I’m writing series of posts examining the question – what is left of Marxism, as a way to understand the world, and as a way to change it, once it is accepted that capitalism is not going to be overthrown by a working class revolution. Last time I talked about class. This post is about crisis. As before, the shorter JQ is “there are lots of valuable insights, but there’s a high risk of political paralysis.”
One of the most powerful feature of Marxian analysis is the idea that crisis is a normal part of capitalism rather than an aberration resulting from exogenous shocks. Marx asserts that crises arise from inherent contradictions in the system and proposes a dialectical account by which the resolution of one crisis produces the contradictions that set the scene for the next. That seems to me to remain valuable
On the other hand, the central point of Marx’s theory of crisis was the claim that crises would grow steadily more intense, driven by the declining rate of profit, until they brought about the revolutionary overthrow of the system. Hence, despite the short-term suffering they caused, crises were to be welcomed as steps on the path to the inevitable downfall of the system.
Once the link between crisis and revolution is abandoned, it is necessary to reconsider the whole analysis of crises. Without the declining rate of profit and the inevitable progress towards revolution, it is obvious that different crises have had different effects on class relations.
Some, such as the Great Depression, weakened the position of the dominant class, giving rise to the New Deal in the US and social democratic reforms in other developed countries
Other crises, such as that the 1970s have strengthened the dominant class. The failure of Keynesian stabilization policy paved the way for the resurgence of market liberalism, the set of ideas I discussed in Zombie Economics, most of which is online here.
The Global Financial Crisis, which initially seemed (to me at any rate) likely to bring an end to the dominance of the financial elite, has so far reinforced it, though it will be quite a while before the final whistle blows.
Standard Marxist analyses don’t deal with this very well, in my view. The tendency is always to present the response to each crisis in terms of increasing exploitation, and of papering over the cracks in a system that is doomed to inevitable failure. After three hundred years of such crises (if you start with the South Sea Bubble), it’s necessary to work on the hypothesis that crises are inherent features of the capitalist system.
The problems with the standard Marxist approach were evident in the response of the German Social Democrats to the Great Depression, which we discussed in the seminar on Sheri Berman’s book The Primacy of Politics The orthodox Marxist response, exemplified by the leading Social Democrat theorist Hilferding was that within the system, there was no alternative to ‘sound finance’. The revisionist Swedish Social Democrats weren’t so constrained and produced a response that was social democratic in the modern sense of the term.
Closely related is the question of what, if anything, can and should be done to stabilise the capitalist economy. The orthodox Marxist answer, it seems to me, is the same as that of classical economics, namely “Nothing”. By contrast, I read the historical evidence as showing that the system can and should be stabilised to a significant extent, as was done during the postwar decades, using Keynesian macroeconomic policies and tight regulation of the financial system. Obviously, those policies broke down in the late 1960s and early 1970s. On the other hand, the limited resort to Keynesian methods in 2008 and 2009 did prevent complete collapse of the system.
As I argued in Zombie Economics, the most promising route forward is to redevelop Keynesian economics in a way that overcomes these failings. That’s not a strategy with a guarantee of success, but it seems more hopeful than any alternative, and certainly better than standing by and restating the obvious fact that crises are part of the system.
John Quiggin 
John I would be interested in your comments on the current Greek situation. The “crisis” there (the result, David Koch argues, of the “laziness” of the Greeks, and their tax avoidance) is clearly being used to smash the remaining public component of the Greek economy and sell it to corporate interests from elsewhere. This is disaster capitalism based on an internal economic crisis, rather than a war or natural disaster.
I also presume you will comment on Abbott’s call to “permanently reduce” the size of “government” by tax cuts. I have commented here http://davidhortonsblog.com/2011/06/26/attacks-on-tax/ that he has finally revealed his love for Norquist. But in more general terms it is imposing on Australia, by deliberate act of choice, what is being imposed on the Greeks by the international banks.
Talking about rushes to assume, the first rush that Marx made was the rush to kill the Czar of Russia before the Czar gave people the right to own property, which he was about to do by some accounts. And this was a rush to effectively capture (enslave) a population for the socialist experiment. And we now know how well that works.
