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Marx May Have Had a Point
Hitting the mainpage for the first time, Black Sabbath writes "While communism has been declared dead and buried (with a few stubborn exceptions), Karl Marx's diagnosis of capitalism's ills seem quite bang on the money. Harvard Business Review blogger Umair Haque lists where Marx may have been right."
It's a pretty good read once you get past the author's three paragraph disclaimer that he is not a communist. The MIT news also ran a short interview discussing the economic trends in August this morning.
I think everyone knew that even Capitalism has its down sides, we just agreed that they were acceptable. Yeah, he may have been right, but it's nothing we didn't already know.
Actually, as the article shows, he had several. However, the people who most loudly proclaimed to be acting out "Marxist ideals" generally had no idea what his points were. One point that was crucial to Marxism - and not mentioned in the article - is that Marx was specifically laying out the communist manifesto for smaller countries (no larger than Germany or the UK) as he did not expect it to be applicable to larger countries like Russia or China.
While he never outwardly admitted it, he likely realized on some level that an idealistic approach such as his communism would not be able to stand up to the crushing weight of human want and corruption in a large country. Which is, of course, exactly what happened in Russia and China; neither of which ever accomplished true communism on a national scale.
Damn_registrars has no butt-hole. Damn_registrars has no use for a butt-hole.
And it's been something economists, philosophers, politicians and, y'know, the actually wealthy have all been struggling with since capitalism was a thing. Wealth accumulates. That's what it does. Much has been said for and against the process (See Rawls, Nozick, et al.) by which this wealth is then redistributed. But in the end it really just boils down to Marx's depiction of haves and have-nots. It's just as true now as it was when he wrote Das Kapital.
Karl Marx's diagnosis of capitalism's ills seem quite bang on the money.
*squint*
I see what you did there...
Our culture doesn't get smarter, it just finds new ways of being retarded.
In the United States: The abolition of slavery, taxation, social security, child labor laws, welfare, the interstate highway system, eminent domain, anti-trust laws (Sherman Act), minimum wage, the draft, the inability to sell your organs, pollution laws, laws against exploiting poor people, the list is endless really. We started out as a very Capitalist nation and have slowly migrated to a better middle ground with some Socialist programs and laws. Conversely, China started out fairly Socialist and everyday move toward more Capitalist tendencies. You can argue all day which is the better way but the truth is that 1) for every country it's different and 2) the best solution is always somewhere in between the spectrum of capitalism and socialism. So you can shut up about demanding "pure capitalism" and "truly free markets" just as well as you can stop branding someone a "socialist" for merely proposing or exploring or investigating movements toward the middle.
My work here is dung.
Has made both labor and capital obsolete. Capital has been defined as sufficient money to contract salaried labor. It other words, nothing but the force and ability to gather and organize labor, by paying for it. Technology substitutes a lot of the labor, and now, it's substituting the methods for gathering, organizing, and paying for the labor.
Capitalism died a long time ago, but (almost) nobody knows how to work any other way. Humanism remains an idea nobody has ever heard of.
Build your own energy sources from scratch. http://otherpower.com/
Would you rather be poor in Marx's day or today? It seems to me that today's poor have it pretty good, considering.
You could also argue that a big part of the problem of late is people living beyond their means. A nice, but modest, suburban home like the one you grew up in is no longer acceptable. Now, you need a McMansion, and that drives the overextension and the debt. Just watch any of the "Real Housewives" shows.
In terms of immiseration, the problem isn't exploitation but globalization (and cheap transport and communications). Back in the day, you competed for wages largely with people in your own country. Now, you're competing with workers from around the world.
But there needs to be some way to prevent capital from influencing politics, especially in a democracy. Our representatives are owned wholly by the people that give them the most money, and until we definitively block money from being a driving force in politics we will be ruled by the richest.
Barring direct financial contribution to political candidates and forcing them to run on equal funds would help. Barring the movement between high public office and private business, especially government contractors, would help as well. Good luck on any of this every coming to pass. Our elected representatives directly benefit off the system the way it is now, and as they're the only ones who can legally change it, we're pretty much effed...at least, until the general public breaks out the torches and pitchforks and goes all French Revolution on their asses.
