Last night I attended a discussion of Karl Marx at the Economic Club of Chicago. You might find it incongruent that an Economic Club discusses Marx. Or, you might think it’s less than satirical that the ECC is discussing Marx, since Chicago’s government operates more like Putin’s than it does Lincoln’s.
I thought the discussion was especially interesting given a few backdrops.
First, Marx, Mao, and Lenin saw no difference between being a Marxist, a Communist, or a Socialist. As a matter of fact, Socialism is the highest form of evolution in Marx book Das Kapital. Layer that over the recent US election. Out of the closet Socialist Senator Bernie Sanders pulled in a lot of the Democratic Party vote. Whether it was true believers or people dissatisfied with an establishment candidate, no one knows. But, a WSJ article cited at the ECC said 31% of people aged 19-29 fully believe in Socialism. Furthermore, 51% don’t believe in capitalism.
The reality is that in practice, Socialism has never worked.
Marx was not an economist. He studied philosophy. His co-writer Engel was the person who could turn a phrase and make the ideas stick. One thought in our discussion was Marx had more of an impact on the 20th Century than any other philosopher, including any religion. There are only two “Marxist” countries left, China and Cuba. Clearly, there are plenty of despots.
I think Marx ideas are sort of sticky because to an untrained mind they sound good. As a matter of fact, we implement many of his ideas in America. Progressive income taxes and public education all are ideas from Marx.
In our discussion, a lot of points came out. One of the most interesting I found is Marx view on innovation. He postulated innovation created rancor and strife, with a fight between the worker and the owner. The truth is that innovation has made our lives better. But, if you look at the world Marx saw, it was very different than today.
Workers in Marx time lived in squalor. In Russia, 30% of the population wasn’t even equal to a slave. They were like untouchables or lower.
But, Marx also missed that there was dignity in work. People don’t work for money. They work for dignity and freedom. Marx talked about freedom, but in practice, people in Marxist society have anything but. Marx missed costs and opportunity costs. Marx missed the essence of what it was to be a human. Capitalism is rooted in humanity as we have seen with studies like Economics of a POW Camp.
In developed western nations, I don’t think we have a system of unbridled capitalism. We have mandates, taxes, centralized programs and regulations that create imbalances. Markets are incredibly efficient. We need to embrace them. Blockchain might have a lot to say about that in the future.
Capitalism is resilient. If allowed, creative destruction allows capitalism to reinvent itself again and again. Capitalism has lifted more people out of poverty since the fall of the Berlin Wall than any other economic system.
Marx obviously never met a person like Gregg Oldham who co-developed Hackman-Oldham theory. That theory shows that people get motivated by self-determination. Not money. He also never met the economists of the Chicago School who strongly believed in individual rights and property rights versus centralization and state-owned enterprises.
Would Marx have developed his theory today given the state of the world?