Liberty Matters

Ways of Critiquing Marx

As I've said multiple times in this exchange, I'm a poor defender of Marx in part because I'm not a Marxist. And so at some level I've considered Marx's arguments (often quite carefully) and rejected them (often adopting arguments along the lines that my dialogical partners have advanced). But I remain uncomfortable with three moves that we often make to "defeat" Marx.
1. The standpoint problem, redux.
Critics of Marx say that his critique of capitalism depends on the possibility of rational economic calculation under socialism (meaning here the elimination of private ownership of the means of production). My point was that this simply cannot be true. Marx or any of us can criticize anything, whether or not we can imagine an alternate reality and whether or not the alternate reality we happen to imagine is theoretically possible or likely to occur. That Marx believed that the future he imagined was necessary for his critique of capitalism to have legs (and he surely did) isn't dispositive in any way. I also understand the insistence that being theoretically impossible is more damning than being unlikely to occur, but I'm not so certain that this holds up.
2. Marx's errors are fatal; others making the same errors just need to be updated.
Yes, Marx's theory of exploitation (as he articulated it) did depend on the labor theory of value. Yes, the labor theory of value has been refuted. But, as Wertheimer (1999, x) argues, "the important moral core of the Marxist view is not unique to Marxism. When Marxism claims that capitalist class exploits the proletariat, it employs the ordinary notion that one party exploits another when it gets unfair and underserved benefits from its transactions or relationships with others." (Note: rather than updating/modifying Marx, Wertheimer articulates a view of exploitation that does not rely on Marx.)
How would Marx, if he were writing today, have to make the case for exploitation? As I suggested earlier, I think he would have to argue that a certain class of workers was not paid its marginal revenue product. He would then have to support that claim by arguing that a certain class of workers is likely to receive less than its marginal revenue product perhaps because it lacks bargaining power. One way to read Marx's discussions in the 1844 manuscripts is as an expression of Marx's hyper-concern with the differential power of employers and employees. This doesn't seem wildly implausible to me. (Note: This may have been what Böhm-Bawerk had in mind when he articulated his "exploitation" theory, as Sheldon Richman (2012) helpfully reminds us.
3. People believe Marx because they want to believe him, and so we're not in the realm of rational debate.
There's a sense in which everything we all believe can be reduced to preferences. I have a tremendous faith in bottom-up solutions to social problems. So when I see evidence of these solutions in the real world, I tend to highlight them. Similarly, when I see social issues that stubbornly resist efforts to ameliorate them, I tend to look for barriers that prevented bottom-up efforts from doing their magic. This is one way to read much of my work on post-disaster community recovery. Still, my wanting to believe in the capacity of community members working together to overcome community challenges does not say anything about how you should evaluate the evidence that I present. Were you to dismiss my findings simply because you knew of my faith in bottom-up solutions to social ills, I'd cry foul, and I think rightfully so.
So let's look at the evidence regarding exploitation (as rearticulated above). There have been several studies that have explored whether workers in particular industries or firms are paid their marginal products. Not surprisingly, the answer is that some workers are paid their marginal product, some are paid more, and some are paid less. Where we see workers being paid less it is because of wage compression in fields where wage disparities would disrupt collaboration or because workers lack bargaining power. Consider the study by Macdonald and Reynolds (1984) of salaries of major league baseball players. Their study did not challenge previous findings that before free agency, baseball players were not paid commensurate with what they contributed to the team's revenues. The study found that after free agency, while veteran players did appear to be paid their marginal revenue product, young players were still "exploited," i.e., paid less on average than their marginal revenue products. I reference this not as a way to advocate for young baseball players. Instead, the study suggests that under some market structures, Marx's concern (i.e., some people get less than they deserve) could be a very real concern.
If these moves are off the table …
I wonder what the discussion would look like if these moves were off the table.
I do think that both Steve and Pete point us in useful directions. Steve's paper "Inequality, Mobility, and Being Poor in America" (2015) is the right sort of response to these kinds of queries. And Pete's insistence that we work to "find that set of institutions that will deal with the sharp edges in our social intercourse, ameliorate social ills, and enable us to live better together than we ever could in isolation" is excellent advice.