Banks fail, then they are bailed out like socialism so you retroactively apply socialism to the reason they are a failure?
Bakunin saw that Marx was right in his analysis of capitol, but did not appreciate the dangers of the state either. He famously said "liberty without socialism is privilege, injustice; and that socialism without liberty is slavery and brutality". Marx accurately predicted the end state of Capitalism. Bakunin accurately predicted the end state of Marxism.
Give me Classic Slashdot or give me death!
But identifying a problem is not identical to finding the correct solution.
The author's examples do not support his point. Over the time period where he shows that average workers incomes have stagnated is the same time period where the government has increasingly intervened in the market on the basis of socialistic principles. The examples the author gives of the "failures" of capitalism are the result of the government applying Marxian theory to "ease" the failings of capitalism. This does not mean that capitalism is perfect, no system involving humans, or designed by humans, will be.
This is a common argument I see: problem A is evidence that we need more government regulation, even though problem A was caused by bad government regulation in the first place. Problem B is evidence that Marx was right, even though problem B is the result of applying Marx's theories (usually partially).
The truth is that all men having power ought to be mistrusted. James Madison
"card carrying communist!!"
Given that a suspicious looking brown guy whose political mentor in Chicago was a communist domestic terrorist has been elected President, I think you're safe Haque.
(Let the battle between "+1 Funny" and "-1 Troll" commence!)
Lehman Brothers was allowed to fail which resulted in making the financial crisis much worst. It was a test of pure capitalism that failed.
Consider advancements in automation, robotics, AI, and networking... the world is increasingly becoming run by non-humans. The only impediments to our continued success are global natural disasters, climate change, disease, war, political and religious extremism... The means of production will be irrelevant, it's only the access to the raw materials, security, free flow of information, and goods and services that will determine our collective prosperity.
The free market is not the panacea that most purist make it out to be either. Every system has its benefits and drawbacks. However, although we may have our industrial and commerce sectors based on corporatism, our financial markets are very close to lassez-faire capitalism, which isn't exactly the shining example that free-market purists make it out to be.
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In unregulated capitalism, the power brokers can set the cost of entry so high that people do not have the choice to start their own business. Monopoly power, left unchecked, is no different than the concentrated power of the ruling elite of a communist nation.
Communism, nor socialism did not exist in the USSR. The USSR was a state capitalist country where a wealthy elite controlled and owned all resources. Communism is a stateless society where there is no elite at all and no central planning or authority. Socialism is a system where there is a democratic system whereby the people elect those who will make economic decisions and everyone has an equal voice in economic issues.
The Economy of the USSR is actually pretty similar to that of the USA, with a wealthy, powerful elite that controls all of the resources (capitalism). There is very little difference between state capitalism and corporate capitalism, both lead to massive consolidation of wealth and capital. In the US, the corporations maintain their dominance by controlling resources and capital people depend on, and controlling markets, this is maintained by factors such as size advantages, economy of scale, and other monopolistic-oligarchistic practices. The Corporations also have their own security forces which could even protect and assert their control over these resources. The only limit on corporate, unelected power is a democratic government, corporations would vastly expand their power in the case that democratic government is weakened or abolished, and that is the goal of the Republican party, to overthrow democratic government in the US and usher in the Corporations as absolute unelected economic royalty.
Communism as i said is a stateless, anarchic system. It is the opposite of corporate capitalism or state capitalistm found in the USSR, or today in North Korea. I do not sure Communism would work as, while most people are really wonderful, eventually an evil few would try to consolidate resources and begin to build up aggregations of resources, along with a security force to maintain such control, these things usually lead to the formation of a absolute monarchy. Free market mom and pop type capitalism in absense of a democratic government is almost exactly the same as communism, and would fail for the same reason that communism can often fail, that out of the decentralisation some evil individuals will try to decentralise and consolidate power.
