The ideology of liberalism

Erik Bulatov, Skier, 1971–4, Oil on canvas, 180 x 180 cm


Considerations based on an article by Eleutério Prado


Before judging or interpreting, it is necessary to understand and prove that you have understood. Without this, one cannot aspire to sincere respect from the author who is the subject of criticism, as well as from his readers. It is in this spirit that this text intends to critically evaluate the article by professor Eleutério Prado, “Universities like factories”, published on the website the earth is round, on May 10, 2024.

Branko Milanovic

“Universities as factories” takes the denunciation of the Serbian-American economist, Branko Milanovic, as a backdrop from which he builds his critique of the ideology of classical liberalism and neoliberalism. According to Eleutério Prado, Branko Milanovic's analysis was accurate. If before, “the police came to the campus on orders from the authorities unhappy with the oases of freedom created by the students. She arrived, armed, attacked the students and put an end to the protest. The university administration sided with the students, invoked “university autonomy” (that is, the right to remain outside police surveillance), threatened to resign or resign. This was the usual pattern.”[I]

Today, things have changed! What is new, as Branko Milanovic presumably denounces, is to see that it is “university administrators themselves [who call] the police to attack students. In at least one case, in New York, the police were perplexed by the request for intervention and even thought it would be counterproductive.”[ii]

It is not difficult to understand this behavior of current university administrators. They took on a new mission. “[…] they no longer see their role as defenders of freedom of thought, as was the case in traditional universities. They are no longer trying to transmit to younger generations values ​​of freedom, morality, compassion, altruism, empathy or whatever else is considered desirable (…). Their role today is that of directors of factories that are still called universities. These factories have a raw material called students, which are converted, at regular annual intervals, into new graduates for the markets. Therefore, any interruption in this production process is like an interruption in a supply chain.”[iii]

Therefore, any interruption in the ever-renewed flow of graduate training must be removed. “It is necessary to send out graduate students, bring in new ones, pocket the money, find donors, obtain more funds. If students interfere in this process, they must be disciplined, if necessary by force. The police must be called so that order can be restored.”[iv]

This form of university administration is the highest expression of neoliberalism, its ideology and politics. This is where professor Eleutério Prado starts, to criticize the accusation by economist Branko Milanovic. To this end, he takes the definition of ideology from Ruy Fausto, which he presents in his book Marx: Logic & Politics, volume II, published in 1987. Based on the text by Ruy Fausto, Eleuterio Prado, appropriately, understands that “ideology does not come to be a claim to know that falsifies reality with some interest in mind, but an understanding of the social that is installed and fixates on the appearance of phenomena, seeking to block an awareness of their essence. As Ruy Fausto says, 'ideology is the blockade of meanings”. Thus, it “makes positive (…) that which is in itself negative, that which contains negativity'”.[v]

[Internal] dialectics of the commodity

Unfortunately, Eleutério Prado did not develop the mediations that allow us to understand ideology as a “block of meanings”. The presentation of these mediations requires some reading time, which may bore those readers with an impatient spirit, who prefer to learn without the work of exposing the connections that allow them to understand the real meaning of things. Therefore, it is worth running the risk of being tiring, when what you have in mind is to make the real meaning of that statement accessible to the public: “ideology is the blocking of meanings”.

It is with this intention that this writer proposes to translate, into exoteric language, the meaning in which Ruy Fausto uses the concept of ideology. In a first approximation, the meaning of ideology as a “block of meanings” can be translated as that which prevents the structural inequality of the system from manifesting itself in light of the appearance of the society of capital, from where, as Marx would say, individuals derive their notions. and concepts about the world of all known. A world in which everyone feels familiar and safe, because they see it not as it actually is, but as it appears to them.

In fact, when someone talks about money, for example, the only thing that comes to mind is that it is a material, a quantity of paper or metallic currency, which is used to acquire the goods necessary for survival. Never for an instant do you suspect that money is, above all, an economic and social category that expresses a form of relationship between men and that, therefore, it is not simply matter, it is also a social form and, as such, expression of diverse class relations inserted in a determined mode of production.

