Karl Marx and His Theory of Capitalism and Labor Power

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Table of Contents

  • Background
  • Alienation
  • Exploitation
  • Economy


Karl Heinrich Marx, born May 5, 1818, Trier, Rhine province, Prussia [Germany]—died March 14, 1883, London, England), revolutionary, sociologist, historian, and economist. Karl Marx, is without a doubt the most influential socialist thinker to emerge in the 19th century. Although he was largely ignored by scholars in his own lifetime, his social, economic and political ideas gained rapid acceptance in the socialist movement after his death in 1883. Until quite recently almost half the population of the world lived under regimes that claim to be Marxist. This very success, however, has meant that the original ideas of Marx have often been modified and his meanings adapted to a great variety of political circumstances. In addition, the fact that Marx delayed publication of many of his writings meant that is been only recently that scholars had the opportunity to appreciate Marx's intellectual stature. Marx's contribution to our understanding of society has been enormous. His thought is not the comprehensive system evolved by some of his followers under the name of dialectical materialism. The very dialectical nature of his approach meant that it was usually tentative and open-ended. There was also the tension between Marx the political activist and Marx the student of political economy. Many of his expectations about the future course of the revolutionary movement have, so far, failed to materialize. However, his stress on the economic factor in society and his analysis of the class structure in class conflict have had an enormous influence on history, sociology, and study of human culture.

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Marx didn't believe anything hence his maxim “doubt everything' including Marx. His main contribution was his analysis of Capitalism and that it doesn't matter how much you try to reform it; it can never satisfy the needs of the overwhelming majority the working class. What Marx pointed out was that the gap between rich and poor forever gets wider and relatively the poor are always worse off, and this is down to the profit motive within Capitalism and its inability to do anything other than maximise those profits. He concluded that due to increasing misery from their position in society the workers will eventually revolt and bring about a classless, stateless, moneyless, wage less society where production will be solely for use not profit, and to satisfy people’s needs not just to continually enlarge the wealth of a minority.


Marx's moral critique of capitalism began with his theory of alienation. The system of capitalism makes work become increasingly dehumanizing or “alienating,” according to Marx, because the capitalist division of labour results in worker specialization. Such specialization, he argued, removes the workers from the final product being created and narrows the scope of their work to a small, seemingly meaningless aspect of production. In turn, the workers, in the Marxist worldview, become more alienated as their labour becomes less meaningful. According to Karl Marks, religion is the by-product of alienation created by capitalist mode of production. Rapid industrialisation has created division of labour that eventually alienated man from his essence that is his labour. In the earlier form of production, a worker had a control over the product, he created, and that is his essence. But the new mode of production has robbed him of his essence, because he is in no control of the products he is preparing. He is not actually making a complete product; in fact, he is making a very small part of the product. Therefore, he does not have any idea of the production process that makes him alienated from his essence. Christian theology separates us from all that are good qualities of human being-love, beauty, kindness and attributes all them to heaven. Hegel also objectifies reason, freedom goodness and claims that these are expressions of some heavenly absolute. Yet these are all basic features of human nature and there is nothing spiritual about it. Thus Christian theology and Hegel both make the same mistake, they alienate human consciousness and assign it to some heavenly absolute or God.

Just as religion alienates us from all our goodness and attributes them to God, the capitalist economy alienates the proletariat from their essence, their labour, the product of their labour. The capitalist economy transforms the products of their labour into some other things by a complex process and sells them in the market to be bought and used by others. Just as religion takes away human merits and attributes them to the Gods, the capitalist mode of production alienates the essence of the proletariat in form of labour and converts them to some commodities on which the labourer has no control, they are only to be sold out in the market for the rich. Thus, religious alienation creates the expression for the proletariat for their unhappiness in the material world that develops from nothing but economic crisis, uncertainty and instability. The religious alienation is evidently the mirror image of the alienation of the material world.

Karl Marx believed that work at its best is what makes us human. He argued that is fulfils our species essence. Work allows us to live, to be creative and to flourish. However, the reality in 19th century Europe is what destroyed workers, particularly those who had nothing to sell but their labour. A worker was simply an abstract idea with simply a stomach that needed to be filled, workers had no choice but to toil long hours for a pitiful wage, what was worse is that their labour alienated them. Alienation is described as a disorienting sense of exclusion and separation. Factory labour under capitalism alienated the workers from the product of their labour, they made stuff they could not buy which disappeared into shops and factories in foreign places for people who paid them nearly nothing. Therefore, it is easy to understand why religion has its strong and lasting influence over man from time immemorial. Therefore, at the root, according to Marx, he births and the development of religion has a strong economic factor. Therefore, the capitalist mode of production is the base, and politics, law and religion are the parts of the super-structure. Thus, it is the religious superstructure that aggravates the emotional bankruptcy of the alienated, unhappy proletariat class.

