Epistemological Problems of Economics

Let us consider first the doctrine which teaches that thought is dependent upon the class of the thinker.

According to the Marxian view, in the period between the tribal society of the golden age of times immemorial and the transformation of capitalism into the communist paradise of the future, human society is organized into classes whose interests stand in irreconcilable opposition. The class situation—the social existence—of an individual determines his thought. Therefore, thinking produces theories that Correspond to the class interests of the thinker. These theories form the “ideological superstructure” of class interests. They are apologies for the latter and serve to cover up their nakedness. Subjectively, the individual thinker may be honest. However, it is not possible for him to pass beyond the limitations imposed on his thinking by his class situation. He is able to reveal and unmask the ideologies of other classes, but he remains throughout his life biased in favor of the ideology that his own class interests dictate.

In the volumes that have been written in defense of this thesis the question is—characteristically—almost never raised whether there is any truth in the supposition that society is divided into classes whose interests stand in irreconcilable conflict.7  For Marx the case was obvious. In Ricardo’s system of catallactics he found, or at least believed that he had found, the doctrine of the organization of society into classes and of the conflict of classes. Today, Ricardo’s theories of value, price determination, and distribution have long since been outmoded, and the subjective theory of distribution offers not the slightest basis of support for a doctrine of implacable class conflict. One can no longer cling to such a notion once one has grasped the significance of marginal productivity for income determination.

But since Marxism and the sociology of knowledge see in the subjective theory of value nothing more than a final ideological attempt to save capitalism, we wish to limit ourselves to an immanent critique of their theses. As Marx himself admits, the proletarian has not only class interests, but other interests that are opposed to them. The Communist Manifesto says: “The organization of the proletarians into a class and thereby into a political party is repeatedly frustrated by the competition among the workers themselves.”8  Therefore, it is not true that the proletarian has only class interests. He also has other interests that are in conflict with them. Which, then, should he follow? The Marxist will answer: “Of course, his class interests, for they stand above all others.” But this is no longer by any means a matter “of course.” As soon as one admits that action in conformity with other interests is also possible, the question is not one concerning what “is,” but what “ought to be.” Marxism does not say of the proletarians that they cannot follow interests other than those of their class. It says to the proletarians: You are a class and should follow your class interests; become a class by thinking and acting in conformity with your class interests. But then it is incumbent upon Marxism to prove that class interests ought to take precedence over other interests.

Even if we were to assume that society is divided into classes with conflicting interests and if we were to agree that everyone is morally obliged to follow his class interests and nothing but his class interests, the question would still remain: What best serves class interests? This is the point where “scientific” socialism and the “sociology of knowledge” show their mysticism. They assume without hesitation that whatever is demanded by one’s class interests is always immediately evident and unequivocal.9  The comrade who is of a different opinion can only be a traitor to his class.

What reply can Marxian socialism make to those who, precisely on behalf of the proletarians, demand private ownership of the means of production, and not their socialization? If they are proletarians, this demand alone is sufficient to brand them as traitors to their class, or, if they are not proletarians, as class enemies. Or if, finally, the Marxists do choose to engage in a discussion of the problems, they thereby abandon their doctrine; for how can one argue with traitors to one’s class or with class enemies, whose moral inferiority or class situation makes it impossible for them to comprehend the ideology of the proletariat?

The historical function of the theory of classes can best be understood when it is compared to the theory of the nationalists. Nationalism and racism also declare that there are irreconcilable conflicts of interests—not between classes, of course, but between nations and races—and that one’s thinking is determined by one’s nationality or race. The nationalists form “Fatherland” and “National” parties, which boast that they and they alone pursue the goals that serve the welfare of the nation and the people. Whoever does not agree with them—whether or not he belongs to their nationality—is forever after regarded as an enemy or a traitor. The nationalist refuses to he convinced that the programs of other parties also seek to serve the interests of the nation and the people. He cannot believe that the man who wants to live in peace with neighboring countries or who advocates free trade rather than protective tariffs does not make these demands in the interests of a foreign country, but likewise wishes to act, and thinks he is acting, in the interests of his own country. The nationalist believes so adamantly in his own program that he simply cannot conceive how any other could possibly be in the interests of his nation. Whoever thinks differently can only be a traitor or a foreign enemy.

