4. Orlando Letelier, 1976.
It became clear after the War that it was impossible for the Italian bourgeoisie to go on ruling with a democratic system. Yet before the War, Italian democracy had already been a fairly singular system. It was a system which knew neither economic freedom nor substantial political freedoms; which strove through corruption and violence to prevent any free development of new forces, whether they committed themselves in advance to the existing framework of the State or not; and which restricted the ruling class to a minority incapable of maintaining its position without the active assistance of the policeman and the carabiniere. In the Italian democratic system, before the War, each year several dozen workers fell in the streets; and peasants were sent to pick grapes in some places with muzzles on, for fear they might taste the fruit. Democracy, for the peasants and workers, consisted only in the fact that at the base they had the possibility of creating a network of organizations and developing these, strand by strand, to the point where they included the majority of decisive elements of the working class. Even this very simple fact implied a death-sentence for the democratic system. The post-war crisis made it explicit.
The existence and development of a class organization of the workers create a state of affairs which cannot be remedied, either through the State violence which every democratic order permits itself, or with a systematic use of the method of political corruption of leaders. This could be seen in Italy after the first elections held under universal suffrage and with proportional representation. After these, the democratic bourgeoisie felt impotent to solve the problem of how to prevent power slipping from its grasp. Despite the wishes of the leaders, and notwithstanding the absence of conscious guidance, the workers’ movement could not fail to advance and achieve decisive developments.
The handclasps for Filippo Turati, the winks at D’Aragona, and the favours done on the sly for the mandarins of the cooperative movement, were no longer sufficient to contain a movement which was impelled by the pressure of millions of men integrated, in however illogical and elementary a manner, in an organization: millions of men moved by the stimulus of elementary needs which had increased and been left unsatisfied. At this juncture, those democrats who wanted to remain consistent posed themselves the problem of how to “make the masses loyal to the State”. An insoluble problem, so long as there did not exist a State for which the masses would be flesh and blood; a State which had emerged from the masses through an organic process of creation, and which was bound to them. In reality, at this juncture democracy understood that it must draw aside, leaving the field to a different force. Fascism’s hour had come.
What service has fascism performed for the bourgeois class and for “democracy”? It set out to destroy even that minimum to which the democratic system was reduced in Italy – i.e. the concrete possibility to create an organizational link at the base between the workers, and to extend this link gradually until it embraced the great masses in movement. It set out too to annihilate the results already achieved in this field. Fascism has accomplished both these aims, by means of an activity perfectly designed for the purpose. Fascism has never manoeuvred, as the reactionary State might have done in 1919 and 1920, when faced with a massive movement in the streets. Rather, it waited to move until working-class organization had entered a period of passivity and then fell upon it, striking it as such, not for what it “did” but for what it “was” – in other words, as the source of links capable of giving the masses a form and physiognomy. The strength and capacity for struggle of the workers for the most part derive from the existence of these links, even if they are not in themselves apparent. What is involved is the possibility of meeting; of discussing; of giving these meetings and discussions some regularity; of choosing leaders through them; of laying the basis for an elementary organic formation, a league, a cooperative or a party section. What is involved is the possibility of giving these organic formations a continuous functionality; of making them into the basic framework for an organized movement. Fascism has systematically worked to destroy these possibilities.
Its most effective activity has, therefore, been that carried on in the localities; at the base of the organizational edifice of the working class; in the provinces, rural centres, workshops and factories. The sacking of subversive workers; the exiling or assassination of workers’ and peasants’ “leaders”; the ban on meetings; the prohibition on staying outdoors after working hours; the obstacle thus placed in the way of any “social” activity on the part of the workers; and then the destruction of the Chambers of Labour and all other centres of organic unity of the working class and peasantry, and the terror disseminated among the masses – all this had more value than a political struggle through which the working class was stripped of the “rights” which the Constitution guarantees on paper. After three years of this kind of action, the working class has lost all form and all organicity; it has been reduced to a disconnected, fragmented, scattered mass. With no substantial transformation of the Constitution, the political conditions of the country have been changed most profoundly, because the strength of the workers and peasants has been rendered quite ineffective.
When the working class is reduced to such conditions, the political situation is “democratic”. In such conditions, in fact, so-called liberal bourgeois groups can, without fear of fatal repercussions on the internal cohesion of State and society: 1. separate their responsibilities from those of the fascism which they armed, encouraged and incited to struggle against the workers; 2, restore “the rule of law”. i.e. a state of affairs in which the possibility for a workers’ organization to exist is not denied. They can do the first of these two things because the workers, dispersed and disorganized, are not in any position to insert their strength into the bourgeois contradiction deeply enough to transform it into a general crisis of society, prelude to revolution. The second thing is possible for them because fascism has created the conditions for it, by destroying the results of thirty years’ organizational work. The freedom to organize is only conceded to the workers by the bourgeois when they are certain that the workers have been reduced to a point where they can no longer make use of it, except to resume elementary organizing work – work which they hope will not have political consequences other than in the very long term.
In short, “democracy” organized fascism when it felt it could no longer resist the pressure of the working class in conditions even of only formal freedom. Fascism, by shattering the working class, has restored to “democracy” the possibility of existing. In the intentions of the bourgeoisie, the division of labour should operate perfectly: the alternation of fascism and democracy should serve to exclude for ever any possibility of working-class resurgence. But not only the bourgeois see things in this way. The same point of view is shared by the reformists, by the maximalists, by all those who say that present conditions for the workers of Italy are analogous to those of thirty years ago, those of 1890 and before, when the working-class movement was taking its first steps among us. By all those who believe that the resurgence should take place with the same slogans and in the same forms as at that time. By all those, therefore, who view the conflict between “democratic” bourgeoisie and fascism in the same way that they then viewed the conflicts between radical and conservative bourgeois. By all those who speak of “constitutional freedoms” or of “freedom of work” in the same way that one could speak of these at the outset of the workers’ movement.
To adopt this point of view means to weld the working class inexorably within the vicious circle in which the bourgeoisie wishes to confine it. To hear the reformists, the workers and peasants of Italy today have nothing more to hope for than that the bourgeoisie should itself give them back the freedom to reconstruct their organization and make it live; the freedom to re-establish trade unions, peasant leagues, party sections, Chambers of Labour, and then federations, cooperatives, labour exchanges, worker-control offices, committees designed to limit the boss’s freedom inside the factory, and so on and so forth – until the pressure of the masses reawoken by the organizations, and that of the organizations themselves, to transcend the boundaries of bourgeois society becomes so strong that “democracy” can neither resist it nor tolerate it, and will once again arm an army of blackshirts to destroy the menace.
How is the vicious circle to be broken? Solving this problem means solving, in practice, the problem of revolution. There is only one way: to succeed in reorganizing the great mass of workers during the very development of the bourgeois political crisis, and not by concession of the bourgeois, but through the initiative of a revolutionary minority and around the latter. The Communist Party, from the day in which the fascist régime went into crisis, has not set itself any other task than this. Is it a task of an “organizational” nature in the narrow sense of the word, or is it a “political” task? What we have said above serves to show that only insofar as the Communist Party succeeds in solving it will it succeed in modifying the terms of the real situation. “Reorganizing”the working class, in this case, means in practice creating” a new force and causing it to intervene on the political scene: a force which today is not being taken into account, as if it no longer existed. Organization and politics are thus converted one into the other.
The work of the Communist Party is facilitated by two fundamental conditions. I – By the fact that the shattering of the working class by fascism has left the Communist Party itself surviving, as the organized fraction of the class; as the organization of a revolutionary minority and of the cadres of a great mass party. The whole value of the line followed by the communists in the first years of the party consists in this, as does the value of the activity of purely technical organization carried on for a year after the coup d’état. 2. By the fact that the alternation from fascism to democracy and from democracy to fascism is not a process abstracted from other economic and political facts, but takes place simultaneously with the extension and intensification of the general crisis of the capitalist economy, and of the relations of force built upon it. There thus exists a powerful objective stimulus towards the return of the masses to the field, for the class struggle. Neither of these conditions exists for the other so-called workers’ parties. They in fact all agree, not just in denying the value of conscious party organization, but in accepting the bourgeois thesis of the progressive stabilization of the capitalist economy after the wartime crisis.
But the political function of the Communist Party is revealed and develops with greater clarity and more effectively because of the fact that it alone is capable of calling for the creation of an organization which, transcending at one and the same time the limits of narrowly party organization and of trade-union organization, realizes the unity of the working class on a vaster terrain: that of preparation for a political struggle in which the class returns to the field arrayed for battle autonomously, both against the fascist bourgeois and against the democratic and liberal bourgeois. This organization is provided by the “workers’ and peasants’ committees” for the struggle against fascism.
To find in the history of the Italian movement an analogy with the workers’ and peasants’ committees, it is necessary to go back to the factory councils of 1919 and 1920 and to the movement which emerged from them. In the factory council, the problem of the class’s unity, and that of its revolutionary activity to overthrow the bourgeois order, were considered and resolved simultaneously. The factory council realized the organizational unity of all workers, and at the same time carried the class struggle to an intensity such as to make the supreme clash inevitable. Not only the fable of collaboration and the utopia of social peace, but also the foolish legend of an organization developing with bourgeois permission inside capitalist society until it transcends the latter’s limits and empties it gradually of its content, found a total negation in the factory council. Working-class unity was achieved on the terrain of revolution, breaking the economic and political organization of capitalist society from below.
To what extent can the revolutionary function once fulfilled by the factory councils be carried out today by the workers’ and peasants’ committees? L’Ordine Nuovo, which in the first period of its existence devoted itself in particular to developing theses relating to the councils movement and to encouraging the spontaneous creation and the development of these organisms, is now basing its propaganda and agitational work on this other problem, to which the Communist Party is devoting itself today. The continuity between the two, whatever the points of similarity and difference between councils and committees may be, lies in the effort to induce the resurgent movement of the broad masses to express itself in an organic form, and to find in it the germs of the new order of things which we want to create. The odious alternation and the base division of labour between fascism and democracy will come to an end only insofar as this effort produces a result.” Antonio Gramsci, “Democracy and Fascism;” L’Ordine Nuovo, 1924
Numero Dos—“The first hurdle to be cleared in order to arrive at a proper understanding of Marx’s philosophy is the misunderstanding of the concept of materialism and historical materialism. Those who believe this to be a philosophy claiming that man’s material interest, his wish for ever-increasing material gain and comforts, are his main motivation, forget the simple fact that the words ‘idealism’ and ‘materialism’ as used by Marx and all other philosophers have nothing to do with psychic motivations of a higher, spiritual level as against those of a lower and baser kind. In philosophical terminology, ‘materialism’ (or ‘naturalism’) refers to a philosophic view which holds that matter in motion is the fundamental constituent of the universe. In this sense the Greek pre-Socratic philosophers were ‘materialists,’ although they were by no means materialists in the abovementioned sense of the word as a value judgment or ethical principle. By idealism, on the contrary, a philosophy is understood in which it is not the everchanging world of the senses that constitutes reality, but incorporeal essences, or ideas. Plato’s system is the first philosophical system to which the name of ‘idealism’ was applied. While Marx was, in the philosophical sense a materialist in ontology, he was not even really interested in such questions, and hardly ever dealt with them.However, there are many kinds of materialist and idealist philosophies, and in order to understand Marx’s “materialism” we have to go beyond the general definition just given. Marx actually took a firm position against a philosophical materialism which was current among many of the most progressive thinkers (especially natural scientists) of his time. This materialism claimed that “the” substratum of all mental and spiritual phenomena was to be found in matter and material processes. In its most vulgar and superficial form, this kind of materialism taught that feelings and ideas are sufficiently explained as results of chemical bodily processes, and “thought is to the brain what urine is to the kidneys.”
