Alienation and the Soviet Economy: The Collapse of the Socialist Era

Alienation and the Soviet Economy: The Collapse of the Socialist Era

Alienation and the Soviet Economy: The Collapse of the Socialist Era

Alienation and the Soviet Economy: The Collapse of the Socialist Era


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The first edition of this seminal book in 1971 pointed out the fatal defects of Marxist theory that would lead to the collapse of the Soviet economy. In this revised edition, Paul Craig Roberts examines how reality triumphed over Marxist theory and the implications for the future of Russia and eastern Europe. In 1971, Roberts created a firestorm among professional Sovietologists by proclaiming that the economies of the USSR and its East Bloc allies were doomed because their planned economies were, in reality, anything but planned. Expanding on his original ideas, Roberts demonstrates in this book the fatal shortcomings of Marxist economies, ranging from misallocation of resources to ersatz capitalistic concepts grafted onto a system that calls for production without regard to profit. Roberts argues that the economies of the nations emerging from the USSR's collapse must grasp the profound truths in this book if they are to become viable.

Product Details

ISBN-13: 9781598132977
Publisher: Independent Institute, The
Publication date: 07/01/2017
Sold by: Barnes & Noble
Format: eBook
Pages: 152
File size: 1 MB

About the Author

Paul Craig Roberts is the chairman of the Institute for Political Economy and a nationally syndicated columnist.

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Alienation and Central Planning in Marx

The publication in 1932 of the Economic and Philosophical Manuscripts (1844) has resulted in many attempts to reinterpret and reformulate Marx. The concept of alienation, the central theme of the Manuscripts, seems to many to cast Marxism in an altogether new light. The surprise and controversy generated from finding a second Marx, or another and different aspect of Marx, reflect only a prevalent neglect of the logical structure of the programmatic content of Marx's work. The interpretations of Marxian alienation that have resulted from the study of the Manuscripts also reflect this neglect and have not led to any real progress in understanding Marx. If anything, the interpretations have lessened our understanding of Marx by raising the paradox of two separate Marxes — a young Marx and a mature Marx — and have encouraged a tendency by scholars to dismiss Marx as wildly inconsistent.

This chapter presents an interpretation of Marxian alienation that demonstrates the consistency of Marx's general scheme and the logic of the programmatic implications of his work. In this programmatic logic are the aspirations that were the cause of the Bolsheviks' economic policies during the "war communism" period. This is the route by which we will follow an abstract idea as it moves into the consciousness of men and culminates in history. The interpretation of Marxian alienation developed here also allows reconciliation of widely split opinion among knowledgeable scholars, because it is an interpretation consistent with Marx's self-image as the Scientific Socialist and, thereby, establishes continuity between the young and the mature Marx.

Our interpretation finds the source of alienation in the "commodity mode of production" by which Marx means the market system. Unlike psychological and sociological approaches from which alienation is studied from the personal standpoint of the individual, the approach here is to look for the cause of alienation in the mode of production, i.e., in the method of economic organization. This approach to Marxian alienation is appropriate, given Marx's materialist conception of history in which the institutions and consciousness of men (ideology in the classical Marxian sense) in any historical period are determined by the economic organization of society. In Marx's words:

The mode of production in material life determines the general character of the social, political and spiritual processes of life. It is not the consciousness of men that determines their existence, but on the contrary, their social existence determines their consciousness.

Although alienation is not the terminology in Capital, this chapter will show that Marx views alienation as an inherent characteristic of commodity production — the method of economic organization in a market system. It is his pre-analytic vision of society upon which his theoretical analysis in Capital is built.

To put our interpretation of Marxian alienation into perspective (see Appendix), other interpretations that find the source of Marxian alienation in private property, the division of labor, and greed are critically analyzed. It is shown that existing alternative interpretations either cannot account for the uniqueness of Marxian alienation to capitalism, the critique of which is Marx's major work, or they do not take into account the materialist conception of history which is, as Tucker himself states, the matrix of Marx's thought.


In the manuscript "Alienated Labor," Marx specifically denotes four aspects of man's alienation. First, there is the alienation of man from the product of his labor. The product of labor dominates man and not vice versa. It has an existence independent of man as something alien to him and becomes a power that confronts him.

Second, man is alienated from labor itself, i.e., from productive activity. Work becomes an activity that is external to, and independent of, the worker and an activity in which the worker finds no fulfillment. A worker does not produce use-value for himself but exchange-value. "The external character of work for the worker is shown by the fact that it is not his own work but work for someone else, that in work he does not belong to himself but to another person." The results of his own activity accrue to him only in his leisure; in what should be the most human of all activity — work — he is alienated.

Marx infers a third characteristic of alienated labor from the preceding two. Alienated labor results in man being alienated from himself, his own body, his external nature, his mental life, and his human life. Man's "life activity" — his labor — appears only as a means to satisfy his needs, that is, to make a living. But a man's work is his life; therefore, "life itself appears only as a means of life."

