Business
Patrick Armstrong
April 26, 2020
© Photo: Flickr/Ann WuytsFollow

Before Marx socialism was a sort of voluntary wish thing, no doubt growing out of Protestant fantasies of life in early Christianity when everything was supposedly shared. There were a few attempts at building Christian socialist communities and most of them had unhappy endings – the Munster Anabaptists’ ending especially so. Secular socialist communities – Robert Owens’ attempts for example – also came to little, albeit more peacefully.

Marx’s claim was that he made socialism scientific by which he meant that he believed he had discovered the mechanism that had driven society through history: he concluded that socialism was the inevitable next stage of evolution. He and his collaborator Engels laid out the theory in The Communist Manifesto in 1848 and Marx spent the rest of his life working out the details. Class struggle – the means of production – the triumph of the bourgeoisie in modern times – labour theory of value – surplus value – the more the bourgeoisie succeeds, the more it creates its destruction: “What the bourgeoisie therefore produces, above all, are its own grave-diggers. Its fall and the victory of the proletariat are equally inevitable.” It’s a complete theory of history and society. The driving force of the coming socialist period is the immiseration of the proletariat – as the owners of the means of production squeeze more surplus value out of the workers, they become more powerful and richer while the condition of the workers becomes worse:

The modern labourer, on the contrary, instead of rising with the process of industry, sinks deeper and deeper below the conditions of existence of his own class. He becomes a pauper, and pauperism develops more rapidly than population and wealth.

By the same process, more and more formerly rich capitalists are ruined and pushed into the ranks of the miserable workers (“One capitalist always kills many“) until – and the details are never really described – there are so few rich and so many poor that:

Centralisation of the means of production and socialisation of labour at last reach a point where they become incompatible with their capitalist integument. This integument is burst asunder. The knell of capitalist private property sounds. The expropriators are expropriated.

The final stage doesn’t need to be especially violent: at the end point, there are so few super rich that whether they’re hanged from lampposts or pensioned off like the last emperor of China doesn’t make much difference in the great scheme of things.

Marx believed that he had discovered the laws, the processes, the machinery, that drove history and society: the way things are and will be, that must be: scientific. After Marx, socialism is no longer something to be wished for, something some rich benevolent owner might create if we asked him politely, an appeal to Christian conscience, but something that is the very mechanism of the way things are and the way they must develop. Socialism is hard-wired into history.

But, right away, there’s a contradiction: if it’s scientific, nothing you or I can do will make it come faster or slower so there’s no point in joining socialist parties: Newton’s laws of motion don’t care whether you or I create a society to proselytise for them. But if it’s important to work towards socialism – and Marx himself was closely involved in at least one effort to do so – then it’s not inevitable and, therefore, not scientific. This created two threads in Marxism – spontaneity (it is going to happen in its own time) and voluntarism (it has to be made to happen).

The scientific expectation that A leads to B and B to C came to a crisis in the late 1800s. Eduard Bernstein argued that things were not following the path that Marx had foreseen half a century before – ownership of capital was not concentrating in fewer and fewer hands, the conditions of the workers was not growing worse. In a word, political developments – the working class’s political power – were changing Marx’s laws. From this conflict of theory and observation was born the idea of what we now call social democracy. Socialists should work within the system to reduce working hours, break up monopolies, eliminate child labour, force up wages, support labour unions and so on: in Marxist terms, use political power to compel the owners to give up a significant portion of the surplus value. Social democracy could be harmonised with the idea of free enterprise by describing it as levelling the playing field. If the essence of the free market is competition, then who can disagree with the idea that labour’s demands should freely compete with capital’s in conditions where each is level; if competition in output is desirable then it is desirable in inputs as well. The mixed economy: the dynamism of the free market prevents the stagnation and bureaucracy of socialism and the power of labour prevented the crushing of the weak and the government is the enforcer of the balance.

Lenin hated Bernstein’s conclusions (“revisionism“) and in What is To Be Done? took a different course: an informed and disciplined few should drive development. And that led to the USSR and, at its flaccid end, the “developed socialism” of Brezhnev. (Parenthetical aside: Brezhnev is what Plato’s Philosopher King looks like when actual humans try it out in real time). Interesting to observe, however, that both Bernsteinism and Leninism were voluntaristic approaches: the future will be created by acts of will today. So much for scientific socialism.

