The foundations of economics are massive. The Wealth of Nations is quite readable; fortunately, Das Kapital is available not only in English, but in an elegant one volume abridgement (Oxford, 1995).
Nine decades after Smith, Karl Marx’s view of the world was grim. Smith had seen as more or less “natural” much that Marx decries as injustice or theft. Smith had aimed primarily to explain; Marx’ goal was revolutionary. “The philosophers hitherto have only interpreted the world… the thing, however, is to change it.”
It was a scientific era (Marx admired Darwin). So he needed theories – labor as value, surplus value – and equations to demonstrate them. They’re sometimes exploded or ignored today. And they make parts of Capital, notably the first nine chapters, hard going. (But even skimming them, there are wonderful insights.)
The basics, however, are straightforward. Landlords and capitalists own agricultural and forested land, and mineral and energy resources. Capitalists own the means of modern production: machines and factories; ancillaries like communications and transport. Workers own, but must sell, their labor.
Capitalists buy labor cheap: they pay for enough of the worker’s time to keep her or him going; the rest of work time becomes surplus value, profit that becomes increased capital. Capitalists profit, workers are exploited.
The evidence is tremendous and terrible. Twelve hour working days, 6 day weeks, are considered normal. Government inspectors struggle to identify and exclude children under ten from factory work. Unshielded machinery, dangerous and noxious trades, shorten and ruin the lives of those who work, while the often unemployed “reserve army” of labor starves. Capitalists and economists unthinkingly condemn themselves when they try to justify and explain: Marx quotes liberally yet selectively.
But capitalist industry draws workers together in increasing, potentially powerful numbers. Politically, economically, socially informed leaders (communists) will help them realize and exercise their power. “The proletarians have nothing to lose but their chains. They have a world to win. WORKING MEN OF ALL COUNTRIES, UNITE!”
Unfortunately, the West misconstrued Smith and favoured ill-regulated capitalism; the East misconstrued Marx and tried unrestrained communism. “Men make their own history, but they do not make it just as they please…”
Like many historians, David R. Jones isn’t really comfortable with grand theories.
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