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(sup) (en) The Utopian Vol. #2 - Anarchist's criticism of KARL MARX'S THEORY OF CAPITAL by Ron Tabor part II. (2/2)

From Worker <a-infos-en@ainfos.ca>
Date Sun, 8 Jun 2003 17:30:37 +0200 (CEST)


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> V. THE LABOR THEORY OF VALUE

Although our discussion so far has called into question
the validity of Marx's conception of value, it is worth
looking at that theory in greater detail.

As I've mentioned, Marx never proves the labor theory of
value. Instead, he assumes it. Insofar as he attempts to
establish its validity, he does so in two ways. One of these
is to demonstrate the theory's explanatory value. In other
words, he develops an internally consistent model of capi-
talism through the logical elaboration of his initial
assumption (that labor is the source of all value), then
uses this model to explain the workings of capitalism and
predict the course of its development. But this does not
constitute proof, since Marx does not strictly test the
model against the actual dynamics of the system and its
evolution. Marx occasionally cites economic statistics to
demonstrate specific aspects of his theory, but even here,
his discussion almost always remains within the parame-
ters of his model. As a result, what appears to be such a
demonstration is in fact a large number of hypothetical
examples that merely illustrate and elaborate the internal
logic of his theory.

Marx's other approach to establishing the validity of the
labor theory of value is to claim that it was a prior
achievement of what he called scientific political economy,
in other words, the theory was developed in a scientific
way by his predecessors in the field. As Marx tells us, he
took the labor theory of value from bourgeois political
economy when it was still revolutionary and therefore sci-
entific, and used it as the foundation of his own analysis.
In effect, he relies on the authority of his bourgeois
antecedents to establish the theory's validity. But this, too,
is no proof, since his predecessors did not prove their the-
ory either. To them and to Marx, it seemed to be virtually
a statement of fact and therefore the logical starting point
for economic analysis.

To more fully grasp the problems with Marx's theory of
value, it is worth remembering his overall method. As I
discussed in the first installment of this article, Marx's
analysis of capitalism in elaborated in stages. First, he asks
us to imagine a society consisting entirely of small, inde-
pendent producers of commodities (such as artisans and
small farmers) who own their own tools and other imple-
ments of production, and in which, it is essential to add,
such tools and implements play a relatively minor role in
the production process. He calls this society "simple com-
modity production." In such a society, Marx says, the value
of any given commodity is determined by the amount of
time it takes an average commodity producer working
under average conditions, to produce that commodity.

Marx then uses this model, particularly the conceptions of
value and money associated with it, to demonstrate the key
components of his analysis of capitalism: the characteris-
tics of commodities and the dynamics of their production
and exchange, the fact that capitalism is exploitive and
how this exploitation occurs, the nature and dynamics of
capital, etc. He does so despite the fact that capitalism dif-
fers from simple commodity production in a number of
significant ways, including that it entails the significant
and ever-increasing use of the means of production in the
production process. In other words, as he develops his
analysis, Marx assumes, without further explanation, that
the points he established in his discussion of simple com-
modity production, especially the nature and determina-
tion of value, apply without significant modification.
(It is not until Volume 3 of Capital that Marx discusses
how the law of value is modified in the operation of
industrial capitalism. And even here, the basic concept of
value remains unchanged. The apparent contradiction
between the notion of value elaborated in Volume 1 of
Capital and its modification in Volume III [which I will
discuss below] is the focus of what is perhaps the best-
known of the critiques of Marx's analysis, that of the
Austrian economist, Eugen Böhm-Bawerk, Karl Marx and
the Close of His System.)

Despite its apparent plausibility, Marx's procedure is
flawed. It is acceptable only if one assumes, as Marx does,
that the means of production are nothing but materialized
labor. In this case, the values of such capitalistically-pro-
duced commodities can still be legitimately said to be
determined by the amount of socially necessary labor they
embody. But if the means of production are not simply
materialized labor, if, instead, as I have argued, they con-
tain other components that cannot be reduced to labor,
then the values of the commodities produced are not
determined solely by the amount of socially necessary
labor that is embodied in them. They are determined by
that and those other components.

In fact, if we recognize that even relatively simple imple-
ments of production, such as the machines and tools arti-
sans use, are not purely products of labor, we can see that
under simple commodity production the values of com-
modities are not solely determined by the amount of
socially necessary labor that is embodied in them. In other
words, even under simple commodity production, the
basic formulation of the law of value holds only as a rough
approximation. While the degree of "roughness" may be
minimal under conditions in which the amount of tools
and machinery involved in production is small, it is cer-
tainly not when analyzing a system such as capitalism,
which is characterized, according to Marx's own theory, by
the preponderant and ever-growing use of the means of
production.

What Marx did was to take an economic theory that was
developed to analyze capitalism in a preindustrial age, that
is, before the Industrial Revolution or as it was just begin-
ning, and to use it, with only slight modifications, to ana-
lyze industrial capitalism. And he did so without really
discussing, let alone proving, whether it was an accurate
representation of how the system functioned. (Even Adam
Smith admitted, according to Marx, that "the determina-
tion of value by labour-time was no longer applicable to
`civilised' times."
Theories of Surplus Value, Part II, Progress
Publishers, Moscow, 1968). But Marx borrowed a lot more
than the law of value from his predecessors. He adopted
much of their overall approach and purpose.
The figures among the pioneers of "scientific political
economy" whom Marx admired most, Adam Smith and
David Ricardo, were supporters of capitalist economic
methods and the free market, and opponents of those
classes and institutions that stood in the way of the
development of capitalism. And the labor theory of
value served their ideological aims very well. Among
other things, they thought that the landlords, the histor-
ical descendants of the feudal nobility who did no use-
ful labor but merely collected rent and consumed the
products produced by others, were economic and social
parasites, a drain on the British economy and a negative
influence on British society. As a result, these economic
theorists were anxious to expose the landlords' parasitic
role and to limit their economic, social and political
influence.

Their judgment of the landlords' unproductive social role
flowed from and was reflected in their theory, the corner-
stone of which was their theory of value. Stated in ordi-
nary terms, this asserts that economic value is generated
by those who work. In other words, only labor produces
value. The critique of the landlords follows inexorably:
those who do not engage in productive labor do not pro-
duce value, they only consume it. In short, the landlords
and their retainers are parasites.

However, their analyses had a major drawback that Marx
was able to discern. They didn't adequately reveal the role
of the capitalists and the origin of their profits. Insofar as
Smith and Ricardo sought to explain this, they tended to
subsume the capitalists under the laboring classes. After
all, compared to the landlords, who merely collected rents
and consumed products produced by others, the capitalists
were active in the production process. They launched
enterprises, built workshops and factories, furnished them
with machinery, tools and raw materials, hired workers,
supervised the production process and marketed the prod-
ucts. Thus, to Smith and Ricardo, the capitalists, in con-
trast to the landlords, participated in, and were at least
partly responsible for, the production of value.
But when Smith and Ricardo actually tried to account for
the source of profit, their theory got fuzzy. Insofar as they
could explain it, they came up with two somewhat over-
lapping explanations: (1) the capitalists receive "wages of
superintendence" for directing the process of production;
and (2) they accumulate the resources to invest in pro-
duction, that is, their capital, by limiting their own con-
sumption.
To Marx, these explanations evaded the issue. In his view,
the capitalists' profits far exceeded any wages of superin-
tendence they were owed even if they didn't consume any-
thing at all. Instead, Marx realized that the same argument
Smith and Ricardo directed at the landlords applied to the
capitalists as well. He therefore took their theory of value,
removed its inconsistencies and elaborated it to develop
his own analysis of capitalism. As they had demonstrated
the unproductive role of the landlords, Marx showed that
the capitalists, too, lived off the labor of others (although
he did grant them the credit for their role in developing
the system, increasing the productive forces and therefore
making socialism possible). In sum, Marx developed the
labor theory of value in a more consistent way than had
Smith and Ricardo and drew the logical conclusion. The
conclusion follows directly from the (unproven) assump-
tion: If only labor produces value, then the capitalists, who
receive profits far above any presumed wages of superin-
tendence, are exploiters; they appropriate value that they
do not produce.
But what Marx in fact did was to take a theory that was at
best only a rough approximation to the reality it was
intended to analyze and used it to analyze a new reality
from which it diverged even more. The theory certainly
demonstrates what Marx wanted it to, but only, in effect,
by assuming his conclusion from the beginning and ulti-
mately misreading the system he was trying to explain.

