Shall we never be rid
of Karl Marx? It is not fashionable any more to be a full blown
Marxist, but writers, politicians, and popularisers find that showing
their sympathy or respect for Marx is a way to proclaim that their heart
is on the left side. It does not matter if historians have argued that
his analysis of capitalism does not fit the facts and that his
predictions of the inevitable evolution of society have been falsified.
His theories are re-interpreted, reformulated, and transmogrified, until
made immune to counterexample and refutation. The first reason for his
perennial presence that springs to mind is that he was a powerful
thinker and a masterly writer—when he set aside his Hegelian prose. A
deeper reason was that he instilled hope in people dismayed by the
disorders of the time by casting socialism into the role of a lay
religion, complete with dogmas, heresies, and excommunications. A third
reason, which is now seducing some French egalitarians, is the quest to
discover the mechanism that will make capitalism self-destruct. But even
for those who would not call themselves Marxist, he proposed a
materialist methodology that many see as an especially fruitful way of
studying society.
A prickly fellow
Political philosophy depends much more on the personality and biography
of its framers than is usually thought. Plato's aristocratic origins and
his resentment at the execution of his beloved master Socrates can be
read in palimpsest in
The Republic or
The Laws. The gentle character and rational disposition of Thomas Aquinas made for the inclusiveness of the
Summas.
Machiavelli was a discarded and over-intelligent civil servant of his
beloved Florence, yearning for an Italy free of the French and Spanish
"barbarians". Hobbes attributed his timidity and insecurity to his early
upbringing and clearly wrote for times of civil discord. And Hegel was
very much the professor at a Prussian State University, marked by the
unfolding of history in Napoleonic times.
Karl Marx
(1818-1883), as many commentators have noticed, showed the traits of an
Old Testament prophet, in that he proposed a doctrine of salvation and
of the end of history akin to that of the great religions of the Book
and fundamentally different from the rationalism of the Enlightenment,
especially the Scottish Enlightenment.
He led the hazardous life of a conspirator. Endlessly persecuted by the
Prussian police, he was repeatedly forced to change his abode on the
Continent, only to find some peace as a refugee in Victorian London,
where he and his fellow revolutionaries were totally ignored in a
supremely confident and prosperous society.
Marx had the good luck to be befriended by Friedrich Engels (1820-1895).
After they met in Paris in 1844 they welded an association which would
last for the rest of their lives and beyond. The development of Marxism,
indeed of socialism, would have been very different if these two
friends had not worked together untiringly and in full harmony for so
many years. Not only did they co-author books and articles; not only did
they jointly launch and organise associations to promote the cause of
communism; they also conspired and fought against what they saw as their
misguided rivals in working class politics. Marx was the more spiteful
(remember "The bourgeoisie will pay for my boils", which he suffered
after long sitting hours at the British Museum). Engels, on the other
hand, was a sunny character full of curiosity and generosity. He even
financed Marx and his family during their spells of poverty and adopted
the boy believed to have been fathered by Marx with the family's
housekeeper, Helen Demuth. All in all, he was the more likeable figure.
Still, they were both full of scorn for their political rivals and
merciless in their battles against them. Their vitriolic attacks on
Feuerbach, Proudhon, Bauer, Lasalle, Dühring are extreme examples of the
well-known savagery of political battles among exiles. The ultimate
explanation for their uncivilized behaviour was their unshakeable belief
that they were in full possession of the truth: their hard-headed
socialism was "scientific"; their rivals in the workers' movement,
misguided or ill-intentioned; the cruelty of their hoped for revolution,
merely "the birth-pangs of history"; all was justified in the march
towards a human and happy society.
The Communist Manifesto
The most read of Marx and Engel's writings is
The Communist Manifesto.
They were asked to compose it by members of a London secret communist
society, "The League of the Just". Engels had convinced them to merge
with the "Communist Corresponding Society" set up by Marx and himself in
Germany. The
Manifesto was presented to the members in 1847 and
published in 1848, just before France erupted in a revolution that
toppled the monarchy and turned it into a republic. The flames then
spread over whole of Europe and for three years it seemed that a new
democratic era was born. Another attempt at socialist revolution, The
Paris Commune, followed in 1871. The next revolutions did not come until
after the havoc of World War I.
