Economic Update: The Contributions of Karl Marx - Part 2

Part 2 of 4 

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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Welcome to Part II 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 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 strengths and its weaknesses, so that we can all be better citizens in terms of how we contribute to making the world a better place.

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 and 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 the community—whether by the way, it’s a small tribal group in the 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’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 inside 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 is what the typical master does. He takes a portion of [the surplus] the slave has produced and gives it back to the slave, so the slave can survive until tomorrow and 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 how do those people live, because they have the 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, that 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”. The 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 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 inside Marx 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, reach an agreement, I’m going to pay you $20 dollars an hour. You come at eight, you go home at five—Monday through Friday—you know them—a typical pattern. And I will give you $20 dollars 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. 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 dollars an hour is if during that hour you produce more than $20-dollar worth of ladder for him to sell.” Why? Because if all your labor did was produce $20 dollars more of ladders to sell, when the employer sold the extra your labor produced, he gets 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 the capitalist business is or does. The employer will give you $20 dollars an hour if, and only if, your labor each hour produces more or, if you like, adds more value to what the employer sells that it cost 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; they 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 wager-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 massive 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 etc., etc. 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, 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.com and democracyatwork.info.

I look forward to installment number three, which comes next.


Transcript by Aleh Haiko
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