I saw this and felt it was important to share with others as it's very well written. This comes from hongtuzi on reddit.
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Why do people support capitalism even though it has historically failed and attempts at communism have been an overwhelming success?
You realize the vast majority of countries on the planet are poor and also capitalist, yes? People say poor countries are poor not because of capitalism but "undemocratic government". Sure, let's agree for the sake of argument that not all the poor capitalist countries are as “democratic” as the wealthy ones, but this is inevitable. What does capitalism mean? It means everything is up for sale. If you have a wealthy capitalist country and a poor capitalist country, this means the wealthy one can just buy up all the industries within the poor one and turn it into a banana republic.
Banana republics are called banana republics because they produce usually one product (such as bananas) solely for a foreign country and all the profits from that product flow to the foreign country and don’t grow their own economy.
Take Cuba for example before its revolution.
Cuban politics remained hostage to the United States, while U.S.companies and investors took control of the major sectors of Cuba’s economy. By 1905, 60 percent of Cuba’s rural land was owned by U.S. citizens or companies. U.S. investors also controlled 90 percent of Cuba’s tobacco trade, the country’s iron, copper, and nickel mines,its railroads, and its electricity and telephone systems…Cuba’s economy exhibited many of the characteristics associated with economic dependency. Three-quarters of the country’s arable land was used to produce sugar, which accounted for 80 percent of its exports. Forty percent of the farms and 55 percent of the mills were in the hands of U.S. companies. U.S. investors also controlled 90 percent of Cuba’s telecommunications and electrical services and half of the country’s railroads, as well as significant portions of the banking, cattle, mining, petroleum, and tourist industries.
— Aviva Chomsky, A History of the Cuban Revolution
The result of this was that Cuba’s economy was horrible with widespread poverty, disease, illiteracy, enormous wealth inequality, etc.
the majority of the population was rural and poor – what Cubans called guajiros . Swedish economist Claes Brunendius described a typical guajiro’s life this way: “ He lived in a bohío , a small house with an earthen floor and a roof made of palm thatch. For 90 percent of the guajiros , a kerosene lamp was the only form of lighting, and 44 percent of them had never attended school. Only 11 percent drank milk, only 4 percent ate meat, and only 2 percent ate eggs. The daily diet, which had a deficiency of 1,000 calories, was the main reason for a constant increase in the number of cases of tuberculosis, anemia, parasitic diseases, and other illnesses.”
— Aviva Chomsky, A History of the Cuban Revolution
This happens all the time. Guatemala for example was mostly owned by the United Fruit Company. The democratically elected president tried to redistribute land to local farmers, the US responded by overthrowing the democratically elected leader and replacing their government with a military dictatorship. The same thing occurred in Iran, where the democratically elected prime minister wanted to audit what is today British Petroleum. When BP refused, he decided to nationalize the oil fields. Britain then complained to the US, and the US overthrew the democratic government and replaced it with a puppet dictatorship.
While these poorer countries are less “democratic” than wealthier ones, the reason they are is due to the very fact they are capitalist. Larger capitalist powers buy up their economy and force their politics onto them and corrupt their governments intentionally to prevent them from redistributing industries back to local businesses.
China as well before the communist revolution was exploited by many countries. They were invaded by the British who tried to force them to buy opium, then they were invaded by Japan who tried to turn them into a colony. France also invaded Vietnam and tried to colonize it, and then the US took the place of the colonizers. It wasn’t until the Vietnamese communists kicked the colonizers out that their economy started to take off. The same for China. China tried to implement liberal democratic capitalism before the communist revolution and it didn’t work.
You talk about “democracy”. Communism is democracy. Eisenhower himself said that the west refused to hold free and fair elections in Vietnam because they knew the communists were overwhelmingly popular and would win any election.
I have never talked or corresponded with a person knowledgeable in Indochinese affairs who did not agree that had elections been held as of the time of the fighting, possibly 80 per cent of the population would have voted for the Communist Ho Chi Minh as their leader rather than Chief of State Bao Dai.
— Dwight D Eisenhower
Compare communist countries to the US. The US government has a 19% approval rating compared to China’s 95% and Vietnam’s 91%, and 73% of Chinese view their system as democratic compared to only 49% of Americans. Western countries aren’t more “democratic” just because you define “democracy” as capitalism.
The fact is, capitalism only has worked in wealthy countries because they are imperialist and brutally oppress and exploit poor countries in order to maintain hegemony over the global economy and global supply chains. I provide a concrete definition for imperialism in this answer.
Imperialism leads wealthy countries like USA, Britain, and at one point Japan, to exploit poor countries and effectively turn them into colonies for their empire. The US still has many neocolonies around the world just like Cuba used to be.
Why do you think the US maintains 800 military bases around the world?
Why do you think the US spends more than the top 10 countries combined on the military?
Can anyone honestly, unironically, believe they do this solely for “defense”? No, of course not, it is to maintain their global hegemony and control over neocolonies which they exploit cheap labor and natural resources for profits. It is essential for imperialist countries to maintain cheap supply chains of natural resources from all over the world for them to be able to provide you things like cheap iPhones.
The vast majority of countries today are capitalist yet poor. Capitalism only works for the few countries on top, in the same sense wealth inequality within the US is absolutely enormous so most people are living paycheck to paycheck, despite being a “developed” country, because the top 1% own more wealth than the bottom 90% combined. This is true both within an individual country, but also globally.
Globally, a little over two thousand people own more wealth than 4.6 billion people, that is, globally, 0.00003% of people own more wealth than 60% of the entire planet. You say capitalism works great for first-world countries, but these are a small minority of countries. What about the rest of the entire globe?
