Let Them Eat Credit Cards

Who is responsible for the housing bubble? In the National Post Terence Corcoran manfully tries to pin the blame on the Clinton adminstration.

I’m not fan of Bill Clinton, but Corcoran could have noted that the Bush White House has followed in the same path (taking great pride in the rise of home ownership as a sign of a economic health, even though it was fueled by unsustainable lending). But really the key role in the whole fiasco was played by Alan Greenspan, that great hero of capitalism and Wall Street.

Basically, U.S. policy makers like Greenspan have used cheap and easy-to-access credit as a substitute for social policy — the idea being that America’s stingy welfare state and low level of economic mobility can be justified by the fact that it’s easier for the working poor to buy houses, albeit on mortgages that they’ll never be able to pay off.

That’s why the current crisis reflects very badly on capitalism and neo-liberalism. What united Clinton, Bush and Greenspan was a commitment to an economic order that said of the working poor, “let them eat credit cards and mortgages.” Now we see the consequences.

It would have been much better to have had social democratic policies (especially in education and health care) that could have alleviated poverty rather than put the poor into a debt trap.

Corcoran’s defence of capitalism today reminds me of my Marxists friends who said that communism hasn’t been discredited — that it was only badly implemented by Stalin. In fact, actually existing communism wasn’t very pretty, and neither is actually existing capitalism.

15 thoughts on “Let Them Eat Credit Cards

  1. I agree with you Jeet: the easy credit of the last ten years has hidden the very real class differences that still exist in the U.S. (I hate using the word class, but what can you do?). I think you overestimate the degree to which capitalism as a philosophy is at fault- what we’re talking about is a turning of dials this way or that, and turning the a couple of dials a small degree (enhancing regulatory oversight or market transparency) would have made all the difference here. A recession (if it comes) would still be the first major downturn in a very long time. The American economy has been stronger than almost any in the world for a remarkably long time. So to gloat that such a downturn indicates a total failure of capitalism takes imagination. Suffice it to say, the Valdez was probably a pretty good boat, if it hadn’t been piloted by a drunk. Can you name any economic regime which has proven itself immune to downturns?
    What I’m getting at is that strong class differences may still exist in a society with a relatively strong economy for most. Having better socialized health care or whatever may be a good idea- but it has nothing to do with the current economic problems. If you see it otherwise, I’d have to venture that you’re more of an ideological hardass than those you’re criticizing.

  2. As an aside, can you imagine Clinton’s proposal to solve this problem with Greenspand and Rubin?? What the hell is she smoking? Is that under the, “They’ve got to get it right some time” file?

  3. It is just me, or are you lumping together home foreclosures and the Gulag in that last paragraph? Why not throw “actually existing Nazism” into the mix and really give it to those dreadful free-marketers?

  4. Well, it certainly wasn’t my intention to compare home foreclosures with the gulag. As the context of the discussion makes clear I wasn’t talking about communism and capitalism as political systems (which wouldn’t make sense in any case since capitalism is compatible with many different types of regimes). Rather, I talked about communism and capitalism as economic systems that exist at variance with the theory. My point was simply that just as there is a gap between communism in theory (Marx) and communism in practice (Stalin’s centralized state) so you could say there is a difference between capitalism in theory (Hayek for example) and capitalism in practice (contemporary America, but also every actually existing capitalist state).

    There are a bunch of reasons why it’s a red herring (or perhaps a black herring) to talk about “actually existing Nazism”. First of all, as a political system, Nazism was equally ugly in both theory and practice, so you can’t chastise it for not living up to its high ideals. Hitler promised to do terrible things and by God he did them.

    More to the point, it’s wrong to conflate capitalism with liberal democracy. All sorts of different states can be capitalist (that is to say, can have a market economy and private property). Contemporary America is capitalist but so was the American South during the period of slavery, so was the British Raj, so was South Africa under apartheid (and so is South Africa now as a multi-racial democracy). All sorts of authoritarian governments (Singapore comes to mind) are capitalist. In fact, as the People’s Republic of China has proved since the 1980s, you can even have a nominally communist state that is actually capitalist.

    And what is often conveniently forgotten is that the fascist nations and Nazi Germany were also capitalist (in the very basic sense of having markets and private property). This is a fact that’s often ignored so it bears repeating: Hitler came to power with the support of the capitalist class (who wanted to use him as a bulwark against communism and working class militancy). This capitalist class continued to support Hitler until the bitter end in 1945. This is not to say that Hitler himself was a capitalist; he wasn’t; he had other concerns (nationalism, anti-Semitism, militarism). But his regime was certainly compatible with “actually existing capitalism”.

