Karl Marx and the Economic Crisis Today

[IndianaGreen]

Karl Marx and the Economic Crisis Today

By Norman Markowitz

In a recent article for Reuters, titled “Karl Marx and the World Financial Crisis,” Bernd Debussmann discusses the present global crisis. The reporter, far brighter than most we are used to in “mainstream” US media, quoted the Communist Manifesto’s statements on the centralization of credit as a major step on the road toward socialism and suggested that Marx and Marxism may be relevant to understanding what is happening in the world today.

These views shouldn’t surprise anyone. They are views that smart people in the capitalist world, especially those who had no desire to see a working-class revolution take place, noted when they began to take Marx and Marxism seriously in the late 1870s. These were the last years of Marx’s life, but the beginning of the establishment of mass socialist parties strongly influenced by and/or committed to the general theories propagated by Marx and Engels. Debussmann, to support his analysis, also quotes warnings from IMF historians and US analysts who saw disaster, the equivalent to an international economic “train wreck,” in the offing.

The article is an excellent one for general readers and should be circulated widely. Debussmann mentions that since 1980 (the beginning of the “free market” reign), the top one percent of US income earners has seen their share of the national income grow from around eight percent to about 20 percent. Meanwhile the percentage of workers in private sector unions has dropped to about 7.5 percent, “the lowest in the industrialized world,” which should be a source of both anger and concern for American working people. Debussmann also mentions positively the campaign labor is waging for the Employee Free Choice Act.

But there are some points of Debussmann's interpretation that need to be challenged, along with important omissions in the article. Let me begin with the omissions, which I see as wholly constructive and friendly.

Marx stressed the battle for democracy as essential for the Communists to support as a necessary condition to the eventual establishment of socialism.

He also saw the attempts by capitalists to save the capitalist system from its chronic crisis, the crisis of overproduction, leading to depressions, as not only hopeless but self-defeating. In their centralization of credit, their creation of bigger and bigger monopolies, their search for foreign markets to dump surplus goods and gain access to greater and cheaper quantities of raw materials and pools of labor, the capitalists were digging their own grave. Marx believed that they were literally setting the stage for bigger crises in the future, breaking down the distinctions between workers in various countries and regions of the world by putting more and more of them, from Beijing to Brooklyn, from Calcutta to Cleveland, in the same boat so to speak.

http://www.politicalaffairs.net/article/articleview/7589/

[izquierdista]

1. The place for capitalism

Capitalism works well when the axioms of a free market are present: low barriers to entry for both buyers and sellers, perfect information, and facile clearing of transactions. As such, it is great for low value consumer products: tomatoes, toys, tampons, toiletries, toilet tissue, turnips, t-shirts, telephones, towels, tape measures, tape recorders, tape dispensers, and tables with folding legs to display the above items. Capitalism is a big unorganized swap meet with a sign at the gate "buyer beware". Since the fall of the Soviet Union, they have seen an abundance of consumer products under capitalism which were in short supply under the former planned economy.

However, capitalism just doesn't work well when free market rules are not present. In that case, PLANNING is in order, which requires a government that comes to a consensus decision. Instead of waiting for competing capitalists each to build a dam on the Arizona-Nevada border and let them compete to sell water and electricity, the government decided on one large project for the benefit of all. Instead of waiting for capitalists to set up a system of letter delivery, the United States Postal Service made it possible to send a first class letter to any address for the same price. Instead of waiting for capitalists to set up subscription based fire service (like are sprouting in the hills east of San Diego), cities provide fire department services to ALL their inhabitants, and maybe even neighboring communities on a reciprocal basis.

So there is a place for socialism, despite wingnuts ranting against it. It is for the important things in life: protecting your home from fire, providing roads and utilities to communities, providing education to all children and health care to those in need. The unimportant things, the Hannah Montana lunchboxes, the capitalists can provide them.

[The Magistrate]

2. To My Way Of Thinking, Sir, Socialism Goes A Bit Beyond That

In society, no person has the right to injure others for their personal benefit. Everyone recognizes this in the case of a stick-up artist with a pistol in his hand and a snarl of 'Gimmie yer wallet!" on his lips. But a great many things flow from any serious attempt to apply this principle universally. For at the core of our present economic practices is the blunt statement that ownership conveys the right to do injury to others for one's own gain. Indeed, this is even raised to the status of an imperative, presented as something a person does not just have the right to do, but something a person is right to do, and ought to do, whatever the promptings of personal conscience, or protests by those it is done to, might otherwise dictate. An owner who pays cut-throat wages; an owner who lays off workers to increase a profit margin; an owner who looses poisons on the land; an owner who shirks taxation: all these do real injury to fellow citizens, and do it for their own gain. People who do these things constrict the lives of others, disrupt and unsettle the lives of others, inflict illness and its attendant costs on others, force others to open their pockets further to the tax collector, and they do them for no better or different motive than the stick-up artist: they want more money than they have at present, and no scruple whatever in effecting that desire, whatever the harm done to another in its fulfillment.

