Essay:Marxism: Philosophy and Ignorance

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by Robinn
Published: 2023-09-13 (last update: 2023-09-20)
25-40 minutes

Review of Marxism: Philosophy and Economics by Thomas Sowell

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Review of Marxism: Philosophy and Economics by Thomas Sowell [pdf] | See this video on Sowell’s general views

Core

• “Marx’s original arbitrary postulate [was] that labor was the source of wealth, and therefore of all non-labor income” — Thomas Sowell, Marxism: Philosophy and Economics, Chapter 7 Marxian Value
  

• “Labor is not the source of all wealth. Nature is just as much the source of use values (and it is surely of such that material wealth consists!) as labor, which itself is only the manifestation of a force of nature, human labor power. The above phrase is to be found in all children's primers and is correct insofar as it is implied that labor is performed with the appurtenant subjects and instruments. But a socialist program cannot allow such bourgeois phrases to pass over in silence the conditions that lone give them meaning. And insofar as man from the beginning behaves toward nature, the primary source of all instruments and subjects of labor, as an owner, treats her as belonging to him, his labor becomes the source of use values, therefore also of wealth. The bourgeois have very good grounds for falsely ascribing supernatural creative power to labor; since precisely from the fact that labor depends on nature it follows that the man who possesses no other property than his labor power must, in all conditions of society and culture, be the slave of other men who have made themselves the owners of the material conditions of labor. He can only work with their permission, hence live only with their permission” — Karl Marx, Critique of the Gotha Programme

The reputed backbone of Thomas Sowell’s analysis of Marxism is his own supposed shift from the method of analysis towards a capitalist framework—called upon to establish credibility as an “ex-ideologue.” Thomas Sowell’s biographer, Jason L. Riley, writes, for instance, “Sowell would self-identify as a Marxist throughout his twenties. His senior thesis at Harvard was on Marxian economics, and his master’s thesis at Columbia was on Marxian business cycle theory. Even his first scholarly publication, in the March 1960 issue of American Economic Review, was on the writings of Karl Marx. But like many others who are attracted to Marxist philosophy in their youth, Sowell would abandon it as he became older and more experienced." His AER article, which Riley describes vaguely as “on the writings of Karl Marx”,—evoking an idea of continued adherence to Marxism with the “but like many others…” platitude following afterwards—was in actuality a polemic against Marx’s conceptions and predictions regarding alienation where Sowell repeatedly speaks of (latter-day) Marxists from the stance of persona non grata (this work was addressed by the Marxist Roland Meek two years later). Peculiarly, and I will concede this is somewhat pedantic, the Reason Magazine reprint of this excerpt contains the additional subheading: “It wasn’t until his thirties that the economist started to turn from Marxism”, with the publisher of Sowell’s biography signing off on this. Given that Sowell’s article was published in the March 1960 issue of AER, and that he was born on June 30, 1930, Thomas Sowell would have been twenty-nine years old at the time of its publication; the RM subheading is incorrect, likely to simplify the question to an even number and render the timeline comprehensible to whatever brainrotten children read “Reason Magazine.” The proof of Sowell’s Marxist history is shaky at best and might be mostly ignored if not for his own assertions clearly only meant as a self-assurance to conservatives that Marxists are merely naive children, mirroring the stories of Jordan Peterson and the like of “breaking from Marxism/socialism.”

Sowell notes in his preface: “Because the main purpose of this book is interpretation, its critical evaluation of Marxism will be saved until the last chapter.” This isn’t true, but it is correct that the final chapter is the most critical, and therefore naturally contains the most errors.

