The Failures of Marxism and the Right Path to Socialism and Communism
The market economy is accepted as the pinnacle of productivity because it brings the highest profits and benefits to society. However, the market economy also has significant disadvantages. It generates superior profits while suppressing the losers in the market. The market economy values profits over people, which creates injustice in production and distribution. This is an alienation that develops inequality and leads to unfair exploitation of workers.
Socialists have fought against injustice in society. At the top of their community rose Karl Marx. He called upon the working class to unite and decide their fate for themselves. He was absolutely correct in this. On the other hand, Marx argued that the antagonism between workers and the owners of the means of production can be solved only through a socialist revolution. In this, he was wrong.
The socialist revolutions that followed Marx’s ideas brought more equality to the distribution of basic material human needs than capitalism did, but they also caused significant damage. Revolutions require a high degree of destructiveness and therefore cannot return a final positive result. Violence produces more violence and certainly cannot bring lasting good. Violent seizures of power create masses of unsatisfied people whom the political power must control. Thus, inequality within the societal decision-making process is both produced and necessary. People often do not realize that lacking the right to make one’s own decisions and participate in decision-making processes can be more exploitative than the loss of surplus value. This series of events is precisely what occurred in the socialist revolutions. To organize, implement, and ensure the lasting effect of socialist revolutions, new leadership is generally autocratic, spreading alienation throughout society with all the well-known dictatorial phenomena throughout history.
Yet even today, most Marxists naively expect a revolution that will change the Western world and bring socialism. The liberal democracy profits from the Left being weak, so it supports rather than attacks Marxism.
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How does exploitation occur? Marx did not identify the problem, and it has remained hidden until now. Employers, with administrative assistance, maintain the unemployment rate at the level they find most suitable for themselves. The higher the unemployment rate, the cheaper the labour because workers are forced to accept any job to feed their families. Unemployment may depress wages to a bare minimum, which is sufficient only for basic survival.
On the other hand, if workers do not earn enough, they cannot buy the goods that private companies produce. I believe an unemployment rate of around 5% best suits capitalists’ interests, which is why economists support it as a “normal” state. This “normal” state reduces labour costs and maintains exploitation, while purchasing power remains strong enough to generate profits for companies.
So what is the solution? Work must be accessible to everyone. We need to create an equilibrium between the number of jobs and the number of workers available to balance labour supply and demand. If creating new jobs is not necessary, full employment could be achieved by reducing work hours proportionally to the unemployment rate. This political measure must be applied equally in both public and private companies. This will eliminate unemployment.
Shortening work hours proportionally to the unemployment rate may abolish exploitation. Here is a simple explanation: If two workers apply for one work position, competition among them will lower the wage, and the worker who gets the job will most certainly be exploited. If there is one worker and two available jobs, competition among the employers would raise the worker’s wage. In an extreme situation where the employer must hire the worker or close the company, the worker might even earn more money than the employer himself. The same is possible if workers’ skills are in high demand.
And so, if Marx proposed shortening work hours proportionally to the unemployment rate, unemployment would not exist, and employers would have to fight for employees by raising wages. Then the market would harmonize labour demand and income levels into ranges acceptable to both workers and capitalists. This would diminish, if not eliminate, exploitation. Workers would be put in a far better position than a revolution could have achieved.
If we shorten work hours proportionally to the current unemployment rate, workers would earn more and be able to purchase more, thereby significantly reducing or eliminating exploitation. It would also reduce today’s economic crisis because the crisis is based on people’s insufficient purchasing power. This would create much better capitalism. This could solve many of today’s financial problems and bring more prosperity to society.
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The Market is the best thing Mother Nature has offered to the field of economics because it gives balance to society. However, Marx did not see it that way. By studying the “widest” law of social movement through dialectical and historical materialism, Marx concluded that a market economy should be abolished because it exploits workers. This was a big mistake in the intellectual history of mankind. This error has prevented the development of society and socialism. By proposing the abolition of the market, Marx removed the measure of value that effectively reveals an economy's performance. He abolished a measure that defines human needs, demand, supply, the objective value of goods and earnings. He essentially beheaded the economy. Marx was aware of it, and so he offered a substitute for the market economy with a planned economy based on people’s consciousness.
