Karl Marx (1818 -1883)	Revolutionary Socialism
	A spectre is haunting Europe ... the spectre of communism. Workers of the world unite! You have nothing to lose but your chains. You have a world to gain. The Communist Manifesto Karl Marx and Friedrich Engels Marx was a genius . . . the rest of us were talented at best. Friedrich Engels

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Marxism has been in retreat in recent years, but Karl Marx's footprints on the history of the 20th Century rival the legacies of Thomas Jefferson, Adam Smith, and Mohandas Gandhi. Many of Marx’s works were written collaboratively with his friend, Friedrich Engels, but Marx's contributions were always clearly dominant. His major work, Das Kapital, was intended primarily as a critique of capitalism, but his sweeping philosophy addressed issues in sociology, psychology, economics, and history.

Scholars disagree on the extent that events colored Marx's perspective, but certain strands of his personality and experience are prominent. One is that adversity often came his way. Marx's radical politics deprived him of a stable income. No university would hire him, despite his Ph.D. in philosophy from the University of Jena. Inflammatory rhetoric led to his expulsion from, first, Germany, and later, Belgium and France.

Life as an exile can be harsh. The Marx family finally settled in England, which was far too tolerant of individual freedom to expel him. Marx erratically eked out a living as a journalist, serving briefly as a foreign correspondent for the New York Herald-Tribune. (Might the course of history have been different if the newspaper had ever given him a raise?) Paradoxically, Engels was a prosperous factory owner and manager. Had it not been for occasional doles from Engels, the entire Marx household might have starved. As it was, they were destitute.

Another aspect of Marx's personality was ambivalence, which may have originated with his parents' conversion to Christianity from Judaism, supposedly more for social convenience than from conviction. During adulthood, his dual commitments to political action and scholarly understanding were often in conflict. Marx's scholarly passions frequently interfered with his political activism, while his political zeal crept into his writing. Consequently, partisan outbursts and scathing condemnations of class interests permeated all his written works.

Biographies of Marx invariably portray an autocratic and paternalistic bent in his relationships with his wife and family, which was inconsistent with his writings about proper family structures. Despite his internal turmoil, or perhaps because of it, Marx left a lasting mark on the world.

ECONOMIC DEVELOPMENT ACCORDING TO MARX

Marx foresaw an unabated course of progress and development for societies everywhere. (Optimists about the human prospect are increasingly convinced that he was wrong about the specifics.) His prognosis was that every society inevitably goes through six major stages of history, culminating in an ideal state.

1. Prehistory. Prior to the dawn of civilization, humankind consisted largely of self-sufficient but nomadic hunter-gatherers. Gradually, these random groups evolved into
2. Primitive culture. Extended families and tribes emerged during this period. Agriculture began to bind small groups to specific territories, but animal herding and hunting continued to be important. As claims to exclusive territories became more extensive, some families were more successful than others in establishing their rights to land, resulting in a system known as
3. Feudalism. The offspring of successful warlords became wealthy landholders who, though titled, typically owed their ability to protect their turf to a king. Kings typically extracted “protection” tributes from lesser wealthy landowners; however, the actual production on the manors held by these minor lords was done by peasants, who owned no land and paid a share of their crops to the titled landowners. (The sharecropping system continues to this day in many regions.) This chain of exploitation governed the social and economic behavior of all members of society from the highest-born prince to the humblest peasant. Industrialization and the gradual evolution of shopkeepers into powerful merchants slowly eroded the powers of feudal royalty, although some merchants and feudal lords became industrial magnates during the transition to
4. Capitalism. The Industrial Revolution and growth in commerce were facilitated by urbanization. Dispossessed peasants streamed into the cities. They owned no resources except their own labor because their income was held at subsistence levels. According to Marx, capitalists accumulated enormous wealth during this period through the expropriation of a surplus value equal to the difference between the total value of production and the subsistence wages paid to workers. In Marxist jargon, all rents, interest payments, and profits are surplus values. Marx predicted that ever-growing disparities between the wealth of capitalists and the impoverishment of labor would generate class conflict and the triumph of a workers' revolution. The successful revolution would lead to a transition period called the
5. Dictatorship of the proletariat. During this period, all basic industries and productive resources would be nationalized, which means that revolutionary governments would seize them from capitalists and hold them in trust for the workers, or proletariat. Each worker would receive compensation only for his or her own production to ensure an absence of capitalistic exploitation. There would be a highly progressive income tax and a confiscators inheritance tax. Gradually, all material wants would be satisfied, and the need for government would fade, leading to the ultimate state of
6. Communism, or socialism. In this highest stage of economic development, basic human needs and wants would be met according to the Marxist principle, “From each according to his ability to produce, to each according to need.” And everyone would live happily ever after.

