Although Marxism is above all a philosophy, located slightly to the left of the philosophical ideas of the Young Hegelians like Feuerbach, Bauer and Strauss, it has always sought to project itself as essentially an economic theory. It was Marx himself who played up the economic dimension of his theory by considering "Capital" to be the cornerstone of his entire ideology.

The secret of this Marxist insistence on characterizing their ideology as an economic theory is easy to understand. For it is Marx's economic theory that proves the validity of his philosophical, political and social theories, all of which depart from the premise that economics are the driving force behind all aspects of social life.

The materialism of Feuerbach took on a purely economic dimension with Karl Marx. In the latter's philosophy, there is no independent or absolute existence for a political system, customs, traditions, ethics, society, art, literature, law or religion; they are all reflections and results of a material/economic reality as embodied in the forces of production prevailing at a given time.

The material foundation of all aspects of human  life, according to Marx, is an economic foundation which consists of two main elements: the forces of production and the relations of production, the latter being a direct reflection of the first.    

The forces of production and the relations of production at any given time, give rise to a particular political, social, moral and legal system  in which a certain art and religion will exist. Karl Marx refers to all those matters as being the superstructure based on forces and relations of production,which are the infrastructure.

This idea, which has been simplified above and which is the basis of historical materialism, is the foundation of the entire Marxist ideology, from which Karl Marx derived all the other aspects of his ideology.

The idea of class struggle, the fuel which fans the flames of the proletarian revolution that will overthrow capitalism, is based entirely on the  theory of historical materialism - which is in turn based on the idea of infrastructure and superstructure. The conflict of interest between the proletariat and the bourgeoisie and the growing enmity between the two classes is due to the production relations prevailing in the stage of capitalist development, in the sense that the exploitation which, the eyes of Marx, is the basic characteristic of the relationship between the capitalists and the proletariat, is the source of the class struggle.

The theory of violent transition from capitalism to socialism through revolutionary action, strongly endorsed by Engels in "Revolutionary Violence", and by Mao Tse-tung in "Questions of War and Strategy", 1938, where he says that armed struggle is the only way not only for the Chinese proletariat but for workers all over the world , ¹⁸³ is based on historical materialism and the theory of class struggle. The contradictions between capitalists and proletariat, and the tenacious clinging of the former to their privileged position makes a confrontation between them inevitable. As it grows both quantitatively and qualitatively, as its social consciousness matures, the proletariat will come to realize that it is only through violent revolution   that it will throw off its chains. Once it has done so, the proletariat will also have brought to an end a complete stage of historical materialism and political economy, namely, the stage of capitalism.

The theory of the dictatorship of the proletariat, which is the backbone of Marxist political theory in the transition stage between capitalism and communism, is based entirely on the ideas of historical materialism, class struggle and revolutionary violence ¹⁸⁴.

In fact, all Marx's theories on private property, the family, the state, society and laws stem from the concept of historical materialism. Yet Marxists refuse to consider their ideology as being a philosophical doctrine first and foremost, and insist on characterizing it as an economic theory. The explanation for this lies in the history of Marx himself,  who considered all philosophical systems preceding his own to be unscientific. This appears clearly in his early writings, particularly "The German Ideology", ¹⁸⁵ where he asserts that philosophy from Hellenistic times up to the time    of his contemporaries, Max Stirner and David Strauss, was a science which was not scientific. In fact, he considered that, of all the social sciences, only history could be classified as a science, and then only if it were divided into the history of nature and the history of man, which, as he says in "The German Ideology", are interrelated.

His insistence on stressing the economic dimension of his theory was a desperate attempt to confer a scientific quality on his philosophical world outlook. ¹⁸⁶  In 1867, he tried to dedicate "Capital" to Charles Darwin, thinking that this would ensure his entry into the scientific community. However, Darwin declined the honour, under the pretext that he had only a perfunctory knowledge of economics. However, this did not deter Frederick Engels, who knew and shared Marx's longing for scientific recognition, from invoking Darwin's name in the eulogy to Karl Marx which he delivered at the latter's grave site at Highgate Cemetery in London on March 17, 1883. Mourning humanity's loss of the "greatest living thinker", he says:

      "Just as Darwin discovered the law of development of organic nature, so Marx discovered the law of development of human history:¹⁸⁷ the simple fact, hitherto concealed by an overgrowth of ideology,    that mankind must first of all eat, drink,  have shelter and clothing, before it can   pursue politics, science, art. religion, etc.;   that therefore the production of the   immediate material means of subsistence    and consequently the degree of economic development attained by a given people or during a given epoch form the foundation upon which the state institutions, the legal conceptions, art and even the ideas on religion, of the people concerned have been evolved, and in the light of which they must, therefore, be explained, instead of    vice versa, as has hitherto been the case".

