The Doctrines of Nineteenth-Century Socialism

Posted in economic institutions, political institutions, social institutions
Based on Émile Durkheim, Socialism and Saint-Simon (Antioch Press, 1958 — drafted 1895-6); Gareth Stedman Jones, ”European Socialism from the 1790s to the 1890s,” The Cambridge History of Modern European Thought  (2019); Robert Heilbroner, Marxism, For and Against (Norton, 1980).

There is no general agreement about what socialism is, but little dispute about when it appeared and what factors propelled it into existence. Socialist doctrines began to appear in the early nineteenth century; the word “socialism” itself was first used by Robert Owen in 1835. Socialism was driven by three revolutions. The first was the French Revolution. Radical reformers had hoped that it would rid France of the monarchy and the Catholic church, if not Christianity in its entirety, but it accomplished neither end. The reformers were forced to think anew about what form the world could or should take. The second was the Industrial Revolution, which seemed to foretell a grim future for those who had only their labour to sell. The third was the Scientific Revolution, which had changed the common understanding of the world. The first two revolutions showed the need for new social philosophies, while the third seemed capable of giving them sound foundations.

In actuality, science added little more than a superficial luster to the new philosophies. The study of the physical world had made huge advances, but the scientific study of society lagged far behind and had little to offer reformist philosophers. Émile Durkheim said of “scientific” philosophy,

How can one fail to note the enormous disparity between the rare and meager data it borrows from science and the extent of the practical conclusions that it draws, and which are, nevertheless, the heart of the system?1

Socialism was not the result of scientific research; instead, a scattering of research was used to support “previously conceived” doctrines.

It is fervor that has been the inspiration of all these systems; what gave them life and strength was a thirst for a more perfect justice, pity for the misery of the working classes, a vague sympathy for the travail of contemporary societies.2

In marked contrast to his assessment of socialism’s origins, Durkheim’s definition of socialism is austere: socialism “demands the connection of all economic functions, or of certain among them…to the directing and conscious centers of society.”3 Durkheim emphasized that connection does not imply subordination. Missing from his definition are class struggle, the plight of the working class, concern for the equitable distribution of income. He deemed all of these things to be inessential.

Durkheim’s definition distinguishes socialism from the earlier ideas of Plato, More, Morelly, and Mably. All of these writers had wanted to abolish private property, arguing that it led to egotism and selfishness, and that it blocked the development of moral character. The elimination of private property would discourage the pursuit of material gain, allowing more ennobling activities to take its place. The socialists also wanted to abolish private property, but their reasoning was very different. They believed that new methods of production had upset the social order.

Socialism has as its basis observations (whether exact or not is irrelevant) which all refer to the economic state of certain societies…It is because, in the most civilized societies of modern Europe, production appears unable to regulate itself to consumption requirements, or because industrial centralization seems to have given birth to enterprises too large for society to be disinterested in, or because the unceasing transformations of machines…rob the worker of all security and place him in a state of inferiority which prevents him from concluding equitable contracts — it is on this and other similar evidence that socialism bases its demand for reform of the existing order.4

Socialists believed that the underlying problem was that production was organized on a laissez-faire basis. The solution was to reorganize production so that it satisfied social, not individual, goals. The earlier writers had wanted to push production to the periphery of public life, but the socialists wanted to make it society’s central focus.

Saint-Simon

Claude Henri de Rouvroy (1760-1825), Count of Saint-Simon, is often considered to be the first socialist philosopher. His philosophy encompassed religion, the economy, and the state.

Saint-Simon believed that a social system is the natural and inevitable expression of a society’s prevailing ideas.

Nature has suggested to men, in each period, the most suitable form of government…The natural course of things has created the institutions necessary for each age of the body social.5

The ideas themselves are evolving because knowledge is slowly being accumulated. New knowledge is always fragmentary, the product of isolated and undirected scientific studies. Organizing and uniting the fragments gives rise to new ideas, and eventually, to a new social system. Humans do not invent the new system; they simply recognize it.

One does not create a system of social organization. One perceives the new chain of ideas and interests which has been formed, and points it out — that is all.6

For Saint-Simon, humans are the instruments of progress, not its authors.7

The inevitability of progress implies that the social system of the future can be inferred from the social system of the past.

The future consists of the last items of a series of which the first composed the past. When one has properly examined the first terms of a series it is to postulate those following. Thus, from the past, deeply observed, one can with ease deduce the future.8

Saint-Simon’s socialism arose out of this kind of historical examination.

In the middle ages, said Saint-Simon, all of economic life depended upon the lords, whose only interest was warfare, and all of intellectual life depended upon the priests. With the exception of these two elites, all people were “doubly subjugated,” having neither economic nor intellectual freedom. This social system began to decay under the pressure of two forces: the free commune and exact science. As Durkheim explains, the free commune ended the people’s economic subjugation.

All economic life [had been] subordinated to the interests of war and warriors. But with the twelfth century began the great movement of the emancipation of the commune. Villages, by payment of silver, were freeing themselves from seigniorial tutelage. And they were totally composed of artisans and merchants…Henceforth the villagers were going to live their own lives, to pursue their particular interests — outside of any military influence.9

Simultaneously, the influence of Greek and Arabic scholarship remade intellectual life, as “observatories, dissection rooms, study rooms for natural history” appeared in Italy, France, England, and Germany. The new intellectual elite, too, pursued their own interests, ending the people’s subjugation to the priests. Feudalism and the church carried on, but by the sixteenth century, the forces that opposed them were plainly evident, both in Luther’s opposition to the established church, and in Copernicus’s and Galileo’s refashioning of the solar system.

