A 'Modern' Economist's Take on Marx

Via, comes Brad Delong, the astonishingly prolific Clintonite economist/blogger, to tell us why mainstream economists disagree with Marx. He boils it down to three 'challenges' and three answers:

• Challenge 1 - the business cycle is endemic to capitalism. Answer - yes, but we can significantly mitigate this through Keynesian measures to the point where it is liveable with.
  

• Challenge 2 : capitalism produces massive inequality. Answer - yes, but we can mitigate this via social democracy and the 'social wage' as embodied in the welfare state.

• Challenge 3 - capitalism's 'cash nexus' is anti-human, reducing people's experience of work to one of imposed meaninglessness. Answer - basically, so what? Demonstrably, enough people can find jobs which satisfy them to blunt this criticism, and leave it little more that a moralistic wail or a metaphysical claim.

Now, of course, there is truth in all three of these responses. But may I just archly enquire quite how answer 1 is currently shaping up? & what are the prospects for answer 2 looking quite so convincing as the global recession proceeds and the cutbacks in state spending start coming in with a vengeance?

But the real problem is with his answer 3. He doesn't seem to understand that this is, in fact, the key line of argument (together with the Labour Theory of Value, which I don't accept) which leads to demands for economic democracy, or workers control. He doesn't understand this because he is an economist, not a political economist. Such things are outside the little intellectual box mainstream economists have made for themselves to live in. He's a bright man, diminished by his theory.

The Limits of ‘I Told You So’ Leftwingery....

Via the blog with no name
Marx on the credit crisis
FromCapital (Volume 3, Chapter 30):

"In a system of production, where the entire continuity of the reproduction process rests upon credit, a crisis must obviously occur — a tremendous rush for means of payment — when credit suddenly ceases and only cash payments have validity. At first glance, therefore, the whole crisis seems to be merely a credit and money crisis. And in fact it is only a question of the convertibility of bills of exchange into money. But the majority of these bills represent actual sales and purchases, whose extension far beyond the needs of society is, after all, the basis of the whole crisis. At the same time, an enormous quantity of these bills of exchange represents plain swindle, which now reaches the light of day and collapses; furthermore, unsuccessful speculation with the capital of other people; finally, commodity-capital which has depreciated or is completely unsaleable, or returns that can never more be realised again. The entire artificial system of forced expansion of the reproduction process cannot, of course, be remedied by having some bank, like the Bank of England, give to all the swindlers the deficient capital by means of its paper and having it buy up all the depreciated commodities at their old nominal values. Incidentally, everything here appears distorted, since in this paper world, the real price and its real basis appear nowhere, but only bullion, metal coin, notes, bills of exchange, securities. Particularly in centres where the entire money business of the country is concentrated, like London, does this distortion become apparent; the entire process becomes incomprehensible; it is less so in centres of production."

Yeah, but I still can't work out prices/resource allocation decisions from the Labour Theory of Value...

So, tempting as all this "Hey, We're BACK!" stuff is, I have yet to see anything thing from the Left which shakes me in my view that the Marxist tradition still has a lot to offer in terms of sociological and historical perspectives - even, stripped of the absurd blind alley of 'democratic' centralism, something to offer in terms of political theory - but it really, really isn't helpful when approaching directly economic questions.I'm with Dave on this one.

Well Dug Old Mole?

"[Capitalism] "is not a success. It is not intelligent, it is not beautiful, it is not just, it is not virtuous — and it doesn't deliver the goods. In short, we dislike it, and we are beginning to despise it. But when we wonder what to put in its place, we are extremely perplexed."

A quote from Keynes, posted by Mick.

The Times- and therefore the blogosphere- are gnawing away at the old Marxist bone today. Stumbling even treats him like as proper economist but fairly points out that Capital itself didn't really deal too much with finance capital per se. That would be Hilferding's patch I seem to remember. Something about tending to create the conditions for war, and constantly seeking state help as I recall. Lenin nicked large parts of the theory to explain Imperialism.

So I'm not falling over backwards to resurrect ol' Karl. Saying that capitalism is unstable and unfair is not uniquely Marxist - as indeed Martin Jacques pointed out in the Times. Saying it can be replaced with a fairer system run by and for the majority of people is.

But right now we seem to have a gravedigger shortage. I blame the government's pathetic excuse for a skills strategy....