Marx fought this type of mechanical, “bourgeois” materialism “the abstract materialism of natural science, that excludes history and its process,”  and postulated instead what he called in the Economic and Philosophical Manuscripts “naturalism or humanism [which] is distinguished from both idealism and materialism, and at the same time constitutes their unifying truth.”  In fact, Marx never used the terms “historical materialism” or “dialectic materialism”; he did speak of his own “dialectical method” in contrast with that of Hegel and of its “materialistic basis,” by which he simply referred to the fundamental conditions of human existence.
This aspect of “materialism,” Marx’s “materialist method,” which distinguishes his view from that of Hegel, involves the study of the real economic and social life of man and of the influence of man’s actual way of life on this thinking and feeling. “In direct contrast to German philosophy,” Marx wrote, “which descends from heaven to earth, here we ascend from earth to heaven. That is to say, we do not set out from what men imagine, conceive, nor from men as narrated, thought of, or imagined, conceived, in order to arrive at men in the flesh. We set out from real, active men and on the basis of their real life process we demonstrate the development of the ideological reflexes and echoes of this life process.”  Or, as he puts it in a slightly different way: “Hegel’s philosophy of history is nothing but the philosophical expression of the Christian-Germanic dogma concerning the contradiction between spirit and matter, God and the world…. Hegel’s philosophy of history presupposes an abstract or absolute spirit, which develops in such a way that mankind is only a mass which carries this spirit, consciously or unconsciously. Hegel assumes that a speculative, esoterical history precedes and underlies empirical history. The history of mankind is transformed into the history of the abstract spirit of mankind, which transcends the real man.” 
Marx described his own historical method very succinctly: “The way in which men produce their means of subsistence depends first of all on the nature of the actual means they find in existence and have to reproduce. This mode of production must not be considered simply as being the reproduction of the physical existence of the individuals. Rather, it is a definite form of activity of these individuals, a definite form of expressing their life, a definite mode of life on their part. As individuals express their life, so they are. What they are, therefore, coincides with their production, both with what they produce and with how they produce. The nature of individuals thus depends on the material conditions determining their production.” 
Marx made the difference between historical materialism and contemporary materialism very clear in his thesis on Feuerbach: “The chief defect of all materialism up to now (including Feuerbach’s) is that the object, reality, what we apprehend through our senses, is understood only in the form of the object or contemplation (Anschauung); but not as sensuous human activity, as practice; not subjectively. Hence in opposition to materialism, the active side was developed abstractly by idealism — which of course does not know real sensuous activity as such. Feuerbach wants sensuous objects really distinguished from the objects of thought; but he does not understand human activity itself as objective activity.”  Marx — like Hegel — looks at an object in its movement, in its becoming, and not as a static “object,” which can be explained by discovering the physical “cause” of it. In contrast to Hegel, Marx studies man and history by beginning with the real man and the economic and social conditions under which he must live, and not primarily with his ideas. Marx was as far from bourgeois materialism as he was from Hegel’s idealism — hence he could rightly say that his philosophy is neither idealism nor materialism but a synthesis: humanism and naturalism.
It should be clear by now why the popular idea of the nature of historical materialism is erroneous. The popular view assumes that in Marx’s opinion the strongest psychological motive in man is to gain money and to have more material comfort; if this is the main force within man, so continues this “interpretation” of historical materialism, the key to the understanding of history is the material desires of men; hence, the key to the explanation of history is man’s belly, and his greed for material satisfaction. The fundamental misunderstanding on which this interpretation rests is the assumption that historical materialism is a psychological theory which deals with man’s drives and passions. But, in fact, historical materialism is not at all a psychological theory; it claims that the way man produces determines his thinking and his desires, and not that his main desires are those for maximal material gain. Economy in this context refers not to a psychic drive, but to the mode of production; not to a subjective, psychological, but to an objective, economic-sociological factor. The only quasi-psychological premise in the theory lies in the assumption that man needs food, shelter, etc., hence needs to produce; hence that the mode of production, which depends on a number of objective factors, comes first, as it were, and determines the other spheres of his activities. The objectively given conditions which determine the mode of production and hence social organization, determine man, his ideas as well as his interests. In fact, the idea that “institutions form men,” as Montesquieu put it, was an old insight; what was new in Marx was his detailed analysis of institutions as being rooted in the mode of production and the productive forces underlying it. Certain economic conditions, like those of capitalism, produce as a chief incentive the desire for money and property; other economic conditions can produce exactly the opposite desires, like those of asceticism and contempt for earthly riches, as we find them in many Eastern cultures and in the early stages of capitalism.  The passion for money and property, according to Marx, is just as much economically conditioned as the opposite passions. 
Marx’s “materialistic” or “economic” interpretation of history has nothing whatsoever to do with an alleged “materialistic” or “economic” striving as the most fundamental drive in man. It does mean that man, the real and total man, the “real living individuals” — not the ideas produced by these “individuals” — are the subject matter of history and of the understanding of its laws. Marx’s interpretation of history could be called an anthropological interpretation of history, if one wanted to avoid the ambiguities of the words “materialistic” and “economic”; it is the understanding of history based on the fact that men are “the authors and actors of their history.” , 
In fact, it is one of the great differences between Marx and most writers of the eighteenth and nineteenth centuries that he does not consider capitalism to be the outcome of human nature and the motivation of man in capitalism to be the universal motivation within man. The absurdity of the view that Marx thought the drive for maximal profit was the deepest motive in man becomes all the more apparent when one takes into account that Marx made some very direct statements about human drives. He differentiated between constant or “fixed” drives “which exist under all circumstances and which can be changed by social conditions only as far as form and direction are concerned” and “relative” drives which “owe their origin only to a certain type of social organization.” Marx assumed sex and hunger to fall under the category of “fixed” drives, but it never occurred to him to consider the drive for maximal economic gain as a constant drive. 
But it hardly needs such proof from Marx’s psychological ideas to show that the popular assumption about Marx’s materialism is utterly wrong. Marx’s whole criticism of capitalism is exactly that it has made interest in money and material gain the main motive in man, and his concept of socialism is precisely that of a society in which this material interest would cease to be the dominant one. This will be even clearer later on when we discuss Marx’s concept of human emancipation and of freedom in detail.
As I emphasized before, Marx starts out with man, who makes his own history: “The first premise of all human history is, of course, the existence of living human individuals. Thus the first fact to be established is the physical organization of these individuals and their consequent relation to the rest of nature. Of course, we cannot here go either into the actual physical nature of man, or into the natural conditions in which man finds himself — geological, orohydrographical, climatic and so on. The writing of history must always set out from these natural bases and their modification in the course of history through the action of man. Men can be distinguished from animals by consciousness, by religion or anything else you like. They themselves begin to produce their means of subsistence, a step which is conditioned by their physical organization. By producing their means of subsistence men are indirectly producing their actual material life.” 
It is very important to understand Marx’s fundamental idea: man makes his own history; he is his own creator. As he put it many years later in Capital: “And would not such a history be easier to compile since, as Vico says, human history differs from natural history in this, that we have made the former, but not the latter.”  Man gives birth to himself in the process of history. The essential factor in this process of self-creation of the human race lies in its relationship to nature. Man, at the beginning of his history, is blindly bound or chained to nature. In the process of evolution he transforms his relationship to nature, and hence himself.
Marx has more to say in Capital about this dependence on nature: “Those ancient social organisms of production are, as compared with bourgeois society, extremely simple and transparent. But they are founded either on the immature development of man individually, who has not yet severed the umbilical cord that unites him with his fellow men in a primitive tribal community, or upon direct relations of subjection. They can arise and exist only when the development of the productive power of labor has not risen beyond a low stage, and when, therefore, the social relations within the sphere of material life, between man and man, and between man and nature, are correspondingly narrow. This narrowness is reflected in the ancient worship of Nature, and in the other elements of the popular religions. The religious reflex of the real world can, in any case, only then finally vanish when the practical relations of everyday life offer to man none but perfectly intelligible and reasonable relations with regard to his fellow men and to nature. The life-process of society, which is based on the process of material production, does not strip off its mystical veil until it is treated as production by freely associated men, and is consciously regulated by them in accordance with a settled plan. This, however, demands for society a certain material groundwork or set of conditions of existence which in their turn are the spontaneous product of a long and painful process of development.” 
In this statement Marx speaks of an element which has a central role in his theory: labor. Labor is the factor which meditates between man and nature; labor is man’s effort to regulate his metabolism with nature. Labor is the expression of human life and through labor man’s relationship to nature is changed, hence through labor man changes himself. More about his concept of labor will be said later on.
I will conclude this section by quoting Marx’s most complete formulation of the concept of historical materialism, written in 1859:
“The general result at which I arrived and which, once won, served as a guiding thread for my studies, can be briefly formulated as follows: in the social production of their life, men enter into definite relations that are indispensable and independent of their will, relations of production which correspond to a definite stage of development of their material productive forces. The sum total of these relations of production constitutes the economic structure of society, the real foundation, on which rises a legal and political superstructure and to which correspond definite forms of social consciousness. The mode of production of material life conditions the social, political and intellectual life process in general. It is not the consciousness of men that determines their social being, but, on the contrary, their social being that determines their consciousness. At a certain stage of their development, the material productive forces of society come in conflict with the existing relations of production, or — what is but a legal expression for the same thing — with the property relations within which they have been at work hitherto. From forms of development of the productive forces these relations turn into their fetters. Then begins an epoch of social revolution. With the change of the economic foundations the entire immense superstructure is more or less rapidly transformed. In considering such transformations a distinction should always be made between the material transformation of the economic conditions of production, which can be determined with the precision of natural science, and the legal, political, religious, esthetic or philosophic — in short, ideological forms in which men become conscious of this conflict and fight it out. Just as our opinion of an individual is not based on what he thinks of himself, so we cannot judge of such a period of transformation by its own consciousness; on the contrary, this consciousness must be explained rather from the contradictions of material life, from the existing conflict between the social productive forces and the relations of production. No social order ever perishes before all the productive forces for which there is room in it have developed; and new, higher relations of production never appear before the material conditions of their existence have matured in the womb of the old society itself. Therefore mankind always sets itself only such tasks as it can solve; since, looking at the matter more closely, it will always be found that the task itself arises only when the material conditions for its solution already exist or are at least in the process of formation. In broad outlines Asiatic, ancient, feudal, and modern bourgeois modes of production can be designated as progressive epochs in the economic formation of society. The bourgeois relations of production are the last antagonistic form of the social process of production — antagonistic not in the sense of individual antagonism, but of one arising from the social conditions of life of the individual; at the same time the productive forces developing in the womb of bourgeois society create the material conditions for the solution of that antagonism. This social formation brings, therefore, the prehistory of human society to a close.”
It will be useful again to underscore and elaborate on some specific notions in this theory. First of all, Marx’s concept of historical change. Change is due to the contradiction between the productive forces (and other objectively given conditions) and the existing social organization. When a mode of production or social organization hampers, rather than furthers, the given productive forces, a society, if it is not to collapse, will choose such forms of production as fit the new set of productive forces and develop them. The evolution of man, in all history, is characterized by man’s struggle with nature. At one point of history (and according to Marx in the near future), man will have developed the productive sources of nature to such an extent that the antagonism between man and nature can be eventually solved. At this point ‘the prehistory of man’ will come to a close and truly human history will begin. …
A problem of the greatest importance is raised in the passage just quoted, that of human consciousness. The crucial statement is: ‘It is not consciousness of men that determines their being, but, on the contrary, their social being that determines their consciousness.’ Marx gave a fuller statement with regard to the problem of consciousness in German Ideology:
‘The fact is, therefore, that definite individuals who are productively active in a definite way enter into these definite social and political relations. Empirical observations must in each separate instance bring out empirically, and without any mystification and speculation, the connection of the social and political structure with production. The social structure and the State are continually evolving out of the life-process of definite individuals, but of individuals, not as they may appear in their own or other people’s imagination, but as they really are; i.e., as they are effective, produce materially, and are active under definite material limits, presuppositions and conditions independent of their will.
