Marx and the Manifesto; W. Baker

678 authors (the ever-present Friedrich Engels shared in its creation) over night recognition as leading lights of the communist movement. All that came later. But as the book aged, it assumed cyclopean dimen sions-giant, intimidating, formida ble. Its subsequent reputation has been inflated beyond any contribu- . tions it may have originally ad vanced. But-for good or ill-flawed or not, the Manifesto is still a potent force upon the world political scene in this age of the so-called ttcommon MARX AND THE MANIFESTO 679 . man." Like the legendary dragon's teeth of ancient mythology, its dor mant fertility retains the seeds of future life. Warriors sprout wher ever the message of The Communist Manifesto has penetrated. But warriors loyal to whom? To what cause? In behalf of which cur rent brand of socialism/commu nism? Which of all the contending utopias is the Utrue religion?"l Upon this matter The Communist Mani festo maintains a lordly and indif ferent silence.

In this chaotic muddle of claim and counterclaim battle the Utrue believers," each asserting his own legitimacy and the apostolic purity of his own descent. Each seeks to promote his own cause and to expose his rivals as the petty bourgeois pre tenders that they really are. Socialist turns murderously upon socialist. All heretics must be de nounced and liquidated-many are called but few are chosen. The Communist Manifesto was tit is an error to assume that UpureH socialism/communism can or ever has existed independent of doctrinal disagreements, policy priorities, and the multitude of petty jealousies and squabbles among those vying for supreme power within the Party itself and the political structure of the specific socialist common wealth. It is even more grievous to suggest that the dawn of socialism will usher in an era of love, brotherhood, and equality for all men everywhere. Each brand ofsocialism possesses its own unique flavor. There is, in the world today, a multiplicity ofsocialisms with a mul tiplicity of conflicting goals.

hastily written on the eve of the 1848 German Civil War when the father land stood on the brink of chaos and discord. Into the Manifesto Marx poured his soul, his hates-above all his hates-his ambitions, his unbri dled mysticism, his vitriolic dia tribes against the evil as he under stood it. It was a work born of blood, desire, and unremitting (or so it must have often appeared) toil. Like all books it was the product of end less, patient, countless hours. One must imagine Marx as he really was: an energetic glutton for almost unbroken study; the relentless de vouring of book after book until he had found just the right word, phrase, or idea. His was a Spartan regimen of stoic simplicity, this angry patriarch of economic Prus sianism. Setting and Background On the other hand, there was more to The Communist Manifesto than mere ubooklearning" ·and the printed word. The Manifesto could just as easily be portrayed as the child of fierce, surreptitious debates in crumbling, rickety garrets, noc turnal discussions in seedy tene ments, and of jocular (and, just as often, not-so-jocular) conversations within the myriad little Bohemian cafes that dotted nineteenth century Paris, Brussels, and Cologne.

In what follows, this paper shall critique the economic underpin680 THE FREEMAN November nings (both stated and implied) of The Communist Manifesto. In each section I shall first summarize Marx's evaluation of a given prob lem followed by my own analysis of the Marxist paradigm. Each section shall deal with a specific topic treated in the Manifesto. In Section I, I shall attempt to unravel the tangled threads of the so-called ttcommercial crises." By contrasting Marx's ttstat ic" model to the dynamic structure of ttreal life" capitalism based upon the expectations of profit-motivated entrepreneurs, this paper shall at tempt to clear up some of the am biguities that have hitherto existed concerning the functioning of the price structure in periods of serious business decline. (Some overlapping with Section III is necessary here.) This shall involve a rather pro longed delineation of cause-and effect: something completely ig nored by Dr. Marx in his sketchy treatment of ttbourgeois" economics.

This should be especially relevant in today's harrowing economic at mosphere when the old bugaboos of unemployment, ((underconsump tion," and Hoverproduction" are again rearing their unwelcome heads. Section II examines the notions of class and class struggle. Does man really live at perpetual war with his neighbors (especially those of another ((class")? Do ((classes" really exist? In the analysis of the class struggle much emphasis will be placed upon the dichotomy between the eternal struggle within the ani mal world and the world of civilized society--characterized by the divi sion of labor. Marxist polylogism the theory of different Hclass logics"-is also briefly considered in Section II. Section III takes a look at the theory of value in general and the labor theory of value (which Marx utilized) in particular. It is the con tention of this section that the mar ket, capitalism, economic depres sions-indeed, any of the varied activities of human action-can not be properly understood with out a workable theory of value.

Marx, like the classical economists of his day, fell into disrepute over the defective theory of value which he propounded. Section III attempts to establish that all value is subjective-and therefore out of the province of the scientific economist. With a personal, subjective theory of value it becomes pure pedantry to talk about ttoverproduction" (in the classical, Marxist sense), usurplus value," ttcapitalistic expropriation," and other such examples of emo tional claptrap. (In its treatment of commercial crises, Section I also at tempts to lay the labor theory to rest by contending that labor is not homogenous as Marx tacitly as sumed. By taking issue with the homogeneity of labor and wages, an 1979 MARX AND THE MANIFESTO 681 important prop is kicked out from underneath the already shaky plat form of Marxist economic theory.) Section IV is two-pronged. The first problem deals with the efficient allocation of labor in the socialist commonwealth. Deprived of the cap italistic tools of monetary calcula tion, how can the socialistic board of production provide meaningful pro duction quotas? Indeed, how can it possibly even know what to produce?

