Karl Marx's Economic Theories

For Karl Marx, the basic determining factor of human history is economics. According to him, humans — even from their earliest beginnings — are not motivated by grand ideas but instead by material concerns, like the need to eat and survive. This is the basic premise of a materialist view of history. At the beginning, people worked together in unity and it wasn’t so bad.

But eventually, humans developed agriculture and the concept of private property. These two facts created a division of labor and a separation of classes based upon power and wealth. This, in turn, created the social conflict which drives society.

All of this is made worse by capitalism which only increases the disparity between the wealthy classes and the labor classes. Confrontation between them is unavoidable because those classes are driven by historical forces beyond anyone’s control. Capitalism also creates one new misery: exploitation of surplus value.

For Marx, an ideal economic system would involve exchanges of equal value for equal value, where value is determined simply by the amount of work put into whatever is being produced. Capitalism interrupts this ideal by introducing a profit motive — a desire to produce an uneven exchange of lesser value for greater value. Profit is ultimately derived from the surplus value produced by workers in factories.

A laborer might produce enough value to feed his family in two hours of work, but he keeps at the job for a full day — in Marx’s time, that might be 12 or 14 hours. Those extra hours represent the surplus value produced by the worker. The owner of the factory did nothing to earn this, but exploits it nevertheless and keeps the difference as profit.

In this context, Communism thus has two goals: First it is supposed to explain these realities to people unaware of them; second it is supposed to call people in the labor classes to prepare for the confrontation and revolution. This emphasis on action rather than mere philosophical musings is a crucial point in Marx’s program. As he wrote in his famous Theses on Feuerbach : “The philosophers have only interpreted the world, in various ways; the point, however, is to change it.”

Society

Economics, then, are what constitute the base of all of human life and history — generating division of labor, class struggle, and all the social institutions which are supposed to maintain the status quo. Those social institutions are a superstructure built upon the base of economics, totally dependent upon material and economic realities but nothing else. All of the institutions which are prominent in our daily lives — marriage, church, government, arts, etc. — can only be truly understood when examined in relation to economic forces.

Marx had a special word for all of the work that goes into developing those institutions: ideology. The people working in those systems — developing art, theology, philosophy, etc. — imagine that their ideas come from a desire to achieve truth or beauty, but that is not ultimately true.

In reality, they are expressions of class interest and class conflict. They are reflections of an underlying need to maintain the status quo and preserve current economic realities. This isn’t surprising — those in power have always wished to justify and maintain that power.