Kelly Capelli at Wachovia bank here in New Smyrna Beach understands the fallacies of Marxism that it "doesn’t work well because it destroys incentive and promotes crime.”
But many more Americans embrace without realizing its roots under such programs as nationalized health care. One of the sad truths of our times is that while many Americans recognize that Marxist ideas have never worked well, many Americans think they can still, somehow, use them to solve our problems.
The core problem with Marxist philosophy is that it absolutely prevents economic efficiency and destroys most or all of the incentive to produce. The result is that Marxist economies create very little wealth compared to capitalist economies and require coercion to exist.
In a capitalist economy, the market efficiently coordinates the actions of millions of people and businesses. One of the main instruments of this coordination is market pricing.
In a market system, the information is revealed and decisions are worked out on a minute by minute basis in the interaction of all of the millions of elements of the market.
In a Marxist system, central planners attempt to make all of the decisions. This includes what to make and how to price everything from materials to labor. Such initiatives cannot sustain themselves for the long haul
Even if the central planners could handle the complexity of the situation, the information needed to make rational decisions is spread throughout the system and cannot be collected by central planners to make decisions. The central planners are working in the dark without information.
The first Principle of Marxism is that there should be no property ownership. That principle alone will wipe out any possible efficiency in the economy. Without property ownership there can be no rational pricing. Without pricing it is impossible to figure out what available means are most economical to use to make a product or even which products to make.
Furthermore, without property ownership there is little incentive to maintain things. There is also little incentive to make something if you will never be able to own it.
Another consideration is that in a Marxist system profit and loss are forbidden. Without profit and loss there is no rational method to measure the performance of your operation.
Take the old Marxist maxim, “from each according to his ability to each according to his need.” The more faithfully that maxim is adhered to the less incentive there is to produce. If it were adhered to perfectly the only way anyone would produce anything would be through force or in the black market.
In the former Soviet Union, the official economy was so inefficient that the country relied heavily on its black market. For example, it is estimated that about 30 percent of Soviet food was produced illegally on private plots that made up about 2 percent of the food-producing land.
It is interesting to note that no matter where they occur socialistic programs require coercion for their existence. No socialistic program I know of exists voluntarily.
Two examples right here at home are the Social Security System and the Public School System. How long would either of these systems survive if the taxes to support them were voluntary?
During the Carter Administration, the government attempted to apply Marxist central planning to the oil market. That was such a failure no one has suggested we try it again even with the recent high prices for gas. The memory of really long gas lines still lingers in people’s memories.
The reason for reminding the reader of these facts is that even with all the evidence of the failure of Marxist ideas many of our leaders seem willing to try to use these failed principals to solve our present problems.
Maybe they may think that Marxism failed to work because it wasn’t done right rather than it is a fatally flawed concept. Maybe they think that a Harvard trained Marxist can make the ideas work when no one else has been able to.