William J. Blake: An American Looks at Karl Marx
Minor Critics of Marxism (British)
Bernard Shaw. “The Intelligent Woman’s Guide to Socialism, etc.”
In 1888 in the Fabian essays, Bernard Shaw annihilated in a few pages both Karl Marx and Henry George and substituted for their unauthentic wisdom a few handpicked bouquets from the quasi-rent garden of Alfred Marshall. He declared Marx antiquated because he depended on the iron law of wages and a “pure” labor theory of value. Having proved completely that he never read a line of Karl Marx, or if he did that he suffered from an infirmity of the senses, Shaw forty years later wrote a canonical system of socialism, based, if one pleases, on a “better distribution of income.” He repudiates surplus-value and decides that the increment of the rich arises from misdirected rents of ability, etc. This is interesting as a proof that gall can be substituted for science.
Emile Burns
Burns proposes some interesting variants on Marxist theory, in scattered contributions in the Labor Monthly. He points out that high wages are not the cause of crisis. The tendency of wages to rise does reduce the production-consumption contradiction somewhat: it lowers profits, true, but it postpones the crisis for a short time. In the monopoly stage of capitalism we must describe the crises of capitalism anew, since the refusal of monopolies to cut their prices prevents the old-fashioned restoration of the rate of profit and results in its being restored partly by the accessory acts of pliant governments, and a much more brutal, though disguised, expropriation of the middle classes.
German, French, Italian, Belgian, and Russian Minor Criticism
Othmar Spann. “Hauptheorien d. Volkswirtschaftslehre, etc.”
Spann is the founder of the “organic” school which gave fascism à la Hitler a philosophical basis, though Spann has since parted company with the Nazi sympathizers, as has their only other serious intellectual, Fried.
He attacks Marx on a pure führer theory, that the achieverments of the laboring masses are rendered possible only by a leader, and that the “universalist” study of economics considers the masses as the material for ability; a sort of historic piano for virtuosi. After this Carlylean theory of heroes, which entitles the leaders to immense compensations, he attacks the theory of surplus-value.
In the first place, relative surplus-value ignores the fact that large industry is not always more efficient than smaller units, that size is often a matter of adaptation. But above all, when capitalism achieves centralization it increases the ratio of constant to variable, and thus dries up the very sources of surplus-value by merging! The less living labor, the less is added to value, and so the less surplus is produced. As the fifth section of Capital is concerned in detail with this very contradiction, Spann might have cited it.
He also denies the Marxian theory of costs. According to his classification they consist of wages, interest, compensation for risk, the service of leadership, salaries of government officials, costs of administration, taxes, education, and provision for new capital.1 Payment for management is sharply distinguished from payment for leadership, which is creative.
Few economists would consider this additive procedure worth criticizing, and so Spann’s acrid comments are not confined to Marx. Obviously he counts many factors twice, ignores the basic production relation out of which all accessory payments are made, etc. He has had his fill of bourgeois criticism, which prefers even surplus-value to his catalogue!
Georges Sorel
In his purely economic criticism of Marx, the Syndicalist philosopher maintains there is no such thing as a theory of value in Marx. What Marx has described is a theory of equilibrium true only for a revolutionary society. (It seems like a contradiction in terms; perpetual revolution is scarcely a society.) Marx’s system requires all industries to be equally easy or difficult, all workers of one type.
Sorel is obviously thinking of Marx’s own definition of his method in Volume I, but his version is quite fantastic. He ends by maintaining that we must give up the idea of converting Marxism into an economic science.
Charles Gide
The most gifted French economist of his time is cursory on Marxism, though he lavishes chapters on Utopian socialists. Marx, he holds, is Ricardo! Labor-value, conflict of profits and wages, theory of rent, notion that value does not concern rarities, etc., what are these but Ricardo? But Marx rejects Ricardo’s social implications as he rejects a Utopian issue. His theory, specially, turns on concentration. But it is pointless. There are men richer than the richest who have ever lived, but there are also more people who are fairly rich than ever before. Joint stock distribution may weaken the middle classes, but it allies them to comfort and to order.
