A red flag with a gold hammer crossed with a gold sickle, broad-lined cartoon propaganda with Lenin towering over the masses screaming "Death to capitalism", and the image of menacing oppression left by the legacy of Stalin and the Soviet Union. While others are evoked with images of Chairman Mao, the Kim dynasty, and the violent Viet-congs all ruling with an iron fist. All of these fears unified behind the word "Marxism" and its entrails (Socialism and Communism). There is a problem in the inquiry of Marxism. Simply thinking of it is demonised, let alone sympathising or empathising with it. It happens in all parts of society everywhere, albeit (although) in different intensities and forms.
In some countries it is even an illegal ideology that can render you up to 20 years of jail time given that you had sympathy over it and are willing to spread it[1]. While in other countries, bans have been lifted but speaking about it is almost considered sinful. In the United States, until Bernie Sanders came along using the word socialist or being called a socialist is a social death sentence where either everyone thinks you're decidedly un-American or just a sympathizer of dictatorships, oppression, and disregard for any basic human rights[2]. All the while conveniently dismissing the ideology as very harmful and having no place in economic ideology and policy. Particularly supported by the loss of the Soviet Union in the Cold War, and other regimes that have shown pervasive economic failure like Venezuela.
Don't get me wrong, I have the utmost respect and understanding for those who have been hurt by groups that have presented themselves as socialist or communist. Indonesia has had a long history of that. But it may be worth looking over the mistakes of peoples and groups who misused it because beneath the swirling rhetoric of criticism lies principles that addresses problems we all face as regular citizens. Things like low stagnant wages that can barely keep our heads above water with housing that, instead of being buyable so we have somewhere cozy to lay our heads, shackles us into a rent that skyrockets every year. Marxist economics tells a very relevant and striking theory that makes it clear to us that the world is not predisposed to turn us over our heads. A very brave proposition that we can change things for the better and if not through its proposed means, at least to its proposed principles: the opposition to inequality and the exploitation of people through economic means[3]. So, let's try to understand the proposals and along the way, make peace with Marx.
Labour creates value
This is the basis of Marx's understanding of economics. Our economy is based on the sale of goods and services. In countries that are industrial and factory based, this means that natural resources such as cotton and linen won't have value unless labour involves itself in the process. Because through, and only through labour could cotton and linen (natural resources) be turned into valuable goods such as shirts, jackets, and pullovers that's given up to 5 times the price. For example, it takes 10 ounces of cotton that's valued at $6.55[4] but a t-shirt in H&M is valued on $29.99[5]. And this also happens in the service industry, train and buses don't drive themselves so the value of those companies are reliant on the bus drivers and technicians that work 24/7 to make sure the rails aren't corrosive, wheels aren't flat, and internal air conditioning still work. If no workers or labour handle these resources, those resources have no value in nature.Â
On the surface, this sounds like a very basic understanding of how things work. However, the point that people fail to conclude is that labour becomes the most important part of a company's production or service line are the workers. Marxism acknowledges that there are efforts from the capitalists (CEOs, Venture Capitalists, and other investors), but their efforts are amplified by the capital that they own. Meanwhile, the labours' efforts lack the freedom and creativity that the abundance of capital coming from inheritted finance, property, land, and personal connections have. Making it harder for workers to put their efforts into making products due to low wage, lack of basic necessities, and a family at home that they need to take care of without handmaidens or butlers or babysitters.
This problem becomes more significant especially when we understand the second concept in the Marxist economic model, which is surplus value. It is the value of the final product deducted by the value that the workers were paid. Basically, the amount of work that workers weren't paid for.So for example, a chair needs 4 hours to produce, but workers are only paid for 2 hours of the value of the chair or else business owners won't profit. This problem is exacerbated especially due to the coming of technology and modern production lines. Because the machines can produce more chairs at a faster rate, people put their labour of four hours to produce 2 chairs and are only compensated for those 4 hours while the company gets the surplus value of 8 hours created by the machines. This means that workers are never compensated fairly and will be much worse as technology makes things more efficient.
But another problem that is more apparent if workers are never awarded the full value of the products they produce, is that they can't buy the products that are made by the business world. Things essentially become overvalued and that's how the modern economy experiences so many booms and busts such as the '97-'98 Asian Financial Crisis and the 2008 Financial Crisis[6][7]. The buildup to 2008 was that people were unable to buy houses and are susceptible to predatory lending schemes. People simply cannot buy the products that businesses produces.
So how do we fix this? Marx suggests there to be no wage labour, and no private property. We know the impracticalities of such solutions. Even Marx understood through historical analysis that a perfect Marxist utopia can only be successful when capitalism is mature and has developed the economy. The mistake that most people make when thinking about Marxism is that capitalism is the absolute enemy. The reality is, permanent and absolute capitalism is what Marxism opposes. A capitalism that evolves to fulfill the needs and meet the challenges of the modern economy is what Marxism, at least some, agrees to. That's why there's a general support of Keynesian economics from Marxists, and support for minimum wage. In the end, what Marxism wants is the closing of the gap that is the surplus value to minimize the harms of capitalism while it develops. It recognises that some people would be at the back foot but it doesn't wash it hands clean and let people suffer by justifying it as necessary for the economy.
So while we study about supply and demand and the most efficient quantity to develop our products, it might be refreshing to look at the impacts and make sure we directly address them by reading and discussing a bit of Marx. Despite the flawed ideologies he inspired, our red uncle isn't so bad don't you think?
Oleh: Derril Pramana | Ilmu Ekonomi 2017 | Staff Kajian Kanopi 2017
