“Marxism versus Libertarianism - Capitalism’s Free Market Fanatics,” by Adam Booth, “In Defense of Marxism,” #36, January 2022
If ‘neo-liberalism’
has a sort of ideology, it is borrowed from the writings of Friedrich Hayek and
Ludwig von Mises of the Austrian School, who made it their life’s work to
attack Marxism and socialism. Libertarianism
provides a shabby ‘line’ for the Republican Party and also many Democrats, first
in economics and later applied to the cultural field.
If you
wonder why capitalist government help is decried as the ‘slippery slope to
socialism’ it comes from Libertarianism. Any planning, even for environmental
catastrophe, is attacked for the same reason. The fanatic red-baiting that
results from this is common, especially from Republicans. A mild form of Keynesianism is its capitalist
rival, mostly coming from Democrats.
When
trillions of dollars were pumped into the economy by the U.S. government during
the 2008 crash and the Pandemic crash, as long as the lion’s share of that
money went to capitalists, no one made a peep. The military budget is similarly immune from
charges of ‘socialism.’ A true libertarian
method would have resulted in a full economic collapse and the large capitalists
know this. ‘Creative destruction’ on
that scale was not appreciated. These events revealed what class is in power -
again - the top international capitalists.
Booth
takes apart the various pathetic arguments by libertarians, so this article is
a view into the real battles being waged in front of us. Key libertarian texts are The Road to Serfdom, Collectivist Economic
Planning and Socialism: An Economic
and Sociological Analysis.
1.
Libertarian
dogma maintains that if every individual pursues his own rational ends, the
whole society will benefit. In reality, this
kind of ‘individual rationality’ has led to widespread social irrationalism.
2.
The
first libertarian thesis was the ‘efficient
market hypothesis’ which takes us back to Adam Smith’s ‘invisible hand’ and ‘Say’s Law.’ The latter oddly posits that ‘supply creates
demand,’ and that if you provide any product, it will have customers. As a result, the economy will run perfectly.
3.
Libertarianism,
while basing itself on some of Smith and David Ricardo’s ideas, opposed the
labor theory of value, which Smith and Ricardo supported.
4.
Fin de
siècle Vienna under the Austro-Hungarian empire became the base for reactionary
ideas to oppose the socialist movements of the time. Wittenstein, Klimt and Freud rubbed shoulders
with reactionaries like Ernst Mach (a target of Lenin’s), Karl Popper, Eugen
Bohm-Bawerk, Friedrich Weiser, Carl Menger, ‘logical positivism’ and later, the Austrian School.
5.
To oppose
the ‘labor theory of value’ - which had roots going back to Aristotle – along with
Marx's refinements embodied in ‘socially necessary labor time’ and ‘labor
power’, the libertarians proposed Marginal
Utility Theory (MUT) along with
people like W.S. Jevons. It was based on
producers having isolated consumer exchanges on what Booth calls a desert
island, not a real society… “a scaled-up version of a barter economy.” Money, businesses and the market (i.e.
complexity) play no role in their tiny abstract scenarios.
6.
For
Marx, the source of real value is labor time and power, (along with nature,
which is ignored by Booth), while supply and demand play subsidiary roles. MUT
only looks at prices. For MUT, the
consumer is the real source of value. Consequently,
value becomes a subjective category, an opinion, not an objective fact. Consumer-based theories like this hide the
role of production, surplus value and profits, as well as real human needs.
7.
Marx
understood ‘use value’ to be embodied in a commodity or it would never have ‘exchange
value’ and be sold. A $5,000 motorcycle
that cannot be sold is worthless under capitalism, even though it has use value
and embodies labor and raw materials. The same goes for food. Libertarian “utility”
for a consumer is subjective and qualitative, not objective and
materially-grounded. Must I have the
latest iPhone? Or super-yacht? Toilet
golf?
8.
