This morning, I finished reading Thomas Sowell’s Marxism: Philosophy and Economics. In some ways, the book was quite frustrating. The discussion of Marxist philosophy was too basic, while the elucidation of the economics came across as little more than a series of floating abstractions. Although Sowell did offer some interesting arguments about the proper interpretation of Marx and Engles, the first eight chapters weren’t all that enlightening by themselves. The ninth chapter on the lives of Marx and Engles was revealing in a disturbing kind of way, but it was the tenth chapter which was most philosophically illuminating.
In that final chapter, Sowell focuses on the great errors in the economic theories advanced by Marx and Engles. He argues that the central concept of “exploitation” depends upon the notion of “surplus value” — and that this “crucial concept in the Marxian theoretical framework was insinuated rather than explicitly established, either logically or empirically” (190). Sowell writes:
As introduced in the fist volume of Capital, surplus value was defined simple as an “increment or excess over the original value” invested in production. From this definition, Marx glided quickly to the conclusion that labor was the factor responsible for this increment in value or of output… It was an assumption deeply embedded in classical economics… [an assumption] devastated by the new conceptions and analyses introduced by neo-classical economics while Capital was in its decades-long process of being prepared for publication.
As a theoretical system, Marxian economics begins the story of production in the middle–with firms, capital, and management already in existence somehow, and needing only the addition of labor to get production started. From that point on, output is a function of labor input, given all the other factors somehow already assembled, coordinated, and directed toward a particular economic purpose… [But] where there are multiple inputs, the division of output by one particular input is wholly arbitrary (190).
(I love the emphasis Sowell places on the somehow in this passage, as it reminds me of Ayn Rand’s own characterization of the economics espoused by the looters in Atlas Shrugged.)
A few pages later, Sowell summarizes thusly: “Once output is seen as a function of numerous inputs, and the inputs are supplied by more than one class of people, the notion that surplus value arises from [the] labor [of the proletariat] becomes plainly arbitrary and unsupported (192).”
In addition to stressing the importance of the “managerial ability and entrepreneurial innovation” ignored by Marx, Sowell also notes the importance of “worker’s skills and experience” as a form of capital (194). Thus Marx engages in the “fundamental fallacy” of “narrowly conceiving capital to mean physical equipment rather than the human capital which may be vastly more valuable and far more widely dispersed” (195).
Sowell notes that Marx’s method of starting in the middle allowed him to “repeatedly ignore the importance of knowledge and risk in explaining the phenomena of a capitalist economy” (198). How so? Because his analysis began with “surviving capitalist firms,” i.e. “firms that had correctly estimated consumer demand” and were now “waiting to hire workers,” Marx “ignored the key implication of failing firms (a majority of all firms in the long run)–that risk is inherent in anticipating consumer demand, and that profit derives from successfully assuming that risk, rather than from merely hiring people to perform the mechanical aspects of producing goods (198).” After all, “failing firms also hire workers–but their very failure shows that that is no guarantee of receiving surplus value” (198).
Sowell is careful not to blithely attribute the evils of 20th century communism to the communism advocated by Marx and Engles. But he does draw out a number of significant connections which render them both substantially responsible for the horrors of communism in practice. For example, he notes that “the fact that Marx and Engles refused to draw up details of such a [communist] society in advance constituted virtually a blank check for their successors” (206). In addition, “whatever Marx intended, the actual effect of the doctrine of historical justification was to provide wide latitude for the most sweeping violations of every moral principles and every sense of decency and humanity” (207).
Perhaps the most telling example of Marx’s ideas in practice is the results of Lenin’s early acceptance of the somehow approach to all but labor, as indicated by this quote from State and Revolution cited by Sowell:
Capitalist culture has created large-scale production, factories, railways, the postal service, telephones, etc., and on this basis the great majority of the functions of the old “state power” have become so simplified and can be reduced to such exceedingly simple operations of registration, filing, and checking that they can be easily performed by every literate person, can quite easily be performed for ordinary “workmen’s wages”, and that these functions can (and must) be stripped of every shadow of privilege, of every semblance of “official grandeur.”
In fact, Sowell observes that:
The early history of the Soviet Union provided the most dramatic empirical refutation of the Marxian assumption that management of economic enterprises is something to be taken for granted as occurring somehow. When economic incentives were drastically reduce or abolished in the heady egalitarian period following the Bolshevik revolution, the Soviet economy ground to a halt. Widespread hunger and a halt to vital services forced Lenin to resort to his “New Economic Policy” that restored the hated capitalist practices. The later nationalizing of all industry under Stalin and his successors did not restore egalitarianism. Quite the contrary. There were highly unequal rewards to management, including today whole systems of special privilege stores to which ordinary Soviet workers have no access. Moreover, the managers of Soviet industry have been disproportionately the descendants of the managerial class of earlier Soviet and czarist times (193).
Then comes the noteworthy conclusion:
Many observers have seen these developments as mere betrayals of Marxist ideals, missing the more fundamental point that a crucial false assumption must be corrected in practice if people are to survive. Its continuing sacredness in theory can only produce hypocrisy. The betrayal may be real, but in Marxian terminology, “no accident.” A similar process is occurring in China, to which many Western Marxists transferred their hopes after disillusionment with the Soviet Union. This too is seen as simply a betrayal of Mao by Deng, rather than a nation’s painful learning from experience that a key assumption of Marxian economics is false (193-4).
The gross falsehoods of Marx’s communism is why the lament commonly heard from so many communist sympathizers — that “true” communism was never put into practice — ought to be rejected. In fact, the ideals of communism — collectivism, dialectical materialism, the evils of capitalism, the idea of labor as the source of all surplus value, the goal of reshaping of man’s nature, the principle of “from each according to his ability to each according to his need,” and so on — were substantially put into practice by the communist regimes of the 20th century. The fact that the result was widespread starvation, forced labor camps, unbearable misery, totalitarian police states, and mass death is hardly a reason to think that the more consistent application of these ideas would result in blissful paradise.
Sadly, in spite of the overwhelming evidence provided by the Soviet Union, Red China, Cambodia under Pol Pot, and other countries devastated by communism, far too many Western intellectuals remain in thrall to Marxist ideals. As for the possibility of the honest Marxist professor, if the millions of dead under communist regimes do not constitute reason enough for a harsh look at the ideals of communism, then no facts and no arguments could possibly persuade them to abandon their precious ideology. Facts and reasons themselves have ceased to matter to such a person, however civilized, amiable, or open they may appear.
And this leads me to a final criticism from Thomas Sowell about the ways in which Marxism promotes the rationalizations which help sustain it:
Philosophic materialism, in its social environmental version, also provides ways of dismissing ideas according to their supposed origins–”bourgeois,” for example–instead of confronting them in either factual or logical terms. Grandly dismissing opposing views as “outmoded” or consigning them to “the dustbin of history” eliminates the need to think about them or to meet their challenge to one’s existing presuppositions. Such practices have spread well beyond Marxists. Much of the intellectual legacy of Marx is an anti-intellectual legacy. It has been said that you cannot refute a sneer. Marxism has taught many–inside and outside its ranks–to sneer at capitalism, at inconvenient facts or contrary interpretations, and thus ultimately to sneer at the intellectual process itself. This has been one of its enduring strengths as a political doctrine, as a means of acquiring and using political power in unbridled ways (208-9).
In other words, the ideology of Marxism is explicitly hostile to intellectual honesty. So it’s no wonder that committed Marxists persist — at least within the protected walls of academia — to this day.