Marx is often accused (ever since Bernstein and the revisionist Marxists of early 20th century Germany) of neglecting the fact that a democratic proletariat could simply vote to mitigate their living conditions, but that's not really where he went awry. What he thought was that as productivity increased, an ever-smaller workforce could produce enough stuff to meet aggregate world demand, leading to ever-increasing unemployment, declining consumer power, falling wages, and an inevitable economic collapse.
Then what would happen is that we would realize that we had all these capital goods lying around, all these unemployed people, all these productive workers, and that it would be easy enough to meet all of our needs by just abolishing ownership and letting everyone do their own thing.
And, indeed, despite the claim that "Communism doesn't work" it would actually be very easy for us to guarantee everyone a standard of living that would be quite comfortable by mid-19th century standards on an egalitarian basis.
What he missed was that productivity wouldn't decrease the size of the workforce needed to maintain a mid-19th century living standard, instead it would increase people's expectations of what constituted a viable standard of living. This is the old-time classical economic principle "Say's Law" which holds that supply generates its own demand. The trouble is that Say's Law seems to break down at times (e.g., the Great Depression) leading to the sort of deflationary spiral Marx worried about. This did, in fact, lead to calls for a Marx-style solution (see Upton Sinclair's EPIC plan) where you would solve the problem of unemployed workers and idle factories and farms by . . . giving the idle factories and farms to the unemployed workers. Fortunately, Keynes showed us that you can boost demand by manipulating interest rates and government spending and get out of these sinkholes.
The interesting issue is what sort of a law Say's Law is. It has a great deal of empirical support from history. Usually things do work out like this. But there isn't really a very sound mechanism to explain it. One would need some kind of account of human psychology to know whether or not it's ALWAYS the case that people will want more and more stuff. It seems at least possible that we COULD invent technologies (like Star Trek's replicators, robots to do personal service work, etc.) that adequately meet everyone's demands while only requiring a minimal amount of work gathering some kind of plentiful energy supply. Then what do you do? The Federation appears to operate along socialist lines of some sort where people compete for prestige rather than material rewards. But we never see very much of civilian life. What happens to people who don't happen to want a glamorous career exploring the stars? Are they sitting fat and happy back on earth, or are they horribly oppressed by the space traveling elite?
Hey, thanks for all this, Matt!
I don't yet see how the objection about the democratic proletariat voting to improve their living conditions goes away. It's still true that as soon as you get a substantial number of impoverished voters, they'll vote themselves more good stuff, right? As you point out, the non-Say's-law framework implies that you do get lots of unemployment. But now they're unemployed happy people who have stuff, and I don't think people like that would start a revolution. Perhaps there are economic consequences I'm not seeing here. Or maybe if you put big emphasis on the claims about how we realize our species-essence in organized productive activity you can still get a revolution, since the unemployed proletarians will clamor for some way to engage in work. But it seems that they'd be happy to play basketball or D&D all the time instead.
I actually had never heard of Say's Law before, and I too am curious how robust a law it is and where it comes from. Personally, I'm not really a confirming instance of Say's Law -- I haven't cared enough to get electricity started in my apartment since I got back to Texas a month ago, and I hope to someday have so little stuff that I'll be able to keep it all in my office and live there. But I am unusual.