A Critique of Interventionism

Usually only those writers can be called Marxists who, as members of a Marxian party, are obliged to indicate approval in their writings of the Marxian doctrines as canon­ized by party conventions. Their scholarship can be no more than “scholasticism.” Their writings aim at preserving the “purity” of the true doctrine, and their proofs consist of quotations from authorities—in the final analysis Marx and Engels. Again and again they conclude that “bourgeois” science has completely collapsed, and that truth can be sought only in Marxism. Every piece of writing then closes with the reassuring remark that in the future socialistic par­adise all social problems will find a very satisfactory solution.

These Marxian writings are significant only inasmuch as they have promoted the careers of their authors. They have nothing whatsoever to do with science, and, as shall be shown, not even with German science that is so greatly in­fluenced by the doctrines of Marx. Not a single thought has emerged from the voluminous writings of the epigones. Nothing remains but horrible waste and incessant repeti­tion. The great struggles that shook the Marxian parties—on revisionism, dictatorship, et cetera—were not scientific; they were purely political discussions. The scientific methods used to conduct them were wholly barren in the eyes of every nonscholastic. Only Marx and Engels, not one of their epigones, have affected German science.

During the 1870s and 1880s State and Chair Socialism came to power in Germany. Classical economics had left the stage. The Austrians, scorned as eccentrics, were the only writers who contributed to modern economics, which, like Western sociology,* at first remained wholly unknown. Be­sides, both were suspected of Manchesterism. Only histori­cal and descriptive-statistical compositions were permissi­ble, and a “social” conviction, i.e., Socialism of the Chair, was the most important requirement for scholarly recogni­tion. In spite of, and perhaps because of, this affinity, the Socialists of the Chair opposed Social Democracy. They barely paid attention to Marx and Engels, who were consid­ered too “doctrinaire.”

This began to change when a new generation came along, pupils of the men who, in 1872, had founded the Associa­tion for Social Policy. This generation had never been ex­posed to university lectures on theoretical economics. It knew the classical economists by name only and was con­vinced that they had been vanquished by Schmoller. Very few had ever read or even seen the works of Ricardo or Mill. But they had to read Marx and Engels, which became all the more necessary as they had to cope with the growing Social Democracy. They were writing books in order to refute Marx. As a result of such efforts, they themselves, and their readers, fell under the influence of Marxian ideas. Because of their ignorance in all economic and sociological theory, they were utterly defenseless against the doctrines of Marx. They rejected the harshest political demands of Marx and Engels, but adopted the theories in milder form.

This Marxism of the pupils soon reacted on the teachers. In his article “Economy, Economics and Economic Method,”2 Schmoller mentions that Jevons “correctly” said of Ricardo that “he put the wagon of political economy on the wrong track.” With visible satisfaction Schmoller then adds that Hasbach observed that “it was the very track which the English bourgeoisie wanted to take.” For a long time during the fight of the German Historical School against the narrow-mindedness of Ricardo, Schmoller contin­ues “many followers of the old school” believed they were walking in the methodological footsteps of Adam Smith. Thus many were not aware “that their theories had become narrow class doctrines.”3 Socialism, according to Schmoller, can be denied “neither justification for existence nor some good effects.” “Born as a philosophy of social misery, it rep­resents a branch of science that suits the interests of work­ers, in the same way as the post-Adam Smith natural phi­losophy had become a theory serving the interests of capitalists.”4

We can clearly see how strongly Marxian notions have permeated Schmoller’s ideas of the historical development of economic systems. They are even stronger with Lexis, whose interest theory, according to Engels, is “merely a paraphrase of that of Marx.”5 Böhm-Bawerk, who agreed with this Engels judgment, observed (in 1900) that Dietzel’s and Stolzmann’s interest theories are also closely related to Lexis’ opinion, and that we often encounter similar thoughts and pronouncements in contemporary economic literature as well. It seems to be “a trend of thought that is coming into fashion.”6

In economics, this fashion did not last too long. For the generation of men who had been the pupils of the founders of the younger Historical School, Marx was the economic theorist par excellence. But when some pupils of these pu­pils began to turn their attention to the problems of theoreti­cal economics, Marx’s reputation as a theorist quickly van­ished. Finally, the achievements of theoretical economics abroad and in Austria during the last two decades were rec­ognized in Germany; and it was seen how small and insig­nificant a position Marx occupies in the history of eco­nomics.

