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Thursday, October 3, 2013

Thoughts on Marxism

Below is a reflection paper for my History of Economic Thought Class. Enjoy.

I have often been wrong in this class. Whether it is suggesting that wealth inequality has been decreasing, or thinking Mills was like Reagan, it is obvious that I have a lot to learn about economic thought. My readings on Marx do not make me feel any different. In fact, in the first reading, “Marx on Economics,” there is a recurring theme about how the majority of people are ignorant to the true doctrine of Marx. Although I would like to consider myself a little more knowledgeable than the average person, it is obvious that I am not the most knowledgeable economist, nor anything close to it. So, I must approach these readings from the perspective of ignorance. It will be difficult to ignore the years of propaganda and lies I have learned about Marx, but I will do my best.
“Marx on Economics” did a very good job pointing out several accomplishments and faults of Marx and Engels writings.  One of Marx accomplishments was his theory of business cycles.  Marx and Engles were some of the first to notice that there were periods of fluctuation of growth, upward and downward.  Although Marx never did extensively define his theory of business cycles, the author mentions that most of what is contained in today’s theory of business cycles can be found in parts of his writings.
Marx also seemed to offer significant contributions to the theory of labor. Although inspired by Ricardo, he didn’t accept Ricardo’s labor theory of value. So, he created his own. There are several problems with Marx’s labor theory of value, and we now know it is not the best way to measure value. The second reading, “Marxian Socialism,” mentioned a major contradiction that it called the “Transformation Problem.” Marx himself attempted to solve this problem in Volume 3 of Capital. The author mentions there is great debate as to the level of success Marx was able to achieve.
Marx denounced Say’s law. He called it childish and boiled it down to meaning that if there is a sale, there must be a purchase and therefor always a balance of sales and purchases. He pointed out the obvious truth that if you add currency, suddenly there is no requirement for someone to make a purchase just because they just made a sale.  If Say’s law is true this would cause crisis.
One of the shortcomings of Marx’s writings was his prediction of the future. Obviously, no one can predict the future any prediction of the future has to be considered in that light. However, many of the motivations of Marx rested on his predictions of the future of capitalism. Marx saw a capitalist society that would continue to grow into a few incredibly rich capitalists wielding unchecked amounts of power and using it to enslaved a massive workforce. The author mentions how Marx could not have foreseen things like growth of powerful workers unions, or the animosity experience between competing industries in multiple nations (ie auto industry). Even though I agree that the “increasing misery of the working class” was a “fantastic miscalculation,” my cynical self will argue that Marx was and is right.
It shouldn’t be surprising to those aware of our current situation. Wealth inequality is at an all time high. Wages have not been increasing lately and it seems that the workingman can barely get by. Politicians are slaves to special interests and addicted to their own power. The uber rich control them by addicting them to power and contributions.  They fear more the next election than worry about what’s right. Has the state not become an “instrument of force used by capitalists against workers?”
Corruption is rampant in our government and private industries. Greed has driving Wall Street and big banks to take bigger and bigger risks. Losses are covered up in offshore companies. Are we not also slaves to the “man?” Do we not sell our freedom by the hour? Does our consumer culture not enslave us in shackles of debt? It might have happened a little differently than Marx predicted, but does this not sound like the “future” of capitalism that Marx described?
Many people believe this, but I don’t. I don’t believe capitalism is to blame for the degradation of society. In fact it is the continued growth of government that tempts politicians with increasing power. It is the call of the worker for more social planning that increases the size of government. Yes, men like Bill Gates yield disgusting amounts of power. However Bill himself would not be able to shape our children’s curriculum to create an army of Microsoft customers if it wasn’t for our socialized education system.
Many people want the masses to believe this. For various reasons they want the lower classes to rise up and revolt. But many of those same people are the cause of many of these problems. For some reason I feel like I am digging myself a hole, but I like digging so I will continue.
The biggest thing that I don’t understand is the obsession with Marx in our current economic society. I have listened while an economist went on and on about how horrible capitalism is. The problem was that he used many Marxist and Socialist examples and called them capitalism because they were or are found in our society today. Maybe I’m wrong, but I don’t believe we live in a capitalist economy. We do to an extent, but I think our current economy more closely represents imperialism. It’s a mix of government collusion with private business similar to what we saw during Great Britain’s period of colonization. I digress.
Marx has been discredited. His labor theory of value was extremely flawed and neglected to recognize other sources of value. His analysis of capital accumulation proved to be wrong and failed to recognize other possible outcomes of capital accumulation. His theory of exploitation of workers, highly dependent on his labor theory of value, proved to be incorrect. Long periods of unemployment have been the exception in capitalism more than the rule. His theory of class conflict failed to recognize that the government could step in and make things better for exploited workers. Even the idea of Marxist Utopia, not mentioned in either reading, has been tried and failed. The incentives to take risks, provided to workers and entrepreneurs by the capitalist system, have proven to be a very efficient way to increase quality of life.

So why is capitalism so demonized? Why is socialism and Marxism making a resurgence of popularity in our society? Although I feel some form of Marxism is an inevitable equilibrium due to proliferating ignorance in society, even some of the most well educated economists in society are Marxist. I just don’t understand it. I assume, and look forward to, my questions being answered in class. I started reading the Communist Manifesto a while ago, and confess that I have been distracted by other readings. However, I have been looking forward to the subject of Marx from the beginning of the semester.

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