Transcript for:
Marx's Analysis of Capitalism's Flaws

Most people agree that we need to improve our economic system somehow. Yet we're also often keen to dismiss the ideas of capitalism's most famous and ambitious critic, Karl Marx. This isn't very surprising.

In practice, his political and economic ideas have been used to design disastrously planned economies and nasty dictatorships. Nevertheless, we shouldn't reject Marx too quickly. We ought to see him as a guide whose diagnosis of capitalism's ills helps us to navigate towards a more promising future. Capitalism is going to have to be reformed, and Marx's analyses are going to be part of any answer. Marx was born in 1818 in Trier in Germany.

Soon he became involved with the Communist Party, a tiny group of intellectuals advocating for the overthrow of the class system and the abolition of private property. He worked as a journalist and had to flee Germany eventually settling in London. Marx wrote an enormous number of books and articles, sometimes with his friend Friedrich Engels.

Mostly, Marx wrote about capitalism, the type of economy that dominates the Western world. It was, in his day, still getting going, and Marx was one of its most intelligent and perceptive critics. These were some of the problems he identified with it. Modern work is alienated.

One of Marx's greatest insights is that work can be one of the sources of our greatest joys. But, in order to be fulfilled at work, Marx wrote that workers need to see themselves in the objects they have created. Think of the person who built this chair.

It's straightforward, strong, honest and elegant. It's an example of how, at its best, labour offers us a chance to externalize what's good inside us. But this is increasingly rare in the modern world. Part of the problem is that modern work is incredibly specialized. Specialized jobs make the modern economy highly efficient.

But they also mean that it's seldom possible for any one worker to derive a sense of the genuine contribution they might be making to the real needs of humanity. Marx argued that modern work leads to alienation, entfremdung. In other words, a feeling of disconnection between what you do all day and who you feel you really are and what you think you'd ideally be able to contribute to existence.

Modern work is insecure. Capitalism makes the human being utterly expendable. Just one factor among others in the forces of production and one that can ruthlessly be let go the minute costs rise or savings can be made through technology.

And yet, as Marx knew deep inside each of us, we don't want to be arbitrarily let go. We're terrified of being abandoned. Communism isn't just an economic theory.

Understood emotionally, it expresses a deep-seated longing that we always have a place in the world's heart, that we will not be cast out. Workers get paid little, while capitalists get rich. This is perhaps the most obvious qualm that Marx had with capitalism. In particular, he believed that capitalists shrink the wages of the labourers as much as possible in order to skim off a wide profit margin. He called this primitive accumulation, ursprüngliche Akkumulation.

Whereas capitalists see profit as a reward for ingenuity and technological talent, Marx was far more damning. Profit is simply theft, and what you're stealing is the talent and hard work of your workforce. However much one dresses up the fundamentals, Marx insists that at its crudest, capitalism means paying a worker one price for doing something and then selling it to somebody else at a much higher price.

Profit is the fancy term for exploitation. Capitalism is very unstable. Marx proposed that capitalist systems are characterized by a series of crises. Every crisis is dressed up by capitalists as being somehow freakish and rare and soon to be the last one.

Far from it, argued Marx. Crises are endemic to capitalism and they're caused by something rather odd. The fact that we're able to produce too much, far more than anyone needs to consume. Capitalist crises are crises of abundance rather than, as in the past, crises of shortage.

Our factories and systems are so efficient we could give everyone in this planet a car, a house, access to a decent school and a hospital. And that's what so enraged Marx but also made him so hopeful too. Few of us actually need to work because the modern economy is so productive. But rather than seeing this need not to work as the freedom it is, we complain about it masochistically and describe it by pejorative word unemployment. We should call it freedom.

There's so much unemployment for a good and deeply admirable reason. Because we're so good at making things efficiently. We're not all needed at the coalface. But in that case, we should, thought Marx, make leisure admirable. We should redistribute the wealth of the massive corporations that make so much surplus money and give it to everyone.

This is, in its own way, as beautiful a dream as Jesus'promise of heaven. But a good deal more realistic sounding. Capitalism is bad for capitalists.

Marx didn't think that capitalists were evil. For example, he was acutely aware of the sorrows and secret agonies that lay behind bourgeois marriage. Marx argued that marriage was actually an extension of business, and that the bourgeois family was fraught with tension, oppression and resentment, with people staying together not for love, but for financial reasons. Marx believed that the capitalist system forces everyone to put economic interests at the heart of their lives, so that they can no longer know deep, honest relationships.

He called this psychological tendency commodity fetishism, varen fetishismus, because it makes us value things that have no objective value. He wanted people to be freed from financial constraint, so that they could at last start to make sensible, healthy choices in their relationships. The 20th century feminist answer to the oppression of women has been to argue that women should simply be able to go out to work. But Marx's answer was more subtle.

This feminist insistence merely perpetuates human slavery. The point isn't that women should imitate the sufferings of their male colleagues, it's that men and women should have the permanent option to enjoy leisure. Why don't we all think a bit more like Marx? An important aspect of Marx's work is that he proposes that there's an insidious subtle way in which the economic system colors the sort of ideas that we end up having.

The economy generates what Marx termed an ideology. A capitalist society is one where most people, rich and poor, believe all sorts of things that are really just value judgments that relate back to the economic system. For example, that a person who doesn't work is worthless, that leisure beyond a few weeks a year is sinful, that more belongings will make us happier, and that worthwhile things and people will invariably make money. In short, one of the biggest evils of capitalism is not that there are corrupt people at the top, this is true in any human hierarchy, but that capitalist ideas teach all of us to be anxious, competitive, conformist and politically complacent. Marx didn't only outline what was wrong with capitalism.

We also get glimpses of what Marx wanted the ideal utopian future to be like. In his Communist Manifesto, he describes a world without private property or inherited wealth, with a steeply graduated income tax, centralized control of the banking, communication and transport industries, and free public education. Marx also expected that communist society would allow people to develop lots of different sides of their natures.

In communist society it's possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, just as I have a mind without ever becoming hunter, fisherman, herdsman or critic. After Marx moved to London, he was supported by his friend and intellectual partner Friedrich Engels, a wealthy man whose father owned a cotton plant in Manchester. Engels covered Marx's debts and made sure his works were published. Capitalism paid for communism.

The two men even wrote each other adoring poetry. Marx was not a well-regarded or popular intellectual in his day. Respectable, conventional people of Marx's day would have laughed at the idea that his ideas could remake the world. Yet, just a few decades later, they did. His writings became the keystone for some of the most important ideological movements of the 20th century.

But Marx was like a brilliant doctor in the early days of medicine. He could recognize the nature of the disease, although he had no idea how to go about curing it. At this point in history, we should all be Marxists, in the sense of agreeing with his diagnosis of our troubles.

But we need to go out and find the cures that really will work. As Marx himself declared, and we deeply agree, philosophers until now have only interpreted the world in various ways. The point, however, is to change it.