Capitalism as an Institution

Capitalism as an Institution.The thought of Marx’s early writings was heavily influenced by his early Hegelian training. The reasoning by which he constructed its framework was largely deductive, but like Hegel he tended to fit into the framework a great mass of data drawn from his historical studies.


It aimed to be a philosophy of history, and following his Hegelian model, Marx assumed that all significant data would in fact fit into a sufficiently spacious framework. As Hegel said, The real is the rational, and Marx too supposed that dialectical materialism could yield a universal theory of the evolution of civilization. He never abandoned this conception, but after 1850 he devoted his life as a scholar less to this kind of speculation and more to using his ideas in a historical interpretation of contemporary society in Western Europe.

In so doing he was developing the most fruitful germ in philosophical Hegelianism its concept of institutional history and what in substance Marx wag trying to do was to treat capitalism as a social institution. He had no thought, of course, of giving up his original practical purpose of furthering a social revolution or of supplying its intellectual underpinning Hence without any consciousness of dividing his effort he could at the same time engage in continuous plans to organize socialist parties.

His twofold plan involved an intensive study of the economic origins of existing social classes and a thoroughgoing economic analysis of the nature of the antagonism between these classes. These two lines of investigation formed the principal subjects of his work on Capital. The first took him into extensive historical research into the origins of the capitalist organization of industry, the rise.of the middle class, and the formation of its counterpart, the industrial wage-earning class, which Marx rightly regarded as the major development in modern European society.

The second undertook to back history with a precise economic analysis of capitalism, upon fines already set by the classical economists, to show at once the mechanism by which capitalism produces the two chief classes and the grounds for their inevitable and growing antagonism. This part of Marx’s work issued in the theory of surplus value, which unfortunately tended to monopolize the discussion of Marxian socialism in its earlier stages.

The historical chapters of Capital, especially those which deal with the earlier history of the capitalist organization of industry, prior to the eighteenth century, and with the formation of a class dependent solely upon its wages were the best of all Marx’s writings. They have scarcely been superseded even yet, despite the attention given to economic history by later writers, who were in no small degree inspired by the beginning Marx made.

He opened up the main avenues of approach to the historical study of capitalism, especially as the new industrial system affected social history the formation of a proletariat by the divorce of the peasantry from common rights in the land, the destruction of household industry by the growth of capitalist organization, the steady increase in the size and power of the units of such organization, and the acceleration of these processes by the expropriation of the church and the colonial exploitation of America and the indies.

The distinctive feature of Marx’s treatment was his stress upon the changes in human and social relations that result from industrial and commercial changes, and particularly upon the cramping, even the distorting, of the workers lives by the steady advance of the division of labor. Marx’s general thesis was that the working class has been subjected by industrial organization to a regimentation at odds with the profession of liberty and equality in the bourgeois democratic philosophy.

In manufacture, the enrichment of the collective worker, and therefore of capital, in the matter of social productivity, is dependent upon the impoverishment of the workers in the matter of their individual powers of production.

Marx believed, mistakenly, that capitalism depended on a progressive reduction of workers living standards. He was not mistaken in believing that working conditions in mines and factories when he wrote were often scandalous, that hours of labor not only for men but for women and children were outrageously long, or that machine tending involved frustrations and risks that had not existed in a more primitive system of production.

The descriptive chapters of Capital opened up most of the criticisms of capitalist industry which are current even today and reinforced his criticisms with much statistical and other factual data drawn from public reports. This part of his work was probably assisted by Engels, who had published his book, The Condition of the Working-Class in England, in 1844.

Marx dealt realistically with such subjects as the periodic recurrence of crises, the existence even in prosperous times of chronic technological unemployment, the destruction of the skilled crafts by new machines, the displacing of skilled by unskilled labor; the sweating of non-industrialized trades, and the growth of an unemployable slum-proletariat. As with his historical studies, the novel and distinctive characteristic of Marx’s treatment was his stress upon the social repercussions of industrialization, its tendency to weaken primary social groups like the family, and therefore upon the human problems that it created.

The contradictory quality of capitalism seemed to him, as it had to Hegel, to be its paradoxical union of organization and anarchy the technological organization of production united to an anarchy of exchange, an elaborate social coordination of the units of production united with an almost complete disregard for the adaptation of industrial means to human ends. Though the ideal received only occasional and passing statement, Marx had always in mind the contrast between capitalism and a planned and socialized economy, designed to produce and distribute goods when and where a legitimate need exists for them.

The real force of Marx’s book was carried not by theoretical argument but by the stark realism with which it pictured the actual conditions of labor and by so doing pictured unregulated capitalism as a parasite that devours the human substance of society, In fact, though, not in intention, Capital was the first and probably the most powerful of the ethical attacks on the sheer moral ugliness of an acquisitive society without adequate protection for its industrial labor force, Characteristically, however, Marx never makes his attack on capitalism as an overt moral judgment, nor does his argument that capital exploits labor mean that the workers were better off under some earlier system of production.

The dialectic was for him a guarantee, and he often says, that capitalism is an advance over the feudalism that preceded it. Nor do the cruelties of capitalism mean that capitalists personally are cruel capitalists and workers alike are caught in the system and in general must do what the system requires.

From Marx’s point of view the system itself is inherently self-contradictory and in the end is therefore self-destructive, but what makes it self-destructive is that it contains the germs of a higher and better system that is struggling to be born. Implicit, therefore, Marx’s criticisms always look toward the future rather than the past toward what he believes the conditions of the workers will be in a rationally planned and socialized economy.

Something of this sort must, he believed, be the logical outcome of an economy from which the contradictions of capitalism have been purged. He tried neither to describe such a future economy nor did he hold it up as an ideal to be striven for. Like Hegel he believed that the course of history is both inevitable and rational men will indeed strive but in the end their striving will be for what they must desire and must create.

Thus in the guise for an arid analysis of economic cause and effects, Marx developed what in fact was an exceedingly powerful moral appeal, backed by a quasi-religious conviction. It was nothings less than an appeal to join the march of civilization and right; and it was this appeal that gathered armies of workingmen to Marxiar socialism.
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