But it is obvious for the serious student of Marxism that it is essentially a philosophical doctrine and that the economic part of Marx's theory was just one of the many bricks he laid carefully over the foundation underpinning his entire ideology, namely, historical materialism, in the aim of bolstering that foundation. That Marx's concerns were purely philosophical is clear from his early works, such as "The Difference Between The Philosophy of Nature of Democritus and that of Epicurus" ¹⁸⁸, his articles in Kolne Zeitung, the manuscripts he wrote in 1844 which were published posthumously,¹⁸⁹ and other early essays and books, like "Critique of Hegel's Philosophy,  of the State" (1842), "Critique of Hegel's Philosophy of Rights" (1844), "The Jewish Question" (1844), "The Holy Family" (1845), "The German Ideology" (1845 - 1846), "The Poverty of Philosophy" (1847) and "The Manifesto of the Communist Party" (1848).

When they are not laying down the philosophical framework of the concept of dialectical materialism, these early works are for the most part violent criticisms of Hegel, Feuerbach, Bauer and Strauss. In other words, they are purely philosophical and/or political in character, without a trace of Marxist economics. The term "historical materialism" frequently crops up in these early writings, with the same significance it came to have later. An entire chapter of "The German Ideology" is given over to the subject. The terms "forces of production" and "relations of production" are also clearly established at this stage.

In fact, a number of pro-Marxist Western scholars also believe that Marx's economic theory was devised only to support his political theory. The British political analyst Harold Lasky notes in his book "Communism" that: "It was imperative for the communist Marx to show that an implacable enmity existed between the masters in general and the proletariat. He was able to do so through the theory of surplus value".

In the same chapter, Lasky quotes a German economist as saying that the theory of surplus value - by far the most important Marxist economic theory as the reader will see in the following pages  - does not derive its importance from its predication on economic facts but from the political and economic slogans it contains.

Innumerable examples in the early works attest to this. However, we shall content ourselves with quoting a passage from a chapter in Volume I of "The German Ideology". In a critique of Feuerbach, Marx writes under the sub-heading, "History": "The production of life, both of one's own in labour and of fresh life in procreation, now appears as a double relationship: on the one hand as a natural, on the other as a social relationship. By social we understand the co-operation of several individuals, no matter under what conditions, in what manner and to what end. It follows from this that a certain mode of production, or industrial stage, is always combined with a certain mode of co-operation, or social stage, and this mode of co-operation is itself a "productive force". Further, that the multitude of productive forces accessible to men determines the nature of society, hence, that the "history of humanity" must always be studied and treated in relation to the history of industry and exchange".

It is clear from the above passage that the concept of historical materialism, the cornerstone of Marx's entire ideology had already been fully developed at that early phase. All his writings during this period and until he settled in London were directed at establishing the concept of historical materialism - which Marx and Engels described as a "discovery" - and at interpreting all human history from this angle.

Marx's economic writings came at a later stage. Between end of May and 27 June of 1865, he wrote his first economic work, in the academic sense of the word, a paper entitled "Wages, Price and Profit". It was publicly aired first as an address he delivered in June 1865 at two sittings of the General Council of the International Working Men's Association, and was published much later - in 1898 - by his daughter, Eleonor, as a pamphlet entitled "Value, Price and Profit". The title was later amended by the Central Committee of the Soviet Communist Party to "Wages, Price and Profit". According to the Institute of Marxism-Leninism, it was in this paper that Marx first presented his theory on surplus value.¹⁹⁰

Scholars consider this book as the basis for his major work, often called the bible of Marxism, ¹⁹¹"Capital", Volume I of which was  published by Marx in London in 1867. Several unpublished works were compiled by Engels after Marx's death in 1883 and published in two subsequent volumes, Volume II in 1885 and Volume III in 1894. The chronological order in which these works appeared is no accident, but the natural result of Karl Marx's process of thinking. His youth, early education, schooling and his doctoral thesis (on Epicurus' philosophy of nature), his writings over a span of twenty years (1840/1860), his political activities during that period, as well as his articles and speeches, all clearly indicate that historical materialism is the cornerstone of his theory and that Marxism is, first and foremost, a philosophy which Marx sought to render different from other philosophies by calling it scientific and claiming that it was of universal significance. That is why he strove to give his philosophy a political dimension (with his theories of class struggle, revolutionary action, the proletarian revolution and the dictatorship of the proletariat), a social dimension (with his and Engels' theories on the family, on marriage and on private property) and an economic dimension (with theories which were only completed after his death, theories which aimed at constructing a Marxist economic system from the set of theories on labour, value and surplus value and from the side theories stemming from these two basic postulates, like the law of accumulation of capital, the law of concentration of capital, the law of pauperization, etc).

All these theories - political, social and economic - were devised to buttress the ideological or philosophical essence of  Marxism, namely, historical materialism, and to make of Marxism a comprehensive and all - encompassing ideology that could provide a theoretical framework for the entire history of mankind in all its aspects: religion, economy, law, literature, nationalities, systems of rule and social systems. It was meant to provide an answer to every question, a solution for every problem and a framework for all forms of social research. At a later stage, when this Marxist conceit (universality) combined with national pride (Russian), the Soviets and Marxists all over the world - extended their claim of universality beyond the field of social sciences to that of applied sciences, referring in their encyclopedia to "communist science" in the domains of genetics, psychology, biology, the atom, etc.

