Commentary on Political Economy

Tuesday, 29 December 2020



We have proposed to periodize revolutionary movements into an initial phase comprising two stages, that of origins and formation and that of the seizure of power as Party-State, during which the movements may be said to operate according to a purposive rationality, and the second and last phase, what we styled with Paxton as “the ultimate stage”, during which they proceed in accordance with what we call value rationality. The rationality that we intend here is not an absolute rationality: it is not the Logos of Platonic or even Pauline or Johannine doctrine (“in the beginning was the Word [Logos]”); rather, it is a Weberian relative or “value-free” (wert-frei) rationality that we believe is distinctly applicable to advanced industrial capitalism (it is the famous Rationalisierung theorized by the German sociological titan as early as the Vorbemerkung to Die Protestantische Ethik) for reasons that we shall adduce presently. It is essential to understand our historico-materialist paradigm in this connection because we believe that it is a novel and crucial application to revolutionary movements and their totalitarian denouement - one that, we submit, will enhance our ability to understand their historical and politico-economic dynamics even for practical political purposes. In the premises, we propose to improve – with the utmost respect owed to a great historian – on the periodization advanced by Tim Mason in his seminal essay on “The Primacy of Politics” wherein he argues that the advent of the Nazi Dictatorship to power in 1933 constituted the beginning of an epochal substitution of capitalist economics with Nazi totalitarian politics. Whilst we agree with Mason that Hitler’s accession to power epitomised the “primacy of politics” where the politico-economic exigencies of the German bourgeoisie were concerned, we differ from him in the narrow sense that, in our submission, to the extent that, to repeat, the Nazi Dictatorship represented and answered to the politico-economic exigencies of German capitalist industry, it was still operating, at this early stage between 1933 and 1939, under the guidance of the purposive rationality that we described earlier. Although, quite plainly, it cannot be denied that the “ethics of conviction” or absolute value rationality were already at play right from the inception of the Nazi movement, we insist on this fundamental “break” or “turn” or caesura between the earlier phase of the Dictatorship when “the ethics of responsibility” prevailed regarding the conduct of social and economic policies favourable to German capital, and the later phase when “the ethics of conviction” lost all contact with the purposive-rational needs not just of German capital but of German society tout court! It may be useful, in this context, to invoke the well-known distinction introduced by Ernst Fraenkel in The Dual State between “the Normative State” and “the Prerogative State”. Evidently, we argue that in the early phase of Nazism it was the ethos of the Normative State that prevailed in line with the interests of German capital as the Nazi Dictatorship sought to cement its power as a Party-State, whereas in the late phase it was the Prerogative State that virtually eclipsed the Normative once the Dictatorship had eliminated all forms of resistance to its totalitarian rule.

The correction we have made to Mason’s own periodization may seem trivial but we insist on its importance on at least two grounds: the first is that it is incorrect to say that “the primacy of politics” imposed itself in Germany only from the time of Hitler’s appointment as Kanzler because, as we explain below, to the extent that “economics is a concentrate of politics”, politics always has “primacy” in social relations. The real question is the extent to which economics as the rationale of capitalist enterprise, which (as Mason rightfully argues) led to the rise of Nazism, continued to hold sway over Nazi regime policies after its accession to power. The second reason is that our differentiation of the periods of Nazi totalitarian rule helps us focus on the extent to which capitalist social relations of production are consistent with totalitarian rule, at what stage the two part ways, and therefore on the significant differences between capitalist social relations of production and the social policies of totalitarian regimes.

It may be said from the outset that economics is truly a concentrate of politics and that consequently economics can be distinguished from politics only in terms of the time periods or cycles that the two spheres occupy. Economics is the inner sphere of social reality, spinning around a hypothetical centre with a different torque or angular momentum from that of the political sphere which has a faster cycle or torque. As we shift from this hypothetical centre of the social sphere to its outer layers, economics grows increasingly political until it turns into policy and finally, at the outer surface of the social sphere, it resolves itself into strategy and tactics.