Though the
Manifesto was written by Marx, he relied greatly on Engels' book
The Condition of the Working Class in England
published in 1845, a scathing denunciation of life in Manchester
factories, presented as an anticipation of what the whole capitalist
system was to become. Nearer to what was the final text of the
Manifesto
there are two drafts of Engels' in 1847 that served as a starting point
for Marx's composition. One was "A Communist Confession of Faith" and the second has been called "Principles of Communism". The "Principles" text clearly shows how aligned in thought the two friends were. It is right after all to call the
Manifesto a joint work.
A comparison with Engels' sketchy drafts shows Marx's great rhetorical
gifts when he shed his crypto-Hegelian garb. The first phrase of the
pamphlet is justly famous:
A spectre haunts Europe—the spectre of Communism. All the powers of old
Europe have entered into a holy alliance to exorcise this spectre: Pope
and Czar, Metternich and Guizot, French Radicals and German police
spies.
The claim was exaggerated but it instilled confidence into the dispersed
groups who called themselves communist or socialist in that their aim
was the abolition of private property.
The
Manifesto was divided into five parts. The first is a short
introduction. Then came chapter I, titled "Bourgeois and Proletarians", a
panegyric of the productive powers of the capitalist economy, you will
be surprised to hear, but really the eulogy in the funeral service of
capitalism. Chapter II was a call for the communist elite to open the
eyes of untaught proletarians to the exploitation they suffered under
capitalism, and eventually to lead them to join the ranks of the
revolutionists. Chapter III damned reactionary and utopian socialism
with faint praise, as they would luckily be superseded by their own
scientific brand. The last chapter proclaimed the readiness of the
communists to back workers' parties across Europe, as long as they
accepted the aim of getting rid of private property "by the forcible
overthrow of the whole social order".
The starting point is proclaimed in chapter I: "The history of all
hitherto existing societies is the history of class struggle".
Throughout history, human societies were divided in a variety of social
classes but modern bourgeois society "has simplified class antagonisms
[...]. Society as a whole [is] dividing itself increasingly into two
great hostile camps, into two great classes, directly facing each other:
the Bourgeoisie and the Proletariat." The essential engine of
transformation is "a series of revolutions in technology and the modes
of production and exchange". Here we are being introduced to a
fundamental element of Marxian sociology, 'historical materialism', that
social change is driven by the modes of economic production embodying
new technologies. This idea, especially as developed in
Das Kapital
(1867) has caught the attention of historians ever since. It was a call
not to be content with mere political history. This is not to say that
there was no economic history before that book—for example,
Adam Smith's
An Inquiry into the Nature and Causes of the Wealth of Nations—but
nobody up to then had presented the modes of production and exchange as
the moving forces of history. In the case of modern capitalism, Marx
was saying, the transformation of technical and commercial conditions
had led to an unprecedented upheaval in society. The idea of
"revolution" has become commonplace to describe profound changes in all
spheres of society, when up to the writings of Marx the term had been
limited to politics, to the English or French Revolutions of the 17th
and 18th centuries. Now Marx applied it to the changes wrought in
society by the bourgeois mode of production and attributed the evolution
of history to the working out of necessary economic laws—a highly
controversial idea.
Then came one of those paradoxical turns of phrase that must have shocked many of his fellow revolutionists.
The bourgeoisie has played in history an eminently revolutionary role.
[...] The bourgeoisie cannot exist without constantly revolutionising
the instruments of production, and thereby the relations of production,
and with them the whole relations of society.
Thus, the capitalist class, he said, has torn through the fabric of
traditional societies and is now in the process of creating a globalised
economy of huge productive force.
The bourgeoisie, during its class rule of scarce one hundred years, has
created more massive and more colossal productive forces than have all
preceding together. Subjection of Nature's forces to man, the extensive
use of machinery, the application of chemistry to industry and
manufacture, steam-navigation, railways, electric telegraphs, clearing
of whole continents for cultivation, canalisation of rivers, whole
populations conjured out of the ground—what earlier century had even a
presentiment that such productive forces slumbered in the womb of social
labour?
It's all there: even the powerful sexual metaphor.
Then came what made the
Communist Manifesto such a stirring piece
of political propaganda: its description of the moving mechanism of
capitalist society and the historical prediction based on this analysis.
