A system within a system
I thought I would write a few lines in anticipation of David in Quatar's forthcoming post with critique of Marx, just to offer the proper context in which I think one must view Marx's writings.
The ideologues always (at least, I am not aware of many exceptions) like to present their ideology in its purified form. Inevitably, the picture they draw for us is always a caricature. If it is free market, we must do away with food stamps, if it's socialism, we must collectivize every farm to the last hen. But pragmatists know that neither ideal is attainable, and that any real system differs from the party slogan as much as a real horse differs from the physicist's 3-dimensional spherical model.
In reality, neither system can be successful without borrowing some of the tools from its ideological rival. The Capsters are very well aware that the system we currently have would - for better or worse - have crashed in 2008 without the American version of Gosplan, also known as the Fed. And bloggers from the socialist camp also remember that they would be undernourished it were not for the "bazaars" where food was sold at market prices. But this does not mean that America has gone socialist or that Stalin was a closeted capitalist. The way you tell the difference is by telling the dominant social structure from the subordinate one.
At times, the distinction becomes so fuzzy that an observer can't even notice it, unless he applies some intelligence and common sense.
Some of you may recall Melville's story, "Benito Cereno", in which a ship controlled by the slaves looks similar to an ordinary ship controlled by the captain. At least it looks similar enough to Amasa Delano, who is paying too much attention to the captain's insignia and misses all the red flags until the very end. It's a telling story, which I am sure Marx would have liked, because it aptly describers the dialectics that accompanies a 180 degree social change. In that story, the U-turn is happening in the literal sense of the word as the ship changes course back to Africa. But the new masters of the ship still need elements of the old order - the captain and his white sailors - to provide the necessary expertise, and also to manage the ship's economy (trade relations with Captain Delano). But the Old System is really playing the second fiddle to the New System, and Benito Cereno's insignia can't buy him a cent's worth of power. This is what Marx's Socialism should look like when managed properly. You can still have a CEO driving his limousine.
The United States of America looks socialist in many respects, especially when viewed from a distance. To many Soviets, it looked in fact like a better version of the USSR: after all, didn't the American unemployed often enjoy a better standard of living than the Soviet workers? But to the Americans, who know the real situation on the ship, it doesn't look like the unemployed are calling the shots. Even more generally, everybody who is in the lower 49% is well aware that his well-being is NOT a primary concern of the government and that all those "socialist" handouts from the government are often just token money. If you can see beyond appearances, all those socialist things that useful idiots like Rush Limbaugh complain about have a well-defined capitalist function.
In Marxist terms, in America, socialist distribution relations form a subordinate subsystem within a dominant capitalist system of property relations.
Now, the reason I'm writing this is because if you don't understand it, you can easily miss the Marxist boat. Marx was more of a philosopher than an economist, and his views were based entirely on Hegel's dialectics. The notion of a system that utilizes its polar opposite for its own purposes was the main tool in his toolkit. A social change, to Marx, works as follows: 1) The old system runs into crisis, 2) The adaptation of the opposite system provides a temporary cure but soon the opposite extreme causes a similar crisis, 3) A synthesis of the best features of the two systems resolves the contradictions and the society moves on to the next stage where the cycle repeats itself.
If you accept dialectics, as you should because it mattered so much to Marx, then you must realize that a frontal attack on private property and collectivization of everything is against Marxism. It is the opposite extreme of pure capitalism, and in dialectics, opposite extremes produce the same result. If you try that, you will wind up with a single enterprise owned by the state. When the dust settles, you will realize to your amazement that it is facing the same problems as any capitalist monopoly. Coincidentally, this is exactly what happened to the Soviet Union. The Marxists were shell-shocked by its collapse only because they never learned dialectics, otherwise they wouldn't fail to see the writing on the wall.
Marxism still remains a scarecrow for many. One part of the problem is that people who called themselves Marxists were in fact as far from Marx as one could possibly be, but the other reason is that the US is really, genuinely, an ideological society. Even if Marxism were carried out in an optimal manner, the ideological rivalry between the two systems would be more intense than the rivalry between religious cults, because while a Christian and a Muslim can in principle agree that they are praying to the same God under different names, Capitalism and Socialism are both about distribution of money, and if a dollar is lying inside Peter's wallet, you can't pretend that it's lying inside Paul's wallet and vice versa. There is no reason you should accept egalitarianism which was so important to Marx. Marxist economics is a different matter.
When you discuss Das Kapital, remember that we are should be talking about regulating the use of capital, not about taking away your bank account. That means making capitalist production relations subordinate to the socialist distribution relations.
Which brings us to the REAL problem with Marxism: how do you set up a good bureaucracy that will work for the whole society and will not itself degenerate into bourgeoisie over time? It is here, in my opinion, that Marx's writings are substandard if not outright utopian. We know that on a small scale of an Israeli kibbutz it can be managed, but how do you manage it on a large scale? Perhaps modern game theory in combination with modern IT technology and motivation psychology could find a solution? But it may well be that the solution remains illusory. I think the jury is still out on this. Our social science is in even worse shape than our economic science, and besides, it hasn't even been asking that question, let alone looking for the answer. To be brief, I see a HUGE problem with Marxism on the social side of the equation. On the other hand, I DON'T see any problem on the economic side. It is my current view (of course I could be wrong) that economically, the system is 100% workable.
Just to make sure you are not fighting against a straw man.