The Dangers of Marxism and the Case for Economic Interventionism

The philosophy of Karl Marx is a complex and heavily-debated topic; spend enough time studying it, and you’ll come to find that even self-proclaimed Marxists cannot agree on what the correct definition and aims of Marxism should be. Therefore it is not my intention to provide the “correct” interpretation of Marxism, or to comment on the various interpretations of Marx’s writings. My purpose is to simply provide a very basic overview of Marxism, and to explain why it is, in general, misguided and potentially dangerous. The arguments and critique that follows come mostly from a close reading of Volume 2 of The Open Society and Its Enemies by the philosopher Karl Popper.   

Before we get to Popper’s criticism, however, it should be noted that Popper did recognize the noble humanitarian impulse in Marx. The working conditions during the time of Marx’s writings were abominable, to say the least (including rampant child labor and 15-hour workdays). In the face of these gruesome working conditions, Marx both (1) exposed the importance of economic factors in social conditions, and (2) attempted to establish a philosophy of hope to counter the soulless capitalist drive for profit and efficiency. The most charitable interpretation of Marx, therefore, is to recognize both his noble intentions alongside his misguided solutions. As Popper wrote, while “‘scientific’ Marxism is dead, its feeling of social responsibility and its love for freedom must survive.”

Marx’s historical prophecy

In Volume 2 of The Open Society and Its Enemies, Karl Popper outlined Marx’s three-step argument of historical prophecy as follows:

  1. Capitalism ultimately leads to the accumulation of wealth into fewer and fewer hands and to the increasing misery and exploitation of the working class. The benefits of increased worker productivity and technical improvements are ceaselessly extracted from the workers to the capitalists (by necessity), forever widening the gap between the two. 
  2. Capitalism will therefore result in the formation of only two classes, a small ruling elite (the bourgeoisie) and a large exploited working class. The increasing tension between the two classes (as the conditions of the workers continue to deteriorate) will ultimately result in a social revolution in which the working class will overthrow the ruling class. 
  3. At the conclusion of this social revolution, where the workers stand victorious over the bourgeoisie, the classless society, now free of exploitation, will be finally realized (socialism). In such a scenario, the state serves no additional function and withers away. 

This, in its most compact and simplified form, is Marx’s argument. Marxists may disagree on whether the social revolution will be violent or peaceful, achieved through force or via political reforms, but it would be difficult to call yourself a Marxist if you do not believe in the general course of history playing out as outlined above. 

Popper’s criticism of Marx

Popper’s criticism of Marx is mainly directed at his historicist approach (i.e., the uncovering of historical “laws” that can be used to predict the future). In doing so, Popper found problems with each step in the above argument.

First, Marx is assuming that capitalism is unsustainable because the capitalists will continue to become wealthier while the workers will continue to become more miserable. This, however, represents Marx’s first and biggest oversight: namely, the possibility of wealth redistribution, in which the state redistributes capitalist profits through taxation, providing, among other things, subsidies for medical insurance, education, social security, and welfare. The state can also take an active role in regulating the capitalists by limiting working hours and setting minimum pay levels, for example. This is, in fact, exactly what has happened. 

The reader should keep in mind that Marx’s theory was a purely historicist theory; in other words, Marx thought that history would unfold according to “social laws” regardless of political interventions, which could only “shorten and lessen the birth-pangs” of the transition to socialism. As Popper wrote:

“But according to Marx’s own theory, we cannot at will alter the economic reality by, for example, legal reforms…For according to Marx, the real power lies in the evolution of machinery; next in importance is the system of economic class-relationships; and the least important influence is that of politics.”

Considering this, it would seem that the very existence of political reforms and programs that in effect decrease class tension—reforms that Marx considered impossible—would be sufficient to prove Marx wrong. That this hasn’t been the case among his supporters is a testament to the power of historical prophecy; regardless of what happens, all events can be interpreted as part of a winding evolutionary process, for the path to socialism doesn’t happen in a straight line. In this way, all events in history can be made to fit the Marxist narrative. Since Marxism cannot be falsified, it is therefore not scientific (as is claimed), either. 

