Marx, the Liberals and Their Critics: Right and Left Through the Lens of Law

Oct 22, 2026 · @Dr. João

Why a jurist should enter this debate

The dispute between right and left is usually fought with slogans. For a jurist, however, it is first and foremost a dispute about institutions: what property is, how far contract reaches, what role the State plays in the economy, what the Constitution guarantees and what it leaves to politics.

It is no accident that Brazil's 1988 Constitution opens with a compromise. Article 1, item IV, places side by side, as foundations of the Republic, the social values of labor and free enterprise. Article 170 grounds the economic order on the value of human labor and on free enterprise, protects private property and free competition and, in the very same article, requires that property fulfil its social function, that consumers be protected and that inequalities be reduced. Two rival intellectual traditions live together in the same text.

This article walks through those traditions using the most honest method available: hearing each of them through the voice of its most qualified critics. First, the thought of Karl Marx and the economists who refuted him — Menger, Böhm-Bawerk, Mises, Hayek and Friedman. Then liberalism and the thinkers who challenged it. Finally, what all of this means for Brazilian law.

The goal is not to choose a side, but to understand the arguments with a depth that public debate rarely offers.

Part I — Marx and his critics

What Marx said

In the first volume of Capital (1867), Karl Marx took up the labor theory of value of Adam Smith and David Ricardo and carried it to a radical conclusion. The value of a commodity would be determined by the socially necessary labor time required to produce it. Since workers receive in wages less than the value they produce, the difference — surplus value — would be appropriated by the capitalist. Profit, therefore, would arise from exploitation.

For the jurist, another thesis matters as well. In the Preface to A Contribution to the Critique of Political Economy (1859), Marx described law as part of the superstructure erected on the economic base: property relations would be the legal expression of the relations of production. Evgeny Pashukanis, in The General Theory of Law and Marxism (1924), radicalized the idea: the legal form itself — free and equal subjects who enter into contracts — would mirror the commodity form and would disappear along with capitalism.

The critics

Carl Menger (1871): value lies with the user. In Principles of Economics, Menger founded the Austrian School by arguing that value does not lie in the hours of labor embodied in a good, but in the importance people attach to its marginal utility. At almost the same time, William Stanley Jevons and Léon Walras reached similar conclusions — the so-called marginal revolution, which moved economic theory from the labor theory of value to subjective value.

Eugen von Böhm-Bawerk (1896): the internal contradiction. In Karl Marx and the Close of His System, published after Engels released the third volume of Capital (1894), Böhm-Bawerk pointed out an inconsistency: in the first volume, prices tend to follow labor time; in the third, they follow the cost of production plus an average rate of profit. The two explanations cannot be reconciled — the famous "transformation problem". Böhm-Bawerk also offered an alternative explanation for interest: time preference, which rewards those who postpone consumption. He was not merely a theorist: he served three times as Austria's Minister of Finance, and his portrait appeared on the 100-schilling note from 1984 until the arrival of the euro.

Ludwig von Mises (1920): the impossible calculation. In his essay Economic Calculation in the Socialist Commonwealth, Mises argued that without private ownership of the means of production there is no market for capital goods; without a market there are no prices; and without prices the planner has no way of knowing whether resources are being used rationally. His major work, Human Action, dates from 1949. A historical curiosity: in 1938, after the annexation of Austria, the Gestapo ransacked his Vienna apartment; his papers were later seized by the Red Army and taken to a secret archive in Moscow, where they were rediscovered in 1996.

Friedrich Hayek (1944–1960): dispersed knowledge and the rule of law. In The Use of Knowledge in Society (1945), Hayek showed that economic information is dispersed among millions of people and that the price system is the mechanism that coordinates it — something no central planner could ever gather. In The Road to Serfdom (1944), he argued that comprehensive economic planning tends to erode freedoms and the rule of law itself. In The Constitution of Liberty (1960) and Law, Legislation and Liberty (1973–1979), he turned to law: he distinguished the general and abstract rules that emerge spontaneously and guide conduct from the specific commands of the legislator. He received the Nobel Prize in 1974 — shared, curiously, with the Swedish social democrat Gunnar Myrdal.

Milton Friedman (1962–1980): economic freedom and political freedom. From the Chicago School, with an empirical and quantitative method, Friedman argued in Capitalism and Freedom (1962) that economic freedom is a necessary, though not sufficient, condition for political freedom. Awarded the Nobel Prize in 1976, he popularized his ideas in Free to Choose (1980), written with Rose Friedman from a television series.

What the Marxists reply

The debate did not end with these authors. Rudolf Hilferding answered Böhm-Bawerk as early as 1904, and Ladislaus von Bortkiewicz proposed in 1907 a mathematical solution to the transformation problem that is still discussed today. In the 1930s, Oskar Lange answered Mises with a model of "market socialism", in which the planner would simulate prices by trial and error. Many contemporary Marxists also argue that Marx's lasting contribution lies not in a blueprint for a planned economy — about which he wrote little — but in his analysis of crises, the concentration of capital and distributive conflict.

