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Richard Wolff “Capitalism Hits the Fan, A Marxian View”
October 12, 2008 |
“Intensifying solvency concerns about a number of the largest U.S.-based and European financial institutions have pushed the global financial system to the brink of systemic meltdown,” says IMF chief Dominique Strauss-Kahn. The G-7 leaders (minus Russia) are scrambling to find a collective solution.
Above is a Marxist take on the situation from Richard Wolff. Wolff is a professor of economics at the University of Massachusetts, Amherst and the editor of the journal Rethinking Marxism. Wolff presents a passionate analysis delivered with a measure of self-congratulating “We told you so” glee. Wolff’s take can be boiled down to American consumers borrowing and borrowing in order to consume. I think Wolff’s concluding statement is more important. The global economic crisis has opened up a space to criticize the dominance of free market capitalism and offer alternative solutions. It’s a rare moment indeed when you can think outside or beyond capital and people are willing to listen. Perhaps Naomi Klein is right to say that “Wall St. crisis should be for neoliberalism what fall of Berlin Wall was for Communism.”
Interestingly, the opening of the discursive space is appearing in unlikely places. Wolff’s emphasis on debt is more or less being echoed by centrist liberals like Joesph Stigliz (I recommend his recent interview on Democracy Now!) and Fareed Zakaria. Here’s what the latter has written in the latest Newsweek:
Since the 1980s, Americans have consumed more than they produced—and they have made up the difference by borrowing.
Two decades of easy money and innovative financial products meant that virtually anyone could borrow any amount of money for any purpose. If we wanted a bigger house, a better TV or a faster car, and we didn’t actually have the money to pay for it, no problem. We put it on a credit card, took out a massive mortgage and financed our fantasies. As the fantasies grew, so did household debt, from $680 billion in 1974 to $14 trillion today. The total has doubled in just the past seven years. The average household owns 13 credit cards, and 40 percent of them carry a balance, up from 6 percent in 1970.
How then does late capitalism keep itself alive? Debt slavery and robbing Peter to pay Paul. As usual, Washington’s solution is to wage class warfare from above. Bail out the rich investors and pray the stability trickles down to the rest of us below. Same story, new packaging.
And what about Russia? Like their Western counterparts, the Russian government is poised to buy up bad assets, loan its corporations money, and flood the market with liquidity. Putin has already promised $36 billion to Russia’s banks. Last week, the Duma passed a plan to give credits to Gazprom, LUKoil, Rosneft and TNK-BP so they can pay their foreign debts, which total about $80 billion. Medvedev’s five point solution doesn’t seem much different than what most are proposing: Regulation, transparency, and increase free trade. Or basically apply band-aids at a time when invasive surgery is needed.
But Russia’s woes don’t end with its banks and corporations. Analysts are now expecting the bubble in Russia’s real estate market to burst. Developer debt, which is a combined $1.8 billion, is the problem. A few are predicting the collapse in 4-6 months. A halt to building construction will slow down one of Russia’s most vibrant economic sectors and put an extra crunch on an already existing housing shortage.
Luckily for the Russian government, they have a budget surplus of $100 billion to weather the financial tempest. The only question is whether any of these measures will make any short term difference.
Popularity: 6% [?]
Comments
201 Comments so far
Just remember - there won’t be any anesthetization (except vaselin)
The housing market in Moscow at any rate is already in meltdown. I won’t be surprised to see the construction sector to go into decline in 2009. The silver lining is that the consumption boom relied little on credit extracted from home values so hopefully it won’t crash.
I really liked the DNA metaphor used by Fareed Zakaria to describe how economic leadership changed in the last few decades to reflect mainly the thinking of the biggest risk takers. And then how, with unchallenged leadership, U.S. political behavior vis a vis the rest of the world became similarly out of whack.
It’s as if this great catastrophe that the scare mongers were scaring us with has pretty much come to pass. It’s like 9/11 without the death, smoke and ability to blaim it on someone else (so far). Wasn’t it the cartoon character Pogo of the WWII era who said “I’ve met the enemy and he is us.”
So now it’s about ‘how are we going to deal with it”. I do think a great percentage of the population in the US is capable of changing behavior. I’m feeling really hopeful, actually.
“The global economic crisis has opened up a space to criticize the dominance of free market capitalism and offer alternative solutions.”
Sean,
the current crisis is a crisis not one of the free market but one of the state monetary monopoly. Credit expansion over the last 20 years has been the main reason for the inflation of housing and stock prices (and of the short-lived dotcom boom).
Instead of reading Naomi Klein and her failed economic confusions, it may be better to read Hayek’s Road to Serfdom. The “Shock Doctrine” is in fact a Hayekian concept, who proposed that the state tends to use crises to expand its power.
But, thanks to the economic ignorance of our elites, we’ll be faced with more state intervention into the market (not less), including massive public expenditure that will drive inflation.
But, ignorance is bliss. Go for socialism again. I guess 70 years of complete failure in socialism just didn’t quite bring home the lesson.
I think I should clarify something here: the credit expansion I\’m talking about is the insane policy of the Central Banks (FED, ECB, etc.) to inflate the money supply.
The core problem is monetary inflation. None of this could happen if there were a fixed money supply. BUT - Keynesianism is far more attractive for governments.
So, continue dreaming
This whole canard reminds me of the energy fiasco in California completely inappropriately known as energy deregulation failure. Just like with the current crisis, it has not been cause by free market but a concoction of idiotic regulatory measures that pretend on deregulating, while some people predicted if would fail. In California both Dems and Repubs managed to deregulate wholesale side of energy supply and fix retail under regulatory price controls. Woopiedo, retailers went belly up.
