The Failure Of Marxism & Capitalism As Necessary Political And Economic Entities

The Failure of Marxism & Capitalism as Necessary Political and Economic Entities

By Richard L. Dixon

The premise that the classical schools of Marxism and Capitalism are the basic economic and political foundations of the industrialized West is a misnomer. They are instead predatory systems which has caused the death of millions around the world. The purpose of this paper is to do a brief comparison of the two systems and how their failings in governments around the world cause have been averted with the adaptation of a system of Physical Economics (the American System of Political Economy) which is neither capitalistic or Marxism in nature. First & foremost Marxism in its purest state is nothing more than schizophrenic romantic nationalism. It is a debased philosophy floundering on the ideology of sentimentalism. “Because the foundation of communism rests on romanticism, those who continue to espouse it can do so only contrary to the warrant of reason and science, and can defend it only with their eyes closed to the fact that it is obsolete as an ideology. Already when it was found that the basic predictions of Marxism were not going to be realised, it should have been put aside. However, it was not abandoned.” (Harun Yahya, 2002). The lynchpin to the bankrupt Marxism ideology was that worldwide revolutions would happen in such heavily industrialized countries as England and Germany. Its basic foundation was built on the theory of materialism which has since been disproved by many historians and social scientists. The revolution that both Karl Marx and Fredrich Engel were hoping for in the industrialized countries never materialized. That revolution they so passionately predicted to unite the workers of the world, happened instead in Russia which was a backwards agrarian country still steeped in a feudalistic system. Russia was ripe for a socialistic revolution because it

had been defeated in two major wars Russo-Japanese War of 1905 and WWI. Czar Nicholas was no visionary leader has had been Peter the Great. He opted to keep the status quo unaware of the growing seed of discontent growing like a cancer in the rank and file of his populace. Hence Vladimir Lenin (a German by birth) played on that discontent and bought forth a revolution that he thought would be spontaneous and would spread to the rest of the world as we know it. “Lenin asserted that it was not in advanced countries such as England where the revolution would occur, but in unindustrialized countries like Russia. He said that communism would be successful there, and from there would spread throughout the whole world. To realize his dream, he spent many years, both inside and outside Russia, making reparations for the revolution. The opportunity for him to come to power arose from the confusion caused by World War l. Lenin's predictions, like those of Marx, came to nothing. Neither was the system he founded successful, nor did communism spread throughout the world. Today, the Soviet Union that Lenin founded has drifted into history, and the communist system it forced on those countries it occupied has collapsed everywhere. It is accepted that communism was the gravest and most unsuccessful political experiment of the twentieth century.” (Harun Yahya). Marxism failed at complete wealth distribution because it did not have a viable Middle Class and in essence descended into a degenerate workers state. I believe that it is important to lay out the definition of a degenerate workers state as coined by Leo Trotsky to get a general understanding of the Soviet System under the rule of Joseph Stalin. “The term degenerated workers' state is commonly used to refer only to the Soviet Union. The term deformed workers' state is used [by some] to describe states other than the Soviet Union which are or were based upon nationalized property, but in which the working class never held direct political power. The term degenerated workers' state is commonly used to refer only to the Soviet Union. The term deformed workers'

state is used [by some] to describe states other than the Soviet Union which are or were based upon nationalized property, but in which the working class never held direct political power.” (National Master Encyclopedia). Trotsky was disenchanted with the path that the Soviet Union had taken because it strayed from its true course to be a workers paradise. To Trotsky, the Soviet Union had descended into an over bloated bureaucracy. Its attempt at collectivism had failed and the power of the workers had resorted back to the state. There has and continues to be disagreement whether the Soviet Union evolved into state capitalism, bureaucratic collectivism or a degenerate workers state. It is my firm belief that the USSR progressed into a point during its political evolution that it exhibited all three traits. It morphed into these entities because it failed miserably in terms of wealth distribution by the means of collectivism. “Collectivism is a form of anthropomorphism. It attempts to see a group of individuals as having a single identity similar to a person. The collective is claimed to have ideas, and can think. It has purpose, and it acts to achieve goals. It even has a personality, called culture. It claims to have moral rules the collective should follow. It claims to have collective rights, as well.” (Importance of Philosophy). Of all the avowed Marxists vision of a Utopian Workers State, the closest had to be Leo Trotsky. Trotsky’s argument and main focus in creating the true Workers State as espoused by Karl Marx, was decentralization and power to the common people. “The radical alteration of the criterion lay in converting nationalized property from a necessary characteristic of a workers’ state into an adequate characteristic. In other words, Trotsky began to argue that no matter how degenerated and anti-proletarian, and even counter-revolutionary the political regime in the country, Russia nevertheless remained a (degenerated or “counter-

