-Ramphal Kataria
Capitalism Divides, Labour Suffers: Smith, Marx, and the Communal Strategy of Class Rule in India
Abstract
This essay undertakes a critical synthesis of Adam Smith and Karl Marx to examine capitalism as a historically transformative yet deeply exploitative social system, with particular emphasis on its contemporary manifestation in India. It argues that Smith and Marx should not be read as mere ideological opponents, but as complementary thinkers who together reveal capitalism’s dual character: extraordinary productive capacity alongside systematic inequality and dispossession. While Smith explained the mechanisms of wealth creation through markets, division of labour, and institutional order, Marx exposed the hidden social relations underpinning those mechanisms—especially exploitation rooted in surplus value, class domination, and the non-neutral role of the state.
The essay first reconstructs Adam Smith as a moral philosopher and political economist, challenging caricatures of him as a simplistic advocate of greed. It highlights Smith’s concern with moral restraint, public institutions, and the social consequences of inequality, while identifying the unresolved contradiction in his acceptance of profits and rent despite labour being the source of value. This theoretical tension becomes the entry point for Marx’s scientific critique of capitalism. The essay then presents Marx not as a failed revolutionary prophet, but as a rigorous analyst of capitalism’s structural dynamics—commodity production, exploitation of labour power, accumulation, crisis, and the class character of the state—many of which are increasingly visible in the twenty-first century.
The essay further examines why capitalism survived while historical Marxist states failed, arguing that capitalism adapted through welfare reforms, regulation, and democratic concessions, whereas centralized, authoritarian socialist models collapsed due to planning inefficiencies, political repression, and ideological rigidity. Against this backdrop, the essay turns to India as a case of “capitalism without safeguards,” marked by extreme informalisation of labour, staggering wealth concentration, weak welfare provision, and deep corporate capture of the state.
Central to the argument is the claim that communal ideology in India functions as a powerful political smokescreen that diverts attention from class exploitation. By fragmenting the working class along religious and caste lines, communalism undermines class consciousness, redirects material anger into symbolic conflict, legitimises authoritarianism, and protects capitalist interests. Drawing on Marxist theory, the essay contends that identity-based polarisation replaces livelihood as the axis of politics, allowing economic injustice to persist unchallenged.
The essay concludes with a normative call for a renewed, democratic, and socially rooted communist politics—one that subordinates Smith’s insights into wealth creation to Marx’s demand for human justice. It advocates re-centering class struggle, socialising essential resources, and guaranteeing universal dignity as the only viable path to eradicating poverty and overcoming both economic exploitation and communal division in India.
Two Thinkers, One World System
The modern world—its wealth, inequalities, political conflicts, technological dynamism, and moral contradictions—has been shaped more profoundly by capitalism than by any other economic system in human history. Capitalism is not merely an economic arrangement; it is a total social order that reorganises work, culture, politics, morality, and even human aspirations. To understand it seriously, one must grapple with two towering intellectual figures whose ideas define both its foundations and its critique: Adam Smith and Karl Marx.
Adam Smith explained how wealth is created. Karl Marx asked at whose cost. Smith gave capitalism its first systematic explanation and moral defence; Marx gave it its most rigorous, unsettling, and enduring critique. Together, they represent not simply opposing ideologies, but the two inseparable sides of capitalism itself—productivity and poverty, freedom and domination, innovation and dispossession.
This essay argues that a meaningful understanding of contemporary capitalism—especially in a country like India—requires three moves. First, a careful reconstruction of Adam Smith as a thinker of markets and morality. Second, a serious engagement with Karl Marx as a scientific analyst of exploitation, not merely as a failed prophet of revolution. Third, and most urgently, an examination of how communal ideology in India functions as a smokescreen, deflecting popular anger away from economic exploitation and fragmenting the working class along religious and cultural lines.
This is not an academic exercise alone. It is a political and moral intervention. At stake are questions of poverty, dignity, equality, and the possibility of a society in which immense wealth no longer coexists with mass deprivation.
Part I: Adam Smith and the Birth of Capitalist Political Economy
1. Adam Smith’s Historical Significance
When Adam Smith published An Inquiry into the Nature and Causes of the Wealth of Nations in 1776, he did far more than write an economics textbook. He articulated the intellectual architecture of a new social order that was emerging from the ruins of feudalism. Europe was witnessing the early stages of industrialisation, the expansion of colonial trade, and the slow erosion of aristocratic privilege. Smith gave this transformation a coherent explanation and justification.
