The mainstream (media, experts, free market boosters, etcetera) and rightwingers who usually operate in delusional essentialisms (capitalism eventually works for all of us; if you’re poor, or fail, it’s your own fault; the world’s resources will never run out; trade unions hold people back, etcetera), are second-guessing themselves. In a strange twist, they taken to reading Karl Marx’s critiques of capitalism to make sense of the global economic meltdown. Basically, they’re concluding Marx was right after all. (We’ll leave their motives out of it for minute.)
Two recent examples: First up, has been New York economist and professed free marketer Nouriel Roubini, who told The Wall Street Journal in late August:
Karl Marx had it right. At some point capitalism can self-destroy itself because you cannot keep on shifting income from labour to capital without not having excess capacity and a lack of aggregate demand, and that’s what’s happening.
More recently Harvard Business School professor Umair Haque, also praised the old Communist intellectual. Haque’s recent book, btw, was titled: “A New Capitalist Manifesto.” Get it.
Writing on his HBS blog, Haque–after apologizing for even bringing up Marx’s name–asks: “Was there maybe a tiny mote of insight or two hidden in Marx’s diagnoses of the maladies of industrial age capitalism?” He then takes the reader through some of Marx’s ideas about immiseration, crisism stagnation, alienation, false consciousness and commodity fetish. It is worth repeating some highlights here:
… Crisis. As workers were paid less and less, capitalism would be prone to chronic, perpetual crises of overproduction — for they wouldn’t have the means to purchase or invest in enough goods to keep the economy humming. As Marx put it, there was likely to be “poverty in the midst of plenty.” How’s Marx doing on this score? Not bad, I’d say: the last three decades have in fact been characterized by global crises of what you might crudely call overproduction (think: too little demand chasing too many disposable widgets, resulting in a massive global debt crisis, as vanishing middle classes took on more and more debt to compensate for stagnant real wages).
Stagnation. Here’s Marx’s most controversial — and most curious — prediction. That as economies stagnated, real rates of profit would fall. How does this one hold up? On first glance, it seems to have been totally discredited: corporate profits have broken through the roof and into the stratosphere. But think about it again, in economic terms: Marx’s prediction concerned “real profit,” not just the mystery-meat numbers served up by beancounters, and chewed over with gusto by “analysts.” When seen in those terms, Marx might be said to have been onto something: though corporations book nominal profits, I’d suggest a significant component of that “profit” is artificial, earned by transferring value, rather than creating it (just ask mega-banks, Big Energy, or Big Food). I’ve termed this “thin value” and Michael Porter has described it as a failure to create “shared value.” Replace “declining real profit” with “shrinking real value” and it’s analogous to what Tyler Cowen and I have called a Great Stagnation (though our casus belli for it differs significantly from Marx’s).
Alienation. As workers were divorced from the output of their labor, Marx claimed, their sense of self-determination dwindled, alienating them from a sense of meaning, purpose, and fulfillment. How’s Marx doing on this score? I’d say quite well: even the most self-proclaimed humane modern workplaces, for all their creature comforts, are bastions of bone-crushing tedium and soul-sucking mediocrity, filled with dreary meetings, dismal tasks, and pointless objectives that are well, just a little bit alienating. If sweating over the font in a PowerPoint deck for the mega-leveraged buyout of a line of designer diapers is the portrait of modern “work,” then call me — and I’d bet most of you — alienated: disengaged, demoralized, unmotivated, uninspired, and about as fulfilled as a stoic Zen Master forced to watch an endless loop of Cowboys and Aliens.
False consciousness. According to Marx, one of the most pernicious aspects of industrial age capitalism was that the proles wouldn’t even know they were being exploited — and might even celebrate the very factors behind their exploitation, in a kind of ideological Stockholm Syndrome that concealed and misrepresented the relations of power between classes. How’s Marx doing on this score? You tell me. I’ll merely point out: America’s largest private employer is Walmart. America’s second largest employer is McDonald’s.
Commodity fetishism. A fetishized object is one which is more than a symbol: it’s believed to have actually the power the symbol represents (like an idol, or a totem with magical properties). Marx claimed that under industrial age capitalism’s rules, commodities became revered talismans, worshipped through transactional exchanges, imbued with mystical powers that give them inherent value — and obscuring the value of and in the very people who’ve worked labored over them in the first place. It’s one of Marx’s most subtle and nuanced concepts. Does it hold water? Again, I’ll merely pointing to societies in furious pursuit of more, bigger, faster, cheaper, nastier, now, whether it’s the retail temples of America’s mega-malls, or London rioters stealing, not bread, but video games.
To date Haque’s post–it went online September 7th–has had more than 650 (!) comments and despite his plea that ” … this is a divisive topic,” exhorting his readers to “stay civilized, enlightened, and keep a sense of humor” and urging them to “… discuss the issues and ideas in the comments — not just defend ideologies by pointing fingers and calling one another names,” the comments are a sight to behold.
* BTW, for beginners who want to start with good, readable studies of Marx and his ideas I’d recommend Eric Hobsbawn’s new book (we posted a link to a review of Hobsbawn’s here) and literary academic Terry Eagletona new book. (Here Eagleton writes about the book.)
H/T: Peter Dwyer.