As most of you are accutely aware by my interpretation of political events, I am a Marxist. I believe Marxism can and should be used to explain the financial crises we’ve just been through, as a matter of urgency rather than consigned to the history books of failed economic orders. Because if we ignore the warning cries from Marx, or even Keynes, that there is inherent danger and crises in capital accumulation, we are simply going to repeat those mistakes.
I am a Marxist, but I understand that there is currently no working class movement any more. I do not call for the abolition of all Private property and a vanguard party to destroy Capitalism from within like a new age Soviet State. I do however believe that when the contradictions of an economic order become so vast and dangerous that they keep descending into crises, the economic order becomes unsustainable and collapses, and that is a matter for history to sort out. I don’t think we’re ready for the collapse of the economic order of Capitalism. Marx expressed that this time would come at a moment when Capitalism was at its most advanced stage. To me, we are not at that advanced stage, but we are heading there. Using Marxist dialectics, we can see that Feudalism was absolutely always going to become Capitalist, because skilled work produced better “things” and was more respectable, but eventually society progressed to a stage where skilled workers were greater in number, and Capitalism rewards skilled workers where Feudalism does not. Marx argued that Capitalism also had a problem; those with property always pitted against those without property, and the eventually those without property would not stand for their plight any longer, and socialism would follow. The argument being that if I have a nine hour day, and I have made the money after six hours that will pay my wage, the extra three hours I have to work I am essentially working for free. But that extra money is used by the Capitalist to expand the business, or to (as recent history shows) gamble it on dodgy stock options. A tension becomes apparent between the economic order and the cultural order of the day….
In Capital, Marx says:
In its rational form it is a scandal and abomination to bourgeoisdom and its doctrinaire professors, because it includes in its comprehension an affirmative recognition of the existing state of things, at the same time also, the recognition of the negation of that state, of its inevitable breaking up; because it regards every historically developed social form as in fluid movement, and therefore takes into account its transient nature not less than its momentary existence; because it lets nothing impose upon it, and is in its essence critical and revolutionary.
When the economic order moved away from an industrial base in the UK, to a financial sector base, suddenly there became a new tension. Instead of expanding, or money “trickling down” as it was promised to do, excess profit was ploughed into unproductive financial gambles, like naked short selling. (Which has just been an accepted practice by the Tory government in the UK, despite being banned everywhere else). The tension grew between the limitlessness of the accumulation of money with the limited notions of production, exchange, labour power, and consumption.
Marx wrote very little on the order of a communist society, because he wasn’t exactly sure how it would look. He was an historian and a theorist. Way ahead of his time. George Osborne is not even in the same league as Karl Marx. Marx wrote extensively on the failures of Capitalism and its inherent crises prone nature. In fact, I would suggest Marx (much like myself) would accept that Capitalism is extraordinarily efficient, but is naturally self destructive.
The tension today I would suggest started at the moment of the industrial revolution, and has perpetuated ever since. After the second World War is was considered the fault of protectionist policies that led to a tension between Nation States and so the United States placed itself as a force for the promotion of free capital flows and pushed for decolonisation whilst opening up markets for as much surplus capital absorption as possible across the World. Though, they did all of this not for the good of humanity, but for their own benefit. In 1944 Keynes suggested the creation of a single global currency outside of the control of any nation state. Keynes saw the contradiction between Nation States and Capitalism and that it would lead only to further tension. The U.S rejected the idea, insisting that the Dollar, backed by a fixed exchange rate against the gold, take the role. Therefore, to all other currency, their “gold” was the U.S Dollar.
There is no viable left wing alternative to the prevailing and powerful neoliberal order perpetuated by key institutions like the IMF. There are little socialist groups that have failed to leave the early 1900s, there are student socialist groups who offer nothing of any substance. There has been a rather concerted effort to discredit any form of left wing alternative for a number of years. The charge that the fall of the Soviet Union represented the fall of the entire doctrine of Marxism is a nice little gimmick as a tool of propaganda, but it simply isn’t true because the Soviet Union was not in any way Marxist. Marx argued that the State needed to begin to whither away for a truly democratic Marxist revolution to take place. The Soviet State was notoriously inflated. A system of wages still existed. The Soviet Union was one big Corporation. Money filtered upwards, and the workers had no say over investment, it was left to “management”. The Soviet Union was State Capitalism. The Menshevik exile Fyodor Dan argued prolifically, that Stalin’s Russia was entirely State Capitalist. Surplus value was still sucked out of the worker, by means of separating him from the means of production.