Before Smith, wealth was often understood through the lens of mercantilism—the belief that national prosperity depended on hoarding gold, maintaining trade surpluses, and protecting domestic merchants through state power. Smith demolished this view. He argued that wealth lay not in bullion but in productive labour, not in royal decree but in human cooperation through markets.
Smith’s core question—why are some nations wealthy while others remain poor?—remains the central question of development economics today. His answer shifted attention away from rulers and towards institutions, incentives, and productivity. This move was revolutionary.
Even in the 21st century, Smith’s influence is unmistakable. Liberalisation policies, free trade agreements, deregulation, and faith in market-led growth—from Washington to New Delhi—draw intellectual legitimacy from Smithian political economy. Whether explicitly acknowledged or not, Smith underwrites the modern belief that economic growth is best achieved by unleashing markets.
Yet Smith’s project had limits. He asked how wealth is created, not how it ought to be distributed. He analysed capitalism’s engine, not its human cost. That unresolved tension is precisely where Marx would later intervene.
2. Adam Smith as a Moral Philosopher
Popular discourse often reduces Adam Smith to a caricature: the prophet of greed, selfishness, and ruthless competition. This image collapses under even minimal scrutiny. Smith was, first and foremost, a moral philosopher.
Seventeen years before Wealth of Nations, Smith published The Theory of Moral Sentiments (1759), a work concerned with sympathy, conscience, and moral judgment. Smith argued that humans are not isolated utility-maximisers. They seek approval, feel empathy, and possess an internal moral compass shaped by social interaction.
For Smith, self-interest was real—but it was socially embedded. Markets functioned not because individuals were virtuous, but because institutions, norms, and laws constrained destructive behaviour.
Markets work not because people are good, but because institutions restrain their worst impulses.
This insight is crucial. Smith never imagined capitalism as an unregulated jungle. He assumed a framework of law, morality, and public authority. When modern capitalism abandons these constraints, it violates Smith’s own assumptions.
Smith also expressed deep anxiety about the moral effects of commercial society. He worried that wealth could corrupt moral judgment, that admiration for the rich could distort social values, and that workers subjected to monotonous labour could become intellectually stunted. These concerns make Smith far more ambivalent about capitalism than his contemporary admirers admit.
3. Division of Labour: The Engine of Wealth
At the heart of Smith’s economics lies the concept of the division of labour. His famous pin factory example demonstrated how breaking production into specialised tasks dramatically increases output. Ten workers, each performing a single operation, could produce thousands of pins a day—far more than if each worked independently.
Smith identified three mechanisms behind this productivity explosion:
1. Increased dexterity through repetition
2. Time saved by avoiding task-switching
3. Technological innovation stimulated by simplified tasks
The division of labour, for Smith, was the primary source of national wealth. However, he added a crucial caveat:
The division of labour is limited by the extent of the market.
Specialisation is profitable only when there is sufficient demand. This insight connects productivity growth to market expansion and helps explain why capitalism relentlessly seeks new consumers, territories, and global markets.
Smith also acknowledged the dark side of specialisation. Repetitive labour could render workers “as stupid and ignorant as it is possible for a human creature to become.” To counter this, Smith supported public education—a strikingly progressive position for a supposed apostle of laissez-faire.
4. Labour, Value, and Price
Smith made a foundational contribution by identifying labour as the real source of wealth. In early societies, he argued, the value of goods corresponded directly to the labour required to produce them.
In capitalist societies, however, Smith introduced a complication. Market prices, he argued, consist of three components:
Wages (paid to labour)
Profits (earned by capital)
Rent (claimed by landowners)
Here lies a profound theoretical tension. If labour creates value, why do non-labouring classes receive income? Smith recognised the problem but did not resolve it. He treated profits and rent as natural deductions from the social product.
This unresolved contradiction became the theoretical opening for Marx. Smith had located the source of wealth but had not explained the legitimacy—or injustice—of its distribution.
5. The Invisible Hand Explained Clearly
The metaphor of the Invisible Hand has been elevated to near-mythical status. Smith used the phrase sparingly and cautiously. He did not claim markets are morally perfect or self-sufficient.
