Financial History 135 (Fall 2020) | Page 22

Karl Marx Eugen Richter
Communist Manifesto . Industrialism did seem to be changing everything , and it was certainly creating some losers . Early industrial machines were not very productive and required little skill to operate . Then as now , supply drives down price , and industrial wages were low . Marx exhorted low wage workers to “ unite ” in revolution against the capitalists , telling them they “ have nothing to lose but their chains !” ( That “ chains ” motif again .)
Marx then began work on his magnum opus , what would become Das Kapital . ( Marx wrote for English-language newspapers but preferred to write in German .) He worked on it at the British Museum in London , where his place of study later became a shrine of sorts . It took him until 1867 to come up with Volume I . In it , he concluded that the divide between industrial workers and management was unbridgeable , that capitalists would maximize profits at the expense of workers , whose wages would inevitably decline as their numbers increased .
Marx was not the first nor the last person to effectively analyze a point in history just as conditions began to change . Alongside the path he took to the British Museum , the world was changing in ways his theories could not explain . During the 1850s , ’ 60s and ’ 70s , faster and more powerful machines used in London and elsewhere empowered those tradesmen with the skills to use them effectively , and as they became more productive their wages tended to increase rather than decline as Marx predicted . The prices of goods that could be purchased with those wages also declined as goods of all types became more plentiful . A perfectly good theory was being shot down by the dreadful specter of reality .
German philosophers may have been entranced by these socialist plans , but other , pragmatic Germans could see problems . Prussian politician Eugen Richter composed a little novel entitled Pictures of the Socialistic Future , published in 1891 , a first-person account imagining the effects of Marxist socialism on a modest German family that is initially enthusiastic for the proposed changes . Family members begin to grumble as their bank balances are confiscated ( to achieve financial equality ), their children are placed in state-run orphanages ( promoting formative equality ) and their “ unnecessary ” furnishings are taken and re-purposed . The family is temporarily heartened by the government ’ s plan to allow citizens to choose their occupations . When the citizenry registers its job preferences , however , it is discovered that there are “ a greater number of persons registered … as gamekeepers than there are hares within forty miles ’ circumference of Berlin ,” and that , “ The number of young women who have put
their names down as waitresses and public singers is very considerable .”
At the same time , “ The entries for the more arduous labors of the road paver , the stoker , the smelter are more sparse ,” and , “ Those who have manifested a desire to become cleansers of sewers are , numerically , not a strong body .” The idea is abandoned , and people are assigned jobs and relocated , with predictable effects on morale . The young and ambitious begin to leave . Fences are erected to halt the exodus . Armed sentries are ordered to shoot those attempting to flee .
Karl Marx died in 1883 , still largely deaf to the incredible material progress of the late 19th century — railroads , the telegraph and telephone , the automobile — that was occurring all around him . Most other economic thinkers around Marx couldn ’ t help but notice . Many had to concede that the institutions protecting private property and the capital markets that so quickly and ambitiously commercialized these advances were in some way responsible for this progress .
Socialism had to adjust . In London , just down the road from where Marx did his theorizing , a group of economically minded socialist thinkers coalesced , a group that could acknowledge what Marx could not . They called themselves “ Fabian ” socialists after Roman general Fabius Maximus ( Fabius the Delayer ),
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