103
production gave them the upper
hand over the majority of the
population, the proletariat. While
workers produced goods and
services in return for a wage,
the owners of capital—the
industrialists and factory owners—
sold those goods and services for
profit. If, as Marx believed, a
commodity’s value is based on
the labor needed to produce it,
capitalists must price the finished
goods by first adding the price of
labor to the initial commodity
cost, then adding profit. In a
capitalist system the worker
must produce more value than
he receives in wages. In this way
capitalists extract a surplus value
from the workers—this is profit.
To maximize profit, it is clearly
in the interests of the capitalist to
keep wages at a minimum but also
to introduce technology to improve
efficiency, often condemning
the workforce to degrading or
monotonous work, or even
unemployment. This exploitation
of the workforce, seen by Marx as
a necessary feature of capitalism,
denies workers both an adequate
financial reward and job ❯❯
See also: Property rights 20–21 ■ The labor theory of value 106–07 ■ Collective bargaining 134–35 ■
Central planning 142–47 ■ The social market economy 222–23 ■ Shortages in planned economies 232–33
INDUSTRIAL AND ECONOMIC REVOLUTIONS
Under capitalism...But they inadvertently
make the workers more
skilled and educated.... greed for profit leads to
overproduction of goods in
demand, causing slumps
in the economy.Capitalism constantly
falters; the economy suffers
an endless series of
economic crises.Economic instability
leads to unrest.... the means of production
are privately owned
by a minority.The minority exploits
the labor of the majority to
make profits.The workers realize
their position and
want to shake off
their oppression.A revolution occurs,
where the workers
overthrow the ruling
class and take control of
the means of production.Let the ruling
classes tremble
at a communist
revolution.By the mid-19th century new
technology and the specialization
of labor were making industry more
efficient. The result, Marx argued,
was an exploited, alienated workforce.