  5. Well, I don’t want to derail, so I’ll confine myself to the observation that if Nazi-style central planning, price controls, profit and dividend limits, and protectionism aren’t inherently incompatible with the concept of “capitalism”, then the term can mean pretty well anything you like.

  6. Colby,

    All the policies you mentioned except for central planning were and are perfectly compatible with capitalism, especially if it’s on a war footing or in wartime (i.e., in the long history of capitalism, protectionism is the norm, free trade the exception; price controls were practiced in the United States during WWII and again in the early 1970s). Unless you’re willing to say that the United States and England also stopped being capitalist countries during the 1930s and 1940s (when they practiced protectionism, price control, etc.), I think it’s fair to say that the umbrella term capitalism applies. (In fact, for most of American history, the US has practiced protectionism: free trade as a concept only really took off after WWII, and even then was very inconsistently applied. The same is true of England, which introduced a type of free trade with the repeal of the corn laws in 1846-1849 but also kept many imperial tariffs).

    As for central planning, my understanding from the most recent historical literature on this matter is that it was more an aspiration (or rhetorical goal) of Nazism than a reality. Business leaders went on running things as before under Nazi Germany. The only major change they saw, one that didn’t displease them, was the liquidation of independent trade unions.

    So the fact remains that Nazi Germany kept the key elements of capitalism: private property and a market economy.

    There was a sort of “redistribution of wealth” under Nazism but that largely meant stealing property from German-Jewish owners and giving it to “Aryan” businessmen. I think that falls under the rubric of socialism for the rich. In some ways, you could think of Nazi Germany as a racialized welfare state: but the fact is that (despite popular myths) the wealth of the German Jews wasn’t that great and was quickly redistributed.

    If Nazism did threaten capitalist social relations, you would have seen a flight of investment out of the country (as happened say in Chile in the early 1970s). In fact the opposite happened, American and English firms started to strengthen their investments in Germany after 1933.

    If you look back at what people wrote in the 1920s and 1930s, you’ll see that many ardent free marketers (notably Ludwig von Mises and H.L. Mencken) had some kind words for fascism, seeing it as a bulwark against working class militancy. (See this posting: https://sanseverything.wordpress.com/2007/12/15/mises-and-the-merit-of-fascism/).

    This is what Mises wrote in 1927: “It cannot be denied that Fascism and similar movements aiming at the establishment of dictatorships are full of the best intentions and that their intervention has, for the moment, saved European civilization. The merit that Fascism has thereby won for itself will live on eternally in history.” (Note that he talks about not just fascism but also “similar movements”; as an Austrian, Mises would have been aware of the German-speaking “similar” movement that was then on the rise. This is especially shocking because Mises was Jewish).

    Along with Hayek, Mises is the most important capitalist thinker of the 20th century. His qualified praise of the “merit of fascism” speaks volume.

    For me, the decisive fact in thinking about this is that capitalists as a class never once revolted against any aspect of Nazi rule. This is quite different from the behavior of other groups like labour unions (in opposition from before the Nazis came to power), the Catholic Church (compromised but willing to speak out against eugenics), and the military and the aristocracy (even more deeply compromised but also the home of the plot to kill Hitler).

  7. I think you’re awfully hard on Mises for the 1927 comment: he can be convicted of thinking that democracy was on the way out (which seems to have been a ubiquitous belief amongst intellectuals of the day), but the Nazi movement you describe as “being on the rise” at that time was still just one of countless völkisch/militarist sects, its speakers were banned in most of Germany, it was by no means certain that the economic radicals would lose the leadership struggle with Hitler, and in the ensuing Reichstag elections the party got less than 3% of the national vote. Mises would have almost certainly have heard of Hitler, but the most likely reason would be the early success of Mein Kampf.

  8. I was surprised to see Hayek as an example of someone whose theory does not speak of U.S.-style credit crises. If you look up the section on Austrian Business Cycle Theory on his wikipedia page (http://en.wikipedia.org/wiki/Friedrich_Hayek#The_business_cycle) you will see that he had quite a bit to say about this type of problem. Ironically, your post cites one of the primary causes he also identifies–artificiallly low interest rates.

