Beyond Capitalism – Albert Einstein, 1949

Screen Shot 2016-01-18 at 10.28.05 PM

The following are excerpts from Albert Einstein’s essay “Why Socialism?” published in the May 1949 issue of the Monthly Review. In this article Einstein describes the systemic problems with capitalism. How as wealth and power is concentrated in the hands of a few the elites form an oligarchy, gaining control of the media and able to sway politicians to make laws in their favor. In this way democracy is subverted…


“Private capital tends to become concentrated in few hands, partly because of competition among the capitalists, and partly because technological development and the increasing division of labor encourage the formation of larger units of production at the expense of the smaller ones.

The result of these developments is an oligarchy of private capital the enormous power of which cannot be effectively checked even by a democratically organised political society.

This is true since the members of legislative bodies are selected by political parties, largely financed or otherwise influenced by private capitalists who, for all practical purposes, separate the electorate from the legislature. The consequence is that the representatives of the people do not in fact sufficiently protect the interests of the underprivileged sections of the population.

Moreover, under existing conditions, private capitalists inevitably control, directly or indirectly, the main sources of information (press, radio, education). It is thus extremely difficult, and indeed in most cases quite impossible, for the individual citizen to come to objective conclusions and to make intelligent use of his political rights…

Production is carried on for profit, not for use. There is no provision that all those able and willing to work will always be in a position to find employment; an army of unemployed almost always exists. The worker is constantly in fear of losing his job.

Since unemployed and poorly paid workers do not provide a profitable market, the production of consumers’ goods is restricted, and great hardship is the consequence.

Technological progress frequently results in more unemployment rather than in an easing of the burden of work for all. The profit motive, in conjunction with competition among capitalists, is responsible for an instability in the accumulation and utilization of capital which leads to increasingly severe depressions.

Unlimited competition leads to a huge waste of labor, and to that crippling of the social consciousness of individuals.. This crippling of individuals I consider the worst evil of capitalism.

Our whole educational system suffers from this evil. An exaggerated competitive attitude is inculcated into the student, who is trained to worship acquisitive success as a preparation for his future career.

I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy, accompanied by an educational system which would be oriented toward social goals. In such an economy, the means of production are owned by society itself and are utilized in a planned fashion.

A planned economy, which adjusts production to the needs of the community, would distribute the work to be done among all those able to work and would guarantee a livelihood to every man, woman, and child.

The education of the individual, in addition to promoting his own innate abilities, would attempt to develop in him a sense of responsibility for his fellow men in place of the glorification of power and success in our present society.

Nevertheless, it is necessary to remember that a planned economy is not yet socialism. A planned economy as such may be accompanied by the complete enslavement of the individual.

The achievement of socialism requires the solution of some extremely difficult socio-political problems: how is it possible, in view of the far-reaching centralization of political and economic power, to prevent bureaucracy from becoming all-powerful and overweening?

How can the rights of the individual be protected and therewith a democratic counterweight to the power of bureaucracy be assured? Clarity about the aims and problems of socialism is of greatest significance in our age of transition…”

~Albert Einstein,
Monthly Review (May 1949)

About Christopher Chase

Co-creator and Admin of the Facebook pages "Tao & Zen" "Art of Learning" & "Creative Systems Thinking." Majored in Studio Art at SUNY, Oneonta. Graduated in 1993 from the Child & Adolescent Development program at Stanford University's School of Education. Since 1994, have been teaching at Seinan Gakuin University, in Fukuoka, Japan.
This entry was posted in Creative Systems Thinking, economics and tagged , , . Bookmark the permalink.

18 Responses to Beyond Capitalism – Albert Einstein, 1949

  1. Pingback: Beyond Capitalism – Albert Einstein, 1949 | Talesfromthelou

  2. Jean says:

    Yet you think when the government owns the means of production – ultimately, that is YOU – that things will be better?

    More like you need a revolution every 20 years or so, as Thomas Jefferson said….

  3. stan foster says:

    Hey, Everybody read this, please,, please,thanks..

