Series of Very Abbreviated Versions of Classical Philosophical Works for Very Busy People.
Chapter 17: The Legal and Social System
The impotence of politics (not the importance of politics)
This chapter should be called “The Legal, Political and Social System”. Popper described it as “probably the most crucial point in our analysis as well as in our criticism of Marxism; it is Marx’s theory of the state and—paradoxical as it may sound to some—of the impotence of all politics.”
Section I describes the theory of the state.
Section II describes the “grim reality” of social conditions for the workers at the time that Marx was working in England (dates).
Section III contains Popper’s arguments on the need to use political power to control economic power (contra the Marxian doctrine of the impotence of politics).
Section IV (the central point) concerns the difference between historical prediction and rational social engineering.
Section V defends the importance of “formal freedom” against radical critics who claim that freedom under the rule of law is not real freedom as long as some people are poor.
Section VI notes how Marx and his followers failed to pay attention to the need to control political power because the abuse of power it is not supposed to be a problem under socialism.
Section VII is about the need to use impartial rules rather than discretionary orders from politicians and bureaucrats for fair and effective public administration.
Marx’s theory of the state is presented by combining the results chapters 15 and 16. The legal and political system—the system of legal institutions enforced by the state— is understood as one of the superstructures erected upon (and expressing) the actual productive forces of the economic system.
"‘Political power, properly so called,’ says the Manifesto, ‘is merely the organized power of one class for oppressing the other.’ A similar description is given by Lenin: ‘According to Marx, the state is an organ of class domination, an organ for the oppression of one class by another; its aim is the creation of an ‘order’ which legalizes and perpetuates this oppression ..’ The state, in brief, is just part of the machinery by which the ruling class carries on its struggle."
This view of the state and the political system is partly a (rational) institutional analysis and partly an (irrefutable) essentialist theory.
"It is institutional in so far as Marx tries to ascertain what practical functions legal institutions have in social life. But it is essentialist in so far as Marx neither inquires into the variety of ends which these institutions may possibly serve (or be made to serve), nor suggests what institutional reforms are necessary in order to make the state serve those ends which he himself might deem desirable. Instead of making his demands or proposals concerning the functions which he wants the state, the legal institutions or the government to perform, he asks, ‘What is the state?’; that is to say, he tries to discover the essential function of legal institutions. It has been shown before that such a typically essentialist question cannot be answered in a satisfactory way; yet this question, undoubtedly, is in keeping with Marx’s essentialist and metaphysical approach which interprets the field of ideas and norms as the appearance of an economic reality."
The most important (and dangerous) outcome of the Marxist analysis is that legal and political institutions can never be of primary importance. In Popper’s words “politics are impotent”. This is a rather strange, even an incomprehensible finding in view of the massive amount of political activity that has been undertaken by Marxists. It suggests that there must be something wrong with Marx’s ideas, or with the interpretation of Marx’s message by Marxists, or with Popper’s interpretation.
On the "strong" theory of the impotence of politics, such activity can never alter decisively the economic reality. On a weaker theory, there is a role for political activity to tip the balance when the contending forces in the class war are finely balanced.
Eitiher way, Popper considered that the Marxist theory of politics was fatally flawed because it did not warn Marxists or socialists to be alert to abuses of power (other than economic power) and the need for institutional checks and balances on all forms of power, even after the revolution ushered in the new utopian era of the classless society.
The political control of economic power
"What have we to say to Marx’s analysis? Are we to believe that politics, or the framework of legal institutions, are intrinsically impotent to remedy such a situation, and that only a complete social revolution, a complete change of the ‘social system’, can help? Or are we to believe the defenders of an unrestrained ‘capitalist’ system who emphasize (rightly, I think) the tremendous benefit to be derived from the mechanism of free markets, and who conclude from this that a truly free labour market would be of the greatest benefit to all concerned?"
Popper believed that the suffering of the workers described by Marx was caused by the abuse of economic power that enabled the employers to exploit the poor by making demands that they could not refuse. Hence he argued that the principle of non-intervention (of an unrestrained economic system), has to be given up.