The mixed economy worked pretty well for a long time and social democracies in Europe delivered high standards of living and social justice across the board. Even the USA, with its hatred of “socialism”, delivered a fine standard of living to its “proletariat” thanks to the power of labour unions and majority voting. Rather than wretchedly existing at the edge of the commodity cost of labour like the protagonists of The Ragged-Trousered Philanthropists, a worker in the West could buy a house and support a family. Altogether, the generality could agree that a good balance had been struck and Marx’s predictions had been disproven. The collapse of the USSR and its satellites fired a nail gun into his coffin. Marxists turned into whiskery crazies shouting on street corners that it can’t have failed because it was never really tried!!!

* * *

But that was then and this is now. What started me off on these thoughts was this headline: “The 3 Richest Americans Hold More Wealth Than Bottom 50% Of The Country, Study Finds“. That’s pretty astonishing: 3 people could buy out 160 million Americans: pay off their rents and mortgages, clear out their savings accounts, pocket their health plans, empty out their pension plans, throw their clothing into the Salvation Army box, pile their knick-knacks at the curb and cash out their tooth fillings. As to buying the other half, the only question is how many more billionaires would it take: a hundred, two hundred? How long before the three could buy up two-thirds of the population? (Last week, we’re told, one of the three added six billion to his kitty – that’s twelve of the latest Princess cruise ships or half a U.S. aircraft carrier.) Before I heard about the big three I’d known of this study from 2014: “Researchers then concluded that U.S. policies are formed more by special interest groups than by politicians properly representing the will of the general people, including the lower-income class.” The two headlines are not, to put it mildly, unconnected.

Moving down to mere millions we learn that the “Ousted Boeing CEO Dennis Muilenburg left the company with stock options and other assets worth about $80 million, but did not receive severance as part of his departure from the embattled company, Boeing disclosed late Friday.” A gold-standard company, probably destroyed on his watch, and he pockets more moolah that you, I or all the readers of this piece will ever see. Meanwhile average wages haven’t changed much for 40 years in the USA. Rich getting richer, poor getting poorer.

What happened? Well, simply put, the rich grabbed hold of political power, took over the government and started to unlevel the playing field. Wherever they can exercise their power they do: executive salaries rise, university fees grow, parliamentarians grow richer, bureaucracies expand, government bailouts bail. None of this is new or unusual, of course: greed+power=more greed is an equation for all times and all places. But somewhere the West lost the countervailing forces that balanced the greed of the bosses with the greed of the unions. We see this throughout the West: super rich, enormous executive salaries, endless perqs for some; austerity for the rest. More dramatically in the USA, of course, because it is the West’s leader and its “early adopter”. Socialists and the institutions they encouraged provided a counterforce and brute power created a balance in which everybody got something. That counterforce disappeared somewhere.

* * *

So, in a way, what Marx foresaw 170 years ago has come to happen. Much later than he expected and much differently than he expected. His theory held that the owners of the means of production – Carnegies, Vanderbilts, Rockefellers – would rule the world. But of the three Americans who, we are told, can buy half the population, one is an investor, another a software developer and the third the inventor of a mail order store. Where are the means of production? Well – another irony – they were sold to China.

So the super rich in the West own intangibles;

The communists in the East own the means of production:

Not exactly what Marx expected.

And yet: three people as rich as half a country? Legislatures that do what they’re told by their paymasters? That is rather like the late stage capitalism that Marx was talking about – a few, very few, super rich and a large number of emmiserated people.

As Marx might say today, opioids are the opium of the people.

So what happens next? COVID-19 is brutally exposing the fact that these Western societies aren’t actually very efficient. Is it significant that three quarters of the COVID-19 cases are in NATO countries? Only six months ago, they were supposed to be the best prepared. Endless wars go on endlessly, debt piles up, wealth gaps grow, austerity policies grind on. The propaganda of Western exceptionalism is still strong but weaker and less convincing with every failure.

The world is changing and Karl Marx doesn’t look as out of date as he did 50 years ago.