A democratic state is necessary to guard against the antidemocratic consolidation of power by such evil, power hungry people. Democratic states rarely form spontaneously, the trend in centralisation by a want-to-be elite is to get power and keep it. Creating a democratic state by filling the power void can pre-empt the formation of monarchies however. And the more democratic government is weakened, the more the non democratic capitalist systems will take its place. In the US today, we have an already established anti democratic agalmation of power and the more the democratic government is weakened, the more of democracy itself that we lose as the corporations become even less regulated and their powers become more boundless.
Marx was properly correct in his diagnosis of the problems of capitalism, in that it is utterly repressive and seeks to exploit common workers to enrich an elite. Capitalism also seeks to manipulate or totally destroy democratic government, as democratic government limits corporate power, eliminating democratic government would infinite expand corporate power and turn corporations into economic monarchies. We have the fact that is the fact that capitalism is an emerging economic monarchy that often fights a war with or totally defeats or pre-empts formation of democratic states. Despite what people in the US believe, our capitalist system is not associated with democracy, it is a anti-democratic system where a few control many via vast control of resources. Power corrupts people and therefore it is wise through democracy to distribute power authority, both politically and economically, this means higher income taxes on the wealthy and limits to resource ownership that assures resource and income distribution are more equal.
Marx however, was overly optimistic and believed that capitaists could be easily defeated o
Regulations, schmegulations. The reason small businesses can't compete is because big business has rigged the game to their favor, and the playing field is no longer level.
"Slow down, Cowboy! It has been 3 years, 7 months and 26 days since you last successfully posted a comment."
Capitalism certainly has lots of problems. But I think Marx looked at the wrong things. He should have asked, what has made capitalism work as well as it has so far?
There are two things that I think make capitalism work as well as it has.
Now it's clear that Capitalism doesn't always work this way; there are lots of times when there's a lack of diversity or feedback for some reason; people are rewarded for destroying value, or not rewarded for the value they create.
But in communism, as it has thus far been practiced, neither of these things are ever true. The State makes has a committee and makes one decision, and that policy is implemented nation-wide. Moreover, often it's taken as gospel truth, and it's heresy to even question it. Furthermore, when officials make decisions, there is almost guaranteed never to be the same degree of feedback, either good or bad.
So Marx saw what didn't work well, and tried to change it; but he didn't see what *did* work well, and try to keep it. On the contrary, he took away what worked well.
TCP: Why the Internet is full of SYN.
--John Kenneth Galbraith
I struggle to think how anyone could have thought up worse examples to undermine their own point, no matter how hard they tried. The turnover at McDonalds and Wal-Mart is amazing, and the very idea that these workers are happy and don't feel like exploited disposable cogs is laughable. Seriously, these two companies may be the very very worst to use as examples, in all the history of humanity, to make an argument for some kind of Stockholm Syndrome.
The dude needs to rewrite that paragraph to avoid distracting readers from his point, with that glaring over-the-top WTF. I almost wonder if he put that into his article as an "are you really reading?" joke or test.
As copyright owner of this comment, I authorize everyone to defeat any technological measure which limits access to it.
Marx's crazy ideas are only palatable to the ignorant and wishful-thinking because he got the diagnosis so spot on. The problem is that his solution is completely unworkable—much, much worse than the condition. His ultimate contribution is a resounding indictment with no real solutions offered. So nothing gained.
The flaws in Marxism were all figured out in the 1920s. Here, let me explain:
If you have goods that are directly consumable like bread or cheese you can divide them up among people evenly. That works. What doesn't work and is essentially an NP hard problem without money is how goods that are used to make other goods are used. Let's take an example of a freight railroad. What do you ship on the railroad? Shoes, fuel, tiny sub-assemblies of combine harvesters? If you have a piece of construction equipment, what do you build with it? A school, a factory, a playground, a road? In a modern economy all this creates an astonishing amount of complexity that is intractable from a central planning point of view.
How does this work in a capitalist system? Simple : Prices. The price of everything determines what the railroad ships, what the construction equipment builds, etc. In a complex investment decision, such as where to build a factory and what to produce in it, the managers use estimations based on prices of the factors of production and how much they can get for the goods produced to determine whether to build a factory, and where to build it. Prices are a distributed highly multi-threaded information system that tells people what is scarce and what is plentiful from moment to moment and thus directs production.
