324 marx overheads

Karl Marx (1818-1883)

1. Early Work: Estranged [aka “Alienated”] Labour claims that capitalism “estranges” workers:

- from their products- from their work- from their fellow workers- from themselves

Question: how much of this is sheer romanticism- bad economics- serious and possibly interesting social criticism?

1. romanticism: Marx objects to the results of the division of labor and increasingly “abstract” kinds of work

- “ it does not belong to his “essential being”[no kidding! Hey, guys: “In the sweat of thy brow shalt thou eat

bread”! It’s true!]- but from the point of view of the worker- who works for wages that will buy him a lot more - where’s the beef?- not surprising that he prefers industrial work

Phil. 324 Overheads ... 192

2. Bad economics: - capitalism impoverishes workers- (cf “the more the worker produces, the less he has to consume”)

- partly empirically wrong- partly theoretical nonsense

- capitalism “robs” them.[- an odd (but signficant) criticism from someone who claims not to

believe in exchange and private property]- baseline fallacies:

- ‘impoverishes’ should mean that workers over times consume less than before

- not merely less than Marx [who is of bourgeois origin] thinks they should have

(And in fact they were consuming more)

3. Primitive IndustrialismComplaints about the specific character of the work are largely a

function of industrial primitivism. “the more ingenious labour becomes, the duller becomes the worker”

- Note that this is not specifically due to capitalism, but to the character of industry. And it has changed hugely over the years.....


The Communist Manifestolabour produces:“for the rich wonderful things -but for the worker, privation. “for the rich, palaces -but for the worker, hovels. - etc.Implicit assumption: capitalists should really not be making much more

than their employees..... - Does Marx have a theory to back this up?Yes - [we’ll see when we get to Capital.] - It’s a bad theory, and it doesn’t actually imply this ...But mainly, it’s the baseline point again. - Capitalists do act in such a way as to enable workers to do better- which they in fact do- But not nearly as well as the (successful) capitalist- but the alternative is to remain mired in pre-industrial poverty

The “ruling class”

“The bourgeoisie is unfit any longer to be the ruling class in society”- [Question: in what sense do business people “rule” society??- Unlike literal “rulers”, they have no authority to compel anybody

to do anything (unless you count paying their bills....)Marx says that Bourgeois “imposes its conditions of existence upon

society as an overriding law”- meaning?

- That almost all of us buy the stuff they cause to be made?- and who “compels” us to do that?

“it is incompetent to assure an existence to its slave within his slavery”[bad economics rides again;

- also bad ethics: capitalists are supposed to be nannies?


Komms der Revolution:Wage-labor rests exclusively on competition between the laborers. The advance of industry replaces the isolation of the laborers- by their revolutionary combination, due to association.

[Uh, huh... but somehow the workers didn’t’ rise to the occasion...

- I wonder why?]

Property, Freedom, history:“property relations” are “subject to historical change” French Revolution: abolished feudal property - replaced it with bourgeois property[? and how’d they do that??]communism: “not the abolition of property generally, but the abolition

of bourgeois property” “modern bourgeois private property is based on class antagonisms” [= the exploitation of the many by the few]

Communism summed up in the single sentence: Abolition of private property

- note: in fact it’s the abolition of free exchange...“Hard-won, self-acquired, self-earned property!”[Marx, who never did a stick of work in his life, implies that people who

don’t “work” don’t deserve to make a lot of money. We’ll see ...!] Do you mean the property of the petty artisan and of the small peasant,

a form of property that preceded the bourgeois form? - the development of industry has to a great extent already destroyed itOr do you mean modern bourgeois private property?But does wage-labor create any property for the laborer? Not a bit.[Karl didn’t bother to look ....] It creates capital, i.e., that kind of property which exploits wage-labor,(now) property is based on the antagonism of capital and wage-labor.


“Capital is a collective product”- the united action of many members, nay, of all members of society,

sets in motion.[note: Marx doesn’t seem to think it matters that different members do

quite different things in this process...] -> Capital is therefore not a personal, it is a social, power.So, when capital is converted into common property [by the revolution]- personal property is not thereby transformed into social propertyIt is only the social character of the property that is changed. It loses its class character ...[uh, huh .... and takes on a political character instead]

“In Communist society: accumulated labor [i.e. capital] is but a means to widen, to enrich, to promote the existence of the laborer”

[i.e., capital will be run in the interest of the workers ...[...by the Central Committee, of course...!]


