Marx, DeLong writes, failed to appreciate the degree to which capital investment raises worker productivity and living standards. And he underrated the power and usefulness of the signals and incentives created by the price system in a capitalist economy. Those mistakes alone would be enough to hobble an economy and send any economic doctrine to the rubbish heap. Collectivization of agriculture seems to have been particularly disastrous for farm-based societies like 20th century China and Russia.
But overthrowing the system has usually been a disaster. Successful revolutions tend to be those like the American Revolution, which overthrow foreign rule while keeping local institutions largely intact. Violent social upheavals like the Russian Revolution or the Chinese Civil War have, more often than not, led both to ongoing social divisions and bitterness, and to the rise of opportunistic, megalomaniac leaders like Stalin and Mao.
Even the French Revolution, though it eventually led France to become a stable liberal democracy, only did do after almost a century of atrocities, short-lived dictatorships and civil strife. Meanwhile, the most successful examples of socialism — the mixed economies of the Scandinavian countries, France, Germany, and Canada — came not from the violent overthrow of the old order, but from gradual change within the democratic, partly capitalist system.
Sperber believes that they had premarital sex. I certainly hope so. The one possible flaw in the domestic idyll has to do with a child born to their servant, Helene Demuth. Almost all women in nineteenth-century Britain who could manage to retain a servant did so.
Engels claimed paternity. This was not implausible. Engels was unmarried and had a taste for working-class women; his longtime lover, Mary Burns, worked in a Manchester factory.
It is sympathy for Marx that leads Sperber and Stedman Jones to insist that we read him in his nineteenth-century context, because they hope to distance him from the interpretation of his work made after his death by people like Karl Kautsky, who was his chief German-language exponent; Georgi Plekhanov, his chief Russian exponent; and, most influentially, Engels.
The word the twentieth century coined for that was totalitarianism. His faith. But it was. Marx was an Enlightenment thinker: he wanted a world that is rational and transparent, and in which human beings have been liberated from the control of external forces. Hegel argued that history was the progress of humanity toward true freedom, by which he meant self-mastery and self-understanding, seeing the world without illusions—illusions that we ourselves have created.
This is what Feuerbach wrote about. We created God, and then pretended that God created us. We are supplicants to our own fiction. Concepts like God are not errors. History is rational: we make the world the way we do for a reason. We invented God because God solved certain problems for us. But, once a concept begins impeding our progress toward self-mastery, it must be criticized and transcended, left behind.
Otherwise, like the members of the Islamic State today, we become the tools of our Tool. Marx was a philosopher. Marx liked to say that when he read Hegel he found philosophy standing on its head, so he turned it over and placed it on its feet. Life is doing, not thinking.
It is not enough to be the masters of our armchairs. The cost, however, is a system in which one class of human beings, the property owners in Marxian terms, the bourgeoisie , exploits another class, the workers the proletariat. They do it because competition demands it. Marx was a humanist. He believed that we are beings who transform the world around us in order to produce objects for the benefit of all.
That is our essence as a species. Capitalism is fated to self-destruct, just as all previous economic systems have self-destructed.
Marx was fanatically committed to finding empirical corroboration for his theory. It was a heroic attempt to show that reality aligned with theory. Marx had very little to say about how the business of life would be conducted in a communist society, and this turned out to be a serious problem for regimes trying to put communism into practice. He had reasons for being vague. Marx was clearer about what a communist society would not have. The state, in the form of the Party, proved to be one bourgeois concept that twentieth-century Communist regimes found impossible to transcend.
Communism is not a religion; it truly is, as anti-Communists used say about it, godless. But the Party functions in the way that Feuerbach said God functions in Christianity, as a mysterious and implacable external power. Marx did not, however, provide much guidance for how a society would operate without property or classes or a state. A good example of the problem is his criticism of the division of labor.
Rather than have a single worker make one pin at a time, Smith argued, a pin factory can split the job into eighteen separate operations, starting with drawing out the wire and ending with the packaging, and increase production by a factor of thousands. But Marx considered the division of labor one of the evils of modern life. So did Hegel. It makes workers cogs in a machine and deprives them of any connection with the product of their labor. Human beings are naturally creative and sociable.
A system that treats them as mechanical monads is inhumane. But the question is, How would a society without a division of labor produce sufficient goods to survive? Nobody will want to rear the cattle or clean the barn ; everyone will want to be the critic.
