Abstract
Many of Marx’s key claims about historical dynamics are correct, but are unsatisfactorily grounded. Social analysis in the tradition of Mises and Rothbard can offer a better grounding and a more satisfactory interpretation of these claims—when, in particular, class rule is understood in relation to state power rather than market activity.
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Notes
- 1.
See […] the following: Karl Marx and Friedrich Engels , The Communist Manifesto (London: npu 1848); Karl Marx, Das Kapital, 3 vols. (Hamburg: Meissner 1867–94); as contemporary Marxists, Ernest Mandel, Marxist Economic Theory (London: Merlin 1962); Ernest Mandel, Late Capitalism (London: New Left 1975); Paul Baran and Paul Sweezy, Monopoly Capital (New York: Monthly Review 1966); from a non-Marxist perspective, Leszek Kolakowski, Main Currents of Marxism (Oxford: OUP 1978); Gustav A. Wetter, Sovietideologie heute 1 (Frankfurt: Fischer 1962); Wolfgang Leonhard, Sovietideologie heute 2 (Frankfurt: Fischer 1962).
- 2.
Marx and Engels, Manifesto sec. l.
- 3.
Marx and Engels , Manifesto sec. 2, last 2 paragraphs; Friedrich Engels , “Von der Autorität,” Ausgewaehlte Schriften, by Karl Marx and Friedrich Engels , 2 vols. (East Berlin: Dietz 1953) 1: 606; Friedrich Engels , “Die Entwicklung des Sozialismus von der Utopie zur Wissenschaft,” Marx and Engels , Schriften 2: 139.
- 4.
See Marx, Kapital. The shortest presentation is his Lohn, Preis und Profit (Berlin: Dietz 1998 [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 simultaneously. It is the labor theory of value, of course, which is supposed to provide the missing link here by trying to establish labor as the sole source of value. I will spare myself the task of refuting this theory. Few enough remain today, even among those claiming to be Marxists, who do not recognize the faultiness of the labor theory of value. Rather, I will accept for the sake of argument the suggestion made, for instance, by the self-proclaimed analytical Marxist John Roemer in A General Theory of Exploitation and Class (Cambridge: Harvard UP 1982) and Value, Exploitation and Class (London: Harwood 1985), that the theory of exploitation can be separated analytically from the labor theory of value and that a generalized commodity exploitation theory can be formulated which can be justified regardless of whether or not the labor theory of value is true. I want to demonstrate that the Marxist theory of exploitation is nonsensical even if one were to absolve its proponents from having to prove the labor theory of value and, indeed, even if the labor theory of value were true. Even a generalized commodity exploitation theory provides no escape from the conclusion that the Marxist theory of exploitation is dead wrong.
- 5.
See on the following Eugen von Böhm-Bawerk, The Exploitation Theory of Socialism-Communism (South Holland: Libertarian 1962).
- 6.
Ludwig von Mises, Human Action (Chicago: Regnery 1966) 407; see also Murray N. Rothbard, Man, Economy and State (Los Angeles: Nash 1970) 300–301.
- 7.
See on the time preference theory of interest in addition to the works cited in notes 5 and 6 as well as Frank Fetter, Capital, Interest and Rent (Kansas City: Sheed 1977).
- 8.
See on the following Hans-Hermann Hoppe, Theory of Socialism and Capitalism (Boston: Kluwer 1988); Hans-Hermann Hoppe, “Why Socialist Must Fail,” Free Market, July 1988; Hans-Hermann Hoppe, “The Economics and Sociology of Taxation,” The Economics and Ethics of Private Property: Studies in Political Economy and Philosophy, 2d ed. (Auburn: Mises 2006) 33–76.
- 9.
Mises’ 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), On the Manipulation of Money and Credit, ed. Bettina Greaves (Dobbs Ferry, NY: Free Market Books 1978); see also his Socialism (Indianapolis, IL: Liberty Fund 1981) ch. 20; The Clash of Group Interests and Other Essays (New York: Center for Libertarian Studies 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 regardless of all economic reasoning. Rothbard adds this insight to the Misesian structure of Austrian economics and makes the analysis of power and power elites an integral part of economic theory and historical-sociological explanations; and he systematically expands the Austrian case against exploitation to include ethics in addition to economic theory, i.e., a theory of justice next to a theory of efficiency, such that the ruling class can also be attacked as immoral. For Rothbard’s theory of power, class and exploitation , see in particular his Power and Market (Kansas City: Sheed 1977); Murray N. Rothbard, For a New Liberty: The Libertarian Manifesto, rev. ed. (San Francisco: Fox and Wilkes 1994); The Mystery of Banking (New York: Richardson 1983); America s Great Depression (Kansas City: Sheed 1975). On important nineteenth-century forerunners of Austrian class analysis, see Leonard Liggio, “Charles Dunoyer and French Classical Liberalism,” Journal of Libertarian Studies 1.3 (1977) 153–78; Ralph Raico, “Classical Liberal Exploitation Theory,” Journal of Libertarian Studies 1.3 (1977) 179–83; Mark Weinburg, “The Social Analysis of Three Early 19th Century French Liberals: Say, Comte , and Dunoyer ,” Journal of Libertarian Studies 2.1 (1978) 45–63; Joseph T. Salerno, “Comment on the French Liberal School,” Journal of Libertarian Studies 2.1 (1978) 65–68.; David M. Hart, “Gustave de Molinari and the Anti-Statist Liberal Tradition” [part 1], Journal of Libertarian Studies 5.3 (1981) 263–90; David M. Hart, “Gustave de Molinari and the Anti-Statist Liberal Tradition” [part 2], Journal of Libertarian Studies 5.4 (1981): 399–434.