No one knows this, nor is anyone concerned about knowing it. Therefore, at the end of chapter IV of book I of The capital Marx invites the reader, together, to “[abandon] this sphere of simple circulation or exchange of goods, from which the free trader vulgaris [vulgar] extracts notions, concepts and parameters to judge society from capital and salaried work, we can already perceive a certain transformation, it seems, in the physiognomy of our dramatic personae [theatrical characters]. The former possessor of money now presents himself as a capitalist, and the possessor of labor power as his worker. The first, with an air of importance, confident and eager for business; the second, timid and hesitant, like someone who has brought his own skin to market and now has nothing to look forward to other than… skinning.”[vi] (MARX, 2017a, p.251).

Thus, the reader is led by Marx to abandon that “rumorous sphere, where everything happens in broad daylight, before everyone's eyes, and [accompany] those who have money and labor power to the hidden terrain of production, whose entry reads: No admittance except on business [Entry permitted only to conduct business]. Here it will be revealed not only how capital produces, but how it itself, capital, is produced. The secret of creating surplus value must finally be revealed.”[vii]

However, the secret of the creation of surplus value, which begins to be revealed from chapter V, will only be fully known when the reader reaches chapter XXII, of book I. Only then, that world where all that reigned was freedom , equality and property, becomes its direct opposite: freedom becomes non-freedom; equality, in non-equality; property in non-property, that is, in the right to appropriate the unpaid work of others.

This conversion takes place when we move on to the theory of reproduction and capital accumulation.

From section II to the last chapter of section VI of The capital, Book I, Marx presents the process of accumulation as cycles independent of each other. The movement of capital occurs in a discontinuous way, as the process of value appreciation appears as if it were always starting over. This is because each accumulation cycle is seen in isolation, as cycles in constant renewal processes. Therefore, capitalists need to establish new contracts for the purchase and sale of labor power, to restart a new cycle of accumulation. Capitalists and workers would thus always be “fortuitously” meeting in the market, where each of them relies on the law of exchange of goods, that is, on the law of the exchange of equivalents.

This scenario changes when we move on to section VII. Then, the purchase and sale of labor power is no longer an accidental relationship, that is, a relationship that comes to an end when the contract for the purchase and sale of labor power expires. The process of accumulation occurs as a continuous flow, as a process without interruption, in such a way that each cycle of accumulation is connected to what preceded and what follows.

In other words, from the relations between individual capitalists and workers, move to the level of social classes; of relations between the capitalist and working classes. It is then that the relationship of equivalence becomes a relationship of non-equivalence, insofar as the appropriation of wealth through one's own work becomes the appropriation of wealth through one's own non-work, through the unpaid work of others. If you prefer, the exchange of equivalents, characteristic of relationships between individuals, becomes a relationship through which the capitalist class sucks the wealth produced by the working class.

 To make all this even clearer, it is worth following Marx a little more slowly. In chapters XXI and XXII of Book I of The capital, he takes the idea, so dear to liberal philosophy, according to which, in a remote past, the capitalist class acquired its property with the sweat of its own brow. He imagines that the capitalist class, after many generations of work, has accumulated wealth of 1.000 units of money and that it can now use it to hire workers. Then, he imagines that this capital generates, annually, a surplus value of 200 units of money, destined for the consumption of the capitalist class. What happens when this capital is repeatedly used to hire workers?

Simple! If a surplus value of 200 monetary units is generated each year, after five years, the total surplus value consumed by the capitalist class will be 1000 units. And what is most important: the capitalist class still has these 1.000 units of capital to restart hiring new workers the following year.

Now, if from the fifth year onwards all the assets of the capitalist class, which they supposedly accumulated with the sweat of their own brow, were fully paid, how can we maintain that all this happened without nullifying the principle of equivalence? Simple. The exchange of equivalents is a relationship that only exists between individual buyers and sellers of labor power; if you prefer, when the accumulation process is seen as cycles disconnected from each other.

Under these conditions, agents only accidentally confront each other as sellers and buyers, as “their reciprocal relationships come to an end when the validity period of the contract concluded between them expires. If the business is repeated, it is as a result of a new contract, which has no relationship with the previous one and in which only chance brings together the same buyer and the same seller again.”[viii]

And so it has to be. After all, as Marx says, “if the production of commodities or a procedure pertaining to it is to be judged according to its own economic laws, we must consider each act of exchange by itself, apart from any connection with the act of exchange that preceded it. and with what follows it. And since purchases and sales are carried out only between isolated individuals, it is unacceptable to look for relationships between entire social classes”.[ix]

But all this, as seen before, changes when we move to the level of accumulation seen in its entirety; when we move from the level of representation of individual capital to that of global social capital; or, if you prefer: from the level of individual relationships to that of social classes. This is not a merely logical passage. On the contrary, it has ontological weight, insofar as it is understood that an individual exchange between a capitalist and any worker presupposes infinite other acts of purchases and sales.

