1 Boring Old Man

Karl Heinrich Marx [May 5, 1818 – March 14, 1883] was a German philosopher, political economist, historian, sociologist, humanist, political theorist, and revolutionary credited as the founder of communism.

Marx summarized his approach to history and politics in the opening line of the first chapter of The Communist Manifesto (1848): “The history of all hitherto existing society is the history of class struggles”. Marx argued that capitalism, like previous socioeconomic systems, will produce internal tensions which will lead to its destruction. Just as capitalism replaced feudalism, capitalism itself will be displaced by communism, a stateless, classless society which emerges after a transitional period, the ‘dictatorship of the proletariat’.

On the one hand, Marx argued for a systemic understanding of socioeconomic change. He argued that the structural contradictions within capitalism necessitate its end, giving way to communism:

The development of Modern Industry, therefore, cuts from under its feet the very foundation on which the bourgeoisie produces and appropriates products. What the bourgeoisie, therefore, produces, above all, are its own grave-diggers. Its fall and the victory of the proletariat are equally inevitable. 
— (The Communist Manifesto)

On the other hand, Marx argued that socioeconomic change occurred through organized revolutionary action. He argued that capitalism will end through the organized actions of an international working class, led by a Communist Party: "Communism is for us not a state of affairs which is to be established, an ideal to which reality [will] have to adjust itself. We call communism the real movement which abolishes the present state of things. The conditions of this movement result from the premises now in existence." (from The German Ideology)

While Marx remained a relatively obscure figure in his own lifetime, his ideas began to exert a major influence on workers’ movements shortly after his death. This influence was given added impetus by the victory of the Marxist Bolsheviks in the Russian October Revolution, and there are few parts of the world which were not significantly touched by Marxian ideas in the course of the twentieth century.

The development of Modern Industry, therefore, cuts from under its feet the very foundation on which the bourgeoisie [merchant class, upper class] produces and appropriates products. What the bourgeoisie, therefore, produces, above all, are its own grave-diggers. Its fall and the victory of the proletariat [laborers, middle class] are equally inevitable.

The alienation of the laborer from his own commodity is, for Marx, a spiritual loss. The laborer is dehumanized and becomes a thing himself, rather than the creator of the thing. That’s all I want to say about Karl Marx. I believe that he’s right. The further a person gets from his/her creativity, the greater the alienation, and the more one turns to other things like money or possessions or something sick like addiction. [How does that lead Marx to Communism? Who cares? It got him there in the ideal, but in practice, it was a flop that dehumanized people even more than Capitalism. So, back to the drawing board for you Mr. Karl Marx.]

But I think he correctly points out a major problem for a Capitalism – the dehumanization of the worker when he/she becomes a Commodity. Therein lies the inevitable Class Struggle. But Marx’s line of thought has many other implications. It seems true that anything that gets too far separated from it’s root leads to alienation and devaluation. This is the essential argument of the Existentialists that "existence preceeds essence." We are tied to the physical world, and only later attach our symbols and meanings to things. And there is a concrete extension of this idea in the center of our current financial crisis [which is why I’m talking about Karl Marx in the first place].

The often mentioned "Derivatives" that have been bought and sold on the unregulated "Commodities Market" are anything but Commodities. They are so far removed from any actual thing as to be unrecognizable. There are bundles of mortgages, bundles of bundles, credit default swaps, bets on the future of indices or the weather, anything under the sun. This Market purports to contain more value than the combined worth of the world. No one has any real idea of how much of what is out there, or what actual value is behind these contracts that float around in a place like Limbo [they might as well be the souls of unborn babies and savages like in the Catholic Limbo of old]. In Marx’s terms these are alienated commodities disconnected from reality. And, as one might predict, no one can place any real value on them. By playing in this virtual world of monopoly money, the traders and financial institutions lost any sense of what they were doing and essentially destroyed the credit market, since not only were these Derivitives undefinable, they were "highly leveraged" – meaning bought and sold with borrowed money.

The Marketplace where Commodities like wheat and soybeans once were traded, things that actually exist and have purpose, became a place where alienated, detached symbols were traded using virtual money and virtual values [eg financial bubbles]. It’s little wonder that we had an economy that evaporated under stress. Throw in the Hedge Funds and a Bernard Madoff or two and you have a recipe for cotton candy instead of meat and potatoes.  If you apply Marx’s logic, you have a spiritless wasteland, devoid of any creative work-product or felt value.

When Obama says "put people back to work," it should mean more than just finances. It should mean reconnecting people to the link between their work product and their labor, not just to put food on the table. In the movie Modern Times [pictured in this post], Charlie Chaplin satirized the alienation of the worker on an assembly line in our earlier history. It’s hard to imagine how one might even try to portray the disconnection of these new invented commodities called Derivatives that have corrupted the Capitalism of today. They are too far removed to even be represented. People who live in the world where these pseudo-commodities are traded love to describe them as "complex financial instruments." I think they are romanticizing the truth. They are actually really quite simple. Derivatives are nothing masquerading as something – a definition born out by the recent financial collapse. They are beyond Marx’s model of a Class Struggle. For Marx, Industrialization made the laborer [Middle Class] into an alienated commodity. In our modern version, "Financialization" has removed the laborer [Middle Class] from the picture altogether. The purpose of the Market [commerce – the trading of commodities among people] has been replaced by a Casino for the bourgeoisie [merchant class, upper class]. I question whether regulation will even help. A better solution would be to ban Derivative trading altogether – for the "spiritual" health of our country…