The production of ideas, of conceptions, of consciousness, is at first directly interwoven with the material activity and the material intercourse of men, the language of real life. Conceiving, thinking, the mental intercourse of men, appear at this stage as the direct afflux from their material behavior. The same applies to mental production as expressed in the language of the politics, laws, morality, religion, metaphysics of a people. Men are the producers of their conceptions, ideas, etc. -real, active men, as they are conditioned by the definite development of their productive forces and of the intercourse corresponding to these, up to its furthest forms. Consciousness can never be anything else than conscious existence, and the existence of men in their actual lifeprocess. If in all ideology men and their circumstances appear upside down as in a camera obscura, this phenomenon arises just as much from their historical lifeprocess as the inversion of objects on the retina does from their physical life-process.‘
In the first place, it should be noted that Marx, like Spinoza and later Freud, believed that most of what men consciously think is “false” consciousness, is ideology and rationalization; that the true mainsprings of man’s actions are unconscious to him. According to Freud, they are rooted in man’s libidinal strivings; according to Marx, they are rooted in the whole social organization of man which directs his consciousness in certain directions. and blocks him from being aware of certain facts and experiences. 
Its is important to recognize that this theory does not pretend that ideas or ideals are not real or not potent. Marx speaks of awareness, not of ideals. It is exactly the blindness of man’s conscious thought which prevents him from being aware of his true human needs, and of ideals which are rooted in them. Only if false consciousness is transformed into true consciousness, that is, only if we are aware of reality, rather than distorting it by rationalizations and fictions, can we also become aware of our real and true human needs.
It should also be noted that for Marx science itself and all powers inherent in man are part of the productive forces which interact with the forces of nature. Even as far as the influence of ideas on human evolution is concerned, Marx was by no means as oblivious to their power as the popular interpretation of his work makes it appear. His argument was not against ideas, but against ideas which were not rooted in the human and social reality, which were not, to use Hegel’s term, “a real possibility.” Most of all, he never forgot that not only do circumstances make man; man also makes circumstances. The following passage should make clear how erroneous it is to interpret Marx as if he, like many philosophers of the enlightenment and many sociologists of today, gave man a passive role in the historical process, as if he saw him as the passive object of circumstances:
“The materialistic doctrine [in contrast to Marx’s view] concerning the changing of circumstances and education forgets that circumstances are changed by men and that the educator himself must be educated. This doctrine has therefore to divide society into two parts, one of which is superior to society [as a whole].
“The coincidence of the changing of circumstances and of human activity or self-changing can only be comprehended and rationally understood as revolutionary practice.” 
The last concept, that of “revolutionary practice”, leads us to one of the most disputed concepts in Marx’s philosophy, that of force. First of all, it should be noted how peculiar it is that the Western democracies should feel such indignation about a theory claiming that society can be transformed by the forceful seizure of political power. The idea of political revolution by force is not at all a Marxist idea; it has been the idea of bourgeois society during the last three hundred years. Western democracy is the daughter of the great English, French and American revolutions; the Russian revolution of February, 1917, and the German revolution of 1918 were warmly greeted by the West, despite the fact that they used force. It is clear that indignation against the use of force, as it exists in the Western world today, depends on who uses force, and against whom. Every war is based on force; even democratic government is based on the principle of force, which permits the majority to use force against a minority, if it is necessary for the continuation of the status quo. Indignation against force is authentic only from a pacifist standpoint, which holds that force is either absolutely wrong, or that aside from the case of the most immediate defense its use never leads to a change for the better.
However, it is not sufficient to show that Marx’s idea of forceful revolution (from which he excluded as possibilities England and the United States) was in the middle-class tradition; it must be emphasized that Marx’s theory constituted an important improvement over the middle-class view, an improvement rooted in his whole theory of history.
Marx saw that political force cannot produce anything for which there has been no preparation in the social and political process. Hence that force, if at all necessary, can give, so to speak, only the last push to a development which has virtually already taken place, but it can never produce anything truly new. ‘Force,; he said, ‘is the midwife of every old society pregnant with a new one.‘ It is exactly one of his great insights that Marx transcends the traditional middle-class concept — he did not believe in the creative power of force, in the idea that political force of itself could create a new social order. For this reason, force, for Marx, could have at most only a transitory significance, never the role of a permanent element in the transformation of society. …
The concept of the active, productive man who grasps and embraces the objective world with his own powers cannot be fully understood without the concept of the negation of productivity: alienation. For Marx the history of mankind is a history of the increasing development of man, and at the same time of increasing alienation. His concept of socialism is the emancipation from alienation, the return of man to himself, his self-realization.
Alienation (or ‘estrangement’) means, for Marx, that man does not experience himself as the acting agent in his grasp of the world, but that the world (nature, others, and he himself) remain alien to him. They stand above and against him as objects, even though they may be objects of his own creation. Alienation is essentially experiencing the world and oneself passively, receptively, as the subject separated from the object.
The whole concept of alienation found its first expression in Western thought in the Old Testament concept of idolatry. The essence of what the prophets call ‘idolatry’ is not that man worships many gods instead of only one. It is that the idols are the work of man’s own hands — they are things, and man bows down and worships things; worships that which he has created himself. In doing so he transforms himself into a thing. He transfers to the things of his creation the attributes of his own life, and instead of experiencing himself as the creating person, he is in touch with himself only by the worship of the idol. He has become estranged from his own life forces, from the wealth of his own potentialties, and is in touch with himself only in the indirect way of submission to life frozen in the idols. The deadness and emptiness of the idol is expressed in the Old Testament: ‘Eyes they have and they do not see, ears they have and they do not hear,’ etc. The more man transfers his own powers to the idols, the poorer he himself becomes, and the more dependent on the idols, so that they permit him to redeem a small part of what was originally his. The idols can be a godlike figure, the state, the church, a person, possessions. Idolatry changes its objects; it is by no means to be found only in those forms in which the idol has a socalled religious meaning. Idolatry is always the worship of something into which man has put his own creative powers, and to which he now submits, instead of experiencing himself in his creative act. Among the many forms of alienation, the most frequent one is alienation in language. If I express a feeling with a word, let us say, if I say ‘I love you,’ the word is meant to be an indication of the reality which exists within myself, the power of my loving. The word ‘love’ is meant to be a symbol of the fact love, but as soon as it is spoken it tends to assume a life of its own, it becomes a reality. I am under the illusion that the saying of the word is the equivalent of the experience, and soon I say the word and feel nothing, except the thought of love which the word expresses. The alienation of language shows the whole complexity of alienation. Language is one of the most precious human achievements; to avoid alienation by not speaking would be foolish — yet one must be always aware of the danger of the spoken word, that it threatens to substitute itself for the living experience. The same holds true for all other achievements of man; ideas, art, any kind of man-made objects. They are man’s creations; they are valuable aids for life, yet each one of them is also a trap, a temptation to confuse life with things, experience with artifacts, feeling with surrender and submission.
The thinkers of the eighteenth and nineteenth centuries criticized their age for its increasing rigidity, emptiness, and deadness. In Goethe’s thinking the very same concept of productivity that is central in Spinoza as well as in Hegel and Marx, was a cornerstone. ‘The divine,’ he says, ‘is effective in that which is alive, but not in that which is dead. It is in that which is becoming and evolving, but not in that which is completed and rigid. That is why reason, in its tendency toward the divine, deals only with that which is becoming, and which is alive, while the intellect deals with that which is completed and rigid, in order to use it.‘
We find similar criticisms in Schiller and Fichte, and then in Hegel and in Marx, who makes a general criticism that in his time “truth is without passion, and passion is without truth.” 
Essentially the whole existentialist philosophy, from Kierkegaard on, is, as Paul Tillich puts it, “an over onehundred-years-old movement of rebellion against the dehumanization of man in industrial society.” Actually, the concept of alienation is, in nontheistic language, the equivalent of what in theistic language would be called “sin”: man’s relinquishment of himself, of God within himself. The thinker who coined the concept of alienation was Hegel. To him the history of man was at the same time the history of man’s alienation (Entfremdung). “What the mind really strives for,” he wrote in The Philosophy of History, “is the realization of its notion; but in doing so it hides that goal from its own vision and is proud and well satisfied in this alienation from its own essence.”  For Marx, as for Hegel, the concept of alienation is based on the distinction between existence and essence, on the fact that man’s existence is alienated from his essence, that in reality he is not what he potentially is, or, to put it differently, that he is not what he ought to be, and that he ought to be that which he could be.
For Marx the process of alienation is expressed in work and in the division of labor. Work is for him the active relatedness of man to nature, the creation of a new world, including the creation of man himself. (Intellectual activity is of course, for Marx, always work, like manual or artistic activity.) But as private property and the division of labor develop, labor loses its character of being an expression of man’s powers; labor and its products assume an existence separate from man, his will and his planning. “The object produced by labor, its product, now stands opposed to it as an alien being, as a power independent of the producer. The product of labor is labor which has been embodied in an object and turned into a physical thing; this product is an objectification of labor.”  Labor is alienated because the work has ceased to be a part of the worker’s nature and “consequently, he does not fulfill himself in his work but denies himself, has a feeling of misery rather than well-being, does not develop freely his mental and physical energies but is physically exhausted and mentally debased. The worker therefore feels himself at home only during his leisure time, whereas at work he feels homeless.”  Thus, in the act of production the relationship of the worker to his own activity is experienced “as something alien and not belonging to him, activity as suffering (passivity), strength as powerlessness, creation as emasculation.”  While man thus becomes alienated from himself, the product of labor becomes “an alien object which dominates him. This relationship is at the same time the relationship to the sensuous external world, to natural objects, as an alien and hostile world.”  Marx stresses two points: 1) in the process of work, and especially of work under the conditions of capitalism, man is estranged from his own creative powers, and 2) the .objects of his own work become alien beings, and eventually rule over him, become powers independent of the producer. “The laborer exists for the process of production, and not the process of production for the laborer.” 
A misunderstanding of Marx on this point is widespread, even among socialists. It is believed that Marx spoke primarily of the economic exploitation of the worker, and the fact that his share of the product was not as large as it should be, or that the product should belong to him, instead of to the capitalist. But as I have shown before, the state as a capitalist, as in the Soviet Union, would not have been any more welcome to Marx than the private capitalist. He is not concerned primarily with the equalization of income. He is concerned with the liberation of man from a kind of work which destroys his individuality, which transforms him into a thing, and which makes him into the slave of things. Just as Kierkegaard was concerned with the salvation of the individual, so Marx was, and his criticism of capitalist society is directed not at its method of distribution of income, but its mode of production, its destruction of individuality and its enslavement of man, not by the capitalist, but the enslavement of man — worker and capitalist — by things and circumstances of their own making.
Marx goes still further. In unalienated work man not only realizes himself as an individual, but also as a species-being. For Marx, as for Hegel and many other thinkers of the enlightenment, each individual represented the species, that is to say, humanity as a whole, the universality of man: the development of man leads to the unfolding of his whole humanity. In the process of work he “no longer reproduces himself merely intellectually, as in consciousness, but actively and in a real sense, and he sees his own reflection in a world which he has constructed. While, therefore, alienated labor takes away the object of production from man, it also takes away his species life, his real objectivity as a species-being, and changes his advantage over animals into a disadvantage in so far as his inorganic body, nature, is taken from him. Just as alienated labor transforms free and self-directed activity into a means, so it transforms the species life of man into a means of physical existence. Consciousness, which man has from his species, is transformed through alienation so that species life becomes only a means for him.” 
