Give Karl Marx a Chance to Save the World Economy: George Magnus

[marmar]

(Bloomberg) Policy makers struggling to understand the barrage of financial panics, protests and other ills afflicting the world would do well to study the works of a long-dead economist: Karl Marx. The sooner they recognize we’re facing a once-in-a-lifetime crisis of capitalism, the better equipped they will be to manage a way out of it.

The spirit of Marx, who is buried in a cemetery close to where I live in north London, has risen from the grave amid the financial crisis and subsequent economic slump. The wily philosopher’s analysis of capitalism had a lot of flaws, but today’s global economy bears some uncanny resemblances to the conditions he foresaw.

Consider, for example, Marx’s prediction of how the inherent conflict between capital and labor would manifest itself. As he wrote in “Das Kapital,” companies’ pursuit of profits and productivity would naturally lead them to need fewer and fewer workers, creating an “industrial reserve army” of the poor and unemployed: “Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery.”

The process he describes is visible throughout the developed world, particularly in the U.S. Companies’ efforts to cut costs and avoid hiring have boosted U.S. corporate profits as a share of total economic output to the highest level in more than six decades, while the unemployment rate stands at 9.1 percent and real wages are stagnant. ..........(more)

The complete piece is at: http://www.bloomberg.com/news/2011-08-29/give-marx-a-chance-to-save-the-world-economy-commentary-by-george-magnus.html

[xchrom]

1. Recommend

[PonyJon]

27. Rewrite and forgive all underwater mortgages. Let the crooked finance industry eat their lunch.

The dollars freed up, not being sent to these crooked institution, would be spent immediately. It would be a hugh stimulus for the economy and not add one cent to the deficit. It would also eliminate the need to prosecute these banks and institutions, just let them eat the lunch they prepared and sleep in the bed they made!

[izquierdista]

2. Right author, wrong remedies

If ol' George is going to read Marxist explanations and agree with them, he can't run back to capitalist tinkering around the edges with tax cuts and debt to fix things.

What should be the #1 remedy on the list is to pry that wealth away from the capitalists that are hoarding it. There is no need to maintain bankers' fiction that they still have a lot of money they made on mortgages they originated before the crash. Those debts need to be given a haircut and marked to market sooner rather than later. Number two on the list is to put tax rates on the top 1% where they need to be; maybe not all the way back up to 91%, but 70% would be most reasonable. Number 3 is to get all that wealth back into the hands of people who will spend rather than hoard. A mandatory unionization law for companies employing more than 100 workers would be a start.

[Fearless]

3. Neither solution works.

They are both the same thing coming from opposite directions. What we need is accountability regardless of the kind of society we choose.

[bhikkhu]

4. Bad idea - this never works

The whole world-view and set of circumstances that incubated Marx's idea no longer exists. The notion that we can pull some workable solution out of the old work of some guy long dead is pretty boneheaded, I think.

If Marx had watched the failure of every single attempted implementation of his work, he probably would have either revised his work, or started over from scratch. Being dead, he never had the opportunity; for solutions to current problems, we need living, thinking people, and ideas that evolve and respond to circumstances.

[texshelters]

5. What I take is that Marx's analysis is true today as it was

150 years ago. Now, the solution in a different time needs to include labor participation, and much more.

Peace,
Tex Shelters

[txlibdem]

6. Two words: Abraham Lincoln

:hi:

[Butch350]

22. How can you make such a statement and then give a vanilla solution?

[GliderGuider]

7. I have the same half-hearted fondness for Marx as I do for Anarcho-Primitivism

Both philosophies present remarkably insightful critiques of where we are and how we got here. Both fail miserably at defining any kind of workable solution space.

So: capitalism doesn't work, communism doesn't work, we can't go back to the caves, and things are already falling apart... The near future is going to be an uncomfortably interesting time.

[deadinsider]

8. Marx critique of Capitalism isn't an endorsement of Communism

Here is my understanding on Marx. Admittedly, I am no scholar or academic on the subject, but I do feel he may be more relevant now than he was in the past.

First, his analysis of Capitalism (the Labor Theory of Value, et al) is not an endorsement of any type. It is merely a critique. I do not believe there is a single reference to Socialism or Communism in Das Kapital.