Industry, which had once been held back by feudalism, grew steadily. Scientific invention and the accumulation of wealth amplified its power. The whole of society became dependent on it — even the military, which had previously been driving production. But as industry rose in importance, industrialists and industrial workers became more influential. In England, for example, the common people — the workers — acquired more influence in government at the expense of the old elite. The replacement of seigneurial justice with trial by one’s peers also empowered the common people, while the creation of standing armies shifted the lords still further to society’s periphery. Science created its own social order, distinct from and often in opposition to the clergy. The common people, especially those engaged in industry, relied more on their own exact knowledge and less on the clergy’s blandishments.

It is by a kind of faith of a new type that they [the common people] successively accepted the movement of the earth, modern astronomical theory, the circulation of the blood, the identity of lightning and of electricity.10

And yet the old institutional system endured.

It was for the old regime and not the new that this system had been made. Industry had utilized it as much as possible, but had not replaced it with one truly created in its own image and adjusted to its needs…Similarly, the old morality and law were discredited in the new world which was arising; but a new juridical and moral order, without which the new system could not be considered organized, did not come into being automatically. Thus, scientific industrial society reached out for an appropriate social organization which was not yet in existence.11

A revolution was needed to sweep away the old system, and in Saint-Simon’s telling, this revolution was the French Revolution. But the French Revolution was an incomplete revolution because it removed the old system without installing a new system, leaving France even more unsettled and chaotic than it had been before.

An action so exclusively destructive, far from attenuating the crisis which had given rise to it, could only make the evil more acute and intolerable.12

The re-establishment of the monarchy after the French Revolution was an attempt to return to the safety of the old system — but society’s ideas had changed and the old system no longer expressed them.

France was not the only country caught between the old and the new. Saint-Simon believed that Britain, despite its advanced economy and burgeoning wealth, was adrift. Durkheim explains:

But a nation does not constitute a true political association unless it has a common goal for activity. It cannot — without being divided against itself — pursue two contradictory ends. This is the case with England whose constitution rests at once on industrial and military principles. The result is that each institution has, so to say, its opposing contra-institution. Thus, impressment of sailors coexists there along with the liberal law of habeus corpus; the industrial city of Manchester has no representative in Parliament, while tiny villages do; the English government attempts to subject all nations to its maritime hegemony and yet asserts the equality of all peoples by demanding suppression of the the slave trade.13

Britain’s military and industrial institutions had a single purpose — to make it rich and powerful — but in Saint-Simon’s view, Britain had to let go of the former and completely commit to the latter. What Britain and France lacked was internal harmony, and they would not have it until they had fully adopted scientific industrialism.

Modern societies carry within themselves two social systems — not only different but contradictory — which have been developing in opposite directions since the early Middle Ages. One has as its key military force and the unreasoned prestige of faith; the other, industrial capacity and the freely accepted authority of the learned. Temporally, one is completely organized for war, for depradation — the other for peaceful production. Spiritually, the former systematically turns men’s minds away from all that is earthly, whereas the latter centers them on things of this world. Such an antagonism precludes mixed and eclectic solutions…A society cannot be consistent and stable as long as it rests concurrently on two principles so manifestly contradictory.14

Saint-Simon emphasized the need for harmony, for society to embrace a single goal, and this need shaped his conception of the scientific industrial society that was coming into being. The new society’s overwhelmingly dominant concern would be production. It would be overseen by a body having the “same nature” as those that it regulates — that is, by people who understood production. Saint-Simon initially imagined that this body would consist of two councils.15 One council would be composed of workers and hands-on industrialists, the other of intellectuals (engineers, artists, scholars, scientists). The industrial council would be paramount, with the intellectual council acting as its advisor. The members of both councils would be chosen on the basis of merit.

In keeping with his belief that social systems spontaneously emerge, that they follow naturally from the prevailing ideas, Saint-Simon imagined the councillors to be revelators rather than decision-makers. Durkheim explains:

[The members] are not summoned to office because they have the power to exercise their will but because they know more than others, and consequently their functions do not consist in saying what they want, but what they know. They do not dictate orders, they only declare what conforms to the nature of things.16

It is truth alone which speaks; it is impersonal, and nothing is less capricious.17

Here and elsewhere, Saint-Simon imagined that merit would determine one’s role. There would nevertheless be complete social equality, because role would not determine status.

True equality consists in each drawing benefits from society in exact proportion to his social outlay, that is to his real capacity, to the beneficent use he makes of his abilities. And this equality is the natural foundation of industrial society.18

Below the councils there would initially be a government that performed an enforcement function, but as people recognized the possibilities of the new society, it would wither away. In Durkheim’s telling,

When organization is finally established, the number of idle, of parasites — and consequently thieves — will be reduced to naught; for being unable to maintain themselves, and being sure of finding in the social organism a place suited to their abilities, those who resort to violence in order to subsist will be rare indeed. Thus government will be more or less completely without reason for existence.19

With the councils acting as revelators rather than rulers, and the government rendered unnecessary, Saint-Simon’s scientific industrial society would be effectively anarchic.

Saint-Simon’s optimistic assessment of society’s future rested on this argument:

If society has a common goal (the maximization of production), and if each person is “sure of finding in the social organism a place suited to their abilities,” then each person’s drive for personal fulfillment will induce him to slot himself into that place and work for society’s betterment.

Saint-Simon was initially satisfied with this argument, but later came to doubt it.

