This article is excerpted from volume 2, chapter 10 of An Austrian Perspective on the History of Economic Thought (1995). An MP3 audio file of this chapter, narrated by Jeff Riggenbach, is available for download.
Some might protest that, in our discussion of communism, we have not mentioned the feature that is generally considered the hallmark of that system: the slogan, "From each according to his ability, to each according to his needs." This phrase seems to contradict our view that the essence of the communist society is a secularized religion rather than economics. The locus classicus, however, of Marx’s proclamation of this well-known slogan of French socialism, was in the course of his vitriolic Critique of the Gotha Program in 1875, in which Marx denounced the Lassallean deviationists who were forming the new German Social Democratic Party. And it is clear from the context of his discussion that this slogan is of minor and peripheral importance to Marx. In point 3 of his Critique, Marx is denouncing the clause of the program calling for communization of property and "equitable distribution of the proceeds of labour." In the course of his discussion, Marx states that inequality of labor income is "inevitable in the first stage of communist society, … when it has just emerged after prolonged birth pangs from capitalist society. Right can never be higher than the economic structure of society and the cultural development thereby determined." On the other hand, Marx goes on,
In a higher phase of communist society, after the enslaving subordination of individuals under division of labour, and therewith also the antithesis between mental and physical labour, has vanished; after … the productive forces have also increased with the all-round development of the individual, and all the springs of cooperative wealth flow more abundantly only then can the narrow horizon of bourgeois right be fully left behind and society inscribe on its banners: from each according to his ability, to each according to his needs!
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It should be evident from this passage and its context that Marx’s final sentence, far from being the point and the culmination of his discussion, was stated briefly only to be dismissed. What Marx is saying is that the key to the communist world is not any such principle of the distribution of goods, but the eradication of the division of labor, the all-around development of individual faculties, and the resulting flow of superabundance. In such a world, the famous slogan becomes of only trivial importance. Indeed, Marx proceeds immediately after this passage to denounce talk among socialists of "equal right" and "equitable distribution" as "ideological nonsense about “right” and other trash common among the democrats and French Socialists." He then quickly adds that "it was in general incorrect to make a fuss about so-called ‘distribution’ and put the principal stress on it.",
The absolute misery and horror of the ultimate stage (and a fortiori of the beyond-ultimate stage) of communism should now be all too apparent. The eradication of the division of labor would quickly bring starvation and economic misery to all. The abolition of all structures of human interrelation would bring enormous social and spiritual deprivation to every person. And, even the alleged "artistic" intellectual and creative development of all man’s faculties in all directions would be totally crippled by the ban on all specialization. How can true intellectual development or creation come without concentrated effort? In short, the terrible economic suffering of mankind under communism would be fully matched by its intellectual and spiritual deprivation. Considering the nature and consequences of communism, to call this horrific dystopia a noble and "humanist" ideal can at best be considered a grisly joke, in questionable taste. The prevalent notion, for example, that Marxian communism is a glorious ideal for man perverted by the later Engels or by Lenin or Stalin, can now be put into proper perspective. None of the horrors committed by Lenin, Stalin, or other Marxist-Leninist regimes can match the monstrousness of Marx’s communist "ideal." Perhaps the closest approximation was the short-lived communist regime of Pol Pot in Cambodia which, in attempting to abolish the division of labor, managed to enforce the outlawry of money so that for their tiny rations the populace was totally dependent upon the niggardly largesse of the communist cadre. Moreover, they attempted to eliminate the "contradictions between town and country," by following the Engels goal of destroying large cities, and by coercively depopulating the capital, Phnom Penh, overnight. In a few short years, the Pol Pot group managed to exterminate one-third of the Cambodian population, perhaps a record in genocide.
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Since under ideal communism everyone could and would have to do everything, it is clear that, even before universal starvation set in, very little could get done. To Marx himself, all differences among individuals were "contradictions" to be eliminated under communism, so that presumably the mass of individuals would have to be uniform and interchangeable. Whereas Marx apparently postulated normal intellectual capabilities even under communism, to later Marxists, it seems that difficulties could be alleviated by the emergence of superhuman beings. To Karl Kautsky (18541938), the German Marxist who assumed the mantle of the top leadership of Marxism upon the death of Engels in 1895, under communism "a new type of man will arise … a superman … an exalted man." Leon Trotsky waxed even more lyrical: "Man will become incomparably stronger, wiser, finer. His body more harmonious, his movements more rhythmical, his voice more musical … The human average will rise to the level of an Aristotle, a Goethe, a Marx. Above these other heights new peaks will arise." If the beyond ultimate stage of communism ever lasts long enough to breed a new super-race, we may safely leave it to the communist theoreticians of that future day to resolve the problem of whether the "contradiction" of "permitting" a super-Aristotle to tower over an Aristotle may be allowed to exist.
