Across the western world, millions are struggling to make ends meet as the cost of living continues to rise. Homeownership, once a cornerstone of the “American Dream,” now seems like a distant fantasy for the youth of today. Faced with these challenges, it’s no wonder that young people are increasingly turning to Marxism, seeking an alternative to the capitalist system they feel has failed them.
At its height, communism governed a third of the world’s population, promising equality and prosperity for all. However, what the communist revolutionaries failed to anticipate was that equality under communist rule didn’t mean everyone would be equally rich; it meant everyone would be equally poor with prosperity reaching only the governing elite.
Today, only a handful of nations remain under its rule, and those that do often grapple with significant economic and social issues. Even China, the world’s most populous communist nation, boasts the largest concentration of billionaires—an outcome only made possible by embracing the free-market economics of capitalism.
Nearly eight out of ten young Britons blame capitalism for the housing crisis and two-thirds want to live under a socialist economic system.
- Owen Jones, The Guardian
Communism’s stark decline begs the question: if it failed so spectacularly in the twentieth century, why are so many young people drawn to marxist ideologies once more?
Monopolies, Oligopolies, and Investor Greed
For a free market economy to thrive, competition is essential. Nothing stifles innovation like a monopoly, which is why antitrust laws exist to prevent too much power from being concentrated in the hands of a few.
In the business world, the “four-firm concentration ratio” (CR4) is a common metric for measuring the market share of the four largest firms in an industry. When the CR4 rating reaches 40 percent concentration, it signals that the industry is forming an oligopoly. Canada faces a crisis of corporate consolidation in virtually every industry.
The most notoriously affected sector is Canada’s telecommunications industry, where the CR4 rating is 100%. Bell, Rogers, Telus, and Freedom Mobility are the top four companies, with Freedom Mobility only controlling 6 percent of the market. Due to government inaction, Canada continues to have some of the highest consumer costs for cell phone plans in the world.
A 2021 report from the US Department of Agriculture revealed that Canada’s food retail industry, dominated by Loblaw, Sobeys, Metro, Costco, and Walmart, had a CR4 rating of 68 percent. With Walmart included, the top five firms control 76 percent of the market. This level of concentration allows these retailers to effectively dictate prices, and they can collude to fix prices, ensuring their profits at the expense of consumers. Without competition, these companies have little incentive to keep prices low and fair, and the industry cannot innovate.
Monopoly is the condition of every successful business. All failed companies are the same: they failed to escape competition.
- Peter Thiel, Billionaire Venture Capitalist & PayPal Co-Founder
The problem is pervasive across Canada’s entire agriculural supply chain, making it very difficult for competitors to enter the market while driving up consumer prices in stores. The impact of corporate consolidation and concentration of power has led to the worst slowdown in the Canadian economy since the 1930s.
With climate change impacting food supplies, prices are expected to keep rising in the coming years, presenting investors with a lucrative opportunity for profit. As a result, investors are rapidly gobbling up the world’s prime land suitable for agriculture and development. By the end of 2020, researchers reported that 70 percent of the world’s farmland was owned by just one percent of the world’s farmers. In Canada, the largest owner of farmland is now a single investor from Alberta, holding 225,435 acres.
In 2023, reports indicated that 20 percent of properties across Canada were owned by investors, a number that is steadily increasing. The Bank of Canada found that investors were responsible for 30 percent of home purchases in the first three months of 2023. In the United States, one in four single-family homes are owned by investment companies.
Last year, five states saw the highest percentage of investor purchases: Georgia (33%), Arizona (31%), Nevada (30%), California, and Texas (both 29%). These investment firms continue diminishing available inventory of houses that may otherwise be obtainable for younger, middle class households.
“Investment Firms & the State of Home Buying in the U.S.” by Sarah Johnson, Bill Track 50
If this trend continues, it won’t matter how much supply is increased if investors, with their greater buying power, continue to outbid young people looking to buy their first home. We can keep building new homes to meet demand, but if investors keep purchasing these properties, real estate prices will keep rising, and new home buyers will continue to be priced out of the market.
When our most basic needs—food and housing—become commodities for profit, the cost of living spirals out of control, making life harder for everyone who isn’t rich. It’s no surprise that so many young people are angry with the capitalist system and are turning to socialist and communist ideologies that promise a fairer and more equitable distribution of wealth.