However, the influence of Marxism on German sociology has continued to grow. In sociology, more so than in eco­nomics, the Germans ignored the achievements of the West. As they began rather late to deal with sociological problems they knew only one ideology: the Marxian philosophy of history and the doctrine of class warfare. It became the start­ing point for German sociological thought and, through the problems it posed, greatly influenced even those writers who strove to reject it most vigorously. The majority did not repudiate the doctrine itself, but merely its political and practical consequences. In most cases they characterized the Marxian doctrine either as exaggerated, or going too far, or too one-sided, and therefore sought to complete it by add­ing new racial and nationalistic doctrines. The basic insuffi­ciency of the Marxian set of problems and the failure of all attempts at solving them were not seen at all. They em­barked upon historical research into the origin of the Marxian social philosophy, but ignored those few possibly de­fensible thoughts earlier elaborated much more concisely in France and England by such men as Taine and Buckle. Moreover, their main interest then focused upon a problem utterly insignificant for science—the famous doctrine of the “withering away” of the state. In this case, as with many of their other doctrines, Marx and Engels merely meant to find a slogan for agitation. On the one hand they wanted to fight anarchism, and on the other hand they sought to demon­strate that the “nationalization” of the means of production demanded by socialism had nothing in common with the nationalization and municipalization demanded by state and municipal socialism. It was understandable from the po[i]nt of view of party politics that the etatist critique of Marxism aimed especially at this point. It seemed so invit­ing to reveal the inner contradiction of the Marxian social doctrine, and to confront “the enemies of the state,” Marx and Engels, with a believer in the state, Lassalle.7

The fact that German science had rejected the utilitarian social doctrine of the eighteenth century explains the suc­cess of Marxian social doctrine in Germany.

The theological-metaphysical social doctrine explains and postulates society from a point of view that lies beyond hu­man experience. God, or “nature,” or an objective value, want society in a certain form to reach a desired destiny. Man must follow this command. It is assumed that submis­sion to the social body imposes sacrifices on the individual, for which he will receive no compensation other than the awareness that he has acted well, and perhaps will be re­warded in another world. The theological doctrines and some metaphysical doctrines trust that providence will guide willing men on their proper paths, and force the recalcitrants through blessed men or institutions acting on behalf of the reigning God.

Individualism opposes such a social doctrine. It demands to know from both the religious and the metaphysical posi­tions why the individual is to be sacrificed to society. The ensuing argument that touches the foundation of the theo­logical-metaphysical social philosophy, corresponds to the distinction so popular in Germany between the collectivistic (universalistic) social doctrine and the individualistic doc­trine.8 But it is a crucial mistake to believe that this classifi­cation has made room for all conceivable social doctrines. It has especially failed to affect modern social philosophy that was built on eighteenth century utilitarianism.

The utilitarian social doctrine does not engage in meta­physics, but takes as its point of departure the established fact that all living beings affirm their will to live and grow. The higher productivity of labor performed in division of la­bor, when compared with isolated action, is ever more unit­ing individuals to association. Society is division and asso­ciation of labor. In the final analysis, there is no conflict of interest between society and the individual, as everyone can pursue his interests more efficiently in society than in isola­tion. The sacrifices the individual makes to society are merely temporary, surrendering a small advantage in order to attain a greater one. This is the essence of the often cited doctrine of the harmony of interests.

The etatistic and socialistic critique never understood the “preestablished harmony” of the free trade school from Smith to Bastiat. Its theological appearance is not essential for the doctrine. Utilitarian sociology seeks to explain the development of society since man’s presumably hermitic ex­istence in prehistoric times, or since his less developed cooperation in known history. It seeks to explain man’s so­cial ties throughout history, and hopefully his future prog­ress toward association, from principles that are active in each individual. In accordance with teleological considera­tions, association is thought to be “good” and laudable. A faithful soul seeking an understanding of social develop­ment views the principle of association as a wise arrange­ment of God. It could not be different: goodness, namely, the division of labor now and in the future, emanates from human nature. It follows that the division of labor is a good means in view of its good results, even if from different points of view it should be viewed as evil, weak, or defi­cient. To Adam Smith, even the weakness of man was not “without its utility.” And he concludes: “Every part of na­ture, when attentively surveyed, equally demonstrates the providential care of its Author; and we may admire the wis­dom and goodness of God even in the weakness and folly of men.”9 Obviously, the theistic tone is only an appen­dage, which could readily be replaced by the term “nature,” as Smith does in other passages of his book where he speaks of “the great Director of Nature” or just of “nature.” The so­cial doctrines of Smith and Kant do not differ in basic atti­tudes and views. Kant, too, tries to explain how “nature” guides man to the goal it has set for him. The only difference between Smith and Kant consists of the fact that Smith has succeeded in reducing the formation of society to factors whose presence in man can be proven empirically, while Kant can explain society only through an assumption of man’s “inclination” to associate and a second inclination to disassociate, from the antagonism of which society emerges. How it does so is not elaborated.10