A capitalist, for example, who transforms part of his money capital into machines, equipment, raw materials, etc., assumes the existence of other capitalists as sellers of these goods. This demonstrates that the different individual capitals constitute only links in the chain of global movement of capital, in which each cycle of capital appreciation presents itself as the beginning of a new cycle of accumulation, as Marx explains in the example above, even assuming reproduction simple.

Acts of exchange are always carried out in accordance with the principle of equivalence, as exchange is an act that takes place only between individuals. However, Marx explains, “insofar as every single transaction continually obeys the law of commodity exchange, according to which the capitalist always buys labor power and the worker always sells it – and, we assume here, at its real value –, it is evident that the law of appropriation or the law of private property, founded on the production and circulation of goods, is transformed, obeying its own, internal and inevitable dialectic, into its direct opposite.

The exchange of equivalents, which appeared as the original operation, has become distorted to the point that now the exchange is effective only in appearance, since, in the first place, the very part of capital exchanged for labor power is no more than a part of the product of someone else's work, appropriated without equivalent; secondly, its producer, the worker, not only has to replace it, but he has to do so with a new surplus. The exchange relationship between the capitalist and the worker thus becomes a mere appearance belonging to the circulation process, a mere form, foreign to the content itself and which only mystifies it. The continuous buying and selling of labor power is the way.

The content lies in the fact that the capitalist continually exchanges part of the already objectified work of others, which he never ceases to appropriate without equivalent, for a greater quantity of the living labor of others.” This demystifies the idea that the right to property appears to originate from the capitalist's own work. However, Marx adds, “this assumption had to be admitted, because only possessors of goods with equal rights confronted each other, but the means of appropriating other people's goods was only alienation [Veräußerung] of his own commodity, and this could only be produced through work. Now, on the contrary, property appears on the capitalist's side, as the right to appropriate unpaid work or its product from others; on the worker's side, such as the impossibility of appropriating their own product. The split between property and work becomes a necessary consequence of a law that, apparently, had its origin in the identity of both”.[X]

Thus, the continuous and uninterrupted process of accumulation transforms the exchange of equivalent into an exchange of non-equivalent; in fact, in a non-exchange, in the sense that “it is with your salary from the previous week or the last semester that your work will be paid for today or next semester”.[xi] The equality of the contracting parties thus becomes a structural inequality.

This is when ideology comes into play. Its function, as Ruy Fausto says, is to block interversion, that is, to prevent the system's structural inequality from manifesting itself at the level of individuals' ideas. It fulfills the same function as fetishism, in the sense that it is a phenomenon of consciousness and social existence. From conscience! Because individuals perceive the world upside down. Of social existence! Because in capital society, individuals are transformed into objects of things. The value of these things varies “constantly, regardless of the will, foresight and action of those who make the exchange. Their own social movement has, for them, the form of a movement of things, under whose control they are, instead of their controlling them.”[xii]

But ideology alone is not enough to prevent the system's structural inequality from becoming an object of discussion, notably by workers. A material force is needed to prevent this problematization. This force is the State. This institution “only preserves the moment of the inequality of the contracting parties by denying the inequality of the classes, so that, contradictorily, the equality of the contracting parties is denied and the inequality of the classes is posited”.[xiii]

Now everything is clarified once and for all. If the exchange of equivalents, as seen before, turns into its opposite, in an exchange of non-equivalents, the society of capital requires that that first moment be kept, to deny its opposite, the second moment. It is therefore understandable why “ideology and the State are necessary. They are the guardians of identity”[xiv]. But the function of the state goes further than that of ideology. That guards identity “partly as ideology realizes it, but partly differently from it, in the form of material force and violence” (Fausto.p301).

