Marx Was Definitely Not Right, Nor Great

Commentary, Core Public Sector Reform, Ian Madsen

Recently, the world was sadly compelled to commemorate the 200th anniversary of the birth of Karl Marx.  He was indeed, a major figure in shaping history, but definitely not for the good.

Marx, along with his patron, Friedrich Engels, created the political-economic philosophy (perhaps a religion) commonly called Communism. Its essential tenet is that what we commonly call ‘capitalism’, which is based on the free exchange of goods, services, labour, ideas, money, and other things, is inherently evil and doomed to a brutal, violent, and ignominious extinction.  

Capitalism, they wished and forecast, would first become terribly unequal and impoverished in a ‘monopoly capitalist’ end-state, and then be replaced through the efforts of virtuous idealistic collectivists during a supposedly transitional Communist period, and then end in a Utopia of peaceful, prosperous, and, crucially, equal income and social conditions in communal light work and cooperative problem-solving.

It should be needless to say that Communism, as it was foisted, by extreme force, on the people of Russia, China, and their satellites, did not, in fact create such an ideal ‘workers’ paradise’.

Indeed, the stronger the application of Communist ideologies and practises, the worse the outcomes, as Khmer Rouge-ruled Cambodia and current North Korea and Cuba show. The only places where it successfully seemed to ‘work’ is where it is or was most loosely adhered to and where it resembled capitalism, specifically in the former Yugoslavia and in present-day China.

Aside from the horrendous death and misery toll under Communism, which is now well over 100 million fatalities and many lives ruined or cut short, there is the tragic loss of opportunity and progress. Communism avoided millions of discoveries and entrepreneurial advances that never happened.  Inequality was not just unique to the West; Communist societies themselves were some of the most unequal in history, with a small equivalent-to-millionaire elite ruling impoverished subsistence-level masses of disenfranchised workers.

Defenders of Communism and its more appealingly-named ‘Socialism’, claim that it was not implemented or applied in its pure and correct form, and that if it were only done humanely and intelligently, Communism would provide people with a far better life than capitalism.

Nothing, however, could be further from the truth.  Communism was, in fact, applied largely correctly; that is, it was done according to Marx’s and Engels’ precepts.  All land, buildings, and other property were seized by the revolutionary governments of Lenin’s Russia and Mao’s China.  Farms were collectivized. All industrial, commercial, retail, and other firms were put under collective ‘soviets’ (workers councils); that is, under Communist Party control. This was done absolutely to ensure full and total application of the ideology with no dissent permitted.

What this amounted to was that the governance of  various enterprises (for they all still had land, equipment, workers, managers, and other staff) was distant and out-of-touch, and followed fanciful centrally-planned ‘five-year plans’. As these firms could not determine their profitability in the usual sense, they often destroyed value, rather than creating it, from allotted inputs.

Quality suffered, as there was little accountability for producing high quality products. Incentives were lacking, as any bonuses were unrelated to true productivity or innovation.  In fact, this whole communist system resemble most closely the monopoly capitalism that Marx predicted.

We now know that state ownership, unaccountable monopolism, cannot but result in stagnation.  Private ownership of property and free exchange of goods and services do not always result in soaring and continual prosperity, yet they have brought more of it to billions of people than Communism and Socialism.  The many present enemies of capitalism should, but will not, remember this important lesson as they celebrate the 200th anniversary of the birth of Karl Marx.