The greatest achievement of Karl Marx

Framing the debate

There is an exchange in the September 2013 issue of the Freeman wherein Gary Chartier argues that We Should Abandon the Term “Capitalism” while Tibor Machan says that We Should Stand By the Term “Capitalism.”   The question has been debated before, I was planning for a long time myself  to write this post to make the argument against using the term because I consider it a most fundamental hindrance in the battle against the enemies of freedom.

The greatest achievement of Karl Marx was the framing of the debate that we still haven’t settled 130 years after his death. Although he did not coin the term, the way it is used still to this day is largely based on his ideas, on his understanding of what the term means.

The heaviest burden: the Ideas of Marx

In the la-la-land of Marx’s imagination there is a world where we can all be farmers in the morning, brain surgeons in the afternoon and concert pianists in the evening. Marx did not like the world he lived in, he was yearning for the simplicity of primitive communism and he was hoping to recreate that idyllic world in his communist utopia. Marx had a negative view of the division of labour, specialization, but most of his animosity was directed toward capital, the idea of private property, best expressed by the quote:
“The enemy of being is having.”

But what is capital? An expression of time preference. Delayed consumption.  A prerequisite to specialization, the division of labour and trade. The prerequisite to the existence of civilization itself. “Having” is a necessary prerequisite for a better “being”, we can only improve our living conditions, we can only have a better life tomorrow if we forgo some of the “being” today. How well we can live tomorrow depends on how much we are willing or able to save, to accumulate today for tomorrow. Capital, of course, has a more technical meaning “a resource or resources that can be used to generate economic wealth” but that meaning also incorporates the foundational elements of time preference and delayed consumption. Capital must be accumulated, must be controlled, must be used for some economic goal in order to be called capital. One could argue that capital is a positive term because it implies all the good things that are essential parts of it, but Marx’s focus on the ownership element turned it into a fundamentally negative notion. Capital is what the bad people have and use to oppress the good people with. It is capital itself that is evil and we can make the world a better place of we could only eliminate it. Economy and politics is almost interchangeable in Marx’s world as he sees economics as the foundation of all political systems. He sees political order as a mere expression of the economic arrangement.

“Das Kapital” was used as the title of Marx’s chef d’oeuvre for a reason. His work is a condemnation of the system by focusing on what he considered to be its most evil element. Any time we refer to the economic system we live in as capitalism, we accept this fundamentally negative framework.

The second layer of the baggage – the communist experience

Marx did an excellent job obfuscating the difference between the economic and the political aspect of the term to begin with, but during the time of the ‘existing communism’ the two meaning became hopelessly intertwined. Capitalism can either be seen as an economic term describing the reliance on capital accumulation and private ownership as the driving force of economic progress versus central planning or as a political one where the essence of the political arrangement is private property as opposed to state ownership and control of the ‘means of production.’

Although Marx was a little vague on the implementation plan, Lenin and his successors did show the way through the dictatorship of the proletariat. The reality of the communist experience, the possibility to see central planning at work gave the term ‘capitalism’ a new life. The communist experience made it obvious that central planning does not work and that shifted the meaning slightly toward the positive. As long as the communist command economies existed, the word capitalism was just a synonym for free market democracies. (Free market as the economic and democracy as the political arrangement). Marx never addressed the question of capital in a socialist/communist economy and it could be argued that this lack of understanding was a main contributor that led to the fall of all socialist experiments.  Central planners just assumed that as long as they follow the ‘scientific principles’ of Marxism, the solutions will reveal themselves.

During the cold war, the champions of the free market had no reason to reject the Marxist terminology as all the positive evidence was on their side. When the communists were talking about the evils of capitalism, all they had to do was to point to the benefits (higher living standards and more personal freedom) that the ‘capitalist’ system provided.

After the fall of the Soviet empire, the discussion is changing again. The negative comparison disappeared, the failures are pretty much forgotten, only the criticism of the existing system remains and getting more vigorous every day.

Capitalism V.3: Where we are today

Marx did not understand even the world he was living in, he couldn’t possibly have imagined the one we live in today, yet his brain-dead ideas are more alive today than they ever were in the past one hundred years.

Marx’s ideas, the labor theory of value, capitalism, the ownership of the means of production, his theory of social classes, class consciousness, socially necessary labour and surplus value, alienation and the very notion of the proletariat were highly debatable already 150 years ago and make no sense whatsoever today. I cannot think of a single idea of Marx that is relevant to the world we live in.
Any of us with some savings is an owner of ‘the means of production,’ the vast majority of us have nothing to do with what is defined as the proletariat, (even if there are some tenured professors of Marxism with most likely six figure salaries who insists that they are part of the exploited working class); chances are that robots may replace manual labour and the biggest problem of the poor is obesity.

The theories of Marx are completely irrelevant, yet, again, Marxism seems to be more alive than ever. What is then the appeal of Marxism today? I suggest three elements:

• Fear and loathing of progress

• Envy

• Hunger for power

All three of these elements of the neo-communist drive are fundamentally Marxist. Even if none of Marx’s ideas and theories is tenable today, these attitudes behind his system can easily stay alive. None of these attitudes are particularly positive or moral; they need to be dressed up in ideology and propaganda and Marxism is a good enough tool for that. What we need to notice however is that they have absolutely nothing to do with the means of production, exploitation or capital accumulation.

The theories of Marx that defined capitalism and framed the discussion about it were always just an excuse for an inhuman, envy driven and power-hungry political agenda. Marx defined capital and capitalism as the enemy of humanity. We have to recognise that for most people, the term ‘capitalism’ is not an objective descriptor but a judgement.

We cannot possibly argue effectively with the enemies of civilization, progress and humanity as long as we accept the fundamentally judgmental, negative framework of the debate. It is not enough to defend it; it is not enough to say that capitalism is not that bad; it is not enough to redefine the term, we should refuse to use it and the whole Marxist framework with it.

I will return to this last point to look at what drives the neo-communist movement today.