Next, Popper notes that it does not necessarily follow that the increasing gap in wealth must necessarily create two distinct classes, or that the individual members of this working class will all feel a special solidarity towards each other in opposition to the ruling elites. Again, as we see in modern democracies, there exists several classes and interests—with social mobility between them—and in many cases decreased tension between classes as a result of redistributionist policies. 

Last, Popper pointed out that, even if Marx was right, and the social revolution were to occur exactly as anticipated, this would be unlikely to result in a classless society and the withering away of the state. More than likely, it would simply pave the way for the emergence of a new elite, who would seek to preserve their own power within a new state apparatus set firmly in place to support this new class (as happened in Soviet Russia). 

The case for economic intervention

We can see that the historicism of Marx was largely misguided, and that history turned out far different than Marx envisioned. Additionally, by focusing on predicting the future, Marx ignored the kinds of social reforms that can make people’s lives better in the near-term, without asking them to make great sacrifices for a distant utopian ideal. Instead, Marx encouraged people to commit atrocities in the service of a distant, future good, which is always dangerous since the future simply cannot be predicted, as Marx himself demonstrated by failing to predict the emergence of mixed economies with socialist elements. 

What then, is a better way to think about politics? According to Popper, it begins with an appreciation of the paradox of freedom (something Marx failed to appreciate). Here’s how Popper describes it:

“I believe that the injustice and inhumanity of the unrestrained ‘capitalist system’ described by Marx cannot be questioned; but it can be interpreted in terms of what we called, in a previous chapter, the paradox of freedom. Freedom, we have seen, defeats itself, if it is unlimited. Unlimited freedom means that a strong man is free to bully one who is weak and can rob him of his freedom. This is why we demand that the state should limit freedom to a certain extent, so that everyone’s freedom is protected by law. Nobody should be at the mercy of others, but all should have a right to be protected by the state…Now I believe that these considerations, originally meant to apply to the realm of brute-force, of physical intimidation, must be applied to the economic realm also.”

For Popper, economic power can be just as dangerous as physical violence. As Popper wrote, “those who possess a surplus of food can force those who are starving into a ‘freely’ accepted servitude, without using violence.” Further, if the state’s function is only to place limits on physical violence, it paves the way for new forms of violence to emerge, as the economically strong tend to dominate the economically weak. 

If this analysis is correct, then the remedy against economic exploitation is the same as the remedy against physical violence—political control. This means we must give up the principle of non-intervention and unlimited economic freedom and replace it with the planned economic intervention of the state (hence the difference between progressivism and Marxism). Of course, there is always the danger of handing over too much power to the state, but the opposite approach of handing over all power to the “free market” results only in the unwavering economic exploitation uncovered by Marx. We therefore have no choice but to engage in a perpetual balancing act between the prevention of economic exploitation in the market and overzealous state planning and control. 

Notice that this turns Marx on his head. Whereas Marx believed that sociological forces and economic arrangements are of greater importance relative to politics, the paradox of freedom forces us to recognize that the protection of freedom, including economic freedom, requires a certain restraint of freedom on the part of the state, thus elevating politics above economics. Politics controls economics, and is the only means by which to resolve the paradox of freedom and to secure the economically weak against the economically strong. 

As Popper points out, this is precisely what has happened:

“The economic system described and criticized by Marx has everywhere ceased to exist. It has been replaced, not by a system in which the state begins to lose its functions and consequently ‘shows signs of withering away,’ but by various interventionist systems, in which the functions of the state in the economic realm are extended far beyond the protection of property and of ‘free contracts.’”

The implication of this is that we should not address our current economic challenges by envisioning a Marxist transition to a communist state, but rather by strengthening our political control of economic exploitation. The enemies to a more just society today are therefore represented on both sides: to the left, the Marxists, and to the right, the libertarians and conservatives who advocate for unlimited economic freedom, and, therefore, indirectly for economic exploitation.  

Further reading

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