Karl Marx:
"Capital (Das Kapital)"

Volume 1, Part I: "Abstract Labor Standard of Value."

Volume 2, Part III:  "The Circulation & Expansion of Capital."

Volume 2, Part IV: "Criticism of Adam Smith."

Volume 3, Part V: "Profits."

Volume 3, Part VI: "Interest, Rent & Labor Use-Values."

Economic value:

The rationalizations begin with a tautology - contain blatant contradictions - are permeated with distinctions that don't reflect any differences - and are based on definitions and redefinitions of economic terms that are indeterminate, completely without function in the real economy, and applied in slipshod and clearly inappropriate fashion.

  Das Kapital is 383 small print - densely paragraphed pages in the Britannica Great Books translation. It is composed of tediously interminable, repetitively and minutely detailed rationalizations, that are nevertheless obviously incomplete and irrational. About 100 pages are dedicated to presenting the undoubted horribles of economic life in the 19th century and in the several centuries prior to that period.
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  This is continued through the next two volumes, as well - in total, approximately 1800 pages. The primary affect of this design is to smother the many omissions and flaws of logic - and thus to shed much heat while providing little light. The rationalizations begin with a tautology - contain blatant contradictions - are permeated with distinctions that don't reflect any differences - and are based on definitions and redefinitions of economic terms that are indeterminate, completely without function in the real economy, and applied in slipshod and clearly inappropriate fashion.
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  Yet, the concept of capitalism presented can all be accurately stated in a handful of paragraphs.

• Only productive labor adds value to the commodities produced. Labor itself is "a particular commodity" - "labour power" - that is saleable like a commodity - and is measurable in terms of an abstract labor standard - based on duration of average simple unskilled subsistence wage labor.

• Capitalists - as owners of capital - contribute no labor to commodities and thus contribute nothing of value to production.

• Commercial factors contribute no labor to commodities, and thus contribute nothing of value to production,. At most, they just prevent loss of value.

• Capitalist wealth is totally due to egregious misappropriations of productive assets beginning as far back as the period of the breakup of feudalism - "primitive accumulation" - and/or to the subsequent exploitation of laborers who have been separated from the means of production and thus made dependent on capital.

• Capitalists are thus entitled to nothing back from the productive process except the wages they pay for labor and the sums needed to maintain industrial facilities and supplies. Anything more that they receive constitutes "surplus value" that they have extracted from the unjust exploitation of labor. See, Karl Marx, "Capital (Das Kapital)" vol. 1, Part I, "Value Determined by an Abstract Labor Standard."

• All capitalist expansion is achieved only by capitalizing surplus value.

• Therefore, the capitalist ownership interest can be dispensed with without economic loss - with considerable justification - and with gain from the elimination of capitalist exploitative conduct.

• The natural course of capitalism is towards greater concentration of wealth and power. Continuous increases in productivity cause overproduction, squeeze profits, cause periodic economic crises, and make "redundant" an ever enlarging "reserve army" of unemployed and underemployed workers. Capitalists respond to these factors by mercilessly imposing ever harsher working conditions and by squeezing more labor for lower wages from their workers.

• The plight of labor must thus inevitably worsen as capitalists greedily  strive to maintain and increase their profits. Ultimately, an ever more numerous and aroused proletariat will overthrow their capitalist bosses and retake control of productive assets.

  Note: Throughout these articles on Volume 1 of Das Kapital, the term "profits" is used as normally defined - NOT as redefined by Marx in Volume 3.

Das Kapital is full of obvious important internal inconsistencies, a basic reliance on tautological reasoning, numerous distinctions without practical difference, bald denials,  selective - one hand clapping - analyses of causation, semantics games based on sly and nonfunctional definitions and redefinitions of terms, and a host of omitted essential factors.

Even Marx, although working feverishly on Das Kapital for about three decades, ultimately found it impossible to work logically with his own ideas.

  There are obvious answers to this narrow Marxist view of the labor theory of value and the expectation of chronic capitalist crisis.

• Management adds value to labor. Indeed, in the modern world, and even well before the middle of the 19th century, most of the value of labor is attributable to management.

• Without the incentives of the ownership interest - and the signals provided by commercial and capitalist markets - good management is impossible. Indeed, so important are the ownership incentives that - even with market signals - government management is INHERENTLY inept.

• In socialist nations that lack both ownership incentives and market signals, "government economic management" is an oxymoron.

• That goods in the market are worth more than goods on the manufacturer's loading dock is observable fact. This additional value can only come from the commercial factors that bring goods to market.

• Workers have in fact been visibly improving their lot in the advanced capitalist nations since the middle of the 19th century, and a growing middle class has been providing an ever widening array of goods and services that are clearly far more than just "luxuries."

• Increases in productivity always permit an economy to produce more goods and services than before - as well as new goods and services that previously could not be economically provided. The changes caused by increased productivity always bring more opportunities than hardships.

