The Economist on Marx’s 200 years

The 200th anniversary of the birth of Marx has prompted The Economist to devote an article on Marx in its issue of May 5, 2018. Characteristically titled, “Reconsidering Marx. Second time farce. Two hundred years after his birth, Marx remains surprisingly relevant”!1 The article combines recognition that Marx was a genius with reactionary slandering that he was, after all, an evil genius and without him the world would certainly had been much better.

Naturally, one could not expect something different. Since the time Marx’s ideas gained recognition in the labor movement, the main concern of the apologists of capital has been to “refute” them as false, dogmatic and dangerous. Nor do, of course, The Economist’s journalists offer something new; they simply repeat the usual simplistic distortions and misunderstandings their predecessors have offered innumerable times in the past. However, their argument is nevertheless of a certain interest. On the one hand, the part of it in which they vilify Marx displays the rancor and hatred of the apologists of the ruling classes, who being unable to counter the great thinker, embrace all kinds of nonsense they come across to slander and debase him. On the other hand, when discussing Marx’s predictions, they openly confess their reactionary bourgeois fears regarding capitalism’s present deadlock and his vindication, at least in some important points. It is worthwhile, therefore, to take a look at both aspects; all the more because The Economist is not a minor journal but the semi-official voice of the markets and of the views of the liberal (and in our times neo-liberal) wing of the bourgeoisie.

Marx’s “failures”

“A good subtitle for a biography of Karl Marx”, The Economist’s gentlemen begin, “would be ‘a study in failure’… His ideas”, they continue, “were as much religious as scientific – you might even call them religion repackaged for a secular age. He was a late date prophet describing the march of God on Earth. The fall from grace is embodied in capitalism; man is redeemed as the proletariat rises up against its exploiters and creates a communist utopia” (p. 71, same in the following quotations).

The proofs are all very weighty:

Marx claimed that the point of philosophy was not to understand the world but to improve it. Yet his philosophy changed it largely for the worst: the 40% of humanity who lived under Marxist regimes for much of the 20th century endured famines, gulags and party dictatorships. Marx thought his new dialectical science would allow him to predict the future as well as understand the present. Yet he failed to anticipate two of the biggest developments of the 20th century –the rise of fascism and the welfare state– and wrongly believed communism would take root in the most advanced economies.

Whence, then, Marx’s influence, that makes even The Economist’s gentlemen confess that “for all his oversights, Marx remains a monumental figure” and that “interest in him is as lively as ever”? How do they explain the steadily increasing mass of publications, discussions and events about his work? How is it that in his 200 years even Jean-Claude Juncker, the in no way Marxist president of the EU, finds it necessary to visit Marx’s birthplace, Trier, and make a speech about the importance of his work? “Why”, as they themselves snobbishly ask, “does the world remain fixated on the ideas of a man who helped produce so much suffering?”

The answer, according to The Economist’s luminaries, will be found in the combination of genius with malice, which were Marx’s chief traits. His influence is due to the “sheer power of these ideas” and “the power of his personality”.

Marx was in many ways an awful human being. He spent his life sponging off Friedrich Engels. He was such an inveterate racist, including about his own group, the Jews, that even in the 1910s, when tolerance for such prejudices was higher, the editors of his letters felt obligated to censor them… Michael Bakunin described him as ‘ambitious and vain, quarrelsome, intolerant and absolute… vengeful at the point of madness’… But combine egomania with genius and you have a formidable power. He believed absolutely he was right; that he had discovered a key in history that had eluded earlier philosophers. He insisted on promoting his beliefs whatever obstacles fate (or the authorities) put in his way. His notion of happiness was ‘to fight.

The only conclusion to be drawn from all that is that if The Economist’s columnists lag far behind Marx with regard to genius, they certainly outweigh him vastly in egomania. In their attempt to prove their superiority –and the superiority of their beloved capitalism– to Marx’s predictions, they inevitably prove their inferiority, their inability to understand even Marx’s most basic positions, necessarily ending up to combine traces of truth with tons of falsehood and lies. Let us briefly bring out some points for their benefit.

First of all, there is nothing new in portraying Marx as a “religious” thinker and a “metaphysician”. This, in fact, was a beloved theme of all reactionaries of his time, who being unable to counter his theories and discoveries, resorted to such abuse and slander. For these of priests of capital and the “free markets”, of course, the “natural” was identical with capitalism, while everything going beyond it was anathematized as “religious” etc.

To limit ourselves to just one example, immediately after Marx’s death, Paul Boiteau, an official French economist, wrote in the conservative Journal des débats:

Karl Marx, who has just died, was in his lifetime one of the most listened prophets and theologians of the religion of social wrongs. He has had no difficulty in passing to the rank of its gods, and he will no doubt share in their fate, which is to disappear rather quickly into the void where socialism successively buried its divinities. But, for the moment, his memory receives the censers to which he was entitled, and, in both worlds, the meetings of the initiates declare that the Gospel of Marx must henceforth be the text par excellence of the preachings of international socialism.2

It would seem that The Economist’s folks have not advanced very far from Boiteau’s views. And, judging from the fact that everyone still knows Karl Marx while almost no one remembers Boiteau, it seems unlikely that they will get a better place in the hall of fame than he did.

Secondly, Marx never portrayed capitalism as a “fall from grace”, a hell that took the place of a previous earthly paradise, and the proletariat as the Messiah of our time. This was, in fact, the position of some Utopian communists of his time, whose primitivism he criticized. On the contrary, Marx acknowledged and stressed, at least after having laid the foundations of his theory, that capitalism represents a great advance in relation to feudalism, and that it substantially expanded the technological basis and horizons of human society. At the same time, however, he argued that by rapidly developing productive forces and socializing production, capitalism undermines its very foundation, makes unnecessary and anachronistic the exploitative relations on which it rests, and creates for the first time the possibility of a non-exploitative organization of the economy, based on the common ownership the means of production. The Economist’s journalists, lacking the courage to address the second point, blur and obscure the first, attributing to Marx things that are not part of his theory.

