Introduction.

Throughout my years as a reader, as I started reading in my 20’s, I was bombarded by Marxist ideas from all sides. I accepted the Marxist doctrine and defended it in college. As I grew older, I have softened, and then switched sides. Now, I am in a sense anti-Marxist. In no way do I allow Marxism to contain me through its opposite. I have developed my own thought, and wherever I see ideas espoused by Professor Marx, I understand the basis from which Marxists pelt the world with their pebbles.

Whenever I criticized Marx and Marxists, I was countered by the tired attaché of Marxistan, asking me if I had read Das Kapital. ‘No, I did not.’ ‘Then how do you criticize his ideas so readily without reading him?’ ‘I know by heart the errors of Newton without reading him. I have read selections, studied classical mechanics, optics, etc., and I am able to reconstruct his arguments. Do I really need to read him in full?’ ‘Newton is different; and in any case, if you are so content to attack Marx without reading him, then there’s no talking with you.’

On the one hand, my detractors make sense: How come you criticize someone without reading him? But on the other hand, Das Kapital is a thick, jargon-filled, tome almost indecipherable in many places, and utterly boring to read. And what of my attacking Marx! I read his pupils, his summarizers, his friends, his other tracts! Am I not allowed to attack him based on his ideas as they survive today?

I was hesitant to read Marx. But then, three events happened. I read Thomas Sowell’s Marxism, and saw that Marx had indeed some things to contribute, according to our author. I also read Rothbard’s Austrian Perspective, which demolished Sowell’s analysis. Rothbard also gave the final critique of Marx’s volume 3 (reproduced below) which gave the final blow to Marx’s pseudo-economics. The final event, which encouraged me to read it anyway was Skousen’s recent history of economics, in which he claimed that Rothbard’s critique of Smith and Marx were acidic, to which I had to step in and verify everything for myself. What is given below are comments on Marx’s three volumes.

---

Volume 1.

I have come to appreciate the writings of Karl Marx more after reading these three volumes. Even though I consider him an unoriginal economist, indeed a lesser thinker, I saw in him some things worthy of some semblance of admiration. I now see how much of Mises’ Human Action: A Treatise on Economics is a response to this first volume. I have read the three volumes of Das Kapital in order to understand the strength of Rothbard’s argument in An Austrian Perspective on the History of Economic Thought. More on this in the review of the third volume. The two economists who made me at least give Marx a try were Thomas Sowell in Marxism: Philosophy and Economics, a book devastatingly attacked by Rothbard, and Mark Skousen’s The Big Three in Economics: Adam Smith, Karl Marx, and John Maynard Keynes and The Making of Modern Economics: The Lives and Ideas of the Great Thinkers.

It is indeed sad to see that the book progresses well in the first two chapters. However, in the third, one starts to see the great errors of the three volumes start to manifest. The first is an error Marx inherits from Adam Smith, David Ricardo, and Thomas Malthus. That the value of an object may be separated into value in use and value in exchange. And that the value in exchange, i.e., its market price, is decided by the amount and nature of labour performed to yield the merchandise. It is uncontroversial that this is utterly wrong today. Almost all economists agree that this shallow representation of value is incorrect. Economists today subscribe to the subjective value theory, whereas a minority believe that prices are set by fiat. Those of the latter disposition will revert to the subjective value theory of prices. This is the first error. The first error also pervades into his writing when we see him inherit the categorizations of Ricardo of the factors of production: viz. capital, land, and labour; and subsequently, the revenue earned from these factors, respectively: interest, rent, and wages. Modern economists add the fourth factor of production, entrepreneurship, and its income, profit. This is totally erroneous, but the discussion is left for another day.

The second error is harder to word. It is a Hegelian hermetic mysticism. In one form, it appears as a variety of historicism. Marx often speaks of inevitable historic forces that shape the flow of societies. In another form, we see it in bizarre ideas like congealed labour, which figures in Marx’s theory of the surplus value of labour, which we call profit. However, it is more appropriately called the revenue that the capitalist enjoys after paying off his equity and liability. A retained earning that ultimately goes back to the assets of the employer or capitalist. This magical thinking is all pervasive in the first volume, and it slowly grades away in the following volumes.

With all this being said, Marx’s work is a great waste of time, and I do not advise anyone to read it. There is little of benefit here. It is an incoherent mess. His attacks on other economists are sometimes on point, but they are economists of no interest to anyone, scholars sidelined by history. I am glad that I have read it. But as my young students would say: It’s a once-and-done experience for me, and that’s it.