Insofar as Mr. Sowell speaks on matters of history, his analysis is worth nothing; Sowell uses in his book the same nonsense example of Pol Pot and by proxy the Khmer Rouge as socialist entities inspired by Marxism and makes no mention of the support afforded by the U.S. to the Khmer Rouge and Pol Pot. He specifically states: “A hundred years later, it has become all too painfully clear that it was Marx and Engels whose ideas led… to the extermination camps of Cambodia” (“Increasing Misery” of the Proletariat). How Marx and Engels’ ideas led to Pol Pot’s anti-Vietnamese extermination program is unclear (and the link between the terror of Pol Pot and that of the Paris Commune is of course non-specific). That the Khmer Rouge/CPK were by their own admission not communists—and never followed a clear communist program—is certainly never given coverage. Sowell cites U.S. Congress to support his assertion of the USSR’s supposed tendency against competition (The Marxism of Marx); he regularly hand-waves away the prospect of capitalist crises (as well as any investigation into the actual affairs of the USSR) much in the same way he disparages Marx for sneering at adversarial theories, although the former’s assertions disguise themselves as notes of established fact. He cites Solzhenitsyn’s Gulag Archipelago as a display of the “practical application” of Marx’s ideas (Philosophy and History; Misery of…), declining to mention the admissions of Solzhenitsyn’s wife Natalya that she had typed a portion of the book and that it represented “not in fact the life of the country and not even the life of the camps but the folklore of the camps,” and the insights of her memoir, Sanya: My Life with Aleksandr Solzhenitsyn (1975), in which she wrote “that she was ‘perplexed’ that the West had accepted ‘The Gulag Archipelago' as ‘the solemn, ultimate truth,’ saying its significance had been ‘overestimated and wrongly appraised.’ Pointing out that the book's subtitle is ‘'An Experiment in Literary Investigation,’' she said that her husband did not regard the work as ‘historical research, or scientific research.’ She contended that it was, rather, a collection of ‘camp folklore,’ containing ‘raw material’ which her husband was planning to use in his future productions.”

Sowell writes, “A similar process [to Soviet revisionism] is occurring in China, to which many Western Marxists transferred their hopes after disillusionment with the Soviet Union. This too is seen as simply a betrayal of Mao by Deng, rather than a nation's painful learning from experience that a key assumption of Marxian economics is false” (Exploitation). This is exactly the issue with Sowell weighing in on real-world issues: his knowledge is less than cursory, which leads to all sorts of misunderstandings and over-simplifications which allow him to mold events and movements that would otherwise be difficult to fit into his epistemological drivel into nebulous puzzle pieces assumedly contributing to rather than negating his ideas. Sowell is correct of course that the method of analysis of betrayal is incorrect (although it is implied that this is not “simply” the case, i.e. might be correct but only part of a larger picture in his view). This is true for multiple reasons: first, Deng put extreme emphasis on not desecrating Mao’s influence pre-GPCR with his general slogan being, “We will never do to Mao Zedong what Khrushchev did to Stalin at the twentieth Congress of the CPSU”, and even now an image of Mao hangs above Tiananmen Square at all times (a policy supported by Deng); secondly, this “betrayal” narrative treats as interpersonal what was really a mass movement (with neither Mao nor Deng having absolute power), with the people loudly supporting the ousting of the Gang of Four; Chairman Mao was not some deity to be betrayed but a leader who made mistakes which should be condemned and contributions which should be applauded. The primary interest of the People’s Republic of China has never been pleasing Mao but protecting the Chinese people and expanding their development. Following its establishment, the PRC (from 1950-1957) had over 50% reductions in infant and child mortality and crude death compared to the old system of semi-feudalism and semi-colonialism which the U.S. attempted to enforce and uphold by financing the Kuomintang and a growth in life expectancy (from 1950-1980) which a study calls “among the most rapid sustained increases in documented global history.” It is strange that Sowell never mentioned the contributions made by the Communist struggle in China, although perhaps it wouldn’t fit into his neat image of communist failure and capitalist triumph. Note for instance that Sowell writes: “The starvation and other basic deprivations that struck millions of people in the early post-revolutionary era in Russia, China, and elsewhere part of the price of this Marxian self-assured optimism [sic]” (Philosophy and History). The basic content of this assertion is unsupported, as shown above with regards to the unmentioned vast expanses in living standards and improvements post-revolution in China—and even with regard to the Great Leap Forward, which was merely the last in a series of famines in feudal China (1907 Great Qing Famine — 25 million dead; 1920–1921; North China famine — 0.5 million dead; 1928–1930 Chinese famine — 3 million dead; 1936–1937 famine — 5 million dead; 1942–1943 famine — 2.5 million dead). Sowell knows that these nations were vastly underdeveloped and that shortages and the like actually decreased following the revolutionary period, but the sheer rhetorical power that the “starvation” paradigm has amassed is likely irresistible even to intellectual anti-communists. The Russia plagued by famines and the USSR which by 1947 had eradicated famine conditions (and with the USSR generally meeting sufficient requirements for caloric intake, which is rhetorically undermined by the constant need to compare an underdeveloped and semi-feudalist nation which had to undergo rapid industrialization to be on par with the imperialist powers and the generally developed imperialist U.S. by the same metrics).

