Progress pill
Freedom or Power

Marx: History as Class Struggle

A Philosophical History of Freedom

Marx: History as Class Struggle

  • The Industrial Revolution in Question
  • The "European Miracle"
Another perspective on history does exist, however. It has been quite successful and has long enjoyed the support of Western intellectuals and representatives from the Global South. This is the socialist and Marxist view of history.
It explains Europe's extraordinary growth primarily through the progress of technology combined with the "primitive accumulation" of capital, stemming from imperialism, slavery, the triangular trade, the expropriation of small peasants, and the exploitation of the working class. The conclusion is clear. This exceptional European growth was achieved at the expense of millions and millions of slaves and oppressed individuals.
Initially, Marx is right about one thing: history is the history of class struggles and exploitation. The quote is well-known, as it is the first sentence of the first chapter of the Communist Manifesto: "The history of all hitherto existing society is the history of class struggles." Marx himself acknowledged that he had borrowed his theory of class struggle from earlier authors:
I have no credit for discovering classes and class struggles in modern society. Long before me, bourgeois historians had described the historical development of this class struggle, and bourgeois economists the economic anatomy of classes. (Letter to J. Weydemeyer, March 5, 1852).
But he is mistaken about a fundamental point regarding the working class: it is not capital that produces exploitation. In other words, the class struggle does not take place within production but between those who pay taxes and those who collect them.
According to Marx, exploitation is a process that involves extracting a portion of the value created by the worker without compensation, thereby allowing capitalists to generate a profit. In other words, exploitation is a mechanism that enables capitalists to enrich themselves by exploiting the labor of the working class, also known as the proletariat.
This analysis reflects a misunderstanding of surplus value and the cooperative and dynamic nature of economic life. Indeed, the profit that the entrepreneur receives is compensation for the risk they take, and the worker or employee is not a slave. In a competitive situation, they can accept or refuse a contract with their employer. They make a choice that reflects a cost-benefit analysis.

The Industrial Revolution in Question

In fact, the Marxist analysis distorts the historical reality of the Industrial Revolution. Ludwig von Mises clarified this issue in his economics treatise Human Action (see especially the chapter titled Popular Interpretation of the Industrial Revolution) as well as in a series of lectures published under the title: Economic Policy: Thoughts for Today and Tomorrow. (Also worth reading, The Anti-Capitalistic Mentality here and here).
Mises explains that jobs in factories, although miserable by our standards, represented the best possible opportunity for workers of the time.
Let's read an excerpt from Human Action:
In the first decades of the industrial revolution, the living standards of factory workers were scandalously low compared to the conditions of their contemporaries from the upper classes, and compared to the present situation of industrial crowds. Working hours were long, and the sanitary conditions of the workshops were deplorable. The working capacity of individuals is quickly exhausted. But the fact remains that for the surplus population, the appropriation of communal grazing lands (enclosures) had reduced them to the worst misery. For those for whom there was literally no place within the framework of the reigning production system, factory work was salvation. These people flocked to the workshops solely because they needed to improve their standard of living.
Mises adds that the improvement of the human condition was thus made possible by the accumulation of capital:
The radical change in situation that has conferred upon the Western masses the present standard of living (a high standard of living indeed, compared to what it was in pre-capitalist times, and to what it is in Soviet Russia) was the effect of capital accumulation through saving and wise investment by far-sighted entrepreneurs. No technological improvement would have been achievable if the additional material capital required for the practical use of new inventions had not been made feasible by saving beforehand. Regarding Marxist historiography, we can also refer to Friedrich Hayek in Capitalism and the Historians (University of Chicago Press, 1954) and his chapter titled "History and Politics". According to Hayek, it was not industrialization that made workers miserable, as the dark legend of capitalism propagated by Marxism claims. He notes: The real history of the connection between capitalism and the rise of the proletariat is almost the opposite of what these theories of the expropriation of the masses suggest.
Before the Industrial Revolution, most people lived in rural societies and depended on agriculture for their survival. They had little to sell in the market, which limited their opportunities and their standard of living. Everyone expected to live in absolute poverty and envisioned a similar fate for their descendants. No one was outraged by a situation that seemed to be inevitable.
With the advent of industrialization, new opportunities emerged, leading to a growing demand for labor. For the first time, people without land or significant resources could sell their labor to factories and manufacturers in exchange for a wage, thereby ensuring future security.
This new access to income allowed them to feed and house themselves, even in rapidly expanding cities. Thus, the Industrial Revolution fostered a population explosion that would not have been possible under the economic stagnation conditions of the pre-industrial era.
This is how Hayek remarks, "economic suffering became both more visible and seemed less justified, because general wealth was increasing at a rate faster than ever before."
Therefore, the worker was not exploited, even if wages were low, due to the abundance of labor fleeing the countryside.
In reality, exploitation only makes sense as an aggression against private property. In this sense, exploitation is always the act of the State. The State is the only institution that obtains its revenues through coercion, that is, by force. Thus, the real exploitation, as we have seen with Bastiat, is that of the productive classes by the state officials themselves. It would be more accurate to say that the history of all societies up to our days is nothing but the history of the struggle between plunderers and the productive classes.

The "European Miracle"

Subsequently, a more nuanced historical analysis than that of Marx allows us to challenge the idea of a predatory Europe, which owes its success solely to imperialism and slavery. By examining comparative economic history, some contemporary historians have sought the origins of Europe's development in what distinguished it from other major civilizations, particularly those of China, India, and Islam. These characteristics have been explored by David Landes, Jean Baechler, François Crouzet, and Douglass North. These researchers have attempted to understand what is referred to as the "European miracle." They focused their attention on the fact that Europe was a mosaic of divided and competing jurisdictions, where, after the fall of Rome, no central political power was capable of imposing its will.
As Jean Baechler, a member of the Academy of Moral and Political Sciences, says in The Origins of Capitalism (1971):
The first condition for the maximization of economic efficiency is the liberation of civil society from the State (...) The expansion of capitalism owes its origin and raison d'être to political anarchy.
In other words, the great "non-event" that dominated Europe's destiny was the absence of a hegemonic empire, like the one that dominated China.
It is this radically decentralized Europe that gave rise to parliaments, diets, and Estates-General. It gave birth to charters like the famous Magna Carta of England. Still, it also established the free cities of Northern Italy and Flanders, including Venice, Florence, Genoa, Amsterdam, Ghent, and Bruges. Finally, it developed the concept of natural law, as well as the principle that even the Prince is not above the law, a doctrine rooted in the medieval universities of Bologna, Oxford, and Paris, and later extended to Vienna and Krakow. In conclusion to this chapter, Europe's economic and cultural takeoff was not due to the conquest and exploitation of the rest of the world. It dominated the world thanks to its economic progress. What has been called "imperialism" is the consequence, not the cause, of Europe's economic progress. But to return to Lord Acton, what distinguishes Western civilization even more from all others is its affirmation of the value of the individual. In this sense, freedom of conscience, particularly in matters of religion, has been a fundamental pillar of this civilization. We will return to this in the following section.
Quiz
Quiz1/5
According to Marx, what explains the exceptional growth of Europe?