[quote]In trying to think what Marx would have made of the world today, we have to begin by stressing that he was not an empiricist. He didn’t think that you could gain access to the truth by gleaning bits of data from experience, ‘data points’ as scientists call them, and then assembling a picture of reality from the fragments you’ve accumulated. Since this is what most of us think we’re doing most of the time it marks a fundamental break between Marx and what we call common sense, a notion that was greatly disliked by Marx, who saw it as the way a particular political and class order turns its construction of reality into an apparently neutral set of ideas which are then taken as givens of the natural order. Empiricism, because it takes its evidence from the existing order of things, is inherently prone to accepting as realities things that are merely evidence of underlying biases and ideological pressures. Empiricism, for Marx, will always confirm the status quo. He would have particularly disliked the modern tendency to argue from ‘facts’, as if those facts were neutral chunks of reality, free of the watermarks of history and interpretation and ideological bias and of the circumstances of their own production.[/quote]
[quote]He was right: no alternative has developed. Economics as a discipline has in effect become the study of capitalism. The two are taken as the same subject. If there were ever going to be a serious and sustained theoretical challenge to the hegemony of capitalism inside economics – a serious and sustained challenge subsequent to the one provided by what used to be called ‘actually existing socialisms’ – you’d have thought one would have come along since the near terminal meltdown of the global economic system in 2008. But all we’ve seen are suggestions for ameliorative tweaking of the existing system to make it a little less risky. We have at the moment this monstrous hybrid, state capitalism – a term which used to be a favourite of the Socialist Workers Party in describing the Soviet Union, and which only a few weeks ago was on the cover of the Economist to describe the current economic condition of most of the world. This is a parody of economic order, in which the general public bears all the risks and the financial sector takes all the rewards – an extraordinarily pure form of what used to be called ‘socialism for the rich’. But ‘socialism for the rich’ was supposed to be a joke. The truth is that it is now genuinely the way the global economy is working.[/quote]
[quote]Marx’s model works like this: competition pressures will always force down the cost of labour, so that workers are employed for the minimum price, always paid just enough to keep themselves going, and no more. The employer then sells the commodity not for what it cost to make, but for the best price he can get: a price which in turn is subject to competition pressures, and therefore will always tend over time to go down. In the meantime, however, there is a gap between what the labourer sells his labour for, and the price the employer gets for the commodity, and that difference is the money which accumulates to the employer and which Marx called surplus value. In Marx’s judgment surplus value is the entire basis of capitalism: all value in capitalism is the surplus value created by labour. That’s what makes up the cost of the thing; as Marx put it, ‘price is the money-name of the labour objectified in a commodity.’ And in examining that question he creates a model which allows us to see deeply into the structure of the world, and see the labour hidden in the things all around us. He makes labour legible in objects and relationships.
The theory of surplus value also explains, for Marx, why capitalism has an inherent tendency towards crisis. The employer, just like the employee, has competition pressures, and the price of the things he’s selling will always tend to be forced down by new entrants to the market. His way of getting round this will usually be to employ machines to make the workers more productive. He’ll try to get more out of them by employing fewer of them to make more stuff. But in trying to increase the efficiency of production, he might well destroy value, often by making too many goods at not enough profit, which leads to a surplus of competing goods which leads to a crash in the market which leads to massive destruction of capital which leads to the start of another cycle. It’s an elegant aspect of Marx’s thinking that the surplus theory of value leads directly and explicitly to the prediction that capitalism will always have cycles of crisis, of boom and bust.[/quote]
[quote]The most obvious mistake in his version of the world is to do with class. There is something like a classic Marxian proletariat dispersed through the world. But Marx foresaw that this proletariat would be an increasingly centralised and organised force: indeed, this was one of the reasons it would prove so dangerous to capitalism. By creating the conditions in which labour would be sure to organise and assemble collectively capitalism was arranging its own downfall. But there is no organised global conflict between the classes; there is no organised global proletariat. There’s nothing even close. The proletariat is queuing to get into Foxconn, not to organise strikes there, and the great danger facing China, which is in a sense where the world’s proletariat now is, is the inequality caused by fractures within the new urban proletariat and the rural poverty they’re leaving behind. China also has tensions between the coast and the centre, and increasing problems with corruption and maladministration that erupt regularly in what are known as Mass Group Incidents, MGI – basically anti-authority riots which occur regularly all over China and seem never to be reported in the Western mainstream media. But none of these phenomena is to do with class, and given the emphasis put on organised class struggle in Marx’s work you have to file this under predictions which haven’t proved true.