One of the main weaknesses of the theory is, as we've dis-
cussed, the one-sided and ultimately false conception of
the means of production that it implies. The problem,
however, is not just theoretical. It also leads to a distorted
understanding of how the means of production are evalu-
ated under capitalism.

We remember that, for Marx, the value of any given
commodity, including those constituting the means of
production, is equal to, or determined by, the amount of
average social labor required to produce it. But how does
one account for the fact that different machines, even
machines designed for the same purpose, are not equally
productive? As an example, we can imagine two
machines designed to perform the same task, say, to
make nails, but one of which produces more nails in the
same period of time using the same amount of human
labor. It is not impossible that both machines require the
same or very similar amounts of labor time to produce,
in which case, according to Marx, they have the same
value. But do they? If two machines cost the same but
one is more productive than the other, isn't the more
productive one more valuable, doesn't it have a greater
value? It seems to me the answer must be "yes," both
from the point of view of the capitalists and from some
other, more objective, standpoint. This, it seems to me, is
something Marx's theory, and the labor theory of value
more generally, cannot easily account for. A Marxist
might argue that the invention of the more productive
machine would make the less productive machine obso-
lete, would therefore devalue it and would relatively
quickly replace it in the production process. But this just
evades the issue rather than addressing it. Clearly, the
capitalists, both those who produce them and those who
purchase them, and therefore the market as a whole,
ought to, and do, evaluate specific means of production
according to their qualitative characteristics and not just
according to their costs of production conceived in
terms of the labor theory of value, that is, according to
how much labor time is required to produce them.

This question is really a specific example of a broader
problem with the labor theory of value: how to account
for the specific qualities of commodities, their use-values.
To review, according to this theory each commodity has
both a use-value, determined by the concrete qualities of
the commodity, and an exchange-value. But, in Marx's
theory, the use value of a given commodity can't be quan-
tified. (There are hints of a quantitative theory of use-
value in the Grundrisse, which neither Marx nor Engels
actually published, but they are dropped in Marx's mature
theory.) In fact, for Marx, use-value has a kind of "on or
off " character; either a commodity has a use-value or it
doesn't. To be more precise, for a product to be a com-
modity it must have no use-value for its possessor (which
is why he/she wants to sell it), while having a use-value
for a potential buyer (which is why he/she wants to buy
it). If a commodity has no use-value for anybody, it has
no exchange-value either. In his desire to find some com-
mon characteristic that enabled distinct commodities to
be exchanged, Marx seems to have assumed that the con-
crete qualities of commodities, aside from the general
question of whether someone wanted to buy them, could
be safely ignored.

We have already seen how this is a problem when it comes
to evaluating specific implements of production. In the
real capitalist economy, their precise qualities, not least of
which are their respective productivities, cannot simply be
ignored. These qualities need to be, and in fact are, fac-
tored into the capitalists' calculations; the capitalists must
evaluate them in some way if they are to stay in business.
But the limitations of the labor theory of value also creates
a problem when it comes to evaluating consumer goods:
not all such goods are the same, and discerning consumers
will soon learn to evaluate such goods and consider their
purchases accordingly.

Perhaps Marx believed that consumers' evaluations of the
specific qualities of consumer goods were purely subjective
and thus had no place in the "objective" science he thought
political science ought to be. But this is wrong. If the deci-
sions of only a very few consumers were affected by their
evaluations of the specific qualities of the commodities they
were considering buying, the result might not be general or
profound enough to warrant consideration in a field that
deals with large quantities of products, average costs, etc.
Yet, once any significant numbers of consumers start to take
the qualitative characteristics of commodities into consider-
ation when deciding on their purchases, or when, on the
other hand, commodity producers start to take pains to dif-
ferentiate or improve their commodities in order to attract
buyers, what may once have been legitimately conceived as
being purely subjective starts to take on a broader social, that
is, objective, significance. This is all the more the case when
producers start to consider which new products ought to be
developed for production and sale.

In Marx's theory, the question of consumer preferences
would be accounted for by contending that where demand
for a particular commodity were high, the prices of these
commodities would rise above their actual value, which
would attract more capital to the production of those
commodities. This would eventually result in more of
those commodities being placed on the market and, via the
laws of supply and demand, a fall in the price of those
commodities toward their actual values. But this assumes
that the new producers of the commodities in question
can produce commodities of the same precise qualities,
and overall level of quality, which may not be the case. If
they can't, the leveling of market prices toward their val-
ues will not take place. In other words, the fact that con-
sumers may prefer one commodity over another because
of their qualities is an objective economic fact, and not
something that can be dismissed or ignored as a mere
"subjective" consideration.

Like much else in his theory, Marx's tendency to ignore the
issue of differences in qualitative value may have made
some sense when capitalism was in its early stages of
development. At that time, the overwhelming majority of
the buyers of consumer goods, the members of the work-
ing class, were paid at a very low level and their purchases
probably consisted almost entirely of a few very basic
goods, such as food and clothes, the quality of which
might have varied very little. But once a significant group
of consumers emerged whose living standards allowed
them to purchase a greater quantity and diversity of
goods, in other words, consumers who had significant
"discretionary income," the assumptions and implications
of the labor theory of value lead to significant distortions
of economic reality. In any case, as we saw above, the theo-
ry does not account for the qualitative differences among
machines and the means of production generally, which
would have been of economic significance even at the
stage of capitalist development when Marx was writing.
Mainstream (bourgeois) economics attempted to deal with
this question by abandoning the labor theory of value
altogether and deciding instead to define the values of
commodities in terms of the interaction (the vector sum,
as it were), of the subjective evaluations of the prospective
sellers and buyers of commodities (the theory of "marginal
utility"). Underneath the theoretical apparatus, the theory
essentially argues that the prices that commodities sell for
represent their values. It may have been true, as Marxists
have contended, that this abandonment of the labor theory
of value was the result of the fact that, as capitalist apolo-
gists, these theorists did not like the conclusions that
flowed from it. But there were also good reasons to jettison
the theory: First, under the labor theory of value, the
actual values of commodities produced under capitalism
are not directly discernible, let alone measurable. For
Marx, value underlies and ultimately determines prices,
but goods only sell at their values by way of exception. As
a result, the theory does not lend itself to practical use and
development Secondly, however useful the labor theory of
value may have once been as a rough approximation, it
does not, as I've tried to show, accurately describe the
nature of capital, the origin of profit and the overall
dynamics of the capitalist system. Whether bourgeois eco-
nomics actually does so is another question.

