Karl Marx & the Flaws of Capitalism: Lex Fridman Talks with Professor Richard Wolff

Wow, anoth­er “aca­d­e­m­ic” who’s going to tell us all about the won­ders of social­ism and com­mu­nism. It’s worked in Venezuela, Cuba, the Sovi­et Union, Chi­na, North Korea, and many oth­er love­ly places. Why won’t it work here, in the evil USA? Maybe peo­ple like to have enough to eat for one!

I did not lis­ten to the dis­cus­sion. I would have read a tran­script, or at least skimmed it, but AV is a waste of time, so I am not com­ment­ing on the dis­cus­sion, only on the com­ments.

Jonathan’s irony might be appro­pri­ate if peo­ple in the USA real­ly did have enough to eat, but it is obvi­ous that many don’t, and the US is also very harsh in its treat­ment of its home­less peo­ple, so there is a lot NOT to like about the US sys­tem, not only its gun lob­by, who should all be lined up and shot, like Amer­i­can school chil­dren are, and all their guns destroyed.

Jonathan is right in say­ing that Com­mu­nism is not the answer, but social­ism could be, but Amer­i­cans insist on equat­ing social­ism with Marx­ism, and because of their mis­guid­ed anti-social­ism they are head­ing for an eco­nom­ic melt-down.

Com­mu­nism worked briefly in the ear­ly Israeli kib­butz­im. It was not even tried in the Sovi­et Union, Chi­na, etc., the near­est they came to com­mu­nism was enforced Col­lec­tivism, which destroyed the Russ­ian and Chi­nese economies and caused famine and huge loss of life. And all the coun­tries that tried Marx­ism dis­cov­ered its fatal flaw, “the Dic­ta­tor­ship of the Pro­le­tari­at”, the fact that peo­ple who gain absolute pow­er sel­dom will­ing­ly relin­quish it, and the asso­ci­at­ed fact that the rul­ing clique soon was dom­i­nat­ed by one man, Stal­in and Mao and their suc­ces­sors in Rus­sia and Chi­na, right down to Tzar Putin and Emper­or Xi Jin­ping, the Kim fam­i­ly in North Korea, Ho Chi Min in Viet­nam, Pol Pot in Cam­bo­dia, etc. etc. Gor­bachev almost saved Rus­sia, but the total­i­tar­i­an regime had become too firm­ly entrenched. That is how Marx­ism works out.

Marx­ism is fatal­ly flawed; Com­mu­nism only works when all mem­bers of the com­mune are com­mit­ted to it; Col­lec­tivism does­n’t work at all, because peo­ple wont work hard unless they derive some per­son­al ben­e­fit from doing so; so short of going back to a sub­sis­tence econ­o­my and a barter sys­tem there real­ly does­n’t seem to be any alter­na­tive to Cap­i­tal­ism.

How­ev­er, Cap­i­tal­ism is also fatal­ly flawed. As cur­rent­ly imple­ment­ed it is a huge Ponzi scheme, requir­ing con­stant growth to remain viable, which is not pos­si­ble in our finite world, and it is huge­ly inequitable because it con­cen­trates wealth in the hands of a priv­i­leged minor­i­ty of ‘investors’ and cor­po­rate high fly­ers, par­a­sites who ‘earn’ mon­ey from mon­ey instead of from hon­est pro­duc­tive work. Inter­est on invest­ments is the pri­ma­ry dri­ver of infla­tion, it increas­es the amount of mon­ey in cir­cu­la­tion with­out pro­vid­ing a pro­por­tion­ate increase in the val­ue of the under­ly­ing econ­o­my, so it is a very effec­tive means of trans­fer­ring wealth from the poor to the rich, by decreas­ing the val­ue of the cur­ren­cy. Because of these fatal flaws in Cap­i­tal­ism we are now head­ing for an eco­nom­ic col­lapse, unless a way is found to share the world’s assets more equi­tably.

To pre­vent the econ­o­my col­laps­ing, cor­po­ra­tions need to brought under the con­trol of Gov­ern­ments, not vice ver­sa, to set lim­its on their prof­it pre­da­tion, and wealth needs to be dis­trib­uted more equi­tably via an appro­pri­ate social secu­ri­ty sys­tem, prob­a­bly a Uni­ver­sal Basic Income Scheme and pub­lic health ser­vices and pub­lic edu­ca­tion, fund­ed pri­mar­i­ly by tax­es on cor­po­rate and investor prof­its.

Unfor­tu­nate­ly, the wealthy will con­tin­ue to avoid tax in their pur­suit of ever greater wealth, and the real incomes of work­ers and the finan­cial­ly dis­ad­van­taged will decrease to the point where retail sales slump because peo­ple can only afford the bare essen­tials, man­u­fac­tur­ing will decrease or stop, the econ­o­my will col­lapse, and the wealthy will dis­cov­er that they can­not eat mon­ey.

The above is a sim­pli­fi­ca­tion of the real­i­ty, but it is the guts of it, Cap­i­tal­ism has with­in it the seeds of its own destruc­tion. We can­not main­tain con­stant growth in a world of finite resources. We can­not con­tin­ue to con­cen­trate wealth in a world of finite resources. If the wealthy do not soon start pay­ing tax pro­por­tion­ate to their means, mon­ey will soon stop cir­cu­lat­ing, the econ­o­my will col­lapse, and the wealthy will find that their mon­ey is worth­less. Fund­ing favoured char­i­ties won’t help, the wealthy need to actu­al­ly pay tax pro­por­tion­ate to their means if they are to keep mon­ey cir­cu­lat­ing and keep the econ­o­my viable.

This cap­i­tal­ism sounds good as a part of a social­ist gov­ern­ment, but you need to give every­one a good an equal start & oppor­tu­ni­ty. Aus­tralia an entire con­ti­nent is owned by 50 mil­lion peo­ple and all of its coasts and nat­ur­al resources are used to brain drain SE Asia of 3 bil­lion peo­ple who were born with few nat­ur­al resources.