Why not? I think for two main reasons. The first is that Marx did not foresee, as no one else did and I don’t think anyone could, the variety of different forms of capitalism which would evolve. We talk of capitalism as one thing, but it comes in many different flavours, involving different models. The contemporary welfare state – housing and educating and feeding and providing healthcare for its citizens, from birth to death – is a development which challenges the basis of Marx’s analysis of what capitalism is: I think he would have looked hard at the welfare state and wondered whether it fundamentally undermined his analysis, just because it is so different from the capitalism Marx saw operating in his day, and from which he extrapolated. Perhaps he would argue that what has happened is that British society in its entirety has become part of a global bourgeoisie, and the proletariat is now in other countries; that’s a possible argument, but not one that’s easy to sustain in the face of the inequalities which exist and are growing in our society. But Scandinavian welfare capitalism is very different from the state-controlled capitalism of China, which is in turn almost wholly different from the free-market, sauve-qui-peut capitalism of the United States, which is again different from the nationalistic and heavily socialised capitalism of France, which again is not at all like the curious hybrid we have in the UK, in which our governments are wholly devoted to the free market and yet we have areas of welfare and provision they haven’t dared address. Singapore is one of the most avowedly free-market countries in the world, regularly coming top or near top of surveys for liberalisation of markets, and yet the government owns most of the land in the country and the overwhelming majority of the population lives in socialised housing. It’s the world capital of free markets and also of council flats. There are lots of different capitalisms and it’s not clear that a single analysis which embraces all of them as if they were a single phenomenon can be valid.[/quote]
[quote]A final challenge to Marx’s model, and also to his picture of the future, comes from something he did see very clearly and prophetically, the extraordinary productive power of capitalism. He saw how capitalism would transform the surface of the planet and impact on the life of every single person alive. There is, however, a crack or flaw close to the heart of his analysis. Marx saw the two fundamental poles of economic, and social and political, life as labour and nature. He didn’t see these two things as static; he used the metaphor of a metabolism to describe the way our labour shapes the world and we in turn are shaped by the world we have made. So the two poles of labour and nature don’t stay fixed. But what Marx doesn’t allow for is the fact that nature’s resources are finite. He knows that there is no such thing as nature unshaped by our assumptions, but he doesn’t share our contemporary awareness that nature can run out. This is the kind of thing which is sometimes called ironic, but is closer to tragedy, and at its heart is the fact that the productive, expansionist, resource-consuming power of capitalism is so great that it is not sustainable at a planetary level. The whole world wants to have a First World bourgeois lifestyle, and the whole world can see what that looks like by glancing at a television set, but the world can’t have it, because we will burn through its resources before we get there. Capitalism’s greatest crisis is upon us, and it is predicated on the unavoidable fact that nature is finite.[/quote]
[quote]So the question is whether capitalism can evolve new forms, in the way it has so far managed to do, and come up with property and market-based mechanisms which deflect the seemingly inevitable crisis that will ensue, or whether we need some entirely different social and economic order. The irony is that this order might in many respects be like the one Marx imagined, even if he saw a different route to getting there. When Marx said that capitalism contained the seeds of its own destruction he wasn’t talking about climate change or resource wars. If we feel a natural gloom and despondency at the prospect of the difficulties ahead, we should also take comfort in the fact of our imaginative adaptability and the ingenuity which has brought us so far so fast – so far, so fast, that we now need to slow down, and don’t quite know how. As Marx wrote, towards the end of the first volume of Capital, ‘man is distinguished from all other animals by the limitless and flexible nature of his needs.’ Limitless needs we see all around us and they’ve brought us to where we are, but we’re going to have to work on the flexible part.[/quote]
Good read by British novelist John Lanchester in the LRB. Some of the bolded points I agree with, some I disagree with and some I think are great distillations of difficult Marxian concepts. Thoughts from the babble hive mind?