John Locke & Karl Marx: Whose Capitalism? Whose Socialism?

to do business ethics well one must learn how to do business well to do business well one must understand economics because economics seeks to articulate how markets originate how markets evolve and how markets work and the better one understands markets the better one understands how we go about our day-to-day exchanges in markets the better one can develop a business a business model a business plan a business strategy selling a good or service that is profitable where you can survive and thrive but also do it in a way that's ethical where you can do so without harming the people who work for you or work with you so that is why in this course we're dealing a lot with economic theory and there are two theorists whose thinking we're going to bump into over and over again perhaps because their economic theory intertwines with their political theory and these two men are John Locke and Karl Marx John Locke was an Englishman who lived from 1632 to 1704 he lived right before the Industrial Revolution hit Britain and that has an impact on his economic theory because John Locke's world was not the giant Factory the giant mill his was the world of the artisan the blacksmith the tailor small-scale manufacturers who mixed their labor with things found in nature and developed private property goods such as clothing and horse shoes and other iron products that they could sell to other people his world was the world of the fee holder the farmer who produced crops and sold those crops either in a raw state or processed them into finished goods then that became private property that he could sell to the public for an agreed-upon price so you see the economic theory here of Locke it's when someone whether a blacksmith whether a farmer any tradesmen any farmer any artisan mixes his labor and sometimes her labor with things found in nature cloth iron any other form of raw material and that develops into one's private property which one can keep or sell based on negotiations with the market at large you had talents of course in Locke's world and in town you had people who engaged in more abstract forms of trade you had professors you had lawyers and they too mixed their intellectual labors with things found in nature things such as ideas which don't take on immediate physical form but they're there nonetheless and that was sold for a good or a service lawyers would be paid by the case sometimes professors worked as tutors and they were paid by their to tease you did not have the why the large-scale manufacturing that was to come enter Karl Marx Karl Marx lived from 1804 to 1883 and his world was very different from Locke's world Marx lived in the endeavor evolution and the Industrial Revolution made many changes to the world that Locke once knew because what happened was you had the mechanization of Agriculture people were no longer needed as much to work the land he needed fewer laborers on the land and so they went into the cities and worked in the factories large-scale manufacturing also displaced small-scale artisans because large-scale factories can produce things more quickly more cheaply at greater volume and so those artisans were displaced and they too worked in the factories and this led to a challenge because you now had workers no longer producing for themselves they were no longer mixing their labor with things found in nature and they produced private property that they could keep and they could sell to the market instead what was going on was workers were producing for somebody else they were producing private property for the owners and the managers who owned and operated the mills and the factories that made up muley industrialized England and this phenomenon repeated itself in Europe and America according to Marx this led to a problem if you're no longer producing for yourself if you're producing for another then how does one get paid thousands of thousands of workers cannot sell their product to the to the open market it's too inefficient it's too clunky so what has to happen is one must be paid a wage in lieu of an auto worker making hundreds of cars and then being held responsible for selling hundreds of cars the worker the auto worker is paid a wage a wage for his labor and the company then takes those cars which it owns the fruit of the workers labor and it sells it on the open market if you're a steel worker you make steel not for yourself to sell you make steel for your company to sell and in lieu of the keeping the product for yourself you are paid a wage now Karl Marx says that there's a problem here because the true value of a workers labor is not being reflected by the wage in other words owners and managers were underpaying deliberately the true value of a workers labor and this led to two problems first worker alienation from one's own labor if you work not for yourself but for another and you see yourself not getting true value for what you're producing you feel alienated from your work there is distance between yourself and your work you're not motivated to work because you're being used this is the source of what Marx called exploitation and this gap between the true value of workers labor and the actual wage being paid to the two by the button to the labor by the owner this is reflected by the profit margin on the part of the owner profits of a company according to Marx is the result of this gap this gap between the true value of it of a workers labor and the wage paid by the owner to the laborer so what's marxist solution it's this workers own the means of production workers own the means of production if you have to pick one definition of what socialism is it's this workers own the means of production if you have to pick a basic definition of what capitalism is the foundational idea behind capitalism it's that a worker mixes his labor with things found in nature things found in the workplace and that's his private property to dispense with as he or she sees fit now this sounds like an oversimplification but keep in mind Locke's world the world of the artists in the world of the farmer that did not anticipate the full impact of the Industrial Revolution and Marx his thinking reflected that of the early Industrial Revolution where there was bonafide worker exploitation but capitalism did adapt Karl Marx had a partner who supported him Friedrich Engels he himself owned the mills and he complained that in the United States there'd be no revolution because workers were becoming middle-class because you see owners who knew what revolution could bring who knew what this could bring found ways the market found ways to have workers bridge this gap of alienation this gap of alienation through a greater share of the company's profit being able to have weekends off so they can rest and relax other things which looked after the workers welfare where they had a greater say in the workplace and a greater share in the prosperity of the workplace that's why Henry Ford charged his workers five dollars an hour it wasn't just to avert revolution but also so that workers who made a decent wage could buy his cars it's the beginning of the consumer economy so you can see where debates about modern economics and politics originate from because we're dealing with how we generate wealth and how we use that wealth and since most of us work for somebody else and our labor is paid for in a wage instead of us keeping our private property and disposing it as we see fit you have the question about avoiding alienation you have the question about avoiding exploitation you have questions about how much a worker should have in terms of the share of the means of production one more thing about Karl Marx the idea that workers own the means of production would be something like this it has to be an employee owned enterprise you have very few of those in existence in the world today the closest thing you have in the United States to workers owning the means of production would be something like Publix supermarkets where the employees own it but you have a professional managerial class running the company hyvee runs along a similar model so to save us rent-a-car if you really want a purely Marxist idea where workers own the means of production it would have to be a cooperative a local cooperative such as a farmers market where the farmers own the market and manage the market and collectively decide on how the market should be run that would be very close to what Marx had in mind the idea of state ownership of production in the name of the workers what communist societies became if you were to talk to socialists like I have they would say that the state capitalism that the state is the owner workers do not own the means of production they would insist that socialists would insist that communism is a betrayal of Karl Marx it's a betrayal that Marxist vision but there's a problem here Karl Marx wrote page after page after page after page after page ten thousand pages at all on economics and most of that was a critique of the capitalist system the writings on socialism and communism is very very very very few Marx did not articulate a complete vision as to what a socialist society would actually look like so it was left to other generations to speculate how and that's why you have many many many many many models of socialism as well as communism which is a more radical form of socialism and you also have many many many models of capitalism so when we talk about capitalism versus socialism the question is who's capitalism who's socialism