Culture and Ideology as Class-Relative

“Your very ideas are but the outgrowth of the conditions of your bourgeois production and bourgeois property,

“your jurisprudence is but the will of your class made into a law for all“- a will whose essential character and direction are determined by the

economic conditions of existence of your class”[we bourgeois] transform into eternal laws of nature and of reason, the

social forms springing from your present mode of production and form of property

-- historical relations that rise and disappear in the progress of production

--a misconception you share with every ruling class that has preceded you.

man's ideas, views, and conceptions, in one word, man's consciousness, changes with every change in the conditions of his material existence, in

his social relations and his social life the history of ideas proves that intellectual production changes its

character in proportion as material production is changed The ruling ideas of each age have ever been the ideas of its ruling

class.”[Comments: the idea of a “ruling class” isn’t well defined here, to put it

mildly.The bourgeoisie do not and cannot “rule”, ordinarily. What they do is to buy and sell, which means that the interactees can take it or leave it.

If the claim is that the bourgeoisie tend to have a lot of influence on government and induce laws to be made in its favor, there’s a good deal in that --- just as, later on, labor unions have a huge effect on government too. The question is whether we shoujld blame the bourgeoisie (or the unions) - or the government if tis is done badly.

The other question, of course, is whether the Communists would do any better....

Hint: not likely!This is related to the idea that Marx seems to be getting at here that

economic principles are themselves politically motivated. That was what did the Communists in when the got in power, as we’ll see...

And thus we move on to the real meat of Marx ....


1. Marx’s “Historical Materialism”

BASE(a) (Social) Relations of Production---------------------------------------------------(b)(Material) Forces of Production ... HJ

Superstructure: Law, Morals, Religion, Culture....jlhghkfg

CAUSATIONMain elements:

BASE: (a) Relations of production (e.g., A owns B’s labor -> A tells B what to produce ..)

(b) Forces of production (steam power ...)

SUPERSTRUCTURE: “legal and political” superstructure to which correspond “definite forms of social consciousness”

Thesis: Social productive relations (a) correspond to a definite “stage of development” of (b) material productive forces

Sum of (a + b) constitutes the economic structure of society - the “real foundation” on which rises (3) and (4).

Materialism: Social Consciousness must be explained from the


“contradictions of material life” [“dialectical” Materialism - conflict between the social productive forces and the relations of production --

-->The mode of production of material life “conditions” the social, political and intellectual life process in general

[‘conditions’? or ‘determines’? Marx says, “Consciousness doesn’t determine our being - social being determines consciousness”][not in selection: “Political power, properly so called, is merely the organised power of one class for oppressing another.” -capitalist State: a “committee for managing the common affairs of the bougeoisie”]The Key: As productive forces develop, they “conflict with the existing relations of production”; These relations “turn into their fetters” -> an epoch of revolution begins.

Marx’s historical stages: Primitive Communism Ultra-low tech common ownershipOriental Despotism slave societyFeudalism peasants go with land... knights ruleCapitalism Private ownership of Means of ProductionSocialism Centralized ownership of MPCommunism “From each according to Ability, To each

according to his Need” - anarchy on that principle ...

>> Bourgeois relations of production are “the last antagonistic form of the social process of production” - arising from the social conditions of life of the individuals

- The productive forces “developing in the womb” of bourgeois society create the material conditions for the solution of that antagonism.

This social formation “brings, therefore, the prehistory of human society to a close”

Capital


(Analysis of the “Capitalist Mode of Production”)Definition: Capitalism = Free Market economy = Everything (labor and productive equipment, and consumer goods) is owned (hence, bought and sold) by individuals and privately acting groups [acting for their own various interests - presumptively, to make as much money as possible]

‘Free” market: No legal obstacles to voluntary exchange - only to involuntary (forced) exchanges.

I. "Theory of Value" - Marx’s argument for having oneCommodity : object, for sale, that satisfies human wants (all sorts)Use-value= Utility -- properties of things making them fit for use (or

“consumption”) (“the constitute the substance of all wealth, whatever may be the social form of that wealth”)

Exchange-value: proportion in which values in use of one sort are exchanged (on a free market) for those of another sort

Exchange-value “appears to be purely relative” - an intrinsic value, (exchange-value inherent in commodities) “seems a contradiction”

BUT: Things that exchange must be equal to each other -> (1) exchange-values “express something equal”

(2) exchange-value is only the mode of expression of something contained in it, yet distinguishable from it -- there is something common to both. The two must therefore be equal to a third, which “in itself is neither the one nor the other”

