Publications  Income Distribution


The Normative View of 
Marxian Theory
on Income Distribution under Socialism



The original Marxian view on distributive justice is very far from crude egalitarianism. Marx and Engels never argued for absolutely equal incomes of all people, although they did believe that the capitalist distribution of income is too unequal and unjust and must therefore be replaced by a new socialist or communist form of distribution. The best known reference for Marx's own view on income distribution under socialism and communism can be found in his ‘Critique of the Gotha Program’. There he stated that under socialism, which he defined as a lower stage of communist society, people should be rewarded according to their work or contribution to society, while in the second stage or ‘full communism' people should be rewarded according to their needs. Neither of these principles requires a full equality of incomes.


The Marxian principle ‘equal amount of product for equal amount of labor' must necessarily produce quite considerable income differentials2 especially if it is interpreted in the context of the labor theory of value. The ‘contribution to society' must be measured in some way, if it is to the a basis for the distribution of income, and for Marxists it would be natural to measure it -- at least in the case of the so-called productive workers -- by the value created by labor. But according to the labor theory of value the amount of value created depends on the skill of the worker and on the complexity of his labor. More complex labor is supposed to create more value in the same interval of time than simple labor3 - The socialist principle of distribution therefore implies that a person with higher skills should receive a higher wage than a less skilled worker. As long as higher skills are obtained by individual effort, schooling or experience such income differentials may be ‘deserved'. But income inequality under socialism may also result from variation in inborn physical and mental abilities. 'One man is superior to another physically or mentally and so supplies more labor in the same time or can labor for longer time.'4 Socialist equality is therefore only the equality of the right to income and not the equality of income. "It recognizes no class differences, because everyone is only a worker like everyone else; but it tacitly recognizes unequal individual endowments and thus productive capacity as natural privileges"5.


The principle 'from everybody according to his abilities to everybody according to his needs' which was designed by Marx for the second stage of communism does not imply full income equality either. As long as people remain physically and intellectually different, they will continue to have different needs so that unequal incomes would be retained even under 'full communism'. 


In the section called 'Private Property and Communism' of his 'Economic and philosophical Manuscripts' Marx distinguished two forms of communism: 
The first one, which he called a 'crude communism' seems to be a simplistic and spontaneous reaction of the formerly oppressed and under-privileged against the rich and powerful. Marx argued that 'crude communism' called for 'equality of wages only because it was an expression of "envy and the desire to reduce everything to a common level".6 Obviously Marx did not like this kind of crude communism because "it aims to destroy everything which is incapable of being possessed by everyone," because "it wishes to eliminate talent etc. by force" and because it "negates the personality of man in every sphere"7 - He even compared the crudely egalitarian view on income distribution with a similar crudely communist attitude toward women: 'This tendency is expressed in an animal form, marriage is contrasted with the community of women -- just as women are to pass from marriage to universal prostitution, so the whole world of wealth is to pass from the relation of exclusive marriage with the private owner to the relation of universal prostitution with the community".8



In contrast to crude egalitarian communism, Marx developed his vision of true communism which is to be more than a simple negation of private property; it is to be 'a positive abolition' which 'assimilates all the wealth of previous development’. True communism should, of course, bring distributive justice, but Marx's vision goes far beyond that, it is to be a society where man becomes a true human being, free not only from all forms of external, (i.e. economic, political, cultural, etc.) oppression and manipulation, but also free from internal self-oppression and self-manipulation. "Communism is the abolition of human self-alienation, and the real appropriation of human nature through and for man".9 As Erich Fromm stresses: "For Marx the aim of socialism was the emancipation of man and the emancipation of man was the same as his self-realization … The aim of socialism was the development of the individual personality." Or in Marx's words: 'The suppression of private property is therefore the complete emancipation of all the human qualities and senses."10


These extensive quotations are intended to demonstrate that although Marx was very critical of the injustices and inequalities of the capitalist income distribution, his view of socialist and communist income distribution did not imply an egalitarian leveling off all incomes. Marx never specified exactly which income inequalities should be eliminated and which should remain, but it may not be difficult to draw some inferences from his views. Generally, Marx would probably argue that all types of income inequality based on artificial, man-made stratification of society into classes, racial or ethnic groups as well as inequalities resulting from the usurpation and exercise of political and social power and from the specific forms of the operation of the capitalist market economy, should be eliminated. On the other hand, the income differentials which are based on natural differences in physical and mental abilities, in acquired skills and knowledge, and possibly also differentials resulting from personal preferences (e.g. between work and leisure) would remain.


It seems clear that Marx would not opt for income equality if it were to limit personal freedom and the full development of individual potential or if it sacrificed talents to barrack type uniformity. Also, ascetic self-deprivation would not be acceptable as a tool for eliminating inequality, because it would almost surely have to be achieved by ideological mass manipulation, rather than by a truly voluntary manifestation of personal preferences.

There are three basic reasons why Marxist justify income inequality:
1.Personal differences in the quantity of work measured either by its duration or by energy expenditures that each individual contributes to society. These differences may result from different physical endowments of individuals i.e. from biological or genetic factors, as well as from differences in attitudes toward work and preferences between work and leisure, i.e. primarily from cultural or 'social environment’ factors.

2.Personal differences in the quality or complexity of work. These may result from different mental endowments of individuals, which may be due both to biological or genetic factors as well as differences in skills and knowledge acquired by experience or education.


3.Differences in the costs of reproducing labor power of a particular kind. According to the Marxian theory, labor which creates value is divided into two parts: necessary and surplus labor. Necessary labor is used to cover the reproduction costs of labor power and as such should be the main determinant of wages. This is relevant especially for income differentials of workers with different levels of education. It is more costly to reproduce more educated labor power therefore wages and salaries of people with more years of schooling should be higher. However, the fact, that a considerable part of the cost of education in socialist countries is paid by the government rather than by individuals, may weaken this line of reasoning. It may seem surprising, but probably fair to conclude, that the Marxian normative view on income distribution under socialism, although based on totally different theoretical and ideological postulates, leads to conclusions very similar to those reached in human capital theory.



Let us now turn to those sources of income inequality, which according to Marxian theory should not exist in socialism.
1.Probably most objectionable to Marxists is income inequality based on unequal distribution of wealth. First, Marxists regard the income from owning property as a truly undeserved, exploitative return. Second, for functional reasons Marxists believe that under socialism private property should not exist. Third, they object to private property as a source of income because it tends to maintain or increase income inequality. Wealthier people have access to better schools and to jobs which bring them higher incomes, and people with higher incomes accumulate wealth faster than those with lower incomes.

2.It seems that Marxists would object to income inequality which results from the power structure of society. The communist party apparatchik, government official or central planner may deserve higher incomes than average workers if their jobs require more experience and higher level of education, but they should not earn more simply because they belong to the upper layers of the power hierarchy.

3.Marxists should also find objectionable income inequality based purely on sex, race or ethnicity. Such income differentials are discriminatory, and have nothing to do with a person's contribution to society.

4.Finally Marxists would probably object to income differentials resulting from persistent disequilibrium between supply and demand in the labor market. According to the original Marxist view all parts of a socialist economy should be rationally planned ex ante so that supply and demand for individual categories of labor should always be in equilibrium.



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