Is it possible, for example, lacking a labor market in the old capitalistic sense, for the socialist common wealth to know whether or not a specific labor project is creating or consuming capital? Secondly, Section IV attempts to ascertain the fate of the individual laborer within the socialist framework. What is the status of the laborer in the Worker's Paradise? A brief look into Marx's Com munist Manifesto is now in order. I. The Commercial Crises According to Marx, one distin guishing feature of capitalism was the periodic recurrence of commer cial crises. Under the direction of the greedy bourgeoisie, factories in undated society with the ((epidemic of overproduction." In this grievous state of affairs: Society suddenly finds itself put back into a state of momentary barbarism; it appears as if a famine, a universal war of devastation, had cut off the supply of every means of subsistence; industry and commerce seem to be destroyed; and why? because there is too much civiliza tion, too much means of subsistence, too much industry, too much commerce.2 Thus, the great paradox: society drowns in a sea of wealth, poverty amidst plenty. This poverty and deg radation, this ((famine" result not in spite of man's opulence and wealth, but precisely because of it.

The wealthier man becomes, the worse off he really is. Wealth can bring nothing but grinding poverty. Man is suddenly faced with ((too much wealth," ((too much of the means of subsistence." This could only happen, Marx assured his readers, because bourgeois society was Utoo narrow" to comprise the wealth created for them. Capitalism, then, dies of gluttony. More correctly, capitalistic society dies of hunger induced by indiges tion. These uparadoxes" of capital ism were insolvable to Marx. He shrugged them off by saying that capitalism contained within itself the seeds of its own destruction, 3 its 2Karl Marx and Friedrich Engels, uMan_ ifesto of the Communist Party," in Collected Works, Vol. VI: Marx and Engels: 1845-48 (New York: International Publishers, 1976), p. 490. 3Ibid., p. 496.

682 THE FREEMAN November own ~~negation." Production, there fore, was nothing other than a juggernaut relentlessly crushing everything in its path. Trade and prosperity were nothing else but the dormant seeds of a future crash. The only refuge from poverty (the effects of the crash) was to abstain from production and trade. In a word, the only refuge from poverty is poverty itself. Unanswered Questions in the Marxian Analysis Marx did not carry his ownargu ments to their ultimate logical con clusions. His analysis stopped pre cisely where the intriguing ques tionspile up and beg to be answered. For example, one might ask, ~~Yes, but what makes all this overproduc tion possible? What prevents the capitalists, motivated by greed as they are, from learning by their past mistakes? At what point· does ~pro duction' become ~overproduction'? Overproduction by whom and in re lation to what? How is this man ifested and discovered in the mar ketplace? At what point do the ef fects of overproduction make them selves known to society? What ac counts for this sudden (cluster of errors,' all turning up at the same time?" The Communist Manifesto greets all these inquiries with stony silence.

The cCoverproduction"theory is a most naive view, at best, of the capitalistic mode of production. 4 The contradictory analysis which Marx painted of capitalism can only result in blatant, unexplainable absur dities utterly divorced from the real world of production. It is difficult even to conceive of such a state of affairs as Htoo much" production, ntoo much" subsistence, CCtoo much" civilization. The fundamental condi tion of life is scarcity. The means of production and the ends they can attain are always necessarily lim ited. They cannot satisfy desires in unlimited abundance. Each product and means of production (including labor) is strictly circumscribed in the tasks and services which they can perform. Unlimited production is impossible. Scarcity is reflected by desires and wants. However, scarcity is relative. Relative to what? In the market society the relative scarcity of dif ferent products is mirrored by price.

Prices exist because scarcity exists. When a good is no longer scarce (i.e., "This paper is not concerned with individual value structures. Ultimate value judgments are not the province of the economist. As such, this paper does not take issue with what the market produces (or what the consumer de mands) but with how available supplies are allocated once they Uhit" the market. In other words, given specific production goals and capacities, is it possible to trigger a commer cial crisis by producing more than the populace can consume? (This is not to say no "oughts" exist, simply that they have no place in this specific work.) 1979 MARX AND THE MANIFESTO 683 if it is available in unlimited abun dance or if demand vanishes) it will not be able to command a price in the marketplace. In other words, its cCprice"will fall to zero. "Overproduction" So, then, what makes H over production" possible? The Marxist theory evokes a mental image of a mountain of goods piling higher and higher, being effortlessly kicked out by mindless automatons with a total disregard for reality. 5 This analysis reveals a faulty understanding of the entrepreneur and of his role in the process of production. Like any one else, the entrepreneur is a human being perhaps no smarter and no duller than anyone else. Like his fellow beings all his action is predicated upon expectations. What are the Uexpectations" of the entre preneur? To make a profit. He will "be able to continue in his capacity of production only as long as he is able to make a profit.