One can well understand why Marx would be attracted to
the labor theory of value. For one thing, it was an estab-
lished theory that had already demonstrated its analytical
usefulness. For another, Marx was a convinced materialist
and, at least superficially, the labor theory of value seems
to be consistent with that school of philosophy. Thirdly,
the theory proved what he already believed, that the work-
ers were exploited. Lastly, the labor theory of value lent
itself to the demonstration that capitalism would evolve to
a state from which its overthrow and replacement by a
socialist/communist society would be highly likely. It is to
this question that we now turn.

> THE TENDENCIES OF CAPITALIST DEVELOPMENT
In Capital and elsewhere, Marx discusses various tenden-
cies of capitalist development, that is, certain economic
and social trends that result from the very functioning of
capitalism. These trends, when taken together, would
roughly describe the future evolution of the system. (In
the interests of space, I propose, with two exceptions, to
describe these tendencies relatively briefly.) The most
important of these tendencies are:

1. The concentration and centralization of capital. Marx
believed that in the course of capitalist development, the
number of capitals constituting a particular national capi-
talist economy would decrease while the average size of the
remaining capitals would increase. This occurs as larger
and, Marx believed, more efficient capitals take over and
absorb the capital of businesses that fail, usually as a result
of the economic crises that Marx felt were endemic to the
system. Since Marx believed that increasing size brought
greater economic efficiency, he also thought that the aver-
age size of factories and other units of production charac-
teristic of the economy would grow as well. The result of
these tendencies would be that any given national capitalist
economy would be made up of a fewer number of ever-larger
capitals consisting of increasingly massive enterprises.

2. A decrease in the size of the capitalist class itself, as
ruined capitalists are thrown into the ranks of the working
class by recurring crises.

3. A comparable destruction of the middle sectors of soci-
ety, particularly small businesspersons, who would also be
relegated to the position of propertyless proletarians. This
would include the elimination of peasants and other small
family farmers and their replacement by large capitalist farms.

4. A tendency for the working class to grow in size, as capi-
talist production expands and the displaced social sectors
mentioned above join the ranks of the working class.
Along with the increasing organic composition of capital,
this tendency also results in an ever-larger "reserve army of
the unemployed." This consists of unemployed members of
the working class whose existence maintains a downward
pressure on the wages of the employed workers. This ensures
that, over time, the workers are paid at value, in other words,
that there is no substantial and long-term rise in wages.

5. A tendency for free competition, in which many rela-
tively small capitals compete with each other via the mar-
ket, to give way to limited, monopolistic, or, more accu-
rately, oligopolistic competition, a condition in which a
few large capitals control the market and the economy as a
whole. Accompanying this would be the replacement of
the free market by a limited type of economic planning, as
a result of oligopolistic firms' ability to coordinate (gener-
ally, to limit), production and set prices. Since Marx
believed that production within individual enterprises was
planned, in contrast to the anarchy of the market, the
growth in the size of the remaining enterprises also pro-
moted the planned nature of production.

6. A tendency for the capitalist state to take over increasing
portions of the total social capital, to manage industry and
the rest of the economy itself, and to relegate the remain-
ing members of the capitalist class to the status of idle
"coupon clippers," that is, the recipients of dividends.

7. A tendency for the rate of profit to decline, the eventual
result being that the capitalist system would tend toward a
state of increasing stagnation and ever-greater crises. Since
this part of Marx's analysis is both essential to his theory and
not easy to grasp, it is worth explaining it in some detail.
In Volume 3 of Capital, Marx showed how even among
capitals of different organic compositions, that is, where
the ratios of the amount of machinery, tools and raw
materials (constant capital), to that of labor (variable capi-
tal), vary, the capitalists' search for ever-larger profits leads
to the formation of an average rate of profit. As Marx ana-
lyzed it, in those sectors of the economy where the organic
composition of capital is low, that is, where the use of
means of production is small relative to the amount of
labor employed, as in the textile industry, the rate of profit
of that sector taken in isolation would be relatively high.

(Since, according to Marx, the rate of profit is expressed in
the fraction s/c+v, where s equals surplus value, c equals
constant capital, and v equals variable, where c is small, the
value of the fraction will be larger than where c is larger.)
As a result, additional capitalists will invest in those sectors.
In other words, capital will flow into those industries,
resulting in increased production of the commodities pro-
duced in those sectors. Eventually, the consequent increase
in competition will drive the prices of the commodities of
those sectors below their actual values. Conversely, capital
will flow out of those sectors where the organic composi-
tion is high (such as the steel industry), and the rate of
profit relatively low. This results in fewer of the commodi-
ties characteristic of those sectors being produced The
decline in competition in these industries will tend to raise
the prices of the commodities produced in these sectors
above their values. In effect, surplus value produced in sec-
tors with low organic compositions of capital (where the
prices of commodities are below their values) will flow, via
the market, out of these industries and into those sectors
with high organic compositions (where the prices of com-
modities are above their values). This process will occur
until the rates of profit of the various sectors are equalized.
As a result of this dynamic, the prices of commodities will
tend to fluctuate around what Marx called their "prices of
production" rather than their values. These prices consist of
the values of the constant capital and labor that go into the
commodities, plus additional value (part of the total surplus
value) that reflects the average rate of profit. Through this
mechanism, the total surplus value pumped out of the
working class is distributed among the capitalists not
according to where it is produced but in proportion to the
amount of capital invested. In other words, on average, the
capitalists earn profits proportionate to the amount of capi-
tal they respectively invest.

Marx also contended that, once established, this overall
rate of profit would tend to decline over time. The basic
reason for this is that since capitalist production entails
the use of ever greater amounts of constant capital
(machines, tools and raw materials), which does not pro-
duce surplus value, compared to labor, which does, the
result of capitalist development would be a tendency of
the denominator of the fraction that expresses the rate
of profit (s/c+v), to increase faster than the numerator,
leading to a decline in the value of the fraction. In other
words, the very logic of capitalist development, particu-
larly the use of increasing amounts of constant capital,
causes a gradual decline in the rate of profit. And since,
from the capitalists' point of view, the whole purpose of
production is to increase their capital by accumulating
surplus value, such a decline would eventually lead to
economic stagnation and point to the ultimate over-
throw of the system.

Marx believed, however, that this falling rate of profit is a
tendency, not an ironclad law, and that the capitalists' usual
methods of increasing the rate of surplus value, that is,
lengthening the workday, speeding up production and car-
rying out the drastic modernization of the means of pro-
duction, would tend to offset the tendency. Marx also
argued that the declining rate of profit could be offset
through other tendencies. These include: the fact that tech-
nological progress tends to cheapen the elements, that is,
lower the value, of constant capital, while simultaneously
reducing the value of labor-power; that an increased rate of
turnover of capital enables the capitalists to produce more
surplus value with the same amounts of capital, and that, in
general, capitalist production entails an increase in the total
quantity of surplus value produced. Despite these trends,
Marx assumed that the tendency of the rate of profit to fall
would ultimately prevail. (In fact, the decline in the rate of
profit was accepted as an established fact by virtually all
economic theorists of the time: they were concerned with
how to explain it.)