For Marx, capitalism unleashed powers that took on an independent life
and turned against the very system of private property on which it was
based. Over the previous thirty years, the history of industry and
commerce had been a succession of crises that "progressively threaten
the existence of bourgeois society". Epidemics of over-production
repeatedly struck, when it seemed that "society has too much
civilization, too much food, too much industry, too much trade", so that
existing products and resources for future production were destroyed.
The reaction of the bourgeoisie was two-fold: the said temporary
destruction of productive forces; and the extension and deepening of the
exploitation of their markets. On the one hand the capitalist mode of
production was extended to more primitive peoples and societies by the
creation of colonies and the extension of trade. On the other hand,
capitalism turned workers into proletarians.
Competition and the division of labour destroyed the societies of old.
Slowly all workers amalgamated into a single downtrodden class. The
condition of small shopkeepers, artisans, farmers, and wage earners
slowly deteriorated into proletarian conditions. The very gathering of
hands in huge factories was a step in the agglomeration of the subject
classes into one body.
Far from prospering with the progress of industry, the modern worker
falls ever further down, underneath even of the standard of his own
class. The worker becomes a pauper.
When these proletarians unite they will become a force for revolution.
They are helped by "the bourgeois ideologues who have raised themselves
to the theoretical comprehension of the general movement of history"—a
highfalutin' way of explaining how it happened that a doctor of
philosophy and a factory owner presumed to tell the poor downtrodden
masses how they should organise their lives and action. Marx ended the
chapter as the supremely effective deviser of slogans that he was: "what
the bourgeoisie mainly produces is its own gravediggers."
"Do I exaggerate when I extol Marx's gift for the telling phrase? "
As I say, the
Manifesto went on to disparage other writings on
socialism and to offer full collaboration to already existing workers'
parties in England, the United States, France, Switzerland, and above
all Germany, so that they all started to think of the coming downfall of
capitalism. Do I exaggerate when I extol Marx's gift for the telling
phrase? He ended with a final call to aim at a communist revolution:
"proletarians risk to lose nothing but their chains; they have a world
to gain. Proletarians of all lands, unite".
The hungry forties
Engels's
The Condition of the Working Class in England (1845) and the
Communist Manifesto
(1848) are very much the books of a particular period, the twenty years
from 1835 to 1855, usually known as the 'hungry forties'. As explained
by George R. Boyer (1998), those years were especially hard for textile
workers, especially in and around Manchester. Their hardship multiplied
during the crises of 1837, 1842 and 1848, and during the 'cotton famine'
of the American Civil War, when textile labourers bore with fortitude
the effects of the Northern blockade on Southern maritime exports.
However, the growing prosperity of the English labourers in the 1860s
put paid to socialism in the British Isles for years to come, if not for
ever.
It is easy to see how Engels and Marx were led astray by the political
and social conditions of middle and Northern England during the 1830s
and 40s. The reward of labour, the conditions of work in factories, and
the exploitation of women and children in the workshops of England
shocked not only Engels but also many humane observers of factory work
and industrial cities. Indeed, Parliament was led to use the law to
forbid the worst abuses, after compiling detailed reports on these
ills—the
Blue Books that Marx so effectively used in his later writings, especially
Das Kapital (1873).
These cruel conditions led large numbers of working men to stage
general strikes, and to take part in the Chartist movement demanding a
more democratic Constitution, so that it seemed Revolution was nigh.
Friedrich Hayek edited in 1963 a collection of essays under the title of
Capitalism and the Historians
which helped overturn the widespread view, taken from Marx and Engels,
that the modern productive society was built on the accumulation of
capital forcibly extracted from a downtrodden working class by heartless
capitalists. Hayek's collection showed that the evolving conditions of
the working classes in England were not based on the worsening of living
standards under industry compared with life under subsistence
agriculture. During the Victorian era,
pace Engels and Dickens,
the people's living standards clearly bettered. Later economic research
has shown that the 1830s did see some worsening, especially due to the
deplorable hygienic conditions in the great factory towns: the incidence
of cholera and tuberculosis made for a shortening of life expectations
after the hopeful of the 1820s.
Boyer usefully summarises the data. There seems to be little doubt that
in the hungry forties there was a fall in real wages for all workers,
and especially so for workers in the cotton industry of South
Lancashire. Especially hard hit were manual cotton workers who weaved at
home and faced the competition of mechanical production in factories.