Sure, it is convenient to blame Enron then and mortgagee based securities trading now. Both cases miss the point. It was government action in creating a failed regulatory structure, not free market. It was ideological pressure to offer credit to those that should not be getting any. JUst like in Energy fiasco in CAlifornia, the idealistic nonsense of combining market forces with price controls.
The most disgusting in both cases is that the same people that pushed this regulatory morass through are now in charge of fixing market even more.
As for Russian real estate market, it will eventually crash because prices are unsustainable relative to incomes. Russian car sales increased 22% last month and probably tripled in last several years. People that were saving to buy condos were priced out of the market and since very few people save anything for any meaningful periods of time there (except country leaders that stash the oil loot in Zurich) the money ended up “invested” in cars.
Cyrill,
tochna. Glad there’s more people with some basic economic understanding out there.
“Hayek’s Road to Serfdom.”
A book even Hayek regarded as bad.
Two “free marketeers” - go to library and read Marx if you really want to learn basics
But back to wolfs of capitalism.
1. What does Richard mean by “workers”? Bank workers? IT workers? Or just old plain guys working in mines and steel companies?
2. Why should I trust his assumption that wages went flat in 70s? Any scientific (as marxism is a science) proof?
3. His idea about new “democratic” management is hilarious. He is real professor - has heard about life out there but never tested it.
I mean his example of IT guys that started their business in garage and have their “board and beer” meetings on Fridays.
It was funny indeed. He thinks it’s “a new way”. In fact - if he looks at Marx - it’s just the natural changes resulted from the changes in the means of production. These IT guys are kind of “artists” who don’t need huge assembly lines or tens of thousands of workers to produce their product. neither they need management/supervision as what they are producing doesn’t exists yet - they inventing/creating it in the process. But how does he see workers of GM - spread around tens of factories all over US - “manage” this corporation? It would be like if patients of psychiatric clinic are managing their clinic.
Ivanov and others, why read Marx, a guy who lived and died in the 19th Century, if he had such a bad track record on his predictions?
Chris,
Hayek may not have thought highly of \”Road to Serfdom\” because it did not meet his high standards for rigorous argument. He would have preferred fleshing out his arguments in far more detail. As it stands, it is by leaps and bounds far superior and more correct than anything Marx - or his champagne socialist heirs like Naomi Klein - have ever put out.
The only problem with Hayek is that he does not see any positive role for government in economics - which is, of course, very hurtful for people whose only abilities are politics and who would otherwise have a hard time making a living.
But, thanks to the verbal acrobatics and mathematical flim-flam of Keynes and Samuelson, the political class can continue claiming a legitimate role in economics even after the stupidities of Marx have turned into mass-murder and economic failure.
Newton lived in 17th and died in 18th centuries. But apples still are falling down not up!
Marx could be wrong in his social/political predictions. As everyone else who tried to predict humans. But his analysis of economy and laws that drive it are very good.
But if you don’t want - you don’t have to…
What I agree with Richard about - this is not a financial crisis.
PS. Kolya, do you know what Richard means by “workers”? If you listened his presentation of course
Ivanov,
Marx was wrong. About everything. Workers of all shades are richer today than every before - in absolute terms. More people today - in absolute numbers - live better today than the entire global population at the time of Marx. Capitalism proved more successful than socialism - and socialism only succeeded temporarily were enforced by the most brutal of force.
The scholastics of almost half a millennium ago had come up with far more sophisticated analyses of economics than Marx and his successors.
To seriously believe that any of Marx’s original ideas were in any way correct betrays little more but ignorance of economics.
The simple fact that Marx believed in the labor theory of price - when the scholastics had already figured out demand is the determinant of price - should be enough to show how silly he was.
do you know what Richard means by “workers”?
This is a good question. I don’t know what Wolff means by “workers”. I assume he provides a definition in his introduction in Re/presenting Class: Essays in Postmodern Marxism
I’m not to keen on his floating out workers’ democracy as a solution. Its too much of a typical Marxist trope. I have yet to even read an adequate theory of how this would work.
If “worker’s democracy” could work economically, the world would be awash in co-ops churning out computer chips, motor vehicles, and mining natural resources.
More people today - in absolute numbers - live better today than the entire global population at the time of Marx.
Not because of capital but in spite of it. The only reason people live better today is because of collective struggle for worker’s rights, better wages, unions, political change etc. Capitalists never gave working people anything out of the goodness of their hearts. Working people have had to consistently fight for it. Is it no surprise that as union power has declined, real wages and incomes has stagnated?
Thanks, Admiral.
You proved it once again - you have NO IDEA what Marx was talking about… You read others about what Marx wrote - but this doesn’t count much.
“Не читал - но осуждаю” (с)
Sean - how did “collective struggle for worker’s rights, better wages, unions” bring about the incredible technological revolution that has improved the lives of billions? I would argue that unions have slowed economic growth and wealth creation - for which there is plenty of evidence. More market freedom = higher standard of living. It takes deliberate ignorance to not acknowledge that.
Of course, the trivial nonsense a la Keynes and Samuelson taught at most universities continues to argue the case for unions as the boon of worker’s in general, rather than just of union members (at the expense of economic growth).
And, of course, it is easy for unions and other socialists to take credit for the unparalleled economic developments of the last 100 years - to which they never contributed a thing.
If unionism would work productively - rather than simply parasitically - why has no labor union ever set up a car manufacturing plant successfully?
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It’s General, Ivanov. I have read more Marx than my stomach could stand, and his predictions about the increasing poverty of workers - and his commitment to the labor theory of price - are well-established aspects of his writings.
Clearly, you have failed to understand Marx’s economic analysis. His insistence that the ‘proletariat’ will continue to live ever more poorly in ABSOLUTE terms was WRONG on empirical grounds.
