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Richard Wolff

March 14, 2022

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This week's show features a discussion of what Marx offers in the way of a basic critique of capitalism and an alternative economic system that would be better for most people, and how this differs from mainstream economics.


Transcript has been edited for clarity

Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives — incomes, debts, jobs — our own, and those of our children. I’m your host, Richard Wolff.

Today’s program is a little different from what we normally do. I want to pose and answer a question, and the question is, “What does Marx and Marxism have to offer us today?” This is a tradition of thought that has been around now for a long time. Marx died in 1883, so we're talking about 150 years of the spread of his thinking and writing, literally to every country on earth, with loads of people contributing their varying interpretations of what it all means. I want to focus on the U.S. today, the world, but particularly the U.S., and ask that question: “What does the Marxian approach to thinking about society offer us?” I think, of course, that it offers good things, otherwise I wouldn't be taking your time, or mine, to talk about this. It's a question that should have been asked much more in this country than it has been but, I want to ask it, and I want to begin to answer it.

Number one: Marxism offers a way out to people who have had enough of Capitalism. It is a critical approach. Marx's entire life was devoted to criticizing the Capitalism into which he was born, and in which he lived, his life. By having died in 1883, he never lived long enough to see any actual attempt to establish something that wasn't Capitalist. His was a critical effort. His basic idea was, “We can, and we should, do better than Capitalism.” So it is a theory. It is a body of writing for people who share that view, who have had it with capitalism, are able to think that way, and pose that to themselves. Here's a thinker who had that idea, too, and here's what he came up with as a way to go about this.

The second thing that Marxian writings, and the Marxian tradition, offer is an understanding which follows from the first thing I just said: Capitalism is itself transitory. It's not perpetual, and this is something that is no minor matter. Capitalism, like slavery, and feudalism, and ancient tribal village economies, has a history. It's born, it evolves over time, and then it passes away, to be replaced by something else. That has happened to every other economic system, and Marxism insists that it's going to happen to Capitalism, too. At least he insists in such a way as to kind of provoke us. He says isn't the burden on those of you who want to imagine it will last forever, rather than the burden on me, who imagines it'll be like every other system we've ever had in the history of the human race. Pretty good point! And then he goes a little bit further, and he says, ‘I'm going to show you how the different systems go about handling the same basic problem and then, he said, I’ll be able to show you what it means to say we can do better than Capitalism.

So here's the problem: every economic system has to solve, says Marx — not the one you might think, although he admits that's part of it — producing the goods and services without which we cannot feed, clothe, shelter ourselves, have a decent life, share our relationships with other people, and so on. He agrees with all of that, but he takes it a step further. He says there's something else that every society, every economic system, has to do. He says in every society not all the people work. This is a remarkable insight. It's kind of obvious once you hear it, but that's like a lot of great truths; you didn't get it until someone said it, and then you said, ‘oh, that's obvious.’ Well, it is, but takes time to figure it out. Here's his idea: In every society of human beings, some people work. That is, they use their brains, and their muscles, and they transform nature into useful products — a tree into a chair, a sheep into a woolen sweater, and so on. It's always true, Marx says, that not all the people do it. All the people sit on chairs, all the people get and need sweaters, and food, and everything else, but they don't all work. What that means, Marx says (and I'm going to use his language) is that a portion of the working class, that is, a portion of the people that do the work, produces more than they themselves consume. In other words, we don't produce just enough to feed, clothe, and shelter the ones who are doing work, because that would leave out all the others who don't do work. They survive, and they have shelter, and they have food, and they have clothing. So the only way to figure this out, Marx says, is there has to be a mechanism, a way in which those who do the work, produce an extra over and above what they themselves consume, and they pass that to the people who don't do work, so that they can survive, too. The obvious examples are easy: children, children that are too young to work. It's not a human society if we simply take all those children and chuck them in the woods, right? We don't do that. We maintain them, we feed them, we clothe them, we shelter them. We consider that a basic part of what it means to be human.