As long as he believed egoism capable of insuring the progress of societies — provided that these were well organized — a unitarian but purely abstract theory of the world could legitimately seem sufficient to give men an adequate feeling of their unity. In fact, there was no need to specially urge individuals to play their social role, since their natural penchant towards egoism brought this about voluntarily…But this was no longer enough once Saint-Simon recognized that without charity, mutual obligation, and philanthropy, the social order — and still more the human order — was impossible. To influence individuals to aid one another, to have as their objective something other than themselves, it was not enough to give them a purely speculative picture of the logical unity of things…To have an active reason to fraternize, they had to feel a positive bond among them, a community of nature, a unique kinship which made them brothers.20

Saint-Simon came to believe that a scientific industrial society would have to adopt a new morality, one that bound together its citizens, in order to succeed. Since society would be entirely secular — remember that it had replaced its priests with scholars and scientists — so must be its morality. Saint-Simon therefore proposed a religion in which the old “celestial morality” was replaced by a “terrestrial morality.” Its chief injunction would be, to improve as much as possible the welfare of the people who are least well off. In his later years, Saint-Simon became increasingly focused on the new religion, which he called New Christianity.21

Saint-Simon slid past another argument that would have vexed classical economists. It is that because production is society’s central concern, it must also be the concern of some central body. Smith had argued the opposite, that business decisions are best left to the businessman most intimately familiar with them. The difference between centralized and decentralized decision-making ought to be a pivotal part of any discussion of socialism, but Saint-Simon sidestepped the issue through his belief that the councillors “do not dictate orders, they only declare what conforms to the nature of things.” Durkheim was aware of the issue, but was oblivious to the difficulties that it posed.

[Socialists] conclude that since economic factors are the substance of common life, they must be organized socially, whereas the economists refuse to subject them to any collective control and believe they can be arranged and harmonized without prior reorganization.22

If economic interests do have the supremacy attributed to them, if as a result, it is to these interests that human ends are reduced, the only goal society can set itself is to organize industry in such a way as to secure the maximum production possible, and finally, the only means to attain this goal and to cause individuals to apply themselves, is to apportion the products thus obtained so that everyone, from top to bottom of the ladder, has enough.23

Durkheim was critical of Saint-Simon on other grounds: that he saw in the new methods of production the possibility of satisfying people’s material wants. Durkheim correctly argued that wants are unlimited, and concluded that socialism must always have an authoritarian aspect.

What is needed if social order is to reign is that the mass of men be content with their lot. But what is needed for them to be content, is not that they have more or less but that they be convinced they have no right to more. And for this, it is absolutely essential that there be an authority whose superiority they acknowledge and which tells them what is right.24

Although Saint-Simon presented a comprehensive plan for future society, some of its elements were not original to him: they were actually part of the prevailing liberal understanding of political economy. Gareth Stedman Jones has shown that in the second half of the eighteenth century, Europeans were aware that “the power of a nation depended more upon the skills and productivity of its citizens than upon the valour of its warriors on the field of battle,” and that political economy could become “a new basis for conceptions of society and the state.”25 There was also a belief — encapsulated in the term “doux commerce” — that economic growth led to the development of manners and made society more cohesive. Although the English maintained the importance of a strong central government, the French imagined that the state could be whittled away to almost nothing.

The idea that work is the central focus of society had its origin in liberal, not socialist, philosophy. Here, for example, is Abbé Sieyès in 1789.

The desire for wealth seems to make all the states of Europe into nothing other than immense workshops; much more thought is given in them to consumption and production than to happiness. Political systems too are today founded exclusively on work; we scarcely know how to make use of the moral faculties which could nevertheless become the most fruitful source of true enjoyments.26

The idea that, along with the workers, both scientists and active capitalists played essential roles in the economy was put forward by Jean Baptiste Say as early as 1803.

In Say’s picture, “industrie,” in which he merged agriculture, manufacture and commerce, was the sole legitimate activity in modern society, and the “industrieux” — the savants, entrepreneurs and ouvriers associated with the process of production – were its sole legitimate members. They were counterposed to the “oisifs,” the non-working landowners and rentiers, whose property was the residue of conquest or occupation. The notion of the entrepreneur was designed, not primarily as a technical refinement in economic science, but similarly as a means to widen the moral and economic breach between those who worked and those who did not.27

The liberal position was elaborated by such writers as Charles Comte, Charles Dunoyer, Augustin Thierry, and Benjamin Constant. It ultimately embraced the idea that the state would disappear.

The industrialist ideal was a society in which all would work and no-one would govern. With the decline of force and fraud, exemplified by the case of the slavery and the diminution of exploitation of industrious people by warrior people, government itself would become less and less necessary. The government of men, as the later Saint-Simonian slogan had it, would give way to the administration of things.28

If these elements of Saint-Simon’s philosophy were all part of the prevailing liberal narrative, which elements originated with Saint-Simon? There are three major ones. The first is the emphasis on the accumulation of knowledge, the molding of knowledge into ideas, and the claim that knowledge and ideas reveal the path forward. The second is that economic decisions must fall under the auspices of some central body (which is, according to Durkheim, the essence of socialism). Liberals, by contrast, adopted the Smithian position that the market system itself provided all the co-ordination that was required. The third is the need for a new religion — one consistent with modern science — to bind together society. Only the second element would have enduring significance for socialism.

Sismondi and Fourier

Shortly after Saint-Simon’s death in 1825, a group of followers set out to popularize his ideas. In 1829 they published Doctrine de Saint-Simon. It proved to be very influential, not only in France, but in England, Italy, and Germany. Its chief tenets were:

First, the replacement of Enlightenment and Jacobin-based notions of human equality and uniformity by the formula “from each according to his capacity, to each according to his works”; second, the representation of progress in history not only as the replacement of war and plunder by industry and peace, but, within that world itself, as the decline of “the exploitation of man by man”; third, the pre-eminent status now accorded to the artist rather than the priest in “the art of moving the masses”; and finally, a new conception of history, no longer as the every greater scope of “association,” but as the oscillation between periods of association and periods of antagonism.29

Doctrine was in many ways a faithful summation of Saint-Simon’s philosophy, but it also incorporated the ideas of other writers. (The fourth tenet, for example, repudiates Saint-Simon’s prophecy of a naturally unfolding industrial age.) The writers who most clearly influenced Doctrine’s composition were Jean Charles Léonard Simonde de Sismondi (1773-1842) and Charles Fourier (1772-1837).