In Marx’s day capitalism had the means to enslave as machinery required human connection. Machines (capital) required people to operate them on a one to one basis. Marx could not have envisaged the emergence of mass automation or computerisation and the labour liberalisation the ensues from that.
The only element of Marxism that is relevent to the modern day is the appreciation of greed, and the control of wealth. However in the modern day the control of wealth in order to be enslaving must originate or be solidly connected at the government level. Where governments do not engage in corrupt practices, maintain equal rights and crime is kept strictly under control, access to wealth is relatively uniform.
Then that leaves taxation philosophy, financial regulation and environmental management. I think that the degree of financial regulation required is a proportional consequence of the taxation philosophy. If you get one right then you need little of the other, and visa versa.
Socialism is maximum taxation, libertarianism is minimal to nil taxation. Somewhere in between is the optimal balance which must depend heavily on the circumstances for each region of human congregation.
I assume this is some sort of chines whispers alternative history of the Russian Revolution which occurred more that thirty years after Marx’s death? Zombie economics indeed!
“On the other hand, the central point of Marx’s theory of crisis was the claim that crises would grow steadily more intense, driven by the declining rate of profit, until they brought about the revolutionary overthrow of the system.”
Marx’s account of the tendency of the rate of profit to fall is well known. Where did he argue that this would cause progressively more intense crises, that economic crisis would cause socialist revolution, and that this was “the central point of [his] theory of crisis”? Zombie Marxology.
Good point Ian Millis, I have to go back and check that story now. Maybe that should have been Marxist rather than Marx, in the rush to kill the Czar.
But reading on here is an interesting prediction…shot down
http://www.smh.com.au/business/they-should-have-listened-to-marx-20090130-7tlk.html
Steve Keen is doing work (partly based on Hyman Minsky’s insights) on the natural tendency of unregulated capitalism to be unstable rather than find an equilibrium. Keen’s work , if I understand it correctly, identifies excessive debt creation and poor regulation of the financial system and instruments, as key sources/causes of the problem. I think Prof J.Q. would broadly agree with that. His “Hard Keynesianism” prescribes rigorous use of stimulus (government deficits) in downcycles and the braking of government surpluses in booms. Both the above named economists advocate reining in easy credit, speculation and pnzis in the FIRE (Finance, Insurance, Real Estate) sector. These seem to me to be the best policies to smooth the cycles.
Capitalism (especially corporate financial managerialist capitalism) still has two crucial problems with its need to expand capitalist exploitation of labor into the third world and with its need for endless growth in a finite world. These problems will lead to a crisis for both of these processes are unsustainable. The crisis is already beginning in the Arab world. Mass shortages of the basic necessities of life are what is really driving the unrest in countries like Libya, Tunisia, Egypt, Yemen and Syria. Repressive oligarchic regimes have run up against the limits of exploitation of the poor masses. Mass revolts will spread as shortages spread. Corporate capitalism is not well placed as a system to deal with this crisis, indeed it helps create it.
Capitalism must transform itself or fall. I cannot predict which will happen or what system will follow. Our best bet (here in Australia) would be to rein in corporate capitalism, use Hard Keynesianism, social democratic and welfare policies along with a decided dirigisme style approach to switching to a renewable and sustainable economy. A steady state population and steady state material economy also needs to be achieved. Qulaitiative growth could continue in culture, knowledge and technology. That is the best case scenario.
Oh once again those silly neoliberals…the ones who engineered the socialisation of mortgage risk, formed the cartel of of credit-rating agencies, the subordination of lending standards to political mandates?
I think you will find Marx invented capitalism in Das Kapital…if you are not one of us you are one of them sort of thing, no evidence of its marxist straw man form prior to DK.
Ike,
I broadly agree with
“still has two crucial problems with its need to expand capitalist exploitation of labor into the third world and with its need for endless growth in a finite world”
other than the endless growth concept. It is possible to achieve expanding growth with declining resources and declining material consumption. One of the essential building blocks in that direction is to determine what is a comfortably sustainable utilisation of natural resources for the economy/environment/population/ecology.
