left behind masses about the perils of capitalism, and helping them to graduate to unite with other left behinds from different countries and industrial sectors and jointly orchestrate a revolution. There is also a need to counter the recent theories of capitalism and the way they always put safety valves onto it just to save itself. Unless one has a solid strategy, one cannot hold the bulls by the horns. And that's what Marxists have been doing till date.

Will discuss some limitations of modern day Indian communists in my next blog.

Till then have a good day..and do send your comments.
Charvaka Acharya

Post script: There are some self styled socialist thinkers and cronies of capitalism who cannot counter basic Marxist tenets. All they do is to point out that the USSR failed, so Marxism doesn't hold true. It is true that USSR failed, but one needs to understand that the point when it failed it was no longer a state for the working masses. It degenerated into a largely one party dominated state capitalist and social imperialist state. The Chinese communist party has also invented its own brand of capitalism. Deng XioPing had put it very bluntly : "It doesn't matter what colour a cat is as long as it catches mice." Surely, Deng wanted to create a section of bourgeiosie who are products of the CPC and controlled most resources in the name of state control. Both the Soviet and the Chinese parties talked of reforms which are more to the right than to the left. Marx once said of such "reform hungry" self styled Marxists who were on the verge of denouncing the revolutionary aspect of Marxism, that if the trash they doled out was Marxism..then "I'm not a Marxist".

"Catch a man a fish, you can sell it to him.Teach him how to fish and you ruin a wonderful business opportunity."-Karl Marx

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