And indeed, Marxism seems to be on the rise again. Our observations. Marx was voted the most influential philosopher of all time in a BBC Radio poll, as nearly four in ten people on earth lived under governments that claimed to be Marxist when the Berlin Wall fell. The base-structure consists of the material conditions and the methods and relations of production means who owns how much of them. The superstructure is comprised of our beliefs, morals and habits, and is the ideological reflection of this base-structure. Economy Economics. What is Marxism Marxism is a social, political and economic philosophy that examines the effect of capitalism on labor, productivity and economic development.
Compare Investment Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation. Karl Marx Karl Marx was a 19th century philosopher, author and economist famous for his ideas about capitalism and communism.
He was the father of Marxism. Conflict Theory Definition The conflict theory states that society is in a constant state of conflict due to competition for limited resources. Capitalism Definition Capitalism is an economic system whereby monetary goods are owned by individuals or companies. The purest form of capitalism is free market or laissez-faire capitalism. Here, private individuals are unrestrained in determining where to invest, what to produce, and at which prices to exchange goods and services.
Communism Definition Communism is an ideology that advocates a classless system in which the means of production are owned communally. Partner Links. Related Articles. The struggle of the central monarch to subdue the regions is a characteristic feature of the period. The eventual defeat of these provincial lords, with their constant strife and war, enabled trade to develop to a higher level. Trade was at a low level. The land, in fact, produced practically everything. However, with the launching of the crusades, the expeditions to the Holy Land, new needs arose, and the merchants who supplied these needs began to establish huge fairs in France, Belgium, England, Germany and Italy.
These periodic fairs played an essential part in the growth of European trade, and helped to establish a strong class of rich merchants. Money relations began to erode the straight jacket of feudal society. Hand in hand with the development of trade, went the growth of the towns. The merchant class that arose in the town clashed with the traditional standards and restrictions of feudalism. The Church, for instance, considered the practice of usury as a sin, using the threat of excommunication against those who promoted it.
Town land belonged to feudal lords, bishops, nobles, kings. These feudal lords at first looked upon their town land in no different light from that in which they looked on the other land … All these forms feudal dues, taxes, services were feudal, based on the ownership of the soil. And all these forms had changed as far the towns were concerned. Feudal regulations and feudal justice were fixed by custom and difficult to alter. But trade by its very nature is active, changing, and impatient of barriers. It could not fit into the rigid feudal frame. Therefore old relationships had to be challenged and changed.
The towns began to demand their freedom and independence, and gradually town charters were conceded, some by agreement, others by force. Trade itself gave rise to new forms of wealth. No longer was land the sole source of power and privilege, as money acquired in trading assumed a much greater importance. In the towns was born the wealthy merchant oligarchy which controlled and regulated the small scale individual production, through the guild system. With the further division of labour, Craft Guilds were established comprising the guild master, apprentices and journeymen.
As more and more wealth was created through production the guild masters employers of labour came into sharp conflict with their journeymen workers. By the 15th century, actual journeymen's unions were formed to protect their interests. The introduction of the money economy which had only a very limited character in slave society slowly undermined the basis of the feudal system. Its laws and customs were modified to correspond with the new development. As serfs ran away to the towns to make their fortunes, money values began to transcend the old relationships, Labour dues being replaced by rented property.
The impact of the Black Death, in the midth century, greatly accelerated the process. Historians have estimated between 30 and 50 per cent of the population of England, Germany, the Low Countries, and France were wiped out by the Great Plague. This in turn resulted in the chronic shortage of labour, which forced many landowners to introduce wage labour to overcome their difficulties. The nation-state as we know it today did not always exist. Peoples' allegiances at this time belonged not to the nation but to the lord, the town, the locality, or the guild.
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People considered themselves not French, English, etc. Every Christian was a member of the Roman Catholic Church, which in turn ruled over Christendom, and thus was the greatest power of all. With the growth of wealth in the towns, a capitalist class began to arise which demanded conditions suitable for the unhindered development of trade and commerce. They wanted order and security. The struggle for independence of the towns from their feudal overlords, the continuous battles between local barons, the pillaging that followed, all gave rise to the need for a central authority, a nation state.
The conflict between the central monarch and the great barons a struggle between two sections of the ruling class ended with a victory for the king. He was supported by the merchants and middle class, who provided the money to raise the armies he required. The emergence of the nation state together with the centralised monarchy ushered in a great economic advance. For their support, the monarch granted certain monopolies and privileges to sections of the middle class and the next stage was set for the clash between the national monarch and the interests of the international church.
