Karl Marx and Business

Karl Marx and Business

Introduction:

I have actually had the desire to work on this post for awhile. After digesting some Karl Marx readings, I came to the conclusion that I vehemently disagree with the man, and that his views will never work efficiently in a political system. Nonetheless, considering that in Marx’s time the government strongly favored industry over industry’s workers, it is no surprise that Marx’s ideas spread when they did. But, in the end, government intervention in the workplace worked against Marx’s ideas. Therefore, the fact that the government intervenes to protect the rights of the workers (i.e. work days, minimum wage, collective bargaining rights, etc.) proves Marx wrong. However, the fact that big businesses dwell strongly on immigrant labor and the fact that they lobby vigorously for deregulation leaves me with this question: “Are corporations, big businesses, and politicians who campaign against collective bargaining rights indirectly Marxist?”

The Era

In order to fully understand Marx’s argument you have to understand the political atmosphere of his writings. He completed the first edition of his famous Communist Manifesto in 1848 in London, but it was not until 1850 that the manifesto was translated into English. During this time, factories and business were growing rapidly in London culminating into two social dichotomies that Marx would label: The bourgeoisie (The factory owners) and the proletariat (the workers in the factory). The simple nature of such an argument has made it extremely applicable even in today’s society because it translates to: the people who have money and the means to make more of it in an economic struggle with those who don’t have money but work to make more of it. However, Karl Marx assumes a government that favors industry over its workers. Though, Marx does touch on many aspects of a capitalistic economy, my main disagreement with Marx is the assumption that united workers work in a capitalistic society in a mutually exclusive relationship.

Marx’s Argument on the Worker

I will provide a very watered down and simple presentation of Karl Marx’s argument, though it does no justice to Marx’s intricate arguments, it is easier to work with my argument and the scope of this post. I am taking arguments from his works The Critique of Capitalism, “Capital: Volume One” and The Communist Manifesto. Initiating his argument, Marx provides the idea that there is a surplus of a workforce, meaning that there are more workers than there are jobs. Marx argues that it will always be in the interest of the capitalist to get more out of one worker and pay one wage instead of paying two wages. The capitalist wants to get the most work for the least amount of expense in order to yield higher profit margins. Thus, the capitalist begins to let go of his skilled laborers to cheaper unskilled labor, and then he moves from adults to children because they are cheaper. Wages correlate with the demand of workers. When demand for workers is high then wages go higher, but when demand is low, then wages fall. These cycles keep the power of the worker low and usurp their power to the capitalist. Moreover, the competition that capitalism uses in its laissez-faire approach to economics does not affect only companies or commodities, but it also trickles down to the work force. When there is a surplus workforce, a low demand for labor, and (the key distinction in Marx’s argument) a lack of unions, then the workers fight for jobs by offering to work for lower wages. The workers fight for lower wages because a lower wage is better than falling into pauperism: “the dead weight of the industrial reserve” where the “demoralized and ragged, and those unable to work” waste away without an income (On Capital).

Unions: The Solution

Karl Marx offers the solution that “the real fruit of their battle lies, not in the immediate result, but in the ever-expanding union of the workers” (The Communist Manifesto). This solution serves as a paradox that proves both Karl Marx right and wrong at the same time. Yes, the workers did need to unite in order to live as human beings and not as machines that were constantly being exploited by the owners of all the capital. Yet, this model assumed a government that did nothing for the proletariat. The establishment of anti-trust laws, child labor laws, collective bargaining, and a minimum wage have depleted the atmosphere of 1850, and transformed it into a new one in which the rights of not just the workers, but of American citizens were valued over profits. Though, it may be argued to the extent in which people matter over profits (this is a whole different issue at large), we no longer live in this state of economic nature in which we have to fight for lower wages to at least have a job. As long as laws that uphold collective bargaining and other worker’s right prevail, the more Karl Marx’s arguments become silenced by a government that favors individual’s rights.

Indirectly Marxist?

Business becomes indirectly Marxist when business favors deregulation to the extent that Karl Marx becomes relevant again. When politicians like Ron Paul call for the end of the minimum wage, or when governors like Scott Walker try to eliminate collective bargaining, they only empower the arguments of Karl Marx even more. Why? Well, because the times before minimum wage and collective bargaining were very evident and relevant to the time when Karl Marx wrote his manifesto. Moreover, the lack of these measures failed, to the point that government had to interject and enact progressive reforms throughout late 19^th century and early 20^th century in the United States. I will be the first to concede that Karl Marx was an idealist in his political model, but not anymore than Adam Smith was. To think that governments without a central figure run by workers was very idealist, in the same way that an economic model that solves its own problems is. We now know that communist ideals lead to totalitarian governments or figures. Nonetheless, the “invisible hand” aids the flow of money through the economy only to turn around and stick the middle finger to those who turn capital into wealth. My main point is that Marx and Smith represent two very opposite economic ideals that cannot work in isolation. There must be a balance between the two, and this balance only becomes more defined through time, progress, and much thought as policy is applied and reformed. Nonetheless, Marxism’s close ties to capitalism (and much more with the laissez-faire form of capitalism), the more Marxism finds relevance in any attempts to make the economy more capitalistic in nature.

-          WSQ