Tuesday, April 10, 2007

Why Karl Marx Supported Libertarianism

by K. Bolton

The term “new Right” in New Zealand and other English-speaking countries is a misnomer and contrary to the way it is applied in Continental Europe. While the term is applied invariably to libertarianism in the English speaking world, it is neither “new” nor “right”.

Libertarianism, free trade, call it what you will, is the reanimated corpse of 19th Century Whig liberalism. The latter, far from being of the “right” or conservative, is antithetical to it. Whig liberalism, what we now call libertarianism, is the doctrinal manifestation of the Industrial Revolution. Its antecedents can be traced back to the Cromwellian Revolution of the 17th Century, a revolt by a newly emerging merchant class against the authority of the monarchy and gentry.

While in terms of our Western civilization it was the first such revolt to be undertaken in the name of the masses, but for the covert benefit of business interests, the French Revolution had the same purpose on the Continent. Both unleashed politically the desire of the merchant to be unfettered by the moral impulse of tradition, to pursue their business interests as they saw fit, without regard to any loyalty beyond profit.

Against these early manifestations of libertarianism stood the partisans of tradition. Conservatism stood for the estate and the rural community against the city, the machine, and the power of money. Conservatism upheld the moral authority of religion against humanism and the relegation of the human being to nothing but “matter in motion”. It defended the monarchy as a unifying focus against the destructiveness of class war. The ideals of noblesse oblige, of duty, of the chivalric concept of protection and obedience, were its basis of social relations rather than dog-eat-dog economics. Work as an ethic and a cultural manifestation, rather than as a mechanical function, was reflected in the old guild concepts.

With the rise of the city, the machine, the bank, and the expansion of the merchant class arose also the proletariat – dispossessed artisans and yeomen. The traditionalist forces represented by conservatism stood pressed between the workers’ movement from below and the plutocracy from above. The workers’ movement was a necessary response to the very real grievances of the uprooted urban proletariat under the libertarian regime of the workhouse, child labour, slum dwellings and cholera. Some traditionally minded individuals and institutions championed the workers’ cause.

The Conservatives, led by Joseph Chamberlain formed the Trade Protection League in 1903 to oppose the free market and champion the British worker. (In New Zealand 1930s Labour maverick John A Lee encountered the opposition of his “socialist” colleagues who thought that trade protectionism was contrary to “International brotherhood”, albeit more a “brotherhood of plutocracy”than of the worker).

Alternatives to both plutocratic libertarianism and socialistic nationalisation were proposed, including monetary reform (e.g. social credit). Catholic social doctrine (called ‘solidarism’) as exemplified by the encyclical of Pope Leo XIII (Rerum Novarum), posited a rejection of socialism and capitalism as materialistic, and advocated a wider distribution of property ( whence the Distributist movement of Hilaire Belloc and G. K. Chesterton). The recreation of the medieval guilds was advocated as a basis for organic social harmony. Such doctrines found an influential voice in the Catholic press in Depression era New Zealand, yet today what prelate advances any socio-economic option beyond crypto-Marxism?

Unfortunately, the “alternative” that triumphed was, until recent years, Marxism, and variants of materialistic socialism such as Fabianism. That they did triumph against the alternatives that were gaining mass support should give pause for thought. For example, why did all the socialist movements from Fabianism to communism have such a ready flow of funds? That the so-called proletarian movements were in the pay of “big capital” was a phenomenon that has been commented on by sundry historians from conservative Oswald Spengler to liberal Carroll Quigley.*

Marxism was very much a product of English economics; the mirror image of the free trade school. It arose with the rise of Darwinism, which was taken from the strictly biological field and applied to economics by both the Marxists and the libertarians. Hence, this economic Darwinism posited history as nothing more than economic development along lineal-progressive (i.e. “evolutionary” ) lines. Both doctrines were based upon economic determinism, upon the materialistic conception of history and human social relations. The materialistic conception is antithetical to such organic bonds as family, nation, and culture. To the Marxist these are “bourgeois” concepts. To the libertarian they are expressions of “collectivism,” and stand in the way of the individual who is complete and sovereign unto himself. While today’s libertarians see themselves and are seen by their foes as the antithesis of socialism, they have this materialistic pedigree in common with the Left.