What we have sought to demonstrate with all the above is that Marxism is in essence a philosophical doctrine and not, as Marxists would have us  believe, an economic theory. A study of Marx's works shows that he started to lay the foundations of his doctrine in 1840/1841 and spent the next twenty years elaborating it as a philosophical-cum-political system.

Only later, when he realized that to make good his claim that his doctrine presented an integrated and all - encompassing world view, he had to develop the economic aspect of the theory, did he proceed to elaborate Marxian economics.

As for Engels, there is hardly a trace of economics, in the academic sense of the word, in all his writings and speeches, with the possible exception of his rather contrived - and comic - study "The Role of Labour in the Evolution of Ape to Man",¹⁹² written in 1876 and published for the first time in the forty-fourth issue of the German review, Die Neue Zeit in 1896. There is also his  role in compiling and publishing the second and third volumes of Marx's "Capital".

In May and June 1865, Marx wrote his famous "Wages, Price and Value". Two years later, in 1867, he published the first volume of his main work, "Capital". If we look at these two works, which together with his book, "A Contribution to the Critique of Political Economy" ¹⁹³ published in 1859, form his economic doctrine, we find that the two most important theories advanced by Marx in these works are those on value and surplus value. His theory on value was formulated in chapter 6 of "Wages, Price and Profit".¹⁹⁴  Two years later, he explained it in greater depth in Part I of "Capital" under the heading "Commodities and Money". In "Wages, Price and Profit", Marx explains the main theory in his economic doctrine - which is the theory of value based on labour - in terms similar to those with which he began "Capital".¹⁹⁵

We shall give a brief presentation below of the two theories which Marxists believe to be the basis of the only scientific economic system ever devised: value and surplus value. For Marxists, these theories prove the validity of Marx's philosophical and political analysis and of the exploitative essence of capitalism. Our purpose in doing so is twofold: one, to prove our claim that Marxist economics was devised to buttress the political aspect of the system and, two, to show that the system in its entirety collapses when confronted with the reality of economic life in the modern world, specifically the development of the forces of production and their reliance on oil.

     Marx's Theory of Value: In the opening lines of "Capital", Marx says: "The wealth of those societies in which the capitalist mode of production prevails, presents itself as an "immense accumulation of commodities", its unit being a single commodity. Our investigation must therefore begin with the analysis of a commodity ...The utility of a thing makes it a use-value ...A commodity such as..iron, corn, or a diamond, is therefore, so far as it is a material thing, a use-value, something useful.........In the form of      society we are about to consider, they are, in addition, the material depositories of exchange-value .........Exchange-value, at first sight, presents itself as a quantitative relation, as the proportion in which values in use in one sort are exchanged for those of another sort, a relation constantly changing with time and place ......A given  different commodity is exchanged for other commodities in the most different proportions. Instead of one exchange-value, wheat, for example, has, therefore,  a great many .........But since each commodity represents the exchange-value of a given proportion of wheat, they must, as exchange-values, be replaceable by each other or equal to each other........... Therefore, first: the valid exchange-values of a given commodity express something equal; secondly, exchange-value, generally, is only the mode of expression, the phenomenal form, of something contained in it, yet distinguishable from it .........Let us take two commodities, e.g., corn and iron. The proportions in which they are exchangeable, whatever those proportions may be, can always be represented by an equation in which a given quantity of corn is equated to some quantity of iron: ........  What does this equation tell us? It  tells us that in two different things - in 1 quarter of corn and x cwt. of iron, there exists in equal quantities something common to both. The two things must therefore be equal to a third, which in itself is neither the one nor the other.    Each of them, so far as it is exchange-value, must therefore be reducible to this third..... This common   "something" cannot be either a geometrical, a chemical, or any other natural property of commodities. Such properties claim our attention only in so far as they affect the utility of those commodities, make them use-values. But the exchange of commodities is evidently an act characterised by a total abstraction from use-value. Then one use-value is just as good as another, provided that only it be present in sufficient quantity ........As use values, commodities are, above all, of different qualities, but as exchange-values they are merely different quantities, and consequently do not contain an atom of use-value.

If then we leave out of consideration the use-value of commodities, they have only one common property left, that of being products of labour........there is nothing left but what is   common to  them all; all are reduced to one and the same sort of labour, human labour in the abstract ......A use-value, or useful article, therefore, has value only because human labour in the abstract has been embodied or materialized in it". ¹⁹⁶

In an extensive study of Marx, as part of a study of socialist theories,¹⁹⁷  an Egyptian professor of economics sums up the essence of Marx's concept as follows:

1.     Commodities comprising labour are the only commodities with value.

2.     Those commodities that include labour are the only ones that have an exchange value.

3.     The value of commodities that have an exchange-value is determined and measured by the quantity of labour they contain.

