In a recent book ‘The Marx Revival’ one contributor writes of Marx that:

‘it is highly unlikely that he would ever have supported any of the critiques of capitalism that centre on exorbitant profits, soaring inequalities of income and wealth, perennial insecurity, uncontrolled power of money and finance,  growth without limits, rampant globalisation that devastates traditional social worlds, or ever harsher competition forcing everybody into a rat race to the bottom.’

Since this series of posts is about Marx’s alternative to capitalism, why not kick it off again by giving our own answer to this question.

The answer is that the writer is correct.  Let’s see why.

Profits that are too high?  Well, what constitutes too high?  There is hardly an objective answer to this.

Perhaps it could be said that Marxists should – by arguing that profits are the result of surplus value (labour for which no payment has been received by the worker) and therefore of exploitation – regard any level of profit as ‘too much’.  Except that even under a collective cooperative economy a surplus, not immediately distributed as wages, would have to be achieved to provide for investment in further accumulation and for social insurance purposes.

Even under capitalism, bigger profits should lead to more rapid accumulation of capital, including buildings and equipment etc. (constant capital) and employed workers (variable capital).   The latter should increase employment and contribute to the growth and potential power of the working class, including reducing unemployment and facilitating the organisation and fighting capacities of the class.

Of course, additional profits may lead to unproductive speculation and accumulation, but that is a further and different point; except that it raises the issue of who owns and disposes of the surplus (profit) produced.

“Soaring inequalities of income and wealth” are a common objection to capitalism, and there is no doubt that a society ruled by the working class would have much, much reduced inequality.  However, as is well known, in the first stages of the development of such a society inequality would remain.

So what constitutes unacceptable inequality?  Like the level of profits there is no objective answer.  In fact, it has been argued that the perception of unacceptable levels of inequality is at least partially determined by the level that already exists:

“Even though income inequality has increased, popular concern with inequality (for example, agreement with the statement that inequality is too high) has not grown. In comparative perspective, public opinion in more unequal countries is not systematically more concerned about income differences and does not exhibit stronger demands for redistribution.”

‘The Guardian’ has just reported that “Luke Hildyard, the director of the High Pay Centre, which campaigns for executive pay restraint, said: “Pay for top CEOs today is about 120 times that of the typical UK worker. Estimates suggest it was around 50 times at the turn of the millennium or 20 times in the early 1980s.”

In a society ruled by workers the level of need will play a greater role in determination of the level of income to be received, which will therefore still give rise to income inequalities.  Until more fully developed, this society will still have income inequalities at least partially determined by skill, knowledge and effort, determined not only individually but also by productive unit and industry etc, not to mention country.  Of course, the direction of travel will be very different, and the social, political and psychological effects of inequality will be taken into account in a very different way than the purely constrained economic calculations of the capitalist market.

It has to be recognised however that the greatest and most socially significant inequalities are determined by inequality in wealth; in particular the ownership of capital from which profit and its derivative revenues such as dividends, rent and interest etc are accumulated.  Equality of income can only realistically become an objective given equality of wealth, that is, the common ownership of the resources now commanded by capital through individual capitalists, corporations and states etc.

“Perennial insecurity” is not an affliction for those whose income is determined by the ownership of capital, or at least not in terms of fear of losing one’s livelihood, job, home or (for example if you are a US citizen) access to health care.  It is a real threat to a civilised existence if you work for a wage (and normally don’t receive enough income from capital) and it’s especially a threat if you are on zero hours, in part-time employment or otherwise have terrible employment contract conditions.

But fundamentally social and economic insecurity arises because you are a member of the working class who lives by selling their labour power and are potentially subject to very unfavourable circumstances when you do.

“Uncontrolled power of money and finance” refers to the simple fact, observable to everyone, that power is very often a function of money and money is power in itself, the power to purchase the resources of society. Most importantly, to employ money to control the production of society’s wealth and then partake of exaggerated levels of consumption.

This seems so common sense that the problem appears to be the ‘uncontrolled’ exercise by money and finance, but since possession of money can determine the level of control this is a merry-go-round.  To rob money and finance of its power would mean robbing it of its power to own and control production, to become capital that employs labour power to produce profit.

