Why Economist Thomas Piketty Has Scared the Pants Off the American Right

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99. Marx was a Historian, his strength was connecting Economics with History

His books are read to this day by the CIA, for he was the first to really connect revolutions with economics. Marx pointed out as things go bad, you do NOT have a revolution, it is when the economy has hit bottom and is starting to recover that you have a revolution.

Marx pointed out the Reformation was more the result of economic and political power coming under the control of the then emerging "Middle Class" (what we would call the "Upper Middle Class" that part of the population earning more then what 90% of the people do, but still below the top 3% who are the true rich) and away from the old landed aristocracy. When the peasants of the Reformation tried to take the Reformation to the next level, that is to provide a greater share of the wealth of society to them, Luther ordered his supporters to put them down.

More on the German Peasant war of 1525:
http://en.wikipedia.org/wiki/German_Peasants'_War

What was pushing the Reformation was also pushing the peasants into open revolt, economic hardship tied in with the decline in weather do to what is now called the "Little Ice Age" a concept Marx did not know about and thus did not consider. On the other hand Marx did look at the problems of the peasants of the 1500s and used it to show when a revolution would occur (i.e. not as things go bad, but as things turn around).

In many ways that was Marx's strength. His concepts of economics, is rejected by other economics. I suspect the main reason is Marx takes Adam Smith policy (Marx considered himself a follow of Smith) to they logical end, and end up in a society where the rich have everything and the poor nothing, and before that occurs you will have a revolution for that is what has happened in the past.

Marx goes into the concept of "Stolen Labor" then defends it as what happens in any society, for people exchange their labor for other things. The classic "Stolen Labor" concept is when a workers builds something for his employer. What ever was made becomes the "Capital" of the employer. The workers get no further value from it, but the employer does even if the employer add nothing to the item. Over time more and more capital is the result of such "Stolen Labor". The "Stolen Labor" may have been used centuries before, but in Marx's term it is still "Stolen Labor" for the original worker who did the work to make the capital is NOT getting any profit from that labor, someone else is.

My opinion on this concept of "Stolen Labor" was that Marx was responding to those capitalists saying their investments was the key to their wealth, not the labor used to make those investments. Marx was setting up a system to justify taking the property of the wealthy on the grounds that wealth was NOT the product of anything they did, but what workers did in the past. It is a call NOT to rely on wealth as a measurement of economic health. Thus Marx both calls Capital "Stolen Wealth" and then justify such "Stolen Wealth" as something any society has to have. i.e. Capital is good and needed even if it is the product of the work of others.

Yes, Marx can be complex. When ask how he would set up a communistic society, he is reported to have said he did not know, but it would take 500 years after any labor revolution before we achieve one.

Remember the thrust of Marxism is turning power over to the bottom 90% of society, and that no ruling group has ever given up political power without a fight. How to get the system to work could only be achieved AFTER the removal from power of those people who oppose such changes. Thus the Revolution was NOT to impose Communism, but to set up a system that would lead to Communism by eliminating the power of Capitalists to prevent such improvements in society.

Thus, Marx is at his best looking at History, when Revolution will occur, and how people get power during such revolutions. In economics, his thrust was to justify a pro labor revolution, not to actually change Capitalist economic thought (Which Marx himself embraced). Marx opposition was to the CONTROL capitalists had over Society and they efforts to undermine Capitalism as an ongoing process. In Marx's view, capitalism had the seeds of its own destruction, and when that occur labor will take over as the ruling elite and take the improvements Capitalism provided and more equitable share them with all the people of society.

Side note: Marx actually has some bad words on the poor, He believed they would stab the Working Class in the back in any fight between labor and capital. Marx said that the poor, could be easily bought by Capital to attack Labor and that was done repeatedly during his life time. Thus Marx said Labor has to support the poor, but not to trust them.

Marx also pointed out a true Revolution occurs not only when things improve, but when the "Petty Bourgeois" roughly those making more the $100,000 today, are pushed into the Working Class as the rich finds out they can no longer cut the wages of the Working Class, and look to such "Petty Bourgeois" as the next place to get additional wealth from. It is these former "Petty Bourgeois" that have lead past revolutions and will do so in the future.

Thus Marx's great strength is as an historian and predictor of when a social revolution will occur. His economics is more aimed to justify a Communist take over of such a revolution then a true economic plan.

Just a comment on Karl Marx and why he is relative today, and that has to do with his study of history and his observations of what is needed to have a social revolution. His economic theories, outside of those areas, have no value today, but in regards to when we will see a social revolutions his writings are accurate.