Every teleological view can be dressed in a theistic garb without any change in its scientific character. For instance, Darwin’s doctrine of natural selection can easily be pre­sented in such a way that the struggle for survival becomes a wise arrangement by the Creator for the development of species. And every teleological view reveals harmonies to us, that is, how that which stands at the end of the develop­ment process emerges from the acting forces. The fact that the conditions cooperate harmoniously only signifies that they lead to the effect we are to explain. If we desist from calling a given state of affairs “good,” all tenets of the doc­trine stay intact. The explanation of how a certain state “nec­essarily” had to result from given conditions that cannot be analyzed further, is independent of how we may value this state. The attacks on the thought of “preestablished har­mony” do not touch the substance, merely the wording, of the utilitarian social theory.

Without change in substance, the social doctrine of Marx­ism, too, can be understood as one announcing a preestab­lished harmony. The dialectics of social reality necessarily lead the way from the primeval world to the goal, the social­istic paradise. The unsatisfactory part of this doctrine is its content; the wording again is unimportant.

The opponents of utilitarian social theory like to taunt it for its “rationalism.” But every scientific explanation is ra­tionalistic. Whatever the human mind cannot comprehend, the tools of science cannot conquer. This criticism often ig­nores the fact that liberal social theory does not explain formation and progress of social ties and institutions as con­sciously aimed human efforts toward the formation of soci­eties, as the naive versions of the contract theory explain them. It views social organizations “as the unconsidered result of specific individual efforts of the members of soci­ety.”11

The misunderstanding that prevails with regard to the harmony doctrine is repeated in a different form regarding property. We can either hold to the opinion that the private property order is the superior form of social organization— that is, we can be liberals—or we can believe that the public property order is superior—that is, we can be socialists. But he who adheres to the former embraces the doctrine that the private property order serves the interests of all members of society, not just those of owners.12

We proceed from the position that there are no insoluble conflicts of interest within the private property order, even to the recognition that warlike behavior becomes rarer as the scope and intensity of social association grows. Wars, foreign and domestic (revolutions, civil wars), are more likely to be avoided the closer the division of labor binds men. The belligerent creature, man, becomes industrial, the “hero” becomes a “trader.” The democratic institutions serve to eliminate violent action within the state, as they seek to maintain or achieve agreement between the wills of those who govern and those who are governed.

In contrast to the utilitarians who believe that the private property order assures greater labor productivity, the older socialists were convinced that it was the public property system that could bring higher productivity, which necessi­tated the abolition of the private property order. We must distinguish this utilitarian socialism from the socialism that takes as its starting point a theistic or metaphysical social theory, and that demands a command system because it is more suited to realize empirically unproven values which society is to adopt.

The socialism of Marx fundamentally differs from these two varieties of socialism, which he calls “utopian.” To be sure, Marx also assumes that the socialistic method of pro­duction yields higher labor productivity than the private property order. But he denies that a solidarity of interest exists or has ever existed in society. A solidarity of interest, according to Marx, can exist only within each class. But a conflict of interest exists between the classes, which ex­plains why the history of all societies has been a history of class wars.

Conflict is the moving force of social development to yet another group of social doctrines. For those doctrines the war of races and nations constitute the basic law of society.

The common error of both groups of warfare sociology is their disregard of any principle of association. They en­deavor to show why there must be war between the classes, races, and nations. But they neglect to show why there is, or can be, peace and cooperation between the classes, races, and nations. The reason for this negligence is not difficult to detect. It is impossible to demonstrate a principle of asso­ciation that exists within a collective group only, and that is inoperative beyond it. If war and strife are the driving force of all social development, why should this be true for classes, races, and nations only, and not for war among all individuals? If we take this warfare sociology to its logical conclusion we arrive at no social doctrine at all, but at “a theory of unsociability.”13

None of this could be understood in Germany, Hungary, and the Slavic countries because of a basic hostility toward all utilitarian thought right from the start. Because modern sociology is based on utilitarianism and the doctrine of the division of labor, it was rejected summarily. This is the main reason for the reluctance of German scholars to cope with sociology, and for the struggle they waged so tena­ciously for decades against sociology as a science. Since sociology was not welcome, a substitute had to be found. De­pending on their political position they adopted one of the two “theories of unsociability” which emphasized the war­fare principle, and completely bypassed any search for a principle of association.