Sismondi was a classical economist and a disciple of Adam Smith. He was a participant in one of the major academic debates of his time, namely, whether it was possible to have a “general glut” in which goods from all sectors could not be sold at cost-covering prices. However, his ideas diverged from those of his contemporaries in several ways that made him appealing to Saint-Simon’s followers and to subsequent generations of socialists.

The most obvious of these ways was Sismondi’s reluctance to treat the economy as a mechanism that could be separated from its impact on human welfare. Even wealth was too great an abstraction for him:

Wealth is a modification of the human condition, an expression of the relationship of things to men, it is only in relation to man that one can form a clear idea of it.30

David Ricardo had argued that depressions occur when exogenous events (such as wars) require capital to be moved from one sector to another. He had treated these events as little more than comparative statics exercises: the economy began in one equilibrium and ended in another; any intervening depression was temporary and self-correcting. Here, for example, is his discussion of the impact of a ten percent increase in productivity.

Suppose a hundred cultivators produce a thousand bags of corn, and a hundred wool manufacturers produce a thousand ells of cloth; viewing only them in the world, abstracting from all other goods useful to men, of all middlemen, they exchange their thousand ells against their thousand bags; let us then assume that with successive progress of industry the productive powers of labor increase by one-tenth; the same men exchange eleven hundred ells against eleven hundred bags, and everyone of them will find himself better clad and fed.31

But Sismondi — and Malthus as well — emphasized the difficulty of reaching the new equilibrium. Here is Sismondi’s take on the same change, channelled through Durkheim.

The clothier does not have a better appetite because he weaves more fabric, and…he will not seek more just because he has something to offer in exchange. The need for clothing is less rigorously fixed. The farmer — in easier circumstances — will order two or three items instead of one. However, even on this score there is a limit that comes from being satisfied, and no one will indefinitely enlarge his reserve of clothing merely because his income increases. What will happen? Instead of demanding more clothes he will wish better ones. He will give up those he is accustomed to and demand finer ones. But then he discourages the present manufacture of common garments and encourages others to replace them and make luxury clothing. Likewise the cloth maker, instead of a larger quantity of wheat — which he will not be able to use — will want a better quality, or else will replace bread with meat. Thus he will not give workers more to do but on the contrary would expect them to be dismissed, to be replaced in part by cattle breeders and the wheat fields by grazing prairies.32

Sismondi emphasized that the time taken to effect this kind of reallocation could be a significant part of a labourer’s working life, leaving him and his family in destitution and despair. If economics was to remain relevant, the transition could not be wished away.

Sismondi was also one of the first economists to frame his analysis in terms of two social classes, the capitalists and the workers (whom he called proletarians, after ancient Rome’s propertyless labourers). The capitalist’s possession of the means of production gave him power over the worker. The worker, his livelihood constantly threatened by the advance of mechanization and by competition with his fellow workers, was forced to accept low wages, long hours, and poor working conditions. Artisans — skilled workers with some capital — found that they could not compete with mass production, lost their livelihoods, and were pushed down into the working class. The capitalists, meanwhile, collected almost all of the gains of the factory system. The result was a highly polarized society consisting of a small group of wealthy capitalists and a very large group of poor workers.

The same forces produced an economy that was, he said, chronically in a crisis mode. The capitalists were wealthy, but did not want the mass produced goods churned out by the factories. The workers wanted the goods, but lacked the income to purchase them. Consequently, the factories lacked stable markets for the goods that they produced, and their goods often remained unsold. The capitalists’ response to this reverse was to press the workers even harder.

Sismondi believed that industrialization created social and economic problems, but he did not attribute these problems to technological progress. The deeper cause, he believed, was the organization of production.

It is not the improvement of machines which is the true calamity, it is the improper distribution we make of their products. The more we can produce with a given quantity of labor, the more we must increase either our enjoyments, or our leisure; the worker who is his own master, when he would have produced in two hours with the help of a machine, what he had before in twelve, would have stopped after two hours, if he had no need, and could not use a larger product. It is our actual social organization, it is the dependency of the worker that brings him to work, not less but more hours per day, for the same wages, while the machine enhances his powers of production.33

Sismondi argued that the government must step in to regulate the pursuit of wealth. He also argued that productive assets should be widely dispersed across people so that capitalists would not be unduly powerful. Of course, such a dispersion would preclude the development of large scale factories. Lenin, recognizing that industrialization was inevitable, accused Sismondi of “economic romanticism.”

Saint-Simon’s followers were neither as dreamy as Saint-Simon himself nor as steely eyed as Lenin. Doctrine replaced Saint-Simon’s benevolent endorsement of industrialization with Sismondi’s skepticism.

Sismondi’s ideas were not so unconventional that he could not debate thoughtfully and productively with the mainstream economists of his day. Charles Fourier’s philosophy, by contrast, was entirely unconventional. His main concern was human passions and the way in which they were frustrated by the society of his day.

If the passions were God-given, they could not be repressed, but they could be harmonized in progressive “series” through association in the “societarian order.” Outside the “series,” the passions were but “unchained tigers.” But within, even apparently destructive passions could be harmonized like chords on a piano and rendered beneficial. The problem was to devise a form of association in which passions could be combined and satisfied to the benefit of all.

