William J. Blake: An American Looks at Karl Marx
The Scope of Political Economy
Political economy is the systematic study of the social modes of the production of wealth, and of the distribution of those products to participants in, or claimants to, that production. There are numerous schools of economic theory. They are not agreed as to its scope or its method. They are in dispute as to the laws of value, price, wages, rent, interest, and profits. There are few branches of knowledge in which there is greater divergence both as to fundamentals and details.
Marxian Political Economy
Among the many contenders for the honor of alone embodying the true science of political economy, a conspicuous place is held by the system of Karl Marx (1818-1883). His system of political economy is notable in that it is not merely a branch of learning but has become the guide to large political parties with some representation in every civilized country, even where repressed. In one country it is the foundation of the entire political and social structure. In this textbook it will be studied entirely from the viewpoint of economic theory, objectively, and its validity tested by the usual methods of evidence and logic.
Rival Economic Systems
Prior to Karl Marx, the dominant school of political economy was the classical British, represented by Adam Smith (Wealth of Nations, 1776) and David Ricardo (Principles of Political Economy, 1817). Marx is the continuer of their tradition, and his system is generally considered to be the epilogue of the British classical school. It gave rise to three branches: the eclectic, of which the chief representative was the humane John Stuart Mill (Principles of Political Economy, 1847); the theory of equilibria and quasi-rents of Alfred Marshall (Principles of Economics, 1890); and above all the elaborate study of Karl Marx (Capital, 1867, 1885, 1894).1
Only one other system of political economy rivaled the British; that was the Physiocratic in France (about 1760). It sought to establish the economic system as an entirety; the total production, distribution, and reproduction of wealth in any given country as a constantly renewing whole. It was as brilliant in synthesis as the British school in analysis. Marx drew copiously on the British school for the first volume of Capital, on the Physiocratic method for the second volume (on the circulation of capital), and applied both methods to a description of capitalism in action in the third volume.
About 1870, the school of subjective value, originally formulated by Say, a superficial French economist, and thought to have been discredited by Marx, was revived in a more penetrating and brilliant style by Jevons in England and Carl Menger in Austria. It has become the dominant school of economics and an examination of several dozen current college textbooks in economics fails to show one in which its principal theories are not taken as proved. Some of its phrases such as “marginal utility” have entered popular speech.
This school is the principal opponent of Marxism, and is thought generally to have superseded and antiquated it. Since Marx employs the older terminology of the British classical economists, and the new school (usually titled “Austrian”) employs a rich nomenclature of its own coining, the latter carries the further weight of a new speech, often held to mean new truth. In the twentieth century the diversity of schools has greatly increased; all of these will appear in the critical section of this book, in so far as they formulate their criticisms of Marxism.
Marx and His Three Sources
It is generally agreed that the whole body of Marxian thought, of which his economic theory is only a section, can be traced to three sources: British classic economic theory; German idealist philosophy, especially that of the system of Hegel (1770-1831); and French socialism, especially that of Fourier (1772-1837) and Saint-Simon (1760-1825). The three sources theory has been crystallized in a celebrated essay of Lenin. It is undoubtedly the most fertile way of describing Marxian origins, but it needs amplification. It does show, though, that Marx was the epitome of European culture, and that his system was not eccentric, but a transfiguration of older theories, a reunion of diverging streams by a great engineer.
Karl Marx
Marx was born in Trier (or Treves), in the Rhenish Province of Prussia, on the frontier of French speech. This border training may have had some influence on his later internationalism. He came of a well-to-do middle-class family, of intellectual traditions. The family became converted to the Protestant faith because of the disabilities attached to the Jewish community. As the tradition of the family was that of Voltaire and Diderot and the French skeptics of the eighteenth century, the older and the newer allegiance were alike nominal.
Marx was classically educated in the then German tradition and steeped in Greek and Roman letters. He studied jurisprudence at Berlin University, which was then under the influence of Savigny, the exponent of the idea that the laws of mankind are rooted in deep historic habits and that no code can be imposed by reason. From the teachings of Savigny, Marx absorbed a dislike of theories spun out of the mind, rather than out of historical experience.