Neither should libertarians be taken in by the Marxian goal of the "withering away of the State" under communism, or in the use of the phrase, borrowed from the cherished aim of the French free market libertarians Charles Comte and Charles Dunoyer: a world where the "government of persons is replaced by the administration of things." There are two major flaws in this formulation from the laissez-faire libertarian viewpoint. First, of course, as the Russian anarcho-communist Mikhail Bakunin (181476) insistently pointed out: it is absurd to try to reach statelessness via the absolute maximization of state power in a totalitarian dictatorship of the proletariat (or more realistically a select vanguard of the said proletariat). The result can only be maximum statism and hence maximum slavery. As perhaps the first of the "new class" theorists, and anticipating the iron law of oligarchy of Michels and Mosca, Bakunin prophetically warned that a minority ruling class will once again, after the Marxian revolution, rule the majority:
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But the Marxists say, this minority will consist of the workers. Yes, no doubt … of former workers, who, as soon as they become governors or representatives of the people, cease to be workers and start looking down on the working masses from the heights of state authority, so that they represent not the people but themselves and their own claim to rule over others. Anyone who can doubt this knows nothing of human nature … The terms "scientific socialist" and "scientific socialism," which we meet incessantly in the works and speeches of the … Marxists, are sufficient to prove that the so-called people’s state will be nothing but a despotism over the masses, exercised by a new and quite small aristocracy of real or bogus "scientists."… They [the Marxists] claim that only dictatorship, their own of course, can bring the people freedom; we reply that a dictatorship can have no other aim than to perpetuate itself, and that it can engender and foster nothing but slavery in the people subjected to it. Freedom can be created only by freedom.
Indeed, only a believer in the preposterous necromancy of the "dialectic" could believe otherwise, that is, could believe that a totalitarian state can inevitably and virtually instantly be transformed into its opposite, and that therefore the way to get rid of the state is to work as hard as possible to maximize its power.
But the problem of the dialectic is not the only, indeed not even the main, problem with Marxian communism. For Marxism shares with the anarchists a grave problem of the higher stage of pure communism, assuming for a moment that it could ever be reached. The crucial point is that, both for anarchists and for Marxists, ideal communism is a world without private property, and that all property and resources will be owned and controlled in common. Indeed, the anarcho-communists’ major complaint against the state is that it is allegedly the main enforcer and guarantor of private property and therefore that to abolish private property the state must also be eradicated. The truth, of course, is precisely the opposite: the state, through history, has been the main despoiler and plunderer of private property. With private property mysteriously abolished, then, the elimination of the state under communism (of either the Marxian or anarchist variety) would necessarily be a mere camouflage for a new state that would emerge to control and make decisions for communally owned resources. Except that the state would not be called such, but rather renamed something like a "people’s statistical bureau," as has already been done in Khadafy’s Libya, and armed with precisely the same powers. It will be small consolation to future victims, incarcerated or shot for committing "capitalist acts between consenting adults" (to cite a phrase made popular by Robert Nozick), that their oppressors will no longer be the state but only a people’s statistical bureau. The state under any other name will smell as acrid. Furthermore, it will be inevitable, under the iron law of oligarchy, that "world communal decisions’ will have to be undertaken by a specialized elite, so that the ruling class will inevitably reappear, under Bakuninite as well as any other form of communism.
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And, as we have indicated, in the "beyond-communism" stage, the stage of universal no-ownership and therefore of no action and no use of resources, death for the entire human race would swiftly ensue.