The late 15th century saw the beginning of the voyages of discovery. Joint stock companies were established to promote the financing of greater exploitation, for plunder and profit. With the massive profits from the voyages, many merchants and financiers became the real centres of power and wealth. Nobles, aristocrats and monarchs became debtors to the rich merchants. One banking family, the Fuggors, were even able to decide who was to be made Emperor of the Holy Roman Empire! The new economic developments were giving rise to a capitalist formation.
The basis of the feudal economy had begun to disintegrate with the growth in power and wealth of the rising bourgeoisie. New values, ideas, philosophies, and morals evolved out of the new relationships. The old ruling class stubbornly resisted the changes. From forms of development of the productive forces these relations turn into their fetters. The old society has been undermined during the previous period. Probably one of the greatest challenges to the old order was the attack on Catholicism. In this period, the Church was not just a religious institution but the chief bulwark of the social order.
Apart from being a powerful landowner, it collected a tithe from everyone, had its courts and special privileges, controlled education and shaped the political and moral outlook of the people. It is said that this was a very religious period but this is wildly exaggerated by historians. Rather than people actually living according to the precepts of the Bible, religion was rather used to justify the Old Order. Everything, including political thought, was expressed in religious terms. Those who wished to undermine the system, had to first challenge the monopoly of Catholicism.
In the early 16th century, the absolute monarchies came into conflict with the Catholic Church themselves. The Protestant Reformation ushered in by Luther, supplied the weapons in the struggle against Papal power. The Puritanism of the Calvin variety suited the outlook and morality of the rising middle class in town and country with its emphasis on self-reliance and personal success. The middle class was now set to rise quickly after adapting to the inflation rampant between , in which prices rose by more than fourfold and came increasingly into conflict with the old ruling class.
In England, the struggle between the new bourgeoisie and the old order took the form of the civil war. In , the King was beheaded and a capitalist republic declared. Cromwell, resting for support on the army, established himself as the head of a Bonapartist military dictatorship. The elements of left-wing democracy and its proponents the levellers and diggers , who threatened capitalist property rights, had to be mercilessly quashed.
From then on the regime rested on a narrow social basis--the armed forces.
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The capitalist regime under these critical crises circumstances reduced itself in the Bonapartist fashion to the rule of one man. The feudal structures were dismantled together with the House of Lords and monarchy. The old ruling class had been defeated, and the lower classes kept in their place. The struggle of the Parliamentarians against the King has been seen by historians and even by some contemporaries as a struggle against tyranny and for religious liberty but as Marx commented:.
The monarchy and House of Lords were restored although from then on they could never play the same role as their predecessors, on the contrary, they became part and parcel of the capitalist state. The bourgeois men of property concerned themselves with their future, and of keeping the lower orders in their place with their power carefully checked.
One hundred years later, the French Capitalist revolution was carried through to completion without any compromise being struck. The French Revolution, like its English counter-part, began with a split in the ruling class. The King and his ministers clashed over a scheme to avoid state bankruptcy, with the Parliament which represented the nobility, higher clergy, the court clique, etc.
The latter's appeal against the government's tyranny took on unforeseen flesh and rioting broke out in the streets of the towns and cities. It brought to a head all the simmering discontent of the middle class and lower orders against the regime. As in all popular revolutions the masses burst onto the scene of history. The most self-sacrificing came to the fore, and pushed the revolution far to the left. Between and the old feudal regime and aristocracy had been completely swept away. The regime was headed by the revolutionary middle class, the Jacobins, who were supported and pushed by the plebeian masses made up of wage-earners and small craftsmen.
A shift to the right occurred in with the government of the Directory coming to power. This in its turn gave way to a new political counter-revolution, which brought to power the law and order type regime of Napoleon Bonaparte. Nevertheless, the old order had been broken, and the new bourgeois property rights were to remain intact. The shift of political power was not accompanied by a social change backwards, i. The great Bourgeois revolutions cleared the path for Capitalism.
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The agrarian changes ensured the growth of capitalist agriculture, where the old feudal estates had been broken up and distributed to the peasants. In England, the conversion of a section of the aristocracy before the revolution prepared the way for the ruination of the peasantry itself. Governments now, instead of acting as a brake on trade and industry, actually championed its cause. Through robbery, enclosure and plunder and competition, the means of production became concentrated into fewer and fewer hands.
The ruination of the peasantry provided a pool of labour-power in the towns and cities. The class structure became more simplified. On the one hand were the capitalists and on the other the propertyless proletarians. All that these workers possessed was their ability to work. The only way they could remain alive was to sell their labour-power to the capitalists in return for wages.
