Another fair warning: Marxism consists of two parts: socioeconomic model, which is still good and valid, and political… stuff, which was put on top of it and, frankly, never was good or valid. I am only talking about the socioeconomic model. Also, if you look at it, you’ll find that most of it does not belong to Carl Marx at all, he actually collected a number of ideas and theories developed by other, still very respectable people, starting with Adam Smith and Charles Darwin.

Under the hood Marxism is a Darwinian theory properly applied to human societies. One paragraph essence of Marxism is quite simple:

There is food, there are those who eat it.
There is no food, there are no those who eat it.

Period.

Here is an informal one page version:

• The history of human kind can be presented as production and redistribution of food.
• Environment, resources and technological level (production forces) define who and how produces the food (the worker class and mode of production).
• Who and how produces the food (the worker class and mode of production) defines who and how takes it away from them (the exploiters class and production relations).
• These parts (production forces, class of workers and class of exploiters, mode of production and production relations) define the social system.
• Example from biology:
  • Beavers built a dam on a creek that flooded the meadow nearby.
    • Marsh plants began to grow. Mosquitoes began to multiply.
    • Mosquitoes are frogs’ food, so frogs began to multiply.
    • Herons, bitterns and other marsh birds eating frogs built nests around.
    • Otters stealing birds eggs came in.
  • Then something happened to the dam. Maybe beavers got eaten, or a bear accidentally broke it, does not matter what. The water left.
    • Marsh plants dried out and died.
    • Mosquitoes disappeared.
    • Frogs died or hopped away.
    • Marsh birds flown away and did not return next year.
  • But:
    • Meadow grasses began to grow, including those that bring grain.
    • Mice and other small rodents came in and began to multiply, eating that grasses and grains.
    • Foxes and owls from nearby forest came in hunting the mice.
  • See? There is food, there are those who eat it. There is no food, these is no those who eat it. Simple, isn’t it? Marsh-marsh plants-mosquitoes-frogs-herons-otters is one “social system”, meadow-grass-mice-foxes-owls is another. That’s it.
• Now let’s get example from the human history:
  • In 16th Century England land was the most important resource, and most efficient use of land was to grow food.
    • Owners of the land wanted others to grow food on it.
    • Hence, a lot of people could support themselves and their families by being peasants. There were “jobs” for peasants, there were peasants.
    • A few other people were able to support themselves by owning (on behave of the King) the land, where peasants worked, and hence taking away food from peasants for themselves. Again, there were “jobs” for landlords, there were landlords.
    • The system was: land to grow food – peasants – landlords. There was land to grow food, there were peasants. There were peasants, there were landlords.
    • Landlords cannot survive without peasants, peasants would be very happy to live without feudal and other gangsters. Land to grow was the reason for peasants. Peasants were the reason for landlords.
  • In 16-17th Century England, it become more profitable to keep sheep on the same land, so the land for peasants disappeared.
    • Hence, peasants were thrown from the land they used to grow food. Less “jobs” for peasants resulted in less peasants.
    • Landlords mostly stopped exploiting peasants-growers, and become wool suppliers with voluntarily employed shepherds.
    • No land to grow – no peasants. No peasants – no medieval landlords.
    • Land for sheep – sheep and shepherds. Sheep and shepherds – wool producers.
  • At the same time, England started to produce a lot of wool textile. That’s why keeping sheep become more profitable than growing food.
    • Peasants, who lost their land, become vagabonds. A lot of them (~200 thousands, with the whole British population 3-3.5 million people) were hanged on crossroads for that, the rest become workers at manufactories, producing textile, and sailors, delivering textile to overseas markets.
    • Again, jobs for workers and sailors appeared, workers and sailors multiplied. There are jobs, there are people.
    • A few people become able to support themselves as owners of manufactories. Again, there are “jobs” for capitalists, there are capitalists. When you have a lot of workers producing textile, there are those who own manufactories and can support themselves by using workers labor.
    • The social system become: steam machines to power manufactories and looms to produce textile – workers – capitalists (manufactories owners). Technology created workers. Workers created capitalists.

Some will argue that it’s capitalists who created workers. However, imagine two identical islands, both with wool supply and textile mill. One island has workers but no mill owners, another has mill owners but no workers. Which one do you think will work?

Also, imagine yourself on the second island. You have the money, would you buy a mill? A reminder, there are no workers on that island. The answer is you won’t, because you cannot use it to produce money. The workers are the resource you need as a capitalist to make money. If there is no resource, there is no income. Hence, the main Marxists point: technology creates workers, who use this technology. Technology and workers create those who benefit from it.

You may use some euphemisms like “technology makes possible to be a worker” or “availability of technology and workers make it possible to produce textile”, but in the end you will say the same thing, just in a less clear way. As I am not in the business of dimming other people minds, I don’t use those complicated vague sentences.

