Frederick Douglass

"Power concedes nothing without a demand. It never did, and it never will. Find out just what people will submit to, and you have found out the exact amount of injustice and wrong which will be imposed upon them..." Frederick Douglass

Monday, March 5, 2012

Marx And The Free Market Fraud, Part Two

I usually don't respond to email in this space, but the feedback I got on the original post [linked below] was so diverse and pointed I thought I'd answer it in public fashion.

If you didn't see the original post, follow the link and watch the brief video and read my response.

I am always impressed by the vehemence with which Anarcho-Capitalists defend their gods. My assertion that Mises was not only incorrect in what he was saying, but was in fact lying drew some rather discourteous responses. I am surprised that A-Caps visit my blog, even more surprised when they say they find things here which are objectionable to them. In case it isn't clear: I detest capitalism. I do not believe capitalism can be reformed, it must be abolished. Libertarianism meant anti-capitalism long before the term was usurped by A-Caps, and I use the term in the original and more accurate sense.

Now, to answer the questions and complaints.

In my home I have two books which deal with the history of socialism and Marxism. One is Socialist Thought [volume two being the relevant section], by G. D. H. Cole, and the other is Main Currents of Marxism, by Leszek Kolakowski. The former author is a socialist but not a Marxist, the latter is neither. I consulted both after receiving critical e-mails about the earlier post and they are in agreement, and generally support what I wrote vis-a-vis the Iron Law of Wages.

According to the aforementioned, David Ricardo was the first to suggest that wages tended toward the subsistence level. He did so after reading Malthus, who was also to influence Lasalle. However, Ricardo didn't use the term "Iron Law", nor did elaborate as to the economic mechanism by which this occurs.

According to Cole, a utopian socialist named Karl Johann Rodbertus also expressed the idea of wages always trending downwards towards subsistence levels.

Lasalle postulated that if wages grew beyond the subsistence level then working families would produce more children. Thus would they flood the market with extra labor which would put downward pressure on wages. If wages dropped below subsistence levels, family size would decrease thus creating a shortage of labor which would drive wages up. This is Lasalle's theory, and he coined the term "Iron Law".

Marx disagreed!


Marx held that wages tended...down...because of the inherent contradictions of capitalism---by which he meant...the tendency of capitalism to enlarge production faster than the means of consumption...of the people.

Thus Lasalle argued wages tended down on Malthusian grounds--which is what the Iron Law states, as Mises describes in the video--and Marx believed the origins of this miserable tendency lie in production.


It was clear [to Marx]...that supply and demand could not be measuredd absolutely but only in relation to the whole economic picture, including such matters as boom and slump, the state of world markets, technological progress...and finally the effect of working-class pressure on wages. According to circumstances these factors might...push wages up or down, but in any case it was a gross oversimplfication to reduce the...problem to the birth rate.

Cole also mentioned the "boom and slump" factor which Marx advanced in his opposition to Lasalle's theory.

Marx also enumerated his objections to the Iron Law in his Critique of the Gotha Programme, which I'm quite sure can be found online.

The disagreement between Marx and Lasalle on this point of theory had important practical consequences. With his belief in the Iron Law, Lasalle argued that political action and worker organization was of no use because the lot of the worker could never be improved under capitalism. This led him to denounce trade unions and political action (at least in the conventional sense). He supported instead the idea of inducing the state to fund co-ops with the intent of eventually eliminating capitalism altogether. In pursuit of this end, he contacted Bismarck, and generally supported an alliance with the then still formidable aristocracy against the capitalists saying that the bourgeoisie was the real enemy of the working class. [Please note that I did say Lasalle was something of a schmuck in the original. This is why.]

Marx voiced strong opposition to these ideas. He supported political action and trade unions, in accordance with his different view on wages, and thought that in a conflict between the middle and upper classes, the proletariat should side with the bourgeoisie.

So there you have it. Ludwig von Measles critiques Lasalle's theory after attributing it to Marx, and then derides it on the very same bases as Marx had. One might think this just a garish, oafish mistake, but I don't think so. I don't believe von Measles is that stupid. He's no fool, he's a vulgar propagandist.

Moving along, I was criticized for resisting von Measles insistence that Marx's views on wages were the "at the bottom of his entire criticism of the capitalist system". Well unlike the above discussion, I admit that this is more a matter of opinion than fact. But it is just too much nonsense.

It would seem to me that at the bottom of Marxist thought is dialectical materialism and the labor theory of value. In my humble opinion, his ideas on wages are tangential. But admittedly I am inexpert in matters of economic theory.

I believe I've answered all the issues raised in the angry emails. Please, insults just will not do. If you wish to refute what's written here, you will need to cite something which Marx wrote. Why do I believe Cole and Kolakowski and not Ol' Ludwig? Because it comports with my recollection of Marx' letters to Engels on the topic, and my understanding of his Critique of the Gotha Programme (which I have never read in its entirety). And they quote Marx, unlike Mises who just generalizes about Marx' views but offers no specifics. In any case, you need to produce something which Marx wrote which contradicts C and K, otherwise don't bother.

One last point: It is all well and good to say that Marxism and socialism is inhumane, everyone is entitled to an opinion, even a vapid one like this. But Mises knows that Marx' writings are moralistic, even if the latter would protest such a characterization. Marx' economic theories may be "scientific", but one cannot read him without marveling at the gaudy breadth of his humanity. The first chapter or two of hiis magnus opus, Das Kapital, is economic theory, the rest is his dialectical materialist synopsis of history. Here we see Marx at his best. It is historiography at its best. The text pulses with humanity and decency and moral outrage. I defy anybody to read it and say that Marx is inhumane. Mises knows what he is saying is untrue. It is inhumane to say Marx was inhumane.