Until recently it would be true to say that it is not possible to live the Australian life style sustainably. But I and my business partner know that with the energy product that we are developing that we can and will be living with total energy independence (international air travel excepted). And with the introduction of the NBN expanding GNP while reducing resource consumption will be ever more possible. Keep in mind the number of people for whom a laptop computer is their total capital investment has value but no material presence. All these people need is a small amount of electricity, some food and a good supply of coffee, and they collectively produce designs, administrative services, entertainments (Avatar for instance), science, mathematics, literature,…and the list goes on. This is all high value creativity which the NBN will enhance many fold with magnified connectivity.
One of the 20th century phenomenons that we need to weed out is the notion of manufactured obsolescence. Iconically Ikea comes to mind. We need things in the future to either last indefinitely or be totally recycleable.
We can and will live 100% sustainably in the near future, and we will have no alternative.
So any way, in summary, Marxism is irrelevent to the Western world. Marx himself was the very exception that defeats his own philosophy. Marxism talks of a physical world, a world in which a persons worth is defined by what they can physically achieve for exploitation, not an intellectual one, a world in which a persons worth is determined by their distinctive mental capabilities and/or creativity, as well as to a far lesser degree their physical output or presence. Marx achieved success for the larger part of his life from his intellect not his physical output and was therefore beyond exploitation, though not banishment.
The only thing left of Marxism is that it describes an extreme region to which no-one should venture.
BilB, I put it to you that you have not read a single work of Marx.
skip,
I will confirm for you, at best just snippets. So I am perfectly happy to be wrong, but I doubt that I am. However, if I am completely wrong please explain, or direct with links.
JQ, you again present a straw man picture of Marx and then proceed to “show” the need for an alternative. It’s either intellectual dishonesty (which I doubt) or intellectual laziness (which contrasts sharply with your forensic examination of market liberal ideology in Zombie Economics).
This seems to be a case of refusing to seriously engage with a set of ideas you clearly disagree with. After having read and reviewed ZE, which I thought was a very good book, I expected better than this.
Are you only interested in preaching to the (anti-Marx) converted, at a time when capitalism is looking in worse shape than any time since the 1930s? An unusual choice.
I’ve read a little more about Marx and amend to recognise that Marx on religion is as relevent today as he was when he wrote. There is no place for religion in politics. philosophy is the appropriate vehicle for the culture and passion of people to permeate into politics.
I am very interested in the works, now, of Jenny von Westphalen. Between Jenny and Karl there is a passionate love story that deserves to be told.
So Dr Tad – why should a crisis in capitalism lead to a revolution that will actually replace that economic system with another? It isn’t enough to just point out that economic turmoil leads to political revolt, that revolt is supposed to lead to a distinct break with capitalism itself.
It seems to me that the idea of the working class (meaning people who sell their labour to the owners of the means of production) being a revolutionary class is justified. Those going out on the streets in the Middle East, in the ‘colour revolutions’ of the last decade, and in the public squares of Spain and Greece are clearly working class in that sense. However it is wrong to assume that discontent with capitalism makes the virtues of replacing it with another system self-evident. This is not a question of workers having ‘false consciousness’. I think it was Eric Olin Wright who pointed out that even if you accept the idea that socialism would be the superior system, the cost of shifting to it – even after a capitalist crisis – might still be too high.
Marx was and reamains the single greatest political economy thinker to ever put pen to paper. Perhaps his tendency to believe in political-economic historical inevitability was his weak point. There is no certainty about what system(s) will replace corporate capitalism when it fails. Growth capitalism will certainly fail because endless growth is not possible in a finite world. This latter is not a prediction of political economy but a prediction which can be made from the laws of physics.
Although I am no scholar and I advice my interpretation to be taken with a grain of salt, my reading of Marx is substantially different.
One cannot understand Marx without understanding the classical economists, especially Smith and Ricardo.
So, in a nutshell, and for what’s worth:
For the classical economists, the most important feature of an economy was its capacity to grow, to produce a surplus (output in excess of inputs).
