Marx and the Market

A couple of years ago I spoke at a Leadership conference in Portland, Oregon. The title of my presentation was “A Managerial Response to the Marxist Critique of Capitalism.” My premise was that Marx did have a point about the exploitation of the worker, and how capitalism as a system can generate a sense of alienation of the worker from the personal satisfaction of work. I enjoyed the talk, wrote a paper, and am still trying to get it published.

Now Peter Coy, in Bloomberg Business Week, has written an article about Marx. It is in this week’s edition. His premise is “The economic crisis has made the philosopher’s ideas relevant again, but the world shouldn’t forget what Marx got wrong.” He argues that most of Marx’s predictions have failed, and many of his followers were the worst mass murders of history. I agree with his argument, however, as the old saying goes “keep your friends close, but your enemies closer.”

Coy points out that “Marx said that the proletariat [worker] isn’t paid enough to buy the stuff that capitalists produce.” Coy is paraphrasing, but is accurate. Marx felt that the Bourgeois, Business Owner, is motivated to do two things. Pay subsistent wages and maintain a large army of unemployed. Therefore, the workers can be controlled and more surplus profit can be generated.

Marx also felt that the owners of production would become fewer, but larger, entities. Which means a smaller number of producers would control the market. At least until the Proletariat had had enough and would rise up and overthrow the Bourgeois.

Coy goes on to draw a comparison of today’s global economy with the economy in the 1800’s when Marx was alive. Coy does make a good point when he describes the productivity gains in the early industrial age as incredible, and how this is similar to the reasons we are currently at a 9% plus unemployment – productivity gains due to technology.

Reading the economic philosophy of Marx is a difficult. I would agree with Coy that Marx’s political philosophy has failed. Communism has not taken over the world. However, Marx’s critique of Capitalism is a relevant discussion. How managers treat employees, pay employees, and develop employees is very important. Today there are many companies that exploit their employees. They will often tell their employees that if they don’t like how they are treated don’t let the door hit you in the behind on your way out. This is a costly and inefficient way of operating.

Therefore, we need to listen to Marx, and then make a decision on how we intend to treat people. Will we as managers exploit, or will we help the employee develop their skills, and give them the opportunity to find purpose in their work. I firmly believe it is the employee’s responsibility to find meaning in their job, but I also believe it is the manager’s job to develop an atmosphere that support this endeavor.

And that is my thought for the day!


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