The Flaws of Marxism

[Destroyer25]

This is something I wrote, I'm sure you'll all find it interesting and or useful.

The Flaws of Marxism – The 7th Edition

One of the fundamental problems with the Marxist system is the way that Marx perceived production. Specifically the way wealth was produced in the Capitalist system. In his eyes, labor was the single most important aspect of the production of goods, which creates wealth. Thus, it was logical to him that the power should be in the hands of the worker, the man who actually made the goods. Rather than those managing the enterprises and getting rich by "exploiting" the so called "real" producers of the wealth. However this fails to take a few things into account.

The Marxist system ignores the fact that the work performed by the management, the owners and the investors is just as, if not more important than the work of those physically producing the goods. This is a fallacy that is still widespread today. Society tends to view laborers or workers as those who are employed, when in actuality the employer is no different. The fact that the employers are far fewer than the employees does not mean the employers play a role of lesser importance in the production of goods. Their role is not only more intellectually demanding, but also commonly requires more hours of work than the average laborer. For this reason it is infeasible to have the workers running everything, because they would all need to be educated in a wide number of fields that are critical to the efficient management of a company. A hierarchy exists in the workplace for this very reason. The work performed by those at the top usually requires a formal education, and involves many more hours of work. While not physically demanding, the intellectual demand is great. Anyone who knows a business person is well aware of this fact.

Now while keeping the above in mind, we must remember that this does not mean that the worker is expendable. Marx believed that in the Capitalist system this was so, and while at the time that may have been true, today it is not. In a Capitalist system, workers have two major advantages that their counterparts did not enjoy under Communism or Socialism. The first is the average person’s ability to start their own business. While you may be working for someone else today, you may be working for yourself tomorrow. Capitalism allows anyone who has a good idea to make a business with minimal red tape. One doesn’t even need capital, as it can be borrowed from banks or directly from investors. This is something that doesn’t exist in a Marxist society, where all businesses are collectively owned, and nobody makes any profit off of them. The second advantage is that businesses have to compete with each other for labor. Because of this, businesses have a vested interested in treating their employees well, so that their competitors can’t steal them. But competition does not exist in a Marxist system, and thus everyone is paid exactly the same amount, even though, as stated above, the employee may do less difficult work than the employer.

The Marxist system also seems to rely on the fallacious assumption that labor is the only necessary input that produces an output, or at the very least, the most important input. If that was true, then everyone would be capable of producing whatever they need, but that isn’t the case. Capital, knowledge (in the form of management, or skilled labor), technology (which in our modern world is necessary to achieve enough efficiency to be profitable and in many cases, to achieve enough volume of production to supply the demand) and natural resource, are all absolutely necessary inputs to successfully create outputs. A business needs centralized leadership to ensure that all these necessary inputs are plentiful and ready when necessary. There needs to be wealthy people, and or banks, to provide the crucial start up capital necessary for getting a business running, there needs to be skilled laborers who are superiors to the unskilled laborers, and much more for a modern economy to function. For these reasons, the workers cannot manage a large business, let alone an industry or a whole economy made up of hundreds of thousands of businesses.

Perhaps Marx’s biggest misunderstanding of the Capitalist system was his belief that profits are the exploitation of the employee by the employer. Profits are actually the left over capital from sales after all expenses have been paid, which includes salaries. So the reality is that once employees have been paid, the owner of the business can do as he pleases with the profits. If he wants to give himself ridiculous bonuses or hide all the profits away in a Swiss bank account that’s his choice. But that begs the question why don’t all business owners do this? Arguably in recent years it has been a more common occurrence, but the fact of the matter is that it is a horrible business practice to keep all the profits for yourself. That’s a one way ticket to bankruptcy for your business.  In a market with competition, profits MUST, be reinvested into the company. Otherwise you'll fall behind your competition. And this is what has happened in the global economy today. Companies have been plagued by incompetent businessmen that have stolen money from their companies, rather than doing the logical thing and reinvesting the money in their business, which would have resulted in the continued sustainability and profitability of their business. Had they done this, they would have been able to increase their salaries at no damage to their business, their employees or the economy.

Now whether the worker is being exploited in the sense that they are being paid very little is another matter entirely, and to determine that we must establish what an exploitative wage is. Any rational person will see that the concept of an exploitative wage is completely relative, rather than absolute. It is up for the individual person to decide what they are willing to work for, and the government has no place in telling people that they must be paid an arbitrary amount of money. Ironically, this is exactly what takes place in a Communist system in practice. The price of everything is arbitrarily decided by an army of bureaucrats.