The consciousness Marx called upon was an idealized construct that cannot be explicitly defined, allowing anyone to interpret it as they wish. That is why it was prevalent amongst revolutionary leaders. Even a murderer could find absolution in his conscience for the crimes he commits. A system cannot be based on idealized values. Idealism also contradicts Marxist materialist philosophy. Without defined values, chaos may ensue. This chaos created the environment for the rise of authorities who took total control of society. All the presidents of socialist states ruled for lifelong terms. They were privileged and, as such, could not create a productive economic environment.
Until recently, the people could not democratically establish a planned economy because the information technology that would make it possible did not yet exist. This is why authorities had to plan the economy, and as such, it could not follow people's needs. An authoritative planned economy primarily supports the needs of the authorities. Authorities were well aware of the shortcomings of the planned economy and tried to overcome them by forming an ideological, working, and humanitarian consciousness. However, this is not achievable with the privileged authoritative forces that control production and distribution. People’s consciences cannot develop without freedom; only obedience can develop without it. Obedience brings poor lives, regardless of what people may achieve. To force people toward the “good” path, autocratic power controls society, thus not differing from extreme dictatorial regimes. Such control oppresses society and is, therefore, doomed to fail, as all dictatorships have failed in the past. Irrespective of some initial success, the authoritative planned economy is not productive and promising; these characteristics are visible in the examples of the breakdown of so-called “real socialism.” I believe that Marxist socialism never stood a chance.
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Socialism will come after capitalism, but not through revolution. It will happen by introducing more democracy and a broader market for work than capitalism can afford. Nobody in today’s world even thinks most problems in the market economy stem from its underdevelopment. I will argue that the main problem with today’s market economy is not too much market, but rather not enough.
Today's economy has accepted regulations on work rights that support people’s work privileges. Once a work position is occupied, it is protected, and nobody else can take it, regardless of the workers’ performance, until the position becomes vacant. Following that, if jobs are not subject to worker competition, they do not produce well enough. That is why socialism has resulted in poor-quality goods and services. Jobs in capitalism are also protected, meaning they are privileged, though to a lesser extent than in socialism. That means capitalism could neither allocate resources efficiently enough nor achieve productivity efficiently enough. One should protect workers, not jobs. The development of the market economy requires the growth of the labour market! The development of the labour market will naturally improve the economy, bring justice to the manufacturing process, and provide stability to society.
Marx fought for equal rights for the people, but failed to define what equal rights really are. A better future for humankind requires workers to become subjects with equal rights in the process of production. This will be achieved when all workers have an equal opportunity to choose their work. Therefore, we must open a permanent labour market. A developed labour market requires that each worker have free access to every public workplace at any time. No division of labour is fairer or better than competition among workers through their own labour productivity at any workplace at any time. Productivity would be measured by earned money, the amount and quality of goods produced, or by consumer ratings of workers’ productivity. An employee who offers higher profits, more manufactured goods, better, cleaner and/or cheaper production will get the desired job any time.
It probably seems impossible to you, dear readers, because such a division of labour has never existed. Such a division of work has never occurred because nobody trusted it was possible and did not invest effort to develop the idea. I have. I have considered the potential problems such a division of work might bring and devised a solution to eliminate them. Once such a division of labour is accepted, it will bring considerable benefits to all.
Of course, this division of work will apply only to public companies, because applying it to private enterprises would practically mean a seizure of private property. Private companies will continue their business as they do today. A new division of labour in public enterprises would be necessary for democratic acceptance and legal regulation. It will not be easy to implement because society resists change, but one day this new division of work will be accepted because it is the best possible division of labour. In this article, I will present the advantages such a division of labour would produce, and you, dear readers, may decide whether it is acceptable.