---

Volume II.

Karl Marx never finished this book. And he couldn’t have. Even Friedrich Engels had to correct many of his errors, his illegitimate use of mathematics, and his historical facts. If the first book had at least something to contribute, this did not, and indeed, could not. Often I would think about how claims in this page or that contradicted ideas in the previous chapter or the previous book. In this specific volume, he focused much more on his faulty exploitation thesis. Karl Marx believed that value is inherent in labour, as did the classical economists before him. He inherited that error. But he went ahead, and I am not entirely sure if he was the originator of this idea, that the surplus value comes from a specific “congealed” useful labour. This idea is just sad. It is utterly meaningless, unquantifiable, and is presented ad-hoc.

Much of this book is just a retelling of the big-business (or even lesser businessmen) exploitation of the working class. Never had Karl Marx, in any page, return to this idea that neither employer nor employee were the architects of the status quo, of which both parties simply want to redress. I was sick of this book from the start but persevered. I do not know what I had gained from it. I have read much longer books, of which I was always engaged in debate with myself. In here, I am tired, and only needed to finish it so that I would miss nothing when I progress to the next book. Hegelism is less strong in this volume. It consumed Marx in the previous volume. It did not here. Maybe he has matured. But his maturation never allowed him to question his much cherished premises.

The exploitation thesis, as I see it, is incredibly insulting. Let me illustrate with an example: Suppose that I was robbed, obviously unjustly, of my wealth in city A. Suppose also that I know that the nearby city B has some job openings by which I can regain what semblance of wealth I have lost. Suppose further that the best short-term employer I can find is not in dire need of an employee. He is only willing to offer me a job if he had to pay me a meagre, miniscule, bare subsistence pay. Finally, suppose also that that task will gain him largess, but also a headache, that he is hesitant to handle the aftermath, but is willing if his costs are low. I agree to the job. He agrees to the employment. A third party only sees the written transaction. Is this exploitation? Am I being exploited because there are no other, better, employers? Who is to blame? Other people for not being able to provide me that ideal job? Myself for being robbed? City A? City B? Who exactly?

No doubt, there is exploitation in this world, and no doubt it is disgusting and cruel. Some people are oppressed, some are without human rights. But the most important question, as I see it, is: Who is to blame? Most of the errors in volume two are errors of this nature. The German government forces employers to provide education to their employees. Many young workers do not want said education, especially how harsh, unaccommodating, or useless it is in Marx’s Prussia. Marx’s complaints about the schools, much of his complaint at least, is appropriate. But it is misguided: Why blame the employer for this task that the students of Marx (and Engels in particular) think should be the proper responsibility of the state? This is but one issue.

The damages that fall to the employees, which Marx strangely attributes to the influence of capital, are often crimes. If the employee has agreed to the risk, then it is the employee’s responsibility, but let us ignore this possibility. In our case, we can blame either the capitalist or the law-makers, the legislators, the judges. Why frame the issue as if it is only within the realm of one party? This bias is all but apparent. Often, regular human beings are treated as if they were automata, unable whatever to forge, or at least influence, their fates. This is the policy of the accuser, and I think that it is apt that the accuser prove this point before proceeding, which neither Marx nor Engels, the authors of this second volume and the third, ever do.

---

Volume III.

I have read the three volumes of Das Kapital mainly to reach the final paragraph of this book. I wanted my experience in reading Marx to be coherent, and my understanding to be complete. Of this, I was very disappointed. First, let us discuss what Marx attempts to do in the third and final volume of his Das Kapital.

I should first note that Marx himself had not much choice in what appeared in the third volume and what content would be left in the second volume. The latter two volumes of Das Kapital were collected, refined, and patched by Friedrich Engels (and partially by Samuel Moore, among other less important secretarial figures). Still, some work was left of Marx’s notes, which was supposed to be collected in the fourth volume, but Karl Kautsky published it separately under the title Theories of Surplus Value.

