In proportion, therefore, as the repulsiveness of the work increases, the wage decreases. Nay more, in proportion as the use of machinery and division of labour increases, in the same proportion the burden of toil also increases, whether by prolongation of the working hours, by increase of the work exacted in a given time or by increased speed of the machinery, etc. Thus, the general tendencies of capitalism are expressed there in their clearest form. These CEOs now make an average of times more than their employees. If inflation is taken into account, median wages for male American workers are actually lower today than they were in In this way, the present boom has been largely at the expense of the working class.
While millions are compelled to eke out a miserable existence of enforced inactivity, millions of others are forced to have two or even three jobs, and often work 60 hours or more per week with no overtime pay benefits. In theory, this means that in order to achieve the same standard of living a worker should only have to work just one quarter of the average working week in , or 11 hours per week. Either that, or the standard of living in theory should have risen by four times.
On the contrary, the standard of living has decreased dramatically for the majority, while work-related stress, injuries and disease are increasing. This is reflected in an epidemic of depression, suicides, divorce, child and spousal abuse, mass shootings and other social ills. The same situation exists in Britain, where under the Thatcher government 2. This has been achieved, not through the introduction of new machinery but through the over-exploitation of British workers.
Marx and Engels explained in the Communist Manifesto that a constant factor in all of recorded history is that social development takes place through the class struggle. Under capitalism this has been greatly simplified with the polarisation of society into two great antagonistic classes, the bourgeoisie and the proletariat.
The tremendous development of industry and technology over the last years has led to the increasing the concentration of economic power in a few hands. For a long time it seemed to many that this idea was outmoded. In the long period of capitalist expansion that followed the Second World War, with full employment in the advanced industrial economies, rising living standards and reforms remember the Welfare State? Marx predicted that the development of capitalism would lead inexorably to the concentration of capital, an immense accumulation of wealth on the one hand and an equal accumulation of poverty, misery and unbearable toil at the other end of the social spectrum.
For decades this idea was rubbished by the bourgeois economists and university sociologists who insisted that society was becoming ever more egalitarian, that everyone was now becoming middle class. Now all these illusions have been dispelled. The argument, so beloved of bourgeois sociologists, that the working class has ceased to exist has been stood on its head. In the last period important layers of the working population who previously considered themselves to be middle class have been proletarianised. Teachers, civil servants, bank employees and so on have been drawn into the ranks of the working class and the labour movement, where they make up some of the most militant sections.
The old arguments that everybody can advance and we are all middle class have been falsified by events. In Britain, the US and many other developed countries over the past 20 or 30 years, the opposite has been happening. Middle-class people used to think life unfolded in an orderly progression of stages in which each is a step up from the last.
That is no longer the case. Job security has ceased to exist, the trades and professions of the past have largely disappeared and life-long careers are barely memories. The ladder has been kicked away and for most people a middle-class existence is no longer even an aspiration. A dwindling minority can count on a pension on which they could comfortably live, and few have significant savings. More and more people live from day to day, with little idea of what the future may bring.
If people have any wealth, it is in their houses, but with the contraction of the economy house prices have fallen in many countries and may be stagnant for years. The idea of a property-owning democracy has been exposed as a mirage. Far from being an asset to help fund a comfortable retirement, home ownership has become a heavy burden. Mortgages must be paid, whether you are in work or not. Many are trapped in negative equity, with huge debts that can never be paid.
There is a growing generation of what can only be described as debt slaves. This is a devastating condemnation of the capitalist system. However, this process of proletarianisation means that the social reserves of reaction have been sharply reduced as a big section of white collar workers moves closer to the traditional working class. In the recent mass mobilisations, sections that in the past would never have dreamt of striking or even joining a union, such as teachers and civil servants, were in the front line of the class struggle.
The idealist method sets out from what people think and say about themselves. But Marx explained that ideas do not fall from the sky, but reflect more or less accurately, objective situations, social pressures and contradictions beyond the control of men and women. On the contrary, the progress of society depends on the development of the productive forces, which is not the product of conscious planning, but develops behind the backs of men and women.
For the first time Marx placed socialism on a firm theoretical basis. A scientific understanding of history cannot be based on the distorted images of reality floating like pale and fantastic ghosts in the minds of men and women, but on real social relations. That means beginning with a clarification of the relationship between social and political forms and the mode of production at a given stage of history. This is precisely what is called the historical materialist method of analysis. Some people will feel irritated by this theory which seems to deprive humankind of the role of protagonists in the historical process.
In the same way, the Church and its philosophical apologists were deeply offended by the claims of Galileo that the Sun, not the Earth, was at the centre of the Universe.
Later, the same people attacked Darwin for suggesting that humans were not the special creation of God, but the product of natural selection. Actually, Marxism does not at all deny the importance of the subjective factor in history, the conscious role of humankind in the development of society. Men and women make history, but do not do it entirely in accord with their free will and conscious intentions.
All that Marxism does is to explain the role of the individual as part of a given society, subject to certain objective laws and, ultimately, as the representative of the interests of a particular class. Ideas have no independent existence, nor own historical development. The ideas and actions of people are conditioned by social relations, the development of which does not depend on the subjective will of men and women but takes place according to definite laws which, in the last analysis, reflect the needs of the development of the productive forces.
The interrelations between these factors constitute a complex web that is often difficult to see. The study of these relations is the basis of the Marxist theory of history. Let us cite one example. At the time of the English Revolution, Oliver Cromwell fervently believed that he was fighting for the right of each individual to pray to God according to his conscience. But the further march of history proved that the Cromwellian Revolution was the decisive stage in the irresistible ascent of the English bourgeoisie to power.
The concrete stage of the development of the productive forces in 17th Century England permitted no other outcome. They believed they were fighting for a regime based on the eternal laws of Justice and Reason. However, regardless of their intentions and ideas, the Jacobins were preparing the way for the rule of the bourgeoisie in France. Again, from a scientific standpoint, no other result was possible at that point of social development. Socialist thinkers before Marx—the utopian socialists—attempted to discover universal laws and formulae that would lay the basis for the triumph of human reason over the injustice of class society.
All that was necessary was to discover that idea, and the problems would be solved. This is an idealist approach. Unlike the Utopians, Marx never attempted to discover the laws of society in general. He analysed the law of movement of a particular society, capitalist society, explaining how it arose, how it evolved and also how it necessarily ceases to exist at a given moment.
He performed this huge task in the three volumes of Capital. Charles Darwin, who was an instinctive materialist, explained the evolution of species as a result of the effects of the natural environment. The difference lies, on the one hand, in the enormously complicated character of human society compared to the relative simplicity of nature and, secondly, in the greatly accelerated pace of change in society compared to the extraordinarily slow pace with which evolution by nation selection unfolds.
On the base of the social relations of production—in other words, the relations between social classes—there arises complex legal and political forms with their manifold ideological, cultural and religious reflections. This complex edifice of forms and ideas is sometimes referred to as the social superstructure. Although it is always based on economic foundations, the superstructure rises above the economic base and interacts upon it, sometimes in a decisive manner.
This dialectical relationship between base and superstructure is very complicated and not always very obvious. But in the last analysis, the economic base always turns out to be the decisive force. Property relations are simply the legal expression of the relationships between classes. At first, these relationships—together with their legal and political expression—assist the development of the productive forces.
But the development of productive forces tends to come up against the limitations represented by existing property relations. The latter become an obstacle for the development of production. It is at this point that we enter a period of revolution. Idealists see human consciousness as the mainspring of all human action, the motor force of history. But all history proves the opposite. Human consciousness in general is not progressive or revolutionary.
It is slow to react to circumstances and deeply conservative. Most people do not like change, much less revolutionary change. This innate fear of change is deeply rooted in the collective psyche. It is part of a defence mechanism that has its origins in the remote past of the human species. As a general rule, we can say that society never decides to take a step forward unless it is obliged to do so under the pressure of extreme necessity. As long as it is possible to muddle through life on the basis of the old ideas, adapting them imperceptibly to a slowly changing reality, so long will men and women continue to move along the well-worn paths.
Like the force of inertia in mechanics, tradition, habit and routine constitute a very heavy burden on human consciousness, which means that ideas always tend to lag behind events. It requires the hammer blows of great events to overcome this inertia and force people to question the existing society, its ideas and values.
All that revolution shows is the fact that the social contradictions engendered by the conflict between economic development and the existing structure of society have become unbearable. This central contradiction can only be resolved by the radical overthrow of the existing order, and its replacement by new social relations that bring the economic base into harmony with the superstructure. In a revolution the economic foundations of society suffer a radical transformation.
Then, the legal and political superstructure undergoes a profound change. In each case, the new, higher relations of production have matured in embryo in the womb of the old society, posing an urgent need for a transition to a new social system. Marxism analyses the hidden mainsprings that lie behind the development of human society, from the earliest tribal societies up to the modern day.
The way in which Marxism traces this winding road is called the materialist conception of history. This scientific method enables us to understand history, not as a series of unconnected and unforeseen incidents, but rather as part of a clearly understood and interrelated process. It is a series of actions and reactions which cover politics, economics and the whole spectrum of social development. To lay bare the complex dialectical relationship between all these phenomena is the task of historical materialism.
In essence, the latest post-modernist interpretation of history has not advanced a single step since then. No socio-economic system can be said to be better or worse than any other, and there can therefore be no question of progress or retrogression. History appears here as an essentially meaningless and inexplicable series of random events or accidents. It is governed by no laws that we can comprehend. To try to understand it would therefore be a pointless exercise. A variation on this theme is the idea, now very popular in some academic circles, that there is no such thing as higher and lower forms of social development and culture.