Thirdly, there is nothing in Marx’s works that contains even a trace of anti-Semitism or racism. Anti-Semites included, among others, Bakunin, whose slanderous criticism of Marx The Economist approvingly quotes, and Bruno Bauer, both of them Marx’s opponents. Bauer argued in particular that Jews would be unable to free themselves as long as they did not discard their religion and that until then they should be deprived of their political rights. Marx, answering him in his brochure on the Jewish question, which is frequently falsely presented by reactionaries as “anti-Semitic”, had rejected any idea of political, religious or other discrimination against the Jews. He countered that the partial liberation of the Jews was possible through their participation in the political struggles of the time, without presupposing any renunciation of their religion, and that their total liberation would take place when society was liberated from all kinds of slavery.

Marx’s perhaps only “anti-Jewish” comment appears in a letter he wrote to Engels, to which The Economist’s folks apparently allude, where he contemptuously labeled Lassalle a “Jewish nigger”.3 However, this letter was written under very special circumstances when Lassalle had stayed for some days at Marx’s home in London during 1862. Lassalle, as Marx mentions, besides his refusal to lend him an amount of money, had proposed him, as a means of getting rid of his financial problems, to hand over one of his daughters as a companion to a bourgeois family, and had unsettled his calmness and work. These things had enraged Marx and he wrote an aggressive letter to Engels, with all sorts of strong comments, which cannot be seen as an expression of his positions on racism or on any other matter. In order to seriously criticize Marx as a “racist”, one would have to point out some explicit or indirect support for racism in his works, which is impossible to do for him or any other serious Marxist.

Let us note by the way, as an example of how strongly prejudiced The Economist’s journalists, who imagine themselves “enlightened”, are, that even some neo-Nazis quote and comment more honestly Marx’s views on the Jews. In an article about Bruno Bauer posted on the National Vanguard, one of the key neo-Nazi websites in the United States, after speaking of Bauer as one of the forerunners of anti-Semitism, R. Pennington refers to Marx’s criticism of his views as a rejection of anti-Semitism: “Bauer’s anti-Semitism”, she writes, caused Marx a great deal of intellectual grief”; Marx’s critique was intended to “releasing the Jews from any intimidation by society or the state”.4 As an orthodox ultra-right, Pennington prefers, of course, to Bauer, honoring his anti-Semitism and condemning “Marxist obscurantism”, but at least she presents somewhat accurately Marx’s position.

Marx, they tell us further, failed to predict fascism and the welfare state. In the same way, one could say Darwin failed to predict (in 1871!) the discovery of DNA or that The Economist failed to predict, not 50 years, but not even 50 days beforehand, the outbreak of the global economic crisis in 2007. To blame Marx for things it was clearly impossible for him to predict, and for the analogue of which they would never blame, let us say, Darwin or themselves, isn’t that a manifestation of egomania and rancor?

Of course, Marx did not explicitly predict the above developments, but he identified the trends that made them possible. In many of his writings on the revolutions of 1848, in his criticisms of vulgar bourgeois political economy and in his analyses of the Commune, he showed and documented the bourgeoisie’s turn towards reaction, one of the ultimate consequences of which was fascism. In his The 18th Brumaire of Louis Bonaparte, he also referred to the development of reactionary petty bourgeois movements; i.e., peasants’ movements “who, in stupefied seclusion… want to see themselves and their small holdings saved”,5 thereby turning against the proletariat; a trend whose exacerbation in the imperialist era contributed decisively in the development of fascism. On the other hand, in his analysis of Malthus’s views in Theories of Surplus Value, Marx extensively referred to the bourgeoisie’s attempts to increase the intermediate strata between itself and the proletariat as a safety valve for its regime, considering that “this is the course taken by bourgeois society”.6 So here, too, he revealed the socio-economic basis of the developments that led to the so-called “welfare state”; i.e., the strengthening of the intermediate strata, which is possible within capitalism, as long as it does not radically contradict the falling tendency of the rate of profit.

Let’s turn now to The Economist’s main claim that Marx’s bad influence helped produce most of the 20th century’s misery, which could otherwise have been avoided. Putting the issue in this way is, of course, foolish; the true question to be asked and answered is: which tendencies in the 20th century have had positive results, those emerging from capitalism and contributing to its perpetuation, or the revolutionary tendencies that, finding their foundation in Marx, were promoting the overthrow of the capitalist system?

Capitalism was exclusively responsible for the first great war of the 20th century, the world imperialist war of 1914-18, with its more than ten million victims. Imperialist intervention was largely responsible for millions of victims in the initially almost bloodless Russian Revolution of 1917. The great crisis of 1929 and fascism were both children of capitalism, as was the case with World War II, an effort of the most reactionary wing of capital to eliminate the achievements of the Russian Revolution. It is true that the course of the USSR was marked, especially in Stalin’s years, by the negative phenomena The Economist points out; i.e., the 1932-33 famine, gulags, massive cleansing, terror and oppression, as was also the case in China during the Great Leap Forward. However, these phenomena have been explained by Marxists as a degeneration process, the result of the backwardness of the countries where the revolution first took place and of the rise of Stalinist bureaucracy, which did not promote but betrayed world revolution both in the USSR –its first victims there being the leaders of October– and abroad. In addition, they were not the only ones and did not characterize the whole experience of the USSR. During the 1920s and early ’30s there took place in the USSR a vast cultural revolution, whose achievements were undermined by Stalinism but nevertheless partly survived and developed in the later phases of the regime. The Soviet people took up the main burden of the anti-fascist struggle, which objectively was a continuation of October’s progressive legacy, while after 1956 the most odious aspects of Stalinist oppression were put aside.