As I indicated before, Marx assumed that the alienation of work, while existing throughout history, reaches its peak in capitalist society, and that the working class is the most alienated one. This assumption was based on the idea that the worker, having no part in the direction of the work, being “employed” as part of the machines he serves, is transformed into a thing in its dependence on capital. Hence, for Marx, “the emancipation of society from private property, from servitude, takes the political form of the emancipation of the workers; not in the sense that only the latter’s emancipation is involved, but because this emancipation includes the emancipation of humanity as a whole. For all human servitude is involved in the relation of the worker to production, and all types of servitude are only modifications or consequences of this relation.” 
Again it must be emphasized that Marx’s aim is not limited to the emancipation of the working class, but the emancipation of the human being through the restitution of the unalienated and hence free activity of all men, and a society in which man, and not the production of things, is the aim, in which man ceases to be “a crippled monstrosity, and becomes a fully developed human being.”  Marx’s concept of the alienated product of labor is expressed in one of the most fundamental points developed in Capital, in what he calls “the fetishism of commodities.” Capitalist production transforms the relations of individuals into qualities of things themselves, and this transformation constitutes the nature of the commodity in capitalist production. “It cannot be otherwise in a mode of production in which the laborer exists to satisfy the need of self-expansion of existing values, instead of on the contrary, material wealth existing to satisfy the needs of development on the part of the laborer.
As in religion man is governed by the products of his own brain, so in capitalist production he is governed by the products of his own hands.”  “Machinery is adapted to the weakness of the human being, in order to turn the weak human being into a machine.” 
The alienation of work in man’s production is much greater than it was when production was by handicraft and manufacture. “In handicrafts and manufacture, the workman makes use of a tool; in the factory the machine makes use of him. There the movements of the instrument of labor proceed from him; here it is the movement of the machines that he must follow. In manufacture, the workmen are parts of a living mechanism; in the factory we have a lifeless mechanism, independent of the workman, who becomes its mere living appendage.”  It is of the utmost importance for the understanding of Marx to see how the concept of alienation was and remained the focal point in the thinking of the young Marx who wrote the Economic and Philosophical Manuscripts, and of the “old” Marx who wrote Capital. Aside from the examples already given, the following passages, one from the Manuscripts, the other from Capital, ought to make this continuity quite clear:
“This fact simply implies that the object produced by labor, its product, now stands opposed to it as an alien being, as a power independent of the producer. The product of labor is labor which has been embodied in an object and turned into a physical thing; this product is an objectification of labor. The performance of work is at the same time its objectification. The performance of work appears in the sphere of political economy as a vitiation of the worker, objectification as a loss and as servitude to the object, and appropriation as alienation.” 
This is what Marx wrote in Capital: “Within the capitalist system all methods for raising the social productiveness of labor are brought about at the cost of the individual laborer; all means for the development of production transform themselves into means of domination over, and exploitation of, the producers; they mutilate the laborer into a fragment of a man, degrade him to the level of an appendage of a machine, destroy every remnant of charm in his work and turn it into a hated toil; they estrange from him the intellectual potentialities of the labor process in the same proportion as science is incorporated in it as an independent power.” 
Again the role of private property (of course not as property of objects of use, but as capital which hires labor) was already clearly seen in its alienating functioning by the young Marx: “Private property,” he wrote, “is therefore the product, the necessary result, of alienated labor, of the external relation of the worker to nature and to himself. Private property is thus derived from the analysis of the concept of alienated labor; that is, alienated man, alienated labor, alienated life, and estranged man.” 
It is not only that the world of things becomes the ruler of man, but also that the social and political circumstances which he creates become his masters. “This consolidation of what we ourselves produce, which turns into an objective power above us, growing out of our control, thwarting our expectations, bringing to naught our calculations, is one of the chief factors in historical development up to now.”  The alienated man, who believes that he has become the master of nature, has become the slave of things and of circumstances, the powerless appendage of a world which is at the same time the frozen expression of his own powers.
For Marx, alienation in the process of work, from the product of work and from circumstances, is inseparably connected with alienation from oneself, from one’s fellow man and from nature. “A direct consequence of the alienation of man from the product of his labor, from his life activity and from his species life is that man is alienated from other men. When man confronts himself, he also confronts other men. What is true of man’s relationship to his work, to the product of his work and to himself, is also true of his relationship to other men, to their labor and to the objects of their labor. In general, the statement that man is alienated from his species life means that each man is alienated from others, and that each of the others is likewise alienated from human life.”  The alienated man is not only alienated from other men; he is alienated from the essence of humanity, from his “species-being,” both in his natural and spiritual qualities. This alienation from the human essence leads to an existential egotism, described by Marx as man’s human essence becoming “a means for his individual existence. It [alienated labor] alienates from man his own body, external nature, his mental life and his human life.” 
Marx’s concept touches here the Kantian principle that man must always be an end in himself, and never a means to an end. But he amplifies this principle by stating that man’s human essence must never become a means for individual existence. The contrast between Marx’s view and Communist totalitarianism could hardly be expressed more radically; humanity in man, says Marx, must not even become a means to his individual existence; how much less could it be considered a means for the state, the class, or the nation.
Alienation leads to the perversion of all values. By making economy and its values — “gain, work, thrift, and sobriety” — the supreme aim of life, man fails to develop the truly moral values, “the riches of a good conscience, of virtue, etc., but how can I be virtuous if I am not alive, and how can I have a good conscience if I am not aware of anything?” In a state of alienation each sphere of life, the economic and the moral, is independent from the other, “each is concentrated on a specific area of alienated activity and is itself alienated from the other.” 
Marx recognized what becomes of human needs in an alienated world, and he actually foresaw with amazing clarity the completion of this process as it is visible only today. While in a socialist perspective the main importance should be attributed “to the wealth of human needs, and consequently also to a new mode of production and to a new object of production,” to “a new manifestation of human powers and a new enrichment of the human being,”  in the alienated world of capitalism needs are not expressions of man’s latent powers, that is, they are not human needs; in capitalism “every man speculates upon creating a new need in another in order to force him to a new sacrifice, to place him in a new dependence, and to entice him into a new kind of pleasure and thereby into economic ruin. Everyone tries to establish over others an alien power in order to find there the satisfaction of his own egoistic need. With the mass of objects, therefore, there also increases the realm of alien entities to which man is subjected. Every new product is a new potentiality of mutual deceit and robbery. Man becomes increasingly poor as a man; he has increasing need of money in order to take possession of the hostile being. The power of his money diminishes directly with the growth of the quantity of production, i.e., his need increases with the increasing power of money. The need for money is therefore the real need created by the modern economy, and the only need which it creates. The quantity of money becomes increasingly its only important quality. Just as it reduces every entity to its abstraction, so it reduces itself in its own development to a quantitative entity. Excess and immoderation become its true standard. This is shown subjectively, partly in the fact that the expansion of production and of needs becomes an ingenious and always calculating subservience to inhuman, depraved, unnatural, and imaginary appetites. Private property does not know how to change crude need into human need; its idealism is fantasy, caprice and fancy. No eunuch flatters his tyrant more shamefully or seeks by more infamous means to stimulate his jaded appetite, in order to gain some favor, than does the eunuch of industry, the entrepreneur, in order to acquire a few silver coins or to charm the gold from the purse of his dearly beloved neighbor. (Every product is a bait by means of which the individual tries to entice the essence of the other person, his money. Every real or potential need is a weakness which will draw the bird into the lime. Universal exploitation of human communal life. As every imperfection of man is a bond with heaven, a point at which his heart is accessible to the priest, so every want is an opportunity for approaching one’s neighbor with an air of friendship, and saying, ‘Dear friend, I will give you what you need, but you know the conditio sine qua non. You know what ink you must use in signing yourself over to me. I shall swindle you while providing your enjoyment.’) The entrepreneur accedes to the most depraved fancies of his neighbor, plays the role of pander between him and his needs, awakens unhealthy appetites in him, and watches for every weakness in order, later, to claim the remuneration for this labor of love.”  The man who has thus become subject to his alienated needs is “a mentally and physically dehumanized being…the self-conscious and self-acting commodity.”  This commodity-man knows only one way of relating himself to the world outside, by having it and by consuming (using) it. The more alienated he is, the more the sense of having and using constitutes his relationship to the world. “The less you are, the less you express your life, the more you have, the greater is your alienated life and the greater is the saving of your alienated being.” 
There is only one correction which history has made in Marx’s concept of alienation; Marx believed that the working class was the most alienated class, hence that the emancipation from alienation would necessarily start with the liberation of the working class. Marx did not foresee the extent to which alienation was to become the fate of the vast majority of people, especially of the ever increasing segment of the population which manipulate symbols and men, rather than machines. If anything, the clerk, the salesman, the executive, are even more alienated today than the skilled manual worker. The latter’s functioning still depends on the expression of certain personal qualities like skill, reliability, etc., and he is not forced to sell his ‘personality,’ his smile, his opinions in the bargain; the symbol manipulators are hired not only for their skill, but for all those personality qualities which make them ‘attractive personality packages,’ easy to handle and to manipulate. They are the true ‘organization men’–more so than the skilled laborer-their idol being the corporation. But as far as consumption is concerned, there is no difference between manual workers and the members of the bureaucracy. They all crave for things, new things, to have and to use. They are the passive recipients, the consumers, chained and weakened by the very things which satisfy their synthetic needs. They are not related to the world productively, grasping it in its full reality and in this process becoming one with it; they worship things, the machines which produce the things-and in this alienated world they feel as strangers and quite alone. In spite of Marx’s underestimating the role of the bureaucracy, his general description could nevertheless have been written today: ‘Production does not simply produce man as a commodity, the commodity-man, man in the role of commodity; it produces him in keeping with this role as a spiritually and physically dehumanized being — [the] immorality, deformity, and hebetation of the workers and the capitalists. Its product is the self-conscious and self-acting commodity…the human commodity.’
To what extent things and circumstances of our own making have become our masters, Marx could hardly have foreseen; yet nothing could prove his prophecy more drastically than the fact that the whole human race is today the prisoner of the nuclear weapons it has created, and of the political institutions which are equally of its own making. A frightened mankind waits anxiously to see whether it will be saved from the power of the things it has created, from the blind action of the bureaucracies it has appointed. …
Marx’s concept of socialism follows from his concept of man. It should be clear by now that according to this concept, socialism is not a society of regimented, automatized individuals, regardless of whether there is equality of income or not, and regardless of whether they are well fed and well clad. It is not a society in which the individual is subordinated to the state, to the machine, to the bureaucracy. Even if the state as an “abstract capitalist” were the employer, even if “the entire social capital were united in the hands either of a single capitalist or a single capitalist corporation,”  this would not be socialism. In fact, as Marx says quite clearly in the Economic and Philosophical Manuscripts, “communism as such is not the aim of human development.” What, then, is the aim?
Quite clearly the aim of socialism is man. It is to create a form of production and an organization of society in which man can overcome alienation from his product, from his work, from his fellow man, from himself and from nature; in which he can return to himself and grasp the world with his own powers, thus becoming one with the world. Socialism for Marx was, as Paul Tillich put it, “a resistance movement against the destruction of love in social reality.” 