  Adam Smith evenhandedly recognized both the abuses and economic contributions of industrialists, financial institutions and merchants - with explanations that are both brief and remarkably clear. See, Adam Smith, "The Wealth of Nations," (Part I - Market Mechanisms). Karl Marx, on the other hand, created a dense rationale for emphasizing the undoubted abuses and arguing that all the contributions of the capitalist ownership interest and capitalist financial systems are of no value and can thus be dispensed with.
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  Repeatedly, Marx's logic breaks down. There are obvious important internal inconsistencies, a basic reliance on tautological reasoning, numerous distinctions without practical difference, bald denials,  selective - one hand clapping - analyses of causation, semantics games based on sly and nonfunctional definitions and redefinitions of terms, and a host of omitted essential factors - as will be presented throughout these articles. They demonstrate that even Marx - although working feverishly on Das Kapital for about three decades - ultimately found it impossible to work logically with his own ideas.
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The labor definition of value - limited to industrial labor use values - is exclusive because other things of value in the market don't meet it. Things of value that don't involve industrial labor have no value because they don't involve industrial labor.

  Glaringly omitted from the Marx definition of economic value are all the factors that contribute to economic production of goods and services but that have no direct relation to labor on commodities as defined by Marx. Marx perforce recognizes a few of these omissions - things that are bought and sold in the market - things that have a market price - like honor and conscience. Quite unscientifically - and in this instance with remarkable brevity - buried in the bowels of the book - he has recourse to a tautology.
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  The labor definition of value - limited to industrial labor use-values - is exclusive because other things of value in the market don't meet it. Things of value that don't involve industrial labor have no value because they don't involve industrial labor. Since the labor theory of value is scientific truth, any value that doesn't conform to it must therefore be "imaginary."
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  Thus omitted from economic value - besides honor and conscience - are such obviously essential economic factors as

• land,

• reliability,

• courage, 

• variety, 

• mental and physical talent, 

• savings,

• financial independence,

• financial security,

• scarcity,

• rarities like works of art and antiques,

• the absorption of risk,

• the universe of financial services,

• the time cost of money (interest rates), 

• the time cost of productive assets,

• the productive incentives of the ownership interest,

• the commercial activities that bring goods to market,

• competition, without which efficient management is impossible.

• all of the management tools available only to profit-seeking enterprises, without which efficient management of complex economic entities is impossible, and

• all the signals provided by commercial and capitalist markets, without which efficient management is impossible.

  Late in Volume 3, Marx notes in a single sentence that works of art and such are not a part of these "scientific investigations."
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After all, who needs all the management processes of capitalism if they can all be replaced simply by the issuance of communist directives?

  Two centuries of socialist experiments at all levels would fail abysmally because of their inability to efficiently function without such factors.

• Deferred maintenance and inability to keep up with technological advances would be particular problems with socialist experiments at the national level due to the absence of such factors as ownership incentives and the time cost of money.

• The factor of quality would prove difficult to evaluate - and variety an impossibility.

• The lack of incentive for diligence would be a problem for all socialist enterprises that are managed in an egalitarian manner. Under egalitarian socialism, the average level of labor intensity would drop precipitously. In the Soviet Union, the workers would explain: "We pretend to work, and they pretend to pay us."

•  A lack of competition would be a prescription for gross inefficiency - even in capitalist systems.

• No other system is as reliant on ethics as capitalism. It runs on trust and reliability at every level - one of the primary reasons for its efficiency and success. That there are failures and scandals is not nearly so remarkable as the relative infrequency with which they occur.

• The incentives of the ownership interest - which are peculiarly sensitive to the risks and rewards of enterprise - provide the only mechanism with which to even roughly balance ambition with caution - to generate prudent action.

• Exploitation of labor by the state in autocratic socialist systems would routinely prove far more onerous - and far more inescapable - than even the worst examples of exploitation by capitalists.

  With incredible naïveté, Marx - and the Marxists that came after him - would assume that socialist systems would solve all their managerial problems simply by issuing appropriate directives - backed up by terror and the use of force. After all, who needs all the management processes of capitalism if they can all be replaced simply by the issuance of communist directives?
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Marx commits the ultimate sin in economics - he is not practical.

Marx is attempting to clap with just one hand. True, that one hand is responsible for the clapping - but not alone - or even predominantly. And worse - Marx offers just half a hand - omitting  for his propaganda purposes  major factors even on the supply side.

  However, the impracticality of the Marxist abstract labor standard would be the most damaging weakness. For all his dense explanations:

• Marx - and the Marxists who followed him - would fail to explain how his abstract labor standard of value would apply to the vast mass of real labor that - because of talent, diligence and/or skill - rises above average levels.

• Indeed, they would never be able to determine how much unskilled labor of each particular type and level of diligence is needed to reach subsistence labor levels.

• Thus, rapid calculations of  "undifferentiated human labor" values for each of the myriad of products and services produced in an economy would prove impossible. "Labor power" is not anything like the physically measurable "horsepower" standard which is applied in turn to physically measurable phenomena.