The imperialist plunder of the Third World, interventions, establishment of dictatorships and the condemnation of entire peoples in starvation, continued on the contrary throughout the 20th century, before and after World War II. The concessions of the ruling classes in the capitalist centers after 1945 were prompted chiefly by their fear of the post-war ascend of communism and anti-fascist movements. Where it not for the USSR, who would have stopped Nazism and force these concessions to the ruling classes? Moreover, while the existence of the USSR checked the aggression of imperialism, after its dissolution its real tendencies have again been manifested openly and unimpeded, producing their true devastating effects. It took just 15 years to take world-wide inequality to unprecedented heights, start many local wars, exacerbate the great powers’ competition to a point threatening a hot conflict, trigger the global economic crisis of 2007, and revive fascism and far-right nationalism worldwide. Even the few positive elements of the latest period, such as the great capitalist development of China, are closely linked to the positive heritage of the 20th century’s revolutions. In China, the fact that a great popular revolution lasting two decades eroded feudalism and imperialist dependence, allowed capitalism to develop without internal and external obstacles and benefit a comparatively significant part of the population; in India, on the contrary, where there was no revolution, but only a bourgeois renovation from above, the growth of the last decades was much weaker and a much larger part of the population is stuck in extreme poverty. Capitalism prevailed in its competition with the USSR due to its higher level of development of the productive forces and the devastating effects of Stalinism, but experience shows that this did not allow capitalism to overcome its contradictions.

The Economist’s journalists make every effort to reject not only Marx himself, but the whole Communist movement and its eminent theorists after his death:

After Marx’s death in 1883 his followers –particularly Engels– worked hard to turn his theories into a closed system. The pursuit of purity involved vicious factional fights as the ‘real’ Marxists drove out renegades, revisionists and heretics. It eventually led to the monstrosity of Marxism-Leninism with its pretentions of infallibility (‘scientific socialism’), its delight in obfuscation (‘dialectical materialism’) and its cult of personality (those giant statues of Marx and Lenin).

Here again, the negative experiences of Stalinism, dogmatism and the necrosis of Marxism, are exploited to discard as nonsense the whole development of Marxism after Marx. However, Marxism in that period had important representatives such as Engels, Plekhanov, Lenin, Luxemburg, Kautsky, Mehring and, after Lenin’s death, Trotsky, Bukharin, Gramsci and Lukacs, who cannot be put aside so easily. These Marxists analyzed developments after Marx’s death, guided the October Revolution and developed Marxism further. That this development involved a clearing of Marxism from alien influences was not something special to Engels or Lenin: Marx had also fought fiercely against the pseudo-socialists of his time, such as Proudhon and the “true socialists”, and Marxists after Lenin, especially Trotsky and Lukacs, explained Stalinist dogmatism as an alien influence and distortion of Marxism.

Paradoxically, and while one would expect that after all these tirades, everything about Marx has been dismissed, The Economist’s gentlemen conclude their reference to his “failures” with a reservation that would seem to distinguish something fertile in his thought. But as it immediately becomes clear, they consider “fertile” only what they themselves want to read or think they can find in Marx.

The collapse of this petrified orthodoxy has revealed that Marx was a much more interesting man than his interpreters have implied. His grand certainties were a response to grand doubts. His sweeping theories were the results of endless reversals. Toward the end of his life he questioned many of his central convictions. He worried that he might have been wrong about the tendency of the rate of profit to fall. He puzzled over the fact that, far from immiserating the poor, Victorian England was providing them with growing prosperity. (ibid, p. 71-72).

Here The Economist’s gentlemen remarkably agree with the representatives of the so-called “New reading of Marx”, that is, representatives of professorial academic wisdom who falsify Marx, such as Michael Heinrich. Marx, of course, rethought and improved his assumptions constantly, but contrary to the claims of these scholars, there is no evidence that he had revised his analysis of the falling tendency of the rate of profit, or that Engels distorted his positions. Moreover, the entire evolution of capitalism in the 20th century has confirmed this fundamental to its historical fortunes law discovered by Marx. The main transformations and models of capitalism, Fordism, Keynesianism, neoliberalism, were, in fact, just ways of reacting to the downward rate of profit, and the fact that the bourgeoisie is forced to replace them after profitability crises proves that they can counteract it only temporarily and that their potential is always exhausted.

Engels was perhaps not as deep as Marx, and he occasionally made some mistakes. But to dismiss Engels for Heinrich’s sake means to read Marx in a systemic way, to make Engels’s mistakes an alibi in order to accept a total mistake. Marx’s concerns at the end of his life had to do with a better conceptualization of the complexity of capitalism’s tendencies, and hence of the revolutionary process, not with their general direction.

Marx’s successes and further “failures”

This brings us to Marx’s successes, some of which are so obvious, that even The Economist’s columnists cannot but recognize them, although still charging him with some other failures.

“The chief reason for the continuing interest in Marx, however”, we read further, “is that his ideas are more relevant than they have been for decades. The post-war consensus that shifted power from capital to labour and produced a ‘great compression’ in living standards is fading. Globalisation and the rise of a virtual economy are producing a version of capitalism that once more seems to be out of control. The backwards flow of power from labour to capital is finally beginning to produce a popular –and often populist– reaction. No wonder the most successful economics book of recent years, Thomas Piketty’s ‘Capital in the Twenty-First Century’, echoes the title of Marx’s most important work and his preoccupation with inequality” (p. 72, same in the following).

