One hundred and fifty years ago, the first volume of Karl Marx’s magnum opus, Das Kapital, edited by Friedrich Engels, was published in Germany. It was subtitled ‘a critique of political economy’, but it was far more than that; it was a devastating intellectual attack on the economic pillars of industrial capitalism. Living conditions of the mid-nineteenth-century proletariat were generally miserable all over Europe. In England they were described by Charles Dickens in novels such as Hard Times and Bleak House; in France by Victor Hugo (Les Misérables); in Denmark by Hans Christian Andersen and others. It is no wonder that Das Kapital came to be known in Germany as ‘the Bible of the working class’; however, its dissemination and reception in Britain did not really gain momentum until it was translated in full around the turn of the century.

What is left?

Since then there seems to have been a resurgence of interest in Capital whenever capitalism has been in trouble. “Booklovers turn to Karl Marx as financial crisis bites in Germany”, the Guardian reported 15 October 2008. But is classical Marxism relevant today? After all, modern capitalism differs substantially from the nineteenth century version castigated by Marx and Engels. Furthermore, the social sciences have made significant headway since then, partly thanks to the intellectual division and subdivision of labour that has replaced political economists by political scientists, macro and micro economists, business economists, sociologists, and more. In fact Marxism itself has contributed to this process through a number of post-Marxist schools during the 20th Century, including the Frankfurt School, French structuralism, and American neo-Marxism, to name but a few.

Classical Marxism was well aware of its own historicity, and searching for the key to the present in a 150 year old text betrays this awareness. It is fully possible to retrospectively appreciate the project of seeking to integrate a theory of relative prices, of functional income distribution, and – last but not least – class exploitation into a single, unified, labour theory of value. Yet, as Baran and Sweezy conceded in Monopoly Capital (1966), we have a better theory of relative prices today. This insight led them to abandon another part of classical Marxism, the theory of the long-term tendency for the rate of  profit to fall, in favour of its exact opposite, the law of the rising surplus. In similar vein class theory has been revised and developed, e.g. by writers such as Nicos Poulantzas and Erik Olin Wright. Finally, few if any contemporary Marxists would embrace the original base-superstructure model without qualification.

The holistic view of society

Nevertheless, classical Marxism remains an important source of inspiration. Part of its inspiration lies in its holistic view of society, in perceiving society as a totality. The economy is but an ‘instance’ of society – a subsystem which contributes to, and relies upon, other parts of society for its reproduction. In his studies of ancient and pre-capitalist societies Marx had been forced to adopt a birds-eye view of these. From this elevated position it had become clear to him to what extent ideological power had been used to legitimize the interests of the ruling classes. For example, rulers often claimed to rule by divine authority. This Dei gratia is still invoked when, say, Margrethe the Second, “by the grace of God queen of Denmark”, signs the laws passed in Parliament or when the Prince of Wales is referred to as “Charles, by the grace of God king of England, Scotland, France and Ireland, defender of the faith”.  From this perspective, subjects rebelling against their masters would be turning against none less that God himself. An obvious case in point can be found in Martin Luther’s condemnation of the great German peasant rebellion of 1525 in which about 100,000 peasants are believed to have been killed. In his pamphlet Against the Murderous, Thieving Hordes of Peasants, he invoked the Apostle Paul’s Divine Rights of Kings arguing that “anyone who is killed fighting on the side of the rulers may be a true martyr in the eyes of God”.

Just as going abroad affects one’s view of one’s own country, visiting the past may change one’s view of the present. Thus, Marx set out to unmask the ideological arguments legitimizing the industrial capitalism of his own day and age. In Capital he pinpoints four tenets of capitalist ideology – freedom, equality, property and “Bentham”:

 “Freedom, because both buyer and seller of a commodity…are constrained only by their own free will,…they contract as free agents. Equality because…they exchange equivalent with equivalent. Property, because each disposes only of what is his own. And Bentham (self-interest), because each looks only to himself.”

Karl Marx, Capital I, p. 280.

The thrust of his argument, of course, is that premises that appear to be free and fair serve to mask underlying conditions that frequently allows one side of the bargain to benefit at the expense of the other. In 1962, sociologist Richard Emerson formally explained that the dependence of actor A on actor B “is (1) directly proportional to A’s motivational investment in goals mediated by B, and (2) inversely proportional to the availability of those goals to A outside the A-B relationship.” Thus, freedom, property and Bentham may mitigate against equality if A is desperate for a job, job openings are few, and B is an employer free to choose among a host of applicants.

