← Economic Update with Richard D. Wolff
Economic Update with Richard D. Wolff
Economic Update: The Contributions of Karl Marx
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Professor Wolff takes a deeper look at the life and work of Karl Marx in celebration of the 200th anniversary of his birth.
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Richard D. Wolff
Welcome to part one of, of a four part series on the work and the contribution made by Karl Marx. We do this now because it's the 200th anniversary of Karl Marx's birth. But of course, the real reason we do it is because we think that that work, that criticism of the capitalist economic system, remains a source of important insights that can be useful for all of those who want to make a better world out of the one we're now living in and through. Before I start, I have to acknowledge what I'm sure you all know, that words like Marx and Marxism, Socialism, Communism and all that have been scare words for an awful lot of us for many years. The Cold War that erupted after 1945 and pretty much the whole time since has been a time when words like that were associated with scary other countries, scary dangers, to various aspects of the way we live. And so they inspired a mixture of fear and anxiety. And the way that worked out for an awful lot of Americans, and indeed people elsewhere too, was a decision not to pay any attention to the work of Karl Marx, not to read it, not to think about it. And unfortunately, that meant we didn't learn from it. So let me begin by explaining briefly what it is we can learn. Karl Marx was a critic of capitalism. He didn't like the system, and he basically thought that the human race could and should do better. And so he spent his adult life explaining and analyzing for all the rest of us what it was that he found inadequate about, about capitalism. Where exactly he thought we could and should do better. And to present that as clearly and persuasively as I think he knew how. Why should we pay attention to the critic? And. Well, the answer is simple. Critics have their perspective. It's different from the perspective of people who like something. And the way an intelligent person goes about dealing with, with a difficult topic is to interrogate and to investigate what the people believe who like it, but also what the people believe who don't like it. And then we draw our own conclusions. It's a little bit like wanting to understand the family that lives up the road. Mama, papa, and the two kids that they have. Even though we know one kid thinks it's the greatest family there ever was and the other one thinks it's a basket case of psychological dysfunction. If we're going to study the family, we wouldn't choose to talk to one child, neither the one or the other. What we would do if we were honest would be to talk to both children, hear what they have to say, ask questions and then draw our own conclusions about that family making the best judgment we can. Well, likewise. So it is with capitalism we study in this country of the United States, but in other countries too, we have plenty of folks who help us study what's good about it, what they like about it, what's positive. But a well rounded understanding, an honest engagement with the system we live in, would require us to look at critics as well. And for the last 200 years, the leading critic has been Karl Marx. More than any other person, he's as important on the side of criticizing capitalism as folks like Adam Smith and Ricardo and John Maynard Keynes are on the side of those who think capitalism really is the best thing since sliced bread. So let's jump right in. What motivated Karl Marx as a young man growing up in the middle of the 19th century as he did? Well, the answer is the goals of the French and American revolutions, he said so many times. He loved the slogan of the French Revolution, liberty, equality, fraternity, brotherhood. He loved the idea of the American Revolution, democracy. And he wanted those things to be realized in modern society in the middle of the 19th century Europe where he grew up and lived his life. But he lived at a time when he was becoming doubtful of a basic idea that had grown up since the French and American revolutions. And this idea was that we would get rid of the old systems of slavery and feudalism, masters and slaves and lords and serfs was now behind us. We would have a new world, a capitalist world, where the two players were employers and employees, no longer unfree slaves, no longer unfree serfs. And by having capitalism replace feudalism and slavery, we would usher in a world of liberty, equality, fraternity and democracy. Well, Karl Marx, coming 50 to 100 years later says, well, we got to capitalism all right. But the promise that capitalism would mean and would deliver liberty, equality, fraternity and democracy. Well, it has not happened. Karl Marx looked around the Europe of his time in the middle of the century, and what he saw is pretty much what was written down, for example, in the novels of Charles Dickens. He saw an enormous gap between a relatively small part of the population that was well off, well educated, literate and comfortable, and on the other, a mass of workers in the industries and the factories who were none of those things, who were poor, who were uneducated, who were illiterate and who were suffering. And he felt the betrayal. It's not too strong a word. Capitalism had betrayed, in his view, the promise that had led so many people that he admired to support the end of feudalism and the end of Slavery and the welcome they all offered to a capitalism because it promised liberty, equality, fraternity and democracy. And so he set himself a goal. What happened was the great question for him. Why did capitalism not bring the promise? Why had it failed to do that? And the research he undertook, which he then wrote up, is what we have now as a criticism of capitalism. Because what he basically discovered