A feeble criticism of Marx (1948)

From the January 1948 issue of the Socialist Standard

Modern criticism of Marx tends to crystalise itself into the concession that Marx discovered but unfortunately over-emphasised certain important truths about the nature of social development. Thus do his capitalist critics damn him with a faint praise. Mr. Christopher Hollis, broadcasting “On the Merits and Defects of Karl Marx” (Listener, 4/9/47) offered a slight variation of the theme by at least appearing to praise him with rather more than faint damns. Apart from that his treatment of Marx has no further claim to originality.

Marx himself, sensitive to the fact that his analysis of existing social forms demanded some insight, into his historical method, presupposed in the preface, to “Capital,” people who were willing to learn something new and therefore think for themselves. Viewing his motley crowd of critics by and large, might suggest that this presupposition erred on the side of over-optimism. Indeed many of Marx’s critics have resolutely refused to take him neat. Instead they have preferred to swallow him heavily diluted with secondhand versions and hear-say of others. The sharpness and flexibility of Marx’s method must, however, be judged by the way Marx himself used it. The fact that certain people have criticised Marx without troubling to discover what can be learned from Marx himself has not prevented them from offering their own versions “of what Marx really meant” or should have meant. It did not, of course, prevent Mr. Hollis.

Calling Marx’s Historical Materialism crude economic determinism he nevertheless conceded that economic circumstances have a great influence on men’s views and conduct. “It is a naive and adolescent crudity that they are the sole influence,” he added. It is more naively adolescent for Mr. Hollis to attempt to foist on Marx a view he never held and the fallacy of which he himself exposed. Education, philosophy, religion, law, and political struggles, as Marx revealed, in their action and reaction on each other, played an important part by in turn modifying and influencing the main trend of economic development. What Marx did say was that the key to the whole social picture was to be found in the economic relations under which men live, for it is this which constitutes the most important influence over men’s lives and through their lives their ideas, institutions, and general cultural activities.

For Marx all social development is historically conditioned. That men make history is central then to his doctrine. Not out of any old circumstances it is true but out of the material conditions they find to hand ; again for Marx the vital difference between a colony of bees, or an organisation of ants lies in the fact that men’s historically determined social behaviour is consciously formulated for given purposes and directed towards given ends. Mr. Hollis could even learn that Marx’s theory of Historical Materialism is not only a way of understanding history but through that understanding a way of helping to make it.

According to Mr. Hollis Marx’s economic determinism merely formulated the fact that human nature had been predominantly ruled by greed throughout history. To expect human nature to change, except by the most gradual evolution, was from the standpoint of Marx’s own logic and materialistic thesis, utterly irrational. Socialism being ruled by a spirit of love and service was therefore impossible. Capitalism may pass, said Mr. Hollis, indeed it is reasonable to think so, but on the day of its overthrow the new Socialists and Communists speaking the language of the classless society will establish themselves as a new governing class.

Marx’s belief in the coming of Socialism, was, according to Mr. Hollis, the rewriting of his ancient Jewish ancestral creed, Marx being the son of a Jew who became baptised in the Christian faith, Marx himself the inheritor of generations of Jewish faith translated the coming of the Lord in terms of the coming Communist revolution. Other “psychologists” have also explained Marx’s theories in terms of personal motivation. With that delightful lack of agreement and refreshing inconsistency which characterises “the finding” of these mind experts they have arrived at different conclusions to those of Mr. Hollis. Thus Marx’s theories of social revolution have been rationalised, as a desire to be revenged on his father for turning a Christian; the result of an ineradicable inferiority complex ; and even as a bye-product of an unhealthy liver. Doubtless a perverse ingenuity could think up a, dozen more reasons equally good—or bad. We for our part confess our utter inability to attempt an objective assessment of a many ideas in terms of subjective personal motivation. Generally speaking, such is the vast range of human motives that they are mostly too complex and obscure for people themselves to be really clear about them. For us the only satisfactory criterion of a man’s ideas is whether it is a more, or less objective representation of the processes he seeks to explain. Mr. Hollis’ attempts to deal with Marx’s theories from this aspect were, however, singularly unsatisfactory.

