Economic Update: The Contributions of Karl Marx (Part II)

Economic Update: The Contributions of Karl Marx (Part II)

Welcome to part two of this four-part
series on the work and contribution of Karl Marx. Once again I just want to say
that the reason we look at Marx’s contribution is that he was the leading,
and remains the leading critic of the economic system we live under, and
therefore to understand his critical perspective is a way to get a deeper
understanding of this system, its strengths and its weaknesses, so that we
can all be better citizens, in terms of how we contribute to making the world a
better place. Let’s turn to the core of what Marx’s
contribution was, particularly in the realm of economics, which was his chosen
area of concentration. He did talk about many other things. He was a true European
intellectual of his time, when relatively few people were educated and given the
benefits of literacy, so he was interested in many things, but he ended
up even though he began as a philosopher to become what we would nowadays call an
economist. And I’m gonna summarize his findings, because we don’t have enough
time to go with him in how he got to them, we’re just gonna concentrate on
what they were. So here’s the the nub of it, the core. In every society that human
beings have had, from the earliest records we know, right down to the
present, the central achievement of humans, that in a way distinguishes them
economically from animals, and many kinds of animals, is that they were able to
produce and to distribute something Marx called a surplus, and so it’s crucial to
begin by explaining what Marx meant. In every society he says, human beings
survive by transforming nature to meet their needs, for example, converting the sheep,
the wool of the sheep into clothing to keep warm, to using the trees of the
forest to build shelters from the rain and the storm, and of course to find the
nuts and berries, and eventually to cultivate the fruits and vegetables, and
to raise the animals that we use to eat. In all societies where human beings have to
do these things to survive, they do labor; they work, they use their brains and
their muscles to transform nature into useful consumable products, and now Marx
says, follow me, when we look deeply into that reality, the reality of labor, all
human beings survive by working at it. They have no choice, and Marx says, in
every human society the following fact is true: not all people work, they don’t
all use their brains and muscles to transform nature: the tree into a chair,
the sheep into a coat, the countryside into a meal. There are always parts of
the community that don’t do work, and the way that happens, and the only way it can
happen, is if the people in a community, whether by the way it’s a small tribal
group in a village, or a whole modern country, the only way there can be people
who survive without working, here comes the punchline, is if the people who are
doing the work, produce more than they themselves consume. There have to be in
the community people who produce a surplus, that’s more than they themselves
take for themselves, if there are going to be people who can survive without
themselves working. Well you all know what the best example is: the
children, the babies, the ones who couldn’t possibly use their brains and
muscles to transform nature, because they haven’t managed to stand up yet. So there
has to be people who produce more than they get, if they are going to be babies
that survive, because they’re gonna live off this surplus. The surplus produced by
their parents, the surplus produced by the community of adults. Now Marx takes
this inside, and it takes it a step further. He says, in most societies that
we have records of, the surplus that’s produced by some of the people, he calls
them productive workers, those who produce more than they themselves take
for themselves, for their own consumption, this surplus in many societies doesn’t
just sustain babies, children, and maybe old people who can’t work anymore.
But there are whole blocks of people perfectly able and capable of working to
produce the surplus, who don’t however do so, and yet they have a lot of
consumption that they enjoy. So there must be surplus produced by some, to
enable these others to live the comfortable lives they do. So let’s, let’s
follow Marx, let’s start with the slaves. When the slave works on a slave
plantation, everything he or she produces belongs to the master, everything, because
they’re just like an animal. They’re owned by the master; everything they
produce is ipso facto and immediately, the property of the master. And here’s
what the typical master does: he takes a portion of what the surplus, of what the
slave has produced, and gives it back to the slave, so that the slave can survive
until tomorrow, and do it all again. The rest of what the slave produces, the
slave’s surplus, what the slave produces above and beyond
what he gets back, belongs to the master, and the master takes that surplus, and he
builds a lovely house with it. How does he do that? He takes that surplus, and he
gives it to a bunch of other people whose job it is to build the house. And
how do those people live? Because they have the surplus from those who do the
work, that allows them to work on the house of the master, without themselves
raising the animals, or the vegetables, or doing any of the productive work. So Marx
begins to say and to teach us that in slavery, the master lives off the surplus,
the work that the slave produces. The master doesn’t have to go out into the
cotton fields; he doesn’t have to go out and raise the fruits and vegetables, the
cheese, the butter, and the meat. The slaves do all of that. They produce more
cotton than they need to clothe themselves, more food and clothing than
they need for themselves, and all that extra is delivered to the master, and the
master uses it to keep this kind of society going. Why? Because the master
sits at the top; the master has the power; the master has the leisure; the master is
sustained by the surplus of the slaves. The same Marx says goes on in feudalism.
Only there the productive workers are serfs, and the surplus they produce is