Prices are somewhat distorted by bank credit money creation and the associated credit cycles, which is what causes the booms and busts in capitalism. That can be fixed, but that's a topic for another day.
The history of the Soviet Union is full of massive planning errors. They built many towns in the middle of Siberia that they abandoned once the Soviet Union fell because the production output was minimal, they cost an enormous amount to heat and deliver supplies to and nobody wanted to live there. They didn't know this until they knew the real prices for running these cities. No communist government, except for the psychopathic regieme of Pol Pot ever dared to completely get rid of money, and even he admitted it was his biggest mistake!
If you want to dig into the theory of the planning problem in capitalism, I'd recommend Mises "Economic Calculation in the Socialist Commonwealth"
http://mises.org/resources.aspx?Id=71e20725-ee72-4adb-ade2-34dfdabf7755
Banks failing isn't the problem.
Actually firms failing, such as Lehman, is the problem because in a modern economy these financial institutions are all deeply interconnected. When one fails, it brings down the others like a house of cards.
So the usual naive pure free market booster solution of "just let it fail" only "works" if by "works" you mean the entire global financial system ceases to function and we are reduced to barter. Kind of a productivity and wealth killer though.
The primary reason the Mennonites and Amish succeed to a large extent is that they also have the ability to boot people who don't cooperate into the larger society. Without the power of ostracism into exile, you're left with containing subversive citizens within the commune, usually in the form of labor colonies, gulags, and similar.
In reality, the "communism" of the world isn't/wasn't true communism. True communism is a philosphy WILLINGLY adopted by THE MAJORITY (and, eventually, totality) of a given society. In the numerous (failed) implementations of Communism, the ideology has been a thin veil for the authoritarian regime that simply wanted an excuse to assume power.
Communism, true communism, isn't a bad thing in and of itself. The problem is that others used its promises to seduce the masses for their own ends. Had it been implemented true to the original philosophy, there wouldn't have been a need for a repressive system to be in place because EVERYONE would have willingly embraced the philosophy.
However, given the overall maturity of humanity as a whole, it's also a philosophy that is doomed to fail because we're not yet "advanced" enough in our thinking to WILLINGLY embrace the principles needed for a successful *TRUE* communist state to be constructed. We're still covetous, fearful, greedy, petty, and envious - no matter how much we deny it. Those are qualities that conspire against us building a better society. The politicians know this full well and are masters at exploiting those 5 negative emotions for their own ends (much the same way the communist "leaders" of yore did, with their respective peoples). That's what I mean by "advanced" - until we overcome those shortcomings, we will be unable to aspire to a better system of government.
Hence why communism is often referred to as a Utopia. The problem in the US is that "communism" == "authoritarianism" == "anti-american", and no consideration is paid to the truth of the philosophy - only to the failed dictatorships of old.
Patent laws aren't part of the free market; they're government regulation. More socialist than capitalist.
Maybe more corporate than capitalist. Not socialist though, as that would assume that the government was acting for the benefit of the people rather than corporate lobbyists (and bribe payers).
It is sad that in the USofA, you have to sped three paragraph just to state that your are not communist. This just because your are making some half positive comment on a piece of text. Witch hunt?
Those savings are insured too. You do realize that just about any bank anywhere can give you a loan? Also, banks are sitting tight on their hoards of cash in fear at the moment, so it's not like getting loans is easy anyway.
There have been bank panics before. That's what insurance is for. People who bought uninsured instruments knew they were taking a risk. When institutions fail, government should let them. After all, you don't want to privatize gains and socialize losses, do you.
"However beautiful the strategy, you should occasionally look at the results" - Winston Churchill
I thought philosophical types specialized in the "shades of grey" areas.
...they've already found the -ism that fits their preestablished view of the world / needs and aspirations.
Then they become -ists of the said -ism, and as such they preach their -ism as a perfect weapon in the endless battle against... well, whatever lies on the polar opposite of their perfectly white -ism.
Mostly all shades of gray of all other -isms out there.