and wrote about was that capitalism not only wasn't the vehicle for bringing into being liberty, equality, fraternity and democracy, it was in fact an obstacle to realizing those lofty goals which Marx never stopped saluting and making his goals as well. Well, what does it mean to be a critic of capitalism? It means that he found in capitalism, and this is what we're going to study in our discussions in parts two, three and four of this series, he found in capitalism the elements of a system that made it impossible to have liberty, equality, fraternity and democracy. He felt that capitalism blocked, prevented, thwarted whatever progress in those directions human beings had achieved. And that led him, of course, to the conclusion that in order to get closer to liberty, equality, fraternity and democracy, we had to go to a different kind of system, one that was fundamentally different from capitalism. And for reasons that he will explain and would explain to us, that was for him, the task. And to summarize in this first introductory presentation what it was, he found it runs roughly like in the slavery we reject. Human Beings were divided into two masters. Slaves, the wealth, the power, the cultural dominance was in the hands of the masters. The slaves literally were property of those other people. The society was shaped, governed, run by the masters for the system's reproduction over time. Masters wanted to stay masters, masters wanted their children to. To be masters in turn, if you were born into that society as a slave, you were a slave and your children would be slaves. For Marx, this was an abhorrent system, and he rejected it. The same applies to feudalism. There, the two positions you could occupy were either the lord who owned and operated and ran and dominated, much like the masters had in slavery. But the mass of other people weren't the property of the lord. They were free, at least in relationship to what slaves had been, but they were serfs. If you were born to a family of serfs, you were ipso facto a serf too. The two positions were a minority of lords and a majority of serfs, like a minority of masters and a majority of. Of slaves. Now, here comes Marx's punchline. Capitalism, he said, wasn't successful in breaking out of that model a few who dominate a mass who don't. All that Capitalism did, he said, was to replace the dichotomies of master slave, Lord Cerf, with a new one. It was different. And in that difference there's lots of important lessons. It was different because what the minority, which was still there, had a new name. They were called employers. And the majority also had a new name. They were called employees. But when you look closely at this system, Marx said, it's very much like the slavery and the feudalism which it overthrew. Because the dominant role in society is again played by the employers. They control the politicians, they control the direction of social development, they make all the decisions in the workplace, they run the show, they dominate it, and the mass of people are subordinated. And so, Marx said, we have to ask how and why this system of employer, employee, which we call capitalism, was unable to realize the liberty, equality, fraternity and democracy that it had promised. What is it about the relationship between the employer and the employee that reproduces a society bedeviled by instability, conflict, tension, inequality, the absence of fraternity and a mockery of the notion of democracy starting right in the workplace, where all the power to decide what to produce, how to produce, where to produce, what to, what to do with the profits is made by a tiny group of people at the top, whereas everybody who works producing those very profits has no say at all. That's not democracy. That is its opposite. Lastly, let me point out, before we get into the nuts and bolts of what Marx's contribution was in analyzing capitalism, because that's what he did in his life, let me make it clear, one other reason why it's worth looking at his contributions. Marx died in 1883, so roughly 140 years ago. That's not very long in historical time. But in that relatively short period of 140 years, Marx's ideas spread to every country on the face of this planet. People in the most completely different economic, political and cultural conditions found enormous meaning in what Marx wrote. That's why in every country there are Marxist organizations, Marxist unions, Marxist newspapers, Marxist societies, Marxist political parties and so on. For me to be able to come before you and say, let's look at what this man has to say is simply to be able to say here and now to you what has been effectively said to literally every peoples on this earth. If they all found meaning in it, my guess is we can and we will do it. And that's what this fourth four part series is intended to do. Well, we've come to the end of part one of these four parts. I hope you found it interesting and worthwhile and that you will join with us in taking a look at the other parts as well. Toward that end, please be sure to visit patreon.com that's P A T R E O-N economicupdate, our regular radio and television program. There you will find the subsequent installments of this four part series. And remember, we value our Patreon community, those of you that follow us in this way. That's why we are producing special programs like this. And of course, please remember also to follow us on Facebook, Twitter and Instagram and on our websites democracyatwork.info and rdwolf.com thank you for your attention. And let's turn now to part two. Welcome to part two of this four part series on the work and contribution of Karl Marx. Once again, I just want to say that the reason we look at at Marx's contribution is that he was the leading and remains the leading critic of the economic system we live under. And therefore to understand his critical perspective is a way to get a deeper understanding of this system, its strength and its