On the Practical Relevance of Marxist Thought

By Renee Toback

Progressives and socialists get very different press today than we did thirty years ago. What is unchanged from thirty years ago, however, is the status of “socialism” in the United States and the usefulness of Marxist analysis.

When I received the first issue of Planners Network thirty years ago, I was a graduate student at the University of Iowa and the newsletter was a few typewritten pages. Idealistic students and professors studied Mao and the contradictions of capitalist development. Activists struggled; “poor people” had movements and advocacy planners. It was a heady time and optimism was in the air.

The exuberance of the 1970s is long gone, replaced by the gloomy specter of apathy and depression. But we must recognize that both are impostors. In many ways, thirty years later, we are light years ahead of where we were!

In the 1970s, the left was easily dismissed as a “youth movement.” McCarthyism had decimated the left and progressive activism was dismissed as a “generational conflict.” Mainstream planners as well as influential developers and their political partners dismissed socialism as an idealistic fantasy bound to end in disaster. Today, socialism is considered to be a “failure” and has lost its status in intellectual and academic discourse. But we have numerous respected Marxist and socialist leaders inside and outside the academy. We have and are experienced activists now with perspective and wisdom gained through years of work. We no longer believe we are inventing the wheel; we know we’re in this for the long haul and that the new day will not dawn tomorrow.

We also focus on concrete policy alternatives and implementation of particular projects rather than broad societal reconstruction. While there is a qualitative difference in the dynamic of today’s discussions of alternatives to capitalist development, that discussion remains vital.

The Circuit of Capital

Marxist analysis is as useful today as it ever was!

One of the most basic Marxist tenets is the circuit of capital. The general formula for economic interaction in a non-capitalist society is C-M-C. People produce commodities (C) for use. They exchange them for money (M) in order to trade for other commodities (C) that they do not produce but wish to consume. This is the general understanding of the use of money in society and the rationale for labor. One produces and trades to satisfy individual desires for material things. Money is a convenient token, easily stored and a standard measure of value.

While the vast majority of people see the exchange of goods in the marketplace as an efficient way of meeting human needs, the Capitalist has an entirely different agenda. Capitalists are in it not to satisfy human needs but to accumulate capital for themselves. Marx describes how capitalism distorts the experience of the market and in the process conceals the reality of capitalism. He illustrates the Capitalist circuit of capital, M-C-M’ (not the C-M-C of non-capitalist society).

The dynamic of capitalist society is the use of money (M) to produce commodities (C) in order to acquire more money (M’). Thus in M-C-M’ the goal is to accumulate assets. The purpose of the market is not to trade products but to amass wealth as capital to better compete in the marketplace. The success of a capitalist enterprise is measured not by the production of useful items but by the ability to increase capital, thereby gaining greater ability to accumulate money and capital. The engine of capitalist prosperity is expansion, innovation, and growth.

This framework is directly applicable to understanding “hot” urban issues and questions of social planning. The contradictions of workplace reform and the rights of workers clearly illustrate the contradictions of capitalism and the value of a dialectical approach. Mainstream economics tells us that the goal of the economy is production for the enhancement of human well-being and human happiness. It also tells us that the pursuit of profit is the path by which the “invisible hand” guides individual self-interest to the satisfaction of human needs. Simply stated, mainstream economics tells us that the production of commodities is directed by the demand for those commodities. They make it appear as if the circuit of C-M-C dominates. Individuals get what they want by producing what others want and engaging in trade.

When we look at the world of work under capitalism, we see overwork accompanied by unemployment, environmental destruction, disease and occupational injury. Even among those who succeed in the marketplace, we see functional impairment caused by stress, sleep deprivation and overwork. When we ask, “Why?” the obvious response only leaves us more confused. Overwork and stress are an inevitable result of the struggle to succeed, the conflict between work and family life. The requirement to work harder, longer and “smarter” drains leisure from our lives. So the question then is, how is it that the market mechanism produces misery in pursuit of the social good?

The answer lies at the root of capitalist production and its guiding force, the market. The capitalist market does not exist to trade commodities; it is the sine qua non of social existence. Production of commodities is incidental to accumulation, which is the central theme of capitalist society, M-C-M’. Dialectical Marxist analysis shows that the commodities produced and the external effects of production–stress, overwork, unemployment, poverty in the material and spiritual sense–are all part of the drive to accumulate, expand and grow.

People Before Profit

Therefore the popular cry of “people before profit” is an attack on the central dynamic of capitalist society. We hear this demand frequently in campaigns for environmental justice, transportation and housing equity and many other current struggles.

Housing displacement of the poor from “revitalized” urban neighborhoods is a 1990s issue and a clear illustration of the effects of the circuit of capital. The failure of housing development for the poor may be dismissed by urban orthodoxy as the result of individual greed or intractable social problems. But “successful” redevelopment efforts are central to the destruction of low-income neighborhoods, and they are tied directly to the circuit of capital.

Despite the traditionally peripheral location of landlords in the accumulation of capital, housing is increasingly drawn into the corporate dynamic. Individual landlords who own one or two housing units are increasingly an element of the economic past. Aided by the public sector in amassing large tracts of land for redevelopment, housing and neighborhood development is more and more a corporate enterprise. As housing becomes profitable, it becomes a source of capital accumulation for corporations, and neighborhoods redeveloped on this model sprout chain stores and franchise restaurants.

The contradictions of successful redevelopment in poor and minority areas give rise not mainly to a call for housing subsidies but for control over the market. Activists trace displacement to the private and unfettered ownership of land. Cooperative housing, which often seemed unworkably idealistic thirty years ago, has become a viable option. At the moment it is largely restricted to alternative private ownership of luxury coops and condominiums. But the mixture of collective and individual ownership is a model for more ambitious, imaginative and socially conscious alternatives to the private property owner/renter dynamic. Union and community sponsored coops are alternative prototypes. More socially progressive forms of collective ownership and control such as limited-equity coops and mutual housing can limit the marketability of housing.

The strength of single-issue movements like the housing movement means building enclaves of alternative practice. It does not make Marxist analysis irrelevant or require abandonment of socialist thought. We approach the body politic from a position of concrete alternatives rather than a broad theory of social restructuring. The critique of private property is implicit in the nooks and crannies of the broad social consensus that “There Is No Alternative.”

Renee Toback is an economist active in her federal workers union and in the anti-sweatshop movement. She is a member of Economy Connection (www.urpe.org), which provides speakers and resources on political economy.