Tag Archives: marx

Understanding Marx

Aaron dismisses the study of Marx as useless , but possibly falls into the the tempting trap of reductionism.

The study of Karl Marx is more than Communism, which of course is a failure, as mass deaths during communists regimes or the economic under-performance of communist countries versus capitalistic ones (North Korea v. South Korea, for example), shows. No one disputes this.

Likewise, studying Hitler doesn’t mean you legitimize Nazism. One should learn from the mistakes of history to avoid repeating them. Also, just learning about this stuff is interesting in and of itself.

Mark had some beliefs that even some on the ‘right’ can support – such as post-labor and post-scarcity societies in which technology and automation supplants the needs for work. The far-left, such as Obama, Keynes, and FDR, on the other hand, advocate ‘full employment’ even if such jobs create no economic value, are unprofitable for employers, and or are subsidized by taxpayers.

Post-scarcity economy

Karl Marx, in a section of his Grundrisse that came to be known as the “Fragment on Machines”,[22][23] argued that the transition to a post-capitalist society combined with advances in automation would allow for significant reductions in labor needed to produce necessary goods, eventually reaching a point where all people would have significant amounts of leisure time to pursue science, the arts, and creative activities; a state some commentators later labeled as “post-scarcity”.[24] Marx argued that capitalism—the dynamic of economic growth based on capital accumulation—depends on exploiting the surplus labor of workers, but a post-capitalist society would allow for:

Keynes, whose ideas are the intellectual forebear of Obama, believed full-employment at any cost was an ideal to always strive for, in contrast to Marx who rejected such idealism. But I’m not saying Marx is right about everything – Marxism is predicated on the belief workers are exploited by capitalism. I disagree, arguing that workers are NOT exploited and have a ‘good deal’. Marx also believed capitalism is self-limiting and would eventually fail, which I again disagree with.

Some of Marx’s ideas, such as Historical Materialism, which the exception of the parts about ‘revolution’, ‘liberation’, and ‘class struggle’, are not much different from introductory economics, or just plain common sense:

The basis of human society is how humans work on nature to produce the means of subsistence.

There is a division of labor into social classes (relations of production) based on property ownership where some people live from the labor of others.

The system of class division is dependent on the mode of production.

The mode of production is based on the level of the productive forces.

Society moves from stage to stage when the dominant class is displaced by a new emerging class, by overthrowing the “political shell” that enforces the old relations of production no longer corresponding to the new productive forces. This takes place in the superstructure of society, the political arena in the form of revolution, whereby the underclass “liberates” the productive forces with new relations of production, and social relations, corresponding to it.

Also, the ‘Marxian framework’ or ‘Marxian dialectic’ is an economic-centric one, referred to as ‘historical materialism’ or ‘dialectical materialism’ (the two are different in subtle ways that can be ignored for the sake of this discussion). In contrast to Weber and Hegel, Marx believed the entire world ‘revolves’ around economics – that economics, not culture or religion, is of foremost importance to all facets of human nature and society. Marx was obsessed with economics and believed it to be the driving force behind everything, and that all societal problems could be reduced to economic ones. In that regard, pretty much all economists, including even Milton Friedman, Rand, Hayek, and Rothbard, are at least tangentially intellectually related to Marx, in seeing the world from an econo-centric point of view, not a religious, cultural, or nationalistic one.

For example, Hayek:

In the book’s postscript, “Why I Am Not a Conservative,” Hayek distinguished his classical liberalism from conservatism. Among his grounds for rejecting conservatism were that moral and religious ideals are not “proper objects of coercion” and that conservatism is hostile to internationalism and prone to a strident nationalism.

This is related to Historical materialism:

Central to Marx’s thought is his theory of historical materialism, which argued that human societies and their cultural institutions (like religion, law, morality, etc.) were the outgrowth of collective economic activity.

Marx’s theory was heavily influenced by Hegel’s dialectical method. But while Marx agreed with Hegel’s basic dialectical thesis of social change, he disagreed with the notion that abstract ideas were the engine. Rather, Marx turned Hegel on his head and argued that it was material, economic forces—or our relationship to the natural, biological, and physical world—that drove the dialectic of change. More specifically, the engine of history rests in the internal contradictions in the system of material production (or, the things we do in order to produce what we need for survival).

