October 14, 2013

Who's a Marxist Now?

Writing about web page http://www.conservativepartyconference.org.uk/Speeches/2013_George_Osborne.aspx

At the Tory conference George Osborne, Chancellor of the Exchequer, made an interesting point about the views of Ed Milliband, Leader of the Opposition:

For him the global free market equates to a race to the bottom with the gains being shared among a smaller and smaller group of people. That is essentially the argument Karl Marx made in Das Kapital. It is what socialists have always believed.

Osborne’s point made me think about the influence of Marx on modern intellectual life. To many this is something of a puzzle. Isn’t Marxism discredited as a political philosophy? Haven’t the economic policies of Marxist regimes generally failed to provide for “an association, in which the free development of each is the condition for the free development of all” – the words by which Marx once distilled the goal of communism? How many of those that identify with the ideals of socialism today have actually read and followed even one page of the fifty volumes of the Marx-Engels Collected Works?

My answers: Yes, Yes, and Not many. Yet Marxism shows no sign of dying out; it lives on in a variety of political movements and branches of academic and cultural life.

Why’s that? The question is puzzling only if we think of Marx as the the reason why Marxist ideas exist. Of course Marx was the originator of Marxism, but I am quite sure that if Marx had never been born to invent Marxism, some other scribbler would have taken his place. The basic ideas that underlie Marxism pre-existed Marx, and would have existed without his writings, and are continually reborn and propagated among people who know nothing of Marx for a straightforward reason: because such ideas correspond with how most people experience everyday life. Marx’s importance, therefore, was not as the discoverer of these ideas but as the writer that gave them a scholarly form.

What are the experiences to which Marxist economics correspond? Behind the complicated terminology of capital and value and Marx’s elaborate philosophical and historical argumentation of them are four simple ideas:

  • The market is a jungle, a chaotic struggle of each against all, in which the strongest, most ruthless predator wins. Lurking behind every transaction is the chance that someone will rip you off.
  • Of all the possible functions of market prices – accounting, economising, distributive – the only one that matters is distribution. A rise in the price of food or fuel cuts the real income of workers and redistributes it in favour of the producers that employ them.
  • Work is hard and stressful, and the main source of pressure is the employers' drive to make you work harder and longer, in order to save them money or increase their profits.
  • You can’t do anything about this on your own. Idealistic advocacy has no traction without numbers. Everyone should get together and intervene forcibly to bring about radical improvement.

What kind of economics do these four ideas make? They make the economics of everyday lived experience for most of the world’s seven billion people. I’m not talking just about the poor and ignorant. It’s nothing to do with education or position in society. My guess would be that most people in my immediate circle of family and friends that are not trained economists hold, most likely, two or three of the four ideas; I expect that all might hold at least one.

Suppose you decided to give your life to elaborating these four ideas and you spent years working them up into a philosophy of economics: What kind of book would you write? I think you’d end up writing something pretty much like Das Kapital. In other words, Marxism is a philosophization of the economics of lived experience, but it's the economics of lived experience that should really demand our attention.

What kind of economics would lived experience support? It would make, in the words of Frederic Bastiat, the economics of “that which is seen.” It would take into account only the most immediate effects of things. It would leave out the other effects, those that “unfold in succession – they are not seen: it is well for us,” Bastiat went on, “if they are foreseen. Between a good and a bad economist this constitutes the whole difference – the one takes account of the visible effect; the other takes account both of the effects which are seen, and also of those which it is necessary to foresee.”

What’s wrong with the economics of “that which is seen”? By analogy, think of the physics of “that which is seen”: the earth is flat and parallel lines never meet. Or the chemistry of “that which is seen”: burning is the release of phlogiston. I’m not saying that economics is a science like physics or chemistry in all respects. What I’m saying is that Euclidean geometry, the idea of a flat earth, and the theory of phlogiston are perfectly serviceable for making sense of a number of things everyone can see from day to day. It’s true, though, that these ideas miss out badly on other things and this prevents them from being useful in many contexts. For the purposes that are missing, we need more; we need the physics and chemistry of “that which is not seen,” including molecular science, gravity, and relativity.

What is added by the economics of “that which is not seen”?