The chief difference between the case of the stick-up artist and the grasping owner is not the different style of their methods of aggrandizing themselves at the expense of their fellows. The chief difference in their situations is the attitude of the state in which they operate. The state takes an adversarial relation to the stick-up artist: police hunt them, courts jail them. The state does no such thing with the grasping owner: the state is the grasping owner's friend, it is in very fact the pistol in his hand. It is by means of the state that the owner can effect his injuries to others, and the owner depends on the state for his very existence. For the very fact of ownership, the secure possession of a great deal of valuable property in the face of those with less property, or none at all, requires the power of the state, and the exertion of state power on the owner's behalf. Nothing is more puerile and false than the claim of owners that they arise and exist independently of the state, that they owe it nothing, that the state is even their adversary. Without the armed power of the state, the habit of obedience to the state, and the civil order this maintains, it would not be possible for an owner to act in ways that injure many other citizens, indeed, it would be scarcely possible to main concentrations of ownership such that one individual owned a good deal more than others. Equilibrium would be restored, and maintained, by that simplest tool of mass numbers, the mob.

Capital is simply value in excess of immediate consumption, fixed for storage in some durable form for later use, whether that be something so basic as pile of food or so esoteric as a piece of paper people have agreed to regard as more valuable than some other piece of paper. Humankind has been accumulating surplus value ever since the species commenced its existence, and the piles have gotten rather large. They are essential to any complex society. A great deal of what people in society need done, and want done, does not have any immediate pay-off, whatever it may bring in time. While engaged in such doings, people must still eat, be clothed and sheltered, amuse themselves. That is done out of the accumulated surplus, which is replenished by the proceeds of the ventures they are engaged in when these come to fruition, and produce a value greater than what has been consumed in the course of its production. The accumulations of surplus value are the enablers of complex social orders, the engine which moves social activity, and the augmentation of surplus value is the nearest thing to a collective purpose for a complex social order.

That this surplus value should be regarded as a private possession, and the increase of it wrought by the labor of many go into the purses of those who claim it as a private possession, is hardly necessary to its function in society. Tended by stewards rather than held by owners it would perform exactly the same function, and produce exactly the same benefits, for the society around it. It is undoubtedly true that some people would be better at superintending the employment of a society's surplus value than others; there is no field of human endeavor in which differentials in aptitude and skill cannot be discerned. But a system of private ownership of the accumulations of surplus value no more guarantees it will be in hands best suited to manage it than a system of private 'ownership' of the state (in the forms of autocracy or hereditary monarchy) guarantees the state will be well governed. In any society, it swiftly becomes the case that most who enjoy private ownership of large portions of accumulated surplus do so through inheritance, through accident of birth into a privileged class of owners. "No damned nonsense about merit" attends their position as those who possess, direct, and personally profit from, the accumulated surplus that is the heart of the society they exist within, or their position at the apex of it.

A chief method by which the owners of the accumulated surplus value defend their private possession of it is by blurring the concepts of property in capital goods and property in personal effects. They pretend that to deprive them of ownership of banks and factories and fleets of transport and great tracts of land is to deprive people of their personal possessions, and since the same word, 'property', is employed for both things, it is a fairly simple trick to pull off. They have been helped at times by ill-judged social movements who have in fact engaged in the same blurring from the opposite direction, and regarded a carter possessing a truck or a neighborhood baker possessing an oven as objects for expropriation equally with the owners of a fleet of several thousand trucks, or of a dozen factory ovens turning out millions of loaves and cakes each year. But a moment's reflection will disclose that these things are no more identical than a mouse and an elephant, and that the difference is the degree in which they are able by their possessions to impact the lives of others for good or ill. The small proprietor can do little in either direction, and must look the people he or she directly affects in the face: the great owner can do great good or great harm to great numbers, and to people he or she will never see.