It is worth noting that in the third volume of "Capital", published by Engels in 1894, eleven years after the death of Marx, the latter states: "The theory of labour within value does not conform either with factual processes or with the real form  of production". ¹⁹⁸

Of Marx's theory of value, Dr. Galal Amin says: "There is no agreement among interpreters of Marxism, not even among Marxists themselves on the aim of Marx's theory of value". ¹⁹⁹ What Dr. Amin means is that Marx's critics and supporters disagree as to the purpose of the theory of value, whether it is to define "price" or "profit". While Marx's critics, headed by the Austrian professor, Bohm Bawerk,  tend to hold that Marx meant to determine "price", Marx's supporters, headed by the American professor, Paul Sweezy, maintain that Marx established his theory of value to explain capitalist profit.²⁰⁰

We do not agree with Dr. Amin that the aim of the theory of value is obscure. The only conclusion to be drawn from an extensive study of Marx's work, particulary of the political part of his system, is  that, contrary to what may be suggested by such texts as chapter 6 of "Wages, Price and Profit", he was less concerned with determining price than with finding an explanation for capitalist profit that would fit in with his political doctrine. The best proof of this is that the only use to which he put the theory of value was in building up his more important theory of surplus value, which he considered to be the "scientific" bulwark of his political theory.

The Theory of Surplus Value: Once Marx had established that the value of any commodity can only be measured by the amount of labour expended on it, he moved on to say that the gains of the capitalist or employer is unjustifiable acquisition. If a worker spends a certain number of hours producing a given commodity, then the capitalist employer sells that commodity for a certain price, gives the worker part of that price as wages and retains the balance, that balance represents an unjustified acquisition for the capitalist employer, since the price is the result of the labour put in by the worker. It is that balance which Karl Marx calls surplus value. ²⁰¹

Marx first defined surplus value in 1865, in  "Wages, Price and Profit" when he wrote: "The surplus value, or that part of the total value of the commodity in which the surplus labour or unpaid labour of the working man is realized, I call Profit". Marx says, furthermore, that: "A rent, Interest, and Industrial Profit are only different names for different parts of the surplus value of the commodity, or the unpaid labour enclosed in it, and they are equally derived from this source, and from this source alone. They are not derived from land as such or from capital as such, but land and capital enable their owners to get their respective shares  out of the surplus value extracted by the employing capitalist from the labourer".²⁰²

With the theory of surplus value, Marx believed that he had presented "scientific" economic proof of the exploitation of workers by the capitalist employers.

Before we try and evaluate these two basic theories of Marxist economy, it should be made clear that the theory of "Labour in Value" was not discovered by Karl Marx as is commonly believed. It is to be found in its entirety in the writings of the classic British economist, David Ricardo, specifically in  his book "Principles of Political Economy and Taxation" (1817). This may come as a surprise to Marxists who may also be surprised to know that after presenting his theory on capital in "Wages, Price and Profit" in 1865, and again in Volume I of "Capital" in 1867, Karl Marx then went back on the theory in Volume III of "Capital". This makes it difficult to continue accepting the economic part of Marx's theory, particularly when one realizes, through observation, that the essence of that theory is false, as we shall explain below.

That is undoubtedly what led Eduard Bernstein, founder of the German Social Democratic Party, to say in his book "Evolutionary Socialism", written in 1899: "The theory of surplus value based on Marx's theory of value is itself founded on an assumption that the science of economics has been proved false". ²⁰³ It is also what led the greatest economist of the twentieth century, John Maynard Keynes, to describe "Capital" as being "a contrived textbook on economics, not only wrong from the scientific point of view, but also of no importance to the modern world and inapplicable in it". ²⁰⁴

In his book "Roads to Freedom" (1918), Bertrand Russell, one of the greatest philosophers of the twentieth century, said: "The theory of surplus value is not so much of a contribution to economic theory as it is hatred expressed in abstract terms and mathematical formulae".

If Marxists are surprised to learn that it was not Marx but Ricardo who discovered the theory of the labour element in value, they will be even more surprised to learn that Marx did not discover the theory of surplus value. It was in 1824, when Marx was sixteen, that William Thompson, the Irish intellectual, presented the same theory, with the same purpose and under the same name, "surplus value". This led to the assertion by Menger that: "Those who really discovered the theory of surplus value are Goodwin, Hall and, particularly, Thompson.

The whole theory, meaning, name and assessment of the quantity of surplus, is, in fact borrowed from Thompson's book". And, centuries before Marx, Ricardo and Thompson, Ibn Khaldoun spoke of labour as the main source of value, yet he avoided Marx's two main errors, that of giving a very narrow sense to labour and that of making the concept an absolute rule on which to build what he had in mind.

Going back to Marx's economic theory, we find  that his statement about labour being the only source of value to be totally refuted by reality. This forced one of the best known Marxist Western professors of economics, R. Meek, to admit exceptions to the rule, even though he believed that those exceptions did not affect the validity of the rule in general.²⁰⁵

Let us examine a few examples before we accept or oppose professor Meek's opinion, by looking at  both direct labour and indirect or inert labour: ²⁰⁶

           Two brothers, similar as to age, physical and mental fitness, go out fishing one morning. After spending ten hours each at his work, the first returns with twenty kilograms of fish which he sells for twenty pounds, while the second returns with twenty pounds of shrimps which he sells for sixty pounds.