His commitment to the classic Smithian labour/cost theory of price is also empirically (and theoretically) wrong.
You could, of course, provide chapter and verse of where he was ‘right’ about something non-trivial, i.e.: original.
I am not holding my breath.
“Is it no surprise that as union power has declined, real wages and incomes has stagnated?”
Standards of living have, however, improved dramatically. The average US citizen today lives significantly better in material terms than his far more unionized parents.
Why? Because of capital driven economic improvements.
The amount of goods and services that can be purchased for a single hour of work today are significantly higher than only two decades ago.
To look at nominal wages only is to pretend economic development today is the same as it was 20 or 10 years ago.
Home ownership today is far more common than 20 or 30 or 10 years ago, there are far more cars per capita (and better ones at that) than only 10 years ago.
But, who cares for boring facts when there are exciting ideologies to brighten the day.
Ivanov,
Marx was wrong. About everything. Workers of all shades are richer today than every before - in absolute terms. More people today - in absolute numbers - live better today than the entire global population at the time of Marx.
Thanks, Admiral.
You proved it once again - you have NO IDEA what Marx was talking about… You read others about what Marx wrote - but this doesn’t count much.
“Не читал - но осуждаю” (с)
——————————————-
One small correction to the above. “live better today than …” should read “has bigger debt today than ….”
Marx was right about all he wrote absolutely. However, we cannot possible apply his theory to the capitalism that exists today. One “small” difference. At the time of Marx all European countries had currencies as good as gold … today on the other hand … there’s one country that can print as much money as its government wishes and then dump the paper on the rest of the world.
Of course unions and entrepreneurs are locked in an adversarial relationship, but let’s not forget that both unions and entrepreneurs belong squarely in the capitalist world. We all know the fate of independent unions and entrepreneurs in the communist countries, where both were treated as ideological enemies.
Dima,
\”One small correction to the above. “live better today than …” should read “has bigger debt today than ….”\”
And how does the \”have bigger debt\” change anything about people having more than ever before? Who FORCED them to live beyond their means?
Regarding currency: what does Marx have to say about currency? Exactly.
\’However, we cannot possible apply his theory to the capitalism that exists today.\’
So… it\’s not much good then, is it?
But, go on believing Marx was right about everything. I know Catholics who believe everything the pope says is good, and I know Protestants who believe everything the bible says is true.
Doesn’t make it so, but… the discussion is at least put to an end and no more time needs to be wasted.
Discussing with Marxists is pointless. Jesuits offer more content.
Just answer me one question, of you can: why are there no union-run car factories churning out competitive, high-quality cars people want to buy?
Just answer me one question, of you can: why are there no union-run car factories churning out competitive, high-quality cars people want to buy?
———————
You are talking about American cars, right? There are good cars made in Europe and Asia (notably Japan), and I’m sure most of those factories are unionized. It also has much to do with who assembles the cars. While in the US cars are assembled by high-school drop-outs who didn’t do much in school anyway, in Japan, - the high-school system is rigorous and makes a person to work and learn. Of course, in the latter case the workers do a better job, unionized or not.
Of course unions and entrepreneurs are locked in an adversarial relationship, but let’s not forget that both unions and entrepreneurs belong squarely in the capitalist world. We all know the fate of independent unions and entrepreneurs in the communist countries, where both were treated as ideological enemies.
————————————————–
Candide,
do you know a smart name called Albert Camues didn’t distinguish between the so-called “capitalistic world” and “communistic world”. To him they were both the same: they both are based on industrialization and specialization of labor and as such cannot possibly make an individual happy.
Admiral.
The answer is easy even for a 5th grader.
Trade unions don’t run car factories. They have another function.
Otherwise it would be logical to ask why Ford didn’t invented conveyor to assemble trade union members.
I really see no point to discuss economy with someone who asks such questions. Or compares how many cars per capita “workers” have today and 20 years ago.
“Наше СМУ установило 1430 газовых плит, что ровно в 1430 раз больше, чем в 1913 году” (с) “Операция “Ы” и другие приключения Шурика”
But better look at computers. Iceland has more computer per capita and in total than the whole world in 1913
But nevertheless comment about trade unions gave me one idea. Trade unions could set up a “workers exchange” trade floor and trade their “product” - work force!
Like “The price per Fillipino worker has dropped today by 20 point to the lowest level in 20 years - below 8500. But good news - Icelandic bank workers are up by 10%”… Why not?
Clearly, you have failed to understand Marx’s economic analysis. His insistence that the ‘proletariat’ will continue to live ever more poorly in ABSOLUTE terms was WRONG on empirical grounds.
It is not about understanding or failing to understand. Ivanov represents a classic group of Russian educated who never thought that there was more to Marxism (including infighting within Marxism that surprisingly survived the 1905 party congress) outside of the USSR college indoctrination.
The only valuable thing that Marx left is his Historical Materialism as a very broad, fundamental method of classification of socio-political and economic formations. Unfortunately, after creating the method he failed completely to appropriately apply it and realize that what he was describing was not capitalism but final stages of feudalism. Lenin almost got that one in his Imperialism as the last stage… creating the concept of ГМК to reflect what he perceived as reality. One more step and he would have understood that ГМК is the first stage of capitalism and not the last one. Unfortunately his ideological obsession clouded his reasoning just like it did with Marx’s.
In addition, the whole idea of “общественной собственности на средства производства” failed to materialize in all the countries that tried his proposed approach and the property ended (упрямая тварь, реальность) being controlled by the same state that controlled it under feudalism, making Marxist communism and feudalism virtually identical ironically making self proclaimed progressivism of socialists real conservatives.
“Marx was right about all he wrote absolutely. However, we cannot possible apply his theory to the capitalism that exists today.”