Marx expressed the aim of socialism with great clarity at the end of the third volume of Capital: “In fact, the realm of freedom does not commence until the point is passed where labor under the compulsion of necessity and of external utility is required. In the very nature of things it lies beyond the sphere of material production in the strict meaning of the term. Just as the savage must wrestle with nature, in order to satisfy his wants, in order to maintain his life and reproduce it, so civilized man has to do it, and he must do it in all forms of society and under all possible modes of production. With his development the realm of natural necessity expands, because his wants increase; but at the same time the forces of production increase, by which these wants are satisfied. The freedom in this field cannot consist of anything else but of the fact that socialized man, the associated producers, regulate their interchange with nature rationally, bring it under their common control, instead of being ruled by it as by some blind power; they accomplish their task with the least expenditure of energy and under conditions most adequate to their human nature and most worthy of it. But it always remains a realm of necessity. Beyond it begins that development of human power, which is its own end, the true realm of freedom, which, however, can flourish only upon that realm of necessity as its basis.” 
Marx expresses here all essential elements of socialism. First, man produces in an associated, not competitive way; he produces rationally and in an unalienated way, which means that he brings production under his control, instead of being ruled by it as by some blind power. This clearly excludes a concept of socialism in which man is manipulated by a bureaucracy, even if this bureaucracy rules the whole state economy, rather than only a big corporation. It means that the individual participates actively in the planning and in the execution of the plans; it means, in short, the realization of political and industrial democracy. Marx expected that by this new form of an unalienated society man would become independent, stand on his own feet, and would no longer be crippled by the alienated mode of production and consumption; that he would truly be the master and the creator of his life, and hence that he could begin to make living his main business, rather than producing the means for living. Socialism, for Marx, was never as such the fulfillment of life, but the condition for such fulfillment. When man has built a rational, nonalienated form of society, he will have the chance to begin with what is the aim of life: the “development of human power, which is its own end, the true realm of freedom.” Marx, the man who every year read all the works of Aeschylus and Shakespeare, who brought to life in himself the greatest works of human thought, would never have dreamt that his idea of socialism could be interpreted as having as its aim the well-fed and well-clad “welfare” or “workers’ ” state. Man, in Marx’s view, has created in the course of history a culture which he will be free to make his own when he is freed from the chains, not only of economic poverty, but of the spiritual poverty created by alienation. Marx’s vision is based on his faith in man, in the inherent and real potentialities of the essence of man which have developed in history. He looked at socialism as the condition of human freedom and creativity, not as in itself constituting the goal of man’s life.
For Marx, socialism (or communism) is not flight or abstraction from, or loss of the objective world which men have created by the objectification of their faculties. It is not an impoverished return to unnatural, primitive simplicity. It is rather the first real emergence, the genuine actualization of man’s nature as something real. Socialism, for Marx, is a society which permits the actualization of man’s essence, by overcoming his alienation. It is nothing less than creating the conditions for the truly free, rational, active and independent man; it is the fulfillment of the prophetic aim: the destruction of the idols.
That Marx could be regarded as an enemy of freedom was made possible only by the fantastic fraud of Stalin in presuming to talk in the name of Marx, combined with the fantastic ignorance about Marx that exists in the Western world. For Marx, the aim of socialism was freedom, but freedom in a much more radical sense than the existing democracy conceives of it-freedom in the sense of independence, which is based on man’s standing on his own feet, using his own powers and relating himself to the world productively. “Freedom,” said Marx, “is so much the essence of man that even its opponents realize it…. No man fights freedom; he fights at most the freedom of others. Every kind of freedom has therefore always existed, only at one time as a special privilege, another time as a universal right.” 
Socialism, for Marx, is a society which serves the needs of man. But, many will ask, is not that exactly what modern capitalism does? Are not our big corporations most eager to serve the needs of man? And are the big advertising companies not reconnaissance parties which, by means of great efforts, from surveys to “motivation analysis,” try to find out what the needs of man are? Indeed, one can understand the concept of socialism only if one understands Marx’s distinction between the true needs of man, and the synthetic, artificially produced needs of man.
As follows from the whole concept of man, his real needs are rooted in his nature; this distinction between real and false needs is possible only on the basis of a picture of the nature of man and the true human needs rooted in his nature. Man’s true needs are those whose fulfillment is necessary for the realization of his essence as a human being. As Marx put it: “The existence of what I truly love is felt by me as a necessity, as a need, without which my essence cannot be fulfilled, satisfied, complete.”  Only on the basis of a specific concept of man’s nature can Marx make the difference between true and false needs of man. Purely subjectively, the false needs are experienced as being as urgent and real as the true needs, and from a purely subjective viewpoint, there could not be a criterion for the distinction. (In modern terminology one might differentiate between neurotic and rational [healthy] needs).  Often man is conscious only of his false needs and unconscious of his real ones. The task of the analyst of society is precisely to awaken man so that he can become aware of the illusory false needs and of the reality of his true needs. The principal goal of socialism, for Marx, is the recognition and realization of man’s true needs, which will be possible only when production serves man, and capital ceases to create and exploit the false needs of man.
Marx’s concept of socialism is a protest, as is all existentialist philosophy, against the alienation of man; if, as Aldous Huxley put it, “our present economic, social and international arrangements are based, in large measure, upon organized lovelessness,”  then Marx’s socialism is a protest against this very lovelessness, against man’s exploitation of man, and against his exploitativeness towards nature, the wasting of our natural resources at the expense of the majority of men today, and more so of the generations to come. The unalienated man, who is the goal of socialism as we have shown before, is the man who does not “dominate” nature, but who becomes one with it, who is alive and responsive toward objects, so that objects come to life for him.
Does not all this mean that Marx’s socialism is the realization of the deepest religious impulses common to the great humanistic religions of the past? Indeed it does, provided we understand that Marx, like Hegel and like many others, expresses his concern for man’s soul, not in theistic, but in philosophical language.
Marx fought against religion exactly because it is alienated, and does not satisfy the true needs of man. Marx’s fight against God is, in reality, a fight against the idol that is called God. Already as a young man he wrote as the motto for his dissertation “Not those are godless who have contempt for the gods of the masses but those who attribute the opinions of the masses to the gods.” Marx’s atheism is the most advanced form of rational mysticism, closer to Meister Eckhart or to Zen Buddhism than are most of those fighters for God and religion who accuse him of “godlessness.”
It is hardly possible to talk about Marx’s attitude toward religion without mentioning the connection between his philosophy of history, and of socialism, with the Messianic hope of the Old Testament prophets and the spiritual roots of humanism in Greek and Roman thinking. The Messianic hope is, indeed, a feature unique in Occidental thought. The prophets of the Old Testament are not only, like Lao Tzu or Buddha, spiritual leaders; they are also political leaders. They show man a vision of how he ought to be, and confront him with the alternatives between which he must choose. Most of the Old Testament prophets share the idea that history has a meaning, that man perfects himself in the process of history, and that he will eventually create a social order of peace and justice. But peace and justice for the prophets do not mean the absence of war and the absence of injustice. Peace and justice are concepts which are rooted in the whole of the Old Testament concept of man. Man, before he has consciousness of himself, that is, before he is human, lives in unity with nature ( Adam and Eve in Paradise). The first act of Freedom, which is the capacity to say “no,” opens his eyes, and he sees himself as a stranger in the world, beset by conflicts with nature, between man and man, between man and woman. The process of history is the process by which man develops his specifically human qualities, his powers of love and understanding; and once he has achieved full humanity he can return to the lost unity between himself and the world. This new unity, however, is different from the preconscious one which existed before history began. It is the at-onement of man with himself, with nature, and with his fellow man, based on the fact that man has given birth to himself in the historical process. In Old Testament thought, God is revealed in history (“the God of Abraham, the God of Isaac, the God of Jacob”), and in history, not in a state transcending history, lies the salvation of man. This means that man’s spiritual aims are inseparably connected with the transformation of society; politics is basically not a realm that can be divorced from that of moral values and of man’s self-realization.
Related thoughts arose in Greek (and Hellenistic) and Roman thinking. From Zeno, the founder of Stoic philosophy, to Seneca and Cicero, the concepts of natural law and of the equality of man exercised a powerful influence on the minds of men and, together with the prophetic tradition, are the foundations of Christian thinking.
While Christianity, especially since Paul, tended to transform the historical concept of salvation into an “other-worldly,” purely spiritual one, and while the Church became the substitute for the “good society,” this transformation was by no means a complete one. The early Church fathers express a radical criticism of the existing state; Christian thought of the late Middle Ages criticizes secular authority and the state from the standpoint of divine and natural law. This viewpoint stresses that society and the state must not be divorced from the spiritual values rooted in revelation and reason (“intellect” in the scholastic meaning of the word). Beyond this, the Messianic idea was expressed even in more radical forms in the Christian sects before the Reformation, and in the thinking of many Christian groups after the Reformation, down to the Society of Friends of the present time.
The mainstream of Messianic thinking after the Reformation, however, was expressed no longer in religious thought, but in philosophical, historical and social thought. It was expressed somewhat obliquely in the great utopias of the Renaissance, in which the new world is not in a distant future, but in a distant place. It was expressed in the thinking of the philosophers of the enlightenment and of the French and English Revolutions. It found its latest and most complete expression in Marx’s concept of socialism. Whatever direct influence Old Testament thinking might have had on him through socialists like Moses Hess, no doubt the prophetic Messianic tradition influenced him indirectly through the thought of the enlightenment philosophers and especially through the thought stemming from Spinoza, Goethe, Hegel. What is common to prophetic, thirteenth-century Christian thought, eighteenth-century enlightenment,  and nineteenth-century socialism, is the idea that State (society) and spiritual values cannot be divorced from each other; that politics and moral values are indivisible. This idea was attacked by the secular concepts of the Renaissance ( Machiavelli) and again by the secularism of the modern state. It seems that Western man, whenever he was under the influence of gigantic material conquests, gave himself unrestrictedly to the new powers he had acquired and, drunk with these new powers, forgot himself. The elite of these societies became obsessed with the wish for power, luxury, and the manipulation of men, and the masses followed them. This happened in the Renaissance with its new science, the discovery of the globe, the prosperous City States of Northern Italy; it happened again in the explosive development of the first and the present second industrial revolutions.
But this development has been complicated by the presence of another factor. If the state or the society is meant to serve the realization of certain spiritual values, the danger exists that a supreme authority tells man -and forces him — to think and behave in a certain way. The incorporation of certain objectively valid values into social life tends to produce authoritarianism. The spiritual authority of the Middle Ages was the Catholic Church. Protestantism fought this authority, at first promising greater independence for the individual, only to make the princely state the undisputed and arbitrary ruler of man’s body and soul. The rebellion against princely authority occurred in the name of the nation, and for a while the national state promised to be the representative of freedom. But soon the national state devoted itself to the protection of the material interests of those who owned capital, and could thus exploit the labor of the majority of the population. Certain classes of society protested against this new authoritarianism and insisted on the freedom of the individual from the interference of secular authority. This postulate of liberalism, which tended to protect “freedom from,” led, on the other hand, to the insistence that state and society must not attempt to realize “freedom to,” that is to say, liberalism had to insist not only on separation from State and Church, but had also to deny that it was the function of the state to help realize certain spiritual and moral values; these values were supposed to be entirely a matter for the individual.
Socialism (in its Marxist and other forms) returned to the idea of the “good society” as the condition for the realization of man’s spiritual needs. It was antiauthoritarian, both as far as the Church and the State are concerned, hence it aimed at the eventual disappearance of the state and at the establishment of a society composed of voluntarily cooperating individuals. Its aim was a reconstruction of society in such a way as to make it the basis for man’s true return to himself, without the presence of those authoritarian forces which restricted and impoverished man’s mind.
