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Source link: http://archive.mises.org/11659/class-analysis-marxian-and-austrian-perspectives/

Class Analysis: Marxian and Austrian Perspectives

February 11, 2010 by

While socialism and communism have now been thoroughly discredited, Marx’s defenders claim that his social analysis — in particular, his theory of class conflict — remains a real scientific contribution. FULL ARTICLE by David Osterfeld

{ 19 comments }

Barry Loberfeld February 11, 2010 at 7:53 am

This is a review by Antony Flew of a book on Marx. If you scroll down, you see that someone posted a comment that he cannot find the information that Flew mentions, viz., statistics in Das Kapital for the condition of British workers.

Can anyone help clarify this matter? (Many thanks …)

fundamentalist February 11, 2010 at 8:16 am

Capitalism did intensify the class of clashes in its early days, but not in a way that Marx would recognize because he was such a poor historian. In the Dutch Republic, the new middle class began to dress like the nobility which scandalized not only the nobility but the rest of Europe as well. Many countries, including the British colonies in the US, passed laws making it a crime to dress like the noble classes.

I’ve been debating the socialists over at Sojourner web site and the thing that has surprised me is how they refuse to acknowledge the source of their beliefs is Marx. The find that highly offensive. But when I detail what socialism is, they agree with all of it. They just don’t want to be called socialists or Marxists. Very strange.

Jon O. February 11, 2010 at 10:24 am

“Class analysis itself did not originate with Marx, but can be traced back at least to Adam Smith.”

Class analysis, like most socio-political analysis, goes back to Plato. Actually the platonic classes (workers, guardians, rulers) seem more realistic than Marxian classes.

If you try hard enough to trace an idea back in time you’ll inevitably get to Plato.

Edmund O'Sullivan February 11, 2010 at 10:41 am

“In what we may call a libertarian class analysis, exploitation indeed exists, but it is the exploitation that results from the difference between free-market prices and regulated prices.”
The problem with this argument is that in an economy dominated by intangibles, markets not only don’t work. They don’t exist.
The state can’t calculate prices because it has no way of forecasting the way individuals behave.
But when price no longer has traction over production or consumption — which is what happens with intangibles — the business corporation also can’t calculate. So in advanced economies there is a duopoly of exploitation: by the state and by the business corporation. Libertarians should consider the effect on individual freedom and civilisation of both, not just one.

Stephen Grossman February 11, 2010 at 10:42 am

“From shirtsleeves to suits to shirtsleeves in three generations” was the American class situation around 1900.

Brad February 11, 2010 at 10:49 am

Classes exist as a consequence of the dynamic between the State and the Individual. They are temporal and the nature of how they come into being, exist, and erode away depends on the root rationale that gave rise to a particular State form. Marx’s view was born from observing what existed in his time, and he viewed history through that static prism.

Generally the cycle is fear, superstition, association, Force, State, Oligarchy/Apparatus, disillusionment, revolution, fear, new boss same as the old boss. Those who are not a part of the Oligarchy/Apparatus resent it and reform the situation, but only after the subservience they have made in the trade of liberty for security is shown to be worthless. And it is an ever evolving process wherein arbitrary lines can be drawn at anytime and labeled as a class to prove some point. But the reality is a cauldron of chaos wherein individuals use and defend against Force.

iawai February 11, 2010 at 10:57 am

E. O’Sullivan:

The problem with this argument is that in an economy dominated by intangibles, markets not only don’t work. They don’t exist.
The state can’t calculate prices because it has no way of forecasting the way individuals behave.
But when price no longer has traction over production or consumption — which is what happens with intangibles — the business corporation also can’t calculate. So in advanced economies there is a duopoly of exploitation: by the state and by the business corporation. Libertarians should consider the effect on individual freedom and civilisation of both, not just one.

What? How are you defining “intangibles”, and who are you suggesting should have the power to regulate their exploitative use? How are intangibles consumed if they don’t exist? What are you trying to say?