This volume feigns to focus on the data collected on surplus values, and more importantly, to analyze and study the laborer-landlord-capitalist divide. It does a botched job at it, and Engels’ comments attest to that, as we see in several areas where he comments that the numbers don’t add up, but are merely to prove the point. Though really, if the numbers do not add up, should not the scientist take a step back and say: Perhaps I could not prove my point unless I know for sure that these numbers are correct and verify, or at least, strengthen my conclusion? (An anecdote: My Ph.D. advisor once asked me to fetch a reference from a paper. I got reference 52 and added it to our research article, but notified him that the paper that cited it was retracted, where my professor promptly verified. Then, quite naturally, he took his pen and wrote on the retracted paper that its result was doubtful, to which I immediately reproached him: ‘Why would that be necessary, since every paper is doubtful. Of course, I knew that the paper being retracted allows us to pragmatically cast greater doubt onto its result, but it was funny to note that out. He replied: “Well…”)

Finally, this volume shows a maturity beyond what was seen in the first two paragraphs. It seems that Marx by now is less quick to jump to conclusions, and is interested in proving and clarifying the main ideas and concepts explored in the first volumes. The final section of the volume is most illuminating. Toward that end, let me reproduce the final paragraph, and then I will put Murray N. Rothbard’s discussion from his An Austrian Perspective on the History of Economic Thought as a case in point. Thus, Marx:

The owners merely of labour-power, owners of capital, and land-owners, whose respective sources of income are wages, profit and ground-rent, in other words, wage-labourers, capitalists and land-owners, constitute then three big classes of modern society based upon the capitalist mode of production.
In England, modern society is indisputably most highly and classically developed in economic
structure. Nevertheless, even here the stratification of classes does not appear in its pure form. Middle and intermediate strata even here obliterate lines of demarcation everywhere (although incomparably less in rural districts than in the cities). However, this is immaterial for our analysis. We have seen that the continual tendency and law of development of the capitalist mode of production is more and more to divorce the means of production from labour, and more and more to concentrate the scattered means of production into large groups, thereby transforming labour into wage-labour and the means of production into capital. And to this tendency, on the other hand, corresponds the independent separation of landed property from capital and labour, [F.E. Note] or the transformation of all landed property into the form of landed property corresponding to the capitalist mode of production.
The first question to he answered is this: What constitutes a class? – and the reply to this follows naturally from the reply to another question, namely: What makes wage-labourers, capitalists and landlords constitute the three great social classes?
At first glance – the identity of revenues and sources of revenue. There are three great social groups whose members, the individuals forming them, live on wages, profit and ground-rent respectively, on the realisation of their labour-power, their capital, and their landed property. However, from this standpoint, physicians and officials, e.g., would also constitute two classes, for they belong to two distinct social groups, the members of each of these groups receiving their revenue from one and the same source. The same would also be true of the infinite fragmentation of interest and rank into which the division of social labour splits labourers as well as capitalists and landlords-the latter, e.g., into owners of vineyards, farm owners, owners of forests, mine owners and owners of fisheries.
[F.E.: Here the manuscript breaks off.]

F. E.’s Note:
F. List remarks correctly: “The prevalence of a self-sufficient economy on large estates demonstrates solely the lack of civilisation, means of communication, domestic trades and wealthy cities. It is to be encountered, therefore, throughout Russia, Poland, Hungary and Mecklenburg. Formerly, it was also prevalent in England; with the advance of trades and commerce, however, this was replaced by the breaking up into middle estates and the leasing of land.” (Die Ackerverfassung, die Zwergwirtschaft und die Auswanderung, 1842, p.10.)

What a beautiful end of a trilogy. An unfinished chapter by which Marx has destroyed Marxism. Let us now consider Rothbard’s commentary [pp. 381 – 385], reproduced in full:

There is a grave inner contradiction at the heart of the Marxian system, in Marx’s crucial concept of class. In the Marxian dialectic, two mighty social classes face each other in inherent conflict, the ruling and the ruled. In the first two of history’s major conflicts: ‘oriental despotism’, and ‘feudalism’, the social classes are defined by Marx in what we have seen to be the libertarian, or Misesian, manner: as classes privileged or burdened by the state. Thus, in ‘oriental despotism’, or the ‘Asiatic mode of production’, the emperor and his technocratic bureaucracy run the state, and constitute its ‘ruling class’. This class acquires privileges from the state, and taxes and controls the ‘ruled’ classes, that is, everyone else, largely the peasantry but also craftsmen and merchants. Here Marx adopts the libertarian (as we have seen advanced by James Mill) definition of a two-class system, the ruling Few who have gained control of the state, who are governing and exploiting the ruled Many. Under feudalism, a similar concept applies. The landlord class has acquired territory through war and conquest, and has settled down to oppress the peasantry and the merchants and craftsmen via coerced rents, taxes, controls and serfdom. Once again, Marx’s class categories are ‘caste’ categories: the ruling class is such by virtue of its having gained control of the state, the main social apparatus of coercion.
All well and good. But then, suddenly, when Marx gets to capitalism, the class categories change, without acknowledgement. Now the ruling class is not simply defined as the class that runs the state apparatus. Now, suddenly, the original act of rule or ‘exploitation’ is the voluntary market wage contract, the very act of a capitalist hiring a worker and a worker agreeing to be hired. This in itself, to Marx, establishes a common ‘class-interest’ among capitalists, exploiting a ‘common class’ of workers. It is true that Marx also believed that this ‘capitalist class’ runs the state, but only as ‘the executive committee of the ruling class’ , that is, of a ruling class that previously existed on the free market, because of the wage system. So that what Marx, as analyst of oriental despotism or feudalism, would consider ruling-class exploitation still exists under capitalism, but only as an addendum to the preexisting capitalist exploitation of the w0rkers through the wage system. Ruling-class exploitation under capitalism is unique in exercising a double exploitation: first, on the market as part of the wage contract, and second, the alleged exploitation by the state as executive committee of the ruling class.
It should be evident that Marx’s analysis of class is by this point a mishmash, in total disarray; two contradictory definitions of class are jammed together, unfused and unacknowledged. Why should capitalism, of all systems’, be able to levy a ‘double’ exploitation that no other ruling class in Marx’s historical schema can ever enjoy?
But the crucial point is that Marx’s definition of class and class conflict under capitalism is hopelessly muddled and totally wrong. How can ‘capitalists’ , even in the same industry let alone in the entire social system, have any thing crucial in common? Brahmins and slaves, in a caste system, certainly enjoy a common class-interest, in conflict with other castes. But what is the common ‘class-interest’ of the ‘capitalist class’? On the contrary, capitalist firms are in continual competition and rivalry with each other. They compete for raw material, for labour, for sales and customers. They compete in price and quality, and in seeking new products and new ways to get ahead of their competitors. Marx, of course, did not deny the reality of this competition. So how can all capitalists, or even ‘the steel industry’ , be considered a class with common interests? Again, in only one way: the steel industry only enjoys common interests if it can induce the state to create such interests through special privilege. State intervention to impose a steel tariff, or a steel cartel with restricted output and higher price, would indeed create a privileged ‘ruling class’ of steel industrialists. But no such class having common interests pre-exists on the market before such intervention comes about. Only the state can create a privileged class (or a subordinate and burdened class) by acts of intervention into the economy or society. There can be no ‘capitalist ruling class’ on the free market.
Similarly, there can be no ‘working class’ with common class-interests on the free market. Workers compete with each other, just as capitalists or entrepreneurs compete with each other. Once again, if groups of workers can use the state to exclude other groups, they can become a ruling class as against the excluded groups. Thus, if government immigration restrictions keep out new workers, the native workers can benefit (at least in the short run) at the expense of incomes of immigrants; or if white workers can keep black workers out of skilled jobs by state coercion (as was done in South Africa), the former becomes a privileged or ruling class at the expense of the latter.
An important point here is that any group that can manage to control, or gain privileges from, the state can take its place among the exploiters: this can be specific groups of workers, or businessmen, or Communist Party members, or whatever. There is no reason to assume that only ‘capitalists’ can acquire such privileges.
In his class analysis, Marx constantly had to struggle with the fact that neither capitalists nor workers act in practice as if they are each members of monolithic, conflicting classes. On the contrary, capitalists persist in competing with each other, and workers likewise. Even in their rousing Communist Manifesto, Marx and Engels had to admit that ‘The organization of the proletarians into a class, and consequently into a political party, is continually being upset again by the competition among the workers themselves’. Indeed.
