Revolution: Marx and Misunderstanding
The only thing that would pacify the people now is the introduction of the Land Value Taxation system of Henry George. The land is common to all; all have the same right to it. Solving the land question means the solving of all social questions... possession of land by people who do not use it is immoral – just like the possession of slaves.
But it wasn’t to be Henry George who moved the world, it was to be Karl Marx. Marx’s teachings dominated radical thought for the next century and produced revolution, 360 degree turns, in half the world. And we remain amazed to discovery that this all represents a vast and crucial misunderstanding, which we’ll return to further on.
In Russia, despite Leo Tolstoy’s pleadings to Czar Nicholas II and the Russian government to take Henry George as Russia’s guide, history turned. Tolstoy could see trouble coming and he was right. In 1917, the Marxist Bolshevik Revolution swept everything away in Russia, creating the USSR, the Union of Soviet Socialist Republics. Inspired by the high ideals of Communism, they soon made the Soviet Union a vast, zealously policed, prison camp. Socialism, under pressure internally and externally, soon became an oppressive security state. Henry George had predicted that Marx’s teaching would lead to tyranny and it didn’t take long.
The men who had led the revolution, this sacred act, needed to defend the revolution from all who would destroy it and, for them, enemies were everywhere. And so survival of the revolution came to depend on the Dictatorship of the Proletariat. The peoples’ will would rule absolutely, as expressed through the wise leadership of the guardians of the revolution, who embodied the will of the people.
A monstrous era would descend, in which brutality and murder on a mass scale was conducted for the advancement of society as a whole, and the individual disappeared completely as if into a massive cold grey concrete block. And behind it all, an intense academic of planners plotting the future. Engels, co-theorist of Marx, had coined the term Scientific Socialism.
Accompanying the intense academia was the peril, which many fell into, of being accused of saying something, theorising something, which was interpreted as counter to the revolution, which revealed your unpure soul and your secret love of the enemy. This would lead to grim imprisonment, suffering and death.
The Soviet Union (USSR) with its ordered and immiserated inmates stood slowly corroding, shaping the world’s history with the force of its gravity, until it just seemed to crack, and it became clear that lots of water had been used in the concrete mix and the planners had been a long way out.
It had to change, and the pace of change ran out of control. It was forced change, and it really was all too much to dismantle in a hurry. In the end, everything was chaos, the national assets were appropriated, and then the state renewed strict authority. Everything became much as before except that all that was previously theoretically owned in common was now owned by a handful of men who had moved swiftly and ruthlessly.
China had gone the same way of totalitarian rule in the name of the workers, and suffered some surreal turmoil driven by the personalities of the leadership which arose. Early in the century, China could almost have achieved Georgist wisdom through the leadership of Sun Yat-Sen (more of which later) but fell under the Marxist spell, with its ideas of struggle against the forces of capital and its certain proofs from history. These were exhaustively academic theorising, and had been presented to the world in a stream of writing and eventually in some massive tomes.
The ideas which would come to dominate the thinking of half the world for the next century is deeply philosophical stuff . . . historical materialism, phew . . . Karl Marx (1818-1883) was obviously a very deep and obsessive thinker. And to attempt reading about it, Hegelian discourse, dialectics, we felt cowed. How could all this knowledge and research be flawed?
These ideas of Marx and Engels are ideas that have been of enormous importance in the world for a tortured century, and an attempt to change the destiny of humanity with an ideology that ripped up everything that went before; what these ideas were is at least interesting.
There is, in recent years, a renewed interest in Karl Marx. Perhaps this is because he said things about states being run in the interests of the ruling class but are nonetheless represented as being in the common interest of all, which people are strongly suspecting could be so. And he writes of the contradictions inherent with Capitalism causing its own inevitable collapse.
He writes about a lot of things, but don’t worry, in no way are we going to try and delve into the details of Marxism – as if - but just skimming over the things we thought we knew and expanding on them a tiny bit, before revealing a reading of the story which we’d never heard and which truly astounded us.
Karl Marx was born in Trier, Germany in 1818, and his life was one of deep study and theorising. He had already stirred controversy with papers he had written when, by 1842, as a journalist at a newspaper in Cologne, he started writing about socialism and economics. He somewhat lashed out, and government censors became interested and finally his newspaper was banned. Then to Paris to write for and co-edit various radical socialist newspapers, during which he continued to refine his ideas, and met Friedrich Engels in 1844.
That's Engels on the right. Engels had just published The Condition of the Working Class in England in 1844, which further convinced Marx then that it was the destiny of the workers to change history and force the world to enlightenment. By this year, his vision was complete in rough form. His compelling fascination remained:
to understand the inner workings of capitalism.
This is perhaps how the main issue can be missed amongst masses of details, the wood from the trees. It’s the obtuse inner workings which blind economists to this day, as the main principles remain invisible to them.
