Liberty Matters

What Is a ‘Class’ and Can Class Analysis Be ‘Wertfrei’?

The concept of class is extremely flexible. It can be whatever one defines it to be, such as “things that are A” as opposed to “things that are not A.” In set theory in mathematics, that is pretty much all that one needs to know (with my apologies to the mathematicians for this gross oversimplification).
In the social sciences the matter is more complex. Normally one selects a criterion which defines a class of objects because one thinks it is important for explaining social phenomena, such as the class defined as large landowners who got their holdings by royal grant or charter (aristocrats) versus those usually smaller landowners who purchased their land on their own account (market-oriented peasants or farmers), those workers who earn an income from wages (the industrial working class) as opposed to those who earn their income via profits from a business they own (capitalists), the salaries for managers who work in that company, those who receive dividends from shares owned in that company, and so on. Social theorists have historically chosen the following as significant criteria to help them understand how societies function or which explain the conflicts that exist within societies: gender, nationality, status, skin color or race, caste, occupation, wealth, source of income, sexual orientation, and so on. The test for selecting a criterion to define one’s understanding of class is, I would argue, its explanatory value for the problem one is trying to explain or solve. And the problem both Marxists and CLs want to solve is who has political (or economic) power, how do they benefit from the exercise of that power, and who pays for it?
In the case of both the Marxist and classical-liberal traditions of class analysis, there is a moral, or normative, aspect and a systemic, or functional, aspect. The moral, or normative, aspect is that it is wrong to “exploit” (Marxist) or “use violence” (CL) against others to achieve one’s own goals. An extension of this is the idea that it is wrong to treat individuals unequally (particularly under the law) based upon their race, gender, sexual orientation, etc. The systemic, or functional, aspect is that the selected criterion is socially significant and thus goes to the very heart of how a society functions and perpetuates itself, or does not function well and gets torn apart by political and social conflict, war, and revolution.
In the Marxist framework the systemic aspect is that the production of “profits” by means of the “exploitation” of wage labor is the key to understanding how the “capitalist system” functions and perpetuates itself, although it will eventually lead to the system’s own downfall. The mere existence of “wage relations” in a society dooms it to being exploitative. The moral aspect is that Marxists also argue that not paying the wage worker the “full value” of what he or she produces and charging interest on loans and rent on land are unjust and immoral and should be changed (by violent revolution if necessary).
Within the CL framework the systemic aspect is that the key to understanding how the “capitalist system” works is the idea that profit-seeking capitalists produce and sell things wanted by consumers, and that if the the capitalists fail to do this adequately they will make losses and perhaps go out of business. The “capitalist system” is thus consumer-centric; all voluntary exchanges are ex ante mutually beneficial to the participants. In contrast to the Marxist normative aspect, CLs believe the market system is inherently peaceful, productive, and “harmonious” (to use Bastiat’s terminology). If the capitalists attempt to engage in rent-seeking to bolster their profits, additional costs and inefficiencies are introduced into the economy which have far-reaching and often unforeseen consequences. Most modern economists qua economists are silent about the morality of these activities, seeing it as being outside of their domain. However, this was not always the case.
Also within the CL framework, how those profits are acquired -- whether by voluntary exchanges in a free market in which prices are freely negotiated or by the use or threat of coercion to take justly acquired property  from some people and give it to others -- also matters -- or should matter. Some branches of liberal political economy wish to be wertfrei (value-free) and in many cases don’t ask if profits are “justly” acquired -- the price system operates regardless. What matters more is that profits are sought, gained, and lost. However, historically the moral aspect was more important within the classical-liberal tradition. One might rightly call political economy in the late 18th and early 19th centuries a kind of “moral economy” or “social economy.” This was the notion that the use of violence is wrong and that taking something that is not rightfully yours is also wrong, and that these activities profoundly affected the operation of the economy and the nature of wealth creation.
What is common (or should be) to both schools of economic thought is that it matters that wealth is acquired by means of coercion instead of voluntary and mutually beneficial exchanges.
Thus it is not surprising that the problem of coerced labor was central to the development of CLCA. It was a serious economic problem for Adam Smith and Jean-Baptiste Say, who argued forcefully that slave labor qua labor was inefficient and more expensive than free labor (not least because of the incentive problem). Other CLs, like Charles Comte and Gustave de Molinari,[79] argued equally forcefully that it was just as much a moral problem (with economic side-effects) since, as acting and thinking beings, slaves resented having their freedom and property taken from them and so attempted to run away, sabotage their work, or rise up in bloody revolt and kill their masters whenever they had the opportunity to do so. These activities had enormous economic consequences and thus had to be incorporated into their economic analysis of societies.
Thus in the eyes of economists like Frédéric Bastiat an institution like slavery was not just an economic matter but also a moral matter which so distorted the operation of the natural “harmony” of the market that it created “disharmonies” so severe that it would eventually lead to war and revolution. To help understand the “disturbing factors” which were undermining the normal operation of the market he developed his theory of class and plunder in which slavery played a most important part.[80] Certainly in the case of Comte and Molinari, the relationship between the slave and the slaveowner was just as economically important as the relationship between the producer and the consumer in classical political economy.
I suspect that one explanation for the decline of interest in class analysis beginning in the late 19th century was the desire of liberal political economists to be more “scientific” and wertfrei in their analysis. So CLCA had to be ditched.
[79.] See in particular the long discussion of slavery in Charles Comte’s Traité de législation, ou exposition des lois générales suivant lesquelles les peuples prospèrent, dépérissent ou restent stationnaire, which had a profound impact on French classical-liberal thought, 4 vols. (Paris: A. Sautelet et Cie, 1827). Book five deals almost exclusively with slavery.
[80.]See, David M. Hart, Class Analysis, Slavery and the Industrialist Theory of History in French Liberal Thought, 1814–1830: The Radical Liberalism of Charles Comte and Charles Dunoyer (unpublished Ph.D., King’s College Cambridge, 1994). Online