So, if inequality has once again become a central issue, to the extent that 1% of the world’s population owns over 50% of the world’s wealth, and 3.7 billion of the poorest account for just 2.7%7, how can “dogmatic” and “fanatical” Marx be confirmed after so many “reforms” and “advances” made by the ruling classes? Let’s see what The Economist’s gentlemen have to say about this as things become more interesting now.

Marx argued that capitalism is in essence a system of rent-seeking: rather than creating wealth from nothing, as they like to imagine, capitalists are in the business of expropriating the wealth of others. Marx was wrong about capitalism in the raw: great entrepreneurs do amass fortunes by dreaming up new products or new ways of organising production. But he had a point about capitalism in its bureaucratic form. A depressing number of today’s bosses are corporate bureaucrats rather than wealth-creators, who use convenient formulae to make sure their salaries go ever upwards. They work hand in glove with a growing crowd of other rent-seekers, such as management consultants… professional board members… and retired politicians…

By reading such passages, one gets convinced that The Economist’s “liberals” will never understand even Marx’s simplest positions, not due to lack of knowledge, but because they do not want to understand them, since this goes contrary to their class interests. Marx never defined capitalism as a rent-seeking system. This was also a feature of feudalism which knew various kinds of rent. The distinctive feature of capitalism, according to Marx, is expansion, the development of production for production’s sake, the accumulation of capital. And what capitalists accumulate is surplus value, the unpaid labor of the workers, which they usurp. Ideas could never create stocks and capitals; and it is absurd to base economic analysis on the difference between the good ideas of capitalists and the bad ideas of managers, etc. Moreover, if it was just a matter of good or bad ideas, one could perhaps solve many problems and save capitalism by imposing a negative rent for some obviously bad ideas of the capitalists and their ilk, such as weapons of mass destruction. The Economist’s gentlemen, distorting Marx in that way, shift the problem from the structure of capitalism to the behavior of the one or other of its agents, bureaucrats, managers, and so on. Yet, while rent is, of course, important –and Lenin, Hobson and others showed how rentiers multiply in the imperialist era with capitalism’s increasing parasitism– according to Marx, it is production and not distribution that defines the essence of capitalism, as of every other economic system.

However, just after that we find two better passages. One is about globalization, which, it is acknowledged, Marx had already foreseen:

Capitalism, Marx maintained, is by its nature a global system: ‘It must nestle everywhere, settle everywhere, establish connections everywhere’. That is as true today as it was in the Victorian era. The two most striking developments of the past 30 years are the progressive dismantling of barriers to the free movement of the factors of production—goods, capital and to some extent people—and the rise of the emerging world. Global firms plant their flags wherever it is most convenient… The World Economic Forum’s annual jamboree in Davos, Switzerland, might well be retitled ‘Marx was right’.

So Marx did predict something correctly after all. And it seems that he did not only predict this, but also something else too, the tendency of capitalism to create monopolies and, along with the accumulation of wealth on the one side, to produce an army of unemployed and occasionally employed in the other:

“He thought”, we read further, “capitalism had a tendency towards monopoly, as successful capitalists drive their weaker rivals out of business in a prelude to extracting monopoly rents. Again this seems to be a reasonable description of the commercial world that is being shaped by globalisation and the internet. The world’s biggest companies are not only getting bigger in absolute terms but are also turning huge numbers of smaller companies into mere appendages. New-economy behemoths are exercising a market dominance not seen since America’s robber barons. Facebook and Google suck up two-thirds of America’s online ad revenues. Amazon controls more than 40% of the country’s booming online-shopping market. In some countries Google processes over 90% of web searches. Not only is the medium the message but the platform is also the market.

In Marx’s view capitalism yielded an army of casual labourers who existed from one job to the other. During the long post-war boom this seemed like a nonsense. Far from having nothing to lose but their chains, the workers of the world—at least the rich world—had secure jobs, houses in the suburbs and a cornucopia of possessions… Yet once again Marx’s argument is gaining urgency. The gig economy is assembling a reserve force of atomised labourers who wait to be summoned, via electronic foremen, to deliver people’s food, clean their houses or act as their chauffeurs. In Britain house prices are so high that people under 45 have little hope of buying them. Most American workers say they have just a few hundred dollars in the bank. Marx’s proletariat is being reborn as the precariat.

The analysis perhaps is not flawless, but we may assume without much danger of error that had Marx read it, he would have rated The Economist’s analysts at least with a 5 (full marks being 10). Unfortunately, is not so with the immediately following argument, for which he would definitely make them repeat the same class:

Still, the rehabilitation ought not to go too far. Marx’s errors far outnumbered his insights. His insistence that capitalism drives workers’ living standards to subsistence level is absurd. The genius of capitalism is that it relentlessly reduces the price of regular consumer items: today’s workers have easy access to goods once considered the luxuries of monarchs… Marx’s vision of a post-capitalist future is both banal and dangerous: banal because it presents a picture of people essentially loafing about (hunting in the morning, fishing in the afternoon, raising cattle in the evening and criticising after dinner); dangerous because it provides a licence for the self-anointed vanguard to impose its vision on the masses.

It is tragic indeed to encounter such expositions of Marx’s views.

