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Marx Was Right: Five Surprising Ways Karl Marx Predicted 2014

From the iPhone 5S to corporate globalization, modern life is full of evidence of Marx's foresight By Sean McElwee January 30, 2014 12:30 PM ET There's a lot of talk of Karl Marx in the air these days – from Rush Limbaugh accusing Pope Francis of promoting "pure Marxism" to a Washington Times writer claiming that New York City Mayor Bill de Blasio is an "unrepentant Marxist." But few people actually understand Marx's trenchant critique of capitalism. Most people are vaguely aware of the radical economist's prediction that capitalism would inevitably be replaced by communism, but they often misunderstand why he believed this to be true. And while Marx was wrong about some things, his writings (many of which pre-date the American Civil War) accurately predicted several aspects of contemporary capitalism, from the Great Recession to the iPhone 5S in your pocket. Here are five facts of life in 2014 that Marx's analysis of capitalism correctly predicted more than a century ago: 1. The Great Recession (Capitalism's Chaotic Nature) The inherently chaotic, crisis-prone nature of capitalism was a key part of Marx's writings. He argued that the relentless drive for profits would lead companies to mechanize their workplaces, producing more and more goods while squeezing workers' wages until they could no longer purchase the products they created. Sure enough, modern historical events from the Great Depression to the dot-com bubble can be traced back to what Marx termed "fictitious capital" – financial instruments like stocks and creditdefault swaps. We produce and produce until there is simply no one left to purchase our goods, no new markets, no new debts. The cycle is still playing out before our eyes: Broadly speaking, it's what made the housing market crash in 2008. Decades of deepening inequality reduced incomes, which led more and more Americans to take on debt. When there were no subprime borrows left to scheme, the whole façade fell apart, just as Marx knew it would. 2. The iPhone 5S (Imaginary Appetites) Marx warned that capitalism's tendency to concentrate high value on essentially arbitrary products would, over time, lead to what he called "a contriving and ever-calculating subservience to inhuman, sophisticated, unnatural and imaginary appetites." It's a harsh but accurate way of describing contemporary America, where we enjoy incredible

using a Marxist and yet are driven by a constant need for more and more stuff to buy. settle everywhere. "Lately. It's no surprise that the best . or the iPhone 4S a year before that? Is it a real need. "Americans came to take it for granted that property would be widely diffused. exploitative jobs. Marx. in the 20th century. Morgan Chase and small famers have been replaced by the likes of Archer Daniels Midland. we know big business is here to stay. argued that market power would actually be centralized in large monopoly firms as businesses increasingly preyed upon each other. that the trend Marx foresaw began to accelerate." It was only later.P. This might have struck his 19th-century readers as odd: As Richard Hofstadter writes. And what do you know? No less an authority than the Wall Street Journal warns. and rising productivity has allowed companies to grow without doing much to reduce the vast ranks of the unemployed.S. Corporate profits are on a tear. recovery has been displaying some Marxian traits. is already becoming centralized. The tech world. he'd nod in recognition. Marx wrote those words in 1848. after a recession. that economic and political power would decentralized. too. 4. "The need of a constantly expanding market for its products chases the bourgeoisie over the entire surface of the globe. "It must nestle everywhere. the U. however. small community banks have been replaced by global banks like J. as well as the incessant demand for more natural resources. Walmart (Monopoly) The classical theory of economics assumed that competition was natural and therefore self-sustaining." While this may seem like an obvious point now. Consider the iPhone 5S you may own." he wrote. and this is easiest to do when there are too many workers floating around. Politicians give lip service to what minimal small-business lobby remains and prosecute the most violent of antitrust abuses – but for the most part. 5." which he explained simply using classical economic techniques: Capitalists wish to pay as little as possible for labor. Big Profits (The Reserve Army of Industrial Labor) Marx believed that wages would be held down by a "reserve army of labor. megacorporations are creating entire advertising campaigns around the idea that we should destroy perfectly good products for no reason. Thus. with big corporations sucking up start-ups as fast as they can. If Marx could see this kind of thing. And he wasn't just right about what ended up happening in the late 20th century – he was right about why it happened: The relentless search for new markets and cheap labor." That's because workers are terrified to leave their jobs and therefore lack bargaining power. or an invented one? While Chinese families fall sick with cancer from our e-waste. Today. establish connections everywhere. Low Wages. because workers are too scared of unemployment to quit their terrible. when globalization was over a century away. mom-and-pop shops have been replaced by monolithic big-box stores like Walmart. we would predict that high unemployment would keep wages stagnant as profits soared. Is it really that much better than the iPhone 5 you had last year. 3. are beasts that demand constant feeding. The IMF (The Globalization of Capitalism) Marx's ideas about overproduction led him to predict what is now called globalization – the spread of capitalism across the planet in search of new markets.

" Today. but because he is inescapable." has yet to lose its potency. When he argued for a progressive income tax in the Communist Manifesto. there is scarcely a country without a progressive income tax. where the richest 85 people have more wealth than the poorest 3 billion. you have nothing to lose but your chains. and it's one small way that the U. But his work still shapes our world in a positive way as well. As Robert L. not because he is infallible. the famous cry. Now. . in a world of both unheard-of wealth and abject poverty. "We turn to Marx. Most of his writing focuses on a critique of capitalism rather than a proposal of what to replace it with – which left it open to misinterpretation by madmen like Stalin in the 20th century.S. no country had one. In Conclusion: Marx was wrong about many things. Marx's moral critique of capitalism and his keen insights into its inner workings and historical context are still worth paying attention to. tries to fight income inequality. therefore. Heilbroner writes.time for equitable growth is during times of "full employment." when unemployment is low and workers can threaten to take another job. "Workers of the world unite.