Assignment: (1) What are some of Marx’s criticisms of capitalism? (2) How might you respond to the criticisms you discussed in question 1? (3) Discuss the following three items in brief: a. What Is To Be Done? b. New Economic Policy c. Ukrainian terror-famine
Karl Marx founded a very interesting and very flawed philosophy named communism. He claimed that communism is much better than the current system, capitalism. Marx had many critiques of the capitalist system, which all showed his misunderstanding of how an economy works.
The Business Cycle
One of Marx’s criticisms of capitalism are that it is affected by the business cycle. He claims that during the busts of the business cycle, many workers lay around idle because there are no businesses willing to employ them. This is a bad thing because the potential labor of these workers is being wasted, as they are doing nothing. This is true; the business cycle does make an economy less productive. However, capitalism is not to blame for the business cycle. The true cause of the business cycle is government manipulation of interest rates. To learn the details of how this works click here. As Capitalism is not inherently subject to the business cycle, Marx’s criticism here is irrelevant.
Productivity
Marx goes on to claim that communist societies are more productive than capitalist ones, therefore communist societies also have a higher standard of living. Once again he returns to the business cycle. He thinks that communism will not be subject to the business cycle, therefore there will be no busts in the economy that reduce productivity. But as has been shown, capitalism is not the cause of the business cycle, so this reason is invalid.
Marx also claims that communism will be more productive because all the capitalists and managers will be required to do manual labor alongside the rest of the workers. However would this make the economy more productive in the long run? The main way an economy becomes more productive is the integration of ever improving means of production, like tools, machinery, etc. This allows each individual worker to become more productive. For example, one person using a cotton gin to remove the seeds from cotton would be far more productive than a person doing it by hand.
So, who is responsible for improving the means of production? It is the capitalists, as it is within their self-interest to do so. To learn the details about how Capitalism raises productivity and the standard of living click here. Forcing capitalists to engage in manual labor might produce a small increase in the productivity of an economy for a very short period of time. But in the long run, it will make the productivity of an economy stagnate, as there is no one to improve the means of production.
Exploitation
Another one of Marx’s major criticisms of capitalism is that he thinks it is an exploitative system. The workers are always being exploited by the capitalists says Marx. He thinks that the condition of the workers will progressively get worse until they are ready to revolt. He also claims that under capitalism workers will only receive a subsistence wage because that is all capitalists have to pay them. To clarify, a subsistence wage is a wage that provides just enough for the recipient to live on and not even the tiniest amount more.
To start the inherent contradiction in Marx’s thought must be pointed out. He claims that the condition of the workers will get worse over time. He also claims that they only receive a subsistence wage. If the worker’s condition is always getting worse how could they only ever receive a subsistence wage? If workers receive anything less than a subsistence wage, then they will perish. Everyone, including the capitalists wound not want that to happen, so how can these claims both be true?
Putting that contradiction aside for a moment, let’s see if these claims are true in practice. One must only take a look around them to see that workers receive much more than a subsistence wage. Everyone has much more than just the means to survive. But do the conditions of workers deteriorate over time? The answer is once again no. As the standard of living rises due to capitalism, the conditions of the workers will improve. That is what happens when the standard of living rises. If one thinks about it, it makes sense too. Many more people have refrigerators, air conditioning, telephones, and all sorts of modern luxuries than what people had 20 years ago. Would this not be considered an improvement in the conditions of the workers?
Finally, the relationship between capitalists and workers is not one of exploitation, but rather one of cooperation. Capitalists are always competing for the best workers. They are incentivized to offer favorable conditions to the workers, so that they attract the best workers. The workers are incentivized to be the best workers they can be, so that they get hired by the best employers. Workers voluntarily choose to work for certain capitalists. If they ever suspect they are being exploited, then they can always quit and find a different capitalist who is willing to employ them under better terms. Does this system sound exploitative?
The Market Makes the Decisions
Marx was also critical of how people are told what to produce by the market. He doesn’t like how the impersonal marketplace makes decisions; he believes that conscious decision making should be the determining factor in what is produced. He wants to plan out the economy and leave the market out of it.
To begin with, the market is just the sum total of the conscious decisions of all the consumers. It is just a term used to represent the decisions of the consumers. It tells capitalists (the producers) what people are willing to buy. Why shouldn’t people listen to the market? If someone produces something the market (average people) don’t want, then the sad fact is that they wasted resources. The raw materials they used to produce their thing could have been used to produce something else that people actually wanted.