weaknesses, so that we can all be better citizens in terms of how we contribute to making the world a better place. Now let's turn to the core of what Marx's contribution was, particularly in the realm of economics, which was his chosen area of concentration. He did talk about many other things. He was a true European intellectual of his time, when relatively few people were educated and given the benefits of literacy. So he was interested in many things. But he ended up, even though he began as a philosopher, to become what we would nowadays call an economist. And I'm going to summarize his findings because we don't have enough time to go with him in how he got to them. We're just going to concentrate on what they were. So here's the nub of it, the core in every society that human beings have had from the earliest records we know right down to the present, the central achievement of humans that in a way distinguishes them economically from animals and many kinds of animals, is that they were able to produce and to distribute something Marx called a surplus. And so it's crucial to begin by explaining what Marx meant. In every society, he says, human beings survive by transforming nature to meet their needs. For example, converting the sheep, the wool of the sheep into clothing to keep warm to using the trees of the forest to build shelters from the rain and the storm, and of course to find the nuts and berries and eventually to cultivate the fruits and vegetables and to raise the animals that we use to Eat. In all societies where human beings have to do these things to survive, they do labor, they work. They use their brains and their muscles to transform nature into useful, consumable products. And now Marx says, follow me. When we look deeply into that reality, the reality of labor, all human beings survive by working at it. They have no choice. And Marx says, in every human society, the following fact is true. Not all people work. They don't all use their brains and muscles to transform nature. The tree into a chair, the sheep into a coat, the countryside into a meal. There are always parts of the community that don't do work. And the way that happens, and the only way it can happen, is if the people in a community, whether by the way, it's a small tribal group in a village or a whole modern country, the only way there can be people who survive without working. Here comes the punchline, is if the people who are doing the work produce more than they themselves consume, there have to be in the community people who produce a surplus. That. That's more than they themselves take for themselves. If there are going to be people who can survive without themselves working, well, you all know what the best example is. The children, the babies, the ones who couldn't possibly use their brains and muscles to transform nature because they haven't managed to stand up yet. So there have to be people who produce more than they get. If there are going to be babies that survive because they're going to live off the surplus, the surplus produced by their parents, the surplus produced by the community of adults. Now, Marx takes this insight, and it takes it a step further. He says in most societies that we have records of the surplus that's produced by some of the people. He calls them productive workers, those who produce more than they themselves take for themselves for their own consumption. This surplus in many societies doesn't just sustain babies and children and maybe old people who can't work anymore, but there are whole blocks of people perfectly able and capable of working to produce the surplus, who don't, however, do so. And yet they have a lot of consumption that they enjoy. So there must be surplus produced by some to enable these others to live the comfortable lives they do. So let's follow Marx. Let's start with the slaves. When the slave works on a slave plantation, everything he or she produces belongs to the master. Everything, because they're just like an animal. They're owned by the master. Everything they produce is ipso facto and immediately the property of the master. And here's what the typical master does. He takes a portion of what the slave has produced and gives it back to the slave so that the slave can survive until tomorrow. Do it all again. The rest of what the slave produces, the slave's surplus, what the slave produces above and beyond what he gets back, belongs to the master. And the master takes that surplus and he builds a lovely house with it. How does he do that? He takes that surplus and he gives it to a bunch of other people whose job it is to build the house. And, and how do those people live? Because they have this surplus from those who do the work that allows them to work on the house of the master without themselves raising the animals or the vegetables or doing any of the productive work. So Marx begins to say, and to teach us that in slavery the master lives off the surplus that the slave produces. The master doesn't have to go out into the cotton fields. He doesn't have to go out and raise the fruits and vegetables, the cheese, the butter and the meat. The slaves do all of that. They produce more cotton than they need to clothe themselves, more food and clothing than they need for themselves, and all that extra is delivered to the master. And the master uses it to keep this kind of society going. Why? Because the master sits at the top. The master has the power, the master has the leisure. The master is sustained by the surplus of the slaves. The same Marx says, goes on in feudalism, only there the productive workers are serfs and the surplus they produce is owned and received by the lord. You might enjoy knowing what the name is, that in feudal society, what the name is given to the surplus that the serf produces and delivers to the lord. The word is rent. A word that we still have, don't we? And now Marx's point in capitalism, which thought it was, which promised it would be