Democracy And Capitalism

Karl Marx is the most controversial economist in history. His writings are studied and debated. He is frequently linked with communism and that association has biased many people against him. Marx's link to communism were formed because many of the socialist dictators such as Lenin studied Marx intensively, however it is erroneous to assume that Marx was a proponent of communism. He was however a critic of capitalism. He studied capitalism extensively and much of his writings focus on the problems with capitalism and specifically on the exploitation of the worker. By examining the origination of capitalism and the Marxist critique of capitalism, we can gain a better understanding of Marx's viewpoints and separate Marx's views from many of the misunderstandings surrounding Marx. Marx spent a great deal of time examining the conversion of the feudal society to a capitalist society. Before the conversion to capitalism took place, England experienced an industrial revolution. This revolution took place from the 10th to the 14th centuries. Around this time, the Plaque that wreaked havoc on England and wiped out nearly half of its population was over. After the Plague ended, many people inherited a lot of wealth and spending on extravagant items became very common. Additionally, it was during this time that technological advances moved industry forward. The invention of the loom made it possible to create linens rapidly and inexpensively and England's textile industry flourished. Soon after that came the invention of the printing press, which changed allowed for the efficient transfer of information. It was no longer necessary to learn how to do things directly through human contact. This spread of information made it possible for the people of England to organize themselves and to expand their knowledge in different areas of industry. During the 16th and 17th centuries England experienced a turning point in its economic history. During the reign of Charles I, England was going through a period of economic shrinkage. Up until this time English monarchy favored an economic system that was monopolistic in nature. The reason for this is that it gave England greater control over profits and taxation. However, as the merchant class began to grow, England's economic policies began to hinder further growth. The merchant class (referred to by Marx as the bourgeoisie) began to compete with the monopolies and England's economy grew increasingly unstable. The rising bourgeoisie began to enclose their land and focused their efforts more and more and their own material gain. These economic factors were, in a large part, responsible for the eventual revolution and execution of the King of England, Charles I. The conversion to capitalism took place over a large period of time, but the changes that took place affected every aspect of society. It changed not only industry, but also politics, religion, laws, and people's social interactions. In feudalism, wealth was tied to the land. Society was based on agriculture and 90% of the people worked the land. If someone owned land they were wealthy; the society was divided into two classes, landowners and non-landowners. In feudalism, wealth was inherited. Land was passed on when the landowner died to his descendants and therefore it was impossible for serfs to move up. With capitalism this all changed. Wealth was linked to trade and production. For the first time, serfs had the ability to acquire some wealth because wealth was no longer based on lineage. Under this new system, owning a business became the major way to generate wealth, which created some opportunity for serfs that had a skill. Furthermore, land became a commodity that could be bought and sold. Previously, land did not change hands and the king could seize it at any time. In capitalism property was bought and sold and people could do with it whatever they wished. In feudalism profits were considered immoral, but under capitalism profits became the way to obtain a better life. Capitalism is the separation of the economy and the state. It is a social system based upon private ownership of the means of production, which entails a completely uncontrolled and unregulated economy where all land is privately owned. Capitalism has been described as the 'a social harmony through the pursuit of self-interest.' This is because those who promote capitalism, believe in that by leaving the state of the economy unregulated, and by each individual left in pursuit of his own self-interests, the economy will automatically adjust itself so that is runs with maximum efficiency. Today in the United States we live in a capitalist society (although our economy is not purely capitalistic because it is not completely unregulated). Under this system a large and growing section of the population survives based on the condition that it works for the owners of the means of production. Production became a key component of this new way of life. Marx defines social class as 'relations to means of production'. Society class structure changed. Instead of society being divided into the landowners and non-landowners, it was divided into those the capitalist and the worker. Capitalists built huge factories instead of small workshops and began to employee hundred of workers at a time. The capitalist owned the factory, the land, and the raw materials and instructed the worker on what to do. Then the goods produced were sold and the capitalist paid the worker a wage and kept the profits. At a time when 90% of England were poor, former serfs, capitalists found plenty of people willing to work for almost nothing. Although, a select few of the workers who were skilled earned a slightly higher wage, the majority worked to just enough money to sustain themselves. The capitalist paid as low a wage as possible and tried to sell their products for as high a price as possible. Most capitalists were very successful. They reinvested their money into new ventures and their wealth grew. Marx recognized that Capitalism divides society into classes, whose interests are not only different, but are opposed to each other. According to Marx the relationship between the capitalist and the worker is inherently antagonistic. What one gains is lost to the other. Because of this he felt that it was inevitable that the worker would have to rise up against the capitalist. Let's take a closer look at the capitalist-worker relationship and how workers wages are determined. The same principles that determine the price of goods also determine the wages. Supply and demand and the competition for labor determine wages by the capitalists. This is what causes the cost of labor to fluctuate and the fluctuations revolve around the cost of producing labor. The costs can be described as the cost of maintaining and training the worker. The easier a worker is to replace or the less training required