Since the capitalistic mode of production aims at profit making it uses gigantic machine for large scale production. The joy of creating something by using small handmade tools, of which the worker is forced to be deprived of. The workers lost his identity before the gigantic machine. And moreover, with the division of labour a worker makes a part of some commodity sometimes he does not know what he is making and what for his work is meant for. He never sees the final product of his labour This is also one shorts of 'dehumanization' according to Marx.


To exploit someone is to take unfair advantage of them. It is to use another person’s vulnerability for one’s own benefit. Of course, benefitting from another’s vulnerability is not always morally wrong—we do not condemn a chess player for exploiting a weakness in his opponent’s defence, for instance. But some forms of advantage-taking do seem to be clearly wrong, and it is this normative sense of exploitation that is of primary interest to moral and political philosophers.

Exploitation can be transactional or structural. In the former case, the unfairness is a property of a discrete transaction between two or more individuals. A sweatshop that pays low wages, for example, or a pharmaceutical research firm that tests drugs on poor subjects in the developing world, might be said to exploit others in this sense. But exploitation can also be structural—a property of institutions or systems in which the “rules of the game” unfairly benefit one group of people to the detriment of another. As we will see below, Karl Marx believed that the economic and political institutions of capitalism were exploitative in this sense. And some contemporary feminists have argued that the institution of traditional marriage is exploitative insofar as it preys upon and reinforces pernicious forms of inequality between men and women (Sample 2003: Ch. 4).

Exploitation can also be harmful or mutually beneficial. Harmful exploitation involves an interaction that leaves the victim worse off than she was, and then she was entitled to be. The sort of exploitation involved in coercive sex trafficking, for instance, is harmful in this sense. But as we will see below, not all exploitation is harmful. Exploitation can also be mutually beneficial, where both parties walk away better off than they were ex ante. What makes such mutually beneficial interactions nevertheless exploitative is that they are, in some way, unfair.

It is relatively easy to come up with intuitively compelling cases of unfair, exploitative behaviour. Providing a philosophical analysis to support and develop those intuitions, however, has proven more difficult. The most obvious difficulty is specifying the conditions under which a transaction or institution may be said to be unfair.

Interest in exploitation as a feature of economic exchange is thus almost as old as philosophy itself. It was not until the 19th century, however, that exploitation as a feature of employment relationships came to be a subject of philosophical and political concern. In a sense, of course, the employment relationship is simply another instance of economic exchange, with the labourer selling his or her work in exchange for money in the form of wages. But two ideas led many people to think that there was something special about labour. The first was a belief that labour is the ultimate source of all economic value. The second was the belief that labour morally entitles the labourer to the full value of that which he or she has produced.

For Marx, however, exploitation was a phenomenon that characterized all class-based societies, not only capitalism. Indeed, it is feudal society, not capitalism, where the exploitative nature of class relations is clearest. Under feudalism, it is readily apparent that serfs use some of their labor power for their own benefit, while another part (the corvée) is used for the benefit of the feudal lord. In contrast, under slavery workers appear to work entirely for the benefit of their masters (though in reality a part of their labor goes toward providing for their own subsistence). And under capitalism workers appear to work entirely for the benefit of themselves, selling their labor to capitalists as free independent contractors (Cohen 1978: 332–3). In reality, Marx thought, workers’ labor under capitalism is neither truly voluntary nor entirely for the benefit of the workers themselves. It is not truly voluntary because workers are forced by their lack of ownership of the means of production to sell their labor power to capitalists or else starve. And workers are not labouring entirely for their own benefit because capitalists use their privileged position to exploit workers, appropriating for themselves some of the value created by workers’ labor.

To understand Marx’s charge of exploitation, it is first necessary to understand Marx’s analysis of market prices, which he largely inherited from earlier classical economists such as Adam Smith and David Ricardo. Under capitalism, Marx argued, workers’ labor power is treated as a commodity. And because Marx subscribed to a labour theory of value, this means that just like any other commodity such as butter or corn, the price (or wage) of labor power is determined by its cost of production—specifically, by the quantity of socially necessary labor required to produce it. The cost of producing labor power is the value or labor-cost required for the conservation and reproduction of a worker’s labour power. In other words, Marx thought that workers under capitalism will therefore be paid just enough to cover the bare necessities of living. They will be paid subsistence wages.

