Marxism degrades into a zero sum game, an unequal division of economic returns favoring the elite class. Social Entrepreneurism grows the number of successful participants by teaching the 'underserved' to play the game and grow the size of economy.
Karl Marx's Worldview
Karl Marx was concerned with one question: What does it mean for people to be free? He believed that people are not naturally free, in fact, they are incredibly constrained and must adapt to handle physical and security needs.
He believed humans are unlike other animals that naturally adapted to their environment. The only way for people to survive is to augment nature with external tools and living arrangements: manufacturing clothing, building structures, and producing food. Working together, humans free themselves from the natural constraints.
The Marxist Socioeconomic Framework
Karl Marx believed there is a common socioeconomic stack that evolves to enable humans to manufacture their living environment. This stack consists of two layers: the base called material reality and the top called the superstructure:
- The material reality is how economic production is organized, and output and surplus (profits) are distributed among the stakeholders — which Marx defined as the economy.
- The superstructure are the social institutions like family structure, politics, religion and other social conventions; and are secondary and completely dependent on material reality.
Of the two layers, Marx believed the material reality was central to the question of freedom and provided the means to enjoy dignified lives. Furthermore, if the organization of labor and ownership and distribution of output and profit were not equitable an economy cannot be self-sustaining — social unrest will ensue.
The organization of an economy Marx called the mode of production. He subdivided the mode of production into two components: forces of production and relations of production:
- The forces of production are the technical, scientific, and material parts of an economy; i.e., tools, buildings, material, technology and the human labor that make production go. It includes cultural or social technologies like the assembly line and mass production.
- The relations of production define the manner in which labor is organized (e.g. do they work for wages or produce and sell their own goods), who owns property, and as production creates a surplus (profit) who is the beneficiary.
The Evolution of the Mode of Production
Marx and his long time collaborator, Friedrich Engels, believed economies evolve over time as changes in the forces of production and inequities in the relations of production give rise to laborers feeling increasingly oppressed and conflict emerges; that is either resolved or precipitates revolution. The end result is the adoption of a new mode of production.
Marx saw the evolutionary progression of the mode of production classified into four basic archetypes:
- Primitive (communal),
- Feudal,
- Capitalist, and
- Socialist.
Each archetype contains a different mix of the forces and relations of production that evolved to alleviate the sources of conflict produced by the previous mode of production. Ultimately, Marx insists socialism (Marxism) emerges as the final solution.
The Flaw in Marx's Paradigm
Socialism (Marxism), and related conflict theory variants, have a basic weakness: they degrade zero sum games and shrinking economic resources. It's a binary view of haves and have-nots which fuels an endless revolution; it's not a final solution.
Granted, Marx's theory of socialism emerged out of exploitative 19th century industrial capitalism and many of the ills of capitalism still exist, i.e., wealth still floats to the elites. But, the solution is not to demonize one group and take their eonomic assets to give resources to an "oppressed" group.
Many pundits like to quote the "all boats rise with the tide" metaphor. The problem is that, unless there are economic structures in place to impede the tide from flowing out, it becomes an endless cycle of ebb and flow with only marginal relief for the "underserved," while continually padding the wealth of the elite class.
Marx's proposed solution to capitalism, socialism, has failed. Many of socialism's attempts to change the relations of production resulted in inefficient forces of production, scarcity, and lowered standards of living. Even hard core socialists like the Chinese are evolving to permit private wealth creation and market-driven product availability.
The Fifth Wave: Social Entrepreneurism
We can skip over the failures of socialism and implement a fair and balanced socioeconomic framework.
We live in a society where:
- Economic resources can become democratized via decentralized and non-protectionist governance;
- High levels of educational literacy are possible which encourages intellectual property creation and spawns innovative business models;
- Efficient flow of investment capital can support new innovation; and,
- Access to free markets can permit more people to enjoy stabilizing personal wealth.
We also have the capacity for a third economic class: the middle class. Containing individuals with the skills and talents necessary to implement innovative business models and continue the momentum of the economy.
Growing the number of successful participants by teaching the underserved to play the game and growing the size of economy becomes the solution to economic disparity and social unrest experienced under socialism.
Under Social Entrepreneurism, organizations and individuals strive to ensure all have access to ownership of economic assets (e.g., their home, a small business, or intellectual property on the internet) and invest in sustainable, innovative business models and nonprofits that provide access to products and servieces needed for basic human dignity (e.g., food security, clean water, and community-based healthcare). The benefits include the reduced cost of criminal justices and improved neighborhood safety, lower taxes, and a higher quality of life for all.
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