Consequently, both doctrines?the Marxian sociology of knowledge as well as the political theory of nationalism and racism share the assumption that the interests of one’s class, nation, or race unequivocally demand a definite course of action and that for the members of a class or nationality, or for the racially pure, no doubt can arise about what this should be. An intellectual discussion of the pros and cons of different party programs seems unthinkable to them. Class membership, nationality, or racial endowment allow the thinker no choice: he must think in the way his being demands. Of course, such theories are possible only if one has drawn up beforehand a perfect program, which it is forbidden even to doubt. Logically and temporally Marx’s acceptance of socialism precedes the materialist conception of history, and the doctrine of militarism and protectionism logically and temporally precedes the program of the nationalists.

Both theories also arose from the same political situation. No logical or scientific arguments whatsoever could or can be brought against the theories of liberalism, which were developed by the philosophers, economists, and praxeologists of the eighteenth and of the first half of the nineteenth centuries. Whoever wishes to combat these doctrines has no other means available than to dethrone logic and science by attacking their claim to establish universally valid propositions. To the “absolutism” of their explanations it is countered that they produced only “bourgeois,” “English,” or “Jewish” science; “proletarian,” “German,” or “Aryan” science has arrived at different results. The fact that the Marxists, from Marx and Dietzgen down to Mannheim, are eager to assign to their own teachings a special position designed to raise them above the rank of a mere class theory is inconsistent enough, but need not be considered here. Instead Of refuting theories, one unmasks their authors and supporters.

What makes this procedure a matter of serious concern is that, if adhered to in practice, it renders impossible every discussion involving argument and counterargument. The battle of minds is replaced by the examination of opponents’ social, national, or racial backgrounds. Because of the vagueness of the concepts of class, nation, and race, it is always possible to conclude such an examination by “unmasking” one’s opponent. It has gone so far that one acknowledges as comrades, fellow countrymen, or racial brothers only those who share the ideas that are alone presumed adequate to such a status. (It is a sign of a special lack of consistency to appeal to the evidence of the existence of supporters for one’s ideology who are outside the circle of members of one’s own class, nation, or race, with such expressions as: “Even those not of our own class, nation, or race must share our view if they are enlightened and honest.” A rule for determining the doctrine that would be adequate to one’s being is unfortunately not stated, nor, indeed, can it ever be stated. A decision by the majority of those belonging to the group is expressly rejected as a criterion.

The three axioms that these antiliberal doctrines all assume are:

1. Mankind is divided into groups whose interests are in irreconcilable conflict.
2. Group interests and the course of action that best serves them are immediately evident to every member of every group.
3. The criterion of the separation into groups is (a) membership in a class, (b) membership in a nationality, or (c) membership in a race.

The first and the second propositions are common to all these doctrines; they are distinguished by the particular meaning that they give to the third.

It is regrettable that each of these three propositions taken individually, or the conjunction of all three into one, is completely lacking in the self-evidence and logical necessity required of axioms. If, unfortunately, they are not capable of proof, one cannot simply say that they do not require proof. For in order to be proved, they would have to appear as the conclusion of an entire system of praxeology, which would first need to be drawn up. But how should this be possible when they logically and temporally precede every thought?at least every praxeological (the sociologists of knowledge would say “situationally-determined”) thought? If a man begins to take these axioms seriously in his thinking, he will fall into a skepticism far more radical than that of Pyrrho and Aenesidemus.

But these three axioms form only the presupposition of the theory; they are not yet the theory itself, and, as we shall see, their enumeration by no means exhausts all its axiomatic assumptions. According to the doctrine of the Marxian sociology of knowledge, to which we return and which is the only one we wish to consider in the rest of this discussion, a man’s thought is dependent on his class membership to such an extent that all the theories which he may arrive at express, not universally valid truth, as their author imagines, but an ideology that serves his class interests. However, there can be no doubt that for members who want to further the interests of their own class as much as they can, the knowledge of reality, unclouded by any sort of ideological error, would be extremely useful. The better they know reality, the better will they know how to select the means for the promotion of their class interests. Of course, if knowledge of the truth were to lead to the conclusion that one’s class interests should be sacrificed for other values, it could lessen the enthusiasm with which these alleged class interests are championed, and a false theory that avoided this disadvantage would be superior to the true one in tactical value. But once this possibility has been admitted, the basis of the whole doctrine has been given up.

Consequently, a class can be aided in its struggles by means of a false theory only in so far as it weakens the fighting power of opposing classes. “Bourgeois” economics, for example, helped the bourgeoisie in the struggle against the precapitalist powers, and then later in its opposition to the proletariat, in spreading among its opponents the conviction that the capitalist system must necessarily prevail. Thus we arrive at the fourth and last of the axiomatic presuppositions of Marxism: The help which a class gets from the fact that its members can think only in terms of apologetics (ideologies), and not in terms of correct theories, outweighs the consequent loss to it of whatever advantages a knowledge of reality unclouded by false ideas might have afforded it for practical action.