  • The market creates many opportunities for sellers to abuse buyers, yet the market is not chaos: it enables specialization and competition. The same market economy that often feels like a jungle is the mechanism that has sustained the West’s unprecedented prosperity and is also the hope for sustained progress of the Rest. But this is not seen because it has taken hundreds of years to materialize; life’s too short for it to be seen. (My colleague Omer Moav makes a similar point in a penetrating review, which he showed me recently, of Ariel Rubinstein's Economic Tales.)
  • If something that you consume is in short supply so that the price goes up, you lose in the short term, and this is seen. Beyond this, however, is an unseen process by which all gain. There is adaptation. Responding to the increased cost, we economize on uses, we search for substitutes, and we find or create new sources of supply. The adaptation is not seen because it would require the simultaneous observation of a million small responses.
  • Work is stressful, and a predatory employer can increase the stress for the sake of profit. But that is incomplete. In the Marxian perspective there is only one kind of surplus, called profit, one source of surplus, called labour, and one class of recipients, the capitalist class. In the competitive market economy every transaction gives rise to a surplus on both sides. Day by day, billions of small surpluses accrue to both sides, buyers and sellers, that are party to every transaction. In other words, there are surpluses everywhere and they accrue to everyone; they are not the monopoly of one class. But this, too, is not seen.
  • Everyone getting together to force change does not always make anything better, and this might be the case quite often. This is not seen for two reasons. First, in every case to establish the results of intervention requires the careful construction of a counterfactual (in other words, what would have happened without the intervention) which, to most people, seems intolerably speculative. Second, when intervention has demonstrably not brought about the benefit sought, there is a natural human tendency to shift the responsibility from our own action to the counteraction of those that disagree with us, whom we make into scapegoats.

Whatever things are not seen, it’s hard to know they are there. Understandably, therefore, most people stick to the economics of what they can see for themselves. Most of those don’t think of themselves as Marxists or even socialists. Still, it ensures a reservoir of instinctive sympathy in our society for ideas that are aligned with Marx's and helps to explain his lasting influence. This reservoir is continually refilled from everyday experience. That's why Marxist ideas live on and will often be well received by well educated, well intentioned people.

Full disclosure: In years gone by I considered myself a Marxist and I read a lot of Marx, Engels, Lenin, Stalin, Mao and others. At various times I joined a Capital reading group, and taught the economics of Marx (alongside Smith, Ricardo, List, and Schumpeter), and I even wrote a pamphlet called The Economics of Capitalism; I still have a copy; one day I’ll scan it and put it on line. Somewhere between that time and this, however, I changed my mind for reasons that I wrote down here.

- 6 comments by 1 or more people Not publicly viewable

[Skip to the latest comment]
  1. Anne Moeller

    What you broke Marx’s ideas down to is not actually the essence of Marxism, I think. It is a lame number of bland accusations frustrated office workers would make today. Lets not forget that work actually killed people during Manchester capitalism, it was not just “hard and stressful”. Just like it still kills people today, in those countries rampaged by capitalism’s never satisfied zest for cheap labor forces. I found what you wrote here so unsatisfying in a number of ways, but I don’t have the time to really go into it now.
    Just one last thought, I think being Marxist today, still makes sense for a whole number of reasons, not least, because he was so accurate about some of the most grim problems we are facing with capitalism today. Looking at the United states today, we can see that capital and profits generated are in deed shared among a smaller and smaller group of people, and we are following this trend as well, if slower. This development for me more and more refutes any of your listed benefits of the free market. Regards Anne Moeller

    14 Oct 2013, 12:39

  2. Saul Jacka

    I fundamentally disagree with your first commenter. I think you have captured exactly the wellsprings of Marxist support.
    Because you have chosen to use moderate language, which reflects the modern setting for many people, your first commenter mistakes your summary for the trivial cavils of the worried middle-class; whereas, in fact, Marxism appeals to many who are desperately confronting the exigencies of a fraught and dangerous existence.

    But that is part of the point. Marxism appeals to emotion and “the now” and teaches a disregard for consequences in favour of a sense of grievance, so if your article fails to address the grievance head on then it must be wrong.