Secondly, there has never been a 'true' Communistic state as Marx foresaw. His endorsement for such a system relied on the the abolition of the state army and the adoption of a democratic militia during the Socialistic stage (to fight against the consequential aggression of the bourgeoisie, as well as any bureaucratic grift/graft) and an emphasis on education (in order to enlighten the people i.e. peasant, proletariat, and petty bourgeoisie classes).

He also worried the transformation would fail if it was implemented too soon: capitalism had to be evolved to certain stage of globalization (mainly in order that the proletariat revolution was world-wide and the labor theory of value resulted in his theorized final crisis of capitalism) and the peasant class would have to be won over in order for the system to work. He thought the petty-bourgeoisie i.e. managers and the self-employed would be more readily allied with the proletariat.

Thirdly, once the socialist phase ('the tyranny of the proletariat') was completed through education, the state would naturally dissolve and thus communism would be born. He often times related the his concept of communism with the anarchists of his day, thinking that society is best managed on a local level.

That's my understanding anyway.

[deadinsider]

9. Also...

I've read that Marx did overlook the value of nationalism as a means of control for the bourgeoisie. One author suggested this is his biggest 'mistake' and may be the single greatest reason that a global revolution would be problematic.

I'm also reading books on anarchism, and it's many, many forms. I do struggle with the concept of a 'stateless society' that is managed on a local level. That is where both anarchism and Marxism seem to be suggesting a great unknown... one that even provides a proponent like me with some major qualms.

BTW: anarcho-capitalism is closely related to Ayn Rand (as I understood when reading though the book offered a caveat that they are not the same and in someways direct opposites - if that makes sense!!). I'd have to look up what the difference is again because the intro to anarchism book goes through so many derivatives of the system that it's kinda hard to keep up and relate all the concepts off the top of one's head.

I will say anarchism is as misunderstood as capitalism vs socialism vs communism. It is by no means chaos... now what we have is looking closer to that than any of the aforementioned!

[Fantastic Anarchist]

12. Anarcho-Capitalism is a contradiction.

Anarchism is a tradition within the socialist umbrella that is as much opposed to capitalism as it is the state. Capitalism thrives on having the state provide the "force" with which to use within capitalist relations. Achieving the destruction of one without the other is nigh impossible - as evidenced by the state capitalism of the Bolshevik/Soviet Union.

Ayn Rand was a minarchist, who's worldview is hardly compatible with anarchism (even that of the egoist Max Stirner's) for reasons that would be too hard to explain without a refresher on "The Ego and His Own."

It was Murray Rothbard proponents (after his switch to the right) that use him in their advocacy of their "anarchism." Ironically, after his transition to the right-wing, he made overtures to the New Left in his opposition to the state.

[PonyJon]

28. "a stateless society' that is managed on a local level" is pretty much the dark ages all over agian

[Fantastic Anarchist]

29. No, it's not. n/t

[Fantastic Anarchist]

11. You are not too far off. Good post.

And it should be noted that the Labor Theory of Value was taken from Adam Smith (though, I can't recollect if he was the first to come up with the idea). Marx was also influenced by P.J. Proudhon as referenced in my post below.

[Fantastic Anarchist]

10. Where in the piece are Marx's solutions? What of Proudhon's solutions?

I read the article at the link, and it seems that the author is prescribing more capitalism to thwart the decline of capitalism? And to top it off, that this was Marx's view?

On another note, why is everyone so enthralled with Marxian solutions that have proven over and over again to establish authoritarian state socialism? Why not look at the views and solutions of the anarchist, Pierre-Joseph Proudhon (being the first to define scientific socialism), whom Marx borrowed from before he (Marx) decided on a more authoritarian trend?

Proudhon's ideas are needed now more than ever.

Pierre-Joseph Proudhon

What is Property?

"Why, how can you ask such a question? You are a republican."
"A republican! Yes; but that word specifies nothing. Res publica; that is, the public thing. Now, whoever is interested in public affairs – no matter under what form of government – may call himself a republican. Even kings are republicans."
"Well! You are a democrat?"
"No."
"What! "you would have a monarchy?"
"No."
" A Constitutionalist?"
"God forbid."
"Then you are an aristocrat?"
"Not at all!"
"You want a mixed form of government?"
"Even less."
"Then what are you?"
"I am an anarchist."
"Oh! I understand you; you speak satirically. This is a hit at the government."
"By no means. I have just given you my serious and well-considered profession of faith. Although a firm friend of order, I am (in the full force of the term) an anarchist. Listen to me."