[Note: why can’t this just be effective demand?... ]Exchange is an act characterised by “total abstraction from use-value”

Leave out use-value -> only one thing remains: being products of labour - human labour in the abstract -- Human labour-power has been expended in their production “as crystals of this social substance”

So: X has value only because human labour in the abstract has been embodied in X - measured by thequantity of the value-creating substance, the labour, contained in it

1. The Labour Theory of Value


(1) Simple Version:

(Where x and y are individual items,

Price of item X: Price of Y :: Labor in X: Labor in Y

I.e., the price of commodities is directly proportional to the labor in them

[Observation (known to Marx): This would make inefficiently produced objects worth more than efficiently produced ones. This is obviously false - for the Consumer, Price is proportional to the thing’s utility, not to its contained labour.]

(2) “Sophisticated” version, first stage: Averaging

Price of average X: Price of average Y):: Average Labor in x: Average Labor in y

ie., P(av x):P(av y)::L(av x):L(av y)[comment: this also is clearly false]

(3) Final form: The value of one commodity is to the value of any other, as the labour-

time necessary for the production of the one is to that necessary for the production of the other - “Socially Necessary Labour Time”P (x): P(y):: (x): SNLT(y)“Socially necessary” labour-time [SNLT]:

“homogeneous human labour (total labour-power of society), embodied in the sum of all commodities Each of these units is the same as any other, so far as it has the character of [1] the average labour-power of society, and takes effect as such; that is, so far as it requires for producing a commodity, no more time than is [2] needed on an average, no more than is socially necessary.


example: - “The power-loom reduced by half the labour required to weave a given quantity of yarn into cloth. The hand-loom weavers required the same time as before” - “but for all that, the product of one hour of their labour represented after the change only half an hour's social labour - and consequently fell to one-half its former value”

“The value of a commodity, therefore, varies directly as the quantity, and inversely as the productiveness, of the labour incorporated in it”

“reduction of skilled labour to average social labour ()” constantly in practice going on”, and “unavoidable”: e.g., one day of skilled to six days of unskilled labour

[Comment: Notice that the labor “fell in value” -- i.e., the unit used to determine price fell in value! Labor is being measured by output!]

- Marx doesn’t go on to ask how you compare outputs: e.g.,how do you compare the labor of a mathematician with that of a bricklayer?

A good answer - and really the only answer possible - is: see how much people want mathematics relative to bricklaying....]

- The theory is now circular: it “explains” market prices by “labor” -- but it measures labor on the basis of market price!

- Since some form of the Labor theory is presupposed by the entirety of Marx’s economics, this is a FATAL flaw...


The Capitalist (Note: `M->C->M' refers to `Money into Commodity into Money')“The expansion of value, M->C->M, becomes his subjective aim” - the sole motive of his operations Use-values are not the real aim of the capitalist -- profit-making alone

is what he aims at

- the capitalist is a “rational miser” [Note: Recall from the Early Mss: “labour produces for the rich ,

palaces -but for the worker, hovels”-- But if the capitalist invests as much of his money as possible -- then

he lives in the hovel ... Marx fails to see the irony: on his picture, the capitalist is, in real

(“material”) terms a pure altruist: everything he does benefits others - none of it himself!]

Labour's relation to Capital“The labourer works for the capitalist instead of for himself” [note: that is to say, he’s not self-employed. But of course, his motive

is to maximize his own income, not the capitalist’s.]If Capitalist [C] pays for a day's labour-pow- Product is the property of

the capitalist and not that of the labourer, its immediate producerthe seller of labour-power [W] parts with it at its value, so, the right to use that power for a day belongs to him the use-value he has sold [L] in exchange for C = consumption of the

commodity purchased (work, promoting aims of capitalist)The labour-process is a process between things that the capitalist has

purchased, things that have become his property. The product of this process belongs, therefore, to him.


2. Surplus-Value: Profit and “Exploitation”

Essential Distinction re the “value of labor-power”:(a) INPUT value: Value of a day's labour-power: means of subsistence

required for its production (b) OUTPUT value: “the living labour that it can call into action” -

i.e., power to produceThese, Marx points out, are two different things Marxian thesis: The former determines the exchange-value of the

labour power, the latter is its use-value-- Its exchange-value is less than its use-value - That’s where profit

comes from! “The difference of the two values was what the capitalist had in view” [Ingenious application of a hopeless theory]

- Labor: source not only of value, but “more value than it has itself”The seller of labour-power realises its exchange-value, and parts with

its use-value. He cannot take the one without giving the otherThus ... Profit! -- Exploitation!

