Was Karl Marx right?

Was Karl Marx right and relevant today?

With capitalism in trouble and society becoming more stratified, many people are asking the question, was Karl Marx right? Maybe not in full but partly, did Marx’s economics make some sense?  People have dismissed Marx, however, why was he so wrong? There is a very clear answer. It is so fundamental, that you do not have to look further. Karl Marx was horribly wrong and incorrect. In fact, I can not imagine how thinking people can not see this. Why anyone would think different after they understand his basic flaw in his economic theory.

Karl Marx on price

In the communist manifesto Marx wrote:

But the price of a commodity, and therefore also of labour, is equal to its cost of production.

On this one sentence all of his economic theory is wrong. In fact, his economic doctrine is nothing more than a optium for the masses. Marx was wrong because the price any good is determined by supply and demand. The price of labor is determined by supply and demand.

How crazy is it, that people somehow connect the cost of production with price. When did cost have anything to do with the price? So does that mean if I make some expensive useless thing that no one cares about I can charge a high price? Does that mean if I am some expert on door hinges on Medieval outhouses and I did my PhD on this I should be paid more for this?

I live in Kraków, Poland and a builder here told me he will be selling each unit in a building he completed for 10,000 a meter. I asked him why? He said he calculated the cost of production and factored in a nice profit. I said that is too much given the market conditions. People do not make that much and will go for alternative solutions, the demand will not be there.  The apartment complex has been empty for years and the bank is taking it. The market does not care what you paid for something. If you buy a stock do you think the person you are trying to sell it to cares about your investment cost?

If you buy anything the value of something is determined by the aggregate demand and aggregate supply. This is marginal economics. It is illustrated in something called the diamond water paradox, that is diamonds are expensive but have no utility or value. While water is necessary for life but is cheap. Because supply and demand determine price not some abstract notion of cost of value.

A few of my friends are anti-capitalist. They never can answer in a direct way about the question what about Marxist theory of price and wages? Marx was more of a fictional novelist and anti-capitalist then an economist.

Now there is not need to explain this further or go into his theory further. However, I invite you to read the rest of this post as it has great internal resources that further illustrate the faccic of Marxism and socialism.

Living in a post communist world

I live in Poland. You will find no followers of Karl Marx’s. I wonder why? Herein Eastern Europe everyone knows it is all fake. Marxism, socialism is about big government and corruption. If prices are not determined by the market,there is something called non-price rationing. Everyone suffers as it is a system built on unfairness. It does not work. Marx’s theory has not a shred of truth in it because Marx did not understand how prices or economic value is determined.

The world I live in, that is a post socialistic country is trying to rebuild from socialism. I have no idea why people living in rich America believe capitalism has failed and America will collapse.  America in crisis is so rich you can not believe it. Americans are spoiled if they think capitalism has failed and socialism and Karl Marx was right. People who think Marx was right or capitalism is bad or is capitalism over, need to live in a socialist country or post socialist country for a while.

Now that you understand why Karl Marx was wrong take my poll on whether capitalism is good or bad.

30 Replies to “Was Karl Marx right?”

  1. Duckabush Writer says:

    You have a PhD? I have never read such writing.
    First what Poland had was State Capitalism. Had you read any Marx you would know he called such systems “barracks communism”…he would have hated Poland, the USSR, etc.

    “Americans think Karl Marx was right” – American know nothing about Marx – most think “Marx” was one of the Marx Brothers – you are not correct.

    I wwill not waste anymore of my time, Capitalism is going down the drain, just as Marx said it would, only a matter of time. If you read anything of Marx works read On Money – It is the United States today and he described it perfectly 150 years ago.

    PhD – from where? Liberty “University”.

    1. Mark Biernat says:

      Thank you for the comment on Karl Marx and the USA. Lets talk about this OK?

      First, like I wrote Marxist theory of value was incorrect. It held that the value of a good is based on the amount of labor put into it. That means if I create a widget and it takes me 100 hours of labor, it should be worth more than if my neighbor creates a doohickey that took only 50 hours to create, even though aggregate demand for the doohickey is greater and it has more usefulness.

      This is why Marx was wrong. His theory of value tried to be objective about how much something is worth. While the Austrian economists reminded us that value is subjective based on supply and demand.

      This means something is worth what people will pay for it or that they value it at. That is pretty clear to me.