    I was also surprised that you would write the following:

    “If you look back at what people wrote in the 1920s and 1930s, you’ll see that many ardent free marketers (notably Ludwig von Mises and H.L. Mencken) had some kind words for fascism, seeing it as a bulwark against working class militancy. . . .

    Along with Hayek, Mises is the most important capitalist thinker of the 20th century. His qualified praise of the ‘merit of fascism’ speaks volume.”

    Are you really trying to draw some sort of association between free-market economics and fascism? If so, the consistent application of the standard you apply would mean we should no longer support darwinism, say, because it has historically been associated with social darwinism etc. Alternatively, if we grant that the existence of fascist darwinians is not grounds to reject darwinism, the existence of fascist free marketers is not by itself grounds to reject free-market economics.

    Finally, I think you exaggerate the significance of the Mises passage. As it happens I recently gave lectures on Aristotle and Marx, and tried to get students to look beyond the pro-salvery and anti-semetic passages in their respective works, and instead judge their central ideas on their merits. Whatever the strengths or weaknesses of Mises’s economics, they deserve to be judged by the same standard.

  9. It wasn’t my intention to say that Hayek doesn’t speak of U.S.-style credit crises; I agree that his analysis has much to tell us about how these things happen (although one could question his suggested cures, largely on the basis of whether they’d be political possible or not).

    The only reason I brought Hayek into the discussion was as identification, to indicate the stature of Mises: “Along with Hayek, Mises is the most important capitalist thinker of the 20th century.”

    Mises statement about the “merit” of fascism can be qualified and contextualized in all sorts of ways (as I did in my original posting). But still, it stands as part of the historical record.

    Nor was it my argument that there is “some sort of association between free-market economics and fascism”. Rather, I was making a more narrow point: Colby Cosh argued that Nazi Germany was not a capitalist state. This is a very common point of view, based on the assumption that capitalism is somehow related to democratic values. Against this, I wanted to make the simple point that you can have capitalist economics in a very un-democratic polity, that in point of fact “many” (not all) free market advocates had a fairly benign view of fascism. (And on a more mundane level, Hitler was strongly supported by the capitalist class in Germany during his rise to power and dictatorship).

    So, my point is a simple one: one shouldn’t equate capitalism (or if you prefer “free market economics”) with democracy.

    Since I did bring Hayek into it, I should make clear that as far as I know, he never made any statements celebrating the “merit” of fascism.

    On the other hand, it is fair to say that Hayek was a profoundly anti-democratic thinker. He wanted as much political power as possible to reside in the courts (to be filled with judges trained to appreciate free market economics). He also argued that in democratic societies a great deal of power should reside in an elite chamber that only those 45 or older could vote for (See Law, Legislation and Liberty, Vol. III, pages 112-114). And as he once told a Chilean newspaper in 1981 (i.e., when Pinochet was in power) “Personally I prefer a liberal dictator to democratic government lacking liberalism.”

    This is perhaps the crucial issues dividing classical liberals from social democrats: what’s more important, democracy or political/economic liberty? Hayek and Mises were utterly consistent with the tradition of classical liberalism in their distrust of democracy, valuing it less highly that political/economic liberty. But social democrats believe that unless you have democracy, political/economic liberty is meaningless. There really hasn’t been any such thing in the modern world as a “liberal dictator.”

  10. Hi Jeet. Thanks for your reply. I think your memory might be playing tricks on you. You write that “the only reason I brought Hayek into the discussion was as identification, to indicate the stature of Mises.”

    However, I was responding to the following (earlier) mention of Hayek:

    “My point was simply that that just as there is a gap between communism in theory (Marx) and communism in practice (Stalin’s centralized state) so you could say there is a difference between capitalism in theory (Hayek for example) and capitalism in practice (contemporary America, but also every actually existing capitalist state).”

    If we are now agreed that he did in fact write about this type of crisis, then the paranthetical remark above is misleading, which is the point I was trying to make.

    Re Mises’s and his importance, I would have to say he is in fact not that important. The approach to economics he and Hayek championed has become fairly marginal in most modern economic departments, which now operates on a much more “scientific” self-understanding, one that sees economists employ complex mathematical models (something Austrians like Hayek and Mises always eschewed). And while Hayek still attracts signifcant attention from academics today, the same cannot really be said of Mises. He has become something of a marginal figure, not much referred to outside the fringes of the U.S. libertarian movement (Mises fate is something Brian Doherty talks about in his recent history of libertarianism, Radicals for Capitalism).