In Manchester, where Engels was in charge of his family's factory from
1842 to 1844, cotton workers as a whole suffered a very hard ten years
after 1832, when their real wages declined by 15 per cent. To this must
be added the effect of high rates of unemployment except for the better
years of 1845-46; at the low points of the downturn before and after
this peak in prosperity, unemployment among the mill workers was as high
as 15-20 percent. (Boyer, pages 165-6) To this was added the discontent
caused by the New Poor Law, which forced temporarily destitute families
to demand relief at "well-ordered Poor Houses", where inmates were
separated by sex and age.
Historians have spent much effort to pair these undoubtedly patchy
economic data with biological indicators of welfare. There is much
dispute about life expectancy, which seems to have declined from 40.8
years in 1829-33 to 39.5 in 1849-53. Another measure used is the height
of military recruits, which "increased from the mid-18th century until
1840, declined during the 1840s, and then rose again after 1850".
(Boyer, page 167)
But the Victorian boom of the 1850s and 60s showed Marx and Engels's
predictions to have been wrong, concludes Boyer. GDP growth per man hour
from 1856 to 1873 grew annually by 1.3 percent. Wages clearly
increased; Boyer recalls a study showing that real wages grew by 38 per
cent from 1851 to 1881. Neither did cyclical downturns become more
severe in the second half of the century. Unions changed their character
to trade associations. Legislation increasingly favoured working class
interests, starting with the repeal of the Corn Laws and other
free-trade measures to make food cheaper.
Alienation and the New Man
The
Communist Manifesto is an excellent introduction to Marx's great work on
Capital
but three fundamental elements needed deeper development: alienation
and the new man; historical materialism; and the economic engine driving
the capitalist system.
In 1846, before writing the
Manifesto, Marx and Engels finished book that they were never able to publish and which was partly lost:
The German Ideology.
There they laid down the philosophical foundations of their system, to
which, as Leszek Kolakowski (2005, chapter VIII) rightly notes, Marx
faithfully stuck during his whole life. Humanity was the sorcerer's
apprentice. Men had created money and commodities, but these took on an
independent life and lorded over them. Man became "alienated", so that
his creations made him incapable of the all-round development of his
aptitudes and talents. The cause of such alienation was the division of
labour driven by technology and competition, portrayed by Charlie
Chaplin in his caricature of "Fordism",
Modern Times—as if
competition were not a form of social cooperation. The degradation of
humanity would proceed relentlessly under capitalism, until the yoke of
private property was forcibly lifted and communism emerged. In a
communist society nobody would have
[...] one exclusive sphere of activity but each can become accomplished
in any branch he wishes, society regulates the general production and
thus makes it possible for me to do one thing today and another
tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in
the evening, criticize after dinner, just as I have in mind, without
ever becoming hunter, fisherman, shepherd or critic.
One does not know whether to laugh or cry at such nonsense. This passage
is a most telling sign of how Marx and Engels conceived the economy.
The power of the productive system was such that, once private property
was abolished and the state had disappeared, the machinery of production
could be left to work of its own accord, like a sort of
perpetuum mobile.
There was no need to decide what to produce. Scarcity would have
disappeared and at the touch of a button all wanted goods and services
would appear. And every man, woman and child would live like rentiers!
The materialist interpretation of history
Marx stood Hegel's philosophy on its head by making material conditions
rather than the Idea the motor of history. "It is not consciousness that
determines life but life that determines consciousness." It is the
non-intellectual part of society that governs thought. Whatever
Kolakowski may say, history for Marx is governed by laws that link
social evolution with modes of production, as he would expound in
Das Kapital.
This does not leave individual people and their ideas without any role
in history. Though most peoples' ideas are distorted by the interests of
the social class to which they belong but, as we saw in the
Manifesto, some bourgeois thinkers heave themselves over their circumstances and can help the revolution along.
As Karl Popper showed in
The Poverty of Historicism (1944-5,
1957) philosophies of history that seek laws of historical evolution are
untenable. Marx did accept that men's ideas had a return influence on
society.
There is little doubt, however, that he also believed he could prophesy
the unavoidable downfall of capitalism and the inevitable coming of
socialism. Such certainties are very consoling but lead to dangerous
ethical conclusions, namely to totalitarian excuses for imposing
suffering on the present generation in the full expectation of a
glorious future for the whole of mankind.