the end of the slave system and the feudal system, what we actually have is the same thing, but it's a little disguised. We have the employee and the employer. And what Marx does in first volume of Capital, his major book, is to show us that right in the relationship between the employer and and the employee is another production and delivery of surplus. And I'm going to do it with you now in the simplest language I know, so that the idea is anchored in your mind because the insight marks achieved here is remarkable. Let's do it this way. You go to look for a job, you find an employer, because that's where jobs are. And you sit down with this employer, let's say it's at a factory that makes ladders, and you sit down with the employer, and you discuss with him what time you have to come to work, what kind of work you will do, and all of that. And then you get to a certain point in the conversation where it's time to talk about money. How much are you going to get paid for working on making ladders? And the employer and you, let's say you reach an agreement. I'm going to pay you $20 an hour. You come at 8, you go home at 5, Monday through Friday. You know the typical pattern. And I will give you 20 hours for every $20. Excuse me, for every hour that you're here helping us produce ladders. And the employer knows that by hiring you and having you work all those hours, there'll be more ladders than he would have otherwise to sell if he didn't hire you. And that's true of every worker. Well, Marx says, wait a minute. And then Marx plays a little game. He tells us what we already know if we think about it. He says the only reason an employer will ever pay you $20 an hour is if during that hour, you produce more than $20 worth of ladder for him to sell. Why? Because if all your labor did was produce $20 more of ladders to sell when the employer sold the extra your labor produced, he'd get 20 bucks, which he would have to pay to you, and there'd be nothing in it for him. He's not going to do that. However much you and he are friends, it's not part of what a capitalist business is or does. The employer will give you $20 an hour if and only if your labor each hour produces more or if you like, adds more value to what the employer sells than that it costs him to have you come there. And guess what Marx then says to us? There's the surplus again. There's the mass of employees producing a surplus and delivering it to the capitalist. It's not as obvious as the serf on the land delivering so many bushels of corn as rent to the Lord. It's not as obvious as a slave whose product is immediately and totally the property of the master. It's a little more hidden. It's a little more complicated, but it isn't fundamentally different. Wow. In the core of capitalism, in the relationship between an employer and an employee is the production of a surplus by the one, the employee and the receipt, the gathering of that surplus into his own hands by the employer. Folks, that's pretty much what the serf and the Lord had as their relationship. And it replicates the master slave as well. So we have uncovered the secret history, if you like, the kernel of capitalism that Marx is going to show us is the problem. Because the absence of liberty, equality, fraternity and democracy in slavery and the absence of liberty, equality, fraternity and democracy in feudalism is going to be re established tragically in a capitalism because it hasn't challenged or broken down this either or situation. It's just changed it a little bit. Instead of slaves and serfs, we have employees. Instead of masters and lords, we have the capitalists. It might help us explain Marx's clever use of words when he sometimes referred to what workers in capitalism could be called and he used the phrase wage slaves. That was not just a casual remark. It was intended to make us connect in our minds the condition of the wage earner and that of the slave. We thought a wage earner was a free person. But when you look at the surplus, no freedom at all. Trapped in a system where the only option to producing surplus for your employer is to quit and do it for another employer. There's no freedom there. Freedom requires changing the system because otherwise you are forever trapped in it. Marx is going to hammer at the point that in a society that organizes production in this way, a relatively small number of employers on the one hand, and a mass of employees on the other, in which the employees, the mass of people, produce a surplus that becomes the private property of the employer. You are going to see these employers using that surplus they gather into their hands to make sure this society stays the way it is, giving the dominant position to the employers. And true enough, if you look around capitalism 100 years ago, 50 years ago, or right now, it's the employer class who are dominant in politics, in culture, in living the high life off the top of the hog, right? And the mass of people who are worried about how well they will do, whether they can send their kids to college, et cetera, et cetera. It isn't new and you all know it, but Marx, his contribution was to locate the fundamental mechanism whereby this happens and happens over time in the relationship between the employer and the employee. We've come to the end of the second part of this four part series. I want to thank you for being with us. I hope you learned something and found it of interest. I want to urge you, as always, please Visit us on patreon.com economicupdate that's P A T R E O N patreon.com economicupdate where you can become a supportive part of our Patreon community. Have access to documents like this that we enjoy producing. And don't forget to follow us as well on Facebook, Twitter and Instagram and through our websites rdwolff with 2f's.com and democracyatwork.info I look forward to the installment number three, which comes next. Welcome to part three of this four part series on the work and contributions of of