A “Right Side” to History? The Failure of Marx’s Predictions About Capitalism, Part 1

by | Dec 10, 2017 | Economics, History

One of the most common phrases to be heard from those on “the left” is the assertion that someone or some public policy is or is not on “the right side of history.”

One of the most common phrases to be heard from those on “the left” is the assertion that someone or some public policy is or is not on “the right side of history.” It has almost become a mantra by those who disagree with, hate or are fearful of ideas and policies proposed by those generally characterized as being politically on “the right.”

The notion behind it is that “history” moves in a particular direction, toward some set of specific goals and societal forms, with each step in the historical process representing a “higher” and “better” stage or level than the preceding ones at which “society” has been operating.

It is also captured in the popular labeling of those, again, on the political left as being “progressives” in their outlook and proposals for social reform and change. On the other hand, opponents are declared to be “reactionary,” “conservative,” or “deniers” of some facet of reality. Under the latter heading would be those who deny or challenge or question whether “climate change” is singularly or primarily or significantly man-made. Or whether America still is or is becoming a more racist, misogynist, or generally anti-“social justice” hateful society.

This attitude and language has been exacerbated by the election of Donald Trump as president of the United States, but it has been an ideological and linguistic conception of the political divisions in America and other places in the world for a very long time. As with many things on the political left, it dates from the nineteenth century and the “scientific socialism” of Karl Marx (1818-1883).

Many of the socialists who preceded or who were contemporaries of Marx believed that mankind could be transformed into a new and better socialist arrangement of human association through reason, will power and conscious institution change. Marx rejected these people, labeling them as “utopian socialists.” They were “utopian,” that is, unrealistic fantasy believers, not because they wanted a bright and beautiful socialist future for humanity, but because they thought that it was in the ability of human beings to “will it” into existence.

Hegel and the Dialectic of Human Perfection

Marx had imbibed the historicist philosophy of Georg Wilhelm Friedrich Hegel (1770-1831) in the years shortly after the latter’s death when he studied for a period of time at the University of Berlin. Hegel has declared that human history followed a trajectory of improvement and purification.

Hegel believed that all of history was guided by a purpose, a design for which everything that happened through the ages were essential links in the chain of historical fulfillment of that purpose. The end goal was “freedom” defined as the pure, the perfect, the “Good” as an Idea and Ideal. All of history were the steps – the logical steps – for the perfection of the Pure Idea of the “Perfect Mind,” the “World Spirit,” the “Good.”

The process of this evolution occurred through the “dialectic.” Hegel’s particular application was the claim that truth was attained through the conflict of opposites.

Thus, there emerged the notion of thesis, anti-thesis, and synthesis. The “dialectic” comes from the Greek – meaning to debate or discuss – the idea that through the conflict of positions and views, the truth is reached.

A thesis affirms a position or proposition; the anti-thesis denies or “negates” it; the synthesis embraces what is true in both and brings the process a step closer to the reality of perfection of the Idea. But then the resulting synthesis is examined and found to contain defects; thus, a new anti-thesis emerges opposing it, creating the conditions for a new synthesis; and the process begins again. This continues until the “Pure” or “Perfect” Idea, or “truth,” is reached, and history as the history of the Perfection of the Pure Idea is attained.

There are three “Fundamental Laws” to Hegel’s Dialectics:

  1. The Law of Transformation. Changes incrementally occur until finally a point is reached when the mutation changes from quantitative shifts to qualitative transformation.  Hence, there occurs a “jump” or a “revolution” in ideas.
  2. The Law of the Unity of Opposites. One idea or position implies its opposite. That is, every “positive” implies and requires its “negative” reflection for its full existence. Thus, they require each other, and, therefore, opposites are connected in one unity.
  3. The Law of the Negation of the Negation. This implies that thesis, anti-thesis, and synthesis are stages of one historical development.  The synthesis of a prior thesis and anti-thesis is “negated” or over-turned by a new anti-thesis. This continues until the final synthesis represents the perfection against which no new anti-thesis can be imagined or constructed.

Thus, the historical conflict of inescapably interconnected ideas passes through progressive stages of perfection until the historical process reaches its end. “History” ends as the evolution of ideas to Pure Perfection.

Marx and the Dialectic of the Material Means of Production

Marx and his friend and longtime collaborator, Fredrick Engels (1820-1895) accepted without reservation Hegel’s formulation of the dialectical process. What they rejected was that it was a dialectical process of ideas. Rather than ideas determining actions, beliefs, and modes of life, they argued it was the modes of production and the material conditions of life that determine ideas, beliefs, and thoughts.

As Marx and Engels expressed it in, The German Ideology (1846):

What [individuals] are . . . coincides with their production, both what they produce and how they produce. The nature of individuals thus depends on the material conditions determining their production . . .

The production of ideas, of conceptions, of consciousness, is . . . directly interwoven with the material activity, and the material intercourse of men . . .