The Marxist theory begs the ques5Marx may have anticipated this question in the Manifestowhen he said: ~~The conditions of bourgeois society are too narrow to comprise the wealth created by them." But if this is true, why create this wealth? To what tCconditions" is Marx referring? No clue. Wealth created by whom? For whom? To what end? These repre sent lamentable gaps in the Marxist theory of ~toverproduction" and depression. Unless this pertinent information is revealed, there can be no intelligent support for his questionable paradigm. tion: why would industrialists be so willing or even able to produce when no one either can or will buy their products? How and why, with bulg ing inventories of unpurchased goods, would assembly belts con tinue to roll? Continued production under such circumstances would be suicidal and impossible. But capital ists are neither suicidal, overly charitable, nor infinitely rich. The Marxist sees .the entrepreneur (or capitalist), however, as a total nit wit, completely unable to adapt to changing circumstances. And what ever else might be said of the indus trialist magnate, he is not lacking in versatility. How could such a condi tion (overproduction) exist outside the realm of fairy tales and prop aganda pamphlets? The law of scar city has never been repealed. The tissue of fallacies must be faced: the theory of overproduction is long overdue for a well-deserved rest.

The Element of Timing Marx's theory of overproduction overlooked other vital questions of practical significance: how does one account for the critical element of timing? Why, for example, do the forces of overproduction and un employment dovetail and emerge all at once in The Crash? Why the sud den cluster of errors? Now there is nothing more certain than that all men are fallible and often err. And, it is only to be 684 THE FREEMAN November expected that entrepreneurs and capitalists, like other mortals, will certainly make their quota of mis takes. They, too, will occasionally ttmiss the .mark." But is it not a bit ironic that all entrepreneurs (as evidenced by the ttcrises") just happen to make the same mistake (overproduction) at the same time? What would account for this singu lar state of affairs? This is a serious omission on the part of Marx. It is as if all were well with the world one day and then is jarred awake the next day to a surprisingly different state of affairs (the crises). One can be pardoned for not taking Marx too seriously in this matter.

There are other problems with the Marxist analysis of Hcommercial crises." If at some point there has been overproduction, there must be some culprits hiding in the bushes somewhere. These unsavory charac ters would certainly be worth our bitterest opprobrium and vitupera tion. Just who is it, exactly, that performs such anti-social deeds? Who is the guilty party? According to Marx, it is the Hworkers," of course, who produce. They are the sole contributors to the productive process. Since capitalists and bourgeois entrepreneurs are only idle parasites devoid of any economic (productive) significance, it stands to reason that it is the Hworkers" who have been Hover producing." But which workers? Medical technicians? Broadway ac tors? Lathe operators? Perhaps chicken pluckers? Plumbers? Maybe garbage collectors? What kinds of goods and services? Just ttthings in general"? If so, what kinds of things? Perhaps stethoscopes or trigger guards or saddles? Toilet tis sue or fingernail clippers? Perhaps book binderies or economic treatises and revolutionary pamphlets?

Seminar papers? ttOverproduction" of what, by whom, in relation to what? Homogenous Factors Marx, like many of his disciples, labored under the delusion that labor, production, and wages were homogenous. All ulabor" was alike, all ttproduction" was alike, all wages were the same. This was an unfor givable blunder. Marx was com pletely wrapped up in his acidic, piecemeal approach to the study of capitalism. He did not have time for such things as detached observation. The Communist Manifesto is not a dispassionate analysis of labor and wages. With his heated invective and imprecation it is not surprising that he so often missed the mark. Because he so slavishly devoted himself to the ttexploitation" theory of labor, he was completely helpless when it came to the task of dissect ing and analyzing processes and categories. The truth is that all workers are 1979 MARX AND THIt; MANIFESTO 685 not alike; they are not ((equal."6 If labor is ((exploited" (how else are the capitalists enabled to accumulate bulging warehouses of unsalable in ventories?), precisely what kind of labor? A Robert Redford or a Mu hammad Ali? An Elvis Presley?7 Is the Iron Law of Wages, so gloom ily trumpeted by David Ricardo and echoed by Karl Marx, equally. grind ing upon each and all? How does this fit in with the Marxist theory of overproduction and the Crises?

