Karl Marx: His Books, Theories, and Impact - Investopedia

Karl Marx (1818-1883) was a philosopher, author, social theorist, and economist. He is famous for his theories about capitalism, socialism, and communism. TableofContents Expand TableofContents WhoWasKarlMarx? EarlyLifeandEducation Marx'sTheories Marx'sWrittenWorks ContemporaryInfluence KarlMarxFAQs TheBottomLine Economics BehavioralEconomics WhoWasKarlMarx? KarlMarx(1818-1883)wasaphilosopher,author,socialtheorist,andeconomist.Heisfamousforhistheoriesaboutcapitalism,socialism,andcommunism. Marx,inconjunctionwithFriedrichEngels,publishedTheCommunistManifesto in1848;laterinlife,hewroteDasKapital (thefirstvolumewaspublishedinBerlinin1867;thesecondandthirdvolumes werepublishedposthumouslyin1885and1894,respectively),whichdiscussedthelabortheoryofvalue. KeyTakeaways KarlMarxwasaprominentthinkerwhowroteontopicsrelatedtoeconomics,politicaleconomy,andsociety.BorninGermany,MarxspentmuchofhistimeinLondon,wherehewrotemanyfamousworksincludingTheCommunistManifestoandCapital(DasKapital).Marxoftencollaboratedwithlong-timefriendandsocialtheoristFriedrichEngels.Marxisknownforhisrevolutionarywritingsfavoringsocialismandacommunistrevolution.WhileMarxismandMarxianeconomicshasbeenlargelyrejectedbythemainstreamtoday,manyofMarx'scritiquesofcapitalismremainrelevanttoday. Investopedia/JoshuaSeong EarlyLifeandEducation BorninTrier,Prussia(nowGermany),onMay5,1818,MarxwasthesonofasuccessfulJewishlawyerwhoconvertedtoLutheranismbeforeMarx’sbirth.MarxstudiedlawinBonnandBerlin,andatBerlin,wasintroducedtothephilosophyofG.W.F.Hegel. HebecameinvolvedinradicalismatayoungagethroughtheYoungHegelians,agroupofstudentswhocriticizedthepoliticalandreligiousestablishmentsoftheday.MarxreceivedhisdoctoratefromtheUniversityofJenain1841.Hisradicalbeliefspreventedhimfromsecuringateachingposition,soinstead, hetookajobasajournalistandlaterbecametheeditorofRheinischeZeitung,aliberalnewspaperinCologne. AfterlivinginPrussia,MarxlivedinFranceforsometime,andthatiswherehemethislifelongfriendFriedrichEngels.HewasexpelledfromFranceandthenlivedforabriefperiodinBelgiumbeforemovingtoLondonwherehespenttherestofhislifewithhiswife. MarxdiedofbronchitisandpleurisyinLondononMarch14,1883,andwasburiedatHighgateCemeteryinLondon.Hisoriginalgravewasnondescript,butin1954,theCommunistPartyofGreatBritainunveiledalargetombstone,includingabustofMarxandtheinscription"WorkersofallLandsUnite,"anAnglicizedinterpretationofthefamousphraseinTheCommunistManifesto:"Proletariansofallcountries,unite!" Marx'sTheories MarxwasinspiredbyclassicalpoliticaleconomistssuchasAdamSmithandDavidRicardo,whilehisownbranchofeconomics,Marxianeconomics,isnotfavoredamongmodernmainstreamthought.Nevertheless,Marx'sideashavehadahugeimpactonsocieties,mostprominentlyincommunistprojectssuchasthoseintheUSSR,China,andCuba.Amongmodernthinkers,Marxisstillveryinfluentialinthefieldsofsociology,politicaleconomy, andstrandsofheterodoxeconomics. Ingeneral,Marxclaimedtherearetwomajorflawsinherentincapitalismthatleadtotheexploitationofworkersbyemployers:thechaoticnatureoffreemarketcompetitionandtheextractionofsurpluslabor.Ultimately,Marxpredictedthatcapitalismwouldeventuallydestroyitselfasmorepeoplebecomerelegatedtoworking-classstatus,inequalityrose,andcompetitionwouldleadtherateofcorporateprofitstozero.Thiswouldlead,hesurmised,toarevolutionwhereproductionwouldbeturnedovertotheworkingclassasawhole. ExploitationandSurplusValue