Mutualism

[deadinsider]

13. I think people need to identify capitalism as the problem...

Your first statement is what I feel Marx was talking about in his Crisis of Capitalism. Rather than identify the system as the problem, they will try to fix it with more of the same. And it will work for a time. This is why he talks about cycles of crises. But he claimed that there must be an end-point, where no capitalistic tool could fix it, because they all ignore the contradictions inherent within the system.

Also, it seems the whole Marx vs Anarchist thing is to do with authoritarianism, as you stated. I believe Marx felt that the socialist stage was necessary, mainly due to the fact that the bourgeoisie would not let go of their power passively, and education (some would call it indoctrination) of the classes was complete.

Interestingly, it was William Morris and Lenin that both identified the stages as "socialism" and "communism." Marx just talks about stages and seems to agree with the anarchists of his day in his ideas for the last stage.

He also felt it necessary not to impose any detailed organizational concepts on future generations. They must be free to choose and adapt the society as they saw fit. Again: as long as they are educated they would be equipped to make their own choices.

So, that's why I am reading more and more about Marx and the anarchists. And the more you read about it, the more you realize that half of what you think i.e. economics is just a result of cultural hegemony. The society you grow up in also informs your needs and wants, your belief system, and biases you against unorthodox thought. Of course, the belief system is that of the elite, and is used to justify their existence and exploitation.

At this point, I agree with the anarchists end game, but fail to see how they have accounted for the bourgeoisie just allowing it to happen. I believe Marx is identifying this as a huge obstacle, and suggests a middle phase (socialism) in order to combat it and get everyone on board.

The problem is that it can result in a stall because the socialist phase may lead to an entrenched new elite that tries to sustain itself, rather than 'wither away.' But I have read Marx feared this, but only if the revolution happened too soon (for one).

Thanks for the reply.

[Fantastic Anarchist]

14. I appreciate the clarification.

It's been a good long while since I've read Das Kapital and Communist Manifesto. Even then, in my memory, most of the socialist works I've read seem to have melded together; and as a result, I forget what to prescribe to whom.

As to the cultural hegemony, if I remember correctly, didn't Antonio Gramsci elaborate on that? At any rate, I think you're right. It's worth noting that the anarchist-communist, Peter Kropotkin, in his Mutual Aid, describes that the environment and society is what influences our competitive vs. our cooperative impulses; in such that a society that rewards competition tends to produce competitive traits, and that a society that rewards cooperation tends to produce cooperative traits. His conclusions were that in animal societies (including human), the cooperative species tended to fare better and prosper, and so that cooperation was, at the very least, just as important as competition as a factor of evolution.

As for the middle "stage" with regard to anarchism, I'll bet you know there isn't one unified thought regarding that. Proudhon advocated a peaceful transition through the use of his ideas within the existing society, gradually replacing the old with the new. Revolutionaries such as Bakunin or Malatesta advocated much more immediate solution to capitalism, but at any rate, all definitely regarded the state as undesirable in achieving socialist ends, whereas, Marx was quite happy with utilizing the state to effect revolution. Such a utilization, in hindsight, proved Bakunin right and Marx wrong, as the Bolsheviks replaced the old tyranny with one of theirs.

Very good discussing this with you.

[deadinsider]

15. Yup it was Gramsci that coined 'cultural hegenomy'

And I do know Marx talks about something similar, but more material, as in the actual religious, military, political systems, et al. He calls it the super-structure (i.e. base and superstructure).

So far Kropotkin is who I lean towards within anarchism, but I'm still a bit ignorant of the system as a school of political science, socialogy, or economics. I believe Kropotkin is a anarcho-communist, and Chomsky identifies himself as an anarcho-syndicalist. The book is hard to follow, even though its and intro to the subject, because it reference so many schools of thought and so many advocates. It is still informative. I'll have to read it again when I'm finished; I'm halfway there.

The book talks about Proudhon at the beginning when its trying to dispel the popular notion (which exists to this day) of anarchy as a system of chaos and without any type of organization. And I believe it mentioned that Proudhon was the one who created the famous (or infamous, depending on your perspective) A in a circle symbol.