owned and received by the Lord. You might enjoy knowing what the name is, that in
feudal society, what the name is given to the surplus that the serf produces and
delivers to the Lord. The word is rent, a word that we still have, don’t we.
And now Marx’s point: in capitalism, which thought it was, which promised it would
be, the end of the slave system, and the feudal system. What we actually have is the
same thing, but it’s a little disguised: we have the employee and the employer.
And what Marx does in first volume of capital, his major book, is to show us
that right in the relationship between the employer and the employee, is another
production and delivery of surplus. And I’m gonna do it with you now in the
simplest language I know, so that the idea is anchored in your mind, because
the insight Marx achieved here is remarkable. Let’s do it this way. You go
to look for a job. You find an employer, because that’s where jobs are, and you
sit down with this employer, let’s say it’s at a factory that makes ladders, and
you sit down with the employer, and you discuss with him what time you have to
come to work, what kind of work you will do, and all of that, and then you get to a
certain point in the conversation where it’s time to talk about money. How much
are you gonna get paid for working on making ladders. And the employer and you,
let’s say you reach an agreement. I’m going to pay you $20 an hour. You come at
8:00; you go home at 5:00, Monday through Friday, you know the typical pattern, and
I will give you 20 hours, for every, $20 excuse me, for every hour that you’re
here helping us produce ladders. And the employer knows that by hiring you, and
having you work all those hours, there will be more ladders than he would have
otherwise to sell, if he didn’t hire you. That’s true of every worker.
Well Marx says, wait a minute, and then Marx plays a little game. He
tells us what we already know, if we think about it. He says, the only reason
an employer will ever pay you $20 an hour, is if during that hour
you produce more than $20 worth of ladder for him to sell. Why? Because if
all your labor did, was produce $20 more of lat, of ladders to sell, when the
employer sold the extra your labor produced, he’d get 20 bucks, which he
would have to pay to you, and there’d be nothing in it for him. He’s not gonna do
that, however much you and he are friends. It’s not part of what a capitalist
business is or does. The employer will give you $20 an hour if, and only if, your
labor, each hour, produces more, or if you like, adds more value to what the
employer sells, that it costs him to have you come there. And guess what Marx then
says to us: there’s the surplus again; there’s the mass of employees producing
a surplus, and delivering it to the capitalist. It’s not as obvious as the
serf on the land delivering so many bushels of corn as rent to the Lord; it’s
not as obvious as a slave, whose product is immediately and totally the profit,
property of the master; it’s a little more hidden, it’s a little more
complicated, but it isn’t fundamentally different. Wow! In the core of capitalism,
in the relationship between an employer and an employee, is the production of a
surplus by the one, the employee, and the receipt, the gathering of that surplus
into his own hands by the employer. Folks, that’s pretty much what the serf and the
Lord had as their relationship, and it replicates the master-slave as well. So,
we have uncovered the secret history, if you like, the kernel of capitalism that
Marx is going to show us is the problem, because the absence of liberty, equality,
fraternity, and democracy in slavery, and the absence of
liberty, equality, fraternity, and democracy in feudalism, is going to be
re-established tragically in a capitalism, because it hasn’t challenged
or broken down this either-or situation. It’s just changed it a little bit.
Instead of slaves and serfs, we have employees, instead of masters and lords,
we have the capitalists. It might help us explain Marx’s clever use of words when
he sometimes referred to what workers in capitalism could be called, and he used
the phrase wage slaves. That was not just a casual remark. It was intended to make
us connect in our minds, the condition of the wage earner, and that of the slave. We
thought a wage earner was a free person, but when you look at the surplus, no
freedom at all. Trapped in a system where the only option to producing surplus for
your employer, is to quit and do it for another employer. There’s no freedom
there. Freedom requires changing the system, because otherwise you are forever
trapped in it. Marx is going to hammer at the point, that in a society that
organizes production in this way, a relatively small number of employers on
the one hand, and a mass of employees on the other, in which the employees, the
mass of people, produce a surplus that becomes the private property of the
employer, you are going to see these employers using that surplus they gather
into their hands, to make sure this society stays the way it is, giving the
dominant position to the employers. And true enough, if you look around
capitalism a hundred years ago, fifty years ago, or right now, it’s the employer
class who are dominant in politics, in culture, in living the highlife off the
top of the hog, right, and the mass of people, who are worried about how well
they will do, whether they can send their kids to college, etc, etc. It isn’t new, and
you all know it. But Marx, his contribution was to locate the
fundamental mechanism whereby this happens, and happens over time, in the
relationship between the employer and the employee. We’ve come to the end of
the second part of this four-part series. I want to thank you for being with us. I
hope you learned something and found it of interest. I want to urge you as always,
please, visit us on, that’s P-A-T-R-E-O-N slash economic update, where you can become a
supportive part of our Patreon community, have access to documents like this, that
we enjoy producing, and don’t forget to follow us as well on Facebook, Twitter
and Instagram, and through our websites rdwolff with
two FS dot com and I look forward to the installment
number three which comes next.

