by Alena Kim, April 2002


Twentieth century was very rich in significant events occurrence of which influenced the development of all nation-states around the globe. Among great “social experiments” of the past century were two World Wars, October revolution in Russia, attempts to build socialist society in the Soviet Union and Eastern Europe, and many other events that “represent priceless historical experience for the whole humanity.” 
Twentieth century was marked by a constant competition and struggle between two systems: during the first half of the century there was a growing perception that socialism was going to dominate the world as number of socialist countries was increasing; however, this tendency started rapidly to change its course already in the second half of the century as capitalist countries won the economic competition.
            But this was not the end of the story. “Having gained political and economic victory, capitalism found itself being penetrated by socialism… It became infected by the ideology of the lost side.” Socialism did not die out; on the contrary, many of its ideas were accepted and “got acclimatized” in the developed countries.
 For better understanding the subject of the discussion (“Who won?” and “How would capitalism and socialism correspond to each other in the 21st century?”), Maksimov suggests to agree upon the following things:

(1) type of the social structure will depend, in accordance with Marx theory, on the type of   ownership of the means of production:

(a) capitalist society will be the one where the large portion of the means of production is in private hands;

(b) socialist society will be the one where large portion of the means of production is in public possession.     

(2) identification of capitalism with liberalism and socialism with dictatorship – direct result from the Marx theory that history of humanity is the history of the class struggle when, once at power, proletariat introduces dictatorship – will be dismissed on the grounds that the establishment of the dictatorship in the Soviet Union and its satellite-states was due to the fact that the level of development in those countries was very low and not enough for transition to real socialism. So, in order to stay in power, proletariat established dictatorship. However, as experience of many developed countries shows, limitations of democratic rights and freedoms do not occur with the advent of social-democratic parties at power.


 In this part of his work, Maksimov lists positive and negative sides of capitalism:

(1) Capitalist method of production is more efficient than socialist one. This translates into higher rates of productivity, production of wider range of consumer goods and, as a result of that, higher standards of living in the capitalist countries.

            (2) Adaptability of capitalism, its ability to quickly respond to changing realities is first and foremost important in its dealing with class struggle and threat of proletarian revolutions. Capitalism chose democratic practices and institutions as its basis. “Having solved problems which Marxism saw as insoluble, democracy proved the possibility and advantages of development through evolution, not revolution.”

Another implication of democratic form of governing is that it ensures adaptability of capitalism not only to social troubles, but also to economic problems. “The main vice of capitalism – appropriation and distribution of the surplus product in the interests of bourgeoisie – if not completely eliminated, was eased… Today a substantial amount of surplus product is spent in the interests of the public. To some extent, democracy saved capitalism.”  

            (3) Due to its flexibility, capitalism is very open to technical progress and innovations. This, in turn, translates into more efficient ways of allocation of resources, production and higher standards of living.

(4) In spite all the positive characteristics of capitalism described above, it has its shortcomings, which are primarily the consequences of the private ownership of the means of production:

(a)“Receiving profits just for the fact that you own capital is socially injustice, and from the state’s point of view means reduction in production.”

(b) trying to maximize its profits, private ownership often ignores social, ecological, and other common to people concerns.

(c) private ownership is presented only in those industries where profits can be accrued; industries where profits are insignificant have to be subsidized by governments as they experience flight of capital.


In this part of the work, Maksimov defines advantages and defects of socialism, which can

be looked at as the opposite side to advantages and disadvantages of capitalism:

(1) economically, socialist countries fell far behind capitalist countries in many respects: lower productivity translated into slower and less development and economic growth, falling far behind in technological advancements, lower standards of living, and increased unwillingness of people to work.

 (2) in the social sphere, socialism displayed some advantages. There was a sense of “social justice,” expressed in insignificant discrepancies in wages; education, health care and vacation packages were free.


 In trying to predict whether socialist and capitalist economic systems can be on the same level, and whether people will choose capitalist or socialist system, Maksimov proposes several scenarios:

            Scenario 1 – Classical: according to Marx, capitalists will face zero profits because they will have to lower prices for their goods due to increased competition. Interest in private ownership will be lost for it does not accrue any profits; governments will take control over the means of production.

            This scenario is not workable. With rapid development of technological progress new goods are produced, value of which is still expressed in prices.

 Scenario 2 – Mass Automation: with advances of technological progress workers will not be needed for production of goods will be automatic, operated by machines. Although such variant is possible and can be realistic since there are already industries where production is operated by machines, complete mechanization of the production of goods is not possible in the near future.
Scenario 3 – Communist Attitude Toward Work: a fraction of population will emerge in the near future for whom lower wages in public sector will be acceptable not because of their fear to lose jobs, but because of their high conscience, moral and ethic convictions. Today’s examples are philanthropic, religious and humanitarian organizations. “As a result of this, productivity in public and private sectors will diminish over time… gradual convergence of productivity indicators in both sectors will soothe and decrease economic supremacy of capitalism.”
Scenario 4 – Depreciation of the Economic Factor: production of industrial and consumer goods will employ a very small fraction of population (scenario 3) for whom “working in public sector will be a necessity, kind of labor-therapy” which will lead to the most efficient method of production. Having achieved this stage of optimality, further increase is not possible and “importance of the economic factor will be significantly reduced, for it will not be needed anymore.”
 Scenario 5 – Dependant Theory: since lagging in industrial output hinders build-up of socialism, industrial production should be abandoned and consumer goods shall be imported from other countries. Maksimov argues that Soviet Union with its abundant natural resources could have developed in the same manner as Middle Eastern countries do by exploiting their oil reserves.
In order to answer such questions as “To what extent will characteristics of both capitalism and socialism be employed in the future?” and “What will be their ratio?” Maksimov considers production and distribution processes separately:

(1) Method of Production. Since capitalist method of production is more efficient and yields higher productivity, it will be the dominant strategy in the production process. But “if at the beginning of the 21st century, share of capitalist method of production will amount for approximately 90%, it will be reduced significantly by the end of this century” (scenarios 2 and 3). More mixed businesses combining state and private decision-making in the methods of production will appear; thus, increasing participation of states in economy.

“Victory’ of a new social order will happen through evolution… gradually and imperceptibly: one day a parliament will issue a decree concerning nationalization of some enterprises, which will tip the scales toward centralized method of production.”

(2) Distribution Process: Marxist statement that those who own methods of production are also those who make distribution decisions failed to become true. As Maksimov mentioned in one part of his work about positive and negative sides of capitalism, “democracy saved capitalism” for it tries to make distribution process fair and in the interests of the whole society. This fair-distribution feature of socialism will continue to develop.
Maksimov predicts that an average man of the second half of the 21st century will not be concerned about problems an average person experiences now, but his main problem will be “the use of his leisure time. Army of unemployed will learn to live interesting and careless life since it will not have to work. Plenty of leisure time will develop more sport, musical, art, and drama schools… Pursuit in science and increasing levels of education will be of particularly honor.”
Overall, Maksimov describes the 21st century as a period when capitalism will dominate production process, but distribution methods will be of socialist nature.

* Maksimov, Vadim. “XXI Century – Capitalism or Socialism.” July 29, 2001. <>