My topic is Marxist and Austrian class analysis. I want to do the
following: first, I will present a series of theses that constitute the
hard-core of the Marxist theory of history. I claim that all of them
are essentially correct. And then I will show these true theses are
derived in Marxism from a false starting-point. And finally, I want to
demonstrate how Austrianism in the Mises-Rothbard tradition can give a
correct but categorically different explanation of their validity.
Let me begin with the hard-core of the Marxist belief system.
The history of mankind is the history of class struggles. That is the
history of struggles between a relatively small ruling class, and a
larger class of the exploited. The primary form of exploitation is
economic. The ruling class expropriates parts of the productive output
of the exploited or, as Marxists say, it appropriates a social surplus
product, and uses it for its own consumptive purposes.
Second, the ruling class is unified by its common interest in upholding
its exploitative position, and maximizing its exploitatively
appropriated surplus product. It never deliberately gives up power or
exploitation income. Instead, any loss of power or income must wrestled
away from it through struggles whose outcome ultimately depends on the
class consciousness of the exploited. That is, on whether or not and to
what extent the exploited are aware of their own status and are
consciously united with other class members in common opposition to
exploitation.
Third, class rule manifests itself primarily in specific arrangements
regarding the assignment of property rights. Or in Marxist terminology:
in specific relations of production. In order to protect these
arrangements or production relations, the ruling class forms and is in
command of the state as the apparatus of compulsion and coercion. The
state enforces and helps reproduce a given class structure through the
administration of a system of class justice. And it assists in the
creation and the support of an ideological superstructure designed to
lend legitimacy to the existence of class rule.
Fourth, internally, the process of competition within the ruling class
generates a tendency towards increasing concentration and
centralization. A multi-polar system of exploitation is gradually
supplanted by an oligarchic or monopolist one. Fewer and fewer
exploitation centers remain in operation, and those that do are
increasingly integrated into a heirarchical order. And externally, that
is as regards the international system, this internal centralization
process will lead to imperialist interstate wars and the territorial
expansion of exploitative rule.
Fifth, with the centralization and expansion of exploitative rule
gradually approaching its ultimate limit of world domination, class rule
will increasingly become incompatible with the further development and
improvement of productive forces. Economic stagnation and crises become
more and more characteristic, and create the so-called 'objective
conditions' for the emergence of a revolutionary class consciousness of
the exploited. The situation becomes ripe for the establishment of a
classless society, the withering-away of the state, or the replacement
of government of men-over-men by the administration of things. And, as
its result, unheard-of economic prosperity.
All of these theses can be given a perfectly good justification, as I
will show. Unfortunately however, it is Marxism, which subscribes to
all of them, that has done more than any other ideological system to
discredit their validity, in deriving them from a patently absurd
exploitation theory. Now what is this Marxist theory of exploitation?
According to Marx, such pre-capitalist socialist systems as slavery and
feudalism are characterized by exploitation. There is no quarrel with
this, for after all the slave is not a free laborer, and he cannot be
said to gain from his being enslaved. Rather, in being slaved, his
utility is reduced at the expense of an increase in wealth appropriated
by the slave-master. The interests of the slave and that of the slave-owner
are indeed antagonistic.
The same is true as regards the interests of the feudal lord, who
extracts a land-rent from a peasant who works on land homesteaded by
himself -- that is, by the peasant. The lord's gains are the peasant's
losses. And it is also undisputed that slavery as well as feudalism
indeed hampers the development of productive forces. Neither slave nor
serf will be as productive as they would be without slavery or serfdom.
But the genuinely new Marxist idea is that essentially nothing is
changed as regards exploitation under capitalism. That is, if the slave
becomes a free laborer, or if the peasant decides to farm land
homesteaded by someone else, and pays rent in exchange for doing so. To
be sure, Marx, in the famous chapter 24 of the first
volume of his Capital, titled "The So-Called Original Accumulation",
gives a historical account of the emergence of capitalism which makes
the point that much or even most of the initial capitalist property is
the result of plunder, enclosure, and conquest. And similarly, in chapter 25, on the modern theory of colonialism, the role of
force and violence in exporting capitalism to the -- as we would now say
-- third world, is heavily emphasized.