It is perverse to the point of absurdity to attempt to seriously maintain decisions concerning how surplus value is to be deployed ought to be made without any concern for the general effects one use or another will have on the society in which it exists, and the people who comprise that society, and insist instead that the sole concern governing how surplus value is deployed ought to be getting more of it into one individual's pockets, whatever any other consequences might be. Actions which have great public effects are properly the concern of the public, and ought to be directed by the public, as the nearest thing possible to a positive assurance they will be made in the public interest. Once this is grasped, it is clear that the private owner of surplus value, and the aggrandizement of the private owner of surplus value, is an irrelevance, where it is not an active agent of harm. A public stewardship would have incentive to increase the accumulated surplus, for doing so is a public good, that enables a society to do more, and is essential to its growing larger and becoming more prosperous. A public stewardship would have no incentive to do this in a way that harmed large portions of the public, and indeed would be actively discouraged by the public from doing any such thing.

[Selatius]

3. There is a quote dealing with the differences between the stick-up artist and the grasping owner.

"Looking back on it, I feel that I could have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents."

-- Maj. Gen. Smedley Butler, USMC

This was his words printed in the socialist newspaper of the time, Common Sense, in 1935:

"I spent 33 years and four months in active military service and during that period I spent most of my time as a high class muscle man for Big Business, for Wall Street and the bankers. In short, I was a racketeer, a gangster for capitalism. I helped make Mexico and especially Tampico safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National city Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefit of Wall Street. I helped purify Nicaragua for the International Banking House of Brown Brothers in 1902–1912. I brought light to the Dominican Republic for the American sugar interests in 1916. I helped make Honduras right for the American fruit companies in 1903. In China in 1927 I helped see to it that Standard Oil went on its way unmolested."

[The Magistrate]

4. General Butler, Sir, Is One Of Our Greatest Patriots, A Man Of Courage And Honesty, A Great Marine

He deserves far more remembrance than he has received.

[AntiFascist]

10. One problem has to do with extreme Libertarianism....

Some feel that they should be able to buy up all the land and and natural resources for their own private use, provided they have the wealth and means to do so. Some justify their cause with the sacriligous belief that mankind has no innate rights, and anything they possess has been in the form of a gift from God (ie in the form of money). If one has the means to threaten, kill, or intimidate others then, according to the extreme right-wing Libertarian, he should be able to use that ability free from regulation. I'm not that familiar with "Joe the Plummer", but I wouldn't doubt that underlying philosophy supporting his cause fits this mold well, and could eventually evolve into a significant threat to our way of life.

[Unvanguard]

11. That's an excellent summary.

When the matter is put the right way, the prevailing capitalist mode of ownership does seem rather absurd. Much of the instinctive public dislike for socialist proposals comes from the fact that the matter is only very rarely put that way....

[Rupert Giles]

5. Booklovers turn to Karl Marx as financial crisis bites in Germany

"Karl Marx is back. That, at least, is the verdict of publishers and bookshops in Germany who say that his works are flying off the shelves.

The rise in his popularity has of course, been put down to the current economic crisis. "Marx is in fashion again," said Jörn Schütrumpf, manager of the Berlin publishing house Karl- Dietz which publishes the works of Marx and Engels in German. "We're seeing a very distinct increase in demand for his books, a demand which we expect to rise even more steeply before the year's end."

Most popular is the first volume of his signature work, Das Kapital. According to Schütrumpf, readers are typically "those of a young academic generation, who have come to recognise that the neoliberal promises of happiness have not proved to be true."

Bookshops around the country are reporting similar findings, saying that sales are up by 300%. (Though the fact that they are not prepared to quote actual figures suggests the sales were never that high).

Literature comes and goes and it is nice to see that trends are not always driven by slick marketing campaigns. Just as Rudyard Kipling would have been delighted that his poem The Gods of the Copybook Headings which contains the apt lines: "Then the Gods of the Market tumbled, and their smooth-tongued wizards withdrew." is modish once more, so Marx would have reveled in the idea that an economic crisis had reignited interest in his works. (Not, you understand, because of the increased royalties that would be coming his way over the next few months were he still alive.)

Increasing numbers of Germans appear ready to out themselves as Marx fans in a time when it is fashionable to repeat the philosopher's belief that excessive capitalism with all its greed finally ends up destroying itself. When Oskar Lafontaine, the head of Germany's rising left-wing party Die Linke, said he would include Marxist theory in the party's manifesto, in the outline of his plans to partially nationalise the nation's finance and energy sectors, he was labeled as a "mad leftie" who had "lost the plot" by the tabloid Bild. But even Germany's finance minister, Peer Steinbrück, who must have had some sleepless nights over the past few weeks, has now declared himself something of a fan. "Generally one has to admit that certain parts of Marx's theory are really not so bad," he cautiously told Der Spiegel.