The Invisible Hand describes a process of decentralised coordination:
Individuals pursue their own interest
Competition limits excess profits
Prices signal scarcity and abundance
Resources flow toward higher returns
By pursuing his own interest, he frequently promotes that of society more effectually than when he really intends to promote it.
The key point is that social benefit is an unintended outcome, not a moral guarantee. It depends critically on competition, transparency, and regulation. Where monopolies or power asymmetries exist, the Invisible Hand ceases to function.
6. Smith and the Role of the State
Contrary to libertarian mythology, Smith was not hostile to the state. He assigned it three indispensable duties:
1. Defence against external threats
2. Justice, including the enforcement of contracts and property rights
3. Public works and institutions such as roads, bridges, and basic education
Smith fiercely opposed monopolies and warned that businessmen rarely gather without conspiring against the public. Most strikingly, he observed:
Civil government is instituted for the defence of the rich against the poor.
Smith acknowledged inequality as a structural feature of capitalism but believed that competition and growth would eventually diffuse prosperity. Marx would argue that this belief underestimated capitalism’s capacity to reproduce inequality.
Part II: Karl Marx and the Scientific Critique of Capitalism
1. Why Marx Still Matters
Karl Marx wrote in the 19th century, yet his relevance has intensified in the 21st. Marx did not deny capitalism’s productivity; he admired it. What he rejected was the claim that capitalism was just, stable, or eternal.
Marx’s project in Capital was not to design socialism but to anatomise capitalism—to expose its internal laws, contradictions, and dynamics. The collapse of state-socialist regimes does not invalidate this critique. Rising inequality, recurring crises, and corporate concentration have returned Marx to the centre of serious analysis.
2. Historical Materialism
Marx’s foundational concept is historical materialism: the idea that material conditions shape social life.
The economic structure forms the base of society
Politics, law, and culture form a superstructure
Dominant ideas reflect ruling-class interests
It is not the consciousness of men that determines their being, but their social being that determines their consciousness.
This framework dismantles the myth of neutral institutions and reveals ideology as a material force.
3. Commodity, Use-Value, and Exchange-Value
Marx begins Capital with the commodity. Every commodity possesses:
Use-value: its utility
Exchange-value: its market price
Capitalism subordinates use-value to exchange-value. Production is organised for profit, not need. This inversion produces abundance alongside deprivation.
4. Labour Power and Exploitation
Marx accepted Smith’s insight that labour creates value but refined it decisively. Workers sell not labour itself but labour power.
Wages reflect the cost of reproducing labour power, not the value created. The working day produces necessary labour and surplus labour.
Profit is unpaid labour.
Exploitation is structural, not moral. Even fair contracts reproduce inequality.
5. Capital Accumulation and Crisis
Surplus value is reinvested to expand production. This leads to overproduction, falling profit rates, and periodic crises. Instability is systemic, not accidental.
6. The State and Class Power
For Marx, the state is not neutral.
The executive of the modern state is but a committee for managing the common affairs of the bourgeoisie.
Law protects property; democracy masks domination.
Part III: Capitalism’s Triumph and Marxism’s Failure
Capitalism survived not just through its inherent dynamism but primarily because it developed mechanisms to address its own internal contradictions (like vast inequality and economic instability) and integrated demands from labor and socialist movements.
A. The Role of the Welfare State and Regulation
Social Safety Nets: The creation of the Welfare State (e.g., social security, unemployment insurance, public healthcare, and education) significantly mitigated the harshest consequences of free-market cycles. This provided a buffer against poverty and economic shocks, which historically fueled revolutionary sentiments.
Labor Rights: The institutionalization of trade unions and the establishment of labor laws (e.g., minimum wage, the 40-hour work week, workplace safety) provided workers with a non-revolutionary, democratic means to bargain for a fairer share of profits and better conditions. This acted as a pressure valve for class conflict.
Keynesian Economics and Regulation: After crises like the Great Depression, states adopted Keynesian principles of demand management, fiscal stimulus, and financial regulation (like separating commercial and investment banking) to stabilize the economy and prevent devastating crashes. This countered Marx's prediction that capitalism was doomed to ever-worsening cycles of crisis.
B. Economic Dynamism and Flexibility
Innovation and Adaptation: Capitalism's decentralized nature, driven by the profit motive and competition, constantly incentivizes technological and organizational innovation ("creative destruction"). This inherent dynamism allows it to adapt to changing consumer demands, resource availability, and technological shifts far more rapidly than centralized systems.