51 thoughts on “Economic Update: The Contributions of Karl Marx (Part II)

  1. This was great. It really helped clear up some basics of Marx that I had trouble getting straight in my head. Thanks guys.

  2. The whole world agrees with Marx's critique but bicker about the solution. So capitalism's chief beneficiaries exploit the confusion and accelerate their profiteering before the i evitable collapse!

  3. Another Fundamentalist religion proliferated and sold as a solution by banks and international finance capital. Complete with Saints, Sinners, commandments, and liquid terms and definitions such as "worker" and "counter-revolutionary" to deem as it pleases. There will always be a hierarchy, and your "horizontalism" is just another term sold to the Good Faithful.

  4. Like I said before , Marx is the past , present, and future. Dialectic Materialism change other Philosopher or political economist close to Marx.

  5. Spot on.
    In essence, we have parasites who are extremely rich, because they exploit the working masses, and the whole society (politics, economy, monetary system, and history is being re-written the way it suits them) is structured, to benefit these parasitic oligarchy… it is the human mindset that needs to change, for people in Capitalism to wake up, and understand that they have been manipulated and exploited all this time… for centuries in fact (system of production is the same, its just the label that is different).

  6. Dr. Wolff your analysis is perfect and in a way that if more water cooler debates could be grounded in such obvious terms, would fundamentally change the US! Thanks for the enlightenment!

  7. The reason why there is a tenancy from Liberty (and all that) to "wage slavery" is because we have experienced the massive prosperity by a few at the expense of the many. Folks who have really no practical choice but to be a wage slave have other viable choices for their own economic prosperity goals.

    The global system as we have it allows only a few to be extraordinarily wealthy at the expense of literally the billions of the rest of us. That system needs to be discarded along with all those who support it and benefit from it. I personally believe there is a simple test and that those who tend towards extraordinary wealth also have extreme levels of greed. Folks who are like that are not going to help the long term survival of humanity. Perhaps building space ships and sending them out into the great beyond to live is a good solution for them.

