Marx thought that private property was the cause of capitalism’s social ills. But when Marx’s ideas were put in action, they were disastrous. I discuss what went wrong.

Blair Fix

Karl Marx is probably the most important social scientist in history.
But while his influence is beyond compare, Marx's legacy is, in many
ways, *disastrous*.

Few thinkers have inspired so many people to commit crimes against
humanity. Think of Stalinist
[gulags](https://en.wikipedia.org/wiki/Gulag){target="_blank"
rel="noopener"}. Think of the [Ukrainian
famine](https://en.wikipedia.org/wiki/Holodomor){target="_blank"
rel="noopener"} of the 1930s, which may have killed as many people as
the Holocaust. Think of the [Great Chinese
Famine](https://en.wikipedia.org/wiki/Great_Chinese_Famine){target="_blank"
rel="noopener"} of the late 1950s, which killed even *more* people than
the Holocaust. All of these crimes were driven by Marxist policy.

### An obvious problem?

OK, many of you are probably wondering where I'm going with this
discussion. You're thinking to yourself: yes, it's obvious that Marxist
ideas led some people to do nasty things. So why do we need to discuss
it?

The problem is that it's *not* obvious to everyone. Many Marxists don't
connect the crimes of Stalin and Mao directly to Marx's ideas. Instead,
they dismiss these crimes as *aberrations*. These crimes, they say, were
unfortunate consequences of bad people or bad circumstances. Marxism
itself was not the problem.

I've experienced this thinking first hand. I once took a class taught by
a professor who was a militant Marxist. One day, a student asked the
professor what had gone wrong with the Russian revolution. The
professor's response surprised me. The revolution, he said, was going
well until Lenin died. Then Stalin took over. It was Stalin, the
professor insisted, who hijacked the revolution. Had Lenin remained in
power (and found a better successor), things would have gone
differently.

Now, like me, you're probably skeptical of the professor's response. But
ask yourself --- what's wrong with his explanation? What's wrong with
pinning the problems of Soviet Russia on Stalin?

Here's a gaping flaw. When it comes to communist revolution, leaders
like Stalin are not the *exception*. They are the *rule*. Think Mao.
Think Pol Pot. Think Kim Jong-Il. For reasons that Marxists don't like
to think about, communist revolutions frequently end up with despots
running the show. So if despots seem to take over Marxist revolutions,
it's hard to argue that Stalin was an aberration.

If we don't buy the 'aberration' argument, then we need to ask a
question. Why do communist revolutions usually lead to despotism? Is it
just bad luck? Unlikely. I think there's something deeper going on. I
think the problem has to do with Marxist theory itself.

### Why do communist revolutions lead to despotism?

Communist revolutions end badly, I believe, because they are based on
faulty ideas. The problem is that Marxists misunderstand the source of
capitalism's social ills. It all goes back to Marx himself.

Marx pinned the ills of capitalism on *private property*. I think this
was a mistake. The real cause of most social ills, I believe, is not
private property. It's *hierarchy*. Why? Because hierarchy concentrates
*power*. And concentrated power is the despot's best friend.
Concentrated power, I believe, leads to social ills like
totalitarianism, inequality, mass violence, and oppression. True,
private property is intimately linked with hierarchy and power. But, as
communist states demonstrated, we can have hierarchy without private
property. This is Marx's fatal error.

So here's what goes wrong with communist revolutions. Distracted by
private property, Marxist revolutionaries make the problem of hierarchy
*worse* than it was under capitalism. They abolish private property,
thinking this will solve the problems of capitalism. But to achieve
their goals, Marxists create a vanguard party that eventually becomes a
single-party state.

So in the name of creating a more just and equitable society, these
revolutionaries *concentrate power*. They replace capitalist hierarchies
with an even larger communist hierarchy. Yes, private property is gone.
But the problems of hierarchy are even worse than before. It's an ironic
twist. Marxist revolutionaries aim for a socialist utopia. But what they
get is a totalitarian nightmare. And it's all because they focus on
private property and neglect the problem of hierarchy.

### Marx's theory of capitalism

To understand why Marxist revolutionaries fixate on private property, we
need to understand Marxist theory.

Capitalists, Marx observed, own the tools and machines that workers need
to do their jobs. By owning the 'means of production', capitalists are
able to exploit workers and extract a 'surplus'. Capitalists, says Marx,
are *parasites*. They live off the backs of workers.

I've tried to visualize Marx's theory in Figure 1. Here we have a group
of workers ('labor') who collectively produce something of value. To do
their jobs, the workers must use construction machines. We call this
machinery 'capital'.