Marx wants goods to be produced according to a plan. In practice, this plan is always created by the government; they are the only ones who could enforce such a plan. But how does the government know what consumers want? They don’t; there is no market to look to. Therefore, the products that will be produced may or may not be wanted by the public. This planned economy can create an astronomical amount of waste. For example, the government planning board can decide that 2 million blue baseball caps are to be produced this year. But only 100,000 people wanted blue baseball caps, so the remaining 1.9 million caps are waste. This is the result of a planned economy.
The Division of Labor
Marx also dislikes the division of labor where everyone specializes in there own niche. He thought it would be much better if everyone could work on whatever they want whenever they wish. He claimed that under communism one could hunt in the morning, fish in the afternoon, rear cattle in the evening, and criticize after dinner without ever becoming a hunter, a fisherman, a cattleman, or a critic.
If this system was put into practice, everyone would be much worse off than they are today. Everyone would be lousy at doing everything and great at doing nothing. Society wouldn’t be able to produce the amazing things everyone has today. If no one specialized, no one would have the know-how to invent any advanced things. But everyone would know how to make basic things. Advanced products like cell phones can only be created if people take the time to master and improve the process of cellphone creation.
Conclusion
Karl Marx had many criticisms of capitalism. Only a handful of them have been presented here. But all of them show Marx’s misunderstanding of how capitalism works. It is remarkably easy to dismiss and find contradictions in Marx’s criticisms. It is a mystery how his thought became so influential in many countries.
Outcomes of Marxism
Around the world there were many negative outcomes of Marxism. The largest country that ever adopted Marxism was the U.S.S.R. The founder and first totalitarian dictator of the U.S.S.R was V.I. Lenin. He put his own spin on Marxism, which guided how he ran that U.S.S.R. In his book What Is To Be Done Lenin outlined his view of Marxism, which is now called Marxism-Leninism. He agreed with Marx on almost everything, however there was one point on which their opinions differed.
Marx believed that socialism/communism was inevitable. Nothing and no one could stop communism coming; history was going to reach it eventually. Lenin believed that communism needed some help to come about. He thought there needed to be a professional class of revolutionaries, that had the sole purpose of bringing about communism. He thought the workers would make themselves content within the current system of capitalism; all they would do is create labor unions, nothing more. The role of these revolutionaries was to spur the workers into action and overthrow capitalism. This revolutionary class is what makes Marxism-Leninism different from Marxism.
The New Economic Policy
Life was not pleasant in the U.S.S.R.; many terrible things happened. Because of his communist policies Lenin created a civil war in the countryside and a country-wide famine. He destroyed the incentives for peasants to work to grow food because all the food they produced he took. His solution to the peasants not working was the firing squad, so he started a civil war with the peasants. The famine was a result of all this. The situation continued to get worse, so Lenin was forced to do something.
Therefore, he implemented the New Economic Policy, which implemented a very small amount of free-market reforms. Peasants were allowed to sell some of there food at government supervised markets. They payed there taxes in food. Additionally, families were allowed to have a small 1 acre plot of land that they could own privately, which they could grow food on. (All land is owned by the state under communism.) Lenin wasn’t happy about instituting these free-market reforms, but he had to in order to not immediately implode the U.S.S.R.
The Ukrainian Terror Famine
One of the many atrocities committed by the U.S.S.R. was the Ukrainian Terror Famine. Ukraine was controlled by the U.S.S.R and it’s people were very resistant to collectivization. The U.S.S.R. wanted control over Ukraine, as it is a very fertile place; sometimes it is referred to as the bread basket of Europe. The Ukrainian national spirit was strong; they did not think of themselves as part of the great U.S.S.R. They thought they were Ukrainians.
The U.S.S.R.’s leader at the time, Joseph Stalin, wanted to put an end to Ukraine’s resistance and nationalistic feelings. Therefore, he created a terror famine. One must try pretty hard to create a famine in the bread basket of Europe. The famine killed upwards of 5 million people. Basically all of Ukraine’s food was confiscated and the population was left to die. But to Stalin’s delight, the U.S.S.R. got it’s hands on more food and the resistance in Ukraine was eliminated.
Marxism/communism has brought about many terrible things. It has led people to devastate countries, commit heinous atrocities, and it is covered in contradictions and flaws. For some reason, people still follow it even though it has been proven to be disastrous time and time again. One must wonder what Marx was thinking when he created his school of thought. Could he even have imagined the terrible things that would come from his beliefs?
This really explains it well.