Marx finds the fourth characteristic, that man is alienated from other men, to be a direct consequence of the other three. "What is true of man's relationship to his work, to the product of his work and to himself, is also true of his relationship to other men, to their labor and to the objects of their labor."

Embodiment of Alienation in Commodity Production

Marx defines a commodity as an object which is produced by human labor for the purpose of exchange. An object produced for an individual's own consumption possesses use-value for the individual, but since it is not produced for the purpose of exchange, it is not a commodity. "All commodities are non-use-values for their owners [producers], and use-values for their non-owners [consumers]."

Commodities acquire their relations as values through exchange. Exchange is also the act whereby producers come into social contact with one another. "The persons exist for one another merely as representatives of, and therefore, as owners of commodities." Thus, for Marx, exchange is an act whereby human beings acting as mutually independent persons confront one another in the sale of commodities.

This is not Webster's definition of exchange, and one should beware of attaching standard definitions to the terms that Marx used. After elaborating his concept of exchange, Marx shows that historically there have been a number of societies in which the "swap" of goods and services among the members of the community did not constitute exchange and that, therefore, these goods are not, by definition, commodities. For example, a patriarchal family, a feudal manor, an ancient Indian commune, or the Inca State in Peru did not, according to Marx, include or permit mutual independence of human beings and exchange relationships (market relationships). As Marx succinctly put it: "Commodity exchange begins where community life ends."

In a market system the specific, concrete labor of an individual worker is manifested as a part of the labor of society, that is, it acquires a social character (and becomes abstract general labor) only through the act of exchange. But the act of exchange establishes only indirectly the social relationships between individuals at work. The direct relation in exchange is between things (commodities). The fact that exchange establishes indirectly the social relationship between individuals by establishing a direct relation between commodities is apparent to everyone until exchange becomes so varied and complex that a special commodity — money — evolves as the universal equivalent by which the value of all other commodities can be measured. Marx says that it is "just this ultimate money form of the world of commodities that actually conceals, instead of disclosing the social character of private labor and the social relations between individual producers."

In advanced stages of commodity production, the social relationships of individual producers are hidden by the veil of money. What appears is a world of mutually independent human beings who fulfill their needs through the impersonal mechanism of the market. Thus, the veil of money or commodities, by hiding the actual social relationships, projects a false consciousness and screens the phenomenon of exploitation.

The fetishism of commodities, by hiding the actual social relationships, prevents men from knowing the objective reality; for example, men are unaware of exploitation. Marx is more indignant that the veil blinds men to exploitation than over the exploitation itself. It is not exploitation that is unique to capitalism but the blindness to it. The blindness to exploitation is one aspect of the false consciousness resulting from commodity production: "This fetishism of commodities has its origin ... in the peculiar social character of the labor that produces them." As we shall show, the peculiar social character of the labor which produces commodities is alienated labor; and this directly connects the veiling of objective reality, alienated labor, and commodity production.

Herein lies Marx's mature treatment of alienation. Man is dominated by an incorrect image of his world. The ideology (in the classical Marxian sense) resulting from the commodity mode of production causes man to perceive the market system as a force beyond his control to which he must adjust. He accepts the market mode of life as unquestionable. Such a perception prevents man from living in the world in a fashion that is otherwise possible for him. It is an alienation that he does not consciously experience but which keeps him from "real positive science" and thereby from establishing conscious social control over economic life and controlling his own destiny. Destruction of the system of commodity production destroys the veil or false consciousness that blinds man to the power within his grasp to fashion his own history. Man is alienated because his economic life, which according to Marx determines his social and political institutions and consciousness, has control over him.

In his discussion of commodity fetishism, Marx develops the theme that in the act of exchange the social relations between men assume "the fantastic form of a relation between things." Some have noted that there is a connection between the fetishism of commodities and alienation, but the connection generally is not explored. The fourth aspect of alienation, noted previously as the alienation of man from his fellow men, is that aspect most obviously seen in Marx's concept of commodity fetishism. In the marketplace human bonds of family, friendship, and community do not exist; individuals face one another solely as owners of commodities.

Since it is our purpose to discover the relationship between all aspects of alienation and commodity production, it is necessary to look beyond Marx's discussion of commodity fetishism to consider the relationship among commodities, the labor that produces them, and alienated labor. In A Contribution to the Critique of Political Economy, Marx discusses the characteristics of labor that produce commodities. Labor that produces commodities is labor devoid of any quality. The individuality of labor is lost, and the specific forms of labor are lost in their abstraction into money. Labor that produces commodities is labor that creates exchange-value instead of usevalue for the laborer. And, finally, labor that produces commodities is "characterized by the fact that even the social relations of men appear in the reversed form of a social relation of things."