Admittedly, all this is generally correct. And insofar as it is, there
can be no quarrel with labelling such capitalism exploitative. Yet one
should be aware of the fact that Marx here is engaged in a trick. In
engaging in historical investigations, and arousing the reader's
indignation regarding the brutalities underlying the formation of many
capitalist fortunes, he actually side-steps the issue at hand. He
distracts from the fact that his thesis is really an entirely different
one. Namely, that even if one were to have a 'clean capitalism' so to
speak, that is, one in which the original appropriation of capital were
the result of nothing else but homesteading, work, and savings, the
capitalist who hired labor to be employed with this capital would
nonetheless be engaged in exploitation. Indeed, Marx considered the
proof of this thesis his most important contribution to economic
analysis.
Now what then is his proof of the exploitative character of a clean
capitalism? It consists in the observation that the factor prices, and
in particular the wages paid to laborers by the capitalists, are lower
than the output prices. The laborer, for instance, is paid a wage that
represents consumption goods which can be produced in three days, but he
actually works five days for his wage, and produces an output of
consumption goods that exceeds what he receives as remuneration. The
output of the two extra days -- the surplus value in Marxist terminology
-- is appropriated by the capitalist. Hence, according to Marx, there
is exploitation.
Now what is wrong with this analysis? The answer becomes obvious once
it is asked why the laborer would possibly agree to such a deal. He
agrees because his wage-payment represents present goods, while his own
labor services represent only future goods, and he values present goods
more highly. After all, he could also decide not to sell his labor
services to the capitalist and then reap the full value of his output
himself. But this would of course imply that he would have to wait
longer for any consumption goods to become available to him. In selling
his labor services, he demonstrates that he prefers a smaller amount of
consumption goods now, over a possibly larger one at some future
date.
On the other hand, why would the capitalist want to strike a deal with
the laborer? Why would he want to advance present goods -- that is,
present money -- to the laborer in exchange for services that bear fruit
only later? Obviously he would not want to pay out for instance $100
now, if he were to receive the same amount in one year's time. In that
case, why not simply hold on to it one year, and receive the extra
benefit of having actual command over it during the entire time?
Instead, he must expect to receive a larger sum than $100 in the future,
in order to give up $100 now in the form of wages paid to the laborer.
He must expect to be able to earn a profit -- or more correctly, an
interest return.
And he is constrained by time-preference -- that is, the
fact that an actor invariably prefers earlier over later goods -- in yet
another way: for if one can obtain a larger sum in the future by
sacrificing a smaller one in the present, why then is the capitalist not
engaged in more saving than he actually is? Why does he not hire
more laborers than he does, if each one promises an additional
interest return? The answer again should be obvious: because the
capitalist is a consumer too, and cannot help being one. The amount of
his savings and investing is restricted [--audio glitch--] by the
necessity that he too, like the laborer, requires a supply of present
goods large enough to secure the satisfaction of all those wants, the
satisfaction of which during the waiting time is considered more urgent
than the advantags which a still greater lengthening of the period of
production would provide.
Now what is wrong with Marx's theory of exploitation, then, is that he
does not understand the phenomenon of time-preference as a universal
category of human action. That the laborer does not receive his "full
worth", so to speak, has nothing to do with exploitation, but merely
reflects the fact that it impossible for man to exchange future goods
against present ones except at a discount.
Contrary to the case of slave and slave-master, where the latter
benefits at the expense of the former, the relationship between the
free-laborer and the capitalist is a mutually beneficial one. The
laborer enters the agreement because, given his time preference, he
prefers a smaller amount of present goods over a larger future one. And
the capitalist enters it because, given his time-preference, he has a
reverse preference order, and ranks a larger future amount of goods more
highly than a smaller present one.
