“The materialist conception of history starts from the proposition that the production of the means to support human life and, next to production, the exchange of things produced, is the basis of all social structure; that in every society that has appeared in history, the manner in which wealth is distributed and society divided into classes or orders is dependent upon what is produced, how it is produced, and how the products are exchanged. From this point of view, the final causes of all social changes and political revolutions are to be sought, not in men's brains, not in men's better insights into eternal truth and justice, but in changes in the modes of production and exchange. They are to be sought, not in the philosophy, but in the economics of each particular epoch. The growing perception that existing social institutions are unreasonable and unjust, that reason has become unreason, and right wrong, is only proof that in the modes of production and exchange changes have silently taken place with which the social order, adapted to earlier economic conditions, is no longer in keeping.” ¹⁸

Although, Marx’s perception of social groups in their relation to private property is inconsistent with reality, nevertheless Marx was very close to understanding that it is exactly people’s affiliation with certain exclusive types of property rights what procreates social groups or as he called them “classes”. Marx believed that the basic immanent societal contradiction stands in counteraction between monopolistic and monopoly dependent social groups as we have defined them previously, or between “exploiting” and “exploited” classes according to his definition. Just like Darwin taught about competition for survival between biological species being an engine of natural evolution, Marx thought that in application to human society we can talk about counteraction between particular individuals and social groups as about an engine of social evolution. In a society particular material interests are uniting in social groups either in order to obtain exclusive property rights or in order to counteract them. From this point of view, social opposition or social counteraction between social groups is extraordinarily important for understanding of social evolution. Only through social counteraction property rights imperfections can be removed or diminished, while a system of property relations exchanged for more efficient one. In this book we are identifying Marxism as an entire complex of communism-oriented economic and social thought. We will stand by this definition because it is really very difficult to embrace all aspects of this theory within one single author’s writings. Moreover, that the entire communist ideology was developed up to an unprecedented height in the former Soviet Union based on Marxist conception. However, we will not include in this definition any writings associated with socialist ideology and with social-democracy in their modern understanding.

Counteraction between social groups with exclusive property rights from one side and the rest of society from the other, but particularly between monopolistic and monopoly-dependent social groups is the main engine, which is making property relations to evolve. Apart from this process, but simultaneously in strong interconnection with it, another progression is having place – the development of production factors – of Capital (including technology), Land and Labor (including self-employment). Production factors development based on accumulation of property is a trend, which is not only moving ahead our civilization, but which is also influencing the evolution of property relations. Property relations or rather property rights imperfections inherent to any property relations, on the other hand, represent the one and the only barrier for perfection and development of our society and civilization. This obstacle is based on self-interest oriented egocentric human nature. Human nature is not directly oriented or not directly interested in pure economic development and in macroeconomic efficiency, but only in satisfaction of personal or private desires, wants and necessities or in personal microeconomic efficiency. Such satisfaction often happens on account of the other people as well as on account of general macroeconomic efficiency. Individual and group behavior based on universal human nature generating imperfections in a system of property relations is producing the above mentioned obstacles and barriers for production factors development or for economic and social evolution of our civilization. Obstacles and barriers on the way of production factors development are manifesting themselves in economic inefficiency and in economic injustice (which natures we will consider in chapter 6) slowing down both economic development and social evolution.

Desire to benefit on account of the other people is simultaneously causing a counteraction on behalf of those people. On the contrary to an evolution engine for property relations, which is basically having entirely social (based upon mechanisms of power and coercion) nature, the underlying reason for production factors development - property or capital accumulation - is connected with purely non-social, production and economic activity. Production factors development is always restrained by the existence in society of property rights imperfections, which direct outcome is that certain people are getting exclusive or monopolistic income on account of the other people and on account of an overall macroeconomic efficiency. If system of property relations would happen to be perfect or if there would be no any property rights imperfections in particular society, then social evolution would only be determined by the permanent development of production factors or basically by the process of property accumulation. However, owing to existing in any society property rights imperfections a certain part of economic resources is simply wasted on account of economic inefficiency. Such waste, among other things, occurs because actions of particular individuals and social groups are often driven by objectives, which are rather distant from purely economic activity and which are oriented towards generation and maintenance of the social (based on power and coercion) methods of distribution and redistribution of property and material wealth created by other people. Normally such statement of things is not only diminishing or sometimes even completely annihilating a real economic activity of monopolistic proprietors, but is also reducing economic incentives for monopoly-dependent social groups. The latter are being forced to give up certain amount of their property or income as a result of the existence in society of exclusive property rights.