A worker who offers the highest productivity for any workplace at any time immediately becomes a prime candidate for that position, regardless of whether the position is occupied. If a workplace already has an employed worker who does not want to leave their job, they would have to accept the competitor's productivity offer and, in that case, would continue to hold the position. If they cannot take on the new responsibilities or do not want to, they would immediately leave the workplace and let the competitor take the position.
The advantages of such a division of work will be enormous. The best worker in every workplace ensures maximum productivity for companies, which justifies such a division of labour. Besides, the labour market will give people the freedom to choose jobs they love, and therefore, they will enjoy work far more than they do today. Work will become a direct value in itself. Furthermore, the open labour market will eliminate privileges. This will eliminate corruption, the source of immorality in today’s society. Today, people might experience the loss of privileges as a great inconvenience. But over time, people will realize that losing such privileges would significantly increase the likelihood of finding work that addresses workers’ needs. Being in need of work develops creativity and brings great and stable conveniences that privileges could not achieve. That is why the developed labour market will eventually be accepted and will bring significant benefits across society.
The labour market will regulate the price of labour. This will be achieved by assigning jobs with limited productivity to the worker who offers the lowest price for the work, resulting in lower income. The price of work will be one of the main factors determining workers' income. In this regard, suitable jobs will achieve relatively lower incomes, and worse jobs will be compensated with relatively higher salaries. In this way, a developed job market will establish an objective price for labour and balance interest across all jobs. Since workers will determine their own income, they will also be most satisfied with their earnings. Unions as mediators between the employers and the employees will no longer be required.
The existential security of people is necessary for societal stability, and therefore, society will guarantee it. In the new system, all workers will automatically be economically secured after leaving any job. Losing a job will no longer be financially stressful, and each worker will be able to find a new job quickly. This will remove the great fear that has spread around the world. Capitalism finds its primary motivation for work in the workers’ concern for their economic survival. That is why it cannot guarantee people financial security. The new system will motivate work through the freedom to choose work and the satisfaction that comes with it.
The system would have no meaning without valid regulations on workers’ responsibilities. If workers, in their quest for competitiveness, offer productivity they cannot achieve, the system would collapse. For example, today’s politicians do precisely that when they promise a better standard of living than they can deliver. The new economy will establish an advantageous system of accountability to ensure workers achieve the productivity they promise, so they will not dare offer productivity they cannot deliver. It will be realized so that workers guarantee the productivity they provide through a new value I call the “productive value of a man.”
It would not be sensible to present a new and complete form of bearing responsibility in this essay since I have developed and introduced it entirely in my book Humanism. But in short, it is necessary to determine and present the total contribution each person has made to the creation of accepted values in society. A numerical value will present this contribution. It includes the capital values a person possesses as well as all other non-capital values he has accumulated in society. It would be similar to corporate shares, but in a human context. These shares would represent a person's productive value. They will also provide workers with a regular income, ensuring they are valued. These shares should also be inherited from their ancestors. These shares would become an effective means of distributing the workers’ responsibilities to achieve the desired productivity in the manufacturing process. If workers do not meet the proposed productivity, they will take responsibility by losing their shares proportionally to the unrealized productivity, which is, in other words, the damage they have caused. The possible loss of shares will prevent workers from achieving productivity they otherwise could not reach. Besides, greater responsibility in the production process will lead workers to base their mutual relations more on cooperation than on competition at all levels, thus contributing to society's productive development.
Such people’s responsibility will extend to everything they do in their lives. If people do something useful to society, they will be rewarded with these shares. Conversely, if people harm society, they will be punished by losing their shares. Courts will enforce this, as is common in today’s democracy. Here, we should immediately point out that the democracy we know has significant disadvantages. Namely, two people can quickly agree about something, but never about everything. People can hardly agree on anything and therefore can scarcely make decisions that satisfy everyone’s interests. The democracy we know cannot solve this problem. We need a new democratic tool that makes optimal decisions for everyone. This will be done through democratic anarchy.
