Book Review from the January 2014 issue of the Socialist Standard
Can Income Redistribution Rescue Capitalism? By Andrew Kliman, Marxist-Humanist Initiative, 2013, $8 plus postage from email@example.com
Subtitled ‘Monthly Review’s Factual & Theoretical Myths’ most of this pamphlet deals with the theoretical and statistical errors used by the USA's dominant left-wing journal in explaining the latest capitalist economic crisis. The Monthly Review attributes the crisis to rising income inequality, with the clear implication that income redistribution can rescue capitalism, though it is doubtful that Monthly Review would admit to that implication. Underpinning Monthly Review’s explanation is an underconsumptionist theory of capitalist economic crisis, and this is Kliman's main target. Underconsumption theory argues, basically, that crises are caused by a lack of effective demand.
Kliman shows that in Marx’s crisis theory crises result from the normal functioning of capitalism and are inevitable under it. Underconsumption theory, on the other hand, typically implies that something has gone wrong and can be remedied. Kliman also challenges the popular notion of the alleged success of the ‘neoliberal’ assault on the working class, the supposed decline in workers’ share of output, and their allegedly stagnating wages. He provides evidence that this notion ignores the substantial growth in the incomes of older, female, and more highly-educated working people. The evidence Kliman cites is mainly drawn from the USA but the point generally still stands. The history of capitalism shows that it is not inconsistent with rising living standards for the working class, and the 100 years prior to the 1970s saw consistently rising real wages in the USA and elsewhere but still with regular crises.
Kliman maintains that undue concern over inequality can divert attention from major economic problems like mass unemployment, people losing their homes, and poverty. And what about the fact, he says, which dominates most people’s lives, that they are forced to do what bosses tell them to do, day after day, year after year––or else starve? 'Why is there so little outrage about this', writes Kliman, 'or even concern about it?' The criticism here is mainly directed at the 2011 Occupy movement which generally focused less on these concrete problems and more on the abstraction 'rising inequality'. Some may find this line of argument controversial, while for others it will be a breath of fresh air. It should be noted that, contrary to popular belief, Marx did not condemn capitalism for its inequality (rising or not), nor did he frame his arguments for socialism in terms of material equality. For revolutionary socialists, claims Kliman, the interests of the working class and the interests of the system are fundamentally opposed and 'this is the primary reason why they maintain that revolutionary transformation of society is needed' (Kliman's emphasis).
Included in this pamphlet are selections from Kliman's book The Failure of Capitalist Production (2011) where underconsumptionist theory is examined in detail. It is sometimes suggested that Marx held to an underconsumptionist position with this statement: 'The ultimate reason for all real crises always remains the poverty and restricted consumption of the masses'. However, capitalist production is production for the market with a view to sale and profit, not directly for human needs. It is profitability, or the lack of it, which creates the possibility of an economic crisis. And this possibility, argues Marx, is 'no more than the possibility. For the development of this possibility into a reality a whole series of conditions is required' (emphasis added). As Kliman points out, there is no suggestion here that crises are the result of persistently inadequate demand. Kliman is worried about the political implications of underconsumptionist theory because 'underconsumptionism implies that a more equitable distribution of income will make capitalism work better'. This is a fallacy all socialists oppose.