Abstract
Iwant to do the following in this chapter: First to present a series of theses that constitute the hard-core of the Marxist theory of history. I claim that all of them are essentially correct. Then I will show how these true theses are derived in Marxism from a false starting point. Finally, I want to demonstrate how Austrianism in the Mises-Rothbard tradition can give a correct but categorically different explanation of their validity.
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References
See on the following K. Marx/F. Engels, The Communist Manifesto (1848); K. Marx, Das Kapital, 3 vols. (1867; 1885; 1894); as contemporary Marxists, E. Mandel, Marxist Economic Theory (London: Merlin, 1962); idem, Late Capitalism (London: New Left Books, 1975); P. Baran/P. Sweezy, Monopoly Capital (New York: Monthly Review Press, 1966); from a non-Marxist perspective, L. Kolakowski, Main Currents of Marxism (Oxford: Clarendon Press, 1976–78); G. Wetter, Sovietideologie heute, vol. 1 (Frankfurt/M.: Fischer), 1962; W. Leonhard, Sovietideologie heute, vol. 2 ( Frankfurt/M.: Fischer, 1962 ).
The Communist Manifesto (section 2, last 2 paragraphs); F. Engels
Von der Autorität, in: K.Marx/F.Engels, Ausgewählte Schriften, 2 vols. (East Berlin: Dietz, 1953), vol. 1, p. 606; idem, Die Entwicklung des Sozialismus von der Utopie zur Wissenschaft, ibid. vol. 2, p. 139.
See K. Marx, Das Kapital, Vol. 1; the shortest presentation is his Lohn, Preis, Profit (1865). Actually, in order to prove the more specific Marxist thesis that exclusively the owner of labor services is exploited (but not the owner of the other originary factor of production: land), yet another argument would be needed. For if it were true that the discrepancy between factor and output prices constitutes an exploitative relation, this would only show that the capitalist who rents labor services from an owner of labor, and land services from an owner of land would exploit either labor, or land, or labor and land
See on the following E. v. Böhm-Bawerk, The Exploitation Theory of Socialism-Communism (South Holland: Libertarian Press, 1975 ); idem, Shorter Classics of BöhmBawerk ( South Holland: Libertarian Press, 1962 ).
L. v. Mises, Human Action (Chicago: Regnery, 1966), p. 407; see also M. N. Rothbard, Man, Economy and State ( Los Angeles: Nash, 1970 ), pp. 300–01.
See on the time preference theory of interest in addition to the works cited in notes 5 and 6 also F. Fetter, Capital, Interest and Rent ( Kansas City: Sheed Andrews and McMeel, 1977 ).
See on the following H. H. Hoppe, A Theory of Socialism and Capitalism (Boston: Kluwer Academic Publishers, 1989); idem, “Why Socialism Must Fail,” Free Market, July 1988; idem, “The Economics and Sociology of Taxation,” Journal des Economistes et des Etudes Humaines (1990); supra ch.2.
Mises’s contributions to the theory of exploitation and class are unsystematic. However, throughout his writings he presents sociological and historical interpretations that are class analyses, if only implicitly. Noteworthy here is in particular his acute analysis of the collaboration between government and banking elite in destroying the gold standard in order to increase their inflationary powers as a means of fraudulent, exploitative income and wealth redistribution in their own favor. [See for instance his Monetary Stabilization and Cyclical Policy (1928) in: idem, On the Manipulation of Money and Credit, ed. P.Greaves (Dobbs Ferry: Free Market Books, 1978); idem, Socialism (Indianapolis: Liberty Fund, 1981), ch. 20; idem, The Clash of Group Interests and Other Essays (New York: Center for Libertarian Studies, Occasional Paper Series No. 7, 1978)]. Yet Mises does not give systematic status to class analysis and exploitation theory because he ultimately misconceives of exploitation as merely an intellectual error which correct economic reasoning can dispel. He fails to fully recognize that exploitation is also and probably even more so a moral-motivational problem that exists
See on this also H. H. Hoppe, A Theory of Socialism and Capitalism; idem, “The Justice of Economic Efficiency,” Austrian Economics Newsletter, 1, 1988 (infra ch. 9); idem, “The Ultimate Justification of the Private Property Ethics,” Liberty, September 1988 (infra ch. 10).
See on this theme also Lord (John) Acton, Essays in the History of Liberty (Indianapolis: Liberty Fund, 1985); F. Oppenheimer, System der Soziologie, Vol. II: Der Staat (Stuttgart: G. Fischer, 1964 ); A. Rüstow, Freedom and Domination ( Princeton: Princeton University Press, 1986 ).
See on this M. N. Rothbard, “Left and Right: The Prospects for Liberty,” in: idem, Egalitarianism As a Revolt Against Nature and Other Essays (Washington, D. C.:
All socialist propaganda to the contrary notwithstanding, the falsehood of the Marxist description of capitalists and laborers as antagonistic classes also comes to bear in certain empirical observations: Logically speaking, people can be grouped into classes in infinitely different ways. According to orthodox positivist methodology (which I consider false but am willing to accept here for the sake of argument), that classification system is better which helps us predict better. Yet the classification of people as capitalists or laborers (or as representatives of varying degrees of capitalist-or laborerness) is practically useless in predicting what stand a person will take on fundamental political, social and economic issues. Contrary to this, the correct classification of people as tax producers and the regulated vs. tax consumers and the regulators (or as representatives of varying degrees of tax producer-or consumer-ness) is indeed also a powerful predictor. Sociologists have largely overlooked this because of almost universally shared Marxist preconceptions. But everyday experience overwhelmingly corroborates my thesis: Find out whether or not somebody is a public employee (and his rank and salary), and whether or not and to what extent the income and wealth of a person outside of the public sector is determined by public sector purchases and/or regulatory actions — people will systematically differ in their response to fundamental political issues depending on whether they are classified as direct or indirect tax consumers, or as tax producers!