The true nature of capitalism: appearance and reality
We saw when commenting on the
Manifesto that Marx and Engels
despised the current forms of socialist thought of their time because
they were not "scientific". The science bit in their social philosophy
was a combination of Hegelian determinism and classical political
economy. The relentless destruction of capitalism and the march towards
communism could be prophesied because of a mechanism in society that
could be understood with a modified version of classical economics.
Marx only published the first volume of
Das Kapital in his lifetime. Engels put together volumes II and III after his friend's death. Marx studied
David Ricardo
and Adam Smith with great care. From Ricardo he took the model of the
functioning of a capitalist economy, where prices could be explained by
the relative cost of producing the goods and services people exchanged.
The profits of entrepreneurs came from the difference between costs of
production, mainly wages, and the prices with a margin obtained by
entrepreneurs. But this analysis of the economy did not satisfy Marx
because it appeared to be just and fair: prices and profits arose from
equal exchange. Was it right that the system should treat labour as a
mere commodity? If labour created value, as Ricardo appeared to say, why
should anybody profit from the effort of labourers? Marx's solution was
a very Hegelian one: beneath the fair appearance of the market there
lurked exploitation. Prices and profits were the appearance; value and
exploitation the underlying reality. No matter if the rate of profit was
one for the whole economy and the rate of exploitation varied among
firms depending on the labour intensity of their productive techniques.
This would be explained in volume III. Neither Ricardo nor Marx analysed demand, the ultimate reason for the productive efforts of humanity.
Capitalism in History
From Adam Smith Marx took the secular fall of the rate of profit, which traced the future path of capitalism, as we shall see.
Das Kapital
volume I is principally a work of history: of how and why humanity has
evolved along the times and where this march is leading us all. To start
with, the Marxian theory of economic growth does not fit the facts of
the industrialisation of the West. For him, the "primitive accumulation
of capital" extracted from agricultural serfs and slaving workers was a
necessary condition of the industrial revolution. Of course there was a
great deal of fixed capital invested in coal mines and canals, but in
fact it all started with public finance and applied science, the new
modes of mass production being set up away from limiting city guilds.
That Marxian misrepresentation had grave real consequences, when in the
Soviet Union it was applied by Stalin's rush for growth on the backs of
ordinary people, by positing that industrialisation had to start with
heavy industry on the back of forced agricultural labour. The path to
development is not forcible expropriation but new ideas freely sought
and applied and new institutions to protect the property of the new
productive classes.
At the heart of
Das Kapital is the trend of the evolution of
capitalism towards monopoly brought about by cyclical recessions. The
tendency of the rate of profits to fall secularly Marx took from Adam
Smith. To restore the rate of profits to the accustomed level,
capitalists were forced to increase their investments. Since, as
investment intensified, wages would tend to increase, there was a need
to keep a sizable number in a "reserve army of the unemployed" and
substitute even more capital for labour. This made for periodic
over-investment and under-consumption, destructive crises, mergers and
take-overs. Wages would become more and more depressed and small-firm
owners demoted into the working class. Miserable workers became
proletarians when they realised the alienation of their nature caused by
the division of labour. The proletariat would be forced or led to bring
down the capitalist system with a revolution. So strikes "the last hour
of capitalist private property. And the expropriators are
expropriated."
Events have not unfolded the Marxian way.
Increases in capital will reduce the marginal productivity of machinery
and necessarily increase the productivity and the reward of labour. So
it has been: the deepening of capital investment has led to a high and
secular growth in wages. Also, Marx took no account of human capital,
the investment in education and on the work training in capitalist
societies, though Adam Smith had broached the question.
Indeed, when Marxist writers of today discuss the distribution of
income between capital and labour they often forget that the most
important capital of a nation is not machinery but that embodied in
people and institutions.
Marx Redux: Why?
The histories of both capitalism and socialism have been quite different
from what Marx and Engels predicted. The attempt to give birth to the
New Man has resulted in unworkable utopias drowned in seas of blood:
such is the experience of Stalin's Soviet Union, of Mao's China, of Pol
Pot's Cambodia and Castro's Cuba. While the individualist societies
damned by our two socialist dreamers have multiplied the productive
capacities of mankind, thanks to the division of labour and competition,
an increasing number of people on this earth can enjoy a Standard of
living that includes ample time free from the drudgery of work.
