The Collapse of Capitalism

The Collapse of Capitalism.The major purpose of Capital, therefore, was to show that capitalism in destroying itself must give rise to socialism, its antithesis. The plan of Marx’s argument was to accept the labor theory of value, which Ricardo had made the central principle of classical economics and which Mar regarded as an authentically scientific theory of capitalism, and then to show dialectically that it is logically incoherent.


The basic concept of Mar’s analysis was “surplus value.” The classic defense of capitalism had been the argument that in a system of free exchange everyone would, in the long run, receive back a value equivalent to that which he brought to the market and would thus receive his equitable share of the social product. Against this Marx sought to show that in an industrial system in which capitalists own the means of production, labor will always be forced to produce more than it receives and more than is required to keep the system going.

Wages, on the average, will lie close to the subsistence minimum, not as Malthus had argued because of the pressure of population but because of the system of private ownership, and the capitalist’s monopolistic position in the system will enable him to sequestrate the surplus in the form of profits and rents.

This argument, with its almost endless ramifications and its excessive technicalities, led to a long controversy which was celebrated in its day but which was outmoded even before it came to an end. For the Ricardian theory of value from which it started became obsolete for non-Marxian economists while the controversy was still in progress. Marx’s economics in general and the theory of surplus value in particular, therefore, belong properly to the history of economic theory.

It is indeed taken for granted by present-day Marxists, yet an ardent Marxist like Lenin rarely referred to it. For Marx, however, surplus value was the keystone of the argument, since it provided the ground of his conclusion that a capitalist system must ultimately he self-destroying. The theory left in its train two propositions that remain articles of faith for later Marxists, first, that capitalism must inevitably collapse, and second, that its collapse must inevitably give rise to socialism.

Marx’s economic analysis, therefore, produced a number of predictions about the course that a capitalist society will run through in its way to ultimate failure. Because of the competition of capitalists among themselves, industry will tend to be concentrated in larger and larger units of production. These will tend to become monopolistic, and wealth will be concentrated in fewer and fewer great fortunes.

Competition to keep up profits will make exploitation more severe, and the working class will become more and more impoverished. Because labor is chronically unable to consume all that it produces, a capitalist economy will be subject to periods of overproduction, depression, and unemployment.

Small businessmen, farmers, independent artisans-the petty bourgeois remnants of a handicraft economy will more and more be reduced to the level of wage earning proletarians, and a capitalist society will tend to be polarized between capitalists, with satellite sub classes, on one side and the proletarian masses on the other. In the end, Marx argued, this must bring about a revolutionary situation in which the expropriators will be expropriated, and the means of production will be socialized.

All these predictions were subjects of prolonged controversy, and judged in the light of what happened after Marx wrote they had widely different values, which suggests that they were not deduction, from sound theory but, when correct, were penetrating guesses about, the way capitalist industry would work. The tendency of industrial and business units to combine and grow in size and the tendency toward recurring cycles of prosperity and depression were verified, though corporate organizations tended to spread ownership and to divest it of the implications of control that Marx attached to it.

On the other hang the prediction that the working class would be progressively impoverished was wide of the mark, for industrial. societies indubitably raised their standard of living. The prediction that the lower middle class would be absorbed into the wage-earning proletariat also proved to be wrong, for industrialization greatly increased the so-called white-collar class, which in Marx’s classification must be called petty bourgeois, Though capitalism assumed international proportions, as Marx-ed, the working class of the more highly industrialized countries showed no tendency to unite for an international class struggle, as Lenin in 1914 confidently expected them to do. Nor does it appear that capitalist industrialism sharpened class antagonism.

If this kind of broad comparison is to be made, it seems nearer the truth to say that industrial societies are less stratified than handicraft societies, that their class lines are easier to cross, and that they are extraordinarily stable, Social revolutions occurred in Russia and China, not in England or Germany.

Marx’s certainty about the validity of his method induced a readiness to predict that revolution and the collapse of capitalism were imminent, and these predictions were usually mistaken because the revolutions either did not occur or occurred in the wrong places.

The other half of Marx’s prediction-that the collapse of capitalism would be followed by a socialized or collective economy-was a speculation that depended wholly on the dialectic. Behind it there was, to be sure, a perfectly justified mood of revulsion against the brutalities of early capitalism. But the dialectic made it impossible for him to think of this as criticism; it must be prediction, and what is predicted must come about. Development must lead to the opposite of that from which it starts, and the opposite of capitalism is communism.

For no substantial reason Marx believed that all the evils of capitalism were concentrated in the private ownership of the means of production, and hence he could believe that the abolition of private ownership would cut off the evil at its root. The anarchy of privately owned and competitive production will be succeeded by a planned and harmonized economy, an association of free individuals who work with jointly owned means of production and wittingly expend their several labor powers as a combined social labor power.

The first step to this end is to bring production under the conscious and prearranged control of society, or in short, public ownership. By reason of this change the whole class structure supported by privately owned industry will be undermined and ultimately destroyed, and a classless society will eventuate in which coercion will no longer be necessary.

The state in Engels famous phrase will wither away, since it is an organ of repression in a society based on exploitation, and in some inexplicable way specialization and the division of labor will no longer be necessary. Again as Engels said in a famous sentence borrowed from St. Simon, The government of persons is replaced by the administration of things and the direction of the process of production.

This was Marx’s repayment for all the scorn that he had heaped on the utopian socialists, or perhaps it was the apocalyptic vision required to make any theory of social revolution convincing human relationships that throughout history had been governed by force and exploitation are at some point to be supplanted by relationships that will be wholly idealized and cooperative. The classless society is the myth of the future which compensates for the disillusionment of the present and the disappointments of the revolution itself.

Coupled with the idea that history has an inevitable end, however, the myth of the future may be a very dangerous kind of moral philosophy. For the future is the one thing that never arrives, and if the present is the domain of sheer force, force will always be morally justified if it leads toward history’s predestined goal, which in practice means, if it succeeds.

Marx had in fact, like Hegel, something very like contempt for moral scruples and convictions and ideals, and both temperamentally and by conviction, he believed that reform is impossible. Society as it is must be ‘‘smashed” to make a fresh start, and though the revolution must be planned, what is to follow the revolution can be left to the new order.

The social morality of the apocalyptic vision is fanaticism, but beyond the vision there is a possibility which Marx’s experience never forced him to consider, namely, that the revolution might occur. The social morality of a realized utopia can quite easily be cynicism.
Read More Related Topics :-

The Proletarian Revolution
Dialectical Materialism
Economic Determinism of Dialectical Materialism
Ideology and the Class Struggle of Dialectical Materialism
Marx’s Summary In Dialectical Materialism
Engels on Dialectic in Economic Determinism
Dialectical Materialism and Politics
Capitalism as an Institution
The Strategy of the Social Revolution

Leave a Comment