  4. Silly article. Have your planned economy, the perfect place is North Korea. What a great place to live

  5. Pingback: A Letter to Bernie’s Millennials (from a Bernie Boomer) | Creative by Nature

  6. Pingback: 7 Reasons Bernie is Stronger Than Hillary Against Trump | Creative by Nature

  7. Pingback: Beyond Capitalism – Albert Einstein, 1949 | For Economic Justice

  8. Gary Reber says:

    The core problem, as Albert Einstein identified, remains CONCENTRATE CAPITAL OWNERSHIP among the few. The solution is to abate all forms of CONCENTRATED CAPITAL OWNERSHIP and broaden personal capital asset formation simultaneously with the FUTURE growth of the economy. This can be accomplished by reforming monetary and tax policies to empower EVERY child, woman, and man to acquire personal capital asset OWNERSHIP in America’s FUTURE economy using INSURED, INTEREST-FREE capital credit, repayable out of the FUTURE earnings of the investments, without the requirement of past savings or ANY reduction in wages or earnings or benefits, should one be employed.

    The result can be an unprecedented engine of responsible green, sustainable growth whereby EVERY CITIZEN would be productive and OWN wealth-creating, income-producing capital assets and see their OWNERSHIP portfolios grow simultaneously with the growth of the economy, resulting in a FUTURE economy that can support general affluence for EVERY child, woman, and man.

    To achieve this FUTURE will require legislation as embodied in the proposed Capital Homestead Act (aka Economic Democracy Act) at,, and

    We will also need to ensure Monetary Justice (see

    These proposals are part of the greater Agenda of The Just Third Way Movement at,, and

  9. Reblogged this on just a girl in the whirl and commented:
    it’s nice to know that i have had similar thoughts. does that make me genius material? 😛

  10. johndjasper says:

    This is terrible! I hoped that the point of the post was to point out how Einstein was not the genius he was purported to be but instead I find people lapping it up like his flawed STR. You don’t need a genius to show what happens when socialism or communism rule.

    Recent examples of the USSR, China, Cuba, Germany under the National Socialist (NAZI) party are clear demonstrations of the failures of these systems. The USA, UK, and many other countries are examples where socialist programs overwhelm what free market economics remain and drive violent and repressive foreign policies.

    I suspect that Einstein was well aware of this but was smart enough to be on the winning side at all times and not fighting to the death for his beloved socialism.

  11. Joseph Schueler says:

    What is becoming increasingly clear to developed societies is this; capitalism is the bedrock of every economy, however it does not resolve market failure scenarios. Market failures can be defined, described, and quantified in real and static terms (education is a commonly accepted market failure in that private education only deepens the divide between those with access to quality education and those without, a requirement to live and work as a sustainable member of society). Government is best described as E Pluribus Unum, from many, one. It exists to respond to market failures, but does a poor job of artificially effecting the free and private market. The private market relies on mutual consent and that freedom to consent or decline is the basis of Liberty. Therefore, it is not the role of government (the public), to infringe on the rights of the private citizen (the individual) in the private market and conversely, it is not the role of the private citizen (the individual) to infringe on the rights of the government (the public) through self interest. We have police for this reason. We do have an individual voice to represent us all (Unum) and that is our sacred right to self govern through voting. The economy needs to remain incorruptible by overt government control of production, while focusing public government programs on the market failures in society (education, health care, military, infrastructure, foreign affairs, anti trust) and otherwise let the free market ensure that free people can make free and independent choices about their private life.

    • johndjasper says:

      Mr Schueler, do you really believe this or are you just trying to convince the slaves that the system of tyranny imposed on them is noble? What supreme being gave us the police? Where did the government/public derive rights above the individual that the individual did not possess?

      How does the economy remain incorruptible by the actions of the most corrupt and corruptible institution known to man – government?