Already in the Poverty of Philosophy (from 1847) Marx had eloquently decried the tendency for the economic logic of market exchange to penetrate every aspect of life:

“Finally, there came a time when everything that men had considered as inalienable became an object of exchange, of traffic and could be alienated. This is the time when the very things which till then had been communicated, but never exchanged; given, but never sold; acquired, but never bought – virtue, love, conviction, knowledge, conscience, etc. – when everything, in short, passed into commerce. It is the time of general corruption, of universal venality, or, to speak in terms of political economy, the time when everything, moral or physical, having become a marketable value, is brought to the market to be assessed at its truest value.”

Marx’s critique of political economy is not least a critique of what he saw as its ideological bias. In his view the political economy of his day painted an all too rosy picture of capitalist reality and its recurrent crises:

“…Instead of investigating the nature of the conflicting elements which erupt in the catastrophe, the apologists content themselves with denying the catastrophe itself and insisting, in the face of their regular and periodic recurrence, that if production were carried on according to the textbooks, crises would never occur.”

Karl Marx, Theories of Surplus Value, Part 2, p. 500.

One wonders what he might have had to say about the heroic assumptions of our undergraduate textbooks: Perfect information, perfect rationality, rational expectations, no transaction costs, general equilibrium, etc. What would he make of its focus on efficiency (pareto optimality) rather than distribution, or of the assumptions required to price public goods at their “truest value”? One can only guess.

Critics have pointed out that there is no objective, non-ideological, standpoint from which to dismiss an argument as ideological, that “ideological” arguments may be perfectly valid, and that ideological mechanisms are at work in all strata of society. In 1842 the young Marx had eulogized the freedom expression in Rheinische Zeitung, pointing out that “You cannot enjoy the advantages of a free press without putting up with its inconveniences. You cannot pluck the rose without its thorns!” In the 20th Century, Communist regimes turned their own hyphenated versions of Marxism into official ideologies, mediated through ideological state apparatuses (a term coined by French Marxist Louis Althusser). Dissidents were no longer enemies of God, but enemies of the people. Censorship was pervasive. Marx himself had hardly survived under Stalin or Mao.

A totality in motion

In his foreword to Balinsky’s Marx’s Economics from 1970 the late Paul Samuelson speculated what had made Joseph Schumpeter admire Karl Marx. The Marxian inspiration is evident in Schumpeter’s work, most notably perhaps in his famous concept of creative destruction, i.e., in the competition from:

“the new commodity, the new technology, the new source of supply, the new type of organization … which commands a decisive cost or quality advantage and which strikes not at the margins of the profits and the outputs of existing firms but at their foundations and their very lives. This kind of competition is as much more effective than the other as a bombardment is in comparison with forcing a door, and so much more important that it becomes a matter of comparative indifference whether competition in the ordinary sense functions more or less promptly; the powerful lever that in the long run expands output and brings down prices is in any case made of other stuff.”

Schumpeter, 1943, pp. 84-85

Like Schumpeter, Samuelson acknowledged the “fragmentary and somewhat contradictory” insights on “overproduction, underconsumption, and periodic business cycles” and – like Schumpeter – found Marx’s economic work respectable, but no more than that:

”What I finally decided to be Marx’s excellence in Schumpeter’s eyes was not his ”schema” but his grand ”vision” of social change. Where a Macauley conceived of whig society as the culmination of all evolution, and a Hayek looks back upon the epoch of Calvin Coolidge as a reattainable golden age, Marx peered at the social order from out the window of the British Museum to chant: This too will pass away. And it did. And it will.”

From Samuelson’s foreword to Balinsky’s, Marx’s Economics (1970).

This quotation is interesting in highlighting what Schumpeter dubbed the ‘chemical’ relationship between history and economics in classical Marxism.

Marx had learnt from the other classical economists (perhaps especially David Ricardo) to build a model and explore its inner dynamics. Adam Smith, in his Philosophical Essays, described models (or “systems” as he called them) in the following way:

“Systems in many respects resemble machines. A machine is a little system, created to perform, as well as to connect together, in reality, those different movements and effects which the artist has occasion for. A system is an imaginary machine invented to connect together in the fancy those different movements and effects which are already in reality performed.”

