Political economics is not for the faint of heart, as Deirdre McCloskey has learned from experience. The distinguished professor of economics, history, English, and communication at the University of Illinois at Chicago, not only has studied Karl Marx, but has looked at the phenomenon of why people study Karl Marx, even revere him in some cases, when they know he’s wrong.
In her most recent essay on Marx, McCloskey admits that Marx is a fascinating subject, even though saying so has caused her much consternation over the years.
I enrage my friends on the right by stating the obvious, that Marx was the greatest social scientist of the 19th century, without compare. But then I enrage my friends on the left by adding, which is my point here, that he was nonetheless mistaken on almost every point of economics and of history. Which is why I haven’t got any friends.
Marx’s legacy has endured to this day despite the error of his theories and overall wrongness of pretty much every facet of his arguments. Nonetheless, McCloskey describes how his lasting impact may be due to the tendency of Marxists — or “Marxians” or “Marxoids” as McCloskey describes their evolution over the decades — to romanticize that which sounds ideal, even if completely irredeemable in practice. Another part of it is the tendency to demonize everything anti-Marx as motivated purely by “evil,” in other words, by an expectation of profit. Still another part is a tendency of otherwise cordial Marxists to refuse to challenge one another, even when in general agreement with others’ conversation points.
McCloskey cites from her own experience.
Some years ago I mildly remarked to a gathering of my beloved Department of English at the University of Illinois at Chicago that the speaker who had just concluded his presentation, a fashionable Marxian imported from New York, just might not have got the economic history exactly right. The speaker responded in a sentence, “Oh, I see that you are a neoliberal” and sat down. That was it, and none of my colleagues, mostly themselves Marxians or Marxoids or cautious fellow travelers, would speak up to insist that he respond more fully to someone who after all had some claim to knowing a little about economics and history. I was startled by his exhibition of proud ignorance and saddened by the implicit agreement in the room that one is not to “listen, really listen, to one’s friends’ questions and objections” and certainly not to those of one’s party enemies. The result of a century of name-calling-as-argument, from “Bernsteinian revisionism” and “economism” to “bourgeois” and “neoliberal,” and not listening, really listening, has had the scientific result one might expect.
Part of its endurance may be that Marxism as a philosophy is “fairly easy to master, but sufficiently mysterious to attract young people,” McCloskey notes. It is like atheism in its “macho positivism” — it is “courageously tough,” hence its appeal in particular to males; and it is built on traditional, even biblical, narrative styles of storytelling — the underdog facing a stronger and more powerful challenger who has the ability, and perhaps even the inclination, to ruin those who get in his way. The capitalist Goliath vs. the David guildsman.
But, therein lies the starkest and most obvious problem with Marxism, McCloskey explains: the left’s “professionalization of history” is built upon an ahistorical foundation. The vernacular used by Marx has been completely repurposed, if not fully recast, to categorize individuals and groups as falling into one of two roles, despite all parts of the capitalist equation applying to all participants in all exchanges.
(Marx’s) foundational labor theory of value was wrong, as every serious student of the matter has agreed for the past century and a half. … (V)alue is determined by how much people want things, considering the income available, not by how much effort the seller put into the things, and that the wage is determined not by bargaining strength but by the market value of what the last worker produces, considering that free labor is a little mobile. …
Everyone buying labor, for example, is a “capitalist” by a consistent use of the word, and therefore “exploiting.” … (A)sk the inhabitants of the Indus valley civilization or those who traded with them in the third millennium BCE from the Horn of Africa or indirectly from Sumer if the trade was “exploitative.”
“Equal trade,” a phrase that floats in the background of many Marxian discussions of exchange, sounds generously wise. It is not. We trade precisely because we differ — if you wish because of a species of “inequality”— not because we pointlessly trade your frog for my identical frog of equal value to us both.