[Note: ‘exploitation’ is ambiguous:(a) Pejorative: to exploit is to harm, to ill-use the thing for one’s

own gain(b) neutral: to exploit is to use, gain some advantage by using -

nothing said, one way or the other, about its effects on the exploited.

Point: What Marx calls “exploitation” is (usually) good for you!

Laborer’s options:product real wage % exploited net gain

cottage 1 1 0 1factory 10 2 80% 2

The worker’s take-home pay is twice in the exploited than the unexploited condition.

-Of course, the capitalist makes still more. Q: So what?


“General law of Capitalist Accumulation”The very nature of accumulation excludes every diminution in the

degree of exploitation of labour . “It cannot be otherwise in a mode of production in which the labourer

exists to satisfy the needs of self-expansion of existing values, instead of, on the contrary, material wealth existing to satisfy the needs of development on the part of the labourer.”

“The industrial reserve army weighs down the active labour-army”[Note: this is empirical and theoretical nonsense.]

Polarization: Accumulation reproduces the capital-relation on a progressive scale - more larger capitalists at this pole, more wage-workers at that --- leading to ....

“Immiseration”: The greater the social wealth, the greater is the industrial reserve army: the more extensive the industrial reserve army, the greater is official pauperism.

“The labouring population always increases more rapidly than the conditions under which capital can employ this increase for its own self-expansion.

This is the absolute general law of capitalist accumulation. (“Like all other laws it is modified in its working by many

circumstances, the analysis of which does not concern us here...”)[and why not?]

[Marx’s claim here implies that as capitalist economies expand, unemployment must rise, at least over the long run.

This has not in fact been the case: In no country has there been a constant increase over long periods.

-> In contemporary times, unemployment is largely an artefact of government policy: governments buy unemployment. In the Great Depression, they, more or less inadvertently, caused it.]


3. Marx’s theory of Class AntagonismClaim: Capitalists and Workers are at Loggerheads

Marx’s Thesis in general:1. Constantly diminishing number of the magnates of capital2. Usurp and monopolise all advantages of this process of transformation3.so, produce “growing mass of misery, oppression, slavery, degradation, exploitation”4. and growth of working-class revolt (“always increasing in numbers - disciplined, united, organised by the very mechanism of the process of capitalist production itself”) 5. The “monopoly of capital” becomes “a fetter upon the mode of production”6. Revolution: “This integument is burst asunder. The knell of capitalist private property sounds. The expropriators are expropriated.” -> In short, “capitalist production begets, with the inexorability of a law of Nature, its own negation. Socialist revolution is “the negation of negation”

Problems with Marx’s argument:Individual worker A and A’s employer have a partial conflict of interest:

more for worker, less for capitalist ... (but if the capitalist makes his demands too high, the worker quits and goes elsewhere)

BUT does the working class have a conflict with the owning class?No! Capitalists make money by selling the product of mass production.There isn’t anybody else to sell them to than workers. -> Therefore, the more the other guy’s workers get paid, the better that

is for the capitalist.Moreover, all capitalists (and all workers) are in competition with each

other-->--> There is no “class interest” of the kind Marxism proclaims


[Notes: (1) the real wages of the typical English workman are estimated to have doubled about every twenty years during the industrialization era. (Engels’ study, “The conditions of the English Working Class in 1844”, didn’t benefit from another look in 1864 or 1884...)]

(2) A theoretical Query: why would an employer want his employees to starve??]

--> the more he works, the more he “falls under the dominion of his product, capital”

[Note: In a capitalist economy, the worker normally produces things that he

(a) doesn’t get to keep, as such, and (b) typically has no interest in even if he could (100,000 ball bearings a

day). Is that what he means by ‘alienation’? If so, so what?> These consequences are “contained in the definition” that the worker is related to the product of his labour as to an alien object- this is FALSE. There is no entailment relation between (1) Worker (W) works for Capitalist (C), and (2) C makes W worse off The major issue here is the appropriate baseline for worsening (or

“harming”)The natural one is: Where W was before “The more the worker spends himself, the more powerful the alien

objective world becomes” [(1) meaning what? (2) does the worker care about this particular kind of “power”?]

[Note that Marx’s dicta ought to apply to an airline pilot making $200,000/yr just as much as to a worker in a shirt factory]

-- for the rich, intelligence -but for the worker, idiocy, cretinism] [>> note: Does it produce “cretinism” for the worker? That suggests that he wasn’t cretinous before, but is now. Is that right?]

