Karl Marx predicted in Das Kapital that capitalism would destroy itself. He believed that capitalism created two classes: the bourgeois upper classes and the proletariat lower classes. Capitalism couldn’t help itself, Marx thought, from growing the latter. Eventually, it would create a massive underclass that would rise up against its overlords.
There have been two theories as to why Marx was wrong. The first theory, bought lock, stock and barrel by the academic establishment, is that capitalism prevented its destruction by buying off the underclass. This technique was first implemented by Otto von Bismarck, who put in place state pensions, medical care, and unemployment benefits. By the twentieth century, this idea was being promoted in America by figures such as Teddy Roosevelt and Woodrow Wilson. Even today, many businessmen and conservatives believe that paying off the poor is the way to prevent revolution.
The second theory regarding Marxism’s failure is that capitalism does not result in two classes, but in three: the rich, the laboring class, and a powerful middle class. None of these classes are permanent. Lower classes can rise through hard work and wise investment; middle classes can become rich through the same formula. No man is chained to his station.
There are consequences to adopting either of these theories. If we accept the first theory, it is incumbent on us to raise taxes and to create government welfare schemes – in essence, to embrace redistributionism in order to prevent social upheaval. A bit of socialism inoculates us to communism.
If we accept the second theory, then the way to prevent the rise of communism is to embrace its opposite, capitalism. Individualism here represents the greatest bulwark against massive class warfare.
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