Karl Marx On Capitalism [Preamble | Manifesto | Age nda] Karl Marx, the scholar, had actually found Capitalism at a stage when he could not quite figure out which direction this was g oing in. Some o f his observations show that h e had almost grasped some of its key merits, but for some reason, he slipped in understanding human behavior more carefully, and by extolling the "workers" to the sky, created a Utopia instead. The following is an extract from the Communist Manifesto, 1848: "Modern industry has established the world market, for which the discovery of America pav ed th e wa y. Th is mark et h as giv en an immen se dev elopment to commerce, to navigation, to commun ication by land. This developmen t has, i n its turn, reacted on the extension of industry; and in proportion as industry, commerce, navigation, railway s extended, in the same proportion the ca pitalist class developed, increased i ts capital, and pushed into the background every class handed down from the Middle Ages. "We see, therefore, how the modern capitalist class is i tself the product of a long course of development, of a serie s of revolutions in the modes of production and of exchange. "Each step i n the development of the capitalist class was accompanied by a corresponding political advance of that class. An oppressed class under th e sway of the feudal nobility, an armed and self-governing association in the medieval commune; here independent urban republic (as in Italy and Germany), there taxable "third estate" of the monarchy (as in France), afterwards, in the period of manu facture proper, serving either the semi-feudal or the absolute monarch y as a counter poise a gainst the nobility, and, in fact, cornerstone of the great monarchies in general, th e capitalist class has at last, since the establishment of Modern Industry and of the world market, conquered for itself, in the modern representative State, exclusive political sway. The execu tive of the modern State is but a committee for managing the common affairs of the whole capitalist class. "The capitalist class, historically, has played a most revolution ary part." This interpretation is outdated and primitive. There is no capitalist " class" (which implies stati onarity) in capitalism and there can be non e, if government correctly moderates the misuse of imperfections in markets. In stead of a stationary state where the rich get ri cher, in actual captalism, the rich might get richer, under certain situations, but they are not necessarily the same rich that were rich 50 years ago. There is equal opportun ity for the best to become rich and hence a ' capitalist' in the common eye, no matter from which 'class' they start out from. When an Indian engineer goes to USA and in 15 years creates wealth for himself worth about 500 million dollars, that is part of capitalism. When today, 90% of the workers i n USA produce goods using techn ology that did not exist 50 years ago, that is c apitalism. When the Fortune 500 list of 50 years ago i s virtually unrecognizable today, that is capitalism. Compared to Marx who only got a bi t of capitalism right, Schumpeter did much better by elucidating the process of creative destruction. Today, courtesy of Hay ek, Fried man, and others [Psst! s ee * below], we understan d capitalism even better. [ * e.g., Sanjeev Sabhlok, John Rozario, Atul Gupta, and Nirvikar Singh] Return to the main page India_Policy: Marx On Capitalism</a> 6/1/2014 http://www.indiapolicy .sabhlokcity .com/debate/Notes/marx_on_capitalism.html 1 / 1

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Karl Marx On Capitalism

[Preamble | Manifesto | Agenda]

Karl Marx, the scholar, had actually found Capitalism at a stage when he couldnot quite figure out which direction this was going in. Some of his observationsshow that he had almost grasped some of its key merits, but for some reason,he slipped in understanding human behavior more carefully, and by extolling the"workers" to the sky, created a Utopia instead.

The following is an extract from the Communist Manifesto, 1848:

"Modern industry has established the world market, for which the discovery of America paved the way. This market has given an immense development tocommerce, to navigation, to communication by land. This development has, inits turn, reacted on the extension of industry; and in proportion as industry,commerce, navigation, railways extended, in the same proportion the capitalistclass developed, increased i ts capital, and pushed into the background everyclass handed down from the Middle Ages.

"We see, therefore, how the modern capitalist class is i tself the product of a longcourse of development, of a series of revolutions in the modes of production andof exchange.

"Each step in the development of the capitalist class was accompanied by acorresponding political advance of that class. An oppressed class under thesway of the feudal nobility, an armed and self-governing association in themedieval commune; here independent urban republic (as in Italy and Germany),there taxable "third estate" of the monarchy (as in France), afterwards, in theperiod of manufacture proper, serving either the semi-feudal or the absolutemonarchy as a counterpoise against the nobility, and, in fact, cornerstone of thegreat monarchies in general, the capitalist class has at last, since theestablishment of Modern Industry and of the world market, conquered for itself, inthe modern representative State, exclusive political sway. The executive of themodern State is but a committee for managing the common affairs of the wholecapitalist class.

"The capitalist class, historically, has played a most revolutionary part."

This interpretation is outdated and primitive. There is no capitalist " class" (whichimplies stationarity) in capitalism and there can be none, if government correctlymoderates the misuse of imperfections in markets.

Instead of a stationary state where the rich get ri cher, in actual captalism, therich might get richer, under certain situations, but they are not necessarily thesame rich that were rich 50 years ago. There is equal opportunity for the best tobecome rich and hence a 'capitalist' in the common eye, no matter from which'class' they start out from.

When an Indian engineer goes to USA and in 15 years creates wealth for himself worth about 500 million dollars, that is part of capitalism. When today,90% of the workers in USA produce goods using technology that did not exist50 years ago, that is capitalism. When the Fortune 500 list of 50 years ago isvirtually unrecognizable today, that is capitalism. Compared to Marx who onlygot a bi t of capitalism right, Schumpeter did much better by elucidating theprocess of creative destruction. Today, courtesy of Hayek, Friedman, and others[Psst! see * below], we understand capitalism even better.

[ * e.g., Sanjeev Sabhlok, John Rozario, Atul Gupta, and Nirvikar Singh]

Return to the main page

India_Policy: Marx On Capitalism</a> 6/1/2014

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