The Marxist system also ignores the fact that technological innovation is dependent on profits, rather than solely the will to do so. Most Marxists suggest that workers can simply cooperate to achieve technological innovation. However as stated before, the fear of bankruptcy is what forces companies to make profits, so they can continue to innovate and expand, in order to remain competitive. Now while the threat of competition does not exist in a Communist or Socialist society, it doesn't change the fact that profits are what facilitate innovation. Without profits, companies would be forced to divert production in order to facilitate innovation, but in a Communist system, any diversion of production will result in economic collapse, whereas in Capitalism it only means bankruptcy for one corporation.

Thus we can conclude that innovation is impossible in a Communist system, because in order to achieve it, production would have to be slowed down in order to split energies so that innovation or expansion could be achieved. In moderation this would create a need to reduce consumption to rationing levels, or alternatively, it could destroy society by not supplying enough to meet demand. Now theoretically these problems could be solved by increasing the scale of production, which would allow enough to be produced, while innovation still occurred. But when taking all of Marxism other flaws into account, one can see that such measures would be impossible to achieve. As in any system not coordinated by prices, allocating scare resources which have alternative uses is extremely difficult, thus causing horrible inefficiency. The chief reason for Marxism’ inefficiency is its lack of a price coordinated market. In a Marxist system, good are produced to meet society’s needs, but in a large state, it’s impossible to know what those needs are. How can one calculate how much grain in one region needs to be shipped to the other regions? How can the same be done for timber? Or fuel? Most importantly, how will international trade be facilitated? If you aren’t producing goods for profit, then you won’t be able to sell them.

Finally, Marx’s most serious misunderstanding of the Capitalist system was his belief that private property was merely a way for the rich to keep wealth away from the poor. This ignores one important aspect of human nature though, which Aristotle summarized quite well when he said, “That which no one owns, no one will care for.” What Aristotle meant by this was, if someone does not own something, he has no incentives to ensure that it is well kept, or operating efficiently. In a Marxist or Socialist system, everything is commonly owned, meaning everyone is responsible for it. This leads to a phenomenon where nobody maintains the commonly owned property, as they feel that someone else will just do it. Since everyone is equally responsible, nobody can delegate tasks, nobody can be blamed for something not working, or something not getting done. The people will just blame each other. One also needs to take into account that everyone is to be paid the same amount, but everyone is also suppose to be entitled to what they work for. This is a huge contradiction in Marxism that tends to get overlooked. As stated before, Marx believed that Capitalists were taking money from the “real” producers of the wealth, and that the workers should be entitled to what they themselves produce. But how can everyone be equal and get equal wages if everyone is suppose to be entitled to what they themselves work for.

Let’s suppose there are 2 workers, Worker A and Worker B and together they can produce goods worth $200, or $100 each. Worker A workers hard and produces $100 worth of goods, but Worker B, does not, and only produces goods worth $50. Now if both workers are suppose to get an equal salary, then both workers can only be paid $75. Worker A is now taking a loss, and has no incentive to work hard, as he will only get $75 despite him producing goods worth $100. So maybe the next day he only produces goods worth $75. Worker B, seeing his colleague slacking, decides to work half as hard, only producing goods worth $25. Now, both workers only get $50 salary. So what can be done? There’s no management, nobody is in charge, and so the unproductive laborer can’t be fired.

Taking everything into account, one can only conclude that a Communist or Socialist society, even if implemented as Marx envisioned (Which is simply impossible given the human psychology), would be in a constant state of economic and technological stagnation. The system would eventually destroy the society due to the difficulties in allocating resources. People would be living in a constant state of horrible poverty, technologically frozen in time, until the horrible conditions lead to violent revolution. And again, this all assumes that such a society could be achieved in the first place, which it most certainly could not. The most fundamental flaw of Marxism has nothing to do with economics at all. It has to do with psychology.

The human race as a whole is inherently greedy. Individuals may not be greedy, but collectively, humans are self centered. We think about ourselves above others. Now while some people may suggest that this is just a mindset that the current socioeconomic system has created, historical study will prove that since Ancient times, individuals have cared about themselves first and their community second. That’s just how the human mind works, and we need to accept that. But Marx did not. Despite the fact that we are self centered, his theories were predicated on the fallacy that humans are inherently, kind, caring, and cooperative. But we aren’t, so what happens when people resist because they value personal freedoms above the “greater good”? Well then they need to be killed, but what if they start a guerrilla war? Well then there will need to be a police state with a powerful military to suppress these people and in order for that to happen you need a dictator. But what if the dictator doesn’t want to give up power? Now while many believe that a Stalinist style dictatorship is not the inevitable result of Communist ideas being put into practice, history, and simple logic prove that it is.

