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How Marx Failed

By Wen Wryte

Amid all the hysterical grievance-mongering we hear today from the radical progressive liberal-Left, the specter of Marxism is barely concealed. The surface veneer of ‘oppression’ outrage is an imperfect disguise for the rhetoric of anti-capitalism. The message is always the same and is still a lie: that capitalism is the cause of the world’s misery and the reason why poverty exists.

The blame for this situation can be placed firmly on Karl Marx, who perfected the rationale of persuading one group of people to hate another group on the basis of lies about the second group’s responsibility for the suffering of the first. He wasn’t the first to use this conceptual model, but he certainly hit the big time with his class theory, the conflict theory of social relations, and the lie that capitalism existed for the sole purpose of exploiting the workers and stealing what was rightfully theirs.

The truth is that Marx’s economic theory was already obsolete by the time he published volume one of Capital in 1867. If he’d bothered to keep up to date in the Reading Room of the British Museum he would have known that the Labor Theory of Value (which he adopted uncritically) was anachronistic even by the 1850s. By that time there were so many other cost factors involved in the production, distribution, and marketing of any product that Marx’s claim that the value of a product is determined solely by the labor put into its production was no longer tenable, and his argument that the total product of the worker’s labor belongs entirely to the worker becomes a moral fiction.

Marx’s economic model might be credible when applied to a peasant or artisan subsistence economy, but it is hideously inapplicable to a free-market industrial economy. And yet his political theory is based on the idea that because the workers cannot retain all the product of their labor the capitalist system must be destroyed. The result — as has been demonstrated by every Marxist experiment to date — is that that the production of goods is drastically reduced, shortages abound, and ordinary people are much worse off than they were before.

Marx failed to understand any of this, yet blamed capitalism for the misery of the poor, a judgment not only maliciously misinformed but also blatantly dishonest. His mistake over basic economics, his conflict theory of social relations, and his ideology of ruthless and violent class warfare have been the inspiration for political upheavals that have brought a life of misery, poverty, and premature death to hundreds of millions worldwide.

In fact, it was capitalism — not socialism of any sort — that was responsible for the great improvement in the quality of life of the working class in the 19th century. The context was the world’s first industrial revolution in England and subsequently elsewhere. In 1801 the population of England and Wales was 10.5 million (according to the first national census); a hundred years later it was 30.5 million. Average life-expectancy had risen from around 40 years in 1801 to around 50 in 1901. Not only were people on average living a lot longer but they were healthier too and on average their diet was better and they had more leisure time. The quality of life was such that in 1901 it was not unusual for an upper-working-class family to employ a live-in maid.

Despite Dickens’ dreadful tales of life in the slums of London the average person was in fact living a much better life in late Victorian England than had been possible at the beginning of the 19th century. The one factor that contributed more than any other to this state of affairs was the growth of industrial capitalism and its capacity to produce ever-increasing quantities of manufactured goods at lower prices at a time of rapidly-increasing population. This remarkable achievement was mirrored by the increase in food production due to startling improvements in crop yields, with fewer workers on the land.

Yes, there were overexploited workers. Yes, there were slums, deprivation, and disease. Yes, the workers continued to want improvements in pay and working conditions (who wouldn’t?). But this did not mean that capitalism had ruined the lives of these people. Instead, it had made it possible for them to aspire to — and achieve — something better, a prospect not available had they remained as landless farm laborers in an industry where the demand for labor was rapidly declining. Marx was wrong.

Marx’s mistake (in addition to his economic illiteracy) lay in not making a valid comparison between the conditions agricultural workers toiled in and the conditions they could expect if they moved to a town or city and worked in a factory. In almost every respect, the conditions and pay in the factories were far better than in the agricultural sector. The ‘greedy’ capitalists paid their workers more than the landowners did and provided better working conditions (indoors for a start). Life was hard compared with today, but the only valid comparison is between the options available at the time.

Marx made his judgments based on his comfortable middle-class lifestyle (financed by Engels) and what he read about the English working class in the Reading Room of the British Museum, supplemented by what Engels told him about factory conditions in Manchester. Had either man done some focused and systematic field research, Marx might have come to a very different conclusion about the supposed evils of capitalism. Capitalism was — and still is — by far the best system for producing goods and services on a massive scale, and at reducing costs and lowering consumer prices, that has ever been developed.

What the champions of socialism never admit is that socialism as a system of economic control has never increased the net amount of goods or wealth available to the human race by even one iota. Only capitalism can produce and distribute wealth on a sufficiently large scale to support the needs of billions of people. Traditional methods of production and distribution are never going to achieve this. Putting the government in charge of wealth-production and distribution will never achieve this, it only makes things far worse. This is because politicians care primarily about power, whereas capitalists care primarily about returns on capital. Enlightened self-interest is actually far more likely among capitalists.

The solution to poverty is not socialism, but more of what already works to create jobs, increase productivity, and reduce prices. Of course, capitalism has faults, and government can play a role in inhibiting these — for example, market manipulation, monopoly interests, and worker mistreatment. And a safety net of social welfare for those unable to support themselves is of benefit to society if it helps as many people as possible to become economically active. But the state controlling everything from the cradle to the grave is a recipe for social dysfunction and growing economic stagnation leading to societal crisis and collapse (which is what we see happening today in Venezuela).

The final evidence that Marx was wrong about capitalism is that levels of world poverty have continued to decline and are still declining, due to Western-sponsored economic development of under-developed countries along capitalist lines, and this is happening despite the continuing efforts of Marx-inspired activists to destroy capitalism and the prosperity it brings.

Marx wanted to destroy capitalism — to kill the goose that lays the golden egg — whilst arguing that this would benefit the workers and the poor.

He was wrong, and governments inspired by Marx continue to prove this even today.

Wen Wryte is the pseudonym of a retired teacher of philosophy who likes a quiet life.

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