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Introduction to Marxism
LESSON TWENTY: The need for Socialism
Capitalist economists have tried to solve the inherent crises built into their system in various ways – such as ‘Keynesianism’ or ‘neoliberalism’. However, none of their theories can explain, let alone resolve the deep contradictions of capitalism. That can only be done through the working class sweeping away capitalism to bring about a socialist transformation - where democratic public ownership of the economy would allow production to be planned, not for profit, but to meet the needs of people and the planet.
Capitalist politicians and economists have spent hundreds of years trying to work out how to overcome the flaws in their system. In periods of growth, they claim their methods are working. But in times of crisis, it becomes apparent that they do not.
‘Neoliberal’ economists base their ideas on the supremacy of the ‘free market’. They advocate reducing the role of government (except when it means shackling trade unions and repressing working-class struggle!), privatisation, deregulation and cutting back on the welfare state. Really it is about eliminating any barriers to the opportunity to increase profit at any cost.
However, the banking crash of 2007 delivered a major blow to neoliberal ideology. Governments were forced – to save their system – to temporarily, and in a pro-capitalist way, nationalise some banks to stop them collapsing and pumped money into the system on a vast scale.
The turn to neoliberalism in governments began with the rise of what was then called ‘monetarism’ in the late 1970s and 1980s, promoted by the Pinochet dictatorship in Chile and the Thatcher government in Britain. It came after they had declared the failure of ‘Keynesianism’, which had been prevalent in the post-second world war period.
The basis for Keynesianism’s apparent success was the economic upswing that occurred after 1945, against the background of the destruction caused by the war. The fear of bankrupted states falling out of the orbit of capitalism and into the Stalinist ‘camp’ after the Second World War was an important factor in this. It drove US imperialism in particular to bankroll massive investment in the productive forces – the Marshall Plan – which underpinned the post-war boom.
Keynesianism advocated a big role for government in managing the economy by using its own spending. Where there was a threat of recession, the idea was that governments could spend their way out of it by boosting aggregate demand in the economy. In theory, Keynesians thought they could fine tune the economy and find a sweet spot between preventing recessions, and before creating inflation. That illusion was shattered when in the 1970s the world upswing came to an end. Not only did recession hit, but also there was rising inflation at the same time – known as ‘stagflation’.
The return of ‘stagflation’ in the 2020s, along with global debt, asset bubbles and trade wars - amongst other factors that could trigger a significant downturn – confirm that none of the capitalist economists have any answers as to how to rescue their decaying system.
However, the working class learns through experience. Just as the 2008 crisis brought in its wake mass workers’ struggles and the emergence of left parties and leaders - from Corbyn to Sanders, from Podemos to Syriza - a new crisis will prepare the ground for new political developments and struggles, from which socialist ideas can emerge as a mass force.
Capitalism’s core contradictions - private ownership and the division of the world into competing nation states and economic blocs - prevent society from solving even its most basic problems. Its cyclical crises do huge damage, and the long-term decay of the system means that the ‘booms’ are becoming weaker and the downturns more profound.
But, as also discussed in the earlier lessons on historical and dialectical materialism, Marxism is clear that there will never simply be a once and for all collapse of the system. It will take mass revolutionary movements of the working class to overthrow capitalism and put an end to its inherent contradictions.
Marxists are at the forefront of struggles to win whatever gains can be made for the working class and poor - for above-inflation wage and benefits increases, for housing and health services, for democratic rights - and more. But victories on those issues will never be permanent under capitalism and cannot overcome the system’s inbuilt contradictions. Neither will it be possible to stop environmental degradation while the capitalism system remains in existence.
Only a socialist transformation can take society forwards – through the nationalisation of the major corporations and banks under democratic working-class control and management, and the introduction of a democratically planned economy. The exploitation and waste inherent in capitalism would be ended and the global economy – linked by socialist cooperation internationally – could be run for the benefit of the whole of society.
As with every other ruling class in history, the capitalist class will use all the ideological and material weapons that they can muster to try to cling on to their privileges and power. It will be for the world’s working class, with a leadership armed with the ideas of Marxism, to sweep their rule aside.
Recommended books & references
56. Frederick Engels (1880) Socialism: Utopian and Scientific. Available at https://www.marxists.org/archive/marx/works/1880/soc-utop/ch03.htm (Accessed 24 February 2026)
57. Leon Trotsky (1939) Marxism in Our Time. Available at https://www.marxists.org/archive/trotsky/1939/04/marxism.htm (Accessed 24 February 2026)
58. Karl Marx (1845) Theses On Feuerbach. Available at https://www.marxists.org/archive/marx/works/1845/theses/theses.htm (Accessed 24 February 2026).
A video summarising some of the ideas in this course, entitled 'Marx, Engels and the Foundations of Scientific Socialism' is available at: https://youtu.be/QFIgnU51Q9A
