PART TWO

MARXIAN ECONOMICS

Introduction

Karl Marx and John Stuart Mill observed the same economic environment. It was a world in which industrialism - at least as measured by expansion in the output of manufactures - was flourishing. Factories had sprung up on a scale that would have astonished Adam Smith. If the first wave of industrialism were to be assessed in terms of the growth of total production, of the volume of international trade, and of the accumulation of productive capital, it would have to be judged an unqualified success.

But this was only part of the story. These impressive changes had brought little conspicuous benefit to the bulk of the population. On the contrary, the new working class was herded into urban slums where its members were exposed to miserable conditions of life. In all too many cases even the most elementary provision for sanitation had lagged behind the build-up of the urban working population and such massive menaces to health as typhus and cholera recurred with alarming frequency. Marx's colleague, Engels, drew attention to the contrasts of the age when he wrote in 1844:

One day I walked with one of these middle-class gentlemen into Manchester. I spoke to him about the disgraceful unhealthy slums and drew his attention to the disgusting condition of that part of town in which the factory workers lived. I declared that I had never seen so badly built a town in my life. He listened patiently and at the corner of the street at which we parted company, he remarked: 'And yet there is a great deal of money made here. Good morning, Sir!’1

If there was little to brighten the life of working people off the job there was still less during the time they spent earning a livelihood. Working hours were long - a fourteen-hour work day was not uncommon in the factories of the 1840s. Even after the public conscience had been stirred (as it had been in England with the beginnings of effective factory legislation in the 1830s), statutory restrictions on the length of the work day and week were aimed primarily as protections for minors and women; ceilings on the working hours of adult males were much later in coming.

These conditions were combined with wage payments at levels that left little scope for more than the bare necessities of life. These terms were still superior to the alternative of no work at all. As industrialism proceeded, uncertainties about employment for wages multiplied. A period of slack trade could easily strip sizeable groups of a means of support. In this environment, it was small wonder that concern about lawlessness mounted.

In England particularly, socially sensitive men perceived that all was not well and sought to learn more about the economic problems of their day. Marx paid high tribute to this manifestation of British empiricism when he observed that other countries would be 'appalled at the state of things' if, as in England, their 'governments and parliaments appointed periodically commissions of inquiry into economic conditions; if these commissions were armed with the same plenary powers to get at the truth; if it was possible to find for this purpose men as competent, as free from partisanship and respect of persons as are the English factory-inspectors, her medical reporters on public health, her commissioners of inquiry into the exploitation of women and children, into housing and food'.2

If the British economic scene had changed dramatically over the course of the first half of the nineteenth century, so also had the political climate. With the Reform Bill of 1832 the rising business and industrial community had overcome the earlier political supremacy of the landed aristocracy and - benefited by an atmosphere conditioned by Ricardian arguments - had later exercised its political power in the repeal of the Corn Laws in 1844. Meanwhile the working class, though still largely unenfranchised, showed fresh signs of political stirrings, hesitant and poorly organized though they were.

Both Marx and Mill sensed that the theoretical apparatus they had inherited was no longer fully adequate to the tasks at hand. The growth of large-scale industry showed signs of undercutting presuppositions around which classical laissez-faire doctrine had been organized. Moreover, this stage of industrial expansion appeared to be associated with increasing economic instability, marked by the recurrence of booms and panics. But, most important, the distributional system of an expanding economy - which Smith at least had expected would bring benefits to all - seemed not to be working smoothly.

John Stuart Mill addressed these problems by untying the classical package of laws and by arguing that the distribution of income was susceptible to human manipulation. His opposition opened new space for policies designed to promote the general welfare (and that of the labouring class particularly) and pointed the way towards a future of enlightenment and uplift.

