Marx has written most of his important thoughts in books like “Communist Manifesto”, “Wage Labour and Capital” and three volumes of “Capital” can be summarized as capitalism is a process of money for making more money.
The rise of Communism since the birth of Marx is the most influential event in industrial civilization. Communist movement shaped not only political discourse but also had its influence upon many major social and academic developments.
The article discusses how Marx and Engels saw the dynamics of society and how close reality was from his prediction. The also shed light on how Lenin tried to narrow the difference between Marx’s prediction and reality and gave rise to a new dimension in the communist movement. Achievements and problems of Stalin and Mao policies while policies of Deng and Gorbachev in the post-Leninist reality will also be in the discussion. Finally, The may discuss the rise of Xi Jinping as the leader of world’s largest economy and its implications. We will also discuss the debt crisis and demographic crisis in the industrial civilization and how communism may triumph the global politics in the near future.
Karl Marx
Marx has written most of his important thoughts in books like “Communist Manifesto”, “Wage Labour and Capital” and three volumes of “Capital”. His thoughts can be summarized as capitalism is a process of money for making more money. Capitalist class invests money in the production process to make profits and then channelize the profits for even more profit. In this process, the capitalist class owns the means of production i.e. machines, buildings, land, etc. They buy labour power of the labour class at market-determined wage rate and labour class use of means of production to produce output. Marx called machines as stored-up labour which exhausts with gradual depreciation.
Thus the profit that the capitalist class obtains is actually produced by labour class. Hence, profit signifies the exploitation of labour class. Moreover, in pursuit of profit the capitalist class competes with each another for the market. Thus the capitalist class has to use economies of scale and automation in their production process to make cheap but quality output by which they try to outcompete each other. Due to economies of scale, big capitalists tend to out-compete small capitalists and the later joins the rank of the labour class. The capitalist class also goes on automating the production process and thus wage rate does not grow as much as profit rate. Now capitalist class uses most of its income for investing in production process while labour class use most of its income for consuming output derived from the production process.
Thus, production capacity grows much more than purchasing capacity. Hence, over-accumulation crisis starts. Marx further thought that small capitalists will be totally eradicated and society will become a class struggle between the capitalist class and labour class. The overaccumulation crisis will force the labour class to rise in revolt against not only capitalist class but also capitalist system. The labour class will strip the capitalist class of their right to private ownership and will gradually go for social ownership of all means of production. The period between seizure of state power by the labour class and complete establishment of social ownership will be the dictatorship of working class.
Engels in his book “Anti Duhring” further explained that working class after seizing power of the state must declare state ownership of means of production and must fight the overaccumulation crisis. They must go on improving technology and automation till the money motivation in the society completely fades out. When that is done state will wither away and social ownership will be complete. Marx and Engels further predicted that the most industrialized countries will see working class revolution and thus the revolutionary working class state will have the best of the world’s technology at its disposal.
Where Marx Stood Wrong
Firstly, technological progress does not mean automation only it implies invention of new goods and services too. Thus while automation reduces the growth of wage rate new products can raise earning an opportunity and hence wage rate growth. Similarly, while economies of scale results in the destruction of small business the invention of new products give small business new opportunities to survive.
Secondly, in face of continuous automation and use of economies of scale working class can reduce family size and its population growth rate. This fall clearly counters the fall in wage rate growth and also minimize the effects of the crisis on individual lives and families.
Thirdly, Marx used political economy and the Ricardian labour theory of value to understand dynamics of capitalism. This theory views price as the supply-side phenomenon. Neo-classical economists to counter Marx developed marginal utility theory to understand demand side of price. Thus Marx failed to use the much more effective tool of neoclassical economics which sees the price as an equilibrium emanating from the supply side and demand side conditions.
Where Marx Proved Correct
Economies of scale resulted in the destruction of small business and by 1890s most of the production became dominated by few large companies and cartels in all capitalist countries. Moreover, despite new technological inventions were coming in they were weak enough to counter the effects of automation and economies of scale. Thus effects of the over-accumulation crisis were visible by late 19th century.
Age of Monopoly Capitalism: Lenin
Lenin by the first decade of the 20th century began to analyse the problems of the then communist movement. He first identified that centralisation of production process and overaccumulation crisis were Marx’s successful predictions. He also identified despite the crisis, the working class of industrially advanced capitalist countries was not showing revolutionary tendencies. Lenin pointed out few important characteristics of the new monopoly capitalist or imperialist age.