Accumulation by dispossession has always been a mightily popular tool for Capitalism to exploit, much like its feudal predecessor. Today this economic violence first appears as stock market gambles, and then the crises that inevitably creates is imposed on the citizens of a country who are told that austerity is the “only way”. Privatisation is used as a tool to dispossess common property like water, and hand it to very few people, whilst an effort is made by the media (the Feudal system of old used Religion to try to legitimise why it had to take things from people, today the media plays that role) using words like “freedom” and “choice” and “giving power back to the people”. It is very transparent, and yet it is essentially allowed to happen. Asset losses today is simply a way of the unfortunate majority losing so that the wealthy few can buy the assets cheap at a view to selling them as the market picks up some time in the future. In short, the crises for the many equals financial christmas for the few. So whilst religion constantly focuses on the judgement day, when those who aren’t fortunate enough to believe in their horrendous myth will end up burning in hell whilst the believers are brought into Paradise, so to financial speculators often gamble on the system falling to its knees for the many, so they will be rewarded. This can be seen on a grand scale. Blackstone Group (private equity firm) take over companies at a low price when they are struggling (not failing), strip them of assets, lay off huge amounts of staff, broke union obligations, and then sell them off for a massive profit. Goldman Sachs is rather good at this.
Nobel Prize winning economist, Milton Freidman, the man responsible for the Thatcher and Reagan revolutions, the 20th Century’s version of Adam Smith, the biggest name in free market economic proposals that has perhaps ever existed, once wrote of the Soviet Union:
In the labour market individuals are seldom ordered to work at specific jobs; there is little actual direction of labor in this sense. Rather, wages are offered for various jobs and individuals apply for them – much as in Capitalist countries.
Two things to note here. Firstly, Freidman refers to other countries as Capitalist. Whilst pro-market fundamentalists who comment on my blog insist on telling me as often as possible that no country has been Capitalist, their hero says differently. Secondly, Freidman is implying, by his acceptance of their being a wage system within the Soviet Union, that it was not Communist. Communism requires the abolition of private property, not a perpetual wage system.
Over time, Freidman-ite followers within the Chicago School tradition have changed their tune in recent decades. They seem to be tacitly implying just how insanely wrong they were in their adherence to market fundamentalism. Rajan, Thaler, and Vishney, of the Chicago school tradition said recently:
“The Chicago School never said we wanted blind deregulation … We should really ask who were the people in 2000 who decided markets don’t need regulating. Those were not Chicago economists. Some of them were Clinton officials, and some of them are now advising Obama”
- They have seemingly moved to the Left apparently. The deregulatory obsession with free markets of the Freidman tradition is now worming its way out of its failures, and suggesting they were in favour of regulation afterall. The anti-state, regulation = impeding human freedom lobby, have now decided that government intervention is not ALWAYS a great evil afterall. In other words, they accept, they were massively wrong.
Freidman has been used by the Republican Right in America, Pinochet in Chile, Thatcher and Cameron in the UK to promote a Corporatocracy that actually is far departed from what he was arguing. Whilst I disagree entirely with Friedman’s premise, I note he was a great economist and his theories (much like Marx) have been wildly abused.
The ideological committment to deregulation, and spending cuts is what Naomi Klein calls a shock doctine. Forcing austerity on a Country that has recently experienced crises (like Chile did after the coup) simply to wipe the slate clean and attempt a neoliberal experiment. Neoliberal experiments are absolutely always a cover for the accumulation of more and more capital concentrated in fewer hands. The one great evil in my view perpetrated by Government is its attempts to limit itself through neoliberal doctrine. Government never limits itself, it simply moves its power around.
In fact, businesses in general are authoritarian by nature. Every so often a member of the human race will have a bit of an authoritarian nature about him. He will want to tell people how they should speak, how they should dress, how they should act, what being “professional” means, when you can eat lunch, how little money you will get for your labour whilst he takes the majority of it, all for the sake of profit and power. We are told we should thank these people for giving us a job. For allowing us not to starve to death. How ridiculous. They should thank us for allowing them the opportunity to acquire surplus value from our work, to fund their new Mercedes fund. At the point of setting up a business, the initial capital needed is the most important aspect of that business. But after that, the cogs, the human labour is the most important aspect. They hold the keys to true power, not the Capitalist. If the boss walks out of his workplace, it will continue without any problems. If the workers collectively walk out, the business is doomed. To ignore this power situation is for the Capitalist to pretend it isn’t there and that a struggle between the two doesn’t exist. It is authoritarian by its very nature. Lots of little Soviet states known as businesses. It is not the height of human freedom, it is oppressive, it alienates people, and it uses class division, race division, and sexual division to perpetuate itself. Labour and capital are vastly opposed.