      Second, Poland and the Soviet Union had communism based on ideas of Marx. It destroyed people’s lives. The effects continue to destroy people’s lives. It was a surreal existence. You might read things out of a book about Marxism but come live in a post communist country. The reason it failed is everything was planned from above. What was deemed valuable and important were things that were not important. Human nature corrupted the ideal in every case and the party members got rich. There is always economic stratification. The question is what is it based on, political and police power or hard work and innovation?

      See the economy is something very complex. It can not be engineer from above. The economy is me and you doing business with others.

      Third, The USA is a rich country. It is so rich the poorest people live like kings and queens in comparison to the rich in upper class in poor countries. If you want to talk about this please write. Marx destroyed everything.

      The USA has a business cycle now because of the Federal Reserve bank pushed interest rates to 1% so we could all go shopping again after 9/11. They helped fuel the Internet stock bubble, the great depression etc. Why? Because economics is complex and can not be steered like a ship. It is not an engine that needs to be started. It is organic and dynamic and changing based on individual people.

      If you are talking about the Gini coefficient, why does someone elses success block you from living your dreams? Is it motivated by jealously and greed? Anyone in today’s America can make it, even in a down turn. If this was not true, why are there so many illegals risking their lives to work in America?

       

    2. To Duckabush Writer:

      State capitalism? This is the later terminology developed by socialists after seeing socialism — as in the Union of Soviet Socialist Republics, and so — wither and collapse. The terms like state capitalism and crony capitalism are designed to confuse. Capital is rather what Marx thought it was, but various forms of capital — to include money, labor and ideas, management expertise and so on — act best when free from too much state control. Socialism, in all its forms with which I am familiar, devolves to state power, and therefore like Italian Socialism, properly termed fascism, it is not so much a question of ownership, as it is a question on control over capital. State capitalism is an idiotic term, for the state seeks control while capital, in all its forms, seeks freedom. The early 20th century anarchists knew this, which is why National Socialism, Soviet and Sino Socialism and their kin worked so hard to clutter the ideological vocabulary and muddy the intellectual waters. Socialists seek control over capital, and Marx urged them on with the notion of a dictatorship over those workers who would throw off their “chains” only to be fitted for new ones. I wager that Duckabush has not read “Das Kapital” cover to cover, and the ad hominem directed at this site’s operator is childish and answers none of the issues raised therein. Rather like Marx’ rage against his green grocer and other vendors who — gasp — wanted to be paid for the products the Marx family consumed, but balked at paying for. Such is the nature of today’s naïve socialists and communists.

  2. Karl Marx was wrong.

    Free men live, Socialist exist
    (except for there psychopath leaders).

    Even if at times we make mistakes and have difficulties we are not well feed domesticated animals this is not our nature since we can and do think for our self. Perfection is hell.

    Socialism is an immoral and utopian system of control.

    Systems are static and do not tend to change. It’s always about protecting the system not its members.

    Socialism can never succeed long term because it dictates the offer wile free markets manages the demand.

    It is an intellectual fraud that feeds bureaucratic parasites at the expense of productive citizens. They are like ants feeding out of a tree they will do so until the tree dyes.

    For to many politicians it has been a very seductive poison and once a large percentage of citizens have tasted it they become dependent and the long downward slope get underway. As things deteriorate the state will blame its failure on capitalist promoting more social reform and accelerating the decline toward total control.

    Any one that think that Big Government is “we” lives in the Twilight Zone.

    1. Mark Biernat says:

      Socialism and Marxism is immoral. I have seen it with my own eyes how it destroys the human spirit. Also it does not create a classless society, but rather a class of bureaucrats that have power over others, restricts freedoms and tells what to do.
      I have experienced even US bureaucrats flexing their power in their petty jobs, while collecting money from US tax payers. It was not a pleasant experience. Expand that exponentially and that is socialism.

  3. A commodity has a double nature: use-value and exchange-value.
    The exchange value is determined by it’s social production cost.

    Supply-and-Demand can explain fluctations about a price (and Marx acknowledge this) however it cannot explain that value nor why houses
    consistently have many times higher prices than shoes.

    Also labour market consistently cannot be equalised (there are always unemployed) and this is said by both Marx and Keynes. Also a worker will not work under a minimum price which cannot sustain it.