His Writings
Marx applied for his doctorate in philosophy to Jena University. His thesis was concerned not with law, in which he had majored, but with the natural philosophies of Epicurus and Democritus, the two most humane Greek thinkers, as they appeared in the religious criticism of Plutarch. It is interesting that his first completed work deals with systems of natural philosophy, and not with the law. The interpretation of legal systems by a comprehensive philosophy was to be one of his achievements.
Early Influences
Marx came under the influence of a school of brilliant and original young men called the “Left Hegelians.” Their most important writer was Feuerbach, who for some time held empire over Marx’s mind. These thinkers, although followers of the most systematic of philosophers, Hegel (1770-1831), assumed that his theories could serve liberalism, whereas he had declared that the Prussian monarchy was the image of perfection. Marx both profited by this school and later revised its teachings. So, from the German juridical school, Marx learned to use history as a weapon; from the philosophical school, he was to understand that mere historical knowledge will never be enough to explain the inner connection of events.
Political Economy
As yet Marx was not versed in political economy. He at first turned to journalism, and was, in the words of Sombart, the first distinguished German journalist. His brilliant editorials, which led to his leaving Germany because of their radicalism, were not well grounded in economics. At Paris, where he emigrated, Marx took up the study of political economy.
Frederick Engels
In Paris Marx collaborated with a young friend, whose talents were scarcely inferior to Marx’s, though he lacked the capacity of Marx for great original syntheses. Frederick Engels (1820-1895), born in Westphalia, was engaged in business in England. Their friendship was everlasting, their co-operation continuous, and they remain unique in the history of learning for their forty years of continuous interchange of ideas and criticism. After Marx’s death, Engels edited his manuscripts and integrated his ideas into a system, that is, as connected with branches of knowledge not directly concerned with political science or political economy.
The State of Paris in 1844
At Paris centered world socialism. Socialism then did not mean what it now does; the later meaning is largely due to Marx himself. It insisted that co-operation replace competition, and that men think communally. But it did not ask for the complete abolition of income not derived from labor. It hoped that a better state of society could be brought about by reason and by the natural philanthropy of the well-to-do. But in the field of political economy it was not sentimental. There its superb criticism of present-day society had an acuity and justice that led to its adoption by Marx.
Criticism Not Enough
But Marx’s juridical and philosophical training enabled him to see that the criticism of society as defective in the abstract, was not a sufficient explanation of economic reality. He mastered the classical economists and found them even more stimulating than the French Socialists. So by 1844 he had already sensed a new economic system, which was pretty explicit by 1846. He was driven to Brussels by the French police, who, under Guizot, the then Prime Minister, desired a state run only by bankers and powerful merchants and manufacturers. The irony of the business was that Guizot was the first formulator of the theory that all history is nothing but an expression of class struggles. He proved it.
The Synthesis
Marx was also impressed by the new, gigantic trades-union movement in England. It was the first general expression of the action of a working class. Although he was associated in the older secret conspiratorial groupings of revolutionists in Europe, he saw that the English movement of the masses of workers was the more significant. He turned from conspiracy to the study of history as made by the masses. From that point on he lost interest in Utopias.2
A particularly pretentious book by the French economist Proudhon, The Philosophy of Poverty, irritated him for its borrowed plumes of philosophy and its naive economics. His first important book, The Poverty of Philosophy, written in French, attacked Proudhon. It did more than that, it created a new political economy (1847).
The synthesis was nearly complete. German idealist philosophy was reversed by Marx. Instead of history being the realization of the idea, the ideas of men were molded by their modes of producing wealth—that is, by the level of technique—within a certain system of class relations. In other words, the institutions and ideas of the human race are a superstructure; their economic relationships and activities are the foundation. But these relationships are not individual but social. Men are related to production as groups, that is, as capitalists or landlords or workers or independent merchants, say. Hence history is understood as reflecting the relations of classes in the production of wealth, and their struggles within that relation for power to determine its distribution.