Distribution among the classes (landed gentry, capitalists, and workers) was secondary: as long as profits kept an adequate volume, investment would increase and output with it.
Since Smith, however, the idea that disproportionate output was allocated to the landed gentry raised questions about long-term growth. In Smith’s view, the landed gentry would receive increasing land rent, which would increase subsistence wages and reduce profits: growth would eventually stagnate. Thus, the idea of capitalist crises pre-dates Marx.
This, by the way, raised questions (questions that Smith chose to ignore, for the most part) about the so-called Say’s Law: if too much surplus was allocated to non-productive consumption by landed gentry, or hoarded, production would be affected.
Ricardo developed his thoughts largely along the same lines. In fact, the idea of international trade and competitive advantages was developed to alleviate and postpone this crisis.
Marx, by contrast, considered that distribution was paramount. In my reading of Marx, capitalists would appropriate excessive surplus, by virtue of their monopoly of capital: the competition among capitalists would drive to overproduction. In this, Marx’s thought parallels the other classical economists’; however, he identified capitalists as the rentiers.
The flip side of the coin of overproduction is under’consumption: not enough aggregate demand. Again, we find the so-called Say’s Law.
This way, to state at the same that Keynes is right, while Marx’s theory of crisis is wrong is a misinterpretation of Marx, in my opinion.
Under my interpretation, it’s easy to understand what Keynes proposes and why he is right (in terms): by a temporary fiscal stimulus to demand the government tries to match supply (production) and demand (consumption).
But this matching is strictly temporary: new crises may and will explode at any moment, as workers never receive the full payment for their contribution to production.
Furthermore, as we have seen, capitalists oppose stimulatory policies and have the political means to impose their views. Thus, there is no certainty that governments will apply these policies when required.
This, in my opinion, leads to the greatest and most ignored insight provided by Marx: unlike economics textbooks suggest, economics is about conflict and means little without politics (and sociology, and culture and…). With respect, I believe progressive, Keynesian economists would do well understanding this (conservative economists have a much better intuitive feeling for these matters).
Ultimately, Keynesian aggregate demand management policies, like Ricardian international trade before it, seem to me like an attempt to patch up a system that’s inherently unstable.
What Keynesians are trying to do is to provide some kind of relief valve to this pressure cooker: it may work… until it fails.
PS: I would advice anyone interested to read William J. Barber’s little, old book, A History of Economic Thought.
‘Furthermore, as we have seen, capitalists oppose stimulatory policies and have the political means to impose their views.’
I don’t think that’s quite right. Capitalists will support stimulatory policies from which they can profit. E.g. the Reagan stimulus of the 1980s built on tax cuts and military Keynesianism.
Aside from Steve Keen’s exposition of Marxism in which he points out that Marx’ labor theory of value contradicts itself, an contradicts all real world evidence, and that neo-classical economics has as a fundamental assumption a perfect socialist dictatorship, the most interesting insight I have had into Marx was from thinking about a book by Holloway called, “Heavens on Earth.”
The collectivism that Marx preached was simply the established fashion of the time. Fourierists, Amanites, Hutterites, Shakers, Oneida and others all believed in and practiced collectivism. This ideal sprang out of Christian pietist thought and has very interesting history. With few exceptions, the communist experiments which were religiously based worked extremely well. They came apart not because they failed, but because they succeeded in making members wealthy. Some communistic religious groups too special steps to make themselves less wealthy because their way of life was just too good at producing wealth. Most turned into employers and members became managers. With no exceptions, the secular communist experiments failed within 5 years.
But Marx became accepted in academic circles, while the Fourierists and others were definitely not accepted since they were religiously based. Marx’ collectivism was obviously influenced by the many who had come before him. By 1910, most people who took up Marx were unaware of the Fourierists and the rest of them.
This aspect of religious economics had a profound influence on the new United States of America. There were many such, but even today groups that are evolved into semi-communism such as the Amish, Mennonites and the Hutterites do very well economically. And this points to an underlying aspect neglected in most economic thought – social capital of groups. Everything else is based on that, and without it, all the rest is a waste of time and nothing works well.