Turmoil and the overthrow of Marxist dictators in Eastern Europe and the growing use of market-based development strategies indicate that Marx's theories, however plausible in the minds of some people, simply did not work.

SOME MARXIST PREDICTIONS

The works of Marx and Engels were written well over a century ago, when the evils of the factory system seemed blatant, and the aroma of revolution wafted throughout Europe. Marx and Engels were not alone in predicting revolutions to overthrow the existing order. Their “dialectical materialism” did, however, generate several specific predictions about the road to revolution:

1. Ever greater unemployment and “immiseration” of workers.
2. Declining rates of profit.
3. Explosive business cycles.
4. Rising concentrations of economic power.
5. Increasingly aggressive imperialistic policies.
6. Bloody revolutions as capitalistic economies reach maturity.

Mature capitalism would fall to communism like rotten fruit. Class struggles would end when the proletariat overthrew capitalists and their middle-class lackeys, the petit bourgeoisie. A short “dictatorship of the proletariat” would follow, during which workers would share the full values of production (subsistence wages plus surplus values). Then government would wither away, as outdated as an adult's baby tooth. Communism would evolve as the final synthesis, characterized by a classless society in which people would live and work under the condition, “from each according to ability, to each according to needs.” And everyone would live happily ever after. In the end, the communist ideal resembles Sir Thomas More's Utopia.

Most Marxist predictions seem way off target. Unemployment rates vary over the business cycle, but there is no discernible upward trend over the past century, even though growing percentages of the world's people have moved into the industrial labor force. The purchasing power of wages has risen dramatically over time. Are workers in market oriented industrialized nations increasingly miserable, when most have color televisions and paid vacations? As Joan Robinson, a prominent 20th Century Marxist, conceded, “`You have nothing to lose but the prospect of a suburban home and a motor car' would not have been much of a slogan for a revolutionary movement.”

Average rates of profit have varied widely over the past century, but without discernible long-run trends. Sporadic booms and busts have plagued capitalism, but with decreasing severity during the past eight decades. Marx was, however, almost alone in correctly predicting greater industrial concentration. Economic power within many industries did become more concentrated from 1850 to 1930, but more recent evidence of increased concentration is hard to glean from the data.

The evils of capitalism identified by Marx have been at least partially cured by the expanding role of government in the market system. Government activity, including development of the modern welfare state, has placed a safety net under the living standards of the poor, dampened business cycles, and slowed industrial concentration in most mature industries. Marx's assertion that “the state is nothing but the organized collective power of the ruling classes” is almost certainly wrong.

A significant rebuttal of Marxist predictions is that communist revolutions bypassed most industrialized capitalist nations, occurring instead in feudal agricultural economies. The USSR, China, Cuba, Vietnam, Kampuchea, and other underdeveloped countries “went communist.” Eastern Europe was largely industrialized before World War II, succumbing to Marxism during 1946-1990 only by dint of Soviet conquest. Imperialistic wars started by major capitalist nations largely ended around the turn of the last century.

In the past two decades or so, most communist governments suffered enormous reversals, being widely replaced by more democratic governments that tend to privatize much of government activity. A domino effect seems at work, with Eastern Europe, the fifteen independent nations that arose from the ashes of the former USSR, Vietnam, China, and now, North Korea and even Cuba all evolving towards ever greater reliance on market forces.