  Economics, after all, is a practical art by which scarce resources are allocated. Marx commits the ultimate sin in economics - he is not practical. Any concept of value that cannot be accurately and readily calculated is useless for the fundamental purpose of allocating scarce resources.
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  Marx, himself, would repeatedly be forced to have resort to market prices as an approximation. Where there are no market prices - as in the individual steps of a manufacturing process - or in socialist experiments based on administered prices - it would remain impossible to evaluate real labor in terms of the standard labor unit devised by Marx.
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  Marx is attempting to clap with just one hand - consisting of factors of supply. True, that one hand is responsible for the clapping - but not alone - or even predominantly. And worse - Marx offers just half a hand - omitting  for his propaganda purposes  major factors even on the supply side.
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  Of course, capitalist systems, too, would prove grossly inefficient whenever administered prices were substituted for market prices - or whenever markets became almost totally uncompetitive. The pricing mechanism of even modestly competitive capitalist markets easily proves far superior to all administered pricing alternatives.
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  "Rationing by the purse" invariably proves to be the most efficient - and the fairest - method of allocating scarce resources. Today, in the U.S., major segments of the vital health care industry are providing a prominent example - and are staggering under the burdens of administered pricing procedures.

Propaganda myths:

Who needs the capitalist?

Means are invariably found - technological and/or management - to overcome all the asserted economic obstacles to the implementation of legislation that limits the hardships of working conditions.

  And they can be - every bit as greedy and ruthless as Marx contends - and as Adam Smith explained a century before him.
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  For example, Marx provides extensive and repetitive coverage of the English Factory Acts and similar labor legislation. He notes how means are invariably found - technological and/or management - to overcome all the asserted economic obstacles to the implementation of legislation that limits the hardships of working conditions. He levels his guns at the arguments raised in opposition to legislated reductions in the working day for laborers and children. The assertion that industry's net profit is all earned in a sacrosanct "last hour" is shredded by Marx with irrefutable logic - as well as by application of his dubious "scientific" theories of surplus labor.

  However, he of course doesn't deign to note that the criticized invalid manipulation of figures was really much like his own. But, of course, Marx's manipulations are "scientific."

  Marx then supplies a long segment outlining the horribles of mid 19th century factory work, and the struggle to legislatively impose limits on the length of the working day. Here, one can find a surfeit of material for use in anti-capitalist agitation.

  The implications of competition, economies of scale, division of labor and other factors that lead to continuous increases in productivity then occupy a considerable number of pages - written yet again in a tediously interminable and repetitively detailed style. What Adam Smith explains with great clarity in a sentence or a paragraph, Marx explains in many pages that nevertheless - at best - have glaring omissions.
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  Repeatedly, Marx inconsistently recognizes the ownership incentives for economic progress and productivity, yet insists that they add no value to production. Ultimately, the capitalist can hire supervisors and managers to free himself not only from physical labor, but also from day-to-day management. Then, who needs the capitalist anymore?

  As late as the 1980s, it was a frequent stupidity of left wing economists that the modern corporation didn't need its shareholders and gained nothing from the existence of the shareholder ownership interest. They argued that corporate management was irrational for striving so much for "earnings," and that the payment of dividends was a waste of corporate assets.

  Marx points to some shops that ran better as cooperatives under worker management.

  Coops of various sorts - and even employee-owned businesses - have on occasion been quite successful. However, they generally exist in niche markets, are limited in size, and have never amounted to any substantial proportion of any advanced economic system.
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  Clearly, there must be some limiting factors at work. One of those limiting factors is the unavailability or limitation of owner incentives. Without that, it becomes very difficult to consistently generate investment decisions that prudently take advantage of opportunities that involve substantial risks - or that conflict with the interests of some of the workers.

Manufacturing and industrial workers:

The capitalist incentive to bring great aggregations of productive assets and labor together creates added productive power.

  It is capital that has the incentive to bring great aggregations of productive assets and labor together to harness the added productive power that labor can provide when working in cooperation, Marx points out.

  "Hence, the productive power developed by the labourer when working in cooperation is the productive power of capital. This power is developed gratuitously, whenever the workmen are placed under given conditions, and it is capital that places them under such conditions. Because this power costs capital nothing, and because, on the other hand, the labourer himself does not develop it before his labour belongs to capital, it appears as a power with which capital is endowed by Nature -- a productive power that is immanent in capital."

  Science, too, gratuitously provides added productive power that capitalists exploit. The capitalist is ever ready to exploit every factor that can improve productivity - whether paid for or free.

  One of the great weaknesses of socialist systems would be the lack of incentives for modernization and the commercialization of new products. The Soviet Union would produce first class scientists and engineers, but their achievements would almost never result in goods and services for public distribution. Apparently, the ownership incentives of capitalism in this way - as in so many other ways - contribute value to the economic process after all.

"[Everything] that shortens the necessary labour time required for the reproduction of labour power, extends the domain of surplus labour."

"In handicrafts and manufacture, the workman makes use of a tool; in the factory, the machine makes use of him."

If on the one hand [the division of labor] presents itself historically as a progress and as a necessary phase in the economic development of society, on the other hand it is a refined and civilized method of exploitation."

It is the nature of vast expensive factory complexes that drive capitalists to attempt to extract as long and as intense a working day as possible from labor.

  It is the evil profit motive that drives this and such other processes of productivity as the division of labor, massive increases in the scale of production, and the maintaining of maximum intensity of work effort.

  "[This] social form of the labour process presents itself as a method employed by capital for the more profitable exploitation of labour, by increasing that labour's productiveness."

