Wednesday, 10 October 2012

Economist of The Week - Karl Marx

The name sound familiar to everyone - Karl Marx, the German scientist is arguably one of the most famous and influential economic thinkers, possibly seconding only Adam Smith. And while his ideas have generally fell out of favour by the beginning of this century, we all know how recent those developments are. This post will aim to provide an insight into the life and economic viewpoints of Marx, trying to separate these bits of information from the subsequent political and ideological effects his works have had on subsequent generations.

Source: Wikimedia

Early life

Karl Marx was born in 1818 in Trier, West Germany, in the province of the emerging Kingdom of Prussia known as Lower Rhine. His ancestry was mainly Jewish, but by the time Karl was born, his father Heinrich has converted to Lutheranism following a Prussian edict banning Jews from practising law. 
His father has embraced the ideas of the Enlightenment (he fought for a Prussian transition into a constitutional monarchy) and he educated young Karl in the same manner, who studied at home until 1830.


In 1830, Karl has entered the local High School of Trier. The school's headmaster, a friend of Heinrich Marx was a liberal himself, distributing literature of political liberalism among the students - which earned the school a raid by the Prussian police in 1832. Following such adventures, Karl's father made him attend Law at the University of Bonn in 1935.
To cut it short, young Marx loathed Law. Instead, he socialised and drank with his peers - he was even elected as a president of a drinking society. However, before he could fully succumb to a lifestyle of dazzle, his father intervened after a year and Karl continued his studies at the conservative University of Berlin.

Beginnings of a career

Marx's years in Berlin had a paramount effect on his way of thinking. Not only he became married to a young Lutheran baroness from Trier, but he discovered the philosophy of Georg Hegel. While he did not identify with his metaphysics (bluntly put, his philosophical world model), but he adapted his dialectic method. Hegelian dialectics said that any idea or philosophy reaches three principal points during it's formulation: a thesis, giving rise to it's opposition the antithesis, followed up by the mediating synthesis. The concept had a clear influence on Marx's theory of evolutionary history, which says that societies go through five stages - Primitive Communism (tribalism), Slave Society, Feudalism, Capitalism and Socialism - before reaching what he viewed as perfection, Communism.


Marx began to write for several radical, left-wing newspapers after University, seeking refuge in Paris from the Prussian authorities in 1843. It was here that Marx has met his lifelong friend Friedrich Engels, with whom he co-authored his magnum opus and later, headed the socialist movement. It was during his years in Paris that Marx has developed the concept of alienation of labour - that in a capitalist society, the worker becomes a mere part of the economic machine. Then, in order to maximise their profit, factory owners will extract as much working energy from a worker as possible, disregarding the worker's individuality.
Marx remained in Paris for two years, when the French authorities expelled him following a Prussian request. He emigrated to Brussels where - despite promises to the contrary - has continued being an active member of radical circles. There, along with Engels, his ideas have both matured and became more radical - and following another two years, the two published the Communist Manifesto in February 1848. The opening lines read: "The history of all hitherto existing society is the history of class struggles."

The manifesto

According to Marx, the economic system of his time - laissez-faire capitalism - was a failure, and not the final step on the historic evolution of mankind. In accordance with his socio-evolutionary theory, he proposed that history was essentially a story of class struggles, with two opposing sides: workers and exploiters, the proletariat and the bourgeoisie. Society was constantly advancing towards communism, the ideal form of government and economy through these struggles, where all property would be common and governance would lay equally in the hands of the people.
The manifesto had it's faults. Crucially, it omitted describing the exact path of transformation towards the communist utopia - which later had serious consequences for a third of the world's population, the former Communist bloc. However, at the time of the writing, probably not even Marx has realised how important his manifesto would be - it was just one of the many radical tones in the 1848 European revolutionary wave.

Emigration to London and Das Kapital 

By the time of the manifesto's publication, Marx and Engels have gathered a group of loyal followers, determined to spread and defend the new ideas. Heading this group of radicals, Marx has emigrated to London in 1849 after the revolutions, where he continued his organising and political work, constantly analysing the shortcomings of capitalism in a series of publications.
The most famous of these is arguably Das Kapital, published in 1867. In it, Marx reinforced the concept of labour exploitation - succeeding the value theory of David Ricardo, he argued that the advantage of any manufacturer over the other comes solely from surplus profit, which in turn derives from surplus labour. Surplus labour only produces extra profit when it is unpaid - hence according to Marx, the source of profit in capitalism is the labour exploitation of workers.

Later life and death

Marx dedicated the rest of his long life to the organisation and maintenance of the First International, a worldwide umbrella organisation of various left-wing, anarchist and radical groups (while continuing writing). Struggling for power with anarchists like Bakunin, he managed to maintain control of the organisation - yet he failed in stopping it disassemble, which happened in 1872. However, after his death in 1872, Engels has founded the Second International - carrying on the socialist ideals until the Russian revolution of 1917. His book Das Kapital has been the 'economic bible' in the Communist bloc for much of the 20th century - making him indisputably one of the most influential economists of all time.

Sources: Wikipedia

No comments:

Post a Comment