History, however, weighed on this debate: the collapse of the centrally planned economies between 1989 and 1991 is widely read as practical confirmation of the economic calculation argument.

A necessary correction

The material that inspired this article associates Nazism with Marx. That is a simplification that does not hold up historically: National Socialism was openly anti-Marxist and persecuted communists and social democrats. Mises was targeted by the Gestapo as a liberal economist of Jewish origin. What Hayek actually argued in The Road to Serfdom is subtler: that totalitarianisms of the left and of the right share the same root — the subordination of the individual to a central plan. It is also worth noting that the labor theory of value did not originate with Marx, but with the classical economists he criticized.

Part II — Liberalism and its critics

Intellectual honesty requires putting liberalism through the same test: listening to its most qualified critics.

What the liberals said

John Locke, in the Second Treatise of Government (1689), held that life, liberty and property precede the State, whose legitimacy depends on protecting them. Montesquieu, in The Spirit of the Laws (1748), gave liberalism its institutional engineering: the separation of powers. Adam Smith, in The Wealth of Nations (1776), showed how the division of labor and voluntary exchange generate prosperity without a central planner — although, in The Theory of Moral Sentiments (1759), he insisted that the market presupposes a society with moral values. John Stuart Mill, in On Liberty (1859), formulated the harm principle: the State may restrict individual liberty only to prevent harm to others.

A clarification useful to the Brazilian debate: "right" is not a synonym for liberalism. Conservatism, whose modern source is Edmund Burke (Reflections on the Revolution in France, 1790), values tradition, inherited institutions and gradual change — and often parts ways with liberals on moral issues and on the role of the State.

The critics

Karl Polanyi (1944): the self-regulating market is a utopia. In the same year as The Road to Serfdom, Polanyi published The Great Transformation. He argued that labor, land and money are "fictitious commodities": they were not produced for sale and, when treated as pure commodities, they disrupt society. Hence the "double movement": the expansion of the market provokes reactions of social self-protection — labor laws, regulation, social security.

John Maynard Keynes (1936): markets do not self-correct. In The General Theory of Employment, Interest and Money, Keynes argued that economies can remain for long periods with high unemployment because of insufficient demand, and that the State must act to stabilize it. His ideas guided postwar policy and the design of Bretton Woods.

John Rawls (1971): liberty requires fairness. In A Theory of Justice, Rawls does not reject liberalism: he reformulates it. He keeps the priority of basic liberties, but admits economic inequalities only if they benefit the least advantaged. This is egalitarian liberalism, the philosophical foundation of much of contemporary social democracy.

Amartya Sen (1999): freedom as capability. In Development as Freedom, the 1998 Nobel laureate argued that freedom is not merely the absence of coercion, but the real capability to make choices — which requires education, health and a minimum income.

Thomas Piketty (2013): the tendency toward concentration. In Capital in the Twenty-First Century, Piketty assembled historical series to argue that when the return on capital exceeds the growth rate of the economy, wealth tends to concentrate, and he proposed progressive taxation of wealth.

What the liberals reply

Robert Nozick, in Anarchy, State, and Utopia (1974), answered Rawls: a distribution is just if it results from just acquisitions and exchanges, and any redistributive pattern would require continuous interference with liberty. James Buchanan, Nobel laureate in 1986, and public choice theory reminded us that government failures — capture, political incentives, inefficiency — can be as serious as market failures. The stagflation of the 1970s weakened the Keynesian consensus and reopened space for Friedman. And Piketty's methodology and conclusions have been challenged by a number of economists, especially regarding the taxation of capital and the interpretation of the data.

Part III — What matters to the law

From the liberal State to the democratic rule of law

Constitutional history is, to a large extent, the history of this debate translated into institutions. The liberal rule-of-law State of the nineteenth century enshrined negative liberties — property, contract, freedom of expression and worship, limits on power — the so-called first-generation rights. The social crises of industrialization produced the social State, inaugurated by the Constitutions of Mexico (1917) and Weimar (1919), which added rights to positive benefits: work, social security, education, health. The democratic State under the rule of law (Estado Democrático de Direito), adopted by Brazil's 1988 Constitution in its Article 1, seeks to reconcile both legacies under the primacy of popular sovereignty and fundamental rights.

Bobbio and the criterion of equality

Norberto Bobbio, in Left and Right (1994), offered what may be the most useful key for the jurist. For him, the criterion that distinguishes left from right is the attitude toward equality: the left tends to see inequalities as social and therefore removable; the right tends to see them as natural or unavoidable. On a second axis, independent of the first, lies the attitude toward liberty, which separates moderates from extremists. Hence the possibility of a liberal left and an authoritarian right — and the place of social democracy as a combination of concern for equality with a commitment to liberty and to democratic institutions.

