Close to the Marx

Capital is dead labour, which, vampire-like, lives only by sucking living labour – Karl Marx

Is Capitalism destroying itself? There is at least one mainstream economist, by definition not a Marxist, who not only thinks that it is but also that Karl Marx, the progenitor of scientific socialism, was correct in his 19th Century analysis that capitalism would buckle under the weight of its own contradictions.

In an age when the prevailing answer to greed is even more greed, manifested in strategies of displacement whereby the weakest and poorest sections of society are compelled to support the strongest and the richest, it is refreshing that somebody within the box is at least thinking outside the box. Nouriel Roubini is an economist who teaches at New York University and whose reputation was immensely enhanced when he was one of the first to foresee the 2008 US economic crash.

He told the Wall Street Journal that a further recession looms, which if it comes to pass could have devastating consequences. He points to the ‘massive redistribution of income from labor to capital’ that has taken place since 2008. Wages go down to ensure profits go up. Business is unwilling to take risks. It has plenty of capital but refuses to invest it until the crisis passes. This means fewer are employed, thus cutting down on income and subsequently spending, leading to reduced economic activity and a worsening of the crisis. An economic situation in which workers with less purchasing power to buy what capitalism produces leads to the subversion of the level of demand that is needed to complete the economic cycle.

The consequences are simple but enormous. Roubini’s non-Marxist conclusion is remarkably similar to that drawn by David Harvey, very much within the Marxist school: Marx had it right, at some point capitalism can destroy itself. That wouldn’t be so bad if in the course of its self-implosion it did not obliterate millions of lives and immiserate countless more.

Around this time last year Harvey told a London audience that, ‘Capitalism never solves its crises. It simply moves them from one place to another. From Brazil to Russia to Argentina to America to Britain to Greece.’ But, the reasoning goes, there is no real place in the finite world of today for the 1.5 trillion surplus belonging to capitalism to invest. With China and India developing as serious economic actors in their own right, fictitious markets, where financial smoke shovelling is the mainstay, were created in anticipation of a quick return.  As Marx put it ‘the adventurous road of speculation, credit frauds, stock swindles, and crises.’ However, unlike industry the economic terra firma was illusory.

Harvey dismissed the notion that human frailty or simple mismanagement (that could be rectified by different managers) lies behind today’s far reaching economic malaise. It was the result of a systemic failure of capitalism. And that failure, it is widely claimed, has been described nowhere better than in the works of Marx. Backing this up in the preamble to his book The Enigma of Capital and the Crises of Capitalism, Harvey says:

When Her Majesty Queen Elizabeth II asked the economists at the London School of Economics in November 2008 how come they had not seen the current crisis the economists had no ready response ... they could only confess in a collective letter to Her Majesty, after six months of study, rumination and deep consultation with key policy makers, that they had somehow lost sight of what they called ‘systemic risks’.

Simply put, the non Marxists of orthodox economics appear to have lacked the conceptual tools to understand the crisis.

In spite of that it would be imprudent to hail the arrival of a different economic order. Capitalism can survive according to Harvey. But the cost of it doing so will be massive. In order to satiate the greed at the top those victims capitalism sends free-falling to the bottom will have to:

give generously of their fruits of labour to those in power, to surrender many of their rights and their hard-won asset values (in everything from housing to pension rights) and to suffer environmental degradations galore, to say nothing of serial reductions in their living standards which will mean starvation for many of those already struggling to survive at rock bottom. More than a little political repression, police violence and militarised state control will be required to stifle the ensuing unrest.

While writers such as Bob Burnett argue that ‘the good news is we're witnessing the failure of global corporate capitalism’ he adds the important rider that ‘the bad news is we don't know what will replace it.’ Because the Marxists have done such a thorough job of discrediting Marxism in the eyes of many seeking to escape the clutches and claws of capitalism Harvey is of the view that communism is not the type of term that is going to be easy to introduce into political discourse as a means to describe the alternative to capitalism.  He prefers something like ‘the Party of Indignation, ready to fight and defeat the Party of Wall Street and its acolytes.’

Call it what we will but something other than what we have now seems obvious. We don’t need to be economic theorists to sense the precariousness of our predicament. We feel it in our bones that Harvey is close to the Marx in pointing out the the implications of continuing to be programmed by the greed machine are ‘socially, politically and environmentally ... nothing short of gargantuan.’


  1. 25 years ago, I took the last course on historical materialism at University of Montreal, we were told back then that Marx was death, then we were told that history was also over. The Irony of it is that the people who sang the death of Marx and History have, by their actions, resuscitated Marx and accelerated the course of history.

  2. Anthony,

    Obviously capitalism has failed and will fail again. But we need a credible alternative. I am not convinced that pure socialism is such an alternative. From the little I have read of economics, it would appear that some sort of market is needed, though not a totally free one. From what I do know about Marx, however, I would seriously doubt that he is the Jesus Christ of the new post-capitalist world.