I don’t know whether you are aware how contradictory your words are. What did Marx write about the future of capitalism? Was he right?
Moreover, this sentence:
“Marx was right about all he wrote absolutely.”
Sounds very similar to what an Islamic fundamentalist would write about the Koran or a Christian fundamentalist about the Bible.
“do you know a smart name called Albert Camues didn’t distinguish between the so-called “capitalistic world” and “communistic world”.”
Hey, I like Camus. I don’t remember him saying that. If he did, well, he was badly wrong about it. I’ve been to both of these worlds. It’s stupid to say that they are indistinguishable. People IMMEDIATELY noticed the difference.
Cyrill. I don’t want to disappoint you but I was sleeping at lectures of nauchniy kommunizm, politekonomia etc.
It was long after I decided to look at Marx work. And first thing I noticed - he’d hated Russia. He was really anti-Soviet
The irony of the history - it was Russia that ruined his work by demonizing Marx himself
As today is the day of easy questions I have one for you. Do you believe that capitalism is ultimate system that humans developed?
Or General Khlynov’s “Marx was wrong. About everything.”, doesn’t it?
Look. I can move my ass from point A to point B at the speed of 900 km/h. Something impossible for the Great Ceaser!!! Can I do it because of capitalism? I doubt it as even such communist country as CCCP allowed me to do that (eight hours non-stop flights - OMG). So when General compares cars per capita or asking why there are no union’s cars around - I see no point to argue whether Mark was right or wrong and where exactly he was right/wrong. Fir sure - he was wrong about cars. Japanese in particular
shit!…a lot of очепяток - time to go too bad
Ivanov - he could not have been anti-Soviet, since he died in 1883.
’nuff said.
Regarding your question: of course capitalism isn’t the ultimate system humans will develop. Humans will come up with all kinds of things, all the time, for the rest of eternity. However, barring a fundamental change in basic human psychology, a free market economy is always going to produce more material and spiritual welfare than the alternatives.
For those who disagree, there is always Cuba and North Korea to go to. Please have your Socialism in One Country - but with volunteers only.
“Trade unions don’t run car factories. They have another function.”
Exactly. They serve the same function as a mafia protection racket. They add nothing of value to anybody not a member of the union.
Ivanov, it’s true that Marx was not fond of Russia, but how was he anti-Soviet if he died decades before the Bolshevik revolution?
By the way, I cannot say that I hate Marx. I cannot say that I’m that familiar with him, just enough to know that he had some interesting things to say–that he was right on some of them and dead wrong in others. Those who deserve our derision are those who elevated him to prophet status and used his writings as some sort of dogma. Those who do deserve our unreserved condemnation are people such as Lenin, Trotsky, Stalin, and Mao–Marxists responsible for the spread of misery and the deaths of millions.
Ivanov,
Let me rephrase my “Marx was wrong about everything”: the few things Marx was right about were trivial (vide Engel’s funeral speech - Ayn Rand’s a=a and 1+1=2 is about as clever). The non-trivial contributions he made - they were wrong.
There are no discernible laws of history, for example. Oh, and he wasn’t even the first to come up with that nonsense. The court-jester Hegel had it first.
Labor theory of value - illogical and wrong.
Or do you want to argue that the amount of time spend on making something determines it’s price?
The ’socially useful’ labor addendum is merely a cop-out, and really leaves only one final conclusion: demand determines price.
I’m afraid that was too fast for you, however.
He was really anti-Soviet
Hardly. Of the 10-point plank in the Manifesto that outlines his plan for immediate and long term measures to establish dictatorship of the proletariat, the USSR fully implemented most and partially implement the few that were left.
This myth that USSR (Cuba, China, Pol Pot, etc) were not doing it how Marx would want it to be done is a century old canard that Marxists use to CYA.
The fact remains the same - no matter how smart and well meaning were the people that wanted to implement Marx’ visions - if implementation went on any meaningful level beyond a hippie commune in a Humboldt County, it failed miserably.
Может что в консерватории поправить?
Do you believe that capitalism is ultimate system that humans developed?
No. It took feudalism about 10 centuries to develop and then some to decay. We are somehow to believe that 300 years is enough for capitalism? Most of the world still lives under feudalism. Russia is a great example of an early transition period.
Your question is either incomplete and incorrectly stated or you don’t understand importance of development. Today’s capitalism is quite different from what Marx saw, what Lenin saw, what Gramsi or Sartre saw.
That correction by itself should answer your question.
If you want to ask if an economic system based on private ownership of means of production is so far the best working model, then yes. Is it possible that a communal ownership based system successfully replaces it sometime in the future? Only if efficiency is no longer a factor and dilithium crystals are widely available.
“Only if efficiency is no longer a factor and dilithium crystals are widely available.”
I know, I know…all value is being created at NYSE. Right now.
When Khlynov didn’t get the joke - I understood. He is general after all
But you!
PS. I neither hate nor love Marx. But he was hell smart man. HELL smart. Way much smarter than Paulson.
“I know, I know…all value is being created at NYSE. Right now. :)”
Avoiding the answer with sophomoric witticism. Do you agree or disagree with the labor theory of labor?
The only reason people live better today is because of collective struggle for worker’s rights, better wages, unions, political change etc.
This is demonstrably false. If all that were needed to improve peoples’ lives is workers’ rights, better wages, etc. then these would have been implemented without the need for capitalism. Try campaigning for unions and political change outside of a capitalist setup and see how much improvement it brings.
The only reason people live better today is because of collective struggle for worker’s rights, better wages, unions, political change etc.
In fact, to get an idea of how wrong this statement is, take a look at conditions in China, Vietnam, Malaysia, and India over the past 10 years. Have millions of Asians gotten richer and hence live better because of a collective struggle for worker’s rights, unions, etc.?
