Karl Marx Was Right

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Karl Marx Was Right

We can’t say Karl Marx didn’t warn us: capitalism contains the seeds of its own destruction. In their chase for ever higher profits, the capitalists shed workers for machines. The higher return on capital means that the share of profits rises and the share of wages falls, and soon the mass of the population isn’t earning enough to buy the goods capitalism produces. And that’s exactly what’s been happening over the past four years of the Great Recession: ever increasing income inequality, leading to ever weaker aggregate demand – temporarily disguised by an unsustainable credit binge – leading to collapse. You don’t have to be a communist to see that this is so. We should all be Marxists now. Or should we? Every time capitalism hits an inevitable bad patch, Marx’s name is invoked with wearisome regularity. But no serious economist or political thinker has ever suggested capitalism can break free of booms and busts. Once bust, as we’ve seen time and again, the capitalist economy has a robust in-built ability to restore itself. As for all the talk of growing inequality, hasn’t anyone noticed that ordinary people in the capitalist West have enjoyed an astonishing long-term rise in their standard of living. Capitalism has been the subject of criticism from many perspectives during its history. Criticisms range from people who disagree with the principles of capitalism in its entirety, to those who disagree with particular outcomes of capitalism. Among those wishing to replace capitalism with a different method of production and social organization, a distinction can be made between those believing that capitalism can only be overcome with revolution (e.g., revolutionary socialism) and those believing that structural change can come slowly through political reforms to capitalism (e.g., classic social democracy).Karl Marx saw capitalism as a progressive historical stage that would eventually stagnate due to internal contradictions and be...
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