In the recent past, some of the world’s most committed Communist regimes have embraced free-market reforms. In doing so, they have gone from the classic Marxian mode of production in which wealth is – nominally – divided equally amongst people, to one predicated on privatization.
What is the logic behind such matters? What is compelling the people to willingly sacrifice the equality gifted to them by their communist leaders? Is capitalism an exploitative economic system? How does capitalism argue against its critics?
Two things result from these facts.
I. Capitalism is already acknowledged by all global powers to be a political factor in itself and the antidote to communist ideals and practices.
II. As nations rise from the ashes of their communist predecessors, it is high time to publish a manifesto of capitalism. Therefore, this manifesto will not only critique communism, but will also seek to contradict other critiques of capitalism.
To this end - supporters of capitalism of various nationalities have assembled in Beijing, and sketched the Capitalist Manifesto to be published in the English, Korean, Chinese, Russian, and Hindi languages.
Class and Success.
In the Manifesto Of The Communist Party, Karl Marx theorizes that “the history of all hitherto existing society is the history of class struggles”, and consequently argues that “the proletariat cannot attain its emancipation from [the bourgeoisie]” without revolting against their oppressors (Marx, Manifesto Of The Communist Party). Therefore, their revolution would advocate an abolishment of classes. In other words, since the root of society’s socio-economic problems are stemmed from the friction between classes, all existing social structures must be destroyed. However, what Marx claims should be abolished, is the very foundation that enables one to elevate his or her standard of living. Simply speaking, the traditional belief for the path of advancement, Marx claims, ironically stifles progress itself. Thus, the social structures that Marx critiqued not only gives one the motivation to progress beyond one’s caste or social status but the structure within itself allows one to advance beyond his or her starting position.
Under the Communist rule of Mao Zedong (from 1945 to Mao’s death in 1976), all of China's peasants (“only 33 percent of China's population” was recorded as urban in 1985) were put under the same conditions, and standards since everyone was theoretically equal under Marxist ideals (Jones, Frost and White, Coming Full Circle: An Economic History of the Pacific Rim). Therefore, by means of centralized economic planning, “farmers were put into communes [whilst] state workers were placed in large work units called danweis" resulting in it being incredibly unlikely for the average worker to advance beyond one’s assigned commune (China Cadre Statistics Fifty Years, 1949–1998). Moreover, the economic results were “disastrous [as] normal market mechanisms were disrupted…[agricultural production] fell behind” despite equal compensation among the workers. Furthermore, due to governmental reliance for food and resources, and poor economic planning - “starvation appeared even in fertile agricultural areas” (Li, Mao and the Economic Stalinization of China). Thus, despite equal distribution among the general public, workers were given no motivation to surpass one’s peers, as they were paid the same wage (Thaxton, Catastrophe and Contention in Rural China: Mao's Great Leap Forward Famine and the Origins of Righteous Resistance in Da Fo Village). Here, the economic downturns of Maoist China signifies that economic practices influenced by the Marxian mode of production emphasizes equality rather than profit (Li, Mao and the Economic Stalinization of China). Therefore, this inevitably creates a dissipation of incentive. In other words, communism takes away the assumed “selfish” motivation of improving the quality of one’s own standard, and seeks to replace it with the satisfaction that everyone is presumably equal. However, to form an illusion of equality, and perhaps implement wage equality to a certain extent,the loss of incentives will undeniably also result in a loss of production.