“in the very act of production The worker estranges himself from himself” [Does Marx mean that the worker doesn’t particularly like his job? If so, what else is new?]


The Right question: How much does the worker like the job (a) at the pay he’s getting (b) compared to the alternatives? - If he prefers some actual alternative to the one he’s got, then why

doesn’t he take it? [Question: does someone owe him a job? Why?]

>> Marx needs to argue that somehow capitalism is depriving him of desirable alternatives - that it coerces the worker. We need an analysis ofCoercion:: A coerces B =

(1) B prefers x to y at t0(2) A intervenes at t1 such that (3) B’s doing x at t2 would be worse, rather than better, for B(4) in consequence of which, B chooses y at t2It is not true that job offers or acceptances coerce people - If you go by

people’s own word about it!

Marx sees the fabulous expansionary tendencies of capitalism... How will he show us that lots of other neat jobs would be available if we didn’t have free ownership of capital? [There’s very good reason for thinking that there will not be]

>> What about such claims as that the work “does not belong to his essential being” - Is this factor, whatever it is, supposed to be something that workers actually care about??

If “the worker no longer feels himself to be freely active in any but his animal functions”, that doesn’t sound too good. But is it true? Is it a complaint that the worker doesn’t have enough leisure time? [Maybe he’d rather have more pay. When Parliament proposed a mandatory limit to the working day, a lot of workers voted against it...]

>> Or that “It makes individual life in its abstract form the purpose of the life of the species, likewise in an abstract and estranged form”? [Should we say: “Hey, no kidding!?”]


Property and FreedomCommunism: abolition, not of property generally, but of bourgeois

property“When capital is converted into common property, it is only the social

character of the property that is changed. It loses its class character.” [The “means” formerly controlled by a subset of people are now

controlled by everybody rather than some subset of people. But is this necessarily an improvement? Why?

Aristotle’s insight: people manage their own things better than other people do. Gwartney & Stroup: ]

Wage-laborMarx: The average price of wage-labor is the minimum wage ...(!)[This essential claim of Marxism is empirically false (if the average were

also minimum, then the fluctuations in wages which Marx notes in his work should be impossible...) and theoretical nonsense.

What Marx does is to go from a “tendency” (for wages to fall) to an unqualified conclusion that they actually do.

- Internal combustion engines are always tending to explode, but they hardly ever do.

“Communism deprives no man of the power to appropriate the products of society; all that it does is to deprive him of the power to subjugate the labor of others by means of such appropriation...”

[That is the absolute reverse of the truth. It deprives every man of that power. Little did Karl know! -- In the Soviet Union...]


Culture and Ideology as Class-Relative “Your very ideas are but the outgrowth of the conditions of your

bourgeois production and bourgeois property”Bourgeois jurisprudence is but the “will of your class made into a law

for all” - as determined by the economic conditions of that classA “selfish misconception” induces the bourgeoisie to transform into

“eternal laws of nature and of reason” the social forms springing from your present mode of production and form of property

Man's ideas, views, and conceptions change with every change in the conditions of his material existence, in his social relations and social life.

The ruling ideas of each age have ever been the ideas of its ruling class...Question: does it follow that those ideas are (a) false? Or (b) that they

have no truth-value??

Ideology - the real story?Why or how would the “ruling class” control our thinking? - Need a nonmysterious explanation- Obvious possibilities: (a) we are dependent on them, so we tend to think in such a way as not

to rock the boat; (b) they have more power of propaganda than we do.

Question: Who are the ruling class?In a democracy, the plausible answer is that it’s (a) the majority -- almost none of whom are capitalists, on Marx’s

account; or (b) elected members of government (elected, almost entirely, by

noncapitalists) Is this good or bad? (Marx talks as though it’s necessarily bad. But

why should that be so? Because slavery is bad? Yes, if this is tantamount to slavery, and if slavery is worse than freedom....


The Theory of Socialism

5. On the Division of Labour in Production (Friedrich Engels)In every society: the producers don’t control the means of production- -the means of production control the producers - [they are] “means for the subjection of the producers to the means of

production”Esp. true of the division of labour --1. the separation of town and country [- which “stupefies” - Marx

didn’t have a high opinion of farmers!]2. Modern industry “degrades the labourer to a mere appendage of a

machine”

Socialism: “society makes itself the master of all the means of production to use them in accordance with a social plan”

-- “puts an end to the former subjection of men to their own means of production

“It goes without saying that society cannot free itself unless every individual is freed”

The former division of labour must disappearIts place must be taken by an organization ... in which productive

labour, instead of being a means of subjugating men, will become a means of their emancipation

(“offers each individual the opportunity to develop all his faculties, physical and mental, in all directions and exercise them to the full”)

“Today this is no longer a fantasy, no longer a pious wish.”