The productive modes of matter determine the images and concepts in the human mind. All of history, the social order, cultural forces, economic institutional forms, are things that emerge, take shape, and are transformed again-and-again through the evolution of the material modes of production.

Everything else is illusion, a part of the “superstructure” of society at any moment in history, meant to facilitate the technological and productive transformative potentials of the physical means of production that are on that trajectory that will lead to socialism and communism, separate from and independent of the wishes and wills of ordinary human beings caught up in the stream of the dialectics of human history.

Said Marx in his Preface to the Critique of Political Economy (1859), in what is often considered the most concise (if not necessarily clearest) statement of his philosophy of human historical development:

In the social production of their life, men enter into definite relations that are indispensible 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, the real foundation, 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.

At a certain stage of their development, the material productive forces of society come into conflict with the existing relations of production, or – what is but a legal expression for the same thing – with the property relations within which they have been at work hitherto.

From forms of development of the productive forces these relations turn into their fetters. Then begins an epoch of social revolution. With the change of the economic foundations the entire immense superstructure is more or less rapidly transformed  . . .

No social order ever perishes before all the productive forces for which there is room in it have developed; and the new higher relations of production never appear before the material conditions of their existence have matured in the womb of the old society itself . . .

In broad outlines Asiatic, ancient, feudal, and modern bourgeois modes of production can be designated as progressive epochs in the economic formation of society. The bourgeois relations of production are the last antagonistic form of the social process of production – antagonistic not in the sense of individual antagonism, but of one arising from the social conditions of life of the individuals; at the same time the productive forces developing in the womb of bourgeois society create the material conditions for the solution of that antagonism.

This social formation brings, therefore, the prehistory of human society to a close.

Marx’s Conception of “Class Struggle”

This now brings us to Marx’s theory of historical change through which the “laws of history” lead society from capitalism to socialism. In The Communist Manifesto (1848), Marx and Engels declare that, “The History of all hitherto existing society is the history of class struggles.” How and why do conflicting “social classes” emerge and take on the antagonistic roles that Marx and Engels claim?

A clear explanation is given in their work, The German Ideology (1846).  Social classes emerge within and out of the development of the modes of production.  When men lived in primitive small, communal bands, production was simple, shared, and undivided among the rudimentary tasks of survival.  Class distinctions emerged with the development of the division of labor.  There arose a separation of industry from agriculture, “town” from “country,” and “A clash of interests between them.”

Division of labor means division of ownership, and division of ownership over the means of production, Marx insisted, means the division of society into antagonistic social “classes.”  In Marx’s view, society has passed through a series of economic organizational forms: tribal ownership; slavery; feudalism, and capitalism.

Capitalism will be replaced by socialism, and socialism shall be the transitional stage to communism (the final stage of human societal development).

The crucial element in Marx’s thinking on social development is that the technological capabilities of the physical means of production contain within them a required set of relationships between themselves and labor, if they are to attain their full productive potential.  In other words, the appropriate social and economic relationships for those physical means of production to be used to their full optimal productive efficiency is determined by the technology in existence.

In The Poverty of Philosophy (1847), Marx declared: “Social Relations are closely bound up with productive forces. In acquiring new productive forces men change their mode of production; and in changing their mode of production, in changing the way of earning a living, they change all their social relationships. The hand mill gives you society with the feudal lord; the steam mill, society with the industrial capitalist.”

In each historical period, social relationships evolve and conform into those necessary for the productive means to be used to their full potential. But opposing these productive means arise new and more productive technological methods of production. These new modes of production are absorbed into the existing property and class relationships, but are found over time to be incompatible with those new modes of production if they, in turn, are to be utilized to their full potential. A crisis finally arises that results in a overthrow of the existing production and property relationships; with the new social relationships being those consistent with the development of the new modes of production.

The cycle repeats itself: Thesis (the existing modes of production with their accompanying property and class relationships); confronted by; Anti-Thesis (new modes of production inconsistent the existing property and class relationships; Social revolution, leading to a new Synthesis (a new set of property and class relationships consistent with the new, superior modes of production).

“History” Takes Humanity from Capitalism to Socialism

Regardless of the historical analysis that is constructed on the basis Marx’s dialectical materialism, the paramount importance of the theory, for Marx, himself, is for the analysis of his own contemporary capitalist society.  Above all else, Marx saw himself as the sociological and economic analyst of the capitalist epoch through which he was living.

On the one hand, Marx viewed capitalism as the miraculous engine of progress, productivity, and improvement. As he and Engels declared in The Communist Manifesto (1848):

The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all the preceding generations together.

Subjection of Nature’s forces to man, machinery, application of chemistry to industry and agriculture, steam-navigation, railways, electric telegraphs, clearing of whole continents for cultivation, canalization of rivers, whole populations conjured out of the ground – what earlier century had even a presentiment that such productive forces slumbered in the lap of social labor?

But, for Marx, capitalism’s very success, its brilliance in “unfettering” the powers of the development of the means of production, sets the stage for its own demise. Marx’s explanation for this demise was based upon three “Laws,” that he believed would result in the end of capitalism and the beginning of socialism.

The “Law of Capitalist Accumulation.”

Marx argued that the force of market competition would lead capitalists to increase their investment in labor saving machines and technologies to lower costs of production relative to their rivals in the marketing of finished products.

But since the source of capitalist profit, argued Marx, is “surplus value,” (the amount retained by the employer over and above what he pays the workers) the more labor is replaced by capital, the smaller the fund out of which profits could be drawn. Thus capital accumulation brings about a falling rate of profit. But a falling rate of profit acts as incentive for capitalists to invest in even more laborsaving, higher production physical capital.  But, however, once again, this decreases the pool of surplus product (“value”) from which profits are derived; and the same cycle begins again.

The “Law of the Concentration of Capital.”

The stiffer the competition becomes under the pressure of capital investment, the more individual capitalists are pushed to the wall and driven out of business. As a result, ownership over the means of production falls into fewer and fewer hands.

Those who were formerly “capitalists” are driven into the “wage-earning class,” and thus the number of “proletarians” (workers without property), expands. The society is more and more dramatically divided into two clearly defined “classes”:  An increasingly smaller and smaller number of “ruling class” capitalists, and an increasing number of “working class” members.

The society, with each passing day, is more and more polarized, with it becoming increasingly clear to all that “a few” own and have “privilege,” while “the many” toil and suffer under this “exploitation.”

The “Law of Increasing Misery.”

The substitution of capital for labor throws more and more workers into what Marx called the “reserve army” of the unemployed, as fewer jobs remain for workers as machines do more of the work.

The pressure of a growing “army” of unemployed keeps wages low, because if an employed worker asks for a higher wage, there are plenty of the unemployed ready to take his place at whatever the capitalist-employer is willing to pay.

Marx was also convinced that mass production was decreasing the skills required by any worker. Hence, the value of any worker was decreased to the lowest common denominator of pay, as “labor” was increasingly reduced to a single homogeneous type of worker skill. The standard of living of the “proletarian” working class would continue to fall lower and lower, with the human condition in capitalist society decreasing further and further, for the great mass of the members of society.

Economic Crises and the End of Capitalism.

Capital investment expands the ability to produce larger and larger quantities of goods, but low wages and rising (permanent) unemployment acts as a barrier for the capitalists to find consumers for all that they produce.

There emerges what Marx considers the cause of the “business cycle,” due to under-consumption relative to the productive capacity of the capitalist system. This intensifies the concentration of ownership, because during the depression phase of the business cycle businessmen are pushed out of the market. The stronger capitalists buy them out, and the class relationships are drawn even more clearly apparent.

“Consciousness Raised” Workers and the Socialist Revolution.

Finally, the society reaches a crisis point, with the workers becoming fully aware of the “true” class relationships in society. In misery and despair, the workers overthrow the capitalists through violent revolution.

The task has been made easier because the number of capitalists to overthrow is a relatively small fraction of the population (due to the concentration of ownership). Even some of the remaining “bourgeoisie,” seeing what is happening and their own fate of eventually becoming proletarians themselves through the effects of capitalist competition and concentration of ownership, “go over” to the side of “the workers” to overthrow the capitalist system.

At this point, the socialist revolution comes. In true Hegelian terms, a transformative break comes with the institutional overthrow of the capitalist system and the dawn of the socialist order of human society that will finally lead to the post-scarcity communist paradise on earth.

To be on the “wrong side of history,” therefore, means to be opposed to the inescapable, irresistible, and irreversible “laws” of societal development that are outside and independent of anything mere mortals may desire or want. It is to attempt to keep humanity in an earlier stage of social injustice and material inequality for the benefit of a few – the “one percent” – who want to maintain their system of exploitation and abuse against the mass of mankind.

But is any of this true? Is humanity taken along an historical journey of social evolution by forces outside of itself and the individuals who make up humankind? Is this the manner and form that capitalist, or market-oriented, societies have followed over the last nearly two hundred years? Is there, therefore, a “right” or “wrong” side of history in the manner that those on “the left” seem to presume and use to beat opponents over the head? These are the questions to which we must now turn.

Dr. Richard M. Ebeling is the recently appointed BB&T Distinguished Professor of Ethics and Free Enterprise Leadership at The Citadel. He was formerly professor of Economics at Northwood University, president of The Foundation for Economic Education (2003–2008), was the Ludwig von Mises Professor of Economics at Hillsdale College (1988–2003) in Hillsdale, Michigan, and served as vice president of academic affairs for The Future of Freedom Foundation (1989–2003).

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.

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