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Last Exit Magazine « Prophet of Profit

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[published: April 15, 2009]

Prophet of Profit

Marx may have seen capitalism’s flaws before the rest of us did, but that doesn’t mean we’ll be handing over power to the proletariat anytime soon.

In early March, as the global financial system seemed in mid-collapse, a friend e-mailed me the following quotation, adding that he’d received it from a wealthy European businessman:

“Owners of capital will stimulate the working class to buy more and more of expensive goods, houses and technology, pushing them to take more and more expensive credits, until their debt becomes unbearable. The unpaid debt will lead to bankruptcy of banks, which will have to be nationalised, and the State will have to take the road which will eventually lead to communism.”

-Karl Marx, Das Kapital, 1867

As someone who’s spent a fair amount of time poring over Marx’s words, my bullshit detector immediately sounded. In 1867, the word “technology” was not commonly used in its modern sense, and although that could be a question of translation, in general the quotation did not sound to me like Marx (whose principal concern for workers, after all, was not that they would buy too much).

Sure enough, the quotation turns out to be bogus. But it’s telling that it was being pawned off as true during a time of great financial anxiety. I see two meanings behind it; the first is defensive. I suppose that, depending on where in Europe one lives, there are still some communists around, mostly in and around trade unions. And given a particular gust in the political winds, they could attain cabinet-level status in some countries, which could cause mild discomfort for a few plutocrats. But come on: the Soviet Union has been out of commission for 20 years now, China does everything it can to imitate the capitalist West, and Castro’s influence has evaporated like a cigar-smoke ring. Yet there is clearly still a Cold War-era stigmatism involved in labelling something “communist.”

The intent of the bogus quote is to discredit the current bailouts underway in the Western world, to present them as part of an inexorable, creeping socialism that will lead to communism. This is amusing, since I don’t think anyone – including the remaining communists – genuinely believes that this is the case. The state’s sudden, emergency role in the Western private sector may be drastic and unprecedented, but it’s nearly impossible to imagine a scenario in which banks, insurance companies and manufacturers hand over the means of production to the proletariat. That’s neither the stated goal, nor a politically or economically viable option. Instead, what we’re witnessing is a massive state effort to prop up the private sector, which is something very different from communism.

The second, more instructive meaning behind this bogus quote is that it betrays a kind of fear: what if, after all these years, Marx was actually right? For decades, mainstream economists, philosophers and others have rushed to disprove any part of Marx’s writings that they could. A good number of those claims are valid, at least in certain particulars, and why not? There are effectively no great thinkers from the 19th century whose doctrines are wholly accepted without qualification today: not Darwin, not Mill, and certainly not Marx.

For all that intellectual smackdown of Marx, however, the fear remains. It is an acknowledgement of some truths that were very hard to utter publicly until recently: Capitalism is flawed. Markets are incapable of self-regulation in the long run. It is the very fact that these truths were always, to use a modern phrase, “front of mind” for Marx that he was able to produce the far-seeing work that he did. It’s a striking feature of Marx’s newspaper columns (I edited a collection of them for Penguin Classics): he frequently writes as if the final collapse of capitalism might happen before his next deadline, as if the precipitous fall in, say, the price of silver is going to bring about the worldwide (well, European-wide) worker’s revolution. It reads like a somewhat laughable tic today, but keep in mind that we have a century-and-a-half more experience with market fluctuation than Marx and his peers did, and that in the 1850s and 1860s, crowned heads of Europe were dropping at a healthy clip, replaced by more democratic systems of government.

The point here is that by fixing his gaze to capitalism’s flaws, Marx produced a small library’s worth of critiques that are not only still relevant today, but vital. While he may be best remembered for certain idealistic lines from the Communist Manifesto, the fact is that Marx was an expert at unveiling the kinds of hocus-pocus that create market bubbles. In his day, they took the form of railroad bonds and the Credit Mobilier (an infrastructure boondoggle that allowed Louis Napoleon to enrich his friends). But if we were lucky enough to have had Marx around to analyze credit default swaps and collateralized debt obligations, he might have been able to at least shame the state into regulating them.

James Lebetter is an author and editor based in New York City. His most recent book is Dispatches for the New York Tribune: Selected Journalism of Karl Marx. Ledbetter is also editor of The Big Money, a business Web site published by Slate.

Copyright Last Exit 2009


Reader Comments [1]

  1. 1.  

    Well said. Should have included a few salient (pungent?) K.M. quotes.

    Arnie · Apr 21, 04:55 AM ·#

Comments closed