Comment: it’s no more, or less, of a fantasy than it ever was


Critique of the Gotha Program: Marx on “justice”What is "a fair distribution"? Do not the bourgeois assert that the

present-day distribution is "fair"? And is it not, in fact, the only "fair" distribution on the basis of the present-day mode of production? (- “what a crime it is to force on our Party again, as dogmas .. obsolete verbal rubbish - ideological nonsense about right and other trash so common among the democrats and French Socialists”)

“Are economic relations regulated by legal conceptions or do not, on the contrary, legal relations arise from economic ones?

[from the proposed Gotha Program of the Communists] we learn that "the proceeds of labour belong undiminished with equal right to all members of society."

"To all members of society"? To those who do not work as well? What remains then of the "undiminished proceeds of labour"? Only to those members of society who work? What remains then of the "equal right" of all members of society?

There must be deducted: replacement costs, capital expansion, reserve insurance funds, education, health, administration not belonging to production. [will, Marx thinks, be “reduced” under socialism...]

In co-operative society based on common ownership, producers do not exchange their products -- individual labour no longer exists in an indirect fashion but directly as a component part of the total labour. The phrase "proceeds of labour" thus loses all meaning ...

Comment: That’s exactly what makes socialism impossible, according to the Austrian school...


[Marx on Socialism, Phase I:]Society as it emerges from capitalist society - “still stamped with the

birth marks of the old society” Accordingly, the individual producer receives back from society--

after the deductions have been made--exactly what he gives to it. What he has given to it is his individual quantum of labour.

[Note: ‘same amount of labour’, remember, is now meaningless, since there is no exchange]

“the exchange of equivalents in commodity exchange only exists on the average and not in the individual case

[Which means that many workers will think they are getting gypped, while the inefficient will have a field day!]

The right of the producers is proportional to the labour they supply; the equality consists in the fact that measurement is made with an equal standard, labour

Right by its very nature can consist only in the application of an equal standard; but unequal individuals are measurable only by an equal standard

“..these defects [his word] are inevitable in the first phase of communist society as it is when it has just emerged after prolonged birth pangs from capitalist society. Right can never be higher than the economic structure of society and its cultural development conditioned thereby.

- a mistake to stress so-called distribution : Distribution of means of consumption function of the distribution of the conditions of production - which is due to the mode of production itself

- Therefore, in Capitalism, the material conditions of production are in the hands of non-workers -- If they are “the co-operative property of the workers themselves, then there likewise results a distribution of the means of consumption different from the present one.”


The question then arises: what transformation will the state undergo in communist society?

This question can only be answered scientifically - “one does not get a flea-hop nearer by combining the word people with the word state”

Between capitalist and communist society lies the period of the revolutionary transformation of the one into the other - in which the state can be nothing but the revolutionary dictatorship of the proletariat.

After that, the “withering away of the state” --

The “higher phase”: Ultimate Communism:- “antithesis between mental and physical labour has vanished - labour has become not only a means of life but life's prime want- “the springs of co-operative wealth flow more abundantly- The principle, “From each according to his ability, to each according

to his needs!” sets in ....

Question: Why should I care about your needs?Marx’s answer might be: Well, I don’t now, while we’re under the

sway of the bourgeoisie, but when things are done right, I will!- And how does he know that?- Probable answer: because the people in power will damn well see to it

that I do, like it or not ...!


Socialism, Utopian and Scientific

Modern socialism is, in its essence, the direct product of the recogniton, on the one hand, of the class antagonism existing the society of today between proprietors and non-proprietors,

Classic philosophy (Locke, etc.): “this kingdom of reason was nothing more than the idealised kingdom of the bourgeoisie”

- Modern industry develops both (1) the conflicts which make necessary a revolution And (2) in these gigantic productive forces, the means of ending these conflicts

Capitalism: “the elements of general wealth are present in abundance - but "abundance becomes the source of distress and want"

“The capitalistic mode of production stands convicted of its own incapacity to further direct these productive forces - there’s a “rebellion of the productive forces”

“production without any definite plan of capitalistic society capitulates to the production upon a definite plan of the invading socialistic society

