|
Lights. Camera. Action. Das
Kapital. Now.
The economic crisis has
spawned a resurgence of interest in Karl Marx. Worldwide sales of Das
Kapital have shot up (one lone German publisher sold thousands of copies in
2008, compared with 100 the year before), a measure of a crisis so broad in
scope and devastation that it has global capitalism—and its high priests—in an
ideological tailspin.
Yet even as faith in neoliberal orthodoxies has
imploded, why resurrect Marx? To start, Marx was far ahead of his time in
predicting the successful capitalist globalization of recent decades. He
accurately foresaw many of the fateful factors that would give rise to today’s
global economic crisis: what he called the “contradictions” inherent in a world
comprised of competitive markets, commodity production, and financial
speculation.
Penning his most famous works in an era when the French and
American revolutions were less than a hundred years old, Marx had premonitions
of AIG and Bear Stearns trembling a century and a half later. He was singularly
cognizant of what he called the “most revolutionary part” played in human
history by the bourgeoisie—those forerunners of today’s Wall Street bankers and
corporate executives. As Marx put it in The Communist Manifesto, “The
bourgeoisie cannot exist without constantly revolutionizing the instruments of
production, and thereby relations of production, and with them the whole
relations of society. . . . In one word, it creates a world after its own
image.”
But Marx was no booster of capitalist globalization in his time or
ours. Instead, he understood that “the need for a constantly expanding market
for its products chases the bourgeoisie over the whole surface of the globe,”
foreseeing that the development of capitalism would inevitably be “paving the
way for more extensive and exhaustive crises.” Marx identified how disastrous
speculation could trigger and exacerbate crises in the whole economy. And he saw
through the political illusions of those who would argue that such crises could
be permanently prevented through incremental reform.
Like every
revolutionary, Marx wanted to see the old order overthrown in his lifetime. But
capitalism had plenty of life left in it, and he could only glimpse, however
perceptively, the mistakes and wrong turns that future generations would commit.
Those of us now cracking open Marx will find he had much to say that is relevant
today, at least for those looking to “recover the spirit of the revolution,” not
merely to “set its ghost walking again.”
If he were observing the current
downturn, Marx would certainly relish pointing out how flaws inherent in
capitalism led to the current crisis. He would see how modern developments in
finance, such as securitization and derivatives, have allowed markets to spread
the risks of global economic integration. Without these innovations, capital
accumulation over the previous decades would have been significantly lower. And
so would it have been if finance had not penetrated more and more deeply into
society. The result has been that consumer demand (and hence, prosperity) in
recent years has depended more and more on credit cards and mortgage debt at the
same time that the weakened power of trade unions and cutbacks in social welfare
have made people more vulnerable to market shocks.
This leveraged, volatile
global financial system contributed to overall economic growth in recent
decades. But it also produced a series of inevitable financial bubbles, the most
dangerous of which emerged in the U.S. housing sector. That bubble’s subsequent
bursting had such a profound impact around the globe precisely because of its
centrality to sustaining both U.S. consumer demand and international financial
markets. Marx would no doubt point to this crisis as a perfect instance of when
capitalism looks like “the sorcerer who is no longer able to control the powers
of the netherworld whom he has called up by his spells.”
Despite the depth
of our current predicament, Marx would have no illusions that economic
catastrophe would itself bring about change. He knew very well that capitalism,
by its nature, breeds and fosters social isolation. Such a system, he wrote,
“leaves no other nexus between man and man than naked self-interest, than
callous ‘cash payment.’” Indeed, capitalism leaves societies mired “in the icy
water of egotistical calculation.” The resulting social isolation creates
passivity in the face of personal crises, from factory layoffs to home
foreclosures. So, too, does this isolation impede communities of active,
informed citizens from coming together to take up radical alternatives to
capitalism.
Marx would ask first and foremost how to overcome this
all-consuming social passivity. He thought that unions and workers’ parties
developing in his time were a step forward. Thus in Das Kapital he
wrote that the “immediate aim” was “the organization of the proletarians into a
class” whose “first task” would be “to win the battle for democracy.” Today, he
would encourage the formation of new collective identities, associations, and
institutions within which people could resist the capitalist status quo and
begin deciding how to better fulfill their needs.