First of all, Marx never claimed that “capitalism drives workers’ living standards to subsistence level”. This was, in fact, Lassalle’s position, expressed in his famous “Iron Law of Wages”, which states precisely this thing. Marx criticized Lassalle’s law, showing that the workers, with their organization and struggles, could improve their position, and that there is a difference, historically defined in each country, between the wage corresponding to subsistence level and the real average wage.8

Secondly, it is funny to imply that a thinker of Marx’s level had not noticed and pointed out the ability of capitalism to limit the prices of consumer goods through technological progress, productivity gains, etc. In fact, Marx was the first economist to recognize and explain this possibility, as well as the historical movement of wages at the various stages of capitalism, with his distinction between absolute and relative surplus value. Let us explain this distinction, for the benefit of The Economist’s columnists.

Absolute surplus value, according to Marx, is the type of capitalist accumulation that dominated the early stages of capitalism, in the so-called period of primitive accumulation of capital. During that period, accumulation was promoted by increasing the working day – for example, the worker was forced to work 12 instead of 10 hours daily, his salary remaining the same. This means an increase in exploitation: if, for example, in the initial 10 hours, 6 hours correspond to the reproduction of the labor force and 4 hours to unpaid labor (i.e., production of surplus value), the final 12 will include 6 unpaid hours. Absolute surplus value goes hand in hand with absolute impoverishment, as pay per hour of work decreases. The brutal expropriation of the rural population and its relocation to the cities under wretched conditions, the deadly work of children and women, etc., were some of the misfortunes of this phase, described in novels by Dickens, Gorky and others.

However, when the development of capitalism, and hence its technological base, reaches a relatively high point –what Marx calls “the real subordination of labor to capital”– absolute surplus value is replaced by relative surplus value. The distinctive feature of the latter is that accumulation is now promoted not by the increase of the working day but by the limitation of the part of the working day devoted to the replacement of the worker’s labor power. In the previous example, if the time for the reproduction of labor power (the necessary labor) is reduced to 2 hours from 6, then even with a reduction of the working day from 10 to 8 hours, the worker will produce more surplus value than before, offering 6 hours of surplus labor instead of 4. Relative surplus value corresponds to relative impoverishment because the salary per hour of work increases. In addition, it is a constituent part of Marx’s analysis that the price of labor power in the latter case will correspond to a larger number of goods, since by the development of specialization, etc., the needs of the worker also grow. Of course, the great limitation of necessary labor is made possible because, due to technological progress, an hour of work in developed capitalism produces a much larger mass of commodities than what it produced in its earlier stages. The total value of these goods remains roughly the same, but the value per unit is drastically reduced.

In Marx’s time relative surplus value had progressed only in Britain, yet this did not prevent him from recognizing it as the main form for developed capitalism and assess its impact on the workers’ living standard. In an excerpt in Capital he sums it up quite clearly:

Under the conditions of accumulation… which conditions are those most favorable to the laborers, their relation of dependence upon capital takes on a form endurable or, as Eden says: ‘easy and liberal’. Instead of becoming more intensive with the growth of capital, this relation of dependence only becomes more extensive, i.e., the sphere of capital’s exploitation and rule merely extends with its own dimensions and the number of its subjects. A larger part of their own surplus-product, always increasing and continually transformed into additional capital, comes back to them in the shape of means of payment, so that they can extend the circle of their enjoyments; can make some additions to their consumption-fund of clothes, furniture, etc., and can lay by small reserve-funds of money.9

Of course, as Marx explains at various points, this improvement has certain limits defined by the needs of capitalist accumulation, and tends to take place in periods of economic growth, while in recessions wages are being pressed. But this is a far cry from presenting him as an advocate of the view that no improvement in the lot of the workers is possible under capitalism.

Marx’s position that in the post-capitalist society people will be able to hunt in the morning and go fishing in the evening was a poetic image of the many sided, cultivated man who will replace the disintegrated, individualistic human existence to which capitalism gives rise. Marx insisted that labor itself will always be “the realm of necessity”, but shorter working hours when everyone will work will give all members of society enough free time for a variety of other activities. It was Marx’s deep conviction that in the future society even The Economist’s journalists will find some better things to do than to exhort capitalism and abuse Marx.

For the time being, of course, no such thing is in sight, so they continue listing some more of Marx’s “failures”. “The World Bank”, we are told, “calculates that the number of people in ‘extreme poverty’ has declined from 1.85bn in 1970 to 767m in 2013, a figure that puts the regrettable stagnation of living standards for Western workers in perspective”. Marx, evidently, failed to anticipate that momentous progress too…

Here again it is a case of progresses existing in the apologists’ heads rather than in reality. Extreme poverty is defined at making less than 1.90$ per day, so that it would hardly look like a great advance to half the number of those caught in it. Moreover, the very definition of extreme poverty by the World Bank is under severe criticism, while if one puts aside China, the picture in the rest of the world is hardly encouraging.

In fact The Economist’s gentlemen are very close to repeating arguments regarding general welfare, which their predecessors advanced in Marx’s time. “Delightful is it thus to see”, one of them went, “under Free Trade, all classes flourishing; their energies are called forth by hope of reward; all improve their productions, and all and each are benefited” (The Economist, 2/1/1853). To which Marx replied by pointing to the numerous cases of starvation in this “generally beneficial” social order10. One has just to look at the thousands of peasants in India who commit suicide due to starvation –according to official estimates, more than 12,000 yearly after 201311 – to see that The Economist’s present attempt to paint a similar worldwide tranquility is not a bit better.

There follows Marx’s worst “mistake”:

Marx’s greatest failure, however, was that he underestimated the power of reform—the ability of people to solve the evident problems of capitalism through rational discussion and compromise. He believed history was a chariot thundering to a predetermined end and that the best that the charioteers can do is hang on. Liberal reformers, including his near contemporary William Gladstone, have repeatedly proved him wrong. They have not only saved capitalism from itself by introducing far-reaching reforms but have done so through the power of persuasion. The ‘superstructure’ has triumphed over the ‘base’, ‘parliamentary cretinism’ over the ‘dictatorship of the proletariat’.

