READ AND DISCUSS:

Old property relations become a barrier to new economic development

In the previous paragraphs of the Manifesto, Marx and Engels emphasised how the rise of capitalism – if at the expense of the poor and the planet – had enormously advanced world production and trade. While feudalism had brought society forward for a time, it had then become a barrier - a ‘fetter’ - on further development. It had been swept aside by a new system, capitalism.

But now the Manifesto explains how the same process was happening once again. Capitalism was now becoming a barrier too. It was no longer capable of making full use of the productive forces it had created.

1. Why does the Manifesto compare capitalism to a sorcerer no longer able to control its own spells?

Capitalist crisis of ‘overproduction’

The Manifesto spells out how capitalism is a system that has crisis wired into its workings – something Marx would write about in much greater detail in Capital and elsewhere. He explained how capitalism is a system that is unable to permanently keep driving the world economy forwards. Periodically, it hits a roadblock and goes into crisis. Why? Because it has created ‘too much’!

In a world filled with poverty and need, how is it possible to ‘overproduce’? In short, Marx explained, because the source of capitalist profit is the ‘unpaid labour of the working class’. The capitalists pay their workforce less in wages than the value of the goods that they have produced. They can then pocket the rest as profit – once they have sold those surplus goods of course.

However, capitalism has an insoluble problem. The working-class also provides the main market for the goods made by capitalism. So, if workers aren’t being paid enough to buy all the goods that their labour has produced, the capitalists can’t sell them either.

In his 1880 pamphlet, ‘Socialism: Utopian and Scientific ²⁰’, Engels described how, to recover from crisis, ‘productive forces and products are wasted and destroyed’: “Commerce is at a stand-still, the markets are glutted, products accumulate, as multitudinous as they are unsaleable, hard cash disappears, credit vanishes, factories are closed, the mass of the workers are in want of the means of subsistence, because they have produced too much of the means of subsistence; bankruptcy follows upon bankruptcy, execution upon execution. The stagnation lasts for years; productive forces and products are wasted and destroyed wholesale, until the accumulated mass of commodities finally filters off, more or less depreciated in value, until production and exchange gradually begin to move again. Little by little, the pace quickens. It becomes a trot. The industrial trot breaks into a canter, the canter in turn grows into the headlong gallop of a perfect steeplechase of industry, commercial credit, and speculation, which finally, after breakneck leaps, ends where it began - in the ditch of a crisis”.

2. Where would you say the world economy is at the moment in that cycle? What companies do you know that are looking to close their factories

3. In the last paragraph quoted from the Manifesto above, as well as “destruction of a mass of productive forces”, Marx and Engels describe another way that capitalism tries to rescue itself from one of its periodic crises. What is it?

Marx and Engels were writing at a time when capitalism had not yet exhausted all its possibilities for ‘exploiting new markets’ and ‘more thoroughly exploiting old ones’. In the declining capitalism of the twenty-first century, just as the Manifesto predicts, capitalism is now a system that can only offer “more extensive and more destructive crises”. That’s why the world is overripe for a socialist transformation of society.