One of the least useful economic debates of the twentieth century has been over the correctness of Marx's analysis of capitalism. As proof of Marx's errors, his detractors point to the rising living standards of modern nations. The working class has not been subjected to growing misery, and labor unions have gained economic and political power in all the major industrialized countries. Moreover, the working class has shared the increased wealth, income, and economic benefits that have been spread widely throughout all social classes.
Marxists answer that the extremes of exploitation have been shifted from the domestic working class to that of colonial and less-developed nations. Peoples dominated politically or economically by great capitalist nations now bear the greatest burden of exploitation, enabling capitalists to ease their treatment of the working class at home and allow its living standards to rise. They also point to the continuing extremes of poverty and wealth within nations, to the rise of big business and the prevalence of monopoly, to the dominant influence wielded in politics by business interests, and to the failure of capitalist nations to find a cure for depressions and unemployment, as indications that the Marxist analysis was essentially correct. In spite of all the "concessions" that have been made to the working class— social welfare legislation, union organization, higher living standards— Marxists contend that the basic defects of capitalism remain, holding back
economic growth and postponing indefinitely the emergence of the abundant society.
Yet even if the Marxist predictions of increased misery and a polarized society were wrong, Marx's arguments must give us pause. No society can long endure that excludes a substantial group of its citizens from enjoying its benefits, as was the case for many workers and their families in Marx's day and during the nineteenth-century decades of discontent and potential upheaval in Europe. In many respects Marx's analysis was a theoretical interpretation of actual conditions.
In the years after 1870, however, many important changes took place on the European scene. The right to vote—political democracy—was gradually extended to working people. National systems of welfare legislation provided protection against the worst effects of the industrial system. The growth of labor unions and the appearance of political parties representing the interests of labor gave a new dignity to the worker and signified the place industrial labor was making for itself. The "safety valve" of emigration to North and South America and Australia enabled many dissatisfied Europeans to start a new life in freer societies. And imperialism offered significant economic opportunities, whatever else might be said against it.
Social tensions would not have been sufficiently eased, however, in spite of these developments, without growth in the European economy. Industrialism opened many doors to the intelligent and the ambitious—Robert Owen is only one example. Although it has always been true that one gets ahead more easily if one begins near the top, it is also true that a growing and changing economy offers more opportunity than a stagnant one. Continued economic growth, both external and internal, gave Europe time to adapt to the stresses of industrialization by instituting reforms that gave political rights to workers and protected them from some of the harshest effects of the market economy. One moral to be derived from Marxism is that an economy must provide dignity and broad opportunities for all if society is to remain healthy.
The Marxist prediction of the triumph of socialism and the creation of a democratic, egalitarian, and nonexploitive society has not proved accurate. The prediction of increased concentration of economic power in the capitalist world has been borne out by events, although many economists would argue that the reasons for that trend differ from those advanced by Marx. And capitalism was placed on the defensive by the rise of communist regimes in Russia and China, and by the spread of socialism through many of the less-developed countries. But in most instances, these noncapitalist economies developed authoritarian political regimes, new forms of economic and social inequality, and new aspects of exploitation. The humane goals that underlay Marx's rage at capitalism seemed no closer to achievement in the noncapitalist regimes of the late twentieth century than in the capitalist. This situation created something of a crisis among leftists in the advanced capitalist countries, as they reevaluated Marxist theory in a twentieth-century context.
We should also note that Marx had little to say about what specific forms socialism might take after the revolution. We should not attribute either the authoritarian command economy of the former Soviet Union or the democratic evolutionary socialism of Western Europe to Marx, although both claim him as godfather.