Marx looked favourably upon free trade capitalism, because it did indeed disrupt those organic bonds that had to be buried before Marxism could triumph. Thus Marx saw the subversive potential of libertarianism. The Marxist historical outlook is dialectical. It sees history in terms of a continuing dialectic of thesis, antithesis, synthesis. The basis of Marxist dialectics is class struggle. Hence the thesis was the old order of ‘feudalism”; the antithesis was capitalism, and from the clash of these opposites would arise the new synthesis of communism.

This is why orthodox Marxist theorists hold that socialism can only arise from an industrialised capitalist country with a large proletariat. Hence the first stage in the dialectical march to communism is capitalism, which prepares the ground for communism. (The mainly agrarian nature of the communist revolutions in China and Cuba caused theoretical problems for communists).

Free trade is the crucial element of the Marxist dialectic, without which there can be no clash of opposites, and therefore no communism arising from the “class struggle”. Few Marxists are open about this seemingly paradoxical support for the subversive nature of libertarianism. Trotskyite publications can, however, be seen adhering to this line when they attack trade protectionism as preserving “national capitalism” and therefore delaying the dialectic that will lead to Communist revolution.

Marx wrote of the subversive role of free trade in the dialectical process when he stated in The Communist Manifesto: “National differences and antagonism between peoples are daily more and more vanishing, owing to the development of the bourgeoisie, to the freedom of commerce, to the world market, to uniformity in the mode of production, and in the conditions of life pertaining thereto.”

Previously, in 1847 (Appendix to Elend der Philosophie) Marx had written:

"Generally speaking, the protectionist system today is conservative, whereas the free trade system has a destructive effect. It destroys the former nationalities, and renders the contrasts between proletariat and bourgeoisie more acute. In a word, the free trade system is precipitating the social revolution. And only in this revolutionary sense do I vote for free trade."

We see Marx’s prophecy being fulfilled increasingly in our own time. “Globalism” and a “new world order” is being heralded by the USA and its allies as the hope of mankind, and is being overtly propagated as the “natural development of capitalism” by books written by corporate advisers. People of differing national, cultural and ethnic backgrounds are becoming interchangeable economic units, an undifferentiated mass of producers and consumers. Banking and industrial corporations spanning the world transcend all such differences. The result is the emergence of an international economic system that can bypass national governments. A global consumer culture emerges from the boardrooms of advertising agencies transcending ethnic and national cultures that are hindrances to international mass marketing. What will arise is a new form of internationalised, rootless humanity: we might call Homo Economicus.

Of course what triumphed was not communism, but libertarianism. The plutocrats knew how to play their own dialectical game, and in many instances used the communists in the manner Marx imagined communism would utilise free trade in a dialectical process. Communism and free trade subverted the organic bonds of nationhood, nationality, and family. The communist bloc imploded in a mountain of bankers’ debt. Upon its ruins libertarianism marches largely unchallenged.

If the forces of tradition wish to reclaim anything of value in the world beyond that which reduces life to an economic tread mill, then it ill behoves the champions of traditional values to get hoodwinked into believing they are served by libertarianism. It can be argued that ACT, Libertarianz and the free trade doctrinaires who infest the Labour and National parties do not fundamentally represent anything other than unfettered money making for the benefit of a few predators and parasites in a Darwinian ‘survival of the fittest”.


*Socialist movements in the pay of big capital.

This seeming paradox has been remarked upon by a number of well placed observers, among the earliest being officers and diplomats in the service of the Czar, whose intelligence network was aware of the nexus between certain plutocrats and Russian revolutionary movements.

