Karl Marx and Capitalism

Monday March 20, 2017

Marx was frothing “death to the capitalism”. He was not saying so because of personal hatred against the system. He argued that one day capitalism would perish under its own gravity.

E.K. Hunt, a professor of economics at the University of Utah wrote in his book, Property and Prophets, mentioning Marx had a faith that, based on analysis, the internal contradictions and antagonisms within the capitalist system would eventually destroy the capitalism itself.

What could come after the capitalism, as Marx pointed out, would be the socialism. To explain this, we need to know the mode of production and two subset concepts: forces of production (the machines, etc) and the relations of production (social relationship among people). Those who own the forces of production are called capitalists and those who work for the capitalists are the working class (a.k.a proletariat).

He envisaged that capitalists would be overthrown by the proletariat, eventually creating a classless society in which the means of production were owned in common by all. But how so?

From what I could understand, it can be summarized from a simple adage: the richer gets richer, the poorer becomes poorer. This partly explains the capital accumulation to which in itself is a loop: ownership of capital would lead capitalists to gain profit, then reinvest to increase capital to gain more profit, and then reinvest more to keep the loop moving. The important consequence of this is that concentration of wealth and economic power would be in the hands of fewer and fewer capitalists. And guess who would take the toll—and if you’ve guessed it right—it would be the proletariat.

Why? The capitalists, over the time, would gain more and more money but the working class would be having their pay stagnated, or if it would ever increase at all, it wouldn’t be increasing as much.

p.s.: I just got the book, Property and Prophets, from Amazon yesterday. I need it for my exam on history of economic thoughts next week.