And from Wikipedia:

Employing a critical approach known as historical materialism, Marx propounded the theory of base and superstructure, asserting that the cultural and political conditions of society, as well as its notions of human nature, are largely determined by obscured economic foundations. These economic critiques would result in influential works such as Capital, Volume I (1867).

I discuss this in more detail here:

Why Progressives Lose Their Minds When They Lose Elections

The Slavoj Žižek-NRx Connection

This difference between materialists and idealists is that for the former, matter is the antecedent of spirit; for the latter, it’s reversed.

Unexpectedly though, Marx and Rand tenuously share similarities, in both advocating a ‘materialist’ view of the world:

Now we begin the process of the deconstruction of Rand’s views. The role of materialism in the philosophy of Marx and Rand can be used as a good starting point. Rand advocated in her writing as a materialist, not doing any less in that regard than Marx. The latter seems, however, by several orders of magnitude a more sophisticated philosopher, as he thoroughly knew the German philosophy, with its deep interest in the complexities of the process of cognition. The main principle of the philosophy of “objectivism” Rand formulated as: “Facts are facts and are independent of human feelings, desires, hopes or fears.” Adjacent to the other premise – a principle of the “identity” – “A is A”, meaning that “the fact is a fact” (the third part of “Atlas Shrugged” is subtitles “A is A”) strikes with primitivism, as well as her critique of Kant. Only Lenin, in his book Materialism and Empirico Criticism published in 1908, had a philosophy almost exactly like Rand’s which was formulated a half-century later: “Consciousness is the mirror image of reality.” Any further than Lenin, the layman in philosophy, though educated for those times, Rand did not go.

Whether materialism is the same as objectivism is heavily debated.

Somewhat similar to Hegel, Max Weber believed that religion underpins capitalism:

This Weber called the “spirit of capitalism”: it was the Protestant religious ideology that was behind – and inevitably led to – the capitalist economic system.[84] This theory is often viewed as a reversal of Marx’s thesis that the economic “base” of society determines all other aspects of it.[73]

The weird thing is, Weber was actually a liberal, founding the German Democratic Party in 1918, the German-equivalent of Bernie Sander’s brand of democratic socialism today, and his analysis influenced the creation of the Frankfurt School – or what some call ‘Cultural Marxism’.

Weber also made a variety of other contributions in economic history, as well as economic theory and methodology. Weber’s analysis of modernity and rationalisation significantly influenced the critical theory associated with the Frankfurt School. After the First World War, Max Weber was among the founders of the liberal German Democratic Party.

The Frankfurt School, related to post-structuralism, rejects the Marxian and positivist ideal that the complexity of society can be reduced to economics. Although it’s related to Marxism, adherents oppose the ‘Stalinesque’ centralized version of communism, in addition to rejecting democracy. Frankfurt School, despite being ‘leftist’, is critical of both mainstream liberal and conservative critiques. Mainstream liberals assume democracy and freedom will fix everything, but the Frankfurt School is critical of this reductionist view.

Regarding religion, Émile Durkheim (considered one the l’principal architects of modern social science’, along with Marx and Weber) shared views similar to Weber and, like Marx, that capitalism gives rise to inequality:

In an advanced, industrial, capitalist society, the complex division of labor means that people are allocated in society according to merit and rewarded accordingly: social inequality reflects natural inequality, assuming that there is complete equity in the society. Durkheim argued that moral regulation was needed, as well as economic regulation, to maintain order (or organic solidarity) in society with people able to “compose their differences peaceably”.[2] In this type of society, law would be more restitutive than penal, seeking to restore rather than punish excessively.