      The many market failures that you list are and always have been seizures of power by a small group of people over the many. Education became a tool for indoctrination of the masses and molding them into useful subjects in the eye of self-appointed elite. Defence became perpetuation of the political system and the ruling elite and a means to extend power beyond accepted borders. Healthcare became an unnatural monopoly for petrochemical sales. Antitrust – destroying naturally occurring monopolies, destined to be shortlived, in favour of those incapable or unwilling to compete in the free market. In all cases, whatever the public gained from this interference in their lives, they lost more precious treasures in the way of freedom and inalienable rights.

      What’s more, none of us chose the system of tyranny we live under. Our rulers don’t ask our permission to rule over us. Ironically, they spend our money to convince us that they are the only thing standing between us and tyranny, that we’ve somehow signed a binding social contract with them. They’ve even made it a crime of treason to question their right to rule over us.

      The only way that people can make free and independent choices about their private lives is in complete absence of government and therefore, within a free market.

      • Joseph Schueler says:

        Mr. Jasper,

        You sound very angry and on some level I don’t blame you, I am angry as well. I believe it is easy to poke holes in a system without ever having to grapple with the realities of a better system to replace it. Your solution is anarchy. ISIS can attest to the relative benefits and problems inherent in anarchy and like all anarchy, they will eventually fall from chaos into order (and back into chaos as do we all). In a perfectly free market, a perfectly legitimate response to a failed bargain is murder. With no oversight, rule of law, or system of justice, we return to a time when might makes right. Do you endorse this world view as the means to manage supply, demand, and production? If so, our current systems of governance come close to that result when contrasting nations. Democracy is the only thing in its way. A system of, for, and by the people.

        Do you vote? Do you engage our systems of governance to ensure the public trust? Do you look for ways to enshrine our sacred and inalienable rights in equality and act as a private citizen to shield and safeguard those who are not able to safeguard themselves? Do you maximize your own utility function as do all other humans? From the unrealistic conclusion you draw, I’m not reassured. I believe you are better than that, but your theoretical framework breaks down along these lines. Yes, power corrupts. And yes, we must fight this corruption for a free society to remain free. A mixed economy with democratic socialist systems to account for market failures is the best approach to economic liberty we can get, sustaining an educated middle class who can retain it if they can learn from history, but the current system is beyond repair and I agree it must be torn down on some level.

        However, it can only be torn down through a nonviolent, internal struggle that reclaims power from the oligarchy elite and hands it back to the people, as the senate did from Caesar (back then, the loss of one life to reclaim the lives of the rest was a win), as Gandhi did from imperialist Britain, as George Washington did to our republic when he clearly could have stayed president, but stepped down. We can stand for more or we can fall to less, great people are separated along the same line. The funny thing about economic principle is the variables may change, but the theoretical framework that governs it does not. Communism will always place too much power in the hands of the government and pure capitalism will always place too much power in the hands of the rulers of production, who then seek control of the government to maintain power (oligarchy). It’s a bit of a paradox, but where free people can self govern, they can and will find a better path towards sustainability. The free market plays an important role if left to remain free. Government also plays a role if left to remain democratic. In these settings, the body politic possesses the means to account for the inherent problems in any society, leaving the free market to ensure liberty while accounting for the market failures that must be controlled to ensure any one entity cannot usurp it. however, it takes work and cooperation to do so. We live in the lowest violent time period per capita in human history. We are interconnecting in many ways the likes of which were never thought possible. We know the lives of those who would sit at the end of our barrel and in that knowledge, we see ourselves there and withdraw. Those who cannot see this have created the hell they sit in, I only wish you good things, so hope this is not the space you spend all your time in, it is so much brighter and sustainable in society. Make your society, do not tear it down, for you havbe nothing to replace it with, but hopelessness.

        My closing thought: Who are these slaves you are speaking of? Are you leading the slaves towards justice or certain mayhem? That was rhetorical, the answer is no one and mayhem. Your pulpit is facing an empty room, it’s easy to lead a revolt of no one, I’m sure they all agree with you.