So there has to be a “surplus.” This is Marx's word. A “surplus” is what workers produce, over and above what they themselves consume, to feed the children. Then again, children aren't the only ones, are they? What about sick people? What about elderly people? They are a whole part of every society our human history has any record of. There are all kinds of people who don't work, who don't help produce, but who consume. If there are people who consume but don't produce, then the people who do produce have to produce extra in order for those who don't work to consume. That's true in every human society. Marx tells us what distinguishes human societies, is how they organize this, how they decide who's going to be a worker, who's not going to work, who's going to live off the surplus that the working part of the population delivers to the rest.

Let me give you an example from the United States right now. We say the population of the United States is 330 million people, more or less. The size of our labor force, according to the United States Labor Department, is about 150 to155 million. In other words, in our society half the people are producing a surplus big enough to sustain the other half. Nor is that unusual. Every society does it, but they do it differently, and here comes the interesting part.

How does a slave society do it? That’s very interesting. It makes one group of people, the slaves, do all the work. They produce a surplus, but the surplus they produce is big enough that not only can it take care of the slave babies, and the slave sick people, and the slave elderly, but the surplus is big enough that another group of people — not babies, not sick, not elderly — but masters, can take it for themselves. In fact, the way slavery works, everything the slave produces, even the slave, is the property of the master. The master gets it all, and then gives back to the slave enough to reproduce the slave, keeping the rest (the surplus) for the masters. And they can live quite a life. If you've never seen it, go watch that famous American movie “Gone With the Wind,” and it will give you a lovely display of how that worked in the American South, but it's common to all slaveries.

So you can have a large number of people producing a surplus for a small number who live very high on that famous hog. In Feudalism, Marx says, it's kind of different, but similar. It's different in the sense nobody's a slave, but it's the same because a small number of people — the Feudal Lords — get the surplus produced by the mass of the workers, who are called serfs.

Now Marx draws the implication for us: Capitalism, he said, was very critical of slavery before it. Here in this country, we fought a war in which Capitalism denounced slavery and defeated it in the American South, freeing all the slaves. That's quite a blow. Capitalism promised “freedom, liberty, equality, fraternity.” Democracy would come with their changes, and they believed it sincerely, but what we've come to see, Marx said, was something different from what was promised. We don't have the liberty, equality, and fraternity. What we got was a new system that's different from the old. We don't have slaves, we don't have serfs, but we have something called “employers” and “employees.” What that means is that a mass of people, the employees, do the work and produce an enormous surplus, which is in the hands of the employers who use it to live high on the hog, and to hire a vast array of people that they can sustain who don't work at all in terms of producing goods and services.

Let's take an example: The Capitalist owns and operates a chair factory making chairs, but the Capitalist is scared that during the night people may come and take away the machinery. So he hires a person to go around and around the chair factory at night in a little Jeep to make sure nobody messes with things. He takes a part of his surplus he gets from his chair making workers, and gives it to this fellow in the Jeep. The guy in the Jeep doesn't help produce chairs, has nothing to do with it. It’s completely irrelevant. How does he live, if he doesn't help produce goods and services? The answer is a part of the surplus is given to him by the people who gather it into their hands. Those are the employers. Marx says, ‘Look at that; that shows us that we haven't broken from the pattern of slavery and Feudalism, even though we've changed to Capitalism. We still have a mass of people doing the work, producing that surplus, as happens in all societies, but we are giving it to a tiny minority. Masters were a tiny minority, Lords were a tiny minority, and employers are a tiny minority. We allow them to decide who to support with that surplus, what to do with it.’

Marx says once you understand that, you can immediately see a powerful punchline: We don't have to do that. We don't need a master, we don't need a Lord, and we don't need an employer. The workers could always have done this on their own. You could have a different system. Here comes the critical insight of Marx, making clear what it means to do better than Capitalism. In the second half of this show, we’re going to talk about that.

We've come to the end of the first part of today's show and, as always, I want to thank you all for the support that makes this show, and others we produce, possible. To learn more about the different ways you can support Democracy At Work and Economic Update, please go to Patreon.com, Economic Update, or visit Democracy At Work, dot, info. Please stay with us. We'll be right back on this subject of what Marx and Marxism have to offer us here and now.

