Can Marxist Theory Save Capitalism? Yes.

Karl Marx, the famous Socialist philosopher, discussed the idea of class consciousness.  The theory of class consciousness has two distinctions, “class in itself”, which is defined as a category of people having a common relation to the means of production, and a “class for itself”, which is defined as a stratum organized in active pursuit of its own interests.  Now Marx saw the working-class as slaves to the producing class.  But he felt that through a revolution of consciousness (a class for itself), the oppressed could confront the economic mechanisms of exploitation.

Marx saw real power in the collective of the working class oppressed through organized revolt against the producing class.  While the unions were able to achieve a great deal of leverage at given points through the 19th and 20th centuries, the ‘free’ trade agreements have all but diminished any power once enjoyed by the collective of the working class.   The producers have simply moved labour offshore to undeveloped economies where working class members of society have no collective voice.  Problem solved for the producers.

But what if Marx had the concept right but the details wrong?  That is, what if I told you that in a capitalist economic model the working class are the gods and the producing class are the slaves?  You’d think I’d finally lost the plot.  But let me explain why this is in fact true.  And because it is true all that is required is a revolution of consciousness and a bit of technology to reverse the roles of owners and slaves.

It is really very simple.  As working class members of society we are receivers of money.  That is, we trade our labour for money, which is our means of survival.  And so we are reliant on the producers to distribute capital to our labour income.  But producers have a choice between allocating to labour income, capital expansion and profit.  And what we find when we look at the historical observable data is that of the available capital, producers have been allocating less and less to labour income and capital expansion while allocating more and more to profit.  Let’s look at the data.

Screen Shot 2017-02-23 at 7.37.39 AM

And so clearly the issue that Marx and other socialists have with capitalism is that it always seems to deteriorate into a system of greed and corruption where wealth and income become concentrated among fewer and fewer.  What we find is this is not just a morally corrupt strategy but is a mathematically unsustainable economic strategy.  The reason is that labour income and capital expansion have very high economic multipliers while dividends and buy backs have almost no economic multiplier.  Logically then when capital is shifted to low or no economic multiplier allocations the economy will eventually slow to a halt.  This is exactly what we’ve seen over the past 40 years and the period around the Great Depression.

But what I believe has been missed by almost everyone, including Marx, is the fact that while we the people are slaves in our roles as laborers we wear another hat.  People are also consumers and in this role we are gods.  You see producers are providers in their role as employers but they are receivers in their role as investors.  That is, shareholders and corporations are receivers of profit and that makes them reliant on those gatekeepers of profit.  But who then are the gatekeepers of profit?  Consumers.  You see you can increase earnings through cost structure ‘efficiencies’ but only given you have a top line.  More bluntly stated, if a business has no customers it has no sales and if it has no sales it has no profit.  That is absolute for all businesses.

And so what we discover is that consumer spending, by way of consumers, is the air by which producers breathe and without which they die.  This makes consumers the gods and producers the slaves.  From this comes an extraordinary revolution of consciousness.  Specifically that the proletariats are in fact in control of the capitalistic model but have simply failed to recognize it and perhaps never had a mechanism to apply it.

I have spent the past year working through a non profit called the Institute for Sensible Economics where we have developed a mechanism by which the proletariats can control the capitalistic model.  That means, they will, at a very high level, determine how and why capital is being allocated by the producers.  We have built out and continue to expand the development of technology platforms that will activate the existing but currently passive power of aggregate consumption.

Because we as consumers are 70% of the economy and because we are the deliverers of profit, when we begin to apply our power there is simply no other force in the economy potent enough to withstand what we are demanding.  And so the role of slave and owner will soon reverse.  What we have essentially done is tied together the mathematical viability with the moral justifiability to create an entirely new macroeconomic policy platform controlled and enforced by we the people.  The econometric basis of our model has been has been substantiated by various studies done at the best economic schools in the country.   We expect to unleash these technologies this summer.

This is how Marxist theory will save capitalism for true capitalism is a social economic model whereby no stakeholder in the economy can prosper unless all stakeholders prosper (profit can only exist without income if it is subsidized by debt and welfare – which is no longer capitalism but corporatism).  Capitalism has existed very rarely in human civilization and gets a bad rap because of the misuse of its name.

One thought on “Can Marxist Theory Save Capitalism? Yes.

  1. I get your thought process and cannot disagree with it. The issue is not how history continues to run in big circles but how to get the circle to stop when you get to where you want it to be, in my case that would when true capitalism is at work with minimal government interference other than strictly maintaining the rule of law aka corruption, special interests, the loose printing of fiat currency with no fixed standard, etc.

Comments are closed.