They claim that there is no such thing as progress, which they consider to be an old fashioned idea left over from the 19th century, when it was popularised by Victorian liberals, Fabian socialists and—Karl Marx. This denial of progress in history is characteristic of the psychology of the bourgeoisie in the phase of capitalist decline. It is a faithful reflection of the fact that, under capitalism progress has indeed reached its limits and threatens to go into reverse.
The bourgeoisie and its intellectual representatives are, quite naturally, unwilling to accept this fact. Moreover, they are organically incapable of recognising it. Lenin once observed that a man on the edge of a cliff does not reason. However, they are dimly aware of the real situation, and try to find some kind of a justification for the impasse of their system by denying the possibility of progress altogether. So far has this idea sunk into consciousness that it has even been carried into the realm of non-human evolution.
Even such a brilliant thinker as Stephen Jay Gould, whose dialectical theory of punctuated equilibrium transformed the way that evolution is perceived, argued that it is wrong to speak of progress from lower to higher in evolution, so that microbes must be placed on the same level as human beings. In one sense it is correct that all living things are related the human genome has conclusively proved this. Humankind is not a special creation of the Almighty, but the product of evolution.
Nor is it correct to see evolution as a kind of grand design, the aim of which was to create beings like ourselves teleology—from the Greek telos, meaning an end. However, in rejecting an incorrect idea, it is not necessary to go to the other extreme, leading to new errors. It is not a question of accepting some kind of preordained plan either related to divine intervention or some kind of teleology, but it is clear that the laws of evolution inherent in nature do in fact determine development from simple forms of life to more complex forms.
The earliest forms of life already contain within them the embryo of all future developments. It is possible to explain the development of eyes, legs and other organs without recourse to any preordained plan. At a certain stage we get the development of a central nervous system and a brain. Finally with homo sapiens, we arrive at human consciousness. Matter becomes conscious of itself. There has been no more important revolution since the development of organic matter life from inorganic matter. To please our critics, we should perhaps add the phrase from our point of view.
Doubtless the microbes, if they were able to have a point of view, would probably raise serious objections. But we are human beings and must necessarily see things through human eyes. And we do assert that evolution does in fact represent the development of simple life forms to more complex and versatile ones—in other words progress from lower to higher forms of life.
To object to such a formulation seems to be somewhat pointless, not scientific but merely scholastic. In saying this, of course, no offence is intended to the microbes, who after all have been around for a lot longer than us, and if the capitalist system is not overthrown, may yet have the last laugh. The mode of production in ma terial life determines the general character of the social, political and spiritual processes of life. It is not the consciousness of men that determines their existence, but, on the contrary, their social existence which determines their consciousness.
As Marx and Engels were at pains to point out, the participants in history may not always be aware of what motives drive them, seeking instead to rationalise them in one way or another, but those motives exist and have a basis in the real world. Just as Charles Darwin explains that species are not immutable, and that they possess a past, a present and a future, changing and evolving, so Marx and Engels explain that a given social system is not something eternally fixed.
That is the illusion of every epoch. Every social system believes that it represents the only possible form of existence for human beings, that its institutions, its religion, its morality are the last word that can be spoken. That is what the cannibals, the Egyptian priests, Marie Antoinette and Tsar Nicolas all fervently believed. The ideas of Darwin, so revolutionary in his day, are accepted almost as a truism. However, evolution is generally understood as a slow and gradual process without interruptions or violent upheavals.
In politics, this kind of argument is frequently used as a justification for reformism. Unfortunately, it is based on a misunderstanding. The real mechanism of evolution even today remains a book sealed by seven seals. This is hardly surprising since Darwin himself did not understand it.
Only in the last decade or so with the new discoveries in palaeontology made by Stephen J. Gould, who discovered the theory of punctuated equilibria, has it been demonstrated that evolution is not a gradual process. There are long periods in which no big changes are observed, but at a given moment, the line of evolution is broken by an explosion, a veritable biological revolution characterised by the mass extinction of some species and the rapid ascent of others. The analogy between society and nature is, of course, only approximate. But even the most superficial examination of history shows that the gradualist interpretation is baseless.
Society, like nature, knows long periods of slow and gradual change, but also here the line is interrupted by explosive developments—wars and revolutions, in which the process of change is enormously accelerated. In fact, it is these events that act as the main motor force of historical development. And the root cause of revolution is the fact that a particular socio-economic system has reached its limits and is unable to develop the productive forces as before.
Those who deny the existence of any laws governing human social development invariably approach history from a subjective and moralistic standpoint. Like Gibbon but without his extraordinary talent they shake their heads at the unending spectacle of senseless violence, the inhumanity of man against man and woman and so on and so forth. However, what is required is not a moral sermon but a rational insight. Above and beyond the isolated facts, it is necessary to discern broad tendencies, the transitions from one social system to another, and to work out the fundamental motor forces that determine these transitions.
By applying the method of dialectical materialism to history, it is immediately obvious that human history has its own laws, and that, consequently, the history of humankind is possible to understand it as a process. The rise and fall of different socio-economic formations can be explained scientifically in terms of their ability or inability to develop the means of production, and thereby to push forward the horizons of human culture, and increase the domination of humankind over nature.
But the slightest acquaintance with history shows that this is false. History manifests itself as the rise and fall of different socio-economic systems. Like individual men and women, societies are born, develop, reach their limits, enter into decline and are then finally replaced by a new social formation.
In the last analysis, the viability of a given socio-economic system is determined by its ability to develop the productive forces, since everything else depends on this. Many other factors enter into the complex equation: religion, politics, philosophy, morality, the psychology of different classes and the individual qualities of leaders. But these things do not drop from the clouds, and a careful analysis will show that they are determined—albeit in a contradictory and dialectical way—by the real historical environment, and by tendencies and processes that are independent of the will of men and women.
The outlook of a society that is in a phase of ascent, which is developing the means of production and pushing forward the horizons of culture and civilisation, is very different to the psychology of a society in a state of stagnation and decline. The general historical context determines everything. It affects the prevailing moral climate, the attitude of men and women towards the existing political and religious institutions. It even affects the quality of individual political leaders. Capitalism in its youth was capable of colossal feats.
It developed the productive forces to an unparalleled degree, and was therefore able to push back the frontiers of human civilisation. People felt that society was advancing, despite all the injustices and exploitation that have always characterised this system. This feeling gave rise to a general spirit of optimism and progress that was the hall mark of the old liberalism, with its firm conviction that today was better than yesterday and tomorrow would be better than today.
The old optimism and blind faith in progress have been replaced by a profound sense of discontent with the present and of pessimism with regard to the future. This ubiquitous feeling of fear and insecurity is only a psychological reflection of the fact that capitalism is no longer capable of playing any progressive role anywhere. In the 19th century, Liberalism, the main ideology of the bourgeoisie, stood in theory for progress and democracy. But neo-Liberalism in the modern sense is only a mask that covers the ugly reality of the most rapacious exploitation; the rape of the planet, the destruction of the environment without the slightest concern about the fate of future generations.
The sole concern of the boards of the big companies who are the real rulers of the USA and the entire world is to enrich themselves through plunder: asset-stripping, corruption, the theft of public assets through privatisation, parasitism: these are the main features of the bourgeoisie in the phase of its senile decay. Up to a certain point, social changes are quantitative in character and do not alter the foundations of society, i. But a point is reached when the matured productive forces can no longer contain themselves within the old forms of property; then follows a radical change in the social order, accompanied by shocks.
A common argument against socialism is that it is impossible to change human nature; people are naturally selfish and greedy and so on. In reality, there is no such thing as a supra-historical human nature. What we think of as human nature has undergone many changes in the course of human evolution. Men and women constantly change nature through labour, and in so doing, change themselves. As for the argument that people are naturally selfish and greedy, this is disproved by the facts of human evolution. Our earliest ancestors, who were not yet really human, were small in stature and physically weak compared to other animals.
They did not have strong teeth or claws. Their upright stance meant that they could not run fast enough to catch the antelope they wished to eat, or to escape from the lion that wished to eat them. Their brain size was approximately that of a chimpanzee. Wandering on the savannah of East Africa, they were at an extreme disadvantage to every other species—except in one fundamental aspect. Engels explains in his brilliant essay Labour in the Transition of Ape to Man how the upright stance freed the hands, which had originally evolved as an adaptation for climbing trees, for other purposes.
The production of stone tools represented a qualitative leap, giving our ancestors an evolutionary advantage. But even more important was the strong sense of community, collective production and social life, which in turn was closely connected to the development of language. The extreme vulnerability of human children in comparison to the young of other species meant that our ancestors, whose hunter-gatherer existence compelled them to move from one place to another in search of food, had to develop a strong sense of solidarity to protect their offspring and thus ensure the survival of the tribe or clan.
We can say with absolute certainty that without this powerful sense of co-operation and solidarity, our species would have become extinct before it was even born. We see this even today. If a child is seen to be drowning in a river, most people would try to save it even placing their own life at risk. Many people have drowned trying to save others. This cannot be explained in terms of egotistical calculation, or by ties of blood relationships in a small tribal group.
