In what ways does Karl Marx’s critique of political economy challenge classical liberalism’s claim that capitalism is a rational system?AbstractThis essay will focus on Karl Marx’s critique of the political economy and how it challenges the classical liberal perception of capitalism as being a system borne out of rationality . The political economy refers to the study of production in connection with law, government and the distribution of national income and other resources.In his critique of the political economy, Karl Marx looked at various issues among them being the way in which money had its origin in commodities.
Commodities according to him have both the exchange and use value, where the use value is restricted by the specific characteristics of a commodity (Marx 2005). The various uses of a commodity according to Karl Marx are for satisfying the needs which capitalism has created, thus does not carry the mark of the production’s social associations. When commodities are produced for exchange the result is developing money.The second concept which Karl Marx looks into is the socially required time of labour, in capitalism labour which is private produces the exchange value.
Thus the kind of labor universally used in a capitalist economy is abstract. The capitalist tends to purchase the power of work yet labor is the one which assists in producing value. In his critique of the political economy, Karl Marx looks at capitalism as a means of labor exploitation. CapitalismCapitalism can be described as an economic ideology whose basis is having ownership of the production means and their profit operation privately (Rosser and Rosser 2004). A capitalist economy comprises of various features which involve property that is private, accumulation of capital, markets that are competitive and also wage labor (Hyman and Baptist 2017). The level of competition and the regulations followed depends on the models used in capitalism. Capitalism thus can be summarized as the accumulation of capital, where production is carried out with the sole purpose of getting profit. Also, the production of a commodity for market exchange, furthermore capitalism involves privately owning the production means.
Capitalism further requires the increased use of wage labor, investing money with the purpose of making a profit (Fulcher 2015). In capitalism also, price mechanisms help in the allocation of resources among the uses that are competing. Finally, capitalism gives capitalists the liberty of acting in their interest in the management of their businesses. Classical Liberalism’s View on the Rationality of the Capitalism SystemClassical liberalism held the view that a capitalist economy is the most rational system. It further emphasized the belief that the existence of market competitiveness in a market which is capitalist would be of value to those involved and also to the society.
Classical Liberalism also related to the philosophy which advocates for ownership of private property, an economic market which is unrestricted, the rule of law, freedom of press and religion guaranteed in the constitution and also free trade. The political ideology of classical liberalism relates closely to the economic ideology of capitalism. Classical liberalism about capitalism emphasized the need of giving freedom to both the labourers and capitalists which could result to their interest guiding them to make use of their labor and capital where it was most productive (Sherman et al. 2008). This view had a purpose of opposing any law that would define the items or goods to be produced (Smith 1937). A free market where producers were competing for the money which the consumer had in their pursuit of profits was seen as a way of guaranteeing the course of labor and capital’s maximum use.According to the classical liberalism’s view on capitalism, having a free market would direct the resources to their maximum use resulting in constant economic growth.
Ways in Which Karl Marx Critique of Political Economy Challenges The Classical Liberalism View on CapitalismKarl Marx in his critique of the political economy looks at several proposals which include; the wages of labor is the fundamental trading unit of a capitalist economy. In this proposal, the work which was not paid to the labourers became the final basis of the additional value of the goods and services produced for the capitalists. Karl Marx further went on to state that the person who owned the production means could claim the value which was surplus since he had the protection of the regime that was currently in power through the rights to property ownership.Further, in his critique of the political economy, Karl Marx suggested that the wages of labor are units of trade for a society which is capitalist. Another proposal that Marx looked at about capitalism was that the development of society economically was a natural history process. This makes the society’s commerce to come first before the administration of people. Furthermore, according to him the economic catastrophes like depression and recession were caused by the capitalists who had an aim of causing the workers to turn against each other. The last proposal that Karl Marx looked at in his critique of the political economy was that in an economy which was capitalist the technological advancement and the resultant production increased wealth but at the same time decreased the wealth’s economic value.
