Marx and Engels – Errors
Marx and Engels – the Theory Errors
The Birth of Communist Theory: Marx, Engels, and the Revolutionary Tide of 1848
As revolutionary fervor ignited across Europe in 1848, Karl Marx and Friedrich Engels stood witness at the throbbing heart of industrial capitalism. This pivotal moment—far from coincidental—would prove instrumental in their formulation of communist theory. Their radical philosophy emerged directly from observing the crushing reality faced by industrial workers during the depression that marked the middle of the second technological cycle. A depression so severe that it sparked revolutions from Paris’s streets to Russia’s imperial corridors.
The Crucible of History
Marx and Engels did not conjure their political philosophy solely from abstract thought. The 1840s represented a critical inflection point in the second technological cycle, during which life was scarcely sustained.
From their vantage point in London—then the capital of the world’s most advanced industrial economy. Marx and Engels documented how those at the bottom of the economic hierarchy invariably shouldered the most crushing burdens during financial crises. The economic conditions of this period, detailed more extensively in analyses of historical depressions and revolutionary movements, provided the perfect laboratory for their developing critique of capitalism.
It is important to note that their work was genuinely collaborative. Though Marx often receives primary attribution, their political theory must be credited to both men. Their intellectual partnership was so deeply intertwined that separating their contributions proves nearly impossible.1
The Ticking Time Bomb Within Capitalism
In their revolutionary 1848 manifesto, Marx and Engels didn’t just criticize capitalism—they predicted its inevitable demise. Their intellectual bombshell: capitalism carried the seeds of its own destruction.
Why such confidence? Marx and Engels zeroed in on a fascinating paradox. Industrial capitalism, the economic powerhouse reshaping their world, suffered from what they saw as a fatal flaw—its chaotic, unplanned nature. Like a machine with misaligned gears, this “planless” system lurched between extremes. Warehouses overflowed with unsold goods while consumers elsewhere went without necessities.
This wasn’t just revolutionary rhetoric. Marx and Engels cleverly hijacked the economic establishment’s own framework against it. They weaponized Say’s Law—the prevailing economic gospel that “supply creates its demand”—to expose what they considered capitalism’s fundamental contradictions. (Modern economists have since abandoned Say’s Law, vindicating at least part of their critique.)
Perhaps most brilliantly, they identified an irreconcilable tension at capitalism’s heart: factories required increasingly sophisticated coordination and planning to function, yet remained trapped within a private property system that made truly efficient social planning impossible. This growing conflict between social production and private ownership, they argued, would eventually tear the system apart from within.
Whether visionaries or ideologues, Marx and Engels crafted an economic thriller whose final chapter remains unwritten.
The Feudal Yoke
However, the second central point in the thesis was founded upon a world which existed at that time. This was a world where the aristocracy, like Engels’ parents, controlled the emerging Industrial Revolution.2 In 1580, Queen Elizabeth I began selling monopolies to generate revenue, which the monarchy could control and spend as they saw fit. Unlike other national monarchies, the English monarchy had been very weak financially since the signing of the Magna Carta.3
The Good Thing about a weak Monarchy
By selling monopolies, the English monarchy inadvertently unleashed the method of funding the start of the Industrial Revolution. The continuous development of capitalism as a system dates back to the beginning of textile automation in the English cloth industry from the 1700s. Marx and Engels addressed the rise in wealth and power of monarchies at the expense of the working class due to the iron-clad caste system,4 which is why they created their political philosophy in the first place.
The Proletariat: Capitalism’s “Grave Diggers”
The revolutionary aspect of their theory was not just predicting capitalism’s failure but identifying who would replace it. Marx and Engels theorized that capitalism inadvertently created its replacement by producing a new “proletariat” class. The industrial workers were increasingly well-trained, disciplined, and numerous. They famously wrote in the Communist Manifesto: “What the bourgeoisie produces, above all, are its grave diggers. It’s fall and the victory of the proletariat is equally inevitable.” This prediction emerged from their observation of the rigid class structures dominating European society since the feudal era from the 800s.
The European caste system, with nobility and the church extracting wealth from workers’ labor, had persisted for nearly a millennium. Marx and Engels could not envision how this deeply entrenched system could be peacefully reformed. Their philosophy thus aimed to identify a new class capable of liberating the 95%. The European caste system had three standard classes. The first class was the aristocracy; the second was with the church. And the third class was everybody else, about 95% of the population then.
Labor Theory of Value: The Fatal Flaw
In “Das Kapital,” Marx elaborated on the economic mechanisms they believed would trigger capitalism’s downfall. Central to this was the labor theory of value—the notion that all capitalist value is explicitly derived from human labor.
According to this theory, when factory owners automated production, they extracted “surplus value” (profit) from workers’ unpaid labor. Since capitalism is hypercompetitive, they argued businesses could not simply raise prices to increase profits. Instead, they would continually automate to reduce wages. Marx and Engels witnessed this process firsthand in factories throughout England.