The Communist Manifesto
By 1847 the activities of revolutionary workers were sufficiently advanced to demand a complete formulation, as to both theory and action. Until this period neither Marx nor Engels had wholly united these two. Engels’s principal book had been a scathing indictment and hideous picture of the life of the British workers, The Condition of the Working Class in England, published in 1844. Marx had written a long series of miscellanies, some brilliant books on philosophy such as the German Ideology, but nearly all these works were critical or polemical. No rounded statement of their aims had appeared. The Communist Manifesto, published in 1848, is the work of the two friends, and is to Socialism and Communism what the Bill of Rights is to Englishmen, the Declaration of Independence to Americans, and the Declaration of the Rights of Man to Frenchmen.
In the Communist Manifesto all the leading ideas of Marx and Engels appear, apart from the economic system that was to authenticate these ideas. But even of that economic. system, practically every idea is implicit in the Manifesto, or is understood by reference to the already numerous letters and editorials and scattered writings of Marx and Engels. That is not to say that the gigantic system now known as Marxism was complete in 1848. It was not really integrated until about 1855 and will never be finished.
The pamphlet Wage-Labor and Capital (even before the corrected version of Engels, issued decades later) already shows that the Marxian economic system was ready for formulation, except that the key idea of the difference between labor and labor-power was missing.
Marx and Exile
After a brief but colorful struggle in the German revolution of 1848-9, Marx made his home in England. There he pursued economic researches with an intensity that has never found a parallel. At that time he became the European correspondent of the New York Tribune, being on friendly terms with the following of Horace Greeley, who coquetted with Socialist notions. His theories were now formulated in a long series of writings, topical, critical, forensic, and both polemical and systematic. They range from flysheets written for conspirators to bulletins, newspaper articles, a masterly and encyclopedic treatise on political economy (Capital), the most recondite history of economic doctrines, and a host of other histories, treatises, etc. In the midst of these studies and writings he was an active leader, and when the International Workingmen’s Association (the “First International”) was formed, he automatically was chosen the leader of the world’s working class, though not himself a laborer.
Special Features of Marx’s Doctrine
Marx’s economic system is outlined in his Critique of Political Economy, issued in 1859: it was a mere corridor to his Theories of Surplus-Value. In 1867 it was formulated for an abstracted capitalist society, in which certain principles were assumed in order to make it easy to isolate the unique properties of that capitalist society, in contradistinction to any previous or future society. The ideas of the “industrial revolution” and of the “capitalist system” now catchwords, were originated by Marx. In this first volume of Capital, Marx studies, not individual acts of exchange, or the relations of prices between specific goods, but the laws of motion of capitalist society as a whole. For this he has two assumptions:
(a) That each society has its own laws of motion, and that while it incorporates features of older societies and reveals features of future societies, the first task of the historian is to comprehend those economic features that are its own contributions, and which are overwhelmingly dominant as forces at any given time.
(b) That no matter how much institutions evolve, at any given moment they can be apprehended abstractly, that is, their actions can be reduced to laws.
And there is a third assumption behind the two leading hypotheses:
(c) That political economists have studied the appearances of rent, wages, prices, values, profits, interest, etc., whereas the task of economic science, as of any science, is to reveal the hidden connections behind all these varying appearances, and that once these underlying laws have been ascertained, we can then account for the constant divergence of appearances from underlying realities.
From these two assumptions, and from the underlying approach, certain very significant consequences arise, all of which differentiate Marxian economic theory from any other. These are:
(1) All economic formulations are concerned with society as a whole. Every day millions of commodities are produced. Every day there is a corresponding series of millions of acts of exchange to distribute these commodities. This production is constantly renewed. The relations of classes to each other, such as worker to capitalist, are equally renewed in this constantly renewed production. Hence the reproduction of commodities, or acts of exchange, and of social relations in production, require first of all a social formulation of economic laws.
(2) Any economic formulations must refer to a specified society, where there are certain known modes of production, at a definite level of technique, as conditioned by given class relations.