Thus, Marxist and other forms of socialism are the heirs of prophetic Messianism, Christian Chiliastic sectarianism, thirteenth-century Thomism, Renaissance Utopianism, and eighteenth-century enlightenment. It is the synthesis of the prophetic-Christian idea of society as the plane of spiritual realization, and of the idea of individual freedom. For this reason, it is opposed to the Church because of its restriction of the mind, and to liberalism because of its separation of society and moral values. It is opposed to Stalinism and Krushchevism, for their authoritarianism as much as their neglect of humanist values.
Socialism is the abolition of human self-alienation, the return of man as a real human being. ‘It is the definitive resolution of the antagonism between man and nature, and between man and man. It is the true solution of the conflict between existence and essence, be tween objectification and self-affirmation, between freedom and necessity, between individual and species. It is a solution of the riddle of history and knows itself to be this solution.’ For Marx, socialism meant the social order which permits the return of man to himself, the identity between existence and essence, the overcoming of the separateness and antagonism between subject and object, the humanization of nature; it meant a world in which man is no longer a stranger among strangers, but is in his world, where he is at home.” Erich Fromm, Marx’s Conception of Man in Capitalist Society; Chapter Two, “Marx’s Historical Materialism,” Chapter Three, “The Problem of Consciousness–Social Structure and the Use of Force,” Chapter Five, “Alienation,” Chapter Six, “Marx’s Concept of Socialism,” 1961
Numero Tres—“To most readers in this continent, starved of authentic information by the imperialist news agencies, the name of George Jackson is either unfamiliar or just a name. The powers that be in the United States put forward the official version that George Jackson was a dangerous criminal kept in maximum security in Americas toughest jails and still capable of killing a guard at Soledad Prison. They say that he himself was killed attempting escape this year in August. Official versions given by the United States of everything from the Bay of Pigs in Cuba to the Bay of Tonkin in Vietnam have the common characteristic of standing truth on its head. George Jackson was jailed ostensibly for stealing 70 dollars. He was given a sentence of one year to life because he was black, and he was kept incarcerated for years under the most dehumanizing conditions because he discovered that blackness need not be a badge of servility but rather could be a banner for uncompromising revolutionary struggle. He was murdered because he was doing too much to pass this attitude on to fellow prisoners. George Jackson was political prisoner and a black freedom fighter. He died at the hands of the enemy.Once it is made known that George Jackson was a black revolutionary in the white mans jails, at least one point is established, since we are familiar with the fact that a significant proportion of African nationalist leaders graduated from colonialist prisons, and right now the jails of South Africa hold captive some of the best of our brothers in that part of the continent. Furthermore, there is some considerable awareness that ever since the days of slavery the U.S.A. is nothing but a vast prison as far as African descendants are concerned. Within this prison, black life is cheap, so it should be no surprise that George Jackson was murdered by the San Quentin prison authorities who are responsible to Americas chief prison warder, Richard Nixon. What remains is to go beyond the generalities and to understand the most significant elements attaching to George Jacksons life and death.
When he was killed in August this year, George Jackson was twenty nine years of age and had spent the last fifteen [correction: 11 years] behind bars—seven of these in special isolation. As he himself put it, he was from the lumpen. He was not part of the regular producer force of workers and peasants. Being cut off from the system of production, lumpen elements in the past rarely understood the society which victimized them and were not to be counted upon to take organized revolutionary steps within capitalist society. Indeed, the very term lumpen proletariat was originally intended to convey the inferiority of this sector as compared with the authentic working class.
Yet George Jackson, like Malcolm X before him, educated himself painfully behind prison bars to the point where his clear vision of historical and contemporary reality and his ability to communicate his perspective frightened the U.S. power structure into physically liquidating him. Jacksons survival for so many years in vicious jails, his self-education, and his publication of Soledad Brother were tremendous personal achievements, and in addition they offer on interesting insight into the revolutionary potential of the black mass in the U.S.A., so many of whom have been reduced to the status of lumpen.
Under capitalism, the worker is exploited through the alienation of part of the product of his labour. For the African peasant, the exploitation is effected through manipulation of the price of the crops which he laboured to produce. Yet, work has always been rated higher than unemployment, for the obvious reason that survival depends upon the ability to obtain work. Thus, early in the history of industrialization, workers coined the slogan the right to work. Masses of black people in the U.S.A. are deprived of this basic right. At best they live in a limbo of uncertainty as casual workers, last to be hired and first to be fired. The line between the unemployed or criminals cannot be dismissed as white lumpen in capitalist Europe were usually dismissed.
The latter were considered as misfits and regular toilers served as the vanguard. The thirty-odd million black people in the U.S.A. are not misfits. They are the most oppressed and the most threatened as far as survival is concerned. The greatness of George Jackson is that he served as a dynamic spokesman for the most wretched among the oppressed, and he was in the vanguard of the most dangerous front of struggle.
Jail is hardly an arena in which one would imagine that guerrilla warfare would take place. Yet, it is on this most disadvantaged of terrains that blacks have displayed the guts to wage a war for dignity and freedom. In Soledad Brother, George Jackson movingly reveals the nature of this struggle as it has evolved over the last few years. Some of the more recent episodes in the struggle at San Quentin prison are worth recording. On February 27th this year, black and brown (Mexican) prisoners announced the formation of a Third World Coalition. This came in the wake of such organizations as a Black Panther Branch at San Quentin and the establishment of SATE (Self-Advancement Through Education). This level of mobilisation of the nonwhite prisoners was resented and feared by white guards and some racist white prisoners. The latter formed themselves into a self-declared Nazi group, and months of violent incidents followed. Needless to say, with white authority on the side of the Nazis, Afro and Mexican brothers had a very hard time. George Jackson is not the only casualty on the side of the blacks. But their unity was maintained, and a majority of white prisoners either refused to support the Nazis or denounced them. So, even within prison walls the first principle to be observed was unity in struggle. Once the most oppressed had taken the initiative, then they could win allies.
The struggle within the jails is having wider and wider repercussions every day. Firstly, it is creating true revolutionary cadres out of more and more lumpen. This is particularly true in the jails of California, but the movement is making its impact felt everywhere from Baltimore to Texas. Brothers inside are writing poetry, essays and letters which strip white capitalist America naked. Like the Soledad Brothers, they have come to learn that sociology books call us antisocial and brand us criminals, when actually the criminals are in the social register. The names of those who rule America are all in the social register.
Secondly, it is solidifying the black community in a remarkable way. Petty bourgeois blacks also feel threatened by the manic police, judges and prison officers. Black intellectuals who used to be completely alienated from any form of struggle except their personal hustle now recognize the need to ally with and take their bearings from the street forces of the black unemployed, ghetto dwellers and prison inmates.
Thirdly, the courage of black prisoners has elicited a response from white America. The small band of white revolutionaries has taken a positive stand. The Weathermen decried Jacksons murder by placing a few bombs in given places and the Communist Party supported the demand by the black prisoners and the Black Panther Party that the murder was to be investigated. On a more general note, white liberal America has been disturbed. The white liberals never like to be told that white capitalist society is too rotten to be reformed. Even the established capitalist press has come out with esposes of prison conditions, and the fascist massacres of black prisoners at Attica prison recently brought Senator Muskie out with a cry of enough.
Fourthly (and for our purposes most significantly) the efforts of black prisoners and blacks in America as a whole have had international repercussions. The framed charges brought against Black Panther leaders and against Angela Davis have been denounced in many parts of the world. Committees of defense and solidarity have been formed in places as far as Havana and Leipzig. OPAAL declared August 18th as the day of international solidarity with Afro-Americans; and significantly most of their propaganda for this purpose ended with a call to Free All Political Prisoners.
For more than a decade now, peoples liberation movements in Vietnam, Cuba, Southern Africa, etc., have held conversations with militants and progressives in the U.S.A. pointing to the duality and respective responsibilities of struggle within the imperialist camp. The revolution in the exploited colonies and neo-colonies has as its objective the expulsion of the imperialists: the revolution in the metropolis is to transform the capitalist relations of production in the countries of their origin. Since the U.S.A. is the overlord of world imperialism, it has been common to portray any progressive movement there as operating within the belly of the beast. Inside an isolation block in Soledad or San Quentin prisons, this was not merely a figurative expression. George Jackson knew well what it meant to seek for heightened socialist and humanist consciousness inside the belly of the white imperialist beast.
International solidarity grows out of struggle in different localities. This is the truth so profoundly and simply expressed by Che Guevara when he called for the creation of one, two, three – many Vietnams. It has long been recognized that the white working class in the U.S.A is historically incapable of participating (as a class) in anti-imperialist struggle. White racism and Americas leading role in world imperialism transformed organized labour in the U.S. into a reactionary force. Conversely, the black struggle is internationally significant because it unmasks the barbarous social relations of capitalism and places the enemy on the defensive on his own home ground. This is amply illustrated in the political process which involved the three Soledad Brothers—George Jackson, Fleeta Drumgo and John Clutchette—as well as Angela Davis and a host of other blacks now behind prison bars in the U.S.A.” Walter Rodney, “George Jackson: Black Revolutionary;” 1971: http://historyisaweapon.com/
Numero Cuatro—“t would seem to be a common-sensical sort of observation that economic policies are conditioned by and at the same time modify the social and political situation where they are put into practice. Economic policies, therefore, are introduced in order to alter social structures.If I dwell on these considerations, therefore, it is because the necessary connection between economic policy and its sociopolitical setting appears to be absent from many analyses of the current situation in Chile. To put it briefly, the violation of human rights, the system of institutionalized brutality, the drastic control and suppression of every form of meaningful dissent is discussed (and often condemned) as a phenomenon only indirectly linked, or indeed entirely, unrelated, to the classical unrestrained ‘free market’ policies that have been enforced by the military junta. This failure to connect has been particularly characteristic of private and public financial institutions, which have publicly praised and supported the economic policies adopted by the Pinochet government, while regretting the ‘bad international image’ the junta has gained from its ‘incomprehensible’ persistence in torturing, jailing and persecuting all its critics. A recent World Bank decision to grant a $33 million loan to the junta was justified by its President, Robert McNamara, as based on purely ‘technical’ criteria, implying no particular relationship to the present political and social conditions in the country. The same line of justification has been followed by American private banks which, in the words of a spokesman for a business consulting firm, ‘have been falling all over one another to make loans.’ But probably no one has expressed this attitude better than the U.S. Secretary of the Treasury. After a visit to Chile, during which he discussed human rights violations by the military government, William Simon congratulated Pinochet for bringing ‘economic freedom’ to the Chilean people. This particularly convenient concept of a social system in which ‘economic freedom’ and political terror coexist without touching each other, allows these financial spokesmen to support their concept of ‘freedom’ while exercising their verbal muscles in defense of human rights.
The usefulness of the distinction has been particularly appreciated by those who have generated the economic policies now being carried out in Chile. In Newsweek of June 14, Milton Friedman, who is the intellectual architect and unofficial adviser for the team of economists now running the Chilean economy, stated: ‘In spite of my profound disagreement with the authoritarian political system of Chile, I do not consider it as evil for an economist to render technical economic advice to the Chilean Government, any more than I would regard it as evil for a physician to give technical medical advice to the Chilean Government to help end a medical plague.’
It is curious that the man who wrote a book, Capitalism and Freedom, to drive home the argument that only classical economic liberalism can support political democracy can now so easily disentangle economics from politics when the economic theories he advocates coincide with an absolute restriction of every type of democratic freedom. One would logically expect that if those who curtail private enterprise are held responsible for the effects of their measures in the political sphere, those who impose unrestrained ‘economic freedom’ would also be held responsible when the imposition of this policy is inevitably accompanied by massive repression, hunger, unemployment and the permanence of a brutal police state.
