Drowning. Drowning. Fighting it. But drowning.

1.

Over five books Eric Aarons has argued that we need to put overarching social theories aside and focus on the values that animate us to seek out those theories.[1] “Intellect and reason alone are not enough,” he says. “We must want something different, must feel it in our gut, bones and heart to prompt our reason and goad us into action”.[2] Wanting and feeling ground action; reason is secondary.

The impulse behind this division is biographical.

Aarons was an activist in the Communist Party of Australia (CPA) between 1938 and its dissolution 1991. The reality and eventual collapse of state-capitalist society in Eastern Europe and Stalinism globally gave those within the movement an acute feeling of chagrin. The 1968 invasion of Czechoslovakia was Aarons’ traumatic moment. “Why had theory that had seemed to explain social developments so fully … resulted in this appalling outcome,” he asks.[3] He still felt committed to struggles for equality and against injustice but could no longer attach this commitment to Marxist theory. “I came to the conclusion that my values … had been a deeper and more constant motivation for my activities than the theory which I had thought to be their source,” he says.[4] The importance of the division of values from theory is that it allows Aarons to separate the values that motivated him to join the CPA from Stalinism.

He argues that the contemporary impasse of the Left repeats the strong ideological character of Stalinism. “Our basic framework of thought was defective in important respects,” he says. “We placed the ‘objective processes’ and structure of society far above the subjective ones in degree of importance.”[5] The destruction of the Prague Spring was only one instance in many that exposed the degeneration of communism into the left-wing Social Democracy that Pier Paolo Pasolini called, “a pessimism into which hopes drown to become more virile”.[6] The essential pessimism of Social Democracy is that we must accept what the “objective processes” say is possible. To have virility we take part in the socially valid practices (we could say, “best practices”) of our situation but by doing this we drown our hope for a world that isn’t this one.

This logic of playing along lead the CPA to back the turn to economic rationalism in Australia. It’s advocacy for the 1983 Prices and Incomes Accord between trade unions, employers and the Labor government was significant in the success of that decade’s turn to social liberalism.[7] The substitution of a former President of the Australian Council of Trade Unions (ACTU), Bob Hawke, for Reagan or Thatcher is the specific difference of the rise of neo-liberalism in Australia: all along it was the Left that was driving the class-struggle. Laurie Charmichael, one the CPA’s most charismatic leaders, Junior Vice-President of the ACTU and some-time leader of the metal workers’ union, argued that unions needed, “to recognise that the process of intervention in the economy will prevail and we can be part of it.” He concluded: “Our position needs to be that we want to be involved.”[8]

In Hayek versus Marx and Today’s Challenges this is expressed in Aarons’ willingness to concede Friedrich von Hayek’s (indirect)[9] argument against Karl Marx; viz. that we cannot hope to do away with the market.[10] His concession is made on purely pragmatic grounds that contradict his insistence on the primacy of values. If values are the rationalisation of wanting and feeling, does surrender to the inevitability of the market not surrender the wanting and feeling of the Left, viz. for a world that isn’t this one, to an external rationality? Does this not repeat the privileging of “objective processes” over “subjective ones” that Aarons names the failure of the communist movement?

2.

Hayek argued that there is no alternative to the market because knowledge and values are dispersed across many individuals. “All man’s mind can effectively comprehend are the facts of the narrow circle of which he is the center,” he said.[11] The addition of one imperfect individual knowledge to another establishes at an infinite point what he calls, “the extended order”, viz. capitalism. Hayek’s method is thus referred to as, “methodological individualism”.[12]

The market overcomes the limitation of these many individual knowledges by transmitting fragments of information through price signals to exactly the people who need to know: the buyer and seller.  “The spontaneous actions of individuals will … bring about a distribution of resources which can be understood as if it were made according to a single plan, although nobody has planned it,” he said.[13] Socialists like the Fabians Sidney and Beatrice Webb genuinely believed that bureaucratic central planning was the model of the good society. Hayek’s argument against this was that reason simply cannot cope with the infinite quantity of information that human society is. Individuals can have their idiosyncratic plans, but any deliberate and collective plan is disposed to systemic error.

