Editorial

150th Anniversary of the Communist Manifesto

by Fred E. Foldvary, Senior Editor

This year, 1998, is the 150th anniversary of the publication of The Communist Manifesto by Karl Marx and Friedrich Engels. With the collapse of central planning over the past decade, the Manifesto could be seen as a historical relic, a curiosity only of interest to professors of history and a few leftover Marxists who haven't learned from history. But while full-blast central planning has fallen from favor in the formerly socialist countries, government's role in the industrialized market economies is bigger than ever.

In his article "Capitalism Has Won The Battles, So Why Hasn't It Won The War?" in the April 24, 1998, Investor's Business Daily, Charles Oliver points out that the cost of government in the U.S. is $3.5 trillion, or 43% of gross domestic product. The situation is similar in Canada and Europe. The spirit of the Manifesto is not dead; indeed, a spanking new edition is hitting the stores on May 1, the internationally celebrated proletarian labor day.

Those of us who struggle for social justice can learn much from the Communist Manifesto. Its economics is confused and muddled, but the propaganda is brilliant. First of all, the Manifesto is a small book - my copy has 68 pages, and the size is about 7 by 4.5 inches, easy to carry around. Secondly, the book was written for the common man, and it strikes its target. Its first punch is the declaration that history consists of class struggle. Who can argue with that? The Manifesto says that in the current era, the two great classes are the Bourgeoisie and the Proletariat. The Bourgeoisie own property, while the Proletariat have only their labor. And the modern state is but a committee for managing the affairs of the capitalist class, the Bourgeoisie.

There is honest propaganda, meant to persuade but based on facts and logic, and there is manipulative, deceptive propaganda, based on lies, and even worse, half truths. Falsehoods can be refuted, but half truths are dangerous because they effectively fool people. The half that is true makes it seem like the whole truth. Such is the case with the division of classes into Capitalists and the Proletariat. Where do the lords of the land fit in? They are merged with the capitalist employers of labor, the owners of the capital goods, the enterprises, the factories. The landowner, who as Adam Smith recognized, reaps where he has not sown, is confused with the capitalist as entrepreneur, as the creator of enterprise who marshals investment and innovates new and better goods for the public. The surplus that Marx claimed really belonged to labor but is expropriated by the capitalist is in economic actuality land rent kept by the landlord.

The ultimate blame for this confusion falls not on Karl Marx, but on his predecessor, Jean Charles Leonard Simonde (1773-1842), better known as Sismondi. He was the original critic of market economies. It was Sismondi's fault that liberalism or "the left" split into two camps, the libertarian and the socialist. The classical liberalism of the French Physiocrats, of Adam Smith, and John Locke favored civil liberties and economic freedom. Sismondi looked at the economies of the early 1800s, plagued with the usual poverty and social problems, and concluded that what was needed was not more freedom, but a welfare state with heavy government intervention. This was the original economic sin of socialism: treating effects rather than causes.

It was Sismondi, not Marx, who originated the concept of the proletariat and class struggle. Sismondi wrote of profits as a surplus. He was a welfare statist rather than a socialist, but his ideas became the foundation for what would later be called Marxism. And most folks today are Sismondians, even though they never heard of Jean Charles Leonard Simonde. Most folks want a welfare state, intervention, and big if not huge government. The Communist Manifesto neatly packaged Sismondi's ideas and propagandized the whole world into believing them even by those who reject the labels of socialism and Marxism.

One of the most famous parts of the Manifesto is its 10 points for reform. The first point is the "Expropriation of property in land and application of all rents of land to public purposes." If they had stopped there, and emphasized it was not land itself but only its rent that would be public, the Manifesto would have been a truly liberating proclamation. But it went from there to call for heavily progressive taxation, the abolition of inheritance, the centralization of credit by a national bank, the extension of state ownership of the economy, and government-provided education. Much of this has been enacted, while most of rent has been retained by the landowners. And does labor really benefit from the taxes, the centralized credit, and the rest of it? No, labor bears the bulk of that $3.5 trillion cost of government and suffers from periodic economic depressions. The owners of capital pay taxes, but their capital gains and rents are taxed much less than proletarian labor.

The Communist Manifesto is worth reading for lessons in propaganda and on how basic economics can be twisted and misunderstood. It will give you an insight as to why socialist ideas still dominate the world despite the socialist collapse. But then the question remains, what is the truth, and what should we do?

We need a new manifesto, a "geoist" manifesto - based on the geo of land and its rent - making plain the basic economic truths, because a specter is haunting humanity, the specter of a coming collapse of the global economy and its bubbles of debt-based stock and real- estate markets. Centralized banking and credit has brought us fiat money based on government say-so, fueling stock and real-estate booms that then crash as they have done in East Asia and will do so in America and Europe. The coming crash will be bad enough, but the global wars and dictatorships that may follow in the ruins may be much worse. A new geoist manifesto could wake up the masses and just maybe put the world on a sound and just economic foundation.