Maybe Karl Marx Was Right After All

Before Marx socialism was a sort of voluntary wish thing, no doubt growing out of Protestant fantasies of life in early Christianity when everything was supposedly shared. There were a few attempts at building Christian socialist communities and most of them had unhappy endings – the Munster Anabaptists’ ending especially so. Secular socialist communities – Robert Owens’ attempts for example – also came to little, albeit more peacefully.

Marx’s claim was that he made socialism scientific by which he meant that he believed he had discovered the mechanism that had driven society through history: he concluded that socialism was the inevitable next stage of evolution. He and his collaborator Engels laid out the theory in The Communist Manifesto in 1848 and Marx spent the rest of his life working out the details. Class struggle – the means of production – the triumph of the bourgeoisie in modern times – labour theory of value – surplus value – the more the bourgeoisie succeeds, the more it creates its destruction: “What the bourgeoisie therefore produces, above all, are its own grave-diggers. Its fall and the victory of the proletariat are equally inevitable.” It’s a complete theory of history and society. The driving force of the coming socialist period is the immiseration of the proletariat – as the owners of the means of production squeeze more surplus value out of the workers, they become more powerful and richer while the condition of the workers becomes worse:

The modern labourer, on the contrary, instead of rising with the process of industry, sinks deeper and deeper below the conditions of existence of his own class. He becomes a pauper, and pauperism develops more rapidly than population and wealth.

By the same process, more and more formerly rich capitalists are ruined and pushed into the ranks of the miserable workers (“One capitalist always kills many“) until – and the details are never really described – there are so few rich and so many poor that:

Centralisation of the means of production and socialisation of labour at last reach a point where they become incompatible with their capitalist integument. This integument is burst asunder. The knell of capitalist private property sounds. The expropriators are expropriated.

The final stage doesn’t need to be especially violent: at the end point, there are so few super rich that whether they’re hanged from lampposts or pensioned off like the last emperor of China doesn’t make much difference in the great scheme of things.

Marx believed that he had discovered the laws, the processes, the machinery, that drove history and society: the way things are and will be, that must be: scientific. After Marx, socialism is no longer something to be wished for, something some rich benevolent owner might create if we asked him politely, an appeal to Christian conscience, but something that is the very mechanism of the way things are and the way they must develop. Socialism is hard-wired into history.

But, right away, there’s a contradiction: if it’s scientific, nothing you or I can do will make it come faster or slower so there’s no point in joining socialist parties: Newton’s laws of motion don’t care whether you or I create a society to proselytise for them. But if it’s important to work towards socialism – and Marx himself was closely involved in at least one effort to do so – then it’s not inevitable and, therefore, not scientific. This created two threads in Marxism – spontaneity (it is going to happen in its own time) and voluntarism (it has to be made to happen).

The scientific expectation that A leads to B and B to C came to a crisis in the late 1800s. Eduard Bernstein argued that things were not following the path that Marx had foreseen half a century before – ownership of capital was not concentrating in fewer and fewer hands, the conditions of the workers was not growing worse. In a word, political developments – the working class’s political power – were changing Marx’s laws. From this conflict of theory and observation was born the idea of what we now call social democracy. Socialists should work within the system to reduce working hours, break up monopolies, eliminate child labour, force up wages, support labour unions and so on: in Marxist terms, use political power to compel the owners to give up a significant portion of the surplus value. Social democracy could be harmonised with the idea of free enterprise by describing it as levelling the playing field. If the essence of the free market is competition, then who can disagree with the idea that labour’s demands should freely compete with capital’s in conditions where each is level; if competition in output is desirable then it is desirable in inputs as well. The mixed economy: the dynamism of the free market prevents the stagnation and bureaucracy of socialism and the power of labour prevented the crushing of the weak and the government is the enforcer of the balance.

Lenin hated Bernstein’s conclusions (“revisionism“) and in What is To Be Done? took a different course: an informed and disciplined few should drive development. And that led to the USSR and, at its flaccid end, the “developed socialism” of Brezhnev. (Parenthetical aside: Brezhnev is what Plato’s Philosopher King looks like when actual humans try it out in real time). Interesting to observe, however, that both Bernsteinism and Leninism were voluntaristic approaches: the future will be created by acts of will today. So much for scientific socialism.