The people who act in this way do not know who they trying to save, nor do they expect any reward for doing what they do. This altruistic behaviour is quite spontaneous and comes from a deep-rooted instinct for solidarity. The argument that people are naturally selfish, which is a reflection of the ugly and dehumanised alienation of capitalist society, is a vile label on the human race. For the immense major part of the history of our species, people lived in societies where private property, in the modern sense, did not exist.
There was no money, no bosses and workers, no bankers and landlords, no state, no organised religion, no police and no prisons. Even the family, in our understanding of the word, did not exist. Today, many find it hard to envisage a world without these things; they seem so natural that they could have been ordained by the Almighty. Yet our ancestors managed fairly well without them. The transition from hunter-gathering to settled agriculture and pastoralism constitutes the first great social revolution, which the great Australian archaeologist and Marxist Gordon Childe called the Neolithic Revolution.
Agriculture needs water. Once it goes beyond the most basic production on a subsistence level, it requires irrigation, digging, damming and water distribution on a big scale. These are social tasks. Large-scale irrigation needs organisation on a vast scale. It demands the deployment of large numbers of labourers and a high level of organisation and discipline. The division of labour, which already existed in embryonic form in the elementary division between the sexes arising from the demands of childbirth and the rearing of children, is developed to a higher level.
Teamwork needs team leaders, foremen, overseers, etc. Co-operation on such a vast scale demands planning, and the exercise of science and technique. This is beyond the capabilities of the small groups organised in clans that formed the nucleus of the old society. The need to organise and mobilise large numbers of workers led to the rise of a central state, together with a central administration and an army as in Egypt and Mesopotamia.
Time-keeping and measurement were necessary elements of production, and were themselves productive forces. Thus Herodotus traces the beginnings of geometry in Egypt to the need to re-measure the inundated land on an annual basis. The word geometry itself means neither more nor less than earth-measurement. The study of the heavens, astronomy, and mathematics enabled the Egyptian priests to foretell the flooding of the Nile, etc. Thus, science arises from economic necessity.
This statement goes right to the heart of historical materialism—2, years before Karl Marx. At the heart of this cleavage into rich and poor, rulers and ruled, educated and ignorant, is the division between mental and manual labour. The foreman is usually exempt from manual labour which now carries a stigma. Its secrets were closely guarded by the caste of priests and scribes whose monopoly it was. Here we already see the outlines of class society, the division of society into classes: exploiters and sub-exploiters.
In any society where art, science and government are a monopoly of a minority, that minority will use and abuse its position for its own interests. This is the most fundamental secret of class society and has remained so for the last 12, years. During all this time there have been many fundamental changes in the forms of economic and social life. But the fundamental relations between rulers and ruled, rich and poor, exploiters and exploited remained the same. In the same way, although the forms of government experienced many changes, the state remained what it had always been: an instrument of coercion and an expression of class rule.
The rise and fall of slave society was followed in Europe by feudalism, which in turn was dis placed by capitalism. The rise of the bourgeoisie, which began in the towns and cities of Italy and the Netherlands, reached a decisive stage with the bourgeois revolutions in Holland and England in the 16th and 17th centuries, and the Great French Revolution of All these changes were accompanied by profound transformations in culture, art, literature, religion and philosophy.
The state is a special repressive force standing above society and increasingly alienating itself from it. This force has its origin in the remote past.
Britain’s neo-liberal state | openDemocracy
The origins of the state, however, vary according to circumstances. Among the Germans and Native Americans it arose out of the war band that gathered around the person of the war chief. This is also the case with the Greeks, as we see in the epic poems of Homer. Originally, the tribal chiefs enjoyed authority because of their personal bravery, wisdom and other personal qualities. Today, the power of the ruling class has nothing to do with the personal qualities of leaders as was the case under barbarism.
It is rooted in objective social and productive relations and the power of money. The qualities of the individual ruler may be good, bad or indifferent, but that is not the point. The earliest forms of class society already showed the state as a monster, devouring huge amounts of labour and repressing the masses and depriving them of all rights. At the same time, by developing the division of labour, by organising society and carrying co-operation to a far higher level than ever before, it enabled a huge amount of labour power to be mobilised, and thus raised human productive labour to undreamed-of heights.
At the base, all this depended on the labour of the peasant masses. Whoever controls this system of production controls power and the state. The origins of state power are rooted in relations of production, not personal qualities.
The state power in such societies was necessarily centralised and bureaucratic. Originally, it had a religious character and was mixed up with the power of the priest caste. At its apex stood the God-king, and under him an army of officials, the Mandarins, the scribes, overseers etc. Writing itself was held in awe as a mysterious art known only to these few.
Thus, from the very beginning, the offices of the state are mystified. Real social relations appear in an alienated guise. This is still the case. In Britain, this mystification is deliberately cultivated through ceremony, pomp and tradition. In the USA it is cultivated by other means: the cult of the President, who represents state power personified. In essence, however, every form of state power represents the domination of one class over the rest of society.
Even in its most democratic form, it stands for the dictatorship of a single class—the ruling class—that class that owns and controls the means of production. The modern state is a bureaucratic monster that devours a colossal amount of the wealth produced by the working class.
Marxists agree with the anarchists that the state is a monstrous instrument of oppression that must be eliminated. The question is: How? By whom? And what will replace it? This is a fundamental question for any revolution. In a speech on anarchism during the Civil War that followed the Russian Revolution , Trotsky summarised very well the Marxist position on the state:. Marxism explains that that the state consists ultimately of armed bodies of men: the army, police, courts and jails.
Against the confused ideas of the anarchists, Marx argued that workers need a state to overcome the resistance of the exploiting classes. But that argument of Marx has been distorted by both the bourgeois and the anarchists. Nowadays, the word dictatorship has connotations that were unknown to Marx. In an age that has become acquainted with the horrific crimes of Hitler and Stalin, it conjures up nightmarish visions of a totalitarian monster, concentration camps and secret police.
For him the word dictatorship came from the Roman Republic, where it meant a situation where in time of war, the normal rules were set aside for a temporary period. In other words, it was a military role which almost always involved leading an army in the field. Once the appointed period ended, the dictator would step down.
His model could not have been more different. Marx based his idea of the dictatorship of the proletariat in the Paris Commune of Here, for the first time, the popular masses, with the workers at their head, overthrew the old state and at least began the task of transforming society.
With no clearly-defined plan of action, leadership or organisation, the masses displayed an astonishing degree of courage, initiative and creativity. The transition to socialism—a higher form of society based on genuine democracy and plenty for all—can only be accomplished by the active and conscious participation of the working class in the running of society, of industry, and of the state. It is not something that is kindly handed down to the workers by kind-hearted capitalists or bureaucratic mandarins.
Strict limitations were placed upon the salaries, power, and privileges of officials in order to prevent the formation of a privileged caste. On the contrary, before the Stalinist bureaucracy usurped control from the masses, it was the most democratic state that ever existed. The basic principles of the Soviet power were not invented by Marx or Lenin.
They were based on the concrete experience of the Paris Commune, and later elaborated upon by Lenin. Lenin was the sworn enemy of bureaucracy. It was not an alien a power standing over society, but a power based on the direct initiative of the people from below. Its laws were not like the laws enacted by a capitalist state power. It was an entirely different kind of power from the one that generally exists in the parliamentary bourgeois-democratic republics of the type still prevailing in the advanced countries of Europe and America.
This power was of the same type as the Paris Commune of It is true that in conditions of appalling backwardness, poverty and illiteracy, the Russian working class was unable to hold onto the power they had conquered. The Revolution suffered a process of bureaucratic degeneration that led to the establishment of Stalinism.
Contrary to the lies of bourgeois historians, Stalinism was not the product of Bolshevism but its bitterest enemy. Stalin stands approximately in the same relation to Marx and Lenin as Napoleon to the Jacobins or the Pope to the early Christians. The early Soviet Union was in fact not a state at all in the sense we normally understand it, but only the organised expression of the revolutionary power of the working people. Trotsky pointed out that revolution is the motor force of history. It is no coincidence that the rise of the bourgeoisie in Italy, Holland, England and later in France was accompanied by an extraordinary flourishing of culture, art and science.
In those countries where the bourgeois revolution triumphed in the 17th and 18th centuries, the development of the productive forces and technology was complemented by a parallel development of science and philosophy, which undermined the ideological domination of the Church forever. In contrast, those countries where the forces of feudal-Catholic reaction strangled the embryo of the new society in the womb were condemned to suffer the nightmare of a long and inglorious period of degeneration, decline and decay.
The example of Spain is perhaps the most graphic in this regard. In the epoch of the ascent of capitalism, when it still represented a progressive force in history, the first ideologists of the bourgeoisie had to fight a ferocious battle against the ideological bastions of feudalism, starting with the Catholic Church.
Long before overthrowing the power of feudal landlords, the bourgeoisie, in the shape of its most conscious and revolutionary representatives, had to break down its ideological defences: the philosophical and religious framework that had grown up around the Church, and its militant arm, the Inquisition. The rise of capitalism began in the Netherlands and the cities of northern Italy.
It was accompanied by new attitudes, which gradually solidified into a new morality and new religious beliefs. Under feudalism economic power was expressed as the ownership of land. Money played a secondary role. But the rise of trade and manufacture and the incipient market relations that accompanied them made Money an even greater power. Great banking families like the Fuggers arose and challenged the might of kings. The bloody wars of religion in the 16th and 17th century were merely the outward expression of deeper class conflicts. The only possible result of these struggles was the rise to power of the bourgeoisie and new capitalist relations of production.