In the process of production, the proletarian produces more value than he receives in wages, the surplus value being expropriated by the capitalists. In its search for profit, amidst competition from rivals, the capitalist class is forced to introduce new methods of production, in this way Capitalism has, historically, played a progressive role, continually revolutionising the productive forces.
The productive forces, technique and science gradually outgrew the nation state which protected it. The period from to saw the division of the world amongst the main powers. By this process of world division had been completed, and capitalism entered its highest stage of Imperialism. Huge trusts and monopolies had grown out of the earlier period of competition.
The state had more and more fused with the monopolies and financial institutions and acted increasingly in their interest. Production in this epoch is accompanied by the export of capital itself. The imperialist stage brings with it the threat of world war, in the struggle for new markets, etc. Due to the carving up of the world and the tremendous growth in production, markets can now only be obtained by a new re-division of the world which inevitably leads to conflict on a world scale.
World war indicates the contradictions between the private ownership of the means of production on the one hand and the nation state on the other. But unlike previous societies Capitalism has furnished the material pre-requisites for the new socialist order that can guarantee plenty for all. The proletariat is the only consistent revolutionary class capable of carrying through to a conclusion the Socialist Revolution. This stems from its particular place in social production. The working class is disciplined in the factories and forced to co-operate in the productive process. It organises itself into large trade unions and then into its own independent party.
Marxism, as opposed to all other theories, provides it with a clear ideology and tasks in its mission to overthrow Capitalism. The Bolshevik Party, led by Lenin and Trotsky, provided a living model to the workers of the world. The peasantry and the middle classes are incapable of playing a leading role, due to their social position. The peasantry is scattered in the countryside, and have no real conception of unity or internationalism. These middle layers of society follow either the bourgeoisie or the proletariat.
Marx in the 21st century
The peasantry have been in fact, the classical tool of Bonapartism--a regime based on the armed forces, balancing between the classes. In the epoch of imperialism and the decay of monopoly capitalism, if the working class fails to win the middle layers to its Socialist banner, they will be driven into the arms of reaction. From a progressive social system, Capitalism has now become a fetter upon production and the further development of humanity. Marx believed that the proletariat would come to power first in the advanced capitalist countries of Britain, Germany, and France.
However, with the emergence of Imperialism, capitalism broke at its weakest link in backward Russia. Society does not develop in a straight line, but according to its laws of uneven and combined development. The uneven growth of society on the world scale is constantly cut across by the introduction of new products and ideas from different social systems. The backwardness of semi-feudal Russia was supplemented by the most modern techniques of production in its cities, due to the enormous amount of foreign capital from France and Britain.
The new industrial proletariat which had recently come into being accepted the most advanced ideas of the working class: Marxism. In many of the under-developed countries the festering sores of much needed land reform, autocracy, national oppression, and economic stagnation, have resulted in enormous discontent. The tasks of the bourgeois democratic revolution, which would have laid the basis for capitalist development, have either only been partially carried out or not at all.
In these countries the Capitalist class has come on the scene too late to play a similar role as its revolutionary counter-part of the 17th and 18th century. As in Russia before , they are too weak and tied by a thousand strings--through marriage and mortgage--to the land owners and imperialists. They both now acquire a common hatred of the emerging proletariat.
The nationalist capitalist class prefers to cling to the old order rather than appeal to the lower classes to carry through the anti-feudal revolution. The only class capable of carrying out the revolution is the proletariat by uniting around itself the poorer sections of the peasantry.
Once the working class comes to power as in October , it is then able to give the land to the peasants, expel the imperialists and unify the country. However, the proletariat would not stop at these measures but would then proceed to the socialist tasks: nationalisation of the basic industries, land, and financial institutions. The Russian Revolution was the greatest event in the whole of human history. It was to be the beginning of the international socialist revolution and fully confirmed the theory of Permanent Revolution. Unfortunately, the betrayal of the socialist revolution in Germany, and other countries, led to the isolation of the revolution in a backward, devastated country.
The destruction of the War, mass illiteracy, civil war, exhaustion, placed terrible strains upon the weak working class, and contributed to the degeneration of the revolution. It was these objective conditions which encouraged the growth of bureaucratism in the state, trade unions and the Party. Stalin rose to power on the back of this new bureaucratic caste. The individual in history represents not himself, but the interests of a group, caste or class in society.
Stalinism and its monstrous dictatorship grew not from the Bolshevik Party or socialist revolution, but out of the isolation and material backwardness of Russia. It destroyed the workers' democracy in order to preserve its privileges and power. The Stalinist regime nevertheless rested on the new property forms of nationalised industry and the plan of production. The Soviets Workers' Councils and workers democracy were crushed in the Stalinist political counter-revolution.