      • johndjasper says:

        Mr Schueler,

        Why be angry? We’re merely standing here on the graves of millions and probably billions directly or indirectly murdered by governments just in the last century and or so, arguing about how bad things would be if anarchy ruled the world.

        You use the phrase “grappling with realities” and then speak of ISIS as though it were an independent, grassroots movement that wasn’t created, trained and fully supported by Western governments and their intelligence agencies. You’re understanding of the words “chaos” and “anarchy” leave much to be desired. To save trouble, I’ll use chaos to mean a society without the rule of law which can include the complete lack of laws or the arbitrary application of thousands of laws. I will always use anarchy to mean “without rulers.” The latter implies the rule of law otherwise it would be chaos.

        Yes, A perfectly legitimate response to a failed bargain or contract is murder. Yes, might makes right! These are true even now under the many systems of government in use around the world. The only difference is who can legally pull the trigger. Countries, with the exception of the USA, manage quite well under the current global system of anarchy. Why is it considered impossible for individuals to do the same?

        Democracy – the tyranny of the majority – is actually worse than tyranny by a monarchy. A ruling family at least has an incentive to nurture the country for the benefit of their offspring. Democracy suffers from the tragedy of the commons, where each short term leader maximises their gains at the expense of the future health of the country. We do not “enshrine our sacred and inalienable rights” by surrendering them to a group of people who supposedly are immune to the failings of humanity. We do not ensure our security by enabling governments to aggress against individuals, companies, or whole countries under the guise of protecting national interests.

        We protect our rights best by forming voluntary associations for mutual trade and defence preferably without artificial borders, flags, and patriotic labels. We safeguard those who cannot fend for themselves best by creating a wealthy society that can afford to care of the unfortunate. We establish the rule of law by recognising and adhering to natural law based on property rights, (as Monica Perez ( is fond of saying, “don’t touch me or my stuff!” and apply the law globally. As for education, anyone who wants to provide “free” education for the masses is perfectly entitled to setup an education system funded by voluntary donations. Similarly, healthcare, housing, sanitation and clean water, safe-homes for orphans, relief for disaster victims, etc can be provided by a voluntary model. If people aren’t willing to fund these programs voluntarily, any attempt to force them to pay for it amounts to robbery, a criminal act under natural law.

        The current system doesn’t need to be torn down – it is destroying itself. The elite use government power to transfer our wealth into their pockets, transform our blood into their continued rule over us and to extend their rule over others. Yes, the elite can hire violent thugs (armies/police) to enforce their rule over us but that costs a lot of money. They ruled for centuries on the strength of superstitions, then religions, and now on patriotism, and taxed us to pay for our violent subjection. However, their greed has no bounds and the massive transfer of wealth since 2008 has made their position untenable. The escalation of wars helps to obfuscate this situation while it further undermines the foundations. Yet, the growing ranks of homeless will not sit idle forever. The continued tightening of the yoke will not go unnoticed. When the money becomes worthless, the power goes off, the food disappears, the fuel supply ends, all hell will break loose and the illusion of democracy will die.

        Our challenge is to end this downward spiral before the complete crash and rebuild a system that doesn’t put us back on the same cycle of power, corruption, and failure that is inherent in government. The system will cease to have power over us when we choose to stop supporting it. This is partially an education issue as most people believe that government is just and inescapable despite what they actually know about its failing. It is also an issue of courage as we have so much invested in the system and turning away will be hard and dangerous. When we reach a critical mass and run out of excuses, the change will happen quickly. Failing that, it will be up to the remnant to salvage what they can of civilisation and start over again.

        You say “The free market plays an important role if left to remain free.” and then say, essentially, that the government has to manage the economy to account for the market’s failures. Obviously, the contradiction escapes you or you have a different definition of the word “free!” Free doesn’t mean do anything you want within the limitations that we’ve set for you. It most assuredly means that any two parties may trade between themselves as they see fit without a third party deciding what can be traded, who can trade with whom, what currency must be used, if any, or how much of the value of the trade must be paid to the third party upon pain of death. Freedom means that you cannot be conscripted into an army or labour force, be vaccinated or medicated against your wishes, detained (except when caught in a criminal act), searched, robbed, or similarly aggressed upon. The alternative to freedom, to any degree, is slavery. You’re either 100% free or you are enslaved.