-           Two painters, A and B, spend ten hours each producing a painting; the first is sold for thirty pounds, the second for ten thousand pounds.

-            "A" worked for twenty years in his shop, adjoining the shop of "B". Throughout those years, each of them worked ten hours a day, alone and using no machinery (no "dead labour" according to Marx); they both manufactured wooden chests with mother of pearl inlay, sold in the Cairo souks to tourists. Yet "A" has always been  complaining that tourists prefer the products of his neighbour "B", because of the latter's innate talent, even though both have been trained in their craft by their fathers; as a result, "B"'s monthly income is almost four times as high as "A"'s.

-           "A", "B", "C" and "D" have been working for ten years on four identical machines in a factory. They are of the same age, have all had the same training programme. Yet their foreman at the factory says that if "A" ' s output is estimated to be one hundred units, "B"'s average production would be ninety, "C"'s would be eighty and "D"'s would be seventy. He attributes the difference to their different levels of intelligence, physical capacity and assimilation of experience.

-            What is produced by 1 million Soviet workers in the oil industry in Baku at the rate of 150 million hours of labour per month is  estimated at a value equal to 70 times the value of what is produced by 1 million Soviet workers in cotton plantations for the same number of hours, disregarding the role of dead or indirect labour (machines etc..).

-            "A", owner of a well-known fashion designer-house in Paris, spent one thousand hours designing a line of ladies' clothes. "B", his competitor, spent five hundred hours designing another line. At the beginning of the winter season, when both started actually producing their designs, "B"'s designs swept the market, earning him a hundred times more fame and money than "A". The following year "C" enters the competition with a new set of designs that conquer the market; the demand on the clothes manufactured by "A" and "B" falls drastically, and they have to cut their prices.

It is clear from the above examples that there are cases where value resides in elements other than the labour put into the production of goods. In the past, Marxist economists would dismiss this argument out of hand, claiming that it applied only in such rare cases, as the sale of a hair from a prophet's beard, of a letter signed by Napoleon, of a painting by Delacroix or Renoir, of a sculpture by Michel Angelo or Rodin or of a manuscript by Dante or Shakespeare.

This specious argument conveniently overlooks the fact that, as we have shown, the cases where a commodity's value does not derive from the labour put into it are too numerous to be dismissed as exceptions. And, even if, for the sake of argument, we accept that they are exceptions that do not  change the rule, the basic premises on which the   rule itself was predicated have been rendered invalid by a major development of the century, namely, the oil revolution. With the total dependence of the world economy on oil as the main source of energy and the backbone of the forces of production in our age, the Marxist claim that labour is the sole source of value becomes nonsensical. The value of oil cannot be measured in terms of the amount of   labour that has gone into extracting it, contrary to what Marx, who totally rejected nature as a source  of value, would have said. Marx held that only if the labour of man was added to the work of nature would the latter acquire value. But is such an analysis compatible with the reality of oil? Is the value of oil on the world market determined by the law of supply and demand, i.e., by the indispensable need for oil to keep the wheel of modern civilization rolling, or is it determined by the number of labour hours spent in extracting it? Obviously, the market value of oil far exceeds the value of the direct and indirect labour that has gone into extracting it.  Let us look at the following examples:

-             The same labour is expended and the same machinery is used to drill two oil wells.  Yet one will yield 10,000 barrels a day while the other will yield only five hundred. Is the effective role in determining value here played by labour or by nature?

-             The value of a barrel of North Sea crude is equal to that of a barrel of Gulf crude, despite the fact that the cost of extracting the former from offshore oil wells is five times greater than the cost of extracting Gulf crude from onshore wells. Does the equivalence in value here derive from the fact that there is an equal demand for both on the world market or does it derive from the labour element, which is very different in the two cases?

-             In some oil fields in California and the Gulf area, oil is extracted without human intervention. Pumps are placed at the mouth of the wells and the force of pressure in the production pipes can keep the oil gushing out spontaneously for tens of years. Pressure in other geological formations is sometimes so weak that injection operations have to be substituted for the natural pressure (this proved necessary in some of the oil fields in the Gulf of Suez, like the Morgan and July fields in the Ras Ghareb area). Yet in both cases, the value of the barrel of oil is the same. Does this not prove that value is determined by factors other than labour?

All of the above examples confirm that the growing importance of and demand for oil have eliminated the role of labour in determining value. In many other spheres, such as architecture, interior decoration and industrial design, labour is not the sole, or, indeed, even the main, determinant of value. Other elements, such as talent, predisposition and a better ability to benefit from training ²⁰⁷ are more important in determining value. A striking case in point is tourism. Can the national income from tourism in countries like Spain, Italy, Morocco, Tunisia, Lebanon (before  the crises) and Egypt be explained in terms of labour? What labour is involved in Egypt's  revenues from tourists visiting Abu Simbel, Luxor and Aswan or the Pyramids and the Sphinx?