The mixed economy worked pretty well for a long time and social democracies in Europe delivered high standards of living and social justice across the board. Even the USA, with its hatred of “socialism”, delivered a fine standard of living to its “proletariat” thanks to the power of labour unions and majority voting. Rather than wretchedly existing at the edge of the commodity cost of labour like the protagonists of The Ragged-Trousered Philanthropists, a worker in the West could buy a house and support a family. Altogether, the generality could agree that a good balance had been struck and Marx’s predictions had been disproven. The collapse of the USSR and its satellites fired a nail gun into his coffin. Marxists turned into whiskery crazies shouting on street corners that it can’t have failed because it was never really tried!!!

* * *

But that was then and this is now. What started me off on these thoughts was this headline: “The 3 Richest Americans Hold More Wealth Than Bottom 50% Of The Country, Study Finds“. That’s pretty astonishing: 3 people could buy out 160 million Americans: pay off their rents and mortgages, clear out their savings accounts, pocket their health plans, empty out their pension plans, throw their clothing into the Salvation Army box, pile their knick-knacks at the curb and cash out their tooth fillings. As to buying the other half, the only question is how many more billionaires would it take: a hundred, two hundred? How long before the three could buy up two-thirds of the population? (Last week, we’re told, one of the three added six billion to his kitty – that’s twelve of the latest Princess cruise ships or half a U.S. aircraft carrier.) Before I heard about the big three I’d known of this study from 2014: “Researchers then concluded that U.S. policies are formed more by special interest groups than by politicians properly representing the will of the general people, including the lower-income class.” The two headlines are not, to put it mildly, unconnected.

Moving down to mere millions we learn that the “Ousted Boeing CEO Dennis Muilenburg left the company with stock options and other assets worth about $80 million, but did not receive severance as part of his departure from the embattled company, Boeing disclosed late Friday.” A gold-standard company, probably destroyed on his watch, and he pockets more moolah that you, I or all the readers of this piece will ever see. Meanwhile average wages haven’t changed much for 40 years in the USA. Rich getting richer, poor getting poorer.

What happened? Well, simply put, the rich grabbed hold of political power, took over the government and started to unlevel the playing field. Wherever they can exercise their power they do: executive salaries rise, university fees grow, parliamentarians grow richer, bureaucracies expand, government bailouts bail. None of this is new or unusual, of course: greed+power=more greed is an equation for all times and all places. But somewhere the West lost the countervailing forces that balanced the greed of the bosses with the greed of the unions. We see this throughout the West: super rich, enormous executive salaries, endless perqs for some; austerity for the rest. More dramatically in the USA, of course, because it is the West’s leader and its “early adopter”. Socialists and the institutions they encouraged provided a counterforce and brute power created a balance in which everybody got something. That counterforce disappeared somewhere.

* * *

So, in a way, what Marx foresaw 170 years ago has come to happen. Much later than he expected and much differently than he expected. His theory held that the owners of the means of production – Carnegies, Vanderbilts, Rockefellers – would rule the world. But of the three Americans who, we are told, can buy half the population, one is an investor, another a software developer and the third the inventor of a mail order store. Where are the means of production? Well – another irony – they were sold to China.

So the super rich in the West own intangibles;

The communists in the East own the means of production:

Not exactly what Marx expected.

And yet: three people as rich as half a country? Legislatures that do what they’re told by their paymasters? That is rather like the late stage capitalism that Marx was talking about – a few, very few, super rich and a large number of emmiserated people.

As Marx might say today, opioids are the opium of the people.

So what happens next? COVID-19 is brutally exposing the fact that these Western societies aren’t actually very efficient. Is it significant that three quarters of the COVID-19 cases are in NATO countries? Only six months ago, they were supposed to be the best prepared. Endless wars go on endlessly, debt piles up, wealth gaps grow, austerity policies grind on. The propaganda of Western exceptionalism is still strong but weaker and less convincing with every failure.

The world is changing and Karl Marx doesn’t look as out of date as he did 50 years ago.

