Karl Marx spent about six weeks writing the Communist Manifesto, and his entire life writing Das Kapital, but we know him as the originator of Communism rather than a long-term student of capitalism. The possible relevance of Joseph Tainter – Niskanen Center interfaces some Marx-like observations of modern Capitalism (things that were not readily observable during Marx’ lifetime) with Tainter’s theory of Complexity:
“capitalism is currently suffering from chronic, degenerative conditions – namely, faltering dynamism and inclusion combined with increasingly dysfunctional politics.”
“After all, contemporary postindustrial capitalism features a mass elite of entrepreneurs, managers, and professionals. Comprising some 20 to 30 percent of the population, this is the largest elite, both in absolute numbers and in size relative to society as a whole, that any social order in human history has yet produced, and – making due allowance for all the problems that bedevil life at the top today – its members are flourishing at a level that would stagger the imagination of aristocracies past. Thus, capitalism as a system for producing mass flourishing is overextended: It works for the top quarter or so of society, but not so well for everybody else.”
Karl Marx died in 1883 – before capitalism managed to pull most people up from abject poverty. He chronicled the problems associated with capitalism – yet years before his death wrote “If anything is certain, it is that I myself am not a Marxist. Still now, 140 years after his death, the problem of Capitalism is that “capitalism as a system for producing mass flourishing is overextended. It works for the top quarter . . . but not so well for everybody else.”
That phrase strikes me as today’s most legitimate criticism of capitalism. It doesn’t lift everyone equally.
I’ve worked and researched the most successful communist group in North America – the Hutterites. Simply enough, their society functions for two reasons – first, the communal ownership they espouse has a strong religious component. The belief is that it is much easier to ascend to heaven from the communal society – which can be one heck of a motivator. The second reason is that the folks who are born Hutterite but do not share the beliefs can easily move from the communal colony into the larger, mostly capitalistic society. I suspect that Karl Marx would have recanted his manifesto had he observed late twentieth century communism in all its forms.
So here’s the next quote from The possible relevance of Joseph Tainter – Niskanen Center
“One fundamental reason for capitalism’s difficulties in promoting more widespread flourishing is the steadily diminishing nexus between economic growth and well-being. It’s not true that more money above a certain threshold has no effect on happiness: The most recent examination of this issue found that reported happiness, both in terms of positive affect and overall life satisfaction, continues to rise indefinitely. Importantly, though, happiness doesn’t increase in linear fashion as income rises; rather, it increases in linear fashion with every doubling of income.”
And that brings us back to the chart that the Niskanen Center shows – demonstrating the decreasing returns to increasing complexity:

Read the whole article. I’ve seen the problems of communism on the small scale of the Hutterite Communes, the Soviet Union, and I owned a Yugo. I don’t know how any economic system can make the lowest sixth flourish as well as any member of the top quarter. Read the whole article, The author does a lot better job at showing how Tainter’s theory applies to our own society than I can. The possible relevance of Joseph Tainter – Niskanen Center
