Failures of Marxism

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The Failures of Marxism and the Right Path to Socialism and Communism



The market economy is accepted as the pinnacle of productivity because it brings the greatest profits and benefits to society. However, the market economy, as we know, has major disadvantages as well. The superior producer profits while suppressing the losers from the market. The market economy values profits over people which causes injustice in the process of production and distribution. This is an alienation that develops inequality and leads to an unscrupulous exploitation of workers.

Socialists have fought against injustice in society. At the top of their community rose Karl Marx. He called upon the working class to unite and decide their fate for themselves. He was absolutely correct in this. On the other hand, Marx argued that the antagonism between workers and the owners of the means of production can be solved only through socialist revolution. In this he was wrong.

The socialist revolutions that followed Marx’s ideas brought more equality to the distribution of basic material human needs than capitalism did, but they also created a lot of damage. Revolutions require a high degree of destructiveness and therefore cannot return a final positive result. Violence produces more violence and certainly cannot bring a lasting good. Violent seizures of power create masses of unsatisfied people who must be controlled by the political power. Thus, inequality within the societal decision-making process is produced and must exist. The people usually do not realize that lacking the right to make one’s own decisions and participate in decision-making processes may be worse exploitation than the loss of surplus value. This series of events is exactly what occurred in the socialist revolutions. In order to organize, implement, and ensure the lasting effect of socialist revolutions, new leaderships are generally autocratic, and therefore spread alienation throughout society with all the unfavorable dictatorial phenomena that is well-known throughout history.

Yet even today, most Marxists naively expect a revolution that will change the Western world and bring socialism. The liberal democracy profits from the Left being weak, so it supports rather than attacks Marxism.


How does exploitation occur? Marx did not identify the problem properly and it has therefore remained hidden until now. Employers, with political assistance, maintain the unemployment rate at the level they find most suitable for themselves. The higher the unemployment rate, the cheaper the labor because workers are forced to accept any job in order to be able to feed their families. Unemployment may depress wages to a bare minimum which is sufficient only for basic survival. On the other hand, if workers do not earn enough they are not able to buy the goods that private companies produce. I believe that an unemployment rate of around 5% best suits the capitalists’ interest and that this is the reason economists support it as a "normal" state. This "normal" state reduces labor costs and maintains exploitation while purchasing power is still strong enough to produce profits for companies.

So what is the solution? Work must be accessible to everyone. In order to establish a proper balance between the supply and demand of work, it will be necessary to create equilibrium between the number of jobs and the number of workers available. If the creation of new jobs is not necessary, full employment would be achieved by reducing work hours proportionally to the rate of unemployment. This is a political measure that must be treated equally in both public and private companies. That will eliminate unemployment.

Shortening work hours proportionally to the unemployment rate may abolish exploitation. Here is a simple explanation: If there are a total of two workers applying for a total of one work position, the competition amongst the workers would lower the price of work and the worker who gets the job would most certainly be exploited. If there is a total of one worker and a total of two available jobs, the competition amongst the employers would raise the worker’s wage. In an extreme situation where the employer must hire the worker or close the company, the worker might even earn more money than the employer himself. The same is possible also if workers’ skills are highly demanded.

And so, if Marx proposed shortening work hours proportionally to the unemployment rate, unemployment would not exist, and employers would have to fight for employees by raising wages. Then the market would harmonize the demand of labor and the income level to acceptable ranges for both workers and capitalists. This would diminish, if not eliminate, exploitation. Workers would be put in a far better position than a revolution could have achieved.

If we apply the shortening of work hours proportionally to the unemployment rate today, workers would earn more and be able to purchase more, in turn causing a significant reduction or elimination of exploitation. Also, it would reduce today’s economic crisis because the crisis is based upon peoples’ insufficient purchasing power. This would create a much better capitalism. This could solve many of today’s economic problems and bring more prosperity to society.