Welcome back, friends, to the second half of today's Economic Update. In the first half, we began a conversation to answer the question, “What does Marx and Marxism have to offer to people today in the crisis of today's Capitalism, with special emphasis on the United States?” This applies beyond all that. Where we ended up was with Marx's offering us a real alternative, a concrete way to understand change beyond Capitalism that offers us a better way which, at a time of Capitalism disappointing (and I'm being polite here) a growing number of people, is no minor contribution. So let's see what it means.

If surplus is produced by workers, and that's clear in slavery, Feudalism, and Capitalism in Marx's view, then the real breakthrough, the real alternative, is not another system that has a minority appropriating the surplus into its hand that a majority produces. That was Feudalism, that was slavery, and that is Capitalism. The real breakthrough, the real change, the way to go beyond not just Capitalism, but all of such systems, is to not allow that difference. It’s not to have a small group of people in the dominant position to direct, and therefore take, the surplus from the mass of people that are working, the employees in Capitalism. The way to change that is not to replace private individuals with government officials, because that doesn't change the basic relationship. It changes who occupies the position, but not what the position is.

The real breakthrough that Marx's argument shows us if we — and here we go now — make the workplace undivided (not master-slave, not Lord-surf, not employer-employee) but make it a community, a self-governing democratic community. Everybody has one vote, and together we decide through debate and then majority voting what we want to do in this workplace, what we want to produce, how we want to do it, where we want to do it, and what we want to do with the total output, the revenue we get if we sell it, and so on. We could make a community out of the workplace, rather than a divided, tension-ridden, master-slave, Lord-serf, employer-employee, and instead make it a community.

By the way, this word “community” that's what the word “communism” initially meant for Marx.It had nothing to do with the government, had nothing to do with the state. It had to do with what he was focused on, which was reorganizing the core of production in a society. It was how the goods and services get organized in terms of producing and distributing them which, for him, became this question of how the surplus is managed. So a “worker co-op,” which is the name given in the United States and some other countries is, for Marx, the logical breakaway from Capitalism. It’s the way to cure Capitalism's ills, the way to do better than Capitalism.

So let's review that. If you're a democrat with a small ‘d,’ you believe in democracy. Well then, Marx's argument ought to appeal to you right off the bat, because he's talking about effectively democratizing the enterprise, democratizing the workplace. A commitment to democracy should never have exempted the workplace from what democracy represents, and means, and offers us. There's another dimension to this. Marx points out that all through history — ancient Greece, Rome, medieval Europe, and in many other parts of the world — human beings have repeatedly tried this. They’ve gone in this direction. They wanted at least to explore, to experiment with, community production. In some societies this was done for centuries. Native American tribes did that. They produced community-wise. They didn't divide into a minority that got the surplus. No, the surplus was produced by people together, and then together they decided what to do with it, how to use it as a collective community resource, that surplus they had together produced.

So this is a way of thinking that is critical of Capitalism in important ways. Of course, I can't go into the details here in any kind of comprehensive way with the half an hour program, but it does lead me to suggest to you that one of the first and most important books that Democracy At Work produced was a book called “Understanding Marxism.” It’s a short book. We issued a later, more recent edition that's longer, with a longer edition. I invite you to get a hold of a copy, put it in your library, buy one, however you can. There you will see these arguments developed in much more detail, answering the questions that no doubt are arising in your mind, and that should arise in your mind. Well, let me go back. I want to close this conversation, this summary conversation, of what Marxian economics offers, by suggesting to you that the criticism Marx levied went after those aspects of Capitalism that he felt would make people understand that they could, and they should, do better. Marx was very sophisticated. He understood that every system had in it people who believed that system would last forever. Capitalism is not exceptional in that regard. Sure, a lot of people at various times think that this system either has existed forever, or will, or both. There were people who thought that about slavery. There were people who thought that about feudalism. They were all wrong, and that might make you at least begin to wonder about people who act like there's nothing else but Capitalism, that they may be blind to something. Marxism makes you aware of that. It makes you ask that question, and that's an important contribution right there, in and of itself.