@Tim
‘Furthermore, as we have seen, capitalists oppose stimulatory policies and have the political means to impose their views.’
I don’t think that’s quite right. Capitalists will support stimulatory policies from which they can profit. E.g. the Reagan stimulus of the 1980s built on tax cuts and military Keynesianism
You are right, of course. I meant to say regulatory, instead of stimulatory. Apologies.
John; As I understand it Hilferding was of the Austro-Marxist school who later involved himself in German politics; and actually did a lot of original work on the theme of ‘organised capitalism’ and ‘war capitalism’ – as new forms of capitalism that emerged during WWI; which he actually thought might lay some kind of foundation for a future socialist economy. But I’m not certain it would be right to call him ‘Orthodox’ – as this all idea of ‘organised capitalism’ was a revision of Marx; Though not in the sense usually referred to as ‘Revisionism’. The Austro-Marxists maintained a revolutionary spirit; even if in the radically altered form of the ‘slow revolution’. (a term used by Hilferding’s colleague, Otto Bauer)
Magpie – I agree with you that it’s more about politics than people realise; Not just ‘good economic management’; It’s always about *interests…* For instance – you would think it ‘makes sense’ to promote genuine global economic development. But the advanced capitalist world has an interest in third world under-development; Not only does this ensure the advanced capitalist world’s POLITICAL superiority; it further entrenches that political superiority by making peripheral and semi-peripheral economics dependent markets; Political and economic domination complement each other – both are properly thought of as ‘a single complex’ of relations of domination and exploitation; Conflict has arisen in the past within the developed world over attempts to monopolise such dependent markets, and exploit their raw materials; A rising China which wants to develop its own political and economic sphere of interest could radically change the current world order, though.
Tim, I agree there is nothing in capitalist crisis that automatically leads to a revolution that sees as its aim a break with capitalism. The last 40 years in the West is depressing proof of that. But what crises do, especially when there are longer-run structural problems, is lay the basis for such challenges to emerge. In that sense, Marx’s theory of revolution doesn’t remotely follow the teleological schema that JQ describes here.
The questions of what politics are needed and how that is organised in human terms are the bridge between the inevitability of some kind of revolt and the possibility that system change can be seriously attempted. That’s the tricky part, but it can’t start (as JQ poses it here) by assuming the impossibility of revolution (which seems to me to be as teleologically biased as the “inevitability” of revolution).
Anyway, have promised JQ a more detailed response at Left Flank after part 3 comes out.
Closely related is the question of what, if anything, can and should be done to stabilise the capitalist economy. The orthodox Marxist answer, it seems to me, is the same as that of classical economics, namely “Nothing”.
Actually, certain Keynesian and left-liberal economists share the same mysticism as the neo-classicals on this point. The latter think that more or less unregulated markets will maximise gains, efficiency, etc, whilst the former seem to think that regulation can magically whisk away the risk inherent in markets. Both approaches are fundamentally fantastic.
Secondly, I think there’s significant scope to amplify a Marxist discussion of crises, including the contemporary ones. The rate of profit in industrial manufacture – this is what, for Marx, was the sine qua non of capitalism – has indeed declined in the developed world. it is no coincidence that this relative decline has led to the increased financialisation of the economy. (General Motors, for instance, increasingly had ever-larger amounts of its capital tied up in financial goods and services).
As manufacture declines in the developed world, we see, as we might expect (according to Marx) that industrial manufacture takes off precisely in those areas in which labour costs are cheap. (China is the stellar example here). Despite the Hayekians and co claiming that capitalism is a spur to innovation, cheap labour costs show that the converse is true; namely, it is cheaper and therefore more profitable to hire more
slavesworkers than to upgrade machinery.At any rate, I think there is much more to Marx’s ideas on crisis than might be gleaned from your post. As you correctly point out, the financial elites have (so far) done rather well out of the GFC, with bankers’ losses continuing to be socialised in the US and Europe.