This scientific situation explains the success Marxian so­ciology was able to achieve in Germany and in the East. When compared with the doctrines of racial and national warfare it had the advantage of offering, at least for the dis­tant future, a social order with a coherent principle of as­sociation. Its answer was ever so much more acceptable because it was optimistic and more satisfactory for some readers than those doctrines which offered nothing in his­tory but a hopeless struggle of a noble race against a suprem­acy of inferior races. He who sought to go even further in his optimism and was less exacting scientifically, found the solution to the conflict not just in the socialistic paradise of the future, but already in the “social kingdom.”

Marxism thus swayed German thought in sociology and philosophy of history.

Popular German sociology adopted, above all, the class concept that is so basic to Marxian sociology. Spann cor­rectly observed: “Today, even so-called middle-class econo­mists are using the term ‘class’ in such a way and in connec­tion with such questions as are raised by the historical materialism of Marx.”14 Adoption of this concept was ac­companied by the Marx and Engels characteristics of uncer­tainty, vagueness, and obscurity, further echoed by the Social-Democrat and Communist parties. During the thirty-five years between the publication of the Communist Manifesto and his death, Marx did not succeed in somehow defining the concept of class struggle more precisely. And it is significant that the posthumous manuscript of the third volume of Das Kapital halts abruptly at the very place that was to deal with classes. Since his death more than forty years have passed, and the class struggle has become the cornerstone of modern German sociology. And yet we con­tinue to await its scientific definition and delineation. No less vague are the concepts of class interests, class condition, and class war, and the ideas on the relationship between conditions, class interests, and class ideology.

For Marx and his parties, the interests of the individual classes are irreconcilably opposed to each other. Each class knows precisely what its class interests are and how to real­ize them. Therefore, there can only be warfare, or at best an armistice. The thought that some circumstances may call an end to the struggle before the socialistic bliss is realized, or that circumstances may moderate it, is rejected summarily. There is no greater entity that could encompass the classes and dissolve the class conflicts. The ideas of fatherland, na­tion, race, and humanity are mere disguises for the only real fact, which is the class conflict. However, popular sociology does not go so far. It could be as Marx describes it, but it need not be so, and above all, it should not be that way. Self­ish class interests must be set aside in order to serve the interests of nation, fatherland, state. And the state, as a principle of reason above the classes, as realization of the idea of justice, must intervene and bring about a social con­dition in which the ownership class is prevented from ex­ploiting the nonowners, so that the class struggle of prole­tarians against owners becomes superfluous.

With the doctrine of class warfare, German etatist sociolo­gists adopted the most important part of the Marxian philos­ophy of history. To them, the British parliamentary system with all its democratic institutions, of which liberal doctrine is singing praises, are mere expressions of the class suprem­acy of the bourgeoisie. As the Germans interpret contempo­rary British history, the British state and its instutitions are more reprehensible for being capitalistic and plutocratic. The British concept of liberty is contrasted with the German concept. They view the great French revolution and the movements of the 1830s and 1840s as class movements of the bourgeoisie. The fact that the principalities prevailed over the 1848 rebels in Germany is hailed as most fortunate, as it paved the way for the social rule of the Hohenzollern kai­sers standing above classes and parties. To German etatists and Marxists, the modern imperialism of the allied powers springs from the capitalistic propensity to expand. The etat­ists also adopted a good part of the Marxian superstructure theory when they depicted classical economics as a hand­maiden of the class interests of entrepreneurs and the bour­geoisie. An example given above illustrates how this ap­plied even to Schmoller.

It should be noted that no critical examination preceeded the adoption of the basic Marxian doctrines. The attention of etatists was directed primarily at blunting the Marxian at­tack on the state ideology and its political offshoots during Prussian leadership in Germany, and at rendering the Marxian doctrines useful for the ideas of state socialism and con­servatism. Etatists did not see the Marxian problem as a scientific problem, but as a political, or at best, an economic problem. In politics they contented themselves with charg­ing Marxism with exaggerations, and sought to demonstrate that there is yet another solution, indeed, a better solution: social reform. Their main attack on Marxism did not aim at its economic program, but at its political program: it placed class interests above national interests.

Only a few comprehended that the problems raised by Marxism were scientific in nature. Sombart was one of the first who as continuator, renovator, and reformer set out to reshape the Marxian doctrines. His new work, which af­forded me the occasion for this essay, provides me with the opportunity to deal with him in detail.