The state - will ultimately have to undertake the direction of production

State ownership of the productive forces is not the solution of the conflict, but concealed within it are the technical conditions that form the elements of that solution -- practical recognition of the social nature of the modern forces of production, and therefore in the harmonising of the modes of production, appropriation, and exchange with the socialised character of the means of production

* this can only come about by “society openly and directly taking possession of the productive forces”


Active social forces work blindly -- when once we understand them, we can subject them more and more to our own will

[Question: who is ‘we’? You and I - or the Communist Party?] The proletariat seizes political power and turns the means of

production into state property.In doing this, it abolishes all class distinctions and antagonisms, also

the state as state. The state was the official representative of society-- but not really:

actually, only the class which itself representedAbolish class rule, - and the state is no longer necessary. The state is not "abolished". It dies out.The law of division of labour lies at the basis of the division into classes

- still carried out by means of violence and robbery, trickery and fraudThe ruling class consolidates its power at the expense of the working

class - an “intensified exploitation of the masses”Dominance of bourgeoisiewas based upon the insufficiency of

production- abolition of classes presupposes a degree of historical evolutionThis point is now reached - the “political and intellectual bankruptcy”

of the bourgeoisie” manifests itself as “economic bankruptcy recurs regularly every ten years”

In every crisis, society stands helpless, face to face with the absurd contradiction that the producers have nothing to consume, because consumers are wanting

The socialised appropriation of the means of production does away, not only with the present artificial restrictions upon production

etc., etc. ...


On Morality “Conceptions of good and evil have varied much from nation to nation

and from age to age - often been in direct contradiction to each other.Today we have:- Christian-feudal morality, which divides into Catholic and Protestant

morality “each of which has no lack of subdivisions”- modern-bourgeois morality- the proletarian morality of the future[note that Engels doesn’t try to tell us just what this is...if he has in mind the Marxian slogan, then note that it was also

suggested by Aquinas ......--> “three great groups of moral theories” which are in force

simultaneously and alongside each other. Which, then, is the true one? Not one, in the sense of absolute finality(the one with the maximum elements promising permanence in the

present... is “proletarian morality”)They represent three different stages of the same historical developmentAt approximately similar stages of economic development moral

theories must of necessity be more or less in agreementIs respect for property an eternal moral injunction? By no means! “In a society in which all motives for stealing have been done away

with - only lunatics would ever steal - one would be laughed at who tried solemnly to proclaim the eternal truth: Thou shalt not steal!

We maintain that all moral theories have been hitherto the product of the economic conditions of society obtaining at the time [Note: Why only “hitherto”?]

Morality has always been class moralityA really human morality which stands above class antagonisms and

above any recollection of them becomes possible only at a stage of society which has not only overcome class antagonisms but has even forgotten them in practical life


How much should government do?

The Options:

How Extensive a State?1. Zero: Anarchy

2. The Minimal State: Protection Only- from what?- why the state?- is state protection compatible with freedom?

3. The Regulative State: Keep things “Fair”note: - in practice, this means keeping prices up in order to benefit suppliers at the expense of consumers.

4. The Welfare State: The “Safety Net”- where do we draw the lines?- and why?- is this charity, or isn’t it?

5. The Socialist State: Run the Productive Services (but retain “Civil” Rights)- if it is run without the market, the attempt will be a disaster- if ti is run with the market, why the monopoly?

6. The Totalitarian State: Control everything- What is the point?


How do we decide?

Answer:Have a good underlying theory relevant to politics

This will be a theory of social moralsthis theory has to be interpersonally effectiveIt has to be rational

Three standard options in such theorizing:

1. Seat-of-pants (“Intuitionism”) ...2. Utilitarianiasm3. “Contractarianism”

(3) is dictated by the fact that:with (1) there’s no way to resolve conflictsand re (2), utilitarianism confuses you with everyone

The Contractarian foundational approach seems the only way to go.

I have argued that it leads to the Hobbesian view on substantive morals: everyone to be required to refrain from aggressing against (harming, damaging, or in general “imposing costs on”) others

Prima facie, that looks as though it will lead tofree-market anarchism.In political theory, what is needed is a justification for not being anarchist.

If there is any such, it will be due to public goods.

So the general question is: are there relevant public goods problems for which government is a real remedy?


On the Theory of Collective Control [i.e., Socialism]

Socialism is “public ownership of the means of production” in the Marxian scheme.

That’s basically right, provided we assume that what “the public” will do with them is manage them, somehow, in the interests of the people.

