From the March 1987 issue of the Socialist Standard
For Marx the social reality that lay behind capitalist production consisted of more than just prices and quantities. The publication of Capital in 1867 was Marx's own unique contribution to this more detailed study of commodity production. The result was the systematic discovery and critique of the laws of capitalism: the economic relationship between capital and labour; the basis on which the product of labour takes the form of a commodity and the underlying contradictions which cause the system repeatedly to pass through periods of boom, crisis and slump. In other words Marx stripped away the surface appearances of capitalist production to show that the central feature of the system was the economic exploitation of the working class during the process of production itself. In so doing he highlighted the parasitical nature of the capitalist class and their ever-increasing historical irrelevance to a point where today the very system of commodity production acts as an obstacle to a more rational organisation and development of society.
Consequently Marx had little time for those economists of his own day who deliberately set out either to defend capitalism or to rectify its inherent contradictions by means of various palliatives or reforms. The footnotes to Capital are strewn with vitriolic comments and side remarks against the leading economists of the 19th century, whether they were "mere sophists and sycophants of the ruling-classes" or the "shallow syncretism" of men like John Stuart Mill.
But it was the "herd of vulgar economic apologists", like Bentham and Malthus, whom Marx particularly singled out to attack. As he wrote in an earlier work:
Their object is rather to represent production in contradiction to distribution ... as subject to eternal laws independent of history, and then to substitute bourgeois relations, in an underhand way. as immutable laws of society in abstracto. (Grundrisse, pp.26-32).
Since his death, what has passed for twentieth century economics has generally followed the vulgar economist trend of the preceding century. There seems to be a Bentham or Malthus born every generation. The so-called leading economists of this century — Keynes, Hayek, Galbraith, Friedman and now Buchanan — have all written works either justifying the principles of the free market or offered "solutions" to capitalism’s periodic upheavals. Divorced from the real world of working-class experience, these economists have only ever concerned themselves with fiscal studies, profits, competition. markets and consumers. They have drifted aimlessly from one crisis to another, unable to understand the very system they purport to defend. Even though they use sophisticated mathematical analysis, statistical data and computer modelling of the economy, it does not make their theories or pronouncements credible, correct or scientific. On the contrary they are in a similar position to the eccentric mysticism of the alchemists during the Middle Ages, forever reformulating the same impotent propositions in an ever more incomprehensible language.
However, the utter failure of twentieth century economics to address the real problems of people’s day-to-day needs throughout the world has not seemed to deter the publication of one new economic theory after another. Each new theory — and there seems to be a pet economic theory for every professor living or dead — is offered up as some universal panacea for the continuing waste, poverty and occasional deliberate under-production that characterises capitalism. Some theories remain unread, just left to gather dust on some academic library shelf, while others have been dissected or watered down to suit the immediate pragmatic or ideological needs of successive governments as they have struggled to administer the economy. In the same way that clothes or pop stars come in and out of fashion so too do the ideas and personalities that abound within the Alice in Wonderland world of vulgar economy. Keynes’ theories, no longer fashionable as a useful political dogma, have been largely abandoned by economists and politicians alike in favour of the more entrenched anti-working-class doctrines of Milton Friedman or Friedrich Hayek.
If it was not for the economic crisis during the 1970s Friedman would most probably have spent the remainder of his life offering advice to capitalists living in and around Chicago; but with the almost universal rejection of Keynes, Friedman and his monetarist doctrines were adopted to fill the void in government economic policy. But monetarism did not help solve the problems facing governments and it certainly had no bearing on the unemployed. But then Friedman has no interest in the working class; they do not pay his salaries or buy his books. The revival of 19th century economic liberalism spearheaded by Hayek is the latest economic fashion. Hardly a day passes without one of the master's disciples claiming on the television or radio, that the whole business of buying and selling will create some form of capitalist Utopia. Indeed Hayek's rise to stardom has been as rapid as Keynes' was during the late 1930s. From power centres such as the Adam Smith Institute, the Institute of Directors and from economics departments such as the LSE and Liverpool University, these market anarchists preach the Hayekian virtues of an “entrepreneur-led and market-driven society".
Although Hayek has been around for a long time the idea that capitalism works in terms of efficient production and distribution of wealth is even older. However, we have just to consider capitalism from an historical perspective in conjunction with our day-to- day struggle to realise that the claim made by Hayek and his disciples is wrong. Capitalism has never worked in our interests, with or without government interference. It is incapable of satisfying human needs while at the same time producing for profit. Throughout their writings the market anarchists seldom mention the millions who die of hunger, nor the increasing concentration of wealth in the hands of a few privileged social parasites. They are also quiet, to the point of dumbness, on the deliberate under-production of foodstuffs to maintain profits as they are about the burning of wheat or fruit because there is no market for it. As the pamphlet A World of Abundance, produced by socialists in Canada, stated:
Socialists are hardened by now to meeting the opinion that the system of production for profit is essentially sane and efficient. The opposite is true; . . . capitalism wastes its wealth and its abilities. The profit motive cannot work efficiently. Capitalism cannot cater for the needs of its people. It produces waste and it produces want and both are profitable only to the minority who hold positions of privilege.
Marx did not write for academics but for the working class. He wanted us to understand the system that to this day enslaves us and to use his works in our continuing class struggle. Hayek will become unfashionable as quickly as he became fashionable; not so Marx, whose relevance will remain until that day when the working class finally capture political power and democratically establish socialism.