Mr. Hollis even described Marxism among other things as a psychology. Although he added “there is no psychologist today who would accept Marxian Psychology.” He thought that in the realm of psychological motivation there was infinitely more truth in Adler’s lust of power theory than in Marx’s crude economic determinism. Not only Marx himself but also his theories are shifted by Mr. Hollis into the realm of “psychological motivation.” The results of Mr. Hollis’ efforts in so doing are sensational. For if we are to believe Mr. Hollis it is not Marx’s view that it is the historical development of social productive forces which put men’s social needs and economic interests in a definite social cast but rather it is certain fixed and inflexible psychological attributes which bring about the social superstructure necessary for their expression. Mr. Hollis, with a wave of his psychological wand, is thus able to turn Marx the materialist into Marx the idealist. For Marx, if we are to believe Mr. Hollis, merely regarded historic social changes as but the derivative and outcome of a state of mind, albeit a greedy state of mind. Social productive relations are not then the prior and indispensible conditions for men’s existence but some ghostly process tacked on as it were to their immutable economic behaviour. All of which leads to the inescapable conclusion that Marxism is but the affirmation of the subjectivist claim that nothing exists but thinking makes it so. Mr. Hollis is probably unaware of the fact that it was Marx who with objective criticism and scientific acumen scourged those idealistic thinkers, such as Stirner, Bentham, etc., who held such notions! Incidentally, although innocently, Marx also scourged the idealistic Mr. Hollis.

Marx, however, denied that men’s economic interests and needs were to be found by an abstract psychological study of men’s minds; any more than they can be found in a physiological study of their bodies. Such interests are not psychologically derived but socially conditioned. More specifically, men’s social interests and economic exigencies have their origin not in the consciousness or unconsciousness of individuals but in the role these individuals play as members of a social group or class, in the organisation of production. Whether a man is born into that social group which makes him slave owner or slave, feudal lord or serf, employer or wage earner, depends not on his good or bad intent but on a set of productive relations indispensable to his existence and independent of his will. A mode of production based then on private property relationships, expresses the way different classes stand to each other in the division of wealth and the manner and extent in which the total social product is divided between them. In a society such as Capitalism the continued social well-being of the class who own the means of wealth production is dependent on the exploited class who are non-owners. It is true that hero and there an individual succeeds in changing his independent status, but for the overwhelming majority of the dependent class their social and economic conditions are given. Consequently their position of social servitude cannot be changed without revolutionising the productive relationships which make this servitude indispensable for the exploiters The interests of an individual are then but the expression of the common interests of his class. Whatever incidental differences may arise between members of the same social group they are subordinated and subservient to those common benefits that serve their class needs.

In the same way the conflict of class interests is never a conflict which originates and centres around abstractions like “human greed” and “lust for power.” These class conflicts themselves have their objective source in the antagonistic character of social relations based on class ownership of the means of living. The solution for the resolving of these class conflicts likewise is not the outcome of arbitrary choice or ethical preference. On the contrary it is the conscious realisation of concrete class needs made possible by the objective opportunities provided by the development of the social forces within present day society. For it is only when social production is freed from the restraint of private ownership which gives power over the lives of the many and hampers their- free development can a state of affairs—common ownership of the means of living—provide the social basis on which “the free development of each individual is the condition for the free development of all.” Which shows how much or how little Mr. Hollis understood of the subject he so kindly undertook to explain.