Contrary to what Lenin is said to have quipped, then, politics is not a concentrate of economics. It is the other way round: economics is a concentrate of politics. In other words, it is not politics that "boils down" to economics; it is economics that can be reduced to a bundle of politics. The important thing is to focus on the meaning of the phrase "a concentrate of" and the phrase "boils down to". What is it that we mean when we say that "in the final analysis" politics is economics or the opposite, that economics really is politics? What kind of "reality" do we refer to when we speak of the ultimate foundations of economics or politics? As we all know, necessity is not just "the mother of invention" - meaning that there are some needs that are so fundamental that they stir up human imagination and inventiveness. Necessity can also be camouflaged and disguised or simply be rationalised away as "virtue": this is what we do when "we make virtue out of necessity". Differently put, we recognize that there are situations in social relations when we are coerced into doing things that either we would rather not do or else "concentrate the mind" to the point of inducing virtue - the acquiescence to necessity as virtue - or inventiveness, the desperate search for alternative solutions. But in all these cases, in all these instances, what we call ‘necessity’ is a function of social relations, not of physical or physiological necessity. If we accept that our environment offers sufficient resources for human societies to reproduce themselves, then it is evident that economics - which as "the dismal science" is often confused with "the sphere of necessity" - has little to do with physical or physiological necessity but must instead have everything to do with "coercion". The necessity of economics intended as a "science" is therefore in reality the necessity of political coercion. That is why it is correct to insist that "economics is a concentrate of politics", in the sense that what we describe or circumscribe as a separate field of human activity - "the Economic" - is a specific form of coercion imposed by some people on other people in the sphere of the production of and for human needs and their satisfaction.

To accept with Lenin that "politics is a concentrate of economics" would be tantamount to asserting that economic activity is dictated by a "necessity" that is independent of "coercion", that is physical or even physio-bio-logical in nature – and therefore independent of "the Political". This may make sense in terms of the economic determinism – indeed, an eschatology or even a “theodicy” of communism – that Lenin inherited from Marx’s labour theory of value and is implicit in the conception of human history expounded most explicitly in The Communist Manifesto and in the “Preface to A Contribution”. It was this economic determinism that Eduard Bernstein attacked with his Evolutionary Socialism wherein he sought to reformulate the strategy of the Social Democratic Party for the conquest of political power in post-Wilhelmine Germany. To be sure, Bernstein’s attack on the notion of the “general crisis of capitalism” or Zusammenbruchstheorie had little resemblance to Marx’s notion of the inevitability of its decline and replacement by “the dictatorship of the proletariat” – which was certainly consistent with the gradual transition to communism and even more consistent with a revolutionary overthrow of bourgeois regimes than with a sudden catastrophic end to capitalism. As Karl Kautsky pointed out in his stinging rebuke Bernstein und das sozialdemokratische Programm, there is nothing remotely resembling a Zusammenbruchstheorie in Marx with the possible exception of “the law of the tendential fall of the rate of profit” (at p.42: Eine besondere ,,Zusantmenbruchsthteorie" ist von Marx und Engels nicht ausgestellt worden.”). Rather, what was more significant than the applicability of the “general crisis” to capitalism for Bernstein’s attack on Marxist eschatology was the undeniable determinism of Marx’s theory based on the notion of “socially necessary labour time” and, consequently, of the validity of the Law of Value. For if, indeed, we assumed the notion of socially necessary labour time to be valid, then, given a fixed working population, there can be little doubt that rising productivity would push socially necessary labour time toward the zero bound, that is, to a point where workers will receive little or nothing out of the social product whereas capitalists will be entitled to the near totality of it! This tendency of capitalism combined with the anarchy of production dictated by the reality of market competition necessarily entails the equal necessity of its supersession by political means to a new and higher form of social production that Marxists call communism.

It was these two pivots of Marxian revolutionary economic theory – those of (i) the unsustainability of surplus-value extraction (Marx’s law of the tendential fall of the rate of profit) and (ii) the anarchy of capitalist market competition – and the obvious implication that these two factors would lead to inevitable and irremediable crises for capitalist production and for bourgeois society – that Bernstein attacked, first, by challenging the “necessity” of the compression of workers’ wages as a proportion of total income (“the immiseration thesis”); and second, in further evidence of the erroneity of this Marxian hypothesis, by showing that indeed, far from the progressive immiseration of the working class and the growing intractability of capitalist crises, the recent emergence of welfare and interventionist states in Western Europe – the Sozialstaat supplanting the liberal laissez-faire Rechtsstaat or Lassallean “night-watchman state” - together with their regulation of capitalist industry occasioned in part by the rapid ascent of social-democratic parties and trade unions – that these new political realities militated in favour of the ability of the capitalist system to avoid catastrophic political and economic crises and also – and this is the crux of Bernstein’s reformist thesis - in favour of the ability of socialist parties to achieve the gradual and peaceful, non-revolutionary evolution of capitalist society into a socialist one of freedom and equality. (On the transformation of the State in the nineteenth century, see the insightful studies by Franz Neumann collected in his The Democratic and the Authoritarian State and The Rule of Law, and those co-edited with Otto Kirchheimer in The Rule of Law under Siege. Again, Bernstein's theses are reviewed elegantly in L. Colletti, From Rousseau to Lenin.)

