Thursday, February 11, 2010

Class Analysis: Marxian and Austrian Perspectives

Lest any of my readers begin to think I'm becoming a Marxist, here is an excellent article comparing Marxist and Libertarian class analysis. The two share similar critiques, but the conclusions are very different. The second half of the article is the most relevant to posts that I've been writing recently.

Here, David Osterfeld, writes,

"Class analysis itself did not originate with Marx, but can be traced back at least to Adam Smith. In contrast to the Marxian doctrine, which assumes that both market and government are coercive institutions, Smith and his followers maintained that while government, with its monopoly on the use of force, was coercive, the market was a voluntary institution. In the market, the only "power" is the power to offer an exchange, and since anyone may reject an offer, every exchange must be to the benefit of all parties involved."

Osterfeld notes that, "The key question is thus, who is likely to control government? The question is really an empirical one, and must be decided on a case-by-case basis. As a general rule, though, those most likely to control government are those with the easiest access, which usually means, as Adam Smith noted, the "rich and powerful."

I commend the article to you, but here is the excellent conclusion:

"The distinction between market and government has remained at the core of libertarian thought. Ludwig von Mises, for example, wrote that "our age is full of serious conflicts of economic group interests. But these conflicts are not inherent in the operation of an unhampered capitalist economy. They are the necessary outcome of government policies interfering with the operation of the market.… They are brought about by the fact that mankind has gone back to group privileges and thereby to a new caste system." While this distinction between harmony and conflict, between mutual benefit and the benefit of one individual or group at the expense of another, between market and government, is systematically ignored in Marxian analysis, it is at the center of libertarian class analysis. It is unfortunate that class analysis is so closely associated with Marxism, for it has meant that libertarian class analysis has been largely ignored. This is unfortunate, since it is a sophisticated and powerful tool for analyzing society."

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