Price Mechanism: The reliance on the price mechanism (supply and demand) efficiently allocates resources and conveys information across the vast complexity of an economy. It continuously adjusts production in a way that no single central planning board could ever replicate accurately.
The historical implementation of Marxist-inspired states (primarily those following the Soviet model of a one-party state and central planning) failed due to a combination of political, economic, and social factors.
A. Economic Central Planning Inefficiencies
The Calculation Problem: The foundational flaw of Central Planning (abolishing the market) was the inability to gather, process, and act upon the necessary information to make rational economic decisions. Without competitive market prices, planners could not accurately determine consumer demand, the true cost of production, or how to allocate millions of goods efficiently. This led to chronic shortages of desired goods, surpluses of unwanted goods, and massive waste.
Lack of Incentives: Central planning removed the primary capitalist incentive (profit) but failed to replace it with an equally effective one. Workers and managers lacked the incentive to innovate, improve quality, or reduce costs, as rewards were determined by meeting quantitative output quotas rather than consumer satisfaction or profitability.
B. Authoritarianism and Suppression of Democracy
The Dictatorship of the Proletariat Became a Dictatorship Over the Proletariat: The revolutionary necessity of a single, vanguard party (often justified as a "Dictatorship of the Proletariat") quickly morphed into a permanent, highly authoritarian one-party state.
Suppression of Civil Society: By consolidating all political, economic, and social power in the hands of the party-state, these regimes systematically suppressed democracy, free speech, independent media, and judicial independence. This meant that the economic system lacked a crucial feedback mechanism: the ability for citizens to openly criticize, protest, and vote out incompetent or corrupt leadership.
Cult of Personality and Terror: The lack of democratic accountability led to the rise of cults of personality (Stalin, Mao) and the institutionalization of state terror to enforce political and economic compliance, further stifling innovation and critical thinking.
C. Ideological Rigidity
Inability to Adapt: Unlike flexible Capitalism, Marxist states often became ideologically rigid. Economic or political deviation from the official party line was seen as "counter-revolutionary." This made it extremely difficult for these systems to implement necessary reforms or course corrections when faced with new economic realities (e.g., the information age) or internal crises. The eventual attempts at reform (like Perestroika in the USSR) came too late and were often insufficient to address the systemic flaws.
Capitalism survived by absorbing and neutralizing its most dangerous critiques through democratic reform and welfare provisions, thereby securing legitimacy and stability. Marxist states failed because the core economic mechanism (central planning) was fundamentally inefficient, and the political mechanism (the one-party authoritarian state) was structurally incapable of self-correction or democratic accountability.
Part IV: India—Capitalism Without Safeguards
India exhibits capitalism’s worst tendencies: informal labour, extreme inequality, weak welfare, and corporate capture of the state. Growth has occurred without justice.
1. Informal Labour: The Backbone Without a Safety Net
The vast majority of India's workforce operates in the informal economy, meaning their employment is not subject to national labor legislation, income taxation, or social protection.
Scale of the Problem: Approximately 80-92% of India's total workforce is in the informal sector. This includes street vendors, construction workers, agricultural laborers, domestic help, and even workers in small-scale manufacturing units.
Lack of Safeguards: These workers are systematically denied basic employee benefits:
No Social Security: They lack health insurance, pensions, and unemployment benefits. This vulnerability is starkly exposed during crises like the COVID-19 lockdown, when millions of migrant informal workers were left without work, income, or a means to return home, highlighting the absence of a social safety net.
Wage Inequality: Informal workers generally earn significantly less than their formal counterparts, even with similar skills, contributing directly to extreme poverty.
"Informalization" within Formal Enterprises: Increasingly, even formal companies hire educated and experienced individuals on a temporary, contractual, or informal basis to reduce costs and bypass labor laws, a phenomenon described as a "low road to growth" that perpetuates precarity.
2. Extreme Inequality: Wealth Concentration at the Top
India is one of the most unequal countries globally, a direct result of "crony capitalism and inheritance" disproportionately channeling wealth to the very top.
Wealth Concentration: The top 10% of the Indian population holds an estimated 77% of the total national wealth.
Income Disparity: In a single year, up to 73% of the wealth generated has been captured by the richest 1%, while the poorest half of the population (approximately 670 million people) saw only a marginal increase in their wealth.