The Logic Error
However, their prediction contained a critical logical error. They failed to recognize that automation technology could never be sold for less than the labor it would save—otherwise, it would make no economic sense to implement. Their theory suggested that surplus value would eventually decrease to zero as automation increased, creating unemployment and civil unrest until capitalism collapsed.
This prediction was not merely an economic analysis but a political vision of how the proletariat might overthrow the ancient caste system. Yet it contained a “lulu of a booboo.” Even if workers owned the factories, profit would still face the same theoretical decline to zero based on their flawed logic.
Philosophers, Not Economic Visionaries
Marx and Engels never detailed how a communist economy or state government would function. Their work remained philosophical rather than practical—they never explained how “society” would own factories, how management would operate without antagonism, or how political power would be distributed. These crucial questions remained unanswered, revealing their limitations as visionaries.
While some credit Marx with accurately predicting certain capitalist tendencies, like larger companies sometimes absorbing smaller ones or technology causing disruption, these observations weren’t particularly insightful for 1848. Instead, they were responding to concrete, immediate problems: workers in Manchester enduring 78-84-hour workweeks under brutal conditions. Their significance lies not in their predictions but in being among the first to systematically research economic crises in technology cycles, albeit with a predetermined conclusion that capitalism must fail.
The Extremes Don’t Work
The revolutionary duo of Marx and Engels crafted a seductive vision of communism yet left a gaping void where practical details should have been. Their manifestos thundered with philosophical ideals but whispered when it came to implementation—how exactly would “society” seize the means of production? Who would resolve workplace conflicts when class antagonism was supposedly erased? By what mechanism would political power flow? These unanswered questions expose the architects of communism as dreamers rather than builders.
While admirers paint Marx as a prophetic figure who predicted capitalism’s evolution—corporate consolidation, technological displacement of workers—this gives him too much credit. These weren’t particularly profound insights in 1848; they were visible trends to any keen observer. What truly animated their work wasn’t foresight but hindsight: the brutal reality of Manchester factory workers toiling for 78-84 hours weekly under conditions that would shock modern sensibilities. Their legacy isn’t as fortunetellers but as pioneering economic crisis researchers who studied technological disruption cycles—albeit with their thumbs heavily pressing the analytical scale, predetermined to find capitalism’s fatal flaws.
Marx and Engels’ vision of special labor classes paralleled Ayn Rand’s in Atlas Shrugged despite their opposite political orientations. Both extremist views imagined labor becoming so intrinsically valuable that society would collapse without these skilled workers, through an International Brotherhood of Labor for Marx and Engels or a “strike” of the capable in Rand’s vision.
Both predictions proved incorrect because they were rooted in emotional responses to genuine suffering rather than balanced economic analysis. Marx and Engels responded to the exploitation they witnessed under early industrial capitalism. At the same time, Rand’s hatred of communism stemmed from her family’s near-starvation after her father’s pharmacy was nationalized in Russia.
Beyond Ideological Extremes
These competing philosophies share a more profound fear that resonates with many workers: becoming obsolete or reduced to a commodity. This anxiety persists because innovation continually transforms economies, as evidenced by movements like the Tea Party and various populist surges worldwide.
Today’s prosperous nations have recognized that neither extreme works. Modern economies require some degree of market management—pure capitalism and communism no longer exist anywhere on earth. Governments have learned that market oversight is necessary because they are responsible for addressing economic crashes.
Without regulatory frameworks, the 2009 Great Recession could have replicated the devastation of the 1930s Great Depression. Even during the Long Depression (1873-1896), originally called the Great Depression until 1929’s crash proved worse, large investors like JP Morgan could only partially mitigate the damage.
Marx and Engels, products of their specific historical moment during capitalism’s second Great Surge, offered a philosophy that responded to real suffering. Their legacy reminds us that economic systems must be evaluated based on theoretical elegance and practical ability to serve human needs across all social classes.
Reviewing the depressions and revolutions at the center of the technology cycles.
Wikipedia has an article on Marxism.
The Footnotes
- Friedrich Engels gathered Marx’s notes after his death, filled in the missing gaps, and then published both the 2nd and 3rd volumes of Das Kapital. He had discussed many of the ideas with Marx. They had jointly published the Communist Manifesto. Ironically, Engels was the son of a wealthy aristocrat. He was also a businessman throughout his life. He certainly didn’t practice very much of what they had theorized, to be sure. ↩︎
- Engels parents owned large cotton-textile mills in Salford England near Manchester. The worlds first industrialized city. Engels parents were devout Calvinists and raised their children accordingly—he was baptized in a Calvinist Reformed Evangelical Parish. ↩︎
- The Magna Carta was a document signed in 1215 that established the principle that the king and his government were not above the law: The Magna Carta was written by English aristocracy to protect their rights and property from King John, who was seen as tyrannical. They demanded that traditional rights be recognized, written down, and confirmed with the royal seal. This also constricted the English monarchy from raising taxes. Henry VIII greatly curtailed the Constitution of England citing the divine right of kings. This is enabled him to break with the Catholic church, primarily over finance controls and papal authority. ↩︎
- The European caste system had three standard classes. The first class was the aristocracy; the second was with the church. And the third class was everybody else, about 95% of the population then. ↩︎