8. One of the results of the trends I've discussed would be a
tendency toward increasing economic crises. Despite the
fact that Marx, in contrast to procapitalist economic theo-
rists, believed that such crises were an intrinsic characteris-
tic of the system, there is no unified and detailed discussion
of economic crises in the published body of Marx's writ-
ings. Instead, there are various elements that point toward
an elaborated theory. Thus, Marx often stressed that since
capitalist production, as a system of commodity production,
occurs through the use of money, and since the ultimate
purpose of production is the accumulation of value rather
than the exchange of commodities, there was the possibility
of a break between purchases and sales. This raised, at least
theoretically, the possibility of an economic crisis, that is, a
break in circulation and a resulting stoppage of production.
For example, an individual might sell his commodities for
money, but then decide to hoard the money rather than
purchase other commodities. If this behavior were general-
ized, the result would be a severe decline in overall demand
and what Marx called a crisis of overproduction, that is, too
many goods on the market and too few buyers.

Marx also emphasized that since capitalist production
occurs through circulation, that is, the exchange of goods
on the market, the correct proportions of the commodities
produced necessary to maintain production smoothly are
only determined after the fact, in an unplanned, haphazard
fashion. That is, since the capitalists do not know for sure
precisely how many commodities they will be able to sell,
they can only make rough estimations. Inevitably, some
capitalists will produce too many, others too few. Marx
called this the "anarchy of production." Where dispropor-
tionalities between the production of different sectors of
the economy-for example, between those producing con-
sumer goods versus those producing means of production,
or within either of these departments-build up over time,
a problem that is exacerbated by the functioning of the
credit mechanism, this, too, would point toward a stop-
page in production and a crisis.

Perhaps most frequently, Marx argued that the ultimate cause
of crises under capitalism was the limited nature of the pur-
chasing power of the working class, which constituted the vast
majority of consumers. This limited purchasing power results
from the fact that each capitalist, in his/her drive to produce
ever-greater amounts of surplus value, tries to lower the
amount of money he/she spends on necessary labor time in
order to increase the amount of surplus labor time. In other
words, he/she tries to keep the wages he/she pays to his/her
workers as low as possible. This puts each capitalist, and the
capitalist system as a whole, in a contradictory situation. On
the one hand, taken individually each capitalist wants to lower
wages as much as possible. On the other hand, each capitalist
(and implicitly, the system as a whole), wants to increase the
market for his/her own commodities. Since the capitalists pro-
duce for the sake of production, that is, to accumulate as
much capital as possible, the result is a virtually constant ten-
dency toward overproduction and crisis. (In addition, this
drive to keep wages low hinders the development of the pro-
ductive powers of the workers, the chief force of production.)
Finally, there is the tendency for the rate of profit to
decline. This underlies and exacerbates these other "con-
tradictions," while itself pointing toward crises, since there
is a point at which, that is, when the expected rate of
return on their investments is low enough, the capitalists
will no longer invest in production at all.

In general, Marx argued that the periodic crises that the
capitalist economy experiences are of a corrective nature,
through which the conditions necessary to maintain capi-
talist production are more or less forcibly reestablished:
excess commodities are destroyed, smaller inefficient capi-
tals are eliminated or swallowed up by bigger capitals,
existing capitals are devalued, workers are thrown out of
work, wages are lowered, debts discounted, etc. These
crises also provide the opportunity and incentive for the
capitalists to modernize their plants and equipment. As a
result, the introduction of such equipment tends to occur
on a periodic basis, thus accounting for the cyclical
motion of the capitalist economy. Overall, Marx felt, and
this is certainly the logic of his theory, that these economic
crises would tend to get more severe over time, pointing
toward capitalism's ultimate demise.

> SOCIALISM: THE LOGIC OF CAPITALIST DEVELOPMENT?
If we take all these tendencies of capitalist development
and carry them to their logical conclusions, the result
would be an increasing (and increasingly obvious), social
polarization of society between a tiny and shrinking elite
of idle capitalists, on the one hand, and a growing class
of workers (many of them unemployed), owning nothing
but their labor-power, on the other. Meanwhile, the capi-
talist state would own, run, and, to a considerable degree,
plan an economy made up of a few very large blocks of
capital, themselves consisting of a limited number of
enormous industrial enterprises, and facing economic
stagnation and periodic crises. In this way, the economic
preconditions of what Marx considered to be a socialist
society would be created. Meanwhile, the political and
social foundations would only require the workers' con-
sciousness to come into accord with the economic reality,
that is, for the workers to decide to carry out a revolution
and take over society. This was something Marx believed
would follow as a matter of course, since, in his view,
consciousness is ultimately a reflection of the material,
economic reality.

Yet, as we know, capitalist society has not evolved this
way. While many of the tendencies Marx discerned cer-
tainly exist, they have been offset by various counter-
tendencies so that the extreme economic concentration
and social polarization that Marx envisioned has not
come to pass. Thus, capital does get concentrated and
centralized, and some enterprises get larger, but capitalist
development also generates smaller capitals, and smaller
enterprises, particularly in newer sectors of the economy.
As a result, while many small businesses and capitals get
destroyed, many new ones are created and the modern
capitalist economy is characterized by generally vibrant
sectors of small- and medium-sized businesses. Likewise
with state intervention. The modern state certainly inter-
venes in the economy to a far greater extent than it did in
Marx's day. Yet it has by no means taken over anything
approaching the majority of capitalist enterprises.
Moreover, it has, in the interests of the health of the sys-
tem as a whole, broken up highly monopolized economic
sectors. Last but by no means least, the middle sectors of
society, rather than diminishing, have increased to an
extraordinary extent. Aside from the many small busi-
nesses, a "new middle class" of professionals-scientists,
engineers, managers, technicians, specialists and consult-
ants of all kinds, government employees, teachers, artists
and writers-along with skilled workers has emerged,
grown in size and increased in economic, social and
political influence. Despite his recognition that the eco-
nomic and social tendencies he analyzed were offset by
countervailing trends, Marx assumed, once again without
proving his case, that the tendencies he focused on were
not only predominant but would actually be carried out
to their logical termini.

To a considerable degree, Marx's conception of capitalist
development, particularly his prediction of a sharp polariza-
tion of classes, flows from his view that capital is just con-
gealed labor and his corresponding failure to recognize the
nature of technology. As long as capital is perceived as sim-
ply dead labor and technology as something automatically
generated by it or somehow simply ready to hand, the entire
question of how technology is developed and managed, and
what sectors of society carry out these tasks, will not even
get posed, let alone answered. And it was the failure to
address this question led Marx to miss the explosion in the
size and internal differentiation of the middle class, what I
think may be the key factor, along with the increased inter-
vention of the state in the economy, behind the stability and
vitality capitalism has shown over the last fifty years. Along
with the growth of the state, technological development has
certainly been a major factor behind the growth of these sec-
tors, while they, in turn, have played a major role in develop-
ing new technology, managing, operating and servicing it,
and training others to operate it.

Beyond this, these social layers have brought about a
tremendous expansion of the market, a key factor in miti-
gating the economic crises to which capitalism is still
prone. Equally important, they have greatly contributed to
the social and political stability of the system. By and
large, these are the people with the highest rates of partici-
pation in the political process, not merely as voters, but as
candidates for office, managers of and consultants for
political campaigns, as well as journalists, analysts and
commentators. Not least, these are the sectors that domi-
nate the labor unions and other organizations of the work-
ing class that have facilitated that class's integration into
the system, a fact that has greatly increased its stability.

