Marx and Marxism Mises Institute

The idea that some groups in society attempt to exploit others was first an insight of the free-market liberals. It was later ripped off and modified by the Marxists.

Recorded 15 October 1988.

Recorded 15 October 1988.

[Transcript (provided by Mr. Kaan Dişli. The text is also available in Turkish.)]

100 years ago If you are an economist living in the United States you might have subscribed to a journal called the “Quarterly Journal of Economics” and you might have gone out to the mailbox one day in October 1888 and found the latest issue and if one found the latest issue of the Quarterly Journal of Economics October 1888 you would have opened it to its lead article and its lead article was by a man named James Bonar. 100 years ago this month, and the title of the article was the “Austrian economists and their view of value”. 100 years ago this month was the first English exposition in detail of the Austrian school.

In this exposition James Bonar, an admirer of Menger and Böhm-Bawerk, offered to the English-speaking world the first systematic, thorough, methodical understanding of how the Austrians viewed value, how from value they explained the emergence of price and market processes. Now what Bonar enabled the reader in America and England to see was that the Austrians were developing an alternative way of understanding the economic process. One that on the other one hand challenged the classical economists ,including Marx as a labor theorist, and offered a new vision of how to construct economic theory for an understanding of the real world. Right there the first English exposition this month 100 years ago

Now what Böhm-Bawerk did was more in his writings than just present a positive theory, he was a brilliant economist who had mastered all of the economics literature up to his own time and he proceeded to first criticize and attack his opponent before he went on to present his positive theory. In fact, it was Böhm-Bawerk who opened the first clash that the Austrians had with the socialists.

In the 20th century we are most familiar with the Austrian challenge to socialism through the works of Ludwig von Mises, his challenge against the socialists, how would a central planning system work where the planners had overthrown private ownership of the means of production and eliminated therefore the price mechanism ,for as I'm sure most of you are familiar with, Mises argued that where there is no private property there is nothing to buy and sell, when there is nothing to buy and sell, there is nothing to make offers or bids for, when there are no bids and offers there are no agreed-upon terms of trade, when there are no agreed-upon terms of trade there are no prices, and when there are no prices, there is no way for agents in the market to form estimates concerning the value that individuals are placing upon the means of production as a calculative device to determine how to an efficient and economizing manner apply the means of production to alternative uses in a society of scarcity.

But that was really the second challenge, the first one was Böhm-Bawerk’s. He first made this challenging criticism in Volume one of “Capital and Interest”, his history and critique of interest theories, in 1884 the year after Marx passed away. He had a chapter on the exploitation theory, in which he criticized another German named Rodbertus and Marx. Then he had another opportunity to extend and elaborate on his criticism and that was in 1886, shortly after volume 3 of ” Das Kapital” had appeared posthumously. Böhm-Bawerk was asked to give a contribution for a German economist. And his contribution was a hundred page monograph called “Karl Marx and the close of his system” in which he attempted to update his criticism in the light of the second and third volume coming out and showing that there were insoluble problems in Marx’s system.

In fact, the interesting thing that one can understand historically is that if one looks at most accounts today on Marx and his economic system and his social system and his conception of the social order, most proponents will present a conception of Marxist theory o

Recorded 15 October 1988.

Recorded 15 October 1988.

Recorded 15 October 1988.