But the leaders of these struggles had no prior knowledge of this. The English Revolution of was a great social transformation. The old feudal regime was destroyed and replaced with a new capitalist social order. The Civil War was a class war which overthrew the despotism of Charles I and the reactionary feudal order that stood behind him. Parliament represented the new rising middle classes of town and country which challenged and defeated the old regime, cutting off the head of the king and abolishing the House of Lords in the process.
Objectively, Oliver Cromwell was laying the basis for the rule of the bourgeoisie in England. But in order to do this, in order to clear all the feudal-monarchical rubbish out of the way, he was first obliged to sweep aside the cowardly bourgeoisie, dissolve its parliament and base himself on the petty bourgeoisie, the small farmers of East Anglia, the class to which he belonged, and the plebeian and semi-proletarian masses of town and country. Placing himself at the head of a revolutionary army, Cromwell aroused the fighting spirit of the masses by appealing to the Bible, the Saints and the Kingdom of God on Earth.
His soldiers did not go into battle under the banner of Rent, Interest and Profit, but singing religious hymns. This evangelistic spirit, which was soon filled with a revolutionary and even sometimes a communistic content, was what inspired the masses to fight with tremendous courage and enthusiasm against the Hosts of Baal. However, once in power, Cromwell could not go beyond the bounds established by history and the objective limits of the productive forces of the epoch. He was compelled to turn against the Left Wing, suppressing the Levellers by force, and to pursue a policy that favoured the bourgeoisie and the reinforcement of capitalist property relations in England.
In the end, Cromwell dismissed parliament and ruled as dictator until his death, when the English bourgeoisie, fearful that the Revolution had gone too far and might pose a threat to property, restored the Stuarts to the throne. The French Revolution of was on a qualitatively higher level. Instead of religion, the Jacobins appealed to Reason. They fought under the banner of Liberty, Equality and Fraternity in order to rouse the plebeian and semi-proletarian masses against the feudal aristocracy and the monarchy. Long before it brought down the formidable walls of the Bastille, it had overthrown the invisible, but no less formidable, walls of the Church and religion.
But when the French bourgeoisie became the ruling class, faced with the new revolutionary class, the proletariat, the bourgeoisie quickly forgot the rationalist and atheist intoxication of its youth.
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After the fall of Robespierre, the victorious men of property longed for stability. Searching for stabilising formulae and a conservative ideology that would justify their privileges, they quickly rediscovered the charms of Holy Mother Church. The latter, with her extraordinary ability to adapt, has managed to survive for two millennia, despite all the social changes that have taken place.
The Catholic Church soon welcomed its new master and protector, sanctifying the domain of Big Capital, in the same way as before the same church had sanctified the power of feudal monarchs and the slave owners of the Roman Empire.? In his classic work, What is history? The English historian E. By that he meant that the telling of history cannot be separated from the viewpoint, political or otherwise, both of the writer and of the reader and of the times they live or lived in. It is often said that history is written by the winners. In other words, the selection and interpretation of historical events are shaped by the actual outcome of those conflicts as they affect the historian and in turn his perception of what the reader will want to read.
Despite the pretensions of bourgeois historians to an alleged objectivity, the writing of history inevitably reflects a class point of view. It is impossible to escape having some sort of view on the events described. To claim otherwise is to attempt to defraud the reader. When Marxists look at society they do not pretend to be neutral, but openly espouse the cause of the working class and socialism.
However, that does not at all preclude scientific objectivity. A surgeon involved in a delicate operation is also committed to saving the life of his patient. But for that very reason, he will distinguish with extreme care between the different layers of the organism. In the same way, Marxists will strive to obtain the most scientifically exact analysis of social processes, in order to be able successfully to influence the outcome. From this we can see that the flow and direction of history has been—and is—shaped by the struggles of successive social classes to mould society in their own interests and by the resulting conflicts between the classes which flow from that.
Very often attempts are made to discredit Marxism by resorting to a caricature of its method of historical analysis. There is nothing easier than erecting a straw man in order to knock it down again. The usual distortion is that Marx and Engels reduced everything to economics. More than this neither Marx nor myself have asserted.
Hence, if somebody twists this into saying that the economic element is the only determining one, he transforms that proposition into a meaningless, abstract and senseless phrase. Historical materialism has nothing in common with fatalism. Men and women are not merely puppets of blind historical forces. But neither are they entirely free agents, able to shape their destiny irrespective of the existing conditions imposed by the level of economic development, science and technique, which, in the last analysis, determine whether a socio-economic system is viable or not.
To quote Engels:. Marx and Engels repeatedly criticised the superficial way in which certain people misused the method of historical materialism. In his letter to Conrad Schmidt, dated 5 August , Engels writes:. But our conception of history is above all a guide to study, not a lever for construction after the manner of the Hegelian.
All history must be studied afresh; the conditions of existence of the different formations of society must be examined individually before the attempt is made to deduce them from the political, civil law, aesthetic, philosophic, religious, etc. Up to now but little has been done here because only a few people have got down to it seriously. In this field we can utilise heaps of help, it is immensely big, anyone who will work seriously can achieve much and distinguish himself.
But instead of this too many of the younger Germans simply make use of the phrase historical materialism and everything can be turned into a phrase only in order to get their own relatively scanty historical knowledge—for economic history is still as yet in its swaddling clothes! Marx and Engels , Collected Works , volume 49, p. They never see anything but here cause and there effect.
That this is a hollow abstraction, that such metaphysical polar opposites only exist in the real world during crises, while the whole vast process proceeds in the form of interaction though of very unequal forces, the economic movement being by far the strongest, most elemental and most decisive and that here everything is relative and nothing is absolute—this they never begin to see.
Marxism does not deny the question of ideas but rather seeks to examine what gives rise to them. Equally it does not deny the role of the individual or indeed that of chance but instead puts them in their correct context. A car crash or a stray bullet may indeed manage to change the course of history but it is certainly not the motive force.
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Hegel explained that necessity reveals itself through chance. This brings us to the central question of Marxist philosophy. In the writings of Marx and Engels we do not have a philosophical system, like that of Hegel, but a series of brilliant insights and pointers, which, if they were developed, would provide a valuable addition to the methodological armoury of science.
Unfortunately, such a work has never been seriously undertaken. There is a difficulty for anyone who wishes to study dialectical materialism thoroughly. Despite the immense importance of the subject, there is no single book of Marx and Engels that deals with the question in a comprehensive manner. However, the dialectical method is in evidence in all the writings of Marx.
Probably the best example of the application of dialectics to a particular field in this case political economy consists of the three volumes of Capital. For a long time, Marx had intended to write a book on dialectical materialism, but it proved impossible because of his work on Capital. This occupied every moment of his time, and even this work was frequently interrupted by bouts of illness brought on by his miserable living conditions, poor diet and exhaustion. But unfortunately, Engels also failed to write the definitive book on Marxist philosophy for various reasons.
First, the emergence of an opportunist trend within the Social Democratic Party in Germany forced him to leave his scientific research to one side in order to write a polemic against opportunism that has become one of the most important classics of Marxism. Later on, Engels returned to his preparatory studies for a comprehensive book on philosophy. But with the death of Marx, on March 14, , he was again obliged to suspend this work in order to prioritise the difficult task of putting in order and completing the manuscripts of volumes two and three of Capital that had been left unfinished.
Dialectical philosophy reached its highest point in the philosophy of the German idealist Georg Hegel. His great contribution was to rediscover dialectics, originally invented by the Greeks. He developed this to new heights. But he did this on the basis of idealism. Reading Hegel, one has the sensation of a truly great idea that is struggling to escape from the straitjacket of idealist mystification. Here we find extraordinarily profound ideas and flashes of great insight, but buried amidst a heap of idealist nonsense.
It is a very frustrating experience to read Hegel! Time and again this great thinker drew tantalisingly close to a materialist position. But at the last minute he always drew back, fearful of the consequences. For that reason, Hegelian philosophy was unsatisfactory, contradictory, botched and incomplete.
Hegel carried traditional philosophy as far as it could go. In order to carry it further, it had to go beyond its bounds, negating itself in the process. Philosophy had to return from the nebulous realms of speculation back to the real world of material things, of living men and women, of real history and struggle from which it had been separated for so long.
The problem with Feuerbach and some other Left Hegelians, like Moses Hess, is that they merely said no to Hegel, negating his philosophy by simply denying it. It required courage, especially in the given context of general European reaction and the repressive Prussian state. It provided inspiration to the young Marx and Engels. But ultimately, it failed. One can negate a grain of wheat by crushing it underfoot. But the dialectical concept of negation is not merely to destroy: it is to destroy while simultaneously preserving all that deserves to be preserved.
A grain of wheat can also be negated by allowing it to germinate. Hegel pointed out that the same words in the mouth of an adolescent do not carry the same weight as on the lips of an old man, who has lived life and accumulated great experience. It is the same with philosophy. In returning to its starting point, philosophy does not merely repeat a long-surpassed stage. It does not become childish by returning in old age to its infancy, but it returns to the old ideas of the Ionic Greeks enriched by 2, years of history and the development of science and culture.
This is not the mechanical movement of a gigantic wheel, the senseless repetition of previous stages, like the endless process of rebirth that features in certain Oriental religions, but the negation of the negation, which posits the return to an earlier phase of development, but on a qualifiedly higher level. It is the same, and not the same. However, although he reached some deep and important conclusions, at times drawing close to materialism for example in The Philosophy of History , Hegel remained a prisoner of his idealist outlook.