Any Marxist justification of value in the last example would be self-defeating for any "dead labour" inherent in those ancient historical sites which a Marxist economist might claim as a source of their value and the revenues they generate is artistic work to which Marx's theory of value does not apply in the first place, since it is the quality and not the quantity of labour that counts in this case.

So much for the theory of value, the foundation on which Marx built his key theory of surplus value, which he defines as the amount by which the value of a product exceeds the value of its constituent elements. In fact, the reasoning process by which he moved from the theory of value to that of  surplus value is far more political than economic.

Herein lies the basic flaw of Marxists economics as a whole.  If the main defect of the theory of value lies in its rigid view of labour as the sole source of value and in its dismissal of all other sources such as nature, talent, skill or organization, the main defect of the theory of surplus value lies in its narrow perception of the role of capitalist or employer.  Marx departs from an assumption that he considered to be axiomatic, viz, that the capitalist does nothing! Such as assumption is, needless to say, contrary to logic and to reality.   The basic postulate on which the theory of surplus value is predicated is that the capitalist always makes a profit.         It follows that what he gets, which is always more than what he pays his  workers in consideration of their labour, is a  surplus value which he obtains by exploiting his workers, who, as Marx repeats twice in Volume I  of "Capital", produce more than they gain and consume. Clearly, this postulate is totally unfounded. As he may make a profit, so too can the capitalist employer incur a loss. How would a Marxist economist explain such a loss? And why should he not put the profit realized by a capitalist employer down to the law of probabilities governing all commercial enterprises? If an employer is as likely to suffer a loss as he is to make a profit, does this not mean that he has a role in the production process greater than that of a mere source of exploitation for his workers? Can his role in bringing together workers on the work premises be dismissed as irrelevant and as not representing a contribution to the production process itself? If labour is defined as direct manual labour only, where does this leave organization, management and mental work? In fact, the theory of surplus value unequivocally denies to organization and management, which are the essence of an employer’s role, the quality of Labour.²⁰⁸ And, while Marxists recognize the contribution of dead labour (site and machinery) to the production process, they do not recognize its contribution to surplus value, inasmuch as they perceive it as the result of labour performed by others and only transmitted to the capitalist employer by inheritance, a mechanism that is totally rejected by Marxism.²⁰⁹

Can anyone who has ever been involved in the field of trade or industry deny the decisive role of organization, management, marketing and personal capability in determining the success or failure of any enterprise? How would a Marxist who subscribes to the theory of surplus value explain the following phenomenon that is prevalent in Western Europe, particularly Britain, France and Italy. ²¹⁰ Identical wages are paid to two workers, similar as to age, ability, education, experience and training, one working in a public enterprise, the other in an identical but private enterprise. In fact, the private sector worker could get even more than his public sector counterpart. Is the percentage retained by the public enterprise for organization and management legitimates, while the same percentage retained by the private enterprise is labeled surplus value, the embodiment of an employer's exploitation of his workers?

In a study on the theory of value and exploitation in his book on Marxism, ²¹¹ Dr. Galal Amin points out that the theory of value does not necessarily prove the existence of exploitation. Even if we accept Marx's claim that the worker has a right to what he produces, that in itself would not prove that the capitalist exploits the workers. This proposition is based on the false assumption that  the capitalist does not contribute to the increase in the value of the commodity. In fact that is not so. On the one hand we have the capitalist's role in organization and management, and no one would dare claim, in this day and age, that management and organization are examples of non-productive labour as Engels said one hundred years ago. Reality proves that management and organization are forms of labour in the sense that they are added to the value of a commodity, which explains the fact that thousands of enterprises, both public and private, in countries like England, France, Germany and the U.S.A. are willing to pay up to two hundred thousand dollars a year for a capable and successful manager.

On the other hand, contemporary economic science recognizes the fact that mechanization of industrial or agricultural production raises the price of a commodity; that is what encourages capitalists to invest in machinery. ²¹²

In her study of Marxist economy published in 1957 in London, the world-renowned professor of economics, Joan Robinson described the way Marxists use the theory of surplus value to prove capitalist exploitation of labour as legerdemain.

Once it has been proved that the theory of surplus value, the cornerstone of the Marxist economic doctrine, fails to establish the exploitative role of capitalists in the production process, the whole structure of Marxist economics comes crashing down, and with it the political theories which the economic theory was designed to serve: the theory of class struggle, the inevitability of revolution and the ultimate collapse of the capitalist stage of development.

If we turn to other basic theories of Marxist economics, such as the law of the accumulation of capital and the law of pauperization, we would realize that time has proved their lack of validity as well. Marx predicted that as the capitalist system developed it would lead capitalists to depend on machinery and do away with workers. Now, one century later, we note that there is an ever-increasing need for workers in the capitalist systems and more jobs available for them.