    Supply and Demand tottaly fails here and Marx’s analysis of exploitation Capitalism explains why. Also the capitalist crises theory is manifested in capitalism again and again. Marx is not a prophet although a very good realist and capitalist analyser.

    Capitaism is unjust and irrational. Now about the so-called socialist countries and how much marxist there were that’s another story. And everyone who is sincere humanist and not just an apologizer of ruthless capitalism is very welcome. The point is to make a better society.

    If somenone has this goal but fails in the process is better that somenone who apologizes for all the unjustness. Thanks.

    1. Mark Biernat says:

      You have a good understanding of Marxist theory but I still respectfully disagree.

      Some houses are cheap, like 1 dollar, some shoes are expensive, like ones with diamonds or ruby slippers, can be worth more than a house in Detroit. What is the shoes have some artistic or historical or celebrity, value then it can be worth many times a house. Value is based on subjective supply and demand. I have seen 100 dollar sandwiches and 1 dollar sandwiches.

      So to look at the unemployment issue you have to understand why someone is unemployed. It is either two reason, they are offering too high rice for their labor or their skill set is not in demand. I am not saying that is a nice thing to be without work. I am just saying that is the reason.

      So the worker has two options, to demand less money or switch professions and skill sets. The workers which can do this will find themselves in better positions, than workers who hold onto outdated work models. No one owes you a job. A job is about creating value greater than your cost.

      The days of mindless factory work is over. If you are not creative and can not see the future of the workplace, and this takes real work thinking, then you will be left behind.

      I have had to reinvent my skill set continuously. I can not rest on my laurels or expect anything from anyone. What is so wrong with that?

      Houses do not sell in the USA because the prices are too high. It is that simple or some restriction on the market.

      Similarly, unemployment exists as people have high expectations about wealth and how much they should earn, or have not taken the time to think up creative ways to apply their talents.

      I also live in a post socialist country and to think about the Marxist theory here and talk about the worker is a moot point. Who wants to be a worker? Everything one should be thinking like an owner. Marxist theory is a joke in these post socialist countries. No one wants to hear it as it did not work. The system destoryed people’s hopes and dreams.

      I do not mean to belittle you or Marx. I also agree with being a good human and humanist. I think most people want this. But capitalist are not about taking advantage of people. Some might be but this has nothing to do with capitalism but rather someone who is not mindful the the seven deadly sins and has allowed greed to consumer their lives.

      But capitalist create great things like Bill Gates, he is giving away most of his money like 90% and enlisting others to pledge at least 50% to charity like Warren Buffet. Georg Soros is a totally liberal philanthropist as as many capitalism.
      Further like Adam Smith says the best way we can all help each other is when we all act on our enlighten self-interest.

      See Darwin was wrong. Life is not about the survival of the fittest, but cooperation, creativity and communication are more important traits in passing our genes and humanity to survive. Capitalism is based on these things as well as trust.

      I do not buy into class warfare of an extreme Hegelian model of conflict or day-to-day interactions of people in business.

      Come back and explain yourself more. I am not opposed to what you say, I just do not believe it to be true. I ideally would like a unified humanity which was motivated only by selfless production, but still in our DNA resides a little bit of the instinct to better ourselves and compete. However, if this is done in an enlighten way we all win.

  4. William Ferguson says:

    Does that mean if I am some expert on door hinges on Medieval outhouses and I did my PhD on this I should be paid more for this?

    That depends upon assumptions.

    Everyone suffers as it is a system built on unfairness.

    There is no empirical evidence for either of that.

    Furthermore, market economics do not advocate any forms of fairness and contemporary macroeconomic theories on labour do not, anywhere, suggest market economies are built on fairness. Conventional capitalist economic theory cares not for “everyone”, only the most abstract theoretical work, which could cannot be refuted could make such a claim.

    The problem with your position, and the position of your economists if they accept what you have said, is that they clearly have no understanding of the economic behaviour. You do not need an education to understand why communism, and Marxism, was both successful and why it provided incentives. Leave arguing against Polish communism in its entirety to your politicians, who at least have some incentive in indoctrination.

    1. Mark Biernat says:

      We both want justice. We both want economic fairness.
      You wrote: “macroeconomic theories on labour do not, anywhere, suggest market economies are built on fairness.”
      Market economics is based on fairness. In fact Adam Smith was a moral philosopher. He believed in the goodness of people and when they act on their own enlightened self-interest society would be raised to an higher level of justice. What is so wrong with that?