  "[Everything] that shortens the necessary labour time required for the reproduction of labour power, extends the domain of surplus labour."

  Marx fills many pages with the different types of manufacture and their development into industrial systems. The skills that workers develop are reduced to operating with a particular machine - rendering them completely dependent for their livelihood on the capitalist who owns the machines.

  "In handicrafts and manufacture, the workman makes use of a tool; in the factory, the machine makes use of him. - - - The lightening of the labour, even, becomes a sort of torture, since the machine does not free the labourer from work, but deprives the work of all interest."

  He emphasizes that, with the division of labor in a factory,

• No individual laborer produces a saleable "commodity." That is the product of many laborers.
• No laborer owns the means of production. That is owned by the capitalist.
• No laborer is free within the bounds of the competitive market. They are now subject to "the undisputed authority of the capitalist."

  "The same bourgeois mind which praises division of labour in the workshop, lifelong annexation of the labourer to a partial operation, and his complete subjection to capital, as being an organization of labour that increases its productiveness -- that same bourgeois  mind denounces with equal vigor every conscious attempt socially to control and regulate the process of production as an inroad upon such sacred things as the rights of property, freedom, and unrestricted play for the bent of the individual capitalist."

  The factory division of labor is unknown in primitive societies like those in India or previously in Europe, even under the Guild system. "[Division] of labor in the workshop as practiced by manufacture is a special creation of the capitalist mode of production." The advent of efficient capitalist production renders impossible the continued independent existence of unskilled laborers. Only as a "manufacturing labourer" can they produce enough to subsist.

  "By nature unfitted to make anything independently, the manufacturing labourer develops productive activity as a mere appendage of the capitalist's workshop. - - - [Thus], division of labour brands the manufacturing workman as the property of capital."

  Marx goes into considerable detail about the plight of the manufacturing workman.

  "[The division of labor] increases the social productive power of labour, not only for the benefit of the capitalist instead of for the labourer, but it does this by crippling the individual labourers. It creates new conditions for the lordship of capital over labour. If, therefore, on the one hand it presents itself historically as a progress and as a necessary phase in the economic development of society, on the other hand it is a refined and civilized method of exploitation."

  Marx provides vast detail about the development of the 19th century factory system. He emphasizes at great length that it is the nature of vast expensive factory complexes that drive capitalists to attempt to extract as long and as intense a working day as possible from labor.

  "Hence, - - - the economic paradox, that the most powerful instrument for shortening labour time, becomes the most unfailing means for placing every moment of the labourer's time and that of his family, at the disposal of the capitalist for the purpose of expanding the value of his capital."

Productivity and competition can force the price of the commodities produced so low that "necessary labor time" expands to fill almost the entire workday and profits are squeezed to the vanishing point. 

  Nevertheless, competition creates a major contradiction in the capitalist system. Productivity and competition can force the price of the commodities produced so low that "necessary labor time" - the labor time necessary for the worker to earn his subsistence - expands to fill almost the entire workday and profits are squeezed to the vanishing point.

  Here, his "scientific" analysis succumbs to his tendency to periodically slip into static analysis. It fails to take into account the dynamic nature of capitalism. Increases in productivity make possible a great expansion of existing markets and the production of new and improved goods and services that couldn't profitably be produced before.
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  With only rare exceptions, Marx stupidly treats all factories as a homogeneous mass. This fails to account for the operations of "creative destruction" that constantly eliminate the least efficient so that the most efficient may thrive.
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Note: Marx redefines "profit" for propaganda purposes, but thereby destroys its functional meaning. However, it is not until Volume 3 that this becomes relevant. There, he tells us that - as he defines it - "the amount of profit - - - is actually identical with the amount of surplus-value" when goods are sold at their "value." This, however, does not solve his theoretical problems. It just compounds them.

  A bit later, Marx perforce recognizes these processes, but minimizes or denigrates them. See, "Worker revolt," below.
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  Marx notes the vast increase in textile exports that accompanied the increased productivity of the 19th century. It is obvious that vast new markets were opened up, and multitudes of people were benefiting from the production of all those inexpensive textiles. However, Marx concentrates on the suffering caused by change thus thrust upon foreign markets, and implies that almost all the benefits were going to the wealthy and the growing middle class of idlers and the otherwise unworthy.

  Considering the volumes of textiles produced, the mid 19th century wealthy and middle classes must have become far larger than previously thought.

Worker revolt:

Because of capitalist technological advances, workers in the hundreds of thousands and even in the millions have been forced from previous occupations, frequently with disastrous consequences for those unable to adapt.

  Much of this is "Luddite" opposition to industrialization itself. Marx, of course, dwells on the very real suffering that results when rapid change hits people unequipped to change with it. His complaints about the pace of change in production methods and their effects on the employment of labor and unemployment rates shows that the insecurity caused by the pace of change in the 21st century is actually nothing new.

  "[Modern industry] incessantly launches masses of capital and workpeople from one branch of production to another. - - - We have seen how this absolute contradiction between the technical necessities of modern industry, and the social character inherent in its capitalistic form, dispels all fixity and security in the situation of the labourer; how it constantly threatens, by taking away the instruments of labour, to snatch from his hands the means of subsistence, and, by suppressing his detail-function, to make him superfluous."