Silence. The too-much-means-of-subsis tence approach has produced a crown of thorns for the more consistent advocates of this doctrine. The remedy which has always enticed and suggested itself to post-Marxist and neo-Marxist economists and ministers of state is to encourage the current political regime and the unions to smash the instruments of production, burn the ((surplus" 6Cookie cutters are not in the same league as surgery assistants. This also involves different qualities of work within the same occupation. Marx greatly erred by asserting in the Man ifesto (p. 492), ... . . machinery obliterates all distinctions of labor, and nearly everywhere reduces wages to the same low level." Even if all ttlabor" were industrial labor, this would still be largely untrue. 7The Communist Manifesto was intended as a timeless work of doctrine. In exploding the tenets of dogmatism it is not necessary to limit oneself to an historical analysis of then current personages and ideas. What counts is the ultimate truth or falsity of the ideology under consideration.

goods, and ((plow under" unhar vested crops. All this is for the good of the Commonwealth. A Saturation Point Perhaps the most fatal fallacy of all implied in the o.verproduction argument, however, is that only a certain amount of production is de sirable, that society can assimilate only a very limited amount of goods. Beyond that point production be comes dangerous and anti-social, re sulting in grave ills. What next? Must there be firing squads ap pointed to liquidate the most vigor ous and talented of workers? Or maybe it would be well to award some medal or cash award to those workers who best succeed in stretch ing five minute coffee breaks to half an hour, or to those who sabo tage factory machinery? The Marxists (and their intellec tual cousins) are not prepared to surrender. Is it not true that many companies during the Great Depres sion of the 1930s were caught with large inventories on their hands?

And did not many of these products sit unmoved for many years? Indeed, is it not true that some of these products were never able to be sold? Is this not a vindication of Marx and his theory? Now, some things must be con ceded. The devil, so to speak, must be given his due. It is beyond a doubt that many warehouses bulged with 686 THE FREEMAN November unmovable goods during the gloomy 1930s. But it is not for the reasons implied in the overproduction ar gument. The point which most advo cates of the ((overproduction" theory of economic woes ignore is that al most any product can be sold at some price. In a capitalistic economy sup ply will always equal demand be cause prices will always be plumb with demand and supply. If there is an ((inventory" or uoverproduction" crisis, it can only mean that prices are too high. Enforced Scarcity This problem prevailed through out the 1930s because the federal government in Washington imposed rigId, unrealistic minimum price controls upon the economy. This ((trapped" many products in warehouses where they eventually rusted, rotted, or became obsolete.

In other words, people were not al lowed to consume because of minimum price controls. The result was enforced scarcity (the implied Marxist ideal) amid consumable in ventories (the Utoo much" means of subsistence noted by Marx). But why? The market was ((overstocked" and ((underconsumed" precisely be cause the market was not allowed to function in relation to the true state of supply and demand. So, sure, con ditions might arise in which con sumers uunderconsume"; but, again, not for the reasons implied and stated by the Marxists and neo Marxists. The industrialist has every inter est in making sure that the Uworker" can Ubuy the product." When the market, regulated and harassed by bureaucratic nonsense, fails to udeliver the goods," it isn't the fault of those engaged in produc tion. C(That's free enterprise for you" is the smug reply to the paralysis which follows each new hamstringing of the market. UThe days of capitalism are numbered,"

intone the regulators as they fire another broadside at the wobbling edifice.) It was only when the wage and price administrators refused to allow downward flexibility, thus crippling the market mechanism, that a full-blown depression was ushered in. When prices are forcibly thrown into disjunction, chaos re sults. When prices are arbitrarily frozen at a disequilibrium, ((under consumption" (thus giving the ap pearance of uoverproduction") is in escapable. This alone could account for the aberration of the Great De pression. A suddenly imposed minimum price control which catches everybody off guard would have the effect of declining business activity and Uunwanted" inven tories. This alone could account for the ((cluster of errors" which crop up all at once. Economic panics and commercial crises are not the conse1979 MARX AND TH]~ MANIFESTO 687 quence of capitalism as The Com munist Manifesto avers, but the all too-predictable sequel of Statism. S II. Class and Class Struggle As far as Marx was concerned, all mankind is split into two separate and distinct classes. These two class es are locked in an eternal contest for supremacy and, ultimately, exis tence. 9 In fact, all the history of civilization and the society of man could be summed up with the idea of class conflict. Marx himself did not formulate this idea of mutual ex termination. It had been around for a long time cloaked in many.difTer ent guises. In this particular doc trine he seems to have been influ enced by his old friends, the French socialists.

There was no doubt in Marx's mind that hostility between the classes was both inevitable and praiseworthy. He saw no reason why there should be harmony instead of discord. As members of separate and distinct social entities there could be no question of collaboration between 8For a relevant discussion of the regulated market during the late 1920s and early 1930s, see Murray Rothbard's excellent America's Great Depression (Kansas City: Sheed and Ward, Inc., 1963). This book effectively shat ters any illusions about the laissez-faire character of the decade prior to 1932. 9Marx and Engels, note especially pp. 484 and 485. the two. There could not be any question of a ~~commonweal." What benefited one class ipso facto viti ated the wellbeing of the other. Society, viewed in this manner, could be nothing else but a brutal civil war, a face-off between bel ligerents. What Dr.·Marx and all his friends contended was true-if one assumes that he was describing the animal kingdom where the ulaw of the jungle" literally prevails and from which there is no escape. The great error of Marx was to assume that human society was merely a pitched battle but one step removed from the world of animal strife. In the world of animals, specimen is arrayed against specimen, competing in a grim struggle for life's meager necessities. These requisites for con tinued life are severely limited. Vic tory in snatching substance from a competitor's mouth spells the differ E~nce between continued existence or death by slow starvation and attri tion.