    I am still left scratching my head at the point you are trying to make re free market economics and fascism. You say you are not trying to establish any connection, but they go on to say that “many (not all) free market advocates had a fairly benign view of fascism . . . Hayek and Mises were utterly consistent with the tradition of classical liberalism in their distrust of democracy.” This linkage continues to bother me, but I do not want to write an overly long comment, so I will explain why in a seperate post.

  11. Sorry, I forgot about the earlier Hayek comment. In that comment I was trying to explain my use of the term “actually existing capitalism” (modeled on a standard term used to described the Marxist-Leninists regimes of Eastern Europe as “actually existing socialism”). As I said, the phrase is used to point out the difference between the ideological claims of a polity (the Soviet Union’s claim to be socialist, contemporary America’s claim to having a free market system) and its practical working.

    The point of the phrase is not to criticize the theoretical model but to highlight out how different that is from the practice. Of course, Hayek as an intellectual purist was aware (acutely so) of all the difference between “actually existing capitalism” and an ideal classical liberal order. Marx, had he miraculously lived into the middle of the 20th century, would equally have been aware of the great discrepancy between “actually existing socialism” and his own ideas.

    As should be clear, this critique is not aimed at theorists like Marx or Hayek but rather at their epigones who use their slogans while betraying the real essence of their ideas. Alan Greenspan, for example, claims to be a believer in the free market; yet his actual behavior (which Hayek, for one, would have criticized) belies that claim. So I think the phrase “actually existing capitalism” is still useful, all the more so because Hayek was critical of the very practices that I decried.

    As for the importance of Mises, I simply have to disagree. His epistemological critique of central planning was the greatest intellectual challenge ever made to socialism; it greatly influenced Hayek, for one; and it stands as the key justification for a market economy.

    To clarify my comments about classical liberalism and fascism: as mentioned before I’m not saying there is a direct connection between classical liberalism and fascism. Rather, I’m saying that classical liberalism has an inherent distrust of democracy (you can see this in any of the great liberal thinkers of the 18th and 19th century). This distrust led some classical liberals (Mises and Mencken) to take a more benign view of fascism than they should have; later it led Hayek to take a more benign view of the Pinochet regime than he should have. So it’s not a matter of classical liberalism leading to fascism; rather certain traits within classical liberalism make its adherents susceptible to anti-democratic regimes, especially if said regimes promise to protect private property and stem working class militancy. It’s an indirect affinity rather than a direct connection. To talk about an “indirect affinity” helps explain why Mises and Mencken wrote as they did and also why other classical liberals were able to resist the siren call of fascism.

  12. Hi again. So here is what is bugging me about your remarks so far. It is not that you are bashing Hayek and Mises–bash away at their economics all you want, I say. There’s lots to criticize in either thinker. It is rather that you seem to be criticizing them using an unfair standard. Let me try to bring it out in three different ways.

    1. Supose someone fished out pro-USSR passages from the writings of Sydney and Beatrice Webb, Lillian Hellman and Jean-Paul Sartre, and remarked that such passages “speak volumes.” Wouldn’t it be fair to ask that person to acknowledge that there was no essential connection between being a leftist and an apologist for Stalinism? Surely you would want to see them acknowledge that point rather than be silent about it.

    Now imagine that the person who cited those passages went on to remark that “many (not all) leftists had a benign view of Stalinism . . . This is perhaps the crucial issues dividing classical socialists from capitalist democrats: what’s more important, democracy or economic equality? Beatrice and Sydney Webb etc. were utterly consistent with the tradition of classical socialism in their defence of authoritarianism.”

    Surely you can see the unfairness of the above passage. It falsely implies that the more someone is committed to economic equality, then the more they will be opposed to democracy and in favour of authoritarianism. But that is no more true than saying that the more someone is in favour of liberty, then the more they will be opposed to democracy. There have been authoritarian and democratic capitalists and there have been authoritarian and democractic socialists. Yet you seem to keep wanting to imply that authors in favour of private property have been especially susceptible to the authoritarian temptation.

    At least, you sometimes seem to want to say that. At other times, you admit, even stress, that capitalism is compatible with more than one type of political regime. That’s a different idea, one with which I would agree (although I would not say that Nazi Germany or the Allied countries during World War II are the best examples: a country can be more or less capitalistic and wartime usually make them less so). But I would point out that the same is true of socialism. It has also been combined with different political systems, including authoritarianism. So the compatibility of capitalism with authoritarian government is not a fact about capitalism, it’s a fact about economic systems more broadly.