  Marx is already warning that "society is compelled, under penalty of death,"  to prepare workers through education and other means for engaging in many different occupations during their working lives. He notes the workers in the hundreds of thousands and even in the millions forced from previous occupations, frequently with disastrous consequences for those unable to adapt.

  The difficulties of adapting to rapid or sudden change continues as a natural part of capitalist industrial development. For the capitalists, too, change can be a threat.
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  Somehow, capitalism keeps advancing and providing ever widening and deepening levels of prosperity despite the difficulties of change. Populations increase rapidly during the capitalist period - workers in increasing numbers find work - living standards rise - and longevity increases - things already evident in the 19th century.

  In yet his sixth, seventh and eighth failed fearless forecasts:

• Marx forecasts that such education of the working class and the development of their varied capabilities "are diametrically opposed to the capitalistic form of production, and to the economic status of the labourer corresponding to that form." (Today, capitalists are attracted to an educated workforce.)
• Like modern left wing critics of capitalism, Marx is already predicting that capitalist forms of industry and agriculture are "unsustainable." (Agriculture and industry would go from triumph to triumph in producing ever greater abundance despite left wing alarums about "unsustainability.")
• Throughout the book, Marx repeatedly forecasts the end of small business - driven under by the increasing advantages enjoyed by large-scale industry. In this, he joins a host of economic forecasters - principally but not entirely of left wing ideology. The demise of small business would play a vital role in the "exploding" of capitalism. Here, he explains this prediction in relation to the increased costs imposed by factory legislation that can more easily be absorbed by large factories - a familiar refrain ever since.

  "By the destruction of petty and domestic industries, [factory legislation raises costs and renders uncompetitive] the last resort of the 'redundant population,' and with it the sole remaining safety-valve of the whole social mechanism. By maturing the material conditions, and the combination on a social scale of the processes of production, it matures the contradictions and antagonisms of the capitalist form of production, and thereby provides, along with the elements for the formation of a new society, the forces for exploding the old ones." (Somehow, small business continues to thrive and dynamically provide new jobs in all the advanced capitalist nations.)

  A growing middle class is noted - and disparaged - by Marx as "idlers" and the dependents of capitalists. He notes that this class makes demands on the economy that provides many jobs, but many of these jobs are denigrated as involving "surplus produce" - "luxuries" - items beyond what is needed for subsistence. These people are a reactionary social phenomenon with no future.

 

  "Their growing wealth and the relatively diminished number of workmen required to produce the necessities of life beget, simultaneously with the rise of new and luxurious wants, the means of satisfying those wants. A larger portion of the produce of society is changed into surplus produce, and a larger part of the surplus produce is supplied for consumption in a multiplicity of refined shapes. In other words, the production of luxuries increases."

Marx's abstract labor theory of value is limited to just the use-values of industrial labor.

  Marx then unequivocally demonstrates his utter ineptness as an economist. Even he must ultimately note the constant expansion of capitalist production - the fact that the capitalist pie is not static, but is constantly growing. Nevertheless, his "scientific" understanding of economics causes him to grossly underestimate the vast magnitude of the prosperity that capitalism was beginning to generate.

• He notes the increased labor involved in transportation as commerce expands globally - but denigrates this as primarily due to trade in "luxuries" and the raw materials and intermediate products needed for industry.
• He notes the use of national wealth to engage in massive infrastructure projects, but dismisses them by stupidly asserting that these "can only bear fruit in the far future."
• He here notes that "[entirely] new branches of production, creating new fields of labour, are also formed [by industrialization, but] the place occupied by these branches in the general production is, even in the most developed countries, far from important." Employment in gasworks, telegraphy, photography, steam navigation, and railways amounts to just the tens of thousands. The production of new products like envelopes and steel pens are themselves quickly industrialized to limit the employment provided.

  This stupidity would continuously afflict socialist and Keynesian economists in the form of the "automation" scare, the "mature capitalism" fallacy, and "declinism."

• The New Deal would initially be based on the "mature capitalism" fallacy. FDR would initially give up on any effort to remedy the problems causing the Great Depression in favor of efforts to more equitably distribute current production.
• The noted Keynesian economist Paul Samuelson viewed the computer in the 1950s as a job destroying technology - typically failing to foresee that it would ultimately create even more jobs than the automobile.
• Lester Thurow would stupidly return to the "mature capitalism" fallacy in the 1980s, viewing economic globalization in stagnant terms - a "Zero Sum Game."
• John Kenneth Galbraith - as late as 1992 - would view that mild recession as perhaps the beginning of the long expected "mature economy" crisis.

  On the one hand, Marx deplores factory work - and on the other hand he demeans all those who are enabled by capitalist prosperity and entrepreneurship to escape factory work. They produce "surplus produce." By providing services to the growing middle and wealthy class, they become "lackeys" - "unproductive" - "modern domestic slaves." His abstract labor theory of value is limited to just  the use-values of industrial labor. The others all live off the "surplus value," indeed, off the "profits," generated by industrial capital. 

  There were numerous instances where Luddites succeeded in using government to mitigate their problems, Marx notes. However, inevitably, legislative efforts to halt the advance of industrialization proved only temporary.

