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Context: KarlMarx

Quora Answer : Are the ideas of Karl Marx still relevant in the information age?

Sep 26, 2014

tl;dr : Sort of. If you're willing to adapt and reinterpret what he said in light of modern understanding.

Marx said a lot of things. Some which are still plausible and some which are now implausible. If you're determined to bury Marx you can have a rant about all the things he got wrong. (Or that you think he got wrong.) But if you treat him the way you treat most historical thinkers then you probably want to ask, not so much, "Is he right? YES OR NO?" so much as "What are the things he said that are still relevant and useful today?"

Now, I am absolutely NOT a Marx specialist. So I am not going to give an exegesis of his philosophy. I'm going to give my, very personal, very idiosyncratic interpretation of what I THINK Marx was getting at and therefore the role he plays in our intellectual history. I know more about Marx from reading Popper's critique in The Open Society And Its Enemies than I do from reading Marx himself, so be warned, this is pretty unorthodox Marxism.

So, very broadly, you can divide the political economic debate into an empirical argument about feedback loops. On the one side you have Adam Smith who first codified the idea that economies and markets were "self-organizing". In cybernetics terms, what is implicit in Smith's view, and the view of his followers, from Hayek to modern "neo-classical" economic theory, is the idea that the economy is a dynamical system that acts rather like a homeostat. In other words, the negative feedback loops dominate the system, damping down oscillations and bringing the market to a stable point, possibly at some kind of optimal maxima. This is what the laws of supply and demand are meant to exemplify : if the price is too high, customers stop buying and suppliers drop their prices or go bust, if the price is too low, suppliers can't make enough product for everyone who wants it, and put up their prices to throttle demand. Eventually, the homeostat balances out at the point where prices are such that supply and demand are matched. And according to further proofs in modern welfare economics, this finds an equilibrium of maximum efficiency (for some extremely technical notion of "efficiency" that is nothing like what the casual listener who hears that economists have proved that free markets maximize efficiency might imagine it means.)

The other side of this debate starts with Marx who - contrary to the assumption of some critics - had, of course, read and understood Adam Smith. And knew all about self-organization. But he was more taken with a different set of dynamics in the economy. These were the positive feedback loops, especially accumulation. For Marx, what was obvious was that Capitalism allowed the successful capitalist to accumulate wealth faster than any other natural dynamic was redistributing it again. And he intuitively understood something that any modern cyberneticist understands : a dynamical system where the positive feedback loops are stronger than the negative feedback loops will, sooner or later, shake itself to pieces.

From this, stems Marx's apocalyptic idea that Capitalism is an auto-destructive system. That without some counter-balancing dynamics, the winners will accumulate more and more of the wealth and resources, leading to increasing difficulty for everyone else, and eventually, the destruction of the social norms that hold society together as the poor get more and more desperate and resentful, at which point there's a catastrophe (or revolution).

Unfortunately though, Marx didn't have a vocabulary of cybernetics or a theory of dynamical systems. Such things didn't exist at the time, even if James Watt and Adam Smith were hinting at them. Instead, Marx picked up a current philosophical trend of the era he was writing : Hegel's dialectical model of history.

The dialectic gives us a theory of history and progress that advances through a logic of violent conflict. This is not entirely stupid. Not very long after Hegel, Darwin was giving us a pretty good theory of how nature produces increasing complexity and fitness through competition between individuals and species struggling to survive. Darwin's model is one that is almost universally accepted today. Not just for nature, but for economics too. As competition and "creative destruction" is seen to drive increasing productivity and wealth.

And before Darwin, when thermodynamics was in its infancy, in a world where scientific models were generally Newtonian models of eternal clockwork-like mechanisms, it wasn't entirely stupid for Marx to look to Hegel as a model of long-term dynamic processes. It was one of the few theories around that offered such a model of history.

Unfortunately, it was disastrously wrong. And intellectual ruin for Marx.

Hegel's dialectic suffers from being part of the Continental idealist tradition that puts neat theoretical model-building above empirical observation. It takes the progress of history almost as a kind of mathematical deduction, as following a distinct and inevitable formula. It doesn't recognise empirical counter-examples or encourage critical thinking about or corrections to the model. Instead it demands naive faith in its oversimplified events, and in a predestined outcome.

This made Marx's theory a hostage to the particular dialectical model he adopted. And, worse, it led him to equate his diagnosis of a catastrophe of Capitalism's auto-destruction with the destructive conflict that Hegel considered necessary for history to progress.

It led him to hope that when the dispossessed rose up in despair and anger against the small elite of "winners", this would be the same conflict that opened the door to the better world that Hegel's dialectical model promised.

