Marxist and Austrian Class Analysis: The State As an Exploitative Firm

Marxism, because it correctly interprets the state as exploitative (contrary, for instance to the public choice school, which sees it as a normal firm among others), is on to some important insights regarding the logic of state operations. For one thing, it recognizes the strategic function of redistributionist state policies. As an exploitative firm, the state must at all times be interested in a low degree of class consciousness among the ruled. The redistribution of property and income--a policy of divide et impera--is the state's means with which it can create divisiveness among the public and destroy the formation of a unifying class consciousness of the exploited.

Secondly, the state is indeed, as Marxists see it, the great center of ideological propaganda and mystification: Exploitation is really freedom; taxes are really voluntary contributions; non-contractual relations are really "conceptually" contractual ones; no one is ruled by anyone but we all rule ourselves; without the state neither law nor security would exist; and the poor would perish, etc. All of this is part of the ideological superstructure designed to legitimize an underlying basis of economic exploitation.

--Hans-Hermann Hoppe, "Marxist and Austrian Class Analysis," in Requiem for Marx, ed. Yuri N. Maltsev (Auburn, AL: Ludwig von Mises Institute, 1993), 65.