There is simply no way that Marxism is a viable socioeconomic system for any modern state. The sooner we recognize this as the fact that it is, the sooner we can continue to move forwards economically, rather than backwards.

Now you may have not taken this all in, and that’s fine. Socioeconomics isn’t one of the easiest subjects to grapple with. But if there is one thing that you should try to take away from this paper, it is this: In a Communist state, all other political theories would be violently suppressed. But in our Capitalist society, people are free to read about whatever they want to. You are not forced to believe anything. You can read an infinite number of opinions on a wide variety of different political theories. That is not a liberty that people had in Communist countries. It’s a liberty we take for granted. Thanks to great men like John Locke, and Adam Smith, who pioneered the concepts of individual freedoms, we are free to believe whatever ideologies we want to, whereas under Marx, you would be forced to believe in Communism and Communism alone. So while you may not agree with Locke and Smith, at least acknowledge that you are able to read about Marx because of them. So ask yourself, would you have the same liberties under Marx?

[CactusCarlos]

H5 for your article.

[obumazombie]

Marx knew very little of capitalism. Or maybe he knew a lot, but it didn't fit his propaganda and agenda.

[Destroyer25]

H5 for your article.

Thank you.

Marx knew very little of capitalism. Or maybe he knew a lot, but it didn't fit his propaganda and agenda.

I haven't read Das Kapital, which I plan on doing someday (I haven't the time), but apparently he actually gets much more in depth with the socioeconomicso of Communism and his own personal beliefs, whereas the Manifesto seems to be more rhetoric than anything. Marx apparently was well aware of Capitalism's efficiency at industrializing society, and had good things to say about it. However it seems to me that he was fixated on the fact that workers were being exploited, and was hell bent on creating a system where they would have the power.

[FreeBorn]

Good read. +1  

I disagree with one statement in your last post though.

Marx was not fixated on improving the lives of exploited workers and did not seek to create a system that would give the power to the workers.

IMHO Marx recognized that he could use class warfare to gain the support of the working class to overthrow the wealthy and seize power for his cronies thereby creating another class ("The Party") to which all other segments of society would be subject. If the working class believed they had a voice in it all the better but the truth is they did not. Not in any communist system which has ever existed.



There was to be no "middle class" comprised of the working masses. The "middle class", those enjoying better conditions than the masses is comprised solely of party officials, the "red aristocracy" as it were. Party officials, police, military brass,etc. had access to a separate black market of goods. That separation was enforced with the truncheon and the average schmuck learned to keep his mouth shut or risk disappearing into Siberia.

"Meat and sausage departments could boast of very advanced equipment – wooden boards, knives and scales with weights. No slicers, electronic scales, shrink-wrap or a packing person. Sausages were sliced into 200-300 gr pieces. One was allowed to buy only one piece. To buy more people had to take their children or relatives with them."





More pics of the "real" Russia.
http://kcmeesha.com/2010/02/20/behind-the-iron-curtainshortages/

[cmypay]

A very good article! I think that one of the biggest problems with Marx's theory is that he ignored Maslow's Hierarchy of Needs, the lowest of which is the basic human needs: food, clothing, shelter (see the above pics of what Russia looked like). It is not until all the lower level needs are met that one can become "enlightened" and care for the greater good of society. We are truly blessed to live in a society where these ideas can even be discussed openly because, for the most part, our more basic needs are being met.

[Destroyer25]

Good read. +1  

I disagree with one statement in your last post though.

Marx was not fixated on improving the lives of exploited workers and did not seek to create a system that would give the power to the workers.

IMHO Marx recognized that he could use class warfare to gain the support of the working class to overthrow the wealthy and seize power for his cronies thereby creating another class ("The Party") to which all other segments of society would be subject. If the working class believed they had a voice in it all the better but the truth is they did not. Not in any communist system which has ever existed.

That was definitely true of most Communists, but I don't think it was necessarily true of Marx. I think his motives were sincere and altruistic for the most part, but his methods were completely wrong. It was Lenin, Stalin, and all the other Communists that just wanted to use class warfare to get themselves in power so they could rule as they saw fit.