revolutionary”) workers’ state so long as property (the means of production and exchange) remained nationalized or state property. It should be borne in mind that Trotsky did not hold that the existence of nationalized property was in itself adequate for a consistent development toward socialism. That required, he rightly emphasized, a socialist proletariat in political power and the victorious revolution in the advanced countries of the West. And, he added, given the absence of the political power of the workers and the revolution in the West, the workers’ state would continue to degenerate and eventually collapse entirely. But so long as nationalized property remained more or less intact, Russia still remained a workers’ state.” (Max Shachtman, April 1943). It was his discontent with the collapse of the Soviet System under the rule of Joseph Stalin, that Trotsky advocated an armed revolt which ultimately leads to his banishment and his assassination by Ramón Mercader, a Soviet Agent in Mexico City August 20, 1940 with an ice axe. (Yes Vladimir Putin was not the first to silence his enemies while they are in exile as in the case of former KGB agent and critic Alexander Litvinenko poisoned by Andrei Lugovoy with polonium-210 which induced acute radiation syndrome and his eventual death). Yet even Trotsky with all his talk, philosophy, and ideology and true ownership by the worker class and distrust of the bourgeoisie, could not get it right about the importance of a viable middleclass as the financial catalyst in terms of efficiency and true wealth redistribution. “This is an iron law that derives from the fundamentally different nature of the class rule of the proletariat as contrasted with the class rule of any private-property-owning class. For example: Under a Bonapartist regime, be it of the early (Napoleon I or III) or the modern (Bruning or outright fascist) variety, the class rule of the bourgeoisie is maintained and fortified by virtue of two interrelated reasons:

1. Although the bourgeoisie does not enjoy full or direct political power, it continues to own, as individuals and as a class, the means of production and exchange, and to draw profit and power from this ownership and 2. The regime which deprives the bourgeois class of full or direct political power uses that

power to strengthen, to consolidate, and to expand the social order of capitalism, to benefit the bourgeoisie in the most easily ascertainable tangible manner. Similarly, though not identically, under feudalism, where ownership of land was in private hands. The proletariat, however, is not, never was and never will be a private-property-owning class. It comes to power, and lays the basis tor an evolution to socialism, by nationalizing property and vesting its ownership in the hands of the state, making it state property as a preliminary to transforming it into social property. The state is not a class, but the complex of institutions of coercion (army, police, prisons, officials, etc.). Once the means of production and exchange have been made state property, the question, “Who is the ruling class” is resolved simply by answering the question: “In whose hands is the state?” It cannot be resolved by answering the question: “In whose hands is the property?” because no class then owns the property, at least not in the sense in which all preceding classes have owned property.” (Max Shachtman). It is important to lay this groundwork because the past Marxist folly of collectivism, statecontrol, nationalization, and state capitalism based on the failed Totalitarian Models of Joseph Stalin (of Russia), Pol Pot (of Cambodia), Mao Zedong (of China) and his failed Peoples Revolution, Kim Il-sung and his son Kim Jong-il (of North Korea), or Fidel Castro and his brother Raoul (of Cuba) with their lunatic stogie Ernesto "Che" Guevara were responsible for the death of up to 100 million people. In essence, their rule wasn’t about wealth distribution it was