  3. Rarley in history has Britain as a state been so vunerable to what happens in Ireland

    120 billion euro is outstanding to British banks in the 26 county state

    Lets just through out there as a scenario- serious social unrest led by Republican elements leading to the economy being even more holed beneath the water.

    Would a large write off of 120 billion leave the British state in trouble? Just wondering like

  4. The big problem is that technology is wiping out jobs.Supermarkets are now culling staff, where will new work come from ? Can't compete with China.

  5. david,
    are you for real? What has our economic woes got to do with 'dissisdent' republicans?
    120 billion, I'm sure they will make that up during their quest to restructure just about every economy they have managed to get their grubby hands on.
    Failing that, they can deduct it from the millions they stole of the Irish in over taxation for decades.

  6. Failing that, they can deduct it from the millions they stole of the Irish in over taxation for decades.

    who's been stealing it recently?

    WHO is who?

  7. The UK is lending the Republic money at 5.9% when Britain's borrowing rate is 2.5%.

    They benefit from the prevention of a dramatic fall in trade with the Republic which would have otherwise occurred.

    The UK's actions in lending the money prevented them being more vulnerable regarding the Irish downturn. They didn't do it for the Republic's benefit per se.

  8. Larry,
    that in no way justifies what they done and continue to do on the world stage today.
    And as Simon points out, it was an deal which cushioned them.

  9. Great piece, as the old beards used to say back in the 1930s, in the future we have only one of two choices, socialism or barbarism. In many ways the implosion of Stalinism is to our advantage, as it proves a top down authoritarian version of 'socialist stalinism,' is not a viable vehicle, as it leads to a bureaucratic authoritarian State, something which most socialists now accept.

    The real question for the left is to begin to have confidence we can do better than the neo liberal economic bunch, who have truly displayed the unacceptable face of capitalism.

    However we must not run before we can walk, a Party of Indignation seems a fine start to me. We need to vigorously oppose those who claim state interference in the economy is a bad thing, after all when the balloon went up, Capital soon started sucking on the State's tit.

    We need to act cautiously with a left social democratic programe which will offer us a way to regain public support, this is not as hard as it might seem to some, as ordinary folk are crying out for a more civilised way of life in the West and a slice of the economic loaf in the third world.

    We should not be afraid to draw from the past, when public amenities were state run. Can anyone in the UK honestly say our public services, rail, water, power, etc, were any better after privatisation? Yet Irish and UK governments still profess this and continue to go down this road.

    To put it bluntly "Luta Continua."

  10. British chancellor of the exchequer George Osborne speaking in November 2010 commenting on the funding given to dublin government "Indeed we export more to Ireland than to Brazil, Russia India and China put together" added in same speech "our two banking sectors are interconnected"

    Mick Hall to me its not about walking or running its about putting the boot in good and proper in an historic and once in a lifetime opportunity

    example: those of us who have espoused left and Republican struggle all our lives step up to the plate and stop paying mortages personal loans ,buying certain items etc

    Cousin of mine who works in a certain public service in Britain described it to me as " they are at the equivalent of looking under the chairs for loose change just to keep the state viable on a day to day basis, the system cannot absorb even minor shocks now" same woman is apolitical just stated it as fact in her opinion.

    At least 130 billion on the line

  11. Alfie,

    just back from Cambridge where I never saw too many Marxists!!

    I think it would be foolish to hold Marx up as a saviour. But he did provide a great critique. A serious problem for Marxismm was Leninism out of which Stalinism had its roots. I don't buy into the notion that Stalinism was a complete departure form Leninism.

  12. AM

    Your right about the direct link between Stalinism and Leninism, with a vanguard party of professional revolutionaries to the fore, which Rosa Luxemburg astutely observed would end up in top down control of the movement and the society it controled. And so it proved, and eventually enabled Stalin to take control of the international communist movement and reduced it to little more than an adjutant of Soviet foreign policy.

    Having said that, Stalin used violence to ensure his own rule and that of the Party and State bureaucracy, (same thing) something which Lenin would have never stooped to. Indeed just before his final illness,
    he recognised his responsibility and attempted to move Stalin from the post of Party secretary, indeed in his last will and testament he forewarned about the road Stalin might take if he were not removed from that post.

    Inexplicably, Trotsky and others agreed to cover this part of Lenin's will up, even though they had the support of powerful forces within the soviet military.

    Stalin turned out to be the better politician and tactician and with a rising social class at his back. He understood perfectly in some situations the pen is not mighty than the sword.

