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If we compare the economic thought of Romer and Nordhaus, the two men who shared the 2018 Noble Prize for Economics, and that of Karl Marx, in terms of their conceptions of man, nature and technology, we are better able to understand the differences between capitalist and communist economic theory.

One of the factors determining the decision to award the Noble Prize to Romer and Nordhaus was that they had stepped outside the box of traditional capitalist economic theory to embrace two new “endogenous” realms. In the case of Romer, it was the role ideas, technology, and science play in shaping macroeconomic policies; in the case of Nordhaus, it was the effect of global warming on macroeconomic policies. Both understand that Capitalism has entered a new “information” age and explore how capitalist competition shaped the evolution of that age.

Even though each has undertaken economic analysis from a new and unique perspective, what binds them together is their uncritical, reverential view of capitalist competition as the motive force of history. Both understand that it has ushered in a new phase of capitalism dominated by information and ideas rather than material things. As capitalist economists they employ traditional theories of value, prices, supply and demand and distribution. They abide by the principles of capitalist resource allocation, believing it to be both real and rational. In their hearts they believe that competition gives rise to all things good and beautiful.

Whether they are conscious of the fact or not, their reverential view of capitalism rests upon a particular concept of human nature first expounded by the great liberal philosophers, Hobbs and Locke, and in the economic realm by Adam Smith. This concept of human nature is viewed as timeless and I’m changing and defined using adjectives: self-centered, competitive, aggressive and rational. Accordingly, individuals are seen to compete with other equal individuals for scarce resources. As each man pursues his own interests, and because each one can kill another, humans are engaged in a constant war of “the all against the all”. Under these circumstances, as Hobbes puts it, “The life of man is solitary, poor, nasty, brutish and short.” However, this competitive creature is also rational so that driven by the fear of death, he understands that it is in his interests to enter into a social contract with others. They agree to elect one from amongst them to rule over them, not to eliminate but merely to limit their aggressive and dangerous natures. This ruler does not rule because God granted him power, nor because he is stronger or better; after all, “all men are created equal.” Rather, he rules because other rational equals have chosen him to do so. If he cannot do his job then, as is stated in the Declaration of Independence, it is the right of the people to remove him. At the core of this theory, both in its political and economic form, is the belief that competition is written into human nature.

Romer begins with the principle of scarcity and goes on to argue that scarcity applies only to the material world, but not to ideas. “It is a principle of economics that capitalist companies face the problem of diminishing returns which is both the result of competition and physical resources.” “The capitalist economy is “characterized by diminishing returns since each additional ton of copper or barrel of oil is harder to find than the previous one and is…scarcer and more expensive to extract from the earth.” “However, diminish returns are a result of the scarcity of physical objects and not ideas. What makes Romer’s work unique is that he places the human mind with its storehouse of human knowledge, at the epicenter of capitalist economics. Thus, he divides the new “information” age from what has come before, and then divided the economy into a “material” sector and an “ideas sector He thus separates mind from matter, ideas from activity, giving supremacy to mind and thought.

And how does this idealist define ideas? “Quite simply, ideas are the recipes we use to rearrange things to create more value and wealth. For example, we have ideas about ways to make steel by combining iron with carbon and a few other elements” Having separated mind from matter, he then gives us a truly capitalist definition of Ideas: they are but useful recipes for making things that make profits. Ideas are reduced to commodities. Like other commodities they are driven by markets, competition and price. Romer suggests allocating “science and engineering human capital” to the production of these ideas, in order to “stimulate economic growth.” Accordingly, the primary purposes of science is not to unravel the mysteries of the universe but to serve capitalism. (all quotes from https://www.strategy-business.com/article/9472.)

Nordhaus’ work deals with the relationship between economic growth and natural resources as well as on the economics of climate change and ways to cope with it. He notes that since 1930 there has been “a decrease in the carbon intensity of the economy” as the economy has shifted from material production to the production of ideas, information, etc. Like Romer, he understands that capitalism has undergone a phase transition such that “the composition of the economy has changed from energy to computers and finance.” (https://www.youtube.com/watch?v=h1RkSuAs03Q&t=1171s)

Thus, both men, believe deeply in the perfect system of capitalist competition and regard it as essential and beautiful. Likewise, both men understand that capitalist competition has given rise to a new phase dominated information and ideas rather than production.

