Karl Marx, in the Capital, developed his critique of capitalism by analyzing its characteristics and its development throughout history. The critique contains Marx’s most developed economic analysis and philosophical insight. Although it was written in 1850s, its values still serve an important purpose in the globalized world and maintains extremely relevant in the twenty-first century.
Karl Marx’s critique of political economy provides a scientific understanding of the history of capitalism. Through Marx’s critique, the history of society is revealed. Capitalism is not just an economic system in Marx’s analysis. It’s a “specific social form of labor” that is strongly related to society. Marx’s critique of capitalism provides us a deep understanding of the system to predict its pattern and protect ourselves from its negative sides.
Capitalism dominates the world today. Known as a system to create wealth, capitalism’s main purpose is to increase profits through land, labor and free market. It is a replacement of feudalism and slavery. It promises to provide equality and increases living standards through equal exchanges, technological innovations and mass productions. However, taking a look at the global economy today, one can clearly see the disparity between developed and developing countries, and the persistence of poverty throughout the world despite the existence of abundant wealth. This modern issue was predicted and explained a hundred and fifty years ago in Karl Marx’s Capital.
There were many theories that promotes and explains how the capitalist system works; however, Karl Marx’s Capital is the first one that can explain the imminent relationship between poverty and wealth, inequality and growth under capitalism. The existence of such conflicted relationships is logically explained by Karl Marx’s theory of surplus and value.
Capitalism’s profits are produced by the surplus value comes from the unpaid, exploited workers. The workers’ wages, under the system of capitalism,
are not equal to the value of their labors. Their wages are kept down to the subsistent level in order to maintain profits for the capitalists.
Just like the slaves in slavery and the serfs in feudalism, the wage-laborers are exploited tremendously. Capitalism, under the disguise of fair exchanges, carries its exploitation nature from previous economic systems.
Many proponents of capitalism argue that the wealth is shared with the workers. But is it true? According to an annual report in 2008, an average American CEO makes as much money in one day compared to what an average worker earns in one year1. And the disparity between business leaders and average workers continues to grow over time. From 1990 to 2005, the CEO’s salaries increased almost 300%, while a worker received a scant 4.3%2. The social consequence of this disparity is the concentration of wealth on a small percentage of population.
In Capital, Karl Marx reveals the ugly truth that...