Dialectics, Rothbard, Etc.

Chris Matthew Sciabarra cms10 at SPAMis2.nyu.edu
Thu Sep 2 10:30:48 MDT 1999

I had a number of responses to my various posts, so I'm going to merge all
the posts in one response.

Jim Farmelant writes:
"I am sure that Chris can answer that question better than I can but my
impression from reading Rothbard some years ago was that he attempted to
incoporate certain Marxist analyses into a libertarian framework built
around the ideas of Hayek and von Mises. His theory of imperialism as I
recall did look much like Lenin's. Of course Lenin's theory of imperialism
owed more than a little to the British liberal economist John Hobson. So if
Marxists can borrow ideas from liberals, it is perhaps only fair if a
libertarian (i.e. classical liberal) should borrow ideas from Marxists
including Lenin."

Jim is correct that Rothbard borrowed from the Marxists, but it is also
true that his class theory owes far more to earlier theories by pre-Marxist
and liberal historians and theorists, such as Dunoyer and Comte, and
Calhoun!  He was also influenced by the "caste" analysis of Mises, and the
works of Franz Oppenheimer, and Old Right anarchist, Albert Jay Nock, in
this regard.  He mounted a fairly strong critique of American imperialism
and connected this to a developed class analysis, linked to Austrian cycle

Charles Brown writes:  "I just meant Marx's influence in changing the world
was not as subtle as Rand's 17 years after his death. In fact, the new
rapid technology would be to Rand's advantage in the rapidity of making her
influence not subtle."

Point well taken; my point was just that there is SO MUCH information out
there, so many competing influences, that the ideas take time to filter
thru, and often come out as products of that interpenetration.

Charles writes: "By synoptic you mean an abstract whole, summary, like I
asked you to give of your ideas in the first post. Every table of contents
of a book simulates one. An outline of the whole.
Doesn't dialectics have as a central concept that synoptic knowledge of a
totality is possible at one phase of the thought process ? Marx proceeds
from the abstract to the concrete and all that. Doesn't this deny abstract
thought ? Every word we use is an abstraction , a synopsis of a whole."

Chris:  Ok, let me try to be brief, because these issues hark back to
debates that are as old as philosophy itself.  A "synoptic" whole is one
seen as if from the vantage point of omniscience.  Dialectics NEVER
approaches omniscience, even though it moves toward comprehensiveness.  The
whole point of dialectics, and the various abstractions that we need to
make in our analysis of any object, is that we can never understand the
whole QUA whole.  We understand the whole only thru the vantage point of
any given part.  True, we can piece together the various shifting
perspectives, and come up with a more comprehensive and enriched portrait
of the whole.  But we cannot grasp the whole as a single totality.  Plato,
in his earliest expressions of the dialectic, wedded the method to an
idealist ontology, as if human beings could act as gods and grasp the Forms
in their wholeness.  This "yearning for the divine" -- as the radical
feminist Cynthia Hampton has called it -- would have a very negative
effect, in my view, on the evolution of the concept of dialectics.
(Hegel's conception, in fact, has elements of the Platonic yearning, but it
is tempered by Aristotelian elements, to a certain extent.)  In fact, the
"yearning for the divine" is actually what Hayek called a "synoptic
delusion."  We delude ourselves into believing that it is possible to know
all things, and we delude ourselves further if we believe that such
presumed knowledge can become the basis for controlling all things.
Dialectics is not formalism or "organicism."  It requires human action,
shifting perspectives on a totality, awareness of dynamic and systemic context.

Sam Pawlett asks:   "Totality of what? Preferences? Why is knowledge of
totality impossible?
If something e.g. a totality, exists it must be ,at least in principle be

I agree that we can investigate a totality.  But we need to define our
terms.  Dialectics investigates STRUCTURED totalities... not the totality
of everything there is in the universe.  A totality is a whole structured
by abstraction of vantage point and levels of generality, and by an
understanding of its various units.  Synopticism robs itself of the role of
abstraction because it is, indeed, ultimately mystical.  I think central
planning fails precisely because it yearns control a society SYNOPTICALLY.

Sam continues: "What is "tacit" knowledge? "Tacit" to me, implies
unconscious. So, how
can one have knowledge that is unconscious? Belief that is unconscious?
Seems to me that once we enter the realm of "tacit" and "unconscious",
things start getting mystical."