Marx spent a great deal of time studying the classical economists Smith and Ricardo. In fact, they were one of the primary influences in shaping his theory, the other two being socialist ideas and the Hegelian dialectic. Thus, Marx adopted the labor theory of value from the classical Capitalist economists, worked out its logical implications and then combined it with the theory of surplus value and concluded that labor is the source of all wealth, and private property the origin of its exploitation.

Marx consciously rejected the view of human nature underlying Capitalist economic and political theory. Whereas capitalist thinkers saw human beings as essentially solitary, self-centered and competitive, Marx sees us as essentially social, communal creatures proclaiming that man is “by nature a social being.” If we are competitive, it is the result of Capitalist relations of production which pit workers against one another for survival.

However, his view of “human nature” extends far beyond the essentialist pronouncement that man is a social being. He does not employ adjectives to define man as the essentialist capitalist economists and political theorists did, but rather nouns: Man has “needs” and corresponding “powers” which help him fulfill those needs. The fulfillment of those needs resides outside himself, in his relations to nature and to other human beings. Thus, humans must “appropriate” nature, literally take it and bring it into themselves. In the process of doing so and over time, both human needs and powers expand and evolve, as do the means in and through which he appropriates nature (what I refer to as “technology”, but which Marxists generally refer to as the “means and forces of production”).

There is no separation in Marx’s thought between human nature and nature. “Thus at every step we are reminded that we by no means rule over nature like a conqueror over a foreign people, like someone standing outside nature—but that we, with flesh, blood and brain, belong to nature, and exist in its midst, and that all our mastery of it consists in the fact that we have the advantage over all other creatures of being able to learn its laws and apply them correctly. (John Bellamy Foster, Marx’s Ecology: Materialism and Nature (New York: Monthly Review Press, 2000), 253). Man, nature and the forces of production, mind and matter, material and intellectual production exist in unity and as a result any separation naturally produces a distortion of one’s perception.

Thus, a natural part of this evolution is the development of the “forces of production”. These include human THOUGHT (also a power) as the tools, knowledge and techniques humans develop. Ever increasingly over the course of human history and as the hallmark of the capitalist mode of production, machines have emerged as the ultimate expression of human powers. The forces of production encompass machines of ever greater efficiency and ever-expanding capabilities. In the new Information Age, these machines are literally in our hands: no longer merely forces of production, they are our creations and our partners; they work for us, serve us, give us pleasure and provide us with entertainment and enjoyment as well as expand both our productive and intellectual capacities. They also monitor and control us, both our actions and our thoughts. They are the tools of ideological indoctrination. The product of ideas they become generators of ideas; they think for us and control our thoughts. They are both revolutionary and counterrevolutionary. Of course, Marx could not have envisioned our technological society from his point in time. However, if he visited the latest stage of capitalism, he would be amazed but not surprised. Certainly, he would agree with Romer and Nordhaus that Capitalism has entered a new phase in which knowledge, information and ideas were front and center.

As regards Marx’s view of man’s relationship to nature, it was more to him that simply the source of the satisfaction of man’s needs. Marx wrote: “Nature is man’s inorganic body nature in so far as it is not the human body. Man lives from nature . . . and he must maintain a continuing dialogue with it if he is not to die. To say that man’s physical and mental life is linked to nature simply means that nature is linked to itself, for man is a part of nature.” (Karl Marx, Economic and Philosophical Manuscripts of 1844, in Marx and Engels Collected Works , vol. 3 (New York: International Publishers, 1975), 276.

Even in his own time, he could see the destructive effects of capitalist production on nature. “Light, air, etc.—the simplest animal cleanliness—ceases to be a need for man. Dirt—this pollution and putrefaction of man… Universal unnatural neglect, putrefied nature, becomes an element of life for him.” Karl Marx, Capital, vol. 1 (New York: Vintage Books, 1977. This is the natural course of things when profits prevail over life. “Capitalist production, therefore, only develops the technique and the degree of combination of the social process of production by simultaneously undermining the original sources of all wealth—the soil and the worker. Karl Marx, Capital, vol. 3 (London: Penguin, 1991), 195.