As for the phenomenon of unemployment in capitalist societies, it is, in essence, only a candid way of calling a spade a spade, far better than the extensive masked unemployment in all socialist systems where there is a place for everyone in state offices, factories or farms, regardless of the actual work to be done. Moreover, in the capitalist systems the unemployed are provided with legal and social securities to guarantee them a minimum income superior to the income of most workers in the socialist systems.

According to Marx, under the law of accumulation of capital, ²¹³ the number of capitalists will dwindle, whereas the number of wage-earners will increase. In fact, the opposite is true, as the ranks   of the capitalist class are systematically swelling in industrialized capitalist countries with the incorporation of former wage-earners.

Actually, the law of accumulation of capital was proved wrong even before the death of Karl Marx in 1883 and that of Friedrich Engels in 1895. In Britain, where Marx made his permanent home, a law was promulgated in 1862 that doubled the number of firms and enterprises by establishing the pattern of shareholder companies. This led to the appearance of a new type of capitalists who did not manage their business themselves but entrusted them to experts. The result was the exact opposite of the law of accumulation of capital.

There is no doubt that the developed capitalized systems have succeeded in transforming the proletariat which existed in the time of Marx, into a Middle/Middle Class in the full sense of the term.

We refer the reader here to the report compiled by former French President Valerie Giscard d'Estaing (excerpts of which are reproduced in chapter 14 of this book) where he uses statistics to prove the upward social mobility of the working class in the capitalist countries. As to the law of pauperization according to which Marx predicts that, with the exception of a narrow circle of capitalists, most members of society would grow steadily poorer until society becomes sharply polarized into two classes: a shrinking ever-richer capitalist class, and an expanding ever-poorer proletariat, this law, like all other Marxist economic theories, was  established to serve Marx's political analysis. This  is clear from Engel's statement in 1890 on the acute conflict of interest between capitalism and the proletariat: "When the capitalist mode of production has transformed the majority of the population into a proletariat, it will have created the force that will either accept to be destroyed or will make the revolution".

The middle class, like the petty bourgeoisie, civil servants, intellectuals, small businessmen and craftsmen, would be crushed downwards to join the ranks of the proletariat, according to the law  of pauperization, one of Marx's main economic laws, as the capitalists systematically lower wages and worsen working conditions.

The years since the death of Karl Marx in 1883 have shown beyond doubt that the law of gradual pauperization is a myth that has been dispelled by steady improvement in the status of the working class.

The worker described by Marx and Engels a century ago did have to work day and night in appalling conditions and without any security: his life was a tale of woe, financially, physically and socially. In fact, the description of that life by Charles Dickens is far more eloquent than the description given by Engels in his famous book on the conditions of the English working class in the mid-nineteenth century. But that worker no longer exists in our time in the industrialized capitalist countries, although something similar still exists in the countries of Eastern Europe and the Soviet Union.

The worker in modern western societies enjoys high wages, a good life and the latest in material comforts. Scores of reliable sources and references, however, describe the poverty and the difficulty of life in the Soviet Union, particularly for the ordinary citizen who does not have the privileges of the ruling class. Unfortunately, many of those references do not exist in Arabic; the only works we do have in Arabic about life in the U.S.S.R. and in the societies of the socialist bloc are very superficial (like the book by Musa Sabri, "Communists Everywhere"). Thus we are forced to refer the reader to one of the best books written on the subject, The Russians (Sphere Books, London 1980, Seventh Edition), for which the author, the noted British journalist Hedrick Smith, was awarded the Pulitzer Prize. The reader will particularly  enjoy chapter two of part one of the book, the Art  of Queuing. ²¹⁴

The book was described by both the New York Times and the Sunday Times as a brilliant work. The Observer wrote: "If you want to know as much as possible about life in Russia today, the best thing you can do is to go to Hedrick Smith. For years to come, his book will remain the definitive introduction to Russian life". Yet, surprisingly, Arab publishers have ignored the book.

Facts and practice have proved Marx's economic theories wrong, leading John Maynard Keynes to dismiss "Capital" as having no relevance in the modern world. It has also led the famous French sociologist, George Sorel, to say: "The experience of Marx's theory of value shows the importance of remaining cryptic so as to confer solidity on an ideology!". All of this goes to show that Marx was in no way an economist. The chronology of his works shows that he only turned to economics to give a scientific dimension to his system so that it would not be looked upon merely as an off-shoot of the philosophy of the Left Hegelians. Marx's study of economics did not start as did those of Adam Smith, Ricardo and John Stuart Mill, by observing economic life in order to draw conclusions and laws; Marx's point of departure was political.

The three volumes of "Capital" indicate that Marx had been  searching for proof that capitalists exploit workers by expropriating the surplus value of their labour. This led him to formulate his economic theories of value and surplus value.