THR,
I have to challenge you on this
“As manufacture declines in the developed world, we see, as we might expect (according to Marx) that industrial manufacture takes off precisely in those areas in which labour costs are cheap. (China is the stellar example here). Despite the Hayekians and co claiming that capitalism is a spur to innovation, cheap labour costs show that the converse is true; namely, it is cheaper and therefore more profitable to hire more slaves workers than to upgrade machinery”
part of your post.
This far from true. Without getting into detailed explnation of the many aspects of manufacturing I will try to summerise it in a few comments.
When I first started work it was common to here “leave your brain at home, I don’t pay you to think, I pay you to work”. Today the comment is” don’t bother coming to work if you’ve left your brain behind.
This is because most aspects of modern manufacturing cannot be done by people. Computer numerically controlled machinery has so completely penetrated manufacturing that it impossible to be competitive with out the use of microprocessors. Even in those places where labour is cheap manufacturing requires computerised automation. There are of course exceptions particularly in clothing manufacture where the complexity of the process of handling soft floppy materials in intricate ways defies extensive manufacture, buteven here the microcontroller is steadily penetrating those areas where materials lend themselves to a variety of high speed processes such as lazor cutting, material scanning and complex calculations for material optimisation.
The fact is that modern machinery is both powerful and cheap. I can lease finance 2 off $100,000 machines for the running cost of one employee. The machines will work 24/7 at minimal running cost, produce components at 100 times the output rate of a person on manual machinery for that class, the machine does not take holidays, and when I have made the last payment I get to keep the machine to keep working for free. The catch is that I have to have the market for the product that can be produced, and the machine cannot think creatively, it will only perform the tasks that it is programmed and tooled to do.
The other comment that needs challenge is
“The rate of profit in industrial manufacture……has indeed declined in the developed world”
This is also not true, and proof of that can be seen in the ratio difference between primary production and manufacture (throughput) and services (overheads) the make up our national GDP.
These are the areas where I believe those academically oriented economic thinkers who might be well read in the economic philosophy over time, have absolutely no real appreciation for what makes industry work, and therefore may believe that thinkers of the past still have some relevence to the extremely different present state of the world.
There are aspects of economic philosophy which are founded on fundamantal concepts which endure over time, but the notion that everything will collapse in a heap at anytime is as true as the idea that flying an aeroplane into a building will destroy a nation. The only thing that can achieve that in today’s 7 billion strong human world is to ignore the threat of global warming.
Apologies – I know cut and paste of long quotes is a commenting no-no. But I think this quote from Chapter 32 of ‘Capital’ Vol.1 explains why people may have felt Marx just a bit teleological:
‘Along with the constantly diminishing number of the magnates of capital, who usurp and monopolize all advantages of this process of transformation, grows the mass of misery, oppression, slavery, degradation, exploitation; but with this too grows the revolt of the working class, a class always increasing in numbers, and disciplined, united, organized by the very mechanism of the process of capitalist production itself. The monopoly of capital becomes a fetter upon the mode of production, which has sprung up and flourished along with, and under it. Centralization of the means of production and socialization of labour at last reach a point where they become incompatible with their capitalist integument. This integument is burst asunder. The knell of capitalist private property sounds. The expropriators are expropriated.
The capitalist mode of appropriation, the result of the capitalist mode of production, produces capitalist private property. This is the first negation of individual private property, as founded on the labour of the proprietor. But capitalist production begets, with the inexorability of a law of Nature, its own negation. It is the negation of negation. This does not re-establish private property for the producer, but gives him individual property based on the acquisition of the capitalist era: i.e., on cooperation and the possession in common of the land and of the means of production.’
http://www.marxists.org/archive/marx/works/1867-c1/ch32.htm
Once upon a time there was something called Simplicity!
Simplicity said that Greed was bad, so is Lying; and the ‘good’ in human beings was good.
It doesn’t really matter whether we are talking about a primitive tribal economy, a slave economy, a feudal economy, a capital economy or the next one to arrive.
It’s human nature and intelligent application of what we know to be true that matters!
The concepts and systems should follow suit …..
