economic systems. communism ► developed by karl marx and friedrich engels in their books das...
TRANSCRIPT
Economic Systems
Communism
►Developed by Karl Marx and Friedrich Engels in their books Das Kapital (1867) and The Communist Manifesto (1848)
Marx described a society with two classes in bitter conflict:
►The Bourgeoisie, who owned the means of production (the land and capital).
►The Proletariat, who had nothing but their labor, and who lived meager existences, exploited by the Bourgeoisie.
Marx believed the proletariat would rise in revolution and overthrow the
bourgeoisie.►Competition
would push many bourgeois into the proletariat.
►Eventually this much larger group would awaken and rebel.
The proletariat would then seize all of the capital and abolish private property.
►The means of production must be held by the government to prevent new classes from arising.
►Society would follow Marx’s formula: “From each according to his ability, to each according to his needs.”
Does it sound like a bad idea?
►Someone once said that anyone who isn’t a communist at age 18 has no heart . . .
► . . . but anyone who is still a communist at age 30 has no brain.
Criticisms of Communism
►#1. Some people disliked communism because Marx criticized religion and communist governments often suppressed it.
►Marx called religion the opiate of the people (but then he never got to see television.
#2. The Revolution would be violent
►The Bourgeoisie would not give up their property and privilege without a fight.
►Most communists didn’t care. Mao Zedong said that “Revolution comes from the barrel of a gun.” He thought the bourgeoisie were getting what they deserved.
#3. The problem of the Nomenklatura
►The class that ran the Soviet government.
►They treated themselves just like the bourgeoisie had.
What does a store look like? Would you recognize it even if you couldn’t read the
signs?
►Maybe not in Soviet Russia!
►The best stores looked like this outside.
►Inside like this.
What’s up with that?
They didn’t want the people to see how much better they were
living.►Most Russian
stores looked like this!
►Marx always said whoever controlled the capital would take advantage of it.
It also made the government really, really powerful!!!
►This created other problems.
►There was no institution left that could stand up to the government.
►Marx said the state would “wither away.” It didn’t.
#4 The Problem of Incentive►What makes
us work hard?►Probably more
importantly, what makes us innovate?
►What if there’s no payoff for all that hard work?
What might a society with little or no incentive look like?
Long lines?Empty
stores?That’s what
the Soviet Union often looked like.
Communists often said we don’t have to be like that.
►Properly educated, people can be happy in a communist system, and work for the good of all.
►They hoped that man was Tabula Rasa or a blank slate, like John Locke had thought.
►But if man has a basic human nature, perhaps communism is impossible.
After all, the Soviet communists had 70 years to educate the
“Soviet man.”
►But both Russia and China have largely given up on communism.
#5 Central planning doesn’t work
►Communist governments have tried to organize production more efficiently.
► In the Soviet Union it was called GOSPLAN
The idea was to set prices and determine quantities.
►There were always problems.
► It turned out to be too big a job too handle.
►How do we do it?
We just leave it to take care of itself
►Adam Smith called it the Invisible Hand
► If people are left to pursue their own self-interest, the market will regulate itself.
►We get what is called “Consumer Sovereignty.”