Mises,
in his theory of ‘praxeology,’ believed
that economic laws were ‘timeless’ – not tied to historical development of
societies. This reveals the idealism
inherent in libertarianism. Other
libertarian theorists use abstract and isolated examples of exchange as ‘proof’
of their theories. As Booth points out,
they seek to hide how capital functions, not to discover how it actually works.
9.
To
oppose socialism, the libertarians started the ‘socialist calculation debate’ – insisting that society was too
complex to plan. They oppose all forms
of planning. What this actually reveals is that capitalism was too complex
for them to understand.
10. Unfortunately for them, huge multi-national capitalist corporations like Wal-Mart, Amazon, GM, etc. are planned down to the ‘T.’ Even small businesses plan. When Sears introduced internal competition within the firm, it led to bankruptcy. It is only the outside general economy that is chaotic, irrational and unplanned. This is a natural consequence of capital.
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11. Some libertarians use Trotsky’s taken-out-of-context remarks about the Soviet economy and bureaucratic methods to bolster their case. Marx understood that under the workers’ state / dictatorship of the proletariat, markets, prices and supply/demand would not magically disappear overnight. Trotsky wanted to introduce workers’ control of planning, not top-down bureaucratic methods, to slowly eliminate that market.
12.
Libertarians
oppose any state intervention in the economy. Idiocy unparalleled.
13.
Libertarians
believe that monopoly or oligopoly is not a result of normal capitalist
functioning (as history has shown) but based on government policy decisions.
Again, against all experience. As Engels
said “Freedom of competition changes into its very opposite …” Monopoly or oligopoly.
14.
Libertarians
have no theory of capitalist crises that happen on a regular basis. They blame it on too generous credit by
governments, not the underlying functioning of capital and falling profits.
15.
Hayek,
in The Road to Serfdom, gave up
trying to make an economic case for ‘free markets’ and instead made a moral,
political case for ‘freedom,’ ‘choice’ and ‘individuality.’ He said that any government planning or involvement inevitably
leads to ‘totalitarianism.’ (There’s that useful word ‘totalitarianism’ again…) This is one of the ideological sources of the
culture war.
16.
Engel’s
pointed out that actual freedom is based on an “insight into necessity,” not
utopian nonsense about being above material reality, nature, human needs or
social reality. I.E. there should be no freedom
to starve, be unemployed, homeless, sick, uneducated, paid poorly, have no free time, be over-policed, in solitary, living in toxic conditions or among the war-dead. As they joke goes, we are free to live under a bridge.
17.
Keynsianism
is distinct from libertarianism in that it seeks to partially restrain rentier capitalism
and laissez-faire. But they both share
the same goal – they are two bourgeois factions whose main interest is maintaining capitalism,
profiteering and the dominance of the billionaires. The ruling class factions mix their methods as they
see fit, through the mediation of the bourgeois parties, but the goal is the
same. As Pelosi and Warren said clearly,
‘we’re all capitalists here.’
Booth,
probably following the line of his organization, the IMT, says that a workers’ state with
the goal of socialism and communism will ‘increase production.’ Given the material and environmental limits
the world has reached, this old position needs to be refined. Abstract statements based on something written 150 years ago will not suffice.
Other than that, Booth does a good overview of libertarianism, which is
a strong animating ideology in parts of the U.S. ruling class and middle-class, and increasingly in Europe.
Prior blog
reviews on this subject, use blog search box, upper left, to investigate our 15
year archive using these terms: “The People’s Republic of Wal-Mart,” “Rich
People Things,” “Who is Ron Paul?” “The Making of the English Working Class,” “Marx
and Human Nature,” “Mean Girl – Ayn Rand and the Culture of Greed,” “Libertarian
Atheism versus Liberal Religionism,” “To Serve God and Wal-Mart,” “The Cult of
the Constitution,” “Anarchism and Its Aspirations,” "AntiTrust."
And I
bought it at May Day Books!
Red
Frog
March 30, 2022
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