Karl Marx. Once again, let me remind you that the point and purpose here is not to have you agree or disagree with what Marx wrote, but to become aware of what the perspective of the leading critic of capitalism is, what insights he may have discovered that we can make use of now to improve the economy for all of us. The point is not to agree. The point is to understand and learn from something we should have been studying for the last 75 years, but were mostly afraid to do. Where we left off was on Marx's basic economic theory, the way in which capitalism as a system reproduces the very dichotomy of a mass of people producing a surplus for a minority of people gathering it into their hands and deciding what to do with it. And that was true of slavery, and that was true of feudalism. And it turns out, as Marx teaches us, that it's also true in capitalism. I want to pick up by asking and answering the question, when a mass of employees produce a surplus that shows up in the hands of and rests in the hands of the employers, a very small part of the population, how does it exactly happen? And what. Here's the big one. What do the employers do with that surplus delivered to them? Well, the surplus takes many forms, but the closest word we have to capture the idea is profit. In some sense, every business involves revenues earning money from selling the fruits of human labor. But by having that revenue be larger than the cost of what we paid the workers and what we spent for the raw materials and the tools and equipment. The revenues, in short, are greater than the costs in a profitable business. And that profit will. What's produced by the workers in that situation is received by the employers. What do the employers do with it? And how does that produce the kind of society that capitalism exhibits? I'm going to give you a few examples. You'll be able to supply them yourselves once you get the hang of it. Let's start with one I like always to start with. It's called dividends. Most business in modern capitalist society is done by an entity called a corporation. The corporation has shareholders, people who have enough money and wealth to buy one or more shares of that company. They are owners thereby of that company. And how Big is their ownership depends on how many shares they can afford to buy. In many large corporations, a part of the surplus, this extra, this profit that the mass of workers has produced that flows into the hands of the employers. A portion of that is distributed to the shareholders. Now, what's that distribution called? It's a dividend. That's the name we give to it. Let's be real clear. What contribution has been made by the person who owns a share? What contribution did that man or woman make to producing the surplus in that corporation? The answer is none. They weren't there. I have no idea how any of it works. They didn't spend one minute that year in that factory, in that office, in that store. But they got a portion of the surplus produced by workers who did labor, delivered to them four times a year by means of a check. That's a use of the surplus. Why is that done? Well, that's the reward for those people buying a share. By buying a share, they showed a confidence in the company. They showed that they were wealthy enough to buy a share, and the company rewards them. It has the interesting consequence of saying to wealthy people, here's a way for your wealth to grow. But of course, to use the word grow implies that the wealth comes out of itself. Like a plant has a seed and another plant comes out of that seed. This isn't that way at all. What these wealthy people have is the means to get a piece of the surplus other people are producing. They get that delivered to them. So now at the end of the year, they have not only the shares, they bought the wealth in the form of those shares, but they have the addition of the dividends paid to them. How nice for them. The workers who produced the surplus, they don't get it. The workers who produce the surplus watch it being distributed by their employer to people they don't know, who had nothing to do with the production process. Remarkable. Here's another example. The employer can decide to take a big fat portion of that surplus and give it to top executives of the company, the CEO, for example, and give him a pay package of 20, 40, 60, $100 million. Not at all uncommon these days in the United States. For sure, that's an interesting way to use the surplus. Let's be real. The mass of people produce a surplus. If that surplus were distributed to all of them, they could rise up out of their working conditions and their wealth conditions and become wealthier. But that's not what happens. The wealth, the surplus they produce doesn't get distributed back to them. It goes into the hands of the employers, and they use it to satisfy themselves, to keep themselves in the position of doing what they're doing. And by giving themselves dividends as shareholders, by giving themselves high pay packages, they make sure they're wealthy enough to keep being in the position of getting pieces of the surplus. In other words, in capitalism, if you're getting a piece of the surplus and accumulating wealth, that's the way to keep getting surplus and accumulating wealth. Or to say the same thing in the language that masses of people have understood for as long as capitalism's been around. The rich get richer and the poor don't. That's how the system works. There should be no surprise, no shock and awe to discover that capitalism is a system that produces inequality. The system is as efficient in producing wealth at one pole as it is efficient in producing poverty at another. Every 20 years, in every capitalist society, along comes a novelist, a sociologist, a statistician, to remind us that there's an awful lot of poor people around the world, an awful lot of poor people around the United States or wherever else, that anyone who has an illusion that this society makes