Answer: no. Trade based on capitalism is what did it.
Private property combined with the right to freely trade and contract has proven to be the single most effective poverty reduction system in the history of the world.
Limiting the right to private property, and violent interference with the right to trade and freely contract is the most effective way of reducing human welfare.
Improvements to the human condition have historically always correlated with an increase to the former, while an increase in the latter have always proven to be the harbingers of human misery.
Claiming otherwise is generally an indication of historical ignorance.
Oh God, it’s a Libertarian circle jerk.
Actually, the single most effective poverty reduction system in the history of the world is known as “universal education.” The second most effective is known as “technology.”
As an aside, I find the attempt to derive the entirety of the content of human history from one human behavior (exchange of goods) to be truly risible, as well as absurdly reductionistic. It is a provincial belief, a Just So story, born from the context of the 20th century which is about as testable and verifiable as psychokinesis.
And for my fourth post in a row: the desirability or lack thereof of free trade has little to do with Marxian analysis. I realize a lot of people confuse Marxian analysis with central planning, but they are not the same thing. This is like conflating Christianity and the Papacy, or better yet Thomism and Vatican II.
The only reason people live better today is because of collective struggle for worker’s rights, better wages, unions, political change etc.
Union’s have had a massive impact over the past century or so and (mostly) for the better.
The thing that puzzles me about this viewpoint, though, is - where did the additional money needed to pay workers better wages actually come from?
“where did the additional money needed to pay workers better wages actually come from?”
GOLD!!! Pretty, shiny GOLD!!!
Chris,
your deliberate ignorance is breathtaking.
Regarding Marxism: Maybe the local Marxist may enlighten us to what actually IS the central tenet of Marxism?
Every time I show a Marxist he’s out to lunch on something, he generally claims that the issue is not central to Marxism.
Talking to Marxist is a bit like trying to wrestle a grease pig. Lots of noise, squeaking, and dirt, but never a firm grip on anything.
And Chris, please demonstrate by reference to facts why you think that private property, free exchange, and the right to contract freely are NOT necessary elements of human progress?
You seem to believe that anybody has stated they are sufficient preconditions, when all that was said is that they were NECESSARY preconditions.
Without private property, free exchange, and the right to contract there can be no improvement in the material welfare of human beings. It’s not all there is to it, but without it life is pretty lousy.
“please demonstrate by reference to facts why you think that private property, free exchange, and the right to contract freely are NOT necessary elements of human progress?”
Proving a negative is impossible, as any student of Logic 101 knows. But now that you mention it, the biggest ever elements of human progress (whatever that is) were probably the discoveries of how to make fire and domesticate animals, neither of which probably had much to do with free exchange. Plus the invention of beer.
I am not a Marxist, but obviously an analytical framework is not an economic institution any more than a cat is a dog.
You can believe whatever you want, but what you are doing is in fact a form of speculative metaphysics, as unverifiable as the idea that history is the history of class struggle.
To phrase things in a less dickish way, the thesis is a thesis. It is not a fact, but a deduction the truth value of which cannot be determined. It is metaphysics, like the belief in four causes.
I have nothing against metaphysics, which is fun. Aristotle was one of my specializations.
But I wouldn’t build a bridge or construct policy using it.
Maybe the local Marxist may enlighten us to what actually IS the central tenet of Marxism?
Other Marxists will disagree, but in my view Marxism is an analytic, as Chris keeps reminding us. I call myself a Marxist not because I believe in the enviable collapse of capitalism but because I think no other theoretical force to date understands capitalism in its totality better than the Marxist analytic. For myself, the central question that I think Marxism helps explain is: not why capitalism collapses, but more importantly how it sustains and reproduces itself materially and ideologically. This analytic is based in the following principles of analysis:
1) historical.
2) materialist.
3) dialectical.
4) humanist.
5) totality.
Now I could take the time to explain all of these and why I associate them with Marxism, but I’m not going to because it is clear to me that I would be wasting my time.
I find it rather ironic that the very people on this blog who show such a hatred to Marx are the very people who treat him as some kind of prophet and his words as biblical. I also find it revealing that people forget that Marxism is a living philosophy. Every serious Marxist thinker I know of uses the Marxist analytic to understand his world as it is now, in all its complexity. He does not run to Das Kapital as some kind of Bible or engages in hermeneutics of Marx’s texts.
If one takes Marxism seriously, you will quickly realize that Marxian analysis is always fleeting and unstable. It makes no assumption of absolute transhistorical Truth. What is the Truth, or should I say appears as true is always caught in a web of shifting and contingent relationships. Marxism, for me, is an analytic of the world in motion.
Another ironic thing I find funny is that the Libertarian circle jerkers here talk about capitalism as if it is some ghostly spirit, as if the invisible hand has some kind of actual material existence. For me this belief is tantamount to believing in spirits, ghosts and Gods. Lost in all of this blustering and paeans to the logical genius of free trade, property etc are the very things that make all of it possible: human beings and their relation to the material and ideological world they create.
This reminds me of what I think the central tenet of Marxist analysis: “Men make their own history, but they do not make it just as they please; they do not make it under circumstances chosen by themselves, but under circumstances directly encountered, given and transmitted from the past.”
Have I ever mentioned Marxism?
I’m talking about Marx work only, Vashe Prevoshoditelstvo, as I don’t know what “marxism” is.
In same way as unions could be car manufacturers…
PS. Free trade, private property bla, bla, bla. But! Can capitalism exist WITHOUT the state (aka government)?
Well said, Sean.
