What Everyone Should Know About How Capital Works
Mainstream economics cannot accept the concept of contradiction that is foundational for Karl Marx’s analysis of capitalism. David Harvey explains why we need the Marxist perspective if we want to make sense of capital’s latest mutations in the age of AI.
David Harvey: “Both Franklin Roosevelt and John Maynard Keynes explicitly recognized that their aim was to save capital from the capitalists. Being averse to Marx’s method, they could not, however, figure out how to do so.” (Ullstein Bild / Getty Images)
In Volume 1 of Capital, Karl Marx ventures the opinion that “classical political economy stumbles approximately onto the true state of affairs, but without consciously formulating it. It is unable to do this as long as it stays within its bourgeois skin.”
Marx and the bourgeois economists confront the same material realities, but they interpret, explain, and use them very differently. For example, both David Ricardo (the leading bourgeois figure in nineteenth-century political economy) and Marx considered capitalism to be a passing form of economic organization but for totally different reasons.
Both believed the profit rate on capital would ultimately fall to zero. Ricardo believed wages would have to rise to pay for the increasing cost of food grown on increasingly scarce and less fertile land. Rents would also rise because cultivable land would become increasingly scarce. Hence, rising wages and rising rents would squeeze profits until they fell to zero.
This is not a paywall. Log in or register for free to keep reading. Subscribe to access our full archives and beautiful print and digital magazine starting at just $3 a month.