us all equal. Equal. You know, in the idea of liberty, equality, fraternity, and democracy that we talked about in an earlier segment, those ideas are delusions. This is a system that produces inequality because it's set up to do that. It's nobody's mistake, it's nobody's cruelty. It's the way the system works. And that's a very fundamental understanding that Marx achieved. It led him to the conclusion that if you want finally to get rid of the gross inequality that capitalism has always produced, you've got to face the difficult, the awkward, maybe even the scary reality that to overcome inequality, capitalism itself has to go. You have to do better than that. As long as you leave the employer employee division, you're going to have the same kind of inequality among people that we know characterized slavery, that we know characterized feudalism, and is with us today. Hint, hint. But we don't need to hint, because Marx explains to us, which is why it's interesting, that we are stuck in a system that keeps reproducing the very thing we say so many of us we don't want. Marx is also interested in pointing out another feature of capitalism, and here it goes. And it's a wonderful insight of his, comes in fact, out of his teacher, the philosopher in Germany named Hegel, who taught that everything is contradictory. Everything about life that we know is a bundle of conflicting ideas, needs, forces, pressures on us that to be free of contradiction is to be free of life itself. This is an idea that Marx plays with, and he shows us how, how capitalism illustrates the contradiction. And I'm going to give you that as an example. Marx explains to us that every capitalist is trying to get as much surplus out of his workers as possible, because the more surplus he has, the more dividends he can pay to keep his shareholders happy. The more high salaries he can give his executives, the more he can keep this system going, because he uses the surplus to reinforce his dominance. So he wants always to get more surplus. One of the ways you do that is have the workers not work for, as in my example, $20 an hour, but maybe get them to work for, I don't know, $15 an hour. You get the same amount of output from them, but you give them less, which leaves more for you, the capitalist. And you all know how capitalists do that. Some of them do it by bringing immigrants into the country whom they can pay less money to. Others do it by employing children or women who are not used to the higher salaries that men have been able to get in these societies, and so they're exploited in that way. Others move to a poor country where they can get away with paying lower wages, whatever it is. A good capitalist graduated from a Master of Business Administration program knows that you're clever and you're good and you're successful as a capitalist if you economize on your labor costs. There are many capitalists who do that by replacing people with machines, with automation, a computer, a robot, something that is cheaper to get the work done than hiring a worker. So capitalists are always looking for implementing, competing over ways to save on labor. It's the way the system works. And then Marx smiles and says, here's the poor capitalist. No sooner are they successful in paying lower wages or no wages at all than they discover, oh, my goodness, the workers, the mass of people don't have as much money as they used to precisely because we are lowering the wages or replacing them with machines. And when they have less money, here comes the punchline, folks. They can't buy the very stuff we're producing to sell. We will have been clever to reduce our labor costs only to discover that we're driving right into the stone wall of insufficient demand, insufficient purchases, not enough of a market for what we sell, which can be as destructive of our success as it would have been to pay higher wages. The system is a contradiction. The very logic imposed on the capitalist undermines the success of the capitalist and again, Marxist punchline. You don't escape from this contradiction by a law or a rule or a regulation or a behavior pattern or anything else. This is how the system works. And if you don't want to have periodic collapses of the economy when capitalists who've been so successful in saving on wages discover they have no market, that people can't afford to buy it. So then they can't sell and then they lay off workers because there's no point in hiring a worker if you can't sell what the worker helps you produce. And then you fire those workers and of course then they have no income and, and they can buy even less than they could before. And you have that downward spiral we call recession and depression. The system is unstable. Every four to seven years, capitalism, wherever it has come in the history of the world, has produced on average an economic downturn. Workers thrown out of work, businesses going out of business, real suffering until the system gets back up again. I like to tell the story that if you lived with a person as unstable as capitalism, you would have moved out long ago. Marxist point. Capitalism is a system that produces and reproduces inequality and capitalism is a system that produces and reproduces instability. Those two reasons alone, Marx suggests to us, are reasons to question, to challenge why we should accept a system that works this way. We could have, and we should have, says Marx, gone beyond capitalism, recognized as he has figured them out and found them, the contradictions, the inadequacies and the injustices that this system has bequeathed to us. It's not that the original ideas of liberty, equality, fraternity and democracy had anything wrong with them, not at all. Marx was entranced by them as a young person and never gave up on his commitment. What's remarkable about Marx is that he located in capitalism itself the obstacles to realizing those objectives and therefore became the critic to show us what those obstacles