Marxisms and market processes David L Prychitko

Last Updated on Sun, 06 Aug 2023 | Economic Theory

Critics of the Austrian school appeared in many forms, from Schmollerian historicists and Veblenian institutionalists to Keynesian interventionists. Compared to their traditional rivals, Austrians seem furthest removed from Marx ism on almost any level we wish to compare. For instance, Austrian methodology is deductive, Marxism's is dialectical; the Austrians developed a radically subjective theory of value, while Marxians, with their own unique twists, followed Ricardo's labor theory of value; Austrians champion the capitalist market system and claim the impossibility of socialist planning; Marxians championed socialist planning and claimed the death of capitalism.

The differences between Marxians and Austrians are almost too obvious to list. This essay has a different task: it will explore some of the contemporary Austrian (and non-Austrian) interpretations of Marxian socialism to suggest to younger Austrians that something might be gained by picking through the rubble that characterizes the crisis in contemporary Marxism.

Marx and the Utopians

Socialism is by no means a homogeneous movement (see Wright, 1986). There are as many visions of socialism as there are socialists, maybe even more. Marx, in his criticism of Saint-Simon, Fourier, Owen and their disciples, ushered in a self-proclaimed 'scientific' (as opposed to 'utopian') socialism. Rather than design a detailed blueprint of some imaginary socialist community, and try to convince well-meaning bourgeois types that socialism i an be ihe best of all possible worlds (a practice the Utopians were inclined to attempt and fail at), Marx would instead thrust forward a radical criticism ul . apitalism, and from it demonstrate socialism's inevitability.

Mai • t*>i in,ed on the organizational principles that structure capitalist and pro i npltaliM societies; in this way he may be interpreted as an originator of ■ iiiiipaiaiiv. e. nitoinii systems analysis. Marx conceived of three categori-i ally dlNtliii i way'i looiguni/c society (through tradition, market or plan) and i lalmed thai • onllh is o| intru st and structural contradictions of the modern iniukr! system (i apllallsm) iiuisl eventually lead to its demise. An entirely diflcrcnl system an lalisi planning would unfold, ending the class struggle and alienation

Perhaps the key dH'lerence between Marx and the earlier Utopian socialists was this: Marx tried to ground his criticism of capitalism in an exhausting

analysis of its 'base' the commodity mode ol production and the t iiculation of capital. Hence, while the Utopians attacked the morality ol > npilaliMii and offered intricately detailed blueprints of some futute socialist alleiunlive. Marx focused on capitalism as an organizational system first, and aifuicd thai the moral/legal/religious dimension (what he called the 'supeistniclnic' 11 an not be understood separately from capitalism's economic base Thus Miiia believed the Utopians were wasting their time (and stunting the revolution) by ululating over the immorality of capitalist institutions such as profit seeking, wage labor and private property. Without an adequate (indeed, for Maix, 'scientific') analysis of the structure of capitalist economic organization, the Utopians failed to pierce capitalism's ideological veil; rather than exposing the alleged 'Laws of History' (such as the necessity of the class struggle and the revolutionary potential of the proletariat), the Utopians dreamed of phalansteries, New Harmonies and brimming oceans of lemonade.

Marx resisted the Utopian temptation to write 'recipes for the cookshops of the future'. He meant this literally. After all, Fourier did provide details on food preparation and kitchen table management for the future socialist society. Marx also meant it metaphorically. He would rather focus on the contradictions of capitalism and let the implications for socialism speak for themselves. But followers of Marx, and critics alike, have disagreed on just what, or how much, Marx has to say about socialism. We can identify at least three interpretations that may be of interest to Austrian economists: an orthodox interpretation, an organizational-economistic interpretation of Marx (as an advocate of centralized, command planning) and a philosophical humanistic interpretation of Marx (as an advocate of decentralized, self managed social ism).

The orthodox interpretation of Marx

The orthodox interpretation suggests that Marx - a furious critic of Utopian socialism - was necessarily silent on the topic of socialist economic organization. He instead left it to his followers to decide all the difficult details. In this view, Marx offered a radical criticism of capitalism, but no vision of fully evolved socialism. For instance, the leading Soviet economic historian, Alec Nove, supports the orthodox interpretation when he writes that 'Marx had little to say about the economics of socialism, and ... the little he did say was either irrelevant or directly misleading' (1983, p. 10). Nove applied the orthodox view to interpret the early Soviet experiment with socialism (during the so-called 'War Communism' period of 1918-21) as 'forced reaction to an emergency situation' (Nove, 1969), rather than a revolutionary attempt to plan inspired by Marx's vision of socialism. Contemporary Auslrinns in general have not subscribed to the orthodox view.