Here is more formal definition of it:

• The food (food and survival essentials, like shelter and fuel in cold countries) is the key to human history and social processes. Everything else matters only as something that’s convertible to food (including being part of food production or distribution).
  Example: Hollywood movies are convertible to food by selling tickets and copies on DVDs.
• Human history and social development can be described in the terms of (a) making and (b) redistributing the food (and food equivalents).
• Redistribution of food became a force in social systems at the time when productivity allowed to take part of the food from the producer, without dooming him and his family to the death by starvation. That’s the same time when humans moved from hunters and gatherers societies to more complex social systems based on domesticated crops and animals. That part of the produced food is called economic surplus.
• Every society since that was divided into two classes of people, where the word “class” is used in the original taxonomy meaning – large group with the same characteristics.
• These two classes of people are those who produce food, and those who redistribute economic surplus in their own favor.
• Everything involved with creation of food is called productive forces, including resources, technology, and food (or food equivalent) producers. Everything involved in redistribution of food is called production relations.
• Productive forces determine production relations, not the other way around.
  Simply put, you cannot use slave labor to create spaceships, they just won’t fly.
• Productive forces, especially level of technology, define how we produce food – production method. The way we produce food (production method) defines who are the food producers (the workers class).
  Example: if you top technology is hoe, your food producers are farmers or slaves, who use hoes on the land to grow food. That kind of a food producer does not need an education (hoe is a very simple tool), can produce food from a really early age and until he is alive, and only needs to maintain himself at the basic survival and procreation level (the second part is essential for the social stability, or you will run out of hoe users in one generations, and then you’ll run out of food, and that will be the end of your society)
• Who are the food producers defines how the food (economic surplus) is taken away from them. The way food taken away from food producers for redistribution defines the second class of the society.
  Example: If the product require some expensive equipment, which can be operated by relatively uneducated workforce (high school skills top), your producers are industrial workers. Owning them won’t bring any advantage, because you have surplus of available industrial workers, hence slave owner would not have any advantage in such economy. Owning large pieces of land would not result in any advantage, because factories only require a limited space, so medieval feudal won’t have any advantage in such economy. Owning the factory becomes a key for production, and hence capitalist who owns the factory has the advantage and can redistribute surplus in his own favor.
• Again, environment, resources and, most importantly, technological level define who and how produces the food (and food equivalents). Who and how produces food, defines who and how redistributes that food.
• These two classes define the social system. Slaves and slave owners in slavery societies. Peasants and feudal landlords in feudal societies. Workers and capitalists in early capitalism. Organized workers and management in socialism (or “industrial society”, if “socialism” sounds too scary for you).
• Social system is how we produce food and how we redistribute food. Another equivalent definition is who and how produces food and who and how redistributes it in their own favor. That’s it.
• Final point is that those who benefit from the system want to keep it even after production forces and technology are developed beyond the point when the old production relations work. Hence any change in social formation follows the same pattern: old relations start failing to produce the results, until finally everything blows up in some kind of unpleasant upheaval ending up with the new production relationships that fit technology level, production forces and the new production method.
• Political part of classic Marxism claims that it’s a revolution, however, we know now that it may take different forms, including some peaceful ones, albeit still quite painful like a deep economic crisis resulting in significant changes to the laws (sounds familiar?)

Frankly, that all, folks.

Oh, yeah, and of course, those who produce food don’t like most of it taken away, and those who take it away, like that a lot. As you can guess, that sort of creates a conflict, which defines a lot of social processes and what’s happening in the society. In the end, human history and social processes can be viewed as one huge fight over the food and who eats it. You see why I say that Marxism is essentially a Darwinian theory applied to human societies?

COMMUNISM! That is probably the thought of those who remember the Cold War. And they are right. Such a system is popularly called “communism.” Let’s clarify one minor detail first. There has really been no such thing as communism throughout history. The countries of the communistic block practiced a social order known as “socialism.” OK, maybe a communistic flavor of socialism.

Socialism is characterized by an administrative hierarchical power structure to control the economy. This sector is comprised of people who don’t own anything, yet control everything. Whole countries and significant parts of the world were deep red merely twenty years ago. You may wonder, why am I talking about something that’s gone in history?

The answer is that I was not talking about communistic countries in the first place. Look at the description again … does it remind you of something else? Something you see every day here and now? It sure does.

I am talking about large American corporations.

If you have any doubts, read the first passage again and see for yourself.

Shocking, isn’t it? Russia was red, but it seems that America today is covered with red pockmarks everywhere you look. But maybe it’s not so bad, is it? Let us recall why it is that we did not like communism. Of course, there was that plainly evident fact that the Communists were strong, and we wanted the whole world, not merely half of it. They wanted peace, and in their language peace and world are the same word … but that’s not what our mass media said we were worried about. We were concerned with the system, right? So, what’s in the system that we did not like? Of course, there is an issue of human rights … although Pinochet in Chile, Saddam Hussein in Iraq, and a few other dictators that we brought to power are not exactly champions of human rights (not to mention former CIA operatives Manuel Noriega from Panama and Osama bin Laden.) So, there should be something else that was the principal problem of communistic states. And actually, there was.