It was the lack of fit between the passions and the social order which explained the “incoherence” of civilization…In the domestic sphere, the chief cause of “incoherence” was the division into individual households and the miseries of “civilized marriage”…In the “industrial” sphere, “incoherence” prevented the alignment of different passions with different kinds of work or the possibility that the divinely implanted passion for riches take an honest form. The true human passion was “unitéisme,” but, set in the context of false social institutions, necessitating oppression and deceit, it could only manifest itself as the contra-passion of “egoism.” Egoism ruled civilization.34

The Doctrine’s emphasis on association came from Fourier, as did its suggestion that the current system must soon fail catastrophically.

Marx

Karl Marx (1818-83) dramatically altered the nature of socialism. His predecessors had sought to improve the welfare of the poorest individuals as individuals:

Their outlook was shaped by a naturalistic version of materialism, standardly accepted by English thinkers from the time of Locke through to Bentham, prevalent among Philosophes and Idéologues in France, and employed in Germany by Feuerbach himself. Man was a natural being; his actions were motivated by the pursuit of happiness and the avoidance of pain; as a creature of nature, a “sensuous being,” man was primarily defined by his needs and impulses…For them, Man was a product of his environment. By improving this environment through better education and a more enlightened attitude toward reward and punishment, it would be possible to transform human nature and increase the extent of human happiness.35

The leading proponents of socialism in England and France, Robert Owen and Étienne Cabet respectively, held this view. Marx, by contrast, adopted the French idea that the proletarians were a separate class who would rise or fall as one. The philosophies of Hegel and his critics explained their past and foretold their future.

Hegel, Feuerbach, and Marx

Hegel’s philosophy was itself a reaction against Enlightenment ideas. Philosophers such as David Hume and Immanuel Kant had argued that humans gain their understanding of the world through their senses. They are able to construct an image of the world in this way, but the image necessarily falls short of reality. Causal relationships, for example, are inferences that we draw from our observation of the world. Our need to rely on such inferences creates an irreducible gap between our image of the world and the underlying reality. Hegel could not accept this claim. He believed that true knowledge was accessible, at least in principle. The world is built upon rationality, he said, and this rationality has the same nature as human reasoning. Their sameness makes true knowledge possible.

For Hegel there is in the last analysis no distinction between mind and its object. Both have a common denominator, which Hegel calls Reason and which appears under the guise of Spirit in the historical world. Spirit[’s]…“internal contradictions” are resolved in the dialectical process, whereby the potentialities of all things unfold in a pattern of self-transcendence to a higher unity. Dialectical progress, though mirrored in thought, is the objective history of the real world.36

In Hegel’s dialectical process, a concept is developed until it reaches its limits (reveals its “internal contradictions”), forcing its refinement or transformation into a new concept. Development begins again with each new concept, so that the concepts “self-transcend” to a “higher unity.” Thus, human reasoning develops in stages, edging ever closer to the world’s intrinsic rationality.

According to Hegel, dialectics permeate both our thinking and our history. Indeed, there is an interplay between human understanding and human societies, with each forcing the development of the other. Marx understood this interaction as showing “the self-creation of Man as a process,”37 and this idea motivated his own philosophy.

Hegel dominated German philosophy for a time, but he was already falling out of fashion when Marx first read his works. Hegel’s philosophy was innately conservative, ill-suited to an era in which many German intellectuals were seeking radical social change.

The Hegelian system provides a transcendental resting-place for ideals not realised in actuality. It holds out to men the promise not of freedom, but of the idea of freedom; it envisages not the actual domination of reason in human affairs, but the recognition of the march of reason through history. It thus embodies both the ultimate aims of mankind — liberty and rationality — and their renunciation.38

Ludwig Feuerbach was one of Hegel’s most effective critics. He believed that there are no divine entities. Religion simply assigns to an imagined god the attributes that people find lacking in themselves, and then promises a path to unite them with that god. It alienates people from themselves, from their own deepest needs — and then promises to cure their alienation. Feuerbach viewed Hegel’s philosophy as the secular version of the same game.

Just as theology splits up and alienates man in order to identify him subsequently with that alienated being, so Hegel duplicates and splits the simple essence of nature and man, which is one identity, in order to forcibly reunite later what was initially forcibly separated.39

Feuerbach argued that Hegel’s invocation of externalized ideals — such as Spirit — alienates man from himself as effectively as the invocation of a god. Avineri explains:

Hegel’s statement that absolute spirit manifests itself in art, religion and philosophy, was made possible by his prior separation of art from human feeling for art, of religion from human mood, and of philosophy from the process of human thought.40

Marx embraced Feuerbach’s criticism, and in 1844, he employed it in a critique of Hegel’s political theory (in which State is Hegel’s externalized ideal). Marx’s critique shows that he had already begun to view society as organizing itself around production, and had recognized production — specifically, private property — as the source of man’s alienation from himself. Marx was already a communist, advocating

…the positive abolition of private property, of human self-alienation, and thus the real appropriation of human nature through and for man.41

Marx and Engels wrote The Communist Manifesto just four years later.

The Materialist Approach to History

Hegel believed that history is driven by ideas. Each idea develops until it reaches its limits, and is then transformed into a higher-order idea that develops in its turn. History is the manifestation of these ideas in the material world. Marx reversed the relationship between ideas and the material world. History is driven by people’s “ever-present necessity to recreate the material requirements of their own continuance.”42 Ideas are simply a product of the material world, like pig iron or cotton textiles.

