Progress pill
Sophisms of unfreedom

The social fallacy: social classes and capitalist exploitation

Freedom as a Social Project

The social fallacy: social classes and capitalist exploitation

  • Social classes: past and present
  • The futility of Marxist social categories
  • Who does capitalism really benefit?
  • The liberal sensitivity to poverty

Social classes: past and present

To understand the sophism of capitalist exploitation, we must first examine the historical reality of social classes. Unfree societies have traditionally functioned with a high degree of social stratification, a feature still found in contemporary communist societies. This stratification fundamentally opposes those who have the freedom to choose for themselves and others, and those who are deprived of it.
Charles Comte (1782-1837), the jurist, journalist, and son-in-law of Jean-Baptiste Say, examines the different states of society in his Traité de législation (1827) to show how freedom and unfreedom have functioned throughout history. Bastiat considered this work his favourite book, and it is not difficult to understand why:
In every society organised on the principle of force, there are two classes: those who plunder and those who are plundered. The plunderer may be a conqueror, a king, an aristocracy, a theocracy, or a majority. The form varies; the principle does not. Wherever men live under institutions that permit some to seize the fruits of others' labour without their consent, you will find this fundamental division. Call it what you will: castes, orders, classes. The name changes nothing. The reality is the same.
In other words, the existence of oppressive social classes is not a feature of capitalism but of all societies founded on force rather than on free exchange. Indeed, in ancient societies such as Egypt, India, Greece, and Rome, social classes remained relatively fixed. Certain groups of individuals enjoyed freedom, while others were deprived of it, with a high degree of social reproduction where trades were handed down from father to son. In the Middle Ages, relations between serfs and lords perpetuated this fixed stratification. Modern society, since the French Revolution and even before, is characterised by individual autonomy, equality before the law, and equal access to all professions. It is precisely this development that distinguishes modernity from earlier societies.

The futility of Marxist social categories

The socialist and communist interpretation asserts that social classes persist in modern societies, maintaining less freedom for certain parts of the population. But when we rigorously analyse what social classes actually mean in the present, we discover fundamental contradictions.
Paul Leroy-Beaulieu (1843-1916), whose productivity was legendary, having produced over forty volumes on economics, colonial policy, and social questions during his long career, attempts in Le Collectivisme (1884) to take the claims of socialists seriously by examining their vocabulary opposing "workers" to the elite possessing the "means of production." His analysis is devastating:
The socialists require us to divide humanity into two groups: those who own the means of production and those who do not. But who, precisely, belongs to the first group? The great factory owner, certainly. But also the artisan who owns his tools, the peasant who owns his plough, the doctor who owns his medical instruments, the lawyer who owns his library. And who belongs to the second group? The factory worker, they say. But also, by the same logic, the great artist who has no studio of his own, the distinguished journalist who writes for hire, the celebrated scientist who works in a university laboratory. This classification produces absurdities at every turn.
These notions prove extremely difficult to apply in practice. Wealthy artists and singers do not own the means of production. A great footballer would logically be a proletarian, since even the ball does not belong to the players. A journalist, a great scientist, or a lawyer would equally be proletarians, since they work with their hands and their intellect without owning the tools of their trade.
In his Essai sur la répartition des richesses (1881), Leroy-Beaulieu demonstrates that modern societies are organised around work: we must constantly redeem our wealth through labour, and the development of capital is itself a daily task of market analysis and investment:
The distinction between capitalist and worker is far less stable in a free society than the socialist imagines. The worker of today becomes the small saver of tomorrow; the small saver becomes the investor; the investor becomes the entrepreneur. This mobility, so characteristic of free societies, is precisely what socialism wishes to suppress. In suppressing it, it would suppress the very mechanism by which men rise from poverty to prosperity.
In other words, the Marxist categories, which made rough sense in describing slave or feudal societies, are simply inapplicable to a society organised around free contracts and equal rights. This reality reveals the futility of Marxist social categories in a society founded on equal rights and freedom of work.

Who does capitalism really benefit?

Contrary to the idea of exploitation, certain traditionally disadvantaged groups benefit particularly from the development of the market economy. But does the evidence support this claim? Indeed it does, and the liberal thinkers of the nineteenth century documented it with remarkable care.
Leroy-Beaulieu, in Le travail des femmes au XIXe siècle (1873), shows that women are among the greatest beneficiaries of capitalist progress:
In ancient societies, the position of women was that of a being made for service, dependent on the arbitrary will of a father or a husband. Her lesser productive power and the general insecurity of life penalised her disproportionately. In the modern commercial society, founded on voluntary contract and the rule of law, two things change fundamentally: security improves, so that physical strength becomes less decisive; and as work becomes increasingly mechanical and intellectual, the difference in physical capacity between men and women diminishes in economic significance. The market does not care about sex; it cares about service rendered.
The lot of children improves for the same reason. As work becomes more intellectual, it becomes impossible to put children to work immediately. Training through education, slow and costly, ensures a better lot and greater respect for children. On environmental questions, liberal authors recognise the nuisances of dangerous and unhealthy industries, deforestation, and pollution, while insisting that one cannot harm others freely: there exists a perimeter of free action, beyond which responsibility for proven nuisance applies.
In other words, the progress of the market economy is not a progress that benefits the few at the expense of the many. It is a progress that systematically raises the floor for the most vulnerable members of society.

The liberal sensitivity to poverty

The socialist assertion that the poor become ever poorer in capitalist societies is contradicted by the facts. But what do the facts actually show?
Leroy-Beaulieu demonstrates in Essai sur la répartition des richesses (1881) that the real trend in societies founded on contract and voluntary exchange is the constant improvement of the condition of the masses:
The critics of the existing order point to the luxuries of the rich as evidence of exploitation. But they neglect to observe that the commodities once reserved for kings are now within reach of the ordinary working man. The cotton shirt, the glass window, the printed book, the metal tool: these were luxuries in the Middle Ages. They are necessities today. This is what the progress of industry and exchange has accomplished. It has not made the rich richer at the expense of the poor; it has made both richer, and the poor proportionally more so, since they have gained access to goods that no amount of wealth could previously have purchased.
Consumer goods become available at ever-lower prices, and labour productivity continually increases. This can be verified simply by observing the size of dwellings, the quality and frequent renewal of clothing, and the improvement of food.
Yet liberal writers also display a strong sensitivity toward poverty and the weak, inherited from the Enlightenment. Turgot's fight for freedom of labour aimed precisely at enabling everyone to make a living from their work, including the women excluded from male guilds. Bastiat, in the nineteenth century, led his fight for free trade explicitly for the poor. In Sophismes économiques, he addresses the protectionist directly:
You say you defend the worker. But the worker is also a consumer. Every tariff that raises the price of iron raises the price of his tools. Every tariff that raises the price of wheat raises the price of his bread. Every restriction on exchange is a tax paid by the many for the benefit of the few. If you truly care for the poor, you will free them from these burdens.
In other words, liberalism is not indifference to poverty: it is the conviction that the systematic improvement of the condition of the poor requires freedom, not tutelage. These thinkers proposed liberal solutions to poverty founded on freedom, contract, human sympathy, and association, the latter being an extension of the individual that gives new strength to individual will and action.
Quiz
Quiz1/5
According to Paul Leroy-Beaulieu's analysis, why do Marxist class categories fail to accurately describe modern capitalist societies?