Cheers,
jrbarch
@Tim Dymond Or, conversely, this from The Holy Family:
‘History does nothing, it “possesses no immense wealth”, it “wages no battles”. It is man, real, living man who does all that, who possesses and fights; “history” is not, as it were, a person apart, using man as a means to achieve its own aims; history is nothing but the activity of man pursuing his aims.’
The point being that Marx could describe tendencies in how capitalism produced social change and revolt — including its tendency to produce a collective working class response because of the way workers are organised in the production process and exploited — as well as arguing for the crucial role that human choices play in shaping outcomes. Rather than plucking out one or other type of quote, it is important to see that he pulls in one direction or the other to emphasise particular aspects of his analysis, those contradictions summed up in the idea that people make history but not in circumstances of their own choosing.
So there is an element of determinism — some processes unfold because of the laws of historical development of capitalist society — but conscious human practice is crucial in whether the end result is socialism or ‘the common ruin of the contending classes’.
Having recently read Capital Vol 1 as part of a reading group, Chapter 32 is clearly situated in explaining the ‘historical tendency of capital accumulation’ and its potentials. In that context it would be hard to shoehorn it as a serious statement of the historical inevitability of the victory of socialism. More importantly, it is impossible to square such a view with Marx’s obsessively interventionist approach to political struggle throughout his entire adult life. Why bother with all that (especially writing that 3-volume magnum opus) if the outcome was inevitable?
@Dr_Tad
“Are you only interested in preaching to the (anti-Marx) converted, at a time when capitalism is looking in worse shape than any time since the 1930s? ”
The latest out of North Korea:
“North Korea has drastically cut public food handouts as it heads towards a new hunger crisis with people again eating grass to survive, one of the most experienced aid workers in the isolated nation said.
Food rations have been cut to as low as 150 grammes (5.3 ounces) a day per person in some parts of the country as foreign donations collapse and higher international prices make imports more expensive, said Katharina Zellweger, head of a Swiss government aid office in Pyongyang.”
“Zellweger said she had seen “a lot more malnourished children” on recent travels around the country.
“You see more people out in the fields and on the hillsides digging roots, cutting grass or herbs. So there are signs that there is going to be a crisis.”
Capitalism has many problems but if characters like Dr Tad want the working class to contemplate revolution they’ll need to have a very good explanation for why the next revolution won’t produce another hideous disaster like North Korea.
@Mel
North Korea is the last fully state capitalist Stalinist regime left on the planet. It is hard to make a historical case that it was the result of any “revolution”. Marx argued that the emancipation of the working class had to be the act of the working class itself, so whatever type of “Marxism” North Korea may claim to be it has no basis in Marx’s own thinking.
This 2002 article written by South Korean Marxists is a good summary of the Northern regime’s class basis.
North Korea is certainly an impoverished, repressive basket case, but its ruling elite’s use of Marxist terminology to justify itself shouldn’t absolve us from trying to get to grips with the nature of the society we are criticizing.
I think that the only way to carry this topic further is to determine why “history” has, so profoundly, not delivered the “revolt” that Marx thought to be so inevitable.
Apart from the possibility that Marx was more attempting to drive an outcome of revolt rather than predicting it, will we ever be able to forget “Bush and his tireless harangue on weapons of mass destruction and Sadam Hussein”, there must have been changes that occurred to steer capitalism away from the path to self destruction.
Either Marx was fully wrong in his conclusions on capitalism, or some new “game changing” force came into play to change the course of “history” as Marx saw it.
I am going to suggest that what provided the change force, multiplier, sufficient to alter the course of history was the arrival of oil, electricity, and the subsequent acceleration of automation with the cascade of change that has unrolled throughout the following century and a half.
@BilB
“Either Marx was fully wrong in his conclusions on capitalism, or some new ‘game changing’ force came into play to change the course of ‘history’ as Marx saw it”.
That seems like a sensible point, to me.
‘More importantly, it is impossible to square such a view with Marx’s obsessively interventionist approach to political struggle throughout his entire adult life. Why bother with all that (especially writing that 3-volume magnum opus) if the outcome was inevitable?’