It must be made clear that the doctrine of the dependence of thought on the class of the thinker is based on all four of these axioms. This relation of dependence appears as an aid to the class in carrying on class warfare. That its thinking is not absolutely correct, but conditioned by its class origin, is to be attributed precisely to the fact that interest points the way for thought. Here we definitely do not in any way wish to challenge these four axioms, which are generally accepted without proof for the very reason that they cannot be proved. Our critique has to do only with answering the question whether a class theory can be used in unmasking modern economics as the class ideology of the bourgeoisie, and we must attempt to solve this problem immanently.

In spite of everything that has been said, one may still perhaps maintain the fourth of the axioms set forth above, according to which it is more advantageous for a class to cling to a doctrine that distorts reality than to comprehend the state of affairs correctly and to act accordingly. But at best this can hold true only for the time during which the other classes do not yet possess theories adequate to their own social existence. For later, the class that adjusts its action to the correct theory will doubtless be superior to the classes that take a false?albeit subjectively honest?theory as a basis for action; and the advantage that the class-conditioned theory formerly afforded, in that it weakened the opposition of enemy classes, would now no longer obtain, since the latter would have already emancipated their thinking from that of other classes.

Let us apply this to our problem. Marxists and sociologists of knowledge call modern subjectivist economics “bourgeois” science, a last hopeless endeavor to save capitalism. When this reproach was directed against classical economics and its immediate successors, there was a grain of truth in it. At that time, when there was not yet 2L proletarian economics, it might be thought that the bourgeoisie could, by means of its science, hinder the awakening of the proletariat to class consciousness. But now “proletarian” science has entered the scene, and the proletariat has become class-conscious. It is now too late for the bourgeoisie to try anew to formulate an apologetic, to construct a new bourgeois science, to develop a new “ideology.” All attempts to destroy the class consciousness of the proletarian, who can no longer think otherwise than in conformity with his class, can redound only to the detriment of those who would undertake them. Today the bourgeoisie could do nothing but harm to its own interests if it were to endeavor to concoct a new class ideology. The classes opposed to it could no longer be brought under the influence of such a doctrine. But because the action of the bourgeoisie would itself be determined by this false theory, the latter would necessarily endanger the outcome of the struggle against the proletariat. If it is class interest that determines thought, then today the bourgeoisie has need of a theory that expresses reality without contamination by false ideas.

Therefore, one could say to the Marxists and the sociologists of knowledge, if one wanted, in turn, to take one’s stand on one’s own viewpoint: Until the appearance of Karl Marx, the bourgeoisie fought with an “ideology,” viz., the system of the classical and “vulgar” economists. But when, with the appearance of the first volume of Capital (1867), the proletariat was provided with a doctrine corresponding to its social existence, the bourgeoisie changed its tactics. An “ideology” could henceforth no longer be useful to it, since the proletariat, awakened to consciousness of its social existence as a class, could no longer be seduced and lulled to sleep by an ideology. Now the bourgeoisie needed a theory that, dispassionately viewing the true state of affairs and free from every ideological coloration, offered it the possibility of always availing itself of the most suitable means in the great decisive battle of the classes. Quickly the old economics was given up; and since 1870, first by Jevons, Menger, and Walras, and then by Böhm-Bawerk, Clark, and Pareto, the new, correct theory has been developed as now required by the changed class situation of the bourgeoisie. For it has become apparent that in this stage of its struggle against an already class-conscious proletariat the doctrine adequate to the existence, of the bourgeoisie as a class, that is, best serving its class interests, is not an “ideology,” but knowledge of the absolute truth.

Thus, with Marxism and the sociology of knowledge you can prove everything and nothing.

• 7This is true above all of those who, like the “sociologists of knowledge” and the school of Max Adler, want to consider Marxism “sociologically,” that is to say, quite apart from all economics. For them, the irreconcilability of the conflict of class interests is a dogma the truth of which only the depraved can doubt.
• 8Das Kommunistische Manifest (7th authorized German edition, Berlin, 1906), p. 30.
• 9“The individual errs frequently in protecting his interests; a class never errs in the long run,” says F. Oppenheimer, System der Soziologie (Jena, 1926), 11, 559. This is metaphysics, not science.