Nations that have allowed for private property rights and full-blown market exchange, in contrast to those “democratic socialist republics” of the twentieth century, have enjoyed remarkable levels of long-term economic growth. Free-market economies lift the masses from poverty and create the necessary institutional conditions for overall political freedom.
Marx just didn’t get it. Nor did his followers. Marx’s theory of value, his philosophy of human nature, and his claims to have uncovered the laws of history fit together to offer a complex and grand vision of a new world order. If the first three-quarters of the twentieth century provided a testing ground for that vision, the end of the century demonstrates its truly utopian nature and ultimate unworkability.
In the wake of communism’s collapse, traditional Marxism, which so many mainstream economists criticized relentlessly for decades, is now seriously questioned by a growing number of disillusioned radicals and former Marxists. Today there is a vibrant post-Marxism, associated with the efforts of those active in the scholarly journal Rethinking Marxism, for instance. Rather than trying to solve esoteric puzzles about the labor theory of value or offering new theoretical models of a planned economy, many of today’s sharpest post-Marxists appreciate marginal analysis and the knowledge and incentive problems of collective action. In this new literature, friedrich hayek seems to be getting a more positive reception than Marx himself. Exactly what will come out of these developments is hard to predict, but it is unlikely to look like the Marxism of the past.