Note that both these theses which form the essence of Bernstein’s socialist reformism can be derived directly from Marx’s own economic determinism. For if, indeed, it is possible to calculate “socially necessary labour time” by reason of its “necessity”, and with it the magnitude of surplus value (the profit or value added by living labour after the cost of the means of production and real wages are subtracted from the total value realized from the sale of the products), it must follow that the Value derived from the Law of Value and the Labour Theory of Value is a calculable material quantity irrespective of the political relations between workers and capital, that is, irrespective of the mode of production. But in that case the crucial question in the Marxian critique of capitalism boils down to the distribution of value in capitalist society and not to its production – because the mode of production is not called into question: the mode of production – what is produced when and how, by what means - remains exactly the same under capitalism as under socialism. All that changes is how the product – the Labour Value – is distributed between capitalists and workers. Furthermore, even the ownership of the means of production becomes relevant only to the extent that it affects (a) the distribution of Value in accordance to the labour-content of the product, and (b) the occurrence of economic crises and consequent unemployment due to the “anarchy” of private capitalist ownership.

It is true that Marx had intended “the Law of Value” – that economic value could be measured by labour content, specifically “labour-power” – to apply only to a capitalist economy and not to a socialist one. Indeed, Marx considered his greatest discovery to be undoubtedly the notion of “labour-power” – in other words, the notion that it is not “concrete labour” that measures the value involved in capitalist production but rather “abstract labour” or “labour-power”, the abstraction of human living activity coerced by capitalist employers into a measurable time entity (“man-power”). But here Marx was trying to have his cake and eat it, too. For if the measure of capitalist value is labour-power and labour-power cannot be measured scientifically because it is strictly a measure of political coercion, then it is inconsistent to call Marx’s theory “scientific”! Throughout his works, Marx was torn between his search for economic determinism, that is the historical inevitability of the supersession of capitalism by socialism, and the simple reality that by its very nature history is not and cannot be an inevitable process. Specifically, Marx’s theorization of capitalist industry as dependent on market competition between and within the capitalist and working classes meant that the overall operation of the capitalist mode of production was independent of political factors such as strategies and organizations not immediately related to the process of production that could affect the operation of capitalism as a whole and more particularly the stratification and composition of social classes, including the working class and the proletariat more broadly, and the segmentation of the working class itself through incomes policies and through the labour process.

This difficulty may be illustrated most effectively by examining the most fundamental components of the Law of Value – the notions of socially necessary labour time and that of labour-power. For these notions to lend themselves to practical economic use in the calculation of the value of commodities and then of their individual prices, it is obvious that the particular living labour that goes into the production of the commodities, of dead labour, must be capable of homogenization or “real abstraction” (the phrase was coined by Alfred Sohn-Rethel in Intellectual and Manual Labour) so that what are incommensurable living labours may be rendered equivalent and thence measurable in an abstract manner. But how can such an “abstraction” of living labours be achieved? Either it is done politically, that is, through an institutional process that consciously directs the processes of production of commodities and their distribution through pricing and the market process – or else this is achieved mechanically through the market process itself, in which case it may be said that the capitalist market is capable of co-ordinating the entire process of capitalist production and distribution automatically. Of course, the latter option is the one propounded by bourgeois political economy through the notion of economic “equilibrium”.

What we find in Marx is the impossible attempt to show that the Law of Value applies to capitalist production through the exercise of coercion over living labour so that it is reduced to its “real abstraction” as labour-power in the process of circulation of capital (from valourization in the process of production to realization in the market) to ensure the expanded reproduction of capitalist industry. But we ask, once again, how is this possible? If indeed the abstraction of living labour is achieved by means of political coercion, it is then impossible for this coerced living labour to be homogenized as an abstract entity, as labour-power, by “impersonal market forces”, that is, by means of a market process that is independent of conscious political manipulation or direction or management. In other words, it is impossible for capitalist industry to be at once decentralized – so that no political agencies determine or ensure the co-ordination of the productive system through market-clearing prices – and centralized so that living labour can be coerced into its abstract form, homogeneous labour-power, as “socially necessary labour time”! (We may recall here that Gyorgy Lukacs, in History and Class Consciousness, perhaps sensing the incongruity of the Marxian position, resorted to describing this “real abstraction” as a “necessary illusion” – conceding inadvertently the pleonastic inconsistency, given that there can be nothing “necessary” about an “illusion”, and nothing “illusory” about a “necessity”! Of course, the same applies to the equivalent phrase “real abstraction” because an abstraction is not real and reality is not an abstraction.)

