Check out the headline from this comment in the Harvard Business Review:
WAS MARX RIGHT?
In case you've been on Mars (or even just on vacation), here's a surprising idea that's been making the rounds lately: there might have been something to Marx's critiques of capitalism after all.
Before the McCarthyists jump out... the article does not advocate communism. It focuses more on Marx's diagnosis rather than Marx's prescription. And the diagnosis is eerily accurate:
Crisis
As workers were paid less and less, capitalism would be prone to chronic, perpetual crises of overproduction — for they wouldn't have the means to purchase or invest in enough goods to keep the economy humming.
As Marx put it, there was likely to be "poverty in the midst of plenty." How's Marx doing on this score? Not bad, I'd say: the last three decades have in fact been characterized by global crises of what you might crudely call overproduction (think: too little demand chasing too many disposable widgets, resulting in a massive global debt crisis, as vanishing middle classes took on more and more debt to compensate for stagnant real wages).
More analysis and predictions below the fold.
In addition to a "crisis of overproduction", the comment also notes that Marx predicted:
- Immiseration of workers
- Crisis of overproduction.
- Stagnation
- Alienation
- False consciousness
- Commodity fetishism
The comment on stagnation is very important.
Stagnation.
Here's Marx's most controversial — and most curious — prediction. That as economies stagnated, real rates of profit would fall.
How does this one hold up? On first glance, it seems to have been totally discredited: corporate profits have broken through the roof and into the stratosphere. But think about it again, in economic terms: Marx's prediction concerned "real profit," not just the mystery-meat numbers served up by beancounters, and chewed over with gusto by "analysts."
When seen in those terms, Marx might be said to have been onto something: though corporations book nominal profits, I'd suggest a significant component of that "profit" is artificial, earned by transferring value, rather than creating it (just ask mega-banks, Big Energy, or Big Food). I've termed this "thin value" and Michael Porter has described it as a failure to create "shared value." Replace "declining real profit" with "shrinking real value" and it's analogous to what Tyler Cowen and I have called a Great Stagnation (though our casus belli for it differs significantly from Marx's).
We used to believe that goods have value, and those goods are produced by workers.
Conservatives played their ideological trump card, saying that it's the INVESTORS who build the factories that make the goods.
Work doesn't create value. Investment creates value.
Give the financial class more power. The path to prosperity is Wall Street.
And now Wall Street is becoming Las Vegas with higher stakes. Speculators bet on real estate prices, oil prices, even food prices. The prices of these commodities spike far beyond any REAL increase in value. By the time the bubble bursts, the speculators are onto the next gambit.
A few people make big money. But no REAL value has been created. And we cover the costs of the whole fiasco.
Here's another quote:
False consciousness.
According to Marx, one of the most pernicious aspects of industrial age capitalism was that the proles wouldn't even know they were being exploited — and might even celebrate the very factors behind their exploitation, in a kind of ideological Stockholm Syndrome that concealed and misrepresented the relations of power between classes.
How's Marx doing on this score? You tell me. I'll merely point out: America's largest private employer is Walmart. America's second largest employer is McDonald's.
When I hear "false consciousness", I think of the Tea Party movement. Working people campaigning for low taxes and deregulation, sponsored by the billionaire Koch family.
Even if Tea Party movement has lost steam, they have changed the conversation. Our country's agenda is now the Tea Party agenda.
How can we keep lowering taxes for corporations?
What can we do to stop brown people?
How far should we go to restore religious law?
If you think I'm exaggerating, turn on CNN. No one is suggesting we raise taxes, or reduce the influence of corporate lobbyists, or give people higher wages so they can afford to buy things. The debate: give Conservatives all of what they want, or just 98%.
.
Here's what I think. (Again, read the whole comment).
"Those who make peaceful revolution impossible will make violent revolution inevitable."
JFK was right. Failing states don't last. Consent of the governed and all that.
But no matter how bad the economy gets, I can't cheer for violent revolution. I don't want America to be the next USSR. I also don't want a revolution led by the tea party, wrapped in the flag, carrying a cross.
The Great Depression was a major threat to America. The New Deal was a peaceful revolution, to save capitalism and democracy from an unprecedented crisis. President Roosevelt regulated the financial class, created social security, made unprecedented investments in American infrastructure.
We are victims of a new crisis. The financial class bought our government, overturned FDR's protections, and caused the worst crash since the Great Depression. But what policies are we pursuing to save our country? We're talking about cutting social security and medicare, while China's police state leads the world in green energy and builds the world's biggest high speed rail line.
Unless America implements a New-New Deal, the whole world is on a dangerous path.
Voters punished Democrats when they failed to produce a solution. But it's a catch-22. Democrats said they can't produce massive change without a supermajority. Now voters won't give them a supermajority unless they see massive change.
That's why my outlook for the future is bleak.
I see a country that flops between bare majorities for either party, one that can't solve the problem, and one that won't solve the problem. I see one group of partisans cheering for policies that destroy the country, and another group of partisans cheering for policies that don't really fix it. I see the American economy going down, and democracy going with it.