PS. Most funny when Pol Pot is associated with Marx (well it was not funny for those murdered by a maniac …)
Sean, I’d love to respond, but honestly, I didn’t really understand much of what you wrote. It seems that whenever I engage in a discussion of Marxism with a Marxist, I’m always told that what the vast majority of people think of as Marxism, isn’t. I must say, though, that I fully agree with the quote at the end of your comment.
The craziest thing about capitalism is that it actually works. The idea that people, engaging on their own in production, distribution, and sales can create an efficient system is counterintuitive at first glance. Granted, there is no ghost in the machine, and the invisible hand is the result of billions of little interactions, but it works better than anything invented to this point, and so it is worthy of defense. Global figures on the market and trade bear this out. Tim mentioned Asia, and Africa is a great case study because they have countries that went in both direction, and the free-market traders have done significantly better than their statist peers.
As much as I disagree with many union initiatives as they are currently in American politics, the right of free association is fundamental and fundamentally good. Workers’ rights movements made great progress in the latter 1800s and early 1900s. Collective bargaining is still important, but too often the unions have become slaves to a particular kind of corrupt politics that puts their own interest above the interest of their workers or those that the workers are supposed to be serving.
Back to the topic at hand, listening to Richard Wolff made me physically sick. The seething anger in his voice, matched with incorrect assumptions about the capitalist system and our social structure reminded me how awful it would be if people like him got into government.
Sean, I’d love to respond, but honestly, I didn’t really understand much of what you wrote. It seems that whenever I engage in a discussion of Marxism with a Marxist, I’m always told that what the vast majority of people think of as Marxism, isn’t.
I don’t deny that there is a feeling that two different languages are being spoken when it comes to Marxism. I think that one of the problems is that even Marxists can’t really say exactly know what Marxism as such is, myself included. I think this is one of its strengthens. As I said it is a living philosophy and the fact that it can’t be reduced (or at least shouldn’t be reduced) to some kind of program is a testament to its analytical power.
Capitalism does indeed work. It works very well. It sets out to do what it preaches very well. It has been the most revolutionary force in human history. It has created wonders. There is no denying that. But as a Marxist I can’t help seeing the system as a dialectically. For example, could world capitalism function as it does today without the Chinese government stomping on worker’s rights? Ironically, capitalists have the best partner in Communist China. Capitalists get their goods made at cheap costs, the Chinese state disciplines its population for capital.
By all economic statistics, the gap in wealth on a global scale is rising and our ecology has becoming increasingly dire. To think that capital is only the solution and not also the problem is dismissing the global reality.
I don’t think we are at the End of History, I believe , and this is one of the few utopian indulgences I allow myself, that at some point in time we must go beyond capital. Sadly, when that beyond will be better or worse is impossible to say. The way things are going I see little to be optimistic about.
Tim mentions the growing middle classes in Asia. That is true. But capitalism has also created vast slums of millions of people. It has created not a surplus of labor but redundant labor that cannot be integrated.
As for unions, well if workers allow their union bosses to swindle them and cozy up to capital and government, then it their own fault. They should fight for their rights inside and outside the union. That said, as a union member I will take my corrupt union over the corporation or university any day. Without my union I would not have a fee remission, health care, or cost of living adjustments. When our graduate union was organizing it wasn’t the union that put letters in out mailboxes that said joining the union might jeopardize our future employment. That was the university chancellor. Also there is a reason why WalMart inculcates its employees with anti-union videos and propaganda.
I have to say that Wolff tone tuned me off also. As for his economics and ideas about American social structure, he’s written extensively on it. I suggest you consult that bulk of writing. There is only so much you can do in a lecture.
A glaring example of how I think he miscontrues capitalism is his assertion that American capitalism created a society in which we judge our worth on material means. That’s just human nature, existed far before we came along. It’s absurd to blame capitalism for our being materialistic.
On a similar note is advertising. It doesn’t necessarily create a new “desire” for a good. In the past two weeks it has worked for me in its prescribed role. I needed shoes, and heard about a sale on the radio. It didn’t create the need for shoes, but it did help me fill it in an efficient, cheap way. Likewise with a guitar. I’d been thinking about learning to play for a while (because I’ve long wanted to, and recently a lot of my friends play so they can help me learn - both of these factors are completely independent of capitalism). Also, I heard about a 3 day sale on the radio, and advertising, again, smoothed operations in the system.
So really, a lot of his anger against affluenza is wrongly directed at capitalism, when it’s a spiritual/psychological problem built in to our natures.
About slums, capitalism offers a choice. If they would prefer to live otherwise, they can. Of course, those other options are usually pretty unattractive. companies come in and offer employment, nobody is forced to take the job. It seems rudimentary, and it is. Take the “sweatshops” that usually provide a higher wage and better working conditions than the alternatives.
Show me a slum and I show you an area where there is no protection of property rights and where the right to contract freely is violated consistently by government and those in cahoots with the government.
Countries where property rights are universally respected and where people are free to contract are always less poor than countries where this is not the case.
About slums, capitalism offers a choice. If they would prefer to live otherwise, they can. Of course, those other options are usually pretty unattractive. companies come in and offer employment, nobody is forced to take the job.
and
Countries where property rights are universally respected and where people are free to contract are always less poor than countries where this is not the case.
Both of these statements are at such a level of abstraction, I don’t even know where to begin. The key ideological fetishisms here are “choice” and “free”.
ivanov, do we have a few new spam words?
\”Free trade, private property bla, bla, bla. But! Can capitalism exist WITHOUT the state (aka government)?\”
Free Trade without the state? Absolutely. It\’s happening every day.
Free Trade without government? Absolutely. It\’s happening every day.
The only role the State plays in trade is reducing it.
Can private property exist without the State? Absolutely. The only role the state plays vis a vis private property is limiting it.