Nevertheless, Mr. Hollis assured his listeners that Capitalism was passing away. While Mr. Hollis was reticent about the shape of things to come he was at least emphatic that the shape would not be Socialism. Sombrely his political horoscope pointed instead to the emergence of a new ruling class. From his statement that the new Society was in its birth pangs we may deduce the fact that the exploited section will continue to be the working class. The economic function of the working class is, of course, to produce surplus value, i.e. the difference in value over and above the cost of their own subsistence and the value of the total product they produce. The appropriators will then be Mr. Hollis’ “new ruling class” who will monopolise the means of living. But it is this method of exploitation based upon the conversion of the dispossessed labourers’ working energies into a commodity and a section who appropriate their unpaid labour which is the starting point and distinctive feature of Capitalism as an historic mode of production. Nothing in essentials will be changed in Mr. Hollis’ “new society.” For a new ruling class to come into existence it must presuppose an entirely new set of economic conditions having entirely different social aims and economic objectives. To call managers, functionaries, bureaucrats, etc., operating and monopolising the means of production under the aegis of the State, a new ruling class is a misnomer. As appropriators of surplus value they would merely be fulfilling the same economic function as the entrepreneur and private corporations they had replaced. The method of exploitation would still exist in the form of capital and wealth accumulation ; or more strictly capital accumulation by the process of seeking, as far as possible, the expansion of surplus value, would be the dominant economic aim and objective. What distinguishes a ruling class is not a particular set of personalities who make up its ranks but the particular way a ruling class, by ownership of wealth resources, appropriates the labour of others. Mr. Hollis’ new ruling class would then be merely different individuals of the old ruling class. In the same way as the former Nazi leaders by forced purchases, appropriation and penetration into large scale industry did not, as some have fondly imagined, form the, nucleus of a new ruling class, but as recipients of surplus value, became part of the German Capitalist class.

It is also an illusion held by Burnham and other supporters of the so-called “managerial revolution” that State intervention weakens and finally destroys the basis of Capitalism. What, in actual fact, does happen is that with the monopolistic growth of modern Capitalism the political functions of the State become more and more integrated into the economic functions of capital. The purpose of political controls is then to ensure as far as possible the smooth running of the various branches of Capitalist production ; the easing of the friction between various sections of the Capitalist class; and the regularising and spreading over of some part of the capital resources of the ruling class in the main field of Capitalist production. State intervention, so far from weakening Capitalism, attempts to strengthen and preserve it in the interests of the Capitalist class as a whole. Even where a considerable measure of State control of industry has been carried out it merely means that the appropriation of surplus value is carried out by the State on behalf of collectivised capital. That is why Mr. Burnham, in his desperate attempt to find a new economic basis for his Managerial Society, merely discovered the novelty of another name for a form of highly developed State Capitalism.

Mr. Hollis also tried to foist on Marx an economic breakdown theory. He said Marx held that only by loans to undeveloped countries was Capitalism able to stave off the breakdown due to its inability to generate sufficient purchasing power ; finally, however, collapse would come. Nowhere did Marx put forward such a doctrine.

Mr. Hollis also thought that the increase of the wealth of the poor was a denial of Marx’s forecast about the development of Capitalism. To talk of the increase of the wealth of the poor is a comical phrase, like talking about the increased health of the permanently diseased. He argued that the worker’s standard of living has increased incomparably more than in all previous recorded history. Yet, strangely enough, never, perhaps, has history recorded such vast inequalities of income on the scale obtaining in Capitalism. What is true is that in spite of the incomparable increase in producing wealth in ever vaster quantities the poverty of the great majority in Capitalism is not merely a logical deduction from Marx’s theories but a physical and social fact.

Mr. Hollis complained that the taxation of the rich was becoming increasingly heavier. One can only say that a system of society, such as the present, where the State is compelled to spend vast resources on the upkeep of such things as armies, navies and armaments in general, can hardly constitute a satisfactory defence of capitalism. If anything it is another excellent reason why Capitalism should go.

That Mr. Hollis should read into what he calls the logic of Marx his own crudely naive and adolescent fatalism of a world in the grip of iron laws based on human greed is lamentable. What is perhaps more lamentable is that it should obtain licence to be performed publicly. Doubtless, however, the traditional “B.B.C. impartiality” is best preserved by letting its listeners hear Marx explained by non-Marxists or even anti-Marxists.

In conclusion we may add that from Mr. Hollis’ discourse on Marx we failed to discern either “the merits or defects of Karl Marx.” We did, however, in this respect discover the defects of Mr. Hollis.

Ted Wilmott

Jottings. (1921)

The Jottings Column from the March 1921 issue of the Socialist Standard

Commenting on the ridiculous demands of the French and British plunderers in connection with the reparation clauses the "Hamburger Volkzeitung" (31.1.21) says: "Let those pay who can. Let the conscienceless bourgeoisie of all countries settle their accounts between them. It is their concern that is going bankrupt. The workers can renounce the inheritance. Their account is on another page." Very nicely put and very true. We have been saying this for years.