  "Therefore, it is with the advent of machinery that the workman for the first time brutally revolts against the instruments of labour."

  Such labor problems stimulate capital to further develop machinery that can displace troublesome workers. "It is the most powerful weapon for repressing strikes, - - -." (It would remain so throughout the 20th century.)
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  The business cycle is shown as a driving force in the repeated rationalization of economic production - frequently at the expense of the workers who endure layoffs and pay cuts. Marx provides many pages of history and analysis of the impact in the textile industry, especially involving cotton goods. He follows this with even more pages on the hardships and health hazards of 19th century factory and industrial systems.
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Communist societies will not be  constrained by mere cost factors in providing workers with the most effective tools, Marx asserts with great confidence - and incredible stupidity.

  The cost of labor is a major factor governing the adoption of machinery. At a given level of productivity, labor can be so cheap as to deter the use of machinery. Cheap labor - including that of women and children - is routinely exposed to the harshest working conditions whenever the machines that might lessen their ordeal would not increase productivity. As regards to this,  in a footnote, Marx makes his ninth - and one of his most absurd - "scientific" predictions.

 "Hence in a communistic society there would be a very different scope for the employment of machinery than there can be in a bourgeois society."

  Stalin and Mao and other communist leaders - by the enslavement of labor in state farms and slave labor camps and designated workshops - would act more like the Marxist version of capitalists than any real capitalists.
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  Whereas Marx waxed indignant at the subsistence wage levels of early capitalist development, in the communist development model, even subsistence was frequently too expensive. Labor was not an asset to be maintained - it was an expendable commodity.

  Marx notes that at every step, capital has had trouble with labor, as men tended to rebel against the conditions of their labor. This can only wind up in conflict - with victory for the ever growing ranks of labor.

  However,  victory would not come as a result of the leadership of a Marxist intellectual elite which - where successful - would lead them instead to even worse exploitation by communist and autocratic socialist governments. And the victory of labor would be by exploitation of capitalists, not by expropriating and eliminating the capitalists.
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  What Marx couldn't see was that victory would be through independent unions and at the polls through democratic processes. See, Muravchik, "Heaven on Earth," sections entitled "Collapse," "Samuel Gompers," and "George Meany."

  Marx couldn't see - and Marxists couldn't accept - that the victory would be based on compromises and accommodations with capital that would permit labor to exploit the very real  contributions that capital contributes to production - contributions that Marx insisted didn't exist. Such compromises and accommodation are the basic stuff of democratic systems - and are alien to autocratic socialist systems
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  He would be astounded that victory would be so complete that labor and leftists would one day deplore the disappearance of  "good factory jobs" as economic development moved beyond his "scientific" vision.

The original source of capital:

"The capitalist class is constantly giving to the labouring class order-notes in the form of money - - -. The labourers give these order-notes back to get their share of their own product."

  The Marxist propaganda myth is thus ready for its complete expression.

  "It is his labour of last week, or of last year, that pays for his labour power this week or this year. - - - The capitalist class is constantly giving to the labouring class order-notes in the form of money on a portion of the commodities produced by the latter and appropriated by the former. The labourers give these order-notes back just as constantly to the capitalist class, and in this way get their share of their own product."

"When he has consumed the equivalent of his original capital, the value of his present capital represents nothing but the total amount of the surplus value appropriated by him without payment."

  Like a peasant in feudal bondage who works for nothing for his lord for half his time, the wage laborer provides surplus labor for the capitalist.
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  Even if a capitalist first acquires his capital by the sweat of his own labor, once he begins to totally depend on that capital for his livelihood and savings, he must exploit surplus value for that purpose. Surplus value mounts as a debt - an unsatisfied obligation against his capital. Thus, eventually, all the capital of the capitalists becomes encumbered with his unsatisfied debt to his workers for unpaid wages.

 

 

  "And so it is with the capitalist; when he has consumed the equivalent of his original capital, the value of his present capital represents nothing but the total amount of the surplus value appropriated by him without payment. Not a single atom of the value of his old capital continues to exist.
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  "Apart then, from all accumulation, the mere continuity of the process of production, in other words simple reproduction, sooner or later, and of necessity, converts every capital into accumulated capital, or capitalized surplus value."

  More than that, the laborer is tied to capital like the peasant in feudal bondage. Separated from the means of production, the laborer becomes just one more of the capitalist's assets. His wage is just a cost of maintaining him as a productive asset - like the cost of oil to lubricate machinery.

  "It is no longer a mere accident that capitalist and labourer confront each other in the market as buyer and seller. It is the process itself that incessantly hurls back the labourer on to the market as a vendor of his labour power, and that incessantly converts his own product into a means by which another man can purchase him."

"In actual history it is notorious that conquest, enslavement, robbery, murder -- briefly, force -- play the great part" in the initial accumulation of capitalist capital.

"[Laborers] became sellers of themselves only after they had been robbed of all their own means of production, and of all the guarantees of existence afforded by the old feudal arrangements."

  And the vast majority of "original capital" is not due to sweat equity. "In actual history it is notorious that conquest, enslavement, robbery, murder -- briefly, force -- play the great part."

