Marx and Friedman

Since the nineteenth century two opposing economic traditions have been struggling furiously. Mutually exclusive, communism and capitalism have the idea of human prosperity and high living standards in common, although they differ greatly in the selection of methods with the help of which this idea should come into life. In the final analysis, communism is a socialist theory asserting that a strong, central state should control the means of production. It also insists on the abolition of private property and advocates the prosecution of the opposing social structures by force.

While capitalism stands up for private ownership of property and the means of production. Marx scolds the bourgeoisie, “You are horrified with our intending to do away with private property. But in your existing society, private property is already done away with for nine-tenths of the population; its existence for the few is due solely to its non-existence on the hands of those nine-tenths.” (Karl Marx and Friedrich Engels. The Communist Manifesto; p.486). Capitalism, for Marx, is the legalized oppression of the poor workers.

As a matter of fact, communism (or Marxism, by the name of Karl Marx, a German philosopher, together with Friedrich Engels, an author of  “The Communist Manifesto”) came into life as a reaction to capitalism. Marxists see capitalism as just one of the stages of economic development (as they also saw feudalism as a past stage of development). In their opinion, capitalism is an imperfect stage before socialism that is ready to emerge very soon. Hence, Marxists acknowledge the fact that our economy is capitalistic by the nature at the moment.

However, in “The Manifesto” Marx writes that capitalism cannot long withstand revolution of the impoverished proletariat. “Modern bourgeois society with its relations of production, of exchange and of property, a society that has conjured up such gigantic means of production and of exchange, is like the sorcerer, who is no longer able to control the powers of the nether world whom he has called up by his spells… The history of industry and commerce is but the history of the revolt of modern productive forces against modern conditions of production, against the property relations that are the conditions for the existence of the bourgeoisie and of its rule.” (Karl Marx and Friedrich Engels. The Communist Manifesto; p.478). S

o, here appears the core socialist concept – the concept of classes. Marx believed that western societies were made up of classes (two central classes exist in a modern economy – the workers and the employers) which defend and advance their interests and are in a constant conflict with each other. Consequently, economic systems surely originate from this conflict.

“The Communist Manifesto”, published in 1848, proclaims the impoverished and exploited proletariat to rise up inevitably and overthrow the capitalist bourgeoisie, establishing a new classless society. The liberal (and Friedman’s as well) view on the concept of classes is quite different. Liberals view capitalism as an economic system that stimulates human nature to become apparent. People will finally understand that profit is the most important thing. Thus, the classless society here means the society of equal demands and possibilities to prosper for all.

Another important difference between communism and capitalism is the question of the scope of government regulation in economy. Marx intends to stop the exploitation of the workers by removing capital – the means of production – from the control of bourgeois individuals and placing it under the centralized control of the state. This is the grand mistake, Friedman says, which inevitably leads to authoritarianism. As he assumes, authoritarian power undoubtedly will provide individuals with economic security but for the price of their freedom and their individuality.

The imposition of censorship and the loss of political and individual freedom, individual rights, and private ownership of property in return for welfare and egalitarianism – this is what communism may offer to you. Friedman is sure that it is impossible to establish a totally collectivist and centrally planned economic system such as communism and still guarantee political freedom for the individuals who constitute this society. “Political freedom is insured by the impersonal system. An impersonal market separates economic activities from political views and protects men from being discriminated against in their economic activities for reasons that are irrelevant to their productivity” (Milton Friedman. Capitalism and Freedom; p.21).

One of the main characteristics of the modern society is its dominating tendency towards the search of the less dramatic relations between individuals and establishing economic systems where  authoritative regimes rule the society no more. And a market is the best solution of the problem. The “invisible hand of the market” (invisible hand is the force Adam Smith believed would rule over the free market economics ensuring that prosperity would come to all the people) actually empowers the neutral legislature. In fact, the market offers an abstract method of a social regulations where no one  is subordinate to his employer or a partner.

This is what Milton Friedman, an American “neo-classical school” economist, claims in his works “Capitalism and Freedom” and “Free to Choose”: his idea, that unregulated markets (unregulated market is a market that tends to have few government directives and interventions controlling it; an unregulated market has no price controls and encourages freedom of movement for capital, goods and services) will produce benefits for all, has become the prevailing governmental course since the early 1980s. In the 1960s he actually predicted an end of government regulation and investment in the economy (including the abolishing of minimum wage standard laws and most social security forms).

Friedman proves that the concentration of power in the hands of government is a threat to individual freedom. In order to protect freedom – that is a global human desire – the scope of government power must be limited distinctly. Friedman’s strong belief is that “by removing the organization of economic activity from the control of political authority, the market eliminates this source of coercive power.” (Milton Friedman. Capitalism and Freedom; p.15). The role of government comes to only maintaining law and order so that prevent coercion and ensure that all contracts voluntarily entered into on the open market are inviolated.

While Marxists says that the market should not be impersonal and uncontrolled because it dehumanizes the worker, Friedman claims that only under these circumstances the development of human society towards freedom is possible. And I agree with this point of view: where there are equal opportunities for all and no oppression from the state every individual has the ability to prosper according to his skills and eagerness. This is what the freedom climb to.

Bibliography

1. “Capitalism and Freedom”, Milton Friedman, 1982, University of Chicago Press.

2. “The Communist Manifesto”, authored by Karl Marx and Friedrich Engels;
   excerpted from The Marx-Engels Reader, edited by Robert C. Tucker, 1978, W.W. Norton.