There is certainly a fundamental contradiction for Marx as and analyist and an activist: ‘philosophers have only interpreted the world, the point is to change it’. Marx clearly believed that people (‘men’) had to do things for things to happen – ‘but not in circumstances of their own choosing’. From his writing however it is hard to construct any kind of distinctive policy program for a active political party. The 10 points of the Communist Manifesto are the least original or interesting part of that otherwise fascinating pamphlet. Many people have pointed out – all the points worth achieving (I can’t think why we would ‘Confiscat[e] of the property of all emigrants and rebels’) can be achieved without a break from capitalism.
John
You might find this article by two leading Historians of Economic Thought interesting.
Howard M C & King J E 2001 ‘Where Marx Was Right: Towards a More Secure Foundation for Heterodox Economics’ Cambridge Journal of Economics 25 78-807
Best regards
Tim
@Tim Dymond
Certainly the tension between thre deterministic “laws of history/forces-relations of production” on the one hand and the humanistic and subjective was never resolved satisfactorily in Marx. The two remain eyeballing each other in the way one imagines, metaphorically, wave and particle conceptions of energy might.
In relation to what might be achived “without a break from capitalism” you might note that at the time Marx wrote he continued to regard capitalism as having unfinished business in authoring modernity, “developing the productive forces” and so forth, and so his program in 1847 was unashamedly reformistic. Indeed, Engels speculated as late as the 1890s on the possibility in at least some jurisdictions of a perfectly peaceable reform driven approach to the the rule of the working class.
Confiscation of the property of “emigrants” was as I recall, a reference to absentee landlordism.
Ah touche Fran! That will teach me not to be a smart alec.
I’m coming from the other side of the fence to you John but could I gently make a few points in defence of real capitalism –
1) You wrote “without a break from capitalism” – most real capitalists I know don’t think we have much of a capitalist system…it is crony capitalism. Capitalism is a profit and loss system. The profit encourages the risk taking and the loss encourages the prudence… governments around the world keep bailing out losers so they keep making bad choices…thats how they got too big to fail. So I think we should give real capitalism a go. As a capitalist i can assure you i think the system we have is terrible but it is unfair to call this capitalism. Friedman used to give a speech called ‘where is the friend of the free market’ which talked about how special interest groups all dislike free markets (eg unions, businesses etc)
2) I don’t think redeveloping Keynesian theories will help. The problem is that with political incentives the discretionary spending by politicians is a joke…the money just gets wasted and diverted from important activities. Friedman has showed that the simplistic keynesian approach doesn’t work (eg stagflation). Higgs has shown that it wasn’t some keynesian multiplier from WWII spending that ended the depression.
3) tighter regulation….there is already plenty of regulation and none of the regulators saw the gfc coming….just like they won’t see the next gfc coming. At least with a (real) capitalist system anyone who bets on a particular outcome suffers a loss when they get it wrong….our current problem is that we bail out these losers…let them make more bad bets and then bail them out again with our money.
4) why is capitalism better – freedom!…should i plan for myself or leave it to you…i want plans by the many not by the few
History and practice has shown that communism won’t make us all richer.
First up, Andy, would you care to outline your system of values. Does capitalism in your view require elimination of human rights, for instance?
Hi BilB,
I am not good at explaining this too well but basically I believe in individual freedom…freedom to choose what transactions to enter into and upon what basis…freedom to own property/capital and to choose how to use it…in my view capitalism is the best system to enhance human rights (not eliminate them).
Under real capitalism a producer profits and becomes wealthy only by satisfying the voluntary choices of other market participants and in direct proportion to the value those participants find in transactions with that producer.
Milton Friedman often spoke and wrote about how economic freedom (capitalism) is a necessary (but not sufficient) condition for political freedom.
I think Milton Friedman in Free to Choose and Capitalism & Freedom explains it better than I can. Also Ayn Rand in Capitalism: The Unknown Ideal does a good job too.
Andy
Thanks Andy,
The question to you was for those people who do not have the equal opportunity, ability, or inclination to choose. How do these people fare in the Friedmanian world of your choosing?