about having a Godlike aura about them which developed (especially in the case of Kim Jong-il) into a Cult status and following. Now that I have laid out the failings of Marxism, I believe that is necessary to take a hard look of the other broken system called Capitalism or the politically collect term called globalization or unregulated free trade. The spread of globalization or unregulated free trade as it exists today is a failure. It has devastated many economies. The inequalities which exist in countries such as Nigeria, is an indirect result of Colonial Imperialism. These countries were left in a weakened state by the brutal rule of the governments of Great Britain, France, Germany, Spain, Portugal, and Belgium. All the imperialists cared about was stealing, plundering, and raping these countries of their natural resources. In fact, they practiced a brutal form of Capitalism called Laissez-faire which was the fictitious creation of British Philosopher Herbert Spencer. “Herbert Spencer believed that the government should have only two purposes. One was to defend the nation against foreign invasion. The other was to protect citizens and their property from criminals. Any other government action was "over-legislation." Spencer opposed government aid to the poor. He said that it encouraged laziness and vice. He objected to a public school system since it forced taxpayers to pay for the education of other people's children. He opposed laws regulating housing, sanitation, and health conditions because they interfered with the rights of property owners. Spencer said that diseases "are among the penalties Nature has attached to ignorance and imbecility, and should not, therefore, be tampered with." He even faulted private organizations like the National Society for the Prevention of Cruelty to Children because they encouraged legislation.

In the economic arena, Spencer advocated a laissez-faire system that tolerated no government regulation of private enterprise. He considered most taxation as confiscation of wealth and undermining the natural evolution of society.” (Constitutional Rights Foundation). The basic premise of laissez-faire capitalism was Social Darwinism. In fact, it was Mr. Spencer who coined the phrase “survival of the fittest.” The Colonial mentality doing that time period took this philosophy to justify their empires because they truly believed that it was their inherent right due to their intellectual, moral, and physical superiority over the indigenous inhabitants of those lands. Hence this false belief gave rise to the term the “White Man’s Burden” as coined by Rudyard Kipling to describe the moral obligation to bring the savage races up to European standards. Laissez-faire capitalism or unregulated globalization back then just as it does now, exploited indigenous people through the use of cheap labor to produce cheap products that they dumped on other countries. Two prime examples that come to mind was the production of Opium in India that the East Indian Trading Company dumped on the Chinese which resulted in massive addiction. When the Chinese objected, the British military pummeled them with Naval Artillery in Two Opium Wars and the Boxer Rebellion. The other example was the institution of slavery in the agrarian South during the Civil War. The South was England’s greatest trading partner and provided them a readily supply of cheap cotton for their textile mills. Meanwhile, the slaves lived in a state of poverty, starvation, and famine which by the look of things was even worst on a grand scale compared to the living conditions in most LDC’s (Low Developing Countries). It was the great Frederick Douglas in one of his essays who made a direct correlation between Free Trade and Slavery. “Cheap Labor is a phrase that has no cheering music for the masses. Those who demand it, and seek to acquire it, have but little sympathy with common humanity. It is the cry of the few

against the many. When we inquire who are the men that are continually vociferating for cheap labor, we find not the poor, the simple, and the lowly; not the class who dig and toil for their daily bread; not the landless, feeble, and defenseless portion of society, but the rich and powerful, the crafty and scheming, those who live by the sweat of other men's faces, and who have no intention of cheapening labor by adding themselves to the laboring forces of society. It is the deceitful cry of the fortunate against the unfortunate, of the idle against the industrious, of the taper-fingered dandy against the hard-handed working man. Labor is a noble word, and expresses a noble idea. Cheap labor, too, seems harmless enough, sounds well to hear, and looks well upon paper. But what does it mean? Who does it bless or benefit? The answer is already more than indicated. A moment's thought will show that cheap labor in the mouths of those who seek it means not cheap labor, but the opposite. It means not cheap labor, but dear labor. Not abundant labor, but scarce labor; not more work, but more workmen. It means that condition of things in which the laborers shall be so largely in excess of the work needed to be done, that the capitalist shall be able to command all the laborers he wants, at prices only enough to keep the laborer above the point of starvation. It means ease and luxury to the rich, wretchedness and misery to the poor. The former slave owners of the South want cheap labor; they want it from Germany and from Ireland; they want it from China and Japan; they want it from anywhere in the world, but from Africa. They want to be independent of their former slaves, and bring their noses to the grindstone. They are not alone in this want, nor is their want a new one. The African slave trade with all its train of horrors, was instituted and carried on to supply the opulent landholding inhabitants of this country with cheap labor; and the same lust for gain, the same love of ease, and loathing of labor, which originated that infernal traffic, discloses itself in the modern cry for

