The short answer to the above question is "nothing". Understanding dialectics does not lead to any particular political or economic viewpoint. Hopefully reading the first four pages of this web site have made this clear. Dialectics does make some assertions. For example, dialectics insists that everything changes through the movement of opposing forces. Such a description is certainly true of a competitive capitalist economy. Likewise contradictions and conflict certainly continued under socialism, with the dramatic fall of the Berlin Wall in 1989 serving as a good example of quantitative change leading to qualitative change.
A Closer Look
On the other hand there is no question that the dialectical materialist outlook is linked closely in the public's mind with communism. Some readers of this web site have dismissed the whole concept of dialectics expressed here as communist propaganda, even though, until this page, there has been very little material related to economics, politics, or socialism.
So what is the connection? The answer is that the creators of the dialectical materialist outlook were Karl Marx and Friedrich Engels, the writers of the Communist Manifesto, and chief proponents of the socialist movement that seized state power in Russia, China, Cuba, Vietnam, and many other places. Even the United States, that bastion of capitalism, has had many converts to Marxism in the past 100 years; for example, the Communist Party was quite influential in the 1930s, and a "New Left" sprang into life at the time of the anti-Vietnam war movement.
Marx and Engels used dialectical materialism to analyze society. They believed that the inherent conflicts within capitalism--i.e. the dialectical contradictions--would lead to a revolutionary seizure of power by the workers. On the last page of Das Kapital, Volume 1, Marx describes the death of capitalism, saying, "The expropriators are expropriated. The capitalist mode of appropriation, the result of the capitalist mode of production, produced capitalist private property. This is the first negation of individual private property. . .But capitalist production begets with the inexorability of a law of Nature, its own negation. It is the negation of negation." (Das Kapital, Gateway publishers, Chicago, 1962, page 356)
While Marx's biting critique of capitalism, fiery rhetoric and grand vision of a world with "co-operation and the possession in common of the land and of the means of production" (same page cited above) inspired generations of idealistic activists, it has not withstood the test of history. The question is--why not? Is the problem with dialectical materialism as a philosophy, or is there a problem with Marx's economic theory?
Obviously to those who have visited the other pages of this web site, the argument here is that the problem with Marxism is not in dialectics, but in economics. Marxist economics is a complicated subject with lots of debates that have gone on for many decades. How can we get to the root of the problem without putting you, the reader, through voluminous research?
Fortunately, the 20th Century, as noted, was full of socialist revolutions and many years of experimentation. From this experience it is easier to see the pitfalls that Marx had not anticipated.
One important clue in science that indicates that a person is on the right track, is when he or she accurately predicts what is going to happen. In the case of socialism, one person who accurately predicted that socialism would fail was a German economist, Ludwig von Mises (there were several others but von Mises was the most prominent).
In his 1922 book, Socialism, von Mises argued that people are interested in "well-being and happiness" and that "The discussion always returns to the same point, the fundamental question whether the socialist order of society promises a higher productivity than capitalism." (quotes are from the 1951 Yale University Press edition) Writing at a time of overwhelming support for social democracy and/or communism in Germany, von Mises states, "The world inclines to Socialism because the great majority of the people want it. They want it because they believe that Socialism will guarantee a higher standard of welfare. The loss of this conviction would signify the end of Socialism." So what is his case?
The Calculation Problem
Von Mises grants that "socialism is one of the most ambitious creations of the human spirit," but quickly goes on to argue that the essential flaw of socialism is that, without markets, "socialism lacks the ability to calculate [prices] and therefore to proceed rationally". "No individual could so discriminate between the infinite number of alternative methods of production that he could make direct judgments of their relative value without auxiliary calculations. . . .Money calculation provides a guide amid the bewildering throng of economic possibilities." "With the best will in the world" socialism will be helpless, he argues. "The problem is not deciding what to produce--any socialist society can do that. The problem is to decide how to use the existing means of production most effectively to produce the desired goods. This requires economic calculation."
Marxists generally respond that prices should simply be set to equal costs. But how do you calculate costs without competitive markets to set prices? In Marxist terms, how do you calculate the socially necessary labor time to make a product? Hand-woven clothes are obviously a lot more labor intensive than machine made clothes, but is it really necessary to make all clothing by hand? Or, what if a factory is operating on outmoded equipment, or under poor management--is it fair to charge consumers based on their excessive cost?
Under a market system, the price is not really verified until someone buys the product. In that way, producers who have used inefficient production methods will not be able to compete, and will be forced to change or go out of business. Under socialism, or with monopolies under capitalism (e.g. sole source bids to crony capitalists such as Halliburton), prices do not accurately reflect socially necessary costs. Without rational methods of economic calculation, it can even happen that worthless products are produced; the spectacle of a Soviet shoe factory that produced thousands of terrible quality shoes that piled up on shelves unsold comes to mind here.