So, what do The Economist’s geniuses tell us? To what does their wisdom end up?

They tell us that Marx was right in verifying those laws and trends of capitalism that bring them and their ilk to the foreground –globalization, monopolization, etc.– but that they, the “superstructure”, the various “think tanks” of capital, with their special astuteness and wisdom, succeeded in changing the action of these laws, making them produce different results than those predicted by Marx. Isn’t that a form of egomania?

We have already seen that Marx recognized the possibilities of reforming capitalism, ultimately based on relative surplus value. He himself refers to them in the Preface to the 1st edition of Capital, pointing out that “present society is not a solid crystal, but an organism capable of change, and is constantly changing”.12 Marx, however, showed at the same time the limits of these possibilities. To clarify this last, vital point, let us listen first to The Economist’s gentlemen final confessions:

The great theme of history in the advanced world since Marx’s death has been reform rather than revolution. Enlightened politicians extended the franchise so working-class people had a stake in the political system. They renewed the regulatory system so that great economic concentrations were broken up or regulated. They reformed economic management so economic cycles could be smoothed and panics contained… Today’s great question is whether those achievements can be repeated. The backlash against capitalism is mounting – if more often in the form of populist anger than of proletarian solidarity. So far liberal reformers are proving sadly inferior to their predecessors in terms of both their grasp of the crisis and their ability to generate solutions. They should use the 200th anniversary of Marx’s birth to reacquaint themselves with the great man – not only to understand the serious faults that he brilliantly identified in the system, but to remind themselves of the disaster that awaits if they fail to confront them.

Well, well, truth must be admitted after all! What we see during the last two decades is the decline of the liberal elites, their constant shift to intensified reaction, their failure to find any viable way out of the crisis and the deadlocks of capitalism, their –as The Economist itself aptly puts it– sad inferiority to the circumstances. However, their failure inexorably raises a relentless question that The Economist’s gentlemen fail to raise: Is this a chance, subjective failure or error of the leading circles of capital? Or does its cause lie in something more profound; i.e., that there exists no longer such a reformist way?

Can capitalism reform itself anew?

So, can capitalism reform itself anew, as it has done in the past, or is its present, self-destructive course definitive?

This question emerges from all modern developments and we can give at least some credit to The Economist’s journalists for posing it openly and sharply as a “life and death” question for capitalism. Yet it cannot be posed in a Shakespearean, “to be or not to be” philosophical way, as they pose it. It must be examined in relation to the whole of social experience, the directions of bourgeois governments and organizations, etc. And any such discussion will inexorably force answering it in the negative. A few concrete questions will clarify that.

If there is a real possibility of a new New Deal today, why do we nowhere see a significant portion of the ruling classes expressing and supporting it? In the 1930s there was a Roosevelt, after World War II there were representatives of the liberal bourgeoisie such as De Gaulle and the Kennedy brothers. Where is their current analogue? Why does the “liberal” wing, whose voice The Economist is, can only oppose Trump with a Hillary Clinton; i.e., something just a trifle better? Why do the few progressive representatives of the bourgeoisie like Sanders prove completely incapable of proposing any positive reform program and are forced, confusing others and themselves, to talk about “socialism”?

All these are sure indications that an internal reform of capitalism which would provide a real economic revival is no longer possible. We will understand why it is so by returning to Marx’s analysis of relative surplus value. The development of mature capitalism, as Marx has shown particularly in his Results of the Direct Production Process, consists essentially in generalizing relative surplus value, through its successive expansion to the various branches of economy. This was done in previous stages with the technological intensification of industry, agriculture and the state sector, services, etc. And the reason capitalism could at those stages have some able representatives was that there were still non-intensified sectors of the economy, whose reshaping, as well as the overall reshaping of the system based on this process, required certain abilities.

The distinctive feature of globalization, on the contrary, is that, at least in the developed countries, there is no longer a non-intensified economic sector. The service and public sectors, the last remaining ones, were intensified in the neoliberal era, this being its essential content. Things like “green economy” are aspirins, while the generalized automation futurists like Mason are dreaming of is inconceivable under capitalism as it would decisively hit the rate of profit. The very fact that capital is now forced to resort to absolute surplus value, increasing again the length of the working day in order to support the rate of profit (and thereby reviving again absolute impoverishment!), is a further proof of the exhaustion of its reformist margins. So at capitalist metropolises at least, there remains nothing else, nothing new to be done; there is no new model of accumulation and consequently no possibility of a new cycle. This makes globalization the last phase, the last moment of the imperialist era and capitalism in general, during which the capitalist system will necessarily leave the historical scene.

All this does not imply, of course, a complete impossibility of reforms, but any such possibilities refer to measures, changes, etc., which fulfill possibilities of the current stage, not of a hypothetical, non-existent future stage. Or to put it otherwise: there is no chance of capitalism presenting something radically new, a modern “New Deal”, but only –and this at a theoretical level– of normalizing and prolonging a bit globalization, by softening for some time its worst conflicts.

Two such possibilities are basically at hand. Relative surplus value has already exhausted its potential in the capitalist centers and is now fulfilling it in Asia and Latin America. But there is a continent where it has not yet been expanded; i.e., Africa. Africa’s participation in globalization could provide a growth momentum when China recedes, opening a further round. Of course, in order to bring this about, that participation should be on comparatively equal terms, not like that of Yemen, which picks up globalization’s bombs, but roughly that of China. Secondly, the North-South gap in the European Union suggests a similar, albeit proportionally smaller, possibility of capitalist progress for the European South, but this also presupposes a change in the EU structure towards true convergence.