When two dogs snarl over an irre placeable. bone, one dog wins and the other loses. One dog receives an ex tended· lease on life, a temporary reprieve from morbidity. The other is that much closer to death's door. With diminishing vitality he must once again take up his quest for a paltry meal. Even the winning dog must retire to lick his wounds and festering sores incurred in battle. In 688 THE FREEMAN November this world of the animals, ferocity and belligerence are everything. One dies that another might live to battle again. With man it is different. Under the division of labor-which Marx and the cafe intellectuals de tested-each contributes to the process of production (not the snatch-and-grab of the animal world) whereby the human race is enabled to survive. In this man dif fers from the lower kingdoms of life. The Iron Law of Wages In the construction of his model Utopia, Marx was misled by David Ricardo's specious Iron Law of Wages which carelessly decreed perpetual hunger and privation for the laborer. 1o Ultimately, he would be reduced to such a state of destitu tion that bare survival would be all he could ever expect for himself and his unfortunate dependents. Armed with this dismal weapon Marx strode forth to do battle with capital ism.

They met on uneven ground. With almost mechanical thoroughness the l°Ibid., p. 495. uThe modem laborer, on the contrary, instead of rising with the progress of industry, sinks deeper and deeper below the conditions of his own class. He becomes a pauper, and pauperism develops more rapidly than population and wealth." See also p. 491: cCHence,the cost of production of a workman is restricted, almost entirely, to the means of subsistence for his maintenance and for the propagation of his race." ((sycophants and apologists of world capitalism" mutilated his con scripted ideology. (Years later, tired and reeling under the hammer blows of the unimpressed econo mists, Marx would try a new tactic: he stifled all criticism by labeling Marxism as ((scientific communism." Opposition vanished.) At any rate, the Iron Law was later discarded as excess baggage. The history of the Industrial Revolution has successfully refuted that satur nine prognostication; even the Marx ist theoreticians have retired from its defense.

Marxism asserts that each man's thinking is determined by his class affiliation. Each individual is, in ef fect, a prisoner of his class logic, ((the will of your class."ll From this there is no escape. It is the task of com munism to unmask the n syco phants" of capital., It is enough to lay bare the background of one's intellectual opposition. This will suffice to reveal his class motives. A ((bourgeois philosophy" must be re jected simply because a ((bourgeois" was its creator. Professor von Mises makes this point about various theories of polylogism: 12 llIbid., p. 501 12Foran excellent exposition of the doctrine of polylogism (many logics), see Ludwig von Mises' Human Action: A Treatise on Econom ics (Chicago: Henry Regnery Company, 1949, pp.75-84).

1979 MARX AND THE MANIFESTO 689 _. They never ventured to demonstrate precisely in what the logic of the proleta rians differs from the logic of the bourgeois, or in what the logic of the Aryans differs from the logic of the non-Aryans, or the logic of the Germans from the logic of the French or the British. In the eyes of the Marxians the Ricardian theory of comparative cost is spurious because Ricardo was a bourgeois. The German racists condemn the same theory because Ricardo was a Jew, and the German nationalists because he was an Englishman. Some German profes sors advanced all these three arguments together against the validity of Ricardo's teachings. However, it is not enough to reject theory wholesale by unmasking the background of its author. 13 Marx was impotent in the face of criticism. He was fully aware of his incompetence in refuting the economists' objections to his work.

His doctrine of different class logics was a last-ditch attempt to remove the lofty theories of ((scientific socialism" from the paltry scrutiny of pedants and ((bourgeois" academi cians. Marxism did not fare well in the bright glare of intellectual dis cussion. Better to clothe it in the mysticism of Hegelianism and the ttiilner voice." After having drawn and quar tered mankind, after having arbi trarily divided it into two armed camps, Marx decreed that absolute conformity within the class struc ture was inevitable. To prove this, he cited ttbourgeois" thinking over against ((proletarian" thought. This would assure that each robot act to the ((best interest" of his own class. But what is the ttbest interest" of one's own class and how can it be known? (Even robots must have their instructions.) Did, for example, the capitalist Engels, son of a wealthy industrialist, and the bour geois Marx, son of a well-to-do lawyer and husband to a scion of the Prussian nobility and landed gentry, act in the ttbest interests" of their class by authoring The Communist Man ifesto and calling upon the workers of the world to unite? Even Marx had to admit that, in fact, the ttor_ ganization of the proletarians"14 are upset by none other than individual competing proletarians. Obviously there are a few such tempestuous individuals within the bourgeois class structure as well. A chink in the armor perhaps?

Marx and his cronies were sure that class consciousness was the only motivation for human action. It was the sole criteria by which indi vidual performance could be inter preted. I5 In the overzealous con13Ibid., p. 75. 14Marx and Engels, p. 493. See also p. 496 where Marx asserts that, UWage labour rests exclusively on competition between the labor ers." (emphasis mine). lSYears later Engels made a rather feeble attempt to deny that Marx places exclusive faith in class determinism. Nevertheless, true or not, that is largely the tone of his published works and recorded speeches. For a typical Marxist statement regarding class deter minism, see Marx and Engels, p. 501.