It does mention that Marx was critical of Proudhon and Bakunin (and vice-versa; quite antagonistic rivalry, very bitter). I view it as a bit silly, especially considering that their end-games were very similar. It was more about the means to that end. Bakunin, BTW, considered Marx's critiques of Proudhon impressive and legitimate (I can't remember if it mentioned the details or just stated it as a matter of historic fact).

Anyway, it sounds a bit like DU community sometimes now that there is a democratic president ;)

In regards to Marx and Proudhon and Adam Smith borrowing from one another, I do know this is true. Also, I'm reading about Descartes right now and how he borrowed from Montaigne and Sextus Empiricus skepticism.

In the end I think this directly correlates to Hegel's dialectic, that all of history is a serious of debates that result in a synthesis and on and on. Whereas Marx emphasized 'dialectic materialism' i.e. economics - BTW he did not coin that phrase either. I think it was Lenin again).

[Fantastic Anarchist]

17. Yes, Kropotkin is an anarchist-communist.

I was a little confused. Which book was it that was hard to follow?

You may be interested in reading some of Kevin Carson's work, if you haven't already. One of his works synthesizes Marx with the Austrian school of monopoly capitalism (within a Mutualist framework). It has some very surprising insight, but I have some reservations as I lean from the Mutualist school to the collectivist school.

Austrian and Marxist Theories of Monopoly Capital: A Mutualist Synthesis

Introduction

AUSTRIAN AND MARXIST THEORIES OF MONOPOLY-CAPITAL

A Mutualist Synthesis

Kevin A. Carson


INTRODUCTION

My starting point for this article is a ground-breaking study by Joseph Stromberg. In "The Role of State Monopoly Capitalism in the American Empire," (1) Stromberg provides an insightful Austrian analysis of state capitalist cartelization as the cause of crises of overproduction and surplus capital. In the course of his argument, he makes reference to Progressive/Revisionist and (to a lesser extent) Marxist theories of imperialism, and analyzes their parallels with the Austrian view.

Although the state capitalism of the twentieth century (as opposed to the earlier misnamed "laissez faire" variant, in which the statist character of the system was largely disguised as a "neutral" legal framework) had its roots in the mid-nineteenth century, it received great impetus as an elite ideology during the depression of the 1890s. From that time on, the problems of overproduction and surplus capital, the danger of domestic class warfare, and the need for the state to solve them, figured large in the perception of the corporate elite. The shift in elite consensus in the 1890s (toward corporate liberalism and foreign expansion) was as profound as that of the 1970s, when reaction to wildcat strikes, the "crisis of governability," and the looming "capital shortage" led the power elite to abandon corporate liberalism in favor of neo-liberalism.

But as Stromberg argues, the American ruling class was wrong in seeing the crises of overproduction and surplus capital as "natural or inevitable outgrowths of a market society." (2) They were, rather, the effects of regulatory cartelization of the economy by state capitalist policies.

The effects of the state's subsidies and regulations are 1) to encourage creation of production facilities on such a large scale that they are not viable in a free market, and cannot dispose of their full product domestically; 2) to promote monopoly prices above market clearing levels; and 3) to set up market entry barriers and put new or smaller firms at a competitive disadvantage, so as to deny adequate domestic outlets for investment capital. The result is a crisis of overproduction and surplus capital, and a spiraling process of increasing statism as politically connected corporate interests act through the state to resolve the crisis.

Although I cannot praise Stomberg enough for this contribution, which I use as a starting-point, I diverge from his analysis in several ways. Stromberg, himself a Rothbardian anarcho-capitalist affiliated with the Mises Institute, relies mainly on Schumpeter's analysis of "export-dependent monopoly capitalism," as read through a Misean/Rothbardian lens. Secondarily, he relies on "corporate liberal" historians like Williams, Kolko and Weinstein. To the extent that he refers to Marxist analyses of monopoly capital, it is mainly in passing, if not utterly dismissive. But such theorists (especially Baran and Sweezy of the Monthly Review group, James O'Connor, and Paul Mattick) have parallelled his own Austrian analysis in interesting ways, and have provided unique insights that are complementary to the Austrian position.

Starting with Stromberg's article as my point of departure, I will integrate both his and these other analyses into my own mutualist framework. More importantly, as a mutualist, I go much further than Stromberg and the Austrians in dissociating the present corporate system from a genuine free market. Following the economic arguments of Benjamin Tucker and other mutualists, I distinguish capitalism from a genuine free market, and treat the state capitalism of the twentieth century as the natural outgrowth of a system which was statist from its very beginning.