> DIALECTIC OF LABOR?
Despite Marx's detailed analysis, capitalism has not
evolved as he foresaw and has turned out to be far more
vibrant than he expected. While he certainly cannot be
blamed for this, it is important for us to recognize Marx's
failure in this regard and to try to account for it. In my
opinion, along with the chief flaws in his conception of
capital, Marx's error flows from his belief that capitalism,
and human history as a whole, reflects, and is ultimately gov-
erned by, the dialectical development of labor. In philosophi-
cal terms, capitalist development, from its origins to its pro-
jected demise, becomes the phenomenology of labor.

As I discussed in the first installment of this article,
Marx took Hegel's dialectical schema and placed it on
what he thought was a materialist basis. Hegel's dialectic
of consciousness became Marx's dialectic of labor. For
Hegel, the essence of humanity is our consciousness
(and self-consciousness), which we (at first, unknowing-
ly) share with God. In this view, our history is, at bot-
tom, the dialectical process through which, in a kind of
discussion with itself, our consciousness journeys to the
recognition of the latter fact, that is, to our spiritual
unification with God (a unification, I should add to be
precise, which maintains the distinctions of the two
poles-us and God-within itself). For Marx, the
essence of humanity is labor, and our history is the
process through which we transform ourselves (and
Nature) through work. Specifically, it is a process
through which labor evolves dialectically towards its
own unification with itself.

In the first installment of this article, we saw how this was
described in terms of the dialectic of abstract and concrete
labor. In light of our discussion of Marx's conception of
capital, we can see this dialectic in another form, the
dialectic between living labor and dead labor, labor and its
products. (In Marx, as in Hegel, all these dialectical
processes occur side by side, and with varying degrees of
temporality. Thus, in addition to the dialectics we have
already referred to, the capitalist system as a whole exists
as an ongoing dialectical unity of production and circula-
tion. This is reflected in the very structure of Capital:
Volume I analyses capitalist production; Volume II, capi-
talist circulation, Volume III, capitalist production as a
whole, that is, the ongoing dialectical unity of the previous
two.) As an integral part of the work process, labor gener-
ates, "objectifies itself in," tools and other implements of
labor. Prior to capitalism, living labor and this objectified,
dead labor were united. Under primitive communism, each
society possessed its own implements of labor and the
land on which it hunted, gathered or farmed, collectively.

Even under early forms of class society, this unity between
dead and living labor remained, although in an attenuated
form. Under slavery, for example, slaves were considered to
be tools; in effect, they were united with the implements
with which they worked. Under feudalism, the serfs pos-
sessed their own implements of labor and were attached to
the land. However, this unity of labor and implements, liv-
ing and dead labor, limited the development of both, that
is, the tools/implements, on the one hand, and the skills of
the laborers, on the other.

Through the historical processes that led to the dissolution
of feudalism in Western Europe, the laborers became sepa-
rated from the means of production. As a result, under
capitalism living labor is now embodied in the proletariat,
the working class that owns no machines or tools of pro-
duction, while dead labor exists in the form of the capital-
istically produced means of production. Living labor and
dead labor are now separated from each other. One conse-
quence of this is that dead labor confronts the workers as
an alien power that dominates and oppresses them: the
more productive the workers' labor is, the more oppressed
they are. In the language of the Grundrisse, labor as subject
and labor as object are alienated from each other and
relate to each other as hostile forces. While this separation
increases the oppression of the workers, it also makes pos-
sible, indeed, it stimulates, the development of new means
of production and a tremendous increase in the forces of
production. Thus, as it evolves, capitalism increases both
the mass and power of the means of production, as well as
generating an ever-larger working class. In other words, as
capitalism develops, the two antipodes, dead labor and liv-
ing labor, labor as object and labor as subject, become ever
larger, while the conflict or contradiction between them
becomes ever more intense.

Once again, we have the Hegelian dialectic but in an
apparently material form: two aspects of an increasingly
intensifying internal contradiction. Labor, originally uni-
fied, is split, becomes alienated from itself. Over time, the
contradiction between its two aspects, living and dead,
subject and object, intensifies. Sooner or later, according to
the dialectical schema, the contradiction will be resolved
in a higher synthesis, the unification of living labor and
dead labor, the liberation of the working class, the subor-
dination of the means of production to their conscious
control, and the establishment of the conditions for the
rapid expansion of the forces of production, particularly,
the skills and talents of the workers themselves. Steeped in
Hegelian philosophy, Marx believed he had discovered,
through his study of capitalism and economic theory, that
this dialectical schema was not rooted in the Idealistic
realm of ideas or consciousness, as Hegel did, but in the
world of what he saw as material production. And Capital
was his effort to trace the inner workings of this supposed-
ly materialist dialectic, in the form of the hidden "laws of
motion" of capitalism and to reveal this discovery, and the
liberatory destiny that it implied, to the proletariat and, I
might add, to the rest of the world. Thus, Marxism is really
a variant of Hegelianism, (to be more precise, Hegelianism
in Ricardian clothes, a kind of Hegelio-Ricardianism or
Ricardio-Hegelianism), and Capital is the equivalent of
Hegel's Phenomenology of Mind, in which labor has
replaced human consciousness as the evolving substance.)

Marx's conception requires, as an essential presupposition,
that capitalism and history as a whole be conceived as the
evolution of one underlying substance, whose develop-
ment occurs in a dialectical manner. And this requires the
notion that the means of production are nothing but
(objectified) labor. If they aren't, then Marx's dialectical
schema isn't an accurate representation of the actual
process of capitalist development. Marx's scenario also
requires a belief in the validity of Hegel's dialectic logic, in
other words, that it is a real process subsisting in reality
rather than an esthetically pleasing and convenient mental
construct, so that there is an actual historical compulsion
for the internal contradiction, the conflict between capital
and labor, to be resolved. But if the dialectical logic does
not inhere in, that is, does not govern reality, there is no
basis to argue that this resolution will necessarily occur. In
sum, if the Hegelio-Marxist philosophical notions cannot
be sustained, Marx's insistence that he had demonstrated
that the class struggle necessarily results in the establish-
ment of the dictatorship of the proletariat, that is, that the
necessary outcome of capitalist development is
socialism/communism, is false.

Like many theoreticians (particularly philosophers),
Marx's mistake was to believe, despite his materialism, that
his theory is more true, more real, than concrete reality, in
fact, that his theory, the laws of motion of capitalism,
actually governs reality. In simpler, if somewhat cruder,
terms, Marx was a victim of his own wishful thinking.

