Baleful Prophesies

Marx saw capitalism as inevitably leading’ to socialism. In Marx’s world, technological advances enable capitalists to replace workers with machinery as a means of earning greater profits. But this increasing accumulation of capital has two contradictory consequences. As the supply of available capital increases, the rate of profit on capital falls. AI the same time, with fewer jobs, the unemployment rate rises and wags fall. In Marx’s terms, the “reserve army of the unemployed” would grow, and the working class
would become increasingly “mesmerized”-hv which he meant that working conditions would deteriorate and workers would grow progress\’e'” alienate- rl from their jobs.

The economic interpretation oj history is one of Marx’s lasting contributions to “‘enters thought. Marx argued that economic interests lie behind and determine our values. do business executives vote for conservative candidates, while labor leaders support those who advocate raising the minimum wage or increasing unemployment benefits? The reason, Marx held, is that people’s beliefs and ideologies reflect the material interests of their social and economic class. In fact, Marx’s approach is hardly foreign to mainstream economics. It generalizes Adam ‘Smith’s analysis of self-interest from the dollar votes of the marketplace toballot votes of elections.