On the other hand, the ideals of capitalism operates on opposite principles. By the mid-1980’s,“small but dynamic domestic private sectors” began to produce “lucrative opportunities” for China’s general public ("China - Income Distribution"). For instance, private educational institutions began to appear “in large numbers” and thus offered “moonlighting work to university professors” with the chance of “doubl[ing] or tripl[ing] their modest incomes” ("China - Income Distribution"). In the more openly commercialized environment of the 1980s, “a small but significant number of people” were also beginning to earn incomes “much larger than those in regular state-owned and collectively owned units” ("China - Income Distribution"). Therefore, “employees [earned] an average of ¥2,437 in 1985, over twice the average income of workers in state-owned units”("China - Income Distribution"). Moreover, small-scale entrepreneurs were given the chance to start their own privatized businesses and could now “earn considerably more in the free markets than the average income” ("China - Income Distribution"). Thus, following the implementation of Deng Xiaoping’s (the chairman of the Central Advisory Commission of the Communist Party in China from 1981 to 1987) policies on privatizing the economy (starting in the early 1980’s), the standard of living as well as the number of employment options gradually rose throughout mainland China (Kau and Marsh, China in the Era of Deng Xiaoping: A Decade of Reform). Consequently, China’s “GDP has risen tenfold” in the past 30 years due to Deng’s capitalistic reform ("China Has Socialist Market Economy in Place”). Hence, in adherence to capitalistic ideals, China’s rapid development can partly be credited due to its alteration in economic systems, for capitalism's primary focus is advancement for oneself rather than for one’s state.
The Individual, and Freedom.
In section I of the Manifesto of the Communist Party, Marx calls for a revolution, since only “the violent overthrow of the bourgeois [will lay] the foundation for the sway of the proletariat”. However, what Marx fails to mention, or perhaps realize, is while he advocates for the liberation of the proletariat from the bourgeois, he unintentionally advocates for the suppression of individual rights. In other words, since Marx wants to abolish the bourgeois in order “to do away with [the] miserable character of this appropriation” in which “the laborer lives merely to increase capital, and is allowed to live only [so far as] the interest of the ruling class requires it”, he is criticizing the negative effects of capitalism. Hence to Marx, capitalism is by nature an economic system that forces one class to live under the ‘vile’ jurisdiction of another.
But, if such an “overthrow of the bourgeois supremacy” was indeed (and has) to take place for the “conquest of political power by the proletariat”, an authoritarian government will replace the free market. Here, the term “authoritarian” implies an inevitable, rather than a hypothetical future. This distinction is important because a majority (if not all) of the past, and current communist states have resulted in authoritarian governments (such as Stalin’s Russia, Mao’s China, Kim’s North Korea, and Castro’s Cuba) in contrast to democratic nations that operate under capitalism (such as the U.S). Therefore, although the U.S’ status as a democratic nation cannot be accredited to its adaption of capitalism alone, it should be noted that the communist nations have all fallen prey to dictatorships. But, why would political power given to the proletariat give rise to an authoritarian government? And how does that affect one’s individual rights? The answer stems from the very ideology behind communism.
To Marx, the free market is currently concentrated in the hands of the bourgeoisie. However, if control were taken away from the bourgeoisie in favor of emancipating the proletariat, control over the market would not be destroyed, but rather, it would be shifted to another group that could perhaps abuse their power. In this sense, the proletariat that seeks to upstage the bourgeois would eventually become the government as there would be a power vacuum for the governing of the free market (a market that jurisdicts the standard of living of its subordinates).
A prime example of a Communist revolution can be seen through the 1917 Russian Revolution, which stemmed “from centuries of oppression of the lower classes by the Tsarist regime” as well as Tsar Nicholas' failures in World War I (Worobec, Peasant Russia: Family and Community in the Post Emancipation Period). Therefore, while Russia’s peasants “had been emancipated from serfdom in 1861”, many still “resented paying redemption payments to the state”, and in turn, “demanded communal tender of the land they worked” (Worobec, Peasant Russia: Family and Community in the Post Emancipation Period). Hence, this is an evident example of a class struggle as stated by Marx as the “lord and serf…[the] oppressor and oppressed, stood in constant opposition to one another”(Marx, The Communist of the Communist Party). However, after the successful overthrow of the Tsar and the establishment of the Russian Soviet Federative Socialist Republic, the SFSR’s provisional government was soon removed and replaced with the Bolshevik (communist) government of Russia (Figes, A People's Tragedy: The Russian Revolution 1891–1924, Part One). Consequently, as the privatization of the economy shifted from Russia’s upper class to the proletariat, Bolshevik revolutionaries were tasked with equally distributing goods to the Russian people; but, to do so, they had to seize full control of the government (Figes, A People's Tragedy: The Russian Revolution 1891–1924, Part One). As Stalin later took power in the Communist Party of the Soviet Union, he abused his power and began to exercise a strict, authoritarian control of the government. Due to Marxist ideals of having no other political parties than the Communist Party as “Communists do not form a separate party”, Stalin and the Bolsheviks had no limit to the power they could exercise, for there was no opposition by default (Marx, The Manifesto of the Communist Party). Thus along with the creation of the Russian secret police, and other intelligence agencies - Stalin was informally the dictator of Russia (due to the power granted to him by the previously mentioned services) and diminished all opposition during his “reign”. Therefore, if what Marx argued was true (that one class lives in the interest of the other), a supposed equal distribution of wealth and power would inevitably force both classes to live under the government.