  8. Wolff claims that Marx's "surplus" is what the business owners steal from their employees. That's a big lie. The so-called "surplus" is the produce of the entrepreneurial talent and skill of the capitalists. People are born with innate inequality, inequality of talent, inequality of skill, inequality of ambition, etc. Why are lefties surprised that all that inequality results in inequality of income?

  9. In my opinion, citizens in capitalist countries must be informed sistematicly in short advertisement way (posters, adds, caricatures…) about socialism and things hat proff.Wolff is saying.

  10. The way out of the slave wage is simple : the worker sells the ladders he's made, to the employer at a price that must reflect reality.
    Which reality ?
    The one that ties the worker to the price of a completed ladder, and that can ONLY be the worker's living costs during the time it took him/her to complete one item(real capital) from beginning till end : that includes all his dependents and sundry expenses during that time frame.
    The employer on his turn, sells the ladders to the market he uncovered by his know-how and contacts he has built up forming part of his CV…for a higher price than he pays the workers in order to restart the next cycle and make enough for him to survive.
    This format immediately frees the laborer from carrying other workers on his back because all workers are paid the same wage per hour(a hopeless dogma).
    This model transforms the worker into his own boss who now gets paid fairly & correctly for his work, not working for his pay – a huge difference ! See the absence of democracy now ? Paying everyone a wage/hour, is the misunderstood fake democracy people want to 'implement' but don't know how and NEVER will because it like an uncompleted calculation : jumbled info/ halve baked ideology causing serious harm to the social fabric…

    We must always ensure we incorporate reality into our calculations or else we'd be lead into the most bizarre conceptions wholly out of step with Nature & reality.
    I want to thank Prof Wolff for providing one of the most exciting platforms on YT.

  11. “Bourgeois society stands at the crossroads, either transition to Socialism or regression into Barbarism.”
    — Rosa Luxemburg

  12. Thanks Professor.
    Marx may not perfect (no human is).. but Marxist theory helps China to transform to be what it is today.. "Marxist theory with Chinese characteristics"..!!

  13. The parasite class is killing the host. I simplify by saying the bankers, politicians and the military are no different than any band of raiders that passed themselves off as royalty and demanded tribute throughout history. The parasite class expects to discard our bloodless carcasses in favor of machines but will continue to feed on and cannibalize themselves because they don't create.

  14. Fundamentally it's totally different. Employees are not slaves. Workers are free to leave if they don't want to be there. By the way if a employer hires someone at $20 an hour he also has to pay insurance and healthcare for his worker. Socialism and karl Marx SUCKS

  15. The employer justifies this by saying he takes a risk. A risk to start the business and continue it. They then keep their advantage going forward, in perpetuity, but still, that is the counter-argument. What would prof. Wolff (or other socialists) say to this? Does one dismiss the risk? That, for example, "of course we need ladders, there is no risk in making them."?

    –YouTube should be a Co-op! We all contribute Likes, Uploads and analytics! One for all, all for one!

  16. Brilliant as usual. I learn so much. How do we abolish capitalism, especially this rotten system in the U.S.? We´ll I guess the empire is falling anyway.

  17. One aspect that was overlooked was how we measure work, and that all work isn't counted or isn't counted equally. Specifically from the ideas in the book 'if women counted' by Marilyn Joy Waring maybe childhood itself should be considered work?

  18. neither capitalism nor socialism/coops will work if you have greedy evil bastards overshadowing the whole system controlling the money supply and creating non ending money surplus through the evil interest banking system. it doesn't matter if you organize the work through coops or through employer and employee if you are still obliged to play by the bankers rules to get the money necessary to start anything

  19. There is freedom to save money from my employer and start my own business tranforming me out of wage slavery to master!