Mit der Dummheit kämpfen Götter selbst vergebens
For those who have even glanced at a history of economics, Marx takes on a rather different appearance. Along with John Stuart Mill and a few others, Marx was one of the founders of analyzing the stability of market economies in the wake of early-19th century boom/bust cycles -- which according to prevailing theory were impossible.
Later, Ricardo was so thoroughly embraced (for reasons not relevant here) that most of that prior work was swept under the rug until the Great Depression. Then we had Keynes, Hicks, and others (who disinterred the works of the economists of a century earlier). They in turn were swept under the rug by the 70s until the current depression -- which the prevailing theories of the last 30+ years tell us is impossible.
And so it goes.
Lacking <sarcasm> tags,
I still think P.J. O'Rourke's Eat The Rich is the best book on this subject. Every Economics major should have to read this book. His basic premise is that almost any socioeconomic system can work provided that there is rule of law and private property rights. Take away these things and nothing works, whether it be capitalism, socialism, communism or anything else.
Proverbs 21:19
He created a flawed mechanism for analysing history. Like the Flinstones, he comically projects an 18th/19th century social relationships, back to the dawn of civilisation.
I used to jest that the Marxist deconstruction of the Jurassic revealed that it was a class struggle between herbivorous dinosaurs and large meat-eaters.
Despite this near-sightedness, Marx was EXACTLY right in his diagnosis of the evils, ills and discontents of market capitalism.
And he was just as flawed, to an equal extent, in his prescription for those evils.
The truth is, those who exploited market capitalism for exclusivity of wealth, power and domination were just as empowered to do the same thing with the intellectual and social methods of Marx's "revolution".
And really. When it comes down to it, how is the organisation of the modern corporation, with it's CEO, directors, officers and hierarchy of management bearing Q10's and quarterly projections any different from the Supreme Soviet, commissars, apparatchiks and 5-year plans? Not at all.
"Flyin' in just a sweet place,
Never been known to fail..."
The only reason to do any any work, where you are not doing work for yourself or being charitable is profit.
What's the reason to go out there and do work if you are not making a profit and you are not doing it to satisfy some other feeling of yours, like maybe you are feeling charitable that day?
Profit is the feedback mechanism that tells you that your way of spending capital/land/labor and organization of these resources is a meaningful pursuit.
Without profit motive there is no feedback mechanism that you can use to figure out if you are doing something USEFUL in the market.
Without profit resources are spent wastefully and in fact they are spent destructively (when we talk about resources being spent by force, like in case of governments doing the spending.)
Government can make you work, it can give you work to do and it can print currency to pay you a nominal salary for this work. But government cannot make your work useful in the sense that market would want to pay you for this work. Either this work will be too expensive due to all of the regulations and bureaucracy built around it, or it will be meaningless, like building and rebuilding roads that market cannot actually use for anything, and which cannot be used to trade with other people who are making something of value.
Marxism relies on people behaving like bees, which is fine for bees, it just doesn't work for people.
You can't handle the truth.
The extremists always win, but to me it seems like the best way is a healthy mixed system where we have regulated capitalism in the marketplace, and socialism for things like infrastructure and health care.
But what do I know.
Marx's analysis of the flaws of capitalism is generally considered to be reasonable. His solutions are now known not to work too well. (On the other hand, in the last century Russia has tried monarchy, democratic communism, dictatorial communism, democratic anarchy, capitalist oligarchy, and the current capitalist semi-dictatorship. None worked all that well for them.)
Marx was quite right about a key point - if capitalism is allowed to use competition between workers to drive wages down, buying power drops and the system stalls, or stabilizes with most people just above some minimum survival level. That's where we are now. (Wal-Mart has a useful way to measure this. They look at weekly store-to-store sales over each month, and observe that their customer base is presently running out of money before the end of each month, and they then stop buying until their next paycheck.)
Unions were developed to beat that problem. The purpose of unions is to force employers to pay employees more than they are economically worth. This helps both union and non-union workers; in a society where a sizable fraction of workers belong to unions, non-union employers have to pay wages competitive with union shops to avoid unionization. This was well understood in the 1930s through the 1970s. The phrase used back then was "labour should not be regarded merely as a commodity or article of commerce." That sounds strange today. Which is part of the problem.