cheap labor and the fair-seeming schemes for supplying the demand. So rapidly does one evil succeed another, and so closely does the succeeding evil resemble the one destroyed, that only a very comprehensive view can afford a basis of faith in the possibility of reform, and recognition of the fact of human progress.” (Frederick Douglas, August 17, 1871). It is quite evident in the context of this argument about the only differences separating Marxism and Capitalism is that one sides with the proletariat and the other with the bourgeoisie. Both are similar because they emphasis materialism, class struggle, and the possession of wealth. To Marx, both free trade and the British System of Political Economy were the best models in the world to date. “Capitalism is the elaboration of a syllogism composed of three general propositions. Firstly he attempts to persuade the reader that the existing British System of political economy, as best defended earlier by Mr. Ricardo, is the highest form of society yet to appear. Secondly he distinguishes between the prices and values of commodities, for the purpose of arguing that the development of the productive powers of labor through the progress of manufacturing is a desirable feature of capitalism, which would be desired even in the absence of the capitalists. Finally, he argues that the accumulation of wealth by capitalists increases the tendency of that accumulation to act as an obstacle to continued development of the productive forces. The development of this third proposition is not completed, but the direction of his argument is clear.” (Dr. Karl Marx Refuted, 1870). Hence, Marx saw free trade and capitalism as the instruments that would bring about a worldwide revolution because the possession of wealth by the ruling class at the expense of the working class through the exploitation of their labor. To Marx they served as a catalyst of consciousness among the workers in the industrialized world in such countries as England and Germany, which at this time along with the United States and France were the most advanced

industrial powers in the world. “Karl Marx advocated Free Trade, i.e. Capitalism, because (a) whereas Protection builds up the nation-state, Free Trade breaks it down, as a prelude to the creation of a world-state by the Capitalists (b) Free Trade breaks down traditional culture, as a prelude to the creation of a world culture (c) Free Trade exacerbates class warfare, and through this the Capitalists will lose control of the world-state - they will be defeated by the impoverished classes, with the help of their backers in the higher classes.” (Peter Meyers, July 7, 2003). Yet Marx made a serious error in his analysis that labor created wealth and not production created wealth. That error occurred because he concentrated on the distribution of wealth instead of the production aspect by which wealth is created. The esteem lawyer, philosopher, entrepreneur, and social activist Louis O. Keslo in his essay entitled “Karl Marx: The Almost Capitalist,” pointed out the errors in Marx’s Das Capital. “Marx’s second great error prevented him from seeing that the ideal “classless society,” of which he dreamed, is not one in which a political group in power has the function of distributing wealth. It is rather the political economy in which the individual ownership of property-particularly capital instruments-is spread over the entire population. Only such a broad distribution of private economic power can guarantee individual freedom and the power of the people as a whole to limit or turn out at will a political group in power.” (Louis O. Kelso, March, 1957). In Kelso’s eyes, Marx would be an adherent where everyone would have the right to ownership because the rules of the game are changed to facilitate this process by creating equal opportunity within a capitalistic mode. It is my firm belief that the reason why wealth redistribution has largely failed because it is authoritarian in nature and does not matter if the government that is in power is democratic or not. It does mean though that a society’s economic assets or GDP are measured incorrectly by

wealth from a financial perspective instead of one based on a physical model. Therefore Classical Marxism and Capitalist theory greatly erred in by defining wealth in terms of financial markets, class, and a violent struggle between the workers and the wealthy. It is a dispute between those who espouse collectivism and those who embrace individualism. There is no political or philosophical bridge in the scheme of things. Physical economics on the other end bridges that great divide and provides a more firm foundation in relevant economic theory. “Physical economics is a school of thought and area of research in economics that aims to study the economy along the lines of natural sciences (in particular, physics) with the use of mathematical modeling. Physical economics puts aside the financial and monetary aspects of the economy, and treats the economy of the world, a nation, or region as en entity analogous to a living organism, or, in other words, a single, integrated, self-reproducing physical process.” (Freebase). Accordingly, a nation may be rich in market financial capital but economically poor where it comes to fixed based assets like infrastructure development such as roads, bridges, railroads, dams, canals, and reservoirs. Therefore we can conclude that true wealth redistribution in a society is based on how well the government improves the general livelihood and welfare of its citizens through infrastructure development, enhancement, and improvement. . “We begin with infrastructure, the power, transportation, water, public health, education, and related systems which create the conditions under which populations can grow and thrive. The more developed the infrastructure of a nation, the more efficiently its economy can operate; and the more developed the infrastructure of the world, the more efficient, global commerce.” (Marcia Merry Baker & John Hoefle, December 26, 2008). Therefore one can see that wealth redistribution by a democratic nation-state from a financial perspective is a pancreas and not a solution. In fact,

