This article titled “Karl Marx, part 1: Religion, the wrong answer to the right question” was written by Peter Thompson, for guardian.co.uk on Monday 4th April 2011 15.34 UTC

Marx famously said that all criticism begins with the criticism of religion. This is often taken to be the starting point of a position that ends with the slogan that “religion is the opium of the people”. However, as with most thinkers, this reduction to slogans does not do the ideas behind them justice. The critique of religion as a social phenomenon did not connote a dismissal of the issues behind it. Marx precedes the famous line in his Critique of Hegel’s Philosophy of Right with the contention that religion was the “sigh of the oppressed creature in a hostile world, the heart of a heartless world and the soul of soulless conditions” and that an understanding of religion has to go hand in hand with an understanding of the social conditions that gave rise to it.

The description of religion as the heart of a heartless world thus becomes a critique not of religion per se but of the world as it exists. What this shows is that his consideration of religion, politics, economics and society as a whole was not merely a philosophical exercise, but an active attempt to change the world, to help it find a new heart. “The philosophers have only interpreted the world in various ways; the point is to change it,” he wrote in his famous 11th thesis on Feuerbach, the phrase carved on his gravestone in Highgate cemetery.

Even though understanding and action were tightly linked in Marx, we can trace his understanding back separately, through two German earlier philosophers, Hegel and Feuerbach.

In Hegel he finds the concept of the idealistic dialectic as a means of understanding historical change but he uses Feuerbach’s materialism as a tool for understanding it correctly. That’s why he called his system dialectical materialism.

Hegel’s dialectic is not at all materialistic. It is based on the existence and importance of ideas, which are conceived of as almost independent of the people who have them. We are merely their puppets. It was essentially an attempt to explain change in history during the period of revolutionary upheaval around the French revolution. Why do revolutions happen, he asks, and what happens to them? Why do things not stay the same and why is some world spirit (Weltgeist) constantly changing its mind about the way it wants the world to be and introducing a new “spirit of the age” (Zeitgeist)? Taking his cue from Kant, adding in some Spinoza and a dash of neo-Platonism, Hegel maintained that change happened in the world because it was immanent in a growing development towards something as yet incomplete but which had at its core the unfolding of the idea of human freedom. History thus became simply a vessel for this unfolding, a totality which was constantly changing and completing itself through a series of constructive negations.

The dialectic is a theory of motion which posits that within every given situation there exists its own negation. The tension and interplay between the situation and its negation, produce constantly new and emergent forms of social existence. Of course there are difficulties in deciding what exactly is the negation of any particular situation. I will deal with those later.

Marx took this Hegelian and idealistic dialectical approach and added in a materialist grounding from Feuerbach who was in many ways a sort of political Ditchkins of his day. For him religion “poisons, nay destroys, the most divine feeling in man, the sense of truth”. His insight was that all forms of religious expression were merely the abstracted vague longings of the human species translated into deities and their hangers-on, or in other words a god delusion.

Marx’s real synthesis of the debate between Hegel and Feuerbach is to agree with both of them but to turn them both upside down (or back on their feet as he would have it) and locate their ideas in concrete historical situations. Hegel’s idealism and Feuerbach’s materialism had one thing in common and that was their abstraction from real concrete conditions. Hegel’s dialectic was indeed a way of understanding change in the world but it failed to recognise that change emanated from prevailing material conditions rather than from the workings of the Weltgeist. On the other hand Feuerbach’s materialism dealt only in abstract form with the way people perceived religion and did not locate the form that abstraction took in the way that people, above all classes, interacted with each other historically.

By 1848 Marx was thus able to open the Communist Manifesto with the contention that “the history of all hitherto existing society is the history of class struggles”. This, for Marx, was the real motor of history; real struggles between real classes which produced real historical outcomes which in turn went on to become new struggles as the process of the negation of the negation – “the old mole” as Marx called it – carried on burrowing away, all the time throwing up new ways of thinking which themselves went on to negate and change the world.

What I shall do in coming weeks is to look at how all of this actually works, how Marxists took up the baton and what the consequences of it all were. I shall also ask whether Marxism still has any explanatory power today, in a new age of revolutionary upheaval, or whether we have, in Hegel’s and Fukuyama’s terms, reached The End of History.

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Karl Marx, part 1: Religion, the wrong answer to the right question

Where did the wealth destroyed on Stock Markets come from?

If 20 percent of the value of world stock markets can be wiped out in one week, as has just happened, then where does that wealth actually disappear to? Is it buried in a big hole somewhere, scuttled at sea or sent on a rocket into outer space? Apparently not, but if money can simply disappear from world markets how can we make any sense of the concept of value in finance. How is it measured and where did it come from in the first place?

In the first post of this series I asked “where does money come from” and gave a brief history of the origins of money in the form of precious metal coins used to facilitate the process of trade from simple barter to the exchange of goods of different values. Without exactly defining where money comes from I hinted at the idea that monetary value is realted to the total amount of work or labour which is tied up in bringing the goods to market. That’s a theory which is known as the labour theory of value and is not always widely accepted, probably due to association with a certain Karl Marx who took that theory, which was already known by cpaitalist economists, and developed it a bit further with his concept of “socially necessary labour time”.

People who don’t subscribe to the labour theory of value believe that money comes from being rewarded for taking risks, that value is determined entirely by the balance between supply and demand, and that substantial sums of money can somehow just “grow”. They say that money doesn’t grow on trees, but that’s not too dissimilar to the idea that interest just accumulates on investments because money begets more money. In reality, investments such as stocks and bank deposits typically pass through a number of hands but end up being used to buy goods not for consumption but for increased or more efficient production. Investment of capital buys machine tools, land, property and other wherewithal to employing labour in order to create goods or services for the market which can be sold at a profit. The important point here is that the capital doesn’t generate a single penny of orginal value until the employment of labour has happened. To be profitable, the output from this process of applying labour to previously accumulated capital must be of actual use to a buying market, and must be produced with a total number of labour hours which is competitive with alternative setups, such as differently tooled machine shops employing labour under different terms and conditions. That’s pretty much all that’s meant by the “socially necessary labour time” formulation really, to counter the idea that simply getting enough people to work hard for the the most minimal wages will necessarily creaste wealth.

All wealth is created in the first place by labour, and that is the real answer to the question answer “where does money come from”. It comes from work that has been done by somebody, that has been abstracted and turned into a type of commodity itself, which can then change hands and accumulate, which can be exchanged for special kinds of products, Which can then be deployed in the employment of further labour. Capital is an accumulation of the results of previous rounds of expended labour, or “dead labour” as is sometimes expressed. The capital exchanged on world money markets then represents a further abstraction as speculators buy and sell options to receive the fruits of other people’s labour in the future, that hasn’t even been expended yet, and place bets on the likelihood of prices rising and falling.

In a serious recession, when stock markets crash, and seemingly abstract wealth is destroyed, this is not just a accountancy game played out with pieces of paper or rather electronic transfers. It does actually play out into the very real destruction of productive capacity as enterprises go under or cut back and the very concrete machinery, buildings, expertise and systems are abandoned due to lack of a buying market that can afford their products at a profitable price. All of that overcapicity which has been built up out of the relentless requirement to reinvest and expand will be scrapped, levelled, and laid waste at the greatest of human cost until enough real capital has been wiped out for the accumulation cycle to begin all over again. In the current circumstances the effects are particularly catastrophic because the downturn had been temporarily postponed for a couple of decades or so through the use of massively expanded credit, which could distort the outward shape of the cycle for a short while, but never the underlying forces at work in any free market system based on the private ownership of capital.

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How is wealth destroyed and where does wealth come from?