Explaining Economics Part 1

From Issue 11 of Forward
The Production Process

Modern economics, what is taught in schools or presented on the news, is less an actual study of economics, the way in which society creates, as much as an ideological and politically biased presentation. That is, what poses as economics today is in fact ‘bourgeois economics’. It is by and large the study of supply and demand and not the manner in which everything around us is produced. It is not a study of the production process.

One example of this would be at the end of each news bulletin the reader calls out the latest figures on the ‘dow jones’ or the ‘isec index’. These represent an indication of a regions market performance based upon the top 100 companies in that region, determined by finance speculators and corporate giants. As a piece of news it is determined by and effects far less of us than say and industrial bulletin of union negotiations. The point being, the economics we are presented with are not really economics and are purposely made meaningless to our lives. This political management of our knowledge and education serves to distance us from the crucial study of economics and its everyday impact upon us.

The actual scientific study of the production process is where Marx found his philosophical progress took him. However, he certainly was not the first to approach it. Ancient Athenian scientists had tackled the question of production and more recently the political economists of Ricardo and Smith in 18th century England had examined it. Marx, with the invaluable help of Engels, was able to draw upon their analysis and experience to further the scientific study of our economic reality.

From this lengthy study and practice Marx was able to draw some certain conclusions:

We thus see that the social relations within which individuals produce, the social relations of production, are altered, transformed, with the change and development of the material means of production, of the forces of production. The relations of production in their totality constitute what is called the social relations, society, and, moreover, a society at a definite stage of historical development.
K. Marx, 1847 ‘Wage-Labour and Capital’

It is from the production process, how we produce, the technology available, the division of labour, and most importantly the ownership of the means to produce, society has its distinct forms, whether slave, feudal or capitalist.

The capitalist mode of production, for example, rests on the fact that the material conditions of production are in the hands of non-workers in the form of property in capital and land, while the masses are only owners of the personal condition of production, of labour-power. If the elements of production are so distributed, then the present-day distribution of the means of consumption results automatically.
K. Marx. 1875 ‘Critique of Gotha Program’

The mass of landless labourers were produced by the growth of capitalism and the disintegration of feudalism. The advancement in technology left many peasants and farm hands useless they were forces to the cities to look for work off the growing number of bosses. These workers have nothing to offer but their bodies and minds to be used where and when necessary by those who own land, factories, companies, business’s, natural resources or capital resources. These facts of life develop the world around us. They ultimately shape and form our family relations from ancient forms of communal reproduction to our current form of monogamous marriage. They dictate the type education we receive or if we receive a formal one at all. The list does go on. And as noted by Marx above and most importantly they create the consumption and wealth patterns of inequality we see all around us.

Class Definitions

Before we examine the most basic class definitions a note on capital and labour is necessary.

Capital therefore presupposes wage-labour; wage-labour presupposes capital. They condition each other; each brings the other into existence.
K. Marx. 1847 ‘Wage-Labour and Capital’

In physical science Newton declared, ‘For every action there is an equal and opposite reaction.’ This is true, by and large, across the sciences. Capital and wage-labour are each other’s opposite. They could not exist without the other, as Marx puts it they presuppose each other. Ones creation brought the other into existence. It is the exploitation of wage-labour by capital that recreates capital. The increase in relative strength of one is the weakness of the other.

When labour was strongest in Europe, through unions, communist parties, and the existence of the USSR, we won broad social reform and a social democratic system. Now, however, when labour is at an incredible low in Europe we have constant attacks and rolling back of these reforms, our health system, our education, our 5 day week, our retirement age, our pension schemes etc. Capital is clearly dominating wage-labour. The bosses are clearly dominating the workers.

Engels definition below is the simplest expression of who the bosses are and who the workers are:
By bourgeoisie is meant the class of modern Capitalist, owners of the means of social production and employers of wage labour. By proletariat, the class of modern wage-labourers who, having no means of production of their own, are reduced to selling their labour power in order to live. F. Engels. 1848 ‘Manifesto of the Communist Party’

It should be very clear now that the working class is by far the vast majority of people on this planet. Most people do not employ others. Most people (if lucky enough!) are employed. We live in a world where there are two obvious classes, and they are antagonistic, they are in conflict.

There are of course great disparity and difference within classes. There is the CEO of Nike and the man who owns the local corner shop, both capitalists. There is also the man on 200,000 a year wage and the man on 20,000 a year, both workers. This difference within wage-labourers is not like the conflict between classes, as this difference is not due to exploitation of one worker over another. We will examine this further in future editions of Forward. It is the struggle between classes that makes history and it is the victory of the majority class of workers over the minority of bosses that will ensure our futures.


Filed under Education, Theory

4 responses to “Explaining Economics Part 1

  1. I recently came accross your blog and have been reading along. I thought I would leave my first comment. I dont know what to say except that I have enjoyed reading. Nice blog.

    Tim Ramsey

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  3. I feel more persons need to read this, incredibly very good info.

  4. Excellent work buddy, keep writing.

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