Karl Marx

On May 5th, 1818, Karl Marx, the founder of scientific socialism, was born into a relatively prosperous family in Germany. His anti-capitalist ideology profoundly impacted the 20th century, dividing the world into two ideological camps. Arguably, Marx was one of the most discussed figures of the 20th century, and even today, he commands a following of at least 1.5 to 2 billion people worldwide.

According to Marx, while philosophers had previously only interpreted the world, the real task was to change it. In his pursuit of transforming economic systems, Marx was significantly aided by his friend, Friedrich Engels. It would be a grave injustice not to acknowledge Engels' contributions here.

Engels, the son of a wealthy industrialist, was born on November 28, 1820, in Barmen. Raised in a Protestant family, Engels was involved in his father’s business, but described it as a "dog's life." By the age of 20, he had distanced himself from religion and attempted a career in journalism, though economic necessity pulled him back to business. By the age of 50, Engels had become quite wealthy and supported not only his family but also Marx's family. A polymath, Engels was fluent in twelve languages and spoke English like a native. Remarkably, it took him just three days to learn Persian. It is largely due to Engels that Marx was drawn towards communism at the age of 24.

Marx’s Ideology

Marx made an earnest effort to ground economics not in rationality but in human sentiment. He was the first to try and frame communism scientifically to counter the rapid production under capitalism.

While Marx claimed to have established a scientific basis for socialism, his predictions about its implementation and its effects proved inaccurate, as socialism does not adhere to scientific principles in the way Marx envisioned.

Before Marx, socialism was merely a moral system. He offered a practical framework for its implementation, reflecting his own struggles with talent and recognition, which he believed could only be rectified through an egalitarian system like communism. Marx's critique of capitalism was not just theoretical; he used his personal experiences as a living example of capitalism’s ruthlessness and selfishness.

Marx’s Historical Context

Marx's observations coincided with the rise of capitalism in Europe, transitioning from mercantilism to industrial capitalism. This was an era of rapid wealth accumulation, where an elite capitalist class, bolstered by its capital, began to dominate not only markets but also state institutions. Conversely, the working class became increasingly marginalized and disempowered.

Industrialization radically transformed traditional craftsmanship, leading to widespread discontent among skilled workers. Marx’s focus was precisely on this class—the artisans and laborers displaced by mechanization. According to Marx, just as Christ took on the religious burden of humanity, the state assumed responsibility for its citizens’ needs. Industrialization spawned new wealth but also exacerbated the plight of the laboring class, creating a stark division between the rich and the poor.

Marx feared that the rapidly advancing elite would soon monopolize the global economic system, creating a world governed by greed and profit, where supply and demand would be manipulated to maintain their control. Adam Smith echoed this concern in The Wealth of Nations (1776), warning that whenever capitalists gather, they plot new ways to increase their profits. Marx predicted that such capitalists would demand either free reign or isolation (laissez-faire economics), creating a world shaped by their selfish interests.

Don’t talk to me about profit—it's a dirty word.

Pandit Jawaharlal Nehru, India's first Prime Minister, was inclined towards socialism. Early in his tenure, he nationalized large industries and promoted a state-owned economy. However, India’s economy did not thrive under these policies, and by 1990, the country was on the verge of bankruptcy.

Faced with this economic crisis, India undertook significant reforms. The infamous “license raj”—a system of heavy state control and regulation—was dismantled, and the country embraced privatization and liberalized the public sector. These reforms yielded swift and positive results.

Within just 2.5 years, inflation, which had peaked at 17% in August 1991, dropped to around 8.5%. Foreign exchange reserves, which were a mere $1.2 billion in June 1991, surged to approximately $15 billion by 1994. Economic growth also rebounded, with GDP rising from a mere 1.1% in 1991-92 to 4% in 1992-93. The fiscal deficit, which stood at 8.4% in 1990-91, was reduced to 5.7% by 1992-93. Exports almost doubled between 1990-91 and 1993-94.