The industrially developed capitalist countries are exporting capital to backward economies including their colonies and semi-colonies in Asia, Africa and Latin America to counter over-accumulation crisis at home as well as to make more profits by exploiting their cheap labour and raw materials. Thus the capitalist countries were colonizing more and more lands. The part of this profit derived from exploiting resources of colonies and semi-colonies are distributed among working class of the industrially advanced capitalist countries. Thus working class in advanced countries no longer feel the urge for revolution. Similarly, capital, industries and technology being exported to backward economies including colonies and semi-colonies create working class there. This backward society’s working class are most exploited among all and they will the main agents of revolution in the imperialist age.
But a new problem arises from it. This working class of colony and semi-colony are the minority in the society and these economies are not yet industrially developed. Feudal relations were still strong in these countries. Theoretically, Marxists believed that capitalist class uniting peasant class revolts against feudalism and abolishes feudal relations after capturing state power. Actually, feudal class nobility and clergy use too much resource in living luxurious lives and wars. Once these classes are removed from power capitalist class can start using resources with profit maximizing motive. This starts in agriculture and finally ushers in the industrialization of the entire society.
This is what that happened in Europe. So how can working class go for socialist revolution when feudal relations were still intact? Lenin answered those feudal relations could be annihilated by capitalist class only when it was still small ownership based on competitive capitalism. Thus there were numerous middle-class capitalists who could challenge the then relatively few rich feudal rulers. Since capitalism has reached the monopoly stage only a few big rich capitalists dominate the production process and small capitalists are no longer viable to survive the competition.
Thus in monopoly capitalist era rise of numerous middle-class capitalists is no longer possible in any nation. Thus in 20th century backward societies including colonies and semi-colonies, there will never be the capitalist class revolt against the feudal relations. Hence it becomes the duty of the working class in the colonies and semi-colonies not only to dethrone the ruling class but also to abolish the feudal relations there and usher in industrialization.
Since the working class are revolting against the rulers of colonies and semi-colonies they directly come into contradiction with the advanced capitalist countries which are allied with these rulers as colonial masters. Thus working class has to revolt against the colonialism too. Thus working class has to make the alliance with peasant class and a section of anti-colonial capitalists against feudal class, pro-colonial capitalists and colonial master advanced countries.
Similarly, another problem of Leninist revolution is that the working class in the backward countries after the revolution would not have the best technology at their disposal. So these countries have to invest a lot in education, health and basic infrastructural industries. This must have resource allocation power to invest in sectors that will lead to rapid industrialization.
Where Lenin Went Wrong
The investments in education, health and basic infrastructures do not give profit immediately and so capitalists fail to invest there. The 19th-century neo-classical pro-market economists also accepted this reality and they advocated state investments there. In fact, Germany and USA in the late 19th century could challenge British industrial might much quickly and successfully simply because they gave state more roles in determining where to invest. Lenin tried to relate Engels prescribed state ownership of developed industrial base under the dictatorship of working class to working class state-led industrialization process. Lenin actually advocated the state-led industrialization while Marx-Engels advocated for state ownership of existing developed industries. Lenin’s primary concern was industrial development and technological progress while Marx-Engels advocated state-led planning to check overaccumulation crisis and gradually wither away money motivation. Lenin never made the distinction between these two working-class state-led planning.
Another problem of Lenin was about women emancipation. Lenin declared world women’s day which is still observed today. Lenin praised motherhood but also sought women participation in outdoor jobs. A woman performing outdoor jobs fails to perform as the mother. This is proved by falling of fertility rate below replacement rate (2.1) throughout the industrialized nations. One of the causes of the collapse of USSR was this falling fertility which we will deal later.
Where Lenin Proved to be Correct
Thus Lenin successfully transformed the communist movement from advanced industrial civilization’s working-class movement to backward feudal civilization’s anti-feudal and anti-colonial movement. So clearly Lenin understood advanced civilization can no longer place for the communist revolution. Moreover, capitalism under the then conditions cannot challenge the feudal relations in backward societies. Hence, communist revolutions can be sold to these societies. The rapid industrialization of Soviet Union under Stalin transformed it from backward feudal society to world’s second largest economy in just twelve years. Moreover, communists must take part in anti-colonial movement too.
This really ushered in many communist movements across the globe especially in industrially backward countries including colonies and semi-colonies. Russia saw the first communist revolution in the world only to be followed by China, Indo-China, Korea, Cuba and many more. From 1917 to 1971 (the triumph of communists in Vietnam), Leninist understanding seemed to be theoretically invincible. In fact, communist bandwagon ushered by Lenin was the most important tool that destroyed colonialism.
DISCLAIMER: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy and position of Regional Rapport.