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Mr. Gilbert Frankau, a person addicted to writing novels, is, despite his name, a British patriot 100 per cent. pure. So much so that he gets quite frantic about it. Loving his country as he claims to do, he is bound to see a menace in almost everything. Writing week after week in the "Sunday Herald," he has covered almost every phase of human activity, and sees in each and every one a menace to the British Empire. But writing on politics and economics is not like writing novels Even his colleague, Robert Blatchford, has had to remonstrate with him as to the accuracy of his statements. But apparently he is not particular as to his facts so long as space is accorded him in which to let himself go. Of course he had to lash himself into a fury when dealing with Karl Marx and Lenin (who, for some strange reason, he couples together), but his knowledge of both must be very scanty indeed if what he has told the "Sunday Herald" readers is all that he knows. In the issue for Feb. 6th he deliberately states that Marx was a lunatic and that he died in a lunatic asylum. This absurd lie Marxists can, of course, afford to laugh at as emanating from an ignoramus, but for the fact that a great portion of the working class bases its whole philosophy of life on the contents of the Sunday papers. This being so, it often falls to the Socialist to correct the erroneous views disseminated by such papers. Karl Marx is accredited, even by capitalist historians, with having written a masterly analysis of capitalist society in which he laid bare the whole system by which the workers are robbed and kept in subjection. It is admitted that "Das Kapital" had the influence that Darwin's "Origin of Species" had, and this from a lunatic ! It is a scientific study of industrial conditions, and from these investigations the theory is maintained that materialist conceptions have guided the history of man. The theory of surplus value is also deduced, that the workers' wages tend to fall to the minimum of subsistence and that all profits, etc., are part of the value the worker has produced but hasn't got—are, in fact, surplus value.

Karl Marx died in 1883, at 8 Maitland Park Road, London, in full possession of his faculties, though he died in broken health, probably accentuated by the death of his wife, whom he loved dearly. Like others of his kind, he was persecuted to his dying day by the Frankaus of his time. But it says much for his teaching when, nearly forty years later, people can work themselves into a fury simply because what he taught has been verified over and over again.

"When the tool arose the tool-less men became the slaves of those who owned the tools." That was stated by Marx, and was never more applicable than at the present day in this glorious new England of ours—or rather, Frankau's—where men and women who fought and worked that the British Empire might be extended to accommodate a lot of gluttonous robbers, are waiting day after day in long queues for a dole of bread and soup from their masters who own the tools, and upon whose permission they must wait before they can use them. If these lines should be read by any of Frankau's readers they may perhaps stimulate them into enquiring a little further into the writings of Marx, when they will easily be able to distinguish which is the lunatic—Marx or Frankau.

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The impression that Liberalism and Labour possess identical aims seems to be a pretty general one. During the anxious times of a bye-election when Coalition meets Liberal there is a dread on the part of Labour that Coalition might win. If the candidate opposing the Coalition happens to be Labour similarly Liberals are agitated lest their favourite be beaten. Sir Hamar Greenwood couples Liberals and Labour in his denunciation of those who would besmirch "the fair name of England." Greenwood's opponent, Joseph Devlin, appeals to Liberals and Labour to arrive at some modus vivendi to clear the "fair name of England." Mr. George Lansbury, the spotless champion of the British proletariat, likewise appeals to Liberals and Labour to combine. "Let us all— Liberals as well as Labour men and women— work together to throw out this Government which is a disgrace not only to England (that fair name of England, how useful everybody finds the gag!) but to the world " (Albert Hall. 15.2.21). Finally an examination of the new economic and industrial policy issued recently by the Executive of the National Liberal Federation discloses hardly any point of difference from the policy of the Labour Party. Indeed, the "Manchester Guardian" claims that "the new Liberalism has stolen not a little of the Labour thunder, and has even taken some hints from the Guild Socialist" (28.1.21). Thus all bourgeois-loving Labourites can—and no doubt will—give the new Liberalism their full acquiescence and support without in any way endangering their status.

