There seems to be some confusion as to what exactly it is we are talking about. Is the debate about Marx’s theory or is it about how socialism has been implemented? Its been said that those are two very different things…and thats partially true. The real question is, does Marx’s theory hold any water?
Marx’s theory is really a theory of history. Given that, has history proven him right? I say no. I dont really have the time to write a detailed post so I’ll steal from someone else. Sorry about the length but its good food for thought.
Kelley L. Ross, Ph.D. writes,
"When diehards say that Marxism has actually never been “tried” (despite what Lenin, Stalin, Mao, Castro, Ho, and Daniel Ortega thought they were doing), they don’t understand that Marxism was not a rule for behavior or a program for action; it was supposed to be the theory of a deterministic mechanism that will produce the future, a theory of actions that will arise spontaneously because of historical circumstances – although we can infer what kinds of actions people, including ourselves, will be taking – after all, Marx said that the purpose of his work was to change the world, not just understand it. It in the theory, however, the world will change because of the objective economic conditions, not because of some decisions we make. This was not a theory about “human nature” or “human psychology” , but about how the mode of economic production (how goods and services are produced) determines all the other political, social, cultural, and moral structures of a society (thought some Marxists are uncomfortable with this in an absolute sense).
The needs of the “English petty bourgeois” are thus not “false needs” , however dismissive Marx sounds, but true needs in relation to a capitalistic mode of production – needs which will change over time, in a historicist sense, as the mode of production changes. As a “science” of history, Marxism would succeed or fail to the extent that it could actually predict the evolution of production and its various effects.
Marx thought that as capitalism had replaced feudalism with a new mode of production, which was more productive and efficient, the same thing would happen to produce a replacement for capitalism. In the end, as the workers were impoverished (when capitalists drove down wages) and the number of capitalists dwindled (as competition was replaced by larger and larger monopolies), the capitalists would end up with no one to sell their goods to and nothing to do with the capital derived from their profits. This would produce increasingly severe credit and banking crises, until the proletariat would easily tip over the whole rotten structure and replace it with a classless society. The revolution would more or less happen of itself…
However, although nominal wages were falling in the United States from 1865-1897, real wages were rising, and there didn’t seem to be a problem with over-production or with capital investment. Marx’s own data showed rising real wages. Recognizing that things weren’t going as predicted, Lenin (Vladimir Ulyanov, 1870-1924) proposed that colonialism and imperialism were relieving the stress on capitalism and had temporarily derailed history: Colonies were a safety valve for excess capital and over-production; and the exploitation of colonies enabled the capitalists to buy off the proletariat at home. Lenin’s own data showed that most foreign investment was in other capitalist countries, and it is hard to imagine how an impoverished colonial population could buy things that the proletariat back home couldn’t afford. Nevertheless, Lenin’s theory at least addressed the issue…
When the Russian Revolution came, Lenin and his colleagues had to address the paradox that according to orthodox Marxism Russia was not ready for a real communist revolution, since it had never passed through the necessary stage of capitalism itself. Although developing quickly enough, and the fourth largest economy in the world just because of its size, Russia was still largely a feudal society. Lenin died before much sense could be made of the situation, especially when his programs caused the economy to collapse and he had to retreat from an attempt at pure communism into the semi-market economy of the New Economic Policy (the NEP).
Subsequently, Stalin (Iosif Dzhugashvili, 1879-1953) followed the principle that the Russian Revolution would substitute a benign replacement for capitalism, namely “socialism,” which would do the same job of industrialization without capitalist exploitation. Meanwhile, the new Russian state, the Soviet Union, would fight against imperialism and work for de-colonization and national liberation. If imperialism and colonialism could be ended, then capitalist economies would revert to the dynamic described by Marx and communism would develop there in the natural way…
With the Great Depression, which looked like just the sort of credit and production collapse that Marx had predicted, and which gave many Westerners the impression that Stalin’s programs were producing better results in the Soviet Union, things seemed to be getting back on track. Then, when capitalist countries joined in to help defeat what should have been their own best hope, fascism, things really started looking up. The post-war world then began to see the start of de-colonization. For fear of “neo-colonialism,” newly independent countries were advised to nationalize foreign holdings and limit capitalist exploitation (i.e. foreign investment). Stalin’s Five Year Plans were seen by people like the new Prime Minister of India, Jawaharlal Nehru (1889-1964), as the proper way to modernize an economy.
Over the years, however, the countries that took this kind of advice the most seriously experienced only failure and stagnation. Nehru’s great plans in fact condemned India to many decades of little improvement in its standard of living. But India was in good shape compared to Africa. By the late 80’s, most former African colonies had lapsed into military dictatorships under which the standard of living was actually lower than it had been when they were colonies. All the modernistic and socialistic rhetoric of the original leaders of African independence, like Kwame Nkrumah (1909-1972) in Ghana, had turned out to be nothing but a mask for incompetence, corruption, and naked power.
Instead of foreign investment, African leaders demanded foreign aid delivered directly to them. Most of that was either wasted on useless projects or diverted into their own pockets: leading to the bitter characterization of them as “Swiss bank account socialists.”
Meanwhile, the once admired economy of the Soviet Union showed what it was truly made of: corruption, inefficiency, and irrationality on a vast scale. Although everyone expected that the Soviet Union’s own economic statistics were unreliable, even the CIA greatly overestimated the size of the Soviet economy. Outside of Moscow and Leningrad, which were bad enough, the Soviet Union was virtually a Third World country.
One result today is that many who still admire Marxism and socialism have decided that it is virtuous to be poor, and that the ruined economy of a place like Cuba is a desirable “ecotopia” – kinder to the environment than capitalism. This would be profoundly astonishing and mortifying to Karl Marx himself: the whole point about the evolution of communism is that it would be more productive and produce greater wealth for all than capitalism. A socialism that simply perpetuated poverty would be worthless – a return, indeed, to what Marx called “oriental” despotism and a slave economy.
Why this all happened goes back to the simplest principles of economics: it was Adam Smith, not Karl Marx, who understood the mechanism of history."