The Ultimate Foundation of Economic Science

The insurmountable difficulties that any materialistic interpretation of reality encounters can be shown in an analysis of the most popular materialistic philosophy, Marxian dialectical materialism.

Of course, what is called dialectical materialism is not a genuine materialistic doctrine. In its context the factor that produces all changes in the ideological and social conditions of man’s history is the “material productive forces.” Neither Marx nor any of his followers defined this term. But from all the examples they provided one must infer that what they had in mind was the tools, machines, and other artifacts that men employ in their productive activities. Yet these instruments are in themselves not ultimate material things, but the products of a purposive mental process.14  But Marxism is the only attempt to carry a materialistic or quasi-materialistic doctrine beyond the mere enunciation of a metaphysical principle and to deduce from it all other manifestations of the human mind. Thus, we must refer to it if we want to show the fundamental shortcoming of materialism.

As Marx sees it, the material productive forces bring forth—independently of the will of men—the “production relations,” i.e., the social system of property laws, and their “ideological superstructure,” i.e., the juridical, political, religious, artistic, or philosophical ideas.15  In this scheme, action and volition are ascribed to the material productive forces. They want to attain a definite goal, viz., they want to be freed from fetters that are hindering their development. Men are mistaken when they believe that they themselves are thinking, resorting to judgments of value, and acting. In fact, the production relations, the necessary effect of the prevailing stage of the material productive forces, are determining their ideas, volitions, and actions. All historical changes are ultimately produced by the changes in the material productive forces, which—as Marx implicitly assumes—are independent of human influence. All human ideas are the adequate superstructure of the material productive forces. These forces aim ultimately at the establishment of socialism, a transformation that is bound to come “with the inexorability of a law of nature.”

Now let us for the sake of argument admit that the material productive forces have a constitution such that they are continually trying to free themselves from fetters upon their development. But why must, out of these attempts, first capitalism and, at a later stage of their development, socialism emerge? Do these forces reflect upon their own problems and finally reach the conclusion that the existing property relations, from having been forms of their own (viz., the forces’) development, have turned into fetters16  and that therefore they no longer correspond (”entsprechen”) to the present stage of their (viz., the forces’) development?17  And do they, on the ground of this insight, resolve that these fetters have to “burst asunder,” and do they then proceed to action that causes them to burst asunder? And do they determine what new production relations have to take the place of the burst ones?

The absurdity of ascribing such thinking and acting to the material productive forces is so blatant that Marx himself paid but little attention to his famous doctrine when later, in his main treatise, Capital, he made more specific his prognostication about the coming of socialism. Here he refers not merely to action on the part of the material productive forces. He speaks of the proletarian masses who, dissatisfied with the progressive impoverishment that capitalism allegedly brings upon them, aim at socialism, obviously because they consider it as a more satisfactory system.18

Every variety of materialistic or quasi-materialistic metaphysics must imply converting an inanimate factor into a quasi man and ascribing to it the power to think, to pass judgments of value, to choose ends, and to resort to means for the attainment of the ends chosen. It must shift the specifically human faculty of acting to a nonhuman entity that it implicitly endows with human intelligence and discernment. There is no way to eliminate from an analysis of the universe any reference to the mind. Those who try it merely substitute a phantom of their own invention for reality.

From the point of view of his professed materialism—and, for that matter, from the point of view of any materialistic doctrine—Marx did not have the right to reject as false any doctrines developed by those with whom he disagreed. His materialism would have enjoined upon him a kind of listless recognition of any opinion and a readiness to attach to every idea advanced by a human being the same value as to any other idea advanced by somebody else. To escape such a self-defeating conclusion, Marx took recourse to his scheme of philosophy of history. He pretended that, by dint of a special charisma, denied to other mortals, he had a revelation that told him what course history must necessarily and unavoidably take. History leads to socialism. The meaning of history, the purpose for which man has been created (it is not said, by whom) is to realize socialism. There is no need to pay any attention to the ideas of people whom this message did not reach or who stubbornly refuse to believe in it.

What epistemology has to learn from this state of affairs is this: Any doctrine that teaches that some “real” or “external” forces write their own story in the human mind and thus tries to reduce the human mind to an apparatus that transforms “reality” into ideas in the way in which the digestive organs assimilate food is at a loss to distinguish between what is true and what is not. The only way it can avoid a radical skepticism that does not have any means of sifting truth from falsehood in ideas is by distinguishing between “good” men, i.e., those who are equipped with the faculty of judging in conformity with the mysterious superhuman power that directs all affairs of the universe, and “bad” men, who lack this faculty. It must consider as hopeless any attempts to change the opinions of the “bad” men by discursive reasoning and persuasion. The only means to bring to an end the conflict of antagonistic ideas is to exterminate the “bad” men, i.e., the carriers of ideas that are different from those of the “good” men. Thus, materialism ultimately engenders the same methods of dealing with dissent that tyrants used always and everywhere.

In establishing this fact epistemology provides a clue for the understanding of the history of our age.

• 14Cf. Mises, Theory and History, pp. 108 ff.
• 15Cf. Karl Marx, Zur Kritik der politischen Oekonomie, ed. Kautsky (Stuttgart, 1897), pp. x-xii.
• 16Marx, op. cit., p. xi.
• 17Marx and Engels, The Communist Manifesto, I.
• 18Marx, Das Kapital (7th ed.; Hamburg, 1914), Vol. I, ch. xxiv, p. 728. For a critical analysis of this argumentation, see Mises, Theory and History, pp. 102 ff.