COVID-19 Resurrected the Ideology of Marx?

Years from now, after the COVID-19 crisis is over, economic analysis will be divided pre and post-pandemic. The reconfiguration of the economy will bring a massive rearrangement of the different production factors that the entire world will never be the same again. If there is one strong evidence that the pandemic transformed the economy in which most businesses came to a screeching halt is that most of the people who are considered unskilled, such as the delivery workers, merchandisers, gardeners, and everyone responsible for the basic functioning of the economy are utmost needed.

Both the people from the opposite spectrum of the political line find out that the economy is no longer working because people who keep business moving were confined to their residence and allowed only to go out for important reasons. The Philippines has one of the most extended and strictest lockdowns in the world. The economy of the country stops.

The economic planners soon raised the alarm that allowing the economy to slide down further may bring it to a comatose state tough to revive. The economic gains the administration achieved in the past might flush down the drain if the business were not allowed to return to normal operations fast enough to reinvigorate the economy. Thus, wealth creation activities must be revived. In a dominantly market economy such as the Philippines, how do we create wealth?

We start with human labor productivity combined with science and technology wealth is created. Capitalism believed that human labor productivity is made unlimited with science and technology. Contrarily, most of Mr. Marx’s followers believed that wealth creation is confined only to human labor productivity. Unfortunately, Mr. Marx that human labor alone does not create value. The raw materials are a co-determinant of wealth creation. Therefore, the wanton destruction of the Chinese in the West Philippine Seas (WPS) immediately ceased the potential for wealth in that area. It is not surprising to see the apocalyptic environmental ruin in China, which they are presently exporting to the world.

The rigid belief that labor power is an exhaustible generator of wealth had various consequences. It inferred that workers should directly benefit from the production. Any surplus from the production, the worker has the power to decide how these would be used.

During the 19th century, such ideology was considered radical and still dominated the thinking of most progressive groups in the country today. Initially, dominant thinking was that additional worker always brings a further contribution to the production. However, economists introduce a brilliant idea called “marginal productivity.” Other workers contribute additional units to the output, but as more workers were added, each additional worker contributes less and less to the production.

The capitalist used the law on diminishing marginal productivity of labor (MPL) to justify low wages. Each additional merchandiser, delivery person, or waiter adds only a minuscule output or revenue to the organization, so they earn the minimum wage possible. “fair” compensation is based on the “real” output for each additional worker hired in capitalism. Therefore, the capitalist considered unreasonable the labor unions' demand to increase wages higher than the last worker’s marginal contribution. In reality, wages are often politically determined or settled through collective bargaining.

Under the market economy, wages are kept to the lowest possible level in the absence of a labor union. There is a frantic movement of jobless people looking for work the mass unemployment courtesy of the pandemic. Regardless of the technology and resources the firm owns, it is still the labor that generates value to the business.

Let us go back to Mr. Marx, the champion of the labor theory of value, who insisted that it is true that there are skilled and unskilled workers , but production is a collective endeavor. The collaborative workforce is responsible for the collective output. Therefore, the control system should be controlled by the collective producer, and any decisions to invest the surplus must be agreed upon politically.

Ideally according to Mr. Marx, there is no hierarchy of workers. Every worker is essential to the production of the collective output. Workers receive a universal basic income and receive freely distributed goods and services. The pandemic reveals that it is essentially the workforce responsible for creating value in the economy, not the owners of capital. As the economy is striving for an uphill recovery, society is slowly discovering the truth.