In his book summarizing the history of the debate, From Marx to Mises, David Ramsay Steele (Open Court Publishing Co., LaSalle Illinois, 1992) argues that Marxists seem "unaware that for the whole economy there would be billions of combinations of millions of projects, not to mention an infinity of different precisely defined ways in which each project could be executed." (page 125)
Bureaucracy and Decision Making
Not only would a socialist system be unable to allocate its resources efficiently, the decision making process itself would be a big problem. Ramsay says, "Nothing could be further from the aspirations of Marx and Engels than an oppressive state or a meddlesome bureaucracy, but their commitment to society-wide comprehensive industrial planning requires that the communist administration be an omnipotent state." (page 316)
Ramsay's argument is echoed by William Mandel, for many years the Soviet affairs commentator on KPFA radio. Mandel wrote in the October, 1991 KPFA folio, "What Marx failed to see was that the relatively democratic procedure of the market, stimulating hundreds of thousands (or millions) of owners to produce cheaper or better goods, would have to be replaced by the bureaucratic decisions of government planners, inevitably far fewer in number and therefore less democratic."
One alternative to a huge bureaucracy is for a socialist society to try a dictator. For example William Mandel recounts that "In the 30s, Stalin would personally phone every night each of the score of the largest mines and factories in the country, and ask how many tons of coal, pig iron, and steel, how many tractors and how many trucks have been produced that day." Such micromanagement of an advanced industrial economy today is simply out of the question.
One puzzle about socialism is resolved in a 1940 book by Trygve J.B. Hoff, Economic Calculation in the Socialist Society. Like von Mises, Hoff was able to accurately anticipate future events. Hoff argued that a socialist society can be more effective than a capitalist society in certain ways because it can marshall all of its forces to achieve limited goals. This explains how the Soviet Union was able to defeat Hitler and launch Sputnik, but could not compete with capitalism on the level of consumer goods. Similarly Cuba has great health care, education, and sports/cultural programs but is also severely lacking providing what we think of as basic necessities--a variety of food, toilet paper, pens, plastic bags, etc.
This essay is probably too short to convince any committed socialist that Marx's vision was fatally flawed. But this essay is really aimed at those who are under the impression that dialectical materialism is some kind of communist plot. Dialectical materialism is a powerful philosophy--so powerful that its practitioners led half the world's population in revolutions. Now that history has shown that the socialist economies they created could not compete with capitalist economies, its time to use dialectical materialism to analyze our present economic reality and see how it needs to changed for the better.
The downfall of socialism was not the fault of dialectics. It was the contradictions within socialism--particularly its inability to produce goods in a rational and efficient way--that led to its collapse.
Back to the Dialectics of Capitalism
So where does that leave us? What about capitalism? Is capitalism the the best that we can hope for? Dialectics does not give us a magic answer to this question, but dialectics does show that change is a certainty, the real question is how can we change capitalism for the better. We can simply look at what is happening in the world today to see that contradictions abound. The world is nowhere near the "end of history" in the sense that we have not developed a stable and sustainable world political economy.
One big problem for capitalism is the environment. In his book, Eco-Economy, Lester R. Brown quotes Oystein Dahle, retired vice-president of Esso for Norway and the North Sea, who says, "Socialism collapsed because it did not allow prices to tell the economic truth. Capitalism may collapse because it does not allow prices to tell the ecological truth." (Earth Policy Institute, W.W. Norton & Co, 2001, page 23) Most of the world is ready to tax fossil fuels to head off the impending disaster of global warming, but the U.S., with an administration dominated by oil interests, is not. The melting of Greenland's glacier would raise the ocean level by 7 meters, an unthinkable disaster for which the world would not be likely to forgive the U.S. Will the U.S. catch on? How will this catastrophe be averted--or will it? (Note that an increase in gas taxes would not necessarily be a tax increase at all; the money raised could simply be refunded through reduced income taxes.)
The environment is just one of the many contradictions facing capitalism today. Here are a few more that could explode in a dialectical breaking point at any time:
Nuclear war - Are we going to blow ourselves to bits rather than build an international federation to ensure peace?
Poverty - Instead of moving toward a world without poverty, the conditions and desperation of the dispossessed are increasing. And desperate people will do desperate things. How will this contradiction be resolved?
Health care should be a human right, but many people die of preventable diseases.
Equal educational opportunity should be a goal, but much is needed to improve and strengthen public education; indeed right wing forces are out to destroy it through voucher programs.
Corporate responsibility is still the law under capitalism - corporations are required to protect the environment, ensure safe working conditions, pay fair wages, and even to audit their books honestly for their own stockholders (!) How do we ensure that the government controls the corporations rather than vice-versa?
The criminal justice system in the U.S. is biased against minorities. The death penalty is especially unjust.
The U.S. has very little citizen participation in government; without an active citizenry, democracy is at the mercy of corporate lobbyists.
And many more issues. . .
The only way these issues will be resolved is by a strong progressive movement supported by millions of people. Dialectics doesn't provide any blueprint, but it does show that change is possible, and inevitable. The question is will it be change for the better or for the worse--you can help decide.