Karl Marx (1818-1883) and Friedrich Engels (1820-1905) [ 1 ]

1. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [1]

2. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [2] Marx - Outline • The “Theory of History”: ‘Historical Materialism’ [19] • Capitalism’s “Contradictions” - Three Major Theses: (1) Value = (somehow) Labour [6, 13, 25] (2) Exploitation [29] (3) Class Conflict [34] (3a) Ideology [17, 54] 4. Socialism: “all power to the people” - planning ... [47, 56] (a) the “dictatorship of the proletariat” [59] (b) the “ultimate” stateless society: “From each according to his ability, to each according to his need” [52] (c) Marx’s bad economics [68-70] 5. An important question: what’s it all about? probably equality (despite Marx’s dumping on “justice” [45])

3. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [3] • 1. Early Manuscripts (1844): Estranged [aka “Alienated”] Labour • the alienation of labour: • First, the fact that labour is external to the worker • Second, self-estrangement - the relation of the worker to his own activity as an alien activity not belonging to him • Third, alienation from the human species. (This is via alienation from nature in general (“man’s inorganic body”) • “First it estranges the life of the species and individual life, and then it makes individual life in its abstract form the purpose of the life of the species, likewise in an abstract and estranged form.” • - What does all this stuff come to? • A lot of it is romanticism The question is whether it is also romantic rubbish My suggested answer is: yup! Frankly, all this manufactured stuff, and the changes we make to the environment in order to produce it, is well worth it! - Certainly the worker himself thinks so!

4. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [4] • Estranged Labour (continued) • “So much does labour's realization appear as loss of reality that the worker loses reality to the point of starving to death.” • [cute, but in fact false.] • “objectification”: loss of the object - the worker is robbed of the objects most necessary not only for his life but for his work. • [note that if you lack what is necessary for life, then you’re dead!] • “the more objects the worker produces the fewer can he possess” • and “the more he falls under the dominion of his product, capital.” • “All these consequences are contained in the definition that the worker is related to the product of his labour as to an alien object.” • [So who wants to possess a million ball bearings?] • [The question is whether he gains from the trade...] • “nature provides labor with the means of life” • (1) with objects on which to operate • (2) means for the physical subsistence of the worker himself. • “Thus the more the worker by his labour appropriates the external world, the more he deprives himself of means of life.” • 1. “the external world more and more ceases to be an object belonging to his labour - to be his labour's means of life” • [?? Last I heard workers actually did work in the external world...]

5. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [5] • [work] “more and more ceases to be means for the physical subsistence of the worker.” • [Presumably this is based on the claim that workers were starving etc. But they weren’t (for one thing. We’ll soon get to Marx’s theory according to which they were supposed to be ...] • [Note: As work becomes more efficient, the worker’s specific product is “less and less” something he either wants or could live on. True. • But then, he is paid for doing what he does and he buys a better living with this than he could make for himself. • So - where’s the beef?] • Thus the worker becomes a slave of his object, • In that: “it is only as a worker that he continues to maintain himself as a physical subject, • and that it is only as a physical subject that he is a worker. • [This raises the question: Well, so? • also the comment: Funny thing for a “materialist” to be complaining about!]

6. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [6] • “The laws of political economy express the estrangement of the worker” • 1. the more the worker produces, the less he has to consume; • Comment: (1) assumes diminishingreal wages - empirically false and economic nonsense • 2. the more values he creates, the more valueless he becomes; • Comment: (2) speak for yourself, Karl! [... or does he mean that more output gets the workers less wages? That’s in general not true, however.] • 3. the better formed his product, the more deformed the worker; • Comment: (3) life expectancy rose throughout the 19th c. How did that happen?? • 4. the more civilized his object, the more barbarous the worker; • Comment: (4) is working away in primitive conditions with hand labor “civilized”? • 5. the mightier labour becomes, the more powerless the worker; • Comment: (5) the worker produces far more per person/hour. (In close cooperation with many others, of course. Does the socialist Marx object to that??) • 6. the more ingenious labour becomes, the duller becomes the worker • Comment:(6) this depends.... but was sometimes true - but it’s not an inherent necessity (modern workers have to be pretty smart...] • - the question is, how much does it matter? And how rectifiable is it? example, the Swedish factory which put teams together making entire engines instead of just bits In any case, this is a complaint about industrial technology, not about capitalism

7. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [7] • Political economy conceals the estrangement inherent in the nature of labour by not considering the direct relationship between the worker (labourer) and production. • Marx’s assertions: “Labour produces: • for the rich wonderful things - but for the worker, privation. • for the rich, palaces - but for the worker, hovels. • for the rich, beauty - but for the worker, deformity. • It replaces labour by machines - and it turns workers into machines. • It produces intelligence - but for the worker, idiocy, cretinism.” • [All this rests on empirical claims that mostly aren’t in fact true]

8. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [8] • II. estrangement in the act of production • First, labour is external - it does not belong to his “essential being” • in his work - he does not affirm himself but denies himself, • not content but unhappy, does not develop freely • - mortifies his body and ruins his mind • [note: Marx complained of the “idiocy of country life” too...] • He only feels himself outside his work; in his work feels outside himself • “at home when he is not working, and when working not at home” • [cute, but is that necessarily bad?] • His labour is therefore not voluntary, but coerced; it is forced labour • [interesting use of the word therefore’!] • “not the satisfaction of a need - merely a means to satisfy needs external to it.” • “Work’s alien character: not his own, but someone else's - does not belong to him - in it he belongs, not to himself, but to another.” • [again - not literally ...] • “not his spontaneous activity” -> It belongs to another; it is the loss of his self. • “in his human functions he feels himself to be an animal.” • What is animal becomes human and what is human becomes animal. • [More Romanticism....]

9. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [9] • III. Man is a “species being” - • “in practice and in theory he adopts the species as his object [?] • “treats himself as a universal and therefore a free being. • “The universality of man is in practice manifested precisely in the universality which makes all nature his inorganic body • “Nature is man's inorganic body • “Man lives on nature - nature is his body • “nature is linked to itself, for man is a part of nature.” • [note: if so, of course, it is impossible for industrial arrangements to undo it] • In estranging from man (1) nature, and (2) himself - estranged labour estranges the species from man. • It turns the life of the species into a means of individual life. • “it makes individual life in its abstract form the purpose of the life of the species, • “likewise in an abstract and estranged form.” • [Is there a real point here? Or is this more romanticism?]

10. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [10] • 2. The Communist Manifesto (1848) • Condemnation of the “bourgeoisie”: • The bourgeoisie is unfit any longer to be the ruling class in society • - to impose its conditions of existence upon society as an overriding law. • “it is incompetent to assure an existence to its slave within his slavery • “it cannot help letting him sink into such a state ... • The essential condition for the existence and sway of the bourgeois class, is the formation and augmentation of capital; • the condition for capital is wage-labor. • Wage-labor rests exclusively on competition between the laborers. • The advance of industry replaces the isolation of the laborers • by their revolutionary combination, due to association. • modern industry, therefore, cuts from under its feet the very foundation on which the bourgeoisie produces and appropriates products. • What the bourgeoisie therefore produces, above all, are its own gravediggers • [More of Marx’s Hegelian penchant for opposites...] • “Its fall and the victory of the proletariat are equally inevitable...”

11. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [11] • Property, Freedom, history: • property relations are subject to historical change • French Revolution: abolished feudal property - replaced it with bourgeois property • communism would be: not the abolition of property generally, but the abolition of bourgeois property • But modern bourgeois private property is based onclass antagonisms, • = the exploitation of the many by the few. • Communism summed up in the single sentence: Abolition of private property. • “Hard-won, self-acquired, self-earned property!” • [Marx, who never did a stick of work in his life, implies that people who don’t “work” don’t deserve to make a lot of money. We’ll see ...!] • Do you mean the property of the petty artisan and of the small peasant, a form of property that preceded the bourgeois form? • - the development of industry has to a great extent already destroyed it • Or do you mean modern bourgeois private property? • But does wage-labor create any property for the laborer? Not a bit. • [Karl didn’t bother to look ....]

12. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [12] • It creates capital, i.e., that kind of property which exploits wage-labor, • (now) property is based on the antagonism of capital and wage-labor. • To be a capitalist, is to have not only a purely personal, but a social status in production. • Capital is a collective product • - the united action of many members, nay, of all members of society, sets in motion. • -> Capital is therefore not a personal, it is a social, power. • So, when capital is converted into common property [by the revolution] • - personal property is not thereby transformed into social property • It is only the social character of the property that is changed. • It loses its class character ... • [uh, huh ....] [This is sophistry. The fact is that the socialist revolution would take possessions from their owners, who lose control over them (which is what ownership consists in). “Socialization” makes a real difference.

13. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [13] • Bad Economics 100: • Let us now take wage-labor. • The average price of wage-labor is the minimum wage • [uh., huh ....] • = what’s absolutely requisite to keep the laborer in bare existence • - “merely suffices to prolong and reproduce a bare existence” • “We by no means intend to abolish personal appropriation of the products of labor, an appropriation that is made for the maintenance and reproduction of human life, and that leaves no surplus wherewith to command the labor of others.” • [??]

14. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [14] • Bad Economics 100: • the laborer lives merely to increase capital • - only insofar as the interest of the ruling class requires it • living labor is but a means to increase accumulated labor • In Communist society: accumulated labor [i.e. capital] is but a means to widen, to enrich, to promote the existence of the laborer • [all this rests on the theorizing in Capital, which we look at soon.] • [i.e., capital will be run in the interest of the workers ... • [...by the Central Committee, of course...!] • In bourgeois society, therefore, the past dominates the present; • in Communist society, the present dominates the past • [more cuteness]

15. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [15] • In bourgeois society capital is independent , while the living person is dependent and has no individuality. [??] • By freedom is meant, under the present bourgeois conditions of production, free trade, free selling and buying. • If selling and buying disappears, free selling and buying disappears also. • talk about free selling and buying has a meaning only in contrast with restricted selling and buying, with the fettered traders of the Middle Ages • - “but have no meaning when opposed to the Communist abolition of buying and selling, of the bourgeois conditions of production, and of the bourgeoisie itself” • The abolition of bourgeois individuality, bourgeois independence, and bourgeois freedom is undoubtedly aimed at [by the communists] • You reproach us, therefore, with intending to do away with a form of property, the necessary condition for whose existence is the nonexistence of any property for the immense majority of society.

16. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [16] • From the moment when labor can no longer be converted into capital, money, or rent, into a social power capable of being monopolized, • - you say, individuality vanishes. • by "individual" you mean no other person than the bourgeois, than the middle-class owner of property • This person must, indeed, be swept out of the way • Communism deprives no man of the power to appropriate the products of society ... • all that it does is to deprive him of the power to subjugate the labor of others by means of such appropriation... • [we’ll see!]

17. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [17] • Culture and Ideology as Class-Relative • Just as, to the bourgeois, the disappearance of class property is the disappearance of production itself, so the disappearance of class culture is to him identical with the disappearance of all culture. • But that culture, the loss of which he laments, is, for the enormous majority, a mere training to act as a machine. • “you apply, to our intended abolition of bourgeois property, the standard of your bourgeois notions of freedom, culture, law, etc. • “Your very ideas are but the outgrowth of the conditions of your bourgeois production and bourgeois property, • “your jurisprudence is but the will of your class made into a law for all • “- a will whose essential character and direction are determined by the economic conditions of existence of your class” • [we bourgeois] transform into eternal laws of nature and of reason, the social forms springing from your present mode of production and form of property • -- historical relations that rise and disappear in the progress of production • --a misconception you share with every ruling class that has preceded you.

18. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [18] • man's ideas, views, and conceptions, in one word, man's consciousness, • changes with every change in the conditions of his material existence, in his social relations and his social life • the history of ideas proves that intellectual production changes its character in proportion as material production is changed • The ruling ideas of each age have ever been the ideas of its ruling class... • [An important Marxian claim. But what does it mean? • Stay tuned ...]

19. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [19] • Mature Marx • 1. Marx’s “Historical Materialism” Law, Morals, Religion, Culture etc. (Social) Relations of Production (Material) Forces of Production Superstructure Base: Main elements: BASE: (a) Relations of production (e.g., A owns B’s labor -> A tells B what to produce ..) (b) Forces of production (e.g. steam power ...)

20. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [20] • SUPERSTRUCTURE: “legal and political”superstructure to which correspond “definite forms of social consciousness” • Thesis: Social productive relations (a) correspond to a definite “stage of development” of (b) material productive forces • Sum of (a + b) constitutes the economic structure of society - the “real foundation” on which rises (3) and (4). • [historical] Materialism: Social Consciousness must be explained from the “contradictions of material life” [“dialectical” Materialism - conflict between the social productive forces and the relations of production -- • -->The mode of production of material life “conditions” the social, political and intellectual life process in general • [‘conditions’? or ‘determines’? Marx says, “Consciousness doesn’t determine our being - social being determines consciousness”]

21. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [21] • [not in selection: “Political power, properly so called, is merely the organised power of one class for oppressing another.” • capitalist State: a “committee for managing the common affairs of the bougeoisie”] • The Key: As productive forces develop, they “conflict with the existing relations of production”; These relations “turn into their fetters” -> an epoch of revolution begins. • Marx’s historical stages: • Primitive Communism Ultra-low tech common ownership • Oriental Despotism slave society • Feudalism peasants go with land... knights rule • Capitalism Private ownership of Means of Production • Socialism Centralized ownership of MP • Communism “From each according to Ability, To each according to his Need” - anarchy on that principle ...

22. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [22] • >> Bourgeois relations of production are “the last antagonistic form of the social process of production” - arising from the social conditions of life of the individuals • - The productive forces “developing in the womb” of bourgeois society create the material conditions for the solution of that antagonism. • This social formation “brings, therefore, the prehistory of human society to a close” • Now for the analysis of the last pre-socialist phase of humanity: Capitalism • Inevitable? ..... • [In the Russian and Chinese cases, the revolutionists jumped stages - • This brings up the question about “inevitability” - the revolutionists apparently felt they could avoid the inevitable! • There are grave doubts about all historicist theories ..... people appear to be quite a bit too cussedly independent to conform to such theories!

23. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [23] • Capital [Das Kapital] • - Marx’s magnum opus - his last word on economic/social theory • In 3 (or 4?) volumes - vol. I, 1867 [vol. 2, 1885; vol. 3, 1894 • a “vol. 4”, was not published in their lifetime • see the Wikipedia article - http://en.wikipedia.org/wiki/Das_Kapital • The book is Marx’s Analysis of the “Capitalist Mode of Production”) • Intended as a work of social science, not ethics • Definition: Capitalism = Free Market economy = Everything (labor and productive equipment, and consumer goods) is owned (and therefore able to be bought and sold) by individuals and privately acting groups [acting for their own various interests - presumptively, to make as much money as possible] • ‘Free” market: No legal obstacles to voluntary exchange - only to involuntary (forced) exchanges. [contrasts, say, with feudal society...]

24. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [24] • Capital [Das Kapital]: The Three Major Ideas • I. Theory of Value: value as ‘socially necessary labour’ • II. Exploitation: capitalists “appropriate” labour from workers • III. Classes: Antagonism between owners and workers

25. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [25] • I. Marx’s version of the “Labour Theory of Value" • 1. Marx’s argument for having a “theory” on this • Commodity : object, for sale, that satisfies human wants (all sorts) • 1.1 A vital distinction: Use-value vs. Exchange-value: • Use-value= Utility -- properties of things making them fit for use (or “consumption”) (“the constitute the substance of all wealth, whatever may be the social form of that wealth”) • Exchange-value: proportion in which values in use of one sort are exchanged (on a free market) for those of another sort. [roughly, price] • Exchange-value “appears to be purely relative” • Marx notes that an intrinsic exchange value (inherent in commodities) “seems a contradiction” • 1.2. BUT: Things that exchange must be equal to each other-> (1) exchange-values “express something equal” • (2) exchange-value is only the mode of expression of something contained in it, yet distinguishable from it -- there is something common to both. The two must therefore be equal to athird, which “in itself is neither the one nor the other” • [Note: why can’t this just be effective demand?... ]

26. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [26] • I. "Theory of Value" • 1.3 Exchange is an act characterised by “total abstraction from use-value” Leave out use-value -> only one thing remains: being products of labour - human labour in the abstract -- Human labour-power has been expended in their production “as crystals of this social substance” • So: X has value only because human labour in the abstract has been embodied in X- measured by the quantity of the value-creating substance, the labour, contained in it

27. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [27] • 1.4.Labour Theory of Value - (1) The Simple Version: • (Where x and y are individual items, Price of item X: Price of Y :: Labor in X: Labor in Y [Px:Py :: Lx:Ly] • I.e., the price of commodities is directly proportional to the labor in them • [Observation (known to Marx): This would make inefficiently produced objects worth more than efficiently produced ones. This is obviously false - for the Consumer, Price is proportional to the thing’s utility, not to its contained labour.] • 1.5. (2) “Sophisticated” version, first stage: Averaging • Price of average X: Price of average Y):: Average Labor in x: Average Labor in y • ie., P(av x):P(av y)::L(av x):L(av y) • [comment: this also is clearly false]

28. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [28] • 1.6. (3) Final form: • The value of one commodity is to the value of any other, as the labour-time necessary for the production of the one is to that necessary for the production of the other - “Socially Necessary Labour Time”:P (x): P(y):: SNLT (x): SNLT(y) • [SNLT]: “Socially necessary labour-time” • def: “homogeneous human labour (total labour-power of society), embodied in the sum of all commodities Each of these units is the same as any other, so far as it has the character of [1] the average labour-power of society, and takes effect as such; that is, so far as it requires for producing a commodity, no more time than is [2] needed on an average, no more than is socially necessary.

29. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [29] • example: - “The power-loom reduced by half the labour required to weave a given quantity of yarn into cloth. The hand-loom weavers required the same time as before” - “but for all that, the product of one hour of their labour represented after the change only half an hour's social labour - and consequently fell to one-half its former value” • “The value of a commodity, therefore, varies directly as the quantity, and inversely as the productiveness, of the labour incorporated in it” • “reduction of skilled labour to average social labour (“constantly in practice going on”, and “unavoidable”: e.g., one day of skilled to six days of unskilled labour ..... • 1.7. Measuring the “intensity” of labour .... • Comment: Notice that the labor “fell in value” -- i.e., the unit used to determine price fell in value! Labor is being measured by output!] • - Marx doesn’t go on to ask how you compare outputs: e.g.,how do you compare the labor of a mathematician with that of a bricklayer? • A good answer - and really the only answer possible - is: see how much people want mathematics relative to bricklaying....] • - The theory is now circular: it “explains” market prices by “labor” -- but it measures labor on the basis of market price! • - Since some form of the Labor theory is presupposed by the entirety of Marx’s economics, this is a FATAL flaw... • NOTE: READ BASTIAT “ON VALUE” (p. 176 ff)

30. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [30] • BASTIAT “ON VALUE” (p. 176 ff) • Air • 5.20 And since what is gratuitous cannot have value, the notion of value implying acquisition through effort, it follows that value too will be misunderstood if we extend its meaning to include, in whole or in part, those things that are received as gifts from Nature, instead of restricting its meaning to the human contribution only. • Air, then, has utility, but no value. It has no value, because, since it occasions no effort, it calls for no service. • 5.36 But if a man goes down to the bottom of a river in a diving bell, a foreign body is introduced between the air and his lungs; to re-establish connections, the pump must be set in motion; then there is effort to be exerted, pains to be taken; and certainly the man will be ready to co-operate, for his life is at stake, and no service to him could be greater. • The Diamond • 5.51 I take a stroll along the seashore. • A stroke of good luck puts a superb diamond into my hand. I have come into possession of a considerable amount of value. • Why? Am I going to contribute something great to humanity? Have I toiled long and arduously? Neither the one nor the other. • Why, then, does the diamond have such value?

31. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [31] • BASTIAT “ON VALUE” (p. 176 ff) • Why the diamond has such value: • Because the person to whom I give it believes that I am rendering him a great service, all the greater because many rich people would like to have it, and I alone can render it. • Their judgment is open to question, granted. It is based on vanity and love of display, granted again. But the judgment exists in the mind of a man ready to act in accordance with it, and that is enough. • 5.52 We could say that this judgment is far from being based on a reasonable evaluation of the diamond's utility; indeed, it is quite the contrary. • But making great sacrifices for the useless is the very nature and purpose of ostentation. • 5.53 Value, far from having any necessary relation to the labor performed by the person rendering the service, is more likely to be proportionate, we may say, to the amount of labor spared the person receiving the service; and this is the law of values. • “ We shall describe later the admirable mechanism that tends to keep value and labor in balance when the latter is free; but it is nonetheless true that value is determined less by the effort expended by the person serving than by the effort spared the person served.”

32. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [32] • A Dialogue about the diamond: • 5.54 The transaction relating to the diamond may be supposed to give rise to a dialogue of this nature: • 5.55 "Let me have your diamond, please." • 5.56 "I am quite willing; give me your whole year's labor in exchange." • 5.57 "But, my dear sir, getting it didn't cost you a minute's time." • 5.58 "Well, then, the way is open to you to find that kind of minute." • 5.59 "But, in all justice, we ought to exchange on terms of equal labor." • 5.60 "No, in all justice, you set a price on your services, and I set one on mine. I am not forcing you; why should you force me? Give me a whole year's labor, or go find your own diamond." • 5.61 "But that would entail ten years of painful search, and probable disappointment at the end. I find it wiser and more profitable to spend ten years in some other way." • 5.62 "And that is just why I feel that I am still doing you a service when I ask only for one year. I am saving you nine years, and for that reason I consider this service of great value. If I appear demanding to you, it is because you consider only the labor I have performed; but consider also the labor that I save you, and you will find that I am almost too easy."

33. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [33] • II. Exploitation • 1. The Capitalist • (Note: `M->C->M' refers to `Money into Commodity into Money') • “The expansion of value, M->C->M, becomes his subjective aim” - “the sole motive of his operations” • Use-values are not the real aim of the capitalist -- profit-making alone is what he aims at • - the capitalist is a “rational miser” • [Note: Recall from the Early Mss: “labour produces for the rich , palaces -but for the worker, hovels” • -- But if the capitalist invests as much of his money as possible -- then he lives in the hovel! • ... Marx fails to see the irony: on his picture, the capitalist is, in real terms (i.e., “material” terms) a pure altruist: everything he does benefits others - none of it himself!]

34. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [34] • 2. Labour's relation to Capital: • “The labourer works for the capitalist instead of for himself” • [this is a misuse of the word ‘for’: all it means is that he’s not self-employed. • But of course, his motive is to maximize his own income, not the capitalist’s.] • The argument: • If Capitalist [C] pays for a day's labour-power • - the worker’s Product is the property of the capitalist and not that of the worker, its immediate producer • and W - the seller of labour-power -parts with it at its value, • so, the right to use that power for a day belongs to W • the use-valuehe has sold [L] in exchange with C is the consumption of the commodity purchased (namely his work, thus promoting aims of capitalist). • That is: the capitalist consumes (uses) the worker’s labour in production • “The labour-process is a process between things that the capitalist has purchased, things that have become C’s property. The product of this process belongs, therefore, to him.” [yes...]

35. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [35] • 3. Surplus-Value: Profit and “Exploitation” • Essential Distinction re the “value of labor-power”: • (a) INPUT value: Value of a day's labour-power: = the means of subsistence required for its production • (b) OUTPUT value: “the living labour that it can call into action” - i.e., power to produce • These, Marx points out [correctly], are two different things • Marxian thesis: The former determines the exchange-value of the labour power, the latter is its use-value

36. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [36] • Surplus-Value: Profit and “Exploitation” (continued) • 4. Origin of Profit: • Behold! -Its exchange-value is less than its use-value • - That’s where profit comes from! • “The difference of the two values was what the capitalist had in view” • [Ingenious application of a hopeless theory] • - Labor: is the source not only of value, but of “more value than it has itself” • The seller of labour-power realises its exchange-value, and parts with its use-value. He cannot take the one without giving the other • Thus ... Profit! • and therefore --Exploitation! • [conclusion: capitalism exploits workers] • [this is clearly true. • question: Is it a problem??]

37. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [37] • 5. The trouble with Marx’s Critique • ‘exploitation’ is ambiguous: • (a) Pejorative: to exploit is to harm, to ill-use the thing for one’s own gain • (b) Neutral: to exploit is to use, gain some advantage by using - nothing said, one way or the other, about its effects on the exploited. • Point: What Marx calls “exploitation” is (usually) good for you! • Laborer’s options: • product real wage % exploited net gain • cottage 1 1 0 1 • factory 10 2 80% 2 • The worker’s exploitational take-home pay is twice than the unexploited condition! • -Of course, the capitalist makes still more. • Q: So what? • [the worker looks at it from his own point of view - in which, it’s better!]

38. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [38] • 6. Marx’s “General law of Capitalist Accumulation” • The very nature of accumulation excludes every diminution in the degree of exploitation of labour • ... “It cannot be otherwise in a mode of production in which the labourer exists to satisfy the needs of self-expansion of existing values, instead of, on the contrary, material wealth existing to satisfy the needs of development on the part of the labourer.” • “The industrial reserve army weighs down the active labour-army” • [Note: this is empirical and theoretical nonsense.] • Polarization: Accumulation reproduces the capital-relation on a progressive scale - more larger capitalists at this pole, more wage-workers at that --- leading to .... • “Immiseration”: The greater the social wealth, the greater is the industrial reserve army: the more extensive the industrial reserve army, the greater is official pauperism. • The absolute general law of capitalist accumulation: • “The labouring population always increases more rapidly than the conditions under which capital can employ this increase for its own self-expansion.” • [but, note:] “Like all other laws it is modified in its working by many circumstances, the analysis of which does not concern us here.” • [no explanation why this “must” be so, of course ....]

39. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [39] • Note: Marx’s claim here implies that as capitalist economies expand, unemployment must rise, at least over the long run. • But this is not true: In no country has there been a constant increase over long periods. • -> [Narveson says: In contemporary times, unemployment is largely an artefact of government policy: governments buy unemployment. In the Great Depression, they, more or less inadvertently, caused it. • This is because the price of labour is not allowed to fall as demand decreases • Full employment is where all available labour is purchased economically • - that is, in such a way that it produces something that somebody else is willing and able to pay for] • [This last is not contentious. The former is.]

40. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [40] • III. Marx’s theory of Class Antagonism • Claim: Capitalists and Workers are at Loggerheads • Marx’s Thesis in general: • 1. Constantly diminishing number of the magnates of capital • 2. Usurp and monopolise all advantages of this process of transformation • 3. so, their activity produces a “growing mass of misery, oppression, slavery, degradation, exploitation” • 4. and the growth of working-class revolt (“always increasing in numbers - disciplined, united, organised by the very mechanism of the process of capitalist production itself”) • 5. The “monopoly of capital” becomes “a fetter upon the mode of production” • 6. Revolution: “This integument is burst asunder. The knell of capitalist private property sounds. The expropriators are expropriated.” • -> In short, “capitalist production begets, with the inexorability of a law of Nature, its own negation. • Socialist revolution is “the negation of negation”

41. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [41] • The Problem with Marx’s argument: • Individual worker A and A’s employer have a partial conflict of interest, yes: more for worker, less for capitalist ... • (but if the capitalist makes his demands too high, the worker quits and goes elsewhere) • -> BUT is the working class in conflict with the owning class? • No! Capitalists make money byselling the product of mass production. • There isn’t anybody else to sell them to than workers. (on Marx’s view) • -> Therefore, the more the other guy’s workers get paid, the better that is for the capitalist. • Moreover, all capitalists (and all workers) arein competition with each other • -->There is no “class interest” of the kind Marxism proclaims • The whole thing is an analytical absurdity! • > And, noclass competition.... • The claim that there is class competition is fallacious.

42. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [42] • [Notes: (1) the real wages of the typical English workman are estimated to have doubled about every twenty years during the industrialization era. (Engels’ study, “The conditions of the English Working Class in 1844”, didn’t benefit from another look in 1864 or 1884...)] • (2) A theoretical Query: why would an employer want his employees to starve??] • --> the more he works, the more he “falls under the dominion of his product, capital” • [Note: In a capitalist economy, the worker normally produces things that he • (a) doesn’t get to keep, as such - but • (b) typically has no interest in even if he could (100,000 ball bearings a day). Is that what he means by ‘alienation’? If so, so what? • > These consequences are “contained in the definition” that • the worker is related to the product of his labour as to an alien object • - ‘alien’ because he doesn’t use it himself? True. • - But, ‘alien’ because its production does him no good?False.

43. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [43] • The Baseline Fallacy (again): • There is no entailment relation between • (1) Worker (W) works for Capitalist (C), and • (2) C makes W worse off • The major issue here is the appropriate baseline for worsening (or “harming”) • The natural one is: Where W was before • “The more the worker spends himself, the more powerful the alien objective world becomes” [(1) meaning what? (2) does the worker care about this particular kind of “power”?] • [Note that Marx’s dicta ought to apply to an airline pilot making $200,000/yr just as much as to a worker in a shirt factory] • “-- for the rich, intelligence - but for the worker, idiocy, cretinism”] • [>> note: Does it produce “cretinism” for the worker? That suggests that he wasn’t cretinous before, but is now. Is that right?] • “in the very act of production The worker estranges himself from himself” [Does Marx mean that the worker doesn’t particularly like his job? If so, what else is new? But seeing that it is the source of his livelihood, he might well come to like it after all! --- see next slide ....]

44. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [44] • The Right question: How much does the worker like his job • (a) at the pay he’s getting • (b) compared to the alternatives? • - If he prefers some actual alternative to the one he’s got, then why doesn’t he take it? • [Question: does someone owe him a job? • Evidently Marxists (and many others) think so. But - why?] • >> Marx needs to argue that somehow capitalism is depriving him of desirable alternatives - that it coerces the worker. • We need an analysis of coercion: • Coercion: A coerces B = • (1) B prefers x to y at the time the interaction takes place, T0 • (2) A intervenes at t1 such that • (3) B’s doing x at t2 would be worse, rather than better, for B • (4) in consequence of which, B chooses y at t2 • It is not true that job offers or acceptances coerce people • - (Not if you go by people’s own word about it)

45. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [45] • Marx saw the fabulous expansionary tendencies of capitalism... • How will he show us that lots of other neat jobs would be available if we didn’t have free ownership of capital? • [There’s very good reason for thinking that there will not be] • >> What about such claims as that the work “does not belong to his essential being” - Is this factor, whatever it is, supposed to be something that workers actually care about?? • If “the worker no longer feels himself to be freely active in any but his animal functions”, that doesn’t sound too good. • But is it true? Is it a complaint that the worker doesn’t have enough leisure time? [Maybe he’d rather have more pay. When Parliament proposed a mandatory limit to the working day, a lot of workers voted against it...] • >> Or that “It makes individual life in its abstract form the purpose of the life of the species, likewise in an abstract and estranged form”? • [Should we say: “Sure, why not?”]

46. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [46] • Culture and Ideology as Class-Relative • “Your very ideas are but the outgrowth of the conditions of your bourgeois production and bourgeois property” • Bourgeois jurisprudence is but the “will of your class made into a law for all” - as determined by the economic conditions of that class • A “selfish misconception” induces the bourgeoisie to transform into “eternal laws of nature and of reason” the social forms springing from your present mode of production and form of property • Man's ideas, views, and conceptions change with every change in the conditions of his material existence, in his social relations and social life. • The ruling ideas of each age have ever been the ideas of its ruling class... • Question: does it follow that those ideas are (a) false? Or (b) that they have no truth-value?? • Ideology - the real story? • Why or how would the “ruling class” control our thinking? • - Need a nonmysterious explanation • - Obvious possibilities: • (a) we are dependent on them, so we tend to think in such a way as not to rock the boat; • (b) they have more power of propaganda than we do.

47. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [47] • [note: Marx & Engels were members of the bourgeoisie... Why weren’t they capitalists??] • Question: Who are the ruling class? • - not the capitalists. • In a democracy, the plausible answer is that it’s • (a) the majority -- almost none of whom are capitalists, on Marx’s account; or • (b) elected members of government (elected, almost entirely, by noncapitalists) • [‘The “ideology” of the ruling class will apparently be what ordinary voters believe... • [Or is it what their legislators tell them to believe? • [or both? ...]

48. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [48] • The Theory of Socialism • 5. On the Division of Labour in Production (Friedrich Engels) • In every society: the producers don’t control the means of production • - -the means of production control the producers - • [they are] “means for the subjection of the producers to the means of production” • Esp. true of the division of labour -- • 1. the separation of town and country [- which “stupefies” - Marx didn’t have a high opinion of farmers!] • 2. Modern industry “degrades the labourer to a mere appendage of a machine” • Socialism: “society makes itself the master of all the means of production to use them in accordance with a social plan” • -- “puts an end to the former subjection of men to their own means of production • “It goes without saying that society cannot free itself unless every individual is freed” • The former division of labour must disappear • Its place must be taken by an organization ... in which productive labour, instead of being a means of subjugating men, will become a means of their emancipation • (“offers each individual the opportunity to develop all his faculties, physical and mental, in all directions and exercise them to the full”) • “Today this is no longer a fantasy, no longer a pious wish.” • Comment: it’s exactly as much of a fantasy as it ever was: viz., a pious wish...

49. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [49] • Critique of the Gotha Program: Marx on “justice” • What is "a fair distribution"? Do not the bourgeois assert that the present-day distribution is "fair"? • And is it not, in fact, the only "fair" distribution on the basis of the present-day mode of production? • (- “what a crime it is to force on our Party again, as dogmas .. obsolete verbal rubbish - ideological nonsense about right and other trash so common among the democrats and French Socialists”) • “Are economic relations regulated by legal conceptions or do not, on the contrary, legal relations arise from economic ones?

50. Karl Marx (1818-1883) andFriedrich Engels (1820-1905) [50] • [from the proposed Gotha Program of the Communists] we learn that "the proceeds of labour belong undiminished with equal right to all members of society." • "To all members of society"? To those who do not work as well? What remains then of the "undiminished proceeds of labour"? Only to those members of society who work? What remains then of the "equal right" of all members of society? • There must be deducted: replacement costs, capital expansion, reserve insurance funds, education, health, administration not belonging to production. [will, Marx thinks, be “reduced” under socialism...] • In co-operative society based on common ownership, producers do not exchange their products -- individual labour no longer exists in an indirect fashion but directly as a component part of the total labour. The phrase "proceeds of labour" thus loses all meaning ... • Comment: That’s exactly what makes socialism impossible, according to the Austrian school...