Capitalism, Socialism and Democracy

Will Capitalism Die?

Was Karl Marx right? If so, was he also wrong? Marx was correct that capitalist economies tend to destroy themselves. He was incorrect that this process occurs due to the economic instabilities that capitalism inherently generates. And Marx’s “theory of vanishing investment opportunity” – the notion that capitalist economies ultimately stagnate due to declining profits and a lack of promising new investment opportunities – is dubious at best. Capitalism will die not from its economic failures but rather from its economic successes, generated as a byproduct of an overwhelming hostility to its social and political effects. This, in turn, will induce governments gradually to enact centralized measures.

Innovation and entrepreneurialism are essential features of capitalism, yet it undermines them. Technological progress and the entanglements of capitalism’s large bureaucracies tend to devalue innovation, replacing individual initiative with regulatory procedures and bureaucratic committees. Capitalism also produces hostility in the body politic because its very progress systematically destroys the social strata of those who initially advance...