He never managed to apply his dialectical method correctly to the real world of society and nature, because for him, the only real development was the development of the world of ideas. Of all the theories of Marx, no other has been so attacked, distorted and slandered as dialectical materialism. And this is no accident, since this theory is the basis and foundation of Marxism.
It is, more or less, the method of scientific socialism. Marxism is much more than a political programme and an economic theory. It is a philosophy, the vast scope of which covers not only politics and the class struggle, but the whole of human history, economics, society, thought and nature. Today, the ideology of the bourgeoisie is in the process of disintegration, not only in the field of economics and politics but also in that of philosophy. In the period of its ascent the bourgeoisie was capable of producing great thinkers like Hegel and Kant. In the period of its senile decay it produces nothing of value.
It is impossible to read the barren products of the university philosophy departments without a feeling of tedium and irritation in equal measure. The fight against the power of the ruling class cannot stop in the factories, the streets, parliament and local councils. And, uncharacteristically of their department, they both treated me with decency, but fairness was beyond their control. Norman Waitzman and Dalmas Nelson accepted to join the embattled committee at two critical junctures, each literally saving the dissertation, and with it the degree, from oblivion.
To them all, I express my profound gratitude. However, bringing this unduly protracted episode to a close, in my judgment, could not have come from within the economics and political science departments only. I therefore gratefully thank any anonymous university member who might have intervened to bring about that end. The Marriott librarians and staff were of great help, both in accommodating my reading and writing imperatives with my part-time work responsibility at the library, for the last four years, and in providing me with invaluable friendships.
And they treated me fairly, and decently. I cannot mention them all. To them all, I am most appreciative. I gratefully thank Christine Pickett, the Thesis Editor, for her keen reading, and conscientious and timely editing of this work. Needless to mention, most facts, and many singular concepts and forms of words, that constitute the building blocks of this inquiry, are adopted from the extant literature.
In its collectivity, fundamental concepts, basic thesis, and main findings, however, this inquiry is mine alone, including all its potential mistakes. My intellectual debt, nonetheless, is to multitudes of scholars, whose written works constitute the foundations upon which I endeavored to build. Unavoidably, mentioning some of them does injustice to others, whose names permeates this work. I finally thank Allen Sievers, for his seven-year perseverance on the committee, despite his reservations, and for his remarks.
This work of course could not have come to fruition without his participation. It is only fair, however, that I make it clear that all along my basic thesis was neither changed nor hidden. Nor was any question of substance raised against it. Only ones aimed at procrastination, under the rubric of scope, modality, clarity, semantics, and nonconformity to neoclassical ways and means; at times taking more than five months to review the dissertation, delivering back no more than a general comment, for the process to be repeated, again and again.
I cannot disregard my circumstance, but can influence it through creative action: create my life by exercising reason and exerting will, to go beyond the ordinary and the given. The essence of dignity is the act of the will. The will to be oneself is dignity. One is to expend oneself, as does Don Quixote, in creative endeavors. One must have the dignity to be, to self-realize, self-actualize, in a life journey of authenticity, as the means to essentialization. Foresight, vitality and willpower, including discipline and order, are the ingredients.
One is also impelled to come to terms with the loneliness, inherent in the journey toward authenticity, by revulsion toward the mediocre, and aloofness from the mundane. By clinging to willpower, one is to shoulder the burden of lonely decisions. I dedicate it to my father's memory; my wife, Suma; and my children, Bassam, Tamy, and Maggie. The research question of this critique concerns the transformation mechanisms that might enable the Underdeveloped Countries UDCs to metamorphose their current bleak and untenable state. The aim is to discern feasible courses of action that would help the UDCs better the conditions of their peoples.
Such courses would provide alternatives to the flawed policy advocated by neoclassical economics and implemented by the Bretton Woods organizations. Yet the entire standpoint of mainstream  economics towards the UDCs is epitomized by it, a standpoint that engenders the Fund-Bank conditionality. The latter entails currency devaluation; abandonment of import substitution, subsidies and social programs as well as government control; reduction of the money supply, budget deficit and size of government, while unleashing unfettered market dealings through privatization, deregulation and opening the country to international division of labor through free trade.
On the other hand, if there are to be theoretical changes in economic thinking, there must be a historical understanding of how the particular aspects of the neoclassical doctrine that are now taken for granted as composing mainstream economics came into being. It differed from naturalism, utilitarianism and historicism in that it compared units of want and feeling instead of things. It attempted to refine the objective view of the Utilitarians by a subjective one, the source of value taken to be found in people and not in materials. This reckoning of everything, of prices and incomes, of wealth and of capital, by differentials and margins pseudo-psychologically measured, is the quintessence of Marginalism.
Society, however, is not simply a sum of single individuals. To the contrary, a single individual is merely a unique member of society. The relational whole is much more than and much different from the sum of its mere fungible parts. Only organic-holistic thought, rather than atomism, can thus account for social phenomena.
Evidently neoclassical methodological individualism attempts to address macroeconomic problems through microeconomic tools so-called foundations. It deals with the various component parts of the economy as if the latter is the sum of its parts, and as if dealing with all the parts is the same as dealing with the whole. The method followed by Smith and Marx, to the contrary, is the deduction of inferences from the entire social existence, a unit of analysis much larger than, and qualitatively different from, the individual.
Neoclassical methodological individualism must therefore give way to a societal political economics, thereby complying with the Durkheimian maxim that collective facts require collective explanations. Samuelson, like Hume who two centuries earlier tried to replicate the paradigm of Newtonian physics, attempted to reduce economics, a social phenomenon, to an exact science.
Ignored of course is the uniqueness of natural science. Marginal utility changed the standard of measurement for exchange ratios, and the explanations given for the pricing and distributing processes under investigation. Feelings and marginal valuations took the place of outgo in things and in labor. Value became an act or a state of consciousness, an imputation of qualities to things and deeds, as exhibited in exchange. Concrete objects ceased to be the sole subject of measurement.
Wealth became a fund of values, rather than a conglomeration of things physical. Production consisted of a creation of values. Like wealth, capital became a fund of values, employed productively. The premises of that persuasion were the hallowed perfect competitive ones, which fitted-in so well with Benthamism. The static, individualistic view alone satisfied the requirements of an "exact" economics. In the pursuit of rationalizing laissez faire capitalism,  therefore, atmospherics unlodged realism. Samuelson thus accepted comparative advantage but conveniently rejected its LTV's comparative cost component, Ricardo's contribution of the determination of value by labor time.
The end result provided a reductionist concoction of the world, ripping out political economy in whose sphere analysis and policy are inextricably intertwined, and the impetus to social change is to be found from its socio-historical matrix, replacing it by a hermetically sealed system of fictitious economics, whereby nonpecuniary ends of policy e. Neoclassical economics has a tendency to treat presuppositions as self-evident, when they are nothing of the kind. Abstract logical constructs divorced from social activity have little value. Its failure is located in the very ontological misconception of the nature of society, whose irreducible basis is abstracted from.
Whereas the processes of scientific understanding and theoretical progress can primarily come through delving into the world of facts, reestablishing contact with reality to bring the essential into relief and to make possible its analysis, not one of these arbitrary assumptions is realistic; in their collectivity they apply only to a bookish world. Of course if one is free to choose, pile up and postulate arbitrary and unrealistic assumptions, one can deduce rigorously any sought conclusions.
However, such are irrelevant conclusions, which go nowhere in the real world, and can be reversed rigorously by different assumptions. Hence, under this assumption ridden theory, factor "endowments" become the source of trade, i. The mathematics took over, and controlled and subjugated, the thought process, rather than merely aiding it. Mathematical techniques became the master rather than the servant of economics.
The UDCs are thus required to follow the free trade path i. Given the unrealism of the assumptions, it is not surprising how fantastic are the inferences. Whereas theories, concepts, methods, paradigms are to be evaluated by the explanatory power of the conclusions they reach about real world activities and processes, neoclassical economics totally abstracted from realism, including the aspect of power projection and use, replacing it with fictitious harmony. And the best remedy for these alleged distortions, it is claimed, is to avoid any protective measures and instead subsidize the export industries.
All goods must be reducible to individual values, in order for the methodological individualist economic schema to be able to take cognizance of them. In addition, this H-O-S theory, conveniently framed as it is in a barter fashion, abstracts from monetary aspects of transactions. Hence having the Coase cake and eating it too. So, transaction costs create and maintain the firm and the market, but transaction costs, simultaneously, do not exist, so that comparative advantages can be accounted for: two essentially contested, if not mutually exclusive, rationales in the same overarching theory.
That would be an understatement,  for it also includes inconsistency. The theory further ignores the fact that each transaction across a boundary is a function of, or results in, an exchange rate the price ratio between the two currencies. Ignored also is the fact that a transaction determines the post trade price ratio for the two countries involved, or the change in international terms-of-trade, and hence real income change, ceteris paribus. Absent from mentioning, furthermore, are other implicit assumptions of the theory: no history, no institutions, no exercise of unequal political power, and, indeed, no human society.
Because that body of thought is represented by differently specified models, each modified with its own set of assumptions, the result is either untestability or simultaneous corroborating and refuting evidence for the same theory. This can neither be science nor a way of doing it, nor can it command mere commonsensical persuasiveness. No wonder the home region of H and O Eli Filip Heckscher and Bertil Gotthard Ohlin , is the one area of the industrial world which most defies this theory.