> MARX'S THEORY AS A WHOLE
At this point, we can come to some overall conclusions about
Marx's theory of capitalism. What are we to make of it?
To answer this question it is crucial to recognize that there
are a number of different ways his theory can be taken. We
can, for example, see it as a philosophical conception. To
me, this means taking it as a tentative point of departure, a
personal and unprovable interpretation of reality, and see-
ing what insights it offers us. To me, Marx deserves credit
for developing a model of capitalism and capitalist devel-
opment that is critical of the system, in contrast to the
apologetic character of most economic theory. Instead of
viewing all economic participants as essentially equal own-
ers of commodities/resources (land, labor and capital),
who meet on the market and gain just rewards (rent, wages
and profit/interest), for their services, Marx analyzed capi-
talism as a hierarchy of power in which one segment prof-
its at the expense of the other. Specifically, he recognized
that the working class, the majority of the population and
a major "factor" or force of production, was exploited and
did not receive a fair share of what it contributed to the
production of material wealth. In addition, instead of see-
ing capitalism as a system that functioned smoothly, in
which economic crises were an aberration, Marx saw capi-
talism as an antagonistic system, one at war with itself, to
which conflict and crises are endemic. Moreover, he
attempted to come up with a model of how the capitalist
system functioned in its entirety. (One of the striking
characteristics of Marx's economic writings is their obses-
sive-compulsive character. He seems to have thought he
could encompass every aspect of capitalism in a unified theo-
ry. He also worked out the internal logic of his theory in
intricate detail, while commenting, often at great length, on
the ideas of virtually all the economic theorists he consulted.)
While the goal of a total theory eluded him (I think it is
intrinsically unattainable), the breadth of his analysis, its
internal consistency, and the sheer amount of work they
reveal, are impressive. He also discerned some of the key ten-
dencies of the system, and his effort to develop a strategy for
human liberation on this basis represents a crucial milestone
for all utopian projects that came after him. Probably most
important, Marx tried to show that the working class is not
just a passive object caught in the automatic workings of an
economic machine, but is an active force whose struggles play
a central role in the system and point toward its eventual
overthrow. This was an attempt to provide a scientific basis
for his insistence that "the emancipation of the working class
must be the act of the working class itself."

But when we view Marx's theory in the light of the insights
it offers, we should keep a number of things in mind. First,
many of these contributions were not originally Marx's.
While Marx broadly admitted his debts to certain predeces-
sors-what he referred to as French socialism, English polit-
ical economy and German Idealist philosophy-many
aspects of his theory were not derived by him, but by oth-
ers, and then taken over and developed more systematically
by him. Thus, a great deal of Marx's economic theory, and
not just some of his language (and underlying philosophy),
can be found in the writings of Hegel, particularly his
Philosophy of Right. In addition, while Marx is usually cred-
ited with the development of the theory of exploitation
under capitalism, this was in fact achieved by a prior eco-
nomic theorist. Given the tremendous political, social and
ideological influence it has enjoyed, Marxism has had a ten-
dency to take credit for, or to be seen as being responsible
for, intellectual contributions made by others. We would do
well to remember, and refer back to the writings of, these
other theorists. This requires us to break from the tendency,
most pronounced among Marxists, but common to the left
overall, to argue from authority, that is, to contend that
since Marx (or somebody else) said something, it must be
true. Finally, rather than believing in or trying to construct
a unitary, apparently self-consistent body of doctrine and
denouncing all who disagree with it, we should be con-
sciously, even militantly, eclectic, seeking to borrow from a
broad range of sources, including those not traditionally
considered to be leftist or revolutionary.

But this way of viewing Marx's theory is distinct from the way
Marx presented it and the way it has been taken by most of
his followers. This is as a scientific program, the unity of theo-
ry and practice, capable of predicting the course of develop-
ment of capitalism and on which one can confidently base a
strategy for social change. If we look at Marx's theory against
this claim, we can see that it does not hold up. Not only has it
not been tested, it cannot, as I argued, even be tested. In con-
trast, truly scientific theories, as part of their very definition,
require themselves to be subject to strict and broadly agreed-
upon tests or standards of proof.

Beyond this, Marx's theory does not hold up on it own terms.
For one thing, as we have seen, the labor theory of value can-
not be sustained; at best, it can be seen as a rough approxima-
tion, but one not capable of supporting a theory that claims
to be able make accurate predictions about capitalism's (and
humanity's) future state. For another, Marx's theory misreads
the nature of capital. Capital cannot be accurately understood
simply as accumulated dead labor that dominates living labor.
Instead, we can better conceive of it, to rephrase Marx's theo-
ry, as accumulated social/economic resources, including labor,
products of the Earth and intellectual/technological contribu-
tions, that, in the hands of a tiny elite, enable that elite to
direct the production process, and through this, to produce
and appropriate the bulk of the surplus product. More broad-
ly, the control of these resources enables the elite to dominate
and control humanity as a whole (and to try to dominate the
Earth), and to increase its wealth and power.

In the same way, Marx's theory misinterprets the nature of
exploitation under capitalism. It is not that the capitalist
class appropriates the social surplus which the working
class alone is responsible for producing. Rather, the capi-
talists appropriate the social surplus that the economy as a
whole, including capital and the forces/products of Nature,
produces. In a society dominated by commodity produc-
tion and exchange, ownership and/or control of these
resources confers social power on their owner/possessors.
This is not only the power to produce and appropriate
wealth, the social surplus, but also the power to control
the activities-social, political and intellectual as well as
economic-of others. This ownership/control is main-
tained and reinforced by the state, which, by becoming
integrated with the economic hierarchy, creates a specifi-
cally capitalist form of economic/political domination.
Seen this way, the root of our exploitation and our oppres-
sion as a whole is the unequal distribution of power.

Moreover, Marx's theory presents a limited and one-
sided picture of capitalism as a whole. If we look at capi-
talism today, does it make sense to see it as merely a sys-
tem that accumulates dead labor to dominate living
labor? This can only be maintained if scientific/techno-
logical achievements and activity are conceived simply as
labor. While scientific activity is work, it cannot be sub-
sumed under the same category as simple, unskilled
labor that, for Marx, constitutes the vast majority of
labor performed under capitalism. Nor does it help to
see it, as Marx does skilled labor, as a compound of
unskilled labor. The more skilled labor becomes, in other
words, the more intellectual preparation and activity are
required to generate a given level of knowledge and skill,
the less can it be conceived as some kind of simple sub-
stance, its products as an embodiment of that substance,
and the value of those products as being determined by
the amount of labor-time it took to produce them.

What, for example, is the economic value of Einstein's
Theory of Relativity? Is it determined by the amount of
labor-time required to produce it? What about Newton's
laws of motion? To be more prosaic, what are the values of
the scientific/mathematical discoveries, accumulated over
the centuries, that have gone into the development of
computers or any other embodiment of our current tech-
nology: are they too determined by the amount of labor
necessary to produce them? The very posing of these ques-
tions suggests the absurdity of any attempt to conceive of
scientific/technological contributions solely as products of
labor whose value is determined by the amount of time
socially necessary to produce them. But if this is so, then
capitalism, whose very existence requires and generates
these tremendous scientific/technological achievements,
cannot accurately be conceived simply as a system based
on the domination of dead labor over living labor.

Marx's analysis also fails to recognize the predatory rela-
tionship human beings, particularly as we have evolved
under capitalism, have with the Earth and the natural
world as a whole. Not only did Marx not recognize that
our use of the products and productive powers of Nature
has a cost and is ultimately destructive, one of his main
criticisms of capitalism was that it fetters the development
of the forces of production, in other words, that it hinders
our ability to dominate the Earth. In other words, Marx
takes humanity's current antagonistic relationship to the
natural world, and the underlying nature and purpose of
our science and technology, as given, rather than advocat-
ing the need to change it. For him, one of the chief bene-
fits of socialism/communism is that it will increase
humanity's ability to dominate the Earth and the natural
world as a whole, not live in harmony with it.

