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The Dynamic of Capitalist Growth
Published online by Cambridge University Press: 13 January 2009
Extract
It has often been remarked that the most eloquent tribute ever paid to the incomparable effectiveness of capitalist social arrangements as means for achieving economic growth was that of the Communist Manifesto. Yet it is rather rare to notice that neither Marx nor Engels, either there or elsewhere, either asks or attempts to give an answer to a question which, to anyone proposing to revolutionize these arrangements, ought to have appeared crucial: namely, “What was the secret, and how shall we ensure that, under our proposed alternative arrangements, that secret is not lost?”
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References
1 Marx, Karl, “The Communist Manifesto,” McLellan, David, ed., Karl Marx: Selected Writings (Oxford: Oxford University Press, 1977), p. 225. (Hereinafter cited parenthetically in the text as CM followed by a page number.)Google Scholar
2 Schumpeter, J., Capitalism, Socialism and Democracy (London: Allen and Unwin, 1963)Google Scholar, Ch. 7.
3 Smith, A., An Inquiry into the Nature and Causes of the Wealth of Nations, ed. Campbell, R.H. and A.S., Skinner (Oxford: Clarendon, 1976), IV (vii) 3 and IV (ix).Google Scholar
4 Lenin was fond of quoting Plekhanov, G.V.: “First, let's stick the convict's badge on him, and after that we can examine his case.” See R., Conquest, Lenin (London: Collins Fontana, 1972), p. 40.Google Scholar
5 Consider just two vital examples, both examined thoroughly in Wolfe, B.D., Marxism: One Hundred Years in the Life of a Doctrine (New York: Dial, 1955)Google Scholar: first, the gulf between the inspirational legend of the Paris Commune as presented by Marx in his address to the International on The Civil War in France, and the historical truths as honestly recognized only in his private papers (Part III, pp. 103–47); and, second, the fact that even before publishing Volume I of Capital, Marx knew that the notorious immiseration thesis – so essential to sustain the treasured revolutionary morals of the whole work – was false (Part III, pp. 322–3).
For example, in the published account of the Commune we read of the egalitarian mandate: “… all functionaries to do their jobs at workingmen's wages.” Yet even at the time of writing “this man of scholarship” knew perfectly well that “… the 6000 franc annual wage the Commune deputies voted themselves and set as a maximum for state officials was nearly twelve times the amount being paid to the National Guard who were defending Paris” (Wolfe, , Marxism, p. 141).Google Scholar As for the falsification of the immiseration thesis, the data were – in the interests, of course, of the revolution – simply suppressed. True to form, Marx made no relevant corrections in later revisions of Capital.
For a less admiring assessment of the scientific pretensions of Marx, as compared with Darwin, see Flew, A.G.N., Darwinian Evolution (London: Granada Paladin, 1984), 111/3, pp. 92–112.Google ScholarSirPopper, Karl, The Open Society and its Enemies (London: Routledge and Kegan Paul, fifth edition, 1956)Google Scholar, even after reading Schwartzschild, Leopold, The Red Prussian [1948]; (London: Pickwick, New Edition 1986)Google Scholar, still gives far too much credit to the fundamental scientific good faith of Marx.
6 One testing exercise for Marxist casuists would be to explain how, in operating a wholly automated factory, surplus value is to be profitably extracted by not buying any labor power at all. A reading of the most relevant Chapter XV, “Machinery and Modern Industry” (in Volume I, Part IV, “Production of Relative Surplus-value”), suggests that, controversially, their best bet would be to divert discussion to the more urgent and practical problem of what alternative employment, if any, might be found for workers displaced by automation.
7 See Roover, R., “The Concept of the Just Price,” The Journal of Economic History, vol. XVIII (1958)Google Scholar; and compare Chafusen, Alejandro A., Christians for Freedom: Late-Scholastic Economics (San Francisco: Ignatius, 1986).Google Scholar
8 Marx, K., Capital [1867], ed. F., Engels, trans. S., Moore and E., Aveling (Moscow: FLPH, 1961), Vol. 111, Ch. XXIII, pp. 376–82.Google Scholar
Wolfe, (Marxism, p. 113n)Google Scholar is incorrect in asserting that the phrase in the note to Vol. 1, Ch. XV, p. 371 – “machinery has greatly increased the number of well-to-do idlers”–is Capital's sole reference to managers. For that phrase does not in fact refer particularly to redundant managers; and there is the discussion mentioned immediately above.
