Saturday, June 04, 2005

Where Marx was right (and wrong)

Looking back through the TAPPED archives, I found this from Matt:

Social Security survived the transition from a 16:1 worker/retiree ratio to a 3:1 worker/retiree ratio and now the Republicans expect us to believe that moving from 3:1 to 2:1 is impossible? The answer to the riddle, of course, is the magic of productivity growth. One worker circa 2005 -- armed with his higher median level of education, five decades of additional capital accumulation, massive technological improvements, and Flynn effect-driven increases in raw intelligence -- can produce the goods and services of many workers circa 1955.

One of my favorite things about Marx is his faith in capitalism. Really. Marx believed that capitalism was necessary, since it could develop the forces of production to such a high level of efficiency that eventually enormous resources could be cranked out at the flip of a switch. That's productivity, and it sure has increased under capitalism! Marx also was right about another, less pleasant feature of capitalism, at least in its purer forms -- it generates massive inequalities. That's why Marx saw late capitalism as a time when enormous resources would be generated, but they'd be concentrated in the hands of a few super-rich individuals. The proletarian majority would be huge and impoverished. But when they took over, they'd redistribute the awesome gains of the factories they took control of. Everyone would have enough and be happy, due to the awesome legacy of capitalism.

Marx was wrong in thinking that a sudden violent revolution would be necessary to generate a more equitable distribution of resources. In democracies, the proletarian majority can vote for laws that redistribute wealth down the income scale (Social Security, among other things) allowing them to get their share of the resources without any violent redistribution. Of course, some countries like Russia and China weren't democracies when the number of unhappy proletarians got big enough for revolution. So that's where you actually got Communist revolutions. I don't understand why Marx thought the proletariat would be held down until the resources were developed fully enough -- given that the rich would be at their weakest early on in capitalism when they didn't have such enormous resources to expend in their defense, it seems that jumping the gun was inevitable.

In Social Security, we can see where Marx was wrong and where he was right.


Julian Elson said...

It's been a while since I've read Capital, but I think Marx's point was that, paradoxically, the bourgeoisie DON'T get get more powerful as a class as capital accumulates. Rather, competition and diminishing returns on capital drive profit margins ever lower. The proletariat, when it revolts, doesn't revolt against a fat and happy bourgeoisie with ever growing influence and power. It revolts against a bedraggled, pathetic bourgeoisie unable to pay its own workers due to the vicious competitiveness of capitalism.

Mark H. Foxwell said...

Hi, I was going to post a comment here but I see there is a more active thread on the subject of Marxist economics (not really) on a later post

" "Yglesias-Sinhababu Marx correspondence""

So I will put it there