Historical materialism still attracts many social scientists. Economic
historians see Marx as the founder of their lore, though they forget
that Adam Smith and the whole Scottish Enlightenment preceded him. It is
true that Marx used statistics and historical evidence as few had done
before. But if I ask myself the question whether the economic
interpretation of history should be preferred to wider, more
encompassing points of view
my answer would be in the negative. I will leave the analysis of such
reductionism for another day, when I will call on the help of Deirdre
McCloskey and Niall Ferguson.
The principal reason why people with democratic convictions still pay
attention to Marx is that he was that arch-critic of social inequality.
Inspired by him, some would impose an equality of results, whereby
individuals would not have very different assets and incomes, whatever
their ability, hard work, or capacity to answer the demands of the rest
of society. Social Democrats would swear by an equality of opportunity
fostered by the state, so that we should all compete on a level playing
field. Only a small number of thinkers and politicians have the courage
to defend free competition and equality before the law, and call Marxism
and socialism by their name: the politics of envy.
References
Boyer, George R. (1998): "The Historical Background to the Communist Manifesto".
Journal of Economic Perspectives, vol. 12, nr. 4, Fall, pgs. 151-174.
Desai, Megnad (1974):
Marxian Economic Theory. Gray-Mills Publishng Ltd., London.
Engels, Friedrich (1845):
The Condition of the Working Class in England in 1844. Cambridge University Press. 2010.
Kolakowki, Leszek (2005):
Currents of Marxism. Book I,
The Founders. The three books of the work were published in a single volume by Norton and Cy., New York.
Marx, Karl (1867, 1885, 1894):
Das Kapital: Kritik der politischen Oekonomie vol. I:
Capital. A Critique of Political Economie (1867). Vol. II:
Capital. The process of the Circulation of Capital, edition by F. Engels (1885). Vol. III:
Capital: The Progress of Capitalist Production as a whole,
edition by F. Engels (1894). MEW, Progress Publishers, Moscow. All
three volumes available online at the Library of Economics and Liberty,
Capital: A Critique of Political Economy, Vol. I. The Process of Capitalist Production,
Vol. II. The Process of Circulation of Capital, and
Vol. III. The Process of Capitalist Production as a Whole
Marx, Karl and Engels, Friedrich (1844):
Die heilige Familie, gegen den Junghegelianer Bruno Bauer gerichtet [English edition:
The Holy Family]
[Marx, Karl and Engels, Friedrich] (1848):
Manifest der Kommunistischen Partei. (
The Manifesto of the Communist Party). Many editions. See, for example,
marxist.org.
McCloskey, Deirdre (2011):
Bourgeois Dignity: Why Economics Can't Explain the Modern World. University of Chicago Press.
Morishima, Michio (1973):
Marx's Economics. Cambridge University Press.
Neal, Larry and Williamson, Jeffrey G. (2014):
The Cambridge History of Capitalism. Vol. I:
The Rise of Capitalism from Ancient Origins to 1848; vol. II:
The Spread of Capitalism from 1848 to the Present. Oxford Universty Press. Paperback 2015.
Piketty, Thomas (2014):
Capital in the 21st Century. Harvard University Press
Popper, Karl R. (1957):
The Poverty of Historicism. Routledge and Kegan Paul, London.
Popper, Karl R. (1957):
The Open Society and its Enemies, vol. II:
The High Tide of Prophecy, Hegel & Marx. Routledge and Kegan Paul, London.
Rojo, Luis A. (1984): "El pensamiento económico de Marx, cien años después" in
Marx, economía y moral, in Rojo and Pérez Díaz. Alianza Editorial, Madrid.
Schwartz, Pedro (1966): "John Stuart Mill and Laissez Faire: London Water",
Economica, NS, vol. XXXIII, nr. 129, February, pgs. 71-83.
Seligman, Edwin (1901-2): "The Economic Interpretation of History",
Political Science Quarterly, vols. 16 pgs. 612-640, and 17, pgs. 71-98 and 284-312.
Kolakowski
(1978) called this the soteriology (the doctrine of salvation) and
eschatology (the doctrine of judgment at the end of time) of Marxist
theology.
June, 9, 1847. Published in
Gründesdokumente des Bundes der Kommunisten. Accessed January 2016 at
http://www.marxist.org
Engels wrote to Marx: "Think over the Confession of Faith a bit. I
believe we had better drop the catechism form and call the thing
Communist Manifesto.