Ah but Sowell protests! Since the Third Plenary Session of the 11th Central Committee of the Communist Party of China in December 1978, China has pursued a policy of “reform and opening up” under the banner of Primary Stage Socialism (Sowell is of course being vague, but we can sort his argument out and pull from obscurity his actual point with relation to the shift from Mao-era economic and political policies). Sowell wishes to suggest that this development reveals the permanent necessity of private property and markets and exposes a crucial flaw in Marxist theory which apparently suggests that these things are superfluous. This argument is a dead end. The introduction of private capital and investment in Special Economic Zones (SEZ) was the product of the specific conditions of China, with the general theory being laid out as such: Marxist theory and historical materialism show that society develops in stages, with changes in relations and ideas occuring only insofar as the means of remuneration and the productive forces are sufficiently developed to accommodate those relations. As the Dictatorship of the Proletariat (in China termed the “People’s Democratic Dictatorship”, following the same basic line as rule by the workers, peasantry, and urban petty bourgeoisie) was established in China following years of imperialist and colonialist subjugation and under a primarily underdeveloped and largely rural/feudalist base, the CPC was too quick to implement wholesale socialist transformation reminiscent of maps of action designated for advanced capitalist nations undergoing socialist reconstruction and should have instead transitioned into a Primary Stage Socialist system. The theory of Primary Stage Socialism (as opposed to Developed Socialism, the designation for the road of the proletariat in developed capitalist nations) suggests that underdeveloped nations emerging under the DOTP should make use of capitalist machinery, investment, and so on in order to enrich themselves and build the foundation for a shift in the culture, political life, and socio-economic relations congruent with socialist society whilst retaining the primacy of public ownership as the dominant mode. As we can see, this has nothing to do with refuting Marxism but is merely an innovation in the inroads of developing socialism under peculiar conditions which avoids mechanistic thinking. But look at all Sowell can obscure by vaguely motioning at something he does not understand and assuring himself (but not the reader, as no explanation is offered!) that this is a historical experience which profoundly falsifies a “key assumption of Marxian economics.”

Sowell has no knowledge of these names and personages, but this is not required of him. The reader (his intended reader, who has already made up their mind), does not possess this knowledge either; all that Mr. Sowell must do is name these concepts at random in order to invoke in the reader a feeling and a vague idea. As such, he generally has the liberty of assuming that the reader will take for granted the truth-content of platitudes regarding socialist nations and movements.

Sowell dismisses the labor theory of value (LTV) and surplus value (as an extension of feudal society) as such: “it was an assumption[,] and one devastated by the new conceptions and analysis introduced by the neo-classical economics while Capital was in its decades-long process of being prepared for publication” (Exploitation). How should we observe this apparent devastation? Sowell provides us with no footnotes to support his vague assertion. He begins thereafter by discussing the Marxist summary of capitalist production, sprinkled with a few “somehow”s in order to insinuate that several questions are left unanswered—it is quite perfect that these questions all deal with the origin of the capitalist mode of production itself and the supremacy of the capitalist class, which any child can observe are discussed in excruciating detail in the works of Marx and Engels (particularly in Capital and The Origin of the Family). Of course Sowell does not mean to look too far backward, since what he really hopes to insinuate is that the factors of production are provided—in the most superficial sense—by the capitalist class, which thereby deserves a certain section of the products of labor (a natural conclusion if one forgets the conditions of nature and thinks myopically with relation to the origin of factories and the tools of performing social labor just as Marx and Engels have been accused of doing). He then undoes all of this (electing to keep his “somehow”s in what appears to the unsuspecting onlooker as providing intellectual charity to Marx’s theory) and continues with a critique of the LTV: “Where there are multiple inputs, the division of output by one particular input is wholly arbitrary. More generally, making one entity the numerator and another the denominator in a fraction does nothing to establish a casual [here Mr. Sowell meant “causal”] relationship between them (though one may exist), much less a special or exclusive causal relationship” (Exploitation).