Chris:  There is a whole literature on this subject that includes Gilbert
Ryle, Michael Polanyi, F. A. Hayek, and many others.  It is the distinction
between "knowing what" and "knowing how."  I may know how to play a piano,
but I may not know all of the physiological elements that go into actually
moving my fingers in order to play.  I may know how to speak a language,
but I may not know all of the rules of grammar that govern that language.
People who are entrepreneurial, who are creative, who do creative things
with given resources may just "have a hunch," or "have a gut instinct" --
while never being able to tell you exactly how they formed a judgment or
acted on an evaluation.  These are individualities of a particular time and
place that get lost when a central planning agency seeks to usurp that process.
The amazing thing about a market system is this:  Each individual on the
market gets to relate price signals to her own individual context of
knowledge, to her own purposes and goals, much of which is not visible to
others.  When the price system is transcended by a central planning
mechanism, planners substitute quantitative information about inputs and
outputs, but they cannot relate these quantities to the qualitative goals
of individuals.

Charles: Maybe you could give a synopsis of the debate :>)

Chris:  Well, as an extension of what I've said above, let me say that
since no human being or group of human beings can ever actualize the kind
of divinity demanded by "synoptic" knowledge, it follows that human beings
cannot PLAN THE ECONOMY AS A WHOLE.  I would have no objection to worker
councils and decentralized collectives managing their affairs within the
context of a price system, in which prices transmit knowledge of relative
scarcities, serving as signals which are related by the acting individuals
(as individuals or in groups) to their own context of knowledge, their own
purposes and goals.  When that price system is destroyed, the delicate
interconnections providing such signals is destroyed as well.  Mises and
Hayek view the result as calculational chaos; history, I think, proves this
as well.

Charles continues: "I'm interested if I don't have to read the concrete
whole of the Austrians' work first. I gotta get a glimpse of the whole
somehow.  How about this ? What did they discover different and the same as
Lenin ?"

Chris:  Fair request.  Let me continue too, but please understand that I'm
simplifying and summarizing a very complex business cycle theory.  The
Austrians argue that there has been an incestuous relationship between the
state and the banking sector almost since the beginning of modern
capitalism.  As the state becomes more intertwined with that sector (at the
banker's urging), the central banking system operates in a way which
affects interest rates artificially by control of the money supply.
Artificially lower interest rates, that is, interest rates lower than the
market rate, are used politically to pump prime an economy, but this has a
relative effect on prices, such that the recipients of new money get to
spend that money first, thus exerting inflationary pressure on prices and
wages.  The trickle down effect of this is that some
-- those debtors closest to the banking sector -- get to benefit from the
infusion of new money before others.  Traditionally, the biggest debtors
are capital-intensive industries.  When their investment expands over time
due to this artificial lowering of interest, it becomes clear that the
investments cannot be sustained, since they have been artificially induced,
rather than the result of actual increases in consumer demand.  The
ultimate consequence is that such 'malinvestments' must be liquidated --
unless political authorities come in and either (a) continue to pump prime
the economy or (b) subsidize failing businesses.  Over time, the Austrians
argue, this has a systemic effect -- as the economy careens from one cyclic
upturn and downturn to another, and as the focus of ultimate
decision-making becomes more and more centered in the finance sector.
There are international effects of this as well, having all sorts of
consequences for Third World nations and  so forth.

Now, let me say that Marx himself (in CAPITAL, vol. 3) recognized the folly
of state intervention in this regard; he saw how state-backed inflation
benefited debtors at the expense of creditors, and how this system became a
tool of class struggle.  The Austrian theory, however, is based on an
understanding of the actual function of prices as bits of information; when
the price structure is thus distorted, it must have negative effects on the
whole structure of production.  The Austrians would not socialize the
economy as a means of resolving the difficulties; instead, they'd get rid
of state involvement in the banking sector.  (It is no coincidence, by the
way, that the state and the bankers have similar interests -- the state
needs banks to fund its wars, while the bankers need the state to destroy
competition among them, and to artificially inflate the currency -- such
that they benefit in ways similar to a counterfeiting operation.)

Well, that's a lot to tackle in one note... so let me stop here, now that
I've opened up a mega-can of worms.
Chris Matthew Sciabarra, Visiting Scholar
NYU Department of Politics
715 Broadway
New York, New York  10003-6806
Dialectics and Liberty Website:
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