Friday, February 22, 2013

Book Review: Karl Marx - Capital Volume 1

Karl Marx in many respects provided the intellectual framework for many communist and socialist planned economies. Capital Volume 1 sets out a substantial part of Marx's economic theories as well as some observations on working conditions during the early stages of the industrial era.

The economic theories have been widely criticised on academic grounds. The flaws are fundamental and render his theory untenable on even a very basic analysis. I was in particular struck by the conclusion (not articulated by Marx) that people would work to the same level of efficiency without personal materialistic incentives and that the correct rate of return on all inputs to the economic process other than labour is zero. In the light of modern understanding of economic processes and human nature, Marx looks completely out of touch with reality. As a side note, I was particularly amused at his descriptions of unproductive workers in the Appendix - including authors with Milton being used as an example of an unproductive worker.

Of greater interest, as the description of working (and living) conditions in industrialised countries. Leaving aside the distorted and rose tinted view of life in pre-industrial times and the fact that Marx either sneeringly dismisses or ignores the benefits that accrued to society as a whole from industrialisation, these sections of the book were powerfully written and conveyed what I believe to be an accurate depiction of the horrific conditions experienced by workers (and many non-workers) during that era.

If he had stuck with social commentary and left economic theory to others, Marx might have been remembered for something other than the man whose fatally flawed economic theories contributed to some of the greatest humanitarian tragedies of the twentieth century when various communist/socialist states attempted to apply them in the real world.

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