True, the condition of the workers is capable of much improvement and Marx has deserved well of us by calling attention to this too often neglected condition of the majority. But the workers should rely on co-operation and social amelioration, by insurance, etc. It is less dramatic but more sure.
As is to be expected from a Parisian, in a city full of exquisite artisan-work, Gide declares that the perfection of designs and the beauty and precision of scientific instruments, etc., answer the theory that goods are made for sale, not for use.
Benedetto Croce
The veteran Italian philosopher, and his disciple, the one-time socialist (now Fascist) Giovanni Gentile, in his Filosofia di Marx, maintain that Marxian thought, through and through, is abstract: his modes of probing into his categories and their action are abstract. But Marx intends that these categories shall come into the market place, live, and fight.
Good, then he divests them of certain qualities and makes them take on others. Labor-value, for example, could be true only for an ideal society without classes. An accomplished Marxian must transmute its qualities to adapt it to a society in which it pervades life but does not describe it.
V. Pareto. “Les Systèmes Socialistes”
Pareto expounds his law that the proportion of the concentration of capital or “doses” of capital and labor will be allowable until their favorable utility is in equilibrium; this puts a brake on the indefinite expansion of industry, for if land or capital or management or labor or markets run short (any one of these) the unbalancing reduces the efficiency of the others and causes a readjustment.
It is interesting to compare this abstract morphological study, with its hash of categories and markets, with the concrete picture, based on shifting class relations, of a monopoly disequilibrium in Lenin’s Imperialism. Pareto’s theory has found few disciples, but in France and Italy he has captured several of the mathematically inclined.
Marxism to him, of course, overemphasizes the labor factor by making it the only factor in production. If labor alone adds new value, then Pareto’s equilibrium is not needed, for the question is one of appropriation and not of balance.
Jules Romains
One includes this novelist, not because of his economic merits2 but for the point of view of which he is a banal spokesman. Why, he asks, should any of Marx’s economic propositions be considered true, when the chemistry, physics, biology, etc., of his time is superseded? Economic society changes more than any other; why should his ideas not be relegated to a museum?
This is the unconscious burden of most clever “intellectuals.” Actually, serious economic scholars are still impressed by Smith and Ricardo, chemists by Julius Fischer, bacteriologists by Pasteur, and biologists by Darwin. Also, George M. Cohan is not a greater playwright than Shakespeare, nor Edgar Guest a better poet than Virgil. The question is not how old it is but how true it is.
That Marx will be largely supplemented and refined and adapted is true but that his analysis of capitalism, worked out by himself and Engels from 1843 to Engels’s death in 1895, in the heart of capitalist Europe and after the greatest mastery of the literature ever known, and whose forecasting power is generally admitted, can be dismissed on any other ground than that it might be false, is another matter.
Henryk Grossman
The continuous stream of articles by Grossman is significant. He points out that we must hold that the means of subsistence are not very elastic for long periods, as otherwise Marxian constructions would become formless. Actually Marx has an excess of form in Volume I, for that isolates a closed capitalist economy with no foreign trade, no credit, value of money constant, two classes only (capitalist and proletariat), all goods conceived of as aliquot parts of total value. In Volume II he gives the whole circulation system, but still limited by assumptions; in Volume III there are no assumptions and exclusions but the economic history of living capitalism.
Critics talk of discrepancy when they should speak of expansion of static concepts into their dynamic action. The last two volumes were in his original plan, when he abandoned the merely descriptive scheme in 1863. He had to study a chemically pure capitalism so as to isolate surplus-value and discover how it held rent, etc., in solution. His theory of credit was what he did not live long enough to illustrate fully.
A. Bogdanov (1873-1928)
This philosophic target of Lenin worked under the Soviets and was esteemed as a man, though suspected as a thinker. He denies absolutely that the economic order is historically conditioned or that it develops in accordance with economic laws. The fetichism of capitalist commodity production is true, but it is due to a lack of understanding, a subjective failure to recognize social relations turning about production and the consequent form of distribution.
