Karl Marx's critique of capitalism and Das Kapital

Marxist Theory

Karl Marx (1818-1883) is famous as the founder of communism. After the eclipse of communism in Soviet Russia and Eastern Europe in the 1990s, his reputation has suffered and most people now tend to dismiss him as a 'false prophet.' Marx, however, was an important philosopher, economist and political thinker of the 19th century whose works are still relevant to our age in several aspects. In this essay I shall briefly discuss the life history of Karl Marx, describe one of his contributions to economics, explain the significance of the contribution and examine the loop holes in his economic theory.

Life History

Karl Marx was born into a middle-class Jewish family in Trier, Germany on May 5, 1818. He studied Law at the University of Bonn and at the University of Berlin. He entered the field of journalism in 1842, becoming the editor of an influential liberal newspaper, "Rheinische Zeitung" in Cologne shortly afterwards. His bold criticism of the social and Economic conditions in Prussia brought him into further trouble with the government and the paper was banned. He left Germany and started to live in Paris where he adopted his Communist beliefs.

He met Friedrich Engels in 1944 and began his life-long collaboration with him to develop the theoretical principles of communism and to organize an international working-class movement dedicated to those principles. In 1845 Marx was expelled from Paris because of his revolutionary activities and settled in Brussels. He organized a network of revolutionary groups in several European cities, which were later consolidated to form the Communist League. The statement of principles formulated by Marx and Engels for the League became known as the "Communist Manifesto" -- a materialist interpretation of history.

Marx was exiled from Belgium soon after the eruption of the 1848 revolutions in France and Germany. He shifted to Cologne, where he was also arrested and tried for incitement of armed insurrection. Banished from France as well as Germany, Karl Marx spent the rest of his life in London -- devoting himself to study and writing. He wrote a number of books during this period, the most significant of which was "Das Kapital." During this period, Marx also contributed articles to newspapers in Europe and the U.S. And tried incessantly to form an international revolutionary organization with limited success. He died in 1883 after being dogged by ill-health during the last years of his life. (Kreis, "History Guide"; "Karl Marx," Encarta)

Significance of Marx's Contribution to Economics

Even the worst detractors of Karl Marx recognize that he was a masterful economist. His rigorous analysis of capitalism in Das Kapital is considered an unparalleled seminal work which explains in detail how Capitalism works. Marx's labor theory of value, decreasing rates of profit and increasing concentration of wealth still provide a valuable insight into how the major economic system of our age operates and just why it is "an alienating and contradictory economic system."

The widening inequality between the rich and the poor in the current age, the increasing power of the monopolistic multinational corporations as well as the ever-present threat of "boom and bust" cycles in most capitalist economies underline the significance of Marx's critique of capitalism.

Loop Holes in His Theory

The main drawback in Karl Marx's economic theory is that although he gives an insightful analysis of capitalism, he offers only a sketchy picture of the alternative economic theory -- socialism. Marx only vaguely predicts that the problems created by capitalism would be eliminated in the next stage of social development. How exactly such a utopian Communist stage would come about has not been fully explained. As a result, people who adopted Marxism (in Russia and Communist China) implemented their own vision of totalitarian states which failed to create the happy, unexploited societies that Marx had envisioned. Marx also underestimated the resilience and longevity of capitalism that has survived and even thrived despite its numerous drawbacks as an ideal economic system.

Conclusion

Although Karl Marx is currently not in fashion, his contribution to economics, particularly his insightful study of Capitalism is still relevant. Despite some glaring drawbacks in his economic theories, they deserve to be studied so that the undesirable effects of capitalism, such as the growing socio-economic inequality around the world, can be effectively tackled.