The arguments underlying Marx’s historical prophecy are invalid. His ingenious attempt to draw prophetic conclusions from observations of contemporary economic tendencies failed. The reason for this failure docs not lie in any insufficiency of the empirical basis of the argument. Marx’s sociological and economic analyses of contemporary society may have been somewhat one-sided, but in spite of their bias, they were excellent in so far as they were descriptive. The reason for his failure as a prophet lies entirely in the poverty of historicism as such, in the simple fact that even if we observe to-day what appears to be a historical tendency or trend, we cannot know whether it will have the same appearance to-morrow.
We must admit that Marx saw many things in the right light. If we consider only his prophecy that the system of unrestrained capitalism, as he knew it, was not going to last much longer, and that its apologists who thought it would last forever were wrong, then we must say that he was right. He was right, too, in holding that it was largely the ‘class struggle’, i.e. the association of the workers, that was going to bring about its transformation into a new economic system.
That is a serious misreading of the historical play: I don’t accept the fundamental premise of exploitation and it is likely that militant trade unionism only slowed down the rate of growth in productivity and creamed off benefits for powerful unions at the expense of the unemployed, the low paid and community at large.
Since I am criticizing Marx and, to some extent, praising democratic piecemeal interventionism (especially of the institutional kind explained in section VII to chapter 17), I wish to make it clear that I feel much sympathy with Marx’s hope for a decrease in state influence. It is undoubtedly the greatest danger of interventionism—especially of any direct intervention—that it leads to an increase in state power and in bureaucracy. Most interventionists do not mind this, or they close their eyes to it, which increases the danger.
Popper considered that the most robust parts of the Marxist prophecy concerned increasing productivity and the potentially disastrous consequences of the trade cycle (boom and bust). He did not claim to know enough to improve on Marx’s analysis and he was left with the need for a theory to explain why the institution of the free market does not prevent depressions
Why it is that “such a very efficient instrument for equalizing supply and demand, does not suffice to prevent depressions, i.e. overproduction or underconsumption. In other words, we should have to show that the buying and selling on the market produces, as one of the unwanted social repercussions of our actions, the trade cycle.”
The answer is that the free market will minimize (or tend to correct) overproduction and underproduction, and will ensure a fairly rapid recovery from busts (for example the 1920/21 bust in the US). The crash of 1929 and the Great Depression of the 1930’s do not demonstrate the failure of free markets, they demonstrate what happens when many and varied constraints are put upon free markets, especially the market in labour.
Roughly speaking, Marx shared the belief of the progressive industrialist, of the bourgeois’ of his time: the belief in a law of progress. But this naive historicist optimism is no less superstitious than a pessimistic historicism like that of Plato and Spengler. And it is a very bad outfit for a prophet, since it must bridle historical imagination.
A faith like the progressivist optimism of the nineteenth century can be a powerful political force; it can help to bring about what it has predicted. Thus even a correct prediction must not be accepted too readily as a corroboration of a theory, and of its scientific character. It may rather be a consequence of its religious character and a proof of the force of the religious faith which it has been able to inspire in men. And in Marxism more particularly the religious element is unmistakable. In the hour of their deepest misery and degradation, Marx’s prophecy gave the workers an inspiring belief in their mission, and in the great future which their movement was to prepare for the whole of mankind. Looking back at the course of events from 1864 to 1930, I think that but for the somewhat accidental fact that Marx discouraged research in social technology, European affairs might possibly have developed, under the influence of this prophetic religion, towards a socialism of a non-collectivist type. A thorough preparation for social engineering, for planning for freedom, on the part of the Russian Marxists as well as those in Central Europe, might possibly have led to an unmistakable success, convincing to all friends of the open society. But this would not have been a corroboration of a scientific prophecy. It would have been the result of a religious movement—the result of the faith in humanitarianism, combined with a critical use of our reason for the purpose of changing the world.
But things developed differently. The prophetic element in Marx’s creed was dominant in the minds of his followers. It swept everything else aside, banishing the power of cool and critical judgement and destroying the belief that by the use of reason we may change the world.