One should reply by commenting that all “multiple inputs” have as their father and mother social labor and the conditions of nature respectively. The capitalist class merely appropriates these factors. For instance, notwithstanding the development of historical relations between classes, the factories themselves are not “ready-made” for the whole proletarian class, nor are the tools of production. Certain sections are made to build the factory, while others are made to refine its material inputs from natural resources, and still more are made to do the same for tools such as looms and hammers, which will again be used to manufacture commodities by yet another group of workers. Labor is indeed subject to its own social regulation, and therefore labor inputs are only arbitrary insofar as they represent a singular labor input rather than an average, since labor is only the father of value insofar as labor produces value, which distinguishes itself from individual inputs as the product of an average (i.e. a man may produce a shirt for a company in three hours what another may produce in two, and if the shirts are identical they will not be subject to individual inputs but will nonetheless represent the product of social labor; the average labor time will govern regulation conscious social regulation of production). There exists no distinguishable “third variable”, and the necessary exploitation of labor may be discovered concretely; as Marx comments: “Every child knows a nation which ceased to work, I will not say for a year, but even for a few weeks, would perish. Every child knows, too, that the masses of products corresponding to the different needs required different and quantitatively determined masses of the total labor of society. That this necessity of the distribution of social labor in definite proportions cannot possibly be done away with by a particular form of social production but can only change the mode of its appearance, is self-evident." How can one avoid this?

Sowell continues: “Yet even within this context, he did not succeed, either logically or empirically, in establishing that present capital is simply the result of past labor. All that he did was to push back into the past the key question of the source of capital.” What else could it possibly be? The overseeing of the administration of laborers cannot be even a component source of value because it deals secondarily with productive labor. The question is so elementary that it becomes farcical; the example of a nation which ceases to work necessarily proves the dominance of labor. And the origin of capital was dealt with in Engels’ Origin of the Family, and not merely pushed back into the past, because Engels begins his work by discussing a time before class divisions and private property.

Sowell writes yet more: “Once output is seen as a function of numerous inputs, and the inputs as supplied by more than one class of people [the capitalists only supply inputs insofar as they have appropriated them from labor and nature, neither of which are their biological children; output only appears as a function of numerous distinct inputs; Sowell wishes to seem more fair by writing off the eternality of present conditions, but he instantly picks this concept up again when he sees fit — Robinn], the notion that surplus value arises from labor becomes plainly arbitrary and unsupported. Factually, it is even worse off. The empirical implications of a special or exclusive productivity of labor would be that countries that work longer and harder would have higher outputs and higher standards of living. But the reality is more nearly the direct opposite—that countries whose inputs are less labor and more entrepreneurship tend to have vastly higher standards of living, including shorter hours for their workers.” Such ignorance cannot be found anywhere else. To look at the vast disparities in the wealth of nations, to see that in the richest nations more live idly whereas in the poorest nations the masses work more diligently and for less pay, and to conclude that this is because idleness produces value more so than labor, is beyond stupid. Imperialism extracts the natural resources and cheap labor of poor nations by leveraging its geopolitical dominance, typically by virtue of having existed prior as a colonial power; this is extremely well documented. It is nonsensical to talk of nations competing on equal footing for the dominion of resources, but a neo-conservative who must assert the complete fairness of trade and defend the “merits of colonialism” as a “civilizing force” cannot do without nonsense. Sowell trips over himself by stating, “Larger transfers of physical capital to Third World countries, through nationalization and foreign aid, have often been only a prelude to the deterioration of that capital.” Has money itself now become of subordinate value to idleness? These phenomena can only be explained by divulging the process of neo-colonialism and debt manufacturing, as seen in the relationship between France and Africa.