Before Marx socialism was a sort of voluntary wish thing, no doubt growing out of Protestant fantasies of life in early Christianity when everything was supposedly shared. There were a few attempts at building Christian socialist communities and most of them had unhappy endings – the Munster Anabaptists’ ending especially so. Secular socialist communities – Robert Owens’ attempts for example – also came to little, albeit more peacefully.

Marx’s claim was that he made socialism scientific by which he meant that he believed he had discovered the mechanism that had driven society through history: he concluded that socialism was the inevitable next stage of evolution. He and his collaborator Engels laid out the theory in The Communist Manifesto in 1848 and Marx spent the rest of his life working out the details. Class struggle – the means of production – the triumph of the bourgeoisie in modern times – labour theory of value – surplus value – the more the bourgeoisie succeeds, the more it creates its destruction: “What the bourgeoisie therefore produces, above all, are its own grave-diggers. Its fall and the victory of the proletariat are equally inevitable.” It’s a complete theory of history and society. The driving force of the coming socialist period is the immiseration of the proletariat – as the owners of the means of production squeeze more surplus value out of the workers, they become more powerful and richer while the condition of the workers becomes worse:

The modern labourer, on the contrary, instead of rising with the process of industry, sinks deeper and deeper below the conditions of existence of his own class. He becomes a pauper, and pauperism develops more rapidly than population and wealth.

By the same process, more and more formerly rich capitalists are ruined and pushed into the ranks of the miserable workers (“One capitalist always kills many“) until – and the details are never really described – there are so few rich and so many poor that:

Centralisation of the means of production and socialisation of labour at last reach a point where they become incompatible with their capitalist integument. This integument is burst asunder. The knell of capitalist private property sounds. The expropriators are expropriated.

The final stage doesn’t need to be especially violent: at the end point, there are so few super rich that whether they’re hanged from lampposts or pensioned off like the last emperor of China doesn’t make much difference in the great scheme of things.

Marx believed that he had discovered the laws, the processes, the machinery, that drove history and society: the way things are and will be, that must be: scientific. After Marx, socialism is no longer something to be wished for, something some rich benevolent owner might create if we asked him politely, an appeal to Christian conscience, but something that is the very mechanism of the way things are and the way they must develop. Socialism is hard-wired into history.

But, right away, there’s a contradiction: if it’s scientific, nothing you or I can do will make it come faster or slower so there’s no point in joining socialist parties: Newton’s laws of motion don’t care whether you or I create a society to proselytise for them. But if it’s important to work towards socialism – and Marx himself was closely involved in at least one effort to do so – then it’s not inevitable and, therefore, not scientific. This created two threads in Marxism – spontaneity (it is going to happen in its own time) and voluntarism (it has to be made to happen).

The scientific expectation that A leads to B and B to C came to a crisis in the late 1800s. Eduard Bernstein argued that things were not following the path that Marx had foreseen half a century before – ownership of capital was not concentrating in fewer and fewer hands, the conditions of the workers was not growing worse. In a word, political developments – the working class’s political power – were changing Marx’s laws. From this conflict of theory and observation was born the idea of what we now call social democracy. Socialists should work within the system to reduce working hours, break up monopolies, eliminate child labour, force up wages, support labour unions and so on: in Marxist terms, use political power to compel the owners to give up a significant portion of the surplus value. Social democracy could be harmonised with the idea of free enterprise by describing it as levelling the playing field. If the essence of the free market is competition, then who can disagree with the idea that labour’s demands should freely compete with capital’s in conditions where each is level; if competition in output is desirable then it is desirable in inputs as well. The mixed economy: the dynamism of the free market prevents the stagnation and bureaucracy of socialism and the power of labour prevented the crushing of the weak and the government is the enforcer of the balance.

Lenin hated Bernstein’s conclusions (“revisionism“) and in What is To Be Done? took a different course: an informed and disciplined few should drive development. And that led to the USSR and, at its flaccid end, the “developed socialism” of Brezhnev. (Parenthetical aside: Brezhnev is what Plato’s Philosopher King looks like when actual humans try it out in real time). Interesting to observe, however, that both Bernsteinism and Leninism were voluntaristic approaches: the future will be created by acts of will today. So much for scientific socialism.

The mixed economy worked pretty well for a long time and social democracies in Europe delivered high standards of living and social justice across the board. Even the USA, with its hatred of “socialism”, delivered a fine standard of living to its “proletariat” thanks to the power of labour unions and majority voting. Rather than wretchedly existing at the edge of the commodity cost of labour like the protagonists of The Ragged-Trousered Philanthropists, a worker in the West could buy a house and support a family. Altogether, the generality could agree that a good balance had been struck and Marx’s predictions had been disproven. The collapse of the USSR and its satellites fired a nail gun into his coffin. Marxists turned into whiskery crazies shouting on street corners that it can’t have failed because it was never really tried!!!

* * *

But that was then and this is now. What started me off on these thoughts was this headline: “The 3 Richest Americans Hold More Wealth Than Bottom 50% Of The Country, Study Finds“. That’s pretty astonishing: 3 people could buy out 160 million Americans: pay off their rents and mortgages, clear out their savings accounts, pocket their health plans, empty out their pension plans, throw their clothing into the Salvation Army box, pile their knick-knacks at the curb and cash out their tooth fillings. As to buying the other half, the only question is how many more billionaires would it take: a hundred, two hundred? How long before the three could buy up two-thirds of the population? (Last week, we’re told, one of the three added six billion to his kitty – that’s twelve of the latest Princess cruise ships or half a U.S. aircraft carrier.) Before I heard about the big three I’d known of this study from 2014: “Researchers then concluded that U.S. policies are formed more by special interest groups than by politicians properly representing the will of the general people, including the lower-income class.” The two headlines are not, to put it mildly, unconnected.

Moving down to mere millions we learn that the “Ousted Boeing CEO Dennis Muilenburg left the company with stock options and other assets worth about $80 million, but did not receive severance as part of his departure from the embattled company, Boeing disclosed late Friday.” A gold-standard company, probably destroyed on his watch, and he pockets more moolah that you, I or all the readers of this piece will ever see. Meanwhile average wages haven’t changed much for 40 years in the USA. Rich getting richer, poor getting poorer.

What happened? Well, simply put, the rich grabbed hold of political power, took over the government and started to unlevel the playing field. Wherever they can exercise their power they do: executive salaries rise, university fees grow, parliamentarians grow richer, bureaucracies expand, government bailouts bail. None of this is new or unusual, of course: greed+power=more greed is an equation for all times and all places. But somewhere the West lost the countervailing forces that balanced the greed of the bosses with the greed of the unions. We see this throughout the West: super rich, enormous executive salaries, endless perqs for some; austerity for the rest. More dramatically in the USA, of course, because it is the West’s leader and its “early adopter”. Socialists and the institutions they encouraged provided a counterforce and brute power created a balance in which everybody got something. That counterforce disappeared somewhere.

* * *

So, in a way, what Marx foresaw 170 years ago has come to happen. Much later than he expected and much differently than he expected. His theory held that the owners of the means of production – Carnegies, Vanderbilts, Rockefellers – would rule the world. But of the three Americans who, we are told, can buy half the population, one is an investor, another a software developer and the third the inventor of a mail order store. Where are the means of production? Well – another irony – they were sold to China.

So the super rich in the West own intangibles;

The communists in the East own the means of production:

Not exactly what Marx expected.

And yet: three people as rich as half a country? Legislatures that do what they’re told by their paymasters? That is rather like the late stage capitalism that Marx was talking about – a few, very few, super rich and a large number of emmiserated people.

As Marx might say today, opioids are the opium of the people.

So what happens next? COVID-19 is brutally exposing the fact that these Western societies aren’t actually very efficient. Is it significant that three quarters of the COVID-19 cases are in NATO countries? Only six months ago, they were supposed to be the best prepared. Endless wars go on endlessly, debt piles up, wealth gaps grow, austerity policies grind on. The propaganda of Western exceptionalism is still strong but weaker and less convincing with every failure.

The world is changing and Karl Marx doesn’t look as out of date as he did 50 years ago.

The views of individual contributors do not necessarily represent those of the Strategic Culture Foundation.

See also

See also

The views of individual contributors do not necessarily represent those of the Strategic Culture Foundation.