    I point this out because you seem to want to draw some essential link between economic equality and democracry, in your remark about social democrats. But a better contast group to classical liberals like Hayek and Mises would be the broader category of socialists, which has of course historically included both friends and foes of democracy.

    2. Can I ask what your reaction is to the anti-Semetic passages in Marx’s essay “The Jewish Question,” as well as the attack Marx issues in the same essay on freedom of religion and the doctrine of human rights? Would you stress the centrality of these passages when judging Marx’s work the same way you stress the centraily of Mises pro-fascism passage and Hayek’s misguided senate plan? Why or why not? Would you also write off Marx an anti-democratic thinker? Why or why not?

    3. This is less important, but your reading of Hakek is unfair. It is inaccurate to call him a “profoundly anti-democratic” thinker, when his books put forward proposals for how democratic legislatures should be designed. There is that dumb passage you refer to regarding an older people’s senate, but note that it is at least elected (by that standard, Hayek’s plan is more democratic than Canada’s current senate). Again, I feel you are adopting a standard you would not employ with a left-wing author, that of defining someone by their worst passages rather than their best ones.

    That’s not a good way to read any cannonical author, whether left wing or right wing. Rather than damn them for their inevitable lapses, we should judge them by the quality of their most central ideas. It is this type of reading I have most been trying to defend here, rather than any particular idea of Hayek’s (let alone von Mises).

  13. I knew what you were trying to get at with the actually existing capitalism line. But it is not quite right to put it the way you do. There is certainly a gap between what Hayek calls for and actual capitalist economies, but it is not quite the same gap that separates Marx and Stalin.

    In the case of Hayek, there are passages in his work addressing what to do in case of a credit crises, and what to do about other aspects of actually existing capitalism. As it happens I disagree with many of the proposals Hayek makes, but his precriptions are nonetheless there. So Hayek’s gap is one between theory and reality, as you say.

    A similar sort of gap seperated Marx’s theory from actually existing socialism. However, in the case of Marx, it is a kind of double gap, in that Marx contains no detailed discussion of what to do in case of Stalinism and other aspects of actual socialism, for the obvious reason that socialism did not exist until long after he died.

    Your comparing the relationship between Hayek and credit crises to that between Marx and Stalin is thus not quite a perfect parallel, in that Hayek lived in actually existing capitalist economies and put forward theories addresing their problems, something Marx could not be expected to do as he never lived in a socialist country.

    Re Mises, it was Hayek who popularized the epistemological critique of central planning, won the Nobel prize, and had the greater influence. Mises by contrast was unable to get a normal university job in the U.S. (he taught at NYU but his salary was paid by the right-wing Volker Fund). As Hayek said at a 1956 tribute to Mises, “You have seen your pupils reap some of the rewards which were due to you but which envy and prejudice have long withheld.” Whether envy was the reason or not, Mises never acheived the same level of prominence as Hayek, and the gap between their influence has only continued to grow as time has gone on.

    Re classical liberalism distrusting democracy, I do not think you have come close to establishing such a sweeping claim. It will take a lot more than a few passages in Mises and Mencken (who I am not sure is really a classical liberal).

    I would be interesting to know if you agree or disagree with the following statement: “certain traits within socialism make its adherents susceptible to anti-democratic regimes, especially if said regimes promise to protect workers and stem capitalist activity.” By your standards, this would seem even more true than the “indirect tendency” linking classical liberalism and anti-democracy.

    Finally, I would be interested to know which 18th and 19th century thinkers live up your standard regarding democracy.

  14. I should say that I’m greatful for such an indepth response and have learned much from it.

    First of all, I agree that the parallels I drew between Marx/Hayek are imperfect, for the reasons you indicated (that Marx preceded actually existing socialism whereas Hayek lived while actually existing capitalism was a fully formed system; and the gaps between theory and practice in the two cases are somewhat different). It might have been better if I had used Adam Smith as an example. Still, I stand by the larger claim I’m making, about the discrepancy between theory and practice; to me there does seem to be a huge gulf between the ideal liberal society as imagined by Hayek and how any existing capitalist economy works. The fact that Hayek was aware of this discrepancy doesn’t make it any less gaping.