690 THE FREEMAN November struction of this dubious paradigm Marx completely overlooked the role of nationalism rCThe workingman has no country."), racism, religion, age, sex, and a host of other vari abIes which help in determining man's attitude and outlook. There is, of course, nothing logically im permissible about dividing society up into classes-whether two or two thousand-no matter how arbitrary that division may be. It would be wrong however, to assert that such is the only way of looking at or dealing with civilization. Nevertheless, not all concepts and propositions regarding classes are equally valid. One may preach (as Marx did) about cCclass rule" until the cows come home. But mere par roting does' not make rhetoric any more of a reality. CCClasses" do not govern or hold office; cCclasses" do not accept bribes; uclasses" do not embark upon political campaigns; Hclasses" do not canvass political districts and solicit votes; individ uals do. To equate the actions and identity of one individual with the actions and identity of a cCclass" is a deplorable and contemptible boner.

III. Value Marx and others of his day were misled by the labor theory of value propounded by the classical economists. According to this assumption, as Marx correctly noted in The Communist Manifesto, the price of a commodity (including labor) is equal to the cost of produc tion. 16 An object is only Hworth" what cClabor"goes into it. Today it is very easy to explode this myth. The truth is, however, that the labor theory of value is still widely held in one form or another by many economists who otherwise lay no claim to the tenets of socialism or to classical economic analysis. These mistaken doctrines have, in their turns, given birth to a host of ills not the least of which has been a marked hostility to capitalism and its productive structure. This en ,mity poisons relations between en tire nations and large segments of populations within those separate states. Karl Marx was totally correct in his interpretation of the labor theory of value. For years the apologists of capitalism and free trade pressed this doctrine into the employ of their own peculiar philos ophy. It was a well-tooled weapon in their arsenal. Nobody was more surprised than they when the so16Ibid.,p. 491. ttBut the price of a commodity, and therefore also oflabour, is equal to its cost of production." Labor wages were supposed to decline as the ttrepulsiveness of the work in creases" (p. 491). Further, the ttlabor theory" is implied in referring to the lower classes as the ttworking class" (emphasis mine). Only labor could ttcreate capital." (p. 498) 1979 MARX AND THE MANIFESTO 691 cialists stormed the barricades and wheeled it into an about-face. Adam Smith and his circle of admirers erred when they assumed that lais sez faire capitalism could be justified by an appeal to this spurious doc trine. As elaborated by Marx, the labor theory was simply a fallacious dogma carried through to its ulti mate logical conclusion. The third generation classical economists were shocked and dismayed by the ease with which their own ordnance could be turned upon themselves.

Thus, crippled by a crotchety princi ple for many years, no adequate de fense of capitalism could be fonnu lated. As long as ((labor" was em ployed as the cornerstone of value, it proved to be an impossible task. All value is subjective. There can be no question of any so-called ((in trinsic" or ((surplus" value. No value can exist independent of the mental act of valuation. There can be no ((value" without a ((valuer." It is use less and vain to postulate ((worth" independent of what conscious indi viduals are willing to exchange for it. The quest for absolute value is an endless labyrinth. When the Marxian socialists commandeered the labor theory of value and appro priated it for their own cause, they felt as if a great coup d'etat had been engineered. But the spoils of war proved to be a bomb with a delayed fuse. In the end it served the socialists no better than it had the economists.

The labor theory of value is an (·objective" theory of value. It pre supposes Absolute Value, indepen dent of individuals. If it can be es tablished that uvalue" is a necessary c:onsequenceof ((labor,"then a plaus ible case might be advanced for supporting the labor theory. In fact, it cannot. One might ((labor" for days on end digging potholes in It"armer Brown's turnip patch. His only reward will be a cartridge of buckshot from the wrong end of a shotgun. The inept artist might ((labor" many months on a uMona Lisa" that is ((worth" less than the canvas upon which it is painted. On the other hand, the owner of previ ously unusable property might awaken to find his deed has ap preciated in value because of the proposed construction of a superhighway nearby. No labor has been expended. There can be no doubt as to the untenability of the labor theory of value. If the price of commodity A (including the commodity labor) is equal to the cost of production B, what, one may ask, determines the cost of production B? It is no answer to reply: the cost of production Bl.

There is no infinite regression. Sooner or later, one comes upon the original goods and factors of produc tion. What determined their value? .At this point it will be easy to simply 692 THE FREEMAN November shrug the shoulders and answer: Usupply and demand." But what ac counts for supply and demand? This is precisely where the classical economists (including Marx) re mained silent. All value springs ultimately from the subjective valuations of individ uals as they make their choices in the daily plebiscite of the mar ketplace. Without an inner process of valuation the old economic stand bys of ((supply and demand" could not exist. What else is the market price but supply and demand? What is supply and demand but the indi vidual evaluations of buyers and po tential buyers? There is no appeal, no recourse from the dictates of the customer. In the realm of economics it is'pointless to declaim the ~~real value" of one's pet project, investment, or labor.

