Where Do Socialism and Capitalism Meet?

The twentieth century saw the massive expansion of two conflicting systems: the corporation and socialism. For the most part, they remained in opposition to one another, staking out their own ground in the competition of ideas and culture, trading insults across the room.

Two of the greatest advocates of these systems were Milton Friedman and Karl Marx. Friedman, the recently-deceased Nobel Prize-winning economist, was a champion of the free market and a clear opponent of communism in all its forms. He believed that corporations had only one purpose: to earn profits. All other objectives—donating a portion of the profits to charity or working to eliminate pollution—could effectively be considered business-based “suicidal impulses.” Such impulses were the equivalent of “pure and unadulterated socialism.” Marx, who died nearly thirty years before Friedman was born, believed that “Modern Industry” (read: corporations) were necessarily in conflict with the proletariat. In defending the working classes, Marx predicted the collapse of capitalism and its replacement with communism.

At first glance, history would seem to be on the side of Friedman. After all, it’s been decades since the Berlin wall crumbled to the ground and Russia discarded its Communist system.

But while capitalism has prevailed, it has done so partially by merging into socialistic territory. One example is the new (RED) product line, a partnership between several corporations and The Global Fund, an organization that provides money and resources for women and children affected by AIDS in Africa. Essentially, through the (RED) program, every time you buy a red iPod, or a red Gap t-shirt, or a red Armani wristwatch, a percentage of your money goes to a good cause.

This campaign operates on the capitalistic model—relying on consumerism, marketing, materialism, and wealth for its success—but it borrows heavily from the Marxist doctrine. Marx, in writing the Communist Manifesto, could very well have been transcribing material for the (RED) publicity department: “They point out and bring to the front the common interests of the entire proletariat, independently of all nationality.”

There are other ways in which the (RED) campaign leans closer to a communistic aesthetic than a capitalistic one. Of course, there’s the color scheme. Then there’s also the Soviet-style font that one finds on their “Manifesto.” But more even than the color, the font, or the obligatory manifesto is the language of (RED): “As first world consumers, we have tremendous power. What we collectively choose to buy, or not to buy, can change the course of life and history on this planet.”

So seamlessly does this idea merge the ideals of Marxism (collectively lifting the lives of all) with the capitalistic impulse that Milton Friedman cherished (selling, buying, making money). But (RED) also veers away from both men’s ideologies. Whereas Marx concentrated on the aim of overturning the class structure, toppling the rule of the wealthy, this new thinking relies on the class structure. It is only through the aggregation of such incredible wealth that so much money can be given away. However, the very idea of a corporation giving away its money struck Friedman as antithetical to good corporate behavior.

(RED) is merely one of the participants in the new corporate strategy that has emerged (a strategy I described in a previous article), which embraces global consciousness as one of the key ingredients to overall business success. These strategies utilize the economic mechanisms of consumerism, wealth, class, and fashion, and somehow mingle them with the Marxist emphasis on collectivism and concern for the lower classes. They operate under the principle that philanthropy can actually earn greater profits and that accumulating and spending money can actually benefit the most needy individuals.

This system is questionable, confusing, tenuous, and perhaps brilliant, and it’s enough to make you wonder: Can a business model succeed when it simultaneously confirms and contradicts two conflicting ideologies? Then again, maybe this is its greatest selling-point.

Picture: © Sven Weigand, 2007