> HUMANITY: DEFINED BY LABOR?
Finally, Marx's theory also presents, it seems to me, a
distorted or one-sided conception of the human species.
Marx sees humanity's defining characteristic as labor,
our ability, and our drive, to transform nature and our-
selves through work. However insightful this conception
may be, it amalgamates and confuses discrete activities
under the category of labor. At the risk of simplifying,
these are: (1) working with existing tools, machines and
other technological devices; (2) making these tools,
machines, etc.; and (3) inventing new ones. If we look at
the early stages of human development, it is easy to con-
ceive these three functions simply as aspects of labor.
But they are conceptually distinct, and at some point in
our evolution, they become obviously so and themselves
subject to the social division of labor: some people work
with existing tools, machines, etc., some people make
them; and still other people devote themselves to invent-
ing them. While working with and making tools and
machines certainly require thought, the invention of new
tools and machines, as well as developing the intellectual
realms that go into this, requires and generates a tremen-
dous expansion of humanity's intellectual capacities. As
a result, it seems to me, it can longer be thought of sim-
ply as labor, let alone seeing it as a compound of
unskilled labor, without making the term "labor" so
broad as to be virtually meaningless.

What this means for Marx's theory of capitalism can be
seen if we integrate this idea into Marx's overall concep-
tion of social development. According to this theory, we
will remember, the growth of labor productivity makes
possible the production of a social surplus, which in
turn is the material basis for the development of social
classes and of exploitation With the emergence of class
society, the social division of labor takes on a class
dimension. The production and expropriation of a social
surplus not only enables a ruling class and state to develop, it
also frees a group of people from manual labor and allows
them to devote themselves to intellectual activities, including
the development of writing, mathematics and astronomy
and other realms of abstract thought. While the activities of
these individuals serve to maintain class society, these people
are not purely parasitical. They help develop the means of
production, for example, the elaborate systems of irrigation
that were the basis of early civilizations in the Nile and
Tigris-Euphrates valleys. In sum, with the development of
class society, a significant portion of humanity's intellectual
activity becomes distinct from the process of labor and
develops its own internal division of labor. However, as Marx
discussed, this separation ultimately distorted and limited
the growth of both humanity's intellectual abilities and the
productive power of labor. In part because of the low status
attributed to labor itself, carried out as it was by slaves or
serfs, the application of science and mathematics to the actu-
al work process was limited and haphazard. As a result, the
development of technology, as well as of science and mathe-
matics, was relatively slow.

But with the dissolution of feudalism, the stage was set for a
more direct connection between science and math, on the
one hand, and economic activity, on the other, to occur. And
the social vehicle for this connection, acting as a sort of
bridge, was the growing class of capitalist entrepreneurs. Not
only did the capitalists organize production, they were the
chief social factor behind the application of scientific devel-
opments to the production process itself. And in so doing,
they fostered the development of technology, to the mutual
benefit of both production and science. Moreover, despite
the much discussed transformation of the individual capital-
ist entrepreneurs into corporate managers, the capitalists still
carry out, to varying degrees, this social function, a fact that
is particularly clear in the new, high-tech sectors of the econ-
omy. Unfortunately, for the social roles they play-as the
organizers of production and as the vectors for the develop-
ment and application of new technology-the capitalists
exact a very high price: the right to expropriate virtually the
entirety of the surplus product produced through the pro-
duction process, and the resulting power to control the labor
and lives of others, indeed, society as a whole.

In part through their role, humanity's intellectual activity
becomes the predominant factor in economic life. One of
the reasons capitalism has been so successful is precisely
because it provides conditions conducive both to the
development of these scientific and technological advances
and to their application to the manufacturing process:
varying degrees of intellectual freedom, on the one hand,
and the opportunity and incentive to launch new enter-
prises, introduce new methods and create new products,
on the other.

In light of this, we can now see much more clearly the lim-
itations of Marx's view that the means of production are
nothing but congealed labor. They are much more the
combined intellectual achievements of humanity applied
to economic production.

Rather than conceiving humanity primarily in terms of
labor, as Marx does, one can with equal or greater justifi-
cation think of humanity as beings who generate and live
in a world of increasingly elaborate and complex symbols,
including language, religion, philosophy, mathematics, sci-
ence, art, music, etc., in short, the world of culture. (For a
detailed discussion of this idea, see the writings of Ernst
Cassirer, particularly his The Philosophy of Symbolic
Forms.) While Marx contended that it is the labor process
that generates the production of symbols, one can just as
well argue that it is the other way around, that without the
symbols and the social life that they make possible, labor
wouldn't exist. In other words, if human beings didn't live
in groups, our economic activity, and anything we could
call labor, wouldn't occur, while our social activity itself
would be impossible if we did not communicate with one
another and create a world of shared meanings, that is, if
we did not generate symbols.

But if history is not ultimately determined by the evolu-
tion of labor, a supposedly material process with a sup-
posedly discernible direction, as Marx thought, but instead
reflects humanity's symbolic life, the world of culture, then
it is much harder to discern, or to claim to discern, a spe-
cific direction of our social development. For one of the
things most striking about our symbolic/cultural life is its
spontaneous, creative character, which, by definition, does
not lend itself to prediction. In other words, if our social
evolution reflects the development of our cultural life,
then the outcome of this evolution is not in itself pre-
dictable, and any attempt to claim that it is, for example,
that socialism/communism is the necessary outcome of
human history, is false and a delusion.

> THE LOGIC OF MARXISM
In light of all this, we can see why the practical results of
the Marxist program have not been free societies, but
totalitarian systems. As I've discussed, when Marxists have
seized power, they've used the state, reorganized to be even
larger and more powerful, to build new societies in con-
formity with their program. While Marx wrote very little
that describes his conception of socialism, he did make it
clear that all or most of the property, the means of pro-
duction, would be nationalized, that is, owned and run by
the state, itself supposedly run by the workers. As a result,
the nationalization of much of the economy becomes one
of the primary goals of Marxist governments. Beyond this,
Marx's analysis of capitalist development provides addi-
tional guidelines for Marxists intent on revolutionizing
society. I am referring specifically to the various trends or
tendencies discussed above. Since Marxists have come to
power in less capitalistically developed societies, and since
Marx saw advanced capitalist society as building the pre-
requisites for socialism, Marxists in power have sought to
carry out the trends of capitalist development, as envi-
sioned by Marx, as close to their logical conclusions as is
feasible: to concentrate and centralize all capital in one
block and to place that block in the hands of the state
(and, of course, to get rid of the capitalists); to eliminate
small businesses, independent entrepreneurs and pre-
capitalist social classes, such as peasants, and to con-
centrate economic activity in large, supposedly more
efficient units, and to direct this activity through what
is in fact a kind of monopolistic planning. By the logic
of Marxism, Marxists, supposedly opponents of capital-
ism, become active proponents of (a specific type) of

capitalism. The result, as we know, has not been
democratic, coopera-tive and egalitarian societies, but
forms of highly centralized, statified capitalism
without the capitalist class, in other words, state
capitalism.

