Marx (and Das Kapital ) revisited

In FP‘s latest issue, Leo Panitch writes:

The economic crisis has spawned a resurgence of interest in Karl Marx. Worldwide sales of Das Kapital have shot up (one lone German publisher sold thousands of copies in 2008, compared with 100 the year before), a measure of a crisis so broad in scope and devastation that it has global capitalism — and its high priests — in an ideological tailspin.

Yet even as faith in neoliberal orthodoxies has imploded, why resurrect Marx?” 

Panitch goes on to make a case for doing just that (an excerpt of which is below), but his article has sparked much debate on the merits of Marx, Das Kapital, and just how much his critique of capitalism applies to today’s economic upheaval. 

All this week, FP will bring you a debate with new posts each day on Marx and whether or not his writings offer insight worthy of resurrection. 

Enjoy, and do weigh in!

An excerpt from “Thoroughly Modern Marx”

By Leo Panitch

To start, Marx was far ahead of his time in predicting the successful capitalist globalization of recent decades. He accurately foresaw many of the fateful factors that would give rise to today’s global economic crisis: what he called the “contradictions” inherent in a world comprised of competitive markets, commodity production, and financial speculation.

Penning his most famous works in an era when the French and American revolutions were less than a hundred years old, Marx had premonitions of AIG and Bear Stearns trembling a century and a half later. He was singularly cognizant of what he called the “most revolutionary part” played in human history by the bourgeoisie-those forerunners of today’s Wall Street bankers and corporate executives. As Marx put it in The Communist Manifesto, “The bourgeoisie cannot exist without constantly revolutionizing the instruments of production, and thereby relations of production, and with them the whole relations of society. . . . In one word, it creates a world after its own image.”

(Read on)

But Marx was no booster of capitalist globalization in his time or ours. Instead, he understood that “the need for a constantly expanding market for its products chases the bourgeoisie over the whole surface of the globe,” foreseeing that the development of capitalism would inevitably be “paving the way for more extensive and exhaustive crises.” Marx identified how disastrous speculation could trigger and exacerbate crises in the whole economy. And he saw through the political illusions of those who would argue that such crises could be permanently prevented through incremental reform.

Like every revolutionary, Marx wanted to see the old order overthrown in his lifetime. But capitalism had plenty of life left in it, and he could only glimpse, however perceptively, the mistakes and wrong turns that future generations would commit. Those of us now cracking open Marx will find he had much to say that is relevant today, at least for those looking to “recover the spirit of the revolution,” not merely to “set its ghost walking again.”

If he were observing the current downturn, Marx would certainly relish pointing out how flaws inherent in capitalism led to the current crisis. He would see how modern developments in finance, such as securitization and derivatives, have allowed markets to spread the risks of global economic integration. Without these innovations, capital accumulation over the previous decades would have been significantly lower. And so would it have been if finance had not penetrated more and more deeply into society. The result has been that consumer demand (and hence, prosperity) in recent years has depended more and more on credit cards and mortgage debt at the same time that the weakened power of trade unions and cutbacks in social welfare have made people more vulnerable to market shocks.

This leveraged, volatile global financial system contributed to overall economic growth in recent decades. But it also produced a series of inevitable financial bubbles, the most dangerous of which emerged in the U.S. housing sector. That bubble’s subsequent bursting had such a profound impact around the globe precisely because of its centrality to sustaining both U.S. consumer demand and international financial markets. Marx would no doubt point to this crisis as a perfect instance of when capitalism looks like “the sorcerer who is no longer able to control the powers of the netherworld whom he has called up by his spells.”

Despite the depth of our current predicament, Marx would have no illusions that economic catastrophe would itself bring about change. He knew very well that capitalism, by its nature, breeds and fosters social isolation. Such a system, he wrote, “leaves no other nexus between man and man than naked self-interest, than callous ‘cash payment.'” Indeed, capitalism leaves societies mired “in the icy water of egotistical calculation.” The resulting social isolation creates passivity in the face of personal crises, from factory layoffs to home foreclosures. So, too, does this isolation impede communities of active, informed citizens from coming together to take up radical alternatives to capitalism….”

DREASAN