The Cost of Essential Services: Due to chronic under-investment in public services, basic necessities become luxury goods for the poor.
Healthcare Crisis: 63 million Indians are pushed into poverty every year due to catastrophic healthcare costs. The poorest states have infant mortality rates comparable to those in sub-Saharan Africa, in sharp contrast to the elite private hospitals catering to medical tourism.
Wage Gap Example: It is estimated that a minimum-wage worker in rural India would take nearly a thousand years to earn what a top executive at a leading Indian company makes in a single year.
3. Weak Welfare: Inadequate and Inefficient State Support
Despite having several social welfare programs, their design, funding, and implementation are often insufficient to provide a strong social security floor, leading to a "missing middle" who are not covered by any financial protection.
Implementation Leakages: Major schemes, like the Public Distribution System (PDS) for food grains and the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), are frequently marred by corruption, "leakage" (where grains/funds are diverted), and administrative inefficiencies. Up to 28% of the grains supplied through the PDS may not reach the intended beneficiaries.
Low Public Spending: India's public spending on social sectors like health and education remains among the lowest in the world, often declining in share of total expenditure, which directly limits the quality and reach of state services.
Isolation of Schemes: The welfare structure is often built around isolated, targeted schemes rather than a comprehensive, universal social protection system. This piecemeal approach fails to address multidimensional poverty effectively.
4. Corporate Capture of the State: The Nexus of Business and Power
"Corporate capture" describes the excessive and often undue influence of powerful business interests on government decision-making, policy formulation, and regulatory bodies.
Crony Capitalism and Political Funding: The historical and persistent feature of the Indian economy is a "partnership" approach based on close, personal relationships between major business groups and political decision-makers. The now-abolished electoral bond scheme, which allowed for anonymous corporate donations to political parties, exemplified a system of non-transparent political funding that strengthened the corporate-political nexus.
The Adani Group Case: The controversy surrounding the Adani Group serves as a high-profile example. Accusations of stock manipulation and accounting fraud were made alongside the observation of the group's extraordinary growth and benefit from government largesse, including subsidies and public contracts, often linked to the perceived closeness between its head and the ruling political establishment. This suggests a regulatory environment weakened in its capacity to discipline large private capital.
Resource Allocation Scandals: Past large-scale corruption scandals, such as those related to the preferential award of mineral resources (e.g., the illegal mining scandals in Karnataka) and telecom spectrum, demonstrate how state assets are often allocated in non-transparent ways that benefit a select few corporations over public interest.
The combination of these four factors illustrates how India's rapid economic expansion has been a process of "growth without justice," where the benefits of a capitalist system have been heavily concentrated, leaving a vast majority vulnerable due to absent social safeguards and a captured state.
Part V:The Communal Smokescreen: How Ideology Masks Class Struggle in India
The vigorous rise of a communal tone in Indian politics, from a Marxist and change agent perspective, is not merely a social phenomenon, but a deliberate and highly effective political strategy used by the ruling class (the bourgeoisie and its political representatives) to protect the underlying system of economic exploitation.
Here is an elaboration on how communalism functions as an ideological shield, preventing the poor from recognizing their shared economic interests:
1. The Division of the Proletariat
The most fundamental goal of communal politics is to break the unity of the working class.
Fragmentation by Identity: Capitalism's core conflict is between the owners of capital (Bourgeoisie) and the sellers of labour power (Proletariat). In India, the Proletariat is diverse. Communal rhetoric weaponizes religious and caste differences, turning potential allies into perceived enemies. Instead of recognizing that all informal workers face precarious wages and lack social security, workers are encouraged to view their struggle through the lens of "us vs. them" (e.g., Hindu vs. Muslim, upper caste vs. lower caste).
Result: A factory owner (capitalist) benefits immensely if his Hindu and Muslim workers are busy fighting each other over identity issues rather than uniting to demand higher wages or better working conditions.
Preventing Class Consciousness: Class consciousness is the awareness among the working class of their shared position in the system of production and their unified economic interests. Communalism actively poisons this awareness. When livelihood issues are framed as security issues or religious issues, the focus shifts away from the mode of production (which unites them) to the cultural superstructure (which divides them).
2. Diversion from Material Grievances
Communalism acts as a massive ideological red herring, diverting the intense frustration caused by economic failure toward safer, symbolic targets.