"These days Marx is on a winning streak in the charm stakes," Ralf Dorschel commented in the Hamburger Abendblatt.

But for those not quite ready to immerse themselves in Marxist theory, Marx's correspondence to Friedrich Engels at the time of an earlier US economic crisis makes more entertaining reading. "The American Crash is a delight to behold and it's far from over," he wrote in 1857, confidently predicting the imminent and complete collapse of Wall Street."

http://www.guardian.co.uk/books/2008/oct/15/marx-germany-popularity-financial-crisis





A comment on: http://libcom.org/forums/news/marx-works-are-flying-shelves-15102008

"There's a real "Capital reading movement" afoot over here. I don't want to wildly over-exaggerate, but it is certainly there.

For one thing, the Rosa Luxemburg Stiftung, the non-profit foundation associated with Die Linke, has been offering regular, well-attended courses in Berlin on all three volumes usually taught by Sabine Nuss, Anne Steckner, and Ingo Stützle (all of whom might be described as students of Michael Heinrich): http://www.kapital-lesen.de

The initial meeting of the second cycle for Volume I was so huge that the Frankfurter Allgemeine Sonntaszeitung even published a short piece on it (this would be like the Sunday New York Times publishing a short piece on a Capital reading group occurring in Washington, D.C)

For another thing, Die Linke.SDS, the student group associated with Die Linke, has initiated a program to train its cadres in _Capital_, so that when they return to their campuses in the fall they are capable of leading reading groups. http://www.linke-sds.org/spip.php?article205

Something is in the air when even a lame, social democratic party like Die Linke contributes to a _Capital_ renaissance.

A _Capital_ renaissance already seemed to brewing a few years back when Robert Kurz's _Schwarzbuch Kapitalismus_ and Krisis' Manifest gegen die Arbeit came out and then Hardt and Negri's _Empire_ was translated into German. Then Michael Heinrich's little introductory volume came out and sold like mad (it is now in the 6th edition). Now with the financial crisis, the snowball effect seems to be continuing."

[Rupert Giles]

6. A marxist view on the crisis

http://video.google.com/videoplay?docid=7382297202053077236&ei=jVL6SOPjMYewiALElbzOAg&q=Richard+Wolff"]http://video.google.com/videoplay?docid=73...q=Richard+Wolff

Richard Wolff a professor of economics at UMass Amherst talks on the current "financial" crisis and capitialism in general. A form of socialism is presented as a possible alternative. This talk was presented by the Asociation for Economic and Social Analysis and the journal Rethinking Marxism

====================================================

During the past 20 years the capitalists have successfully - with support from the displacement of power to their favor that was achieved during the Reagan-era - taken hold of a bigger part of the production. Real wages have dropped while the profits have grown. The traditional problem for the capitalists when such a strategy has grown too successful, is that when the workers' wages drop so does their ability to consume. And who should the capitalist then sell their commodities to? The solution to that question have been cheap loans. No working class in history has been so beloaned as the american, Wolff states. And it has been an immensely profitable solution for capital, instead of raising the wages:

"Profitearners lend the money to the workers, to enable the workers to consume more, not by paying them rising wages, like the previous hundred and fifty years, but by lending to them. Try to think of this an employer: Instead of paying your worker a better wage, you lend him or her the money so that they will have to pay it back to you with interest."


On this road have the american working class, often dubble- and tripple working to get their economy together, collapsed under increasing debts that on growing credit has financed the entire systems continuing expansion. Until it can't be kept together any longer...

[struggle4progress]

7. The Reuter's link loaded very slowly for me so here's a link to Debusmann's article at FT

U.S. following Karl Marx's playbook?
By Bernd Debusmann
October 18, 2008 12:01 AM ET
http://www.financialweek.com/apps/pbcs.dll/article?AID=/20081018/REG/810169975/1036

The Reuter's link gives the article over 3pp; the FT link gives the same article as a single page

[nichomachus]

8. The problem is not capitalism

but corporatism. Capitalism on an interpersonal level works well. Even corporate capitalism, when appropriately regulated and restrained can work. However, unrestrained, unregulated corporate capitalism, as we've seen, is a recipe for disaster.

[readmoreoften]

9. If Walmart was owned by one family with no stockholders it would still be a problem.