  "[Laborers] became sellers of themselves only after they had been robbed of all their own means of production, and of all the guarantees of existence afforded by the old feudal arrangements. And the history of this, their expropriation, is written in the annals of mankind in letters of blood and fire."

  Although certainly not by itself sufficient, today, the freeing of agricultural workers for wage labor is one of the first - and most productive - steps in transforming communist, socialist, feudal and tribal economies into growing capitalist systems. Factory work in undeveloped nations is indeed hard - but its a lot better than working in leach infested rice paddies.

  Marx provides several chapters covering economic history running back to feudal times. The moral of the story is that, at each step of the way, the agricultural serfs, small tenant farmers and laborers have been badly abused and taken advantage of, to the ultimate benefit of the capitalists. Marx calls this "primitive accumulation."
 &
  The freeing of serfs who were then ejected from the land, along with the enclosure of common lands, created vast armies of paupers and laborers. Feudal tenure of land was transformed into private property. Along with the "robbery of the Church estates" as a result of the Reformation, commons and crown lands were "given away, sold at a ridiculous figure, or even annexed to private estates by direct seizure." Thus, from the last third of the fifteenth to the end of the eighteenth century, were established large "capital farms" and the mass of agricultural proletarians who would be available for employment as laborers for manufacturing industry.

  "The spoliation of the church's property, the fraudulent alienation of the State domains, the robbery of the common lands, the usurpation of feudal and clan property, and its transformation into modern private property under circumstances of reckless terrorism, were just so many idyllic methods of primitive accumulation. They conquered the field for capitalistic agriculture, made the soil part and parcel of capital, and created for the town industries the necessary supply of a 'free' and outlawed proletariat."
 &
  "About 1750, the yeomanry had disappeared, and so had, in the last decade of the eighteenth century, the last trace of the common land of the agricultural laborer."

  In the first third of the 19th century, the great landed estates were "cleared" of the cottages and villages of the rural poor.
 &

  The exploitation of colonies provided great opportunities for sudden wealth. Marx provides detail about the horribles of the European colonial and trading systems. The slave trade, the great mercantile empires, and the major financial houses that make money from money, arose during this period. Financial capital flowed from Venice to Holland to England and then to the United States. Financial capital - helping to build capitalism in new regions - is "the capitalized blood of children."

  "Colonial system, public debts, heavy taxes, protection, commercial wars, etc., these children of the true manufacturing period increase gigantically during the infancy of modern industry. The birth of the latter is heralded by a great slaughter of the innocents."

  On the other hand, in the North American colonies and Australia where land is cheap and available even to the poor, labor retains its independence - remains scarce despite waves of immigration - and demands higher wages for its hire. This enables the laboring classes in these colonies to live observably better lives than those in Europe - demonstrating the degree to which capitalist expropriations have impoverished the laboring classes in Europe. (Yet, capitalism was thriving in North America and Australia - and has continued to thrive. How was this possible?)
 &

  Capital is expanded by dedicating some of the surplus value - the surplus value not needed to maintain existing capital (this is "profits" - a term Marx doesn't rely on in this chapter) - into additional machinery, wages and materials used in expanded production. Indeed, even when the capitalist offers increased wages, he is doing this only so that labor can not only reproduce itself, but also can produce an increase in labor for the next generation of expanded production. Capitalism thus devilishly increases wages above subsistence levels not for the benefit of the workers, but for its own future benefit.

  This is, of course, ridiculous - a feeble attempt to somehow account for the reality of the increasing number of workers earning substantially above subsistence wages, and the constant population increase in the face of the horrible conditions Marx presents. These capitalists are quite incredible - not only interested in their own greedy interests, but willing to sacrifice in spite of that greed for the benefit of the next generation of greedy capitalists.

  Marx goes on for many pages explaining the phenomenon of capital accumulation in terms of his propaganda myth and his pseudo scientific jargon. Everything takes place "strictly according to the laws of exchange" as Marx "scientifically" has revealed them. What the capitalist accumulates "is to conquer the world of social wealth, to increase the mass of human beings exploited by him, - - -." What the capitalist personally consumes, "is a robbery perpetuated on accumulation."
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  The existence of the capitalist is "transitory" - lasting for only as long as the "transitory necessity for the capitalist mode of production." The capitalist greedily seeks not use values, but exchange values.

  "Fanatically bent on making value expand itself, he ruthlessly forces the human race to produce for production's sake; he thus forces the development of the productive power of society, and creates those material conditions which alone can form the real basis of a higher form of society, a society in which the full and free development of every individual forms the ruling principle."

  In the mean time, all other justifications for the accumulative behavior of capitalists crash on the rocks of the propaganda myth created by Karl Marx.
 &
  Marx thinks much more highly of the economic system in India, where it is "Magnates" - rather than capitalists - that dominate the economy. They take tribute and rents from the peasants. They spend on the labor which provides them with goods and services, but these are produced with means of production in the possession of those laborers. "Here, production and reproduction on a progressively increasing scale go on their way without any intervention from that queer knight, the capitalist 'abstainer"' who accumulates capital from surplus labor.

