So now we have the head of the Bank of England Mark Carney pronouncing that Marxism may become relevant because of the technological revolution. He stresses that the Engels Pause which saw low wage growth during the early industrial revolution, explains low wage growth now. Apart from the fact that Marx confined his economic analysis to bushels of corn or yards of linen, how relevant are these observations in a post-capitalist West within an emerging global hegemony?
Firstly, Marx was writing at a time when the main economic preoccupation was the “surplus value” or profit, created by labour power. Wages ware paid at a level set by the labour market and the downward pressure on wages was caused by the abundant supply of labour rendering wages cheap to the point of survival levels only. Children as young as ten working 12-16 hour shifts in factories.
This downward pressure on wages advantaged the capitalists who were able to take greater levels of “surplus value” and in doing so were engaging in a merciless exploitation of their workers.
As capitalism settled down, children were removed from the labour market, workers were able to negotiate a better deal for themselves and wage levels rose. The State also intervened to improve the lot of the worker. This is the nub of Marxism, the worker or the State re-appropriated the surplus value previously taken by the capitalist and the capitalist alone. The role of Trades Unions was essentially the same. Take back from the capitalist some of the excessive surplus value generated by the worker in the process of production. In the 18th and 19th centuries, there was a lot of surplus value and capitalists became very rich and an empire was built on the back of it.
Of course, increasing output in a capitalist system is important as there would be diminishing profitability without it, but in terms of wage levels, the labour market and government intervention feature more significantly. After any plague, the price of labour power goes up. Machines increase output and of course enhance the wages of those skilled people who remain in work. Labour markets for skilled people are different from the labour market for the unskilled, but they work on the same principles.
The issue Carney highlights though is interesting in two further respects. Firstly he fails to address the fact that migration of unskilled labour is a contributory factor in the process of lowering wages, creating downward pressure on wages through oversupply. And he sees the forthcoming crisis of unemployment as likely to re-ignite an interest in Marxist ideas as a solution.
The fact economists and politicians seem obsessed with promoting migration suggests that the political system Marx called the bourgeois (capitalist) political system really does have an impulse to lower wages for the worker. And moreover, the left is as guilty as the right in being silent on this issue.
The secondly Marxism as a word and an ideology lost all accurate meaning in the 2oth century because of its use to describe fascist, state socialist and feudal dictatorships, all borne of violent revolution and none “Marxian” in any sense Marx would have recognised. However, that doesn’t mean Marxist analysis is completely irrelevant.
So how might Marxism become relevant again? This depends on how people use Marxist analysis. Marxism is essentially about two things that spring forth from the capitalist system, one as we have described above is surplus value (profit) and the other is alienation. Alienation is the process by which the worker becomes disassociated from his economic role being a beast of burden to a process or machine.
Today a capitalist economy Marx would have recognised no longer exists. We are now able or perhaps willing to create national indebtedness to provide a “living wage” to people who have no actual economic function. They create no economic value, and the State isn’t taking surplus value from the bourgeois, it’s taxing and indebting the workers too many of whom are employed by the State itself. We are in some senses living in a post-Marxian age already.
The critical relevance about Marx, however, isn’t about wages. Marx was an advocate of material determinism. He basically believed that the economic system creates social values which are necesary to promote the interests of the economic system itself.
So, our bourgeois values of contract, choice and consent freedom and democracy which were necessary for the capitalist system to function profitably have taken on a social character and we all expect rights based on these principles today. However, if the nature of the economy becomes as we have suggested debt based with little role for productive Western workers i.e. not creating surplus value or profit, will the values that the economy requires and therefore society requires, alter significantly? The answer is, of course, yes if you apply a Marxian analysis.
Capitalism in the West is coming to an end and Marx’s economic relevance at a National level has perhaps been eclipsed as the British economy is now global. On that basis, the post-capitalist West probably is sliding back towards a feudal model of power and control and Marx can help explain this. This change is necessary as the economic system operates globally and there is little need for capitalist values of contract, choice and consent at the bottom of this global system i.e. at the bottom of the National level. This is mainly because being dependent on an indebted government for welfare is not a contracted arrangement it is more feudal in character.
It’s a wild speculation but the sympathetic approach given to Islamic values which are in total contrast to Contract, Choice and Consent suggest that autocratic and discriminatory principles have some advocates in the world, who are happy to risk pushing aside contract, choice and consent, particularly for women, in the interests of preserving the global economic hegemony.
When capitalism leaves by the front door its values will according to Marx leave by the back. And as we are progressing towards a more and more unfair global economy, by crystallising the worlds current injustices, injustices will be reflected into any society once based on “just” principles of contract, choice and consent, freedom and democracy. Someone out there knows that and doesn’t care. Hence the attack on free speech and the nonsense of hate crime as opposed to “crime” across the western world.
So, to answer the question is Carney right to conclude that Marxism will have relevance in the future. The answer is probably yes in the sense of offering an insight into how the values of the global economy create injustice around the world and yes in terms of reframing our understanding of how the global economy maintains power structures and erodes rights in the face of mass Western unemployment. But to offer an insight into wage levels in a post-capitalist West. Marx is probably irrelevant.