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Mises, Kant, and Worker Exploitation

Most of my readers are likely to think that socialism is morally wrong in that it violates people’s rights; but in this week’s article, I’d like to discuss an argument by one philosopher who thinks just the contrary, that morality requires socialism, as well as Ludwig von Mises’s refutation of this argument. The philosopher who came up with this argument is Hermann Cohen, a German Jewish philosopher who flourished in the late nineteenth and early twentieth centuries. He was the founder of the Marburg school of neo-Kantianism, and though in the English-speaking world he is little read today outside the field of Jewish studies, he at one time was world famous.

Cohen accepts a modified version of Immanuel Kant’s ethics, and it was from this that he derived his argument that socialism is morally required. The gist of his argument is simple. The categorical imperative, in one of its several versions, requires us to treat each person never only as means but also as an end, but in the capitalist market, people do not do this. People regard others simply as instruments to gain their own ends, and in particular, employers view labor in this way. To employers, workers are just a commodity, a factor of production that, like its complementary factors, has a price but not an intrinsic value, or, as Kant phrases the matter, value but not dignity.

Mises explains Cohen’s argument in this way:

The starting-point of their Socialism is generally the sentence: “Act in such a way that you use your being, equally with the being of anyone else, always as a purpose, never merely as a means.” In these words, says Cohen, “the most profound and powerful meaning of the categoric[al] imperative is expressed: they contain the moral programme of the modern age and of all future world history.” And from that to Socialism, he seems to infer, is no great distance. “The idea of the purpose preference of humanity becomes transformed into the idea of Socialism by the definition of every individual as ultimate purpose, an end in himself.” 

Why does Cohen think that capitalism violates the categorical imperative? His main argument has already been mentioned. In the free market, labor is treated like a commodity: the employer buys labor in the same fashion he buys anything else used in production. Concerning this, Mises says,

Cohen’s special argument for the abolition of private property reveals the obscurity in which he still labours with regard to this fundamental problem of social life. Things, he says, have value. Persons, however, have no value. They have dignity. The market price of the value of labour is incompatible with the dignity of the person. This leads us into the abyss of Marxian phraseology and the doctrine of the “commodity-character” of labour and its objectionableness…. After this we need not be surprised to find repeated in Cohen all those catchwords which for thousands of years have been brought to bear against the institution of private property. He rejects property because the owner, by getting control over an isolated action, becomes in fact the owner of the person. He rejects property because it withdraws from the worker the produce of his labour.

Mises’s reply to this argument is that even if you accept Kant’s ethics, Cohen’s conclusion that in capitalism, workers are not treated as ends in themselves does not follow. To get to this conclusion, Cohen needs to add a Marxist account of wages or some alternative account that, like Marxism, makes exploitation central to the employment contract. Mises takes these accounts to have been sufficiently refuted by economics, and, absent the required premise about how workers are treated, Cohen’s argument fails.

An obvious response is that Cohen’s argument does not depend on a Marxist doctrine of wage determination that, to say the least, is controversial. In Mises’s own Austrian account, isn’t the worker selling his labor services and thus being treated as a commodity? In answer to this, the worker is indeed selling his labor services, but it hardly follows that he is being treated as a commodity. The labor contract comes into effect only with his consent, and the employer cannot do anything to him to which he has not consented. This sharply differentiates buying labor from buying other factors of production: to sign a contract with someone is to recognize his independent personality, not to treat him as a mere tool.

Mises’s defense of capitalism from Kantian attack depends on keeping in mind a crucial part of the categorical imperative, a part that is often forgotten. The categorical imperative does not say you should never treat another person as a means to your end; rather it says you shouldn’t treat him only in this way. It is all right, so far as this imperative is concerned, to treat someone simultaneously as an end and a means. This, Mises says, is precisely what happens in the free market:

Liberal social theory proves that each single man sees in all others, first of all, only means to the realization of his purposes, while he himself is to all others a means to the realization of their purposes; that finally, by this reciprocal action, in which each is simultaneously means and end, the highest aim of social life is attained—the achievement of a better existence for everyone. As society is only possible if everyone, while living his own life, at the same time helps others to live, if every individual is simultaneously means and end; if each individual’s well-being is simultaneously the condition necessary to the well-being of the others, it is evident that the contrast between I and thou, means and end, automatically is overcome. This, after all, is just what the simile of the biological organism is supposed to make us perceive. In the organic structure no parts are to be regarded only as means and none only as ends. According to Kant the organism is a being “in which everything is end and reciprocally also means”. Now Kant was thoroughly familiar with the nature of the organic, but he did not see—and in this he lagged far behind the great sociologists who were his contemporaries—that human society is formed according to the same principle.

The structure of this argument is interesting: Mises is saying that if you treat someone only as a means to your end, but he at the same time treats you as a means to his end, this counts as fulfilling the categorical imperative. I suspect Cohen would disagree.

Mises’s argument against Cohen in no way depends on accepting Kant’s categorical imperative. Mises in fact strongly rejects Kantian ethics. But even if you accept Kant, you should reject socialism.

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