On the 150th anniversary of the Communist Manifesto, I think it is fair to say that a university or community college student would be hard pressed to avoid either a course or healthy discussion on the principles of Karl Marx. Likewise, it seems that even as adults, we cannot avoid his utopian chants! A recent issue of The New Yorker entitled "The Next Issue" discussed subjects such as who the next President of the United States might be, where the next space odyssey might go, and so forth. In that issue, writer John Cassidy argued that the next thinker might actually be Marx, who was wrong about the rise of communism, but could be right about the problems with capitalism.

Marx and capitalism: a brief overview

In the Communist Manifesto, Marx outlined his view that the existence of different social classes was based solely on "the formation and augmentation of capital" by the bourgeoisie, or capitalist class. This system of industrialization enhanced the need for individualism, and the most important component of this was private property. The only way to "stop the madness" (so to speak) was for the proletarians, or working class, to bring down the system by changing it from within. This would be done by creating a communist society, which would eliminate the need to obtain capital by "abolishing private property."

The relationship between Marx and capitalism has been discussed and debated by numerous political scientists, economists, and academics. As the noted political scientist Seymour Martin Lipset stated, the system that Marx wanted the world to adopt "was not institutionalized democracy, but anarchy." While he was opposed to mass revolt, Marx wanted to see an upheaval of societal values, and be able to prevent a type of laissez-faire capitalism from emerging.

Simply, while Marx believed that society would naturally want to follow communism, he forgot an important fact: people are individualists by nature, and want the opportunity—and the right— to accumulate wealth and status.

What's wrong with capitalism?

In the last few months, many articles and books have been written, mostly negative, about capitalism. However, John Cassidy's recent article "The Return of Karl Marx" may turn out to be one of the most creative—albeit implausible—of all the recent works.

After a recent conversation with a former schoolmate at Oxford University, where both had studied economics, Cassidy began to reconsider the ideas of Marx and capitalism. Most of his professors had ridiculed Marx's economic theories and communism as a whole in the 1980s. However, more than a decade later, Marxian issues like globalization, political process, and corruption, and the monopolization of industries were being debated once more. As Cassidy pointed out, economists are talking about these issues "without realizing that they are walking in Marx's footsteps."

Cassidy's article reviewed many of Marx's popular works, proving, at the same time, how many high-profile people had taken up Marx's cause in modern times. One of his interesting comparisons is how Marx's insight from The German Ideology, "the materialist conception of history," was actually adopted by James Carville with a new label, "It's the economy, stupid." In other words, no matter how you try to ignore it, materialism and the nature of the free market economy drives our ambitions and desires.

Although the Communist Manifesto failed in its prophecies, Cassidy states that it did succeed in explaining how capitalism works. How? Marx never simplified the powerful entity of a free market. This is why he and Friedrich Engels wrote, "Capital is, therefore, not a personal, it is a social power." He knew that capitalism had the power to transcend countries and empires, and felt it was more than a worthy adversary.

Cassidy also looked at a number of fundamentals of modern economic thought in which Marx left his indelible mark. First, Marx stated that capitalism inherently leads toward the monopolization of industry. While Teddy and Franklin Roosevelt may have been able to control monopolies, they resurfaced in the '80s. Second, Marx articulated the concept of the entrepreneur and the need for profit as being of primary importance for the "accumulation" of wealth. This theory of economic growth was later adapted in many economic models. Third, many of the social services designed to help workers, such as welfare legislation, health benefits, and labour laws, were brought to the forefront by Marx. These early socialist concepts have existed for over 100 years in many capitalist systems. Fourth, some modern-day economists are taking note of Marx's economic conclusion that the circumstances that force people to make choices are often as important as the actual choices. In other words, the focus of power in a capitalist society is based on who is in control of the situation—governments, legislators, or even lobby groups.

Conclusion

To prove the importance of Marx in our society, consider an ingenious commentary by Merrill Matthews Jr. and Morgan O. Reynolds of the National Center for Policy Analysis. Taking their cue from the Communist Manifesto, the two authors wrote their own "Capitalist Manifesto." Included was the all-important goal of the capitalist (protection of private property), the need for such items as a flat tax, abolition of inheritance taxes, and elimination of direct school funding, which was followed by a catchy slogan: "Capitalists of the world, compete!"

Of course Cassidy is right when he refers to Marx as an influential economist and political voice. But do we not think the same of other economists such as Milton Friedman, Friedrich von Hayek, Paul Krugman and Lester Thurow? In the end, it doesn't much matter whether we agree with Marx or not.  The fact remains that he laid the groundwork for the growth of the communist movement, and tried to explain in a jaded manner, of course how the capitalist movement, and the bourgeoisie, operated in society.

But Cassidy is wrong about Marx becoming the next big thinker. There will always be nay-sayers in discussions on the motives of capitalism. However, by giving the general public freedom of choice, a free market economy with limited boundaries, and the unlimited ability to succeed in terms of wealth and success, is still the best economic theory we have ever had, bar none. Free marketers of the world, unite!