Marx as an organization theorist

A second interpretation of Marx, which claims Marx is an organization theorist who necessarily advocates central planning, stems from a criticism of the orthodox view. Economists Paul Craig Roberts and Matthew Stephenson, and Austrians Don Lavoie and Peter Boettke, argue that Marx's assault on the organizational 'anarchy' of the market process suggests definite, consistent implications for the socialist economy, and thus Marx's overall research program and revolutionary agenda cannot be understood without this organizational interpretation. Boettke claims, for example, that viewing Marx as an organization theorist enables the student of Marx to see a tremendous unity in Marx's life-work that is denied by those who wish to split Marx into a young Marx and a mature Marx. The young Marx, just as the mature Marx, was concerned with transcending the organizational form of alienation, that is, the commodity production of capitalist social relations. (1990, p. 44, n. 29)

Lavoie claims that 'Marx's scientific socialism was not merely an excuse for avoiding any examination of socialist society. It was a recommendation of a particular method for the conduct of such an examination - that is, that socialism be described through a systematic critique of capitalism' (1985b, p. 29). He further contends that 'there is implicit throughout Marx's writings a single, coherent, and remarkably consistent view of socialism' (p. 30) -namely, economic planning - which 'Marx consistently foresaw ... as centralized and comprehensive' (1985a, p. 19). Roberts and Stephenson contend that, indeed, central planning constitutes the 'defining characteristic of Marxian socialism' (1973, p. 94).

This theme - that Marxism ultimately strives for centralized economic planning - is common in the Austrian comparative systems literature, whose well-known argument that central planning must fail, because of a severe lack of knowledge confronting the central planners, need not be repeated here (see Lavoie, 1985b). More recently, viewing Marxism as promoting central, command planning has prompted a revisionist account of the War Communism era immediately following the Bolshevik Revolution. Contrary Novc and other Soviet historians, Roberts (1971) and Boettke (1990) have demonstrated that Lenin and the Bolsheviks tried to plan the fledgling Soviet economy centrally in order to revolutionize Russia and create socialism, and thus the lailute ol Wat Communism in 1921 was, in effect, a failure ol Marxian socialism

Marx u.s a praxis philosopher

A third interpretation ol Matx emphasizes his philosophical-humanistic dimension, as opposed to the dialectical materialism of the orthodoxy, or the organizational inletpteialion ol the Austrians. Mere the focus is upon Marx's

Marxisms am! matkei protew« s 5IV

praxis philosophy and his corresponding notion nl alicnnllnu Wiinis m tin*.

tradition most notably the Yugoslav Praxis CJroup (•»( • Ntm

I'el ro vie, 1979), fellow travelers Karel Kosik (1976) and fin li I mi i l''»(| i and contemporary economists such as Bratlko Ilorval ( P'K.'i dn ago i ihai Marx's critique of capitalism offers a vision of socialism llul lh< \ disagn . that his vision must be one of centralized command planning < 'uiilnu ^ in llu organization theory interpretation, they argue that central planning dors nui abolish alienation, but in fact may intensify it.

This is curious because both the organizational interpreters id Man and the praxis interpreters claim to draw their conclusions from Marx's < oiu op! of alienation. Boettke claims, for instance, that 'The transcendence of aliemi lion means to Marx the transcendence of market relations' (1990, p. 44, n 29); Roberts emphasizes this point: 'in the Marxian scheme, central Ceo nomic planning eliminates Marxian alienation by eliminating the exchange relationships of commodity production' (1971, p. 10). The praxis interpretation claims that abolishing the market system constitutes a necessary, but not sufficient, condition for de-alienation.

In other words, the organization theory interpretation tends to limit aliena lion to its economic dimension, while the praxis philosophy interpretation focuses on Marx's concept of praxis as a totality: as Kosik writes, 'In the concept of praxis, socio-human reality is discovered as the opposite of giveness, i.e. at once as the process of forming human being and as its specific form Praxis is the sphere of human being' (1976, p. 136). To say that a human is a praxis being is to say that he or she has the potential to be a Iter, i icaiivr being - to participate democratically with others and rationally design, * loalo and control society. To be alienated, then, means that, for whatevei reason, our praxis potential is blocked. By definition, alienation is llu gap hciwn u human essence and human existence (Horvat, 1982, p. H4) I oi Mai pooph are alienated under the 'anarchy' of the market system. (This is t loin in his The Economic and Philosophic Manuscripts oj IHIL |9M.) llni Mais also attacks political alienation that results from bureaucratic hierarchy and con Irol. He writes in the Critique of Hegel's 'Philosophy oj Right' (1970), loi example, that 'in true democracy the political Mate disappears' (p, I IK). As long as the modern bureaucratic state exists, il is separated from civil society by a hierarchy of knowledge and control. Uiulei the slate 'Man's conlenl is not taken to be his true actuality' (ibid., p. 82).

