Socialist ideas are more relevant than ever to address the crisis of modern day capitalism
2018 was significant as the 100th anniversary of the end World War One. Yet another momentous anniversary that year was largely overlooked by the mainstream media. It was 200 years since the birth of the German philosopher and founder of Communism Karl Marx. Love him or hate him, there is no denying the enormous impact of Karl Marx’s ideas on world history. He is up there with Darwin, Freud, and Hegel.
However, as in his own day, his ideas today are still a threat to the British establishment and that is why Marx and Marxism, despite being called irrelevant, are still in our societal discourse.
Recent events in the Brexit melodrama raise the prospect of a general election in the next few months and put the ideas of socialism back on the agenda in this country.
Marx’s analysis of capitalism offers much that is useful to the modern-day labour movement in its struggle against the iniquities of contemporary capitalism.
Professor Terry Eagleton is one of the few academics to offer us a useful insight into the importance of Marx’s ideas:
“Marx was the first to identify the historical object known as capitalism-to show how it arose, by what laws it worked, and how it might be brought to an end. Rather as Newton discovered the invisible forces known as gravity, and Freud laid bare the workings of an invisible phenomena known as the unconscious, so Marx unmasked our everyday life to reveal an imperceptible entity known as the capitalist mode of production’’.
Marx was given unique gifts by nature to be able to analyse and interpret huge amounts of date and information, gathered from years of study in the British Library, and apply this to understanding the capitalist world.
His approach to understanding historical developments past, present and future was to apply a combination of unique insights that he formed with his close collaborator and best friend Frederick Engels. Marx and Engels developed and applied dialectical materialism and historical materialism to understand the processes that govern the development of human society.
In 1848 Marx and Engels published the Communist Manifesto which summed up their approach to history and politics by declaring that:
“The history of all hitherto existing society is the history of class struggles. Freeman and slave, patrician and plebeian, lord and serf, guildmaster and journeyman, in a word, oppressor and oppressed, stood in constant opposition to one another, carried on an uninterrupted, now hidden, now open fight, that each time ended, either in the revolutionary reconstitution of society at large, or in the common ruin of the contending classes.”
The Occupy Wall, Street movement that arose from the 2008 global economic crisis captured Marx’s approach to understanding history and politics with their slogan, “For the 99% not the 1%’’. In this simple slogan they captured the essence of Marx’s idea that the struggle between the haves and have nots shapes our society’s development.
The Occupy Wall Street slogan also expressed another key tenet of Marx’s philosophy that capitalism is driven by the urge of capitalists to acquire greater amounts of capital with which to enrich themselves. This increased concentration of wealth in the hands of fewer and fewer individuals is a clearly discernible trend in the current day.
This process has greatly accelerated since the 2008 economic crisis as central banks have lent trillions to corporations around the world at zero per cent interest. This huge giveaway has not been used for productive investment in the infrastructure and well-being of society. Quite the opposite. It has been used to facilitate one of the greatest wealth transfers in human history as huge corporations have used these handouts to buy back their owns shares, buy up other companies concentrating wealth in even fewer hands and speculative activities in the financial economy.
As a result, capitalist society is witness to a constant struggle between the capitalists who try to pay the bare minimum to their workers and the workers who individually and collectively try to improve their living standards through industrial action, lobbying of politicians and voting in elections. Marx was ever an agitator and supporter of the workers. Following the revolutions of Europe of 1848 of which Marx was an active participant, he concluded that revolutions were born out of economic crisis. He then proceeded to devote his life to the study of political economy.
If Karl Marx was here today would he be justified in saying he was right? The stock market corrections of late 2018 and at different times this year have been accompanied by a chorus of soothsayers in the financial media stating that these are minor correction of no great consequence. Besides, things are different this time. The fundamentals of the global economy are strong so no need to worry and we have learned our lessons from the 2008 financial collapse.
This complete lack of understanding of what caused these stock market corrections and the view that things are different this time is nothing new. At the height of the U.S. housing boom in October 2005 Ben Bernanke, chairman of President Bush’s Council of Economic Advisors, declared:
“House prices have risen by nearly 25% over the past few years. Although speculative activity has increased in some areas, at a national level these price increases largely reflect strong economic fundamentals, including robust growth in jobs and incomes, low mortgage rates, steady rates of household formation, and factors that limit the expansion of housing supply in some areas.’’
Sounds eerily familiar to the soothing noises made by our present-day experts that all is well as economic fundamentals are strong.
In early 2006 the housing bubble began to deflate while the Federal Reserve raised interest rates to contain inflation which in turn accelerated the collapse of mortgage backed securities precipitating a major financial crisis in 2007.
This view that things are different this time brings us back to another major tenet of Marx’s thought that capitalism is an inherently unstable system that is subject to booms and slumps. Capital is unable to resolve the fundamental contradictions of its own economic system that bring economic misery to untold millions when the economy collapses in a cyclical manner. The graph above from the Atlanta Federal Reserve Bank illustrates this point of Marx’s and should remind us to not take the things are different mantra too seriously.
It reveals how since the end of World War 2 recessions are a natural part of the capitalist economic cycle. There have been 9 recessions each of which no doubt came as a surprise to the economic experts and politicians who all believed that things were different in the periods of expansion between each economic downturn.
When the next recession strikes the political classes will no doubt express their amazement that economic collapse has struck again. They will then raise the question of how to protect the interests of ‘society’ i.e. the1%. In other words, the all-important question, who will pay for the economic crisis? The answer of capitalist politicians and their media acolytes will be that the general population will need to tighten their belts in the national interest. The economists John Bellamy Foster and Fred Magdoff have pointed out that:
“Without a revolt from below the burden will be imposed on those at the bottom. All of this requires a mass social and economic upsurge, as in the latter half of the 1930s, including the revival of unions and mass social movements of all kinds ...’’.
They observe that in the next period capitalism faces an unprecedented economic crisis due to the fact in 2008 none of the fundamental problems of its system were resolved. The gigantic upsurge in global debt by over $35 trillion since 2008 has postponed the day of reckoning that should have happened in 2008. The ongoing emergency measures taken by the U.S. Federal Reserve to prop up bank liquidity through its injections of $45 billion per day into the Repo market are indicative of an economic system on the brink.
Faced with this crisis ridden economic system the ordinary people of the world have a choice: they can continue to accept capitalism with all its attendant evils, or they can rise from their feet and take their destiny into their own hands.
As Foster and Magdoff observe the other option is to:
“replacing the present system of capitalism with something amounting to a real political and economic democracy; what the present rulers of the world fear and decry most-as “socialism’’.
In the Communist Manifesto Marx and Engels noted that such an historic development would create the conditions for the liberation of all mankind:
“In place of the old bourgeois society with its classes and class antagonisms we shall have an association in which the free development of each is the condition for the free development of all.”
The next global recession, that gets closer as day passes, may well provide fertile ground for the realization of their vision of humanity liberated from all the various evils of a capitalist system that is driving the planet towards environmental catastrophe.
The next Labour government must forward a bold socialist agenda that deals with the wanton inequalities of capitalism that have created so much suffering, misery and wretchedness in this country.
Suggested Reading:
Karl Marx and Frederick Engels, The Communist Manifesto, February 1848, Workers Educational Association, London.
Terry Eagleton Why Marx Was Right, 2011, Yale University Press.
John Bellamy Foster and Fred Magdoff, The Great Financial Crisis: Causes and Consequences, 2009, Monthly Review Press, New York.