At this point Marx dissented. In his view Mill was the 'best representative' of a 'shallow syncretism' and 'tried to harmonize the Political Economy of capital with the claims, no longer to be ignored, of the proletariat'; he regarded the result as 'a declaration of bankruptcy by bourgeois economy'.3 Marx reasserted the inevitability of natural laws, but with a quite different interpretative twist. The laws he sought to uncover were neither universal nor eternal, but unique to particular stages of history. The failure of economists in the classical tradition to appreciate this point was, he maintained, a fundamental source of their error:

Economists have a singular method of procedure. There are only two kinds of institutions for them, artificial and natural. ... In this they resemble the theologians, who likewise establish two kinds of religion. Every religion which is not theirs is an invention of men, while their own is an emanation from God. When the economists say that present-day relations - the relations of bourgeois production - are natural, they imply that these are the relations in which wealth is created and productive forces developed in conformity with the laws of nature. These relations therefore are themselves natural laws independent of the influence of time. They are eternal laws which must always govern society. Thus there has been history, but there is no longer any.4

Marx's critique did not rest solely on the assertion that economic laws were specific to particular stages in history. No less important was his claim to the discovery of laws governing the unfolding of history itself. In his analysis economic circumstances were the fundamental determinants of all social relationships and even of human consciousness itself. The economic environment, in this interpretation, cast men in particular roles - roles which, in turn, governed their behaviour and their thought. All human activities - not simply those performed in the course of acquiring a livelihood, but religious, artistic, and philosophical expressions as well - were fundamentally conditioned by class positions in the economic system.

When this view is described in technical terms - i.e. as a materialist view of history or as economic determinism - the overtones of these words are likely to prejudice serious consideration of the point Marx wished to establish. If the nomenclature is neglected, few would deny that a man's job and its demands leave a significant imprint on his attitudes. The case may have been stronger in Marx's day - when, on the average, most men were obliged to spend the larger proportion of their waking hours in the struggle for a livelihood - than in ours. But even now, only an unreflective observer would maintain that a man's economic role, his behaviour off-the-job, and the attitudes he holds bear no connexion with one another. The modern discussion of the 'organization man' - whose job calls for certain consumption patterns, the public expression of certain attitudes, membership in acceptable organizations, etc. - is not too far removed from what Marx had in mind. Even those of us who work in less structured situations are not altogether immune from society's standards of the 'done' thing. Marx was the first to insist forcefully on a systematic connexion between economic roles and attitudes and he gave thereby a tremendous stimulus to the development of serious sociological study. That some such relationship exists can hardly be challenged; what is questionable is the absolute status Marx accorded to one simple relationship.

Marx's presuppositions about the nature of history and of society gave his economics a unique character that differentiates it sharply from other 'master models' in the history of economic ideas. His analytical system, while built around economic phenomena, was by no means restricted to economic issues as commonly construed. Instead, it offered a comprehensive view of society in which all events were seen as intimately inter-related. This approach is capable of offering an account of everything, but runs the risk of explaining nothing. Marx, for example, could maintain that the abstract systems of classical economists derived from their 'class interests' and that their works were apologies for capitalism. But his scheme of determinism was placed under some strain when called upon to explain the specific content of their teaching. After all, classical writers with identical class interests did not make the same reading of events and some whom fortune had blessed were markedly unsympathetic toward unregulated capitalism.

Marx was aware of this diversity and he tried to accommodate it with the aid of his interpretation of historical change. Within his frame of reference, conflicts between divergent economic interests were inevitable. Discord among economists was itself symptomatic of the antagonisms latent within capitalism. He maintained that:

The more the antagonistic character comes to light, the more the economists, the scientific representatives of bourgeois production, find themselves in conflict with their own theory; and different schools arises.5

Some of these schools might genuinely lament the miseries of the proletariat and propose measures to ameliorate distress. Such sentiments, however admirable, were naive. Marx insisted that those who held them failed to understand that conflict was inherent in capitalism and that tensions were the engines of historical change. Moreover, they failed to comprehend that the causes of distress were rooted in the very nature of the system and could only be eliminated through the destruction of the system itself.

This line of argument gave to Marxian economic thought another distinctive attribute. All of the other `master models' have been constructed for the purpose of throwing light on the types of policy most likely to improve economic performance. Even early classicism, despite its appeal to the natural order, was reformist in orientation with its appeals for amendments in existing legislation and in prevailing administrative practice. The Marxian approach could not stand more sharply in contrast.6 Within its historical framework, policies intended to remedy economic ills are useless and constructive reforms impossible. The function of economic analysis is thus restricted to laying bare the laws of historical change which foredoom the destruction of capitalism, and to demonstrating the futility of policies designed to relieve its ills.