Marx, Opium, Zetas.
In 1840 the Chinese government tried to block English drug kingpins who were selling opium in Chinese coastal cities. In response, British Naval warships bombarded Canton and went up the Yangtze river into the heart of China, burning, looting on a grand scale and shelling defenceless towns while killing many civilians. The out-gunned Chinese government was forced to give in to narco-terrorism, ceded Hong Kong to British rule and granted English drug dealers and other merchants free reign in multiple coastal cities ( as in not being subject to Chinese law). Ten years later, when the Chinese seized a British pirate ship, the British government sent a larger force that entered the capital and burned the Summer Palace, got more special treatment for their drug and other merchants, and even extorted a huge payment. Narcotics exports to China (of opium produced by forced labor on land stolen in India) were a critical economic issue for Britain because British purchases of Chinese manufactured goods were otherwise draining hard currency from the United Kingdom. British manufactured goods could not compete in open markets against Chinese goods but Chinese weaponry and military organization was inferior. It is not surprising that right wing economists do not discuss this war or others like it. They have a nice fantasy tale of free enterprise to curate and pesky facts could mess it up. But consider the most famous left wing polemic ever - a polemic written neatly between the two Opium Wars.
The bourgeoisie, by the rapid improvement of all instruments of production, by the immensely facilitated means of communication, draws all, even the most barbarian, nations into civilisation. The cheap prices of commodities are the heavy artillery with which it batters down all Chinese walls, with which it forces the barbarians’ intensely obstinate hatred of foreigners to capitulate.
That Thomas Friedman level puffery for free trade is from the Communist Manifesto and contrary to Marx and Engels, the heavy artillery that battered down the Chinese walls was the kind of heavy artillery that blows up things and kills people not “cheap prices”. British manufacturing built a strong capital position in much the same way that the Zetas did, but with larger scale violence and looting. The “rapid improvement” that was at issue was in weapons of war and government warmaking capability not textile manufacturing automation or factory organization.
While it is customary to consider Marxism as the antithesis to neo/paleo-classical economics, from the viewpoint of 150 years of perspective, they start to appear as just variants of the same theory.
Ricardian economics and its descendents [see note 1] claim to factor out politics and government and supposedly show how the “laws” of economics govern economic development. In this view, the ability of English textile manufacturers to dominate the world market is a function of “efficiency” and comparative advantage. The inconvenient story of narco-terrorism factors out magically (as does the massive role of slave grown and British financed cotton). Marx and Engels incorporated this worldview into their work, with somewhat different “laws”. In a crude sense, Marx’s big difference with Ricardo was to add the concept of class relations evolving over time to Ricardo’s model in which class relations were assumed to be unchanging - and also to cheer for the working class rather than the owners. But Marx bought into many of the notions of efficiency that come from Ricardo and Smith’s work. Marx’s success in setting the basic framework of left-wing thought was so comprehensive that the point of dispute between left and right became simply the ownership and control of this “efficient system”. The right wanted to increase the power and freedom of action (which they often call “freedom”) of private owners and the left wanted to increase the planning and social security role of the government. Right wing economists championed the supposedly self-correcting properties of aggregated choices in “markets” of individuals and left wing economists championed government regulation or control. But there is no market without the operation of government. On one level the left/right economics argument is an argument between people who claim ripe watermelons are pink and those who insist they are green. But on another level both views insist that morality, moral choice, and human freedom are irrelevant “superstructure” carried along by the majestic operation of vast and impersonal economic cargo ships. Thus, the story that the objectively “barbarian” Chinese had their society ripped asunder by the objectively more efficient operation of “civilized” capitalist mills is a story both left and right can cherish even when it is plainly false.
Both Neoclassical economists and Marxists will both dispute this analysis. The neoclassicals will say that “externalities” are known to economics and the Marxists will argue that exploitation is a key concern of Marxist analysis. But, in practice,they both make a claim to have a “scientific” explanation in which clockwork laws of economics operate in much the same way as the laws of gravity. The American economist Henry Carey said Ricardian economics was a theory designed to justify the misery it causes, and I think much the same could be said for Marxism. And note that Marx, in his dispute with Cary, wrote a series of articles justifying British pillage of India as a brutal, ugly, hypocritical, but ultimately beneficial rationalization of “oriental despotism”. The reality of the impoverishment of India under British looting was as unacceptable to Marx as it was to Fred “Being tortured makes you free” Hayek.
 Adam Smith was under no illusion that markets functioned without government action.
 clearly not a completed work.
Revised slightly: 01/17/2013 and 12/3/2013