Back to Marx

2012-05-09 00:00

NEVER mind business confidence: capitalism is in deep crisis. The 2008 financial collapse was caused by greedy bankers who failed to observe the traditional rules of their trade. Scathing critics of nationalisation and advocates of spectacular salaries and inexplicable bonuses, they happily accepted government bail outs and continued to reward themselves generously. Their opposition to regulation is as great as ever, but they have joined used-car salesmen as objects of public suspicion.

Economic recovery, we are told, requires growth. What this means is more of the same that led to the crisis: production of goods and services that people often do not need and certainly cannot afford. The result: unsustainable debt. Much of this consumption-led growth is achieved at the expense of the environment and the dwindling resources of the planet.

To this dismal scenario there is a sinister subplot. Where recovery is reported it is not matched by job creation. The system wants consumers, not employees. When it cannot avoid taking on the latter it drives down costs by searching the globe for the cheapest, least organised labour. The social costs are enormous, and compounding. They are rarely addressed in a media mesmerised by the market, profit and shareholder value.

The political consequences are slow to emerge. The Arab Spring, South African township unrest, riots in Athens and the electoral triumph of the left, the fall of the Dutch government, the trial of the Icelandic prime minister and the defeat of Nicolas Sarkozy are significant straws in the wind. The Occupy Wall Street movement has been strong-armed out of the picture for the moment, but real grass-roots anger is yet to come. The last Great Depression was ultimately resolved by world war. That will not happen again, but it would be foolish to assume it will be business as usual.

The political left allowed itself to retreat into hand-wringing impotence while the carnage took place. But in academic corridors there is renewed interest in Marxist analysis, enough to revisit the work of the most famous reader of the British Museum Reading Room. Karl Marx’s Communist Manifesto was first published in London in 1848 and its famous opening sentence proclaims: “A spectre is haunting Europe”.

Of course, he got the politics totally wrong, although he was correct to say that history is an account of struggle versus domination and exploitation. The industrial proletariat tended to be a conservative, self-interested force in advanced economies, not his revolutionary vanguard. This was more likely to be the peasantry or radical fractions of the middle-class intelligentsia. And when they occurred, revolutions tended to be hijacked by opportunist authoritarians.

His philosophy was not much better. The Hegelian dialectic (thesis, antithesis, synthesis) he converted into dialectical materialism. But he failed to appreciate the logic that Utopia, a socialist state in Marx’s case, is further subject to change unless it resorts to repression.

However, his economics, helped by the insights of his friend Friedrich Engels, are more plausible. Capitalism does indeed drive down wages, fails to pay people their real worth and extracts the surplus to accumulate capital. Labour is commodified and robbed at the point of production. That this failed to produce revolution was due to the shrewd behaviour of capitalists (Marx called them the bourgeoisie). They recognised trade unions, raised wages and improved working conditions in collaboration with reformist governments to create a labour aristocracy that had no need of Marx. This social compact produced remarkably stable and prosperous societies.

But that was before rapacious capitalism reared its ugly head again in the last quarter of the 20th century in the form of Reaganomics and Thatcherism. Marx wrote of “naked self-interest [and] egotistical calculation”. Just so: crude market forces became the basic orthodoxy. The views of businesspeople were accepted as unarguable laws of human nature and shareholder value ruled. Indeed, over the past three decades wages have declined significantly in relation to investor profit, or surplus labour value. Of course, some of the latter is held by pension funds, but the casualisation of the workforce means that increasing numbers of workers have no pension rights.

If Marx was wrong about revolution he could take comfort from the fact that his description of labour economics has not changed fundamentally in 150 years. Now, in a globalised world, manufacturers seek the most downtrodden labour force available. Marx also identified the absurd veneration of change that obsesses the business world: “All that is holy is profaned”. He was familiar, too, with an unreasonable wage gap between bosses and ordinary workers. Now bosses are increasingly assisted by highly rewarded managers who have none of the skills required to bring the best out of people, nor the inclination to act as advocates for workplace justice. They are more often recruited as enforcers to make sure that economic uncertainty induces the necessary compliance that goes with continued profit and happiness in the market. At the wrong end of this system are not only the lowly paid but professionals as well, another trend identified by Marx.

Marx would no doubt say that this is untenable and will end in revolution. History suggests otherwise. However, he was right that capital is social power: the bankers and financiers do rule. During his successful election campaign new French president François Hollande pointed out that they, not Sarkozy, were his opponents. It’s an increasingly widespread view. The people are restless.

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