But there are more grave problems. For Marx had his two-class analysis; the essence of each titanic struggle in history is between two great social classes: the ruling vs the ruled, the rising class in tune with the new material productive forces, the declining one out of tune. But it is one thing to employ a two-class ruler vs ruled analysis according to libertarian or Millian definitions; since there are indeed common caste interests and conflicts, this concept is here a simplification, but an important and workable one. But what are we to do in the complex, multi-class world of the capitalist market economy? How can we employ a two-class model there, either for market or political action?
And there is no question that Marx is committed to the two-class model: capitalists vs proletarians. All other classes fade away, so that the mighty, exploited immiserated class can and will rise up as a monolith to overthrow ‘the capitalist class’. As Marx and Engels say in the Communist Manifesto:
‘Our epoch, the epoch of the bourgeoisie, possesses, however, this distinctive feature: it has simplified the class antagonisms: Society as a whole is more and more splitting up into two great hostile camps, into two great classes directly facing each other: Bourgeoisie and Proletariat.‘
But in practice, in analysing recent history or current events, Marx and Engels were forced to talk about many classes and groups, and their interactions – thereby implicitly but definitely betraying their own absurd two-class model. And so we have the problem that Marx’s two classes are far from monoliths, that their members compete with each other constantly and collaborate very rarely, and also that in capitalist society in particular it is impossible to analyse historical action by squeezing all human actors into two classes.
In practice, however, Marx and other Marxists happily use a multi-class model in analysing historical events: ‘steel capital’, ‘textile capital’, ‘armament capital’, ‘finance capital’ , etc. But they do not seem to realize that while they are being far more realistic than when prating about ‘capitalists’ vs ‘workers’ as two-class monoliths, they are totally betraying the Marxian dialectic itself. No inevitable revolution,·for example, will ever follow from multi-class squabbling – certainly not Marx’s cherished proletarian one. Marx himself, and Marxists generally, have devoted many millions of words to the concept and use of the term ‘class’. Yet in all his writings, Marx never once defined it. For if he had attempted a definition, the stark inner contradiction in the concept, the slippage between state creation and mere market action, would have become starkly clear, and something would have had to give.
Thus, in Marx’s theoretical magnum opus, Capital, there is no attempt at a definition of class. Only an incomplete Volume I was published in Marx’s lifetime (1867), at which point he had substantially finished working on the book. After Marx’s death in 1883, Engels worked up, edited and published the remaining manuscript in two further volumes (1885, 1894).14 Only in the famous very last chapter of the third volume does Marx finally arrive at an attempt to define what he and Engels had been talking and writing about for four decades. It is an unfinished chapter of startling brevity – five short paragraphs. In this chapter, ‘Classes’, Marx begins with the classical Ricardian triad: that the sources of income in the market economy are wages, profits and rents, and that the receivers of such income constitute the ‘three big classes of modern society’ – labourers, capitalists and landlords. 15 So far, so good. But then Marx adds that even England, ‘the most highly and classically developed’ capitalist country, contains ‘middle and intermediate strata [which] even here obliterate lines of demarcation everywhere’. But, he quickly hastens to assure his readers that this problem is irrelevant, since the concentration and polarization of classes is proceeding apace.
Marx then begins the third paragraph of this seemingly climactic chapter. ‘The first question to be answered is this: What constitutes a class?’ Indeed. He then adds that the reply to this question ‘follows naturally’ from the reply to a second, related question: ‘What makes wage-labourers, capitalists, and landlords constitute the three great social classes?’ We are now primed for the answer, first to the latter Ricardian question and then to the first, critical query, ‘What constitutes a class?’
On the second question, Marx states that ‘at first glance’ the identity of incomes with their sources constitutes the answer. After all, workers earn wages from their labour, capitalists make profits from their capital, and landlords obtain rent from their land. But Marx quickly warns us that this
simple answer will not do. For:
‘However, from that standpoint, physicians and officials, e.g., would also constitute two classes, for they belong to two distinct social groups, the members of each of these groups receiving their revenues from one and the same source. The same would also be true of the infinite fragmentation of interest and rank into which the division of social labour splits labourers as well as capitalists and landlords – the latter, e.g. into owners of vineyards, farm owners, owners of forests, mine owners and owners of fisheries.‘
Precisely. Marx has said it very well; his cherished two-class monolith model (or three-class, if we throw in the allegedly declining ‘feudal remnant’ – the landlord class) lies totally in ruins.
Thus Marxian class theory, and therefore Marxism, lay destroyed by its creator’s own hand. But if it is always darkest before the dawn, if the suffering of the oppressed class is greatest just before the apocalyptic revolutionary moment, we would expect Karl Marx to step in and triumphantly save the day. How does he do it? How does the drama unfold? In one of the great anti-climactic moments in the history of social thought, the manuscript ends with the lines we have just quoted. There is just a cryptic footnote from Engels: ‘Here the manuscript breaks off’.
The way Engels puts it implies that the Master was struck down just as his pen was ready to wield the Answer that would rescue the crumbling Marxian theory of class and place it on solid foundations. But we know this was not true, for the ‘breaking off’ occurred 16 years before Marx’s death. Marx had ample time for his dramatic and conclusive answer. Why didn’t he pursue it? We can only conclude that he couldn’t, that he was stopped, that he realized that there was no answer, and that Marxism would henceforth have to rely on repetition and bluster to carry it through.

Glorious.