However, despite the fact that some critics of capitalism have noted that "[although] capitalist development leads to the concentration of capital, employment and power [it also] leads to the almost complete destruction of economic freedom” - it is rather the inverse (Horvat 11). Since capitalism puts control of the market in the hands of the people, it therefore allows the people to exercise their freedom to participate in the market in contrast to the government having full control under the guise of equal distribution. For example, (as mentioned earlier) before the privatization reforms of Deng Xiaoping, there was little to no economic freedom as well as economic creativity in mainland China (Kau and Marsh, China in the Era of Deng Xiaoping: A Decade of Reform). But, after Deng implemented the “household responsibility system” (which allowed “local managers to be held responsible for the profits and losses of an enterprise”) - “agricultural output increased by 8.2% a year, compared with 2.7% in the pre-reform period despite a decrease in the area of land used” (Huang, Signal Left, Turn Right: Central Rhetoric and Local Reform in China). Food prices also dropped “to nearly 50%”, while agricultural incomes rose (Huang, Signal Left, Turn Right: Central Rhetoric and Local Reform in China). This signifies that under capitalistic reforms, farmers had the economic freedom to manage their own product margins in contrast to having these margins pre-calculated by the state via communist policies.
The Individual and the Free Market.
Capitalism places emphasis on the free market and thus, trusts that the “invisible hand” will guide the market in correlation to supply and demand (Smith, The Wealth of Nations). Therefore, by its definition, the free market is “a market system in which the prices for goods and services are set freely by consent between sellers and consumers, in which the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other authority” (Bockman, Markets in the name of Socialism: The Left-Wing origins of Neoliberalism). In other words, capitalism utilizes the free market as a platform for persons to exercise their economic freedoms, as well as letting their own actions dictate their social positions. In this sense, their success is solely, as well as fairly based on their success in accordance to the “invisible hand” (Smith, The Wealth of Nations). However, some critics of capitalism do highlight that market failure - a condition in which the “allocation of goods and services by a market is not efficient [due to] individuals' pursuit of self-interest” - emerges as a result of non-governmental intervention (Krugman and Wells, Economics). Moreover, problems such as: “monopolies, monopsonies, insider trading, and price gouging” are bred and in turn, taints capitalism as it is abused by self-interest (Rea, Monopoly, Imperfect Competition, and Oligopoly). Therefore, although the free market may breed monopolies and trusts and collectively retain market shares to a selected few, this in itself is not a critique of capitalism.
Rather, it is a critique of the abuse of capitalism. As Marx pointed out, monopolies create a situation in which “the laborer lives merely to increase capital” in the interest of their overseer - however, that is a critique of an individual's misinterpretation and later, abuse of the system but not the economic system in itself (Marx, The Communist of the Communist Party). Consequently, many critics of capitalism also view exploitation as a consequence of capitalism “since it is often related to the expropriation of labor for profit” (Cass, A Comparative Political Economy of Unfree Labor). For instance, critics argue that “unfree labor -- such as slaves, indentured servants, prisoners, and other coerced persons are exploited by theirs masters” due to their masters' desire to value profit over ethical practices. But, although it can be argued that corruptions within the market are due to the selfish interest of their enactors, it cannot personally be attributed to the economic system of capitalism. Capitalism is an economic system that advocates the free market and one’s personal economic freedom (in the hopes that one can advance from their present social position). However, the system itself does not advocate abuse of labor for profit, or any other exploitation within the market. Therefore, the danger is not capitalism but rather unfettered capitalism.
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