The Economic Prescription & Chile’s Reality
The economic plan now being carried out in Chile realizes an historic aspiration of a group of Chilean economists, most of them trained at Chicago University by Milton Friedman and Arnold Harberger. Deeply involved in the preparation of the coup, the “Chicago boys,” as they are known in Chile, convinced the generals that they were prepared to supplement the brutality, which the military possessed, with the intellectual assets it lacked. The U.S. Senate Select Committee on Intelligence has disclosed that “CIA collaborators” helped plan the economic measures that Chile’s junta enacted immediately after seizing power. Committee witnesses maintain that some of the “Chicago boys” received CIA funds for such research efforts as a 300-page economic blueprint that was given to military leaders before the coup. It is therefore understandable that after seizing power they were, as The Wall Street Journal put it, “champing to be unleashed” on the Chilean economy. Their first approach to the situation was gradual; only after a year of relative confusion did they decide to implement without major modification the theoretical model they had been taught at Chicago. The occasion merited a visit to Chile by Mr. Friedman himself who, along with his associate, Professor Harberger, made a series of well-publicized appearances to promote a “shock treatment” for the Chilean economy—something that Friedman emphatically described as “the only medicine. Absolutely. There is no other. There is no other long-term solution.”
These are the basic principles of the economic model offered by Friedman and his followers and adopted by the Chilean junta: that the only possible framework for economic development is one within which the private sector can freely operate; that private enterprise is the most efficient form of economic organization and that, therefore, the private sector should be the predominant factor in the economy. Prices should fluctuate freely in accordance with the laws of competition. Inflation, the worst enemy of economic progress, is the direct result of monetary expansion and can be eliminated only by a drastic reduction of government spending.
Except in present-day Chile, no government in the world gives private enterprise an absolutely free hand. That is so because every economist (except Friedman and his followers) has known for decades that, in the real life of capitalism, there is no such thing as the perfect competition described by classical liberal economists. In March 1975, in Santiago, a newsman dared suggest to Friedman that even in more advanced capitalist countries, as for example the United States, the government applies various types of controls on the economy. Mr. Friedman answered: “I have always been against it, I don’t approve of them. I believe we should not apply them. I am against economic intervention by the government, in my own country, as well as in Chile or anywhere else.”
This is not the place to evaluate the general validity of the postulates advanced by Friedman and the Chicago School. I want to concentrate only on what happens when their model is applied to a country like Chile. Here Friedman’s theories are especially objectionable—from an economic as well as a moral point of view—because they propose a total free market policy in a framework of extreme inequality among the economic agents involved: inequality between monopolistic and small and medium entrepreneurs; inequality between the owners of capital and those who own only their capacity to work, etc. Similar situations would exist if the model were applied to any other underdeveloped, dependent economy.
It is preposterous to speak about free competition in Chile. The economy there is highly monopolized. An academic study, made during President Frei’s regime, pointed out that in 1966 “284 enterprises controlled each and every one of the subdivisions of Chilean economic activities. In the industrial sector, 144 enterprises controlled each and every one of the subsectors. In turn, within each of ‘these 144 manufacturing enterprises which constituted the core of the industrial sector, a few shareholders controlled management: in more than 50 percent of the enterprises, the ten largest shareholders owned between 90 and 100 percent of the capital.”
On the other hand, studies also conducted during the pre-Allende period demonstrated the extent to which the Chilean economy has been dominated by foreign-based multinationals. As Barnet and Müller put it in Global Reach, “In pre-Allende Chile, 51 percent of the largest 160 firms were effectively controlled by global corporations. In each of the seven key industries of the economy one to three firms controlled at least 51 percent of the production. Of the top twenty-two global corporations operating in the country, nineteen either operated free of all competition or shared the market with other oligopolists.”
From 1971 to 1973, most of the monopolistic and oligopolistic industries were nationalized and transferred to the public sector. However, the zeal with which the military dictatorship has dismantled state participation in the economy and transferred industries to foreign ownership suggests that levels of concentration and monopolization are now at least as high as they were before the Popular Unity (Allende) Government.
An International Monetary Fund Report of May 1976 points out: “The process of returning to the private sector the vast majority of the enterprises which over the previous fifteen years, but especially in 1971-73, had become part of the public sector continued [during 1975]…. At the end of 1973 the Public Development Corporation (CORFO) had a total of 492 enterprises, including eighteen commercial banks…. Of this total, 253 enterprises…have been returned to their former owners. Among the other 239 enterprises…104 (among them ten banks) have been sold; sixteen (including two banks) have already been adjudicated, with the completion of the transfer procedure being a matter of weeks; the sale of another twenty-one is being negotiated bilaterally with groups of potential buyers.” Competitive bidding is still to be solicited for the remaining enterprises. Obviously the buyers are always a small number of powerful economic interests who have been adding these enterprises to the monopolistic or oligopolistic structures within which they operate. At the same time, a considerable number of industries have been sold to transnational corporations, among them the national tire industry (INSA), bought by Firestone for an undisclosed sum, and one of the main paper pulp industries (Celulosa Forestal Arauco), bought by Parsons & Whittemore.
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There are many other examples to show that, as far as competition goes, Mr. Friedman’s prescription does not yield the economic effects implicit in his theoretical model. In the first half of 1975, as part of the process of lifting regulations from the economy, the price of milk was exempted from control. With what result? The price to the consumer rose 40 percent and the price paid to the producer dropped 22 percent. There are more than 10,000 milk producers in Chile but only two milk processing companies, which control the market. More than 80 percent of Chilean paper production and all of certain types of paper come from one enterprise—the Compañia Manufacturera de Papeles y Cartones, controlled by the Alessandri interests—which establishes prices without fear of competition. More than fifteen foreign brands are offered in the Chilean home appliances market, but they are all in the hands of only three companies, which assemble them in Chile and determine their retail prices.
Of course, any of the followers of the Chicago School would say that, with the liberalization of the international market, as prescribed by the model, Chilean monopolies and oligopolies would be exposed to competition from abroad. However, that does not happen. Chile so lacks foreign currency that it cannot import what it needs, of even the most essential goods. Still more important is the fact that foreign enterprises are not interested in sending to Chile goods which could compete with those, manufactured by their own Chilean subsidiaries. Besides, in Chile the economic interests which control the manufacturing industry also control the financial apparatus and import activities. These groups are not disposed to compete with themselves. In short, the application of Friedman’s theories to the real world of Chile means that the industrialists can freely “compete” at whatever price levels they choose.
Other aspects of the brand of economics taught at the University of Chicago are conveniently ignored by the junta’s economic advisers. One is the importance of wage contracts freely negotiated between employers and workers; another is the efficiency of the market as an instrument to allocate resources in the economy. It is sardonic to mention the right of the workers to negotiate in a country where the Central Workers’ Federation has been outlawed and where salaries are established by the junta’s decree. It may also seem grotesque to speak of the market as the most effective instrument for allocating resources when it is widely known that there are practically no productive investments in the economy because the most profitable “investment” is speculation. Under the slogan “We must create a capital market in Chile,” selected private groups enjoying the junta’s protection have been authorized to establish so-called “financieras,” which engaged in the most outrageous financial speculations. Their abuses have been so flagrant that even Orlando Saez, former president of the Chilean Industrialists’ Association and a staunch supporter of the coup, could not refrain from protesting. “It is not possible,” he said, “to continue with the financial chaos that dominates in Chile. It is necessary to channel into productive investments the millions and millions of financial resources that are now being used in wild-cat speculative operations before the very eyes of those who don’t even have a job.”
But the crux of Friedman’s prescription, as the junta never ceases to emphasize, is control of inflation. It should, according to the junta, enlist “the vigorous efforts of all Chileans.” Professor Harberger declared categorically in April 1975: “I can see no excuses for not stopping inflation: its origins are well known; government deficits and monetary expansion have to be stopped. I know you are going to ask me about unemployment; if the government deficits were reduced by half, still the rate of unemployment would not increase more than 1 percent.” According to the junta’s official figures, between April and December 1975, the government deficit was reduced by approximately the 50 percent that Harberger recommended. In the same period, unemployment rose six times as much as he had predicted. The remedy he continues to advocate consists of reducing government spending, which will reduce the amount of currency in circulation. This will result in a contraction of demand, which in turn will bring about a general reduction of prices. Thus inflation would be defeated. Professor Harberger does not say explicitly who would have to lower their standard of living to bear the casts of the cure.
Without a doubt, excessive monetary expansion constitutes an important inflationary factor in any economy. However, inflation in Chile (or any underdeveloped country) is a far more complex problem than the one presupposed by the mechanical models of the monetarist theorists. The followers of the Chicago School seem to forget, for example, that the monopolistic structure of the Chilean economy allows the dominant firms to maintain prices in the face of falling demand. They also forget the role that so-called inflationary expectations play in generating price increases. In Chile, inflationary expectations have lately been approximating 15 percent per month. Looking ahead, firms prepare for rising costs by raising their own prices. This continuous price “leap-frogging” feeds a general inflationary spiral. On the other hand, in such an inflationary climate, no one with liquid assets wants to hold them. Powerful interest groups, operating without government control, can thus manipulate the financial apparatus. They create institutions to absorb any available money and use it in various forms of speculation, which thrive on and propel inflation.
The Economic Results
Three years have passed since this experiment began in Chile and sufficient information is available to conclude that Friedman’s Chilean disciples failed—at least in their avowed and measurable objectives—and particularly in their attempts .to control inflation. But they have succeeded, at least temporarily, in their broader purpose: to secure the economic and political power of a small dominant class by effecting a massive transfer of wealth from the lower and middle classes to a select group of monopolists and financial speculators.
The empirical proof of the economic failure is overwhelming. On April 24, 1975, after the last known visit of Messrs. Friedman and Harberger to Chile, the junta’s Minister of Finance, Jorge Cauas, said: “The Hon. junta have asked me to formulate and carry out an economic program primarily directed to eradicate inflation. Together with a numerous group of technicians, we have presented to the Chilean authorities a program of economic revival which has been approved and is beginning. The principal objective of this program is to stop inflation in the remainder of 1975.” (The “group of technicians” is obviously Friedman and company.) By the end of 1975 Chile’s annual rate of inflation had reached 341 percent—that is, the highest rate of inflation in the world. Consumer prices increased that same year by an average 375 percent; wholesale prices rose by 440 percent.
Analyzing the causes of Chilean inflation in 1975, a recent report of the International Monetary Fund (IMF) says: “The cutback in government spending, with its adverse effects on employment, in housing, and public works, went significantly further than programmed in order to accommodate the large credit demands of the private sector.” Later on it states: “Overall monetary management remained expansionary in 1975. Moreover, continued high inflationary expectations and the public’s attendant unwillingness to increase its real cash balances greatly complicated the implementation of the monetary program.” Referring to private organizations which have begun to operate without any control, the report adds that the “financieras” have been allowed to operate beside the commercial banking system and at interest rates up to 59 percent higher than the maximum permissible banking rate. According to the same source, the “financieras” were operating in 1975 at an interest rate of 14 percent a month, or 168 percent a year; they obtained loans in New York at 10 percent to 12 percent a year.
The implementation of the Chicago model has not achieved a significant reduction of monetary expansion. It has, however, brought about a merciless reduction of the income of wage earners and a dramatic increase in unemployment; at the same time it has increased the amount of currency in circulation by means of loans and transfers to big firms, and by granting to private financial institutions the power to create money. As James Petras, an American political scientist, puts it: “The very social classes on which the junta depends are the main instrumentalities of the inflation.”