However, diving headlong into communism is not the right solution to the problems of capitalism.
Communism Leads to Authoritarian Rule
While on paper, the ideal communist society is a classless utopia, in practice, communism generally leads to repressive totalitarian regimes controlled by the very same corrupt social elites deplored in capitalist societies.
There are only two ways in which communism can take hold in a society. The first is by electing a communist government in a free election. While this has happened in some places around the world, it has never led to a true transformation of a nation’s socio-economic system. The other, far more prevalent method, is through violent revolution.
In a democratic society, a communist party can never fully implement its policies due to the threat of a capitalist party winning the next election. The only way to ensure that their communist policies aren’t immediately reversed is to prevent any possibility of being removed from power. This inevitably leads to single-party authoritarian rule, as seen in China, Cuba, and every other communist nation over the past century.
The outcome of a violent revolution doesn’t fare much better. Once a revolution has successfully overthrown the capitalist system, it too would have to ensure that capitalism cannot regain a foothold, leading to the consolidation of power into a single-party system.
Communism Leads to Stagnation and Repression
When communism speaks of “public ownership of the means of production” and “no private property,” in practice this means that all property is owned and controlled by the government, as is the means of production. This ultimately means the government determines where people work and live.
When the only employer across all industries is effectively the government, you can’t simply change jobs if you’re unhappy with your current position. Your options become extremely limited. And when job security is guaranteed regardless of competence, there is no consequence for poor performance, leading to a decline in work quality.
Without the possibility of performance-based raises, promotions, or other rewards for excellence, there’s no incentive to perform well, resulting in widespread inefficiency and mediocrity. Innovation stagnates, and with it, the economy.
Before communism, Cuba ranked among the most developed Latin American countries, with living standards exceeding those of many European countries.
Communist Crimes, Estonian Institute of Historical Memory
A stagnant economy results in less money for the government to invest in its people, leading to worsening living conditions. People become poorer, food becomes scarcer, and luxuries disappear.
In an attempt to reverse the failing economy, the government forces everyone to work and uses threats and punishment as motivators, since there are few positive incentives in this communist society to motivate workers. Regardless of their abilities, people can’t earn a higher income by working harder or smarter because everyone is treated equally. In the end, the government resorts to the only tools they have left to keep the masses from revolting: fear and repression.
This is the reality of a communist society. It fails as a philosophy because it doesn’t account for inherent human motivations. We need incentives, such as money, to work for someone else, but we also need to believe that we can improve our lot in life so long as we work hard. Without those incentives, people lose the motivation to do their best work, and the economy ultimately collapses.
So, What Do We Do?
While the widespread disillusionment with capitalism is completely understandable, switching to communism is clearly not the answer. However, that doesn’t mean Marxist ideas are useless. On the contrary, there are many valuable concepts in communism and socialism, just as there are in capitalism. What we must do is combine the best aspects of both to create a balanced socio-economic system that is democratic and free, but also takes care of its citizens.
The simplest way to put it is that we use socialism for our needs, and capitalism for our luxuries.
Socialism would be used for the essentials we need to survive in modern society. These include ensuring that nobody goes hungry and everyone has access to healthy food and clean drinking water; providing high-quality public education and universal healthcare; ensuring access to affordable housing (including for the currently homeless and dispossessed) while eliminating speculative investment in real estate; and providing reliable essential services like utilities, basic internet access, and public transportation.
Once our basic needs are secured by socialist policies, we can use capitalism for luxuries—the things we want rather than need. These are the material pleasures that make life more enjoyable, such as video games and entertainment, fancy cars, restaurant meals, and trips to Disneyland.
This approach would ensure that everyone’s basic needs are met, eliminating the constant worry about basic survival, while also allowing the freedom to better oneself and improve one’s lot in life. In this framework, the government ensures the well-being of every citizen, while also enabling their individual rights to pursue personal goals. You get the security of socialism with the freedom of capitalism.
Of course, this does not solve every problem. We would still need to address corruption in politics and strictly limit the power of big business to prevent the consolidation of power into the hands of a few.
However, by leveraging the beneficial aspects of both socialism and capitalism and clearly defining their responsibilities, we can create a system that allows everyone to live comfortably and prevents the catastrophic effects of income inequality that we’re seeing today.