Value is crystallized labor-time, and therefore, since social labor-time must continue forever, is independent of any social order. It is not an evanescent appearance that will go with capitalism. (This is really the theory of von Wieser that marginal utility value can be perfectly realized in Communism—Natural Value, London, 1889.)
Charles Turgeon
The head of the faculty at Rennes in Britanny is a tenacious Breton. He holds that the entire concept of economic determinism in Marx lacks precision. Sometimes Marx says that the techniques of production and exchange are decisive, and at other times he says general economic conditions are, to which he adds the superstructure when he likes, and abandons it when it serves his purpose to, etc. It is a device, whose size and shape varies to suit Marx’s convenience. Turgeon has been a doughty foe of Marx for thirty years and has a disciple in Henri Sée. His principal opponent in France is René Maublanc.
Spectator
Social Science Abstracts notes that a leading Russian economist, under that pseudonym, has at last integrated the present system of world economics, including the interrelation of non-capitalist and capitalist areas and aspects, into a whole, as required by Marxian theory. Those who read Russian might do well to consult this effort.
Henri de Man. “Psychology of Socialism”
For a finance minister, the purely economic criticism of this self-advertised great reviser of Marx is surprisingly small. He argues that surplus-value does not exist, but merely dogmatizes. He affirms that the reason the workers go to the factories is their enjoyment of labor, not the forced sale of labor-power; he proved this by a questionnaire in happy Belgium. We have little time here for this type of critic, as he belongs to the more readily discussed “philosophy” of Marxism.
M. Anhalt, in “Ekonomistya” (1929)
This disciple of Rosa Luxemburg holds that Volumes II and III of Capital enumerate the problems that political economy has to solve, and lead to the solutions but do not give the solution itself. Marx forgets that in an isolated capitalist economy there can be no equation for reproduction, for production equals both productive consumption and unproductive consumption, and there can never be a balance. Marx thus overlooks both overproduction and deficit because of his self-sufficiency.
On the other hand, Grossman (see Bibliography) thinks Volumes II and III not torsos but completed studies with full solutions, and refutes conscientiously the theory that a deficit in consumption cannot be remedied within a closed capitalist system. (See the section on Rosa Luxemburg.)
Varga
The official exponent of the current Marxian theories (in the relation of Marxian method to topical situations) is E. Varga, formerly a classical economist. While he says little that is not in the present tradition, he is so faithful and clear an interpreter that he typifies a certain approach. At the same time, in repeated congresses concerned with economic questions, his point of view has been attacked as far too adroit and as glossing over dialectical difficulties. With these provisions, his theories remain dominant, especially on the statistical side in which, if he lacks the profundity of the German Marxists, he has an unrivaled gift for presentation.
Rate of Growth of Constant Capital
He carries further Thompson’s illuminating idea that the accumulated wealth of society is trifling as a factor in economic calculation. In the United States the amount of constant capital is figured as merely three years’ production. Living labor adds an increment of 25 to 30 per cent per annum. But net accumulation of capital is merely from 3 to 4 per cent per annum, whereas in England, even during booms, it is merely a little over per cent. He contrasts this with the rate of capital accumulation in Russia, which he considers a decisive argument for socialism.
Lenin, he holds, rejects imperialism as a pure system. It is a definite stage in capitalism, not above capitalism. It is a superstructure, ever more important, but never more than that, for the foundations of competition, etc., remain, worse than ever.
The characteristic of decay is not the statistical computation of mass of production, but of the nature of its distribution and its inherent tendencies. Nevertheless mass of production is to be considered in this way: from 1890 to 1913 capitalist production rose 5.8 per cent per annum, and since 1913, 1.5 per cent per annum. But as world population rose 15 per cent since 1913, despite the war and epidemics, the actual increase is the smallest in the history of capitalism.
Differential developments are becoming more strained than ever. Since 1913 the United States production is up 52 per cent, England 7 per cent, Germany 9 per cent, France down 2 per cent, Japan has increased fourfold. Cotton and steel are declining, rayon and oil and cinemas rising, etc.; but Varga does not explain theoretically wherein this differs, in relation to the whole position of capitalism, from similar disturbances between, say, 1780 and 1820 (it was then an evidence of growth). This brushing away of inward analyses for formal statements is one of his weaknesses. His facts are significant, but they appear as in a catalogue.
