POINTS OF VIEW
8085 Politics 3 -- Marxism versus Capitalism
Until the end of the 1980s, when Berlin Wall tumbled, and Francis Fukayama wrote the famous quote about the 'End of History, the main dialectic was between Communism and Democracy; or in terms of theory between Marxism and Capitalism. Marks had by far the greatest impact on economic and political theory. Even now, 150 years after his proclamations, modern political theory -- albeit expressed in the modern terms of democracy -- still reflects his pronouncements. Indeed, it is arguable that his greatest legacy is in the structure of US business.
The argument after his time, therefore, was how you handled the different demands of the various parts of population -- initially in terms in classes. His solution was that the state had to intervene to protect the masses, in order that they would not be exploited by the bourgeois elites. Against this were ranged the market capitalists, who argued that the free market was the best way of allocating resources across the population as a whole. Following Adam Smith's concept of the invisible hand, the market would reallocate resources in the most efficient manner.
The most significant aspect of all the theory is that it does not account for practice. Thus, in the so-called communist countries -- those following Marx as their spiritual leader -- it was the bourgeois elite who ruled, just as in capitalism. There have been few genuinely Marxist communist leaders. Of these perhaps Mao Tse Tung and Fidel Castro were the closest -- though, as seems inevitable with political leaders, they also ultimately lost their way.
On the other side of the argument, market capitalism insists that the perfect market is the only solution. What they don't point out is that there is almost never any such thing as a perfect market. Even the commodity markets, which should be ruled by price alone, are never perfect. They tend to be even more heavily regulated than other markets, and -- as OPEC so dramatically showed -- they are vulnerable to political intervention.
The outcome in recent years has been that Communism has been comprehensively dismissed as a failing philosophy, though I would argue that many of its lessons are still extremely important. At the other end of the scale however, market capitalism has yet to be effectively defined. America tends to equate it with what they call democracy, or now freedom, which is just as vague however. It is significant that many of the richest people, even in the US, are those who have managed to tap into government money.
Complicating matters, socialism -- or now social democracy -- would like to see itself as the middle way. In fact, perhaps the greatest impact of socialism has been to save capitalism. It is possible that, without the ameliorating qualities of socialism, market capitalism would have lost out to Marxist Communism. The result, socialism, has always been weakened by the fact that it is an emasculated version of Communism, since the revolutionary elements are removed, and it is vulnerable to the claim that it is a compromise with market capitalism. On the other hand, it too has had its defenders -- the elite who benefited greatly from it -- and has developed chameleon-like quality which allows it to wriggle away from any attempt to bring it down.
As I have reported elsewhere, the essence of the western system of market capitalism, is greed. In talking about individualism, or now freedom, what it really means is the acceptance of powerful individuals being able to hold the rest of society to ransom. When this meant the rest of society was held in abysmal conditions, revolution was always on cards. Now that the rest of society has acceptable conditions, there is little chance of revolution.
Before its demise, the Marxist theorists -- who were the most adventurous and insightful of the time -- came up with concept of structuralism. This no longer focused on the fight between the proletariat and bourgeoisie, but on the structures of society. This is, actually, a very powerful concept. Our own work in futurology has shown that the most important elements determining the future are the structures of society -- and how they are changing. Unfortunately, these are the elements almost totally ignored by market capitalism and modern political movements.
Out of this structuralism also emerged a rather more arcane theory, that of 'Crises of Legitimation'. This said that the demise of western capitalism will be due to its problems in obtaining political legitimation. There is some considerable evidence that this is actually happening, though it probably is not just restricted to western capitalism but spreads across all political establishments. Indeed, the Communist political establishments were the first to tumble due to such moves.
It also states that the workers of the stronger organisations will be better off than those of the weaker organisations -- as can also be observed, and is now the basis for much of labour economics.
All in all, therefore, political theory has little to say about the true state of mankind at this time. If anything, structuralism at least had a better, more interesting, set of ideas. Market capitalism, motivated by the greed, may have its powerful supporters - typically those personally who gain most from it -- but it has a long way to go to win the ethical argument.
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