Their interests are not antagonist, but harmonious. Without the
capitalist's expectation of an interest return, the laborer would be
worse off, having to wait longer than he wishes to wait. And without
the laborer's preference for present goods, the capitalist would be
worse off, having to resort to less-roundabout and less-efficient
production methods than those which he desires to adopt.
Nor can the capitalist wage system be regarded as an impediment to the
further development of the forces of production, as Marx claims. If the
laborer were not permitted to sell his labor services, and the
capitalist to buy them, output would lower, because production
would have to take place with relatively reduced levels of capital
accumulation.
Under a [--audio glitch--] homesteading, producing, and or savings.
In each case it is brought about with the expectation that it will lead
to an increase in the output of future goods. The value an actor
attaches to his capital reflects the value he attaches to all expected
future incomes, attributable to its cooperation, and discounted by his
rate of time-preference.
If, as in the case of collectively-owned factors of production, an actor
is no longer granted exclusive control over his accumulated capital and
hence over the future income to be derived from its employment, but
partial control instead is assigned to non-homesteaders, non-producers,
and non-savers, the value for him of the expected income and hence then
of the capital goods, is reduced. His effective rate of time-preference
will rise. There will be less homesteading of resources whose scarcity
is recognized, and less saving for the maintenance of existing -- and
the production of new -- capital goods. The period of production, the
round-aboutness of the production structure, will be shortened, and
relative impoverishment will result.
If Marx's theory of capitalist exploitation, and his ideas on how to end
exploitation and establish universal prosperity are false to the point
of being ridiculous, it is clear that any theory of history which can be
derived from it must be false too. Or, if it should be correct, it must
have been derived incorrectly. Instead of going through the lengthier
task of explaining all of the flaws in the Marxist argument as its sets
out from its theory of capitalist exploitation and ends with the theory
of history which I presented earlier, I will take a shortcut here.
I will now outline in the briefest possible way the correct Austrian,
Misesian, Rothbardian theory of exploitation. I will then give an
explanatory sketch of how this theory makes sense out of the class
theory of history, and highlight along the way some key differences
between this class theory and the Marxist one, and also point out some
intellectual affinities between Austrianism and Marxism, stemming from
their common conviction that there does indeed exist something like
exploitation and a ruling class.
The starting-point for the Austrian exploitation theory is plain and
simple, as it should be. Actually, it has already been established
through the analysis of the Marxist theory. Exploitation characterized
in fact the relationship between slave and slave-master, and between
serf and feudal lord, but no exploitation was found possible under a
'clean' capitalism.
Now what is the principle difference between these two cases? The
answer is this: the recognition or non-recognition of the homesteading
principle. The peasant, under feudalism, is exploited because he does
not have exclusive control over land that he homesteaded; and the slave,
because he has no exclusive control over his own homesteaded body. If,
contrary to this, everyone has exclusive control over his own body --
that is, everyone is a free laborer, and acts in accordance with the
homesteading principle, there can be no exploitation.
It is logically absurd to claim that a person who homesteads goods not
previously homesteaded by anybody else, or who employs such goods in the
production of future goods, or who saves presently-homesteaded or
produced goods in order to increase the future supply of goods, could
thereby exploit anybody. Nothing has been taken away from
anybody in this process, and additional goods have actually been
created. And it would be equally absurd to claim that an agreement
between different homesteaders, savers, and producers, regarding their
non-exploitatively appropriated goods or services, could possibly
contain any foul play then.
Instead, exploitation takes place whenever any deviation from the
homesteading princple occurs. It is exploitation whenever a person
successfully claims partial or full control over resources which he has
not homesteaded, saved, or produced, and which he has not acquired
contractually from a previous producer-owner. Exploitation is the
expropriation of homesteaders, producers, and savers, by late-coming
non-homesteaders, non-producers, and non-savers and non-contractors. It
is the expropriation of people whose property claims are grounded in
work and contract by people whose claims are derived from thin air, and
who disregard other's works and contracts.
