Marx vs. Mises: Digital Futures Edition
Is this a debate or an example of "horseshoe" theory? Michel Bauwens and I discuss the future of socioeconomic organization, with roots in Marx and Mises, yet we both advocate subversive innovation.
The following is a discussion/debate between Michel Bauwens and me, hosted by the folks at the
. Niklas Anzinger selected Bauwens and me because he knows we disagree profoundly about human social and economic organization, but we also share some deep overlaps—particularly in belief in the promise of distributed ledgers as anti-authoritarian.In short, you might say Bauwens is an integral Marxist, and I’m an integral liberal. Despite any shortcomings in such characterizations, it should give you some idea about how our respective worldviews evolved. Though Bauwens and I disagree, we are united on the importance of free speech, open debate, and searching for the strongest ideas from your interlocutor. I have huge respect for Bauwens and continue to learn from him.
The Debate (Headphone Edition)
Here’s an audio version of the debate for your listening pleasure. Consider reading this entire post first, and then come back to the audio if the debate holds your interest.
The Debate (HTML Edition)
In the provocatively titled “Ron Paul Maoism,” Bauwens offers an insightful but wrong-headed analysis of the evolution of economic systems. You can read the original here. In the interests of brevity, I summarize Bauwen’s arguments and then offer interstitial commentary using blocks of italics just like this.
Bauwens starts by emphasizing the transition away from capitalism as described by orthodox Marxists, tracing industrial capitalism up to the emergence of what he terms “cognitive capitalism” and how that phenomenon manifests in contemporary phenomena like open-source movements, cryptocurrency, and networked-based markets. Bauwens believes Marx’s basic analysis still applies.
According to Bauwens, Marx's perspective on capitalism recognizes capitalism’s dynamic nature, but Marx thinks this nature leads inexorably to phases of transformation—as does Bauwens. Marx envisioned an initial revolution leading to a socialist society, where “fair” exchange and society-wide use of surplus would prevail, followed by a communist phase characterized by material abundance and the obsolescence of the state.
When you hear terms such as “late-stage capitalism,” you are hearing the echoes of old leftists who still believe in that Ole Time Marxist religion. Those who use this term are pining away for the socialist transition, which most believe will require state power and be totalizing. It’s not clear whether Bauwens follows Marx and Engels in that particular prediction, but one gets a sense that the infrastructure of crypto could take us to some form of digital socialism. My biggest criticisms, though, militate against the dubious idea of “fair” exchange and the completely dead labor theory of surplus value. These ideas are linked by their commitment to the wholly unjustifiable premise of objective economic value, as well as by a failure to incorporate subjective value into the nature of exchange.
Contrasting with Marx's predictions, Bauwens shifts to the contemporary reality of 'cognitive capitalism.’ Here, he highlights the open-source movement as an example of “really existing communism within capitalism,” marked by transparent, collaborative production of immaterial assets. This ecosystem operates within capitalist structures yet follows communist technical principles. Bauwens notes that while historical capitalism encloses the commons, modern “cloud capitalism” exploits them.
Here is another fundamental problem with Marxist theory, which I have described as bad in theory and practice. First, digital Marxists such as Bauwens cannot claim the institution of the commons for Marxism by arguing that the absence of private property rights is somehow a feature of communism by default. Any institutional rules placed upon any feature of the physical or digital world are human-contrived ascriptions. There are no natural institutional defaults. We contrive different institutions based on different ideas of instrumental value, and we won’t always agree about such value.
Second, Bauwens wants to argue that open-source movements are “communism within capitalism” instead of dealing with the nature of reality. Briefly, physical goods and digital goods are different kinds of things. One is a scarce good while the other is a non-scarce good. That is why only I can sit here in this chair as I write, but a thousand of us can be reading these very words at once. Whether and to what extent we program scarcity into digital assets depends upon how such assets are to be used.
Bauwens's discussion then moves to the evolution of the “immaterial economy,” specifically through the lens of cryptocurrency. Cryptocurrency, which he views as a shift towards socialism, addresses the issue of social reproduction in open-source production by creating a market interface that allows for the payment of developers and funds common infrastructure.