• CENTRAL PLANNING AND FORCED SAVING

Were ideal societies implemented where Marxists gained control? Hardly! One famous Marxist slogan is, “Religion is the opiate of the masses.” Paul Samuelson, a Nobel Prize winner, has paraphrased this as, “Marxism is the opiate of the Marxists.” No matter how brutal some socialist regimes have been (e.g., the USSR under Stalin, China and Mao Zedong, or Kampuchea under Pol Pot) or how poorly Marxian predictions fare, many Marxists persist in believing that worldwide communism is desirable.

Marx and Engels wrote thousands of pages on capitalism's ultimate collapse, but less than a hundred pages even hint at specific mechanisms to replace markets. When communist revolutions succeeded in feudal rather than industrialized countries, the new leaders were on their own. Alternatives to markets as ways to answer What? How? and for Whom? had to be invented. None of these alternatives fostered prosperity. Central planning, in which government specifies wages, prices, an the outputs of most industries, was the most common path adopted when communists seized power.

The Marxist term surplus value refers to gaps between what workers are paid and the average value of their total output. Orthodox Marxism categorized all rent, interest, and profit as “surplus value.” Marxists contend that capitalists exploit workers by “expropriating” surplus values. It is ironic that centrally planned Marxist societies have been extraordinarily exploitative. Under Soviet five-year plans initiated in 1929 and used until 1990, low wages were set relative to individual output, while prices for most nonessential consumer goods were kept artificially high. Holding consumption far below production forced people to “save.” The USSR rapidly attained the status of a world power.

Forced saving is intended to foster rapid growth, but we now know that growth in the USSR was actually slower than in most countries that rely heavily on private saving and investment. The apparent evolution (based largely on bloated statistics) of the Soviet Union from sleeping giant to world power from 1930 to 1970 persuaded leaders of many underdeveloped countries to adopt the Soviet model. The result? Their countries suffered a double whammy: slow growth and the inefficiency inherent in central planning. A low-wage / high-price strategy under central planning is just one way a government can acquire resources to use for capital accumulation. “Land reform” programs are another: large estates are consolidated into collective farms or allocated to peasants. Revolutionary governments also nationalize the factories or financial assets of deposed elites as sources of “social” capital accumulation.

Central planning used coercion to enforce productivity, but these pressures eventually backfired: productivity, incomes, and standards of living collapsed. The painful transition of centrally-planned former Soviet-bloc nations toward heavier reliance on market forces initially resulted in less forced saving and less investment, and was plagued by high unemployment and reduced productivity. Unfortunately, criminals accustomed to dealing in “black markets” frequently were the only people with expertise in using market forces, and the march towards market efficiency has been marred by widespread corruption. Moving to a market-oriented economy may require decades to develop the social institutions of private property and other market mechanisms. The turmoil of transition delays possible benefits from capitalist markets. Although forced-saving strategies in Soviet-controlled nations yielded only anemic growth at best, other ways to force higher saving exist in democratic, market-oriented economies: inflation and taxation.

Epilogue

Karl Marx, though an incendiary polemicist whose words galvanized generations of radical revolutionaries, was not an especially creative thinker. Major strands of thoughts in Marx’s writings echo the analyses of earlier and far more original philosophers. For example, his dialectical materialism borrowed the “dialectics” developed by the idealist Georg Hegel [1770-1831], and “materialism” came from the writings of Ludwig Feurbach [1804–1872]. Another example: The popular rallying cry often attributed to Karl Marx and Friedrich Engels, “from each according to his ability, to each according to his needs,” was actually written by a radical journalist, Jean-Joseph Louis Blanc [1813-1882]. If not for the historical influence of Marx’s works, he might be remembered today by specialists in the history of economic thought merely as a minor Ricardian.

Nevertheless, Marx’s ambitious attempt to synthesize all social knowledge since Aristotle was intended to extend understanding of the conditions of human development so that the movement to higher stages of development might be accelerated. His vision of this ultimate society, dimly sketched, was that of a communist system based on rational planning, cooperative production, and equality of distribution. Above all, it was to be a society freed from all political and bureaucratic hierarchies. Those societies that, until recently, were categorized as “Marxist,” scored very poorly on this last point, but for Marx the “withering away of the state” was critical. It may have been the tendency of his followers to compromise on this matter that allegedly led Marx to declare on his deathbed, “I am not a Marxist.

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Author: Ralph Byrns

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