      People not only do good with the market by applying their talents to satisfy demand, but also when people are free they tend to help others out as humans are at their core good.

      Charity and freedom goes a long way.

      Further, you care so much about injustice but what about the real world? I would rather be poor in the USA than rich in many countries. The poor in the USA have ps2, the Internet and DVD players.
      I am sure of it that you are sincerely caring about economic injustice as I am also. However, to anyone who lives in Eastern Europe there is now way, you could argue that communism or Marxism was anything more than a grand failure. It was so horrible. There was nothing on the shelves, no one wanted to work as there was no point, all the people in the party were corrupt and heartless. Millions died. This was universal, under Mao, under the Union (soviet) or their republics.
      It was a system that treated people like cattle.
      Rivers and air are polluted and the nothing was good, or fair. Only with a market system is the air and rivers being cleaned, my friend is making money by owning a firm that cleans rivers. What is wrong with that? He is a nice guy and employs many people.

      Polish communism was not as bad as the church as the center of resistance and people operated small markets.

      However, when communism fell, it was like a great burden was lifted, they were free from a surreal type of prison. My wife remembers the first time she saw a Mars bar in the store. She picked it up and could not even figure out what it was. She had never seen anything like that. In the shops during communism there was only vinegar and bug juice, one flavor. Nothing else. You would have to wait everyday in line 8 hours for bread.
      Eight people would sleep in one bedroom with many people sleeping on the floor.
      My relatives to this day in Ukraine still do not have running water, only now
      How is that a system that works?

      How many Eastern European or post communist countries have you lived in? I invite you.
      My point is theory is one thing, but reality is another.
      Marx is one of my favorite thinkers. His classical atheism as well as his theory of value are interesting to read. I want to release a series of books on him and by him.
      I prefer to read Marx over any modern thinkers of the subject as he was brilliant. But I think if you have lived in anything type of controlled economy you can not take his theory as a perspective for a just society.

  5. William Ferguson says:

    Apologies – last paragraph

    The problem with your position, and the position of your economists if they accept what you have said, is that they clearly have no understanding of the economic behaviour that lead to communism. You do not need an education to understand why communism existed, and was popular in Poland, Russia, and pretty much every country in the world at some point. Your statement, at those of the most prestiguous economists, with a few exceptions, generally has nothing to do with understanding economic behaviour.

    Leave arguing against Polish communism in its entirety to your politicians, who at least have some obvious incentive to indoctrinate.

    1. Mark Biernat says:

      I will answer why communism can to Eastern Europe as I think I know the answer.

      But first, you are polite and well educated so I have no problem with trying to see economics from your point of view. In fact I would like to understand where people who still think Marxism as any value are coming from? I think it comes from the injustices that do exist in economics. I have written several posts on how corporate America sucks and can make you a bad person.
      I also believe in public goods like air and water that need to be regulated,
      However, this is something different from what you are saying, that is injustice in the market place exist today where we have to consider another system.
      Communism arose because people were serfs.
      They were slaves. One person would own serfs. Read the book Dead Souls by Nikolai Gogol.
      I do not have to, I live in Eastern Europe and I know that one land owner who was given this land for favors to the king would own people’s lives. One big fat big wig, guy living in a big house on the hill had all the benefits of people work. He could educate his family and the serfs he owned were given little.
      Not all society was like this but a lot of society was, even with the emancipation of the serfs this economic feudalism still existed.
      This system was unfair, inhuman and based on injustice. Communism did do away with this and educated the people. It really did a good job with this. However, this could have been accomplished in other ways. Through simple reform.
      The Communists offerd ‘bread, land and peace’ in WWI Russia and this was good marketing. The White Russians offered freedom and nation etc. These were too abstract compared to bread, land and peace.
      Further, the war, WWII destroyed everything. This was such a crazy time.It distorted any real analysis of the situation. However, as time progressed you could see that communism was not as good a market system in building a middle class.
      However, I will give you that that Europe and other countries that had feudalism were very unjust societies and people who perpetuated this were bad people.
      I know this was a judgement of moral character but it is true. How could anyone with any compassion support a system like this. Maybe they did so out of a lack of awareness.
      So Marxism was not a reaction to enlightened market freedom and libertarian economics but rather a primitive type of slavery or feudalism.
      In the cities it was not as bad, as people had free movement and employment opportunities were greater. But still the owners of the capital did not provide enough for people to live lives above anything but subsistence. I think it was a specific time in human history. Workers today in a free society have options.That is anyone can do anything they put their minds to. I am very happy that I do not live in the feudal societies that restricted human freedom or the socialist societies that restricted human freedom but rather a free market and mind society.