I hope you can see why Bauwens’s conclusions do not vindicate Marxist analysis but instead turn on the difference between different kinds of goods, as well as an assumed theory of transaction costs. In other words, following Ronald Coase, because most early twentieth-century enterprises were dealing with scarce raw materials, scarce production goods, scarce physical inputs, and scarce physical outputs, industrial capitalism evolved due to the reality of transaction costs at the time, not due to much in Marxist theory, such as exploitation or surplus labor. It was simply infeasible (i.e., too costly) to organize society as either a peer-to-peer market or a collectivist cooperative. That is why so-called “capitalist” firms resembled feudal hierarchies. But innovation allowed a continuous transformation of organizations away from extractive Taylorite hierarchies because new ideas, recipes, and insights reduced transaction costs—and they still do. Indeed, the more we mingle non-scarce goods with scarce goods, the more improvements we’ll see. But that doesn’t mean everything ought to become common property.
Bauwens further delves into the nature of “networked-based capitalism,” distinguishing it from traditional capitalism through its focus on open, contributory networks rather than separate firms and commodified labor. This new form of capitalism is seen as evolving alongside novel accounting systems like crypto, which enable a more transparent and inclusive allocation of resources.
Yes, networked capitalism market entrepreneurship does indeed increase transparency and inclusivity, just as it reduces transaction costs. Indeed, that is why Marxists have had continuously to kick the can when it comes to the upside-down Hegelian analysis of capitalism >socialism >communism as phase transitions that never arrive where private property, free prices, and profit and loss predominate. Marxists either tell us that true Marxism has never been tried or we have to wait for the process to play out. My own view is that Marxian analysis is both unfalsifiable and theoretically bankrupt: unfalsifiable because the Marxist will always find some ad hoc reason to explain away its predictive failures, theoretically bankrupt because it continues to rely on too many ideas that bourgeois thinkers killed with vampire stakes long ago.
Now, here’s where shit gets weird.
Criticize by Creating
Finally, Bauwens presents three future scenarios for the development of this new economic landscape:
For-profit Network States. Where crypto wealth is used to create virtual communities with localized sovereignty, often in collaboration with territorial states.
Localized ReGen Projects. Ecologically focused initiatives using crypto to regenerate local environments, emphasizing local sovereignty and bioregionalism.
Cyber-Physical Sovereigns. Combining elements of the first two scenarios, this model involves alliances of regenerative projects forming a non-territorial, proto-sovereign structure for mutual support and financing.
Despite all the throat-clearing about Marx—and my disagreement with Marxist analyses—I completely agree with these “scenarios,” at least in broad strokes. Indeed, not only is each interesting and possible in its own right, but all three (and more) can and should exist simultaneously as experiments in institutional design governing different aspects of our lives. But here’s the BUT: only if there can be entrepreneurial markets in governance. In other words—and this is what I argue strenuously in my debate with Bauwens—we can never escape the Darwinian matrix. Evolutionary forces of success or failure will continue to be with us. The more we can experiment with governance in both the physical world and the digital world, the greater the likelihood we will innovate new governance structures that work for people or can easily be abandoned if they do not work. Bauwens strikes me as something of a Rousseauvian idealist as much as an integral Marxist, but I hope I can persuade him that small, local experimentation (antifragile) is always better than global system-wide experiments which tend to be fragile. There is no reason why Bauwens’s scenarios can’t be run as experiments.
In conclusion, Bauwens suggests that these emerging economic models represent a hybrid of capitalism, socialism, and communism, driven by a network logic and potentially leading to a post-capitalist economy characterized by mutual coordination and decentralized power structures.
My own view is that it doesn’t matter what the analysis is. Systems either work in a fitness landscape, or they don’t. Darwinian logic always beats Marxian logic. So whether you want to call this a “hybrid” system or acknowledge that relatively free people tend to innovate to reduce transaction costs in different settings, the result is the same.
What’s important to remember, though, is that my integral liberalism insists that there is no One True Way. I also doubt that we want to throw out any wet babies, such as market prices, private property, and a profit/loss system, not to mention concepts such as that incentives matter, value is subjective, and no system of tradeoffs is perfect.
We need a system of systems in which more people can criticize by creating.
Note: if you read and enjoyed this, I hope you find the audio edition above interesting, too. In that conversation, we covered more ground on environmental issues, such as institutions, stewardship incentives, problems of the open commons, managed commons, private property, and more.
Now, here is a gratuitous but relevant Marx vs. Mises video: