Marxism: Philosophy and Economics
by Thomas Sowell

A sympathetic presentation of Marx's philosophy. Sowell saves his criticism for the final chapter. The book has surprises. Marx was not a Marxist:
"The dialectic approach was seen by Marx and Engels as a useful way to investigate the real world, not a mysterious force imposing its own will on humanity or on history." p.35
He believed in religious freedom (page 45). Imperialism has a historic function, according to Marx - to civilize and advance more primitive societies (p. 79). He did not believe in the labor theory of value (p. 88-89). Marx would have agreed with Bohm-Bawerk's classic "refutation" of the labor theory of value (p. 109), it just didn't apply to Marx. He believed free-market competition was necessary to allocate productive resources efficiently (p. 127).
"Contrary to Samuelson's interpretation, for example, Capital does not show wages falling to subsistence over time; wages tend to be at subsistence over time, with the specific contents of that subsistence tending to increase." p. 137
Marx and Engels were opposed to making labor value the basis of prices or income distribution under socialism, and they opposed establishing prices by fiat (p. 141). Marx had little sympathy with the socialist idea of redistributing the total wealth of society (p. 161).

After treating Marx fairly and carefully reading all his works, Sowell summarizes Marx's contribution to economics as "virtually zero."

"By starting his analysis in the middle, with surviving firms in place, waiting to hire workers, Marx ignored the key implication of failing firms (a majority of all firms in the long run) - that risk is inherent in anticipating consumer demand, and that profit derives from successfully assuming that risk, rather than from merely hiring people to perform the mechanical aspects of producing goods. Failing firms also hire workers - but their very failure shows that is no guarantee of receiving surplus value." page 198 ...

"The esoteric Ricardian-Marxian conception of wage shares is hardly a weighty matter even to other economists, much less a life-and-death issue to the working class. Similarly, Marxian "alienation" is a philosophically esoteric concept projected by intellectuals onto the working class, rather than a passion felt from within that class with such intensity as to drive the proletariat to the barricades." p. 202...
...in some Western nations, the workers also possess a substantial amount of physical capital, owned by their pension funds. It is estimated that the workers in the United States, for example, own a higher proportion of the means of production that do workers in Communist Yugoslavia." p. 203

"Moreover, wherever the masses can "vote with their feet," it is almost invariably to move toward capitalist nations where intellectuals say they are alienated." p. 204

"Statistical data on a country-by-country basis show very nearly the opposite of what Lenin claimed. Industrial nations tend to send their foreign investment to other industrial nations, rather than to industrially undeveloped nations. The United States, for example, has more invested in Canada than in Asia and Africa put together - and it has more invested in Europe than in Canada." p. 215

Year Read: 1987


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