One of two things: either labour power and socially necessary labour time are politically-coerced abstractions, in which case the capitalist system is directed by specific political institutions and historical agencies (the capitalist class, the capitalist State), or else they are real objectively measurable and quantifiable entities that can be co-ordinated through an “impersonal”, “self-regulating market-pricing mechanism”. But in the latter case it is obvious that the capitalist market mechanism would be an entirely “scientific” institution whose anarchical crises of overproduction or underconsumption with consequent underemployment can be avoided easily, contrary to what Marx envisaged in his critique. Conversely, in the former case, it is impossible to see how the Marxian Law of Value could apply to the capitalist system of “independent” or “decentralized” production for the market! Even if we agree with Marx that the Law of Value, where commodity values and prices are determined by socially necessary labour time, applies only to capitalism as a historically specific form of class exploitation, it is impossible to conclude that such a mode of production could ever co-ordinate itself in any manner other than by conscious political direction – and therefore that any such “law” of value could ever be possible, let alone be effectual.

To recapitulate: if, as Marx contended, the Law of Value applies only to the capitalist mode of production, then it follows conclusively that the notion of “socially necessary labour time” on which that of Value depends is just as necessarily the effect of political coercion. But then, in that event, the homogenization of living labour as labour-power “embodied” in commodities can be effected only by means of political measures and institutions and certainly not by “impersonal market forces” or “decentralised decisions”! If, conversely, the Law of Value is an absolute standard applicable to all societies, then the difference between capitalism and socialism becomes merely one of the just distribution of Labour Values – a question of Ethics, not one of systematic class exploitation and oppression.

Ronald Meek, in his impressive Studies in the Labour Theory of Value, reviews Bernstein’s objections to Marxian theory and rightly points out that Marx intended the Law of Value to apply only to capitalism. But he remains ambivalent over whether Marx’s theory is to be considered “scientific”, in which case it is clearly a vicious circle, which Meek does not concede, or political, in which case it makes perfect sense from a practico-historical viewpoint, but Meek considers to be insufficient to qualify as "theory". Whilst he opts for the political theory that the Law of Value applies only to capitalism, Meek then gets entangled in the insistence that such a “theory” would be scientifically indeterminate or unprovable:

But surely there are two salient points which a theory of distribution appropriate to our own times should concentrate on explaining: First, how is it that unearned incomes continue to be received in a society in which the prices of the great majority of commodities are determined on an impersonal market by the forces of supply and demand, and in which the relation between the direct producer and his employer is based on contract rather than on status? And second, how are the respective shares of the main social classes in the national income determined in such a society? Unless one is content to rely on some sort of explanation in terms of “force” or “struggle” (in which case again one could only with difficulty speak of a theory of distribution), it is impossible to give adequate answers to these questions without basing one's account on a theory of value.2 (Meek, Studies, p.250.)

Evidently, like Marx before him, Meek is trying to circle the square, that is, attempt the impossible, because he is looking for a precise scientific theory of distribution, how a capitalist economy can co-ordinate itself as a market economy, without resorting to “force” or “struggle”, when in fact such co-ordination can only be politically regulated, and certainly not be the product of “impersonal market forces”! Meek’s retort is that such a “theory” is not distinguishable from a general theory of exploitation:

A “theory of distribution” which said only that unearned income was the fruit of the surplus labour of those employed in production would hardly qualify as a theory at all; and the mere fact that it expressed input and output in terms of embodied labour would not make it any more likely to qualify as one. At the best, such a “theory” could be little more than a generalised description of the appropriation by the owners of the means of production, in all types of class society, of the product of the surplus labour of the exploited classes. (ibid.)

