When my macroeconomics class began a month ago, one of the first topics we covered was Adam Smith, his book
The Wealth of Nations, and the concept of the invisible hand. In describing Smith's ideas, our professor contrasted free-market economies with command economies, and, without explaining any of the reasoning behind socialist and communist theory, dismissed the subject by pointing out that the vast majority of the so-called communist states had collapsed in the early 90's. Keeping in mind that most of these students are fresh out of high school, few of them could even talk when the Berlin Wall came down; for them the entire Cold War, communism vs. capitalism, East vs. West, the USA vs. the USSR, NATO vs. the Warsaw Pact, Gorbachev, glasnost, perestroika - all of this had been learned, if at all, through history books. Whereas previous generations were generally familiar with at least the basics of communist theory, and even if opposed to the idea, may have recognized the relevance of at least learning about it, these kids had had no reason to know much about it aside from their history classes. Therefore this professor would be giving them perhaps their first academic exposure to the subject.
Our professor was very enthusiastic about his admiration of Smith's fundamental assumption that people want material wealth and are perhaps even greedy. And that in the face of limited resources and unlimited wants, the incentive to work harder, thereby earning an individual more money, and thereby allowing a person to surround themselves with more material wealth, would generate competition and promote efficiency among workers; this in turn would benefit the society at large. Thus, individuals pursuing their own self-interest would, in the end, be simultaneously pursuing society's collective self-interest.
After pointing out that most so-called communist countries collapsed 15 years ago, he posed the class a question: would we rather live in a free society where each person is allowed to pursue their own self-interest, where hard work would be rewarded with wealth, or would we prefer a society where the government controls the economy and, in accordance with Marx's famous statement of "from each according to his abilities, to each according to his needs", each person was only guaranteed his most basic needs? He gave no more explanation of the advantages and disadvantages of each system than that.
At this point I had to get involved. I pointed out that it was important to note that Marx clearly stated that communism would develop as an
evolution of capitalism; that he theorized that capitalism was not a sustainable economic system because wealth tends to become concentrated, and increasingly so, in the hands of a small minority; and while taking as concrete fact the belief that greed is part of every human's innate psychology is questionable at best, and entirely misleading at worst, Marx was implying that an economic system based on full acceptance and encouragement of this trait was not, in the long run, sustainable as a system that could meet the needs of an entire world population; in stark contrast to Smith's assertion that limited resources necessitated individuals acting in their own self-interest and fostering competition, Marx's logic leads to the conclusion that the reality of limited resources instead encourages active cooperation and planning so that an equitable, sustainable allocation can be made of those resources. I stopped there, not even continuing on about the reality that the globalization of the world capitalist economy is continually accelerating the polarization of global wealth: the rich are getting richer and the poor are getting poorer, and not only is it getting worse as time goes on, it's getting worse faster and faster.
Without addressing much of my question, the professor instead insisted that greed is an undeniable human trait. I could not disagree more with this assertion. I believe the vast majority of human behavior patterns are learned, and greed is no different. Self-preservation - the survival instinct - is of course innate. But equating self-preservation with greed is inaccurate because the latter behavior is a manifestation of the former's motivating factors taken to the very extreme. We don't
have to be greedy; we often
are simply because our society rewards it.
Another student asked, "I don't know much about communism, but given what you've said about it here, it seems pretty bad. Why, then, are a handful of South American countries' governments moving toward more socialist economic systems? What benefit are they expecting?" To which the professor replied, "Well, that's a good question. I think these countries' governments have been so corrupt and inefficient, and a result poverty levels are so high, that the idea of socialism appeals to them, as it typically does to poorer sections of a society." Absolutely no mention of the history of exploitation and manipulation of these countries' governments, industries, and natural resources by Western countries, and how that has encouraged poverty and corruption. No mention of the fact that wealth is continuing to flow out of these countries, toward already-wealthy Western countries. No mention of the fact that World Bank and IMF loan terms have often included Structural Adjustment Programs (SAPs) that force them to cut back on essential social programs and open their industries to foreign investment and ownership. No mention that most of these countries are clearly not benefiting from the global capitalist economy, and that therefore it should be expected that their leaders would consider moving along a nationalist course.
By the end of the class I was thoroughly frustrated with the professor's one-sided presentation of the material, and on the way out I asked the guy who had asked the question about South American countries if he had some idea of what the actual answer was, and was trying to see if the professor could address it, or if he really was looking for an answer. He said his reason was both; on the way to the parking lot, we talked about it and the points I made were entirely new to him.
Clearly the examples the modern world has seen of communist countries have not been always encouraging. There are a variety of reasons for this - faulty implementations of Marx's ideas, the pressures of dealing with a world capitalistic economy, and relentless hostility from capitalist states, among others - but what bothers me is that lost in this reality is the value in the underlying ideas themselves. How can anyone possibly argue that the massively state-supported capitalism that has accelerated the process of globalization and thereby also accelerated the polarization of wealth, not only between regions and countries but also between classes, is sustainable and efficient? Communism doesn't have all the answers, but capitalism sure isn't coming up with much either.