        My closing thought is on how people such as you, judging by your words, believe that society must be established and controlled by the educated elite. Once again, the masses are not capable of building a system to meet their needs and provide for civilised society. This is the same rhetoric used to support central control of whole economies and justify repressive state bureaucracies and police states. It is self-serving for those in power or desiring such power. History teaches us time and again that central control brings nothing but bread lines, inefficient and wasteful production, misery, starvation and concentrations of wealth in the top tier. The graves, mostly unmarked, are still there, as testimony to the truth I’m passing on here.

      • Joseph Schueler says:

        Established and controlled by all people equally, the definition of democracy. In regards to your anarchistic state, tell me how all that works out for you in the near future, the distant future… or never, as it will never actually happen in real terms. Humans are too inquisitive, too greedy, and too invested in themselves to not search out a higher social function than anarchy, it is where we start, but will never be where we end, we’ll destroy ourselves first, then perhaps start all over, order into chaos. It’s a beautiful dream, but in reality, together we accomplish more and fighting that social construct is as doomed to failure as creating it. Yes, there are flaws in any social order, but so too are there flaws without governance. Greed and violence are normal elements of society and are only curbed through rule of law. In nature, the might makes right principle accounts for this as you agree, but when a person has the capacity to act beyond instinct, remaining in a base line state of instinctive reaction is regressive and fulfills nothing. Your bitterness towards social well-being is perhaps a symptom of your social fears or perhaps the social rejection you have endured, true social acceptance being a dream we all wake up to enjoy from time to time. We all experience the best in life in a social manner and love… well, I hope you understand. To search for something and someone greater than ourselves is the eternal desire of human kind. You give humans too much credit for being able to live without government, yet too little credit to master the variables that create harmony and peace. I can only say it is belief, but I believe that peace is possible. It may not be very probable at this point in time, and certainly you will never eradicate crimes of passion and ignorance. However, the means with which we can control the variables that make war necessary or unnecessary are in fact within our reach currently and we continue to diminish violence per capita annually to that end, on an amazing trajectory towards a world without mass warfare. Alas, we all have to believe (and trust) for it to come true. Yes, you can read about the tragedies in this ever interconnected world, but taken as a whole, we are safer, more empathetic, and self aware of our impacts on the world around us than ever before. I think perhaps we can both have a sense of these issues and try them out in our minds and mouths and ears. However, our own senses have little to do with reality. I respect your candor and do indeed hope you find this world of non-governance that somehow masters what the governed world cannot. I enjoy the thoughts you bring to mind, but I also will not be holding my breath. My bet is on society, a society which cares not at all what either of us think and will not bet on anything. It will just survive as it has always done, while extremists claim Armageddon and live their own wretched world view into destruction. And while peace advocates are killed and never see their ideals come to fruition, life will continue to survive and perhaps in their death they will know peace finally. I know that my peace comes from acting in a manner that is fair and just to others. I am troubled by the same issues you are, but will always do what I can personally to make the world a better place and do not see the path you describe as doing so, just making it harder for any amount of people to survive without tearing their opponents apart. I get it, the world is bad, I know. Everyone is evil and you know a better way. I do not hear anything remarkable in your false claims for a better approach to society, only regurgitated thoughts about a false utopia you probably read about. To me, your statements are hubris, the usual feeling of someone who has never had to carry the weight of true leadership. If the life of ten people fell on your shoulders, you would likely yearn for some organization, much less having to carry the weight of billions of people. Or is your approach to shrug off that responsibility? you would necessarily defy human nature itself in doing so and there too goes your social anarchism as another, perhaps like me, takes up the challenge.

  12. Pingback: The Perpetual Curse of Feudalism, Reinvented | Creative by Nature

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s