  20. Sir just one thing that did not seem to be addressed: Voluntary or forced. Slaves are forced employees are not. And one more thing an employer is the one taking the risk. He has channelised his resources to grow up a system from where the surplus could be generated. There are also the chance he might not get any of those surplus a labourer produces due to economic situation… So while I accept that surplus get's created I just want to know why taking the risk is never considered by Karl Marx? Or did he?

  21. The slavery surplus was only about 10% after taking out the slaves' maintenance costs. And I think that's why slavery was abolished. To increase the surplus. Today's "slaves" produce much more than the average 10% of slavery. That's not an argument to go back to slavery, and slavery is wrong and immoral. But I'm just saying that advancement of society can sometimes be not so clear cut.

  22. No one gets hired for the actual value they add.

    That being said, managers/employers may add value to the product we make. It depends. Did the manager open more markets? Did they provide materials? Did they add value to the product?

    It seems to me that the lesson in part II is the the hierarchical idea that managers/ owners are better is bad because they don't contribute to the making of a product nearly as much as the value/control they have.

  23. If people want ACTUAL examples of what Marx envisions, it’s not the Soviet Union (that all went down hill when Trotsky was ousted) or the Nordic European nations, these examples would be the Zapatistas in Mexica, Rojava in Syria, and town in Spain that has an all communist economy (and its thriving believe it or not) don’t believe me? Please look it up because it’s amazing! I think that’s what communism looks like and what Marx likes to see.

  24. If anyone is in doubt, just look at the student "loan," system. Dig a bit, and you will discover it is a GIANT scam. Cut funding to higher ed, in favor of tax "breaks," "Loan," the money to people desperate to survive. Take away ONLY for student "loans," a basic constitutional right: bankruptcy protections. Let the banks gouge people with loans guaranteed by the government. Disgusting. But it is right in line with this economic "system."

  25. 6:20 were getting somewhere. Now we just need to recognize rhe psychological impact for the worse that the master incures himself by not working and how poor leadership therefore results.

  26. I come here and read the comments to find those rare people still capable of critical thinking.
    Thank you and happy yule 😉

  27. Thanks for explaining this system of surplus. But, if the added value produced by the employee who is being paid 20 dollars per hour but producing more then 20 dollars does not go to the employer, why would the employer run the business at all? I guess the ownership structure has to be changed. How do you suggest that this value addition be distributed? What will be the motive of production if the owner does not have access to the profit?

  28. It seems fatalist to believe that Capitalism is the absolute pinnacle of human society… is modern society truly as good as it gets? Is there truly nothing better than this? Is capitalism the end of the road, or is there more and better yet to come?
    You can deliberate over what may come next, what it looks like, how it functions, but if Capitalism really is as good as it gets, we may as well just lie down and stop trying, right here, right now.
    OR: "far better is it to dare mighty things, to win glorious triumphs though checkered by failure, than to rank with those poor souls who neither enjoy nor suffer much because they live in the grey twilight that knows neither victory nor defeat." Roosevelt extended the persistence of capitalism, but I'm pretty sure there are mightier things to dare yet still ahead of us.

  29. Marx contribution was to intellectualize jealousy and envy.
    To rationalize the need to murder millions of people if they stand in the way of your idea of "progress".
    The fact this crap is taken seriously at all is God Damn disgusting!

  30. I'm confused. So your american pupils don't get this information near 8th grade at school in history lessons as we russians do? Very strange.

  31. Don't be naive. There is no solution to capitalism. Worker co-ops might look vital and even powerful but they will be destroyed by capitalists – destroyed and condamned. As worker unions, as communist and socialist parties before – worker co-ops will be destroyed with workers' own hands. As USSR was destroyed by my unfortunated fellow countrimen. Because history teaches us nothing, people will always be people – lazy stupid greedy and arrogant.

Leave a Reply

Your email address will not be published. Required fields are marked *