Marxism

Essentially, Marxism replaces the private pursuit of capital with the collective ownership of production and distribution of goods and services. German philosopher and political economist Karl Marx (1818–1883) developed this revolutionary theory of socioeconomic power relations based on his radical socialist critique of capitalism. Communism is considered inevitable as the only way for the majority to completely rid itself from what is regarded as the essentially exploitative nature of capitalism.

While he was deeply influenced by German idealist philosopher G. W. F. Hegel and Scottish political economist Adam Smith, Marx rejected as much of their thinking as he embraced. He replaced Hegel's theory of human history, as an evolving dialogue between opposing ideas (dialectical idealism), with his own “dialectical materialism,” whereby ideas are shaped by material and social forces instead of the other way around. He thus followed Smith in analyzing the material implications of the free flow of capital, while rejecting Smith's view of human nature as essentially acquisitive. For Marx, human nature is much more malleable and dependent on prevailing socioeconomic frameworks. Accordingly, Marxists hold that capitalism encourages people to become individualistically competitive and profit seeking, while socialism encourages them to become more cooperative and less selfish. Marx held that capitalism was politically and economically unsustainable and would inevitably lead to a more equitable and beneficent socialism, in which the means of production are controlled by the democratic state. And ultimately, this socialism would lead to a worker-controlled communism in which all property is collectively owned.

Although capitalism is still growing on a global scale, it has been tempered in many ways that Marx predicted. Indeed, no successful economy today is anything close to pure laissez-faire capitalism, and several of the world's largest economies remain semisocialist, for example, France, Germany, Italy, and Canada. China is a notable exception since it is not democratic. History has shown that while every socialist economy has privatized its markets to a certain degree, every successful capitalist economy has regulated them to a certain degree. Thus, each of the world's top 10 economies has sought to find its own ideal mix of capitalist and socialist elements. For example, all the dominant capitalist nations have instituted a minimum wage, antitrust legislation, union rights, graduated income tax, social security, unemployment insurance, public education, and so on. These are initiatives that Marxism endorses and predicts.

Conspicuously absent in the United States is universal medical coverage—present in all the other nine largest economies, and Marxists would expect it to arise here as well. Interestingly, globalization has resulted in some U.S. companies losing competitive edge partly as a consequence of bearing most of the health care costs of their employees. And some foreign job importers such as Toyota have publicly stated that they chose Canada over the United States to save on health care costs even when most of their sales are in the U.S. market.

There are many other examples of Marxist principles that arguably benefit business, and we will consider [Page 1349]a few examples of U.S. corporations successfully implementing them, often without relying on government. But first we must understand the essential elements of the Marxist critique of capitalism itself.

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