In my last post (Karl Marx), I highlighted Karl Marx. In this post, I will highlight his works in a nutshell: a societal development model, as shown above. Let me explain this model by focusing on the three boxes in the bottom layer …

1. What is feudalism?

Read Wikipedia – Feudalism.

Here is my simple definition of feudalism:

• With a monarch (king or queen) sitting on the top, power is inherited via a bloodline or marriage.
• The monarch, via a few lords, controls the economy as well as national politics.

2. What is capitalism?

Read Wikipedia – Capitalism.

Capitalism is the best thing ever happened to mankind. Capitalism has not only been feeding more and more people on earth, but also created huge prosperity around the globe. For example, it was capitalism that propelled the West ahead of China some 200 years ago.  And it is state capitalism that has enabled China to lift some 800 million people out of abject poverty over the past few decades, with a burgeoning middle class.

Capitalism, however, has many endemic problems, not the least of which are its business cycles and the recklessness in pursuit of profits by the capitalists, exactly as Marx observed in his time.

Two grand examples of disastrous laissez faire capitalism:

• The Great Depression in the 1930s.
• The Great Recession in the 2000s.

However, capitalism must not be simply replaced by socialism, as Marx argued. Rather, it should be counter-balanced with socialism, and vice versa. In other words, they should co-exist for a long time, as elaborated in my last book (History 2.0 – China’s Comeback vs. America’s Decline).

3. What is socialism?

Read Wikipedia – Socialism.

Simply put, a republic is socialistic by definition, as everything is supposed to be for the “public”. A government conducts socialism in three major ways:

• Taxation and being responsible for everything “public”, from safety to handling a pandemic.
• Owning or controlling some means of production. Two contemporary American examples: the USPS and the GM bailout (GM Chapter 11 reorganization).
• Regulations: Theodore Roosevelt started it big time in America one century ago.  However, American slavery should be deemed as one of the worst forms of socialism: supporting capitalism with “free labor”!

4. The advancement from feudalism to capitalism

Different countries take different routes, but typically a revolution is necessary. Two prominent examples:

• France (French Revolution).
• Russia (Russian Revolution).

Both overthrew the monarchy via a violent revolution.

5. The advancement from capitalism to socialism

Marx called for a “proletarian” revolution (or “forcible overthrow of all existing social conditions”) to advance from capitalism to socialism.  This has proven to be deadly, as Lenin and Mao amply proved. Specifically, history since then has shown that

• Such a revolution is not always necessary. For example, many Western countries (e.g., France and Sweden) have become more and more socialistic over the past 100 years, without a contemporary revolution.
• A failed socialist country may adopt capitalism without a revolution. The most prominent example: China.

6. Discussion

At a very high level, Marx’s model is correct. Two “communists”, Lenin and Mao, capitalized on his model more than anybody else, not only in theory but also in practice. Both of them eventually failed for the same reason: They jumped from feudalism to socialism via a violent revolution that destroyed capitalism, albeit very primitive in their respective countries. As a result, the USSR was a total disaster, and so was China under Mao (1949-1976).

Here is a summary of Marx’s works:

• Capitalism: Marx’s understanding remains the most thorough and insightful to date.
• Socialism: His advocacy of socialism as a replacement for capitalism is most likely wrong. For details, read History 2.0 – China’s Comeback vs. America’s Decline.
• Communism: It is so remote and so idealistic that it is almost equivalent to a lie.

7. Closing

Marx’s model is basically correct, for his era at least. It’s time to have it enhanced. Wait for my next article or read History 2.0 – China’s Comeback vs. America’s Decline.