The Economic Basis of Class Conflict

In a free society, there are no natural conflicts between groups — and certainly none that need to be remedied through state intervention. So Lionel Robbins observes in The Economic Basis of Class Conflict. According to classical-liberal wisdom, conflicts occur between individuals, and these are not intractable but managed best through the rule of law. Any state measures to fix such conflicts engender more conflict and create damages on both the taxed party and the group that is the target of the benefit. Robbins specifically mentions how fake conflicts between classes, races, and sexes end up tearing society apart. This whole essay, then, becomes a response not just to Marxism but to the entire anti-liberal tendencies of modern statecraft.

As the book proceeds, we find defenses of market freedom in the areas of trade, competition, price controls, countercyclical policy, and even patents. On patents in particular, Robbins has some wonderful analysis that anticipates all the modern criticisms of policies that grant industrial monopolies and slow down growth. It’s almost unbelievable that he could have been so prescient in 1939, long before patents became a source of stagnation in so many industries from pharmaceuticals to software.

Lionel Robbins (1898–1984) is most famous for his leading role in shaping the London School of Economics in the interwar years, and also for his remarkable body of scholarship.

Robbins was writing at the end of a terrible decade of depression and upheaval, and just before the war-planning state came to be the central planner of the world’s economies from 1940 onward.

We discover him here in the last period of his status as a leading defender of free markets. He is directing his arguments not only Keynes and not only against socialists but also against the defenders of capitalistic monopoly and the redistributionist state. His arguments are fresh and passionate — a model of consistency and clarity on topic after topic.