Only by a new political revolution could the Russian working class have restored the workers' democracy which existed under Lenin and Trotsky. This would not mean a return to capitalism, but an end to the privileged bureaucratic elite, as the masses themselves become involved in the running of society and the state. The socialist transformation ushers in a new and higher form of society by breaking the fetters on the development of the productive forces.
The obstacles of private property and the nation state are swept away, allowing the socialised property to be planned in the interests of the majority. The Socialist Revolution cannot be confined to one country, but puts the world revolution on the order of the day. The world economy and the world division of labour created by capitalism demands an international solution. This in turn would provide the basis for the planned and harmonious production of goods for the satisfaction of human wants. One of the first tasks of the victorious working class would be the destruction of the old state machine.
Lenin, The State and Revolution This raises the question, does the working class need a state? The anarchists reply no. But they fail to understand that some form of force is required to keep the old landowners, bankers and capitalists in their place. The proletariat therefore has to construct a new type of state to represent its interests. In a workers' state, the majority are holding a tiny minority of ex-capitalists in check and therefore the massive bureaucratic state of the past is not needed.
Bourgeois democracy was defined by Marx as the workers deciding every five years which section of the ruling class would misrepresent their interests in Parliament. Everyone could say what they liked, provided that the boards of the monopolies could actually decide what was to be done. The new workers state would extend democracy from the political to the economic sphere with the nationalisation of the major monopolies. Ibid Bureaucracy would be replaced by the involvement of the masses in the running of the state and society.
In order to prevent the growth of officialdom, the proletariat of Paris in and of Russia in introduced the following measures:. With the reduction of the working week, the masses are given the opportunity to involve themselves in the state, and obtain the key to culture, science and art. For as Engels once said, if art, science and government remain the preserve of the minority, they will use and abuse this position in their own interest, as was the case in the Stalinist countries.
The state arose historically with the emergence of class society. Thus, from its very inception, the workers' state begins to wither away , as classes themselves dissolve within society. As Lenin said:. Marx, Critique of the Gotha Programme Although the exploitation of man by man has been ended, production has not yet reached a high enough level to completely eradicate inequality or class differences. The state, despite its transitory character, remains the guardian of inequality.
Yet with huge strides forward in production, based on the most advanced science and conscious planning, humanity enters the higher realms of real society. Ibid The antitheses of town and country, and mental and physical labour disappear with the further revolution in the productive forces.
There will then be no need for society, in distributing the products, to regulate the quantity to be received by each; each will take freely according to his needs. The barbarous nature of class society would have ended once and for all. The prehistory of humankind would have been completed. The productive forces built up over thousands of years of class rule now laid the basis for classless society where the state and division of labour were rendered superfluous.
Humanity sets itself the task of conquering nature, and opens up the tremendous wonders of science and technology. For the first time mankind will regard itself as raw material, or at best as a physical and psychic semi-finished product. Leon Trotsky, In Defence of October. Today, under the impact of the capitalist crisis, many workers have developed a thirst for economics. They are attempting to understand the forces which dominate their lives.
This brief introduction to Marxist economics attempts to provide the class conscious worker not with a complete account of economics, but a guide to the basic laws of motion of capitalist society dominating his existence. The shallowness of capitalist economics is demonstrated by their inability to understand the crisis affecting their system. Only the transformation of society on socialist lines and the introduction of a planned economy can end the nightmare of unemployment, slump and chaos. The left reformists still cling to the capitalist policies of yesterday reflation, import controls, etc.
Only with a Marxist understanding of capitalist society can the conscious worker cut through the lies and distortion of the capitalist economists and combat their influence within the Labour Movement. Today, modern production is concentrated in the hands of giant companies.
Although it is true that small businesses do exist, they really represent the production of the past and not the present. Modern production is essentially a mass, large-scale business. At present, top companies together with 35 banks and finance houses control the British economy, and account for 85 per cent of output. This development has come about over the past few hundred years through ruthless competition, crisis and war. At the time when the classical economists predicted free trade in the future, Marx explained the development of monopoly from competition as the weaker firms went to the wall.
Monopoly capitalism grew out of and abolished free competition. At first sight, it looks as if goods and things are produced mainly for people's needs. Obviously every society has to do this. But under capitalism, goods are not merely produced to satisfy someone's want or need, but primarily for sale. That is the paramount function of capitalist industry. The capitalist process of production requires the existence of certain conditions.