According to the praxis philosophy interpielation, the implications loi socialism are clear: 'Man is not only what he bus been, ho Is in Ihr In si pla< <• what he can and ought to be,' writes Gajo Petrovlc I I''(i7) 'Minx's luin to praxis follows from this in the sense that his mm option of man nimnil remain a mere conception, but it is also a criticism nl alienated man ^ Im not realize his human possibilities and a humanism pingiam nl snuggl» Im humanness.' Hence it necessarily follows that 'Marx's conception of man can thus not he separated from his humanistic theory of alienation and de-alicna tion' (ibid., pp. 80-81). Full-Hedged socialism is supposed to end alienation, whether economic or political; it is supposed to end the contradiction between human existence and essence. As Marx wrote, socialism would inevitably 'return man to himself' (1964, p. 135).

From this purely philosophical analysis, socialism would abolish both the anarchy of the market process and the hierarchy of the political structure. Abolishing the market in favor of despotic, command planning would merely replace many competing capitalist despots with a universal despot (the central planning board) that dictates the plan to the rest of society. Full de-alienation would require abolishing the market in favor of a comprehensive yet decentralized plan - a council-based, non-hierarchical planning network grounded in radical democracy and self-management (see Markovic, 1974).

Which Marx? (and why Austrians might want to care)

It is reasonable to believe, contrary to the orthodoxy, that Marx's scientific socialism offered some direction for socialism. Both the organization theory and praxis philosophy interpretations provide scholarly evidence of this, but we run the risk of making an exegetical mistake if we focus on one interpretation while ignoring the other. The organization theory approach, by itself, offers only an 'economistic' understanding of Marxian socialism - it deduces the economic logic of abolishing the market process, but at the cost of ignoring the praxis benchmark. Surely, organizational analysis is fruitful because it suggests that comprehensive planning must collapse into hierarchical centralism in the face of information scarcities and conflicts of interest (see Hayek, 1944; Prychitko, 1988). But that in itself does not mean central planning was an aspiration, let alone a 'defining' characteristic, of full-lledged Marxian socialism. Although the work of Roberts and Stephenson, loi example, actually claims to comprehend the meaning of Marxian alienation, II K questionable because they ignore Marx's praxis concept, the ful-• nun 111•*mi which the entire alienation issue rests. On the other hand, the 1'itnk philosophy interpretation, by itself, is much too 'philosophistic' -fit Mil Ihi pnms benchmark it deduces a theory of alienation and de-aliena Hun wlin li un1 an end to markets and hierarchies. It provides a nice KcdimkeiI t'\ino Intent which describes the parameters of a de-alienated, so i ihIIni not it'iy. Inn tluit society is dubious because it ignores organization theory ami . < onoinlt Inpi the praxis philosophy interpretation fails to com pit'henil the uiiinlenileil consequences of decentralized planning.

Isolated, each inieipiciuilon tends to claim that Marx has a consistent, coherent vision ol sot iultaiu Yei the visions contradict each other. This is a hermeneiitii al problem (hpanl/nliou theory ignores the full implications of

Marx's turn to praxis; praxis philosophy ignores llu* unintended oignui/.n lional consequences of abolishing the market proecs« in a world ««I m arcily Both the organizational interpretation and the philosophical inleipretntion might instead shed more light on our understanding of Marx when Juxln posed. Each arguably represents one side of a tension, a conlln i or Hliugglr, in Marx's vision of socialism (see Prychitko, 1991). Perhaps Marx's vision ol socialism is not nearly as coherent as we once thought.

This may interest more than historians of thought. It may also affect the way Austrians interpret the historical record. For instance, problematizing Marx's vision of socialism suggests three counter-intuitive examples, upon which we shall conclude: (1) if central planning is ultimately inconsistent with Marxian de-alienation, then the failure of command planning would not necessarily establish a failure to implement Marxian socialism - for that is not its defining characteristic; conversely, (2) any theoretical (or practical) model of socialist planning that requires hierarchical centralization to work successfully represents a theoretical (or practical) failure to achieve Marx's fully de-alienated Utopia (for instance, even if Lenin or Stalin centrally planned I he USSR successfully, Marxism would still be a flop); and (3) if the Austrians are correct in arguing that the market process cannot be abolished in favor of rational economic planning - that the market system is here to stay -we are not 'stuck' with alienation. If comprehensive planning is humanly impossible, then Marx's claim that we are beings of praxis, whose essence is freely and creatively to design the society we live in, is patently false. If the achievable, as Marx saw it, is epistemologically unachievable, the gap disappears and Marxian alienation simply ceases to be.

Marxisms and market processes David L Prychitko

Marx and the Utopians

The orthodox interpretation of Marx

Marx as an organization theorist

Marx u.s a praxis philosopher

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