Can Capitalism exist without the State? Depends on what you mean by capitalism. I guess you\’ll define it in a way that it necessitates the state. So, maybe not. So what.
Private Property and Free Trade do not in any way, shape, or form depend on the state.
Owen. No one is forcing me to take the job. But bastards at the store don’t give food for free either
General, I guess you mean Iceland and its supe-universal respect to property rights and free to contract…
(PS. Not clear what smiles I should place - laughing or crying…)
Both of these statements are at such a level of abstraction, I don’t even know where to begin. The key ideological fetishisms here are “choice” and “free”.
Sorry you have such difficulty with basic words.
I also assume that by referring to the words ‘choice’ and ‘free’ as fetishes you disapprove of what these words mean.
It is hard to discuss sensibly with somebody who opposes the concept of human freedom and the right to chose.
You probably prefer Plato to Locke, too.
Ivanov,
good for you to bring up Iceland: it’s not currently an exactly good example of a well-managed society, is it?
OMG…I assume you got your education in military academy, General
Well then answer to yourself - who/what protects your private property and what generals are for?
Without a State only PERSONAL property exists - the one you personally can protect. But we - ivanov, Sean and Dima - could overcome that problem together and take you property. Thus we would create out small State.
ivanov,
thank you for making it very clear that you understand what the state is: an institution born of robbery.
Franz Oppenheimer has shown that long ago.
What protects my personal property? My weapons. And the weapons of my friends and associates. Or maybe the weapons of the protection service I have hired.
(and if you think THAT is a state, you simply show your inability to distinguish between voluntary and involuntary associations)
Society was managed very well. Like medical care in practical terms is free.
But business was also so free that were able to crash itself… And it’s not clear why the F*&^K I should pay for that.
Ivanov,
medical care in Iceland is free? Nobody pays for it? Amazing. Where are they hiding their Star Trek Assemblers?
Ivanov,
“But business was also so free that were able to crash itself… ”
Thank you for showing clearly that your economics education never included the topic of “Money - what it is, what it does, and where it comes from”.
Ignorance is bliss. Next thing you tell me is that the current credit crunch is the result of too little regulation and too much free market.
Origins of the Family, Private Property, and the State
(c) Engels 1884
http://www.marxists.org/archive/marx/works/1884/origin-family/index.htm
I bet Engels was first that that German kid…who was responsible for WWII (in some way - as German professor)
“In 1919, he accepted a call to serve as Chair for Sociology and Theoretical Political Economy at Johann Wolfgang Goethe University in Frankfurt/Main. This was the first chair dedicated to Sociology in Germany.“
I was afraid you would bring up “Origins of the Family, Private Property, and the State” by Engels. You would be well advised to do a little research into the sources that ‘informed’ Engels about the life of the American Indians.
To make life easy for you: he based his ideas on a fabrication. Not his fault, really, but…
Sorry you have such difficulty with basic words.
I tend to think that simple words that are often deployed tend to have deep ideological meaning.
What protects my personal property? My weapons. And the weapons of my friends and associates. Or maybe the weapons of the protection service I have hired.
Didn’t Hobbes refer to this as civil war? I don’t see how capitalism of any kind can exist without the nation state. It is interesting that both developed parallel with each other. If there was no state, how would you have law and rights? Rights are only protected because the state is given the monopoly on violence to punish their violation. Capitalism with no state! Now that’s utopian!
Hobbes was wrong.
It’s also interesting that you now only talk about Capitalism - I have already pointed out that I’m not concerned with that term - which was a Marxian invention in any case. So, I grant you there could be no capitalism without the State. Who cares.
Without a state, there would be no ‘laws’ as we understand them in a state system, obviously. And there would be no ‘rights’ as there are in a state system.
There would be private property and free exchange. Any violation of these would be the negation of private property and free exchange. You either have private property and free exchange, or you do not. Obviously.
The State negates private property and free exchange. Also obvious.
The state is nothing but an institution that claims for itself the unilateral right to use violence. Any such institution reduces human welfare, no matter what you call it.
“could world capitalism function as it does today without the Chinese government stomping on worker’s rights…By all economic statistics, the gap in wealth on a global scale is rising and our ecology has becoming increasingly dire. To think that capital is only the solution and not also the problem is dismissing the global reality.”
In my interpretation, what you are saying here, Sean, is that the capitalism that has comparatively ‘worked’ in the last century has done so without factoring in certain real and immense costs. Your 2 examples: chinese labor and the environment. (I would like to add my ‘good’ mother labor into your list of invisibles.) Now those costs are being revealed; bills are coming due.
I had the good fortune to attend a talk by Amory Levins of the Rocky Mountain Institute the other night, and he gave a powerful, though sad, example of how the market works: One of RMI’s biggest clients is the US military. Formerly, the DoD’s spreadsheets assumed the cost of delivering fuel to run their fleets in Bagdad to be so low as to be ‘0′. Of course, heavy, highly accessorized, fuel inefficient tanks and Hummers take a lot of fuel and require frequent well-armed convoys to carry the hydrocarbons. Easy targets. So, now they are starting to count all the manpower costs, deaths and amputations incurred in this effort. Big number! A cost revealed only after the worst has happened. Thus, the military becomes yet another customer demanding that Detroit wake up and deliver better MPG.
So…market demand will eventually drive even the US to better vehicles for the environment. (Toyota is years ahead in the development of light, strong carbon fiber electric cars.) Does capitalism have to be so blind, slow and painful? Why can’t we ever put a $$ value on these invisibles before catastrophe happens? Amory brought up carbon-offset programs too…I’m still trying to get how that is going to work. I guess it’s just counter-intuitive to be estimating such immensities as breathing, not eating poisons, not suffering, not dying and loving your children in terms of ‘capital’.
tess: military expenditures by the state are not a part of the free market. Logically. There is no “market” for state military procurement, since the ‘buyer’ is not a market economic actor.