Marxism: Philosophy and Economics
Firstly, the existence of a large class of propertyless workers who are obliged to sell themselves piece-meal in order to live. Secondly, the means of production must be concentrated in the hands of the capitalists. Over the centuries, the peasants and those who owned their own means of subsistence were ruthlessly crushed and their means of life appropriated by the capitalists and landlords. They in turn hire the workers to work these means of production and produce surplus value. How does capitalism work? How are workers exploited?
Where does profit come from? How are slumps caused? In order to answer these questions, we first need to learn the key to the mystery: what is value? Having solved this problem, the other answers fall into place. An understanding of value is essential, for an understanding of the economics of capitalist society. To begin with, all the capitalist firms produce goods or services, or more correctly they produce commodities. That is a good or service produced for sale only.
Of course, someone may make something for his or her own personal use. Before capitalism existed, many people had to. But this is not a commodity. Marx, Capital Vol. I That is why Marx himself started his investigation of capitalism with an analysis of the character of the commodity itself. Every commodity has a use-value for people.
That means they are useful to someone otherwise they could not be sold. This use-value is limited to the physical properties of the commodity. If we leave the use of money out for the time being, commodities, when they are exchanged, fall into certain proportions. Each of the items on the left can be exchanged for 10 yards of cloth. They also, in the same amounts, can be exchanged with one another. This simple example shows that the exchange value of these different commodities expresses something contained in them.
And so on…. Well, obviously, there must be something common to all. Clearly it is neither weight, colour, nor hardness. Again, it is not because they are useful. Bread after all is worth less than a Roll Royce, yet one is a necessity and the other luxury. So what is the common quality? The only thing in common is they are all products of human labour. The amount of human labour contained in a commodity is expressed in time: weeks, days, hours, minutes.
To go back to the example: all these commodities can be expressed in terms of their common factor, labour-time. But in exchange, commodities are looked at differently. The special character is lost sight of and they appear as so many units of average labour. In exchange we are now comparing the amounts of human labour in general contained in the commodities. All labour, in exchange, is reduced to average simple units of labour. It is true that the commodity produced by skilled labour contains more value than that produced by unskilled. Therefore in exchange, the units of skilled labour are reduced to so many units of unskilled, simple labour.
Explained simply, the value of a commodity is determined by the amount of average labour used in its production. Or how long it takes to produce. But left like this, it appears that the lazy worker produces more values than the most efficient worker!
Let us take the example of a shoemaker who decides to use the outdated methods of the Middle Ages to produce shoes. Using this method, it takes him a whole day to make a pair of shoes. When he tries to sell them on the market, he will find that they will only fetch the same as shoes produced by the better equipped more modern factories. If these factories produce a pair of shoes in, say half an hour, they will contain less labour and therefore less value and will be sold cheaper.
This will drive the shoemaker using medieval methods out of business. His labour producing a pair of shoes after half an hour is wasted labour, and unnecessary under modern conditions. On pain of extinction he will be forced to introduce modern techniques and produce shoes at least equal to the necessary time developed by society. At any given time, using the average labour, machines, methods, etc. This is governed by the level of technique in society.
In the words of Marx, all commodities must be produced in a socially necessary time. Any more labour-time spent over and above this will be useless labour, causing costs to rise and making the firm uncompetitive. So to be more precise, the value of a commodity is determined by the amount of socially necessary labour in the article. Naturally, this labour time is continually changing as new techniques and methods of work are introduced.
Competition drives the inefficient to the wall. Thus we can also understand why precious gems have more value than everyday items. More socially necessary labour time is needed to find, and extract the gems, than the production of ordinary commodities. Their value therefore being considerably higher. Again a thing can be a use value without having any value, i. Therefore labour is not the only source of wealth, i. From the above we can see that an increase in productivity will increase the amount of things produced material wealth , but can reduce the value of the things concerned, i.
Increased productivity therefore results in an increase in wealth. With two coats two people can be clothed, with one coat only one person. Nevertheless, the increase in the quantity of material wealth may correspond with a fall in the magnitude of its value. Instead of saying a good is worth so much butter, meat, cloth, etc. The money expression of value is price. Gold was used because of its qualities. It concentrates much value in a small amount, can easily be divided into coins, and is also hard wearing. As with all commodities, the value of gold itself is determined by the amount of labour-time spent on its production.
For example, say it takes 40 hours labour to produce one ounce of gold. Then all the other goods that take the same time to produce are equal to that ounce of gold.
Those that take half the time equal half the amount, etc. Due to the changes in productive technique and the increase in the productivity of labour, all the values of commodities are continually fluctuating, like so many trains in a station pulling in and out at differing times.
If you take any train as a standard which is moving off to gauge the movement of others, it would lead to confusion. Only by standing on the firm platform can you judge accurately what is happening.