Instead of employing unfettered free-market postulates, Scandinavia trims and restrains capitalism. Schumpeter, This is put very mildly indeed, in comparison, e. That is, rather than moving into the new industries such as chemicals, in which technological advance was now most rapid, Britain continued to rely upon the cheapness of its coal, to obtain a comparative advantage in the steam-driven, cotton textile industry.
This threatened the British ability to continue extracting primary products out of other countries. Those countries would be well-placed trading with Germany, or the United States. Further, the Hans Singer , -Gunnar Myrdal infant economy protection is beyond the realm of neoclassical economics. This critique, therefore, dissents from the positivist reductionism of neoclassical economics, and adopts, once again, the holistic thought of political economy, deducing inferences from the entire social existence, and paying special attention to all relevant factors of economic action, not only to its pecuniary logic.
Its primary relevance is to communities, countries, peoples, regions, governments, powers, rather than to unrealistic models, ideological abstractions emphasizing asocial individual behavior, or harmonious theologies of invisible hand and laissez faire. Pragmatically, moreover, capitalism for the UDCs is for now a fait accompli.
The critique thus attempts to discern loopholes, in the workings of capitalism, which would enable the UDCs to function and transform themselves within that socioeconomic system domestically, and to navigate through it globally. The aim is not to change the endogenous workings of capitalism but to find exogenous, pragmatic ways for the UDCs to move ahead transform , while accommodating themselves to the capitalist predicament.
Capitalism did not evolve merely through purposeful action, nor can purposeful action alone least of all that of the UDCs eject that socioeconomic system. Capitalism, as much as any other epochal social occurrence and transforming economic institution, has resulted more from human action than from human design. The aim thus is to explore how the UDCs can live in the same den with that unmerciful companion, without continuing to be utterly pillaged by its workings, as they are experiencing now. This aim, therefore, is not dogmatic: It is neither that the market be abandoned in favor of centralized planning nor that planning be discarded for the sake of freeing the market.
Instead, the aim is to identify impediments in both market operations and planning strategies that might be hampering development, and to find ways of overcoming them. The question then is not whether a regime of free contract is or is not to exist, but whose choices does free contract give effect to, and how to prevent the powerful from manipulating the order to exploit the weak. Not freedom or no freedom, but whose freedom and for what.
Not reform or no reform, but which attainable reform and for whose interest. Not democracy or no democracy, but whom does democracy empower, who rules and on whose behalf, and whether democracy is also substantive or merely procedural. Not government or no government, but whose government and for whom, and the economic jurisdiction as well as the scope and limits of this government. More specifically, this critique examines several substantive and pragmatic questions:.
Or may the alleviation of other resource constraints such as scarcity of entrepreneurial orientation, organizational and administrative regimes, and foreign exchange be efficacious as well? How can foreign exchange be secured? What type of reform would that be? Is it likely to be implemented in the foreseeable future? Or does it lead to capital outflows, leaving the UDCs in ruins? Does it lend itself to measurement and quantification? Can it be planned and monitored?
What alternative courses of action need be pursued, still within a capitalist framework, if those people, not commodities or their interlocutors, are the principle focus of national policy? These are the issues focused on, whenever appropriate, while analyzing various mechanisms and suggesting transformation themes. As to the benefits of trade  for the UDCs, these are under no dispute. The metaphor "free trade" used by neoclassical economics, however, is misleading, and results in unequal exchange, which is elaborated upon below. The critique thus includes components that are designed as full fledged courses of action, e.
Besides the conventional orthodox mechanisms, moreover, the critique also employs works that are tabooed, ridiculed or ignored by neoclassical economics, and endeavors to put them to good use. These are the Marxian, structuralist and delinking perspectives, respectively. The critique further includes the often despised equity intermechanism, as well as the much hailed neoclassical efficiency mechanism, and illustrates the possibility of attaining an accommodating equity-efficiency tradeoff.
Therefore, the inquiry is less "elegant" than current technocratic works in economics appear to be, for it encounters the classic problems of causality and explanations in the social sciences: Variables are so numerous that the differentiation of dependent from independent ones can at best be commonsensical; at worst, this unilinear causal construct has to be entirely discarded from the social sciences. However, elegance should never be mistaken for mere simplification. It is neither nihilistic nor dogmatic, respectively.
It is a pragmatic realist and functional endeavor, rather than strictly academic. It heuristically attempts to discern loopholes in the capitalist dynamics, through which the UDCs could exogenously bridle capitalism, tame it to suit their purposes, and figure out doable themes that might mitigate their dependency and underemployment, and alleviate their poverty. Because geo-economic reality is impervious to being thus encapsulated, in formal monolithic criteria, neoclassicism and reality are incommensurable. In the present state of knowledge one must resist the notion that any simple model will account for the whole transformation process.
One cannot model it, say, as a production process which makes modernization, eighteenth-century industrialization, or the sustained rise of real incomes, the output of a handful of stylized inputs, while hoping to retain any sense of the historical complexity involved.
Too many parameters shift and dissolve; long-term economic change in the DCs was much more than the usual conception of an "economic" process. Different development strategies must therefore be improvised for different contexts. And any well-conceived development strategy must respect the perceptions of underdeveloped nations on equitable, enabling and environmental issues, and reflect the different tracks of their development.
The research method hereby adopted, therefore, is that of Smith and Marx,  critical inquiry, i. Nor did they go to engage in some xenophobic chats at the coffee shops of the informal sector in rural Zaire  or at the bazaars of provincial Tajikistan, another method currently in vogue in economics, in order to establish the originality of their credentials. Smith and Marx read; thought; analyzed textually and contextually, comparatively  as well as critically ; elaborated; cohered; taxonomized; agonized; conceived; inductively investigated, corresponded, and corroborated their deductively theorized findings with reality; and only then slowly and laboriously made up their minds, and concluded.
It filters and classifies this material into related groups, with an eye on the intelligibility of the exposition, while seeking what this material has to offer for the improvement of the status of the UDCs. Rather than from the taxonomy, the research thesis unfolds from the various elements of the critique.
The taxonomy is thus not an end in itself, albeit it is a contribution of some significance. It coordinates courses of action and policy recommendations found by social scientists to have worked or to be potentially workable as prime movers in macro-societal transformation. It organizes these into mechanisms that could potentially lead to the sought transformation.
Such organization is built upon and hence discloses the relationships between concepts and the conceptual structures categorized as mechanisms. Without further ado about semantics, a mechanism  is but a course of action, a process, a device, a strategy by which socioeconomic transformation is brought about. Growth is essentially the mere rise of per capita income; development basically includes also the rise of productivity and the expansion of economic activities. It also leads to problematic social, cultural, and other human factors. This critique embodies a topic embracing introduction which also includes a methodological prologue , complemental abstract and conclusion, and quasi discrete chapters.
Those themes unfold from the various mechanisms, whose aim is to serve the main functional purpose. This modality precluded the separation of the literature review,  but, one hopes, saved redundancies and facilitated the unfolding of the themes. This is merely a matter of modality; there are no profound reasons as to why there are as many chapters, or as many sections in a chapter, or why some mechanisms are combined together in one chapter. The orthodox mechanisms, doctrinal and established, entail the classical, Marxian, Keynesian, traditional and Bretton Woods.
The classical fosters division of labor, market extent and accumulation of stock. The Marxian credits primitive accumulation and institutional change. The Keynesian upholds demand management. One can hardly inquire in social science today without taking the Marxian perspective into account, for much of contemporary social science is unthinkable absent the influence of Marx. Indeed, mainstream economics considers Marx --a theorist who albeit originated in the classical traditions has drastically changed the focus and direction of political economy and, virtually single-handedly, created a paradigmatic school of economic thought and worldwide disciples-- to be a classical economist, on the basis that he made use of the traditions of Smith and Ricardo.
Paradoxically, it totally circumvents him in neoclassical economics. Hence while the new rendition of the classical school, neoclassical economics, depicts Marx as one of the founders of its parent school, it casts out his entire work as if he never existed. The study of the relationships between developed and underdeveloped countries is not of course the monopoly of Marxism, but cannot be authentically and fruitfully conducted in its absence, even as one ultimately disagrees with Marx's Voltairian revolutionary prescription for overcoming the problem of underdevelopment.
The Keynesian mechanism is the most serious endeavor in the last two centuries to reform capitalism from within, to infuse some realism into the unrealistic tenets of neoclassical economics, to replace the Great Depressions by a demand management growth which is either ignored or attacked by supply side neoclassicism , and to institutionalize the international monetary system for the purpose of globalizing economic growth. Both the rationale and the intent are of significance to the development of the central thesis of this inquiry, bridled capitalism. The heterodox mechanisms, dissenting and nonconformist, include the delinking and the structuralist.
The former emanates from the two inseparable yet distinctive perspectives of neo-Marxism and dependency, both grounded in the theory of imperialism. Hence it is exposited independently. Those heterogeneous mechanisms are ones that could not be accommodated with any of the other mechanisms. They could make more than one chapter, and they could be further internally taxonomized.
Neither step would affect the research thesis however. The transformation versus growth mechanisms are depicted respectively by communal equity and neoclassical efficiency. Efficiency, the neoclassical preoccupation, is juxtaposed to equity, an indispensable intermechanism in underdeveloped conditions, to contrast their attributes while avoiding redundancies. Both efficiency and equity are suggested as intermechanisms, i. Meanwhile, the importance of communal equity, the seal of political economic legitimacy in the UDCs Khaliel, , is emphasized. The themes, after the manifestation of underdevelopment, are semiclassified into the needed transformation , bridled capitalism , distributional corrections, fiscal efficacy end equity, Bretton Woods reform, muddling through the Bretton Woods regime, and prospects for transformation.
