[...] in the course of their individual struggles both sides will develop ‘class consciousness’; i.e. each person will become conscious of themselves as a member of a particular class. This now takes us to a new level, for at this point the class will be capable of acting as a class, rather than as a group of individuals who simply happen to have something in common. In this sense, for Marx, classes are real agents, which distinguishes them from the market researcher’s constructions. They are much more than a handy form of classification. They are the means by which world-historical change is effected. Indeed the antagonism between the classes provides a mechanism for replacing capitalism with something more humane: communism. Only in communism can we transcend class differences. Communism will be, so it is claimed by Marx, a classless society. [...]

Marx’s idea is that economic structures rise and fall as they further or impede human productive power. For a time— perhaps a very long time—an economic structure will aid the development of productive power, stimulating technological advances. Yet, Marx believes, this will typically last only so long. Eventually any economic structure (except, apparently, communism) starts to impede further growth. In Marx’s terminology, it ‘fetters’ further development of productive power. Technology just cannot grow within the existing economic structure. At this point the economic structure is said to ‘contradict’ the productive forces. But this contradiction cannot continue indefinitely. There will come a time when the economic structure cannot hold out any longer, for it cannot hold up progress—the development of the productive forces—for ever. The ruling class will begin to lose its grip, and, at this point, Marx says, the economic structure will be ‘burst asunder’ leading to a period of social revolution. Just as one form of society is replaced by another, one ruling class falls away and another becomes dominant. This is how capitalism is said to have replaced feudalism, and will be how capitalism falls to communism.

Yet the sensible Marxist position is to say that real-life politics is determined by many factors, including class struggle, in which from time to time the workers—and even the intellectuals—will win out. But in the long-term the bourgeoisie will win the great majority of the important political and legal battles, at least for as long as they are economically dominant.

[...] Adam Smith had been so impressed with the miracle of the division of labour that he opens The Wealth of Nations with an unlikely peon to a pin factory. [...]

Surplus labour creates surplus value, and on Marx’s analysis, surplus value is the source of all profit. It is this that makes the difference between the money advanced and the money received. The process of ‘extracting’ surplus value is called ‘exploitation’. Finally we have arrived at the point of Marx’s great discovery. Under capitalism all profit is ultimately the result of the exploitation of the workers. For, by this account, there is simply nowhere else for profit to come from.

Now you may think, either this represents the workers as very stupid, or there must be something wrong with Marx’s analysis. For if workers posses this incredibly valuable thing— labour power—why don’t they keep it to themselves, or, at least sell it for a decent price?

The reason why they don’t keep it to themselves and thus harness its full earning potential, says Marx, is that they can’t. According to Marx one of the conditions of capitalism’s existence is that there must be a class of workers who are free in an ironic ‘double sense’. First, they must be free from feudal ties, which would otherwise prevent them from entering any sort of market transaction. Second, they must be ‘free’ from independent access to the means of production. In other words they must both be able to work for capitalists and need to. They acquiesce in their own exploitation only because they have no alternative. They cannot work for themselves as they have nothing to work on or with, no land or other resources. Thus they must hire out their labour power to the highest bidder.

The account of the ‘employment cycle’ is worth thinking about. Marx’s theory is that the Industrial Reserve Army of the Unemployed is essential to the functioning of capitalism. It acts as a ‘dead-weight’ to the aspirations of those in employment. Their wages will always be held down for as long as others want their jobs. In ‘boom’ times, the Industrial Reserve Army becomes depleted, and wages can rise above their values. But the good times cannot last, and mechanisms exist, as we have seen, to bring wages back down.

This analysis is enormously significant. First, it involves the claim that capitalism, as part of its natural functioning, involves an employment cycle. There is no tendency to equilibrium, either in the short term or long term. Rather the economy has to be understood in dynamic terms, as going through regular cycles. Consequently the politician’s Holy Grail of permanent full employment is a mirage. As we have seen, on Marx’s analysis anything close to full employment will be a short-term phenomenon. Defences against rising wages see to that.

[...] Marx suggests that social classes do not develop until there is a possibility of productive surplus; that is, not until an individual human being, on average, can produce more than he or she needs in order to survive. Once surplus is possible, this also opens up the possibility of one group, or class, living off the work of another class. Now the more productive society becomes, the greater the potential surplus, and the bigger and richer the exploiting class can become. Under capitalism one class lives a relatively leisured, potentially fulfilling, life, with the opportunity to pursue educa- tion, art, literature, and culture (whether or not they decide to avail themselves of this opportunity), while another class struggles to feed and clothe itself. However, once society becomes sufficiently productive it becomes, in theory, possible for everyone in society to lead a life finally worthy of human beings. Free from need, people can develop their individual potential.

The idea of the economics first model is that just as feudal economics gave way to capitalist economics long before feudal politics was overturned, capitalist economics would fall to communist economics, before the communist political revolution. Here is one way of developing this idea. At a time of capitalist crisis unemployed workers could pool their meagre resources to set up co-operative enterprises of their own. Working conditions would be reasonably decent, for the workers would not impose terrible conditions on themselves. Wages could also be higher than elsewhere in the economy as the bloodsucking, parasitic capitalist is not there demanding his piece of the action. Prices of goods might also be reasonable as the workers would be selling to themselves, or, at least, people like them. Co-operatives would share knowledge with other enterprises as they need not see them as competitors, to everyone’s benefit.

One important dispute revolved around Marx and the leading anarchist Bakunin. Marx had argued that after the revolution there must be a period of ‘dictatorship of the proletariat’ in order to expunge from society those still existing elements of the capitalist economy. But sooner or later this revolutionary state would ‘wither away’. Bakunin countered that once it had its dictatorship the proletariat would never let go. The dictatorship of the proletariat may not be all that much of an improvement over the dictatorship of the bourgeoisie.

Communism is not for us a state of affairs which is to be established, or an ideal to which reality will have to adjust itself. We call communism the real movement which abolishes the present state of things. (M. 187)

Finally, a quick word about distribution. How should goods be allocated to individuals? Marx’s dictum that each would contribute according to their ability, but receive according to need obviously anticipates a world in which everyone willingly pulls their weight—they do what they can. They do not raise questions about the return they are getting for their labour, or try to ensure some proportionality between input and output. Utopian? But this is how the family often works. You contribute what you reasonably can, and your needs are taken care of as far as this is possible.

The crunch question, of course, is what about those who refuse to contribute? If they fail to contribute according to ability, will communist society refuse them what they need? Marx does not discuss this, but I think that his official answer is that this question would not arise. Once labour is ‘life’s prime want’ who would refuse to work if they could? But the point can be pressed. Suppose there are people who just refuse to play the game. Presumably Marx should say that communist society would have to find a way of dealing with this issue, if it does arise, but it is not for him, from the standpoint of capitalist society, to tell them what to do.