were so we would understand what kind of changes need to be undertaken to free us from the inequality and the instability that this system cannot escape. In the fourth and final segment of this four part series, we will talk about what kinds of changes Marx's work points to that might get us out of the failure of capitalism to deliver on liberty, equality, fraternity and democracy. Thank you very much. We've come to the end of part three of this four part series on Marx's contribution. I hope you have found it of interest and I ask you, as I always do, please join us. Join the Patreon community we are building by going to patreon.com p a t r e o n patreon.com economicupdate for the final installment, and indeed for several of these installments of this series on the contribution of Karl Marx, Please also note that you can follow us on on Facebook, Twitter, Instagram and through our two websites, democracyatwork.info and rdwolf.com welcome to part four of this four part series on the work and contribution of Karl Marx. I won't repeat what we have said at the beginning of the other segments because you've heard it already and you know it anyway. We study Karl Marx here. We summarize his work because of the insights it offers us, ways for us to solve problems we face today. This is not about agreeing or disagreeing with what Marx is saying. It has to do with finding out if there's something important that we can learn. In this fourth and final segment, I want to talk about what Marx gestures toward as a way to get out of the dilemmas of capitalism, to overcome the obstacles built into capitalism that prevent us from achieving the liberty, equality, fraternity and democracy that we, like Marx and many others, have been committed to for all of our lives. Before I jump into it, I want to make sure I'm clear here. Marx never wrote a word, and certainly not an extended examination of what a future society might look like, what a post capitalism might look like. He didn't believe in that kind of future gazing. He didn't think it was serious. He didn't think anybody could know how the world was going to evolve in the future. So he pointed only in the gestural sense, that is, he gave some ideas of what might have to happen if we were going to get beyond capitalism. But he didn't offer blueprints, he didn't offer complete images of what such a society would look like. As I say, he didn't believe in that being a useful exercise. And in particular, Marx never suggested, contrary to what so many have said, that the state, the government, had to play some sort of central role in what this future post capitalism would look like. Later Marxists interpreted him to have suggested that. But it's hard to find in Marx any idea like that. Never wrote a book about the state, never wrote an article about the state, just didn't do it because it wasn't the center of his view. And I say that to challenge those of you who may still believe that there's something intrinsically statist or focused on the state in what Karl Marx did. So then, what is Marx's basic idea? Well, in a sense, the three segments we've Already exposed in this program answer that question. For Marx, the key thing is the relationship between people among people in production. The relationship of master, slave, lord, serf, employeremployee. In each one of those, a minority of people make all the key production decisions. Masters, landlords, employers. They decide what gets produced, how it gets produced, where it gets produced, and what is done with the surplus from those workers who produce the surplus. So for Marx, if you want liberty, equality, fraternity and democracy, the place it has to begin is in production, in the enterprise, in the place where work gets done. The office, the factory, the store, the home, wherever work gets done. And his idea is no more dichotomy between a few at the top who make the decisions and everybody else. No more the mass of people produce a surplus that flows into the hands of. Of a small minority. That's got to stop. In its place, Marx advocates, points toward a different economic system, one in which the workplace becomes fundamentally egalitarian and democratic. What does that mean? It means that the decisions of the workplace what to produce, how to produce, where to produce and what to do with the surplus is made by everyone together, one person, one vote. A democratic decision making life at the job for all adults. After all, that's where most adults spend most of their adult lives, at work. If you believe in democracy, Marx would have said, well, then it has to start where you spend most of your time, which is at work. So what is the solution? He says a transformation of the workplace from the top down, dichotomized, hierarchical, employer at the top, mass of employees at the bottom. Transform that into a democratic institution where everyone has an equal say on what is happening at work. Now, let me point out to you that what Marx is advocating for, the economy, is precisely what, for example, Americans and many Europeans and others in the world advocate for their political life. After all, we got rid of kings and czars and emperors and all of that on the grounds that that was a tiny group of people making decisions for all of us. In the United States, we made a revolution against George III in England because he said he could control what happened here. And we said, no, we want to control and how do we want to do it? One person, one vote in a democratic system took a long time to make all persons get this right. But you could see where we were going from the beginning. The democratization of politics has been a mantra, has been a slogan, has been a goal for a long time. Marx asks the question, why only the democratization of politics? Why not the democratization of. Of the economy? The same logic would apply. And I would go even further, having learned this from Marx. I don't believe you can have a genuine political democracy