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We have been repeatedly told by those who profess to be our leaders in matters industrial and political, that we, the workers, and constituting the largest portion of the community, bear the largest share of the burden of taxation. If this be true, then obviously any reduction or relief in taxation should redound to our benefit. When Mr. Will Thorne asked the Minister of Transport who would reap the advantage of a reduction in railwayman's wages consequent on the fall in food prices Sir Eric Geddes answered the taxpayer would. He meant by this that the increases of wages to railwaymen—and presumably those of other industries where "control" has been exercised—have been borne by the taxpayers, and that therefore any reduction should revert to them. If we, as workers, are also taxpayers, we should expect to find the sum total of all these reductions, or nearly all of it, spread out over the whole of the working class. What I want to know is, if a reduction in wages is going to find its way back into our pockets, will any Labour leader now come forward and discourage any resistance on our part to wage reductions ?

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Even if the worker be not sanguine that he will experience a return of the suppressed portion of his wages indirectly there are yet many who believe that there is some justification for the complaint of the master class that high wages are responsible for high prices. At any rate the bluff appears to have done its work. At Roubaix and Tourcoing in France, where the same gag was tried, the workers in all the mills, including those whose wages were not immediately threatened, decided to cease work as a mark of their resistance to any reduction. If any protest is offered in this country the plan seems to be to stop the job for a week or two on some pretext or other, and then in the interval put up a notice inviting those who are prepared to start back at a reduced rate to give their names in. The real facts, of course, are that owing to the vast numbers of workers looking for jobs and the prospect of destitution staring them in the face, they are compelled to accept. Apart from the quick realisation of profits there is nothing more desirable to the master class than to have a decent-sized army of unemployed always on hand. This it is that tends to keep wages low.

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All the same, it is rather pathetic to find some workers anticipating the wishes of their boss and asking for a reduction ! It marks a very low stage indeed in the development of knowledge of the factors governing industry. One such case has been extensively advertised in the Press recently, presumably to encourage others in a like course. It occurred at a mill in Manchester, and the method of approach was something like this: "Your employers have decided to approach you with the suggestion that our wages be reduced by 10 per cent. We hope that this offer will be accepted, as it is felt that the present high cost of living exists primarily owing to the very high cost of production." Needless to say, their hopes were quickly realised, along with the satisfaction of knowing that a strike was not necessary in order to enforce their demands.

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Enforced leisure, as a rule, is not exactly pleasant to think about when applied to the case of the worker. But I often wonder if a thought is given any time to the way in which our "betters" spend their leisure time. Do they (the workers) ever read the reports of "our special correspondent in the Riviera," who appears to be having a posh time recording the doings and the latest fashions in vogue among the wealthy Britishers out there? Just now Nice, Monte Carlo. Mentone, and the other places are simply packed with people who have gone to escape the rigours of the English climate. Back here at home those who look after interests are busy trying to dope us with the tale that unless wages are reduced they will have to shut down because they simply cannot carry on!

Judging from the reports, there doesn't seem to be any shortage of money on the Riviera ; and all this, mind you, represents profits wrung out of the toil of the workers. Other things remaining equal, any increase of wages must come out of their profits. Consequently if they can get the workers to accept less wages, they will have more profits to spend in the Riviera and elsewhere. Whilst the workers here are walking the shoes off their feet looking for jobs and wondering how their children are going to be clothed, or even where the next meal is coming from, these parasites are promenading in straw hats or minx coats, or magnificent sables costing a thousand pounds apiece. One lady appeared at a ball in a dress made up of feathers of humming-birds obtained at "stupendous expense."

Think of this, you ex-warriors, when next you or your wife take up your position in the queue waiting for your dole of bread.

The latest report says that black is de rigueur—which means no class—probably because it is a colour affected mostly by the working class —when they can get it. They need it most. What are described as "wonderful" silk stockings at £4 a pair are very fashionable. It is wonderful—why it is allowed to go on.

Tom Sala

Marxism and the Media (1975)

From the December 1975 issue of the Socialist Standard

Between the wars and later the word Socialist was used to describe all manner of things which had nothing to do with Socialist or Socialism. Such were the pathetic utterances on the subject by Snowdon and Ramsay MacDonald in the first Labour government of 1924 that King George V felt bound to admit that “he too was a bit of a Socialist”. We have had “socialist” millionaires and dukes from the Daily Express; “socialist” Lords and Ladies; “socialist” policies of nationalization and taxation. The TUC was at one time referred to as a “socialist” institution. Also, Russian and Chinese capitalism has been described as socialist, as were Adolf Hitler and Oswald Mosley. The parties which were largely responsible for this distortion of the word socialist were the Communist and Labour parties, aided and abetted by the press barons.