Eleutério Prado – a review of his critical comments

It is hoped that, now, all the mediations to understand the interversion of the laws of commodity production, that is, of the laws of the exchange of equivalents, into laws of capitalist appropriation, of the exchange of non-equivalents, have been exposed. It is from there that one can grasp the real meaning of the functions performed by ideology and the state, as well as understand how such functions play the role of legitimizing the system.

As legitimizing instances of order, they only keep the appearance of the system so that the contradictions of the material base “disappear”. In this sense, the moment of the system's appearance is not pure illusion, it is not a falsification of reality; because, as seen before, Marx explains the production of surplus value without appealing to possible cheating or theft on the part of capitalists in their exchanges with their consorts and the working class.

Surplus value is not theft. If it were, the theory of exploitation would be nothing more than a usurpation.

With this, we can now move on to the criticism that Eleutério Prado directs towards classical and contemporary liberalism, the latter understood as a form of liberalism with social concern. In addition to these two forms, he subjects neoliberalism to his criticism.

For reasons of space, here only the criticisms he directs at classical liberalism, that is, at Classical Political Economy (CPE), will be evaluated.

Without any embarrassment, Professor Eleutério Prado understands that classical liberalism, that is, classical political economy “keeps from capitalism only its appearance as a market economy; in this way, it affirms the equality and freedom of the contracting parties who supposedly seek their self-interest. However, when one critically examines the contractual relationship of exchange between the capitalist and the worker, as the appearance of a production relationship that links capital and labor, as a relationship between the owner of the means of production and the possessors of labor power, one sees that It is clear that capitalism rises above the denial of equality and freedom of contracting parties, on the denial of self-interest since it only consists of a subordination of private interests to the greater “interest” of capital appreciation. By fixing the appearance of circulation, liberalism as an ideology hides the contradiction that lives in production, so that the system can prosper.”[xv]

Here, Professor Eleutério Prado does an injustice to classical economists, by stating that this science only keeps the appearance of the system. Now, Professor Eleutério does not realize, not even for a moment, that that science was responsible for reducing the different forms of capitalist wealth (salary, profit, income and interest) to their internal source: work. Without this analytical reduction, one cannot “adequately expose the movement of reality”.

Comparing the classics with vulgar economics, Marx states that that analytical work of reduction is, in fact, a critical work, since classical economists seek to dissolve the form of alienation in which capitalist wealth manifests itself. This is what we read in the following passage from Theories of Surplus Value, when he asserts that “while classical and, therefore, critical economists deal with the form of alienation and seek to dissolve it with analysis, vulgar economics, on the contrary, feels completely at home precisely with the strangeness in that the different parts of the value face each other; the happiness of a scholastic with God-Father, God-Son and God-Holy Spirit is the same as that of a common economist with land-rent, capital-interest and labor-wages. This is the way in which these relationships, in appearance, appear directly interconnected and thus exist in the ideas and consciousness of the agents of capitalist production, of these prisoners. The vulgar economist considers himself the clearer, the more natural, the more useful to society and the more distant from all sophistication, the more he limits himself, in reality, to translating common notions into doctrinal language. Therefore, the more alienated the way in which he conceives the formations of capitalist production, the closer he comes to the basis of common notions, the more he finds himself in his element.”[xvi].

Eleutério Prado, it seems, is unaware of this abysmal difference that separates classical political economy from vulgar economics. Hence its theoretical folly. All the more right, when we bear in mind that it is Marx himself who recognizes the enormous work of analytical reduction undertaken by that science. Proof of this, he gives in his Surplus Value Theories, when he states that classical economics “seeks through analysis to reduce the different forms of wealth, fixed and foreign to each other, to their intrinsic unity (…). Therefore, […] he reduced all forms of income to the single form of profit (revenue) and all the independent figures that constitute the titles under which non-workers share in the value of commodities. And profit is reduced to surplus value, since the value of the entire commodity is reduced to labor.”[xvii]

Em The capital, book I, chapter I, in a footnote, number 32, Marx once again insists on the importance of this work of analytical reduction, carried out by classical political economy. Once again he repeats the difference that separates that science from ordinary economics. Literally: “to make it clear once and for all, I understand by classical political economy every economic theory since W. Petty, which investigates the internal structure of bourgeois relations of production as opposed to vulgar economics, which moves only within the apparent context and constantly ruminates on the material long provided by scientific economics in order to provide a plausible justification of the most brutal phenomena and to serve the domestic needs of the bourgeoisie.”[xviii]

Marx could not have been clearer and more accurate. Unlike vulgar economics, classical political economy refuses to be the voice of the practical conscience of economic agents. It goes beyond the apparent forms of wealth, as Marx says in this last passage, to seek its internal, causal link. In this sense, it can be said that Smith and Ricardo were thinkers committed to knowledge, they were not apologists like the economists representing vulgar economics.