Question: Can Socialism do as well as Capitalism?This means: can centralized, political control do as well as decentralized, free-market organization (= “anarchy in the means of production and exchange”)

The Case for Anarchy: * People are each concerned for themselves* they are what the system is all about* when they make their own decisions they presumably are doing as well for themselves as they can* if they fail, it’s their fault - not somebody else’s.* all the marxian theses are wrong: (1) value is subjective, not a function of “quantity of labor” or whatever(2) there’s nothing in principle wrong with exploitation: it can (and usually does) pay to be “exploited”(3) the theory of class antagonism is wrong. Everyone being in limited competition with everyone can make everyone better off; classes have nothing to do with it.


The “Calculation Problem”

How will Socialist managers manage? And for what?

We assume they are managing for liberal ends. This wasn’t so ... the socialist state is a state, it puts extroardinary power into the hands of the managers, and they have used it for their own ends - not surprisingly.

But never mind: suppose they are totally devoted to the public good. Still, how do they pursue it?

They need to allocate resources with high efficiency, using them to produce the things that people most want. Can this be done without a market?

Probable answer: No. How will a manager tell which use is better if he doesn’t have a market to provide information about what people want?

Capital allocation in capitalism is easy: each capitalist tries to maximize his profit. He buys his resources, and adjusts his investments so that they give him the highest return. The incompetent are weeded out, the competent remain and prosper.

How do you tell whether you are succeeding in socialism?

The answer by socialist theorists in the early 20th C. was: Mimic the market!

Can that be done? No. Consider how many decisions consumers make every day. How are a handful of managers going to anticipate all this?

More generally:


Political management requires that some people are in a position to make better decisions for other people than those people themselves. Is this plausible?

(a) in one sense, by definition No: each person is the supreme authority on what’s good for himself. Nobody else can tell him what he likes.

(b) in another sense, yes: doctors, and in general experts, can help us. However, they help us only if we have our choice whether to accept their services. Socialism undercuts this.

What would government need, to be efficient?

1. Great similarity of wants among the populace (rare)2. Saving in transaction costs (e.g., you don’t pay when you go to hospital in Canada)3. such that we do better by not having a choice....(to say this is rare is an understatement)

Suppose x can be produced at a profit by somebody. Why would it be better to have the State produce it?

Suppose it can’t. If the demand is too low to enable production to succeed without spending more than income, Why produce it at all?


Private property system will be better if we all do better. Socialism will be better if we all do better under it.

Questions: (1) what is “doing better”? Answer: each person assesses his own situation and makes his own judgment. BUT we don’t go by his assessment of society - only by his assessment of how he himself is doing. A’s judgment about B doesn’t stack up against B’s judgment about B. (That’s Liberalism)

(2) what’s the base-line? By comparison with what?This one is easy (sort of): better than under the other one, presumably.

Capitalism has this feature: it is, pretty much, what we have if we do nothing. Socialism is planning, big-time; this cannot happen without special effort.

Problem: What if only some of us do better? That is, some do better than others in each (no problem); but also, what if some do better in one than they would in the other, and vice versa?

Argument: if under socialism some people do better and some do worse, those who do better are doing so at the expense of those who do worse. This is not obviously true with capitalism.


The Restated Calculation Problem

The problem is: How does a socialist manager achieve efficient production/allocation without a market?

“Labor units” idea (as in Marx’s Phase I): won’t work, because measures of labor are irrelevant.

Deciding between building factory X or dam Y without cost-calculation can’t be done efficiently.

In capitalism, capital goes where it is most efficient, by virtue of being most profitable. No market, no way to do that.

The “shadow price” system: the managers try to think what would happen if there were a market, and then act accordingly.

Problem: creating shadows in the absence of realities is impossible - even with super-speed computers.

(e.g., problem of Revealed Preference: to see what the consumer wants, look at what he chooses given the choice, not what he says he would choose if he had his choice.)

Socialist management seems to be strictly impossible. (Empirically, socialist economies have been basket cases, by capitalist standards.)


The Revised question about socialism:

How much should government do?

the alternatives:

Nothing***************National defensePolice protection

***************Infrastructure***************Health, Educaton, WelfareManage the “means of production”

Try to bring about “equality”

John Rawls:

(1) a Liberty principle, providing that everyone is to have an "equal right to the most extensive total system of equal basic liberties compatible with a similar system of liberty for all;" and

(2) “inequalities are arbitrary unless it is reasonable to expect that they will work out for everyone’s advantage, and provided the positions and offices to which they attach, or from which they may be gained, are open to all.”


324 marx overheads

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