There is no ((real value" in the world of production and trade but what people are willing to obtain by ex change. It is vain to stubbornly argue the ((intrinsic" or ((real value" of a product which can be ~~moved" for only a fraction of its overhead. Marx went to great pains to dem onstrate that the workers were dupes enslaved by heartless felons who were forever depriving them of their ((surplus value." For the insol ence of these capricious capitalists, the dialectical forces of material ism had decreed an apocalyptic day of vengeance, judgment, and retaliation. Then the benighted masses could be set free. The labor theory was a fountainhead of Marx's anal ysis. He wielded it well. With it he slew many a dragon; he formu lated with it the concept of ex ploitation, of class conflict, and of labor and wages. With its collapse the Marxist structure must collapse as well. IV. Labor and the Socialist Commonwealth It is no secret that Marx wanted to abolish capitalism. He de.cried the ((exploitation" of workers by owners and viewed the labor market as lit tle better than a slave auction. As far as Marx was concerned, laborers were the unwitting victims of the callous, hardhearted businessman.

He felt it was absolutely deplorable that the laborers ~~sell themselves piecemeal, are a commodity, like every other article of commerce, and are consequently exposed to all the vicissitudes of competition, to all the fluctuations of the market."17 The 170f course everybody is either directly or indirectly affected by the ttvicissitudes" of the marketplace-not just those engaged in daily trade and competition. The crucial question to ask here is: Would all that change under socialism/communism? Is reality any less stem under political regulation of economic necessities and desires than under market production, allocation and distribution?

1979 MARX AND THE MANIFESTO 693 only alternative, Marx felt, was to abolish the market society. It is positively true that ulaborers" must ttsell themselves" in order to survive. Certainly they are Subject to the ttvicissitudes of competition" -as is everyone engaged in earn ing his ttdaily bread." But how would all this. change under a communist economy? Specifically, having abolished the structure of the market (including its interlock ing relationships between prices, production, and the supply of goods and services), what part would labor play in the socialist commonwealth? Production Comes First Obviously, the first task of the socialist commonwealth is' to pro vide for production. Labor will be no less a necessity than it had been under capitalism. Once the market and the existing structure of produc tion and distribution have been abolished, what then? How will the administration allot its resources?

Upon what will they depend as a reliable guide for future production? Marx himself was silent on these matters. That he had an inkling of the can of worms he opened will be demonstrated later. (Marx was an advocate of communism-not state capitalism. He did not want merely to exchange one tyranny for another. Therefore, there could be no question of a market structure of prices to guide the decisions ·of the Socialist Planning Board. But as to how those decisions should be ar rived at Marx never said.) Under a upure communism" there can be no money-and therefore no meaningful structure of prices to di rect and allocate the flow of goods and services. I8 Nowhere has man succeeded in abolishing capitalism without immediate chaos. All such ventures are doomed to failure and have always resulted in a hasty re treat to the safer confines of the umixed economy" -where the ad :ministration may enjoy the bless ings of capitalism with the bureau cratic trappings of State power and control.

Again, Lenin and his authoritar ian successors were fully aware that they had failed to create the com munist utopia. For this they had (and have) many excuses andjustifi cations. Someday (they seem to be saying) when greed and venal cor ruption no longer rule man's heart, 18Lenin, the erstwhile disciple of Marx, learned this bitter lesson for himself in the :years following the October Revolution. Le nin's response to the failure of Socialism was a thinly veiled resort to a quasi-market (New Economic Program) which allowed for incen tive and the making of rational economic deci sions. Further, the basic premises of the NEP were not scrapped by the Soviets after Lenin's death. The Soviet economy merely assumed a more subtle form of State Capitalism-a sys tem which most assuredly relies upon a mar ket structure of prices; in· short, the Soviet Union is a ~~mixed economy," so to speak, not a communist society in the purest sense.

694 THE FREEMAN November when all these great evils and in equities have disappeared, then the Blessed Day will be ushered in and the pure in heart shall inherit their collectivist paradise. Until then, communist leaders and citizens are forced to play the capitalists' game of money exchange and market prices. The failure is not the fault of worldwide communism, but, rather of the venal capitalists who have sabotaged the global effort of the workers. The point is, however, that for one reason or another, com munism has never uworked." Chaos has always followed in its wake, and, barring an elemental change in man's basic nature, it probably al ways will. Efficient Use of Resources The communist society must labor and exploit its resources as effi ciently as possible. Not only must the Planning Board of Socialist Pro duction determine how and what will be produced when and where, but it must also make vital decisions regarding the procurement of labor ers for the projects which it deems most necessary. The utilization, channeling, and allotment of labor goes hand-in-hand with the pro curement thereof. How will this be done?