This is possible if the resources that are employed to produce society’s wealth, and from which incomes are received, is owned and controlled by the majority in society.  The power of money and finance then becomes a function of the decisions of the majority and subject to its direction, putting it under the control of society as a whole and removing the ‘uncontrolled’ power of its ownership and direction by the capitalist class and its most senior hirelings.

“Growth without limits” is hardly a problem if this growth breaks down barriers and obstacles to the satisfaction of human need.  It is a problem if instead it refers to the logic of capitalism, which is the limitless pursuit of profit and the disregard for un-privatised costs to humanity and rest of nature.

‘Rampant globalisation that devastates traditional social worlds’ is also a problem if these traditional social worlds met human need.  But, as Marx argued in the Grundrisse, “needs are originally confined and only develop along with the productive forces”.   Unfortunately, traditional societies have historically only addressed this by massively circumscribing and retarding the growth of productive forces and hence of the human needs that capitalism has developed.

Even more unfortunately, as Marx also says, “the development of the human productive powers is effected “at first at the cost of the majority of human individuals and even of the entire classes.”  “The higher development of the individuality is brought only through a historical process in which the individuals are sacrificed.”  The answer is not to artificially and foolishly seek to thwart the development of humanity’s productive powers and the potential for emancipation they contain.  It is not to seek to prevent capitalism in the name of less developed social systems, or seek to prevent less developed forms of capitalism from developing.

Finally, would Marx have supported a critique of capitalism centred on ‘ever harsher competition forcing everybody into a rat race to the bottom’?  In so far as this competition is the expression of the development of capitalism “a race to the bottom” in this critique simply expresses outward characteristics of the system.  It paints a damning picture but one, no matter how bright the colours painted, that is a representation of reality and a one-dimensional one at that.  It does not get to the heart of the question and so cannot give rise to an answer.

This is true of all the criticism mentioned.  The critique of capitalism cannot rest on an attempt to restrict profits.  This would simply be an attempt to stop the system working but not to go beyond it.   Inequalities of income and wealth cannot be dissolved through taxation and redistribution since it assumes continuing unequal ownership, while perennial insecurity cannot be eradicated as long as workers have to sell their labour power in the market and own nothing else.

The power of money exists mainly because of its power to command ownership of society’s productive powers without which human civilisation as we know it could not survive.  “Growth without limits, rampant globalisation that devastates traditional social worlds,” and “ever harsher competition forcing everybody into a rat race to the bottom” are simply the dynamics of capital and the pursuit of surplus value extraction from workers.

This is why for Marx, as explained in ‘The Communist Manifesto’, and after listing the various movements in which his comrades were involved, he said that they “bring to the front, as the leading question in each, the property question, no matter what its degree of development at the time.”

This means that the concerns that motivate these criticisms are not dismissed; concerns over inequality, insecurity and ‘the rat race’ etc.  It just means that these are not soluble within the confines of capitalism and only a revolutionary alternative can provide a solution.

In the ‘Financial Times’ editorial on the last day of 2020, the paper paid tribute to those who had worked through the Covid-19 pandemic: ‘these unsung heroes are underpaid, over-worked, and suffer unpredictable work opportunities and insecurity . . . and brutalised working conditions – to the point of such grotesque episodes as the woman giving birth in a toilet cubicle for fear of missing a shift.’

The newspaper declares that ‘it is a moral imperative to help the neediest’, as it decries inequality and the existence of a precariat: ‘lifting people out of economic precariousness is also greatly in the self-interest of the better off’.  But it does so mainly because it fears that ‘it is just a matter of time before the pitchforks come out for capitalism itself’; it therefore believes that ‘capitalism’s political acceptability requires its adherents to polish off its rougher edges.’

Many will contend that it is more than ‘rough edges’ that need to be polished off and that polishing off the whole system is required.  It is not therefore, as the FT editorial headline puts it, that ‘a better form of capitalism is possible.’  But what is much less understood is that it is not enough to pick up ‘the pitchforks’ against capitalism; we need an alternative that we can fight for. This alternative is least understood and is the subject of this series of posts.