Mark Harrison’s Liberal Confusion of Marxist Economics

Ed. Note: Normally I wouldn’t find it necessary to respond to such an old post, but I felt it was important given the prevalence of the opinion that Harrison is giving. Many liberals feel Marx has some relevance to their criticisms of capitalism without realizing that they in fact do not.

In a post made by Mark Harrison of Pieria (Oct 14th, 2013) he attempts to make a point about Marxist influence on modern political life. In the course of doing so he demonstrates that he doesn’t understand Marxist theory at all. His post centers on comments made by George Osborne, Chancellor of the Exchequer (UK) making a criticism of Ed Milliband the leader of the opposition:

“For him the global free market equates to a race to the bottom with the gains being shared among a smaller and smaller group of people. That is essentially the argument Karl Marx made in Das Kapital. It is what socialists have always believed.”

From here he goes on to claim that Marxism has been discredited. I find it interesting that if it was so discredited I see no reason why its “influence” on modern intellectual life would be so prevalent. If this was so perhaps he would care to explain all the Marxist movements still making theoretical breakthroughs. His lack of knowledge is quite apparent when he uses Marx’s own words, ‘Haven’t the economic policies of Marxist regimes generally failed to provide for “an association, in which the free development of each is the condition for the free development of all” – the words by which Marx once distilled the goal of communism?’ The problem with Harrison’s words is that communism was not reached, socialism was achieved which is the transitional period towards communism. His statement is essentially that socialism isn’t communism, thus communism doesn’t work. Once can make the argument that communism to a limited degree was achieved in some of Mao’s communes, but I do not thing it is enough to prove it on a national scale.

Ironically he continues by complaining that other people don’t understand Marxist economics:

“What are the experiences to which Marxist economics correspond? Behind the complicated terminology of capital and value and Marx’s elaborate philosophical and historical argumentation of them are four simple ideas:”

What he proceeds to do is completely fail to understand Marxist theory. As he attempts “Marx’s elaborate philosophical and historical argumentation” in his own words he ends up completely misrepresenting them. In attempting to explain them to the reader he reduces Marxist economics to “four simple ideas”. These ideas are in reality, liberal complaints of the functioning of capitalism. They are by no means the criticisms Marx made, nor do they correspond to the elaborate theory regarding the system of commodity production that he laid out. Allow me to go through them one by one and explain how they are liberal misrepresentations.

  • The market is a jungle, a chaotic struggle of each against all, in which the strongest, most ruthless predator wins. Lurking behind every transaction is the chance that someone will rip you off.

  • Of all the possible functions of market prices – accounting, economising, distributive – the only one that matters is distribution. A rise in the price of food or fuel cuts the real income of workers and redistributes it in favour of the producers that employ them.

  • Work is hard and stressful, and the main source of pressure is the employers’ drive to make you work harder and longer, in order to save them money or increase their profits.

  • You can’t do anything about this on your own. Idealistic advocacy has no traction without numbers. Everyone should get together and intervene forcibly to bring about radical improvement.

  • To deal with the first claim, this is not the point Marx makes at all. Marx attempts to analyze capitalism as fundamentally a system predicated on the private ownership of the means of production combined with competition which requires greater and greater effort to extract surplus value. It is inevitably destructive to the environment and production for human need. His framing of it is incorrect. Capitalism does not incentivize these “ruthless predator” behaviours. Further his wording seems to try to imply that “ruthless predators” are some kind of byproduct of the capitalist mode of production. That is to say it sounds like his words claim that it is not inherent to the systematic pursuit of profit that socially destructive outcomes occur… But competition and relentless drive towards profits are key dynamics of capitalism require the capitalists to behave in socially destructive ways (denying global warming for example). Harrisson’s framing of the issue is incorrect, or incorrect insofar as he tries to associate with Marxist thought. He moralizes the issues in such a way that it obscures the functional analysis of capitalism, which is the primary task Marx undertakes in Capital. Profit is the key measure, and whether it is obtained by helping a wealthy old woman across the street or by charging more than cost such that extraction from the working classes systematically occurs, it doesn’t matter. They do what they do because that’s where the profit is, if it was in helping an old lady cross the road they’d do it. It does not incentivize such behaviours, capitalism IS those behaviours. The competition dynamic of capitalism requires the capitalist to behave in socially destructive ways (denying global warming for example), there is no avoiding it.

    Furthermore, Marx uses the term anarchy of production, he is not characterizing capitalism as some sort of arbitrary chaos, but rather as a relatively unstable system due to capitalism’s relentless drive towards profits under competitive conditions. This may also include much of the socially destructive aspects of capitalism, depending on the context in which it is used.

    To deal with his second claim, to Marx the market prices are much more than distribution. For example market prices in Marxist theory is used as an input price for the next capitalist. It comprises many of the contradictions of capitalism that give rise to the social antagonisms that flow from it, largely inequality. The market (and corresponding price) is the determining factor in the realization of exchange-value in monetary form. This is linked to all kinds of things like rates of profit and how social labour is apportioned throughout the economy. As one industry becomes unprofitable, the social labour is moved to another sector that is. The buying and selling of commodities regulates the division of labor, supply and demand send signals that appoint labor to different tasks. This can only happen if labor power itself is also a commodity to be bought and sold, moved about. Wage-labor is the mechanism by which the “hidden hand of the market” moves labor inputs around.

    To deal with his third claim, while what he says is correct, it leaves out the important capitalist necessity of it. The rate of profit has been shown to historically fall according to Marx’s theories and predictions. The only way to maintain profitability is for the capitalist to cause more “pressure”. There are other ways in which the capitalist increases their rate of profit (exploitation), technological innovation for example. It also manifests by expanding into new markets, Lenin investigates this further with his works on imperialism. This drive is necessary and it in fact has manifested in some unexpected ways. For instance the lion’s share of physical production has been shifted to the Third World with a super rate of exploitation on their workers leaving some First World workers not to be exploited at all, or to minimal degree. Capitalism is predicated on the production of surplus-value which can come only from an unequal exchange.

    To deal with the fourth claim, there’s much to go over as this isn’t even close to what Marx was talking about. Marx never supported idealist advocacy with numbers, he supported social change through a materialist understanding of the development of history, what he called historical materialism. Marx showed how history developed through an evolution of the means of production, the mode of production, the method by which society produced and distributed the products of that society. The realization of this historical truth is what allowed people for the first time not to be slaves to this historical process. We know with this knowledge that we have the power to shape our future societies through the deliberate use and organization of the means of production. This demonstrates that economic planning is essential in the construction of that future society. This of course requires the use of force through revolution, which requires the working class to rise up against its oppressors. It is not a matter of, as Harrison puts it, “Everyone should get together and intervene forcibly”. It is the working class that must come together and overthrow the capitalist class.

    What Harrison has given here is no demonstration of what Marx put forward as his theory. At best these are liberal complaints about the nature of capitalism that seem to correspond with “criticisms” that Marx makes. Marx does not criticize capitalism; he shows the very inner workings and function of the system, how it operates. In his analysis these byproducts of capitalism that liberals complain about are the inherent functioning of the system itself. This is why liberals always resort to regulation to tackle the evils of capitalism instead of opposing the system outright. These are not the side effects of the capitalist mode of production, these are capitalism.

    This is why Marx makes it so clear that a revolutionary overthrow of the ruling class is necessary.

    Source:

    Who’s a Marxist Now?, Mark Harrison, Pieria
    http://www.pieria.co.uk/articles/whos_a_marxist_now

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