As more or less history has to be related in it, the form it has been
in hitherto quite unsuitable. I am bringing what I have done here with
me. It is in simple narrative form but miserably worded, in fearful
haste." As published of all places in the Chinese edition of
Marx/Engels Selected Works, Peking, 1977.
October-November 1847. Published in 1914 by Eduard Bernstein. Accessed January 2016 at
http://www.marxist.org.
See in Capital Section 3, "The Production of Absolute Surplus Value". (Available online at
http://www.econlib.org/library/YPDBooks/Marx/mrxCpA16.html.) This section of the first book of
Capital
must be read to see how hard Marx worked at getting his facts right,
how effective his sarcasm was in debate, how genuine his indignation at
the uses of manufacturers, and how excessive the hopes he lay on the
Chartist movement.
Before Engels published his book, Edwin Chadwick, the great Utilitarian public servant, had written a critical Report on the Sanitary Condition of the Labouring Population of Great Britain
(1842). It was that self-same Chadwick who connected the contaminated
water supply of London with the prevalence of cholera. The discovery of
bacteria by Louis Pasteur was still in the far future, but the causal
connection was made by statistical induction. See Schwartz (1966).
Some
commentators jokingly call Marx's philosophy of history an "escalator
theory": the movement of history takes us up effortlessly towards
communism but we can always help by climbing steps.
Kolakowski
(2005), page 130, says: "Clearly Marx cannot be saddled with the view
that all history is the effect of historical laws, that it makes no
difference what people think of their lives, and that the creations of
thought are merely foam on the surface of history [...]."
Popper was especially discerning in his treatment of Marx in The Open Society (1945, 1957).
Das Marx Problem, that value and
exploitation do not coincide with price and profit, has exercised many
later socialists, such as Professors Desai and Morishima. Values and
rates of exploitation cannot be observed. The value method of
calculation cannot be used to explain actual prices (or as Desai puts
it, page 65, "Marx's theory is a tool for the critical study of
capitalism, not an operational tool for socialist planning"). Desai and
Morishima take the escape that in the aggregate total value in a capitalist economy is equal to total prices, and total surplus value is equal to total profits—but not for each and every commodity.
As Luis A. Rojo (1984) put it, what Marx wanted to show with the
identity of total surplus value and total profits is that "a capitalist
economy is like a great corporation set up to exploit wage labour, where
each capitalist receives the part of profits corresponding to his share
of total capital invested". Where is competition among capitalists,
then? All this is a purely theological excogitation about the original
sin of capitalism, of no practical or philosophical interest.
See Deirdre McCloskey's Bourgeois Virtues, for example, for a very un-Marxian view of capitalism.
Historical necessity of this sort is again seducing today's critics of capitalism. Thus Piketty, in his revealingly titled Capital in the 21st Century
(2015), posits a tendency of the return to capital growing more quickly
than the return to labour, until inequality becomes so extreme that the
capitalist order will implode, unless private property is taxed out of
existence—the same kind of idea as that of Marx.
Anybody wanting
to examine Marx' and Engels's view of capitalism, its past and its
future should not fail to see the two volumes titled The Cambridge History of Capitalism, edited by Larry Neal and Jeffrey G. Williamson (2014, Cambridge University Press.)
In chapter I.x of the An Inquiry into the Nature and Causes of the Wealth of Nations
Smith studied the causes of differences in wages among employments he
analysed the cases of the disagreeableness of the work, the investment
needed to learn it, the trust in those who perform it, the likelihood of
unemployment, and the probability of success—what we would call
differences in human capital.
In his
monumental study of inequality in the return to capital and labour
(2014) Piketty only mentioned human capital once in a single footnote,
thus forgetting its importance among the assets of the working class.
The classic
reference is Edwin Seligman (1901-2): "The existence of man depends upon
his ability to sustain himself; the economic life is therefore the
fundamental condition of all life. [...] What the conditions of
maintenance are to the individual, the similar relations of production
and consumption are to the community. To economic causes, therefore,
must be traced in the last instance those transformations in the
structure of society which themselves condition he relations of social
classes and the various manifestations of social life."
*Pedro
Schwartz is "Rafael del Pino" Research Professor of economics at
Universidad Camilo José in Madrid. A member of the Royal Academy of
Moral and Political Sciences in Madrid, he is a frequent contributor to
the European media on the current financial and social scene. He
currently serves as President of the Mont Pelerin Society.
For more articles by Pedro Schwartz, see the
Archive.
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