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Karl Marx the Visionary? e:\world\five\industry\marx.vision.dp e:\manage\communism\marx.vision.short.dp 1. Class Struggles. After 1850 general economic prosperity brought a gradual improvement in health and living standards. However the disparity between the rich and the poor increased. The rich got richer at a faster rate than the poor. Among the British ruling elite, the membership of that class remained remarkably stable. As wages improved, the workers wanted better and better wages. The workers began to compare their rates of increase with that of the upper class. This comparative social disparity created some feeling that a bigger slice of the pie should be enjoyed by the very workers whose labor created such profits. Richard L. Greaves, Robert Zaller, Jennifer Tolbert Roberts, Civilizations of the West (New York: HarperCollins Publishers, 1992), 744. As Big Business grew bigger and profits mounted, too many Americans felt they were not sharing sufficiently in this growth. Two thirds of American workingmen were receiving less than $12.50 a week in wages, eighty percent of the people barely subsisted, and it was estimated that 1% of American families owned more than half of the nation’s wealth. James Munves, A Short Illustrated History of the United States (New York: Grosset & Dunlap, 1965), 211. In 1890, the national wealth was $65,037,091,197. The United States had 63 million people. 11 million of its 12 million families lived on an average income of $380 a year. Roger Butterfield, The American Past (New York: Simon and Schuster, 1947), 257. The bourgeois comprised 15% of the population of the industrial west. They derived their earnings from capital, profit, rent, loans and investments. This included millionaires with servants. Richard L. Greaves, 742, 744. Main Ideas: Key Words: Analysis: 2. Capitalism Results. It is especially the emergence of the new middle class of office and service workers, supervisors, managers, and technicians that has falsified Marx’s predictions. He neither foresaw the ascendancy of this class nor the emergence of fascism, to which under Main Ideas: Key Words: Analysis: 1 certain conditions this class would lend mass support. As a prophet he proved singularly wrong when he expected the industrial proletariat to rise against the bourgeoisie. Instead of rising against it, members of the proletariat have much preferred to rise into the bourgeoisie or into the greatly expanded middle class. Henry William Spiegel, 466. Karl Marx’s view of the growth of the industrial reserve army of the unemployed gained considerable following during the protracted period of mass unemployment from which the world suffered during the Great Depression of the 1930s. Since then, however, depressions have as a rule been mild in the advanced countries. Public policies have evolved that are designed to avert mass unemployment. Henry William Spiegel, 475. Karl Marx failed to recognize, however, that the large corporation, while facilitating the concentration of control, has at the same time been instrumental in diffusing property among many small capitalists. Henry William Spiegel, 475. 3. Wages. The proletariat has in fact not been exposed to increasing misery. Instead, affluence and leisure have spread among all classes of society in Western Europe and North America. Some students of economic development hold that the gulf between these parts of the world and the underdeveloped countries has widened as incomes have increased faster in the former than in the latter. But this is not what Marx had in mind. His analysis was meant to apply to class alignments within a given country rather than to the alignment of poor and rich nations throughout the world. Henry William Spiegel, 475. The index of real wages in France increased from 55.5 in 1820 to 100 in 1900 and in Great Britain from 37 in 1790 to 100 in 1913. Because average real wages approximately doubled, there was a significant rise in the general standard of living. The majority of the population of Europe was better off on the eve of the first world war than they had been before the French Revolution. Editor Carlo A Cipolla, Professor of Economic History at University of California at Berkley, The Fontana Economic History of Europe Volume 3: The Industrial Revolution, 1700-1914 (Sussex, England: Harvester 2 Main Ideas: Key Words: Analysis: Press/Barnes & Noble, 1976), 176. During the second half of the nineteenth century, the real income of workers rose throughout the capitalist world. In England the average real wage increased rapidly throughout the 1860s and early 1870s. By 1875 it was 40 percent higher than it had been in 1862. After 10 years in which wages sagged, they again rose sharply between 1885 and 1900. By 1900, the average real wage was 33 percent higher than in 1875 and 84 percent higher than in 1850. Most of the gains in real wages can be attributed the advent of mass production techniques that permitted the prices of many commodities consumed by laborers to be lowered. As a result of new methods of producing and labor's greater purchasing power, there was a fundamental change in patterns of consumption. Workers began to eat more meats, fruits, and sweets. Mass-produced shoes and clothing, furniture, newspapers, bicycles, and other new products came within the reach of many. Unquestionably, the average worker’s lot improved substantially during the period. E. K. Hunt, University of Utah, Howard J. Sherman, University of California, Riverside, Economics: An Introduction to Traditional and Radical Views (New York: Harper & Row, Publishers, 1990), 133. 4. Big Labor. Through trade agreements, collective bargaining, political agitation, and if necessary, by strikes, boycotts, and picketing, these increasingly powerful organizations of workingmen in all countries strove for improvements in wages, hours, working conditions, and industrial security. And not without success." Francis J. Tschan, The Pennsylvania State College, Harold J. Grimm, The Ohio State University, J. Duane Squires, Colby Junior College, Edited by Walter Consuelo Langsam, Western Civilization: The Decline of Rome to The Present (Chicago, Illinois: J. B. Lippincott Company, 1947), 1125. Part of organized labor’s power was to strike. As a counterbalance to the employer's ability to lockout, or prevent workers from entering the plant until the employer's demands were met, the employees could strike. The workers could refuse to work until their demands were met. Transportation industries were particularly vulnerable to strikes. A work stoppage in any major 3 Main Ideas: Key Words: Analysis: sector could paralyze the economy. Richard L. Greaves, 765. In the 25 years from 1881 to 1906 there occurred some 38,000 strikes and lockouts, involving almost 200,000 establishments and over 9.5 million Workers. Samuel Eliot Morison, Professor of History at Harvard, And Henry Steele Commager, The Growth of The American Republic, Volume Two (New York: Oxford University Press, 1962), 246. 5. Antitrust. The most obvious effect of monopolies was to fix prices and wages and eliminate competition. In theory, the role of the liberal state was to prevent this and to keep markets free. The Sherman Act of 1890 stated, "every contract, combination, or conspiracy in restraint of trade is hereby declared to be illegal.” The Clayton Act of 1914 prohibited any merger or acquisition, horizontal, vertical or conglomerate that would substantially lessen competition or threaten monopoly. These firm sounding pronouncements had little impact on trusts. The great corporations and their lawyers could outlast federal litigators and find or buy sympathetic judges and legislatures to conform with their own interpretation of their practices. Richard L. Greaves, 739. In 1890, on the other hand, Congress attempted to restore competition through passage of the Sherman Anti-Trust Act, which declared illegal trusts and other combinations that restrained trade. The U.S. Supreme Court favored laissez-faire and consistently blocked both federal and state efforts to regulate private business. The so-called robber barons and their immense fortunes were practically unscathed as they exploited the nation’s natural resources and dominated its economic life. Harvard Sitkoff, "History of the United States," Grolier Electronic Publishing, Inc., 1993. On March 14, 1904, was Northern Securities v. United States the first of more than thirty antitrust actions begun by Theodore Roosevelt administration. The Supreme Court dissolved a holding company formed by means of stock transaction to control four of the six railway systems running from the Central states to the Pacific Coast. No criminal prosecutions followed. Charles van Doren and Robert McHenry, Webster's Guide to American History 4 Main Ideas: Key Words: Analysis: (Springfield, Massachusetts: Merriam Webster, 1967), 347. 5