The “extended order” is the spontaneous interaction of many individuals and is undesigned by any one person. It is, thus, neither just nor unjust but simply is. “Justice has a meaning only as a rule of human conduct,” Hayek said, “and no conceivable rules for the conduct of individual persons supplying each other with goods and services in a market order would produce a distribution which could be meaningfully described as just or unjust.”[14] He said that the only common values of a market order are, “not concrete objects to be achieved, but only such common abstract rules of conduct as secure the constant maintenance of an equally abstract order”.[15]

While the actual movement of the market is exactly amoral, the way we ground it can be called good or bad. Hayek argued that a set of abstract “rules of just individual conduct” have evolved over thousands of years to ground the spontaneous market order of capitalism.[16] These rules are, “private property, honesty, contract, exchange, trade, competition, gain and privacy.”[17] Hayek’s concession that this definite set of values underwrites the market is in fact an argument against any counter-set of values from the Left.

Hayek argued that left-wing intellectuals recklessly abandoned the basic liberal values that had underwritten massive growth in material wealth when thy rejected the market. “According to the views now dominant the question is no longer how can we make the best use of the spontaneous forces found in a free society,” Hayek said. “We have in effect undertaken to dispense with the forces which produced unforseen results and to replace the impersonal and anonymous mechanism of the market by collective and ‘conscious’ direction of all social forces to deliberately chosen goals.”[18] Hayek insists that the result is totalitarianism. “The rise of Fascism and Nazism was not a reaction to the socialist trends of the preceding period, but a necessary outcome of those tendencies,” he said.[19]

Further, opposition to the market is simply ressentiment toward the efficacy of capitalism. “Most people are reluctant,” he said, “to accept the fact that it should be the disdained ‘cash-nexus’ which holds the Great Society together.”[20]

3.

Aarons takes Hayek’s theory of the market as a revelation next to the disaster of state-capitalist society. “On the subject of markets, Marx was almost wholly wrong, and Hayek largely right,” Aarons says. “With a widespread division of labour in separate societies which now extends across the world, exchanges of billions of different commodities are a daily necessity, and markets are the site in which they take place.”[21]

But there is something different in Aarons’ argument.

His idée fixe is the division of labour rather than the individual.[22]

Aarons begins with the failure of central planning in Russia and then derives the benefit of market exchange from its deficiencies; for instance that consumer preferences had no affective expression.[23] “Neither Marx nor any other socialist had considered or explained how, if markets were abolished, the society or its officials would be able to work out quantities of consumer goods to be produced and distributed,” he says.[24] He insists that Ludwig von Mises’ argument that any non-market economy disqualifies rational calculation is sound.[25] The failure of Gosplan to work through an infinite quantity of information proves that a system of prices is indispensable to social reproduction. “The capacity of the market to generate prices is its key virtue,” he says. “Such prices, necessary for economic calculation in any society with a wide division of labour, cannot be obtained in any other way.”[26] Hayek’s theory of the market is then an almost convenient patch-up for Aarons. But Hayek would criticise him for beginning with an abstract whole, the division of labour, and then backtracking to individual preferences. “Wholes as such are never given to our observation but are without exception constructions of our mind,” Hayek said.[27]

A further problem is that by deciding at the outset that the question of the market is about the allocation of resources within an assumed division of labour the question is divested of wanting and feeling. “Even today,” he says “some still say that the large number of equations involved in the projections about prices and their changes can be solved because of the capacity of even small modern computers to process an almost infinite quantity of data.” But, he concludes: “This quite misses the point. It is not the processing of the data that is the problem—it is the one of collecting it.”[28]

The problem, of course, is neither.[29]

What Aarons misses is the normative ground of the market.