Deefburger February 11, 2010 at 2:31 pm

“Now we see the violence inherent in the system! Come and see the violence inherent in the system! Help! Help! I’m being repressed!

Bloody Peasant!

Oh, what a give away!”

Try Lateral February 11, 2010 at 2:55 pm

“While socialism and communism have now been thoroughly discredited,”

They always restart the same failed program over and over again with a new name.

First it was communism, then socialism, then liberalism, then leftyism, now it’s environmentalism global warming, feminism etc.

Richard Garner February 11, 2010 at 4:17 pm

Good to see another article by David Osterfeld. When will we get a chance to see a new hard copy version of his excellent book on anarchism?

Edmund O'Sullivan February 12, 2010 at 6:50 am

iawai
Price works in tangibles because people as individuals can make choices between and among them.
Individuals have subjective preferences between, for instance, apples and bananas. Once the relative price of bananas and apples is known, you can work out an individual’s banana and apple demand curve ceteribus paribus.
But how can an individual choose between an intangible apple and an intangible banana? Intangibility means the thing in question can’t be seen, touched, tasted, smelt or heard. Even if an individual were able to treat an intangible apple as if it were tangible, what would happen if they put it down and came back later. How would then know where to find the intangible apple? How would they know if someone had taken it and replaced it with an intangible car?
All theories of consumer preference, including Austrian ones, logically fail when intangibles are involved.

Russ February 12, 2010 at 8:49 am

fundamentalist wrote:

“… when I detail what socialism is, they agree with all of it. They just don’t want to be called socialists or Marxists. Very strange.”

It’s not strange at all. As Try Lateral pointed out, it’s all just the same thing over and over again, re-packaged as something newer and better. Lefties know that if they market their ideas as socialism, they will fail (here in the US anyway), because people here know that something is wrong with socialism. They probably don’t know what is wrong with socialism, or why, though. So if it’s repackaged as progressivism, Obama-ism, third-way-ism, bilateralism, or whatever, people will buy into it.

cptn america February 12, 2010 at 8:59 am

classes exists because of time preference.

Jon Leckie February 12, 2010 at 10:48 am

Edmund O’Sullivan

In what circumstances do your intangibles arise? I would say an intangible banana, on your definition, is not a banana at all. It is nothing, having no presence in space or time. I mean this respectfully, but what’s your point? The price mechanism and any theory of consumer preference based on it might fail when confronted with intangibles, but given (as I believe you’re saying) an intangible can’t exist, why should anyone care?

Peter Trump February 12, 2010 at 6:18 pm

Mr. Osterfeld observes that “Marx’s taxonomy … would place the owner of the corner bakery or an automobile repair garage that employs one or two helpers into the same class as Donald Trump, John D. Rockefeller, and Andrew Carnegie.” Focus for a moment upon exploitation within the moneyed class. I recently came across Ronald H. Gruner’s well-written, small ebook A Call for Legal Entrepreneurship, which exposes the financial and emotional harm that an individual – litigant or defendant – suffers in the civil litigation process. Mr. Gruner avers that legal entrepreneurship can reduce the costs of various phases of litigation, a point well taken; however, the underlying disease is the existence of The State, or, in Professor Hoppe’s words, the “expropriating property protector.” The State makes possible the legal cartel and its abuses. Free trade in law will come to pass in a private law society, but it may be slow in coming.

P.M.Lawrence February 12, 2010 at 7:56 pm

Fundamentalist wrote “In the Dutch Republic, the new middle class began to dress like the nobility which scandalized not only the nobility but the rest of Europe as well. Many countries, including the British colonies in the US, passed laws making it a crime to dress like the noble classes.”

Actually, the main reason for such “sumptuary laws” was a mercantilist one, to restrict the imports of things like silk. Class issues only came into it to determine just who should get the rationed supply, not about whether there should be such rationing.

Brad wrote “Classes exist as a consequence of the dynamic between the State and the Individual”.

