4. History and economics¶
Core Argument¶
Chapter 4: History and Economics¶
This chapter mounts a rigorous defence of the Marxist method of historical materialism against the idealist and unscientific approach of Heinz Dieterich and his co-thinkers. The core argument is that Marxism does not treat economics in the abstract, but examines distinct socio-economic formations, each with its own specific laws of motion. Trotsky is cited to affirm that Marx denied the existence of eternal economic laws; Capital is a study of the capitalist economy alone. Dieterich, by contrast, divides all history into just two phases: primitive tribal communism based on “equivalents”, and all later societies lumped together as based on “unequal exchange” and moneymaking. This is denounced as profoundly unscientific, as it ignores the fundamentally different laws of motion governing slave society, feudalism, and capitalism, each of which extracts surplus value through distinct mechanisms.
The chapter provides a sweeping historical survey to substantiate this critique. It shows that in pre-capitalist modes, production was dominated by use-values, with exchange being accidental and largely arbitrary. Marx’s own analysis is invoked to demonstrate that exchange-value only crystallised gradually with the development of trade, and that capitalism is uniquely based on the universal exchange of equivalents, with exploitation occurring through that equal exchange. Dieterich and Peters are accused of inverting this, adopting a moralistic, Proudhonian attitude that seeks an ideal of justice derived from commodity production itself. The chapter traces the evolution of economic forms from the Asiatic mode of production (an historical dead end, with no money economy and exploitation through open corvée labour) through Greek slave society (where trade was marginal and the ruling class despised moneymaking) to Rome. Roman “capitalism” is dismissed as a misnomer; its large-scale slavery was incompatible with modern capitalism, its proletariat was a parasitical mob, and its economy collapsed when the supply of slaves from conquest dried up, leading to the conversion of slaves into serfs and the prefiguring of feudalism.
Under feudalism, the chapter notes, moneymaking was actively despised, with the Catholic Church prohibiting usury as a mortal sin. This demonstrates that the moneymaking economy is not ancient but developed from the 17th century, becoming dominant only with the Industrial Revolution. Capitalism establishes equivalence in exchange, but its historical genesis was through merchant’s profit, plunder, piracy, and colonial conquest. The “discovery” of America drove capitalist development through the genocide of indigenous peoples, a process Marx described as primitive accumulation: “capital comes dripping from head to foot, from every pore, with blood and dirt.” Despite this horror, the chapter insists that class oppression has developed the productive forces, laying the basis for socialism through the expropriation of the expropriators.
The chapter’s most pointed polemic is reserved for Dieterich’s Socialism of the 21st Century. He is accused of opposing expropriation and advocating a “mixed economy” with state, private, and social property, a project denounced as reformist and social democratic, effectively identical to capitalism. The text argues that as long as landlords, bankers, and capitalists own the means of production, all key decisions remain subordinated to the rich; a government cannot plan what it does not control, and cannot control what it does not own. Dieterich’s claim that capitalists invest to “cover a social need” is dismissed as nonsense; capitalists invest only for profit from unpaid labour. The chapter concludes that Dieterich abandons Marxism for pre-Marxian utopian socialism, offering no programme for overthrowing capitalism and postponing socialism indefinitely. In contrast, the Russian Revolution is held up as the model, where nationalisation of land, banks, and industry was the fundamental premise for advancing toward a classless society.