In truth, after all, “surplus value” is “extracted” every time you exchange anything for something else — or else you wouldn’t do it, would you, now? You are a “capitalist” when you buy a cup of coffee served by an “exploited” owner of a coffee shop. She gets the profit of a price higher than the lowest she would accept, and you get a cup of coffee for lower than the highest price you would accept—which is why exchange happens, earning a profit for both sides.
A member of the “working class,” such as you or I, gets profit likewise from our employments. The working class in any case is not peculiar to modern times. It has existed anciently … Under the Marxist definition of workers a CEO hired at $20,000,000 a year to drive Home Depot into the ditch is a worker, too, because he was hired. The “relations of production” therefore do not have the explanatory force that Marxists attribute to them. So the Marxist word “capitalist” and its derivative dating from (Werner) Sombart, “capitalism,” which are supposed to have historically unique relations of production, but don’t, serve to mislead people into thinking that there is something especially modern about banking and finance and profits (which is mistaken … ).
“Unequal bargaining power” and “unequal trade” can only mean market outcomes that we wish were different, wishing that the hungry farmer’s cotton sold for 15 cents rather than 10 cents a pound, that the Indian worker got $10 an hour instead of pennies. No one bargains when they have options, and markets, as against literal enslavements, bring options, however nasty.
No, market outcomes aren’t always equal, but over time, the overall outcome has been to lift incomes as well as human dignity by measurable and immeasurable sums.
Just as recently as 40 years ago, the world faced a bottom 4 billion out of a total human population of merely 5 billion, with no prospects. Now the abysmally poor are a bottom billion out of 7 billion, which is bad, but much, much better than in 1976, and historically unique.
Since 1976, that is, most of the poorest people in the world have been getting better off almost every year. From 1981 to 2008 the share of the world’s population living at the level of Afghanistan, a horrible $2 a day (expressed, if roughly, in present-day US prices allowing for the cost of living; US income now is $130 a day), fell from 70 percent to 42 percent. The share of the world’s population living on an appalling $1.25 a day, as in Liberia (the experiment in sending African Americans with longer American lineages than most European-origin Americans “back to Africa”), fell from 53 percent to 22 percent. It fell, in other words, by more than half. From 2005 to 2008 even sub-Saharan Africa, for the first time since its independence from the colonial powers half a century earlier, shared on average in the betterment.
As for earning a fair wage, state interference, if anything, has distorted real wages, but efforts to keep raising the minimum prove that mandated minimums don’t “work as advertised.” If that were the case, Venezuela, for instance, wouldn’t be suffering from empty grocery shelves or creating a new era of boat people in search of more hospitable shores.
Finally, Marxism encourages the romantic notions of the left because his own words have been misquoted, McCloskey states. Morality arguments claiming that capitalism is the equivalent of “greed” rarely appear in the arguments Marx made to describe man’s pursuit of gain.
More so, the sins of capitalism ascribed to it by the Marxian left have not, in fact, come to pass.
Left feminists have supposed that trade-tested betterment damages women, when it has in fact liberated and enriched them. … The left has said in sequence, 1848 to the present, that capitalism results in impoverishment (it has not), in alienation (not), exploitation of the Third World (not), spiritual corruption (not), inequality (not), and, recently, environmental decay (correctible, socialism having done much worse).”
But in this late day and age, an admission of misplaced romanticism has been superseded by the quest for political supremacy.
In keeping with the simplicities of the early-life formation of political opinions, the left now supposes that rightists are simply bad people, who do not care about the poor, and are therefore not to be listened to. By contrast, the right is more likely to believe that the leftists are simply misled — not entirely bad people, though shamefully ignorant — and therefore that they might be open to patient factual and logical correction.
McCloskey closes with a plea to her “friends on the left (and less hopefully with my enemies there),” that they take a look at how liberalism and socialism compare over the centuries and reach the conclusion “that Smith’s liberalism, not Marx’s socialism or its shadows in regulation, has achieved since 1800 a pretty good approximation to human flourishing.”