But there is NO justification for this assumption. It's simply an aesthetic conceit. The two events "rhyme" and so are assumed to be connected. But without any better arguments, we should dismiss this assumption as "pretty unlikely".

In that sense, Marx is worthless to us today. His thinking is corrupted by a bad philosophy and offers us no guidance.

But there is a version of Marx that I think is worth holding on to. This is a Marx stripped of his Hegelianism and reinvented as making empirical claims. It's a Marx who makes a simple, scientifically respectable conjecture : that the kind of dynamical system that a Capitalist market is, does contain positive feedback loops towards accumulation (and overproduction) that, left to themselves, will spiral out of control and destroy the market, our social norms and bonds, and even the natural environment we have co-evolved to depend on.

This is a hypothesis that the heirs of Adam Smith refuse to take seriously, sticking to their own naive, untested faith that all the dynamics in the capitalist system are benign and that, left to themselves, markets tends to produce economic stability, social harmony and a general welfare.

But Marx's hypothesis is one which we have far too little empirical evidence to dismiss. And some reasons to find plausible.

It's true that Capitalism didn't shake itself apart in the 20th century. But only because governments, even in the capitalist half of the world, did step in and constrain it. When some countries fell to allegedly Marxist revolutions, the remaining capitalist countries made concessions, built welfare systems, countered accumulation with redistributive taxation and did what they could to manage the market. They put it to work while limiting its excesses. We saw that with markets constrained by government, we avoided auto-destruction from the rise of monopolies, we avoided social destruction due to increases in extreme poverty, inequality, hopelessness, crime, illness and resentment. We didn't quite avoid the environmental destruction but that was because governments and markets failed to understand the problem alike.

We also saw that when those heirs of Adam Smith who believe that markets self-organize towards stability got the upper hand politically, and started to remove the constraints, markets actually became more volatile and unstable, and social destruction, poverty, ill-health, crime and resentment increased. And environmental destruction accelerated.

So today, I think we should see Marx as the champion of the view that capitalist market dynamics can lead to unplanned malign outcomes (and so need to be constrained). Just as Adam Smith is held up as the champion of the view that capitalist market dynamics can lead to unplanned benign outcomes (and so need to be freed).

So who is right?

The truth is that complex systems are ... well ... complex. We know they are highly sensitive to minor variations. So you can't really make blanket generalizations one way or the other. (At least we have no good models that allow us to assume one or the other as certainty.) Markets won't necessarily self-destruct. Nor will they necessarily bring everyone prosperity. And they NEVER operate in a vacuum where their dynamics act free from constraints due to geography, resource availability, environment, human culture and politics.

Nevertheless, the Adam Smith tradition has given us models of how idealized markets can lead to stable and optimized outcomes. The Marx tradition has given us plenty of social critique highlighting how they can lead to unstable and non-optimal outcomes. And now complexity theorists are starting to come up with better models (also idealized) of how such negative outcomes can arise. ( How the Science of Complex Systems is Transforming Economic Thought )

Ideally we should honour both thinkers and the traditions they spawned as complements. Both indicate half of the story; between them they alert us to both the opportunities and the dangers inherent in the Capitalist economy as a way of organizing our lives.

There is a further twist. Although Hegel's model of history was wrong, both the Smithian / Homeostatic perspective and the Marxian / Auto-destructive perspective have to be supplemented by a notion of time / history. Even if it's a Darwinian one, where events and new ideas are the result of unplanned contingency and natural selection rather than Hegel's unfolding teleology.

Many people who favour markets might actually admit that they DON'T really believe that markets tend towards stability. Instead markets are valued because the creative destruction is seen to drive innovation and increases in productivity faster than the forces of accumulation strip wealth from the poorest. So inequality increases, but the rate at which the poorest are enriched by productivity increases, out-paces any negative effects.

It should be noted that this is an entirely DIFFERENT argument and reasoning from the Adam Smith self-organization argument. And is based on, at best, a naive inductivism (productivity increases outstripped the spread of misery in the past, so it will automatically happen in future), or at worst, selective ignorance of history (what about all the famines where people died as the market sucked the food away from the centres of hunger?) or a blind faith that markets must have good outcomes.

You can construct an equally flawed Darwinianism of the Marxist side, just by countering such guess-work with equivalent contradictory truisms : evolution can drive species extinct as easily as it improves them; the rate of productivity increases can fall behind the rate of accumulation; especially if some of that productivity was based on the consumption of scarce resources like fossil-fuels.

Darwinianism enriches our understanding, but doesn't offer knock-down arguments to either side.

Related :

Phil Jones (He / Him)'s answer to Why did Marx think that capitalism exploits workers?

Phil Jones (He / Him)'s answer to Was Karl Marx a genius even if he was wrong on the big picture?

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