After a slow decade in the 1970s, we got Reagan, the "great communicator", who sold America on "unfettered" capitalism. US median per-capita real income hasn't gone up much since, after a huge rise in the 1940s, 1950s, and 1960s. The US peak was in 1973.
Government is not neutral in this. Deregulation, free trade, weak antitrust and labor law enforcement, anti-union state policies, and tax cuts for the rich all helped to reduce US wages.
The point here is that the economy has more than one stable state. One stable state looks like a third-world country - wages are at poverty levels, a few people have most of the money, disposable income is low, and production is limited by available disposable income. Another stable state has much higher wages and consumption levels. The US has seen both, and has chosen the former.
As far as I know, Marx still is considered the leading philosopher in modern philosophy of history. So I assume he indeed "may have had a point"...
Oh, the beautiful gloss of greality!
The problem was not with Marx's analysis, but with his conclusions.
Oliver's law of assumed responsibility: If you're seen fixing it, you will be blamed for breaking it.
Marx described the mechanical forces driving human social evolution. Production relations are the infrastructure, they create a social superstructure. Each society evolves through a thesis-antithesis-synthesis process very similar to the ying-yang concept of Asia. So, capitalist society creates its own replacement: the industrial revolution that created capitalism has created the information revolution. Old ways of creating wealth are gradually being obsoleted. New ways are taking over. What the future society will look like? No one knows, but it will grow from the current advanced capitalist countries. A surprisingly insightful analysis can be found at Cracked: http://www.cracked.com/article_18817_5-reasons-future-will-be-ruled-by-b.s..html
I skipped right past TFS and into the inevitable flamewar and never bothered to notice that the blogger in question is Umair Haque, author of The New Capitalist Manifesto: Building a Disruptively Better Business. Haque is unapologetically pro-capitalism, and his book (which I'm reading now) is about the changes needed to make it a permanently-sustainable, society-lifting system without the government having to step in and tear it all apart.
Dewey, what part of this looks like authorities should be involved?
Capitalism is a shitty economic system.
The problem isn't that Communism doesn't work, the problem is that people are still thinking in terms of Westphalian nation-states. Communism may be difficult to impossible to implement on a large scale, but it's been successfully done many times on a small scale. There are successful intentional communities run on communist principles all over the world. Just look at the kibbutzim in Israel - they held all property in common, and even raised children communally. It was only outside economic forces from a fiercely anti-communist society that finally broke most trditional kibbutzim (there's an "urban kibbutz" movement that's building momentum in Israeli cities, but they are more akin to modern cooperatives than the traditional kibbutz). In less hostile environments, communist communities can last up to a century (the Harmony Society, which lost membership only because it was started by a religious movement where many members took vows of celibacy). Imyself live in an intentional community of students run on communist principles that has been going since 1974.
After a slow decade in the 1970s, we got Reagan, the "great communicator", who sold America on "unfettered" capitalism. US median per-capita real income hasn't gone up much since, after a huge rise in the 1940s, 1950s, and 1960s. The US peak was in 1973.
After WW2, the US stood essentially alone as an industrial power. Japan and Europe were in ruins. It took decades for foreign competition to return in a major way. When it did, in the 1970's, the results were catostrophic. The steel and auto industries were nearly wiped out.
Reagan thought that loosening controls on capitalism would restore American competitiveness. Union wages aren't of any use if the factory shuts down.
Whether it really worked for the economy as a whole is debatable but, at least for a time, it did seem improve the competivness of American businesses.
Socialism seemed to be failing against foreign competition so policy became more laissez faire.
Unfortunately, the economy is now even more complicated. American goods don't just compete with foreign goods. American labor competes with foreign labor in service of American based companies.
American companies thrive but employees and the wider society no longer benefit.
Capitalism is supposed to harness monetary greed for the greater good of society. Unfortunately, deregulation and globalisation has permited the engine of capitlism to slip its harness.
Socialism is still not competive so I think we are stuck with some sort of capitalism. Further loosening the reigns is a non-starter. Release the horse from the wagon and it may indeed run faster but the wagon won't move at all. We need a new harness. I wish I knew what it was.