There are more essays by him here:

Articles and Essays

Also, I found this to be an exceptional read by Daniel Guerin:

Anarchism: From Theory to Practice

[deadinsider]

21. Cool & thanks.

This looks like it will be a very interesting read.

[Fantastic Anarchist]

24. Sure thing! Enjoy!

;)

[tama]

18. Just happen

>>>At this point, I agree with the anarchists end game, but fail to see how they have accounted for the bourgeoisie just allowing it to happen.<<<

As was said, there's no single process but 'multitude'. Main force will be no doubt that as capitalism self destructs because of its own impossibility, the parasitic classes will mostly evaporate.

Grass roots revolution is happening all the time and spreading in many forms, I'm somewhat familiar with ecovillages, DIY hippie movements and such - what also Kropotkin was speaking about and doing. Not all who live anarchistic way of life use the word or self-identify as 'anarchists' - not even majority.

[Fantastic Anarchist]

19. +1

Good post!

:toast:

[deadinsider]

20. Understood...

However, in much the same way as Capitalists will not give up their power willingly, I also feel anarchists will encounter the same with the State. Really, its both that are the problem (and, as most schools of anarchist thought explain: the State is just a tool for control).

This is a good example of what I'm talking about in regards to my speculation:

http://www.huffingtonpost.com/2011/08/03/rawsome-raid-_n_917540.html

I have qualms about people being educated enough to peacefully migrate to a communist\anarchist type of system. Remember, I'm just learning more about anarchism myself! It will be pure necessity forces the system to change, but due to the power of the state (see the Defense Budget), I feel it will evolve into a more overt fascism for our country, and our world.

Currently, the authority of the state is relatively passive (albeit becoming more aggressive) and depends upon the circus maximus as well as cultural hegemony to pacify or circumvent popular dissent. I should add that it seems the latter of the two is critical for manufacturing pseudo-populism such as the Tea Party, where ignorance is exploited in order to corrupt the proletariat's sense of self-interest.

Just some thoughts...

Thanks for your insight.

[tama]

23. Not just peacefull

Remember, the Zapatista revolution of anarchistic self-governance in Chiapas started with armed rebellion. Not to mention Spain, Makhno, etc. Or current anarchistic movement in Greece, Black Block tactics, Seattle, Anonymous etc.

Seattle is good example. It is seldom remembered and realized that WTO has not progressed an inch since Seattle.

On the other hand, I can't really see the point of violent "anarchistic" rebellion to get rid of State for once and all, especially if and when your urban militant anarchist ideologues have no way to feed the future stateless population. Peasant rebellions a la Makhno are somewhat different story, anarchist peasants of Ukraina fed the urban people even after the urban people had nothing to barter. There's no technocratic 'way-to'do' an anarcho-communist community. IMHO anarchy is a matter of heart and soul and organic growth of letting all the flowers flourish... All the Gardeners of the Earth, Unite! :)

[Fantastic Anarchist]

25. But it is amazing to think what Makhno's Insurrectionarry Army was able to accomplish ...

...while simultaneously fighting both the White and Red Armies.

[tama]

26. Yup

I've also seen the power of anarchistic self-organization in many forms in this life, and it is simply amazing. Very reassuring examples, giving us (collective and individual) self-confidence in and for these interesting times.

Of course, then Lenin and Trotsky bloodily betrayed Makhno's Insurrectionary Army after it had beaten the White armies for them and then starved half of Ukraina to death. Just like Stalin betrayed anarchists of Spain. Commie pigs behaving like they are more equal than others... duh, that's just what democratic centralism (and other forms of institutional power hierarchies) does to people, especially those at the top.

And no, I'm not saying that 'never trust a commie (or any other democratic centralist)' is the right conclusion... :)

[deadinsider]

16. In addition: anarchy, socialism, and communism...

... are about appropriating the means of production (resources, equipment, etc) from the 'exploiters' i.e. capitalists.

I read an interesting thought on charity in capitalism (can't recall if it was Marx who said it): it is merely the thief returning wealth back to the true owner.

Marx consistently uses this type language to hammer home the fact that the real 'creators' of the world is labor, not capital.

You know, the whole thing about who the 'job creators' are and are not? He goes further, and asks who are the real creators of wealth.