His most important Marxian point is that the excess of fixed capital is consistent and never wholly eliminated; even in 1929 in the United States it was over 20 per cent, and, over a decade, well over 40 per cent, including prosperity and crisis periods. Intensity of work, productivity per man increasing by half, and chronic excess of fixed capital, join in producing permanent mass unemployment. This mass unemployment would be catastrophic were it not for the fact that the plunder of the more primitive countries, and the consistent maintenance of dividends and interest at home, despite slackened earnings, enable large parasitic expenditure, and mean a considerable non-industrial employment. Even in England, the revival in industrial employment3 is largely in the “light industries,” that is, largely in consumers’ goods.
He argues somewhat like Corey, that expropriation from the soil, conquest of colonies, building of public works such as the railroads, and exportation of capital, the four forms of relief for capitalism, are drying up.
On the last he is emphatically correct, but he does not correlate two factors, the reduction of export of capital and the implications for Lenin’s theory that this age is characterized by an export of capital as the former was by export of commodities.
Nor does he correlate the reduction of middle-class parasitic income, due to devaluation, default, conversion, with Lenin’s theory that this parasitic income was becoming primary.
Obviously Lenin understood these as symptoms of a given monopoly situation, but those which, once they had served their purpose, must give rise to other expressions of monopoly capital interests, since it is their position in production that is decisive, and the others are merely reflections of that mode of production. Varga does not critically expound such adaptations of Leninist theory.
He makes the excellent point that owing to tremendous plant investment of monopolies they dread their supersession and so they concentrate on machine tools, speed up, etc., but decline to make giant new investments. The refusal to accumulate means that the ratio of constant capital or, at any rate, of fixed capital, is not increasing. The implications of this latest phase, in which capitalism attempts to extract surplus-value more out of variable capital, transferring less value and creating more new value, and yet attempts to reduce variable capital itself, by reducing employment and wages, points to profound changes, and would be a masterly thesis in “degeneration,” not as a literary concept, but an exact economic expression. Varga explores an important extension of theory.
The agricultural crisis for him is unique. In the latter part of the nineteenth century it began with the competition of the new countries. Now capital itself, that once took off the burden of agricultural losses, is declining. Hence inventories of agricultural goods are permanently above prewar, even in the best years.
The wave of devaluations of currency, the first in capitalist history (common enough in the Renaissance), is a new weapon, and helps retain the privileged position of monopolies. Their prices are comparatively firm, and the relation of these prices to poorer competitors, means that we do not have the normal write-down of constant capital, so that the recovery is shifted to a write-up basis in fictitious currency. A competitive society could not do with this device, but a quasi-monopolistic one requires it.
The decline of world trade which, in gold value, is only a third of 1929 (though nearly as great in mass), brings about autarchy and currency restrictions, and quotas. The volume of trade is now only 6 per cent above prewar, the first time under capitalism that external trade has stagnated. The manufacture of consumption goods in colonial countries is a cause; so are restrictions of immigration.
To him the present unique characteristics are: (a) interior monopoly dictation of policies and centralization, as in Fascism; (b) reduction of debts, the rich being the debtors in the shape of bonds, etc.; (c) subsidies to bankrupt monopolies so that they play a sure thing—profits when they get them, subsidies when they do not; (d) social legislation (France and the United States; increased workers’ resistance, typified in the C. I. O., which alone makes social legislation real); and (e) war preparations. These he divides into two sections, those in countries with abundant capital (such as Britain and the United States, where these schemes actually increase consumption) and secondly, Germany, where they can be effected only by reducing consumption.
He considers, of course, like all Marxians, that the chronic mass unemployment and speed-up (which requires more subsistence to maintain the expenditure of energy) show a progressive worsening of labor conditions.
His last demonstration of monopoly is farming; in 1910 less than 19 per cent in area of American farms were over 1,000 acres, in 1936, over 30 per cent. At last the tempo of capitalism in agriculture is beginning to rival that of industry; capital is breaking through the customary barriers of land tenure.