  Marx repeatedly indicates a tendency towards romantic glorification of rudimentary economic systems. This is typical of many left wing ideologues to this day - and a mark of their incredible ignorance. They, themselves, do not rush to those parts of the world if they must earn their living under such conditions. Marx, at least, acknowledges that - in any event - such rudimentary economic systems are too primitive to survive once the capitalist alternative is established.

Supply and demand for labor and capital:

  "The law of capitalistic accumulation, metamorphosed by economists into a pretended law of nature, in reality merely states that the very nature of [capital] accumulation excludes every diminution in the degree of exploitation of labour, and every rise in the price of labour, which could seriously imperil the continual reproduction, on an ever enlarging scale, of the capitalistic relation. It cannot be otherwise in a mode of production in which the labourer exists to satisfy the needs of self-expansion of existing values, instead of, on the contrary, material wealth existing to satisfy the needs of development on the part of the labourer."

  By the end of the 19th century, Marxists and other socialists would be mortified when one of their own would point out what by then was obvious - just how far workers had in fact succeeded in improving their lot under capitalist systems - and only under capitalist systems. See, Muravchik, "Heaven on Earth," section on Eduard Bernstein.

  Tendencies towards the concentration of capital into monopolies are, of course, covered. The joint stock company is especially complicit in this process. All of these forces of accumulation and concentration increase productivity, so that the total spent on wages - even if increasing in absolute terms - constantly decreases as a proportion of total capital.
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"In proportion as capital accumulates, the lot of the labourer, be his payment high or low, must grow worse," Marx absurdly asserts.

"Centralization of the means of production and socialization of labour at last reach a point where they become incompatible with their capitalist integument. This integument is burst asunder."

  A great "industrial reserve army" of the unemployed and underemployed is created that capital can readily exploit for new or expanded production. The existence of these labor reserves also serves to restrain any tendency for the wages of the employed to rise.
  Thus, "the absolute general law of capitalist accumulation."

  "The same causes which develop the expansive power of capital, develop also the labour power at its disposal. The relative mass of the industrial reserve army increases, therefore, with the potential energy of wealth. But the greater this reserve army in proportion to the active labour army, the greater is the mass of a consolidated surplus population, whose misery is in inverse ratio to its torment of labour. The more extensive, finally, the Lazarus layers [women, children and temporary workers] of the working class, and the industrial reserve army the greater is official pauperism."

  Thus, workers can't win. They either know the "misery" of unemployment or underemployment, or the "torment" of exploitation at wages kept at or near subsistence levels by the threat of replacement from the unemployed.
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  Marx thus provides us with his tenth - and another major - false fearless forecast: The lot of the working class "must" grow worse as capital accumulates.

  "[Under capitalism] all methods for raising the social productiveness of labour are brought about at the cost of the individual labourer; all means for the development of production transform themselves into means of domination over, and exploitation of, the producers; they mutilate the labourer into a fragment of a man, degrade him to the level of an appendage to a machine, destroy every remnant of charm in his work and turn it into a hated toil; they estrange from him the intellectual potentialities of the labour process in the same proportion as science is incorporated in it as an independent power; they distort the conditions under which he works, subject him during the labour process to a despotism the more hateful for its meanness; they transform his lifetime into working time, and drag his wife and child beneath the Juggernaut of capital. But all methods for the production of surplus value are at the same time methods of accumulation; and every extension of accumulation becomes again a means for the development of those methods. It follows, therefore, that in proportion as capital accumulates, the lot of the labourer, be his payment high or low, must grow worse."

  From absurd premises, come absurd conclusions.

  And then we come to his final - and most famous faulty fearless forecast - expressed with scientific certitude - based on forces operating with "the inexorability of a law of nature."

  "Along with the constantly diminishing number of magnates of capital, who usurp and monopolize all advantages of this process of transformation, grows the mass of misery, oppression, slavery, degradation, exploitation; but with this too grows the revolt of the working class, a class always increasing in numbers, and disciplined, united, organized by the very mechanism of the process of capitalist production itself. The monopoly of capital becomes a fetter upon the mode of production, which has sprung up and flourished along with, and under, it. Centralization of the means of production and socialization of labour at last reach a point where they become incompatible with their capitalist integument. This integument is burst asunder. The knell of capitalist private property sounds. The expropriators are expropriated."
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  "This does not re-establish private property for the producer, but gives him individual property based on the acquisitions of the capitalist era, i.e., on cooperation and the possession in common of the land and of the means of production."

  Unfortunately, everywhere where communist systems are actually put into practice, economic production collapses and the "proletariat" suffers from even greater and more inescapable exploitation. Where capitalism continues to thrive, the economic resources for ever widening prosperity keep growing.
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  The capitalist working class would indeed materially improve its lot - but by working with capitalists - by compromise and accommodation of interests - in recognition of their essential mutual dependence on each other.

  See, Marx, "Capital (Das Capital)" Volume 1, Part I: "Abstract Labor Standard of Value," and Volume 2, Part III:  "The Circulation & Expansion of Capital," and Volume 2, Part IV: "Criticism of Adam Smith," and Volume 3, Part V: "Profits." and Volume 3, Part VI: "Interest, Rent & Labor Use-Values."