Repeatedly, Meek reverts to the notion that for Marx “socially necessary labour time” referred to an absolute standard or measure by means of which the capitalist “transformation” of labour-time values into market prices, and therefore the calculation of profit as surplus value, was to be determined. (See above all his discussion of Benedetto Croce's critique of Marx's labour theory in Studies.) But this is simply false, because in Marx the concept of “socially necessary labour time” refers to “labour-power” not in a theoretical society analysed scientifically or objectively but specifically to the abstraction of human concrete labour achieved by means of capitalist political violence and coercion! Throughout his Studies, Meek overlooks the fact that for Marx, as for us, capitalism is a specific mode of production operating according to historically specific modes of exploitation or “social relations of production”, into which we will inquire presently. The essential point to Marx's critique was not to determine the distribution of value in a capitalistic society on scientific grounds but rather to show that capitalist production was conceivable only through the violence of the reduction of concrete labour to abstract labour or labour-power. The problem then becomes one of discovering how such an abstraction or homogenization of concrete labour or living labour can take place in a politically sustainable manner, albeit one not immune to severe and often catastrophic crises.

It is true that Marx often deviates from this position in a misguided attempt to give his critique of capitalism the (Darwinian!) status of a natural science (a science of history in the Engelsian distortion of historical materialism re-baptized as dialectical materialism). Yet, this cannot detract from the essential validity of Marxian theory when interpreted in its politico-practical, historico-materialist dimension. No greater claim need be made for the originality and greatness of Marx’s critique and theory of capitalism than that it discovered the precise historico-political mode of exploitation specific to capitalist enterprise! Once again, the residual problem then remains of how it is possible for capitalist enterprise to regulate and calculate values and prices to ensure at least partially the co-ordination of social production. As we shall discuss later, this exakte Kalkulation at the heart of capitalist enterprise will become the political measure or rule of Weber’s entire theorization of Western capitalist “rationalization”.


The blatant contradiction in Marx’s Labour Theory of Value that we have exposed above explains his ambivalence with regard to the theorization of the State in capitalist society. Marx’s firmly-held belief in “impersonal market forces” as the unshakeable foundation of the capitalist mode of production meant that he interpreted capitalist society as a construct of social relations of production between individual workers and individual capitalists – as a set of economic links that he called “civil society” – that were entirely independent from political forces such as “the State” or liberalism, nationalism, religion or culture tout court which he saw as an “ideological superstructure” entirely and scientifically determined by the “economic base” of civil society. It is a widely known fact that Marx never developed a political theory worthy of the name after completion of the three volumes of Capital (although Volume Three was published posthumously). It is true that he had promised to devote a later volume of his vast oeuvre to the State, and that he died before being able to keep his promise. But even a cursory look at his tangential or incidental commentary on the nature and character of the State in capitalist society scattered throughout his writings shows conclusively that even had he had time to complete such a study – and provided he held firmly to his earlier pronouncements on the subject - he would never have been able to develop anything like an adequate political theory of capitalist society. To be sure, our contention here is that Marx’s historico-materialist method combined with his critique of political economy could have led indeed to the enucleation of a powerful, coherent and cogent theory. Yet, such a theory would have had to diverge quite significantly from the overall premises and perspective on which his disparate commentary was clearly founded.

Bernstein’s revision of Marxist economic and political theory starts from this deterministic Marxist premise that all human activity – taken as “labour” in the abstract – can be measured, and that this absolute measurement entitles workers to their rightful share of the social product. It follows that for Bernstein the essence of socialism was the fair distribution of the social product according to the “labour” required for its production. For Bernstein and for social democracy, the key sins and flaws of capitalism consisted in (a) the “theft of labour time”, and (b) the unnecessary wasteful recurrence of economic crises or slumps. The whole social question then became one of distributive justice, not one over the political control of the entirety of social production including its what, when and how.

Furthermore, Bernstein concurred with the prevalent critique of Marx’s “scientific” labour theory of value set forth by Eugen Bohm-Bawerk in Karl Marx and the ‘Close’ of His System to the effect that Marx’s theory could not establish a direct verifiable empirical link between “socially necessary labour time” and the market-clearing prices of individual commodities. Following Bohm-Bawerk, Bernstein objected that Marx’s labour theory of value was no theory at all because it pretended “to transform” aggregate value into aggregate prices. But such an equivalence of “aggregates” clearly amounted to sheer metaphysics because any “aggregate” in the world may be said to be equivalent to any other “aggregate”. The difficulty of what became widely known as “the transformation problem” from values to prices that Marx attempted to solve in Volume Three of Capital is that the problem is not open to solution because, even if we accept that there is such a thing as “socially necessary labour time”, this “necessity” must ultimately be validated by “market prices” – which yields the vicious circle that labour values determine market prices and market prices determine labour values!

Paradoxically, the critiques conducted by Bohm-Bawerk (vaunted as “the bourgeois Marx”) and Bernstein led scores of Marxists (from Bortkiewicz to Hilferding and Sraffa) to theoretical and mathematical contortions to prove that such transformation of values into prices was possible. Yet it is obvious that precisely in the event that Marx’s “system” could be “closed”, the very closure of this system would turn the Marxian critique of political economy into a tautology – value is defined so as to be the equivalent of price - and Marx’s entire notion of “praxis” (“philosophers have hereto interpreted the world; the point now is to change it”) into an eschatology, that is to say, into an immutable destiny incapable of the very “revolutionary praxis” that Marx exhorted! Once the notion of value is reduced or reified to a quantity, labour-time, then it is obvious that the calculations of the individual value of commodities can be “transformed” into prices by applying simultaneous equations that take account of “the average rate of profit”. (This is what Bortkiewicz achieved mathematically – see his “On the Correction of Marx’s Fundamental Theorem”, in P. Sweezy [ed.], Karl Marx and the Close of his System.) But then, the Marxist attempt to prove the “scientificity” of “Marxian economics” – what was on the contrary the Marxian “critique of economics” – would demonstrate the very thing that Bernstein and Bohm-Bawerk wished to prove (!) – the eschatological nature of Marx’s theory -, which is why Schumpeter, Bohm-Bawerk’s pupil in Vienna, could speak presumptuously of “Marx, the Prophet” (in Capitalism, Socialism and Democracy).


To return to Bernstein’s revisionism, in a nutshell, it can be summarized thus: once it is established that all Value is created by Labour – through the absolute “scientific” version of socially necessary labour time -, it becomes clear that the redistribution of value from capitalists to workers can be achieved by peaceful reformist social-democratic means through the process of parliamentary representation which was already spreading throughout Western Europe with the introduction of ever more “universal” suffrage. The process of production of Value and pricing of the product becomes thus a “technico-neutral” question – a mere matter of social engineering - that is now removed from the more “ethical” question of the workers’ claim to the fruit of their own Labour. Thus, Bernstein’s revisionism and reformism represent a seismic shift in socialist politics not just in tactics but indeed in strategy – because the fundamental presuppositions (Voraussetzungen) of Marxist theory have changed. The very title of Bernstein’s series of essays that kicked off the controversy around the Bernstein-Debatte and the secession of the Third from the Second International referred to The Premises (Voraussetzungen) of Socialism. And these premises had changed in part, as we have seen, because of the crucial ambiguity in Marx’s own theorization of the evolution of capitalist enterprise. By seeking to give a scientific foundation to his critique of political economy, Marx had ended up reducing the political basis of capitalist industry – the violence of the “exchange” between living and dead labour, its coercion, in the production and reproduction of human society – to the economic quantification of the distribution of a scientifically calculated Value between workers and capitalist “managers”.

This technical scientization of the production and distribution of Value according to the calculable amount of Labour represented by them threw open the question over the integration of working-class parties in the bourgeois institutions of parliamentary government and representation that was at the centre of the dramatic split in the workers’ movement between the Second and Third International, between social-democratic and communist parties around the Organizationsfrage – the question of the organization of the workers’ party either into a reformist majoritarian “umbrella” mass party leading to a broad-based parliamentary democracy or into a minority revolutionary “vanguard” that would lead the proletarian “masses” to the dictatorship of the proletariat. It is important to appreciate that both the social-democratic and the communist variants of the Marxist movement agreed on the “scientific” determination of labour-values in society, whether capitalist or socialist. They also agreed that in a capitalist society founded on private property the preponderance of anarchical decisions in capitalism over the scientifically planned decisions under socialism would result in unnecessary and oppressive social and economic crises of underemployment and immiseration and social waste. The difference between the Sozialismus and the Kommunismus lay precisely on the degree of scientificity, and therefore of steered planned economic decision-making, that could be achieved in a socialist economy. The lesser degree implied by Bernstein’s critique of Marx meant that greater democratic consensus was required to avoid the upheavals (and evils) of capitalism; whereas the greater degree of scientificity claimed by the Kommunismus meant that only the “democratic centralism” of the dictatorship of the proletariat could steer society to socialism by wresting the ownership of the means of production from the exploitative anarchy of the capitalist bourgeoisie.

The inability of both the Sozialismus and the Kommunismus to understand and penetrate the true political foundations of capitalist industry can be traced back to the contradictory ambivalence of Marx’s critique of political economy and specifically to his inability to construct a political theory of capitalist society and its State: in other words, his failure truly to understand and theorize what we have called “the society of capital”, - a society founded and constructed entirely in the likeness and for the purposes of capitalist industry.

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