Historical experience so far proves that the weakened liberal leaders of capitalism cannot implement these changes or even aid them. Obstacles on their way are more than obvious. Africa is already the field of competition between China and the West, and the great powers are not interested in its development, but in enhancing each one’s sphere of influence and plundering at the expense of the rest. In addition, American imperialism’s policies of past decades, interventions around the world, etc., have strengthened the worst, most adventurous forces in its protectorates, the consequence being that change stumbles not only on the directions of imperialism itself, but also on local cliques, “compradorial” segments, etc. Africa’s current growth rate of about 4% reflects these barriers, being extremely low for a continent with a population of 1.3 billion and less than one-third of US GDP.

It would be erroneous to imagine that when China’s momentum fades, capital will flow in Africa and start a new swift rise there. Firstly, China’s potential as capitalism’s steam engine has already been half-halted. Yet Africa’s development has not gained momentum, but has receded during the last years, from 5.5% in 2012 to 2.7 in 2016, and an anemic recovery in 201713 In the second place, China’s huge capitalist progress was made possible by the fact that the revolution had created a viable social order, a skillful and educated working class, etc. Only traces of these will be found in Africa, which is moreover divided in a multitude of small, unsustainable states, with extreme poverty increasing strongly during the last decades. In practice, moving these barriers aside will require at least some Chavez type revolutions in Africa, like those of Latin America during the last two decades. A key condition for a steady development in that continent will be that the leading circles of imperialism support these processes, yet wherever they have happened so far, either in Africa itself in the 1950s, ’60s and ’70s, or in Latin America recently, imperialism has constantly tried to stifle them.

On the other hand, the European Union, the only intensive global integration process, remains, as Mr. Juncker acknowledged in his recent Marx speech, extremely fragile. “The European Union”, he said, “is not a flawed, but an unstable construction. Unstable also because Europe’s social dimension until today remains the poor relation of the European integration. We have to change this”14 But of what change can one speak of, when, in a construct that its own leaders confess its instability, all the pressures of the crisis are directed to its weakest joints? It is not clear that the next crisis, which even according to them, is probably a short time away, will break it into pieces? And what will the consequences be then? Under the present circumstances, these can only be chaos, a fascist takeover of power in at least some European countries and war conflicts.

Of course, Trump’s election in the United States, the developing commercial wars and the existence of anachronistic regimes, such as Syria, Iran, and so on, belonging to Russian sphere of influence, obstruct economic progress even more at a world level. Add to this the whole parasitic raff of globalization, which in not limited to bureaucrats and politicians as The Economist would have it, but also includes all kinds of market speculators, lobbyists, mafias, etc, who loot world economy –movies like Gavras’s “Le Capital” and Hickenlooper’s “Casino Jack” depict their range– and you will see why it is utopian to expect something different from the ruling elites.

One last point that deserves some comment in The Economist’s arguments is their hints that Marx’s revolutionary forecast has been refuted in the capitalist centers. While Marx “believed communism would take hold in the most advanced economies… The only countries where Marx’s ideas took hold were backward autocracies such as Russia and China”. And even today, in period of severe crisis, opposition to capitalism appears “more often in the form of populist anger than of proletarian solidarity” (p. 71, 72).

These arguments are not new, yet there is a grain of truth in them, which has also been adequately dealt by Marxists. After Marx’s death, Engels, Lenin and Trotsky recognized the bourgeoisie’s ability to create a “working class aristocracy”, by sharing a small part of the booty of colonial exploitation, a fact allowing it to stabilize its hold in the capitalist centers. On the other hand, the obvious reason recent opposition to capitalism has so far been manifested chiefly by the rise of (often far-right) populism is that the crisis hit first the petty bourgeoisie, who tend to seek to restore their previous position at the expense of the working class15 All that, however, belongs to the kind of complications and difficulties with which Marx struggled in the last phase of his life, when he clearly envisaged some of them (e.g., the possibility of a revolution in Russia) and in no way counters his central claims. Doesn’t the fact of “the regrettable stagnation of living standards for Western workers” (p. 72), to which The Economist reluctantly refers, prove indeed that the main stabilizing factor in the capitalist centers belongs to the past?

Let us sum up in a graphic way. Capitalism is a Titanic that, due to the very materials and contradictions ingrained in its frame, is doomed to break up and sink. It is composed, of course, of several levels, each one of them having its own watertight parts which delay for a while flooding from incoming water. In the previous stages or levels, there was a difficult way out of Titanic to the new ship of socialism, but there were also higher levels to which one could move when the previous ones were flooded. The peculiarity of the current level is that there no more exists a level above. There is only a possibility of delaying the flooding of the current level either by increasing its space (a relatively equal participation of Africa in globalization) or by absorbing some of the pressures on the walls by channeling them to their strongest points (allocating part of the burdens of the EU crisis to Germany, France, etc.). We do not see any of these possibilities being realized today; on the contrary, the policies pursued are in the exactly opposite direction.

We have already explained why this is so and why a realization of the progressive possibilities of the current stage by the ruling classes is extremely unlikely, if not impossible. Moreover, if they were to be implemented, this should have been prepared during the past decades; e.g., by instituting a United Nations program to combat poverty in Africa and elsewhere, such as that proposed in the 1960s by the Kennedy brothers (who were murdered incidentally by their own class), rather than conducting military interventions in Iraq and Afghanistan. If, however, The Economist’s gentlemen are of another opinion and consider such a program possible, nothing prevents them from becoming its preachers, even if a little late.