(3) Nevertheless, in so far as this society has other features, these come under broader laws. For example, all societies that employ money have certain characteristics in common for money users. But the relation of that use of money to each special mode of production makes for different laws, as well.
(4) Production precedes distribution. It has been the relations of men in production, master and slave, lord and serf, guildman and apprentice, capitalist and worker, merchant and clerk, etc., that have been the basic economic institutions of any given time. All wealth is renewable constantly only in continuous production. That is the dynamic factor in society. Altered modes of production alter all other economic behavior. Steam engines precede giant production, and it is giant production that gives rise to appropriate modes of exchange.
(5) Although production relations are primary, nevertheless the modes of circulation of commodities have a minor influence. These sometimes have a significance of their own and react on production. But their influence is never basic; that is reserved to production.
(6) There are “eternal laws” of economics but they are pale and useless generalizations that have no meaning for science. The truism that everyone who has just eaten a heavy meal desires food less than those who have not yet eaten (a favorite of subjective economists), tells us nothing of varying production relations or of the real activities of hundreds of millions of human beings in constantly renewed production relations, nor does it reveal the difference between myriads of men working at mechanized tasks in factories as compared to a few field laborers working for a feudal lord.
(7) The value of the entire social production is the first object of exploration. Then follow the total economic position of wages, profits, rent, interest, etc. Once the total quantity of these categories are known, we can then proceed to approximations that come closer and closer to specific acts of exchange, specific prices, etc.
(8) Political economy is always dynamic, always on the move. Two events that we call by the same name are never quite the same thing. You can use the word crisis for the crisis of 1837 and that of 1929. These crises have certain features in common and that is why we use a common term. But their altered relations to the different production techniques and to the social relations depending thereon, mean that each has individual attributes and that the study of these altered attributes is as significant as that of their general resemblances.
(9) Political economy is not a “study,” it is a guide to action, or, as a disciple of Marx has stated, “A working tool.” It is never an immobile object on the dissecting table. The persons who study it are in it: they derive their living from that society and they belong to economic groups within it. While they are talking about it, while they study it, it is changing, and changing by human agency.
(10) More exactly, political economy is the science of a given class: and it is ascertained by that class, not abstractly, but because that class, by its action, creates the economic activities it seeks to apprehend. Thus political economy cannot be based on the perceptions of any scholar, or even of a group of thinkers, except in so far as they reflect the activities of the masses.
(11) There is, however, an objective science of political economy. But an objective science is one thing and the way we come to know it is another. The perception of economic phenomena depends upon a class that perceives data as it creates it, and it sees that data according to its needs. Thus capitalists in the seventeenth century saw that landlords were useless, because of what they were doing, and what landlords were not doing. But in the twentieth century, social production has made laborers see what they are doing and what their class is headed for, but the capitalists still see political economy according to their activities and interests. The issue here is no longer settled by theory but in the realm of facts and struggle: that is, the class whose actions and perceptions of these actions, embodied in theories, are nearest objective truth, test out their theories in struggle. This struggle realizes theory; thus we must unite abstract notions to action at a given point.
(12) But science is still dominant. For the laws of political economy are none the less valuable as abstractions because at a definite point theories alone are not decisive even as descriptions. We must strip economic appearances of all variations, so as to isolate their common features and pure modes of action. Once we have ascertained these categories, we see how they contain other categories, so to speak, in solution. Thus for Marxian theory, as we shall see later, the concept “surplus-value” holds rent and merchant-profit end interest in varying solutions.
(13) However, the laws we discover, although they apply only to a given society, do not wholly describe that society, for we abstracted them. For most economists, these laws are enough, but not for Marx. For him, these abstractions are a guide to exploration, once they have been ascertained. Thus the law of value, in Marx, is determined for the totality of production. From it springs another law, surplus-value. But in actual life the profits of capitalists do not appear in this abstracted form, but quite differently. Hence Marx moves from abstraction to a higher synthesis that relates abstract laws to varying special facts. Most, critics of Marx would have saved large volumes if they had studied his methods. Most of his contradictions, so-called, arise from his partial statements, at different levels of his enquiries.