The Market is the best thing Mother Nature has offered to the field of economics because it gives balance to society. However, Marx did not see it that way. By studying the "widest" law of movements in society through dialectical and historical materialism, Marx concluded that a market economy should be abolished because of the exploitation of workers. This was a big mistake in the intellectual history of mankind. This error has prevented the development of society and socialism. By proposing the abolition of the market, Marx removed the measurement of values that reveal the performance of an economy effectively. He abolished a measurement that defines human needs, demand, supply, an objective value of goods and earnings. He essentially beheaded the economy. Marx was aware of it and so he offered a substitute for the market economy with a planned economy based on people's consciousness.

The consciousness which Marx called upon was an idealized construction that cannot be explicitly defined, allowing for anyone to interpret it as they wish. That is why it was very popular amongst revolutionary leaders. Even a murderer could find an absolution in his conscience for the crimes he commits. A system cannot be based on idealized values. Idealism is even contrary to the Marxist materialist philosophy. Without defined values, chaos may ensue. This chaos is what created the environment for the rise of authorities who took total control over society. All the presidents of socialist states ruled lifelong terms. They were privileged and as such could not make a productive environment for the economy.

Until recently, the planned economy could not be democratically established by the people because the information technology that could make it possible did not yet exist. This is why the economy had to be planned by authorities and as such it did not have the ability to follow the needs of the people. An authoritative planned economy primarily follows the needs of the authorities. Authorities were well aware of the shortcomings of the planned economy and tried to overcome them by forming an ideological, working, and humanitarian consciousness. However, this is non-achievable with the privileged authoritative forces that control production and distribution. People’s consciences cannot be developed without freedom; only obedience may develop without freedom. Obedience brings poor lives, regardless of what people may achieve. En route to force people towards the “good” path, the autocratic power controlled the society, thus not differentiating from the extreme dictatorial regimes. Such control oppresses the society and is, therefore, doomed to fail, as all dictatorships have thus failed. Irrespective of some initial success, the authoritative planned economy is alienated, non-productive, and non-perspective; these characteristics are visible in the examples of the breakdown of so-called "real socialism". I believe that Marxist socialism never stood a chance.


Socialism will come after capitalism, but not through revolution. It will come by introducing more democracy and more of a market of work than capitalism can afford. Nobody in today's world even thinks that most of the problems of today's market economy are primarily based on the underdevelopment of the market economy. I will try to present here that the main problem of today's market economy is not too much market, but rather, not enough.

The economy today has accepted a regulation of work rights that supports the people’s work privileges. Once a work position is occupied, it is protected and nobody else can take this position regardless of the workers’ work performances until the position becomes vacant. Following that, if jobs are not subject to the competition of workers, they do not exercise good enough production. That is why socialism has resulted in a poor quality of production of goods and services. Jobs in capitalism are also protected, and that means privileged, although to a lesser extent than in socialism. That means capitalism could neither allocate resources efficiently enough nor achieve productivity efficiently enough. One should protect the existence of workers, not jobs. The development of the market economy requires the development of the labor market! The development of the labor market will naturally improve the economy, bring justice to the manufacturing process, and provide stability to society.

Marx fought for equal rights for the people but failed to define what equal rights really are. A better future of humankind necessarily requires that workers become subjects with equal rights in the process of production. This will be achieved only when all workers have an equal opportunity to choose their work. Therefore, it is necessary to open a permanent labor market. The developed market of work requires free access for each worker to every public workplace at any time. There is no fairer or better division of work than a competition of workers through their own labor productivity at any workplace at any time. Productivity would be measured by earned money, by the amount and quality of goods produced, or by rating the productivity of workers by consumers. An employee who offers higher profits, more manufactured goods, better, cleaner and/or cheaper production will get the desired job any time.

It probably seems impossible to you, dear readers, because such a division of labor has never existed. The reason that such a division of work has never existed is just because nobody trusted that such a thing is possible and did not invest an effort to develop such an idea. I have. I have taken into account the possible problems that such a division of work might bring and formed a solution that would eliminate such problems. Once such a division of work is accepted, it will bring huge benefits to all.

Of course, this division of work will relate only to public companies, because if it is applied to private enterprises, that would practically mean a seizure of private property. Private companies will continue their business as they do today. A new division of labor in public enterprises would be necessary to democratically accept and regulate by law. It will not be easy to implement because resistance of society to change, but one day this new division of work will be accepted by society because it is the best possible division of work. I will present in this article the advantages that such a division of labor would produce and you, dear readers, may decide whether it is acceptable or not.