Adam Smith, 2003, p. 66

This quotation is found in a chapter on astronomy. Smith was inspired by Isaac Newton and his classical mechanics. Yet, the assumption underpinning the quotation is that the real economy (of which the “system” is a model) is a machine – a non-programmable eighteenth century machine operating in accordance with immutable causal laws. While this machine ontology may be appropriate for the study of astronomy and physics, its limitations are obvious in the human and social sciences. Unlike the eighteenth century clockworks, modern  machines are often programmable (and even programming), and so are human beings; the human mind is, at least to some extent, culturally programmable and endowed with the creativity required to develop new programmes, new solutions to old problems. It is no coincidence that social sciences have failed to come up with constants comparable to Newton’s G.

The machine ontology has serious limitations when it comes to grasping qualitative changes, be they incremental or revolutionary. Marx was inspired by two approaches: Hegelian dialectics and Darwinian evolution. Perhaps the most central concept within Marx’s version of dialectics is that of contradiction. The original meaning of the word dialectic is “the art of debate”, i.e., of developing one’s views by making and exchanging arguments. For Hegel, similar ‘cognitive’ processes were at work in nature and society, driving their evolution. In modern terms, a system may be unsustainable due to internal contradictions, and it is important, therefore, to look for such ‘contradictions’ to understand what will eventually force the system to change or collapse. For Marx the theory of the long-term tendency for the rate of profit to fall constituted such a contradiction; a profit-based economy without profit is not only a contradiction in terms, but would be an unsustainable economic system in the real world.

The affinity between dialectics and systems theory has been addressed, e.g. by Ollmann (1993) and Levins (1998). Levins refers personal conversations with biologist John Maynard Smith:

“John Maynard Smith argued that the development of a rigorous, quantitative mathematical systems theory makes dialectics obsolete. Engels’ awkward ‘interchange of cause and effect’ can be replaced by ‘feedback’, the mysterious ‘transformation of quantity into quality’ is now the familiar phase transition or threshold effect’… He could have added that hierarchy theory grasps some of the insights of ‘integrated levels’ or ‘overdetermination’.”

Levins, 1998, p. 375

What happens when a system reaches its quantitative limits, its thresholds, and has to change its mode of functioning or cease to exist? What happens beyond these boundaries? Marx the agitator had some rather vague (and inconsistent) notions of socialism in the Communist Manifesto of 1848, but Marx the scientist was less cocksure. In Die deutsche Ideologie he and Engels had pointed out that “Communism for us is not a state, which must be brought about, an Ideal to which reality must conform. What we call Communism is the real movement that puts an end to the existing state of affairs.” (Die deutsche Ideologie, p. 25. My translation, VS). They obviously did not envisage the forms of Communism that emerged from revolutions in backward peasant societies in the Soviet Union and China. Despite his beard, Marx was not a prophet and dismissed as undialectical any notion of the future as an unfolding of something already given.

Nevertheless, he did seem to have a sense of the direction of social development. Thanks to modern educational systems we undoubtedly contribute more according to our abilities than was possible in his day. And we certainly enjoy more in accordance with our needs. The latter is due in part to a more humane social order, but we should not forget the capitalist technological dynamics – praised by Marx and Engels in the Communist Manifesto of all places.

Although the theory of the falling rate of profit was ill founded, the underlying idea of looking for internal contradictions, e.g. in the form of dynamics that would push the system towards its ‘tipping points’ seems perfectly valid in any attempt to look forward. It is no coincidence that Marxist geographer David Harvey entitled his latest book Seventeen Contradictions and the End of Capitalism. To be sure, rumours of Capitalism’s imminent death have often been greatly exaggerated, and it has survived most of Harvey’s many contradictions for centuries. Yet, there is no shortage of pressing contradictions setting the scene for the future. Let me single out just four of them:

