Greetings, young Socialists. I realize you probably racked up a lot of student loan debt getting to the point you wanna support the DSA. And who doesn’t like getting free stuff? Trouble is, free stuff starts running out. For example, on New Year’s Eve 1988, I got to visit East Berlin. It wasn’t pretty. And in 1989, I saw the wall come down on the evening news. So—at no charge to you—let me offer you some information you probably weren’t given in college.
Start with this: The average American is likely to be wealthier than 95 percent of people on earth, and America is a mixed economy. And this prosperity didn’t arrive by chance. It arrived thanks to millions of strangers coordinating without ever meeting—through firms, corporations, investors, supply chains, workers, and the price system. We eat because a network of people we’ll never meet, or get to thank, has organized complex industries around feeding us. A mature economic philosophy starts with the recognition of such dynamics—not with grievances, not with envy, and certainly not with just-so stories.
No, that’d be Marxism.
It starts with entitlement dressed up as analysis. Marx thought that the whole market system was based on theft, but turned right around and used his theory to justify institutionalized stealing. Just so you know, if that’s your starting point, it ain’t gonna work. You need more net producers than net consumers.
The Central Claim
Marxists are fond of saying true socialism has never been tried. Even less doctrinaire folks are fond of saying that Marxism sounds great in theory, but fails in practice. The truth is, Marxism fails in both theory and practice. It fails in theory, because its core doctrines rest on mistaken premises about economics and human nature. It fails in practice, because every attempt to implement it produces the opposite of what it promises. It fails on both counts because if your economy is going to have more Makers than Takers, either the Makers get rewarded for their effort and risk-taking, or you’ll have to enslave people. (That’s right: slavery.) Any system that requires slavery sucks.
Eight Failures of Marxism
Remember, Marx taught that socialism is the stage before communism. So, here are eight failures of Marxism that matter.
1. The Labor Theory of Value
Marx claimed a good’s value comes from the labor used to produce it. But value isn’t poured into a good. It’s assigned by the person who wants the thing. For example, two shirts might have the exact same labor inputs, but one shirt has a picture of Che Guevara and another a picture of Milton Friedman. Ironically, more people are willing to pay more money for Che Guevara shirts than Milton Friedman shirts. That’s because value is subjective. Marx thought value is objective, so thought wrong.
Market Entrepreneurship is the discipline of guessing what people will want. Profit is what happens when that guess is right, and one sells a unit for more than what it cost to produce. Profit is a reward for that correct anticipation, not the confiscation of somebody’s labor.
2. Alienation
Marx watched factory workers repeat the same motion all day and thought it dehumanizing. He wasn’t wrong about the boredom and the hard labor. He was wrong about the tradeoff. Pre-industrial labor was just as boring and backbreaking for the most part.
Specialization is the reason a single farmer today feeds hundreds of people instead of four. Every economic arrangement trades one thing for another. For example, entrepreneurs risk time and capital that workers don’t. But if workers genuinely prefer cooperative ownership, nothing stops them from forming one—since worker co-ops are legal and already exist. But they have to compete for customers like anyone else. So America doesn’t ban Marx’s alternative. It just refuses to mandate it.
3. Exploitation
Strip away the labor theory of value, and the charge of exploitation collapses with it. An employer offering a wage and a worker accepting it is not a hostage situation. It’s a trade both sides prefer to the alternative of no trade at all.
Labor markets are thus no conspiracy against the working class. They’re what happens when millions of individual decisions about time, skill, and payment are made in an economy with many alternatives, where prices are set mainly by labor supply and demand.
4. Abolition of Private Property
If you take away ownership, you take away the reason—and the incentive—to be a good steward of property. Nobody repaints a rental they’re about to abandon. No one invests in building a new apartment building if the city is going to freeze rents. Multiply that logic across an entire economy, and you get exactly what history delivered with socialism: collectivized farms that starved, state factories that rotted out, common land that nobody protected because everybody owned it, so nobody did.
5. Abolition of Market Prices
Prices aren’t a symptom of capitalism. They’re a decentralized information service—the only one humanity has ever built that tells millions of strangers, simultaneously, what’s scarce, what’s abundant, and whether the incentive is strong enough for any given person to buy.
Kill the price system, and you don’t get equality. You get commissars guessing how much of some good a nation needs, or guessing wrong in both directions at once: shortages of what people want, like Soviet bread, or mountains of what they don’t, like Soviet shoes.
6. Historical Materialism
Marx reduced history to a single metanarrative: class conflict. But geography carved the trade routes. Culture shaped what people were willing to sacrifice for. Technology rewrote what was possible. Marx’s predictions about capitalism’s inevitable collapse have been repeatedly postponed for over a century, which is what happens when a theory is meant to explain everything but is unfalsifiable.
7. Dictatorship of the Proletariat
Every promised “temporary” dictatorship in the Marxist tradition became a permanent bureaucracy. Why? Because authorities with the power to seize resources never develop a desire to give power back. Communism doesn’t run on consent, after all. It runs on compulsion—indefinitely. That’s because the moment the compulsion stops, people either leave or start producing and trading. And as we suggested, private property rights are preconditions of widespread production and trade.
8. Human Nature
Marx believed man could be remade—so under different conditions, self-interest would dissolve into solidarity. Every regime that tried to accelerate that transformation ended up sending good people off to the Gulags. If you need force to make the Socialist Man and Woman, your system ain’t gonna work for very long.
Lasting institutions are the ones built for humans as they are—not how we wish them to be. Regimes that assume they can remake human beings tend to stack up bodies. The Black Book of Communism estimates 100 million people died under communist regimes. If your response to that is that real communism hasn’t been tried, I think we’d want to know how many more deaths are acceptable to figure it out.
Evolution Over Revolution
Here’s the alternative to the warmed-over Marxism that is animating the Democratic Socialists: Let ideas compete in niches. Markets already run on this principle: constant feedback through profit and loss, a verdict rendered daily instead of promised for some future decade. Undistorted markets are the ultimate accountability loops.
If communal ownership, worker cooperatives, or any alternative to various corporate forms in most markets actually deliver on their promises, you don’t need a revolution to prove it. People will just migrate to the better system. The new system needs a chance to compete at a smaller scale. Different people need the freedom to try it or something else—on their own terms.
I’m Max Borders. Let’s criticize by creating.