Aarons does allow that the market might leave out important elements of society, like the environment, and he does argue that governments must intervene in the market under the condition of definite social values,[30] but he refuses to allow the market itself to be the problem. “Forms of regulation are needed … to restrict the damage their [markets] free operations are likely to cause,” he says. “Not, it must be said, that the market mechanism as such is the direct cause of any damage, but because the competitive struggle for profits promotes efforts to reduce even necessary expenditure.”[31] Aarons is equally explicit that nothing political is implied in accepting Hayek’s thesis that the market is a mechanism for communicating infinitely dispersed information. “Recognising that prices convey information throughout society as a whole,” Aarons says, “has no inherent political implications beyond a heightened appreciation of the necessity and value of market mechanisms.”[32]

4.

Marx argues exactly the opposite. Whereas Hayek argued that the market is grounded by liberal values and Aarons doesn’t allow values a place in the market, Marx argued that the market generates the liberal values that Hayek defends.

In other words, the market is partisan and Hayek is its commisar.

Marx’s concept of value is exactly the notion that labour is transfigured into a material process that makes a set of atomised individuals its object. Marx called value a “subject” in exactly this sense.[33] “Value” names the real reduction of material wealth and labour to objects of indifference. “With the disappearance of the useful character of the products of labour, the useful character of the kinds of labour embodied in them also disappears,” Marx said. “They can no longer be distinguished, but are altogether reduced to the same kind of labour, human labour in the abstract.”[34] Hayek said that this creates an, “order in which all human brings count alike”.[35] But Marx insists that it is the capacity to create value, not being human, that is counted alike. The market then becomes a process of sorting out which labours are socially valid and which are not. “A thing cannot be a use-value without being a value,” he says. “If the thing is useless, so is the labour contained in it; the labour does not count as labour, and therefore creates no value.”[36] The market says what does and doesn’t “count” as valid human activity.

Where Hayek said that the market is amoral, Marx said that the law of value is a normative ground internal to it: the good society accumulates surplus-value.

Human judgement is displaced by this alienation of wanting and feeling. Our capacity to say if this is the good society or not is carried over into a material process, that, as Marx never tired of saying, goes on “behind our backs”. The director  of Barack Obama’s National Economic Council expressed this concisely in his infamous World Bank memo. “The economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that,” Lawrence Summers says. His recommendation is entirely acceptable within capitalism: “a piece of good luck for the buyer but by no means an injustice towards the seller.”[37] The revulsion that emerged against Summers was revulsion at the logic of capital. But it equally expressed ressentiment toward our everyday submersion in the market. “Fair Trade” is an example of an initiative from the Left that thrives on this ressentiment. It sublates the logic of capital without destroying it. It begins by saying there is something terribly wrong with the market and ends by saying how great it is. It is the scene of someone drowning.

5.

Splitting reason from wanting and feeling allows Aarons to clarify the rudimentary impulse that motivated his political commitment. It is a significant point and does isolate a perennial problem in politics. But it also expresses bad faith in his 50 years plus of activism within the communist movement.

Jean Paul Sartre names the denial of one’s own will “bad faith”. He gives the example of a waiter who is aware that he or she can choose to turn up to work at 5am and open; but, rather than accepting this, he or she becomes, “this person who I have to be … and who I am not”.[38] Sartre refers to this more generally as playing a role. For instance, the bartender he describes in his 1945 novel The Age of Reason: “A little while ago he had been smoking a cigarette, as vague and poetic as a flowering creeper; now he was awakened, he was rather too much the bartender, manipulating the shaker, opening it, and tipping yellow froth into glasses with a slightly superfluous precision: he was impersonating a bartender.”[39]

Aarons likewise describes the personalities fostered by the CPA as “one sided” and “rather frantic”.[40] He says that when the party faced its end, for some members, “the desire to hang on was a gut feeling based largely on the fact that they had been communists all their lives and could not imagine any other identity.”[41] Tying one’s identity to some specific organisational practice is very much an instance of Sartre’s notion of “impersonating what one is”.[42] Marx, of course, called this alienation: “The worker feels himself only when he is not working; when he is working he does not feel himself.” [43]

