Karl Marx - The Revolutionary Economist

There are few economists who have become both so reviled, and admired as Marx. I
ndeed some would even question whether Marx deserves to be called an economist;
others would prefer terms like 'bungling and failed revolutionary'. However, the
re are certainly few economists who read so widely and wrote so much as Marx. Wh
ether you love or loathe Marx, we cannot deny his writings had profound influenc
e on the twentieth century.
What Did Marx Believe?
Marx believed society was an evolving struggle. He believed Capitalism was an ev
olving structure. However, unlike Adam Smith, Marx did not believe this evolutio
n was always smooth, nor did he believe it evolved for the best. In fact Marx, p
redicted the collapse of Capitalism.
Marx placed great value on economic forces for explaining social structures. He
argued that institutions such as church, education and the state evolved to supp
ort the capitalist class. But, Marx, was revolutionary in placing so much emphas
is on the power of economic forces to influence society.
Marxist Critique of Capitalism.
Marx examined society and argued that the wealth of capitalists was based on pay
ing labour less than their true labour value (underpaid labour). This difference
between the true labour value and the wages paid led to the accumulation of mon
ey capital.
Marx argued that Capitalism was inherently unstable because:
Workers were abused and disenfranchised. As capitalism developed, Marx predicted
, workers would become increasingly alienated and seek to overthrow the capitali
st class.
Capitalists could make bad decisions about what to produce
Growth was not guaranteed but could become volatile leading to periods of econom
ic slump. Marxists certainly point to the Great Depression of a vindication of h
ow capitalism can fail.
Failings of Marxism
The proletariat mostly became better off. Economic growth did enable Capitalists
to make more profit, but, ultimately, workers benefited from real wage rises. I
n the nineteenth and twentieth century, labour was often exploited with poor con
ditions and low wages. But, workers have become better off. After all, it is in
the interests of Capitalists to have a workforce who can afford to buy their goo
ds.
The elusive 'dictatorship of the Proletariat' in practice tended to be more abou
t 'dictatorship' and less about the proletariat. In some ways Marx was a democra
t. He was criticising a system which did not extend the vote to large sways of t
he working class; he wanted these disenfranchised workers to be enfranchised. Bu
t, in practise, Marxism is indelibly linked to the totalitarian state of the Sov
iet Union.
Why Mention Marxism - Surely it is all History?
I can imagine some readers (especially in America) thinking why even mention Mar
x? Surely, he was hopelessly flawed and the inspiration behind the despotic Stal
inist regime? It is worth mentioning what John Maynard Keynes says on Marxism (1
931)
"How can I accept the [Communist] doctrine, which sets up as its bible, above an
d beyond criticism, an obsolete textbook which I know not only to be scientifica
lly erroneous but without interest or application to the modern world? How can I
adopt a creed which, preferring the mud to the fish, exalts the boorish proleta
riat above the bourgeoisie and the intelligentsia, who with all their faults, ar
e the quality of life and surely carry the seeds of all human achievement? Even
if we need a religion, how can we find it in the turbid rubbish of the red books
hop? It is hard for an educated, decent, intelligent son of Western Europe to fi
nd his ideals here, unless he has first suffered some strange and horrid process
of conversion which has changed all his values."[13]

Why Marx is Important

Marx was a revolutionary, he enabled a powerful critique of capitalism. This was
perhaps essential for more informed criticism to emerge over time. We do not ha
ve to agree with a revolutionary to acknowledge that they bring new issues into
a different perspective. I do not agree with Plato, but, at the time his work wa
s important for the development for Western thought.
Marx never lived to see the Russian Revolution. I imagine he would have generall
y supported Lenin and Trotsky, but would have been disgusted with Stalin who was
only a Communist out of convenience to achieve his goal of absolute power.
Whether we like it or not, the ideals of the Communist Manifesto did inspire man
y. At a time of vast inequality and widespread poverty, it is hardly surprising
that many were excited by a vision of a society based on equality and fairness r
ather than the abject poverty and inequality prevalent in nineteenth century soc
iety