“Marx And Smith”: Misrepresenting Socialism and Capitalism

Essay contributed by Comrade Amos
(This essay contains the thoughts and critiques of Comrade Amos, reflecting on a textbook excerpt which caught his attention. In analyzing and confronting the misinformation passed off as fact in this excerpt, Amos brings into direct light the capitalist propaganda within our schools and demonstrates one of the more effective methods by which the Ruling Class deceives us. However, the fact that Amos was able to dissect the assertions made in this textbook should give hope that even our younger comrades are eager to break their chains, and that the facade of capitalism may finally crumble. I hope you enjoy reading this contributor essay as much as I did.  – W.F.)

So, while I was perusing the website for my High School history class, curious about what subjects we would be covering, I found an excerpt from a textbook titled “Marx and Smith”. Oh hey, I thought. Something I’m interested in and enjoy reading about. This will be great!

It wasn’t.

Instead, I found one of the worst representations of Capitalism vs. Socialism in an academic setting that I’ve ever seen. Sure, it’s no Black Book, but it is still quite terrible. Not just this, though: If it was just some ridiculous thing I saw, I would maybe grumble a little bit and move on. Rather, I found it representative of how misinformed, particularly in the US, most people are about Socialism, Capitalism, and the real underlying theories of both. So, I figured, why not write about it? And that’s what I did.

The Laws of Humanity

The excerpt starts with a brief rundown of Adam Smith’s theories about Capitalism, and specifically covers his Laws of Humanity. These “Laws” are utter trash garbage.

The Law of Self Interest is the belief that people are inherently selfish, and if they don’t directly benefit from an action, they will have no incentive to perform. It’s wrong. It’s true that a lot of philosophers believe people are selfish and overall humanity sucks, but this is not in any sense because of “human nature.”

First, there are plenty of historical examples of the exact opposite being the case. These include the Russian Soviet Federative Socialist Republic (RSFSR), the Confederación Nacional del Trabajo-Federación Anarquista Ibérica (CNT-FAI), the Paris Commune, the Free Territory of Ukraine, and workers’ cooperatives and smaller communes all over the world, to name just a few.

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While all those territories and nations did technically “fail” and fall, it wasn’t because of their rejection of this “Law,” but because of either foreign influence or, as in the case of the RSFSR, political infighting. The Free Territory, FAI, and Paris Commune all fell because of outside aggressions and invasion, not because their economic system was inherently flawed. In each of these cases, they fought against a largely superior enemy, and were crushed by forces they were completely outmatched by, except perhaps in Spain.

In Spain, the Nationalists weren’t that strong, but they did have support from the elite Army of Africa, largely unified politicians, and massive German and Italian aid. The Republicans meanwhile had limited Soviet aid, a diverse range of ideologies, and the majority of their army was made up of quickly trained and poorly equipped foreign volunteers. It should be kept in mind that they still could have won due to the skill of their strategists, popular support, and pure force of will. The Free Territory went up against the RSFSR, which backstabbed them during the Russian Civil War, and the Paris Commune stood against the might of combined Franco-Prussian forces.

The RSFSR, meanwhile, was incredibly successful for a very long time. Workers generally had control of their workplaces, and the people worked not for greed but for the collective good. They advanced centuries from where they were in 1917 in a span of 20 years. Stalin was arguably a terrible dictator (there are a few folks who think he was alright, and they do bring up some valid points), but he did rapidly industrialize the Union after Lenin’s death and Trotsky’s exile. However, in my eyes, there were three political divides that very much harmed the Soviet Union: The Stalin-Trotsky conflict, the struggle over Stalin’s successor, and the turmoil under Gorbachev.

In the twenties, the debate over Lenin’s successor during his illness had narrowed down to Iosef Stalin and Leon Trotsky. While Trotsky would have continued Lenin’s programs of Soviet Democracy, World Revolution, industrialization and workers’ control over the means of production, Stalin’s plans were quite different: Socialism in One Country, State control over the mean of production, a centralized and largely authoritarian state, and Two-Step Revolution.