Marx had some notion of the prob lems involved in the dismember ment of the market and its atten dant structure of prices which have hitherto directed and guided entre preneurs in production decisions. Specifically, what is the nature of labor under a socialist common wealth? Marx provided some impor tant clues: UEqual liability of all to labor. Establishment of industrial armies, especially for agriculture. Combination of agriculture with manufacturing industries. Gradual abolition between town and country by a more equable distribution of the population over the country."19 In short, without a price allocation system inherent in the market economy, the only viable al ternative is an order of ((liability" to labor where conscripts are massed into ((industrial armies."20 Laborers will no longer be able to freely select the type and place of employment the levee en masse will take its place. Labor laws replace market prices. Serfdom replaces free choice and the ((invisible hand."

Of course, the ((industrial army," as Marx correctly noted, would come under the direct control of its to talitarian leaders. Without the flex ibility of the pricing system, this 19This brings to mind Hitler's National Labor Front under the anticapitalistic Nazis. Old film clips show row upon row, thousands upon thousands of laborers, young and old, standing at cCPresentArms" with shovels and picks-the great ccindustrial army" of an au thoritarian regime. 2°Marx and Engels, p. 505.

1979 MARX AND THE MANIFESTO 695 army will find itself ((relocated" from time to time to ensure a ((more equable distribution of the popula tion over the country." Their coun try cannot have its cake and eat it too. Either it must submit to the ((vicissitudes" of the market or suc cumb to the absolutism of its socialist dictatorship. The question is not: will there or won't there be ((planning"? The only legitimate question to be asked at this point is: uwho shall do the planning?" Presumably (optimistically) the plans of the socialist commonwealth will be made for and in behalf of The Public. Marx spoke quite a lot of ((the public." Such cliches never solve anything. They merely pro mote a scramble for all the myriads of special interest groups to see who gets to be ((the public." The great problem of the socialist common wealth is ((Le public, c'est moi." Conclusion What might one safely conclude about Karl Marx and his curious tract? What kind of person would it take to write the Manifesto? Marx must certainly have imagined him self as the noble St. George sent to right wrongs and rescue the pro letariat in distress. He, Karl Marx, did not tilt with windmills; he preferred to slay dragons. But how real were those dragons which he sallied forth to dismember? How much shadow and how much substance?

What was rhetoric and what reality? Which of the Marxist tenets have remained unexploded by the ((apologists and sycophants" which Marx so despised? Karl Marx was not quite the heroic figure about which he surely fantasized. Like another crusader of a distant age, he too was ensnared by his own delusions, the victim of his own fallacies. And, like the ludi crous knight of La Mancha, Marx's own literary page was not gifted with any better perception. Marx and Engels committed their blun ders together. Their incessant dis paragement of the market society and the dynamic Age of Liberalism has taken its toll. The Marxist fetish for capitalistic windmills rages un abated. Every prophet must have a Baby lon. The spark kindled in Berlin grew throughout his life and raged into a conflagration. With all the holy zeal of the True Believer and the self-righteous authority of an Old Testament patriarch, the sage of Trier endlessly denounced the ((op pressive" bourgeois and proclaimed the inevitability of socialism. This jihad. (as all jihads are) was holy, just, and irrevocable. The vast mul titude would rise up in defiance of their chains and shrug off the 696 THE FREEMAN parasitic edifice of landlords, em ployers, and usurers. This day of liberation would be the death-knell of capitalism and of the expropria tion of the many by the few.

An Appeal to Arms Marx was the eternal Pruss ian, boiling and seething with Teutonic wrath. He had, so to speak, traveled his own road to Damascus, revealed to man the dictates of the inner voice and communed with the Burn ing Bush. The fervent Dr. Marx was still young when he returned from Mt. Sinai with the burning tablets of the Manifesto still smoldering in his affectionate embrace. This dictum was to be the law and schoolmaster which would guide man to the Prom ised Land, eradicating for all time to come the despicable golden calf of capitalism and ~~unconscionable Free Trade." The days of Moloch were numbered. 21 21The imagery is intended; for the gods of an inevitable Armageddon and the Apocalyptic Day of Vengeance do most assuredly lurk between the lines of The Communist Man ifesto. Marx is merely the privileged servant, a prophet who just happens to be marked out by the blind eye of Destiny. Marx is better in fonned than his less enlightened fellows, the voice of thunder and lightning sent to mop up the stubborn pockets of bourgeois resistance.

Oppression is the theme, retaliation its sacred assurance. The Communist Manifesto is not a sophisticated economic analysis. It is propaganda and must be read as such. The rantings, the genuflec tions at the altar of ~~the Public," the ~~workers," and the ~~dictatorship of the Proletariat" are served up with out grace so to speak. To be sure, The Communist Manifesto reflected many of the fallacies of the day. It was a looking glass into the mental ity of French Socialism, classical economics, German philosophy, and a moral tradition which stretches back at least to the age of Socrates. The image which stares back at us is the bristling insolence of the armed thug. The Communist Manifesto is an appeal to arms. It calls for blood and death. Hand in hand the twin con cepts of fear and faith etch them selves upon the mind of the True Believer. It is not an appeal to rea son. Its final argument is the smok ing barrel of a loaded gun. ® A Bibliography of primary and sec ondary sources drawn upon in pre paring this paper is available upon request, The Foundation for Economic Education, Irvington on-Hudson, N.Y. 10533.