Durkheim saw religion as the most fundamental social institution of humankind, and one that gave rise to other social forms.[60][76] It was the religion that gave humanity the strongest sense of collective consciousness.[81] Durkheim saw the religion as a force that emerged in the early hunter and gatherer societies, as the emotions collective effervescence run high in the growing groups, forcing them to act in a new ways, and giving them a sense of some hidden force driving them.[54] Over time, as emotions became symbolized and interactions ritualized, religion became more organized, giving a rise to the division between the sacred and the profane.[54] However, Durkheim also believed that religion was becoming less important, as it was being gradually superseded by science and the cult of an individual.[57][76]

This is an example of how the the political spectrum may actually be a loop or horseshoe-shaped, with the far-left and far-right meeting on certain issues.

Sorry Marx, Capitalism May Not Be Self-Limiting

From the Wall St. Journal: The Middle-Class Squeeze

dire forecasts of Karl Marx…

The Marxian prophecy may be wrong because of the Pareto Principle, which is that the richest 20% contribute 80% to consumer spending, while the poorest contribute very little. This means that Capitalism may not be as self-limiting as commonly believed by some. America’s middle class may not be so important anymore, and the economy as measured by GDP, technological progress, profits & earnings, and exports can do fine even as many see their economic prospects stagnate. Capitalism as measured by profits & earnings, economic activity and consumer spending is doing better than ever. There is a billion-strong and growing middle class in China and all over the world that is overtaking the American middle class. Globalist consumer companies Apple and Nike keep posting blowout earnings year after year. Disney, too. Then you have business to business – Cisco, Oracle, and Microsoft, for example, selling enterprise software and hardware to other businesses all over the world.

In the Silicon Valley, techies strait out of college are making 6-figures. Anyone with a good idea and some coding can become a multi-millionaire or even a billionaire within 2-3 years, with notable examples being Dropbox, Facebook, Snapchat, Uber, and Pinterest..If that’s not capitalism, I don’t know what is.

If you’ve ever had the misfortune of arguing with a liberal about economics, he will tell you the problem is our regressive tax system that hurts wage earners, since the income tax is sometimes higher than the than long-term capital gains rate. What the liberal ignores is that investment involves risk, potentially 100% of invested capital or more, unlike a paycheck. Or in mathematical terms, the cumulative equity curve of a paycheck is monotonically increasing whereas investments have ups and downs.

But technology also means that while inflation adjusted wages may be stagnant, you get more bang for your buck. For example, a TV today has much more utility than a TV set manufactured 40 years ago. Before the invention of compact storage formats (VHS, DVD), movie choices were limited to what was playing at the theater or on TV, but Netflix, at an affordable monthly price, provides thousands of choices instantly at your fingertips.

And also, entitlement spending keeps surging, offsetting stagnation of wages. This is evidenced by declining out-of-pocket costs for healthcare and tuition; prices are high, but grants, loans, and other subsidies keep rising.

Inflation adjusted prices for food and energy keep falling; for example, food has become so affordable and abundant, there is an obesity epidemic. People have dozens of appliances plugged in all night and day, sucking power.

Also employee benefits, especially healthcare, have out-paced inflation.

But on the other hand, as part of the post-2008 bigger is better theme, capitalism may be harder for small business due to high borrowing costs, unlike large business that have very cheap borrowing. Forever low interest rates benefits multinationals that can raise gobs of cash by selling low-yielding debt, while small business has to pay very high yields. Large business also have better pricing power, economies of scale, and can buy inputs in bulk, which is good for profits. This allows large businesses to ‘price out’ smaller competitors, sometimes by lowering profit margins temporary to put a smaller competitor out of business before raising them again. So capitalism may great for big guy, but harder for small guy unless, I suppose, you’re in web 2.0 or other select industries. I’m sure there are some capitalism opportunities catering to the new ‘tech elite’ in Silicon Valley, whether it’s food, landscaping, or child care.

While nations, economies, and civilizations come and go, America is not typical. There have been only two major crisis in the past 100 years (1929, 2008). Emerging market, on the other hand, are a minefield. Pretty much every emerging market has at some point defaulted and or had a crippling crisis that required the IMF to bail them out. It’s better to not lose sleep over crisis, although the doom and gloom media tries to make it seem like financial crisis are an everyday occurrence.

The good news is policy markers are good at fixing crisis when they occur, which I think is more important than predicting them. We can’t let an irrational fear of crisis impede economic progress if we have the tools to quarantine crisis as it arises.