(14) Thus there are only two possible methods in political economy. One is to count up economic phenomena and generalize from the induction. By this method we obtain merely the sum of their appearances. Marx rejects this method, urged on him by superficial thinkers, who wonder why he did not pursue this “common-sense” method.
The other possible method is to isolate the laws of political economy by taking up a single specimen, or a given set of specimens, in that economic organization, and by abstracting them from all divergent relations, and by controlling them by rigid sets of assumptions, to discover how they behave under such a mode of enquiry. If the conclusions are rich with significance, one pursues them and discovers congruence with ever wider groups of data. If the subsequent development of these categories leads to still more elaborate and controllable data, then the method is proved exact. We have used a single specimen, or set of specimens, we have enumerated them by a method that enables us to discover their relations, and we have found that by their use we describe ever-increasing circles of economic law.
(15) Thus although abstract laws do not describe the rich variety, of concrete economic facts, they provide us with the only method for making this variety understandable, and for providing a basis for a synthesis between abstract law and concrete facts. This can take place only under the appearance of a “contradiction.” But if we do not use this method, we shall explain nothing. (See Paragraph 17.)
(16) The reason Marx uses a single specimen, or limited set of specimens, is that no one can begin by counting a totality: he must check a totality by its constituents, and yet he must be sure that the constituents he counts are really those of a significant total. Marx takes the present capitalist system, a limited field of enquiry, and points out that it is an immense accumulation of commodities. True, land is bought and sold, but commodities, formerly scant, are now made by the hundreds of millions, and this is what distinguishes the system from any previous system, whereas no more land exists now than in a previous system: land is a constant, commodities the variable.
(17) Hence the unit he selects for control is a commodity. He then further assumes that it is exchanged for value. He asks what is its common quality with other commodities when it is exchanged for value. From that point on, he discovers hidden relations in that commodity, since he abstracts what it has in common with other commodities and what it has that differs from other commodities. Once he has similarity and distinction, his analysis broadens into further distinctions. But he does not assume therefore, that even a single real commodity behaves in this exact fashion. For he is acting on the assumption that this commodity is a perfectly equal part of the totality of commodities and tests it under these conditions. Once he has uncovered all the relations and contradictions revealed by the analysis of this model commodity, he relates his findings to the totality of phenomena in that specified commodity-society. In Capital, Volume I is basically an act of abstraction, Volume II a study of the motion of those abstractions, and Volume III an integration of the laws ascertained by means of those abstractions, with the apparently contradictory phenomena of the real world.
(18) The reason for this apparently tortuous method is that according to Marx (as we shall see later in his section on antagonisms and fetichism), the divisions of society require that every relation in it shall appear to be harmonious, even where the contrary is the fact.
(19) There is no science of economics, there is only political economy. Economics assumes that economic action can be understood apart from the political structure. But this is impossible. Buying and selling require property relations, embodied in a code of laws, and defended by the police and courts, etc. Certainly, certain modes of economic action can be isolated only as to theory, but so soon as they must be really understood, then it is clear that economic actions are within a social and political setting, and can only so be comprehended.
(20) The system that Karl Marx describes is the capitalist system and that only. By the capitalist system he means a society in which wealth is produced socially, by co-operation, and where the ownership of the means of production is in much smaller hands than that of the community as a whole. On the other hand, these owners of the means of production buy and sell the services of labor which, as a class, has no productive property. The immense accumulation of commodities so produced are bought and sold in a market, by the use of money or the representatives of money. All men are related to each other by way of their property or through payments. The system is based on profit: that is, profit is the incentive to produce. Specifically, Marx means the age of machinery, begun about 1780 and now spread over nearly all the world.
Consequences of the Unique Marxian Method
The student should master the foregoing enumeration of Marx’s method. It is not, strictly speaking, necessary to follow it in order to understand Marxian economic theory. But experience shows that those who understand Marx’s reasons for every single step he made, do not waste a great deal of time in following the later elaborations of his theory, and also are enabled to evaluate criticisms of Marx in a much more thoroughgoing fashion.