  13. Mick,

    I take your point about the difference between Stalin and Lenin but to my mind it was a matter of degree rather than kind. A serious problem with Stalin was the suppression of politics, the placing of the secret police rather than the party in the engine of driving the movement (we can hardly say forward). Even WW2 was hampered by the purges and the removal of the most brilliant generals in 1937. And while Stalin gets much praise for defeating the Germans and saving the globe from fascism, the fact remains that his directives in the 1930s split working class alliances in Germany and allowed the Nazis to come to power when they could have been checked. On military matters Georgi Shukov won the war. He had the balls to stand up to Stalin and take control when Stalin was paralysed by indecisiveness. Had it not been for Shukov and a small band of people determined to remain in Moscow come what may while they built defences in depth to draw the sting out of the Wehrmacht on the road to Moscow, the capital would have fallen. Stalin was ready to desert.

    My difficulty is that I am not convinced that Lenin would be that much different. Lenin abandoned far too much for me to think he would have had any qualms about abandoning the party. He knew when he suppressed democracy that the revolution would fail. He predicted it yet carried on all the same. Throughout, his greatest criticism was that Stalin was a bit rude, a trait he excused in Communists. Trotsky was hopeless. He either did not turn up for meetings where he could have turned things around or when he did allowed the Stalinists to get the upper hand.

  14. Not for me to defend Lenin as I am NOT a Leninist as you know, but to be fair to Lenin, when he was still in control of his faculties, Europe was still ripe with revolution and not for a minute did he, or many old Bolsheviks at the time, believe their regime could survive in the long run without a revolution in Germany or another of Europe's major states. Stalin on the other hand with his Socialism in one country was beginning to think otherwise.

    You mention the disastrous impact of Stalin's military purges and again here if Trotsky had moved against Stalin with the support of commanders like Frunze,Tukhachevsky, etc, they may never have occurred. Unlike Ataturk in Turkey, trotsky being a Marxist, believed socialism or any progressive change could only come about when led by progressive social forces, thus he felt even if he had gained power in a Bonapartist coup, no good would come of it.

    Interesting times, I completely agree the USSR victory in WW2 was in spite of Stalin's leadership, not because of it. As a commander he was barbaric and wasteful with the way he managed his forces.

  15. Mick,

    I know the Socialism in one country came with Stalin but I feel Lenin would have ultimately embraced it had the prospects of the revolution not being spread looked likely. Lenin's was an ideological position but linked to strategy. Stalin's was less an ideological position and one of raison d'etrat. He asserted the position of the Soviet Union in a world probably looked at through the eyes of a member of the realist school. Consequently, he imposed Soviet foreign policy on the other communists in different countries.

  16. Modern day Marxists are constantly trying their hardest to reinvent and repackidge their ideology for the modern consumer.Over the past few years in Britain we've seen the rise of the Peoples Charter, the Labour Representation Commitee and the latest brainchild of the Left - the Coalition of Resistance, all drawing in the same old faces and no new blood.Over on the Ultra-left the Trots are doing equally well in remoulding the SWP into Counterfire but alas shooting themselves in the foot with a co-option move by calling an antiwar march in London in partnership with failed and reinvented radical Muslim groups whoose senior members stand accused of aiding and abetting Hamas along with Holocaust denial claims from Labour MP's.
    Whilst "we don’t need to be economic theorists to sense the precariousness of our predicament," I ask the question should we be looking at a third-way economic philosophy such as Distributivism?

  17. Stefan

    Before you make a blanket condemnation of the UK left it might help if you get some of the facts correct. Counterfire was started by people who were expelled, or left the SWP, it is not one of their many fronts. LP MP's may have many faults, amongst them supporting a war mongering former leader who danced to the USAs neo conservative tunes, but I am yet to come across a single Holocaust denier amongst their ilk.

    In a broad based anti war movement, it would be a bit odd if not a crime, if the left refused to march alongside those from differing political persuasions
    and religions.

    As to Hamas, whilst its politics are not mine, it is a perfectly respectable organization and one I might add which received the popular mandate in the last democratic elections to take place in occupied Palestine.

    You seem to wrongfully accuse others of being holocaust deniers whilst you yourself display a certain amount of islamophobia. Which is a shame as 'distributivism' seems a worthy subject to debate.

  18. Thanks for that Mick.
    I beleive I said Counterfire was a remoulding of SWP, wether it be by expelled SWP members or whoever...same politics different name.I never said counterfire was a front, I said the anti-war march was a co-option move.You seem to have misread my post, the holocaust denial claims came from Shahid Rafique Malik Labour Party politician, I quote referring to the MCB decision not to play a part in the 2007 Holocaust Memorial Day, "Its flawed moral leadership places the MCB alongside the likes of the BNP leader, Nick Griffin, as nonattendees."I am sure you are well aquanted with Counterfire founder member Clare Solomon's antisemitic comments..."I think you’ll also find that ALL religions have had their oppressors-some worse than others true, but to paint the picture that Jews have been persecuted all throughout history is one that has been fabricated in the last 100 or so years to justify the persecution of Palestinians."
    Please back up your accusation of Islamophobia against me with some evidence.