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While it is debatable who was right and who was wrong, many consider Stalin’s victory in this conflict a failure of socialism. However, assuming this was in fact a failure, socialism had very little do with this event, but rather it was a failure of the Union to prevent such a conflict. Similarly, the other two cases are not failures of socialism, but failures of the Soviet Union to first secure a fitting successor to Stalin, and secondly to prevent the total degradation of the Union.

While it may seem like these points are irrelevant, the truth that can be drawn from them is that the failure of these nations is not the fault of a lack of “profit motive,” as Smith and many of his students would have one believe, but rather internal/external conflicts leading to the demise of the nation.

As for economics, true Socialism is also sound, considering the fact that the myth of 100+ million is indeed just a myth. In actuality, the authors of the Black Book of Communism, the source of this ridiculous statistic, have indeed admitted that the leader of this McCarthyist coalition was not only intent but positively fanatic about reaching such an unbelievable number.

Not only is the source untrustworthy as a result of the bias of its authors, but the statistic itself is largely impossible. While tens of millions did die in the People’s Republic of China, this not only ignores the PRC’s history and successes, but also ignores the fact that the population of China exploded during this period. Similarly to China, the Soviet Union was also incredibly economically efficient and, while there were a few famines during industrialization, this ignores the fact that the Soviet Union (and China alongside it) came from nations/regions of perpetual famine – malnutrition in the Russian Empire and China was unbelievable and nearly perpetual.

This is all before we even note the humanitarian failures of the “Law of Self-Interest” when put into practice: as long as greed is seen as acceptable, and even virtuous, people will continue to be denied healthcare, and Capitalists will continue to hoard land while forcing people to give them money while doing next to nothing, hoard food and natural resources from those who cannot afford them, and use foreign sweatshop labor. Around 20 million die annually because of this greed. It’s quite clear this is not a problem of management or of undeveloped “third world” nations, but a problem that is inherent in a system which allows such greed to persist.wh75hilyrtgy.jpg

The Law of Competition is the idea that in order to achieve progress, there must be market competition. In other words, in order to get more customers and make more money, companies need to innovate and be the furthest ahead technologically. This is flat out wrong, and has been completely disproven by history. In fact, this competition actually causes progress to slow, and where Capitalism causes stagnation, Socialism brings rapid change.

Some Socialist inventions and innovations include (this is by no means a complete list):

Laser eye surgery

The first space satellite

The first person sent to space

-Weaponry such as the PPSh, Kalishnikov/AK-47, T-34, and the Katyusha

Some social advances include:

Universal healthcare

Improvement of working conditions

5-year-plans and other economic methods

Abolition of private property

Workers’ control over their workplace

-Communal land

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The Law of Competition, thought by many to be simply a “fact of life”, is actually very easy to disprove through even a most basic historical and ideological understanding.

The Law of Supply and Demand is the idea that value, specifically market value, is created by supply vs. demand. Simply put, if something is in low supply and high demand, it will be worth more, and vice versa. This law, while overall accurate, does not consider ways the inherent problem could be solved other than through Capitalism. If something is “needed” but in low supply, its overall importance should be reconsidered, not artificially inflated. If something is unnecessary but in high supply, then production may simply shift to produce something else with few ramifications. In Capitalism, the cost to replace this production may be too large, making it unprofitable do to so, and thus unviable. Without the cost-benefit factor, the question of viability becomes much less important.

Also, the “Law” of Supply and Demand is very easy to manipulate for profit. A company may produce a small amount of product intentionally and advertise it as something valuable, whether it actually is or not. For just one example (and I know this is a bit of a meme), look at the Supreme brand. Let’s be honest here. They make crappy clothes and sell them for hundreds of dollars. They produce tacky clothing with their branding very visible on the front, and because these clothes cost so much, they have become a status symbol. Companies can and will manipulate supply and demand in order to make even something incredibly basic, such as a t-shirt with a logo on it, incredibly valuable, monetarily speaking.

Marxist Theory and History

The excerpt proceeds to “explain” Marxist theory, and offers up some very poor excuses for criticism of it. This second part, while still containing long segments, will mostly be made up of responses to sections which I will directly quote here. If you thought the Laws of Humanity were bad, trust me, it gets so much worse.

Robert Owen preached cooperation among social classes. A later socialist, Karl Marx (1818-1883), said that such cooperation was impossible. ‘The history of all… society is the history of class struggles.’” The usage of the quote “The history of all… society is the history of class struggles” is poor, as it implies that this was in response to Robert Owen’s claim that classes can collaborate. In actuality, this was a line from The Communist Manifesto and was not directed at Owen.

Regardless, Marx was still correct, and history since those words were written has only confirmed this claim. In 1905, the Russian people preached reform and they were shot. In 1913, the workers in Paterson, NJ peacefully unionized and they were beaten and arrested. In 1919, members of the newly-reformist Socialist Party of America advocated widespread strikes in solidarity with the Soviets and they were banned from party affairs. In the Fifties and Sixties, African Americans peacefully advocated for equal rights and were beaten and arrested. Collaborationism in the form of reform is either incredibly bloody and slow, or it produces no results altogether.

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However, all of this is ignoring the historical perspective of the actual quote, which is also correct. It is incredibly difficult to find examples of conflict in the world that had nothing to do with class. Even in the era of Pike and Shot, the Hussites were in class conflict against the ruling class of Bohemia. In the Colonial Era, it was the native peoples or the colonists against their unwanted foreign rulers. In the Industrial Era, it was the new industrial Proletariat against their Capitalist bosses. In World War I, it was the soldiers and the industrial laborers against the generals and the kings. In World War II, it was the oppressive Nazi regime versus those who sought to liberate the oppressed working class. In the Cold War, it was small working class uprisings fighting against empires. Even today there are conflicts against fascism, against automation, against neo-imperialism, and against modern bourgeois bureaucracy.

Relating to the last point, the article acts as though The Communist Manifesto is the defining document of Marxist and even overall Communist thought. But this is incredibly ignorant. The Manifesto was just that: a manifesto. A very basic outline of their beliefs and what they wanted to accomplish. Later works, not just Marx’s but also Lenin’s and others’, expand on Marxist/Communist thought and the specifics of certain aspects of Capitalism or Socialism (Imperialism: The Final Stage of Capitalism by V.I. Lenin, Fascism: What it is and How to Fight It by L. Trotsky, The Conquest of Bread by P. Kropotkin, and so on). In no way is the Communist Manifesto THE defining document.

Not only this, but some Communist ideologies are completely non-Marxist (Anarchism, Syndicalism, Egoism, etc), and many are indirect interpretations of Marxism (Leninism, Trotskyism, Maoism, Marxist-Leninism, etc). The authors of “Marx and Smith” make a similar mistake about Marx’s writings later, claiming that he wrote three volumes of Capital, something only someone who has clearly never read or even slightly researched Capital would say. Marx wrote the first volume and then died while writing the others. They were “finished” by Engels.

“Marx’s co-author for both The Communist Manifesto and Das Kapital was a fellow German socialist, Friederich Engels… Engels came from a well-to-do family with international economic interests.” Engels was rich and this appears to be framed as hypocritical. However, the connotation that someone is unable to believe in Marxism because they personally benefit from Capitalism is absurd. I know many people who are living just fine in Capitalism, and I myself am as well. That doesn’t mean it’s impossible for us to believe what we believe, as shown by the fact that, well, we exist. It’s possible to benefit from a system you know most people suffer because of, and to oppose that system as a result of that suffering rather than support it because of personal benefit.

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“…The most basic question in history was this: Who controls the means of producing goods? In a farming society, Marx reasoned, land was the most important source of wealth. Therefore, landowners dominated society and government. In an industrial society, factory owners had the greatest economic power. As a result, they soon won political power as well. Marx said that work was the true source of all value. For example, the work of a shoemaker changed a piece of leather into a pair of shoes for which a buyer would pay money. Without the shoemaker, the leather had no value.” The claims about Marx’s beliefs on land, labor, and politics are all very oversimplified. This article seems to think labor only includes physical labor, and while that may have been the case back then, nowadays this includes white collar jobs, art, and intellectuals, be they philosophical or scientific.

His claims on land do not directly mean “people own land/factories and therefore they rule all”. Rather he suggests that owning these things in a society forces the working class into working for them and so they may treat the workers as they please, and the ruling class’s interests largely lie with the preservation of this imbalance of power, as they benefit from it. This is because, due to their ownership of all labor and ability to directly harm the state with it, they have the upper hand. Not only this, but the bureaucrats will, in return for following the directions of the bourgeoisie, be rewarded with large sums of money in the form of “donations.” This has happened throughout history and it will continue as long as capitalism exists.

“Marx used the word bourgeoisie to describe the factory owning middle class.” Marx did not describe a “Middle Class.” Marxism identifies two opposing classes: the Working Class (proletariat) and the Ruling Class (bourgeoisie).

While a more nuanced view of this perspective would reason that these classes can be broken up into smaller classes (the poor, the middle class, the petit bourgeoisie, etc), the point is that this statement is entirely inaccurate to Marx’s philosophy. The middle class is proletarian, which is widely accepted among Marxists.

“Despite Marx’s predictions, however, workers showed little sign of rebelling. Except for a brief outburst in Paris in 1871… there were no large workers’ revolts in the late 1800’s.” This is flat out false. The so-called “brief outburst” in Paris was only so brief because it was surrounded on all sides by world powers. The revolution itself was quite large: multiple French regiments, notably the National Guard, mutinied and killed their own officers; most of the Parisian populace was deeply involved; the invading Prussians and Frenchmen devastated much of the city; and it ended with massive social upheaval all across France and left a legacy that still exists not just in France but all across the world today (Kropotkin described the social aspects of the Paris Commune very well in the opening chapters of The Conquest of Bread. Read it, it’s a good book).

This passage also ignores the multiple armed labor conflicts that have occurred since Marx’s writings: the Coal Wars in the US which lasted from the 1890’s to the 1930’s, labor movements and unions all across the world, the rise of the IWW and other parties in France, Germany, Britain, and of course the Russian Revolutions, and many others. While many of these events did not go as Marx predicted (Marx expected socialism to rise in industrialized and urban countries, however many of the countries it manifested in were agricultural/rural and needed to industrialize after the revolution), the point is that he predicted that the workers of nations across the world would revolt, and many of them did.

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In fact, the threat of worldwide revolution in the wake of the Paris Commune was so great that it was acknowledged by leaders all across the world, including Bismarck, who said: “Crowned heads, wealth and privilege may well tremble should ever again the Black (Anarchists) and Red (Marxists) unite!”

“Most workers did not want to overthrow the system but share in its benefits.” Firstly, see above. Secondly, most worker movements to overthrow their masters were crushed by military/police intervention (Coal Wars, Paris Commune, 1905 Revolution, most major union/IWW strikes and resistance movements, and others). They certainly did not want to “share in its benefits.” Speaking of benefits:

“The gap between the rich and the poor did not widen as (Marx) expected. The rich certainly got richer, but the lives of the poor also improved. The tremendous growth of trade and production brought benefits to almost everyone.” Let’s address this absolute trainwreck in consecutive order.

First of all, yes, the wage gap absolutely did grow. In most countries, workers lived poor and worked at terrible jobs with little pay. This really hasn’t changed much even now, more than one hundred years later. Meanwhile, the wealthy lived in mansions and estates as they leeched wealth from the workers’ labor into their pockets. Just Google photos of Mill Towns and sweatshops if you want photographic evidence. While over time conditions have improved somewhat for the first world middle class, the same cannot be said for anybody else.

The poor have still suffered on the streets, sweatshops and their workers are being exploited beyond imagination, and the broken economy of the United States, with its “entry level jobs” and student debt, has kept millions working jobs that can barely (if at all) pay for their basic needs, let alone the absurdly high rents demanded by landlords and real estate agencies all across the country. This is being worsened by automation taking over jobs, and those jobs being replaced by the worthless, filler “entry level jobs” that will not supply someone with enough money to live. While the terrible conditions of today are not as overt and explicit as they were back then, they are just as malicious, if not more, and in more insidious ways.