Aarons’ protest against Marxist theory can then be understood as a repetition of exactly the subjectivity he imbues it with, viz. the elevation of objective processes over values. While he had believed that some “law of history” would draw workers into the ranks of the CPA, he had down-played the wanting and feeling that had drawn him to communism in the first place. Likewise Marxist theory didn’t do anything. It certainly didn’t invade Czechoslovakia! Rather, real individuals made a series of choices in definite political situations from “gut feeling”. Aarons’ point is that their gut feelings were disfigured by ideology. But this only reiterates Lukacs’ comment that any genuinely political organisation, “will necessarily consist of men who have been brought up in and ruined by capitalism”.[44]

If this ruined subjectivity remains, even after Aarons has made his noisy brake with Marx, can we not say that it was not Marx’s thought, but exactly the alienation he diagnosed, that caused individuals to elevate objective processes over values? One of Marx’s most rudimentary ways of describing alienation is after all: “the conversion of things into persons and persons into things.”[45]

6.

Aarons’ adoption of the market doesn’t move him beyond this ruined subjectivity. It seems almost naive to note that his idée fixe, the division of labour, is socially determined and not, “an eternal natural necessity”.[46] If politics is about anything it is about making what appears to be constant buckle. Adorno notes that, “to think is, in itself and above all particular content, negation, resistance to what is imposed on it”.[47] By assuming the contemporary division of labour, viz. a direct expression of the law of value, politics is divested of any substantive role. It can’t think against the situation it wants to throw off. Aarons can only end up surrendering the possibility of there not being the law of value; or, the other way around, of there being a world that isn’t this one. What can he tell those people whose wanting and feeling is for an end to the indifference of the market if his narrative is ultimately that there is no alternative?

This only continues the failure of twentieth century communism.

At its end the CPA was convinced that the road to socialism required trade unions to join the state. It increasingly called local disputes around pay and conditions retrograde and unproductive. It argued that unions needed a global “interventionist strategy”, or to take up their place within the state. The CPA’s 1982 congress decided that, “if the union movement takes a leading role in formulating policies to benefit the whole working class … and full participation, democracy and mobilisation is developed, then a challenge to the ruling class in Australia can develop in a socialist direction.”[48] After the Hawke-Labor government came to power in March 1983 the CPA argued that, ‘expanding trade union rights through involvement in economic decision making is a first step towards democratic planning in industry and democratic control of investment.”[49] Its newspaper, Tribune, soon ran the headline: “Extend and Defend Labor’s Reforms”.[50] This was a bizarre, but probably common, tranfiguration of changing the world by occupying the state.

The CPA wasn’t alone in thinking that the Accord was a first step towards socialism, when it was rather a first firm step into neo-liberalism. But it had made a long argument within the labour movement that having a place inside the state was the only way toward a just and equal society. It believed that trade unions were somehow the base of socialism and that socialism was portended if trade unions became a formal part of government “decision-making”. In other words, its idea of socialism hadn’t moved beyond Stalinism. It certainly had nothing to do with emancipation.  The CPA had become, what Theodor Adorno called, “a piece of the politics it was supposed to lead beyond” – it had drowned to become more virile.[51] It was doomed to the, ‘constant and monotonous repetition of the same process”.[52]

And Aarons is still submerged.

The claim that the market causes no “damage”, but rather “the competitive struggle for profits” does, is formally identical to the claim that state-capitalism caused no damage, but rather “excesses” (murders, show trials, labour camps, the cult of personality, etc.) did. In both cases an ideal is violently abstracted from its reality in flat-out denial of the world. But the world of concepts provides no proof against drowning, as Marx note at the opening of The German Ideology.[53] Aarons simply substitutes Hayek’s theory of the market for Marxist theory. Reason grounds action; wanting and feeling are now secondary. He hasn’t let values determine social theory, but has let social theory remain a condition on action.