F. Oppenheimer, System der Soziologie, Vol. II, pp. 322–23, presents the matter thus: “The basic norm of the state is power. That is, seen from the side of its origin: violence transformed into might. Violence is one of the most powerful forces shaping society, but is not itself a form of social interaction. It must become law in the positive sense of this term, that is, sociologically speaking, it must permit the development of a system of `subjective reciprocity’: and this is only possible through a system of self-imposed restrictions on the use of violence and the assumption of certain obligations in exchange for its arrogated rights. In this way violence is turned into might, and a relationship of domination emerges which is accepted not only by the rulers, but under not too severely oppressive circumstances by their subjects as well, as expressing a `just reciprocity’. Out of this basic norm secondary and tertiary norms now emerge as implied in it: norms of private law, of inheritance, criminal, obligational and constitutional law, which all bear the mark of the basic norm of power and domination, and which are all designed to influence the structure of the state in such a way as to increase economic exploitation to the maximum level which is compatible with the continuation of legally regulated domination.” The insight is fundamental that “law grows out of two essentially different rootsChrw(133): on the one hand, out of the law of the association of equals, which can be called a `natural right,’ even if it is no ‘natural right,’ and on the other hand, out of the law of violence transformed into regulated might, the law of unequals.”
See J. Buchanan/G. Tullock, The Calculus of Consent ( Ann Arbor: University of Michigan Press, 1962 ), p. 19.
See H. H. Hoppe, Eigentum, Anarchie und Staat (Opladen: Westdeutscher Verlag, 1987); idem, A Theory of Socialism and Capitalism.
See H. H. Hoppe, “Banking, Nation States and International Politics,” Review of Austrian Economics (1989) (supra ch.3); M. N. Rothbard, The Mystery of Banking, chs. 15–16.
See on this in particular M. N. Rothbard, Man, Economy and State, ch. 10, esp. the section “The Problem of One Big Cartel”; also L. v. Mises, Socialism, chs. 22–26.
See on this G. Kolko, The Triumph of Conservatism (Chicago: Free Press, 1967); J. Weinstein, The Corporate Ideal in the Liberal State (Boston: Beacon Press, 1968): R. Radosh/M. N. Rothbard, A New History of Leviathan (New York: Dutton, 1972 ); L. Liggio/J. J. Martin, Watershed of Empire ( Colorado Springs: Ralph Myles, 1976 ).
On the relationship between state and war see E. Krippendorff, Staat und Krieg (Frankfurt/M.: Suhrkamp, 1985); Ch. Tilly, “War Making and State Making as Organized Crime,” in: P. Evans, Bringing the State Back In (Cambridge: Cambridge University Press, 1985 ); also R. Higgs, Crisis and Leviathan ( New York: Oxford University Press, 1987 ).
On a further elaborated version of this theory of military and monetary imperialism see H. H. Hoppe, Banking, Nation States and International Politics (supra ch.3).
See on this in particular L. v. Mises, Theory and History (Auburn, Al.: Auburn University, Ludwig von Mises Institute, 1985), esp. part 2.
It may be noted here that Marx and Engels, foremost in their Communist Manifesto, championed the historically progressive character of capitalism and were full of praise for its unprecedented accomplishments. Indeed, reviewing the relevant passages of the Manifesto concludes J. A. Schumpeter, “Never, I repeat, and in particular by no modern defender of the bourgeois civilization has anything like this been penned, never has a brief been composed on behalf of the business class from so profound and so wide a comprehension of what its achievement is and what it means to humanity.” “The Communist Manifesto in Sociology and Economics,” in: idem, Essays of J. A. Schumpeter, ed. Clemence (Port Washington, N. Y.: Kennikat Press, 1951), p. 293. Given this view of capitalism, Marx went so far as to defend the British conquest of India, for example, as a historically progressive development. See Marx ‘s contributions to the New York Daily Tribune, of June 25 1853, July 11, 1853, August 8, 1853 [Marx/Engels, Werke, Vol. 9 (East Berlin: Dietz, 1960)]. As a contemporary Marxist taking a similar stand on imperialism see B. Warren, Imperialism: Pioneer of Capitalism ( London: New Left Books, 1981 ).
See on the theory of revolution in particular Ch. Tilly, From Mobilization to Revolution (Reading, Mass.: Addison-Wesley, 1978 ); idem, As Sociology Meets History ( New York: Academic Press, 1981 ).
For a neo-Marxist assessment of the present era of “late capitalism” as characterized by “a new ideological disorientation” born out of permanent economic stagnation and the exhaustion of the legitimatory powers of conservatism and socialdemocratism (i.e., “liberalism” in American terminology) see J. Habermas, Die Neue Unübersichtlichkeit (Frankfurt/M.: Suhrkamp, 1985); also idem, Legitimation Crisis (Boston: Beacon Press, 1975); C. Offe, Strukturprobleme des kapitalistischen Staates (Frankfurt/M.: Suhrkamp, 1972).
For an Austrian-libertarian assessment of the crisis-character of late capitalism and on the prospects for the rise of a revolutionary libertarian class consciousness see M. N. Rothbard, “Left and Right”; idem, For a New Liberty, ch. 15; idem, The Ethics of Liberty (Atlantic Highlands: Humanities Press, 1982), part V.
On the internal inconsistencies of the Marxist theory of the state see also H. Kelsen, Sozialismus und Staat (Wien, 1965 ).
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Hoppe, HH. (1993). Marxist and Austrian Class Analysis. In: The Economics and Ethics of Private Property. Springer, Dordrecht. https://doi.org/10.1007/978-94-015-8155-4_4
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