And in their collectivity, the abstract, introduction and conclusion, following the Scholastics, expose, inter alia, the general purpose, method and findings of the inquiry. Any excessive attempt at elaborate rationales for this format both contradicts the concept of economism and is moot, because the aim, as has been pointed out above, is not to furnish a taxonomy, for the latter is beside the point, which is to find out what is to be done, irrespective of taxonomies.
As to research tributaries, this critique, in disenchantment with the reductionist method prevalent in economics today, its static analysis, unrealistic assumptions, and technocratic bent, is conducted in the holistic footsteps of Smith and Marx, in the sense of deducing discernments from the entire social existence but without applying an overarching paradigm as did Marx. Both Smith and Marx recognized that the social problem was indivisible into purely economic or whatever categories. They thus attacked the questions at hand on the basis of this conception.
Nor did Marx confine himself to strict pecuniary analysis to found his thought. He drew upon the collective profundity of German gentile philosophy,  world general history, British political economy, and French proto-socialism and sociology. Smith and Marx are thus the two source eclectic political economists par excellence, and this inquiry is conducted in their methodical footsteps. An obvious disclaimer needs to be made explicit. This research is by no means unabridged, although, to the extent that one can evaluate, this is all there is of relevant value, negative as well as positive, in the literature.
The monographs utilized in this critique are of course not exhaustive, but no literature of direct value and immediate relevance to its purpose is ignored or excluded. Of necessity there is a limitation on what to include, if only because of logical reasons. The political economic transformation literature is tremendous, and research comprehensiveness definitionally abridges encyclopedism.
Prioritizing the tributaries of the inquiry, with the guidance of the research aim, is therefore inevitable. It is also important to stay within the general boundaries of political economy, especially its concern with prescription, as opposed, e. Reference to such subfields is delimited to their overlap with political economy. There are also works that, for one reason or another, are incompatible with the first principles and aims of this inquiry, and thus can be either out of tune with its body and analysis or of no contribution to offer to its findings and thesis.
Another disclaimer is that bridled capitalism, entailing the generic transformation themes, is not a panacea for all UDCs' predicaments. Nor is the aim to construct an overarching paradigm of whatever kind. The aim is only to explore problem solving exits or ways out of the current dire situation of the UDCs. If two and half centuries of classical and neoclassical economics, spanning thousands of genuine and reputable scholars, have not produced a sound theoretical foundation for the transformation process,  a single inquiry should not aim at much less be expected to solve this problem univocally --once and for all.
Ultimately, the persuasiveness of bridled capitalism, which is neither an overarching paradigm nor a law of motion, but merely an heuristic remedy, essentially resides in the absence of a better alternative. And absent a better alternative, bridled capitalism should be considered a step in the right direction, especially given that such variety of socioeconomic formations as economically liberal England, social democratic Sweden, and national socialist Germany were all intellectually based on generic capitalism, which encounters little, if any, objection.
There does not seem to exist a clean cut way out. Enlisting strictly in one or the other of the transformation mechanisms is bound to provide no solution. Therefore, the supplemental themes are necessarily rather eclectic to make full use of the entire gamut of transformation mechanisms,  of which none captures the whole truth but each holds some. A particular set of supplemental themes, compatible with a given condition, may then be selected and used by an UDC according to its circumstances.
Country studies could therefore determine, through situation specific contextualization, the most suitable supplemental themes to the case at hand. A measured degree of eclecticism is also tolerated in the supplemental themes because mainstream economics provides neither effectual strategies for UDCs' transformation nor coherent theoretical foundations thereof.
On the other hand, the prescription of the only other overarching paradigmatic school of thought in economics, Marxian revolution, is unattainable. For Marx the revolution is to come about in the advanced capitalist countries, not in the UDCs. However, he also realizes that even there "the trouble is that revolutions require a passive element, a material basis.
Theory is going to be realized in a people only to the extent that it is the realization of its needs Will the theoretical needs be immediately practical needs? It is not sufficient that the idea strive for realization; reality itself must strive toward the idea" quoted in Alfred Meyer's Leninism, Revolutions, in the Marxist sense, arise out of insoluble conflict between productive forces and the system of productive relations in which they operate, which can only be overcome by a transition to another mode of production, and hence the hegemony of a different social class.
If they unwisely do,  then a counter revolution can be easily concocted by power hegemons, after the poor strata have incurred heavy human and economic costs,  and the bourgeoisie has transferred its capital and hoarding abroad, leaving the country in ruin. So, in UDCs' weak and divided conditions, a revolution cannot be carried out successfully as long as it is necessary, and will no longer be necessary, paradoxically, once it becomes feasible.
Even the century's most prominent revolutionary stressed the contingency of the century's most notable revolution. In a passage, quoted in Colburn , Lenin conceded that "if the Revolution has triumphed so rapidly it is exclusively because, as a result of a historical situation of extreme originality, a number of completely distinct currents, a number of totally heterogeneous class interests, and a number of completely opposite social and political tendencies have become fused with remarkable coherence. Sustaining radical fervor for long, when a revolution has already succeeded, is hardly possible.
Revolution engenders divisions among different segments of society whose interests clash. And revolution becomes tiresome to the average citizen and, eventually, constitutes a drain on popular support for new power holders. Alternatively, the UDCs are not privileged with a Germanic tribalism that would produce bourgeois society through serf feudalism via gentile militarism.
Nor do they have the luxury of sitting and waiting for an external stimulus, either direct colonial conquest, full economic penetration or all out proletarian revolution in the West  the one in Russia has already proven impotent , for the Eurocentric processes of modernization, industrialization and economic development to take place on their own pace and take these countries out of misconceived feudalism  to utopian communism via disarticulated capitalism.
UDCs' desperate situation can neither afford them to be that passive nor sustain them as all out revolutionaries. Both schools have come to exclude geo-economic categories, with neoclassicism portraying developmental economics as a harmonious psychiatry and neo-Marxism projecting it as a revolutionary theology. One has no alternative therefore but to venture beyond these two "rigorous" and "coherent" domains,  respectively, if any solution at all is to be found for the dire situation of billions of people in the UDCs.
For that purpose, some principled eclecticism may not be too much of an intellectual inconvenience to endure. However, efficiency, in the straightforward sense of continuously rationalizing production, distribution and exchange, maximizing the ratio of output to input in each case, means economizing, which together with provisioning --that counts most in underdeveloped conditions is the essence of things economic, and as such cannot be abstracted from.
Therefore to the extent that neoclassical economics enhances efficiency, one has to adopt that contributive part of that school, a part which is not given enough attention in Marxian economics notwithstanding the works of Oscar Lange, Abba Lerner, and Maurice Dobb, specifying the conditions required for an optimum allocation of resources.
Again one more reason for resorting to measured eclecticism is that the labor theory of value is appreciated, essentially for commonsensical reasons; not even one scholar dare deny the fact that labor is a source of value or a factor of production. Smith's capital was basically a fund for the payment of laborers and the purchase of material, and not of machinery, the latter being considered merely an accessory to the labor force. However, in the same year in which Smith's Wealth of Nations appeared, , James Watt succeeded in setting his first steam engine in motion. Only a quarter century later, therefore, fixed capital became a new fact of life that Lauderdale, in his Inquiry , pointed out that "not by supporting the laborer, but by replacing him, capital becomes a source of value.
After all, Marx himself gave his monumental critique of the dominantly industrial socio-economic system the title Capital, not labor, presumably because it is capital that distinguished that system from previous ones. They are an orientation, a framework of attitudes and practices for the interplay of forces. They are heuristics rules of thumb , probatory and dynamic; they are not laws, nor are they, nor can there ever be , the final word on the matter,  for whereas nature may be immutable, society is constantly changing, whereby a static Being is merely a moment of the dynamic Becoming.
Whereas mechanical motion is the product of certain physical forces, economic phenomena, especially in the power lacking intricacies of underdevelopment conditions, result, for the most part, from certain normative juridical postulates. Every idea of economic policy has a definite perception of economic theory at its root. Change, thus, is the only social constant. Moreover, because in the difficult conditions of underdevelopment, in contradistinction to those of development, one encounters as much human postulates as economic tendencies, because options are so limited, the germane question concerns as much "what is to be done" as "what is," and both aspects have to be related.
Therefore the sought transformation will not develop by spontaneity alone. It has to be consciously pursued. It is not a law of nature, but a task of woman and man. Persons let alone societies are not just "phenomenal objects," like rocks, trees and even animals, about which "laws of regularity and predictability" can be established, but are thinking, feeling, calculating, purposive beings.
The human observer is also an instrument of observation and, like other instruments, requires a theory for its proper use Abraham Kaplan, The Conduct of Inquiry: Methodology for Behavioral Science, Nobody thinks the order of the stars good or bad, but everyone has an opinion on whether the order of the human world is right or wrong.
The Origins of Capitalist Development: A Critique of Neo-Smithian Marxism
No will to objectivity Weberian freedom from valuation can change this fact, even the most objective person cannot escape judging socioeconomic precepts. And the judgment of people on reality no doubt shapes, but more importantly is well- shaped by, this very reality. And measured eclecticism, as the repudiation of piety or fideism towards one theoretical tradition, is certainly a virtue, a means of liberation from mystification. Still another reason for measured eclecticism is that old economic theories do not die, and they do not die not because one is built on the other but because one is independent from the other.