However, as time has gone by it is clear for all to see that the appellation of socialist really meant someone who disagreed with the Tory and Liberal parties, and when we got down to cases we found the Labour and Communist parties were just some other kind of Conservatives who had been misunderstood as to their original intentions. To accuse the Communist and Labour parties of being revolutionary, because that is what Socialism means, is virtually asking for a writ to be served for slander. Somehow or other we in the SPGB got the impression that those who misused the word were not as ignorant as they pretended. First among the phoney ignoramuses we place the BBC. This institution has been very careful not to confuse the respectable “socialist” — they know Stork from butter and can tell the difference; so much so that consistently over the years they have discriminated against the SPGB by never allowing it to to answer the gross misrepresentations of its case, nor to allow it to give talks on the subject of Socialism.

Today we have a new phenomenon. As practically everybody outside of the Carlton Club is a “socialist” of some sort or other (the late Mr. James Robertson Justice referred to himself as a “mild socialist”), the word has lost its impact, so the press have invented a new word which is calculated to put the fear of God into their easy-going readers — the word Marxist.

Where there’s a strike there’s a “Marxist”; where there’s a terrorist there’s a “Marxist”; where there’s sabotage and subversion there’s a "Marxist”. “Marxist” kidnappers, bank robbers, in fact everything socially undesirable is represented as “Marxist”. The fear of the Devil is replaced by the fear of Marxism. Luckily, we have some balancing factors in the shape of “Marxist” generals, “Marxist” admirals, “Marxist” bishops and politicians, and no doubt as time goes by we shall have “Marxist” funeral undertakers and “Marxist” mid-wives. But the saving grace, the spice of respectability, will be finally bestowed should Birmingham City Education Authority start teaching “Marxism” in their schools, as they have threatened.

We shudder with apprehension as to what atrocities will be perpetrated on the poor captive school-kids under the guise of learning “Marxism”. The only redeeming factor is that the press will have to find another name to denigrate the dissidents, as everyone will now become a “Marxist”.

Cartoon by Robert Barltrop.

We in the SPGB have been in politics for a very long time and we have more than a nodding acquaintance with the theories of Karl Marx, but we must confess our ignorance when we say that the Marxism referred to by the press and the BBC is unknown to us. What’s more, there must be a secret store of Marxist information to which we have no access, for try as we may we can never square the press’s description of Marxism, nor of the motley bunch who masquerade under its name, with the Marxism that we have known and advocated for over seventy years.

Marx discovered the reason why social systems change and what were the factors that would cause capitalist society to change. He also made a detailed analysis of the nature of capitalism and showed that anarchy in production would produce crises, war, unemployment and social problems. According to Marx and Engels capitalism sows the seeds of its own destruction by bringing into being a wage-working class without property in the means of production. That the intolerable conditions of capitalism weighing on those workers would cause them to consider their future role in society. The true Marxist associates with other Marxists to propagate and persuade workers in the majority all over the world to abolish capitalism and the wages system as a matter of urgency, and to establish a democratically-run moneyless system based on common ownership. The whole essence of Marxism is that the working class must be conscious of its historical role, act purposefully, and not trust in leaders. Their organization should be concerned with getting control of political power constitutionally without violence, state-smashing, insurrection and other minority action.

This is what constitutes a Marxist. How many of the “press Marxists” hold and work for these ends? Not one. Most of them are intense nationalists, frustrated politicians, or just plain thick-headed Communists or narrow-minded trade unionists who have never had a Marxist thought in their heads. As regards some of the self-styled Marxist organisations like IMG and IS, the least said the better. We can only agree with the old proverb that “Empty vessels make the most sound”.

Jim D'Arcy

Saying Marx Is Right, Getting Him (And Capitalism) Wrong (2011)

From the December 2011 issue of the Socialist Standard

“God save me from my friends; I can protect myself from my enemies.”