Needless to say, exploitation defined in this way is in fact an integral
part of human history. One can acquire and increase wealth either
through homesteading, producing, saving, or contracting -- or by by
expropriating homesteaders, producers, savers, or contractors. There
are no other ways. Both methods are natural to mankind. Alongside
homesteading, producing, and contracting, there have always been
non-productive and non-contractual property acquisitions.
And in the course of economic development, just as the producers and
contractors can form firms, enterprises, and corporations, so can
exploiters combine to large-scale exploitation enterprises -- to
governments and states. The ruling class is initially composed of the
members of such an exploitation firm. And with a ruling class
established over a given territory, and engaged in the expropriation of
economic resources from a class of exploited producers, the center of
all history indeed becomes a struggle between exploiters and the
exploited.
History then, correctly told, is essentially the history of the
victories and the defeats of the rulers in their attempt to maximize
exploitatively-appropriated income, and of the ruled in their attempts
to resist and reverse this tendency. It is in this assesment of history
that Austrians and Marxists agree. And by a notable intellectual
affinity between Austrian's and Marxist's historical investigations
exists. Both oppose a historeography which recognizes only action or
interaction, economically and morally all on a par. And both oppose a
historeography that instead of adopting such a value-neutral stand,
thinks that one's own arbitrarily-introduced subjective value judgements
have to provide the foil for one's historical narratives. Rather,
history must be told in terms of freedom and exploitation, parasitism
and economic impoverishment, private property and its destruction.
Otherwise it is told false.
While productive enterprises come into or go out of existence because of
voluntary support or its absense, a ruling class never comes to power
because there is a demand for it. Nor does it abdicate when abdication
is demonstrably demanded. One cannot say by any stretch of the
imagination that homesteaders, producers, savers, and contractors, have
demanded their exploitation. They must be coerced into accepting it,
and this proves conclusively that the exploitation firm is not in demand
at all.
Nor can one say that a ruling class can be brought down by abstraining
from transactions with it, in the same way as one can bring down a
productive enterprise. For the ruling class acquires its income through
nonproductive and noncontractual transactions, and thus is unaffected by
boycotts. Rather, what makes the rise of an exploitation firm possible,
and what alone can in turn bring it down, is a specific state of public opinion
-- or, in Marxist terminology, a specific state of class consciousness.
An exploiter creates victims, and victims are potential enemies. It is
possible that this resistance can be lastingly broken down by force in
the case of a group of men exploiting another group of roughly the same
size. However, more than force is needed to expand exploitation over a
population many times its own size. For this to happen, a firm must
also have public support. A majority of the population must accept the
exploitative actions as legitimate. This acceptance can range from
active enthusiasm to passive resignation. But it must be acceptance in
the sense that a majority must have given up the idea of actively or
passively resisting any attempt to enforce nonproductive and
noncontractual property acquisitions. The class consciousness must be
low, undeveloped, and fuzzy.
Only as long as this state of affairs lasts, is there still room for an
exploitive firm to prosper even if no actual demand for it exists. Only
if and insofar as the exploited and expropriated develop a clear idea of
their own situation, and are united with other members of their class
through an ideological movement, which gives expression to the idea of a
classless society where all exploitation is abolished, can the power of
the ruling class be broken. Only if and insofar as the majority of the
exploited public becomes consciously integrated into such a movement,
and accordingly displays a common outrage over all nonproductive or
noncontractual property acquisitions, shows a common contempt for
everyone who engages in such acts, and deliberately contributes nothing
to help them make successful, not to mention actively trying to obstruct
them, can its power be brought down to crumble.
The gradual abolishment of feudal and absolutist rule and the rise of
increasingly capitalist societies in Western Europe and the United
States, and along with this unheard of economic growth and rising
population numbers, was the result of an increasing class consciousness
among the exploited, who were ideologically molded together through the
doctrines of natural rights and liberalism. In this, Austrians and
Marxists agree. They disagree however on the next assessment.
The reversal of this liberalization process, and steadily increased
levels of exploitation in these societies, since the last third of the
nineteenth century, and particularly pronounced since World War I, are
the result of a loss in class consciousness. In fact, in the Austrian
view, Marxism must accept much of the blame for this development, by
misdirecting attention from the correct exploitation model of the
homesteader-producer-saver-contractor vs. the
non-homesteader-producer-saver-contractor, to the fallacious
model of the wage-earner vs. the capitalist, thereby muddling things up.
The establishment of a ruling class over an exploited one many times its
own size by coercion and the manipulation of public opinion -- that is,
a low degree of class consciounsess among the exploited -- finds its
most basic institutional expression in the creation of a system of
public law, superimposed on private law. The ruling class sets itself
apart and protects its position as the ruling class, by adopting a
constitution for their firm's operation. On the one hand, by
formalizing the internal operations within the state apparatus, as well
as its relations vis-Ã -vis the exploited population, a constitution
creates some degree of legal stability. The more familiar and popular
private-law notions are incorporated into constitutional and public law,
the more conducive this will be to the creation of favorable public
opinion.
On the other hand, any constitution and public law also formalizes the
exemptory status of the ruling class as regards the homesteading
principle. It formalizes the right of the state's representatives to
engage in nonproductive and noncontractual property acquisitions, and
the ultimate subordination of private to public law. Class justice --
that is, a dualism of one set of laws for the rulers and another for
the ruled -- comes to bear in this dualism of public and private law,
and in the domination and infiltration of public law over and into
private law. It is not because private property rights are recognized
by law, as Marxists think, that class justice is established. Rather,
class justice comes into being precisely whenever a legal distinction
exists between a class of persons acting under and being protected by
public law, and another class acting under and being protected instead
by some subordinate private law.
More specifically then, the basic proposition of the Marxist theory of
exploitation is false. The state is not exploitive because it protects
the capitalist's property rights, but because it itself is exempt from
the restriction of having to acquire property productively and
contractually. In spite of this fundamental misconception however,
Marxism, because it correctly interprets the state as exploitative,
contrary for instance to the Public Choice school, which sees it as a
normal firm among others, is on to some important insights regarding the
logic of state operations.
For one thing, Marxism recognized the strategic function of
redistributive state policies. As an exploitative firm, the state must
at all times be interested in a low degree of class consciousness among
the ruled. The redistribution of property and income, a policy of
divide et emperor, is the state's means with which it can create
divisiveness among the public, and destroy the formation of a unifying
class consciousness of the exploited. Furthermore, the redistribution
of state power itself, through democratizing the state constitution and
opening up every ruling position to everyone, and granting everyone the
right to participate in the determination of state personnel and policy,
is a means for reducing the resistance against exploitation as such.
Secondly, the state is indeed as Marxists see it, the great center of
ideological propaganda and mystification. Exploitation is really
freedom; taxes are really voluntary contributions; noncontractual
relations are really 'conceptually contractual' ones; no-one is ruled by
anyone but we all rule ourselves; without the state neither law nor
security would exist, and the poor would perish. All of this is part of
the ideological superstructure, designed to legitimize an underlying
basis of economic exploitation.
And finally, Marxists are also correct in noticing the close association
between the state and business, especially the banking element, even
though the exploitation is faulty. The reason is not that the borgeois
establishment sees and supports the state as a guarantor of private
property rights and contractualism. On the contrary, the establishment
correctly perceives the state the very antithesis to private property
that it is, and takes a close interest in it for this reason. The more
successful a business, the [-- audio glitch --], but the larger also the
potential gains that can be achieved if it can come under government's
special protection, and is exempt from the full weight of capitalist
competition. This is why the business establishment is interested in
the state and its infiltration.
The ruling elite in turn is interested in close cooperation with the
business establishment because of its financial powers. In particular,
the banking elite is of interest, because as an exploitative firm, the
state naturally wishes to possess complete autonomy for counterfeiting.
By offering to cut the banking elite in on its own counterfeiting
machinations, and allowing them to counterfeit on top of its own
counterfeited notes, under a system of fractional reserve banking, the
state can easily reach this goal, and establish a system of state
monopolized money and cartelized banking, controlled by its central
bank. And through this direct counterfeiting connection with the
banking system, and by extension the bank's major clients, the ruling
class in fact extends far beyond the state apparatus to the very nervous
centers of civil society. Not that much different, at least in
appearance, from the picture that Marxists like to paint of the
cooperation between banking, business elites, and the state.
Competition within the ruling class, and among different ruling
classes, brings about a tendency toward increasing concentration.
Marxism is right in this. However, its faulty theory of exploitation
again leads it locate the cause for this tendency in the wrong place.
Marxism sees such a tendency inherent in capitalist competition. Yet it
is precisely so long as people are engaged in a 'clean' capitalism, that
competition is not a form of zero-sum interaction. The
homesteader, the producer, saver and contractor, do not gain at
another's expense. Their gains either leave another's physical
possesions completely unaffected, or they actually imply mutual gains --
as in the case of all contractual exchanges.
Capitalism thus can account for increases in absolute wealth. But under
its regime no systematic tendency towards relative concentration can be
said to exist. Instead, zero-sum interactions characterize not only the
relationship between the ruler and the ruled, but also between competing
rulers. Exploitation, defined as non-productive and non-contractual
property acquisitions, is only possible as long as there is anything to
be appropriated. Yet if there were free competition in the 'business'
of exploitation, there would obviously be nothing left to expropriate.
Thus, exploitation requires monopoly over some given territory and
population.
And the competition between exploiters is by its very nature
eliminative, and must bring about a tendency toward relative
concentration of exploitation firms, as well as a tendency towards
centralization within each exploitative firm. The development of
states, rather than capitalist firms, provides the foremost illustration
of this tendency. There are now a significantly smaller number of
states, with exploitative control over much larger territories, than in
previous centuries. And within each state apparatus, there has in fact
been a constant tendency toward increasing the powers of the central
government at the expense of its regional and local subdivisions.
Yet outside the state apparatus a tendency toward relative concentration
has also become apparent, and for the same reason. Not, as should be
clear by now, by any trait inherent in capitalism, but because the
ruling class has expanded its rule into the midst of civil society,
through the creation of a state banking business alliance, and in
particular through the establishment of a system of central banking. If
a concentration and centralization of state power then takes place, it
is only natural that this be accompanied by a parallel process of
relative concentration and cartelization of banking and industry. Along
with increased state powers, the associated banking and business
establishment's powers of eliminating or putting economic competitors at
disadvantage by means of non-productive or non-contractual exploitation
increases. Business concentration is a reflection of state-ization of
economic life.
The primary means for the expansion of state power and the elimination
of rival exploitation centers, is war and military domination.
Interstate competition implies a tendency toward war and imperialism.
As centers of exploitation, their interests are by nature antagonistic.
Moreover, with each of them internally in command of the instrument of
taxation and absolute counterfeiting powers, it is possible for the
ruling classes to let others pay for their wars. Naturally, if one does
not have to pay for one's own risky ventures, but can force others to do
so, one tends to be a greater risk-taker, and more trigger-happy, than
one otherwise would be.
Marxism, contrary to much of the so-called borgeois social sciences,
gets the facts right: there is indeed a tendency towards imperialism
operative in history, and the foremost imperialist powers are indeed the
most advanced capitalist nations. Yet the explanation is once again
faulty. It is the state, as an institution exempt from the capitalist
rules of property acquisitions, that is by nature aggressive. And the
historical evidence of a close correlation between capitalism and
imperialism only seemingly contradicts this. It finds its explanation,
easily enough, in the fact that in order to come out successfully from
interstate wars, a state must be in command of sufficient, in relative
terms, of sufficient economic resources. Other things being equal, the
state with more ample resources will win.
As an exploitative firm, a state is by nature destructive of wealth and
capital accumulation. Wealth is produced exclusively by civil society,
and the weaker the
state's exploitative powers, the more wealth and capital society
accumulates. Thus, paradoxical as it may sound at first, the weaker or
a more liberal a state is internally, the further developed capitalism
is. A developed capitalist economy to develop from, makes a state
richer, and a richer state then makes for more and more successful
expansionist wars. It is this relationship which explains why initially
the states of Western Europe, and in particular Great Britain, were the
leading imperialist powers, and why in the 20th century this role has
been assumed by the United States.
And a similarly straight-forward, yet once again entirely non-Marxist
explanation exists for the observation, always pointed out by Marxists,
that the banking and business establishment is usually among the most
ardent supporters of military strength and imperial expansion. It is
not because the expansion of capitalist markets requires exploitation,
but because the expansion of state-protected and -privileged businesses
requires that such protection be extended also to foreign countries, and
that foreign competitors be hampered through noncontractual and
nonproductive property acquisitions in the same way or even more so than
internal competition.
Specifically, the business elite supports imperialism if this
imperialism promises to lead to a position of military domination of
one's own allied state over another state. For then, from a position of
military strength, it becomes possible to establish a system of -- as
one might call it -- monetary imperialism. The dominating state will
use its superior power to enforce a policy of internationally
coordinated inflation. Its own central bank sets the pace in the
process of counterfeiting, and the central banks of the dominated states
are ordered to use its currency, the currency of the dominating state,
as their own reserve currency, and inflate on top of it. This way,
along with the dominating state, its associated banking and business
establishment, as the earliest receivers of the counterfeit reserve
currency, can engage in an almost costless expropriation also of foreign
property owners and income producers.
A double-layer of exploitation of a foreign state and a foreign elite,
on top of a national state and a national elite, is imposed on the
exploited class in the dominated territories, causing prolonged economic
dependency and relative economic stagnation vis-Ã -vis the dominant
nation. It is this very uncapitalist situation that characterizes the
status of the United States and the US dollar, and that gives rise to
the quite correct charge of US economic exploitation and dollar
imperialism.
Now I come to the last thesis. The increasing concentration and
centralization of exploitative powers, leads to economic stagnation,
impedes the development of productive forces, and thereby creates the
objective conditions for its ultimate demise and the establishment of a
classless society capable of producing unheard-of economic prosperity.
Contrary to Marxist claims, this is not of course the result of any
historical laws. In fact, there exists no such thing as historical laws
as Marxists conceive of them. Nor is it the result of a tendency for
the profit rate to fall, with an increased organic composition of
capital, as Marxists phrase it -- that is, an increase of constant
capital as compared to variable capital. Instead [--audio glitch--] of
crises, that promote the development of a higher degree of [--audio
glitch--].
Exploitation is destructive of wealth-formation. Yet in the
competition of exploitative firms, that is of states, less-exploitative
ones, because they are in command of more ample resources, will win out
over more exploitative ones. Hence the process of economic imperialism,
specifically of US imperialism, initially has a relatively [--audio
glitch--].
State rule becomes increasingly recognized as incompatible with the
further development of productive forces and economic growth.
Anti-statist social pressures mount, and bring a process of
withering-away the state. Contrary to the Marxist model, however, if
and insofar as this occurs, it will not mean 'social' ownership of means
of production. In fact, not only is social ownership economically
inefficient, as I've already explained earlier, moreover it is in fact
incompatible with the idea that the state is withering away. Because,
if means of production are owned collectively, and if it is
realistically assumed that not everybody's idea as to what to do with
these means happens to coincide as if by a miracle, then it is precisely
socially owned factors of production which require state action.
That is, they require state action in order to impose one person's will
on another disagreeing person's will.
Instead the withering-away of the state, then, and with this the end of
exploitation, means the establishment of a pure private property
society, ordered by nothing but private law.
Thank you.
(applause)
Hans-Hermann Hoppe delivered the
above in 1988 at a Mises Institute event titled Marx and Marxism, and I transcribed it
from the mp3 available from its media
archive.