Common and Miscellaneous Objections to Marxism
The following theories have no name specially identified with them, but it is a rare economics seminar that will not produce them.
I. The Rich Either Consume or Reinvest, and in either case there is no loss to labor. For if they reinvest they employ labor, and if they consume they employ labor, and unless they merely hoard (which is rare), their profits are really another mode of serving labor. There are so many labor-hours, whether they are consumed as machines or as champagne.
Marxist Commentary: There is no reason to answer this theoretically. If the rich “cost” nothing, then nobody costs anything. Then why don’t they pay their workers a thousand dollars a week? The workers would either consume it, and so let the capitalists sell at a profit, or they would save it, and so add to invested capital in production. Since no class, by this argument, can abstract anything, why hold on to class relations? You cannot take from a man what he does not have, and so, if the rich neither consume nor fail to invest, what would they lose if it were confiscated? The transfinite becomes the infinite. As to the theory that all incomes add up to so much, the slave and the master, when added up, yield a total of possessions.
II. A Man Invents Something—Why Shouldn’t He Make Something? Perhaps he ought to; usually he doesn’t, and “inventors” are no longer ingenious watchmakers and crazed mechanics in garrets and barns, but usually salaried scientists working for monopolies. At any rate the incentives to invention are complex: the sources are social largely, and the complexity of the matter is such that it is really dubious to what extent persons whose names are given as the inventors are anything other than ingenious mechanics with a flair for assimilation of others’ techniques, etc.
If the incentives to invention are not primarily pecuniary, then the social utility of the discussion is small. The Harvard studies in their motivation bear out the idea that the pecuniary motive is slight, even under capitalism. An inventor is like a spider or a poet: he has to go on that way or be miserable. His reward is creation, and keeping it up.
III. Capitalism Was Brought About by Money-makers, Socialism by Agitators. There are two objections rolled into one. The first assumes that capitalism arose naturally by those who practiced it, and the second that socialism is purely a destructive and critical attitude and, as Sombart says, attracts men who do not think in terms of construction. Marx made no money. (But Engels did, which is something the Sombarts forget.)
No, capitalism came about by a conjunction of money-men, with soldiers and statesmen, jurists and thinkers, as their allies. The proletarian, like the merchant in the Middle Ages, is fashioning a new society within the old, that of social labor, and capitalism is developing the social forms to be taken over. The middle class, constructive and honest, is becoming a trained salariat, and technique and labor are beginning an alliance. It may prove uneasy at first under socialism, but will make way for a later fusion of labor and technical education.
True, the socialist is primarily not of the stuff of men who are perfectly adapted to a system as it stands, but neither were Luther, Columbus, Cellini, da Vinci, and Descartes.
A system begins with men with critical but synthetic minds, combining destructive tendencies with an inner apprehension of development. It bumps badly until it acquires a technique, true. But that is life, and always will be until we are frozen into another ice-age.
The second objection is that the love of money is inherent in man’s psyche, or capitalism would never have developed. Once the poison is in his heart, he will return to the fleshpots of Egypt and socialism will be destroyed by the nature of the beast. Of course there is truth to this. But man also had the capacity for witch-burning, the Inquisition, sacrifices of young girls to Babylonian fire-gods, or what you will. Whatever man had done, he is capable of doing. But the argument has no more validity than that of identification. We can do nothing with the concept.
IV. If Communism Occurred, There Would Soon be Another Division of Property by Those That Held Power, as in This Way Primitive Communism and Democracy were Dissolved. Power is the Authority of Classes. The Strong Seize the Means of Production and Subjugate the Others.
This is a variant on the “if you divided everything” objection to egalitarian socialism à la Edward Bellamy in Looking Backward. The Marxians, however, do not posit equality, but inequality; the only meaning of equality for them is the abolition of classes. What the analysis forgets is that every society, including our own, is based on an economics of scarcity. For example, capitalism limits production because of the need that production pay a profit. Where there are limits of production, corruption, as with the Jacobins, eats up the revolutions.