Karl Marx’s circle of friends, or at least friendly acquaintances, has grown considerably since the financial crisis broke out in the autumn of 2008. Now, three years later and with many countries facing a double-dip recession or worse, articles titled “Was Marx Right?” (or even “Marx Was Right”) are a fairly common sight in the pages of the financial press.

Twenty years ago, with the collapse of the Soviet Union, it was so obvious to most that Marx had been wrong that he was subject to more ridicule than criticism—or simply ignored altogether. Followers of Marx may find it satisfying that he is now being taken seriously, but the standard used to conclude that he is “right” in 2011 is not much different from the one employed in 1991 to prove he was “wrong.”

Then as now Marx is often treated as a nineteenth-century Nostradamus, as if his main aim had been to predict the future course of capitalism or prophesize its end. Judged on this basis, Marx has been deemed right whenever capitalism is struggling or appears to be on its last legs, only to be proved wrong again during the next economic recovery or boom. (And since many assume that Marx sketched the blueprint for state capitalism, a system still commonly referred to as communism or socialism, his critics have pointed to false predictions about a future utopia as another reason he is wrong.)

Using the word “prediction” to describe the results of Marx’s investigation of capitalism is a bit off the mark. The term is only apt in the sense that his analysis of how capitalism functions, which reveals its limits or boundaries as a profit-driven system, can serve as a basis for “predicting” what sorts of problems will arise under it. But these are more general expectations than specific predictions, and from experience we already know what sort of trouble to expect from capitalism. The significance of Marx’s analysis is that it explains why those problems – such as unemployment, war, and poverty – are permanent fixtures of the capitalist social system.

Dr. Doom digs Marx

One of the most widely-quoted “Marx was right” comments in recent months was made by the economist Nouriel Roubini, who earned fame and the nickname “Dr. Doom” for correctly predicting a messy end to the housing bubble. In a videotaped interview with the Wall Street Journal in August, Roubini said: “Karl Marx had it right. At some point capitalism can self-destroy itself. That’s because you cannot keep on shifting income from labor to capital without not having an excess capacity and a lack of aggregate demand.”

And Roubini repeated the same point in an article titled “Is Capitalism Doomed?” in which he wrote: “So Karl Marx, it seems, was partly right in arguing that globalization, financial intermediation run amok, and redistribution of income and wealth from labor to capital could lead capitalism to self-destruct (though his view that socialism would be better has proven wrong). Firms are cutting jobs because there is not enough final demand. But cutting jobs reduces labor income, increases inequality and reduces final demand.”

Roubini’s praise for Marx gets his ideas on crisis wrong in two significant ways worth exploring: Marx certainly did not think that workers’ limited consumption is the real  cause of crises (or that increasing their consumption is a way out); nor did he think of a major crisis in terms of the potential “self-destruction” of capitalism.

Greedy but not stupid

The “underconsumption” theory of crisis that Roubini ascribes to Marx is in fact a position that he had harshly criticized. On just an empirical level, Marx thought it dubious to claim that “crises are caused by the scarcity of effective consumption” because experience shows that they are always directly preceded by “a period in which wages rise generally.” Thus, according to the underconsumption theory, “such a period should rather remove the crisis” (Capital vol. 2).

The more interesting rebuttal of the theory, however, can be found in Marx’s explanation of why capitalists, as Roubini laments, end up “cutting jobs [which] reduces labor income, increases inequality and reduces final demand.” Are they simply too stupid and greedy to know what’s good for them? Should they read Roubini’s latest book to figure it out?

Capitalists may indeed be greedy and short-sighted, but they are not stupid when it comes to their own interests. Unlike the advocates of the underconsumption theory, they are smart enough to remain focused on obtaining profit, knowing that to fall short of that goal can mean falling out of the capitalist class.

Raising the wages of their own workers may contribute to expanding the overall “final demand” but it cuts directly into their own individual profit. Moreover, the beneficiaries of a wage increase at one capitalist firm will be other capitalist firms, particularly those producing consumer goods. Such an act of self-sacrifice on the part of some capitalists is even less likely to occur in an economic crisis, when it is already difficult for many firms to secure a more or less average level of profit. Roubini should know that when the prospects for profit are dim, capitalists will prefer to curtail or even cease production altogether, not raise wages. He can lament the situation all he likes, but it is perfectly rational behaviour under the irrational capitalist system.