There is no “market” for state military procurement, since the ‘buyer’ is not a market economic actor.
Yeah only the profits are privatized, while the costs are socialized.
Tess, your interpretation is what I was trying to say. In my view, capitalism is always doubled.
Sounds like Fannie and Freddie.
Sounds like the whole damn economic crisis if you ask me. I find it revealing of capitalism’s true face when the state only steps in when the big, big investors begin losing money. Only then does the Economy go on life support and requires immediate intervention by any means necessary.
In fact, I noticed another telling thing on ABC News last night. There was a report on the bailout which the White House allocated $250 billion to save the banks. Straight reporting. Then there was a report on Obama’s bullshit economic plan to freeze foreclosures for 90 days and give tax cuts etc. After reporting these facts, the reporter asked, “The cost?” and the usual we can’t afford it rhetoric. I found this also revealing of whose side the state and capital is on. Anything goes for the banks and investors (they are too big to fail!), for those who’ve had their homes foreclosed, let them eat cake!
I should also like to point out, like with many economic crises, the process of monopolization that is going on. Forget the banks being half nationalized. Look at the consolidation that is happening between big banks. Wells Fargo is buying Wachovia etc.
The current economic crisis is self-evidently a clear failure of state intervention into the free market. In a free market, governments would not print money (and the Central Banks are government institutions since they have the government approved and enforced monopoly on money), would not guarantee mortgages, would not subsidize industries, would not subsidize private life-styles, and would sure as hell not bail out businesses.
The problem is that we may have Capitalism, but we sure as hell don’t have a free market economic system.
The funny thing is that those who complain about the current system mostly want to replace it with something that involves even MORE state intervention into the economy.
I’m not that well informed in matters of economics, but I think (and hope) that in the future economics will lose most of its ideological flavor (e.g., Marxist dogma vs. libertarian dogma), and its theories and hypotheses will be exclusively based on empirical evidence. In other words, economics will be much more science and much less philosophy. This trend started quite a while ago, but the influence of old ideological battle-lines, although weakening, are still strong. In any event, there are more and more economists that acknowledge that the old Right/Left divide is obsolete and not conducive to good science. Economics, as a field of study, will be based more on what we know of our biology than on our ideological inclinations.
“Most funny when Pol Pot is associated with Marx (well it was not funny for those murdered by a maniac …)”
There is no denying that Marxism was a crucial part of Pol Pot’s world view. He was a member of the Communist Party in France and even in Cambodia his communism was initially very orthodox. Despite his ostensible break from Marxism, his murderous movement was deeply influenced by Marxist ideology.
The desire to turn economics into an ‘exact’ science is to a significant degree at the root of what is currently ailing our economic system.
Human values cannot be objectively measured like the velocity, weight, and position of particles. But human values are what drives economic behavior: “I value this apple less than that piece of steak” thought the gardener and exchanged it for a steak from the herder. The Herder valued the steak less than the apple. So both are better off - but there is no way to measure that, because 1 apple does only equal 1 steak in the interaction of these two people at that particular time.
Trying to quantify economics along the lines of physics is one of the greatest intellectual mistakes ever to befall economics.
“where did the additional money needed to pay workers better wages actually come from?”
Thet were stolen from the People?
Engels work was not about Indians, “general”.
And it’s funny that you were not afraid of referencing Franz Oppenheimer - the scientist who worked in the country that started both world wars…
Free? Not at all.Tthere two things in the world that are free really. Cheese in mouthtrap and stars on Generals’s shoulders.
have to pay in full (except kids and pensioners). I know this is very bad and agaist free market.
Medical care in Iceland is paid by people of Iceland. As income tax. So the more you make - the more you pay. If you are lucky - you’ll be never paid back. If you are unlucky - and need major operation (like full kidney transplant) that costs hundreds of thousands of dollars - you’ll get it. After 6 month of living and working here (if you are born here - just a moment after that). Well I have to admit - this doesn’t apply to robbers - I mean dantists
Give me you address - and we’ll see how long your tribes of voluntary associates would stand against my government army. Khlynov, please, don’t call yourself general. Not even private. Tribesman - would be fine
Khlynov. How are you going to conduct “free exchange”? A sack of grain against two sack of kartoshki? two cows agaisnt one horse? Two jap compacts against one Ford 350 truck? Oh! I know. You’ll print free money!!! Othewise you’ll have to use exotic shells. Kolt would also work - in disputes!
Remember “God created people, Kolt made them … free” (in your terms).
Tell this to the Boing, MD and other guys who are fighting for “non-market” orders. BTW I have never heard that any tribe of voluntary associates ever bought a nuclear attack submarine to protect their free market
Looks like the both are clinical idiots but gardener is also a crook
Unless the herder is actually working on the trade floor of cattle exchange and his regular daily commission is two steaks. Than he is the crook. But his irresponsive merket behaviour causing the drop of steak value and - as the result - the crisis of cattle exchange. Khlynov, you see! I’m trying to stay in very simple terms.
PS. Don’t forget to tell your address - I’ll send one parashutno-desantniy batalion
“The desire to turn economics into an ‘exact’ science is to a significant degree at the root of what is currently ailing our economic system.”
Economics does not be an ‘exact’ science such as physics in order to be considered scientifically rigorous (e.g., epidemiology, population genetics.) One advantage of such an approach is that its progress does not depend on a particular doctrine or ideology to be true.
Sorry. I was not clear: epidemiology and population genetics are two examples of scientifically rigorous fields that are not ‘exact’ like physics.