Marxism and the Labor Movement
This essay is taken from Omnipotent Government. Here von Mises presents Marx's ideas with a lucidity rarely encountered in other classical liberals. What emerges is that Marx vision was in favour of the development of the capitalistic mode of production in view of the construction of a post-capitalistic society. Instead liberals have presented Marx as a rabid anti-capitalism propagandist. Many have done it and are still doing it for political gains, in order that liberal parties prevail over socialist parties. Whatever the reason, the manipulation has been a stumbling block to a fruitful analysis of Marx's ideas.
Karl Marx turned to socialism at a time when he did not yet know economics and because he did not know it. Later, when the failure of the Revolution of 1848 and 1849 forced him to flee Germany, he went to London. There, in the reading room of the British Museum, he discovered in the 'fifties not, as he boasted, the laws of capitalist evolution, but the writings of British political economy, the reports published by the British Government, and the pamphlets in which earlier British socialists used the theory of value as expounded by classical economics for a moral justification of labor's claims. These were the materials out of which Marx built his "economic foundations" of socialism.
Before he moved to London Marx had quite naively advocated a program of
interventionism. In the Communist Manifesto in 1848 he expounded ten measures
for imminent action. These points, which are described as "pretty generally
applicable in the most advanced countries," are defined as "despotic
inroads on the rights of property and on the conditions of bourgeois methods
of production." Marx and Engels characterize them as "measures,
economically unsatisfactory and untenable, but which in the course of events
outstrip themselves, necessitate further inroads upon the old social order
and are indispensable as a means of entirely revolutionizing the whole mode
of production." .
Eight of these ten points have been executed by the German Nazis with a radicalism that would have delighted Marx. The two remaining suggestions (namely, expropriation of private property in land and dedication of all rents of land to public expenditure, and abolition of all right of inheritance) have not yet been fully adopted by the Nazis. However, their methods of taxation, their agricultural planning, and their policies concerning rent restriction are daily approaching the goals determined by Marx. The authors of the Communist Manifesto aimed at a step-by-step realization of socialism by measures of social reform. They were thus recommending procedures which Marx and the Marxians in later years branded as socio-reformist fraud.
In London, in the 'fifties, Marx learned very different ideas. The study
of British political economy taught him that such acts of intervention in
the operation of the market would not serve their purpose. From then on he
dismissed such acts as "petty-bourgeois nonsense" which stemmed
from ignorance of the laws of capitalist evolution. Class-conscious proletarians
are not to base their hopes on such reforms. They are not to hinder the
evolution of capitalism as the narrow-minded petty bourgeois want to. The
proletarians, on the contrary, should hail every step of progress in the
capitalist system of production. For socialism will not replace capitalism
until capitalism has reached its full maturity, the highest stage of its
own evolution. "No social order ever perishes before all the productive
forces for which there is room in it have developed; and new higher methods
of production never appear before the material conditions of their existence
have matured in the womb of the old society itself." .
Therefore there is but one road toward the collapse of capitalism - i.e., the progressive evolution of capitalism itself. Socialization through the expropriation of capitalists is a process "which executes itself through the operation of the inherent laws of capitalist production." Then "the knell of capitalistic private property sounds." . Socialism dawns and "ends . . . the primeval history of human society." .
From this viewpoint it is not only the endeavors of social reformers eager to restrain, to regulate, and to improve capitalism that must be deemed vain. No less contrary to purpose appear the plans of the workers themselves to raise wage rates and their standard of living, through unionization and through strikes, within the framework of capitalism. "The very development of modern industry must progressively turn the scales in favor of the capitalist against the workingman," and "consequently the general tendency of capitalist production is not to raise but to sink the average standard of wages." Such being the tendency of things within the capitalist system, the most that trade-unionism can attempt is to make "the best of the occasional chances for their temporary improvement." Trade-unions ought to understand that and to change their policies entirely, "Instead of the conservative motto: A fair day's wages for a fair day's work, they ought to inscribe on their banner the revolutionary watchword: Abolition of the wages system!" .
These Marxian ideas might impress some Hegelians steeped in dialectics. Such doctrinaires were prepared to believe that capitalist production begets "with the inexorability of a law of nature its own negation" as "negation of negation,"  and to wait until, "with the change of the economic basis," the "whole immense superstructure will have, more or less rapidly, accomplished its revolution." . A political movement for the seizure of power, as Marx envisaged it, could not be built up on such beliefs. Workers could not be made supporters of them. It was hopeless to look for cooperation on the ground of such views from the labor movement, which did not have to be inaugurated but was already in existence. This labor movement was essentially a trade-union movement. Fully impregnated with ideas branded as petty bourgeois by Marx, unionized labor sought higher wage rates and fewer hours of work; it demanded labor legislation, price control of consumer's goods, and rent restriction. The workers sympathized not with Marxian teachings and the recipes derived from them but with the program of the interventionists and the social reformers. They were not prepared to renounce their plans and wait quietly for the far-distant day when capitalism was bound to turn into socialism. These workers were pleased when the Marxian propagandists explained to them that the inevitable laws of social evolution had destined them for greater things, that they were chosen to replace the rotten parasites of capitalist society, that the future was theirs. But they wanted to live for their own day, not for a distant future, and they asked for an immediate payment on account of their future inheritance.