What is democratic anarchy? Let each person have an equal right to punish, say, three individuals who disadvantage them most in any given month, and to reward, say, three individuals from whom they gain the most significant benefits in any given month. The rewards and punishments may have an equivalent value of, let’s say, one dollar. Such small, direct power in the hands of the people will motivate each member of society to respect every individual, create the greatest possible advantages for the community, and diminish or abolish all forms of disadvantage. As a result, bullies will no longer harass children at school, bosses will not abuse their employees at work, neighbours will not produce excessive noise at night, salespeople will not cheat their customers, and politicians will not lie to people. They will all try to please each other in the best possible way. My book Humanism explains this new system of bearing responsibility in detail.
No economy can be more productive than one where the best available worker gets the job they are needed for. In this model, public companies will become more productive and more profitable than private ones. That would put private companies in challenging positions or even lead to potential bankruptcies. Under competitive pressure from public companies, private company owners would try to increase productivity similarly to public companies. They would not be able to do it well enough because they lack the operational capabilities to compete with public companies. Specifically, private entrepreneurs would not be able to accept workers' participation in decision-making and profit-sharing processes because, in that case, they would no longer be able to gain any advantage for their workers in their own companies. What then is private ownership for?
Since workers in private companies lack the freedom of employment in public companies and cannot share in the profits, they will be less interested in working for private companies. Private companies, along with capitalism, will fade from history. Society will adequately compensate private property owners.
In the new system, all companies in a region will, over time, merge into one big company. The company will have centralized leadership to coordinate work as effectively as possible. It will open job positions where they are needed and close those that are no longer necessary. This economic organization will reduce market competition between companies, but it will ensure production efficiency by reducing competition to the level of jobs. The new economy would bring values that are less profit-driven and more focused on the maximum satisfaction of human needs.
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Direct democracy will be extensively developed and implemented in all strategic political and economic decision-making. For example, with the integration of information technology, each person will participate in the decision-making process on how much income should be separated for taxes after the leadership proposes, and the parliament accepts, the minimum income tax percentage needed for the system to operate. Together, people would create a fiscal policy for society. They would democratically decide how much tax money to allocate to education, health care, public safety, infrastructure, and other services. This would form the democratically planned economy Marx desired but could not conceive without information technology. Production based on consumer demands is the most rational and stable possible. Given that the new system fosters steady and positive relations among nations, people will no longer allocate money for military needs, and armies will, therefore, cease to exist. In a developed democracy, war will no longer be possible.
The political and economic model described here will enhance production efficiency and stability, bring justice to production and distribution, and offer far greater advantages to all members of society. By accepting it, and thereby ushering in equal rights and powers in society, people will become genuinely equal. Only that should be called socialism.
In general, the new system will rid people of authoritative pressure and give them the freedom to follow their own interests, while also driving people toward mutual respect. Such experiences will demystify the values imposed by authorities and teach people to live according to their true nature, which will, in turn, free them from all types of alienation characteristic of present-day society. Furthermore, the system will teach people to set their needs according to what they can satisfy. This is the chief prerequisite for overcoming destructiveness in society because people who permanently satisfy their demands are not destructive. The proposed system promises a natural, harmonious and highly prosperous development of society.
The new system will give people the freedom to discover their true values and connect with their own nature. They will begin to understand that work itself is a great value; individual-to-individual is a prime value, while goods will lose their alienated value. Once they follow this, they will also understand that collective consumption is the most rational form of consumption, and they will be willing to allocate all their income directly to taxes, so all goods and services are distributed free of charge while establishing the most stable and rational democratically planned economy. This is communism; the best social system possible. That was what Marx desired but couldn't define: a flourishing society.
My book “Humanism” presents socialism and communism in detail. It is available free of charge here.
April 03, 2012