One hundred and fifty years after the publication of the Communist Manifesto, the New Yorker has discovered that "Marx's version of free enterprise also chimes with the views of many contemporary businessmen, who would rather be flogged than labelled Marxist".
John Cassidy's 5,000-word essay "The Return of Karl Marx" in the October 27 issue of this magazine from the bastion of American capitalism does not include Marx's view of a future world based on common ownership. Nor does it support his labour theory of value. It is however amazingly laudatory when dealing with Marx's analysis of how capitalist accumulation operates. Cassidy quotes one Wall Street organiser of stock issues as saying: "The longer I spend on Wall Street, the more convinced I am that Marx was right . . . I am absolutely convinced that Marx's approach is the best way to look at capitalism."
At first Cassidy was astonished at that claim and recalled that he had studied economics with his financial friend at Oxford in the early eighties when their teacher had taught them to agree with Keynes that Marx's economic theories were "complicated hocus pocus". He decided to re-examine Marx's writings and found himself agreeing with his Wall Street friend.
After sneering at Marx's writing style he goes on to heap praise on his analysis of capitalism:
"When he wasn't driving the reader to distraction, he wrote rivetting passages about globalizaion, inequality, political corruption, monopolization, technical progress, the decline of high culture, and the enervating nature of modern existence--issues that economists are now confronting anew, sometimes without realising that they are walking in Marx's footsteps."
Cassidy is unstinting in his praise for Marx's materialist conception of history:
"Indeed, as Sir John Hicks, a Nobel Prize-winning British economist, noted in 1969, when it comes to theories of history Karl Marx still has the field pretty much to himself. It is, Hicks wrote; 'extraordinary that one hundred years after Das Kapital . . . so little else should have emerged'."
On the growth of global markets Cassidy again praises Marx. "Globalization is the buzzword of the late twentieth century, on the lips of everybody from Jiang Zemin to Tony Blair, but Marx predicted most of its ramifications a hundred and fifty years ago. Capitalism is now well on its way to transforming the world into a single market, with the nations of Europe, Asia, and the Americas evolving into three rival trading blocs within that market."
While criticising Marx's view of the struggle between worker and capitalist as "too rigid", Cassidy provides some startling figures about ownership in the USA in modern times. "Between 1980 and 1996, the share of total household income going to the richest five percent of the families in the country increased from 15.3 percent to 20.3 percent, while the share of the income going to the poorest sixty percent of families fell from 34.2 percent to 30 percent." Even more to the point he writes: "According to Edward Wolff, a professor of economics at New York University, half of all financial assets in the country are owned by the richest one percent of the population, and more than three-quarters of them are owned by the richest ten percent."
In discussing the role of the unemployed in keeping down wages, Cassidy is in no doubt that Marx got that right too. "Marx believed that wages were held down by the presence of a 'reserve army' of unemployed workers who attempt to underbid the employed. Reduce the ranks of this army, he said, and wages would rise--just as they have started to do in the last year."
The role of the state
This remarkable essay ends with the writer discussing the relationship of politics to ownership. "Perhaps the most enduring elements of Marx's work is his discussion of where power lies in a capitalist society . . . Marx, of course delighted in declaring that politicians merely carry water for their corporate paymasters. 'The executive of the modern state is but a committee for managing the common affairs of the bourgeoisie,' he wrote in the 'Manifesto', and he later singled out American politicians saying they had been 'subordinated' to 'bourgeois production' since the days of George Washington. The sight of a President granting shady businessmen access to the White House in return for campaign contributions would have shocked him not at all."
For socialists reading any praise for the works of Karl Marx in such a supporter of American capitalism as the New Yorker magazine is astonishing. It shows that once an enquirer frees himself of the prejudices of orthodox thinking the only way to understand how world capitalism is developing is from the standpoint of Marx's materialist conception of history.
With a little more application Cassidy may even rid himself of the orthodox nonsense that he at present embraces; namely "supply and demand curves, production functions and game theory", and realise that Marx's labour theory of value is the view that best explains production, exploitation and surplus value.
But let's not look for too much. We still relish his conclusion that "despite his errors, he was a man for whom our economic system held few surprises. His books will be worth reading as long as capitalism endures."