Karl Marx on Labor Day

The Marxist school of economic thought comes f...

Image via Wikipedia

It’s Labor Day and my thoughts turn to Karl Marx. My impression is that the general public, to the extent they think about old Karl at all, think of him as some kind of political theorist whose ideas led to the disaster of Communism. There’s some truth to that, but Marx was mostly an economist who had some brilliant insight (as well as a few boneheaded ones). His notion of “historical forces” are pure conjecture and the source of much subsequent anguish. But he did rightly deduce a lot of things about the cost of labor and the cost of capital and how, over time, it was inevitable that labor would become of less and less importance as a factor of production. Some people interpret this to mean a “race to the bottom”, ignoring the fact that as the real cost of labor declines, so does the real cost of capital.

Marx didn’t foresee the enormous improvements in technology ahead, nor the need for complex organizations to cope with those technologies. He didn’t foresee the growth of capitalist participation, where many laborers are also capitalists. He certainly didn’t foresee the growth of the knowledge industries, where the “big earners” are people who possess skills – he didn’t see the arrival or impact of human capital.

I’m not knocking Marx. His contemporaries didn’t foresee these things either.

Marx is worth reading – he was a brilliant thinker. He strikes a chord for some people. But beware: Marx is from a different age and worked with assumptions that aren’t especially germane in today’s world. Marx isn’t the devil, but he’s not  the path to salvation either.


4 responses to this post.

  1. […] Karl Marx on Labor Day (jimdew.wordpress.com) […]


  2. Karl Marx argued that revolution was impossible in a society that lived on the family farm. He believed that urbanization and industrialization were both requirements for a Communist revolution. In the 1920s, half of all Americans lived on a farm. Family farms that remained free of debt, enjoyed full-employment during the 1930s. Those that used debt to expand, were destroyed.

    The Federal Reserve Bank is a Marxist and Fascist institution. It creates the debt necessary to enslave a Republic, and the politics that are required to increase our indebtedness. Whether this country spends money on social programs (Socialism), or military expansion (Fascism), we end up borrowing money from the Federal Reserve. As an added bonus, the privately owned corporation also charges us interest to use its Federal Reserve Notes as our currency!


  3. Posted by NormallyRude on February 11, 2012 at 6:06 pm

    I would agree that Marx didn’t foresee the technology that we would have today – how could he? But for him, it really didn’t matter what type of technology it was (remember moving from an ox to a tractor was like us moving from land lines to smart phones). But he did foresee that as the technology improves, the need for more complex organizations would emerge. He asserted, through his sociohistorical, dialectical analyses that as technology advances, the divisions of labor in society would expand, and as that happened societies would become more complex, and along with that would be more complex organizations. He also did foresee the growth of the growth of capitalist participation in that he could see that it would eventually become a global phenomenon. I don’t understand what you mean when you say,
    “where many laborers are also capitalists.” I don’t know of any laborers who are capitalists. Who are they?


    • Posted by jimdew on February 12, 2012 at 7:21 am

      Anyone who has a 401K or similar plan is a capitalist. Over half of American households own stocks, either directly or indirectly. The percentage is even larger if you include anyone who benefits from third party ownership arrangements such as pension plans.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: