A critique: Where Marx (1818-1883) was right and why he was wrong on the demise of capitalism – National Herald

Posted: May 9, 2021 at 11:14 am

Now let us look at Marxs labour theory of Value that he borrowed from David Ricardo [1772-1823] and adopted for his own purposes. And how it leads to exploitation of man and hence makes overthrow of the superstructure of Capitalism desirable. [The base is to be carefully preserved in order to keep producing platitude.]

In Marxs earlier formulation of his theories, then based in metaphysics, Commodities have both a use value and an exchange value. Use value is easily explained in relation to the actual use the commodity is put to. What explains exchange value and how does that make it possible for somebody to accumulate exchange value through the operation of the market?

David Ricardo in his labour theory of value, posits that the exchange value of any commodity is simply the number of socially necessary hours of labour needed to produce it. [Liberal theory thinks use value is already in the exchange value as part of it and hence need not be separately tracked.] The more labour required, the higher the exchange value. Marx latched on to this explanation by Ricardo to reformulate his theory of exploitation of labour under capitalism.

The accumulation of exchange value as surplus is then explained in terms of extortion of labour from the laborer, by exchanging his means of subsistence for hours of labour in excess of those needed to produce those means.

Marx thus makes the case that the existence of any & all surplus value must necessarily be explained in terms of labour used but not paid for.

Marxs assumption is without basis under free market conditions and fully true only under slavery. Hegel would argue even against such an assumption under slavery. But nevertheless, Marx assumes such exploitation of labour as the basis of his new theory of human nature that triggers history to overthrow Capitalism.

Marxs assumption that only labour produces any value flies in the face of his own assertion that accumulated knowledge is a key part of his productive forces. Nor does Marx give much thought to how to value the store of accumulated knowledge that actually and visibly drives history in our everyday experience.

Stop for a moment to think where this complication or contradiction comes from. As I noted earlier, Marxs very definition of labour is metaphysical in which any and everything I do is labour, and there is no other way in which I can interact with this world or others like me, save through my labour.

So, if I work for 1 day on the shop floor, I get a wage to fill my belly. But if I decide not to work, go hungry, in order to make a widget that helps me do my job better, I neither get a wage, nor any extra reward for inventing the widget, and have to go hungry. Which fool will argue that, under such conditions, Mans store of accumulated knowledge will grow, and grow inevitably [and for free] as Marx assumes?

We see precisely this killing off of innovation at work in modern socialistic societies, where rate of innovation falls off steeply compared to Capitalistic societies. This mixing up of concepts about labour, and what it is utilized for - direct for production, or saved to add to accumulated knowledge, lies at the heart of the flaw in Marxs thought.

There are other deep philosophical issues that arise with respect to store of accumulated knowledge and Capital itself [assuming Capital itself is nothing but saved labour] when you bring the time dimension into the matrix of productive forces and try to balance inter-generational equity.

This is true not only of Marxs ideas but also those of the liberal theories. There is this notion of unearned gains when wealth passes from one entrepreneur to his progeny. Or windfall profits to certain types of property holders when technology changes, completely revising the valuation matrix in society.

On the negative side, changes in store of accumulated knowledge render whole industries obsolete making large number of workers redundant, and destroying enormous amounts of accumulated wealth/capital. Material forces not only create value but also destroy value, and if one looks at history, value destroyed as redundant far exceeds the value currently in use. Pause to think. Unlike Marx assumes, Capitalism destroys a considerable amount of wealth and property even as it creates it through changes in accumulated knowledge. Marx gives no thought to this aspect at all.

Nor is liberal theory free from flaw. Under Capitalism, the historical claims of Capital are preserved over future labour of others not yet born. In a sense, there is more notional wealth in this world than the labour required to meet those claims!! If you look at rich nations today, you find enormous amounts wealth, but a declining work force, that cannot meet the claims on its output by accumulated wealth over a life time. Such wealthy nations have to perforce import labour from abroad, either directly or through import of goods and services. What is true of nations today can be true of the world tomorrow because accounting for wealth is deeply flawed.

And yet we see people go hungry and without jobs. To explain this curious phenomenon of paper or notional wealth require a book. So, I will leave it here as a contradiction that bedevils both Marxist thought & Capitalism.

So, Marxs simplistic but critical assumption that all value comes from labour is deeply flawed and misleading. The reality should give more weight to store of accumulated knowledge and once you recognize that, the entire Marxist theory of base + superstructure driving history, and constituting consciousness, becomes inconsistent needing complete revision.


He did a phenomenal job of restoring man to the centre of our philosophical attention through his concept of labour. This place had been lost to machines, technology, and deified history. Marx brought focus back to man, which is why he proved so popular.

Unfortunately, he couldnt resurrect the individual that Renaissance, and Kant had created; but Hegel had lost in his Theory of History. Marx promised to restore the Kantian man through Communism to his free creativity, but his thoughts about labour were to prove deeply flawed. You cannot sink, reduce, and submerge a creative individual into mere labour, and nothing but labour, and expect to restore him to full free creativity. The two are mutually exclusive. But Marx did not return to the metaphysical problem he had defined away in his conception of labour. He just kept waiting a life time for history to prove him right.

Also, as we saw, production of goods and services in plentitude necessary to transcend capitalism, requires growth in accumulated knowledge that comes from saved labour. A right to private property arises when I forego my meal in order to save my labour in making a widget. It is not a fetish for property that drives me, but the need to creatively address my problem in enhancing my productivity. So Marx rather long a dreary fascination with fetishes and false consciousness was as misplaced as the Buddhist thought that the world is Maya and should be forsaken. Hardly a constructive way to engage with the world although conceptually, it a thought pregnant with meaning.

Lastly, Marxists of all kinds have misrepresented Marx in order to use his philosophy as an intellectual manual to overthrow the existing order. Marx spent most of his life waiting for the revolution. But it never came. 175 years after Marx, we still wait for it.

My guess is we are missing the revolution even as we wait for it because a revolution happens each day I skip my meal and wage in order to make a widget or think of a new way to teach maths to school kids. They are tiny, ubiquitous, and everywhere, if only we know how to look for them. The bigger economic problem is how to recognize and reward them under any economic arrangement. Even Capitalism is yet to find an efficient way of doing so.

Marxs friend, philosopher, and guide, and later publisher of all of Marxs unpublished works, warned Marx to rethink his revolution because even in his life time, instead of collapsing through overproduction as Marx kept predicting, Capitalism was thriving as it found new markets vertically in increasing demand, or horizontally through imperialism. With oil, entirely new markets were created in transportation. Friedrich Engel therefore asked Marx to rethink his revolution as Capitalism kept creating it own demand for goods and services, instead of collapsing under the weight of over-production. But Marx I guess was too exhausted to do so.

Every generation logically thinks doom is here. The world ought to have ended soon after Buddha discovered that it was an illusion. It never did. My guess is that even if Communism were ushered in by some magic, as Herman Hesse imagined in his book the Glass Bead Game, Nietzsches Will to Power thesis will ensure we will invent a new game of life to transcend even the Communist utopia, if it were at all desirable.

Marx didnt reckon with what creativity can do when Man mixes it with his labour and nature. John Locke invented labour as one of Mans rights. Marx tried to sink and submerge Man in the narrow concept of his labour. Not a very wise thing to do even if your intentions are noble as Marxs undoubtedly were.

Man is much more than his labour.

Much much more.

Man is creative; and much much more than just an artifact of his history.

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A critique: Where Marx (1818-1883) was right and why he was wrong on the demise of capitalism - National Herald

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