In conclusion

Marx in his time never held The Economist in any high esteem. He called it, the “optimist conjurer of all things menacing the tranquil minds of the mercantile community”.16

The Economist’s article on Marx’s 200 years confirms his judgment. It is a mirror of the illusions of the condemned classes concerning their “eternity” and of their gaudy front, from which “superstitions and prejudices emerge like frogs”.17 How could Marx be a great thinker and a racist egomaniac at the same time? If he was a racist, why has he been an anathema for all reactionaries? Questions like these The Economist’s gentlemen are unable even to pose; prejudice blocks them from surfacing in their minds. And in this way, they unwittingly offer the best proof that Marx was right both in his opinion about The Economist, which has not advanced far since then, and in his overall predictions about capitalism’s fate.

However, The Economist’s journalists are wrong when they say that the practical implication of these predictions is to “hang on the chariot of history”. Such passivity was alien to Marx; on the contrary, he stressed that history presents active possibilities, the content of which, according to his famous statement, lies in “shortening the birth pangs”. It is on the contrary the “free market” apologists who hang on it and never prepare anything.

From this point of view; e.g., a capitalist development in Africa similar to that of China cannot be indifferent to Marxists as it would limit the sufferings of the next capitalist crisis and help realize the transition to socialism under better conditions. But herein lies the problem, that all such possibilities are hampered by the bourgeoisie itself, by the oligarchies of the developed countries. As Trotsky points out:

In the conditions of capitalist decline, backward countries are unable to attain that level which the old centers of capitalism have attained. Having themselves arrived in a blind alley, the more civilized nations block the road to those finding themselves in a process of civilizing themselves.18

Despite The Economist’s reformist optimism, all realities of our time cry in chorus that the necessary progressive reforms, even those in principle theoretically possible within capitalism, can only be fulfilled in a revolutionary way. And their fulfillment is only conceivable as a step, a starting point in the process of transition to socialism.

  1. See Readers of the World Read Karl Marx, The Economist, May 3, 2018. In the electronic edition the title is different, “Rulers of the world: read Karl Marx!” Roughly one year ago The Economist had published a similar item on Marx, expressing its “scorn” regarding John McDonnell’s praise of him but also admitting that Marx “becomes more relevant by the day”. The Economist, 11/5/2017. []
  2. P. Boiteau, “Mort le Karl Marx”, Journal des débats, 25/3/1883. []
  3. See K. Marx – F. Engels. Collected Works, Progress Publishers, vol. 41, p. 388-391. []
  4. R. Pennington, “Bruno Bauer: Young Hegelian”. That article had appeared first at Instauration, an ultra-right periodical, in 1976. Of course, Pennington goes on to invent an antithesis between Marx and Engels, by presenting the latter as an anti-Semite. This is a lie, Engels had written an article against anti-Semitism, exposing it as an ultra-reactionary current: “anti-Semitism”, he said, “serves… reactionary ends under a purportedly socialist cloak; it is a degenerate form of feudal socialism and we can have nothing to do with that” (F. Engels, “On anti-Semitism”.

    The myth of Marx’s “anti-Semitism” is ably refuted by R. Fine in “Karl Marx and the Radical Critique of Anti-Semitism”.  Unfortunately Fine, in his otherwise excellent article, attributes wrongly the above quoted phrase of Engels to Marx. []

  5. K. Marx, “The 18th Brumaire of Louis Bonaparte”, in K. Marx – F. Engels, Selected Works, Progress Publishers, Moscow 1977, vol. 1, p. 479-480. []
  6. K. Marx, Theories of Surplus value, Progress Publishers, Moscow 1975, vol. 3, p. 63. []
  7. See “World wealth increases, inequality rises“, Kathimerini, 15/11/2017. []
  8. In a well-known passage in Capital, in the part on labor power, Marx emphasizes this point; see K. Marx, Capital, Progress Publishers, Moscow 1977, vol. 1, p. 168. []
  9. K. Marx, ibid, p. 579. []
  10. K. Marx, Dispatches for the New York Tribune. Selected Journalism of Karl Marx, Penguin Books, London 2007, p. 111-113. []
  11. Dhananjay Mahapatra, “Over 12,000 farmer suicides per year, Centre tells Supreme Court”. []
  12. K. Marx, ibid, p. 21. []
  13. See “Economy of Africa”. []
  14. See “EU president Juncker defends Karl Marx’s legacy”. Regarding predictions of a new crisis by EU and IMF officials see  “Juncker’s article on Europe in ‘Ta Nea”, C. Lagarde. “A new crisis is possible”,  and Lagarde. “The Eurozone must be ready for the next crisis”, . []
  15. This, let us remark by the way, means that it will be necessary to overcome great difficulties in turning social protest to the left, which implies, among other things, a confrontation with neo-Stalinist, nationalist and other pseudo-socialist currents and the unification of the nowadays scattered revolutionary and oppositionist groups that do not share the above errors. But this requires time so that the ruling classes’ tendency to avoid any progressive reform, partly explained by their usual fear of opening up the appetite of the movement and triggering revolutionary developments, is not right presently. []
  16. Κarl Marx. “Revolution in China and in Europe”, New York Daily Tribune, June 14th, 1853. []
  17. Α. Arnellos, A Game of Chess, Tipothito Editions, Athens 2002, p. 77. []
  18. L. Trotsky, Revolution Betrayed, Allagi Editions, Athens 1988, p. 15. []
Christos Kefalis is a writer and editor of the Greek journal Marxist Thought. His book Lenin. The Intellect of Revolution was published in 2017 by Topos Editions. Read other articles by Christos.