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The inflationary process, which the junta’s policies stimulated immediately after the coup, was slightly reduced in 1975 as compared to the unbelievable rate of 375.9 percent in 1974. Such a minor reduction, however, does not indicate any substantial approach to stabilization and seems on the whole utterly irrelevant to the majority of Chileans who must endure the total collapse of their economy. This situation recalls the story of a Latin American dictator at the beginning of this century. When his advisers came to tell him that the country was suffering from a very serious educational problem, he ordered all public schools closed. Now, more than seventy years into this century, there still remain disciples of the anecdotal dictator who think that the way to eradicate poverty in Chile is to kill the poor people.
The exchange rate depreciations and the cutbacks in governmental expenditures have produced a depression which, in less than three years, has slowed the country’s rate of development to what it was twelve years ago. Real Gross Domestic Product (GDP) contracted during 1975, by nearly 15 percent to its lowest level since 1969, while, according to the IMF, real national income “dropped by as much as 26 percent, leaving real per capita income below its level ten years earlier.” The decline in the overall 1975 GDP reflects an 8.1 percent drop in the mining sector, a 27 percent decline in the manufacturing industries and a 35 percent drop in construction. Petroleum extraction declined by an estimated 11 percent, while transport, storage and communications declined 15.3 percent, and commerce fell 21.5 percent.
In the agricultural sector production appears virtually stagnant in 1975-76, with only an 0.4 percent variation from the previous agricultural year. This stagnation has been caused by a combination of factors, including the continued rise in the cost of imported fertilizers and pesticides. The use of fertilizer dropped by an estimated 40 percent in 1975-76. The increase in import prices also accounted for the decline in production of pork and poultry, which are almost entirely dependent on imported feed. The return to the former owners of several million hectares of farm land that had been expropriated and transferred to peasant organizations under the 1967 Agrarian Reform Law, has also reduced agricultural production. As of the end of 1975 almost 60 percent of all agricultural estates affected by the land reform—equivalent to about 24 percent of total expropriated land—has been subject to the junta’s decisions. Of this total, 40 percent of the agricultural enterprises (75 percent of the physical acreage and more than 50 percent of the irrigated land) have entirely reverted to former owners.
In the external sector of the economy, the results have been equally disastrous. In 1975 the value of exports dropped 28 percent, from $2.13 billion to $1.53 billion, and the value of imports dropped 18 percent, from $2.24 billion to $1.81 billion, thus showing a trade deficit of $280 million. Imports of foodstuffs dropped from $561 million in 1974, to $361 million in 1975. In the same period domestic food production declined, causing a drastic reduction in food for the masses of the population. Concurrently, the outstanding external public debt repayable in foreign currency increased from $3.60 billion on December 31, 1974, to $4.31 billion on December 31, 1975. This accentuated Chile’s dependence on external sources of financing, especially from the United States. The junta’s policies have burdened Chile with one of the highest per capita foreign debts in the world. In the years to come the nation will have to allocate more than 34 percent of its projected exports earnings to the payment of external debts.
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But the most dramatic result of the economic policies has been the rise in unemployment. Before the coup, unemployment in Chile was 3.1 percent, one of the lowest in the Western Hemisphere. By the end of 1974, the jobless rate had climbed beyond 10 percent in the Santiago metropolitan area and was also higher in several other sections of the country. Official junta and IMF figures show that by the end of 1975 unemployment in the Santiago metropolitan area had reached 18.7 percent; the corresponding figure in other parts of the country was more than 22 percent; and in specific sectors, such as the construction industry, it had reached almost 40 percent. Unemployment has continued to climb in 1976 and, according to the most conservative estimates, in July approximately 2.5 million Chileans (about one-fourth of the population) had no income at all; they survive thanks to the food and clothing distributed by church and other humanitarian organizations. The attempts by religious and other institutions to ease the economic desperation of thousands of Chilean families have been made, in most cases, under the suspicion and hostile actions of the secret police.
The inhuman conditions under which a high percentage of the Chilean population lives is reflected most dramatically by substantial increases in malnutrition, infant mortality and the appearance of thousands of beggars on the streets of Chilean cities. It forms a picture of hunger and deprivation never seen before in Chile. Families receiving the “minimum wage” cannot purchase more than 1,000 calories and 15 grams of protein per person per day. That is less than half the minimum satisfactory level of consumption established by the World Health Organization. It is, in short, slow starvation. Infant mortality, reduced significantly during the Allende years, jumped a dramatic 18 percent during the first year of the military government, according to figures provided by the U.N. Economic Commission for Latin America. To deflect criticism from within its own ranks against the brutal consequences of layoffs, the junta in 1975 established a token “minimum employment program.” However, it covers only 3 percent of the labor force, and pays salaries amounting to less than $30—a month!
Although the economic policies have more mercilessly affected the working classes, the general debacle has significantly touched the middle-class as well. At the same time, medium-size national enterprises have had their expectations destroyed by the reduction in demand, and have been engulfed and destroyed by the monopolies against which they were supposed to compete. Because of the collapse of the automobile industry, hundreds of machine shops and small industries which acted as subcontractors have faced bankruptcy. Three major textile firms (FIAD, Tomé Oveja and Bellavista) are working three days a week; several shoe companies, among them Calzados Bata, have had to close. Ferriloza, one of the main producers of consumer durables, recently declared itself bankrupt. Facing this situation, Raul Sahli, the new president of the Chilean Industrialists’ Association, and himself linked to big monopolies, declared earlier in the year: “The social market economy should be applied in all its breadth. If there are industrialists who complain because of this, let them go to hell. I won’t defend them.” He is so quoted by André Gunder Frank in a “Second Open Letter to Milton Friedman and Arnold Harberger,” April 1976.
The nature of the economic prescription and its results can be most vividly stated by citing the pattern of domestic income distribution. In 1972, the Popular Unity Government employees and workers received 62.9 percent of the total national income; 37.1 percent went to the propertied sector. By 1974 the share of the wage earners had been reduced to 38.2 percent, while the participation of property had increased to 61.8 percent. During 1975, “average real wages are estimated to have declined by almost 8 percent,” according to the International Monetary Fund. It is probable that these regressive trends in income distribution have continued during 1976. What it means is that during the last three years several billions of dollars were taken from the pockets of wage earners and placed in those of capitalists and landowners. These are the economic results of the application in Chile of the prescription proposed by Friedman and his group.
A Rationale for Power
The economic policies of the Chilean junta and its results have to be placed in the context of a wide counterrevolutionary process that aims to restore to a small minority the economic, social and political control it gradually lost over the last thirty years, and particularly in the years of the Popular Unity Government.
Until September 11, 1973, the date of the coup, Chilean society had been characterized by the increasing participation of the working class and its political parties in economic and social decision making. Since about 1900, employing the mechanisms of representative democracy, workers had steadily gained new economic, social and political power. The election of Salvador Allende as President of Chile was the culmination of this process. For the first time in history a society attempted to build socialism by peaceful means. During Allende’s time in office, there was a marked improvement in the conditions of employment, health, housing, land tenure and education of the masses. And as this occurred, the privileged domestic groups and the dominant foreign interests perceived themselves to be seriously threatened.
Despite strong financial and political pressure from abroad and efforts to manipulate the attitudes of the middle class by propaganda, popular support for the Allende government increased significantly between 1970 and 1973. In March 1973, only five months before the military coup, there were Congressional elections in Chile. The political parties of the Popular Unity increased their share of the votes by more than 7 percentage points over their totals in the Presidential election of 1970. This was the first time in Chilean history that the political parties supporting the administration in power gained votes during a midterm election. The trend convinced the national bourgeoisie and its foreign supporters that they would be unable to recoup their privileges through the democratic process. That is why they resolved to destroy the democratic system and the institutions of the state, and, through an alliance with the military; to seize power by force.
In such a context, concentration of wealth is no accident, but a rule; it is not the marginal outcome of a difficult situation—as they would like the world to believe—but the base for a social project; it is not an economic liability but a temporary political success. Their real failure is not their apparent inability to redistribute wealth or to generate a more even path of development (these are not their priorities) but their inability to convince the majority of Chileans that their policies are reasonable and necessary. In short, they have failed to destroy the consciousness of the Chilean people. The economic plan has had to be enforced, and in the Chilean context that could be done only by the killing of thousands, the establishment of concentration camps all over the country, the jailing of more than 100,000 persons in three years, the closing of trade unions and neighborhood organizations, and the prohibition of all political activities and all forms of free expression.
While the “Chicago boys” have provided an appearance of technical respectability to the laissez-faire dreams and political greed of the old landowning oligarchy and upper bourgeoisie of monopolists and financial speculators, the military has applied the brutal force required to achieve those goals. Repression for the majorities and “economic freedom” for small privileged groups are in Chile two sides of the same coin.
There is, therefore, an inner harmony between the two central priorities announced by the junta after the coup in 1973: the “destruction of the Marxist cancer” (which has come to mean not only the repression of the political parties of the Left but also the destruction of all labor organizations democratically elected and all opposition, including Christian-Democrats and church organizations), the establishment of a free “private economy” and the control of inflation à la Friedman.
It is nonsensical, consequently, that those who inspire, support or finance that economic policy should try to present their advocacy as restricted to “technical considerations,” while pretending to reject the system of terror it requires to succeed.
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This note on “Allende’s Economic Record” was published next to the piece.
There is a widespread notion—reported by the American press, often without substantiation—that the Allende government made a “shambles” of the Chilean economy. It is hardly acceptable to judge an ongoing sociopolitical process only by traditional economic indicators which describe aggregate economic features and not the general condition of society. However, when those indicators are applied to Chile, the Popular Unity Government fares very well.
In 1971, the first year of the Allende government, the GNP increased 8.9 percent; industrial production rose by 11 percent; agricultural output went up by 6 percent; unemployment, which at the end of the Frei government was above 8 percent, fell to 3.8 percent. Inflation, which in the previous year had been nearly 35 percent, was reduced to an annual rate of 22.1 percent.
During 1972 the external pressures applied on the government and the backlash of the domestic opposition began to be felt. On the one hand, lines of credit and financing coming from multinational lending institutions and from the private banks and the government of the United States were severed (the exception being aid to the military). On the other hand, the Chilean Congress, controlled by the opposition, approved measures which escalated government expenditure without producing the necessary revenues (through an increase of taxes); this added momentum to the inflationary process. At the same time, factions of the traditional right wing began to foment violence aimed at overthrowing the government. Despite all this and the fact that the price of copper, which represented almost 80 percent of Chile’s export earnings, fell to its lowest level in thirty years, the Chilean economy continued to improve throughout 1972.
By the end of that year, the growing participation of the workers and peasants in the decision-making process, which accompanied the economic progress of the preceding two years, began to threaten seriously the privileges of traditional ruling groups and provoked in them more violent resistance. By 1973, Chile was experiencing the full effects of the most destructive and sophisticated conspiracy in Latin American history. Reactionary forces, supported feverishly by their friends abroad, developed a broad and systematic campaign of sabotage and terror, which was intensified when the government gained in the March Congressional elections. This included the illegal hoarding of goods by the rich; creation of a vast black market; blowing up industrial plants, electrical installations and pipe lines; paralysis of the transportation system and, in general, attempts to disrupt the entire economy in such a way as to create the conditions needed to justify the military coup. It was this deliberate disruption, and not the Popular Unity, which created any chaos during the final days of the Allende government.
Between 1970 and 1973, the working classes had access to food and clothing, to health care, housing and education to an extent unknown before. These achievements were never threatened or diminished, even during the most difficult and dramatic moments of the government’s last year in power. The priorities which the Popular Unity had established in its program of social transformations were largely reached.” Orlando Letelier, “The Chicago Boys in Chile: Awful Toll;” Nation Magazine, 1976