Of recent sources, one of the most eminent was Professor Quigley, of the Foreign Service School, Georgetown University, also of Harvard and Princeton. His importance is not so much as an eminent historian and government adviser, but that he himself, as he states it, was close to the agencies of what he described as an “international network” of plutocrats. In his magnum opus Tragedy & Hope (Macmillan, 1966) Quigley describes the workings of this “network” and alludes to it as having “no aversion to co-operating with communists, or any other groups, and frequently does so.”

Plutocrats have funded all shades of socialism, from Fabianism to communism. For example, the Fabian Society established the London School of Economics, with funds from the British branch of the Rothschild dynasty, Sir Julius Wernher, and Sir Ernest Cassel, an influential banker associated with the New York bankers Kuhn, Loeb & Co. This was related by Fabian leader Beatrice Webb in her autobiography, Our Partnership.

The head of Kuhn, Loeb & co. around his time was Jacob Schiff who had a large part to play in financing socialism. The NY Times of 24 March 1917 reported that at a meeting of US revolutionaries celebrating the victory of the first (March) Kerensky Revolution in Russia, a congratulatory telegram was read from Jacob Schiff.

At the time of the March revolution most of the Communist leaders were in exile, Lenin in Switzerland, Trotsky in the USA. Trotsky was able to return to Russia courtesy of the US State department. He left the USA for Russia aboard the SS Kristianiafjord in the company of a large number of fellow revolutionaries and Wall Street businessmen, according to Dr Antony Sutton, research fellow at the Hoover Institute, who has documented the relationship between Communists and plutocrats in Wall Street & the Bolshevik Revolution (Arlington House, 1974).

At the time Russia was still in the war against Germany. The Bolshevik policy was one of separate peace with Germany. Not surprisingly, the Canadians detained Trotsky at Nova Scotia. Lt Col J B MacLean, publisher of MacLean’s Magazine, himself having had a long association with Canadian army intelligence, commented that Trotsky was released, “at the request of the British Embassy in Washington, which acted on the request of the US State Dept., who were acting for someone else.”

With the triumph of communism in Russia, the American business establishment was quick to urge US recognition of the regime. In a letter to Pres. Wilson, for example, William Sanders, chairman of Ingersoll-Rand Corp. a director of the Morgan American International Corp. and deputy chairman of the Federal Reserve Bank, stated (17 Oct 1918): “I am in sympathy with the Soviet form of government as best suited for the Russian people.” The Red Cross Mission to Russia was utilised as a cover by the American business establishment. .

The mission was funded by International Harvester, according to Sutton. The mission’s director was William Thompson , director of the NY Federal Reserve. Sutton states that the majority of the mission comprised lawyers, financiers and their assistants, rather than people from the medical profession.

According to the Washington Post (2 Feb 1918) Thompson gave the Bolsheviks a personal contribution of $1 million for the spreading of propaganda in Germany and Austria. He stated to the media that the Bolshevik cause had been misunderstood. Sutton states that Thompson joined up with Thomas Lamont of J P Morgan and went to London to persuade the British War Cabinet to halt its anti-Bolshevik policy. Thompson then toured the USA campaigning for US recognition of the Soviets.

From Europe the principal channel of funds to the Bolsheviks was Olof Aschberg, of Nya Banken, Stockholm. A message from the US Embassy in Norway, 21 Feb 1918 states that “Bolshevik funds are being deposited in Nya Banken.” In 1922, when the USSR formed its first international bank, Ruskombank, comprised of German, Swedish, American and British bankers, it was headed by Aschberg. The London Evening Standard (6 Sept 1948) noted of Aschberg’s career when visiting Switzerland, that he was known among diplomatic circles as the “Soviet banker” who “advanced large sums of money to Lenin and Trotsky in 1917. At the time of the revolution Mr Aschberg gave Trotsky money to form and equip the first unit of the Red Army.”

The USSR and the rest of the Eastern bloc subsequently became so enmeshed with debt and reliance on Western technology that the supposed “Soviet threat” was largely a fiction, but served a useful purpose in dragooning nations into the American orbit. China has opened up to Western capital, while even North Korea has recently been forced to come to terms with capitalism as the result of a combination of famine and economic blockade.


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