The 1789 Discourse: Marx and Engels VS Hayek on Economic Planning

Bettmann

The following is the final iteration of the 1789 Discourse, and the topic of this article will be me simulating a debate between Karl Marx and Friedrich Engels against Friedrich Hayek. This debate will be the forefathers of Communism defending a centralized “planned” economy versus the staunch defender of free markets and liberalism’s position for a decentralized, competitive economy. To level the playing field, I will take liberties with the available information and knowledge held by both men since they were nearly three generations apart.

The role of the moderator will be to guide the conversation to cover the main points of each argument, and each side will present opening statements/arguments, a rebuttal, and then closing statements.

Moderator: Gentlemen, let’s begin with opening statements concerning your positions on a planned versus competitive market place so that we may work our way down to the specifics from your broad summations.

Marx and Engles: The history of all existing society is the history of class struggles. There is always the oppressed, the oppressor, and a means by which the oppressor maintains the oppression of those it oppresses. Capitalism is merely an evolution of the colonialist, mercantile systems that ravaged those markets it sought to extort.

Modern Industry has dramatically increased and exaggerated the scale and breadth of this unjust relationship. The owners of the means of production, the Bourgeoisie, endlessly profit off of the capitalist system at the expense of the working class, the Proletariat, that they have enslaved by way of industrialization.

As the Proletariat class accumulates under the boot of the Bourgeoisie, their political power will increase, inevitably to the point that they will seize the means of production and own the industries they work for by means of the worker state. Vladimir Lenin, the first leader of the USSR, discussed how the centrally planned economy of that worker state would all become employed workers of the state, and they will all work their fair share and receive their fair pay.

It is only at this point will we truly be able to live up to “from each according to their ability; to each according to their need”.

Hayek: “In order to achieve their ends the planners must create power – power over men wielded by other men – of a magnitude never before known.”

“Planning” an economy seems to be an inevitability of monetary policy. However, it is the means by which this economy is planned that is of the utmost importance. A centrally planned economy of democratically or popularly chosen representation trusted by the people seems to be a utopian goal of modern society. Possessing the necessary information to “fairly” allocate resources to citizens equally could be such a simple solution to the inequality we all witness in the world.

However, to assume one body to not even effectively utilize and act upon the pertinent information of every localized and personalized interaction, but even to be able to gather the necessary information is utterly unrealistic. A planned economy through the individual actions and interactions of free persons within a free, liberal society is not only the most efficiently planned economy, but it is also the most humane.

The power a man, or group of men, would wield by controlling all of the economic power within a state would be a tyranny beyond a king. If capitalism has become the indomitable machine you assume it to be, then a singular entity could wreak havoc on anyone and anything in its crosshairs without so much as a bridle to restrain it.

Marx and Engels: We must agree that the power of industrialists themselves surpasses any power that democracy says that it would promise those herded under the control of the Bourgeoisie. Capitalists can no longer harness the power of the machines they have wrought on the world that subjugates the common citizenry. Observe how American society through the Gilded Age, and up to the Progressive Era industrialized to a level unprecedented and created men like Rockefeller and Carnegie. These men possessed wealth the likes of modern society had never dreamed of.

This free market is merely a disguise for the inevitable oppression of the capitalist as it extracts wealth from workers that have no choice but to work for and purchase the very products that their hands have created. What else could you consider this other than oppression?

No more will workers compromise with the promises of democracy. Still, they must seize power, concentrate into the hands of the state so that humanity might realize their natural needs and contributions to the collective. At this point, the necessity of a state will be obsolete since each will be able to take freely according to their need.

Hayek: You preach about the freeing of the working class; however, the centralization of authority into a singular body of the state would dramatically expand the potential power available within society. Any employer employing any individual would not wield such a power as that which a bureaucrat could wield with the coercive powers of the state.

This reference to Rockefeller and Carnegie was fostered by the very compulsory powers of the state that you seek to create. As the historian Murray Rothbard once wrote about in his work, The Progressive Era, the cartelization of railways and the formation of trusts was only truly completed through the actions of the state itself. Wilson signed off on the Federal Reserve, a cartel of New York banks, that eventually became the central monetary dictator that it is today.

The competition was the only force that genuinely hindered those titans of industry from effectively cartelizing American sectors. What resulted from this centralization of power was not truly a free market that rewarded those that specialized their skills to the demands of the market.

Facilitating the creation of a body as supreme as the politburos of the USSR and the People’s Republic of China resulted in the most oppressive and inhumane regimes of human history, besides the Nazis, who also centralized power into one specific individual body. It would be naive to trust such a body would naturally relinquish its power for the sake of some utopian ideal.

Marx and Engels: Industry will care little about the human necessities of the workers it employs, and the inevitable crises of excess and greed will only drive the Proletariat to the inevitable end of seizing power and creating a true system for the people.

Hayek: Equality and utopian promises will merely be a Trojan Horse for demagogues and dictators to undermine the true interests of the people they supposedly would serve. These industries will no longer be operated individually by those that have earned capital within the scope of the market. Still, they would be mismanaged by political actors that seek an ideological end over mutual interaction.