More publications followed, articles, manuscripts, theses, poured from him, many of them never to be seen until long after his death. He was expelled from France and allowed to move to Brussels in 1845, promising not to write anything political. Marx and Engels distilled their philosophy, based on materialism as the single driver in history; that people define themselves and gain fulfilment and status from material possessions, is what history is all about.
Marx continued his associations, plotting how to capture the feet of the mass working classes of Europe, and persuading the Communist League, an underground movement, to operate openly to appeal directly to this class.
In early 1848, Marx and Engels co-authored The Communist Manifesto to lay out the aims and beliefs of the League, and began:
The history of all hitherto existing society is the history of class struggles.
Then, in the summer, there was some real revolutionary action, uprisings around Europe and the overthrow of the monarchy in France. Marx supported all of this and was accused of using inherited money to arm revolution-minded workers in Belgium. He was sent back to France, where things seemed safe for him now.
Then onto Germany to ferment revolution there, taking the view that the bourgeoisie must overthrow the feudal monarchy and aristocracy so that the proletariat could then overthrow them. He started a newspaper and was regularly arrested and put on trial. Eventually the newspaper was shut down and he was ordered to leave; back to Paris, and soon expelled from there, with a pregnant wife in tow.
They found haven in London, moving to Soho in 1849. Engels was running his father’s textile mill in Manchester and sent the accounting and production figures from the mill to inform Marx’s research.
In 1855, Engels persuaded Marx to put all his ideas down definitively. Karl Marx’s life’s work is most famously known to the world by its title in German, as Das Kapital; three gargantuan 800 page plus volumes, real doorstoppers. The full name is Das Kapital: Kritik der politischen Ökonomie; in English, Capital: Critique of Political Economy.
The poor man had some nasty health condition which people still speculate about, so all his writing was done standing up. Only Volume1 of the planned six was published in his lifetime, Engels putting the subsequent two volumes together from Marx’s notes.
Marx saw the development of human history as a historic class struggle between a ruling class and a ruled exploited class. In his view, the ruling class of the times was what he called the bourgeoisie, by which he meant the capitalist class that owned and controlled the means of production, that is, the factories, machines, tools. The combination of labour with the means of production produces goods, and these goods have use values. Through ownership of these means of production, the ruling bourgeoisie class were seen as exploiters of the proletariat, the workers, the wage-owners, who had nothing but their labour to trade.
The ruling class were seen as appropriating the surplus value created by the proletariat, the excess of their production over the cost of their wages. And it’s clear that history is the story of a ruling class exploiting the others, but the question we became aware of is: what is the source of power?
Marx argued a Labour Theory of Value, that the economic value of goods or services comes from the amount of socially necessary labour required to produce it. The value of something isn’t what someone is prepared to pay for it, its value is the labour and skill that someone has put into making it and its social use. He noted the English uses of the word value for price, an objective measure, and worth for something of greater subjective value and made this distinction.
He writes about a contradictory tension inherent in Capitalism, in the two-fold character of Labour, that is, a dichotomy between human labour as economically valuable worktime, and human labour as a particular activity that has a specific useful effect, this idea about abstract and concrete value.
Socialism, in Marxism, is a specific phase along the road to classless utopia, where production is planned and coordinated by committees of planners who direct production of goods which have use value. Distribution of these goods is on the basis of to each according to his contribution.
And Marx wrote of what he called a Fetishism of Commodities, where Marx saw the relationships in production as involving relations not between people but as relations between money and commodities in the marketplace. That commodities are given spirit, become real things.
To find an analogy, Marx said:
we must take flight into the misty realm of religion. There the products of the human brain appear as autonomous figures endowed with a life of their own, which enter into relations both with each other and with the human race.
He saw a fetishism that attached itself to products, that they became real things in people’s minds, which broke the relationship between the value of things and what he calls the physical nature of the commodity and the material relations arising out of this. The fetishisation of commodities creates an objective value about something, from what should be a subjective value somehow based on what social use the something has.
Another theory concerned alienation, whereby workers are estranged from their true selves, from their species-essence, and lose their sense of self-determination, as they are directed to goals set by the owners of the means of production. There’s no mention of their estrangement from the land. There’s seems no mention of land or nature anywhere, the fetishism of which had served humankind very well in its ancient past (which we will return to.)
Building on the ideas of the Philosopher Georg Wilhelm Friedrich Hegel (1770-1831), Marx has analysis of history at the centre of his approach, an approach known as historical materialism, which holds that the conditions of a society and how it operates, at any given time in history, is determined by that society’s ways of sustaining human life, which in Marxism would be expressed as the combination of the society’s productive capacity with its relations of production, the relations anyone has to have in order to survive and reproduce. He produced a broad and persuasive picture based on an analysis of human history, proposing that the development of economics in society is a process of natural history, thus making possible, he thought, an objective study of the laws of Capitalism. Engels termed the ideology scientific socialism.