Social counteraction between social groups with exclusive property rights and the rest of society is not only improving system of property relations but, first of all, it is providing an impulse for production factors development eliminating social obstacles and barriers on its way. In this sense we can talk about counteraction between monopolistic and monopoly dependent social groups (which Marx called a “class struggle”) as about the engine of social evolution, which is also inseparable from economic development.

 “Freeman and slave, patrician and plebian, lord and serf, guild-master and journeyman, in a word, oppressor and oppressed, stood in constant opposition to one another, carried on an uninterrupted, now hidden, now open fight, a fight that each time ended, either in a revolutionary reconstitution of society at large, or in the common ruin of the contending classes.” ¹⁹

Although social counteraction is always there wherever exist property rights imperfections, it is evolving together with accumulation of property and wealth, which are bringing along accumulation of knowledge and higher levels of social education and human self-recognition. Such evolutions are making people more and more sensible to any kind of injustice, however, directing them usually against visible or perceptible economic and social injustice rather than towards elimination of its causes, fundamentals and deep down roots.

Production factors development is another fundamental reason contributing to elimination of particular property rights imperfections. In consequence of production factors development social counteraction is progressing and getting more sophisticated. At the same time, social counteraction improving system of property relations and removing social barriers for the free flows of economic resources is influencing economic or production factors development. At certain point in time production factors development derived from people’s economic activity is coming in contradiction with existing system of property relations. From that very moment current property relations are doomed on disintegration and elimination. Their elimination can be either forcible or peaceful. If social controversy or contradictions are strong while economic inefficiency and injustice are persistent – elimination is taking aggressive and even violent forms such as revolutions for instance, otherwise it takes peaceful character. Production factors development is always a progressive element; it is bringing along improvements in all societal domains but, first of all, in economy. From societal point of view, production factors development is stimulating progress in man’s and society’s self-recognition and self-apprehension, in social justice, morality, law, education, etc. From economic point of view, production factors development is inspiring an accumulation of capital and accumulation of knowledge, more sophisticated skills and qualifications, improvements in technology and in entrepreneurial skills. On the contrary to production factors development, property relations represent a rather conservative element, which is always in opposition to a natural process of social evolution. Property relations tend to preserve and to conserve an outdated social structure and social relations. At some point in time property relations are coming in such contradiction with the requirements of social and economic development, which can only be removed either by total elimination or at least by a fundamental modification of inefficient societal system and of obsolete property regime. 

 Diagram 2. Social Evolution

Social counteraction is a very important and comprehensive social phenomenon, which deserves a special separate analysis. Constantly generating economic development production factors are simultaneously influencing a system of social and property relations. Stimulating and intensifying social counteraction production factors development is providing a permanent impulse for qualitative changes in social and property relations. Consequentially, tearing apart dominating exclusive property rights (or dominating social monopolies), these qualitative changes supply a new extraordinary incentive for further development of production factors. This is an essence of never-ending cyclical process of social evolution. Peaceful social counteraction is not necessarily always free from particular acts of violence. Non-violent counteraction is rather an ideal than real outcome. In reality peaceful social counteraction implies non-forcible or non-coercive elimination of existing system of property relations and of existing societal structure through a permanent and gradual evolutionary process rather than through any kind of social revolt. Particular acts of violence are not excluded even in case of environmental or anti-war demonstrations, which by no means represent forcible social counteraction. We also have to differentiate between organized or planned and natural social counteraction. Peaceful social counteraction to any imperfections in social and property systems is not only tolerable, but vice a versa is absolutely essential for economic development and social evolution. Organized forcible social counteraction or planned forcible overthrow of existing system of property relations and of existing societal structure is a very dangerous action. It might happen that property relations, which such kind of counteraction is planning to destroy, in reality have not yet come into a sharp conflict with necessities and requirements for production factors development. On the other hand, there is no guarantee whatsoever, that newly emerged in consequence of organized forcible counteraction property relations and newly emerged societal structure will be any better than previous ones. Another threat coming from violent obliteration of property relations is connected with human nature and human interests. Particular systems of social and property relations as well as their elimination are closely linked with a lot of interests, while each and every interest, as we remember, is eager to become exclusive through an intermediary of mechanisms of power and coercion at societal level. There is no guarantee, that new system of property relations and the people, who are eager to promote it, will not employ social counteraction in their own non-socialized, ambitious and egocentric purposes. Actually there is always a guarantee that somebody will definitely try to utilize social counteraction and its outcomes in his own egocentric and non-socialized purposes. Even, if it will not be exactly those people who are planning and organizing forcible social counteraction and social insurrections, relevant individuals with such ambitions will always come along. People, who are eager to benefit from new societal structure, from new system of property relations and from new arising perspectives of property redistribution will always try to make the most from social counteraction, from new social conditions and from idealists, who are passionately and impartially promoting those conditions.