"If we wish freedom to be safeguarded, then we must demand that the policy of unlimited economic freedom be replaced by the planned economic intervention of the state. We must demand that unrestrained capitalism give way to an economic interventionism. And this is precisely what has happened. The economic system described and criticized by Marx has everywhere ceased to exist. It has been replaced, not by a system in which the state begins to lose its functions and consequently ‘shows signs of withering away’, but by various interventionist systems, in which the functions of the state in the economic realm are extended far beyond the protection of property and of free contracts."
Questions have to be raised about the case studies and descriptions of suffering cited by Marx (1) whether they dated from earlier times, (2) whether they were at all representative of the conditions of workers at the time or they were sheer fabrications or unusual and isolated incidents and (3) whether they could have been ameliorated by the kind of intervention that Popper envisaged. It is important to take account of alternative accounts of the situation at the time, especially in the factories which were the major point of attack by the British reformers and regulators. This important paper by Bill Hutt provides a corrective on the factories and especaillly child labour, and his comments on the impact of militant trade unionism tend to destroy the credibility Popper's belief in the efficacy of the reforms that they achieved. Elsewhere Popper contemplated the problem of explaining the exploitation that occurred at that time, concluding that there was no adequate explanation. The most obvious explanation for this is that there was no general or systemic exploitation, just very tough times, immensely aggravated by the protracted Naopleonic wars.
The central point of the analysis
For Popper the argument with Marx on the efficacy of polical power and the role of non-violent institutional reform is the most central point in his analysis because "It is only here that we can begin to realize the significance of the clash between historicism and social engineering, and its effect upon the policy of the friends of the open society."
"Marxism claims to be more than a science. It does more than make a historical prophecy. It claims to be the basis for practical political action. It criticizes existing society, and it asserts that it can lead the way to a better world. But according to Marx’s own theory, we cannot at will alter the economic reality by, for example, legal reforms. Politics can do no more than ‘shorten and lessen the birth-pangs’. This, I think, is an extremely poor political programme, and its poverty is a consequence of the third-rate place which it attributes to political power in the hierarchy of powers. For according to Marx, the real power lies in the evolution of machinery; next in importance is the system of economic class-relationships; and the least important influence is that of politics."
In contrast Popper considers political power as fundamental and he envisaged a comprehensive legislative program to control economic power – laws to limit the working day, insurance for various form of disability, unemployment, old age. Of couse this would proceed by trial and error, with the consequences of each reform monitored every step of the way to learn from mistakes
"And when we are able by law to guarantee a livelihood to everybody willing to work, and there is no reason why we should not achieve that, then the protection of the freedom of the citizen from economic fear and economic intimidation will approach completeness."
Not only did Marx’s theories block the development of (possibly) helpful interventions, the Marxists also neglected the greatest potential danger to human freedom. Because of the doctrine that political power was impotent they did not see the need to control it after the revolution or to be alarmed at the prospect of the “dictatorship of the proletariat”.
The importance of “formal freedom”
"Marx discovered the significance of economic power; and it is understandable that he exaggerated its status. He and the Marxists see economic power everywhere. Their argument runs: he who has the money has the power; for if necessary, he can buy guns and even gangsters. But this is a roundabout argument. In fact, it contains an admission that the man who has the gun has the power. And if he who has the gun becomes aware of this, then it may not be long until he has both the gun and the money."
"The dogma that economic power is at the root of all evil must be discarded. Its place must be taken by an understanding of the dangers of any form of uncontrolled power."
The hidden danger of democracy (an aside)
During the nineteenth century there was a strong move towards universal voting rights and this was regarded as the great hope for freedom (along with the welfare state and cognate interventions) as the people took political control away from hereditary monarchs,Popes, emperors, and dictators of all kinds. It was not adequalty noted that the achievement of democracy (or universal sufferage) is not the end of the problem of keeping power under control. Hayek pointed out that there was a tendency for complacency about limiting the powers of democratic governments because it was assumed that “the people” would not permit abuses to be inflicted on themselves by their (democratic) leadership. The danger of powerful factions was noticed by the American founding fathers but apparently it slipped out of sight until the modern revival in the form of public choice theory. Hutt drew attention to the "vote buying motive" as the Achilles heel of democracy and he described the process at work when parties of all kinds sought the vote of the trade unionists in Britain as the franchise widened.