WhilemanyequateKarlMarxwithsocialism,hisworkonunderstandingcapitalismasasocialandeconomicsystemremainsavalidcritiqueinthemodernera.InDasKapital (Capital inEnglish),Marxarguesthatsocietyiscomposedoftwomainclasses:Capitalistsarethebusinessownerswhoorganizetheprocessofproductionandwhoownthemeansofproductionsuchasfactories,tools,andrawmaterials,andwhoarealsoentitledtoanyandallprofits. Theother,muchlargerclassiscomposedoflabor(whichMarxtermedthe"proletariat").Laborersdonotownorhaveanyclaimtothemeansofproduction,thefinishedproductstheyworkon,oranyoftheprofitsgeneratedfromsalesofthoseproducts.Rather,laborworksonlyinreturnforamoneywage.Marxarguedthatbecauseofthisunevenarrangement,capitalistsexploitworkers. Thisexploitationisthereason,accordingtoMarx,thatemployersareabletogenerateprofits:theyextractafullday'sworthofeffortandproductionfromworkersbutonlypaythemasmallerfractionofthisvalueaswages.Marxtermedthissurplusvalueandarguedthatitwasnefarious. LaborTheoryofValue Liketheotherclassicaleconomists,KarlMarxbelievedinalabortheoryofvalue(LTV)toexplainrelativedifferencesinmarketprices.Thistheorystatedthatthevalueofaproducedeconomicgoodcanbemeasuredobjectivelybytheaveragenumberoflaborhoursrequiredtoproduceit.Inotherwords,ifatabletakestwiceaslongtomakeasachair,thenthetableshouldbeconsideredtwiceasvaluable. Marxunderstoodthelabortheorybetterthanhispredecessors(evenAdamSmith)and contemporaries,andpresentedadevastatingintellectualchallengetolaissez-faireeconomistsinDasKapital:Ifgoodsandservicestendtobesoldattheirtrueobjectivelaborvaluesasmeasuredinlaborhours,howdoanycapitalistsenjoyprofits?Itmustmean,Marxconcluded,thatcapitalistswereunderpayingoroverworking,andtherebyexploiting,laborerstodrivedownthecostofproduction. WhileMarx'sanswerwaseventuallyprovedincorrectandlatereconomistsadoptedthesubjectivetheoryofvalue,hissimpleassertionwasenoughtoshowtheweaknessofthelabortheory'slogicandassumptions;Marxunintentionallyhelpedfuelarevolutionineconomicthinking. HistoricalMaterialism AnotherimportanttheorydevelopedbyMarxisknownashistoricalmaterialism.Thistheorypositsthatsocietyatanygivenpointintimeisorderedbythetypeoftechnologyusedintheprocessofproduction.Underindustrialcapitalism,societyissoorderedwithcapitalistsorganizinglaborinfactoriesorofficeswheretheyworkforwages. Priortocapitalism,Marxsuggestedthatfeudalismexistedasaspecificsetofsocialrelationsbetweenlordandpeasantclassesrelatedtothehand-poweredoranimal-poweredmeansofproductionprevalentatthetime. Marx'sWrittenWorks Duringhislifetime,KarlMarxwroteandpublishednolessthanleastfifteencompletemulti-volumebooks,alongwithnumerouspamphlets,articles,andessays.HecouldoftenbefoundwritingatthereadingroomsatLondon'sBritishMuseum. Perhapshismostfamouswork,TheCommunistManifestosummarizesMarx andEngels'stheoriesaboutthenatureofsocietyandpoliticsandisanattempttoexplainthegoalsofMarxism,and,later,socialism.WhenwritingTheCommunistManifesto, MarxandEngelsexplainedhowtheythoughtcapitalismwasunsustainableandhowthecapitalistsocietythatexistedatthetimeofthewritingwouldeventuallybereplacedbyasocialistone. DasKapital (inEnglish,Capital:ACritiqueofPoliticalEconomy)wasafullandcomprehensivethree-volumecritiqueofcapitalism.Byfarthemoreacademicwork,itlaysforthMarx'stheoriesoncommoditiesproduction,labormarkets,thesocialdivisionoflabor,andabasicunderstandingoftherateofreturntoownersofcapital.Marxdiedbeforethethirdvolumewasfinished,whichwaspublishedposthumouslybyEngelsbasedlargelyonMarx'snotes.Today,manyoftheideasandcritiquesofcapitalismremainrelevant,suchastheemergenceofmonopolisticmega-corporations,persistentunemployment,andthegeneralstrugglebetweenworkersandemployers. Theexactoriginsoftheterm"capitalism"inEnglishareunclear,anditiscertainthatMarxwasnotthefirsttousetheword"capitalism"inEnglish,althoughhecontributedtotheriseofitsuseandinterestintheconcept. AccordingtotheOxfordEnglishDictionary,theEnglishwordwasfirstusedbyauthorWilliamThackerayin1854,inhisnovelTheNewcomes, whointendedittomeanasenseofconcernaboutpersonalpossessionsandmoneyingeneral.Whileit'sunclearwhethereitherThackerayorMarxwasawareoftheother'swork,bothmenmeantthewordtohaveapejorativering.AdamSmithalsofamouslywroteaboutthecapitalisteconomicsysteminhis1776masterpiece,TheWealthofNations,andMarxwaswellawareofSmith'swritings. ContemporaryInfluence Marx'sworklaidthefoundationsforfuturecommunistleaderssuchasVladimirLeninandJosefStalin.Operatingfromthepremisethatcapitalismcontainedtheseedsofitsowndestruction,hisideasformedthebasisofMarxismandservedasatheoreticalbaseforcommunism. NearlyeverythingMarxwrotewasviewedthroughthelensofthecommonlaborer.FromMarxcomestheideathatcapitalistprofitsarepossiblebecausethevalueis"stolen"fromtheworkersandtransferredtoemployers. Marxistideasintheirpureformhaveveryfewdirectadherentsincontemporarytimes;indeed,veryfewWesternthinkersembracedMarxismafter1898,wheneconomistEugenvonBöhm-Bawerk'sKarlMarxandtheCloseofHisSystem wasfirsttranslatedintoEnglish.Inhisdamningrebuke,Böhm-BawerkshowedthatMarxfailedtoincorporatecapitalmarketsorsubjectivevaluesinhisanalysis,nullifyingmostofhismorepronouncedconclusions.Still,therearesomelessonsthatevenmoderneconomicthinkerscanlearnfromMarx. Thoughhewasthecapitalistsystem'sharshestcritic,Marxunderstoodthatitwasfarmoreproductivethanpreviousoralternativeeconomicsystems.InDasKapital, hewroteof"capitalistproduction"thatcombined"togetherofvariousprocessesintoasocialwhole,"whichincludeddevelopingnewtechnologies. Hebelievedallcountriesshouldbecomecapitalistanddevelopthatproductivecapacity,andthenworkerswouldnaturallyrevolt,leadingcommunismwherebytheworkerswouldbecomethedominantsocialclassandcollectivelycontrolthemeansofproduction.But,likeAdamSmithandDavidRicardobeforehim,Marxpredictedthatbecauseofcapitalism'srelentlesspursuitofprofitbywayofcompetitionandtechnologicalprogresstolowerthecostsofproduction,thattherateofprofitinaneconomywouldalwaysbefallingovertime. EconomicChangetoSocialTransformation Dr.JamesBradford"Brad"DeLong,professorofeconomicsatUC-Berkeley,wrotein2011thatMarx's"primarycontribution"toeconomicscienceactuallycameina10-paragraphstretchofTheCommunistManifesto, inwhichhedescribeshoweconomicgrowthcausesshiftsamongsocialclasses,oftenleadingtoastruggleforpoliticalpower. Thisunderliesanoftenunappreciatedaspectofeconomics:theemotionsandpoliticalactivityoftheactorsinvolved.AcorollaryofthisargumentwaslatermadebyFrencheconomistThomasPiketty,whoproposedthatwhilenothingwaswrongwithincomeinequalityinaneconomicsense,itcouldcreateblowbackagainstcapitalismamongthepeople.Thus,thereisamoralandanthropologicalconsiderationofanyeconomicsystem.Theideathatsocietalstructureandtransformationsfromoneordertothenextcanbetheresultoftechnologicalchangeinhowthingsareproducedinaneconomyisknownashistoricalmaterialism. WhatIsKarlMarx'sMainTheory? KarlMarx’stheoriesoncommunismandcapitalismformedthebasisofMarxism.Hiskeytheorieswereacritiqueofcapitalismanditsshortcomings.Marxthoughtthatthecapitalisticsystemwouldinevitablydestroyitself.Theoppressedworkerswouldbecomealienatedandultimatelyoverthrowtheownerstotakecontrolofthemeansofproductionthemselves,usheringinaclasslesssociety. WhatIsKarlMarxBestKnownfor? KarlMarxisbestknownforhistheoriesthatledtothedevelopmentofMarxism.Hisideasalsoservedasthebasisforcommunism.Hisbooks,DasKapitalandTheCommunistManifestoformedthebasisofMarxism. WhatIsMarxismvs.Communism? Marxismisasystemofsocioeconomicanalysis,whilecommunismisaformofeconomicproductionthatextendstogovernmentorpoliticalmovements.MarxismisabroadphilosophydevelopedbyKarlMarxinthesecondhalfofthe19thcenturythatunifiessocial,political,andeconomictheory.Itismainlyconcernedwiththebattlebetweentheworkingclassandtheownershipclassandfavorscommunismandsocialismovercapitalism. TheBottomLine KarlMarxremainscontroversial,buthiswritingsstillremainrelevanttoday.EvenasmainstreameconomicshasrelegatedMarxismasaheterodoxschoolofthought,Marxdidhavealottosayaboutthecapitalisticsystemofproductionandroundlycritiqueditforgeneratingsocialandwealthinequalities,negativeexternalities,andclassstruggle.Ultimately,Marx'spredictionsabouttheimpendingcollapseofcapitalismandthecommunistrevolutionsthatwouldfollowprovedincorrect.ThishasledmanytodiscountMarxandMarxianthought.Still,Marx'sinsightsremaininfluentialandinspiringtoothers. ArticleSources Investopediarequireswriterstouseprimarysourcestosupporttheirwork.Theseincludewhitepapers,governmentdata,originalreporting,andinterviewswithindustryexperts.Wealsoreferenceoriginalresearchfromotherreputablepublisherswhereappropriate.Youcanlearnmoreaboutthestandardswefollowinproducingaccurate,unbiasedcontentinour editorialpolicy. Marxist.org."CapitalACritiqueofPoliticalEconomyVolumeIBookOne:TheProcessofProductionofCapital,"Pages1-549. TheBritishLibrary."Marx:readerattheBritishLibrary." Marxist.org."CapitalACritiqueofPoliticalEconomyVolumeIBookOne:TheProcessofProductionofCapital,"Page330.AccessedAugust19,2020. CompareAccounts AdvertiserDisclosure × TheoffersthatappearinthistablearefrompartnershipsfromwhichInvestopediareceivescompensation.Thiscompensationmayimpacthowandwherelistingsappear.Investopediadoesnotincludealloffersavailableinthemarketplace. Provider Name Description RelatedTerms WhoWasFriedrichEngels? FriedrichEngelswasaGermanphilosopher,writer,andsocialscientist.CollaboratingwithKarlMarx,Engelshelpedtodefinemoderncommunism. more UnderstandingtheLaborTheoryofValue Thelabortheoryofvalue(LTV)wasanearlyattemptbyeconomiststoexplainwhygoodswereexchangedforcertainrelativepricesonthemarket. more PoliticalEconomyDefinition Politicaleconomyisabranchofthesocialsciencesthatfocusesontheinterrelationshipsamongindividuals,governments,andpublicpolicy. more Socialism:History,Theory,&Analysis Socialismisaneconomicandpoliticalsystembasedonpublicorcollectiveownershipofthemeansofproductionthatemphasizeseconomicequality. more Marxism:WhatItIsandComparisontoCommunism,Socialism,andCapitalism Marxismisasetofsocial,political,andeconomictheoriescreatedandespousedbyKarlMarxthatbecameaprominentschoolofsocialistthought. more WhatIsCommunism? Communismisanideologythatadvocatesaclasslesssysteminwhichthemeansofproductionareownedcommunally. more PartnerLinks RelatedArticles Government&Policy WhatAretheDifferencesBetweenCommunismandSocialism? Economics ABriefHistoryofEconomics Economics WhoWasAdamSmith? Government&Policy Capitalistvs.SocialistEconomies:What'sTheDifference? Economics WhoWasJohnLocke? Government&Policy WhatRoleDoestheGovernmentPlayinCapitalism?