Social counteraction is an extremely complex and equally important for understanding of sociality and of human society phenomenon. In a wider sense counteraction embraces any contradictions between private interests. Since so far property rights imperfections are an immanent part of human society, social counteraction also represents a pertinent and intrinsic to human society social phenomenon. Social counteraction is leading to and is materializing in certain balance of power between all private interests or between all individuals and social groups in society. From one side, the socially strongest individuals are always eager to acquire and to maintain exclusive social rights. From the other side, socially weaker individuals and social groups who are normally unable to obtain any exclusive rights for themselves are always trying to annihilate exclusive rights and privileges of the strongest and to get some exclusive rights for themselves should the possibility arise. Definition of the social strength or of the social power of particular individual or of particular social group covers all types of human capacities (physical, intellectual, educational, material wealth, social status, inheritance and others). These capacities are helping a person or a social group to fight with other people and social groups for or, vice a versa, against exclusive social and property rights. The socially stronger are particular individuals and social groups the higher are their abilities to counteract other individuals and social groups. Social strength, first of all, depends on two fundamental factors - by relation to the mechanisms of power and coercion and by material wealth of particular individuals and social groups. Since the material wealth of particular individuals, groups of people, social groups and of the entire nation is determined by both social and by economic factors, in the long-term an achieved level of economic development and social evolution are the main causes, which are shaping intensity of social counteraction and an overall balance of power in society. The more developed is social counteraction to any property rights imperfections, to exclusive social rights and to societal injustice the more just and more civilized is particular society. Together with accumulation of material wealth or together with economic development, monopoly dependent social groups are becoming wealthier and therefore more educated, knowledgeable and powerful. Simultaneously is rising their capacity to counteract monopolistic social groups.

Social monopolies generally and production factor monopolies in particular cannot be maintained and supported by purely economic tools. They cannot be maintained naturally exactly because of their essence, which is based on macroeconomic inefficiency and social injustice and which is always calling for social counteraction. Both their formation and their preservation can only be realized by non-economic means, such as power, coercion, ideology, law, habit, cultural and educational prejudices, etc. All these elements we unite under the term “social infrastructure”. Sometimes, it seems that social background or social infrastructure is shaping an economic behavior or that embedded social behavioral forms and motives prevail over economic ones. For example, occasionally people imagine that laws, moral sentiments or existing societal structure is determining social and even economic behavior or that some people may prefer social benefits to economic ones. Even though some people now and then might prefer social benefits to economic ones, in the long-term all these so to speak “social benefits” are either directly aiming at concrete economic benefits and concrete patterns of income appropriation (in which case they represent pure investments) or they simply represent luxury goods when a person is having so much money that he can buy social benefits just like he would buy some piece of art or some fancy car for example. In this case we cannot say that he prefers social benefits to economic ones – this is just his way of spending his fortune.