Actually, they have often arisen separately in another form, e.g. tribes with an inner and outer group and outsiders, and then been adapted within a state context. It really depends on whether you are willing to use “class” as a concept in other contexts; would you consider the Indian caste system a class system or not?

Edmund O'Sullivan February 12, 2010 at 11:38 pm

Jon Leckie
Because intangibles account for more than 75 per cent of the output of many advanced economies. Which means price is increasingly irrelevant in determining production and consumption in them.
Because even if something is intangible (or immaterial) it can still be perceived: like commitment, engagement, respect, honesty. These are necessary for the creation of value in intangibles (eg teaching, medicine).
The concept of the intangible banana, which is an impossibility, is designed to demonstrate that economic theory, including Austrian, can’t work with intangibles.

The Unrepentant Iconoclast September 22, 2010 at 1:15 pm

The main problem with Vulgar Capitalist Apologists of the “Austrian” kind is that (1) they conflate use-value and exchange value and (2) they have not a clue about skill exploitation.

The Unrepentant Iconoclast September 22, 2010 at 2:53 pm

What if we read the two quotes by Marx IN CONTEXT:

“What he [Ricardo] forgets to emphasise ||746| is the constantly growing number of the middle classes, those who stand between the workman on the one hand and the capitalist and landlord on the other.

Next sentence:

“The middle classes maintain themselves to an ever increasing extent directly out of revenue, they are a burden weighing heavily on the working base and increase the social security and power of the upper ten thousand.” (Chapter XVIII, Section 1d)

Actually Marx complained that the workers’ lot was becoming WORSE due to the growth of the middle class.

Marx on Malthus and Skill Exploitation:

“The selfsame “profound philosopher” remarks:

“But it is evident that all cannot be in the middle. Superior and inferior parts are in the nature of things absolutely necessary; and […] “ (naturally there can be no mean without extremes) “strikingly beneficial. If no man could hope to rise, or fear to fall in society; if industry did not bring with it its reward, and indolence its punishment; we could not expect to see that animated activity in bettering our condition, which now forms the master-spring ||346| of public prosperity” ([Malthus, Principles of Population, p. 303,] Prévost, p. 112).

Thus there must be lower classes in order that the upper ones may fear to fall and there must be upper classes in order that the lower ones may hope to rise. In order that indolence may carry its own punishments the worker must be poor and the rentier and the landlord, so beloved of Malthus, must be rich. But what does Malthus mean by the reward of industry? As we shall see later, he means that the worker must perform part of his labour without an equivalent return. A wonderful stimulus, provided the “reward” and not hunger were the stimulus. What it all boils down to is that a worker may hope to exploit other workers some day.

Rousseau says: “The more monopoly spreads, the heavier do the chains become for the exploited.”

Malthus, “the profound thinker”, has different views. His supreme hope, which he himself describes as more or less utopian, is that the mass of the middle class should grow and that the proletariat (those who work) should constitute a constantly declining proportion (even though it increases absolutely) of the total population. This in fact is the course taken by bourgeois society.

“We might even venture,” says Malthus, “to indulge a hope that at some future period the processes for abridging human labour, the progress of which has of late years been so rapid, might ultimately supply all the wants of the most wealthy society with less personal effort than at present; and if they did not diminish the severity of individual exertion” (he must go on risking just as much as before, and relatively more and more for others and less and less for himself), “might, at least, diminish the number of those employed in severe toil” ([Malthus, Principles of Population, p. 304,] Prévost, p. 113).} |VIII-346||” (Theories of Surplus Value, Chapter XIX, Section 14)

“Thus, far from squeezing out the middle class, the free market tends to eliminate extremes of wealth and poverty, thereby increasing the size of the middle class.”

In fact, Marx was making a case against skill exploitation; he was NOT conceding that Capitalism helped the middle-class grow.

To conclude, either Osterfeld is incompetent, or he is intellectually dishonest.

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