      1. My God Mark.

        When you have to put a wall around your country do you really need more explication or evidence that it simply did not work.
        Rivers in East Germany where dead and totally polluted and the entire place was a total disgrace.

        Marxism worked really well in theory in some University Campus millieu but not so well if you happened to have lived under it in such places as Cambodia.

        There is for some people unfortunately still this a nostalgic perception of this ideology of the perfect order, The fair, equal and ideal human system.

        The problem with this is that humans do not live in a orderly fashion except at war and in the cemetery.

        So called leftist intellectuals are not intellectual they are totally closed minded and conformist and suffer from “Cognitive dissonance”

        We do have to be responsible but the plan is that there is no plan and that is why life is such a fantastic experience when you are free.

        1. Mark Biernat says:

          East Germany Vs. West Germany, North Korea Vs. South Korea, Hong kong Vs. Mainland China, Singapore Vs. Cuba etc. There is not even a comparision. I can reading Karl Marx as a fiction but it is not the real world. I can understand where Marx was comming from given history, but it is not reality. I understand he wanted a more just society and people who want a just society might think it was a good idea but it was not. Where I live in Poland, so much was polluted and destoryed because communism.

          1. “I can understand where Marx was coming from given history, but it is not reality.”

            The alleged goals of socialism were:

            The abolition of poverty, the achievement of general prosperity, progress, peace and human brotherhood.

            The results have been: A terrifying failure—terrifying, that is, if one’s motive is men’s welfare.

            “Famine did not take long to appear and was the start, the insignia announcing communist rule as in Soviet Russia, as in Red China, as in Cambodia as in North Korea and even in Cuba. It reduced the people to unspeakable poverty, to literal starvation, and has kept them on a stagnant level of misery.” It was like being forced in to a permanent and terrible depression and “No, it was not “just temporary,” as socialism’s apologists have been saying—for more than half a century.”

            I have friends that escaped such regimes, some simply jump out from a boat at New York City harbor some where Hockey players,some had escaped Romania’s strange Communist dictator. All have done very well for them self and there family in America. They are especially very appreciative, very hard working and very family oriented. They tend to avoid talking of the past as its like a bad post traumatic experience. For them this was not a theoretical experience.

            When you know people that came out of hell you do not need to experience it your self to know this experience does not need a second chance.

          2. “No, it was not “just temporary,” as socialism’s apologists have been saying—for more than half a century.”*
            *That came from Alisa Zinov’yevna Rosenbaum. Russian born author.
            Known to all as Ayn Rand.

          3. Ukrainian famine where seven million perished. http://www.ibiblio.org/expo/soviet.exhibit/famine.html
            Or Chernobyl were just two examples of this horribe system.
            The only hope for people living under this was to escape even if you had to risk your life.
            It was no theory but a reality for 70 years. I think that was enough testing.

          4. Thank you Katya.

            “Yet one of Stalin’s lieutenants in Ukraine stated in 1933 that the famine was a great success. It showed the peasants “who is the master here.”

            Scary is it not to think that such insane person(s)could be given so much destructive power over there fellow men.

          5. For some reason the many things like the Ukrainian – Holodomor or Морити голодом by the communists was a footnote in history. Was 7 million people not enough to matter? Many people in the West have never heard about it. It shocks me.
            Or when you bring it up to a Marxist, they say that was different. How is that different? The 20th century experimented with various forms of Marxism and socialism and national socialism and communism and other societies with government control over the economy and it failed.

            Why do people forget the lessons of history that came at such a price?

            Most people want to live and live free.

          6. There are bad persons in all systems and in a free society since we are more transparent and permissive we are therefore more expose to demagogic statements. If something very bad in our economy or society is expose we need to condemn it instead of the condemning system that allowed it to be exposed in the first place.

            Actually I do not like to use the term System when it comes to Free Market Economy. Its more like an Anty-System that auto corrects its self when left alone.

