Marx Was Right?
2. The iPhone 5S (Imaginary Appetites)
Marx warned that capitalism's tendency to concentrate high value on essentially arbitrary products would, over time, lead to what he called "a contriving and ever-calculating subservience to inhuman, sophisticated, unnatural and imaginary appetites." It's a harsh but accurate way of describing contemporary America, where we enjoy incredible luxury and yet are driven by a constant need for more and more stuff to buy. Consider the iPhone 5S you may own. Is it really that much better than the iPhone 5 you had last year, or the iPhone 4S a year before that? Is it a real need, or an invented one? While Chinese families fall sick with cancer from our e-waste, megacorporations are creating entire advertising campaigns around the idea that we should destroy perfectly good products for no reason. If Marx could see this kind of thing, he'd nod in recognition.
3. The IMF (The Globalization of Capitalism)
Marx's ideas about overproduction led him to predict what is now called globalization – the spread of capitalism across the planet in search of new markets. "The need of a constantly expanding market for its products chases the bourgeoisie over the entire surface of the globe," he wrote. "It must nestle everywhere, settle everywhere, establish connections everywhere." While this may seem like an obvious point now, Marx wrote those words in 1848, when globalization was over a century away. And he wasn't just right about what ended up happening in the late 20th century – he was right about why it happened: The relentless search for new markets and cheap labor, as well as the incessant demand for more natural resources, are beasts that demand constant feeding.
4. Walmart (Monopoly)
The classical theory of economics assumed that competition was natural and therefore self-sustaining. Marx, however, argued that market power would actually be centralized in large monopoly firms as businesses increasingly preyed upon each other. This might have struck his 19th-century readers as odd: As Richard Hofstadter writes, "Americans came to take it for granted that property would be widely diffused, that economic and political power would decentralized." It was only later, in the 20th century, that the trend Marx foresaw began to accelerate. Today, mom-and-pop shops have been replaced by monolithic big-box stores like Walmart, small community banks have been replaced by global banks like J.P. Morgan Chase and small famers have been replaced by the likes of Archer Daniels Midland. The tech world, too, is already becoming centralized, with big corporations sucking up start-ups as fast as they can. Politicians give lip service to what minimal small-business lobby remains and prosecute the most violent of antitrust abuses – but for the most part, we know big business is here to stay.
5. Low Wages, Big Profits (The Reserve Army of Industrial Labor)
Marx believed that wages would be held down by a "reserve army of labor," which he explained simply using classical economic techniques: Capitalists wish to pay as little as possible for labor, and this is easiest to do when there are too many workers floating around. Thus, after a recession, using a Marxist analysis, we would predict that high unemployment would keep wages stagnant as profits soared, because workers are too scared of unemployment to quit their terrible, exploitative jobs. And what do you know? No less an authority than the Wall Street Journal warns, "Lately, the U.S. recovery has been displaying some Marxian traits. Corporate profits are on a tear, and rising productivity has allowed companies to grow without doing much to reduce the vast ranks of the unemployed." That's because workers are terrified to leave their jobs and therefore lack bargaining power. It's no surprise that the best time for equitable growth is during times of "full employment," when unemployment is low and workers can threaten to take another job.
In Conclusion:
Marx was wrong about many things. Most of his writing focuses on a critique of capitalism rather than a proposal of what to replace it with – which left it open to misinterpretation by madmen like Stalin in the 20th century. But his work still shapes our world in a positive way as well. When he argued for a progressive income tax in the Communist Manifesto, no country had one. Now, there is scarcely a country without a progressive income tax, and it's one small way that the U.S. tries to fight income inequality. Marx's moral critique of capitalism and his keen insights into its inner workings and historical context are still worth paying attention to. As Robert L. Heilbroner writes, "We turn to Marx, therefore, not because he is infallible, but because he is inescapable." Today, in a world of both unheard-of wealth and abject poverty, where the richest 85 people have more wealth than the poorest 3 billion, the famous cry, "Workers of the world unite; you have nothing to lose but your chains," has yet to lose its potency.
Sean Mcelwee