<figure id="attachment_436" class="wp-caption alignnone"
aria-describedby="caption-attachment-436" style="width: 955px">
<img
src="https://i0.wp.com/economicsfromthetopdown.com/wp-content/uploads/2019/05/capital_marxist.png?resize=723%2C482&amp;ssl=1"
class="alignnone size-full wp-image-436" loading="lazy" decoding="async"
data-attachment-id="436"
data-permalink="https://economicsfromthetopdown.com/capital_marxist/"
data-orig-file="https://i0.wp.com/economicsfromthetopdown.com/wp-content/uploads/2019/05/capital_marxist.png?fit=955%2C637&amp;ssl=1"
data-orig-size="955,637" data-comments-opened="1"
data-image-meta="{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;,&quot;orientation&quot;:&quot;0&quot;}"
data-image-title="capital_marxist" data-image-description=""
data-image-caption="&lt;p&gt;capital marx&lt;/p&gt;
"
data-medium-file="https://i0.wp.com/economicsfromthetopdown.com/wp-content/uploads/2019/05/capital_marxist.png?fit=300%2C200&amp;ssl=1"
data-large-file="https://i0.wp.com/economicsfromthetopdown.com/wp-content/uploads/2019/05/capital_marxist.png?fit=723%2C482&amp;ssl=1"
data-recalc-dims="1" width="723" height="482"
alt="Marxist view of capitalist income" />
<figcaption> 
Figure 1: Visualizing Marx’s theory of
capitalism. 
</figcaption>
</figure>

Here's the catch. The capitalist owns the capital. So to do their jobs,
the laborers must work for the capitalist. Now comes the crucial part.
According to Marx, it is *workers* who create all the value. But since
the workers are employed by the capitalist, they don't own the value
they create. The capitalist owns it. And unsurprisingly, the capitalist
takes a cut.

So here's the crux of Marxism. Marxists think that by owning capital,
capitalists can take a cut of the value produced by workers. Marxists
call this cut 'surplus value'. It's value that is produced by workers
and stolen by capitalists. That's Marx's theory of capitalism in a
nutshell. It's simple, seductive, and incendiary.

### Private property as an ideology that justifies hierarchy

Here's the problem with Marxist theory. I don't think that private
property is the true problem. Private property is just an ideology that
justifies *hierarchy*. And it's hierarchy, I believe, that is the real
social evil. Hierarchy concentrates power, leading to many forms of
debauchery.

With hierarchy in mind, let's take another look at the role of private
property in capitalism. Marx focuses on the ownership of *things* ---
the tools and machines that workers' use to do their jobs. But I think
this is a distraction. What is really important is the ownership of
*institutions*.

When you own an institution, in effect, you own a *hierarchy*. But it's
not the ownership itself that is important. It's the fact that ownership
is what *legitimizes* your power. As the owner of hierarchy, you are the
legitimate ruler.

Let's illustrate this principle using a modern example. Think about what
it means to purchase all the shares in a company. What are you buying? I
argue that you are buying *hierarchical power*. As owner of the company,
you gain the right to command the corporate hierarchy. Your subordinates
obey your commands because, as owner, they believe you are the rightful
ruler.

I've visualized this thinking in Figure 2. Here we have a capitalist who
commands a corporate hierarchy. As ruler, the capitalist is able to
split the firm's income stream. The capitalist keeps some of the income
(as profit), and pays the rest to workers. We think of capital not as
'thing', but as the [symbolic power of the
owner](http://bnarchives.yorku.ca/259/2/20090522_nb_casp_full_indexed.pdf){target="_blank"
rel="noopener"}.

<figure id="attachment_435" class="wp-caption alignnone"
aria-describedby="caption-attachment-435" style="width: 1315px">
<img
src="https://i0.wp.com/economicsfromthetopdown.com/wp-content/uploads/2019/05/capital_hierarchy.png?resize=723%2C239&amp;ssl=1"
class="alignnone size-full wp-image-435" loading="lazy" decoding="async"
data-attachment-id="435"
data-permalink="https://economicsfromthetopdown.com/capital_hierarchy/"
data-orig-file="https://i0.wp.com/economicsfromthetopdown.com/wp-content/uploads/2019/05/capital_hierarchy.png?fit=1315%2C435&amp;ssl=1"
data-orig-size="1315,435" data-comments-opened="1"
data-image-meta="{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;,&quot;orientation&quot;:&quot;0&quot;}"
data-image-title="capital_hierarchy" data-image-description=""
data-image-caption="&lt;p&gt;capital hierarchy&lt;/p&gt;
"
data-medium-file="https://i0.wp.com/economicsfromthetopdown.com/wp-content/uploads/2019/05/capital_hierarchy.png?fit=300%2C99&amp;ssl=1"
data-large-file="https://i0.wp.com/economicsfromthetopdown.com/wp-content/uploads/2019/05/capital_hierarchy.png?fit=723%2C239&amp;ssl=1"
data-recalc-dims="1" width="723" height="239"
alt="Capitalist income in a hierarchy" />
<figcaption> 
Figure 2: Private property as an ideology that legitimizes
hierarchy. Rather than a ‘thing’, we conceive of private
property as an ideology. As owner, a capitalist is the legitimate ruler
of a corporate hierarchy. The capitalist uses his/her power to divide
the firm’s income stream. My thinking here combines my ideas about
hierarchy with Jonathan Nitzan and Shimshon Bichler’s theory of <a
href="http://bnarchives.yorku.ca/259/2/20090522_nb_casp_full_indexed.pdf"
target="_blank" rel="noopener">capital as power</a>. 
</figcaption>
</figure>

So here's my main point. I think Marx looked at private property the
wrong way. Private property is not the *source* of our social ills.
Private property is just the *ideology* that justifies hierarchy. And it
is hierarchy (and the concentration of power that goes with it) that is
the true source of our problems.

### The many ideologies of power

When we treat private property as an ideology of power, something
interesting happens. We realize that banning private property won't
solve any problems. Why? Because there are many ideologies of power.
[\[1\]](#nb_372) Banning private property just leads to a *new* ideology
of power. And so the problem of hierarchy continues.

Here's an interesting way to look at communist revolutions. In a matter
of years, they reveal the same pattern that human history shows over
centuries. What's the pattern? That hierarchy is a consistent part of
civilization. You can change the ideology that justifies hierarchy, but
hierarchy itself doesn't go away.

Take a long-term change --- the transition from feudalism to capitalism.
Over centuries, the ideology of power changed. In feudalism, power was
justified by religion. (Think of the [divine right of
kings](https://en.wikipedia.org/wiki/Divine_right_of_kings){target="_blank"
rel="noopener"}). But in capitalism, power became justified by private
property. The ideology of power changed, but hierarchy itself didn't go
away. If anything, [it
grew](https://economicsfromthetopdown.com/2019/05/15/the-growth-of-hierarchy-and-the-death-of-the-free-market/){target="_blank"
rel="noopener"}.

Communist revolutions show the same trend, but over a matter of years
(not centuries). In one fell swoop, communist revolutionaries abolish
private property. In effect, they instantly kill the capitalist ideology
of power. They also usually ban religion, and so kill the ideology of
feudal power. But do communist revolutionaries abolish hierarchy? No!
They remain slavishly devoted to it, probably even more so than under
capitalism.

After killing the old ideologies of power, communist revolutionaries
adopt a new one. They created a secular religion --- a belief in
salvation through socialist utopia. Then they used this ideology to
*concentrate* power.

Marx would probably be horrified if he had lived to see his ideas put in
action. At least for a time, communist revolutionaries made Marxist
thinking a more potent ideology than private property or religion ever
were. In the name of Marx, communist regimes plumbed the depths of
totalitarianism. Millions died as a result.

### Marx underestimated the scale of the problem

Marx argued that there is a simple solutions to the problems of
capitalism. Abolish private property, he claimed, and a socialist utopia
would follow. But when Marx's ideas were put in action, they failed
spectacularly. Marxist revolutionaries wanted a socialist utopia.
Instead, they got a totalitarian hell.

I've tried to explain here what went wrong. Basically, Marx
underestimated the scale of the problem. Our problem is not private
property. Our problem is hierarchy, and the concentration of power that
goes with it. Marxist revolutionaries showed that we can abolish private
property. But no (lasting) revolution has ever abolished hierarchy.
Revolutions just replace one ideology of power with another.

The point that I'm trying to drive home is that hierarchy seems to be a
consistent part of civilization. It has been for [thousands of
years](https://www.goodreads.com/book/show/8340464-pathways-to-power){target="_blank"
rel="noopener"}. So barring the collapse of civilization itself, it's
unlikely that hierarchy will vanish any time soon.

So it looks like we're stuck with hierarchy, and all the social ills
that go with it. But that doesn't mean that we should give up the goal
of seeking a more just and equitable society. It just means that
communist revolution is not the answer.

### Are there answers to the problems of hierarchy?

I believe the answer to our hierarchy problem is simple --- make those
in power more accountable to their subordinates. Yes, this is simple,
but it's devilishly hard to do. Bottom-up accountability runs counter to
the top-down command that those in power love.

Still, over human history we've made modest gains in holding those in
power to account. We have democracy, however limited it may be. The
answer to our hierarchy problem is more democracy. I think it's doubtful
that we'll get this through revolution. Instead, the march to hold power
to account will be a long slow process, fraught with many failures and
setbacks.

### Notes

\[1\] Jonathan Nitzan and Shimshon Bichler have an apt name for the
relation between ideology and power. They call it a [mode of
power](http://bnarchives.yorku.ca/372/){target="_blank" rel="noopener"}.

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Karl Marx is probably the most important social scientist in history. But while his influence is beyond compare, Marx’s legacy is, in many ways,

 disastrous

. Few thinkers have inspired so many people to commit crimes against humanity. Think of Stalinist gulags. Think of the Ukrainian famine of the 1930s, which may have killed as many people as the Holocaust.

Messaggi di Rogue Scholar

The Allure of Marxism … And Why It’s a Mistake