Economic Pain Misdirected: When unemployment surges, inflation makes basic goods unaffordable, and farmers face debt crises, popular anger naturally targets the government or the economic system itself. To prevent this, political narratives intensify around symbolic, cultural, or religious controversies (e.g., temple construction, cow protection, historical grievances).
Focus on Exchange-Value vs. Use-Value: While Marx argued that capitalism prioritizes Exchange-Value (Profit) over Use-Value (Human Need), communal politics makes citizens prioritize Symbolic-Value (Identity) over Use-Value (Livelihood). People are made to feel spiritually or culturally rich even as they become materially poorer.
The Shared Crisis: The economic crises facing India—such as massive informal labour, lack of universal healthcare, and collapsing public infrastructure—do not discriminate by religion. A communist perspective insists that the solution is to unite the victims of these shared crises, not to let identity politics obscure them.
3. The State as the Manager of Bourgeois Affairs
Marx described the state as the "committee for managing the common affairs of the bourgeoisie." In a communally charged political environment, this role becomes even more insidious:
Political Capture: While the ruling elite benefits from privatization, corporate tax cuts, and weakened labour laws (the "common affairs of the bourgeoisie"), they need a popular mandate. They secure this mandate by offering ideological comfort (communal identity) in exchange for material submission (acceptance of economic exploitation).
Weakening Checks and Balances: Communal fervor can be used to justify authoritarian actions, stifle dissent, and attack civil society organizations that do focus on material issues like labour rights or environmental protection. Any critique of the economic system is quickly labeled as "anti-national" or "anti-community," thereby suppressing the Smith-Marx debate entirely.
4. The Caste-Class Overlap and its Manipulation
The intersection of caste and class in India adds another layer of complexity:
Caste as a Pre-Capitalist Tool: Historically, caste determined the division of labour and restricted mobility. While capitalism formally abolished some caste restrictions, it often re-uses caste as an amplifier of exploitation. Dominant classes within each community often become the regional agents of capital accumulation.
Manipulation: Communal politics often attempts to forge unity among different caste groups within one religious identity by directing their collective resentment outwards toward a minority or marginalized group. This prevents the true class solidarity across religious lines that would challenge the economic power of the elite, irrespective of their caste or religion.
Conclusion for the Change Agent
For the communist change agent, the path to eradicating poverty and achieving equality requires a single, ruthless act of clarity: smashing the communal wall of distraction.
The urgent task is to re-educate the masses to see that their economic reality is the primary source of their suffering. Only when the focus is returned to the struggle for dignity, equal share, and the end of exploitation—a struggle that unites the poor across every religious and cultural divide—can the ideological and political defenses of the exploitative class be defeated.
The core message: The rich, regardless of their religion, exploit the poor, regardless of their religion. Unity of the exploited is the only answer to the communal agenda.
Communalism divides workers, diverts anger, legitimises authoritarianism, and protects capital. Identity replaces livelihood as the axis of politics.
Part VI: A Communist’s Call for Justice: Eradicating Poverty and Reclaiming Dignity
To conclude this discussion on Smith and Marx, we must move beyond academic debate and adopt the perspective of a change agent—a communist in the truest sense—who demands the complete eradication of poverty, the establishment of genuine equality, and the end of all forms of exploitation. This perspective is not about historical dogma; it is a moral and material imperative focused on human dignity.
The Indictment of Injustice
From this vantage point, contemporary Indian polity, and global capitalism more broadly, is fundamentally and unforgivably flawed:
1. The Failure of Smith's "Invisible Hand": Smith promised that competition and growth would uplift all. Today, especially in India, the growth has been captured at the top. The "Invisible Hand" has not distributed wealth; it has concentrated it. The market, left to its own devices, is not a force for equality but a machine for extracting surplus value from the poor, validating Marx's core critique.
The Reality of Exploitation (Marx Vindicated): The massive scale of India’s informal economy—the construction workers, manual labourers, street vendors, and landless farmers—perfectly embodies the structural exploitation Marx identified. Their wages are often below the cost of maintaining their basic life (the value of their labour power), and they have zero claim on the enormous profit (surplus value) their labour generates for corporate and political elites. Profit is, literally, their unpaid labour.
Capitalism's Contradiction: Abundance Amidst Squalor: We live in a society capable of producing immense wealth (Smith's legacy) yet tolerates abysmal poverty (Marx's contradiction). This is not an accident of policy; it is the design of the system that prioritizes exchange-value (profit) over use-value (human need). A true communist view sees this tolerance of poverty as a profound moral crime.