Marx and his followers have never demonstrated any awareness of the vital importance of the problem of allocation of scarce resources. Their vision of communism is that all such economic problems are trivial, requiring neither entrepreneurship nor a price system nor genuine economic calculation that all problems could be quickly solved by mere accounting or recording. The classic absurdity on this matter was laid down by Lenin, who accurately expressed Marx’s view in declaring that the functions of entrepreneurship and of allocation of resources have been "simplified by capitalism to the utmost" to mere matters of accounting and to "the extraordinarily simple operations of watching, recording, and issuing receipts, within the reach of anybody who can read and write and knows the first four rules of arithmetic." Ludwig von Mises wryly and justly comments that Marxists and other socialists have had "no greater perception of the essentials of economic life than the errand boy, whose only idea of the work of the entrepreneur is that he covers pieces of paper with letters and figures." Notes
 Karl Marx, Critique of the Gotha Programme (New York: International Publishers, 1938), p. 10. The critique was first published by Engels in 1891, after Marx’s death. The Lassalleans were followers of the late Ferdinand Lasalle (182564) a blowhard and dandy who was extremely popular in Germany, especially beloved by the working class, and the preeminent organizer of the proletariat. Typically, Lassalle died early in a most unproletarian and aristocratic way in a duel over a lady. One of Lasalle’s two major deviations from Marxism was his ultra-Malthusian devotion to the Malthus-Ricardo subsistence theory of wages as determined by population growth, which he popularized in the most rigid form, and allegedly named the "iron law of wages," in which form it won widespread fame. In reality, Lassalle dubbed it the "brazen law of wages" (in the sense of "made of brass"), and his most common locution was "the brazen and gruesome law of wages" (das eherne und grausame Gesetz).
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Lassalle’s other and more important deviation was his embrace and worship of the state. Marx saw the state as a tyrannical instrument of mass exploitation which required a violent revolution to overthrow. Lassalle, in Hegelian fashion, on the other hand, worshipped the state as a guide and developer of freedom, as the fusion of man into a spiritual whole, and as an eternal instrument for moral regeneration. The only problem with the state, for Lassalle, was the fact that it was not yet controlled by the workers, but this could be rectified simply by enacting universal suffrage, after which the state would be run by a workers’ party and the workers would then become the state and all would be well. The state would promptly transfer the control of production to workers’ associations which would thus circumvent the brazen law by appropriating to themselves the surplus profits now extracted by the capitalists. See Gray, op. cit., note 16, pp. 33243.
 Actually, Marx goes on to make a useful point: that distribution always flows from the "conditions of production" and cannot be separated from it. One would like to think that this was not only an argument against the "vulgar socialists" but also an implicit slap at J.S. Mill, who thought that while production was bound by economic law, "distribution" could be separated from production and reformed by state action.
 See the excellent discussion of this point in Tucker, op. cit., note 8, p. 200.
 The Soviet people were spared the full cataclysm of communism when Lenin, a master pragmatist, drew back from the early Soviet attempt (191821) to abolish money and leap into communism (later deliberately mislabeled "war communism"), and went back to the largely capitalist economy of the New Economic Policy. Mao tried to bring about communism in two disastrous surges: the Great Leap Forward, which attempted to eliminate private property and to eliminate the "contradictions" between town and country by building a steel plant in every backyard; and the Great Proletarian Cultural Revolution, which tried to eliminate the "contradiction" between intellectual and manual labor by shipping an entire generation of students to forced labor in the wilds of Sinkiang. On the myth of "war communism," see the illuminating discussion in Paul Craig Roberts, Alienation and the Soviet Economy (Albuquerque: University of New Mexico Press, 1971), pp. 2047.
 In an amusing note, during the New Left period of the late 1960s, the Liberated Guardian broke off from the quasi-Maoist journal, The Guardian, in New York City, on the ground that the latter functioned in the same way as any "bourgeois" periodical, with specialized editors, typists, copy-readers, business staff, etc. The Liberated Guardian was run by a "collective" in which, assertedly, every person performed every task without specialization. The same criticism, followed by the same solution, was applied by the women’s caucus which confiscated the property of the New Left weekly, Rat. Both periodicals, as one would expect, died a mercifully swift death. See Murray N. Rothbard, Freedom, Inequality, Primitivism, and the Division of Labor (Menlo Park, Calif. Institute for Humane Studies, 1971), pp. 15n, 20.
 See von Mises, op. cit., note 15, p. 143. Also see Rothbard, op. cit., note 34, pp. 815.
 Bakunin, Statehood and Anarchy: quoted in Leszek Kolakowski, Main Currents of Marxism: Its Origins, Growth and Dissolution (New York: Oxford University Press, 1981), I, pp. 2512. See also Abram L. Harris, Economics and Social Reform (New York: Harper & Bros, 1958), pp. 14950.