unless it is grounded on an economic democracy. If you allow capitalism to make a few people rich and the mass of people not, you can bet your bottom dollar that the few rich will use their wealth to corrupt the political system to destroy the democratic reality of it and make it a contest between billionaires buying maximum time on TV to get the votes. You don't need me to explain that to you. You're living it every day. So Marx's argument is change the economy. Now, let me tell you what this implies, because it may not be immediately obvious. One of the implications of Marx's gesturing towards a different way of organizing the workplace, a democratic way. One of the arguments that flows out of it is that it will never be enough for the state to replace private entrepreneurs or private employers if all the state does is get rid of the private people who are the employers and replace them with government officials who are the employers. We haven't gotten rid of the employer versus employee division. We have, then what Marx would have called state capitalism rather than private capitalism. But it's all capitalism, which means it will operate in a similar way. Therefore, what the Soviet Union did, what China did, what Cuba did, whatever the pros and cons of replacing private capitalism with state capitalism might be going beyond capitalism they did not achieve. Because that requires, if you're going to be taking the lesson from Marx, transforming the workplace so it isn't an employeremployee relationship that has to be understood because it's the logical outgrowth of, of everything Marx tried to understand and to achieve is the question of realizing Marx's dream. Marx's solution, Marx's idea of how to actually get, excuse me, to liberty, equality, fraternity and democracy, is that just a utopian dream? My answer is none at all. Marx was aware, as we are now, that human beings have understood this more or less for thousands of years. Yes, Marx is the formal statement of it. He's worked it out a bit further. He's a modern, relatively modern exponent of this idea. But the idea itself is very old. One of the ways it's been embodied is in something we call worker co ops, where workers cooperatively run a business that's as old as Methuselah. Early American history is full of examples of worker co ops. Workers in farms, in stores, in little craft enterprises getting together as groups of people democratically, an egalitarian way. Everybody gets the same wage or Roughly the same. Everybody has one vote in deciding everything the business does. There are examples all over the United States today. Spain has a famous example in the Mondragon Corporation. Emilia Romagna in Italy is a place where roughly 40% of businesses are run as worker co ops, et cetera, et cetera. So, yes, Marx makes a breakthrough. Marx teaches it in a systematic, theoretically sophisticated way. But he is recouping for us the history of many efforts over many years in virtually all cultures to move in that direction, to see that as the way to realize the goals for a just economic system. What's the conclusion one can draw from all of this? Marx was a critic. Marx said that capitalism is not the end of human history. It's just the latest phase. Marx reminds us, and he does it with a grin, that the proponents and the celebrants of capitalism have often made the same mistake as the proponents and celebrants of slavery and feudalism before them. They imagined with wishful thinking that their system was the end of history, that their system was as good as it gets, that you couldn't do better than what they had done. Every single one of those people over the last 5,000 years, if not longer, of recorded history has been proven wrong. That means that the people who tell you today that we can't do better than capitalism, that capitalism is the greatest thing since sliced bread, it's the end of history. It's the ultimate. There's no more reason to believe that sort of argument today than there is reason to do anything but smile at the people who believe that about feudalism, slavery and everything else. It's really the point of view of people who are either afraid of or dead set against progressive social change. And that's not Marx. That's what he was about. And he felt that the capitalist system had demonstrated enough for him by the 1850s to know that we can, we need to, we must do better. And as one who has learned from Marx, as I have learned from all kinds of other thinkers, I have to say that the last 150 years since he left the scene has not made many of us one whit less impressed by how much he understood, what insights he had to offer. And as an American, which I am, and I'm glad, I am, I am profoundly grateful on the one hand that I can explain all of this, and I can say it to you, but my pride in being able to do that is coupled with a shame that for the last 70 years it has been, in the main, almost impossible in this society to get people to understand the simple truth that you have to listen and pay attention to the critic as well as to those who love the system. If you're ever going to get a balanced understanding of the sort, you need to do better. The best part of many of us is that commitment to do better. And that alone is a reason to celebrate the 200th anniversary of one of the greatest critical thinkers of the economic system we live with. I want to thank you for staying with us through these four segments. It was a pleasure to produce them. I hope it was interesting for you to listen to them. And once again, I want to invite you to join the Patreon community that supports all of this kind of work. And you can easily do that by going to patreon.com p a t r e o n economicupdate and following us and supporting us in that way. And likewise through Facebook, Twitter, Instagram and on our two websites. You can also follow what we do. The two websites are rdwolff with two f's.com and democracyatwork.info. thank you very much for your attention.