Indeed, in the history of economic thought, most disputes  over the fundamental aspects of economic analysis are due to factors outside the scope of economics per se. Such factors include conflicting currents of thought concerning methods of reasoning in the social sciences. Economics in an era is thus partially a creature of its episteme, the epistemological paradigm of the epoch. And more often than not an old episteme undergoes a revival through the process of cross cultural dialectics, thereby resulting in a renaissance of an old economic theory. Moreover, tolerating a measured degree of eclecticism in social inquiry is not unprecedented.
Indeed, Rajaa' Roger Garaudy considers this method inevitable for dealing with the complexity and heterogeneity of social phenomena, undemarcated by an infinite range of gradations and variations. Half a century prior to Garaudy, Lewis Henry Haney, an ardent composer of eclectic thought, hence a disciple of historicism in the wider sense of the word, upheld, in his History of Economic Thought and Social Point of View in Economics , the conclusions that a social point of view was the only correct one for judging economic phenomena, and that the great questions of political economy cannot be mustered in isolation from their setting in real life; hence the imperatives of principled eclecticism.
Neoclassical economics, no less than scholasticism, and the sooner the better, will thus succumb to the fundamental fact of all history, by which in the course of time even sense turns to nonsense, truth to error, and the unimaginable to commonplace. The whole history of thought testifies to the relativity and historicity of human understanding. Nothing is quite certain.
Nothing holds true for more than a time, whether the subject matter is creed or deed, thought or thing, economics or politics. But even this new doctrine is only the expression of a transient epoch in the change of history, yesterday not yet dreamed of, today in full splendor, tomorrow abandoned and forgotten. This century alone, several tangible empires, not just theoretical constructs, have disappeared altogether: the Ottoman, Austro-Hungarian, Japanese, Third Reich, French, British and Soviet. The empire of neoclassical economics, mighty as it may feel today, can and should expect no better.
This is the verdict of history. For "though economic analysis and general reasoning are of wide application," conceded none other than Alfred Marshall 66 , "yet every age and country has its own problems; and every change in social conditions is likely to require a new development of economic doctrines. At any rate, preference revelation is not much better than the order of seating among the angels in heaven, given that one full millennium has separated these two preoccupations.
Beyond all that, moreover, eclecticism is the method of the social science as no other.
It is, as shown above, the method of Cicero, Augustine, Aquinas, Smith, Marx, Haney, Garaudy and many other original pillars of social science. Political economy is ipso facto eclectic; indeed its strength is that it draws upon the work not only of philosophers but also of lawyers and various social scientists, particularly sociologists, economists, psychologists and political analysts.
To elucidate the meaning and value content of ideas by which different actors are guided, to embrace the philosophical, psychological, sociological, legal and economic components of social phenomena, political economy has by necessity to be eclectic. Also, prescription may result from analysis of contemporary conditions; for example, arguments in favor of activist government could be based on a particular diagnosis of political, rather than economic, malaise.
Finally, but not exhaustively, the analysis may reflect a concern with the examination of diverse political economic, not merely economic, generic theories, such as liberalism, Marxism, and so forth. The generic themes constituting bridled capitalism , on the other hand, are essentially noneclectic. Anyone unaccustomed to eclectic thought can thus forego the supplemental themes and focus only on the generic ones.
Concededly the latter are grounded neither in neoclassical nor in Marxian economics. They endeavor to balance the conceptual-theoretical with the empirical-historical, that is the transcendental aspect of German idealism, as embodied in Leibniz, Kant, Schelling and Hegel, with the materialist dimension of English empiricism, as upheld by Hobbes, Locke, Bentham and Mill.
Instead of Fund-Bank economic liberalism, therefore, socioeconomic reform is the themes' dominant principle in prescribing economic policy. The generic themes acknowledge both the spatial as well as the class relations of production and exchange as tributaries of socioeconomic formations in underdeveloped conditions. The themes thus are no neat positivist  reducibles, because the concept of economic value as well as the phenomena of price and distribution form essentially social categories. And a study of these can produce satisfactory results only when it is attempted from the outset via a social perspective, the subject matter of which is human --including international-- relations.
Muddling through different aspects of transformation, within a variety of states of underdevelopment, that often lack the luxury of pure choice, needs more than one entrenched recipe. The important point is to set the objectives of transformation clearly, then pragmatically approach them from the most feasible themes. In light of more abundant data, and more thorough analysis by going beyond the narrow and reductionist market formalism, and democratic rhetoric , more judicious appraisal and sober judgment are likely to evolve as to why underdevelopment compels lower levels of liberalism than does development and what can be done about it.
A way out of the neoclassical stand with respect to the UDCs, which amounts to claiming that all their problems are the result of ignorance or unwillingness to make full use of the virtues of neoliberalism and the vision of the IMF, is badly needed. One final disclaimer is that this critique is not an attempt at a full fledged theoretical synthesis. It is rather an heuristic, heretical, probe of how the UDCs can change their state within their current holistic, not just pecuniary, stance. Intellectual humility, if not realism, is thus in order.
Nor should one be expected to produce such a theoretical in contradistinction to descriptive synthesis. Genuinely original syntheses are rare, difficult to arrive at, and usually take lifelong mental labor before materializing. This said, and with all humility, the fundamental conceptual insights of this inquiry are original. The very outlook of the inquiry, the thesis that a principled eclectic approach liberated from overarching ideologies namely bridled capitalism  which essentially throws away the yoke of Marxian revolutionism as well as neoclassical laissez faire is the most suitable way to muddle through the contemporary underdevelopment configuration, is original indeed.
The concept that the underdevelopment problem is fundamentally as much one of security as of economics is original. Such breadth and treatment amount to a transdisciplinarity of approach that breaks free from both the magic formula of universal applicability and the artificial divisions imposed by the compartmentalization of the social sciences into separate subject disciplines. Instead, this approach attempts to employ a contingent, heuristic, nonreductionist social science that is, one hopes, capable of grasping the complexity of social phenomena, the wide variety of actors and rationalities substantive, procedural, complex --recursive-reflexive and motivations economic, sociological, cultural, ethical, ecological, psychological , and the multiple determinations of social systems, without recourse to a purely idealist and teleological logic see Ash Amin and Jerzy Hausner, Beyond Market and Hierarchy: Interactive Governance and Social Complexity , 8, Contrary to the neoclassical reductionist characterization of the economy, this approach strives to be sensitive to nonteleological change, cognitive and cultural boundedness, social and institutional  embeddedness, variant and diverse actor rationalities, autonomous and extroverted social networkings, cross cutting and conflicting goals, locational and temporal adaptations, oscillating and asymmetrical interdependencies, and contingent and contextual path specificities.
This approach thus endeavors to analyze properly the dialectics between ontology and epistemology, between structure and agency,  and between individual and collective, in handling the forces and relations of production within the UDCs, and among the latter and the DCs. The significance of this critique, however, is not a matter of intellectual curiosity and pondering, but of real survival value for billions of people in the UDCs. On the other hand, the endeavor to discern heuristic transformation themes from diverse political economy monographs on growth is undoubtedly a worthwhile intellectual contribution.
Without any need to disclaim comparison, this is what Smith's Inquiry and Marx's Critique are essentially about. Indeed, Hegel's dialectic treats this gradual assemblage process as the characteristic form of theoretical progress, the concept of aufhebung , expressing how opposites are deliberately and piecemeally canceled and preserved in a new unity. And aside from the speculative elaboration upon untested hypotheses, such as the notion that celestial bodies move in perfect circles, the great works of Aristotle, which much Western European thought adopted as its basis, consisted essentially of the systematization of earlier thinking in the realm of science, logic, politics and ethics, with very few novelties.
The Aristotelian picture of the universe was of course composed of a group of perfect crystal spheres centering on, and revolving about, the Earth. That did not preclude its great contribution to the thought of more than one civilization. Further research to prioritize various aspects of human development and to identify social returns to different types of social expenditures over time is also needed.
Not least, country studies are in order to determine which set of supplemental themes is germane to specific country conditions. A comparative study of the internal and external conditions in nonimperialist European economies, seeking to elaborate on how these economies avoided dependent peripheralization and underdevelopment, is further in order. And the recrimination of UDCs' population growth as the cause of poverty needs serious reconsideration. On the one hand it seems fundamental for both motivating the bulk of the populace and enlisting the most talented to run the societal machine.
A lot of work is yet to be done, for this critique barely scratches the surface of how to overcome underdevelopment, how to help billions of desperately poor people in the world self-transform. This chapter focuses on the orthodox mechanisms of socioeconomic transformation. These are doctrinal, established and prevalent theories of economic growth. The aim is to point out, analyze and elucidate the contribution each of these theories can lend to the specific objective of improving the current situation in the UDCs.
Needless to repeat, this will be the aim of each of the first four chapters with respect to the theories involved. The perspectives discussed in this chapter are either unsuitable for direct application in the UDCs, or speak for historic circumstances that are different from, or no longer characteristic of, the situation of the UDCs at the threshold of the twenty-first century. They nonetheless provide the foundations for the other perspectives discussed in the following chapters. Any potential loose ends, therefore, are cumulatively tied in by the comparative process in the following chapters, especially by the regrouping of chapter five.
For there are concepts in the following chapters that need to be introduced before some comparative analysis can take place. That pattern also much reduces redundancy.