In reality social infrastructure, though is having certain impact on personal behavior, education and values, is far less strong motivation for any human actions than social (based on mechanisms of power and coercion) and material interests. Sociality and social motivation are one hundred percent correlated with exclusive property rights and with exclusive income; otherwise there is nothing social in them and therefore there is nothing social in society. Social is only that, what in one way or another is based on the mechanisms of power and coercion and that is what society or social infrastructure is all about. In the long-term, any social infrastructure is becoming extremely fragile and cannot explain neither economic nor even social behavior of particular individuals simply because of a permanent emergence and dismantling of the entire row of social structures, which are qualitatively changing and challenging one another. On the other hand, such categories as property, exclusive property rights, mechanisms of power and coercion and human interests (first of all economic or material interests) are with us all the time, they are immanent to human society and to human beings and almost never change or even never evolve. It cannot be denied that social infrastructure is having certain influence on people’s economic and social behavior and even on the entire system of property relations. In the short-run individuals and social groups can benefit much more (including economically or in terms of income) by complying with existing societal structure, than by breaking its rules and regulations. Strategically it might be rather profitable for us to follow some predetermined patterns of economic and social behavior, even if we do not like them or do not believe in them. This is the case when societal structure is relatively complying with our economic and social interests. However, if only people are getting a feeling that social infrastructure is not satisfying them anymore, does not benefit them or that they can have much more significant gains by obstructing or trying to obstruct social rules, they are getting inclined to forget about any social requirements. If this feeling is strong enough amid a large number of individuals, they might be even able to destroy an existing societal structure or, what is the same, to destroy an existing type of society. General nature of interconnection between property relations and social infrastructure is by and large accurately described by Marx.

“…in every historical epoch, the prevailing mode of economic production and exchange, and the social organization necessarily following from it, form the basis upon which it is built up, and from that which alone can be explained the political and intellectual history of that epoch …” ²⁰

Balance of interests and primarily a balance of material interests of all members of society is determining particular system of property relations. Property relations built on the balance of people’s interests or more precisely on the balance of strength and intensity of those interests are shaping all elements of social infrastructure, which is usually called “society”, although this term commonly understood in a bit sentimental, moralistic, biased and unscientific way. Social infrastructure incorporates law, politics, culture and education, ethics, moral, religion and anything else what comes to mind in relation to society. Social infrastructure is playing a dual role in terms of its influence upon economic development and social evolution. At the time of emergence of a particular social formation, social infrastructure usually helps to support and to establish new more progressive system of property relations. Later and close to disintegration of particular social formation, it is starting to play a conservative or even reactionary role aiming at maintenance and preservation of inefficient and obsolete type of social and property relations. It is rather difficult to determine when social infrastructure is accomplishing its protective role and when it is becoming to be an obstacle on the way of social progress, economic development and social evolution. It is also difficult to say if this cyclical process ever ends and if one day humanity will be able to overcome all property rights imperfections or at least all forms of social monopolization in society.

Production factor monopolies are rather difficult to overcome, not only because they are convenient and profitable for certain individuals and social groups, but also because they are providing those individuals and social groups with exclusive or monopolistic income, which is a very powerful tool for maintenance and support of any social order. Maintenance of social monopolies and their very existence is always relying on the interests of particular social groups, which are participating in distribution of monopolistic income either directly from their economic property or sometimes indirectly through different forms of income redistribution. Because exclusive income coming from production factor monopoly is much more complicated phenomenon than the one from structural monopoly, an essential role in maintenance and preservation of production factor monopolies as well as in distribution and redistribution of monopolistic income is playing the State.

Microeconomic efficiency is usually defined as a relation between output and input. Following this principle, understanding of macroeconomic efficiency can be derived from a relation between achieved level of economic or production factors development from one side and between a level of economic inefficiency represented by exclusive property rights from the other. In abstract macroeconomic efficiency formula, we can consider a level of production factors development as total or macroeconomic output, while the payments to proprietors of various economic resources or of various production factors as macroeconomic input or as national income. Under the conditions of social monopolization, additionally to general payments to all proprietors of economic resources, people have to pay extra to monopolistic proprietors for their exclusive property rights. Therefore, a level of social monopolization or of social exclusivity, being additional cost to people, simultaneously represents denominator for the level of economic development. We can similarly conclude that in society free from any social monopolization (if such kind of society will ever occur), permanent and even development of production factors is actually a single cause of social evolution.

In order to constantly generate social evolution mankind has to accomplish two tasks simultaneously. First we have to work in order to constantly develop production factors, and second we have to fight any property rights imperfections generated by self-interest oriented and egocentric human nature. We do not have any choice and we are doomed to do both things together, whether we want it or not. Particular person can be a “free rider” within any of these tasks or even within both of them, but mankind generally cannot.

¹⁸ Fredrick Engels. Socialism: Utopian and Scientific

¹⁹ Karl Marx and Frederick Engels. Manifesto of the Communist Party

²⁰ Karl Marx and Frederick Engels. Manifesto of the Communist Party. Preface to 1888 English edition