            The USSR controlled the offering side of there economy instead of respecting demand. The result was as you mentioned famine.
            World Leaders that do not like freedom never have your best interest at heart. There seductive rhetoric is not important its always their action will be.

          7. Free market is not another ‘ism’ – like you said it is an anti ‘ism’. That is, it is not a system at all. Rather, it says I can exchange ideas or goods and services with you and you with me without a third-party interfering and telling us we are wrong or bad and need to do it in another way by another person’s agenda.

            “Freedom is the emancipation from the arbitrary rule of other men.”

            – by Mortimer Adler the Great books of the western world philosopher for common man.

            This is why a free market is more an anti system like you said. Who wants to be put in the chains of another man’s vision, like something from a Phillip Dick Novel.

            What amazes me both in Russia and the USA the people who understand this the most are the people trying to better their lives, not the people in power nor PhD economists. The crazy theories about economists have mislead people from Marx to Trotsky.

            It is like a relationship. If there is a man and a woman; who wants a third person interfering? It would be like if two people lets call them Michelle and Mr. O. Lets say they are having a relationship, then another person wants to watch over and direct their relationship.

            Sorry about that but it is true. Three is a crowd.

            Most isms and systems are one person’s idea imposed on others at the expense of personal liberty.

            The irony of Russia is that although the economy is a bit more controlled even today than the west on paper, with silly rules, if you are an average person living in Moscow, lets say, the government leaves you alone or there is a way around it. You can do business under the table and no one cares. You just do business with your neighbours and connections and everything is fine.
            Unless you are a big oil and gas magnate of course.

            In the USA I think the government watches economic activity closer. Maybe I am wrong and Russia is not a good example on a macro scale of a free market, because it is not. Just on a small-scale.

            In Scandinavian countries oh my goodness, I was in Denmark one summer and everything is registered official. No under the table transactions between private citizens. Danes do not even want to hear about it, even if it is small, for example being an au pair.

            Зако́н что ды́шло, куда́ повернёшь, туда́ и вы́шло

  6. William Ferguson says:

    “However, to anyone who lives in Eastern Europe there is now way, you could argue that communism or Marxism was anything more than a grand failure”

    That is not true, with the exception of Poland and some other countries who have largely replace an opposition of far left critics (as in most Western continental) European countries have simply replaced that voice with a far-right.

    In analysis of the Soviet Union you have to seperate two issues; technological innovation which, besides military, was fairly poor – even by developing country standards. The other is socio-economic. I am very suprised you mention overcrowding and water supply problems, particularly post-WWII. I would like to see empirical evidence for this. A lot of communist policies were applied to the West post-WWII because of their success in providing homes and water for large numbers of people very cheaply.

    With bread queues, again, I would need to see the evidence. Since most results which indicate relative development is often dismissed as being exaggerated by Soviet authorities, I am suprised that, particularly Polish individuals speak with such conviction about historical ‘fact’. In Ukraine, Czech Republic, Hungary, and Serbia the former communist party is still represented in parliament, and the older generation do not seem nearly as antagonistic toward their living standards, they, after all, lived through it.

    “How many Eastern European or post communist countries have you lived in? I invite you.”

    First of all, even if I lived in a contemporary post-socialist economy, it would prove nothing. I suspect any problems I have with the distribution system would not be that it is post-socialist. That, again, would be irrelevant.

  7. William Ferguson says:

    “So Marxism was not a reaction to enlightened market freedom and libertarian economics but rather a primitive type of slavery or feudalism.
    In the cities it was not as bad, as people had free movement and employment opportunities were greater. But still the owners of the capital did not provide enough for people to live lives above anything but subsistence. I think it was a specific time in human history. Workers today in a free society have options.That is anyone can do anything they put their minds to. ”

    My complaint against critiques of communism is that it is just political rhetoric. My belief system is irrelevant. If we were, though, to be truly objective economists, and evaluate communist economic policy, we would never come to the conclusion that it was a bad economic system. We can say things like “they impact of x, was probably y, ceteris parabis”.

    This, I have to say, is the same when you say “I have written several posts on how corporate America sucks and can make you a bad person.” The issue should not be, as it is currently in economics, whether corporate America sucks or not, but how Corporate America is structured, what it does, and how it uses resources and distributes them.