    Part of the problem we’re constantly having is the conflation of a social/political system (capitalism) with an intellectual tradition (classical liberalism). I might be partially responsible for this confusion through faulty writing, although I’ve been trying to make myself clear (I’ve been trying to avoid the term “free market economics” because it muddies the water). Capitalism describes a political/social system that rests on markets and private property; all sorts of polities have been capitalist (including social democratic nations, fascist nations, and contemporary mixed economies like the United States). Classical liberalism is an intellectual tradition that defends one variation of capitalism. The genealogy of classical liberalism is fairly clear in the writings of Hayek (the old Whig tradition of Adam Smith, J.S. Mill, etc. leading up to Mises and Hayek).

    Because I think of social democrats as capitalists and also believe that not all capitalist are necessarily democrats, I don’t think it makes sense to say “This is perhaps the crucial issues dividing classical socialists from capitalist democrats: what’s more important, democracy or economic equality?” (I should also add that classical socialism includes a great diversity of thought on the issue of democracy whereas classical liberalism is fairly uniform in its distrust of democracy).

    I agree with you There have been authoritarian and democratic capitalists and there have been authoritarian and democratic socialists.” Just to clear up the issue of double standards, I’m happy to condemn the Stalinism of Lillian Hellman and Satre (and the fellow-traveling of the Webbs). Anti-democratic socialism is no prettier than anti-democratic capitalism.

    In fact, I thought I went out of my way to indicate that not all capitalist think like Mises by saying that capitalism is compatible with many different types of polities (including social democracy). It wasn’t my intention to say that all capitalists are anti-democratic; rather that there is a strand of pro-capitalist thought (classical liberalism) that is distrustful of democracy.

    This perhaps is the crucial question: you think the statement “that classical liberalism has an inherent distrust of democracy” is too sweeping. To me it’s almost a truism. I think the best example of this is J.S. Mill, who of all the classical liberal thinkers was the one most sympathetic to democracy (as witness his support for giving women the vote). Yet even Mill supported imperialism (we have to uplift those natives before they can govern themselves), thought that the wealthy should have more votes than the poor, wanted an intelligence test for the franchise, and wanted to disenfranchise those who received government assistance. All these policies are in keeping with classical liberalism belief that property and the rule of law are more important than democracy. You still see this type of argument being made all the time.

    As for Hayek being anti-democratic: there is a stark difference between the old persons Senate he wanted and the Canadian senate: Hayek’s senate would have had a great deal of actual power, whereas the Canadian Senate’s power is highly circumscribed. Hayek’s ideas about the senate, his support of Pinochet, his comments about preferring “a liberal dictator to democratic government lacking liberalism”, and his desire to have the courts circumscribe economic policy making: all these add up to a portrait of someone who can fairly be described as anti-democratic.

    As for who supported democracy in the 18th and 19th century, I think the tradition of working class radicalism (best exemplified by the Chartist movement) was much more democratic than classical liberalism: they wanted a much wider franchise than anything the classical liberals could tolerate, more elections, and more direct democracy.

    As for the best way to judge old thinkers, I think we have to look at them whole, warts and all, both for their achievements and lapses. I don’t want my comments here to be taken to mean that I think Mises and Hayek are worthless. Far from it: they are the most far-reaching and serious critics socialism has ever had. In fact, I probably have a higher opinion of Mises than A.M. Lamey does (most of Hayek’s best insights came from Mises and that Mises is a deeper thinker than the technical experts who current rule economics). So despite the fact that Mises and Hayek had some ugly political ideas, we shouldn’t condemn them out of hand.

    The same is true of everyone else mentioned: the Webbs, Hellman, Sartre. Sartre for example was a great writer, despite the obtuseness of his Stalinist (and later Maoist) politics. So, yes, I agree we have to be careful not to junk a thinker just because of some lapse.

    As for Marx: I think he was right to condemn the idea of human rights but he should be judged harshly for his comments on the Jews and liberty of religion. In both cases, his errors represent a serious lapse in this thinking that have bedeviled the Marxist tradition: it took Marxists a long time to come to terms with the persistence of ethnic identities and religions. Marx’s writings on the Jews grew out of an enlightenment celebration of universalism and disdain for particularistic identity. It made him blind to the cultural power of religion and nationalism, something that Marxists have only slowly come to grapple with.

    As with Mises and Hayek, so with Marx: we can’t ignore the lapses, and in fact have to focus on them as clues to how to move forward. The errors of a genius can be a portal of discovery.

  15. Thanks for your thoughtful reply. I’m enjoying this, and learning from it also, so I want to follow up on your comments one last time. I have write a lecture today though, so it may take me a little while to do so.

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