Sowell writes: “The offspring of privilege have dominated the leadership of Marxist movements from the days of Marx and Engels through Lenin, Mao, Castro, Ho Chi Minh, and their lesser counterparts around the world and down through history. The sheer reiteration of the ‘working class’ theme in Marxism has drowned out this plain fact” (An Assessment). All of these leaders had the popular support of the masses (and it is surely in Sowell’s best interest to obscure this and put all mass movements to the name of one man). That the more well-off workers in these underdeveloped nations became the first to understand their conditions is perfectly in line with Marx’s theory:

“We shall, of course, not take the trouble to enlighten our wise philosophers by explaining to them that the ‘liberation’ of man is not advanced a single step by reducing philosophy, theology, substance and all the trash to ‘self-consciousness’ and by liberating man from the domination of these phrases, which have never held him in thrall. Nor will we explain to them that it is only possible to achieve real liberation in the real world and by employing real means, that slavery cannot be abolished without the steam-engine and the mule and spinning-jenny, serfdom cannot be abolished without improved agriculture, and that, in general, people cannot be liberated as long as they are unable to obtain food and drink, housing and clothing in adequate quality and quantity. ‘Liberation’ is an historical and not a mental act, and it is brought about by historical conditions, the development of industry, commerce, agriculture, the conditions of intercourse” — Marx & Engels, The German Ideology

If all workers will not attain liberation at once, but will gradually begin to understand that their conditions have made the way for liberation, then should not the first to head these movements be those workers who were most well-supplied but who shared a common class interest (and thereby came to call for a revolutionary change in the class order first)? Land reform, pensions, mass line, and literacy programs, all done away with due to the background of a single figurehead; this sort of nonsense is only viable in rhetoric, but does not have any real meaning apart from it.

Sowell: “Even within the intellectual realm, the materialist conception of history has serious deficiencies. By taking Europe as the model and illustration of his theory of history, Marx missed the implications of the enormous cultural differences between European and non-European civilizations—differences not explainable by any obvious technological differences, for Europe's technological or organizational advantages over China, for example, emerged only within the past few centuries. Taking a global view of history, it might more readily be argued that cultural differences—ultimately, differences in people's thinking—explain much of the difference in material advancement, rather than vice versa” (Philosophy and History). History is sanitized, its motive forces reconfigured, and the final blow is that notorious appeal to “common sense!” Culture is this great masking force of ideological prejudices because it gives the immediate impression of legitimacy within itself. Everything seemingly bases itself upon “culture” as such, but a momentary reflection tears this assumption apart. Are people endowed inherently with ideas separate from their conditions? If not, how do they acquire these ideas? From experience? Experience with what? Sowell clarifies that “Europe's technological or organizational advantages over China, for example, emerged only within the past few centuries.” And this is really unfortunate: he continues, “cultural differences explain much of the difference in material advancement, rather than vice versa.” Notice the disparity! Sowell at first distances cultural differences from technological advancements in order to assure the reader that these ideas are separable as opposed to the materialist convention. Now secondly, the correspondence between modes of thinking/culture and material conditions becomes clear, so Sowell now attempts to assert that ideas precede material and jump ahead of (rather than lagging behind) content.

Let us dispense with the European colonialism and brutality against China that Sowell so adores, and assume his notions of development. If Europe has only recently surged ahead of China (with the inverse being true currently), then their culture must not have always been superior in ushering in development; if this is the case, from where did their advance in culture arrive? If culture is not constant or eternal, what force determines its attributes? Sowell makes so many jumps in his argument that the disconnection between A and B could separate them altogether. Asserting differences in thinking—explain this on a mass scale!—guide history rather than development and material surroundings guiding thinking is not a demonstration of the “deficiencies” of historical materialism, much less so when the only “evidence” is self-defeating, hence the lack of a connective tissue between it and the assumption.