No such ambitious vision
for enacting change has arisen from the crisis so far, and it is this void that
Marx would find most troubling of all. In the United States, some recent
attention-getting proposals have been derided as “socialist,” but only appear to
be radical because they go beyond what the left of the Democratic Party is now
prepared to advocate. Dean Baker, codirector of the Center for Economic and
Policy Research, for example, has called for a $2 million cap on certain Wall
Street salaries and the enactment of a financial transactions tax, which would
impose an incremental fee on the sale or transfer of stocks, bonds, and other
financial assets. Marx would view this proposal as a perfect case of thinking
inside the box, because it explicitly endorses (even while limiting) the very
thing that is now popularly identified as the problem: a culture of risk
disassociated from consequence. Marx would be no less derisive toward those who
think that bank nationalizations—such as those that took place in Sweden and
Japan during their financial crises in the 1990s—would amount to real change.
Ironically, one of the most radical proposals making the rounds today has
come from an economist at the London School of Economics, Willem Buiter, a
former member of the Bank of England’s Monetary Policy Committee and certainly
no Marxist. Buiter has proposed that the whole financial sector be turned into a
public utility. Because banks in the contemporary world cannot exist without
public deposit insurance and public central banks that act as lenders of last
resort, there is no case, he argues, for their continuing existence as privately
owned, profit-seeking institutions. Instead they should be publicly owned and
run as public services. This proposal echoes the demand for “centralization of
credit in the banks of the state” that Marx himself made in the
Manifesto. To him, a financial-system overhaul would reinforce the
importance of the working classes’ winning “the battle of democracy” to
radically change the state from an organ imposed upon society to one that
responds to it.
“From financialisation of the economy to the socialisation
of finance,” Buiter wrote, is “a small step for the lawyers, a huge step for
mankind.” Clearly, you don’t need to be a Marxist to have radical aspirations.
You do, however, have to be some sort of Marxist to recognize that even at a
time like the present, when the capitalist class is on its heels, demoralized
and confused, radical change is not likely to start in the form of “a small step
for the lawyers” (presumably after getting all the “stakeholders” to sit down
together in a room to sign a document or two). Marx would tell you that, without
the development of popular forces through radical new movements and parties, the
socialization of finance will fall on infertile ground. Notably, during the
economic crisis of the 1970s, radical forces inside many of Europe’s social
democratic parties put forward similar suggestions, but they were unable to get
the leaders of those parties to go along with proposals they derided as
old-fashioned.
Attempts to talk seriously about the need to democratize our
economies in such radical ways were largely shunted aside by parties of all
stripes for the next several decades, and we are still paying the price for
marginalizing those ideas. The irrationality built into the basic logic of
capitalist markets—and so deftly analyzed by Marx—is once again evident. Trying
just to stay afloat, each factory and firm lays off workers and tries to pay
less to those kept on. Undermining job security has the effect of undercutting
demand throughout the economy. As Marx knew, microrational behavior has the
worst macroeconomic outcomes. We now can see where ignoring Marx while trusting
in Adam Smith’s “invisible hand” gets you.
The financial crisis today also
exposes irrationalities in realms beyond finance. one example is U.S. President
Barack Obama’s call for trading in carbon credits as a solution to the climate
crisis. In that supposedly progressive proposal, corporations that meet
emissions standards sell credits to others that fail to meet their own targets.
The Kyoto Protocol called for a similar system swapped across states. Fatefully
however, both plans depend on the same volatile derivatives markets that are
inherently open to manipulation and credit crashes. Marx would insist that, to
find solutions to global problems such as climate change, we need to break with
the logic of capitalist markets rather than use state institutions to reinforce
them. Likewise, he would call for international economic solidarity rather than
competition among states. As he put it in the Manifesto, “United
action, of the leading . . . countries, at least, is the first condition for the
emancipation of the proletariat.”
Yet the work of building new institutions
and movements for change must begin at home. Although he made the call “Workers
of the world, unite!” Marx still insisted that workers in each country “first of
all settle things with their own bourgeoisie.” The measures required to
transform existing economic, political, and legal institutions would “of course
be different in different countries.” But in every case, Marx would insist that
the way to bring about radical change is first to get people to think
ambitiously again.
How likely is that to happen? Even at a moment when the
financial crisis is bleeding dry a vast swath of the world’s people, when
collective anxiety shakes every age, religious, and racial group, and when, as
always, the deprivations and burdens are falling most heavily on ordinary
working people, the prognosis is uncertain. If he were alive today, Marx would
not look to pinpoint exactly when or how the current crisis would end. Rather,
he would perhaps note that such crises are part and parcel of capitalism’s
continued dynamic existence. Reformist politicians who think they can do away
with the inherent class inequalities and recurrent crises of capitalist society
are the real romantics of our day, themselves clinging to a naive utopian vision
of what the world might be. If the current crisis has demonstrated one thing, it
is that Marx was the greater realist.
Leo Panitch is Canada
research chair in comparative political economy and distinguished research
professor of political science at York University in Toronto, and coeditor of
the annual Socialist
Register |