Now, if Smith, in particular, when undertaking the analysis of reducing the apparent forms of wealth to their internal nexus, discovers that profit is a value produced by the worker above the value he receives in the form of wages. Granting him the floor, he states that from “the moment that wealth or capital has accumulated in the hands of private people, some of them will naturally employ this capital to hire industrious people, providing them with raw materials and subsistence in order to making a profit from the sale of the work of these people or from what this work adds to the value of these materials. When exchanging the finished product for money or labor or other goods, in addition to what may be sufficient to pay the price of materials and the wages of workers, something must result to pay the entrepreneur's profits.”[xx]

As for Ricardo, it is better to rely on Marx's reading of him. Referring to England, the author of The capital states that “his classical political economy coincides with the period in which the class struggle was not yet developed. Its last great representative, Ricardo, finally consciously turns the antithesis between class interests, between wages and profit, between profit and land rent into the starting point of his investigations, naively conceiving this antithesis as a natural law of society.”[xx]

Marx does not separate science from historical-social conditions. In the case of England, he says, “its classical political economy coincides with the period in which the class struggle was not yet developed”. However, as soon as “the class struggle assumed, theoretically and practically, increasingly more accentuated and threatening forms”. From then on, “she sounded the death knell for the bourgeois scientific economy. It was no longer a question of knowing whether this or that theorem was true, but whether, for capital, it was useful or harmful, comfortable or uncomfortable, whether it contradicted police orders or not. The place of disinterested investigation was taken by hired swordsmen, and the bad conscience and bad intentions of apologetics replaced impartial scientific investigation.”[xxx]

This proves that Eleutério Prado is wrong in stating that “classical liberalism appears to be hypocrisy; [because] he anticipates (sic) the contradiction at the basis of the system, but accepts as valid knowledge only that which dissimulates it in an objective way…”.[xxiii].

Finally, it is fair to recognize that Eleutério Prado is right in defining neoliberalism as a hypocritical science. Even more precise when recognizing that the liberalism of the century, interversion, that is, class contradiction, appears as difference. The social state recognizes structural inequality between classes, to address it with compensatory policies.

*Francisco Teixeira He is a professor at the Regional University of Cariri (URCA) and a retired professor at the State University of Ceará (UECE). Author, among other books, of Thinking with Marx: a critical-commented reading of Capital (Rehearsal). []


[I] Prado, Eleutério FS Universities like factories, in The Earth is Round;10.05.2024.

[ii] Idem.Ibidem.

[iii] Idem.Ibidem.

[iv] Idem.Ibidem.

[v] Idem.Ibidem.

[vi] Marx, Karl. Capital: critique of political economy: book I. – São Paulo: Boitempo,2017,p.251.

[vii] Idem.Ibidem.p.250.

[viii] Idem.Ibidem.p.662.

[ix] Idem.Ibidem.p.262.

[X] Idem.Ibidem.p.659.

[xi] Idem.Ibidem.p.642.

[xii] Idem.Ibidem.p.150.

[xiii] Fausto, Ruy. Marx: logic and politics. São Paulo: Editora Brasilience, 1987.p.299/300.

[xiv] Idem.Ibidem.p.301.

[xv]Prado, Eleutério. op.cit.

[xvi] Marx, Karl. Theories of Surplus Value: critical history of economic thought: Book 4 of Capital – São Paulo: Difel, 1980; Vol. III; p.1540

[xvii] Idem.Ibidsem.p.1538.

[xviii] Marx, Karl. The capital. Op.cit.p.156.

[xx] Smith, Adam. The Wealth of Nations: investigation into its nature and causes. – São Paulo: Nova Cultural, 1985., p. 77/78.

[xx] Marx, Karl. The capital. op.cit.p.85.

[xxx] Idem.Ibidem.p.86.

[xxiii] Prado, Eleutério… op.cit.

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