Beyond the necessity of suppressing the individual, beyond the impossibility of planning an economy outside of markets and the natural formation of prices, the criticisms of Marxism are wide and varied. Many problems of many kinds are cited, pointing to flaws in the reasoning, that his laws are very open to interpretation, that the laws of dialectics at the heart of Marxism are flawed, which historian of ideas Leszek Kołakowski has said are often truisms with no specific Marxist content. He also said:
We learn history not in order to know how to behave or how to succeed, but to know who we are.
Karl Popper, one of the most influential philosophers of the 20th century and author of The Open Society and its Enemies, found a complete absence of critical spirit in Marx’s analyses. He argued that Marx’s concepts and historical methods are unfalsifiable, could not be proven either way. He said:
The Marxist theory of history, in spite of the serious efforts of some of its founders and followers, ultimately adopted this soothsaying practice. In some of its earlier formulations (for example in Marx's analysis of the character of the 'coming social revolution') their predictions were testable, and in fact falsified. Yet instead of accepting the refutations the followers of Marx re-interpreted both the theory and the evidence in order to make them agree. In this way they rescued the theory from refutation; but they did so at the price of adopting a device which made it irrefutable. They thus gave a 'conventionalist twist' to the theory; and by this stratagem they destroyed its much advertised claim to scientific status.
Damningly, critics point out that Marxist conclusions simply do not actually follow from his theories and that there’s a lot of making the facts fit the theory. George Bernard Shaw wrote that:
profit to the proprietors of the more favourable raw material (is) economic rent, the main source of surplus value. Without a thorough grip of this factor, it is impossible to defend socialism.
And said that without this point Das Kapital is useless.
Economist and philosopher Thomas Sowell summed up the whole phenomenon:
What Marx accomplished was to produce such a comprehensive, dramatic, and fascinating vision that it could withstand innumerable empirical contradictions, logical refutations, and moral revulsions at its effects. The Marxian vision took the overwhelming complexity of the real world and made the parts fall into place, in a way that was intellectually exhilarating and conferred such a sense of moral superiority that opponents could be simply labelled and dismissed as moral lepers or blind reactionaries. Marxism was – and remains – a mighty instrument for the acquisition and maintenance of political power.
We must work to keep this dramatic and fascinating vision in the dustbin of history.
In 1850, Marx, writing in his own magazine in London, had started using the term dictatorship of the proletariat. Hal Draper made the point that, in the mid-19th century, the word dictatorship didn’t mean the kind of totalitarian tyranny we take it to mean now, for centuries it had been a reference to the Dictatura of the Roman Republic and was an emergency and limited constitutional arrangement. Though, as he also pointed out, Julius Caesar had developed the meaning during the era when he declared himself unlimited and permanent dictator and ended the Roman Republic. The emergency never went away in the Communist constellation; here, too, the meaning was brought into a sharp focus, and a model developed for strict, disciplined rule of society by vanguard parties around the world, armed with an ideaology which, it could be said, Engels had fetishised by calling it scientific, the only true path to a glorious future beyond classes, where the state could wither away.
The interpretation and extrapolation of this idea would lead to the imprisonment and repression of entire societies, millions of people, in prisons and forced labour camps, dying for someone’s calculation of the common good, the march to ultimate civilisation; people were coerced and directed as they had been by the previous ruling class, only with a lot less style and with possibly more cruelty.
Josef Stalin may have had this quote misattributed to him, but it speaks well of the times:
A single death is a tragedy; a million deaths is a statistic.
Stalin’s regime may have taken the lives of over 40 million people.
And it gave a cue, and a justification, to totalitarians everywhere, to dispense to the people iron authority for their own good, individual energies directed for the greater good, and to rule ruthlessly, lawlessly, guided and legitimised by a glorious vision of the future.
Despite being completely unqualified to, not even the qualification of having read very much Marxism, we’re going to join in kicking Marx. For it seems to us that Marx’s ideas, in losing sight of Land, anticipate the development of Neoclassical Economics - forged to thwart the real revolutionary ideas of Henry George. Land nowhere appears as a economic factor, for Labour was the source of all wealth. It’s clear that in the bulk of Marx’s writing, there is only Labour and its struggle against Capital. Further, it seems that a lot of what Marx calls Capitalism is actually just the price mechanism which, although awaiting Adam Smith’s definition, has been working with its invisible hand since the beginning of human history, that he had apparently considered so closely.
Marx predicted that capitalism would eventually eat itself, that internal problems within it would bring about its self-destruction. Key to this process would be the development of class consciousness among the working classes. Marx proposed that all the contradictions and internal tensions inherent in capitalism created the conditions for proletarian revolution, that the working class should carry out revolutionary action to bring down Capitalism, take control of the means of production and achieve their emancipation. A resonate phrase from his writings was:
Workers of the world unite! You have nothing to lose but your chains!