Capitalist exploitation thus consists in the forced appropriation by capitalists of the surplus value produced by workers. Workers under capitalism are compelled by their lack of ownership of the means of production to sell their labor power to capitalists for less than the full value of the goods they produce. Capitalists, in turn, need not produce anything themselves but are able to live instead off the productive energies of workers. And the surplus value that capitalists are thereby able to appropriate from workers becomes the source of capitalist profit, thereby “strengthening that very power whose slave it is” (Marx 1847: 40). Marx’s theory of exploitation appears to presuppose that labor is the source of all value. But the labor theory of value to which Marx and early classical economists subscribed is subject to a number of apparently insurmountable difficulties, and has largely been abandoned by economists in the wake of the marginalism revolution of the 1870s. The most obvious difficulty stems from the fact that labor is heterogeneous. Some labor is skilled, some labor is unskilled, and there does not appear to be any satisfactory way of reducing the former to the latter and thereby establishing a single standard of measure for the value of commodities.

Exploitation thus involves A unfairly benefitting from an interaction with B. But what exactly does it mean to benefit unfairly? One natural response to this question is to conceive of unfairness as benefitting A at B’s expense. Perhaps exploitation advances the interests of A while harming B. Exploitation, thus understood, is a kind of parasitism. Or, as Allen Buchanan defines it, exploitation is “the harmful, merely instrumental utilization of him or his capacities, for one’s own advantage or for the sake of one’s own ends” (Buchanan 1985: 87).


Marx explains society from a materialist perspective. The determining factor of social being is not our ideas or institutions, according to Marx. It is how human beings interact with nature and with each other during the material production and reproduction of their existence. This involves analyzing the forces of production (tools, machines, forms of technology, methods of labor, etc.). It also involves analysing things like the climate and soil conditions of a region. In a fantastically boring section of the Grundrisse, Marx even analysed the material characteristics of precious metals and their suitability as representations of money.

Marx’s analysis of the material conditions of society revealed a link between how things were produced (the mode of production) and who appropriated and controlled what was produced (the social relations). In all class societies, the ruling classes controlled “the material means of production, “which gave them power over the “mental means of production.” Hence, ideological structures and institutions serviced the needs of the material conditions beneficial to the ruling classes of society (“natural slaves,” “divine right of kings,” “the invisible hand,” etc.)

This is an uncontroversial point, despite bourgeois fairy tales to the contrary. For instance, nobody came up with the ‘idea of capitalism’ and, then, decided we should end feudal social relations. Nor do we have some capitalist gene in our biology that drove us from the bonds of feudal production. No. The development of the forces of production were chaffing under the restrictive relations of productions in feudal society. Material conditions changed, which changed the social relations.

When capitalists no longer appropriate and control the fruits of working people’s labor, it won’t be the result of some thinker who had a really good idea. It will be the result of the unbearable conditions of living in a society with forces of production that are capable of providing for the needs of the many, but are wasted on creating wealth for the few. Marx contribution to our understanding of what actually constitutes methodology on its own is the key to formulating a system analysis of the natural and social sciences. This is not to argue that Marx provided a system analysis of everything. His quest was to uncover how capitalism came into existence and Marx never ‘argued’ about the methods how wealth is produced under capitalism. The methods of wealth production in capitalism were a prior to Marx and he used his reasoning to analyse - and not argue - how, why and when these particular methods of production came to form a particular mode of production in the terms of social evolution of societies.

This quest and the journey travelled - along with his companion Fredrick Engels - meant covering not just the past and the present but also the future in order to evaluate how one society changes into another so as to formulate a conclusion on what actually comprises the drivers of the revolutionary process in the production and reproduction of real life. In this sense it meant that Marx formulated a theory of system analysis which covered the culture, economic, political and social aspects of all modes of production which he termed political economy.

His methodology consisted of: the labour theory of value, the materialist theory of history and the political theory of the class struggle. These are tools of analysis, which have been further developed and modified by socialists, to explain how the working class are exploited under capitalism and how world socialism will be the emancipation of our class. The validity of Marx’s theories is independent of Marx the man. Nonetheless, criticisms of Marx have been made because of the misinterpretations and distortions of Marxism that have occurred in the twentieth century.

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