the primary purpose of finance is the issuance of credit to fund the industries that drive the economic engines of a national economy. “There is a role for finance in modern life, but finance is properly viewed as a handmaiden to the productive sector. It is the productive sector which generates the wealth, and the productive sector to which we must direct our attention if we are to survive.” (Marcia Merry Baker & John Hoefle). Therefore true wealth is how government invests in its people and there is no financial price tag that can be readily applied. Alfred Lawson in his book entitled “Direct Credit for Everyone” really highlights this point. “Wealth is anything and

everything made valuable by human effort. The total wealth of the United States (1931) is generally estimated at about $400,000,000,000. This means that there is eighty times more wealth in this country than there is money in circulation. This wealth principally consists of inventions; factories; machinery; manufactured products; crops; live stock; mines; quarries; raw materials; railroad, steamship, bus, truck, airplane and other means of transportation and distribution; good highways; bridges; telephones; telegraphs; radios; entertainment outfits; literature; paintings; city and country real estate including farms and all kinds of public and private buildings. All of which was made valuable by everybody. There is no part of wealth that any one person has made completely. Every one has helped everybody to give value to everything.” (Alfred Lawson, 1931). Such a statement puts the arguments of struggle between the Industrial and workers class at bay because the primary purpose of any sovereign republic is to improve the general welfare for all and there should be no distinction between the two.

Endnotes

1. Harun Yahya, Romanticism: A Weapon of Satan. (New Delhi: Millat Book Center, 2002),

45. 2.

Ibid., 42.

3. Nation Master Encyclopedia, “Degenerated Workers State,” http://www.nationmaster.com/encyclopedia/Degenerated-workers'-state (accessed September 3, 2009). 4. Importance of Philosophy, “Collectivism, http://www.importanceofphilosophy.com/Evil_Collectivism.html (accessed September 3, 2009). 5. Max Shachtman, “Introduction to Trotsky on the Worker’s State,” Marxists Internet Archives. Taken from New International, Vol.IX No.4 (Whole No.74), April 1943, http://www.marxists.org/archive/shachtma/1943/04/intro-trotsky.htm (accessed January 22, 2009), 121-124. 6. Ibid., 121-124. 7. Constitutional Rights Foundation, “Social Darwinism and American Laissez-faire Capitalism,” http://www.crf-usa.org/bill-of-rights-in-action/bria-19-2-b.html (accessed September 3, 2009). 8. Douglas, Frederick. “Cheap Labor” Frederick Douglass Attacks the Fraud of Free Trade. (August 17, 1871), New Federalist Archives (1998), http://american_almanac.tripod.com/fredfree.htm (accessed September 3, 2009).

9. Dr. Karl Marx Refuted: By A Veteran of The War,” (Philadelphia, 1870), Reprinted In The Campaigner Special Supplement “The Attack To Which Karl Marx Could Have Not Replied! Dr. Karl Marx Refuted, (October 1983). 10. Peter Myers, “Why Karl Marx Advocated Free Trade (Capitalism),” July 7, 2003 http://users.cyberone.com.au/myers/classwar.html (accessed September 3, 2009). 11. Louis O. Kelso, “Karl Marx: The Almost Capitalist, “Center for Economic & Social Justice, Originally Printed in The American Bar Association Journal, March 1957 http://www.cesj.org/thirdway/almostcapitalist.htm (accessed September 3, 2009). 12. Freebase, “Physical Economics Topics,’ http://www.freebase.com/view/en/physical_economics (accessed September 3, 2009), 13. Marcia Merry Baker and John Hoefle, “A Real Stimulus Requires Physical Economy, Not Money,” Executive Intelligence Review, (December 26, 2008), http://www.larouchepub.com/other/2008/3550econ_not_money.html (accessed January 23, 2009). 14. Ibid. 15. Alfred Lawson, Direct Credits for Everyone, (Sturtevant, Wisconsin: University of Lawsonomy, 1931) http://www.lawsonomy.org/DCEverybody107.html (accessed September 3, 2009).