Entrepreneurial Marxism

Carl Packman on Twitter has described my vision of socialism as “entrepreneurial Marxism.” I like that. Entrepreneurial Marxism is necessary, roughly compatible with Marx, and feasible.

Let’s start with the necessary. Here, we Marxists have a paradox. On the one hand, Marx thought that socialism required material abundance: it was the solution to Keynes’ problem (pdf) of what to do with our leisure time. As G.A.Cohen put it:

[Marx] thought that anything short of an abundance so complete that it removes all major conflicts of interests would guarantee continued social strife, "a struggle for necessities and all the old filthy business". It was because he was so uncompromisingly pessimistic about the social consequences of anything less than limitless abundance that Marx needed to be so optimistic about the possibility of that abundance (Self-ownership, Freedom and Equality, p10-11)

He thought capitalism would deliver such abundance: “No social order is ever destroyed before all the productive forces for which it is sufficient have been developed.”

This might, however, be too optimistic. Over the last ten years, productivity has almost stagnated – something we’ve not seen (except briefly in the 1880s) since the start of the industrial revolution. This suggests we’ll need a form of post-capitalism which delivers economic growth. Now, I’ll concede that a centrally planned economy might be good at generating growth in the sense of more of the same; it can deliver more pig-iron. But this isn’t the sort of growth we need now.  As Gilles Saint-Paul points out (pdf), growth must come from an increased variety of products. Centrally planned economies are lousy at this. Decentralized entrepreneurship is better.

And such entrepreneurship isn’t wholly incompatible with Marx. To Marx, it is our human nature to work and produce:

In creating a world of objects by his personal activity, in his work upon inorganic nature, man proves himself a conscious species-being (Economic and Philosophic Manuscripts.)

It’s for this reason, largely, that he condemned capitalism. Capitalism, he thought, forced us to do meaningless drudge work under the domination of others, and thus alienated us from both our nature and each other. It’s for this reason that Jon Elster has written: “Self-realization through creative work is the essence of Marx’s communism.” (Making Sense of Marx, p521.)

It’s likely that, for some at least, this self-realization will take the form of working under one’s own steam. In fact, Marx saw this:

A being does not regard himself as independent unless he is his own master, and he is only his own master when he owes his existence to himself. (Economic and Philosophic Manuscripts, quoted by Erich Fromm)

Marxists have traditionally interpreted this as to mean that collective self-mastery is necessary, through democratic control of the means of production. That’s true enough. For some people, though, it might mean individual own-mastery – working for oneself.

But wouldn’t this entail the very exploitation of others that Marx hated?

Maybe not so much. Even under capitalism, the profits (and hence exploitation) from innovative activity are small. And the prospects for exploitation under post-capitalism might be less, to the extent that intellectual property laws would be less friendly to incumbents and because fulfilling work elsewhere would make it hard for entrepreneurs to attract labour without offering something decent.

But wouldn’t this kill off innovation and entrepreneurship? Not necessarily, and not simply because I suspect a lot of such activity arises from intrinsic motives such as the urge to create things and solve problems. It’s also because there’ll be offsetting stimuli to entrepreneurship. One is that higher aggregate demand would close the innovations gap. Another is that post-capitalism would ensure a high supply of finance, for example via a state investment bank. And a third is that lower rewards to rent-seeking would force some bosses out of cushy monopolies and bureaucracies and into entrepreneurship.

Of course, I appreciate that all this will be sneered at from both sides – from Marxists claiming (with some justification) that I’m being unfaithful to Marx, and from some rightists who can’t get their tiny minds around the possibility that there are economic models other than capitalism and central planning. But I don’t give a shit.

Comments

[Handy Mike]

I'd keep to the usual shtick of pretending objectively to have rediscovered the truth and utility of Marxism in corroborating snippets of behavioural economics and finance.
That clearly went over with a lot of people, and bagged you the odd repost on places like The Browser.
This foray into more substantive theorising risks showing people the funny little man behind the curtain.

[Peter K.]

"One is that higher aggregate demand would close the innovations gap."

This hasn't really been tried in advanced economies except for the post-war decades until the neoliberal counter-revolution.

My socialism = https://youtu.be/8mU8gDKN5sE

The New Seekers - Free to Be ... You and Me

[Jon_halsall]

Handy Mike - 'pretending objectively'?