Dependence on Marx is the special characteristic of Ger­man social sciences. Surely Marxism has left its traces as well on the social thinking of France, Great Britain, the United States, the Scandinavian countries, and the Nether­lands. But the influence that emanated from Marxian doc­trines was incomparably greater in Germany. The fact that the sociology of utilitarianism was generally rejected in Ger­many undoubtedly offers an explanation for this great in­fluence.15 In Italy also, the influence of Marxism was rather significant, although not so strong as in Germany. But in Eastern Europe, in Hungary, and in the Slavic countries, it was even greater than in Germany—that is, it was greater in countries that completely depended on German thought in spite of their political hostility. Marxism had swayed Russian social thought, that is, not only the thinking of the followers of the revolutionary parties openly fighting czar­ism, but also the imperial Russian universities. Altschul, the translator of Gelesnoff’s Fundamental Economics, cor­rectly observed in his preface to the German edition, “In no other country did Marx’s economic doctrines invade univer­sity teaching so quickly and influence it so significantly as in Russia.”16 In its hatred of liberalism and democracy czarism itself paved the way for the Bolshevist ideology through its promotion of Marxism.

• *Translator’s note: In this essay, the author still used the term sociology for what he later called praxeology, the general theory of human action.
• 2Schmoller, “Volkswirtschaft, Volkswirtschaftslehre und -methode” [Economy, economics and economic method], Handwörterbuch der Staatswissenschaften [Hand­book of social sciences], 3rd ed., vol. VIII, p. 426.
• 3Ibid., p. 443.
• 4Ibid., p. 445.
• 5F. Engels, Vorrede zum III, Band des “Kapitals” [Preface to vol. 3 of Das Kapital], 3rd ed., Hamburg, 1911, p. xii et seq.
• 6Einige strittige Fragen der Kapitalstheorie [Some disputed ques­tions of capital and interest], Vienna, 1900, p. 111 et seq.; also on Brentano, cf. O. Spann, Der wahre Staat [The true state], Leipzig, 1923, p. 141 et seq.
• 7See B. H. Kelsen, Sozialismus und Staat [Socialism and state], 2nd ed., Leipzig, 1923.
• 8See Dietzel, “Individualismus,” in Handwörterbuch, 4th ed., ch. V. p. 408 et seq. A. Pribram, Die Entstehung der individualistichen Sozialphilosophie [The develop­ment of individualistic social philosophy], Leipzig, 1912, p. 1 et seq. For a critique of this view, see L. von Wiese, “Dietzel’s ‘Individualism’ “in Kölner Vierteljahrs­hefte für Sozialwissenschaften [Cologne quarterly for social sciences], Munich and Leipzig, vol. II, 1922, p. 54 et seq.
• 9A. Smith, The Theory of Moral Sentiments, Edinburgh, 1813, pt. II, sec. III, ch. III, p. 243. [American edition: The Theory of Moral Sentiments (Indianapolis: Liberty Classics, 1976), p. 195.]
• 10See Kant, “Idee zu einer allgemeinen Geschichte in weltbürgerlicher Absicht” [Ideas on a general history from a cosmopolitan view], Collected Works, Insel ed., Leipzig, vol. I, p. 227 et seq.
• 11Menger, Untersuchungen über die Methode der Sozialwissenschaften [Inquiries into the methods of social sciences], Leipzig, 1883, p. 178. [English-language edi­tion: Problems of Economics and Sociology (Urbana, Ill.: University of Illinois Press, 1963).] F. v. Wieser’s critique of the rationalistic-utilitarian doctrine in general, and of Menger’s formulation in particular, leaves its substance untouched (See Wieser, Theorie der gesellschaftlichen Wirtschaft [Theory of social economics], Tübingen, 1914, sec. I, p. 242 et seq.). Its significance lies in its distinction between leader and masses—probably under the influence of Tarde—and in its greater emphasis on the principle of heterogeneity of objectives—as Wundt called it.
• 12See A. Smith, op. cit., pt. IV, ch. I, p. 417 et seq. [American edition: p. 297 et seq.]
• 13Die Philosophie der Geschichte als Soziologie [The philosophy of history as sociology], 3rd ed., Leipzig, 1922, p. 260.
• 14O. Spann, “Klasse und Stand” [Class and estate], Handwörterbuch, 4th ed., vol. V. p. 692.
• 15If in the United States the influence of the antiutilitarians (e.g., that of Veblen) should spread, Marxism, too, will spread with all its consequences.
• 16Gelesnoff, Grundzüge der Volkswirtschaftslehre [Fundamental economics], Leip­zig, 1918, p. iii.