The more right winged people I discuss the economic crises with, the more I am affirmed in my belief in Marxism, because I am yet to meet a Conservative supporter who can argue his or her case, without resorting to simple cliches that he or she has heard in the press. Cliches like “if you are in debt, you have to pay off your debt, that is why we are paying our debt as a nation, that the Labour party forced upon us“. The fallacy here is the comparison between National sovereign debt and individual debt. It is a fallacy for a number of reasons. Firstly, if an individual is in work and cannot reach his or her repayments, he or she cannot just start to work more. A Nation in debt that is cutting away the public sector necessarily has a flood of unemployed. It is the equivalent of a credit card company saying “you have to pay off your debt, whilst working only two hours a week”. That would be a more accurate representation of National debt during economic hardship, and individual debt. Secondly, individual debt like National debt is not necessarily a bad thing. A mortgage is not a bad thing. Similarly, a government investing when aggregate demand is low in order to keep people in jobs and homes, whilst the private sector is in no position to take on the horrendously inflated unemployment market, is not a bad thing. It is an investment that will be paid back.
The comparison of the UK to Greece is laughable. We still have the ability to pay our debts. We’re triple A credit rated, which suggests our spending patterns under Labour were not out of control as the right wing would have us believe (if they were, we certainly wouldn’t have the highest credit rating you can possibly wish to attain). 80% of our debts mature in 14 years. Greece has three years to pay 80% of its debts. We are not like Greece. Don’t believe the bullshit.
Norway is the second richest country in the World. It ranks bottom in the Forbes Failed States Index. And yet it has a public health system, a high standard of living, and 32% of its work force are employed in the State sector, the highest in the OECD. Tories would try to reform this, and say it’s “broken”. Norways basic egalitarian values have resulted in the gap between the lowest paid worker and the CEO being far smaller than anywhere else in the World.
I am yet to understand why it is that when Labour spent money they “didn’t have” to keep people in jobs and homes, it was deemed bad, but when the Conservative government spend money they “don’t have” (the debt is set to rise higher), at the same time making people unemployed, and presiding over out of control inflation, it is acceptable? Why is cutting Corporation Tax and the 50p top rate of tax whilst cutting winter fuel allowances for pensioners during a time when fuel is at an all time high and VAT a huge burden, along with inflation in general, perfectly acceptable?
Let’s be honest, freezing police pay, at a time when inflation is high, fuel is out of control, and on top of both of those, VAT is up….. whilst you cut tax for the wealthiest few, is not about sorting out the debt (in fact, it is tacitly accepting that their is no debt problem), it is ideological.
When your Country has a triple A credit rating, and is the fifth biggest economy in the World it is a lie to suggest we’re about to go bankrupt, or anywhere near bankrupt. It is a lie to say we are like Greece. To suggest, the UK is anywhere near unsustainable debt levels, we must look at the evidence. Here is a graph of the UK’s net debt since 1900:
I’d say that’s quite conclusive. We are not in a debt crises. We never were.
As inflation rises, as more people become unemployed, there is inevitably less disposable income, and so less money being spent in the private sector, because the pound in your pocket is worth less and you now have less than a pound in your pocket anyway. The public sector should be investing in infrastructure, education, and health. This is the best and only way to aid the growth of the private sector. The private sector, which is being expected to take up all the jobs that are being thrown away. In the long run, it will cost us more. Because with 12 people chasing 1 job, only 1 person can get the job. Therefore 11 need supporting. They need retraining. They need protecting. Who pays for them? Who gives them the money that will be spent in the private sector, to boost revenue and growth? When purchasing power of the main bulk of consumers is destabilised by mass unemployment, what then? Allow the private sector to employ people without the need for worker protection because if the worker wishes to negotiate terms for the buying of his labour power he can just be told “We wont hire you then, we’ll hire someone who will be as close to a slave as possible“. Whenever a right winger tells you what they are doing is for your “freedom” or your “choice”, note that it is for the freedom of the wealth to dictate terms of employment. What an awful prospect. There is great merit in government investment in infrastructure projects during economic hardship. When a perceived “crises” is barely even a “problem”, cutting so drastically exits the realm of necessity and enters the realm of ideology. The UK is facing massive ideological attacks.
It is apparent to me that the public sector did not fail. It was fine. The crises of the financial sector eventually moved the crises to the public sphere. The issue is and always will be (from a Marxist perspective at least) the crises of capital accumulation.
Understanding Marx is not about condoning Stalin.