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Further, trade and production did not bring benefits to everyone. They benefitted the ruling class, but the working class was simply forced to continue their work. Not only this, but jobs were and are still being replaced by automation. In a system that did not require money to pay rent and such, this would be a good thing, as more people could focus on what they want to do with their lives. Instead, they must seek other, presumably worse jobs, as if one was working such a manual labor job then chances are that it was the best job they could get their hands on (keep in mind “best” doesn’t equal “good”). This automated production can also make working environments more dangerous, as exemplified by the smoke, steam, grease, and metal nightmares of the late nineteenth and early twentieth centuries.

These international markets also fueled wars of capitalism, involving suppression of anti-capitalism in Vietnam, Chile, Cuba, China, Russia, Korea, and others. Not just suppression of anti-capitalism, but the “flourishing” of capitalism is achieved through war. John Reed covers much of capitalism’s historical wars quite well in his work The Traders’ War, however this is only covering pre-WW1 wars.

For a much more recent example, the Iraq War and the Gulf War were done in the capitalistic economic interests of the United States and much of the west. In 1991, it was for the purpose of securing oil to fuel the American economy (the U.S. had no problem with the Iraqi invasion of Iran, but Kuwait was of interest to the American government due to its natural resources – if it was truly to prevent Iraqi expansionism, they wouldn’t have been sending Iraq weapons to fight Iran only 3 years earlier). In 2003, the excuse of WMDs was a flimsy one, because if the United States truly feared too many nukes in the world, it would disarm itself instead of constantly resisting any notion of disarmament. In actuality, it was because Iraq had oil and other natural resources the United States wanted dearly.

Not just this, though: Vice President of the United States at the time, Dick Cheney, owned a weapons manufacturing company, and it’s no surprise to anybody who the Army paid to supply them with weapons. In the end, the United States had more oil, Dick Cheney had stuffed his pockets with inconceivable amounts of money, and only at the cost of at least 4,424 (mostly) innocent people’s lives (far more if we consider any of the war’s adverse effects or the economic sanctions that were placed on the country).

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This is not mentioning global capitalism’s role in the creation of things such as sweatshops where, due to the desperation of poverty, companies can pay foreign laborers in third world countries dirt to work in the worst conditions imaginable. In summary, no, not everybody benefitted. The ruling class benefitted. The working class, in both the first and third worlds, suffered.

“Marx also underestimated the noneconomic forces that influenced people. He ignored the importance of religion, nationalism, ethnic loyalties, and other ideals in people’s lives.” This is incredibly misleading. He, and indeed most socialist theorists, have never ignored these factors. Rather, they have called for the degradation of these philosophies: Religion, specifically the hierarchical powers that lead it such as the Church, is inherently contrary to the ideals of socialism.

This is not to say people should not be allowed to follow a religion. Rather, the apparatus of the Church, for example, should be dismantled, as “divine authority” which limits freedom and instead demands submission to one individual or an oligarchy is directly contrary to socialism – i.e. a world where men and women are not subject to unwanted bourgeois hierarchy, and where they are free to own the products of their labor and not submit to capitalist authority. The Church, and indeed organizations similar to it, directly counter this, forcing their ideological demands on its followers, delivering as an excuse unprovable and quite possibly false promises of a heaven when we die.

It also seeks to dismantle the freedom of the individual in many ways: Anti-LGBT+, the aforementioned demands, anti-feminist, anti-proletarian in general. Also historically, they have been shown to oppress working class innocents in Spain, the UK, Russia, the US, and indeed most of the world.

As for nationalism, this is again something directly contrary to the freedom socialism demands. Nationalism promotes superiority complexes, fascism, and disunity from your fellow man based on something as trivial as birthplace. Socialism holds the belief that workers of the world must unite to stand against capitalism and, eventually, together in freedom and solidarity. We are all people, we are all proletarians, and may any supposed differences between us, be they race or nationality or language, be cast aside in favor of compassion, peace, and the collective good. Culture may be preserved and indeed valued, however we cannot let these things create divisions between us. Ethnic loyalties fall under this category as well.

In conclusion, I found that this excerpt was a chore to read and represents the worst of capitalist ideology. Sadly, it is representative of the common consensus, and misconceptions, about socialism and capitalism in the First World. This essay was my attempt at countering those misconceptions, and at the very least, having nothing better to do, gave me an opportunity to complain about Adam Smith.

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