Aarons’ development after the CPA is simply the denial that genuine alternatives to Stalinism existed becoming the denial that there are genuine alternatives to Social Democracy today.

References

Aarons, Eric, 1972, Philosophy for an Exploding World (Brolga Books)

Aarons, Eric, 1993, What’s Left? (Penguin)

Aarons, Eric, 2003, What’s Right? (Rosenberg)

Aarons, Eric, 2008, Market versus Nature: The Social Philosophy of Friedrich Hayek (Australian Scholarly Publishing)

Aarons, Eric, 2009, Hayek versus Marx and Today’s Challenges (Routledge)

Adorno, TW, 2001, Negative Dialectics, http://www.marxists.org/reference/archive/adorno/1966/negative-dialectics/index.htm

Caldwell, Bruce, 2005, Hayek’s Challenge: An Intellectual Biography of F. A. Hayek (The University of Chicago Press)

Colletti, Lucio, 1972, From Rousseau to Lenin (New Left Books)

Hayek, Freidrich von, 1944, The Road to Serfdom (Routledge & Keagan Paul)

Hayek, Freidrich von, 1952, The Counter-Revolution of Science (The Free Press)

Hayek, Freidrich von, 1958a, “Individualism: True and False” Individualism and Economic Order (The University of Chicago Press), pp1-32

Hayek, Freidrich von, 1958b, “Economics and Knowledge” in Individualism and Economic Order (The University of Chicago Press), pp33-56

Hayek, Freidrich von, 1978, The Three Sources of Human Values (London School of Economics)

Hayek, Freidrich von, 1979, Social Justice, Socialism and Democracy (Centre for Independent Studies)

Hayek, Freidrich von, 1988, The Fatal Conceit (The University of Chicago Press)

Lukacs, Georg, 2002, History and Class Consciousness (The MIT Press)

Marx, Karl, 1975, Early Writings (Penguin)

Marx, Karl, 1990, Capital Volume I (Penguin)

Marx, Karl, 1992, Capital Volume II (Penguin)

Marx, Karl and Engels, Friedrich, 1976, The German Ideology (Progress Publishers)

McNally, David, 1993, Against the Market: Market Socialism and the Marxist Critique (Verso)

Pasolini, Pier Paolo, 1964, “Vittoria”, in Poesia in Forma di Rosa (Garzanti). Available in English at: http://direland.typepad.com/direland/2005/10/a_hitherto_unpu.html

Sartre, Jean Paul, 1984, Being and Nothingness (Washington Square Press)

Sartre, Jean Paul, 2009, The Age of Reason (Penguin)


[1] See Aarons, 1972, Aarons, 1993, Aarons, 2003, Aarons, 2008 and Aarons, 2009.

[2] Arrons, 2009, pp4, 98-9.

[3] Aarons, 2009, p104. See also Aarons, 1993, pp164-8.

[4] Aarons 2009, p104.

[5] Aarons, 1993, p188, 189.

[6] Pasolini, 1964, p202.

[7] The Pries and Incomes Accord was an agreement negotiated between 1979 and 1983 that had trade unions agree to wage restrain in return an increased social wage. It came to an end in the early 1990s when Labor decided it didn’t allow enough labour market “flexibility”.

[8] Quoted in Tribune 23 February 1983.

[9] The degree to which Hayek’s arguments can be said to actually confront Marx is infinitesimal; the socialists he debated weren’t Marxists and he rarely ever mentions Marx in his writing, when he does it is only as a punch-line to comments about central planning or totalitarianism. See Caldwell, 2005, pp214-20, 232-41.

[10] By “the market” I mean both production and circulation; viz. the actuality of capitalism.

[11] Hayek, 1958a, p14.

[12] “This sort of step-by-step approach whose the starting point is the choice behaviour of a single individual (or agent) I would call methodological individualism.” Caldwell, 2005, p156. See also Hayek, 1956, p38.

[13] Hayek, 1958b, p54.

[14] Hayek, 1979, p4.

[15] Hayek, 1978, p16

[16] Hayek, 1979, pp3-15.