A worker who offers the highest productivity for any workplace at any time immediately becomes a prime candidate for that position, regardless of whether the position is occupied or not. If at such a workplace there is already an employed worker who does not want to leave his job, he would have to accept the productivity offered by the competitor, and in that case he would continue to hold the position. If he is not be able to accept the new responsibilities or does not want to, he would immediately vacate the workplace and leave it to the competitor.

The advantages of such a division of work will be enormous. The best worker in every workplace ensures maximum productivity for companies, and yet because of it, such a division of work has its justification. Besides, the labor market will give people the freedom to choose jobs that they love more and therefore they will enjoy work far more than they do today. Work will become a direct value in itself. Furthermore, the open labor market will eliminate privileges. This will eliminate corruption, the source of immorality in today's society. Today, people might experience the loss of privileges as a great inconvenience. But by time, people will realize that the loss of such privileges would significantly increase the possibility of finding work that will allow bringing workers’ needs of being to life. Being needs of work develop creativity and bring great and stable conveniences that privileges could not achieve. That is the reason the developed labor market will be accepted one day and will bring great benefits across society.

The labor market will regulate the price of labor. This will be achieved by giving the job, with limited productivity, to the worker who demands the lowest price for current work and, consequently, a lower income. Price of work will be one of the main factors that determine the amount of income for workers. In this regard, suitable jobs will achieve relatively lower incomes and worse jobs will be compensated with relatively higher incomes. In such a way, a developed market of work will form an objective price of work and balance interest for all jobs. Given that the workers themselves will determine the amount of their income themselves, they will also be most satisfied with their earnings. Unions as mediators between the employers and the employees will no longer be required.

The existential security of people is necessary as a condition of stability for society and therefore, society will guarantee it. In the new system all workers will automatically be economically secured after leaving any job. Losing a job will not be financially stressful anymore and each worker will have a great ability to quickly find a new job. This will remove the great fear that has spread around the world. Capitalism finds its main motivation for work from the workers’ fears for their economic survival. That is the reason it cannot guarantee economic security to the people. The new system will build motivation for work from the freedom of choosing work and in the satisfaction that comes from it.

The system would have no meaning without an effective regulation of workers' responsibilities. If workers, to gain competitiveness, offer productivities that they would not be able to realize, the system would collapse. For example, today’s politicians do exactly that when they promise a better living standard than they could deliver. The new economy will form a very effective system of accountability for the realization of the productivities workers offer, so that they would not dare offer productivities they cannot accomplish. It will be realized in such a way that workers would guarantee the productivity they offered by a new value that I call a “productive value of man”.

It would not be sensible to present a new and complete form of bearing responsibility in this essay since I have developed and presented it fully in my book Humanism. But in short, it would be necessary to determine and present the total contribution that each person has made in the creation of accepted values in society. This contribution will be presented by a numerical value. It includes the capital values a person possesses as well as all other non-capital values he has accumulated in society. It will be something similar to the shares of corporations but in a human environment. These shares will present the productive value of man. They will also bring workers a regular income so that they would be accepted as values. Also, these shares should have to be inherited from their ancestors. These shares would become new effective means for bearing the workers' responsibilities for achieving the offered productivity in the manufacturing process. If workers do not meet the proposed productivity they will bear the responsibility by losing their shares proportionally to the unrealized productivity, or in other words, proportionally to the damage they have produced. The possible loss of the shares will prevent workers from offering productivities they cannot achieve. Besides, a greater responsibility in the production process will lead workers to base their mutual relation more on cooperation than on competition, at all levels of the production process, and thus it will contribute to the productive development of society.

Such people's responsibility will be extended to everything that people do in their lives. If people do something good to society they will be rewarded with these shares and vice versa, if people produce damages to society they will be punished by the loss of their shares. This will be accomplished by courts as is common in today's democracy. Here we should immediately point out that the democracy we know has great disadvantages. Namely, two people can easily agree about something, but never about everything. All people can hardly agree on anything and therefore can hardly make decisions that will satisfy everyone's interests. The democracy we know cannot solve this problem. It is necessary to find a new democratic tool that will build optimal decisions for everyone. This will be done through democratic anarchy.