Since it cannot be suggested that we deal with all of Sowell’s nonsense in one review, we will end with a discussion of his supposed refutation of Lenin’s Imperialism: the Highest Stage of Capitalism (seen in Chapter 10 The Legacy of Marx). Sowell writes: “Lenin's classic work Imperialism contained much statistical data—but it was used to illustrate, rather than to test, his theory. Imperialism documented extensively what was never at issue—that foreign investments were growing, that railroad track mileage was increasing around the world, that bank deposits were growing, etc. What was not tested was the central proposition that ‘backward countries’ played a major role in absorbing foreign investment capital. Lenin tried to insinuate this instead.” This is quite a clever diversion! What Lenin showed in facts and figures was the concentration of deposits in large banks, which is derived from percentages and not merely the passage of time, that a few large banks were encompassing huge industries, and that banks were forming coalitions with industrial enterprises, which illustrates the phenomena of imperialist monopoly (Sowell has more to say on foreign investments, so we will leave our response for then). Lenin also employs statistical data to show the creation of monopolist prices from these phenomena, quotes extensively from bourgeois economists of the time to show their recognition of this phenomena, etc.

Sowell: “Statistical data on a country-by-country basis show very nearly the opposite of what Lenin claimed. Industrial nations tend to send their foreign investments 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 [this is no longer true — Robinn]—and it has more invested in Europe than in Canada. In Marxian jargon, it was ‘no accident’ that Lenin chose such loose categories. Even his own table of Imperialism showed that France and Germany each had more than twice as much invested in ‘Europe’ as in all of ‘Asia, Africa, and Australia’ put together.”

Lenin shows firstly that the foreign investment of capital by the foremost imperialist countries grew rapidly from the end of the 19th century and onwards. Investment is merely the pseudo-pacifist pretext of exploitation. When talking of loose categories, Sowell seems to have no knowledge that Lenin chose such categories (Asia, Africa, and Australia vs. America and Europe) particularly because the former is vastly underdeveloped compared to the latter, with there by no means being an “equal” assortment of developed and underdeveloped nations in each category. The imperialist powers are hegemonic, and therefore have much more wealth (in the form of industrial development) and influence. It is quite appropriate to talk exactly in regards to the more wealthy categories, but more broadly with relation to underdeveloped nations, because from this general trends may be derived. In regards to the conflict of investment, this critique is overly held down by empirics. It ignores the relative purchasing power of the imperialist nations in colonies and the imperial periphery as opposed to other great powers (including special tax treatment).

Note 1

Sowell: “Despite the massive intellectual feat that Marx's Capital represents, the Marxian contribution to economics can be readily summarized as virtually zero. Professional economics as it exists today reflects no indication that Karl Marx ever existed” (An Assessment).

This, like most of Sowell’s other arguments, is pure sophism meant to address readers who have no knowledge of economic thought outside of the West and capitalism. Sowell subtly begins with the a priori assumption that bourgeois economists, the paid lackeys of capitalism (the immediate economic incentive is self-explanatory), which hold and justify ideals necessarily upholding capitalism in proportion to simplification and distortion, not to mention the general principle of adherence to the ideology which presupposes the eternality of the dominant class, are neutral agents merely observing natural principles with the means of their subsistence and self-actualization having no importance whatsoever, much less the nature of the system in which they exist, which is circularly appealed to as a neutral development of “economics.” Not only is it incorrect that the LTV’s supposed inability to be empirically demonstrated (although empirics are generally useless without thorough analysis) is the reason for its absence from “orthodox economic studies”, Sowell is completely wrong in suggesting that Marxism has had no effect on “economics”, with China, the world’s most populous country and fastest-growing (second largest) economy, having published numerous professional works on Marxist economics and implemented policies corresponding to Marxist thought certainly by 1985 (as well as other socialist and post-colonial nations), and even more so henceforth—and if we are to test Sowell’s ideas against history, what must we say of this development? Since this objection is relatively standard, I will repost a section of another article which probes this topic:

The appeal to “orthodoxy” has always come off as strange to me when what counts as “orthodoxy” differs from country-to-country. Marxian political economy is still taught in schools in China, which is the largest economy in the world. If you read peer-reviewed economic journals from China, economic problems are still approached from a Marxian economic perspective… “Orthodoxy” simply implies whether or not it is held commonly, not whether or not you agree with its particular interpretation. A right-wing critique tends to claim China is not “true” Marxism, arguing that they abandoned it in the late 1970s. There is a strange myth in the west that China abandoned Marxian economics after Mao died, when it was quite the opposite. Chinese economists in fact accused Mao of diverting from Marxian economics, and the market reforms in fact were more justifiable through Marxian economics than Mao’s economic policies. Mao may have been a genius in many things, but you cannot master everything. There were economic mistakes made. The insistence on tying the entire Marxian economic school to Mao’s policies personally makes little sense… Appealing to “orthodoxy” makes little sense when the “orthodoxy” in China is Marxian economics, and it is the largest economy in the world. This is merely an appeal to “western orthodoxy” and not orthodoxy in general. People who claim China abandoned Marxian economics by adopting market reforms tend to just reveal how incredibly ignorant they are of Marxian economics and equate it to some religion that asserts “public ownership = good.” This is, in fact, psychological projection, as the people who accuse Marxian economists of black-and-white thinking are the ones themselves who simply think “public ownership = bad, free markets = good.” Modern Marxian economics accepts both the efficacy of public planning and markets, but under different conditions… I tend to get the impression that those who insist that China abandoned Marxian economics — despite the fact this claim is objectively and observably false and simply talking to a Chinese person they will inform you that they were taught Marxian economics in school—often just assert this as a way to maintain western dignity. China is surpassing the west in many fields, and so rather than asserting their system is superior like they did to the Soviet Union, they instead try to insist that China’s system is actually the same as the west’s, so therefore it only further proves the west’s system is superior. In other words, it is a coping mechanism… appealing to “orthodoxy” is hardly an argument when it is only western orthodoxy. The idea that we can dismiss the entirety of the economic theories from the largest economy in the world just because western countries don’t agree with them is fundamentally not an argument.

Note 2

Sowell: “Moreover, in some Western nations, the workers also possess a substantial amount of physical capital, owned by their pension funds. It is estimated that workers in the United States, for example, own a higher proportion of the means of production than do the workers in Communist Yugoslavia” (“Increasing Misery”).

How can the conflict between labor and capital be ignored in this context? By omission? The pension fund is the most basic form of concession in capitalist society, with various rollbacks throughout history, whose sole purpose in disorganization is to give the illusory autonomy associated with “ownership.” Not the sort of ownership that entails operative capacity, either directly or semi-directly through a popular state intermediary which represents the majority, but in the form of stocks, of which a certain percentage of wages are deducted for investment, which is then received for retirement. Even Drucker (Sowell’s cited source) talks about how the privatization of pension funds was merely an opportunistic appropriation of the inevitability of the pension fund due to labor bargaining, which was dominated by the demand for a nationalized pension, and further:

“no investment in the company for which the employee works; no investment in any company in excess of five per cent of the company's total capital; no investment in any company of more than 10 per cent or so of the total assets of a pension fund—were finally written into the country's laws in the 1974 Pension Reform Act”

It is precisely from this regulation that the pension fund is removed from ownership through decentralization  and compartmentalization. This “bigger proportion” is calculated exactly from the point of taking pension funds as genuine “ownership” equivalent to ownership in socialist society. Individual stock ownership, which is organized by the investment operator into a collective stock, is essentially worthless in individual operative capacity (with the anti-democratic decentralization of shares being scaled up and then down again through collection), and it is a given that this does not alter the class character of the state, the class character of the state in the U.S. being essentially known through investigations into capital’s control over “democratic” processes, that national elections are basically determined by corporate backers, that foreign policy is operated for the benefit of corporations, with the U.S. public knowing basically nothing of the actual operations. Where many workers lack pensions with the vast majority constantly being in flux, Drucker proudly proclaims America’s “socialization”, and this ownership is given no motive force by Sowell, stated as merely a fact of the matter. That the very existence of private pensions is unheard of as a concession, despite the only explanations being charity, national bribery, and class competition, is typical of supposedly “commonsensical” analysis.

“Elections cannot be allowed to change economic policy” — Wolfgang Schäuble, former German Finance Minister