    There is no reason why, even after the failure of the Soviet Union, individuals would still not seek a similar economic system. Although unlikely, the idea that Marx has been refuted is ludicrous, pretty much every single economic theory could be refuted on similar grounds, see ceteris parabis.

  8. “We would never come to the conclusion that it was a bad economic system.”

    What belongs to every one as little or no value to anyone.
    Even if somehow Communism made us richer in terms of material goods it’s not the role a Government to decide how much we should produce or consume. I can technically be called poor by Government and socialistic economist standard because I am a happy fisherman living on a Island of my choice in an humble habitation and be called by the same criteria a richer middle class communist driving my Lada car to the steel mill producing the people’s metal.

    The problem in Comparing Communism with Free Market Capitalism is that there are very rigid and fixed set of rules in communism and this may be a case where “ceteris paribus” is philosophically suspect. Thanks to Big Governments we tend to forget that there is far more than production capacity in a real free market economy. This notion of production at any cost is a product of Governments and Crony capitalism.

    A free market economy is dynamic, it’s in motion and it continually adjust and self correct. Our self serving socialist ideologues detest changes and do there very best to slow it down.

  9. William Ferguson says:

    Adam,

    The problem with your post is that it is entirely your own opinion, or perhaps more accurately your prejudice.

    I have no idea how you could reach the conclusion that one system is more dynamic than another. Since I assume that you would argue communism, controlled economies, or whatever, ‘collapsed’. That is indicative of a pretty dynamic economy.

    Some of your points could be tested either theoretically, or empirically. A lot of the problems you cite are actually existing in capitalist regimes. Pollution a prime example. There are examples where state control (or community ownership) actually stops pollution much more effectively than within a market system.

    The very fact you distinguish between ‘chrony capitalism’ or ‘big government’ (within a market system presumably) is very telling indeed. The ceteris parabus clause is, therefore, important even in your own writing here. That is, without a bunch of conditions that actually exist in free market capitalism, it is an ideal system. My complaint is not against, or for, Marxism, Soviet communism, free market capitalism or an abstract theoretical model of anarcho-socialism but that theoretically, and practically, there is nothing to suggest that one is superior to another. There is, however, stuff that has happened that we should try and understand.

    The problem is, you and Mark will never make any attempt to understand economic systems. I agree a great deal of theorists may suffer from this problem, but we are not discussing the merits of the value judgements behind the model, but the model itself.

    1. Mark Biernat says:

      I can tell you that all of Eastern Europe is polluted. The air the water. People get sick and children have problems. The idea is when the community is responsible there is a diffusion of responsibility.
      When people own it personally or there is some state-private mix people take care of their own stuff.
      The state can regulate and clean up with things like taxes on pollution as the air is a public good or regulate output and call for higher standards but this can be accomplished in a free market model. You do not need to throw out the whole systems.
      Look at a guy like Milton Friedman. He was a compassionate, socially minded individual, who wrote about helping the poor and the environment, but he was for personal liberty rather tha social engineering.

      I

  10. “I have no idea how you could reach the conclusion that one system is more dynamic than another.”

    What I meant to say William is that when no different equations are employed a system can not be dynamic other than for its eventual collapse.

    You are right, It is entirely my own opinion and I am not as analytical as you are when it come time to evaluate that one is superior to another. To me its so obvious but I can appreciate and respect your comments.

  11. William Ferguson says:

    Sorry for being a pain. You are entitled to your opinion, I just get a little angry sometimes, particularly when people talk about the end of ideology or different ways of thinking.

    1. Mark Biernat says:

      William, I think in the end it is not about ideology only. For people who have experienced the effects of communism Vs. capitalism it is a reality. I am sure if you polled people who lived under both systems tha vast majority, over 90% would prefer a free economy to a controlled economy.

      I wish I could convey how much real suffering communist/marxist thinking cause. I invite you to live in Eastern Europe if you have not already. It really affected and destoryed people’s lives.

      I am not against your idea that you want a fair and just society, we all want that, but the whole idea of ethics in economics needs to be based on the idea of liberty and freedom. You personally being responsible for your moral life and conduct in society.

    2. Willam, hello from Moscow. If you have any questions about Marxism or experiences under communism ask. I am a Student so I did not live under these systems really, but my friends and family have.

  12. Katya

    Thats it, “It is an anti ‘ism’.” That is the key to “voluntary action versus physical coercion or compulsion.” Systems don’t think free men do.

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