The Case Against Communalism
The most dangerous distraction from this core economic injustice is the vigorous communal tone dominating modern Indian politics.
Communalism is not merely a political tactic; it is the bourgeoisie's most effective tool for managing class struggle.
Divide and Rule: By pitting one religious or social group against another, the ruling class successfully fragments the proletariat. Workers—whether Hindu, Muslim, Dalit, or tribal—share the same fundamental economic reality: they are exploited by the same bosses, suffer the same precarity, and need the same social protection. Communal rhetoric makes them see each other as enemies, preventing the unified class action necessary to demand change.
Ideological Shield: The focus on cultural, religious, and identity conflicts serves as a massive ideological smokescreen, diverting attention from the real issues: the agrarian crisis, rising unemployment, the collapse of public healthcare, and the corporate capture of the state. The state manages symbolic conflicts while accelerating the economic extraction.
The Shared Oppressor: A true communist perspective demands the recognition that the fundamental oppression is economic. The landlord, the industrialist, and the corporate executive belong to a class that transcends religious identity, and their victims belong to a class that transcends it, too.
The Communist Path Forward for India
The goal is not to repeat the bureaucratic failures of the past but to build a democratic, socially owned economy that guarantees dignity and equality for all.
1. The Re-Centering of the Working Class:
The primary struggle must be against economic exploitation. All political action must be focused on empowering workers—formal and informal, urban and rural—to control the value they create.
This requires a unified front where shared class interest in livelihood, wages, and security is placed explicitly and aggressively above communal and caste divisions.
2. Social Ownership of Essentials (The People's Right to Use-Value):
Resources critical to human dignity must be removed from the logic of profit. This means social ownership and democratic control over land, major financial institutions, water, energy, and fundamental services like healthcare and education.
This is not "government ownership" but ownership by the community and the working people themselves.
3. Universal Dignity and Equal Share:
The principle is absolute: All people are equal, and equally deserve an equal share with dignity. This means universal income security, the abolition of landlessness, and social investment to eliminate all forms of precarity.
The immense wealth created by the nation's labour must be treated as a social inheritance, not the private property of a few.
The ultimate conclusion is that Adam Smith's methods of wealth creation must be subordinated to Karl Marx's principles of human justice. India cannot achieve its potential by dividing its people or by allowing the market to define its morality. The only path to genuine prosperity is through a collective awakening to the reality of exploitation and a unified demand for an equal, exploitation-free society.
The task is to re-centre class struggle, socialise essentials, and guarantee universal dignity. The rich exploit the poor regardless of religion; the poor must unite regardless of religion.
Conclusion
Contemporary global capitalism, starkly evidenced by figures like the richest 10% in India holding over 72% of national wealth (Oxfam), demonstrates an inherent tendency toward extreme wealth concentration and systemic inequality. This economic base translates into a political superstructure where industrial interests compromise genuine democracy, and social fragmentation (along religious and caste lines) is leveraged to suppress a unified opposition among the exploited majority. The commodification of basic amenities like health and education further denies a dignified life to the common person, thereby validating the fundamental Marxist critique of exploitation.
Despite the historical setbacks of centralized, authoritarian state socialism (like the USSR), the persistence of these acute crises necessitates a radical alternative. The enduring hope rests in a revitalized Marxist philosophy that advocates for social ownership of resources and equity as its central theme, ensuring work for all and curbing all forms of discrimination. By consciously addressing the failures of the past—namely, the need for internal democracy, decentralization, and economic responsiveness—the new vision of Marxian thought is viewed as the only path capable of structurally dismantling exploitation and securing a truly dignified and equitable life for the people. The answer to systemic oppression, therefore, is found not within the confines of capitalism, but in its fundamental Marxist transcendence.
References
1. Smith, Adam. The Theory of Moral Sentiments (1759)
2. Smith, Adam. The Wealth of Nations (1776)
3. Marx, Karl. Economic and Philosophic Manuscripts of 1844
4. Marx, Karl. Capital, Volume I (1867)
5. Marx, Karl & Engels, Friedrich. The Communist Manifesto (1848)
6. Wolff, Richard D. (Contemporary works on democratic socialism and Worker Self-Directed Enterprises).
