I have just finished reading a short book by Nikolai Bukharin, “Economic theory of the leisure class.” It was published in 1914, exactly 100 years ago. His idea was a very good one. At the time of the rising, and seemingly victorious, marginal revolution which argued that value is determined by marginal utility and not by the socially-necessary labor, a Marxist, like Bukharin, took upon himself to reply to the Austrian school and John Bates Clark.
It was a good idea because this was also the time of the rentier-capitalist to whose preferences it seemed that the new theory was principally directed. Hence ”the leisure class” in the title. It was also consistent with Marxist approach on non-neutrality of political economy. There was one proletarian and scientific political economy, and then there were other “vulgar” political economies, essentially created by the bourgeoisie to express its own viewpoint and defend its privileges. And it would seem that a theory that puts the emphasis on utility was perfectly suited for such a purpose, especially with “coupon-clippers” at the apex of economic power.
Moreover, Bukharin chose to single out for attack Böhm-Bawerk, one of the main figures in the Austrian school (whose lectures in Vienna around 1910 Bukharin attended), and also a person who sharply criticized Marx after the publication of “Capital”s third volume. In 1896, Böhm-Bawerk published the scathing book reviewing Marx, translated into English under the title “Karl Marx and the close of his system.”
So, Bukharin decided to kill two birds with one stone: show the non-scientific nature of utility-based conception of value, and hit back at Böhm-Bawerk. The book however falls well short of these objectives. The reasons are two, and somewhat paradoxical. Böhm-Bawerk writings, quoted in extenso by Bukharin, are most of the time so abstruse, clumsy, plain silly (“[under capitalism and division of labor] each producer produces only a few articles but far more of these than he needs for his personal needs”) or incomprehensible (“when the prices of commodities and simultaneously the cessation of the various types of needs are so situated that a loss occurring within the specific type would cause relatively more important requirement to go unsatisfied, than [or then?] if the purchase price of a replacing specimen should be taken from the satisfaction of other needs”; huh?) that even the critique becomes so. It is, in effect, often hard to understand what Böhm-Bawerk is really trying to say. But then in addition, Bukharin’s own style is dogmatic in his defense of Marxism, and frequently too pedantic. Thus the two opponents almost cancel each other out, not to the greatest reading pleasure.
In an interesting point, which would be much later taken up by the Cambridge controversy, Bukharin (p. 93) notes that the valuation of capital presupposes the knowledge of the rate of interest which in turn is supposed to be derived from the greater productivity of the “roundabout” (more capital-intensive) processes.
One almost wishes that the demolition job of Böhm-Bawerk was undertaken by Marx (who of course was no longer alive) or Lenin. If the former, we and Böhm-Bawerk would have been treated to irony; if the latter, to the acerbic comments. Only in a few instances, does Bukharin muster enough sarcasm to make fun of Böhm-Bawerk and the Austrians; thus (p. 41), in a remarkable passage, he lists Böhm-Bawerk’s and Menger’s favorite examples with which to explain pricing in a capitalist economy: “the inhabitant of the forest primeval”, “dwellers in an oasis”, “an isolated farmer”, “shipwrecked people”, “people in a besieged town” and my favorite, “short-sighted individual on an isolated island.”
Bukharin is perhaps too polite, or just not as good a writer. However, there is no doubt that he is a very well read, even erudite, person.
This last fact, in the absence of very many interesting points in the book, led me to reflect on the extraordinary intellectual power that revolutions generally bring to the political top. This was the case with the American revolution when intellectual figures such as Washington, Jefferson, Madison, Adams and Hamilton seemed to have appeared almost out of nowhere. It was true for the French revolution with Robespierre, Danton, Marat, Saint-Just. And it was true for the Russian revolution. It was, I believe, also true for the Chinese revolution (whose leaders other than Mao and Zhou Enlai I know less well) and was probably true in the case of the Iranian revolution.
But going back to the Russian leaders: all them wrote enormously, read huge amounts, and generally, it would seem, had the levels of knowledge far above their contemporary counterparts (the non-revolutionary leaders) and even much above those who rule us today. What are the historical books, or polemical treatises and essays written by the current presidents and prime ministers, not to mention the kings an queens? Obama’s “Dreams from my father” is an exception, but it is an exception too because Obama has not written anything of note since or before. But the others have written nothing of value, and certainly even if they did put their names on some books, such scribblings were both irrelevant and often ghost-written (hard to find a worse combination).
The future leaders of the October revolutions were almost uniformly high-level intellectuals. Consider the composition of the Bolshevik Politburo in 1919: Lenin, Trotsky, Stalin, Zinoviev, Kamenev, Bukharin, Kalinin and Krestyansky. Lenin and Trotsky have written dozen books and essays (just check their listings on the Web; they go for several pages), some of them (like Lenin’s “The development of capitalism in Russia” or Trotsky’s “The revolution betrayed” or “My life” of first order). Trotsky, of course, was also a journalist with a very keen eye, and a literary critic. Zinoviev and Kamenev (seemingly forever united) were excellent publicists. Stalin was derided for his intentionally scholastic and dogmatic style and indeed his writings are excruciatingly boring even if the messages are conveyed with clarity and intentional simplicity. So it is not a high-brow fare. But Stalin’s excellent knowledge of literature, history and military affairs is without doubt, a fact recognized by no less an antagonist than Churchill.
The problem however is that all this intellectual power was often wrongly used, or perhaps was counter-productive because it endowed the leaders with the feeling of superiority and arrogance, leading them astray to believe that societies can be reorganized, transformed from the bottom to the top, through sheer intellectual will-power. Indeed, it was one of his very smart colleagues, Stalin, who eventually had Bukharin killed. So however remarkable they might have been as individuals, having them as leaders was not a good thing for the countries they ruled. Are we better off with less erudite leaders, leaders of acknowledged mediocrity? Perhaps.