Hegel applied the dialectical process to ideas; Marx applied it to the “mode of production.” Men in every era

…enter into definite relations that are indispensable and independent of their will, relations of production which correspond to a definite stage of development of their material productive forces. The sum total of these relations of production constitutes the economic structure of society, on which rises a legal and political superstructure and to which correspond definite forms of social consciousness. The mode of production of material life conditions the social, political and intellectual life process in general. It is not the consciousness of men that determines their being, but, on the contrary their social being that determines their consciousness.43

Class conflict drives Marx’s dialectical process. Each mode of production creates a dominant social class and a subordinate social class, and these classes must work co-operatively to fully exploit the mode. But there is an ever-present tension between the classes, as the dominant class defends the system and the subordinate class attacks it. The tension builds as the mode approaches its full potential, and ultimately splits it apart.

Marx emphasized two aspects of this crisis. The first is that the crisis follows from the “internal contradictions” of the mode of production: the class divisions essential to the mode’s operation are what ultimately blow it up. The second is that the crisis occurs when the mode is fully developed. For Marx, the repeal of England’s Corn Laws was a step towards the completion of the capitalist system, and therefore a step towards its demise.

According to Marx, class struggle — and therefore the dialectical process — would end with the collapse of capitalism.

In the mode of production of capitalism, class antagonisms are finally simplified to two great opposing camps — workers and owners, proletarians and capitalists. The class struggle under capitalism thus leads to the possibility of a final victory by the great masses of individuals who will create a “dictatorship of the proletariat”…The vanquished class would be absorbed and disappear. A terminus of history would be reached in which a classless society would vindicate the long historical struggle.44

However, Marx says little about the mode of production that will follow capitalism. The claim that it will be classless, that a new class of bureaucrats or technocrats will not emerge, is very near to a Hail Mary pass.

The Rise of Capitalism

One of Marx’s modes of production was feudalism, in which the major social classes were the lords and the serfs. The feudal economy was overwhelmingly agricultural, but there were towns that produced simple goods such as textiles and metalworks. The gradual improvement of technology made the towns both wealthier and more politically powerful, and led to the emergence of a “civil society” separate from both the state and the church. A key element of civil society was the simplification of property rights, which facilitated the accumulation of capital.

Marx ascribes the emergence of civil society to the communal movement of the late Middle Ages, which emancipated the urban corporations and communes from their dependence on the political arrangements of the feudal structure. According to Marx, the communal movement created a sphere of autonomous economic activity, unrestricted by political and religious tutelage which might limit its freedom of economic choice. The struggle of the burghers’ communal movement sought to free property from the ethical and social limitations imposed on it by the feudal nexus which saw all property as a trust. It encumbered every object of property with numerous parallel and overlapping claims, making intensive economic activity almost impossible and severely limiting the growth of a market economy. Only the late medieval town developed, in the wake of the communal movement, a concept of property free from feudal, i.e. political and community-oriented, limitations. Not only did this development justify morally the accumulation of property; it also separated the political sphere from the economic and gave rise to legal and institutional arrangements that made the accumulation of capital possible and socially acceptable.45

Production was initially dominated by independent artisans and small manufacturers, but capital accumulation led to the concentration of production in larger enterprises. It became commonplace for the workers’ tools to be provided by their employers rather than by the workers themselves. Under this new system, capitalism, the worker simply became “wage labour.” One of its consequences was man’s alienation from himself.

Marx viewed humans as self-created, largely through work. They changed the world around them through both individual and collective labour, and these changes were a mirror of their own selves. In the past the connection between one’s work and one’s self had been clear. A peasant farmer worked the land that his grandparents had cleared, lived in the house that his parents had built, ate the grain that he had planted and harvested, warmed himself by burning the wood that he had cut and laid aside. Wage labour changed that. The worker’s produce belonged not to him but to his employer. He laboured for money, which simply sustained him from one day to the next. Work was no longer meaningful, no longer reflected his influence upon the world.

He works in order to live. He does not even reckon labour as part of his life, it is rather a sacrifice of his life. It is a commodity which he has made over to another. Hence, also, the product of his activity is not the object of his activity. What he produces for himself is not the silk that he weaves, not the gold that he draws from the mine, not the palace that he builds. What he produces for himself is wages, and silk, gold, palace resolve themselves for him into a definite quantity of the means of subsistence, perhaps into a cotton jacket, some copper coins and a lodging in a cellar. And the worker, who for twelve hours weaves, spins, drills, turns, builds, shovels, breaks stones, carries loads, etc. — does he consider this twelve hours’ weaving, spinning, drilling, turning, building, shovelling, stone breaking as a manifestation of his life, as life? On the contrary, life begins for him where this activity ceases, at table, in the public house, in bed. The twelve hours’ labour on the other hand, has no meaning for him as weaving, spinning, drilling, etc., but as earnings, which bring him to the table, to the public house, into bed.46

Marx believed that alienation was an inevitable consequence of private ownership of the means of production. Ending private ownership would end alienation — but only if the state withered away. Marx believed that since “the very existence of the state is an institutional expression of man’s alienation, this alienation cannot be overcome within the state.”47 And certainly, alienation persisted among the Soviet workers who toiled under a despotic and dysfunctional central planning system.

The Labour Theory of Value and Capitalism’s End

It has been said that a parrot can be turned into an economist by teaching it the words “supply” and “demand.” This witticism is a backhanded acknowledgement that the marginalist revolution of Jevons, Walras and Marshall gave us a way of thinking about markets that is successfully deployed millions of times each day. By contrast, Marx’s labour theory of value is still looking for a problem that it can solve more than a century and a half after its first appearance.

Perhaps the labour theory of value is best understood as a polemical device. Marx was interested in the social implications of production, especially the plight of the proletariat. He believed that the economists of his day described production in a way that obscured these matters. They imagined land and capital to be purely physical entities. Production required land and capital as well as labour, so output was naturally shared among the people who provided these things. But for Marx, the dominant feature of production was its intrinsic conflict: the proletarians worked and the capitalists claimed a share of work’s reward. The labour theory of value highlights this conflict by claiming that the full value of output is attributable to labour: goods are simply “crystallized labour.” The capitalists’ rightful share is nothing.

Marx’s labour theory of value makes two problematic assumptions. The first is that unextracted minerals have no value, and neither do standing forests and natural streams and rivers. Natural resources are “gifts of nature” that become valuable only through human labour. This premise makes sense in a frontier community in which the scarcity of labour limits production, causing some resources of every kind to be left idle. It is more difficult to accept when competition among labourers for limited resources gives rise to positive rents. The theory asserts that in this case, rents are simply the form in which capitalists appropriate the rewards of labour.48 The second assumption is that the labour of fishermen, farmers, and factory workers is essentially the same. Marx argued that this equivalence is an implication of the capitalist mode of production, which replaces individual relationships (such as that between lord and serf) with a market for labour. It also encourages the division of labour, simplifying the tasks that workers perform. The worker ceases to be this worker, and becomes simply a worker drawn from those available on the market. But if Adam Smith “missed” the Industrial Revolution, Karl Marx “missed” the increasing complexity of production. The dynamo, the internal combustion engine, the typewriter and the telegraph predate Capital. New technologies created new classes of skilled workers, and in the modern world, the dichotomy between the many who labour and the few who own has completely broken down. People commonly incur large direct costs and opportunity costs to acquire the “human capital” that will differentiate their labour from that of other workers. They are simultaneously capitalists and workers.

The labour theory of value is an attempt to explain the rate at which one commodity will exchange for another over the longer term. It argues that each exchange ratio is equal to the ratio of the quantities of labour embodied in the two commodities. The embodied labour includes the labour directly used in the commodity’s production, but also the labour embodied in the raw materials and in the tools and machinery.49 It was most carefully elaborated by David Ricardo, although there is some controversy over whether he accepted it without reservation — George Stigler somewhat whimsically claimed that Ricardo had a “93% labour theory of value.”50

Marx adopted the labour theory of value but added a crucial innovation: labour itself is a commodity, and like any other commodity traded in a competitive market, it is exchanged at its cost of production. The cost of producing a day’s labour is simply the cost of keeping the worker alive and functioning for another day. But Marx observed that in an industrial economy, it takes less than a day’s labour to produce the goods necessary to maintain a worker for one more day. The difference between what the worker actually produces in a day, and the amount needed to maintain him, is appropriated by the employer. This difference is called “surplus value,” and it is the capitalist’s only source of profits. A capitalist — say, a factory owner — collects the surplus value of many workers. He consumes some of it, giving himself a luxurious lifestyle, but the rest he holds as additional capital. The accumulation of capital gives rise to a catastrophic dynamic, as Peter Singer explains:

If capital grows, the domination of capital over workers increases. Wage labour “produces the wealth that rules over it,” and gets from this hostile power its means of subsistence, only on condition that it again assists the growth of capital.

Capital increases its domination by increasing the division of labour. This occurs because competition between capitalists forces them to make labour ever more productive, and the greater the scale on which they can produce, and the greater the division of labour, the more productive labour is. The increasing division of labour has several effects.

First, it enables one worker to do the work of ten, and so increases the competition among workers for jobs, thus driving wages down.

Second, it simplifies labour, eliminates the special skills of the worker and transforms him into ‘a simple, monotonous productive force’.

Third, it puts more small-scale capitalists out of business. They can do nothing but join the working class. “Thus,” says Marx, “the forest of uplifted arms demanding work becomes ever thicker, while the arms themselves become ever thinner.”

Finally, Marx says, as the scale of production increases and new markets are needed to dispose of the production, economic crises become more violent. Initially a crisis of overproduction can be relieved by opening up a new market or more thoroughly exploiting an old one. This room for manoeuvre shrinks as production expands.51

Marx described all of these effects in Wage Labour and Capital (1847), before he had developed the idea of surplus value. In Capital (1867), Marx used surplus value to drive one last nail into capitalism’s coffin. The capitalists’ accumulation of capital pushes up the demand for labour, which puts upward pressure on wages and downward pressure on profits. The capitalists respond by substituting capital for labour. But labour is the only source of surplus value — of profit — so the replacement of labour with capital causes the capitalists’ rate of profits to fall. The capitalists themselves are forced to struggle for survival, just as the workers do. Marx believed that such a system could not survive for long; indeed, he believed that it was on the verge of collapse even as he wrote Capital.

Generations of socialists have used Marx’s philosophy as a framework for organizing their understanding of the world. The idea of struggle among classes — defined by income, race, or gender — now seems to dominate all of the social sciences except economics. Within economics, however, Marxism has been abandoned. Marx made a number of strong predictions, and the passage of time has shown them to be wrong. Capitalism has not collapsed. The rate of profits has not irretrievably fallen. Workers do not live at subsistence levels. Society has not split into a “reserve army” of impoverished workers and a small coterie of wealthy capitalists. But it was not simply these failed predictions that caused Marxism to be set aside. Economics must evolve with the human societies that it studies. Marxism, trapped as it is in the age of “dark Satanic mills,” has become an anachronism. It doesn’t describe the modern economy any better than the novels of Charles Dickens describe modern London.

  1. Durkheim, Socialism and Saint-Simon, p. 6. ↩
  2. Durkheim, Socialism and Saint-Simon, p. 7. ↩
  3. Durkheim, Socialism and Saint-Simon, p. 19. ↩
  4. Durkheim, Socialism and Saint-Simon, p. 37. ↩
  5. Saint Simon, quoted in Durkheim, Socialism and Saint-Simon, p. 101. ↩
  6. Saint Simon, quoted in Durkheim, Socialism and Saint-Simon, p. 108. ↩
  7. Durkheim, Socialism and Saint-Simon, p. 100. ↩
  8. Saint Simon, quoted in Durkheim, Socialism and Saint-Simon, p. 102. ↩
  9. Durkheim, Socialism and Saint-Simon, p. 111. ↩
  10. Saint Simon, quoted in Durkheim, Socialism and Saint-Simon, p. 118. ↩
  11. Durkheim, Socialism and Saint-Simon, p. 119. ↩
  12. Durkheim, Socialism and Saint-Simon, p. 120. ↩
  13. Durkheim, Socialism and Saint-Simon, p. 128. ↩
  14. Durkheim, Socialism and Saint-Simon, p. 139. ↩
  15. In his later writings, Saint-Simon was less definite about the structure of this body. ↩
  16. Durkheim, Socialism and Saint-Simon, p. 150. ↩
  17. Durkheim, Socialism and Saint-Simon, p. 151. ↩
  18. Saint Simon, quoted in Durkheim, Socialism and Saint-Simon, p. 151. ↩
  19. Durkheim, Socialism and Saint-Simon, p. 153. ↩
  20. Durkheim, Socialism and Saint-Simon, p. 185. ↩
  21. Saint-Simon was not the only nineteenth century socialist to invent a “scientific” religion to replace an out-of-date Christianity. Charles Fourier, Auguste Comte, and Robert Owen also proposed religions of their own design. ↩
  22. Durkheim, Socialism and Saint-Simon, p. 196. ↩
  23. Durkheim, Socialism and Saint-Simon, p. 196. ↩
  24. Durkheim, Socialism and Saint-Simon, p. 200. ↩
  25. Gareth Stedman Jones, “Saint Simon and the Liberal Origins of the Socialist Critique of Political economy” (manuscript, 2004), p. 6. ↩
  26. Quoted in Gareth Stedman Jones, “Saint Simon and the Liberal Origins of the Socialist Critique of Political economy”, p. 13. ↩
  27. Gareth Stedman Jones, “Saint Simon and the Liberal Origins of the Socialist Critique of Political economy”, p. 16. ↩
  28. Gareth Stedman Jones, “Saint Simon and the Liberal Origins of the Socialist Critique of Political economy”, p. 23. ↩
  29. Gareth Stedman Jones, ”European Socialism from the 1790s to the 1890s,” The Cambridge History of Modern European Thought, Volume 1 (2019), p. 197. Here, “association” means the development of more encompassing social entities. ↩
  30. Sismondi, quoted by Thomas Sowell, Say’s Law (Princeton University Press, 1972), p. 66. ↩
  31. David Ricardo, as quoted by Sismondi, New Principles of Political Economy, pp. 620-1. ↩
  32. Durkheim, Socialism and Saint-Simon, pp. 75-6. ↩
  33. Sismondi, New Principles of Political Economy (Transaction Publishers, 1991), pp. 558–559.
    ↩
  34. Gareth Stedman Jones, ”European Socialism from the 1790s to the 1890s,” The Cambridge History of Modern European Thought, Volume 1 (2019), pp. 201-2. ↩
  35. Gareth Stedman Jones, ”European Socialism from the 1790s to the 1890s,” The Cambridge History of Modern European Thought, Volume 1 (2019), p. 223. ↩
  36. George Lichtheim, Marxism: An Historical and Critical Study, p. 8. ↩
  37. Marx, “Critique of the Hegelian Dialectic and Philosophy as a Whole” (1844). ↩
  38. George Lichtheim, Marxism: An Historical and Critical Study, p. 6. ↩
  39. Feuerbach, quoted by Shlomo Avineri, The Social and Political Thought of Karl Marx (Cambridge, 2012), p. 11. ↩
  40. Avineri, The Social and Political Thought of Karl Marx (Cambridge, 2012), p. 11. ↩
  41. Marx, “Private Property and Communism” (1844). ↩
  42. Robert Heilbroner, Marxism, For and Against (Norton, 1980), p. 63. ↩
  43. Marx, “Preface to a Contribution to the Critique of Political Economy” (1859). Although one can get a sense of Marx’s argument from a casual reading of this quote, it should be noted that Marx is using very deliberate terminology. A mode of production is forces of production coupled with relations of production. Forces of production include things like population, resources, and technology. The relations of production describe the social system under which the forces are employed to produce goods. The society’s class structure is a major element of the relations of production. ↩
  44. Robert Heilbroner, Marxism, For and Against (Norton, 1980), p. 73. ↩
  45. Avineri, The Social and Political Thought of Karl Marx (Cambridge, 2012), p. 155. ↩
  46. Marx, Wage Labour and Capital (1847). ↩
  47. Avineri, The Social and Political Thought of Karl Marx (Cambridge, 2012), p. 38. ↩
  48. Adam Smith attempted to occupy the middle ground by arguing that it is the institution of private property, not scarcity, that gives rise to rents. “As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce.  The wood of the forest, the grass of the field, and all the natural fruits of the earth, which, when land was in common, cost the labourer only the trouble of gathering them, come, even to him, to have an additional price fixed upon them.  He must give up to the landlords portion of what his labour either collects or produces.” (Wealth of Nations, book 1, chapter 6) But if there is no overall scarcity of the resource, so that some of it will inevitably be left idle, rents can only persist if there is some sort of market imperfection — monopolization of the resource, or else a conspiracy among the resource owners — since otherwise, competition among the owners would drive the rents to zero. ↩
  49. In the case of tools and machinery, the embodied labour is the labour required to offset their depreciation. ↩
  50. George Stigler, “Ricardo and the 93% Labor Theory of Value,” American Economic Review (1958). ↩
  51. Peter Singer, Marx: A Very Short Introduction (Oxford University Press, 2000), pp. 62-3. ↩