In 1867, Das Kapital Vol.1 was published in an age when a great international movement had started to organise around the ideas of Socialism/Communism; international groupings of trade unions, socialist, communist and anarchist groups were forming.
And that was very roughly what we knew about the Marxist story until we read an essay by Fred Harrison: Who’s Afraid of Henry George, in The Corruption of Economics, (Shepherd Walwyn, 1994), essays by Harrison and Mason Gaffney, where he writes about Marx’s reaction to the Gotha Conference in Germany.
In 1875, the inaugural party conference of the German Social Democratic Party (SPD), took place in the town of Gotha, adopting here what was known as the Gotha Programme, a strongly socialist platform, bitterly opposing what was termed the iron law of wages, that wages will always, over time, tend towards the minimum necessary to keep a worker alive.
It was a shock to come across these paragraphs in Harrison’s essay. Harrison points out the complete failure of social sciences over the last century to identify the roots of power. He says:
By failing correctly to analyse the defects in 19th century capitalism, the philosophical field was left open for a vulgarised Marxism to emerge in opposition to the social system, which has, at its heart, the economics of the market.
But he says that this vulgarised form was not all the fault of Marx, who received an early draft of the Gotha programme and quickly responded to it, distancing himself from its wording. Harrison says:
At the heart of the disagreement was the nature of power.
Marx got it right. In his Critique of the Gotha Programme, Marx traduced those socialists who claimed that labour was the sole source of wealth.
Marx had written:
Labour is not the source of all wealth, nature is just as much the source of use-values (and surely these are what make up material wealth!) as labour.
And the source of power? Harrison says:
Well, according to Marx – if we are correctly to interpret his words – the capitalist was as much a victim as the worker. Why? His single most important pronouncement was thrown away in a parenthesis.
Marx’s throwaway parenthesis:
In present society, the instruments of labour are the monopoly of the landowners (the monopoly of land and property is even the basis of the monopoly of capital) and of the capitalists.
The focus and fury of the Gotha Programme – continued in the Socialism to come in the 20th century – was directed at the capitalists, the businessmen, the owners of the means of production. But here is Marx highlighting that the owners of land were a separate class, underlining the difference when he said:
In England, the capitalist doesn’t even own the land and soil on which his factory stands.
For the sake of analytical clarity, Marx ought to have added that if the workers suffered from the primary power of the land monopolists, then so did the capitalists who also relied on access to land for his activities. He could not have done so, of course, because had he added these words his house of cards – the one built on the theory of exploitative capitalists – would have crumbled in one swift sentence!
Marx went on to make clear the primary significance of land monopoly in the manuscripts which Engels used to produce Volume III of Das Kapital in 1894, nine years after Marx’s death.
Unfortunately, says Harrison:
this was published posthumously; by that time, the damage was done by the lopsided analysis in the first two volumes, which were not perceived as a fatal threat to the interests of the power elites and were therefore not subjected to the forensic examination they deserved. That ought not to have been fatal for the evolution of culture in the 20th century, however, for the radicals of the 1800s were provided with a full analysis of land as the basis of power from the pen of Henry George.
(Further reading see Fred Harrison, Gronlund and other Marxists in Robert V Andelson, Critics of Henry George (1979), Cranbury, NJ: Associated University Presses)
So, that was all a sham? We’re not even the most vaguely qualified amateur historians, we’re just fascinated readers, but this revelation was a bombshell to us . . . So, all of that struggle was a misunderstanding, received from Vol I and all the earlier stuff, that Labour was the sole source of all wealth?
So, Sidney Webb, drafting the Labour Party’s constitution in 1917, had apparently not read Progress and Poverty – though that’s hard to credit – but neither was aware of what Marx said in Critique of the Gotha Programme or Das Kapital Vol. III, or missed its significance, otherwise he wouldn’t have misunderstood life enough to have stated in Clause IV of the Constitution that the aim was based:
. . . upon the basis of the common ownership of the means of production, distribution and exchange
Harrison writes that Das Kapital Vol.III is the corrective analysis. We’re not going to read it now or soon, but snatched a quick look online at Das Kapital Vol. III and alighted first upon Part VII, Revenues and their Sources, Chapter 52. Classes. It begins:
The owners merely of labour-power, owners of capital, and land-owners, whose respective sources of income are wages, profit and ground-rent, in other words, wage-labourers, capitalists and land-owners, constitute then three big classes of modern society based upon the capitalist mode of production.
And, indeed, Karl Marx is, by now, talking about three classes, three elements to the economy, three different sources of income, and not two. By this point, well over two thousand pages in, and Marx is telling his adherents how many classes of actor, how many elements of the economy there are; there are three and not two. Three is the magic number.