Man is alienated from the objects of his labor, the work process, and from his own being when his labor loses its quality and individuality and when his labor is expended in producing for the market. Man is alienated from other men when his labor results in the personification of objects. Clearly, labor that creates commodities is alienated labor.

These characteristics of the labor that produces commodities are revealed in the antitheses and contradictions which, in Capital, Marx finds to be inherent in commodities. In commodities are "the antithesis between use-value and [exchange-]value; the contradiction involved in the fact that individual labor must simultaneously manifest itself as directly social labor, the contradiction involved in the fact that particular concrete labor only counts as abstract general labor; the antithesis between the personification of objects and representation of persons by things."

The various aspects of alienation given in the Economic and Philosophical Manuscripts are immanent in the nature of commodities. The contradictions and antitheses present in commodities, which are analyzed in Capital, are manifestations of alienation. The alienation of man from the product of his labor, from the work process itself, from his own being, and from other men is manifested in the contradictions between use-value and exchange-value, individual labor and social labor, particular concrete labor and abstract general labor, and the personification of objects and representation of persons by things — all contradictions being inherent features of commodity production.

It is possible, perhaps, to pair single aspects of alienation with single contradictions immanent in a commodity. As pointed out, others have noticed the connection between the alienation of man from his fellows and commodity fetishism, which in the terminology of Capital is "the antithesis between the personification of objects and the representation of persons by things."

The contradiction between use-value and exchange-value implies the alienation of man from the objects of his own labor. Use-value is realized when man produces directly for himself, his family, or his community; exchange-value is realized when man produces for the impersonal market. The specific products of a man's work accrue to other (unknown) men.

The contradictions between individual labor and social labor and between specific concrete labor and abstract general labor imply the alienation of man from the work process. Marx says that labor creating exchange-value (commodities) is abstract general labor. From the viewpoint of the market it is immaterial who the individual worker is or whether he is a tailor, a carpenter, or a manager. The specific concrete character of labor is lost by its abstraction into money.

The alienation of man from his own being follows from his alienation from the product of his labor and the work process. According to Marx, since man realizes himself in work, alienation from the products of his work and from productive activity results in alienation from his own being.

It is possible to jump to the conclusions that by "alienation of man from the objects of his own labor" Marx meant that the worker's product was expropriated by the capitalist and that by "alienation from the work process" Marx meant that the worker suffered under the monotony of the assembly line. These are the conclusions to which some have come. However, having found alienation to be an inherent feature of commodity production, Marx proceeded to analyze "scientifically" the development of the capitalistic system. The contradictions and antitheses of that system, which Marx found revealed in such phenomena as crises, follow directly from the contradictions and antitheses immanent in commodity production, which in turn are manifestations of the various aspects of alienation. Although Marx made many references to the worker's plight, Capital is not a study of the psychological and sociological features of alienation. Since Marxian alienation is a feature of a particular mode of production, it was the study of that mode of production which was the major work of his life.

To summarize, we have argued that since labor that creates commodities is alienated labor, the contradictions in the relations of production of commodities can be expected to reflect the characteristics of alienated labor. In the Manuscripts Marx gives the characteristics of alienated labor. In the Critique of Political Economy and in Capital he gives the characteristics of labor that produces commodities. We see that the characteristics of labor that produces commodities are the characteristics of alienated labor and conclude that commodities are produced by alienated labor. In Capital, Marx gives the contradictions inherent in the commodity mode of production. We see that these contradictions are manifestations of alienation and conclude that Marxian alienation is embodied in the phenomenon of commodity production.

Transcendence of Alienation

To Marx, commodity production reaches its highest stage of development in modern capitalism. Although ancient and feudal societies experienced a foretaste of commodity production, it was not the principal mode of production during those times. Except perhaps in some nascent commercial centers, man's relation to his work and to other men was convivial rather than commercial.

Marx's interpretation of alienation is unique in that he sees the phenomenon as being the product of the developed market system. The method of economic organization enslaves both workers and capitalists. The unique character of Marxian alienation permits a unique solution. Organization of autonomous producers in a system of market relationships is replaced by uniting the whole of society into a single factory. The goal was to transcend Marxian alienation by transforming economic organization and providing a new basis for relations between men. Upon this new basis a new society would arise.


Excerpted from "Alienation and the Soviet Economy"
by .
Copyright © 1990 The Independent Institute, Oakland, CA.
Excerpted by permission of Holmes & Meier Publishers, Inc..
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Table of Contents

Foreword by Aaron Wildavsky,
Introduction to the Revised Edition,
1 Alienation and Central Planning in Marx,
2 "War Communism" — Product of Marxian Ideas,
3 Polycentricity and Hierarchy,
4 The Polycentric Soviet Economy,
6 Speculative Excess as a Force in History,
Appendix: A Critique of Other Interpretations of Marxian Alienation,
Note on the Author,

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