Where there is a classless society based on abundance and on a new technique of education adapted to it, we have yet to see whether older psychic patterns would have social meaning. At the best it seems excluded, and at the worst there is no analogy to guide us from the deficit economics of the past. The bourgeois psychic survivals in Russia are still met with, but among those under thirty they are already feeble.
V. If Labor-time Determines the Value of Goods, and the Value of Labor-power is Itself Determined by the Means of Subsistence, and the Value of These Is Their Labor-time, How Do You Escape from Regression, or Circular Reasoning, and How Does Marx Escape the Contradictions of Adam Smith, that Labor Was Determined by Cost of Living, and That by Labor?
If the Consumption of Labor-power is Unique Because it Can Produce Surplus-value, Why Can’t Other Natural Forces Produce a Surplus?
Marxist Commentary: Labor-time determines value; the price of labor-power is determined by value; where is the contradiction? The cost of labor-power is only a part of its time, and not all of it; Marx’s theory explains their differences, due to surplus-value; whereas Smith chased his tail. If Marx said that the means of subsistence were labor-time and this determined total labor-time (not merely that section that was the price of labor-power), he would be in as bad a way as Smith. He saved the labor theory by his surplus-value theory.
Other forces command a price that is determined by the labor-time put into their utilization, as with public utility rates based on physical investment. They never comprehend a surplus-value, since that was already included in the price of the equipment for utilization.
VI. Why Can’t Bureaucrats and Soldiers Take Surplus-value Like Capitalists?
How? Only by getting labor to work a certain number of hours for them gratis. For reinvestment? That is excluded. For consumption, then? That is possible. But where do they reproduce the class relations in production, as a constant process, if there is no ownership of means of production? Some spoliation of consumption goods is not absolutely excluded, but class exploitation, as a relationship in production, is ended. Capitalism, and not socialism, would have to be instituted to replace it. Surplus-value, in a developed technique (not among boyars), is a production relation, due to the sale of labor-power for capitalist value.
VII. What is a Worker Anyway but Someone that Changes the Shape of Things or Their Place?
But both his hand and his eye are replaceable. The automatic power station shows that he can be eliminated largely from production. Granted that he must always be present in some numbers. But might his contribution not become inconsequential as science learns to replace the crude human forces with their fallibility and approximation with perfection, synchronization, accuracy, predictability? Suppose that cellulose is converted into starch directly, where are most farmers? Or water-crops, electrically stimulated, to replace land crops? Could not labor be nearly wholly replaced?
This vision of the future (not the present) has some logical defects to mar its beauties. Unfortunately capitalists could make no use of this paradise. Already its techniques result in mass unemployment and the attempt to bridge the gap in demand is leading them into adventures that may be costly enough to annul all the benefits of technique. Technique occurs in no technical vacuum greater than that of the brain-pan of Utopians.
Unfortunately, too, this dream has little significance for this historic, or any proximate historic, period, with which Marx is concerned. The mechanical development of mankind is stupendous compared to the past. How many workers has it eliminated? There are about a billion, four hundred million human beings working (including housewives). Of these, no more than 3 per cent on a world basis, have ever been unemployed at any given time. In the mechanical industries of some countries unemployment was 50 per cent, but 97 per cent of mankind still plugged at daily tasks.
Ever since the Stone Age man has been rendered comparatively superfluous by the invention of devices. Everything invented has replaced some movement of his body. And the result? A proletariat of hundreds of millions, the mass labor of which Marx speaks.
Actually this question is based on what Engels calls the prejudice of human division. It assumes that the “educated engineers,” a priesthood, apart from “manual labor,” ought to dominate. Perhaps it would be better to build on the certainty of continued mass labor, and impose the Hellenic ideal of man, a whole, a fusion of manual and intellectual training, rounded, not divided by class education. Plato is still a greater guide than the Scientific American for the humanity that is, after all, the object of all production.
1. He forgot dog licenses.
2. Though his play Donogoo is the most pointed satire on capital promotion ever written.
3. Not that dividends and interest are not reduced, but not to compare with profit reductions.