Having looked at the various proposals that Marx associated with capitalism there are numbers of ways in which he challenged the rationality of the capitalism system. One of them was the labor theory of value whose focus was capitalism’s exploitation of workers (West 2005). This theory states that the economic worth of a service or good is defined by the aggregate sum of the socially required labor needed in its production. In this theory, Karl Marx challenges capitalism by arguing that labourers produce commodities whose exchange is dependent on the labor time which is necessary socially for their production. This led to the workers’ exploitation as they tried to create more value for exchange in comparison to their survival cost which includes clothing, food and shelter (Marx 2009). Thus through the exploitation of workers, the capitalists are in a position of paying for their survival cost.
Another way which Karl Marx challenged classical liberalism view on capitalism was by giving the opinion that free market for labor cannot ensue due to the economic inequalities. The reason for this is because capitalist is the ones who control the production means, that is, the machinery, factories and also businesses while the workers have control of the labor only leading to further exploitation (Engels 1993). A worker cannot challenge the wages which they receive since by doing so the capitalist are capable of finding another person that is in more desperation (Engels 1999).
According to Karl Marx, the ownership of the factors production privately is to be viewed as a reliance on the governing class by the people who did not have any ownership and eventually become the basis of limiting the freedom of human beings.According to Karl Marx, a capitalist economy is characterized by an unstable market (Marx 2010). In his critique of the political economy, Marx held the belief that the growth in capitalism which was both volatile and unplanned occurred roughly. This capital growth was interrupted by times where there were overproduction and recession happened as a result (Marx and Engels 2009). Marx further challenged the classical liberalism view of capitalism as a rational system by showing the existence of contradictions in the means of production. This contradiction according to Marx is seen internally between the free market and industrialism.Another way which Marx challenged capitalism through the critique of the political economy was that he saw the accumulation of more capital by capitalists would later result in a working class which was impoverished (Abouzeedan 2008).
This would result in social circumstances that would bring a revolution which would eventually defeat capitalism. Also according to Karl Marx, the private ownership of the distribution and production means in capitalism made individuals who did not own anything depend on the class which was ruling, eventually restricting their freedom.Karl Marx critique on political economy has further challenged classical liberalism view on capitalism a rational system by focusing on the surplus value which he equated to the value of exploitation. The surplus value according to him could take place in three forms which are different from each other; the first could happen through labor which is unpaid. The second way in which the surplus value could occur was when goods were taken by the governing class as products of the additional work. An example was the payment of the feudal rent through produce. The third way is where the surplus value was in the form of money.Moreover, capitalists hired workers with the aim of having them add value to the raw materials which were more than their value (wages).
This meant that the amount which the capitalist paid the labourers was less than the value added to the commodities. The difference between the value added to the raw materials and the value of the wages which the labourers receive is what Karl Marx referred to as the surplus value. This value also related to what was left after the class of people which produced commodities had got their reward and under capitalism was referred to as wages.
Furthermore, Karl Max challenged capitalism through his critique of the political economy by stating that the power of labor was used as a commodity. Here work was exchanged for a value that was much less than the value the labourers gave the capitalists. Regarding the surplus value Marx further argued that the means of production which was used by the capitalists was differentiated by ways in which they obtained the surplus value from the labourers through the sale-value of commodities which had been produced. The capitalists according to Karl Marx required that a majority of the population not be in possession of the means of self-sustenance which would enhance their independence. This forced the workers to survive through selling their labor (Harvey 1993)According to Karl Marx, the surplus value could be improved by increasing the length of a working day when there was the existence of legal restriction. This extension could be done through technical inventions or by increasing the production pace which would result in a more intensified labor.
Where technological innovations were used to extend the working day’s length, the result was an increase in the creative labor power, lowering the commodities’ value. This further gave rise to the decrease in the worth of the power of labor and a higher labor surplus and ultimately an increase in the surplus value.