Misconceptions of Marxism

As previously examined, the theoretical definitions of capitalism, socialism, and communism are all different from their actual implementations throughout history. While Karl Marx is known as the father of communism, he is often criticized and blamed for the ways in which socialism and communism have been utilized in governments throughout history. I believe that this is unfair criticism, as Marx simply put out his theoretical definition of the two systems. Marx never orchistrated any actual implementation of either system, and the ways in which certain societies have gone about doing that are not inherent to Marxism. In the United States in particular, there is a strong sense of animosity towards the word communism. Since World War II and the Cold War have brought out a lot of hatred toward the connotation we have towards communism as Americans. But, after studying Marx and his beliefs, it is clear that these representations of socialism and communism are not what Marx had in mind, and are actually quite different from Marxism itself. Many if not all of the communist societies we have seen throughout time have been implemented by force, under a corrupt dictatorship in developing countries. This is not even close to Marx's image of how socialism, and eventually communism, would come about. He saw it as a natural process; that the inevitable class struggle within communism would give way to socialism, and eventually, the same would happen in socialism and a communist society would thrive. We have yet to see socialism arrise naturally in a developed nation. It is very difficult to grasp the fact that the theoretical idea of socialism portrayed by Marx is much different than the examples of socialist societies so far.

In Defense of Marx:

Many defenders of Marx claim that to blame the horrors brought about by the likes of Stalin and Mao in Soviet Russia and communist China on Karl Marx, is to blame the dropping of the atom bombs on Albert Einstein for his analysis of mass-energy equivalent. Another one of the main arguments against Marx is that his ideas strip individuals of their freedom. This argument could only be made by someone who has never read anything on Marx. His whole purpose in analyzing capitalism was to allow individuals to realize their full potential and break away from the alienation that labor markets brought upon them. Especially in the United States, there has been an overwhelming amount of propaganda against communism and Marxism. While it is fair to criticize the former "communist" societies for their greed and corruption, it is not just to criticize Marx for their wrongdoings.

Capitalism, Socialism, & Communism

Marx's Analysis of Capitalism:

In an attempt to discover the laws of motion of capitalism, and thus, recognize contradictions within the system, Marx applied his theory of history to the society and economy of his time. In his analysis, he created what are known as the Marxian laws of capitalism. These laws consist of the reserve army of the unemployed, a falling rate of profit, business crises, increasing concentration of industry into fewer firms, and increasing misery within the proletariat. Also in his analysis, Marx assumed: a labor cost theory explaining relative prices, neutral money, constant returns in manufacturing, diminishing returns in agriculture, perfect competition, a rational economic man, and a modified version of the wages fund doctrine. Marx rejected the assumptions of fixed coefficients of production, full employment, and the Malthusian population doctrine. Marx was very critical of capitalism, and his aim was to find faults and contradictions within it. For Marx, the capitalist system produces undesirable social consequences. He claimed that capitalism would fade away over time, as more and more contradictions manifested themselves.

Marxian Laws of Capitalism:

Marx's first law, the reserve army of the unemployed, was his vehicle to explain the existence of surplus value and profits. In Marx's model, as capital accumulation increases, the demand for labor also increases; which consequently raises wage rates. The reserve army of the unemployed keeps surplus value and profits from decreasing to zero. Marx's second law of capitalism, a falling rate of profit, is what he described as the thing that would eventually lead to the destruction of capitalism. Marx showed that as capital accumulation increased, demand for labor also increases, raising wages, thus, the rate of profit will fall. Marx's third law, business crises, had multiple ways of being portrayed or perceived. One of which was different than the others for the fact that it accepted Say's law. In Marx's model, a capitalist economy depends on the behavior of the capitalist. As the rate of profits continue to fall, the capitalists will reduce investment spending, causing a business crisis. Marx saw periodic fluctuations in economic activity as inherent within the capitalist system. He was also aware of the growing size of firms, the weakening of competition, and the growth of monopoly power. he believed these to be the result of increasing centralization of capital, his fourth law of capitalism. This phenomenon occurs when individual capitalists accumulate more and more capital.. Centralization of capital refers specifically to when existing capital is redistributed so that its ownership is placed in fewer and fewer hands. Additionally, there are three different interpretations of Marx's fifth law of capitalism, known as the increasing misery of the proletariat. First, absolute increasing misery of the proletariat happens when the real income of society decreases with the development of capitalism. Relative increasing misery of the proletariat means that the proletariat's share of the national income declines over time. However, the final interpretation has little to do with economics. It states that with the advance of capitalism, the quality of life diminishes as people become chained to the industrial process. 