    15 Oct 2013, 10:35

  3. Sam

    I find your presentation of Marx to be a straw-man here. You argue against a simplified version of classical Marxism that I doubt many Marxists at all would accept. You paint a picture of Marxist thought as a discredited political philosophy but do not acknowledge the profound impact Marx has had on modern economic thought (although, you seem to say that those ideas generally already existed but that does not mean that they are wrong). Very few would argue that Marx is infallible and modern Marxism (neo-/ post- Marxism, for example) incorporates many elements of Keynesian economics, Weberian sociology, game theory etc where they better explain certain phenomena. Schumpeter took elements of Marx and built upon them. Sraffa provoked important debates about capital and value. In any case, I think economics benefits from methodological pluralism.

    I think the argument has some weak points: Marxism does describe ‘that which is not seen’, people do care about whether an argument is right or accepted/discredited, and, even if the argument were correct the conclusion does not necessarily follow. The premises could easily lead to acceptance of other accepted/discredited schools of thought. As a final point, you use the word ‘discredited’, I presume you chose this instead of ‘wrong’...

    15 Oct 2013, 14:37

  4. Mark Harrison

    Everyone’s entitled to an opinion, so I limit myself to clarifications. Here’s one. I listed what I think are the key everyday experiences that create a widespread sympathy for the ideas of Marxist economics. Sam says these are “a straw-man,” but by definition they are not. When you make a straw man, you set up something that you know to be false in order to knock it down. I don’t think these experiences are false; they are real and that’s why they matter. Anne says they are “bland accusations frustrated office workers would make”; I think they are more serious than that. As Saul suggests, I simply expressed myself in moderate language, preferring the general case over the extreme one. Marx himself would have argued that his case against capitalism did not rest upon any particular atrocious examples.

    21 Oct 2013, 11:06

  5. Peter C

    The economic policies of countries that have labelled themselves communist have not been, in general, worth emulating. Hard to disagree with that. Hard also to disagree with the sentiment that many on the left do not have a good understanding of the practicalities, or is that impracticalities, of many of the utopian policies they support.

    That said, although, I like apparently you have not read Marx, as indeed few have, I have listened to enough others who have read Marx to know you have not distilled his ideas into your four points.

    Others have accused you of a straw man. Might I say you have economised on the straw?

    This is a very disappointing read.

    27 Oct 2013, 11:28

  6. Mark Harrison

    Peter is another one that has mistaken what I tried to do. I did not set out to distil Marx’s ideas, nor would it be possible to do that in four points. I set out to distil “the experiences to which Marxist economics correspond.” This is what I sought to do in an economical way. It would have been easy for me to increase complexity by adding more points. I thought of including things like how personal experience of the labour market can contribute to identification with a particular social class, or sources of biases towards pessimism in anticipating the future of our society. But I wanted to be brief and thought these sufficiently implicit in what I had said already. In other words, to go on at greater length would have added complexity but not clarity; it would have unnecessarily “multiplied entities,” something that William of Ockham warned against. That’s why I left things there.

    28 Oct 2013, 12:46

Add a comment

You are not allowed to comment on this entry as it has restricted commenting permissions.

I am a professor in the Department of Economics at the University of Warwick. I am also a research associate of Warwick’s Centre on Competitive Advantage in the Global Economy, and of the Centre for Russian, European, and Eurasian Studies at the University of Birmingham. My research is on Russian and international economic history; I am interested in economic aspects of bureaucracy, dictatorship, defence, and warfare. My most recent book is One Day We Will Live Without Fear: Everyday Lives Under the Soviet Police State (Hoover Institution Press, 2016).

Economics Blogs - BlogCatalog Blog Directory

Mark talks about why and how he blogs on Warwick’s Knowledge Centre.

Search this blog

Blog archive



Most recent comments

  • Thanks! Yes, it's hard for people who didn't experience it to grasp what it was like to live in that… by Mark Harrison on this entry
  • Mark, Great account. Hitchhiking through Bulgaria in 66 did the same, or similar, to me. What an ext… by Mark Allen on this entry
  • Great blog as usual Mark. You always lay out the facts of the situation. by Thomas O'Malley on this entry
  • Mark, fascinating as always. As you clearly point out, restricted access to price–controlled goods a… by Saul Jacka on this entry
  • I asked a friend and colleague, Mark Kramer, to look at my column on McCarthyism and tell me what he… by Mark Harrison on this entry
Not signed in
Sign in

Powered by BlogBuilder