The 1988 Constitution as a compromise

The Brazilian constitutional text carries both traditions in nearly every economic and social chapter:

Article 174 is a good example of the synthesis: the State acts as a normative and regulatory agent, and planning is binding on the public sector but merely indicative for the private sector — the constitutional answer to the debate between Mises and Lange.

The pendulum in legislation

Ordinary legislation swings between the two poles. The 2002 Civil Code, coordinated by Miguel Reale, introduced the social function of contract (Art. 421) and objective good faith — expressions of its guiding principle of "sociality". The Economic Freedom Act (Law 13,874/2019) swung the pendulum the other way: a presumption of good faith in favor of private parties, minimal and exceptional intervention in business contracts (Civil Code, Art. 421, sole paragraph, and Art. 421-A) and fewer requirements for low-risk activities. The Consolidated Labor Laws (CLT) and the Consumer Protection Code, in turn, remain landmarks of protection for the weaker party.

In the courts, the tension shows up every day. When Brazil's Superior Court of Justice (STJ) sets strict technical criteria for requiring health plans to cover treatments outside the list of the national health insurance regulator (ANS), or when the Supreme Federal Court (STF) rules on the scope of social rights, it is arbitrating, case by case, the same conflict between the predictability of rules — dear to Hayek — and the effectiveness of benefits — dear to the social tradition.

The traditions side by side

A critical reading

Marx's critics were right on a point that history confirmed: without free prices and without property, planned economies lost their compass, and the promise of emancipation ended, in several countries, in regimes that suppressed the very freedoms they claimed to deliver. But liberalism's critics were also right on another point: markets left entirely to themselves produced crises, mass unemployment and inequalities that corroded democracy itself — and it was the institutional response to those problems that saved capitalism in the twentieth century.

For the jurist, perhaps the most valuable lesson is this: law is the place where ideologies stop being slogans and must become rules that are applicable, predictable and subject to review. The 1988 Constitution is neither a left-wing nor a right-wing text — it is a pact that obliges each side to live within the limits imposed by the other. Those who understand both traditions at their best argue better, decide better and, above all, distrust anyone who promises that one side has all the answers.

The question left to the reader is Bobbio's: faced with a concrete inequality, is it natural or social? And, if it is social, what price in liberty are we willing to pay to reduce it?

References

• MARX, Karl. A Contribution to the Critique of Political Economy (1859); Capital, vols. I (1867) and III (1894).
• PASHUKANIS, Evgeny. The General Theory of Law and Marxism (1924).
• MENGER, Carl. Principles of Economics (1871).
• BÖHM-BAWERK, Eugen von. Karl Marx and the Close of His System (1896).
• HILFERDING, Rudolf. Böhm-Bawerk's Criticism of Marx (1904).
• MISES, Ludwig von. Economic Calculation in the Socialist Commonwealth (1920); Human Action (1949).
• HAYEK, Friedrich. The Road to Serfdom (1944); The Use of Knowledge in Society (1945); The Constitution of Liberty (1960); Law, Legislation and Liberty (1973–1979).
• FRIEDMAN, Milton. Capitalism and Freedom (1962); with Rose Friedman, Free to Choose (1980).
• LOCKE, John. Second Treatise of Government (1689).
• MONTESQUIEU. The Spirit of the Laws (1748).
• SMITH, Adam. The Theory of Moral Sentiments (1759); The Wealth of Nations (1776).
• BURKE, Edmund. Reflections on the Revolution in France (1790).
• MILL, John Stuart. On Liberty (1859).
• KEYNES, John Maynard. The General Theory of Employment, Interest and Money (1936).
• POLANYI, Karl. The Great Transformation (1944).
• RAWLS, John. A Theory of Justice (1971).
• NOZICK, Robert. Anarchy, State, and Utopia (1974).
• BOBBIO, Norberto. Left and Right: The Significance of a Political Distinction (1994).
• SEN, Amartya. Development as Freedom (1999).
• PIKETTY, Thomas. Capital in the Twenty-First Century (2013).
• Brazilian Federal Constitution, Arts. 1, 3, 5, 6, 170, 173 and 174; Civil Code, Arts. 421 and 421-A; Law 13,874/2019.
• Introductions to the Selected Works of Ludwig von Mises — Richard Ebeling, Liberty Fund (on Mises's papers rediscovered in Moscow)
• Eugen von Böhm-Bawerk — Wikipedia (ministerial posts and the 100-schilling note)
• Starting material: the "Guardião da Tradição" carousel, @prof.paulolima1844.

Informational and academic content. It does not constitute legal advice and does not create an attorney-client relationship. Andrade & Cintra Advogados · Biblioteca Andrade & Cintra.