9 Smith, Inquiry, IV (ii).
10 Menger, Carl, Problems of Economics and Sociology [1883] (Chicago: Illinois University Press, 1960), p. 93Google Scholar, emphasis added.
11 Hayek, F.A., Studies in Philosophy, Politics and Economics (London: Routledge and Kegan Paul, 1967).Google Scholar
12 “Alienans adjective” is a medieval, Scholastic technicality. Whereas, for example, the ordinary adjectival expression “red book” is used to imply that something is both red and a book, such alienans adjectives as “imaginary,” “fictitious,” or “non-existent” are not similarly employed in order to pick out a subset for some more extensive set: imaginary books, unlike red books, are not species of the genus books!
13 For supporting argument see my “Prophecy or Philosophy? Historicism or History?” R., Duncan and C., Wilson, eds., Marx Refuted (Bath, England: Ashgrove, 1987), p. 68–88.Google Scholar
14 Smith, Inquiry, I (ii).
15 Mara, Capital, Vol. I, Ch. XIV, p. 362.
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17 The fury and the envy provoked by such extraordinarily large rates of profit may be to some extent assuaged by the reflection that – whatever the truth about the alleged tendency of the overall average rate of profit to fall – there most certainly must be a tendency for the rates of profit made by innovators to decline once, encouraged by the success of these innovators, competitors move in.
18 Quoted at pp. 256–257 of Wolfe, Marxism; and compare Engels, F., Herr Eugen Duhring's Revolution in Science, trans. E., Burns and edited by C.P., Dutt (London: Lawrence and Wishart, 1934), pp. 23, 299, 301, and 311.Google Scholar The failure to grasp that there can be, and both in Nature and in human affairs is, order which is not imposed by directing intelligence should be seen as a failure to surmount even the pons asinorum of social science. Contrast Flew, A.G.N., Thinking about Social Thinking (Oxford: Blackwell, 1985)Google Scholar, Ch. 3.
Anyone curious to discover how things really are done in the lands of “actually existing socialism” may be referred either to Spaskowski, Romuld, The Liberation of One (New York: Harcourt Brace Jovanovich, 1986)Google Scholar, or to any of the publications of the Centre for the Research into Communist Economies, recently established under the auspices of the Institute of Economic Affairs in London.
19 Tawney, R.H., Equality [1931], with an Introduction by R.M., Titmuss (London: Allen and Unwin, fifth edition, 1964), p. 157.Google Scholar
20 They were Denis Healey, then Chancellor of the Exchequer, and Varley, Eric, then Secretary of State for Industry. The sentence quoted comes at p. 3 of An Approach to Industrial Strategy (London: HMSO, 1975 – Cmnd. No. G315).Google Scholar See also The Regeneration of British Industry (London: HMSO, 1974 – Cmnd. No. 5710).
21 On the general record of the British nationalized industries see: , G. and Polanyi, P., Failing the Nation: The Record of the Nationalized Industries (London: Fraser Ansbacher, 1976)Google Scholar; Redwood, J., Public Enterprise in Crisis (Oxford: Blackwell, 1980)Google Scholar; and Pryke, R., The Nationalized Industries: Policies and Performance since 1968 (Oxford: Robertson, 1981).Google Scholar For more particular cases see Broadway, F., Upper Clyde Shipbuilders, Jones, C. The 200,000 Job, Bruce-Gardyne, J., Meriden: Odyssey of a Lame Duck, and Burton, J., The Job Support Machine (London: Centre for Policy Studies, 1976, 1977, 1978, and 1979).Google Scholar
22 See almost any contribution to the recent, rapidly growing literature on the economics of public choice. There are, for instance, three introductory collections, all from the Institute of Economic Affairs and all, presumably, edited by Seldon, A.: The Economics of Politics (1978); The Taming of Government (1979); and The Emerging Consensus (1981). Runyon, Compare D., Runyon on Broadway (London: Constable, 1950).Google Scholar
23 The term “constituency” in the UK is roughly equivalent to “district” in the U.S. and to “riding” in Canada.
24 U.S. citizens are fully entitled to take a measure of national pride in comparing the behavior in this matter of their Senate with that of the British Parliament. For the U.S. Senate, despite the impassioned advocacy of the late Senator Jackson (“the Senator for Boeing”), defeated a proposal to vote a vast subsidy for the production of a supposedly commercial SST (Super Sonic Transport), even though Senator Jackson was certainly both much better liked and more widely respected than Mr. Anthony Wedgwood Benn.