Popper’s critique of Marx’s theory of the classes follows the lines taken up in the last chapter. He accepts that the formula ‘all history is a history of class struggle’ is valuable as a reminder to look into the important part played by class struggle in power politics as well as in other developments. But he went on to point out that dissention within the Marxian classes is at least as important as the conflict between the classes (even allowing the assumption that there is some kind of fundamental conflict between the rich and poor, which I do not accept). Consequently the Marxist theory of classes is a dangerous over-simplification.
"One of the dangers of Marx’s formula is that if taken too seriously, it misleads Marxists into interpreting all political conflicts as struggles between exploiters and exploited (or else as attempts to cover up the ‘real issue’, the underlying class conflict). As a consequence there were Marxists, especially in Germany, who interpreted a war such as the First World War as one between the revolutionary or ‘have-not’ Central Powers and an alliance of conservative or ‘have’ countries—a kind of interpretation which might be used to excuse any aggression... On the other hand, his attempt to use what may be called the ‘logic of the class situation’ to explain the working of the institutions of the industrial system seems to me admirable in spite of certain exaggerations and the neglect of some important aspects of the situation; admirable, at least, as a sociological analysis of that stage of the industrial system which Marx has mainly in mind: the system of ‘unrestrained capitalism’ (as I shall call it) of one hundred years ago."
This last statement signals a fundamental error that Popper has brought to his critique of Marx, namely his assumption that the economic system and the markets of the mid-nineteenth century were (a) actually unrestrained, that is, a system of free markets of the kind desired by free traders and (b) a system that exploited the workers, any more than the situation prior to industralisation and the rise of the factory sytem. More on that later..
Returning to the start of the chapter where Popper describes the Marxist theory, before his criticism; the most important function of the theory is to explain the increase in productivity which is an integral part of Marx’s story to account for the revolution and the advent of freedom under socialism.
"An important place among the various formulations of Marx’s ‘historical materialism’ is occupied by his (and Engels’) statement: ‘The history of all hitherto existing society is a history of class struggle.’ The tendency of this statement is clear. It implies that history is propelled and the fate of man determined by the war of classes and not by the war of nations (as opposed to the views of Hegel and of the majority of historians). In the causal explanation of historical developments, including national wars, class interest must take the place of that allegedly national interest which, in reality, is only the interest of a nation’s ruling class. But over and above this, class struggle and class interest are capable of explaining phenomena which traditional history may in general not even attempt to explain. An example of such a phenomenon which is of great significance for Marxist theory is the historical trend towards increasing productivity. Even though it may perhaps record such a trend, traditional history, with its fundamental category of military power, is quite unable to explain this phenomenon. Class interest and class war, however, can explain it fully, according to Marx; indeed, a considerable part of Capital is devoted to the analysis of the mechanism by which, within the period called by Marx ‘capitalism’, an increase in productivity is brought about by these forces."
It is very strange to read that Marx was a pioneer in explaining the factors that increase productivity which was a major interest of Adam Smith and others who pointed to the division of labour, specialisation, comparative advantage and advances in science and technology. It is also unfortunate that Popper did not encounter writers such as Hutt who would have explained that role of the militant trade union movement in reducing productivity and employment.
Popper did not accept the idea that class interest is a psychological phenomenon. He argued that Marx pursued an institutional analysis (rejecting psychologism). According to his gloss on Marx, the rulers emancipated themselves from the productive process by making other people do the dirty work, by degrading them and virtually enslaving them. But in doing that they themselves were trapped in a new kind of bondage, locked into their own place in the class system and forced to fight the working class to maintain their situation.
"Thus all, rulers as well as ruled, are caught in the net, and forced to fight one another. According to Marx, it is this bondage, this determination, which brings their struggle within the reach of scientific method, and of scientific historical prophecy; which makes it possible to treat the history of society scientifically, as the history of class struggle."
Just as an aside, that analysis did not do justice to the situation of small business people like farmers who worked side by side with their employees, often doing identical or very similar work in addition to providing the capital to set up the business and carrying the risk of loss if the venture fails.
"The system evolves as the conditions of production change, so each historical period is characterized by the means of production and the consequent class system (according to Marx’s “economism”). Marx wrote: 'The hand-mill gives you a society with the feudal lord; the steam-mill gives you a society with the industrial capitalist ... In the social production of their means of existence, men enter into definite and unavoidable relations which are independent of their will. These productive relationships correspond to the particular stage in the development of their material productive forces. The system of all these productive relationships constitutes the economic structure of ociety' [i.e. the social system]."
"This is the way in which, according to Marx, the social system determines the actions of the individual; the ruler as well as the ruled; capitalist or bourgeois as well as proletarian. It is an illustration of what has been called above the ‘logic of a social situation’. To a considerable degree, all the actions of a capitalist are ‘a mere function of the capital which, through his instrumentality, is endowed with will and consciousness’, as Marx puts it, in his Hegelian style. But this means that the social system determines their thoughts too; for thoughts, or ideas, are partly instruments of actions, and partly—that is, if they are publicly expressed—an important kind of social action; for in this case, they are immediately aimed at influencing the actions of other members of the society. By thus determining human thoughts, the social system, and especially the ‘objective interest’ of a class, becomes conscious in the subjective minds of its members (as we said before in Hegelian jargon). Class struggle, as well as competition between the members of the same class, are the means by which this is achieved."