[Ahmed]

I read somewhere that what was equally important as to who owned the means of production was who controlled the means of production.

Which is why socialism failed. Because the people who controlled the means of production, ostensibly for the public good, used them to further their own interests instead. Human nature being what it is.

Looked at that way, socialism simply shifted power from capitalists to bureaucrats, the public never saw a benefit from it.

[Anglo-Saxon]

Sorry, but I am sick of the growth/productivity crap. Stop whining over something governments can't calculate. Not every year or generation is going to find a great idea. I think the post-war era had enough "productivity" and ideas for 10 generations. The party is over. Let it go.

Increased "demand" is not going to create any "innovations". Period. Its like saying the real wages in the late 90's created a investment boom. That is dead wrong. It was the surge in debt from corporate bonds due to computerization that created the investment boom. Real wages were the after effect. When the corporate bond boom ended in 1998 and Y2K ended in 2000, investment fell. Real wages dropped.

You need both central planning and a merchant caste.

[Brad Culkin]

Read some god damned Steve Keen. Jesus. You twits. Non linearity. Grock it or die. We may indeed be too stupid to live.

[rogerh]

How is a socialistic commercial organisation going to work? In principle raising the capital seems not much different. Then the allocation of profits must pay the cost of capital and provide wages. I suppose the reason for going the socialistic route is to more evenly distribute the earnings, a bit less for those managing and a bit more for those doing the work. So, in a mixed capitalist/socialistic economy there may be difficulty recruiting the kind of people who know what they are doing regarding managing and some difficulty avoiding over recruitment of seemingly well paid workers.

Then as the general economy goes up and down and the business changes over time there is the problem of getting rid of people no longer needed. I can see some reluctance in a socialistic model and some strains on how the management policies get worked out. Who decides on hiring and firing, who decides to open a new operation here and close an operation there. The capitalist model is fairly simple in this regard but the socialistic model seems a bit harder to figure out an acceptable model. We can get our minds at least halfway round the problem but 'How?' still seems to be the big question in moving to a socialist model. As ever, the devil is in the detail.

[Ralph Musgrave]

Capitalism is a system under which one man exploits another.

Under communism, it's the other way round.

Groan.

[Jeffrey Stewart]

Oh for goodness sakes! Please quit your Marx dilettantism! Please! You know I despair every time I see your blog and something related to Marx because I know whatever you write will be superficial, incomplete and wrong. You're the Fred Moseley of Marxian wannabes.

"To Marx, it is our human nature to work and produce:"

Uh, wrong again! Marx wrote that labor is an eternal necessity imposed on humans by nature. Human labor must continually transform the materials provided by nature into forms suitable for satisfying our needs and wants for food, beverage, housing, clothing and many other things. Humans work to produce our the material basis of our lives. This is a fundamental historical materialist premise known as the material production of life. Geez Louise and the bees' freakin' knees!

I'm done spoon feeding you elementary historical materialism. Either learn it yourself before another inaccurate Marx post or leave him alone. You're doing the cause much more harm than good.

What's wrong with you?

[Paraic Seoighe]

Totally agree with M. Stewart here.

The material reproduction of life imposes on humans the necessity of labor. See Marx's letter to Kugelmann for the Marx's succinct, definitive analysis of this.

PJ

[Blissex]

«Marx wrote that labor is an eternal necessity imposed on humans by nature.»
«Marx's succinct, definitive analysis of this.»

But old bearded Karl, who was passionate about working as much as partying, also argued eloquently that (self-directed) work is also self-realization, and that the greater criticism he made of "capitalism" was not that it was exploitative, a mere matter of degree, but alienated the proletarians from work, a far more serious matter of dehumanizing them.

Our blogger has made abundantly and explicitly clear that his main reading of Karl's multiplicitous work is the critique of alienation, and as to that I think that is very perceptive.

The mistake some people make (handwaving here) is to think that the critique of alienation was somehow "idealistic", but my impression was that in Karl's view self-realization through (non-alienated) work was part of "historical materialism", as "creation", "production", being purposefully engaged, is a material necessity of the mental health of humans. His view of "communism" seems to me that of a society in which everybody can spend a small part of their time in creating surplus value, and the rest writing technical manuals, composing music, building physics experiments, planting trees, studying hard in the British Library reading room, being passionate about the work they freely choose to do.
Perhaps "communism" as Etsy+electrification :-).