Karl Heinrich Marx was a German philosopher, author, social theorist, journalist and economist. He is notorious for his capitalism and communism theories. One of his most famous works is Das Kapital, which consists of a total of three volumes that were published in 1867, 1885 and 1894 respectively. Das Kapital is a fundamental text that revealed the doom of capitalism and discussed the Labor Theory of Value (LTV).
Early life and education
Karl Marx was born in Trier, Prussia on May 5, 1818. Karl Marx was the son of a Jewish lawyer. During his teenage years, he studied law in Bonn and Berlin. He was introduced to the philosophy of G.W.F. Hegel and later philosophy became a part of his studies.
Future philosopher got his doctorate degree in the University of Jena in 1841. However, due to his radical views, he was unable to pursue a teaching career. That is why Karl Marx became a journalist and later an editor of a liberal newspaper Rheinische Zeitung.
During his life, Karl Marx lived in different European countries. After living in Prussia, the future philosopher lived in France. While living there he met Friedrich Engels with whom he built a long-lasting friendship. Later, Karl Marx was expelled from France and lived in Belgium for a short period. After that he moved to London, when he and his wife lived for the remaining portion of their lives.
Karl Marx died on March 14, 1883 of bronchitis and pleurisy in London. The place of his burial is Highgate Cemetery in London. Originally, his grave was a nondescript, but in the middle of the 20th century the CPGB unveiled a large tombstone that also included a bust of Karl Marx.
Karl Marx was inspired by Adam Smith and David Ricardo who were notorious economists at the time, while his branch of economics (also known as Marxian economics) was not yet favored by the majority of the researchers. However, his ideas had a great impact later on people in such countries as China, Cuba and the USSR. Thus, Karl Marx's ideas still have a lasting impact on our world and the minds of modern thinkers. His ideas have also influenced several fields, most notably sociology and political economy.
Marx's social economic systems
He made an invaluable contribution to such sciences as sociology and economics. His works remain well-respected among many modern economists, despite the fact that many people associate Karl Marx with socialism. In his theoretical text, Das Kapital, Karl Marx states that society consists of two main classes: capitalists and laborers. Capitalists are a part of a smaller class, these people are in charge of production. Simply put, they are the ones who own factories.
On the other side of the spectrum is a larger class of Laborers. Laborers don’t own anything regarding the production, the only thing they get is a money wage. In his works Marx argued that capitalists exploit laborers.
Karl Marx’s views on society
Marx considered society as a historically established system of human life, the main factors in the formation and development of which are economic aspects. Nature is the subject of human labor which society turns into material goods.
Marxian economics is a branch of economic thought based on the theory of surplus value and the principle of the planned development of the economy. Marxian economics includes the author's reflections on labor theory and theory of exploitation, according to which surplus value is always appropriated by the capitalists. Subsequently, the theory of exploitation was extended to the relations of less developed countries with more developed ones. This theory predicts the emergence of monopolies, the impoverishment of the proletariat, and ultimately the collapse of capitalist society as a result of underconsumption.
Labor Value of Theory
In order to explain the differences in the market prices, Karl Marx referred to a theory of value. According to this theory, it is possible to measure the value of any economic good by the medium number of labor hours that is needed to produce said good. Put differently, if a laptop takes twice as long to produce as a smartphone, then the laptop should be considered twice as valuable.
Karl Marx was ahead of both his predecessors and contemporaries in terms of understanding labor theory. In Das Kapital Marx came to the conclusion that capitalists are poorly paid and overburdened, and thus exploited by the capitalists in order to reduce production cost.
Karl Max’s proclamation was enough to reveal the weakness of the labor theory’s logic, despite the fact that his statement was eventually proved wrong. His ideas helped to make a sudden and complete change in economic thinking.
Historical materialism was another groundbreaking theory developed by Karl Marx. The core essence of this philosophical direction lies in the materialistic understanding of human history societies’ dialectical development. According to historical materialism theory, the course and nature of the historical process depend on material factors (production resources and production relations).
The Communist Manifesto was written by Marx and Engels and published in 1848. It encompasses authors’ theories about the nature of politics and society. In this book authors were attempting to explain the goals of both Marxism and socialism. Authors explained their thoughts on the class war between the capitalists and laborers, deeming capitalism unsustainable. Authors suggested that in the future the society they were living in at the time would be replaced by a socialist one.
Capital: A Critique of Political Economy was published in 1867. This is the main work of Karl Marx on the political economy. This book contains a critical analysis of capitalism. This work describes the nature of the exploitation of the working class. Its author proposes that the one and only motivation of capitalism is the exploitation of labor.
Economic and Philosophic Manuscripts of 1844 was published after Karl Marx’s death in 1932. These manuscripts are a series of notes that Karl Marx wrote in 1844. This book provides a philosophical analysis of the most important concepts of political economy. Some of these concepts are: capital, needs, money, wages and property.
Critique of the Gotha Program was written in 1875 and published in 1891. In this book the author further developed the doctrine of dictatorship of the proletariat, sustained the provisions on the transition period from capitalism to socialism on the two phases of communist society (socialism and communism).
Marx’s work was the inspiration for the communist leaders of the 20th century, such as Vladimir Lenin and Joseph Stalin. Subsequently, Marx’s ideas became a theoretical foundation of communism.
Karl Marx suggested that capitalism was much more productive than alternative economic systems, despite the fact that he himself was one of the harshest critics of this economic and political system.
He believed that in order to develop productive capacity, all countries in the world should become capitalist. However, just like his predecessors (David Ricardo and Adam Smith), Karl Marx predicted that the profit rate in capitalism would inevitably be falling because of capitalism's continuous pursuit of profit.
Main theories of Marxism
- Labor Theory of Value (LTV).
- Theory of Surplus Value
- Theory of Exploitation