- 10.
See on this also Hoppe, Theory; Hans-Hermann Hoppe, “The Justice of Economic Efficiency,” Austrian Economics Newsletter 1 (1988); Hans-Hermann Hoppe, “The Ultimate Justification of the Private Property Ethics,” Liberty, Sep. 1988.
- 11.
See on this theme also Lord Acton, Essays in the History of Liberty (Indianapolis: Liberty Fund 1985); Franz Oppenheimer , System der Soziologie 2: Der Staat (Stuttgart: Fischer 1964); Dankwart A. Rustow and Salvator Attanasio, Freedom and Domination: A Historical Critique of Civilization (Princeton: Princeton UP 1986).
- 12.
See on this Murray N. Rothbard, “Left and Right: The Prospects for Liberty,” Egalitarianism as a Revolt Against Nature and Other Essays (Washington, DC: Libertarian Review 1974) 14–33.
- 13.
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 laborer-ness) 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 producers 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 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!
- 14.
Oppenheimer (2: 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 roots 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 trans formed into regulated might, the law of unequals.” On the relation between private and public law, see also F. A. Hayek , Law, Legislation and Liberty, 3 vols. (Chicago: U of Chicago P 1973–79), esp. 1: ch. 6 and 2: 85–88.
- 15.
See James Buchanan and Gordon Tullock, The Calculus of Consent (Ann Arbor, MI: U of Michigan P 1965) 19.
- 16.
See Hans-Hermann Hoppe, Eigentum, Anarchie und Staat (Opladen: Westdeutscher 1987); Hoppe, Theory.
- 17.
See Hans-Hermann Hoppe, “Banking, Nation States and International Politics,” Review of Austrian Economics 4 (1990) 55–87; Rothbard, Mystery chs. 15–16.
- 18.
See on this in particular Rothbard, Man, ch. 10 (esp. the section, “The Problem of One Big Cartel”); Mises, Socialism chs. 22–26.
- 19.
See on this Gabriel Kolko, The Triumph of Conservatism (Chicago: Free 1967); James Weinstein , The Corporate Ideal in the Liberal State (Boston: Beacon 1968); Ralph Radosh and Murray N. Rothbard, eds., A New History of Leviathan (New York: Dutton 1972); Leonard Liggio and James J. Martin, eds., Watershed of Empire (Colorado Springs, CO: Myles 1976).
- 20.
On the relationship between state and war see Ekkehart Krippendorff, Staat und Krieg (Frankfurt: Suhrkamp 1985); Charles Tilly, “War Making and State Making as Organized Crime,” Bringing the State Back In, ed. Peter Evans, Dietrich Rueschemeyer, and Theda Skocpol (Cambridge: CUP 1985) 169–91; also Robert Higgs , Crisis and Leviathan (New York: OUP 1987).
- 21.
On a further elaborated version of this theory of military and monetary imperialism see Hans-Hermann Hoppe, “States.”
- 22.
See on this in particular Ludwig von Mises, Theory and History (Auburn: Mises Institute 1985), especially part 2.
- 23.
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 Joseph A. Schumpeter , “Never, I repeat, and in particular by no modem 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,” Essays of J. A. Schumpeter, ed. Richard V. Clemence (Port Washington, NY: Kennikat 1951) 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 (these can be found in the ninth volume of Marx and Engels , Werke [East Berlin: Dietz 1960]). As a contemporary Marxist taking a similar stand on imperialism see Bill Warren, Imperialism: Pioneer of Capitalism (London: New Left Books 1981).
- 24.
See on the theory of revolution in particular Charles Tilly, From Mobilization to Revolution (Reading, MA: Addison-Wesley 1978); Charles Tilly, As Sociology Meets History (New York: Academic 1981).
- 25.
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 social-democratism (i.e. liberalism in American terminology) see Jürgen Habermas, Die Neue Unvebersichtlichkeit (Frankfurt: Suhrkamp, 1985); also Jürgen Habermas, Legitimation Crisis (Boston: Beacon 1975); Claus Offe, Strukturprobleme des kapitalistischen Staates (Frankfurt: Suhrkamp 1972).
- 26.
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 Murray N. Rothbard, Left and Right: The Prospects for Liberty (Washington, DC: Cato 1982); Rothbard, New, ch. 15; Murray N. Rothbard, The Ethics of Liberty (Atlantic Highlands: Humanities 1982) part 5.
- 27.
On the internal inconsistencies of the Marxist theory of the state see also Hans Kelsen, Sozialismus und Staat (Vienna: Volksbuchhandlung 1965).
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Hart, D.M., Chartier, G., Kenyon, R.M., Long, R.T. (2018). Hans-Hermann Hoppe, “Marxist and Austrian Class Analysis” (1990). In: Hart, D., Chartier, G., Kenyon, R., Long, R. (eds) Social Class and State Power. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-64894-1_34
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