Yet the underconsumption theory of crisis, despite its inanity, has continued to seem attractive and plausible to some capitalists (and most Leftists). Marx explains how the theory reflects capitalists’ rather fond view of the workers of other capitalists: “Every capitalist knows this about his worker, that he does not relate to him as producer to consumer, and [he therefore] wishes to restrict his consumption, i.e. . . . his wage, as much as possible. Of course he would like the workers of other capitalists to be the greatest consumers possible of his own commodity” (Grundrisse).

Roubini sees that restricted consumption limits final demand, and fancies that the solution can be found in simply reversing the situation by increasing consumption to expand final demand. He never stops to think about why consumption must be limited in the first place. Roubini views restricted consumption as the cause of crisis when in fact it is the natural outcome and also the basis of a system designed to squeeze profit from workers’ labor.

Ignoring the profit motive and its relation to workers’ wages, Roubini feels free to dispense his wisdom on how the current crisis can be overcome by means of a “return to the right balance between markets and provision of public goods” in order to “enable market-oriented economies to operate as they should and can.” Instead of imagining the “should and can,” however, Roubini would be better advised to consider the “how and why.”

A forcible solution

The other way Roubini gets Marx wrong is by saying that he envisaged the possibility that capitalism could “self-destruct” in a crisis. Alarming capitalists by pointing to this dire prediction may be part of Roubini’s shtick as Dr. Doom, but at the same time it is a fairly widespread assumption regarding what Marx thought.

Marx does describe the occurrence of a world crisis as an “explosion” or “eruption” of capitalist contradictions and antagonisms, or even as a “destructive process.” But far from viewing crisis as the potential end of capitalism, Marx describes it as a “forcible solution” or “forcible adjustment” that temporarily restores the disturbed equilibrium, and as a violent process involving the “real concentration and forcible adjustment of all the contradictions of bourgeois economy” (Theories of Surplus Value).

The capitalist contradictions or antagonisms Marx is alluding to concern things that are linked to, yet independent of, each other – such as the relation between sale and purchase, or between the production process and circulation process. These things are clearly connected and interrelated, yet they can diverge from each other. The potential for sale and purchase to diverge, for instance, is magnified greatly under our modern credit system, where an inability to conclude one transaction can unleash a chain reaction that disrupts other transactions.  

Crises according to Marx are a forcible means of bringing such contradictory (semi-independent) elements back into some sort of alignment with each other so that the system can better function. This view of crises as a solution, albeit a crude and violent one, contrasts with the outlook of Roubini, who sees the destruction of a crisis as an avoidable problem rather than an unfolding solution.

Marx seemed to have economists like Roubini in mind when he wrote: “Instead of investigating the nature of the conflicting elements which erupt in the catastrophe, the apologists content themselves with denying the catastrophe itself and insisting, in the face of their regular and periodic recurrence, that if production were carried on according to the textbooks, crises would never occur” (Theories of Surplus Value).

The entire focus for an economist like Roubini is on coming up with practical solutions to crisis, not understanding why crisis occurs or what it tells us about the contradictions and limitations of capitalism. Marx thought of crisis as a phenomenon to be understood, not as a problem that could be solved. Even if we can manage to understand the exact causes of a specific crisis and fully examine all of the contradictions and antagonisms that are “strikingly revealed” (Theories of Surplus Value) in it, we are still not in a position to solve or prevent future crises. This is because the contradictions that explode in a crisis are all an integral part of the capitalist system.

What is clear from reading Marx is that the only way to get rid of crisis is to replace capitalism with a new system, free of capitalist barriers and antagonisms. This is not a “prediction” of the end of capitalism, but an explanation why workers must bring about its end.

In his analysis of crisis and other phenomena, Marx always seeks to understand why things are the way they are, not to predict when they might disappear or how the system might “self-destruct.” The defenders of capitalism are less interested in the why of things, than in making suggestions for how they should be, as if problems like crisis could be avoided if only capitalists followed the recommendations of economics textbooks. And this fosters the misguided hope that capitalism can (some day) be reformed. It’s natural for these economists to misinterpret Marx, even when praising him: they take capitalism completely for granted, and Marx didn’t.

Michael Schauerte