The Marxians had to choose between a rigid uncompromising adherence to their master's teachings and an accommodating adaptation to the point of view of the workers, who could provide them with honors, power, influence and, last but not least, with a nice income. They could not resist the latter temptation, and yielded. They kept on discussing Marxian dialectics in the midst of their own circles; Marxism, moreover, had an esoteric character. But out in the open they talked and wrote in a different way. They headed the labor movement for which wage raises, labor legislation, and social insurance provisions were of greater importance than sophisticated discussions concerning "the riddle of the average rate of profit." They organized consumer's cooperatives and housing societies; they backed all the anticapitalist policies which they stigmatized in their Marxian writings as petty-bourgeois issues. They did everything that their Marxian theories denounced as nonsense, and they were prepared to sacrifice all their principles and convictions if some gain at the next election campaign could be expected from such a sacrifice. They were implacable doctrinaires in their esoteric books and unprincipled opportunists in their political activities.
The German Social Democrats developed this double-dealing into a perfect system. There was on the one side the very narrow circle of initiated Marxians, whose task it was to watch over the purity of the orthodox creed and to justify the party's political actions, incompatible with these creeds, by some paralogisms and fallacious inferences. After the death of Marx, Engels was the authentic interpreter of Marxian thought. With the death of Engels, Kautsky inherited this authority. He who deviated an inch from the correct dogma had to recant submissively or face pitiless exclusion from the party's ranks. For all those who did not live on their own funds such an exclusion meant the loss of the source of income. On the other hand, there was the huge, daily increasing body of party bureaucrats, busy with the political activities of the labor movement. For these men the Marxian phraseology was only an adornment to their propaganda. They did not care a whit for historical materialism or for the theory of value. They were interventionists and reformers. They did whatever would make them popular with the masses, their employers. This opportunism was extremely successful. Membership figures and contributions to the party, its trade unions, cooperatives, and other associations increased steadily. The party became a powerful body with a large budget and thousands of employees. It controlled newspapers, publishing houses, printing offices, assembly halls, boarding houses, cooperatives, and plants to supply the needs of the cooperatives. It ran a school for the education of the rising generation of party executives. It was the most important agency in the Reich's political structure, and was paramount in the Second International Working Men's Association.
It was a serious mistake not to perceive this dualism, which housed under the same roof two radically different principles and tendencies, incompatible and incapable of being welded together. For it was the most characteristic feature of the German Social Democratic party and of all parties formed abroad after its model. The very small groups of zealous Marxians - probably never more than a few hundred persons in the whole Reich - were completely segregated from the rest of the party membership. They communicated with their foreign friends, especially with the Austrian Marxians (the "Austro-Marxian doctrinaires"), the exiled Russian revolutionaries, and with some Italian groups. In the Anglo-Saxon countries Marxism in those days was practically unknown. With the daily political activities of the party these orthodox Marxians had little in common. Their points of view and their feelings were strange, even disgusting, not only to the masses but also to many party bureaucrats. The millions voting the Social Democratic ticket paid no attention to these endless theoretical discussions concerning the concentration of capital, the collapse of capitalism, finance capital and imperialism, and the relations between Marxian materialism and Kantian criticism. They tolerated this pedantic clan because they saw that they impressed and frightened the "bourgeois" world of statesmen, entrepreneurs, and clergymen, and that the government-appointed university professors, that German Brahmin caste, took them seriously and wrote voluminous works about Marxism. But they went their own way and let the learned doctors go theirs.
Much has been said concerning the alleged fundamental difference between the German labor movement and the British. But it is not recognized that a great many of these differences were of an accidental and external character only. Both labor parties desired socialism; both wanted to attain socialism gradually by reforms within the framework of capitalist society. Both labor movements were essentially trade-union movements. For German labor in the imperial Reich Marxism was only an ornament. The Marxians were a small group of literati.
The antagonism between the Marxian philosophy and that of labor organized in the Social Democratic party and its affiliated trade-unions became crucial the instant the party had to face new problems. The artificial compromise between Marxism and labor interventionism broke down when the conflict between doctrine and policies spread into fields which up to that moment had had no practical significance. The war put the party's alleged internationalism to the test, as the events of the postwar period did its alleged democratic tendencies and its program of socialization.
 Communist Manifesto, end of the second section. In their preface to a new edition of the Manifesto, dated June 24, 1872, Marx and Engels declare that because of changed circumstances "stress is no longer laid on the revolutionary measures proposed at the end of the second section."
 Marx, Zur Kritik der politischen Oekonomie, edited by Kautsky (Stuttgart, 1897), p. xii.
 Marx, Das Kapital (7th ed. Hamburg, 1914), I, p. 728.
 Marx, Zur Kritik der politischen Oekonomie, p. xii.
 Marx, Value, Price and Profit, edited by Eleanor Marx Aveling (New York, 1901), pp. 72-74.
 Marx, Das Kapital, op. cit., p. 729.
 Marx, Zur Kritik der politischen Oekonomie, p. xi.