Believe me. As Marx conceded, capitalism, for all its evils, had created abundance. He seems to have imagined that, somehow, all the features of the capitalist mode of production could be thrown aside and abundance would magically persist. In , it is harder to be dismissive. It uses data to show us the real nature of social relations and, by doing that, forces us to rethink concepts that have come to seem natural and inevitable.
One of these is the concept of the market, which is often imagined as a self-optimizing mechanism it is a mistake to interfere with, but which in fact, left to itself, continually increases inequality. Another concept, closely related, is meritocracy, which is often imagined as a guarantor of social mobility but which, Piketty argues, serves mainly to make economic winners feel virtuous. Piketty says that for thirty years after a high rate of growth in the advanced economies was accompanied by a rise in incomes that benefitted all classes.
It now appears that those thirty years were an anomaly. The Depression and the two world wars had effectively wiped out the owners of wealth, but the thirty years after rebooted the economic order. We are approaching those levels again today. In the United States, according to the Federal Reserve, the top ten per cent of the population owns seventy-two per cent of the wealth, and the bottom fifty per cent has two per cent.
His wealthy friend Engels was an effective promoter and organizer who believed in Marx and his ideas with messianic fervor, and supported him financially. As fate would have it, this combination of brilliance, controversy and self-promotion meant that Marx's reputation rose far above that of rival leftist political economists.
Over the course of the late 19th and early 20th centuries, his ideas came to be accepted as unchallengeable dogmas on the revolutionary political left.
As a result, when the credibility of Europe's royal houses collapsed in the wake of the disastrous First World War that they had misled the Continent into, it was Marx's ideas and doctrines that leftist revolutionaries tried to implement. Marx's writings became the Bible of the revolutionaries who took power in Russia in , and later in other countries.
Even today, after Marxism-inspired state communism has been thoroughly discredited by the dark experiences of history, innumerable leftist groups define themselves as "Marxists" and cling to the bearded economist's ideas with quasi-religious intensity. Many insist that Marx's theories were largely correct — and the disasters of real-world Communism only occurred because his ideas were not implemented correctly. Marx's core idea was that the whole of human history could be explained as a materialist struggle between classes, playing out a zero-sum game over control of the means of production and the distribution of what is produced.
He based this idea on his and Engels' observation of the exploitation of the 19th century "proletariat," or factory workers, by factory owners industrialists , whom Marx termed "capitalists," or owners of capital. By "capital," Marx meant the physical means of production, rather than money financial capital , though he recognized that it was necessary to first own financial capital in order to buy physical capital.
Marx gave a fair bit of attention in "Das Kapital" to the question of how businessmen initially obtain enough money to buy factories. He termed this "the problem of primitive accumulation," and showed that it was nearly impossible to acquire an initial fortune by saving up excess money from selling one's labor. He argued that the original sources of fortunes large enough to launch a person, or a family, into the capitalist class were almost always some form of theft, such as the seizure and privatization of public lands, acquisition of booty through war, colonialism, enslavement of workers, or financial fraud.
On that score, history shows innumerable examples confirming Marx's hypothesis. The acquisition of great fortunes by Russian and Eastern European oligarchs who seized public property in the wake of the collapse of state communism is a recent case in point. In Volume One of "Das Kapital," Marx said that capitalists made "profits" unfairly, by seizing the "surplus value of labor," which he defined as the difference between the factory owner's costs and the money he was able to obtain by selling goods produced in the factory.
Since the workers produced the goods, Marx argued, it was they, not the capitalist, who had a moral claim on earning all the sales revenues. The capitalist was, in this view, essentially a parasite.
This led directly to Marx's fundamental political-economic prescription: The "proletariat" should seize the means of production. Marx thought this would inevitably occur, in part because the proletariat was much more numerous than the capitalist class, and so would eventually win the "class struggle" — all it needed was sufficient "class consciousness" to recognize the nature of its predicament.
He also argued that in any given domain of industry, competition between capitalists would lead to overproduction, intense downward pressure on prices, and a consequent collapse in net profits. This presumed tendency for the rate of profit to fall would inevitably lead to crises, because without profits, capitalists would be unable to continue financial accumulation. Capitalism, Marx and Engels thought, was systemically unstable. It would eventually collapse because of its "inherent contradictions," and give way to socialism, in which the means of production would be owned by the producers the workers.
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