When it comes to Marx, there’s no time like the present

By Matt Yglesias

With the world facing the most serious economic crisis in many decades, the free-market orthodoxies that have governed the United States for the past 30 years — and proven increasingly influential abroad — are increasingly coming under question. Under the circumstances, it’s perhaps natural that we’re seeing something of a resurgence of interest in the work of Karl Marx, both in the form of a recent Atlantic article by Christopher Hitchens written mostly to amuse, and in Leo Panitch’s more serious take in Foreign Policy.

It should be noted that there’s something a bit parochial about this. In the English-speaking world in general, and in the United States in particular, there’s thought to be something a bit naughty about mentioning Marx or letting slip the “s-word.” But in the rest of the world, it’s extremely common for the main left-of-center political party to have “socialist” or “social democratic” in its name. And while Americans mostly think of Marx’s practical political influence in terms of the Soviet Union and its satellites, many democratic political parties in Western Europe can trace their origins in part back to Marxist influence.

Meanwhile, the pop art depictions of Marx that accompany both articles suggest to me an intention to undermine the nominal commitment to the idea that we ought to take Marx more seriously. They suggest that to raise fundamental doubts about the capitalist enterprise is actually quite silly.

Further re-enforcing this sense is the heavy emphasis currently being placed on Marx’s argument that periodic financial crises were endemic to the capitalist system. At the time Marx was writing, the modern era of financial crises was quite new, and so this point was both original and by no means obvious. Subsequently, we’ve had more than 100 years to study the operations of capitalist financial systems and that time has proven Marx so overwhelmingly correct that the observation no longer counts as distinctively Marxian. Everyone, from followers of John Maynard Keynes to Milton Friedman’s monetarists to the “Austrian School” of extreme libertarians agrees that periodic episodes of crisis are endemic to the system. This is not to take anything away from Marx, who got to the point quickly. But bringing him up only to cite him making a now-banal point seems almost as if we’re exhuming the corpse in order to demonstrate to the village that it’s still dead. Not to explore our doubts about capitalism, in other words, but to quiet them by making it seem as if Marx doesn’t have anything to say that we don’t already know.

I would suggest on the contrary that there’s no time like the present to learn from Marx’s theory of ideology — the idea that wealth and power have a tremendous ability to gin up self-justifying narratives. Global elites’ curious passivity in the face of the growing housing bubble was an excellent example. That prices were out of line with historical trends was easy enough to see, and the fact that asset bubbles recur periodically and lead to financial crises was once well-known and then swiftly rediscovered after the bubble popped. But during the bubble years, prominent policymakers on both sides of the aisle found themselves in the grips of an extremely naive rationalism that held that there couldn’t possibly be a bubble, since the market should be magically self-correcting.

Naturally, nobody believes that now. And, indeed, it seems like a slightly ridiculous thing to have ever believed. Marx can be helpful in letting us understand how it ever came to be so widely believed and how it is that, to this day, the voices of a small clique of extremely wealthy financiers continue to speak so loudly in Washington. Understanding the process of ideology and self-justification can help us to dispel its power and see our way through to a better resolution of the crisis and a more just society.

Unfortunately, attention to the specific issue of Marx’s account of financial crises seems mostly to inspire a curious kind of passivity. “Reformist politicians who think they can do away with the inherent class inequalities and recurrent crises of capitalist society are the real romantics of our day,” writes Panitch, “themselves clinging to a naive utopian vision of what the world might be.” This is radicalism as conservative — even in the midst of a great economic crisis, there’s nothing we can or should do to reform the system and no concrete lessons we should learn. But of course some countries’ regulatory systems are better than others at avoiding banking panics — Canada and Spain, for example. Some countries, Sweden for example, appear to have found workable methods of resolving insolvent banks. And while no country is without some economic inequality, many countries get by with quite a bit less than we have in the United States. Re-reading Marx ought to be a spur to reform — to cast off the illusion that policy decisions made in the interests of the few represent nothing more than neutral technical expertise — rather than a further source of complacency.

Matt Yglesias is a fellow at the Center for American Progress Action Fund. You can read his blog here.

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