January 24, 1994

KARL MARX REVISITED: A FLUID SOCIETY

by Jude Wanniski

In the last several weeks, as I contemplated the new year, I found myself thinking about Karl Marx -- easily the most influential political economist and among the most creative social philosophers of the 19th century. I've always been an admirer of Marx, since my grandfather presented me with a copy of Capital at my high school graduation in 1954. In the years since, even as I moved politically from left to right, I've retained a deep appreciation of his insights. I believe if he were alive today, he would look at the world much as I do, having adjusted his own model of the way the world works to take into account the experiences of the last century. In the same way, I can see myself transported back to the London of the 1850s and seeing the world as Marx did then. If you will bear with me through the lengthy essay that follows, you will see what I mean.

Marx was not the first philosopher to put forward a youthful, idealistic vision of a classless society¹ , but he certainly was the first to develop the concept that the historic forces of production would lead inevitably to that ideal. How would he look at the world if he were alive today? Would Europe look much different to him than it did in his day? What would he say about the failure of the communist experiment in Russia and China? What would he make of the economic boom unfolding in Asia? Would he be hopeful or despairing? Most importantly, how would he analyze the social turmoil in the United States, the country he most admired and idealized? What of its underclass? As 1994 opens, by calling on Marx and bringing him up to date, we can learn a great deal about the historic forces at work by viewing the world from his perspective.

Because we naturally equated Marx with our mortal enemies throughout the Cold War, we found it easy enough to think of him as an evil genius, who has nothing to teach us today. In many ways, though, his original insights are more valuable because we now no longer have our vision of him colored by adversarial tensions. Surprising as it may seem to those who equate the collapse of communism with the failed ideas of The Communist Manifesto and Das Kapital, there was actually little connection between the two. Marx would certainly have applauded the Soviet Union going into the dustbin of history, as it exemplified all that he stood against -- a corrupt oligarchy blocking the forces of production in their historic trek toward a utopian withering away of the state. Indeed, when I visited Moscow in 1989 at the invitation of the Gorbachev government, I told my hosts, with only a slight smile, that "Marx would have been ashamed of what you have done here in his name."

Marxism has certainly done a lot of damage in this century, but Marx himself insisted until his death in 1883 that he was "not a Marxist." I've never held him accountable for the great damage done in his name during this century, any more than I would hold Christ accountable for the Inquisition. In the same way, John Maynard Keynes would be mortified if he were alive today, seeing the global damage his "neo-Keynesian" followers have done in his name. Marx was a theoretical socialist, an intellectual giant of his time who found his ideas twisted by the militant revolutionaries of Europe into action schemes. All the while he objected that history could not be hurried: Capitalism first had to outlive its usefulness, he insisted. It was not until 1913 when Rosa Luxemburg, a militant communist theoretician in Germany, was brave enough to acknowledge that Marx left this giant loophole in his system of thought -- which admitted the possibility that capitalism could develop indefinitely.² Marx wasn't hedging. His precise, formal scholarship was, after all, keyed to the Hegelian dialectic, which would permit that outcome.

As we will later see, one of Marx's harshest modern critics, Ludwig Von Mises, essentially agreed with Marx's economics as well as his political insights involving class struggle. His disagreement was with Marx's mystical forecast of capitalism's demise and the ascendance of socialism. In this manner, the modern opponents of socialist thought have found themselves forced to destroy Marx the icon, conceding nothing to him in the process. Thomas Sowell, who is one of the best political economists around today, has poked myriad holes in Marx's challenge to classical economics. But, he has been careful to note that a great many modern economists attribute to Marx positions he expressly did not advocate.³ What then was Marx all about?

First of all, he was not a republican, but a democrat, who would feel most comfortable today in Switzerland, which, while not perfect, is the most democratic of all countries.⁴ He lived at a time when democracy, as we now know it, still did not exist anywhere on earth. In 1847, at the time the Manifesto was written in London, the United States was the most democratic of nations, yet it still countenanced slavery, limited the franchise to a fraction of the male population, did not have direct election to the Senate or a one-man-one-vote rule for the House of Representatives, and most importantly did not have secret balloting. The "Australian," or secret ballot, was not used until the early years of this century. Voters could not hide their true feelings behind a curtain, a key to democratic control of the oligarchs. In London, class was dominant and democracy was, of course, a much iffier thing. The Reform Bill of 1867, which extended the franchise to the workingman, was enacted 20 years after the Manifesto was written. It is not hard to see Marx identifying class struggle as the central fact of social evolution, "dialectical materialism": "The history of all hitherto existing human society is the history of class struggles." If he were around today, as a political analyst, he would say that it still is. My own belief is that class struggle, as Marx used the term, has appeared frequently as a tactic of the forces of history, but that the driving force has been civilization's search for mechanisms that produce superior political leadership -- leadership that finds harmony and avoids struggle. Would Marx buy that formulation? With my advantage of hindsight, I think so.