One of the first and most persuasive advocates of modern capitalism was Adam Smith. The most serious challenge to Adam Smith and his followers came from Karl Marx, a nineteenth century German. The son of a Prussian lawyer, the methodical Marx was a worthy and resourceful opponent. He unfolded his economic theories in his monumental Das Kapital, a work on which he spent eighteen years of research and writing. Marx s main objection to the capitalistic system was that it was unfair to workers.
To show this, he developed his now famous theory of surplus value. This theory involves the relationship between the worker and his product and the employer and his profit. It implied that whatever profits the capitalist class acquired, it stole from the workers. Seventy years after his death about a third of the human race was living under governments that called themselves Marxist. Marxism is more that just a set of bright ideas which anyone, at any time, might have thought up.
It is rather a time and place phenomenon, which acknowledges that the very categories in which it thinks such as abstract labour, the commodity, the freely mobile individual and so on could have emerged from a heritage of capitalism and political liberalism (Eageton, 9). Karl Marx s ideas had a greater influence in a shorter time then any other thinker in history. Karl Marx was born in the Germany in a town called Trier. His parents were Jews who converted to Lutheranism when he was six, but Marx was anti-religious by the time he was a teenager. His creed even then was, Criticism of religion is the foundation of all criticism (Magee, 165).
Marx did little paid work in the course of his life, instead, he chose to live in poverty most of the time and continue his studies and his writing. Marx went to Paris in 1843, where he met the young Friedrich Engels. Engels came from a rich German family that lived in Manchester, where they owned a textile business. Engels maintained Marx financially for the rest of Marx s life, enabling him to produce his work. A few years after he met Engels, Marx elaborated on the basic system of ideas that was to became known as Marxism, and became the intellectual foundation of Communism.
Marx was expelled from France in 1845, so he went to Brussels, where he and Engels wrote the Communist Manifesto, published in 1848 (Magee, 179). Marx was duly expelled from Brussels in the same year, and ended up in London in 1849. He spent the rest of his life there. Most of his writings consisted of brilliant pamphlets and articles, but there was one full-length book, his masterpiece, Das Kapital, meaning simply Capital, published in 1867. It is one of the most influential books in history. Marx died in London in 1883, and is buried in Highgate Cemetery.
Within seventy years after Marx s death there were people living under governments called Marxist. These included countries in Eastern Europe, Russia, the former Tsarist land empire, and China (Gurley, 89). Nothing like this had ever happened before, nor will it probably happen again. It was amazing, the fact that Marxism was one continuous failure. The ideas conquered, but the societies that grew from it collapsed or separated themselves from Marxist policies (Magee, 167). During this period of ideological success, Marxism had an influence on the arts and politics.
Famous people in the arts such as playwrights Jean Paul, the poet Pablo Neruda and the painter Pablo Picasso regarded themselves as Marxists or Communist (Magee, 178). Marxism and capitalism were engaged in an intense worldwide struggle. Societies organized according to Marxist principles seemed to be coming up everywhere, they spread from zero to a third of the world, (Gurley, 3). The ideals of Marxism inspired, as capitalism did not, millions of people around the world, mostly the poor, but many intellectuals and a few priests and other clergy.
Marx and Engels believed that above capitalism itself would rise a still higher form of society, socialism, where the workers would be the ruling class. They could be both admirers and critics of capitalism, but at the same time recognized exploitation, alienation and troublesome features of the new society, which they thought would be overcome when the working class successfully built the system. Marx s solution to this exploitative situation was simple, the means of production and exchange should be taken from the capitalist and turned over to the workers.
This would eliminate the problem of surplus value, since the working class would be producing and exchanging goods for itself as a collective unit (Leone, 5). The labor theory of value, even if it could be granted to be valid for every other commodity, can never be applied to the commodity of labor. This would imply that workmen, like machines, are being produced according to rational cost calculations (Schumpeter, 27). Since they are not, there is no guarantee to assume that the value of labor power will be equal to the man hours that enter into production.
Marx thought that the development of modern technology was to go on putting more and more people out of work. This would divide society into two classes, the capitalist and the workers. Capitalist exploitation would worsen the living standards of workers until, one day the workers would revolt violently. The overthrow of capitalism would usher in a socialist age based on common ownership of property. Once socialist ownership had benn consolidated, true communism would arrive (Gurley, 65). Governments would disappear and people would be able to live in complete liberty.
Society s guiding principle would then be from each according to his abilities, and to each according to his needs. Marx s theories did not develop the way he said they would. This was partly because he was mistaken as to the nature of his theory. He believed it to be scientific in the same way as Newton s physics is scientific. What the bourgeoisie produces…is its own gravediggers. Its fall and the victory of the proletariat are equally inevitable, Karl Marx said (Magee, 144). He thought he was able to predict the inevitable future development of society.
Other thinkers were based on simple Utopian dreams, moral uplift or wishful thinking, whereas he had carried out a scientific study of society to discover what forces were actually at work, and had based his political teachings on these realities (Magee, 169). According to Marx and Engels, human nature is determined by the mode of production in which people work to maintain human life, and since the mode of production changes, so does human nature (Gurley, 9). Marx s theories have been the source of continued disagreement. His detractors challenge the uselessness of the labor theory of value and the idea of surplus value.
Among socialists, communists have accepted the bulk of Marx s theories and applied them in countries subject to communist rule. Through gradual reform, rather than revolution, socialists in countries such as Canada have played a major part in social reform and in the creation of modern mixed economies in which governments are much more important than they were a century ago (Mclellan, 76). The capitalist system has changed over the years in the industrialized democratic nations of the world. The main reason has been the ongoing changes between government and industry and also between industry and labor.
Government has been playing a bigger role in business affairs. The proliferation of laws regulating monopolies, the pricing of goods child labor, and minimum wage scales have succeeded in controlling or removing most of the excesses which characterized industry in the 19th century (Leone, 54) Through collective bargaining, unions have won higher wages, better working conditions, and benefits for their members. Some may claim that when the government is able to interfere in economic affairs, there will be inefficiency and an erosion of political freedom.
Under the present system, it is argued, the worker never has, and never will, receive a fair share of the pie. When the capitalist can t make a profit, they turn off the machines and they turn us off like we were part of the machines. If General Motors can t make enough money, they just lay off 10 000 people, as if they were turning off a machine, said Peter Camejo; Socialist Workers Party candidate for president in 1976, from a speech delivered at the University of Chicago on December 2, 1975 (Leone 57).
By the end of the nineteenth century it was becoming clear that things were not turning out as Marx s theories said they must. Nowhere in the world was there a society where changes were happening according to Marx s scientific laws of historical development. This gave rise to something that became known as revisionism. Different Marxist thinkers started trying to revise Marx s theories so as to fit in with the contrary evidence and also started to reinterpret the evidence to fit in with Marx s theories (Magee, 170).
Out of this grew a plurality of different Marxist schools of thought, at odds with one another, sometimes violently so. What led in with the end to the withering away of most of them was the fact that wherever Marxist political movements came to power the result was, invariably and without exception, a bureaucratic dictatorship, a society nothing like the one the theory had claimed was inevitable (Magee, 168).