But at the same time, Marx’s doctrines have converted more plain folk than any other, and therefore can be quite easily understood even if they are merely taken for granted as they appear. The bias of this textbook is toward a philosophical outlook in describing Marxian economic theories and in appraising the numerous and powerful critiques that have been made of every one of his ideas. But anyone who reads Marx’s pocket-summary of his principal doctrines in Value, Price and Profit, addressed to workingmen, knows how easy and clear his leading ideas can be made.
Marx’s system has often been described as historical. That is not quite true. He does, say, concern himself only with capitalism, with large-scale production and universal markets. But there have been other historical schools, such as that of Roscher, Knies, Cliffe-Leslie, and these have denied the importance of theory. Marx assumes the union of history, as limiting the subject of economic enquiry, and of the theory, as guiding one within the limitations.
The Influence of Marx on Economic Speculations
The coincidence of a richly elaborated theory, encyclopedic knowledge, a passionate dogmatism, a universal culture, and a burning oratorical and journalistic style, made Karl Marx the father of Socialism. His political activities stamped his system exactly as the astoundingly successful stock exchange operations of David Ricardo had made him the first of economic realists. Neither the greatest theorist of classical economics nor the greatest expounder of Socialist economy was a cloistered thinker. Their theories were at white heat with practice. Marx’s Capital became the Bible of Socialism. Not since the Koran has a single book so stirred men’s minds and engaged their passions. At one blow, his greatest Socialist predecessors, the mystic Saint-Simon, the sharp, fantastic Fourier, the dour Thompson, the benevolent Robert Owen, were remembered mainly as his forerunners.
But on the political economy taught in the universities his influence was slight, and the opposition nearly unanimous. The Austrian school, so-called, swept nearly everything before it, and soon Marx was considered a pretentious Dry-as-Dust, wholly refuted, and not to be considered as in the great tradition of economics. On the continent of Europe, however, the prestige of Marx remained very high, except that he was thought to be theoretically wrong. The academic world there refused to brush aside the first man since the Renaissance to command international parties numbering millions. But the Anglo-Saxon world simply did not read him. It was asserted that his “cumbrous Germanic style” prevented his being understood.
What the Marxians Say
The Marxians declare that the real reason why his doctrines were rejected was that they were destructive of important property interests. According to them, once it had been found out that classical political economy could end only in his assumptions, it became necessary (even if unconsciously) to develop a subjective theory of value and price, that is, to strip political economy of any social meaning. Hence Marx’s method, which is based on classes, was put aside and a series of elaborately constructed scales of psychological preferences were studied instead.
Marx and the Subjective Approach in Economics
For Marx it is useless to speak of valuation unless one knows what pressures are behind the persons doing the valuing. That wages are determined by bargain and sale may be true, but what more fundamental situation determines the resistance of capitalist and laborer in holding out until a bargain is struck? Why speak of demand (since demand is effective demand) without knowing socially why whole classes can effectively demand only their subsistence and others superfluities? Abstract demand is unlimited. Concrete demand requires class treatment. As to supply, it is related to the type of consumption possibilities and these are determined by levels of wages.
For Marx, too, the subjective system of value is unhistorical. To relate human demands and psychology in a feudal society where sale was unknown, or in the Inca communalist theocracy to the New York Stock Exchange, will merely tell us that men prefer some things more than others, when they do prefer them. For him it is the suicide of economics.
The Insolence of Marxian Theory
The historical basis of Marxism, linked to philosophical method, renders it, in the Elizabethan sense, hot with insolence. It regards all opposing economic systems as determined by the present structure of society, and as much a function of the capitalists as the production of cloth for the market. It considers itself scientific, it considers them apologetic.
The economists explain carefully the surface phenomena of capitalism, so as to conceal the dread reality underneath.
To the Marxians, the present-day economists seem in the same state as the Ptolemaic astronomers before Copernicus, who studied carefully how the sun rose in the East, because it seemed to rise there.