According to our beliefs, a socialistic/communistic economy is simply not efficient. Without free internal competition progress stagnates, productivity falls, and the whole thing heads straight for a disaster. People are simply not interested in performing in such a system. Hierarchical management systems bring biases into the goals and execution that are incompatible with the survival of the system and the prosperity of the people. With the complexity of the system up, control drops, and being a pet of your boss becomes more rewarding than really doing your job. More to that, soon the pets rather than the workers are getting promoted. In no time the guy on top is only good at being somebody’s pet and fighting off the competition, no longer good as a worker. Once it happens, the system is doomed. Which, as many Americans believe today, was confirmed about twenty years ago.

What is really puzzling for me is this: How is it that we think that communism is inefficient, yet still practice it every day inside our own businesses? How is it that we practice communism in large corporations – sometimes corporations the size of small countries – and still be surprised that they turn out inefficient, moronic, and don’t care about their employees or shareholders?

Granted, sometimes non-mercantile relationships work. An average atomic family with a mom, a dad and two kids lives in a perfect communism where common resources are shared by the members of the family. This is without counting who brought them in and without granting monetary rewards for helping each other … and it works great. As another example, if you own a small company with 10-20 employees, you control the system directly and everything is fine as well.

However, somewhere between 400 and 600 employees is where things start to get sour. It may also be said that somewhere around the fourth level of management, businesses go through a significant change and arrive at the worst. It is almost like at a certain number of employees, the negative effects of communism in the corporate structure grows out of control, and then we get irresponsible managers, favoritism, and a system that goes astray.

Does this magic number of 600 people, or four levels of management, remind you of something? Yes, the level of the organizational complexity that we talked about in previous chapters. In fact, the systematic negative effects of communism are exactly the way in which the drop in control due to complexity shows up in organizations. That is what’s happening in large American corporations all over the country.

Russians were red. They’ve changed their minds. Our economy is covered now with the red pockmarks of large corporations. We need to do something about it. We need to change the way large corporations are governed and managed. We need a cure for this mini-communism. Fortunately, we do not have to demolish our whole political system to achieve that in the manner that Russians had to do. We can do that one company at a time. We can heal and turn around one company at a time. But we need to do that soon … because our shirts are at stake.

To make things worse, supporters of these economic schools hate each other and don’t admit that the other group has a point. Normally, they criticize ideologies, created based on their opponent’s models, and examples of their poor application. Say, the Keynes theory applied to Russia as a recovery after the “terrible Marxist rule” has already cost this country more in population than World War II. In case you didn’t know, according to the official data, in World War II, Russia lost about twenty million people. Yes, “million”, like one with six zeros afterward. And, well, the “Marxist rule” was no picnic either.

However, these examples have nothing to do with the validity of either of these theories. The only thing they show is that no matter what the theory is, there will always be a nitwit who, with oblivious faith, will put it on his banner and implement in the worst possible way with a maximum possible damage. If you want to criticize something with such examples, start with Justice, which is, in all likeness, the #1 reason for unjust things done by the people of this world to each other.

You always wanted to make money. But then once, at a party, you overheard a conversation. A stately man, looking like a professor from the local university, mentioned that modern societies are divided into two classes of people: the ones who make money, and the ones who are getting all that money. Suddenly, the idea of making money stopped looking so attractive and you started to consider the means to join the second group.

Further research showed that the professor referred to Marxism, a dreadful theory practiced by Soviets, Chinese and a bunch of other guys, whom you know being bad from mass media propaganda. Probably, Bin Laden too,… no, wait, he was something different… Anyway, you decide, you gonna do what you gotta do. After all, if it is so dreadful, it should be efficient, so you pick up “Das Kapital” in the local library and find out that the guy wrote it in German. Oh my, you certainly don’t have the time for German. So, you pick up the translation, go on and read several pages, and suddenly German does not look that bad. Yes, Karl Marx’s “The Capital” is not a light reading, not at all. In fact, you would not like any classic edition to be dropped on your foot. That’s two thick and heavy volumes written in as heavy a style as the books physically are.

So what are you going to do? Read this book instead. This is not a “for dummies” book. First, in author’s opinion, real dummies are out of reach for a help. Second, you don’t have time to read “for dummies” books. They may have lighter style, but they are still thick. This book is light and easy, and it’s short. In plain English it explains the essence of Karl Marx’s socioeconomic model.

This book does not cover Marxist ideology, it is only about the rational basis of Marxism, its socioeconomic model. Even more, when Marx patches his model with pieces of ideology, we dared to replace it with something more scientific based on modern data. Of course, such places are clearly identified.