Defining Capitalism, Socialism, and Communism:

We can see a clear representation of capitalism in our society here in America. It is a system that has worked well for our economy, but there are many different kinds of capitalism. The words capitalism and socialism have general, not really any precise meanings. They combine economic characteristics with ideology; to some they mean good and bad, and to others, they mean bad and good. It is possible to theoretically define these words with precision, but doing so would mean that any given society might not fit the criteria of one term or another, since there are many variations of each. The existing systems of both capitalism and socialism are different than the theoretical ideas of what they should be. Often times, arguments between believers of each system use the theoretical models, rather than existing systems to make their points. Louis Blanc (1811-1882) was one of the first people to use the term socialism, and he described it as an economic system in which all individuals had jobs paying fair wages. Blanc coined the phrase, "from each according to his ability, to each according to his needs." Defenders of capitalism argued against the idea of socialism, claiming that it was incompatible with freedom. One objector to socialism, F. A. Von Hayek, stated that an economic plan like socialism could not come about naturally because planners would have no way of knowing the preferences of everyone in society, and thus, they must necessarily "impose their scale of preferences on the community for which they plan." Even some who are sympathetic to socialism have expressed concerns that Marxist socialist governments fail to allow for political freedom. We have seen this throughout history, in Nazi Germany, Soviet Russia, and even now in North Korea; where socialism and communism take over and the governments become corrupt and the people suffer. What is not clear is whether or not this failure to promote freedom is inherent to socialism, or if it has occured for other reasons. 

In addition to capitalism and socialism, the term communism offers no one exact meaning. However, in the Marxian system, socialism and communism refer to stages in the historical process. One of the chief characteristics of capitalism, according to Marx, is that the means of production are not owned or controlled by the proletariat. Marx claims that this will change with the transition into socialism. Additionally, Marx points out that a remaining vestige of capitalism exists under socialism, that being the use of incentive systems in order to persuade people to labor. Thus, according to Marx, a new system will emerge from socialism in the same way, communism. In a communist society, people would no longer be motivated  to work by monetary or material incentives, and the social classes that existed under capitalism, and to a lesser extent under socialism, would disappear. Under socialism, each individual contributes to the economic process based on his/her ability, and receives an income based on their contribution. Under communism, each individual contributes based on his/her ability, but consumes only to his/her needs. Marx believes that human beings are perfectible and human goodness is being suppressed by the current state of affairs. He argues that markets alienate human beings, and this contradiction in capitalist society will ultimately lead to its overthrow and the institution of a new, non-alienating economic system.

The two opposite ends of the spectrum, while socialism lies somewhere in between.

Background on Karl Marx

Karl Marx (1818-1883):

Marx was a German philosopher, economist, and socialist who focused on political economy and Hegelian philosophy in his studies. Marx's theories and beliefs are collectively known as Marxism, and were greatly influenced by the German philosopher G. W. F. Hegel. Marx was most fascinated by Hegel's conception of history, pertaining to his theory of progression. Hegel believed history held the key to the science of society, and was not smoothly continuous. He didn't see history as a sequence of accidental occurrences or as proceeding cyclically through a series of recurring events, as many people did at that time. Rather, Hegel saw the progression of history as an outcome of opposing ideological forces. He claimed history was a result of conflict induced change. These influences from Hegel led Marx to form his dialectic. The word dialectic refers to the nature of those conflicting elemental processes that are believed to constitute the essence of reality itself. Marx's dialectic includes a thesis, an antithesis, and a synthesis. In this dialectic, the thesis refers to the status quo; the accepted system or beliefs in society. The antithesis in his dialectic concerns the idea or belief that challenges the thesis and creates a conflict. And finally, the synthesis is the outcome of the struggle between the thesis and the antithesis in Marx's dialectic. As time progresses the synthesis becomes the new thesis, and another antithesis arises to challenge that thesis, and so on and so forth. 

Karl Marx (1818-1883)

Marx's Critique of Classical Economics:

Karl Marx combined economic analysis with philosophical and sociological elements in a way that was unique to his time period. Marx was a critique of capitalism especially, looking for contradictions within the system, between the dynamic forces of production and the static relations of production. Marx predicted that capitalism would eventually inevitably collapse and give way to socialism, which would in turn give way to communism. Marx's goal in his studies was to promote the changes in society that he considered desirable. Marx saw many faults in the society he lived in. He described the difference between the forces of production and the relations of production. The forces are portrayed by the technology used in producing material goods, manifested in labor skills, scientific knowledge, tools, and capital goods. The forces of production are inherently dynamic, according to Marx. The relations of production refer to social relations and property relations. Social relations are those between people and other people. Property relations are those between people and things. Marx claims that the relations of production are static and past-binding. He also states that this static nature is reinforced by what he calls the social superstructure. This superstructure included art, literature, music, philosophy, jurisprudence, religion, and other cultural forms accepted in society, and its purpose was to maintain the status quo. Put in terms of Marx's dialectic, the relations of production is the thesis, while the forces of production is the antithesis.

Karl Marx's main objection to capitalism was that he believed it alienated human beings from themselves. He claimed that the market system and private property devalue all that they touch and thus, alienate individuals from their true selves. Marx concluded that the very existence of markets, especially labor markets, undermine one's ability to achieve true happiness. Marx continued to argue that to sell one's time to another, as one does in the labor market, is to alienate oneself from the realization of one's true self. Marx disliked the functionality of classical economics because he believed that it simply accepted the market system and failed to consider the nature of private property and the effect that existing markets had on people. His major criticism of classical economics followed from that belief; that it failed to to consider how the forces of production would undermine the relations of production. Finally, Marx argued that capitalism, like feudalism, contained the seeds of its own destruction within it, as conflicts eventually develop with changes in the forces of production.

The Communist Manifesto, a pamphlet written by Marx and Frederick Engels in 1848. The pamphlet details the problems of capitalism and class struggles specifically. It is commonly considered one of the most influential political manuscripts of all time.