Marx is hot again

Posted: 19 August 2011 in Uncategorized
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Back in 2008, in the immediate aftermath of the crash, Marx was hot. Now, as the capitalist recovery falters and there are fears of another crisis, Marx is hot again.

A few days ago, it was Nouriel Roubini admitting that Marx might have been right about the self-destructive tendencies of capitalism. A day or so later, UBS’s George Magnus invoked Marx in somewhat different manner, quoting from the Preface to A Contribution to the Critique of Political Economy:

At a certain stage of development, the material productive forces of society come into conflict with the existing relations of production or – this merely expresses the same thing in legal terms – with the property relations within this framework of which they have operated hitherto.

Like Roubini, Magnus makes the usual silly statement about capitalism not really being as bad as Marx presumed, and socialism not really being a viable or desirable alternative. But he does admit “the old guy was a pretty shrewd analyst. . .[who] offered some still relevant insights into how and why things happen in the economy and society.” That’s certainly better than most practicing economists these days, who don’t even read Marx let alone have anything but a quick dismissal to contribute to the conversation.

Magnus’s use of Marx is, in fact, interesting. In his view, Marx’s conception of social development “captures the important idea of conflict or turbulence when events happen that lead to challenges to the power, authority and legitimacy of the existing political and economic order.” And those challenges are happening right now, in Europe, the United States, and China. To quote from his text at length:

The 2008/09 financial crisis unleashed three fundamental shocks that still reverberate, and are likely to continue to do so for a while. First, it wrecked the financial stability and order that had previously prevailed, leaving us with a mountain of private and public debt to be reduced and restructured, aka the Great De-leveraging. Second, it blew up the economic model based on housing, credit expansion and financial services, not least depriving our governments of substantial tax revenues, and leaving us looking for new output and employment growth drivers.

These financial and economic shocks have produced widespread insecurity, and revealed critical weaknesses in our capacity to re-create sustainable growth. It looked a bit simpler in late 2009 and 2010, when the full range of stimulus measures and QE were in full flight, but as these have been withdrawn or terminated, the language of ‘recovery, mid cycle, and double dip’ seems rather inappropriate and misleading. The levels of economic and employment activity look worryingly depressed, and remind us that the Great De-leveraging is something totally different from anything we have experienced in the West in the last 60 years from an analytical and a policy standpoint. We demand answers and solutions from politicians, who either haven’t grasped the implications of the change in the economic environment, or are wrestling with appropriate responses.

And thirdly, as a result of these shocks, our political elites and belief systems have been shaken, and consensus has fractured. It seems that we are having sometimes esoteric tiffs between Keynesians and Austrians about if and how governments should sustain jobs and growth. But, deep down, we are having a much more significant debate as we are being forced to redefine what we think about the rights and obligations of citizens and the State, especially in view of the structural economic and social implications of demographic change over the next couple of decades – a phenomenon we have known about but ignored for many years.

That’s not a bad start. Magnus himself is looking for the conditions that will lead to long-term capitalist growth. But he has articulated at least some important dimensions of the current crisis, which can also lead to thinking beyond capitalism.

If Marx is hot again, maybe a serious consideration of alternatives to capitalism will be next on the agenda.

  1. […] (sursa foto: […]

  2. […] in 2008, in the immediate aftermath of the crash, Karl Marx was hot. Then, as the capitalist recovery falters and there were fears of another crisis in 2011, Marx was […]

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