The clear and present danger of intervention
"I have criticized this Utopian and Romantic approach to social engineering in a previous chapter (chapter 9). But I wish to add here that economic intervention, even the piecemeal methods advocated here, will tend to increase the power of the state. Interventionism is therefore extremely dangerous. This is not a decisive argument against it; state power must always remain a dangerous though necessary evil. But it should be a warning that if we relax our watchfulness, and if we do not strengthen our democratic institutions while giving more power to the state by interventionist ‘planning’, then we may lose our freedom. And if freedom is lost, everything is lost, including ‘planning’. For why should plans for the welfare of the people be carried out if the people have no power to enforce them? Only freedom can make security secure."
In addition to the "paradox of freedom" that Popper described in Chapter 7, there is also a paradox of state planning. "If we plan too much, if we give too much power to the state, then freedom will be lost, and that will be the end of planning."
"Such considerations lead us back to our plea for piecemeal, and against Utopian or holistic, methods of social engineering. And they lead us back to our demand that measures should be planned to fight concrete evils rather than to establish some ideal good. State intervention should be limited to what is really necessary for the protection of freedom."
The fundamental flaw in Popper's argument in this chapter is that intervention in the market order (beyond policing non-discriminatory rules of the game of social and economic life) is required to protect freedom. As to the welfare of the poor and weak who cannot offer their services in the market, there has always been a strong body of charitable sentiment in the west under the influence of our Judeo-Christian heritage. However up to the time of the industrial revolution the ovewhelming majority of people lived close to subsistence and it was only during this modern time that extra productive resources became available and at the same time conditions began to improve. However, as Hutt pointed out, the energies of entrepreneurs who were driving the improvements were blamed for the problems (the harsh conditions for the poor) as though they were the cause and not the solution!
Persons and institutions: rules and orders
The remainder of the chapter is concerned with the kind of legislative and administrative arrangements that are required for the state to intervene without allowing dangerous discretionary powers to be assumed by politicians or officials. Possibly influenced by correspondence with Hayek, Popper proposed that state intervention should proceed by way of protective laws and a legal framework instead of empowering organs or agents of the state to act as they see fit to achieve the ends laid down by the rulers at the time.
"From the point of view of piecemeal social engineering, the difference between the two methods is highly important. Only the first, the institutional method, makes it possible to make adjustments in the light of discussion and experience. It alone makes it possible to apply the method of trial and error to our political actions. It is long-term; yet the permanent legal framework can be slowly changed, in order to make allowances for unforeseen and undesired consequences, for changes in other parts of the framework, etc. It alone allows us to find out, by experience and analysis, what we actually were doing when we intervened with a certain aim in mind. Discretionary decisions of the rulers or civil servants are outside these rational methods. They are short-term decisions, transitory, changing from day to day, or at best, from year to year. As a rule (the Budget is the great exception) they cannot even be publicly discussed, both because necessary information is lacking, and because the principles on which the decision is taken are obscure. If they exist at all, they are usually not institutionalized, but part of an internal departmental tradition."
So the piecemeal method is rational in the sense of permitting learning by trial and error. It is also rational and desirable in a different and equally important way because the legal framework can be known and understood by the people. Moreover it should be designed to be understandable (a situation which is far from the case at present, where a great many actions invcluding modest financial investments may required significant legal advice to avoid complications). Popper anticipated that the functioning of the legal framework should be predictable, thereby introducing a factor of certainty and security into social life. So in his view, when the framework is is altered, allowances should be made, during a transitional period, for those individuals who have laid their plans in the expectation of its constancy.
"As opposed to this, the method of personal intervention must introduce an ever-growing element of unpredictability into social life, and with it will develop the feeling that social life is irrational and insecure. The use of discretionary powers is liable to grow quickly, once it has become an accepted method, since adjustments will be necessary, and adjustments to discretionary short-term decisions can hardly be carried out by institutional means. This tendency must greatly increase the irrationality of the system, creating in many the impression that there are hidden powers behind the scenes, and making them susceptible to the conspiracy theory of society with all its consequences—heresy hunts, national, social, and class hostility."
The Open Society and its Enemies
Karl Popper