Then Marx went on and looked at the system for the things in it that were “contradictory,” as he liked to say. He examined things that showed that this system had problems it wasn't likely to be able to solve. Let me mention a couple. Every Capitalist has the incentive to lower the costs of whatever it is he or she produces, right? So saving on your labor costs is always a big one, getting workers at a lower wage that you have to pay them, doing with fewer workers, maybe because you buy a machine, or making the existing workers work harder, or work longer, or work faster. There's countless ways to lower the amount of money that you, as an employer, give your workers, because other things being equal, that's more profit for you. Every capitalist understands that. Every business school has courses in how to do this, but Marx comes along and says, ‘Wait a minute. If the Capitalists are successful in shaving off portions of what they pay their workers one way or another, the irony is this hurts them. They don't seem to get it. If you don't give money to the workers, they're the majority. They're your market. They're the people who buy whatever it is Capitalists produce, and if they don't have the money from the Capitalists, they won't be able to buy from the Capitalists. What you gained in profit by paying them less you lose, because you can't sell your output. This is a conundrum. This is a built-in problem when you organize society's production between an employer and an employee, and make profit a bigger issue. Very interesting, isn't it? We live in that problem. It's never been resolved, ever.

Marx makes another point. Capitalism has a built-in tendency for the tiny minority, the employers who get the surplus in their hands, to take an ever bigger chunk of it for themselves. In other words, he explains that Capitalism has built into it a mechanism for ever greater inequality. One of the reasons Thomas Piketty back in 2014 wrote the famous book he wrote and called it “Capital in the 21st Century,” (as a nod to Marx who called his great work Capital) was because he was saying the same thing. He demonstrated it with all the statistics of what has happened since Marx died, but basically showing that Capitalism, until the people rise up and stop it, produces ever greater inequality. That has the same problem. The rich don't need to spend money the way average average people do, so they don’t. That means goods are not being purchased in the market, because you have moved wealth away from the middle and lower class who spend it, into the hands of the super rich who don’t. You’ve got to work this out, otherwise it'll cripple your economy. That's what it's doing in the United States right as I speak to you. Marx figured that out. Marx gives us a way to think about that, and to see how that connects to the whole notion of history moving from one system to another. It allows us to ask, ‘what are the signs that Capitalism now is coming to an end? Are they persuasive? What are the options of where to go? How, as I pointed out in a program earlier, is Fascism an attempt to hold on to a system that is running out of gas?

Before I end for today, I want to talk about what Marxism has to offer in terms of the United States today. There is something called “mainstream economics.” It's what I was taught in the universities I attended, and it's what I've been asked to teach, and often have, in the universities where I've been a professor. In mainstream economics, there is no surplus. There is no question about some people producing a surplus for others. Mainstream economics does not work like that. It does not look at that idea, ignores it, doesn't take it seriously, doesn't even bother to refute it occasionally, but not much. It just pretends it isn't there. Here's what’s very interesting to me. What do they offer instead? In the mainstream economics view, the economy is kind of lots of individuals — you, me, him, her, they. We're all here, and we're buying and selling whatever it is we have. Some of us only have our ability to work, to sell to others who are people who buy our ability. Those people happen to be employers. How do they have the money? Well, they saved it. We didn't save it, so we can't do that. You know all kinds of wonderful stories about an economy composed of individuals. In this economy we each do the best we can, and we end up with whatever it is we can get out of this system. If we're just a worker, well, we get a wage. And if we're an employer, well, we get a profit. And if we're a landlord, well, we get a rent. And it's kind of reasonable. It's just we each get what we contribute. We each get what we deserve. You know what that reminds me of? The role of the church in medieval Europe, and the role of the church in many places, is to tell everybody that what you got, and what you get, is what you deserve. The reason is, if God wanted you to be in a different place, he would have so arranged matters. It's an interesting argument. The modern equivalent is, if you have a bad job and you have a low income, that's because that's what you deserve. It's your fault. There is no system distributing surpluses that you can look to, to explain the situation. It's really all about the individual.

Now in this country we are afraid, as a nation, of the Marxian idea. That's why it isn't taught in universities, or very rarely, why it’s not spoken about publicly by our political leaders, or in the mass media. That is a loss to everybody. If I've done anything, my hope is to give you an idea that we ought to be talking about what Marx has to offer, and what Marxism has to offer because, by not doing it, we are the poorer, that's all. We need all the help we can get with a Capitalism that’s in as deep a trouble as ours is today.

Thank you for your attention, and I look forward to speaking with you again next week.

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