Exactly opposing the historical school which asserted that economic events are all we know, the Marxians assert they are the reverse of what we should know. Lenin maintained that to speak of non-Marxian economics was a misuse of the term. If the Marxians are asked to explain the numerous differences of opinion among the “apologetic” economists, they answer that they represent either different segments of the capitalists or the national interest of capitalists having differing requirements. But even they do not assert that these theoreticians are consciously corrupt.
Marxians regard all political economy from the viewpoint of the working class (the proletariat). What the economists term objectivity they call residence in the stratosphere above the class conflicts.
There is no such objectivity (see Marxian assumption No. 11, above). The clairvoyance given to a rising class, merely because it is rising, is the witness of truth. Despite the claim of the Marxians that indignation against wrong is a sterile mode of thought, and that no matter what the crimes of capitalists, it would have been folly to oppose that progressive class when they were on the historic upgrade, the Marxians use indignation as a weapon in the service of their class, which they think is on the upgrade.
Convinced that capitalism, no matter how rent with contradictions and weak from continuous catastrophes, can never be overthrown except by the conscious activities of the vanguard of the working class, sustained by mass action, they necessarily hate their opponents. This theory of class consciousness cannot be divorced from Marxian economic theory. For Marx holds that no economic system exists in and of itself, and so no mere economic development will ever produce an automatic collapse of any system. Marxist economics is the only system that must be transformed out of economics into politics, to become significant. It is not merely a theory, it is a prophetic system, which analyzes the origin, workings, and destiny of the present system, in order better to supersede it. Political economy here is a fighting doctrine.
Hence the Marxians argue that whether the marginal-utility theory or the relative-value theory be true or false, no one stands to lose a dollar thereby. Therefore the schools tolerate each other, but are equally hostile to Marxism.
The non-Marxians answer that if this is true, then all that any theorist has to do is to cry down the rich, and no matter how wrong his theory, he can always maintain that those who expose his fallacies are lackeys of the wealthy classes. To which the Marxists retort that were academic opponents, as a class, to be converted to Socialism, how long would they be rewarded with good incomes? A few dissenters are always allowed, but not the whole class of political economists.
For Marx this makes all conformist systems of economics suspect. For that reason he is acrid, unpleasant, insulting, ungracious, and mordant, and in the case of chopping blocks like J. B. Say and Destutt de Tracy, almost sadistic. It is this fusion of the agitator and the scholar that distinguishes Marx from so penetrating a thinker as Ricardo, so cool, disciplined, original, and fair an economist as Cournot (who was very modest). For Marx modesty was treason to the working class: they had been humble long enough.
How Marx Determines a Class
When Marx uses the concept “class” as an economic category, he is extremely definite. It is often argued that classes are not basic, and that the idea of them is not exact. It is stated that consciousness of kind precedes classes, or that there are such numerous shadings and subdivisions of classes that the idea is not useful. Or, it is held that you can have as many kinds of classes as you wish, depending upon what criterion you use for the division of society. It is pointed out that it is not comprehensive (men are moved more by nationality or religion than by economic interests). Scholars, who hold to the primacy of ideas or of technology, regard Marx’s definition as deformed. But Marx answers all such critics with a method derived from Hegel.
He takes a specimen or set of specimens of total economic production. By this philosophical analysis of the commodity, he seeks to find out the social reason for any contradictions he discovers in that analysis. This social division, directly corresponding to the contradictions so revealed, is a class division in his sense. He then analyzes the surplus-value derived from such prior analyses, and whatever class divisions are revealed by these further contradictions are subsidiary class divisions. Hence his use of the term is rigorously logical and exact.
The Marxist Notion of Categories
Until the time of Marx it was held that categories (basic constant concepts) like rent, wages, profits, interest, were fixed, although the societies to which they applied might vary. This is still the principle of most economists. They regard value, demand, utility, etc., as basic ideas which are adapted to differing industrial societies. In the Ricardian theory of rent, for example, it was considered axiomatic that if one field is naturally more fertile than another, the natural difference of their several productions was expressed as rent. Hence there arose the theory of the three factors, still generally held. Wages are a factor; whether paid in money by an employer or earned by a man working for himself, they are the same equivalent for the labor factor in production. Rent and interest compensate the other factors, land and capital, whether these are owned in common or privately.
