Karl Marx and Historicism

Many of the post-marginal revolution scholars can be categorized into one of two major schools of economic theory: either originating from classical economics theory or originating from the German historical school. This categorization is effective because the schools occupy fundamentally opposite methodologies of study, resulting in vastly different conclusions — while classical economists like Adam Smith and David Ricardo believed in universal economic law and the infinite complexity of the economy, the German Historical school believed that the study of economics was a relative one that could be well understood with enough study of cultural context. Karl Marx, however, occupies a unique niche in the history of economic thought, for unlike most, he seems to bridge the divide between these two schools. In examining the work and influences of Marx, we can seek to better understand how he reconciled the seemingly irreconcilable differences between classical and historicist thought. We will seek this greater understanding through an examination of the foundations of Historicism and a subsequent examination of the work of Karl Marx.

As a result of utopian influences on the thoughts and ideas of Karl Marx, he believed that over time, the economic system of a society would progress through various stages to ultimately become a communist state. The theoretical process by which this occurs was first conceptualized by Georg Wilhelm Friedrich Hegel, who described the evolution of mankind as an organic process. This evolution consists of a thesis, that is, the state of being, coming into conflict with some challenge or antithesis, which would then synthesize in what he called a dialectical scheme. For Marx, this dialectic scheme occurred when class conflict induces the adoption of a new economic system; for example, a revolution led by the working class causes the adoption of capitalism over feudalism. Early in his career, Marx outlined the specific stages of economic evolution from slavery to a communist state, a process he believed to be inevitable and presumably, identical (Marx 1867). But what remains unclear, however, is whether this process is an isolated one that must occur for each culture individually or whether Marx accounts for a given society's unique circumstances. This is perhaps addressed in a letter to Arnold Ruge in 1843, in which Marx writes, "every individual must admit to himself that he has no precise idea about what ought to happen . . . we do not anticipate the world with our dogmas but instead attempt to discover the new world through the critique of the old (Marx 1843)." This would seem to contradict his outline of specific economic stages in favor of the universal principles of revolution. Marx's economic perspective thus seems contradictory: how can his theories be dually influenced by the absolute methodology of classical economics as well as historicist, relativist utopianism?

In the context of modern economics, Historicism has been largely rejected as a methodology of thought especially in the Western World. This might be because historicism is not, at its core, an economic theory but rather an investigation of historical context to explain economic phenomena. Historicism can be defined as a "critical movement insisting on the prime importance of historical context to the interpretation of texts of all kinds" (Hamilton 2004) — for while humans have always studied history, they have not always done so as historicists. Put simply, Historicism was an academic reaction to the Enlightenment, a philosophical movement aimed towards the search for universal truths (Page 2010). Historicism has been contrasted with reductionism — "the historicist stress on the significance of historical context certainly distinguishes it from social theories that postulate general and often immutable laws" (Bevir 2017). Perhaps the greatest influence on Hegel, widely considered to be the most prominent influence on Karl Marx, was Friedrich Wilhelm Joseph Schelling. Schelling argued that all modes of thought, including philosophy, should be seen as manifestations of an overarching transcendent reality known as 'The Absolute' (Burckhardt 2007). The work of Georg Wilhelm Friedrich Hegel, considered the first true historicist, took the movement in a more extreme direction, leading the way to radical historicism. Hegel's philosophy was most likely a product of the time in which he lived — during the bourgeois emergent era in Paris and Britain. This would explain why his works contemplate the meaning and significance of political revolution. Hegel's earliest description of society's "momentary crisis" existed in his essay 'The Positivity of the Christian Religion,' which contrasted the current state of social division to the unity of the polis (Grumley 2016). This idealization and conceptualization of a utopian society would play an important role in utopianism. According to Hegel, it was the absence of cultural unity that was the direct cause of the current fragmented society — a schism between the spiritual and the secular (Beiser 1993). The Geist, however, is the most influential Hegelian concept. Known as 'mind' or 'spirit,' Geist is the spirit behind naturally occurring social institutions like the family, state, religion, and philosophy. Humans, as functioning within a family unit, then serve as a vehicle for the consciousness of the Geist. It is self-actualizing and self-interpreting, which attributes a sort of self-consciousness to it — the guiding force in the natural evolution of society and the "ruse of reason" behind political and economic change (Hardimom 1994). Hegel argues that as a result of the Geist, all human societies are defined by their history and that the history of any human effort builds upon or reacts to the preceding materialization of this spirit.

Karl Marx studied under one of Hegel's students, Bruno Bauer, a leader of the Young Hegelians. However, Marx soon sought to break away from the Young Hegelians and some of the philosophy of Hegel himself, writing a critique of the Young Hegelians in The German Ideology. Marx inverted Hegel, by "turning the idealistic dialectic into a material one in proposing that material circumstances shape ideas, instead of the other way around" (Faal 2005). This means, however, that Marx does not fully reject the philosophy of Hegel, but reacts both to and against Hegel's dialecticism, differentiating himself as a dialectic materialist and rejecting Hegel's immaterial Geist. In Marx's Critique of the Hegelian Dialectic and Philosophy as a Whole, he defends "the establishment of true materialism and of real science, by making the social relationship of 'man to man' the basic principle of the theory" (Marx 1844). Dialectic materialism is thus better understood as humanism, for Marx believed that developed materialism evolves into human-focused endeavors. This is why in Das Kapital, he explains that "capitalism is abolished root and branch by the bare assumption that it is personal consumption and not enrichment that works as the compelling motive" (Marx 1867). Marx calls this "humanism" in The Holy Family as distinct from idealism and materialism, constituting at the same time the unifying truth of both. For Marx, "History is not like some individual person, which uses men to achieve its ends. History is nothing but the actions of men in pursuit of their ends" (Marx 1845). This means that while he believes history to be a force towards progress, he does not believe history to be some immaterial Geist. Thus it seems that Marx cannot be classified as a historicist or classical economist because his beliefs seem to exist at the junction in between.

Our question is further answered in Marx's critiques of George Friedrich List, the father of the German Historical School. Only recently, a critique of List's 1841 book Das nationale System der politischen Ökonomie was found in which List argues against the consequences of the capitalist industrial system. For while List believed that capitalism failed to properly incentivize productive forces which resulted in poor economic circumstances for the working classes, Marx emphasized the potential for "theoretical interpretation to distort the true nature of the system with respect to the situation that it dictated for families and workers (Oakley 1983)." This is because Marx found List's stress on the role of productive forces at the exclusion of valuing profit and exchange to be misleading: "For while Marx was aware of the significance of 'productive forces' for comprehending the material dimension of this mode of production . . . it was the human dimension of the system that he continued to emphasize" (Oakley 1983). For Marx, the objective of capitalism is to produce and realize exchange value, including profit. This means that the end of productive forces and the end of exchange value are not mutually exclusive or even separable. It is important to note that List is not a true historicist; however, List's beliefs about the capability of a government to design a nationalist alternative to capitalism bear great consequence on the aim of his historicist successors. Marx's critique of List suggests again that while he does not believe in pure economic theory he also does not believe in the exhaustibility or superiority of historicist study — and so as a result, we cannot classify him as a historicist.

Because of the ultimate direction of both sides of the economic field into their modern counterparts, it can be tempting to reduce Marxian theory as historicist, thus denigrating his work as without value. However, in flipping Hegelianism on its head and forming dialectic materialism, Marx effectively merges classical theory with dialecticism. Considering the political turbulence of his time, it is of no surprise that Marx believes in the necessity of revolution to achieve a better condition of being for mankind. If we are to look back in history, after all, we cannot help but sympathize with our own nation's efforts towards human progress through violent revolution.