Moving now from the theoretical to the practical aspects of Marxist economics, what do we find? Have the regimes subscribing to Marx's theory in the Soviet Union, in the People's Democratic Republic of China, in Cuba and in the countries of Eastern Europe managed to provide the economic wealth which is the material basis for the highest stage of communism, when the state, laws, and private property will have disappeared and wealth and women are available to each according to his need? Our readings of serious economic studies on Marxist economics, our own observation of  socialist experiences in countries of the Third World, especially in Egypt, Syria, Iraq, Libya, and Algeria, and visits to several other countries of different social and economic levels, have all led us to believe that socialist economy can never provide the abundant productivity which is the basis for communism.

In all the socialist countries, whether they are dictatorships of the proletariat according to the Soviet model or countries of the Third World, like Nasserite Egypt and similar countries, the economic situation does not indicate any possibility of achieving the abundance of production that can allow the emergence of a communist society as envisaged by Marx. The poverty of socialist economy augurs no significant improvement for the future.

Undoubtedly too, those who relinquished public freedoms in exchange for better economic conditions have discovered that they have in fact lost both. For years socialists claimed that real freedom is economic and social, not political, yet their regimes clearly show that they have none of those freedoms.

The picture of the economic situation in countries of the socialist block that emerged from discussions with such noted experts on the subject as professor Alec Nove and from the accounts of scores of artists and intellectuals who had fled from the U.S.S.R. and other socialist countries whom I met in Paris was a shocking revelation. For years, Marxist comrades in Egypt had extolled the economic situation under socialism in general and in the Soviet Union in particular. For hours on end, the author of these lines had listened to Soviet statistics read out to young Marxists in the late sixties by the Egyptian communist leader, F.M., claiming that the citizens of socialist countries enjoyed better food, better clothes and better holidays than those of capitalist societies!

So many fictitious statistics about week-end holidays, education, sports, entertainment and health care in the Soviet Union, the paradise of the proletariat and of all the down-trodden, were repeated to us who had no references then save Soviet magazines and publications, that all-powerful weapon of communist propaganda.

The same pragmatic approach that has shaped our attitude to ideological, economic, political and social issues also shaped our perception of Marxist economics. If the tales of socialist economic successes are true, then the economic and social freedom which Marxists regard as the true essence of freedom must also exist in those societies. So too must the political freedom that ensues from economic and social freedoms. Why then the walls erected by socialist regimes around their peoples? Why the fetters that prevent them from travelling freely to that capitalist world burdened with exploitation and class inequities? How to explain the fact that the "infernal" capitalist systems allow their proletarian slaves to see the world, to visit the workers' paradise in the socialist states?

We maintain that Nasserite Egypt is the best example in the Third World of the failure of socialist economic systems where the regime controls the people's livelihood, leading to total economic, cultural, social, military and political disaster.

Socialist societies lack the main component or element of progress, the one that has allowed humanity to achieve so much, namely, individual initiative. The failure of socialist systems to realize the productive plenty which is the basis of the higher stage of communism can only be put down to the absence from such systems of this factor, the primary driving force that has propelled humanity forward through its successive stages of development. The incentives which allow the elite to carry their respective societies ever forward disappear under socialist regimes. This task is left to the broad masses who are quite simply not qualified to perform it, as borne out by the total absence of artistic creativity from socialist societies.

Is the literature of Soviet Russia comparable to that of Tzarist Russia? What has the socialist regime anywhere produced in terms of culture, music, opera, drama and cinema? If we look to scientific inventions, we find that those of the socialist states lack innovation. The atom bomb was first invented by the Americans and then produced by the Russians. The same is true of other weapons, missiles and planes, which were all invented by Westerners then reproduced by the Soviets. The pattern is repeated in other fields like medicine, engineering, electronics and other industries.

We believe that without the role of outstanding individuals and personal initiative, mankind would soon regress to stone-age level. We would go even further to say that the only hope and salvation for the masses resides in the genius of the elite, that it is thanks to the personal initiative of the latter that they obtain much more than they do in a society where the "ordinary" control power. Let the peoples of our region observe the outstanding figures which Egypt produced in all domains before Nasser's regime stifled all personal initiative.

In the field of medicine, Egypt produced great doctors in all fields of specialization, on a par with the most advanced nations of the world. In the sciences, a generation of Egyptian scientists, headed by Dr. Mesharaffa. Egypt produced such men of letters as Al Aqad, Taha Hussein, Ahmed Amin Al Mazny, Shoukry, Zaky Mubarak, Ahmed Shawqy, Hafez  Ibrahim, Al-Rafei, Al-Manfalouty and Naguib Mahfouz. In the fields of law, politics, music, sociology, psychology, architecture, etc, whole generations of great men drove Egypt forward and would, had it not been for the disaster caused by Nasser's regime, have placed Egypt on a par with the greatest nations of the world.

Yet the socialist regime in Egypt crushed personal initiative and brought the country to its present state. Why is contemporary Egypt so barren of great artists and scientists? The answer is simple: personal initiative has been crushed while it alone creates the conditions and framework for real progress.

    The greatest proof of the success of demagogically Marxist propaganda is that comparisons are still being made between the economic system of the socialist East and that of the capitalist West. In my opinion, this is like conducting a debate over whether light is stronger in daytime or at night.