In the case of the Physiocrats, or the so-called Harmonist school of Bastiat, this natural system was considered as harmonious as the movement of the planets in Plato’s musical cosmogony. Only greed marred it. The perfectionist, Mercier de la Riviere, declares that since categories are eternal, once man is harmonized with them, economic justice will be perpetual.
For Marx, the categories themselves evolve, are fluid. Wages depend on the sale of labor-power, as a commodity, by the worker to the capitalist. Rent depends partly on the legal institution of private property in land, partly on the application of capital to land. Value itself will disappear in a socialist community. “Abolition of the wages system,” “Society can do without value,” were slogans of Marx and Engels. The price system has a wholly different economic significance from that of barter; it does not merely “replace” it.
For Marx the very counters we use are as much produced and as transient as the class relations they express, at a given level of technique, with a given mass of production, a definitely ascertained market. That these categories are constant for a long period does not mean they are eternal. Hence there is an irreducible difference between Marx and his critics. When they speak of “value,” they mean a single eternal concept that is an adjective of any given object anywhere. When he uses the word, he means the attribute of a type of goods, in a price society, characteristic of that society as against others.
This is extremely important, for the more differences between Marx and his critics are studied, the better it will be to eliminate shadow-boxing and get down to real blows. The most radical difference is just in this treatment of “factors,” which Marx rejects. For him the transformation of categories is as fascinating as the transformation of their corresponding production relations.
Two Sciences of Political Economy
If the very categories we are dealing with are themselves transient, then it is clear that we require a science over and above political economy to explain political economy itself. There are diverse societies; is there any science that is above their separate political economies? Marxist theory has formulated historical materialism. This more comprehensive science concerns itself with man’s total social evolution and that of his institutions. In it the form of society precedent to capitalism (and loosely termed feudalism) or the prophesied form (loosely termed socialism) are identified and comprehended.
Marxism is like celestial mechanics. We have a formulation for the solar system, a still wider one for the stellar systems, and a still more comprehensive one of their evolution and direction. Thus Marxism takes account of that large section of any order that comes from the past or foreshadows the future. Marxism gives a name to the dominant characteristic of our society and calls it capitalism.
But it does not close the issue. It understands the theoretically pure idea of capitalism, necessary to ascertain its laws, but knows where they must be placed in a still more inclusive science.
Hence Marxism, on its theory of changing categories, regards any attempt to assimilate modern production to general theories as “vulgar,” that is, as stressing merely formal resemblances. But it regards any theory which does not make these comparisons as “mechanical,” as failing to understand that man, after all, is the animal who is primary to all his social manifestations, and that he makes his history, institutions, and ideas, not out of the whole cloth, but out of the textiles at hand.
Marxism Not a Theory of Stages
Marxist theory is differentiated from such ideas as that of the celebrated French founder of sociology, Auguste Comte (1798-1857), who spoke of a law of three stages of society. Even now, according to Marx, we see before our eyes, small business giving way to large, as when the process of centralization of capital began. We see native tribes driven off their hereditary hunting grounds and driven into mining compounds in South Africa, very much as slavery was instituted in the Americas.
True, their significance is altered by the different state of economic development, but all sorts of processes co-exist. Russia, though crowded with antique institutions, repudiated a recently developed capitalism for a classless society, and did not first lop off these institutions, as France and America did wholly and England partially. The development of society is neither unilateral nor fixed. But that does not mean that one can speculate lazily on their differences. For the basic history of society, primitive communism, primitive agriculture, slavery, feudalism, manufacture, capitalism, are still the only important guides. But they must be studied as real economic forms, not as simply ideal specimens of a definition.
1. Volumes II and III were published posthumously.
2. The first expressions of working-class activity, politically, were in the American workingmen’s parties about 1830 and in British Chartism.