Free to Lose: An Introduction to Marxist Economic Philosophy


Marxism is dead. Except that it isn't. From "democratic socialism" to Piketty's inequality narrative, unfortunately, varieties of Marxism are far from dead.

Free to Lose: An Introduction to Marxist Economic Philosophy

by John E. Roemer

Cambridge: Harvard University Press, 1988, 203 pp.

Marxism is dead. Except that it isn’t. From the ongoing popularity of “democratic socialism” to the Piketty inequality narrative, varieties of Marxism are far from dead. Since we have to live with the legacy of Marx, we should follow the best Marxist analytical philosophers and economists like G.A. Cohen, Jon Elster, and John E. Roemer, to pick Marx’s arguments apart, and see what (if anything) remains to be salvaged of his theory. Although he draws heavily from earlier thinkers, including Marx, Lenin, and Mao, and especially the philosopher G.A. Cohen, Roemer makes contributions to this debate through the rigorous application of game theory, neoclassical microeconomics, and equilibrium theorizing to reconstruct Marx’s theory. He argues that the (in)famous labour theory of value, far from being the cornerstone of the theory, is either false or not necessary to it, so it needs to go. Poof. Instead, he argues, persuasively enough, that what remains compelling about the Marxist theory of class exploitation is the core idea that exploitation happens when some people have an unfair advantage over other people based on their privileged control over the means of production. He argues that we should interpret the “means of production” (or the property rights regime) in terms of the distribution of external and internal assets (natural resources).

Roemer’s interpretation of Marxist theory combines the idea that people are concerned about maximizing utility and realizing social justice with the notion that the best way to do so is to a) equalize ownership in external assets and b) to abolish private property. Roemer’s theory approaches, in some respects, two competing theories of justice. On the one hand, it approaches a form of left-libertarianism associated with Henry George, Hillel Steiner, and others, with the important difference that Roemer’s version of Marxism, although it is open to self-ownership and equal resource ownership, forbids all capitalist accumulation, and not merely resource rent accumulation, on justice grounds. On the other hand, Roemer’s theory approaches a radicalized reading of the Dworkin-Rawls type of luck egalitarian theory of justice. His theory shares with theirs the view that a just social contract needs to be sensitive to “brute luck” and thereby equalize welfare opportunities that derive from it. However, Roemer claims that, contrary to the conclusions of Rawls and Dworkin (both of whom attempted to justify and demarcate a domain of property rights), if the idea of a “resource equality” is taken to its logical limit, and even if we acknowledge the justice of self-ownership up to a point, the resulting inequalities of income or wealth (such as those described under the Rawlsian difference principle) are, in fact, almost never justified.

Methodologically, the book obeys the strict censures of rational choice theory. It relies on simplified assumptions about static economic arrangements that are similar to the Walrasian-Samuelsonian model of perfect competition that underlies much of neoclassical capitalist theorizing. One of the “artefacts” of this methodological choice is that dynamic preferences, disequilibrium conditions, informational uncertainty, and structural shifts are excluded from consideration. Such weaknesses, of course, are apparent also in neoclassical economics, but they cause severe problems for Roemer’s artificial Marxist model for two reasons: 1) For one, the static equilibrium assumptions make it impossible to model such Marxist things as “class consciousness,” “ideology,” “class struggle” or any of the other dynamic, evolutionary, revolutionary, and Hegelian dialectical processes. 2) These assumptions also make it impossible to model some of the key positive features of the capitalist system, namely, its capacity to produce innovations, entrepreneurial discoveries, and dynamic preferences (which even Roemer, however begrudgingly, acknowledges as important). This means that the Smithian division of labour is reduced to a static equilibrium instead of the kind of dynamic process of social evolution that it was intended to be. At the same time, the epistemic Hayekian and innovative Schumpeterian processes of entrepreneurial discovery are completely ignored. This is a bit too convenient for Roemer, because it means that private property appears superfluous. But if one empirically acknowledges that private property contributes to social innovations and market dynamism that are not replicable without it (as Mises and Hayek have argued), this conclusion is false. Roemer does not discuss such dynamic efficiency arguments in his work. Indeed, his analysis is so stunted by strong artificial restrictions that he even ignores work incentive arguments. This means that one would need to advance better arguments to make the final case for socialism.

The main conclusions of the book are wrong, and its game theoretical equilibrium assumptions are misleading, but everything else in the analysis is great. Well, almost everything. The blurb text, attributed to Erik Olin Wright, claims that Roemer’s book is written in a “nontechnical” and “accessible” manner that requires a minimal knowledge of economics. This is a barefaced lie. The book is full of mathematical jargon, although no more than an average neoclassical economics book. I only wish that the technical derivations and proofs had been relegated to separate chapters or appendices instead of being scattered all across the otherwise very readable text. A lot of people will not be able to follow these sections and much of this technical language is not even necessary to make his point. But overall, I really enjoyed the book. It may not be entirely original, it is wedded to an unfortunately static view of economic production and consumption that does disservice to both capitalism and Marxism, and it reaches premature conclusions about the abolition of private property that are not warranted by the evidence. But Roemer’s work has contributed greatly to the “analytical Marxist” revival that has purified the Marxist tradition from much that is excessive, outdated, false, misleading, or uninteresting in it. While I think Roemer was a victim of his own narrow models that he constructed to prove his points, he made Marxism interesting again. As I read it, G.A. Cohen and John E. Roemer together are the Gorbachev of leftist philosophy: they wanted to reform Marxism but ended up, by earnest curiosity, almost bringing the whole edifice down. This means, ironically enough, that Marxism has a second life as a post-Marxism.


  • Otto Lehto

    Otto Lehto is currently a postdoctoral researcher at NYU's Classical Liberal Institute. He has a PhD in Political Economy from King's College London.His research interests include political philosophy, classical liberalism, UBI, evolutionary economics, and complexity theory.

The views expressed on austriancenter.com are not necessarily those of the Austrian Economics Center.

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