Before considering the issue of good and bad economics, and how economic theories are products of good and bad worldviews, we should have an understanding of certain economic definitions. Typically, liberal economists are said to be “leftists” while conservative economists are said to be “right-wingers.” The range is thought to be on a horizontal line. However, I find it more accurate to think of the range as a clock.
At 4 o’clock, we have Capitalism. This is an economic system as described by Adam Smith in The Wealth of Nations. “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner,” he writes, “but from their regard to their own interest.”[i] This is a system that works because it takes into account the idea that personal profit is a good motivator for most people. Thus, with most people motivated, civilization progresses.
At 8 o’clock, we have Socialism. It’s “a stage of society in Marxist theory transitional between Capitalism and communism and distinguished by unequal distribution of goods and pay according to work done.”[ii] This is where 100% of profits are taxed, and then equal shares are redistributed among the population. When the Marxist talks of the “bourgeoisie,” he means middle-class business owners. When he talks of the “proletariat,” he means the laboring class. The Marxist sees an antagonism between the two classes, so he hopes to abolish this antagonism by making everyone the same.
Because the words “bourgeoisie” and “proletariat” have heavy Communist connotations, and because Communism has such a bad reputation for having failed so many times in the past, American Communist sympathizers today say “the privileged 1%” instead of “bourgeoisie”; and they say “the 99%” instead of “proletariat.” Essentially, the old terms may be understood to be interchangeable with the new terms. Socialism has failed every time because it presumes that man is selfless, as if workers would continue to produce with no personal incentive while a homeless man would earn the same wage as everyone else by sitting on Tremont Street.
Between 4 and 8 o’clock, we have the moderates such as John Maynard Keynes and Milton Friedman. This range is where the free market is mixed with social programs like government funded healthcare, public schools, and welfare. And if a company is “too big to fail,” the Keynesian believes in government bailouts in order to prevent drastic rises of employment in the market. It’s not redistribution for the sake of Socialism. It’s redistribution for the sake of Capitalism. The idea is to keep competition alive.
When we move counterclockwise from 4 to 12 o’clock, we make the transition towards Anarchy, or, “a utopian society of individuals who enjoy complete freedom without government.”[iii] For example, Mikhail Bakunin and Ayn Rand would be found somewhere within this range. His book God and the State, and her novels The Fountainhead and Atlas Shrugged are ideas and stories where economic success is rooted in an open market. However, these are just hypotheticals, or fictional stories.
While Capitalism has proven itself to be the best economic system, given our options, it does require government regulation. Warren Buffet quotes Martin Luther King, Jr. on the issue, saying, “It may be true that the law can’t change the heart, but it can restrain the heartless.”[iv] The principles of the French Revolution, shaking off the proverbial yoke and all that, caused France to move counter-clockwise from 4 o’clock, into an economic system that was very unstable. This is the direction by which the leaders of the French Revolution sought to achieve their aim, but failed. That was a nonfictional story. Unlike Bakunin’s and Ayn Rand’s wishful thinking, the French Revolution actually happened, and near-anarchy failed.
When we move clockwise from 8 to 12 o’clock, we make the transition towards Communism. Between 8 and 12, the theoretical redistribution of wealth is complete, and everyone in the world has en equal share of everything in the world. Because no one has anything that anyone else does not have, hypothetically, the Marxist believes that there would be no need to steal, kill, or commit any crime. From there, government institutions may be abolished because they will have become unnecessary. It’s a little dreamy, but many people still believe this theory. Although there have been ideological Communists, there has never been an actual Communist government because the road to Communism is through Socialism, and Socialism always self-destructs prematurely.
12 o’clock is utopia. It’s an economic Tower of Babel, where man reaches paradise apart from God. Anarchy and Communism are ultimately the same in the end, but they are achieved by opposite means. Engels even warns of trying to reach this utopia via the Anarchist track in a letter. Therein, he argues that it is not the state that must be abolished in order to reach utopia, but that it is the state’s job to create equality to reach utopia. This is in direct opposition to Bakunin, whom Engels specifically and outright opposes, because, in part, of the failure of the French Revolution.[v] Incidentally, it makes sense that Marx, Engels, Bakunin, and Ayn Rand could believe that government regulation was unnecessary for a healthy economy because they were all self-described Atheists with false presumptions about the nature of man. Whether Commies or Anarchists, both worldviews are derived from Atheism, which presupposes that man is good, and can reach Utopia on his own. In contrast, Adam Smith, Keynes, and Warren Buffet understand that people are selfish, which is a Protestant understanding. Coincidentally, these men are right.
The range between 11:30 and 12:30 is basically indecipherable. That’s why I find the economic clock-range to be helpful. It helps us to visualize the differences as well as the similarities of opposite schools that attempt to create a perfect society. Because we’ve already seen how the French failed to reach this utopia by moving counterclockwise from 4 o’clock, the issue here is whether the Communist will be able to reach utopia by traveling clockwise from 8 o’clock, and how the Atheist leads the construction of this Tower of Babel.
Marx and Engels
Karl Marx and Friedrich Engels developed the rules of modern Socialism. In Socialism: Utopian and Scientific, originally published in 1880, Engels writes that while Socialism is essentially the direct product of class antagonism, “modern socialism originally appears ostensibly as a more logical extension of the principles laid down by the great French philosophers of the eighteenth century.” He then mentions the Frenchmen who planted the seeds of revolution, and how “[t]hey recognized no external authority of any kind whatever. Religion, natural science, society, political institutions—everything was subjected to the most unsparing criticism, [and] Reason became the sole measure of everything.”[vi]
While the Christian comes to the conclusion that an absence of God’s law led to the downfall of the French Revolution, Engels the Atheist comes to the conclusion “that this kingdom of reason was nothing more than the idealized kingdom of the bourgeoisie,” claiming that the downfall was the product of bourgeois justice, bourgeois equality, and a bourgeois republic.[vii] Moreover, he writes that this French dystopia was the product of “the idealized understanding of the eighteenth century citizen, just then evolving into the bourgeois.” He concedes that the “new order of things, rational enough as compared with earlier conditions, turned out to be by no means absolutely rational. The state based upon reason completely collapsed” until it defaulted “under the wing of the Napoleonic despotism.” In short, he believed that the change in France was “rational enough” but for the bourgeoisie, and that modern Socialism is the “logical extension” of the 18th century French philosophers who inspired the French Revolution.[viii]
He states that the “antagonism” between the proletariat and the bourgeoisie had grown from the discovery of “surplus value,” because “[i]t was shown that the appropriation of unpaid labour is the basis of the capitalist mode of production and of the exploitation of the worker that occurs under it.”[ix] He then takes this idea and runs with it, writing, “As soon as there is no longer any social class to be held in subjection,” and as soon as class rule is removed, “nothing more remains to be repressed, and a special repressive force, a state, is no longer necessary.”[x]
Engels preaches that upon the death of the state, “Man, at last the master of his own form of social organisation, becomes at the same time the lord over Nature, his own master—free.”[xi] He then sums up Communism in a single sentence: “Abolition of private property.”[xii]
Marx and Engels believed that this system would render the family and the countries of the world obsolete. The argument, word-for-word, against the opposition was merely that “[t]he charges against Communism made from a religious, a philosophical, and, generally, from an ideological standpoint, are not deserving of serious examination.” [xiii] This condescension of open discussion stems from Communist gimmicks, where, if someone disagrees, he is either evil or insane. Marx and Engels predicted objections by the bourgeoisie, who would argue that “’Communism abolishes eternal truths, it abolishes all religion, and all morality, instead of constituting them on a new basis; it therefore acts in contradiction to all past historical experience.’” Marx and Engels reply that the abolishment of such things was merely the next phase of human development. “The history of all past society has consisted in the development of class antagonisms, antagonisms that assumed different forms at different epochs.”[xiv]
From there, Engels says that there are “three classes of modern society[:] the feudal aristocracy, the bourgeoisie and the proletariat,” and that “each have a morality of their own.” Engels writes that, “The conceptions of good and evil have varied so much from nation to nation and from age to age that they have often been in direct contradiction to each other.”[xv] He then comes to the conclusion that Sartre would later copy in Existentialism Is a Humanism: “that men, consciously or unconsciously, derive their ethical ideas in the last resort from the practical relations on which their class position is based.” Engels writes
From the moment when private ownership of movable property developed, all societies in which this private ownership existed had to have this moral injunction in common: Thou shalt not steal. Does this injunction thereby become an eternal moral injunction? By no means. In a society in which all motives for stealing have been done away with, in which therefore at the very most only lunatics would ever steal, how the preacher of morals would be laughed at who tried solemnly to proclaim the eternal truth: Thou shalt not steal![xvi]
The Communist Manifesto, first published by Marx and Engels in 1848, is the handbook on how to make a Communist society. It begins by condemning “that single, unconscionable freedom—Free Trade. In one word, for exploitation, veiled by religious and political illusions, naked, shameless, direct, brutal exploitation.”[xvii]
The steps for creating a Communist society are clearly listed by Marx and Engels in the Communist Manifesto: the abolition of property; a progressive income tax; the abolition of inheritance; confiscation of property from all rebels; the centralization of credit by a national bank; the centralization of communication and transport by the state; the extension of factories owned by the state; equal pay for equal work; a combination of industrial and agricultural labor; and free education for all children, placing an emphasis on labor production.[xviii] The Communist Manifesto ends with echoes of Jean-Jacques Rousseau’s Social Contract: “Let the ruling classes tremble at a Communistic revolution. The proletarians have nothing to lose but their chains.”[xix]
The countries that implemented these ideas, a belief in Communism and Atheism, suffered some of the worst hell that man has ever known. The repercussions of Atheist Communism are nothing less than evil.
 Although Milton Friedman devolved towards Socialism during his later years, his legacy is his work as a conservative economist, and for books like Capitalism and Freedom. We will discuss his work a little more in the chapter on Nordic Europe.
[i] Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, 21-2 (Management Laboratory Press) (2008).
[iv] Rana Foroohar, warren Buffet Is on a Radical Track, 36 Time (Jan. 23, 2012).
[v] Friedrich Engels, Versus the Anarchists from The Marx-Engels Reader, 728-9 (Robert C. Tucker editor, Norton & Co. 2d. ed.) (1978).
[vi] Friedrich Engels, Socialism: Utopian and Scientific from The Marx-Engels Reader, 683 (Robert C. Tucker editor, Norton & Co. 2d. ed.) (1978).
[vii] Id. at 684.
[viii] Id. at 685-6.
[ix] Id. at 700.
[x] Id. at 713.
[xi] Id. at 717.
[xii] Karl Marx & Friedrick Engels, The Communist Manifesto, 24 (Filiquarian Publishing) (2005).
[xiii] Id. at 29-32.
[xiv] Id. at 34.
[xv] Friedrich Engels, On Morality from The Marx-Engels Reader at 725.
[xvi] Id. at 726.
[xvii] The Communist Manifesto at 9.
[xviii] Id. at 35-6.
[xix] Id. at 55.