“The use values . . . of commodities, are combinations of two elements—matter and labor. If we take away the useful labor expended upon them, a material substratum is always left, which is furnished by Nature without the help of man. . .. We see, then, that labor is not the only source of material wealth, of use values produced by labor. Marx, Capital, vol. 1, 35 (New York: International Publishers, 1996), 53.

We can see that what separates Romer and Nordhaus, is the former’s reverence for Capitalism, and for competition as the source of all things good, and Marx’s perspective which sees Capitalism and competition as both necessary and destructive. He understands the “development of productive forces is fueled by competition” and that it “is an absolutely necessary practical premise [of communism], because without it privation, want is merely made general, and with want the struggle for necessities would begin again, and all the old filthy business would necessarily be restored.” (Marx and Engels, The German Ideology, 49.) He also understands that this same competition, embraced in a system of private ownership directed towards the accumulation of ever more profits, distorts both nature and human nature.

Thus, while Nordhaus’s solution to climate change, which is to impose a carbon tax, Marx would have answered that the solution to the pollution of the environment would be the end of a society which placed profits before life itself.

While our Nobel Prize Laureates see capitalist competition as the timeless source of all progress, as natural and beautiful in and of itself, as the source of all things good, Marx does not. Marx dedicated his life to exposing the ways in which capitalism harmed humans and nature. For him, it is only an historically specific reflection of a particular mode of production which like all things, has come into being and will pass out of being. Marx would have seen the phase transition which capitalism has unquestionably undergone, as laying the groundwork for the next transition from capitalism to communism (or socialism as one prefers). He would never have accepted Romer’s abstraction of “ideas” from the material conditions of life. He would have been alarmed but not surprised by the capitalist pollution of the environment but would never have proposed a solution to it within the context of capitalism itself as Nordhaus does with his carbon tax.

Marx never won a Nobel Prize, but his theories shaped the course of nations, the actions of humans. They have been a source of inspiration for the workers of the world, for the downtrodden and oppressed.

Mary Metzger is a 72 year old retired teacher who has lived in Moscow for the past ten years. She studied Women’s Studies under Barbara Eherenreich and Deidre English at S.U.N.Y. Old Westerbury. She did her graduate work at New York University under Bertell Ollman where she studied Marx, Hegel and the Dialectic. She went on to teach at Kean University, Rutgers University, N.Y.U., and most recenly, at The Moscow Institute of Physics and Technology where she taught the Philosophy of Science. Her particular area of interest is the dialectic of nature, and she is currently working on a history of the dialectic. She is the mother of three, the gradmother of five, and the great grandmother of 2.

2 Comments

  1. We need to understand that the exchanging of goods and services most likely was a part of our nature long before this Axial Age. Although there is no direct empirical evidence, anthropologists assume that Homo sapiens from the time that they were fashioning beads most likely were trading them within their communities. A recent example of this possibility is an assortment of such artifacts found in the Blombos Cave in South Africa. (It showed the possibility of near humans trading as early as 140,000 BCE) We also need to recognize that any solution to our ecological problems must recognize this part of our nature. Non market solutions that deny our being Homo economicus have in the past failed, with Marxist Soviet Communism being a prime example.

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  2. Mary Metzger says:

    Just because something once was does not mean it is now or will always be.

    For example, people have always c
    onsumed food. The kinds of food they ate and eat, the ways in which they appropriate and prepare it, and its effects upon their bodies are time and place specific and socially and materially determined. Our primitive ancestors ate raw meat, we consume McDonald’s on the one hand, and the rich consume gourmet meals at expensive restaurants. Some consume too much, others, in fact most of the world, too little.

    Resources need to be distributed, but by whom and how and most importantly, who profits from that distribution is socially and materially determined.

    Also, I have written part of a series, called Sheer Hypocricy, on the “destruction” of the Soviet Union in which I explore how American Banks, politicians, political advisers and presidents, spies and propagandists brought about that destruction. It was and is very difficult for communism or even a solitary communist to survive in a capitalist world.

    But thank you for commenting. I is good to know someone has read your work. I found your site and will return the effort by reading yours.

    With kind regards,

    Mary Metzger