  1. The contradiction between population and economic growth and a limited eco-system. Economist Hans Aage once remarked that there are two things we know about exponential growth: One is that it becomes something very large; the other is that it stops. Without a green transition of our economies, growth may not only stop but could actually turn negative. Green transition seems to be precondition for whatever long-term growth is possible, but will we realize this in time?
  2. The increasing social tensions caused by accelerating inequality [1]. As mentioned, long-term rates of profits do not appear to have fallen, but long-term growth rates have declined over the last fifty years. In Thomas Piketty’s Capital in the 21st Century the gap between profit rates and growth rates (r – g) gives rise to ever higher levels of inequality, much like those that ultimately put any game of Monopoly to an end. Will the taxation of capital income, as suggested by Piketty, be increased sufficiently to contain this process? So far, tax competition has led to decreasing levels of capital taxation in most countries.
  3. The displacement of labour power. Technical change is rendering labour power increasingly disposable. As Harvey observed: ”Robots do not (except in science fiction accounts) complain, answer back, go on strike, demand more wages, worry about work conditions, want tea breaks or simply refuse to show up.” (Harvey, 2014, p. 103) A recent McKinsey report estimates that some 40 per cent of the labour time in Denmark can be automated using existing technology. However, the amount of ‘intelligence’ built into modern machinery is likely to explode over the coming decades and may reduce employment in manufacturing to levels similar to those of modern farming. Will this be consistent with an economic circuit based on wage labour?
  4. The contradiction between national politics and a globalized economy. Trump won the American election on the slogan of putting America first. Britain has decided to leave the EU. The Scots are considering their position within the future UK. Many Catalonians wish to leave Spain, and so do many Andalucians. Veneto and Lombardy have voted in favour of greater autonomy vis-à-vis Rome. At the same time the world is facing truly global problems – most notably that of climate change – that even large countries cannot handle alone. Will the tide turn, or shall we continue to see “things fall apart; the centre cannot hold” as did Yates in 1919?

The End of History boldly announced by Francis Fukuyma in 1989 seems far away. It still makes sense to peer at the social order and chant: This too will pass away. For it will.

Evolution and Revolution

Yet, this need not imply that we are heading for a revolution. Marx lived in a revolutionary era; he was well acquainted with the revolutions of the past, and his Hegelian dialectics may have predisposed him towards seeing qualitative change as disruptive rather than gradual. In view of the seriousness of the above contradictions, revolutionary changes cannot be ruled out in the long term, but they are not to be wished for! Naïve dreams of seizing the headquarters, taking control, and creating Paradise on Earth in the uncharted territories beyond the revolutionary tipping points have rarely if ever been realized. Many revolutions have drowned in blood and given way to even harsher oppression. This applies to the long list of failed peasant revolts of the European renaissance as well as to many of the recent uprisings in the Arab world. Even when revolutionaries have succeeded in overthrowing the old system, no Phoenix appeared from the flames. The October Revolution in Russia in 1917 was followed by four years of civil war, not to mention all those years that were to follow. Even when it comes to the micro revolutions known as organizational change, failure rates are awfully high.

The alternative is not to ignore the contradictions, stay the course and sail Titanic into the iceberg. The enormous inertia of the supertanker is reflected in Maersk’s strategic motto of timely care, of looking as far as possible into the future and adjust the course in good time. If we do not want the deep contradictions of our societies to evolve to the point of revolutions or armed conflict over resources, the relevant alternative is evolution. For all their shortcomings, modern societies are precious – way too precious to be torn down and rebuilt from scratch – but they can only be preserved through change.

Charles Darwin’s Origin of the Species, published in 1859, provided a consistent framework for understanding qualitative evolution and came as a revelation to Marx. The biological dynamics generated by (what we now know is genetic) variation, by transmission, and selective retention clearly had a bearing on social evolution as well. Thus, in books 2 and 3 of Capital, Volume I, Marx compares the evolution of human tools and technology to the evolution of biological organs with explicit reference to Darwin. Furthermore, in a letter to Ferdinand Lasalle he observed that “Despite all shortcomings, it is here that, for the first time, “teleology” in natural science is not only dealt a mortal blow but its rational meaning is empirically explained”. MECW, vol. 41: 246–47

So – is Capital still relevant?

The answer hinges on what is implied by the word relevant. It is not reasonable to expect a theoretical analysis of 19th century capitalism to be applicable to an entirely different society 150 years later. Yet, I hope to have shown that at a level above the theoretical level, the approach is still inspirational. The societies in which we live are still totalities in motion, and the formidable forces that are reshaping our societies and economies make it as relevant as ever to consider how to grasp these transformations in their totality – how to catch the whole bird and catch its flight at the same time.

[1] Excessive inequality appears to have a negative impact on growth for a number of reasons. Thus, higher inequality seems to reduce social mobility. See e.g.


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