After these reforms, India never looked back. The country never had to turn to the IMF for help again.

Marxism vs. Capitalism

While some of Marx's predictions did not come to pass—socialism failed to replace capitalism in most parts of the world—his ideas remain relevant. Notably, when implemented, Marxist systems were often associated with scarcity, leading to the criticism that "communism is the economics of shortage." In many cases, systems based on Marx’s ideas collapsed, though countries like China adapted communism in ways that led to rapid growth, earning the label "Communism 2.0."

Despite the mixed results of Marxist experiments, his critique of capitalism continues to serve as a powerful challenge to the system, particularly during times of economic crisis. As capitalism, under the guise of a free market, evolves and adapts to crises, it almost appears as though some invisible force is guiding it. However, as economist Joseph Stiglitz notes, "there was no invisible hand," challenging the belief in self-regulating markets.

Communism, as a political and economic system, was adopted by several countries in the 20th century, but its success and failure varied significantly across different regions. Here's a brief overview:

Failed Communist Countries:

Soviet Union (USSR): Established as the first communist state in 1917, the Soviet Union was the most prominent example of a communist experiment. However, it collapsed in 1991 due to economic stagnation, political repression, and inefficiencies in central planning.
East Germany (GDR): Under Soviet influence, East Germany adopted communism after World War II. Despite initial industrial growth, it faced economic problems and was ultimately reunified with West Germany in 1990.
Czechoslovakia, Poland, Hungary, and Eastern Bloc Countries: These nations, part of the Soviet bloc, adopted communism after WWII. Most struggled with economic inefficiency, limited freedom, and public dissatisfaction. Following the collapse of the Soviet Union, they transitioned to democratic, market-based economies.
Cuba: After Fidel Castro's revolution in 1959, Cuba embraced communism, leading to decades of economic hardship, particularly after the fall of the USSR, its main supporter. While it survived as a communist state, it remains economically isolated and underdeveloped.
North Korea: Still a communist state under the Kim dynasty, North Korea has maintained strict control over its people and economy. It faces international isolation, economic difficulties, and widespread poverty, though the regime remains in power.
Cambodia (Khmer Rouge): Pol Pot's brutal communist regime (1975-1979) resulted in mass genocide, economic ruin, and eventual overthrow. It is considered one of the most catastrophic communist failures.

Successful Communist Adaptations:

China: While China adopted communism in 1949 under Mao Zedong, it faced severe setbacks like the Great Leap Forward and the Cultural Revolution. However, since the late 1970s, under Deng Xiaoping, China introduced market reforms while maintaining political control, resulting in rapid economic growth. Today, it operates a mixed socialist-market economy.
Vietnam: After reunification under communist rule in 1975, Vietnam experienced severe economic challenges. However, with the introduction of market reforms (Đổi Mới) in the late 1980s, Vietnam has seen considerable economic growth, while the Communist Party still controls the government.
Laos: Like Vietnam, Laos adopted communism in 1975 but later introduced reforms to create a mixed socialist-market economy. It remains a one-party state but has seen moderate economic success.

The Future: A Hybrid Approach?

The time may come when the world will need to consider a hybrid economic system—perhaps 15% socialism and 85% capitalism. If that happens, it would mark a vindication of Marx’s ideas, even if not in the form he originally envisioned. Despite the inaccuracies in some of Marx’s predictions, his legacy remains deeply intertwined with the ongoing discourse on economic systems, social justice, and class struggle.

حوالہ جات:

کیا آپ اس مارکس کو جانتے ہیں؟ (پہلا حصہ)

کمیونزم 2.0: چین، سرمایہ دارانہ نظام اور نئے سوشلزم کی مقبولیت

کارل مارکس اور سرمایہ دارانہ نظام

کمیونزم ، کیپٹلزم اور سوشلزم کے درمیان فرق

کیا آئی ٹی کی صنعت ملکی معیشت کو سہارا دے سکتی ہے؟

کارل مارکس کی سالگرہ اور بائیں بازو کا زوال

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