A Marxian Case for Capitalism

Release Date
February 11, 2014


Free Markets and Capitalism

The question of how to address poverty in the United States is complicated. Steven Horwitz, chair of the department of economics at St. Lawrence University, and Jeffrey Reiman, professor of philosophy and religion at American University, debate the level of government assistance that should be given to help the poor.
In this clip from the full debate, Prof. Reiman answers Prof. Horwitz’s question about the role he sees for markets in addressing the poor. Prof. Reiman says he is a believer in capitalism and a believer in free markets. He finds that capitalism has worked well to raise the general standard of living for the poor in the United States and elsewhere in the world. He has even written a book titled, A Marxian Case for Capitalism. But he suggests that these gains are general and that more should be done for the individuals who are struggling in our country. Prof. Reiman also argues that the current system has degraded the dignity of many of the poor and that there are many problems that stem from bad government programs. But, he says, he does not favor abolishing the role of government dogmatically.
Prof. Horwitz responds that the question of reducing government is not so much a dogmatic question as it is an empirical one. Has government worked at these things? Can it solve these problems? Prof. Reiman argues that perhaps the results are mixed. What do you think? Watch the full debate for more.

Wealth and Health of Nations [resource]: An infographic from Gapminder that charts the life expectancy and income per person since 1800 across the globe
As Free and as Just as Possible [interview]: Jeffrey Reiman talks about being influenced by Karl Marx, and how that man’s theories fit into the modern world
Defining Social Justice [article]: Michael Novak on the origins of the phrase “social justice” and its role in government and society
Economic Calculation in the Socialist Commonwealth [essay]: The classic Ludwig von Mises piece on why command economies fail
Marxist and Austrian Class Analysis [essay]: Hans-Hermann Hoppe on the differences, and interesting overlaps, between two fields of thought normally considered opposites

A Marxian Case for Capitalism
STEVEN HORWITZ: I’m curious, Jeff: So how, in your idealized world what would that role of the market be? And,  how do you see those limits of inequality? Where, what would you want to do about it? And how would you know that inequality was too great? I mean, where, I mean, you’ve talked about how, you have this kind of libertarianism in that it’s not inequality per se. So I’m just curious, where are the problems you see in markets? And where are those limits?
JEFFREY REIMAN: Well, first of all let me say, I am a believer in capitalism. I am a believer in the free market. I have recently written a book, which is, I’m sure you’ll love this, A Marxian Defense of Capitalism. You think that’s logically impossible, right?
So, you know, I believe in, I believe that the main contribution that comes from the market, and this is a moral thing, is dramatically increasing the standard, the material standard of living of people. I think this has been going on now for a long time. I think it’s going on globally now because of the spread of capitalist reforms. It’s going on constantly in America, even in the face of inequality. I agree that the poor are better off now materially than they were 20 years ago, then 40 years ago.
Here’s one statistic which I just really love. In 2009, 82 percent of Americans below the poverty line had air conditioning. Think about that. Imagine what they had 20 years ago or 40 years ago. So that’s a way in which capitalism is working, but I mean that’s very general. That is across the board. It doesn’t quite get to individuals like the kid in that movie.
There I think that there are questions about discrimination, about poor education, and related ideas like that, which, I don’t think you can just exclude the role of government there somehow because—dogmatically. Maybe government can be replaced; maybe not.
I think that we’ve had a welfare system which treats people as the objects of charity, has treated them in a very condescending way and that contributes to dependence. I’m all for changing that. But I’m not worried about the dignity of charitable givers. I’m worried about the recipients who think, only because of the kindness of these more successful people do I get it. It’s not because I deserve it, that the society owes me some kind of fair share.
BRANDON TURNER: Jeff, I want to give Steve a chance to respond real quick and then wrap up.
HORWITZ: Real quick, I think the only comment I’d make there is the assertion that government isn’t the solution to these problems or perhaps isn’t necessary, for me, is not a dogmatic assertion, it’s an empirical question. Has government worked at these things? Can it work at these things? That’s the question.
REIMAN: And I think it’s got a more mixed answer: it’s worked some and failed some. So let’s make it