While it is true first-world countries had fast development during the Cold War, this isn’t even true today. You can’t even point to first-world countries and say “that’s an example of capitalism being successful”. First-world countries today are also failing.
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Ever since the financial crisis in 2008, the vast majority of capitalist countries on the planet have had absolutely no growth. They’ve been collectively frozen in time, so to speak, for more than a decade. The entire European Union has a smaller GDP today than it did in 2008.
What about the great capitalist success in Japan? Japan has actually been frozen in time since 1995 with absolutely no growth. It is only further proof of the failures of capitalism.
What was the second largest economy in the world in 1990?
Eastern Europe arose from an incredibly poor place to the second largest economy in the world within only a few decades. What did the return of neoliberal capitalism do?
THE ‘WASHINGTON CONSENSUS’, which for nearly a decade put the best face it could on Russia’s mis-transition, is showing signs of crumbling. It is now acknowledged that the Russian Federation’s post-communist depression was deep and painful, causing immense physical hardship and psychological stress. After reporting unemployment in the low single digits during the first half of the 1990s, it turns out that more than 17 million are seeking work or have left the labour force after years of discouragement…the physical hardships, social disruption and psychological distress associated with a 44% decline in Russia’s GNP caused millions of premature deaths, in addition to any adverse impact they may have had on fertility. The exercise reveals that there were 3.4 million Russian premature deaths in 1990–98 plausibly attributable to the travails of post-communism.
— “Premature Deaths: Russia's Radical Economic Transition in Soviet Perspective”, Europe-Asia StudiesLook at what the transition to capitalism did to eastern Europe.
Russia did not even recover its 1991 GDP until 2013, and even then its economy has been stagnant ever since due to massive de-industrialization and also has had trouble growing since 2008.
After the USSR dissolved, many of its factories were largely abandoned, Russians stopped buying Russian products and started buying western products. Western clothes, cars, etc. There is an interesting article 15 industrial wastelands in Russia that are truly apocalyptic (PHOTOS) that is just photos of abandoned industrial sites in Russia. 1 2 3 4 5
Here is another article discussing The Deindustrialisation of Contemporary Russia.
While it is true that the USSR had economic slowdown before the neoliberal policies destroyed the country, it is clear free market capitalism was not the solution to their problems. Meanwhile China did not implement neoliberal free-market policies but instead put its best Marxian economists to work, like Chinese economist Xue Muqiao and Su Shaozhi who also revisited other Marxian economists like Soviet economist Nikolai Bukharin to fix their economic system not from a neoliberal classical perspective, but from a Marxian perspective, and came to the conclusions of the socialist market economy, which I explain how they came to these conclusions in this answer. China is an economy dominated by public ownership and one of the most controlled markets in the world, where 50% of the entire labor force works in the public sector, which comprises most finance and heavy industry, alongside a private sector that is one of the most controlled in the world.
It appears that the CPC’s integration policy towards private enterprises has effectively utilized both ‘top-down’ organizational infiltration and ‘bottom-up’ political integration. In doing so, the CPC maintains its control over private enterprises. Not only does it consolidate the governing legitimacy of the Party, it also enables private businesses to fulfil its social function. The policy helps the Party successfully prevent the formation of non-institutionalized powers outside the system.
— “The Chinese Communist Party’s integration policy towards private business and its effectiveness: An analysis of the Ninth National Survey of Chinese Private Enterprises”, Chinese Journal of SociologyThe capitalist road was tried and found wanting. Reformism, liberalism, social Darwinism, anarchism, pragmatism, populism, syndicalism—they all were given their moment on the stage. They all failed to solve the problems of China’s future destiny. It is Marxism-Leninism and Mao Zedong Thought that guided the Chinese people out of the darkness of that long night and established a New China; it is through socialism with Chinese characteristics that China has developed so quickly. — Xi Jinping
In response to China’s successful socialist market economy model, which both allowed China to negate the problems of capitalism and the problems the USSR’s economy was facing, Vietnam adopted a similar model they call the socialist-oriented market economy.
You want to talk about how great first-world capitalist countries are doing, let’s just compare the response they had to COVID between the US and Vietnam and China. Compare the numbers.
China's successful control of COVID-19
U.S. Image Plummets Internationally as Most Say Country Has Handled Coronavirus Badly
3 Months Of Hell: U.S. Economy Drops 32.9% In Worst GDP Report Ever
The claim that capitalism is the best model when it is failing even first-world countries now is just funny to me. I don’t know if you realized, but the US isn’t even top anymore. China is.
The fact is liberal economics is a failure for everyone. Marxian economics provides the way out for poor countries. The west at this rate is going to fall behind the east if they do not reform. Labor productivity growth is grinding to a halt, which is something Marxian economics predicts will eventually happen in any capitalist economy.
The problem has gotten so bad that the GDP per capita of much of Europe and even the US is predicted to decline if there is nothing done about it.
Something needs to be done about it. The solution is not to worship the markets and hope they will solve it on their own. The era of free market anarchy solving all your problems is long gone. While capitalism is failing all around the world, socialism has consistently been succeeding.
In 30 of 36 comparisons between countries at similar levels of economic development, socialist countries showed more favorable [physical quality of life] outcomes...The data indicated that the socialist countries generally have achieved better [physical quality of life] outcomes than the capitalist countries at equivalent levels of economic development.
— “Capitalism, Socialism, and the Physical Quality of Life”, International Journal of Health ServicesThanks for the effort post. Leaving a comment so it's easier to find again.