4 thoughts on “John Locke & Karl Marx: Whose Capitalism? Whose Socialism?

  • This is an easy one. He's incorrect about the difference between the two. The scale was much larger in Marx's time but don't think that blacksmiths or ship builders or people who built buildings like some of the large cathedrals or large farms didn't have people working for them. A persons value is derived from an agreement between the worker and the employer. Nobody FORCED the workers to work for at a lower rate with much less responsibility than the owner who carried ALL the responsibility. If the person felt he deserved more he could ask the employer and if he felt he needed him then he would pay him more. If not the worker was free to start his own business and take on the full responsibility of that ownership in hopes he could make more money.

  • The issue with Karl Marx's argument which could be debunked by a 5 year old. It ignores what the owner brings to the table like a factory, equipment and risk. If a guy can catch one fish an hour with a rod and it's possible to catch 4 fish with an net an hour. if some one comes along and say I'll let you use my net if you give me half your fish. then he ultimately get 2 fish and hour rather than 1. Of course ultimately the most important aspect of this deal is it's voluntary. Socialism evolved over time and to use your definition would be inaccurate because it pretends everything after never happened. the idea of collective ownership evolved to be the government representing the collective. The reason Marx's true vision never happened is simply down to his arguments and predictions been economically wrong.

  • Interesting.  Locke's world would be the economic system of free/private enterprise, not capitalism.  Capitalism is the financed exploitation of markets for rentier profit.  The U.S. economy was built via free/private enterprise, capitalism destroyed that and inserted a system of franchised subservient dependency.

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