[17] Aarons, 2009, p109. This list is drawn from Hayek, 1988.

[18] Hayek, 1944, p15.

[19] Hayek, 1944, p3. Karl Mannheim didn’t help matters when, in 1939, he said: “In the end agreement that planning is necessary, together with the inability of the democratic assembly to agree on a particular plan, must strengthen the demand that the government, or some single individual, should be given powers to act on their own responsibility. It becomes more and more the accepted belief that, if one wants to get things done, the responsible director of affairs must be freed from the fetters of democratic procedures.” Quoted in Caldwell, 2005, p240.

[20] Quoted in Aarons, 2009, p108. See also Hayek, 1979, pp12-4. “Great Society” is a phrase taken from Adam Smith that Hayek uses as synonym for capitalism.

[21] Aarons, 2009, p185. This is to entirely ignore the non sequitur between state capitalism and Marx that Aarons relies on.

[22] For instance: “Exchange of products and services is both essential and unavoidable when there is a widespread division of labour.” Aarons 2009 p83 see also pp35, 43, 185. “The project of abolishing markets as such is impossible in conditions of a widespread division of labour.” Aarons, 2003, p37. Etc.

[23] Aarons, 2009, p25-6 and Aarons, 2003, p32.

[24] Aarons, 2009, p24-5.

[25] Ludwig von Mises was Hayek’s master and wrote an essay called Economic Calculation in the Socialist Commonwealth in 1920, during the First Socialist Calculation Debate. Hayek reprinted this essay in an English language collection in 1935 during the Second Socialist Calculation Debate. It has gone down as a sound challenge to socialism; see David McNally, 1993, chapter 7 for a sound rebuttal.

[26] Aarons, 2009, p35.

[27] Hayek, 1952, p54.

[28] Aarons, 2009, p25.

[29] We can note that the question of prices is irrelevant if Marx’s project was the destruction of the law of value.

[30] It should be noted that Hayek vocally opposed laissez faire economics. The substance of his dispute with Keynes, following the publication of The Road to Serfdom in 1944, was that he had not spelt out where he thought it was appropriate for the state to draw the boundaries of the market. “You admit here and there that it is a question of knowing where to draw the line. You agree that the line has to be drawn somewhere, and that the logical extreme is not possible. But you give us no guidance whatever as to where to draw it,” Keynes said in a 28 June 1944 letter to Hayek. Quote in Caldwell, 2005, p289.

[31] Aarons, 2009, p188. The claim that the market causes no “damage”, but rather “the competitive struggle for profits” does, is formally identical to the claim that state-capitalism caused no damage, but rather “excesses” (the terror, show trials, labour camps, the cult of personality, etc.) did. In both cases an ideal is separated from its reality in flat-out denial of the world; or, in the words of the economic rationalists, in both cases exogenous distortions interrupt what is otherwise desirable.

[32] Aarons, 2008, p6 (emphasis original).

[33] See Marx, 1990, p255 and Marx, 1992, p185.

[34] Marx, 1990, p128.

[35] Quoted in Aarons, 2009. pp19-20, 66.

[36] Marx, 1990, p131. See also p135-6.

[37] Marx, 1990, p301.

[38] Sartre, 1984, p102 emphasis original.

[39] Sartre, 2009, p174. Thanks to Veronica Ganora for pointing out this passage to me.

[40] Aarons, 1993, p229.

[41] Aarons, 1993, p232.

[42] Sartre, 2009, p174.

[43] Marx, 1975, p326.

[44] Lukacs, 2002, p335. Lukacs, in fact, attributes this notion to Lenin.

[45] Marx, 1990, p209.

[46] Marx, 1990, p133.

[47] Adorno, 2001.

[48] Quoted in Stilwell, 1986, p27-8.

[49] Tribune 20 April 1983.

[50] Tribune 4 May 1983.

[51] Adorno, 2001.

[52] Marx, 1990, p210-1.

[53] Marx & Engels, 1976, p30.