Marx is spinning in his grave
I’m neither an economist nor an historian, but I know enough about Marx to know that none of the governments that have been established in his name followed Marx’s theories. Suffice to say that Marx taught that socialism—and eventually communism—would arise in mature capitalist economies, when the workers got tired of labor exploitation and overthrew their capitalist overlords. Marx believed that the nations most ripe for this revolution in his time were Germany and the UK.
Marx was long dead by the time Lenin and the Bolsheviks claimed his mantle in the 1917 Russian Revolution. To resolve the paradox of how a Marxist revolution is legitimate in a predominantly agrarian pre-industrial society, Lenin et al. sidestepped this inconvenience by proclaiming “socialism in one country.” IOW, socialism because we say so. Of course, the West was happy to accept the re-branding as a way of alienating Marxist economics for its workers.
In 1949, Mao and his cadre came to power in China, branding his totalitarianism as Marxism, again imposed on an agrarian and decidedly pre-industrial society. The same could be said of Hoxha’s Albania, Castro’s Cuba and Kim Il-sung’s North Korea. After WWII, socialism did come to East Germany, but that was imported on the backs of Russian tanks, not the result of a worker’s revolution.
Today’s China is neither Marxist nor Maoist. It is a government-controlled kleptocracy:
“Deng Liqun (no relation to Deng Xiaoping, China’s leader at the time, who had initiated the economic reforms) noticed that many rural businesses had started to hire a large number of workers. Deng, citing Das Kapital by Karl Marx, began to sound the alarm about the greedy capitalists extracting surpluses from the Chinese proletariat. To him, large private businesses were inherently exploitative.
“Deng’s warnings were ignored, but they turned out to be prescient: China’s workforce was about to get squeezed. According to official Chinese statistics, in the real economy—that is, agriculture, industry, and utilities—the share of labor compensation relative to the value of all economic inputs, such as raw materials, production components, and capital, fell from 21 percent in 1987 to 15 percent in 2023, the last year for which data are available.”
This is far from Marx’s vision of government by the proletariat. Today’s China is neither a Marxist state nor a worker’s paradise. The workers aren’t exploited by free-market capitalism, they’re exploited by state-controlled capitalism.
Of course, Marx was a creature of the 19th century. He wouldn’t recognize a world of the internet and bitcoin. And to say that there is no Marxist state today is simply a recognition of Marxist anachronism. Marx was right about the control of labor by capital, but he was risibly wrong about the mechanisms available to correct that imbalance. Indeed, in the third decade of the 21st century, the world is headed rapidly in the opposite direction.
How China forgot Marx
Marx was long dead by the time Lenin and the Bolsheviks claimed his mantle in the 1917 Russian Revolution. To resolve the paradox of how a Marxist revolution is legitimate in a predominantly agrarian pre-industrial society, Lenin et al. sidestepped this inconvenience by proclaiming “socialism in one country.” IOW, socialism because we say so. Of course, the West was happy to accept the re-branding as a way of alienating Marxist economics for its workers.
In 1949, Mao and his cadre came to power in China, branding his totalitarianism as Marxism, again imposed on an agrarian and decidedly pre-industrial society. The same could be said of Hoxha’s Albania, Castro’s Cuba and Kim Il-sung’s North Korea. After WWII, socialism did come to East Germany, but that was imported on the backs of Russian tanks, not the result of a worker’s revolution.
Today’s China is neither Marxist nor Maoist. It is a government-controlled kleptocracy:
“Deng Liqun (no relation to Deng Xiaoping, China’s leader at the time, who had initiated the economic reforms) noticed that many rural businesses had started to hire a large number of workers. Deng, citing Das Kapital by Karl Marx, began to sound the alarm about the greedy capitalists extracting surpluses from the Chinese proletariat. To him, large private businesses were inherently exploitative.
“Deng’s warnings were ignored, but they turned out to be prescient: China’s workforce was about to get squeezed. According to official Chinese statistics, in the real economy—that is, agriculture, industry, and utilities—the share of labor compensation relative to the value of all economic inputs, such as raw materials, production components, and capital, fell from 21 percent in 1987 to 15 percent in 2023, the last year for which data are available.”
This is far from Marx’s vision of government by the proletariat. Today’s China is neither a Marxist state nor a worker’s paradise. The workers aren’t exploited by free-market capitalism, they’re exploited by state-controlled capitalism.
Of course, Marx was a creature of the 19th century. He wouldn’t recognize a world of the internet and bitcoin. And to say that there is no Marxist state today is simply a recognition of Marxist anachronism. Marx was right about the control of labor by capital, but he was risibly wrong about the mechanisms available to correct that imbalance. Indeed, in the third decade of the 21st century, the world is headed rapidly in the opposite direction.
How China forgot Marx
If one accepts the current speculation about AI and automation, Marx’s prophesies about the probable results of capitalism are likely to manifest themselves here in the United States.
@Jack,
I think Marx was anticipating a revolution by exploited workers, not by the unemployed.
That said, how would you predict the outcome of AI and automation to play out in economics? Or will that be moot in a world consumed by global warming and resource wars?
@Joel,
The workers of the automation/AI future won’t all be unemployed. Many will be exploited and impoverished. The overarching Marxist principal would be realized: exploitation of the “masses” by the “wealthy” leading to revolution. Should revolution occur, it resulting from exploitation of medieval populations, as in the case of Russian serfs, or “wage slavery” in an industrialized setting, or a combination of the two, won’t matter. The result will be from similar dynamics.
@Jack,
Thanks. Having read a few books covering the Russian Revolution, I’d say that outcome isn’t a good look.
If it were to occur in the US, it would certainly be a far better fit to Marxist theory than Czarist Russia or 1949 China.
I agree that the Russian result doesn’t seem desirable. I think there is a real concern about the problem of reduced earning opportunities likely to result from AI and automation. Reports of reduced opportunities currently are widespread. Guaranteed universal basic income? Or would that just result in inflation?
@Jack,
If the earnings from AI and automation are taxed and those taxes are used to fund UBI, that shouldn’t be inflationary. If UBI is just funded by printing money, I expect it would be inflationary in the long run.
@Joel,
“Earnings” from AI and automation are likely to be largely capital gains instead of income and, unless the tax structure and rates are changed, insufficient to cover the costs. I think we’re in for a bumpy ride.
@Jack,
You’ll get no argument from me about the bumpy ride.
I’ve long held that capital gains should be taxed like income. For the more affluent, capital gains “are” income.
I’d also be happy to see the top marginal income tax rate somewhere north of 70%. Many MAGA Americans regard the 1950s as a golden age of prosperity. The top marginal tax rate was over 90%.