Not surprisingly, many of the other characteristics of
these systems reflect Marx's theory. Given Marx's belief
that the Earth offers its productive services gratuitously,
is there any wonder that the so-called socialist countries,
including, above all the Soviet Union and the People's Republic
of China, experienced some of the worse environmental destruc-
tion in the world, devastation made far worse by the fact that
the totalitarian structures of these societies prevented the
emergence of independent environmental movements? Given
Marx's failure to fully recognize that the means of production
are not just material, not just congealed labor, but that they
also embody intellectual activity, is it any surprise that the
socialist economies were ineffective in developing new tech-
nology, inefficient in their use of capital and incapable of
accurately evaluating capital equipment? And given Marx's
refusal to recognize the social significance of individuals' sub-
jective evaluation of commodities, isn't it perfectly logical that
the state capitalist economies were/are incapable of producing
high quality consumer goods in the variety and amounts that
people desired, or that the much touted centralized planning
led to tremendous shortages and waste, in other words, that
state planning was really a pretentious label for barely-man-
aged chaos. Finally, given Marx's failure to recognize the true
role of humanity's intellectual/cultural activities in human
society and its creative and ultimately unpredictable nature,
doesn't it make sense that Marxist regimes have systematically
sought to suppress independent intellectual and artistic activi-
ty? All these characteristics of the state capitalist societies
were/are not purely accidental results of the circumstances
under which the "socialist" transformations occurred, the
legacies of historical and economic conditions, or the results
of the errors or personalities of the revolutions' leaders. They
flow from, and reflect, Marx's theory and the Marxian program
as a whole.

> THE IRONIES OF MARXISM
There is considerable irony in the fact that Karl Marx,
one of the paramount intellectual figures of the 19th
century, should have failed to recognize the true signifi-
cance of intellectual activity to human history. But this
is not the only irony of this kind. Marx and Marxism are
a study in ironies. Marx was an intellectual who down-
played the role of intellectual activity in capitalism and
history as a whole. He was a philosopher who denied he
was doing philosophy. He considered himself a material-
ist, but his philosophy is actually Idealist. He saw himself
as a critic of ideologies, but he developed one of the
most influential ideologies yet created. He was what we
would now recognize a middle-class person who predict-
ed the demise of this class. He was from a Jewish family
(his father converted, his grandfather had been a rabbi),
who wrote what many consider to be an anti-Semitic
tract. He was a militant opponent of religion whose
worldview is a restatement of the ancient messianic
vision of Judaism. He claimed to be an opponent of the
state, but advocated a dictatorship (supposedly a demo-
cratic one) to achieve his goal. He was a man who ana-
lyzed and condemned what he called false consciousness
(a social form of self-delusion), but was the very embod-
iment of such false consciousness. He analyzed the
fetishism of commodities, the reification of our social
relations (seeing them as relations among things), but
was himself a victim of such reification, viewing the
abstractions of his own theory (labor, value, the "laws of
motion" of capitalism), as objectively existing substances
and structures that govern our lives. He was a passion-
ate advocate of the liberation of humanity whose pro-
gram became a blueprint for one of the most brutal
forms of society humanity has ever seen.

But if we look at Marx as a product of his times, these
ironies make sense. He was a highly trained intellectual
who refused to accept the marginal, essentially apologetic
role to which intellectuals of his day were assigned. (At the
top of the intellectual hierarchy, Hegel became in effect the
court philosopher of the Prussian monarchy. Had he
accepted is assigned role in society, Marx would have
wound up as a low-level functionary in the state bureau-
cracy, as his father had been.) Outraged at the barbarities
of society, particularly those of the still emerging capitalist
society, and seeing little future either for himself or for the
intellectual class of which he was part, Marx looked for
and thought he had found the vehicle for his own and
humanity's liberation in the working class being created by
the burgeoning industrial economy. And he sought to
become the proletariat's theoretician and spokesperson. In
this way, Marx projected his own dreams onto the world
stage. To use Nietzsche's phrase, Marx's work and Marxism
as a whole is a reflection, an embodiment, if you will, of
Marx's "will to power."

Unfortunately, this will to power was to find a social base.
Belying Marx's predictions, the middle class, rather than dis-
appearing, has greatly increased in size and social influence,
both in the state and as the leading layer of the working class
movement, which Marxism itself was instrumental in creat-
ing. At the same time, the modernization of the state and the
development of the techniques of political, social and eco-
nomic domination and control, facets of the means of pro-
duction that Marx overlooked, made it possible for intellectu-
als and other middle class sectors to take over and run the
state. Through these ultimate ironies, Marxism, the product of
an alienated middle-class intellectual, developed the social
leverage that enabled it to play a powerful role in history.

Although Marxism claims to be the program of the working
class and at times has attracted large number of workers to its
banner, it remains the outlook and dream of a middle-class
intellectual. As a result, throughout its history, Marxism has
been most attractive to morally outraged, socially alienated
intellectuals. (Among other things, this helps explain why
Marxism became so attractive to middle-class nationalists
who quickly discarded Marx's focus on the working class and
its revolutionary self-emancipation in favor of an orientation
to the peasantry or to any other class that might serve as a
base for their own conquest of power. It also explains why so
many intellectuals and would-be intellectuals, morally con-
cerned and seemingly intelligent in other respects, have been
so easily seduced into becoming blind apologists of barbaric
totalitarian regimes.) Rather than being the program for the
liberation of humanity, Marxism is, and has shown itself to
be, an embodiment of these intellectuals' will to power.

Yet it is not merely ironic that Marxism, with its failure to
recognize the intellectual nature of capital and the emer-
gence of the middle class, became a vehicle for the will to
power of sections of that class. These very blind spots help
make Marxists' seizure of power possible. It's because
Marxist intellectuals do not see that they are part of a dis-
tinct social layer and do not recognize that their intellectu-
al, technical and managerial skills represent the basis for
their own domination and exploitation of the working
class that they believe they truly represent the interests,
indeed, the very consciousness, of the working class. It is
this delusion, this false consciousness, that provides the
moral impetus and justification for their struggle for
power. It's what gives the Marxists' drive to create a totali-
tarian state the fervor of a moral crusade. Marxists truly
believe they are liberating humanity. And it is this delu-
sion, it seems to me, that makes Marxism so dangerous.

> THE END OF UTOPIA?
But if Marxism is at bottom a middle-class program, so are
all the other utopian schemes developed by intellectuals.
Does this mean we must give up our utopian dreams? I
don't think so. As part of our intellectual and emotional
life humanity needs and generates such ideals. And all
those who seek to improve social conditions, even those
who are not advocate revolution, need them as guidelines
or standards against which we judge present-day society
and toward which to aim. But what we must do is to avoid
presenting our visions as what they are not. They are nei-
ther science nor scientific; they are not inevitable nor even
highly probable. They do not represent the standpoint, the
supposedly true consciousness, of the working class. They
represent our consciousness and our desires; we can only
believe that they represent the interests of the working
class and all humanity. Such visions are, I hope, possible to
achieve, but any claim that they are "necessary" is ulti-
mately a moral one, a fact that must be admitted and
argued for as such. Above all, we must forever abjure the
use of the state, and the means of coercion it controls, as
the vehicle to achieve our goals. Our aim should be to lead
by example. If we don't, if we succumb to the temptation
to impose our dreams, we will, if we succeed at all, become
oppressors rather than the liberators we claim and wish to
be.

By way of a postscript, it is worth noting what the Danish
philosopher Soren Kierkegaard once wrote of Hegel:
If he had written his whole Logic and in the preface
had disclosed the fact that it was merely a thought-
experiment (in which, however, at many points he
had shirked something), he would have been the
greatest thinker that has ever lived. Now he is comic.
(Quoted in Walter Lowrie, A Short Life of Kierkegaard,
Princeton University Press, Princeton, New Jersey,
1970, p. 116.)

If we replace Logic with Capital, I think this quip equally
applies to Marx, although in light of the destructive conse-
quences of Marxism-the millions jailed, tortured and
killed, the colossal environmental devastation, the sullying
of the terms "socialism" and "communism" - we should
probably change "comic" to "tragic."

---------------------


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