What is democratic anarchy? Let each person get an equal right to punish let’s say three individuals who disadvantage them the most in any given month and to award let’s say three individuals from whom they attains the greatest benefits in any given month. The rewards and punishments may have an equivalent value of let’s say one dollar. Such a small direct power in the hands of the people will motivate each member of society to respect every individual, to create the greatest possible advantages for society, and diminish or abolish the creation of all forms of disadvantages. As a result, bullies will no longer harass children at school, bosses will not abuse their employees at work, neighbors will not produce excessive noise at night, salespeople will not cheat their customers, politicians will not lie to people, etc. They will all try to please each other in the best possible way. The new system of bearing responsibility is explained in detail in my book Humanism.

No economy can be more productive than one where the best available worker gets the job that he is needed for. In this model, public companies will become more productive and more profitable than private ones. That would put private companies in difficult positions or even potential bankruptcies. The owners of private companies, under the competitive pressures of public companies, would try to increase their productivity in a similar way as the public companies. They would not be able to do it well enough because they simply would not have the operational capabilities to oppose the public companies. Specifically, private entrepreneurs would not be able to accept the participation of workers in decision-making and profit sharing processes, because, in that case, they would no longer be able to gain any advantage in their own companies in relation to their workers. What then is private ownership for? Given that workers in private companies would not have the freedom offered with employment in public companies, and could not participate in sharing the profits, they will be less interested in working for private companies. Private companies, along with capitalism, will go down in history. The owners of private properties will be properly compensated by society.

It can be expected in the new system that all companies in a region will, with time, merge together into one big company. The company will have a centralized leadership that will establish the most effective coordination of work. It will open job positions where they are needed, and will close off ones that are not needed anymore. Such an organization of the economy will decrease market competition between companies but it will ensure the efficiency of production by lowering the level of competition from the companies to the level of jobs. The new economy would bring new values which would be less based on profit and more on the maximum satisfaction of human needs.


Direct democracy will be strongly developed as well and implemented in all strategic political and economic decision-making. For example, with the integration of information technology each person will participate in the decision-making process regarding how much income money should be separated for taxes after the leadership proposes, and the parliament accepts, what the minimum tax percentage of incomes would be sufficient for the system to operate. Together, people would create the fiscal policy of society. They will democratically decide how much of their tax money should be allocated for education, health care, public safety, infrastructure, etc. This would form the democratically planned economy Marx desired but was not able conceive without information technology. Production based on the demands of the consumers is the most rational and stable production possible. Given that the new system offers stable and positive relations among nations, people will no longer allocate money for the needs of armies and armies will therefore cease to exist. In a developed democracy war will no longer be possible.

The political and economic model described here will improve the efficiency and stability of production, introduce justice into the process of production and distribution, and provide significantly higher advantages to all members of society. By accepting it, and thereby ushering in equal rights and powers in society, people will become truly equal. Only that should be called socialism.

In general, the new system will rid the people of authoritative pressure and give them the freedom to follow their own interests, while at the same time driving people to mutual respect. Such experiences will demystify the values imposed by authorities, and will teach people to live in accordance with their proper nature, which will in turn free them from all types of alienation characteristic of present-day society. Furthermore, the system will teach people to set their needs according to the possibilities of satisfying them. This is the chief prerequisite for overcoming destructiveness in society because people who permanently satisfy their needs are not destructive. The proposed system promises a natural, harmonious and highly prosperous development of society.

The new system will bring people the freedom to learn what their real values are and how to get closer to their own nature. They will begin to understand that work itself is a great value; individual to individual is a prime value, while goods will lose their alienated value. Once this is understood, they would also understand that collective consumption is the most rational consumption and they will be willing to allocate all their incomes directly towards taxes, causing all goods and services to be distributed free of charge while establishing the most stable and rational democratically planned economy. This is communism; the best social system possible. That was what Marx desired but was not able to define, a flourished society.

My book “Humanism” presents socialism and communism in detail. It is available free of charge here.

April 03, 2012


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