Marx and the current crisis of capitalism

D. T. Cochrane Last Modified: October 23, 2008 Issue: October 2008 8 Recommended this Post Comments & References 1

The latest upheavals in the global financial markets have revived interest in the political economic analysis of Karl Marx. Sales of Marxs opus Capital - which English media insists on calling by its untranslated German title, Das Kapital - have reportedly skyrocketed. The UK Times published a lengthy commentary asking, did he get it right? This turn to Marx makes sense, as he is the original theorist of capitalist crisis. The actual invocations of Marx have been, in general, tentative and flippant. For example, Dr. Rowan Williams, the Archbishop of Canterbury, pays Marx a backhanded compliment when he notes that Marx observed capitalisms capacity for ascribing power to that which is not real and then says that Marx was right about that, if about little else. Much of the commentary is snide, with its tongue firmly planted in its cheek. Marx is presented as a figure of historical ridicule and commentators use him as a foil in reassuring people that capitalism is safe and sound. Brendan ONeill, editor of the British online journal spiked, has a problem with how Marx is being used. However, his complaint is not that an important figure of intellectual history is treated so shabbily. He complains that most commentary invoking Marx relates the current crisis to the inevitable collapse of capitalism that Marx foresaw. ONeill writes that it is a fallacy that Marx considered the collapse of capitalism to be a necessary outcome of progress. He claims this belief is a fallacy based on a misreading of the first part of the Communist Manifesto. To interpret Marx this way is alleged to be an attempt to turn him into a prophet. ONeill claims that [t]hroughout his more profound works, Marx never talked about the inevitable collapse of capitalism. However, this simply is not true, and to deny the teleology of Marx is to seriously misunderstand the inherited thought with which Marx was grappling. More seriously, however, to deny Marx had a belief in historical necessity is to miss why he is largely inappropriate as a means to understanding the current crisis. ONeill appears to have grabbed onto Marxs well-known assertion that men make their own history. Although, instead of this quote he selects and misrepresents an obscure reference from The Holy Family, a Marx-Engels work critiquing the Young Hegelians. ONeills claim requires one to overlook numerous statements from Marx about the natural laws of capitalist production. In the preface to the 1867 German edition of Capital, Marx refers to capitalist societies working with iron necessity towards inevitable results. Marx considered himself a scientist, and his predictions were those of a scientist - in the same way that Einstein made predictions based on the theory of general relativity. The reality is that, as with all great thinkers, Marxs thought was full of aporias and paradoxes. For Marx, there was an on-going tension between his realization that society is the product of nondetermined human action and his desire to discover the laws of history and society. Cornelius Castoriadis calls this the antinomy of Marx, and it reflects the paradox of the Enlightenment. Enlightenment thinkers wanted to both articulate the rational policies of a society that is in tune with nature and celebrate the free individual. However, if history is governed by rational laws, then human agency is meaningless. ONeill asks if those currently name-dropping Marx have read Chapter 32 of Capital. This is a puzzling question, given that it is precisely the chapter in which Marx offers one of his most

widely quoted phrases about the inevitability of capitalisms collapse: The knell of capitalist private property sounds. The expropriators are expropriated. This knell comes out of the capitalist mode of production and it is coming with the inexorability of a law of Nature. The laws of historical motion are akin to gravity in their necessity. As surely as the river flows to the sea, history flows toward industrial communism. This was the outcome of historical materialism. Marx focused on the mode of production because he saw it as the intersection of society and the material and, therefore, as the essential component for understanding society scientifically. This does not mean there is no anti-teleological element to Marx. There absolutely is, after all he did write, Men make their own history. Especially in his early writings, Marx appears to be wrestling with this insight, and the conflicting belief that there are laws of history and society that can be discovered, explained and used to make predictions. One attempt to resolve this antinomy is found in the proviso to his famous line quoted above: but they do not make it as they please. The conflict can be seen in his description of the laws of capitalist society as both natural and immanent. Castoriadis cites the on-going battle between these two incompatible lines of thought as one of the reasons Marx failed to finish the ambitious project he set about in writing Capital. Unfortunately, in Marxs most important works, the search for the laws of society and history tended to win out over his realization that we make our own societies and own history. It is precisely Marxs realization that our societies and histories are the product of conscious and creative people that renders his teleological analysis largely irrelevant in the context of the current crisis. Marxs rationalist materialist political economy led him to claim that financial instruments like those at play in the current situation are the perfect fetish. They are hollow; a once-removed appropriation of surplus value. The current crisis is, from a Marxist perspective, a fiction. It may be a fiction that has some real consequences, but it ultimately remains a fiction. It has no roots in the material and, therefore, it is not real. The crisis and collapse of capitalism as foreseen by Marx is a necessity of the system of production. It is a crisis from within the nuts and bolts of capitalist-controlled industry. The predicted crisis grows out of his metaphysical belief that labour is the source of value. According to Marx, the accumulatory process that drives the capitalist involves both a financial and a material accumulation. The financial has to become the material in the hands of the functioning capitalist. This requires ever growing amounts of labour and draws upon technological progress. This progress provokes increasing centralization of production and capital: One capitalist always kills many. Proletarianization and centralization result in the economizing of all means of production by their use as means of production of combined, socialized labor, the entanglement of all peoples in the net of the world-market. Centralization of the means of production and socialization of labor at last reach a point where they become incompatible with their capitalist integument. Thus integument is burst asunder. The knell of capitalist. Well, you know the rest. Is this what is happening? No. You would be hard pressed to find anyone who claims that labour is becoming increasingly socialized. This does not mean a Marxian materialist analysis has nothing to say about the current crisis. Marx recognized well before other theorists that capitalism is not a smoothly operating system. He certainly knew that capitalists were capable of turning crises to their own advantage. However, he still regarded such crises as secondary to the primary operation of productive capitalist accumulation. Marxs analysis was rooted in the heavily competitive cotton mills of newly industrialising Britain. The reality of contemporary capitalism is well

removed from those heady days of full liability, low entry costs, frequent bankruptcies, rapidly expanding demand, and a large quantity of available labour - turning man, woman and child into wage-slaves. Where Marx once saw a distinction between productive capital and finance capital with value only created and accumulated through the utilisation of labour in production, a modern analysis makes it clear that such a distinction is impossible. Consider just one corporation as an example. Caterpillar is as productive a corporation as one could imagine. Their products are utilised by the primary industries. They make use of smoke belching factories. They employ workers that are organised into assembly lines within those factories. Yet, one of its most profitable business segments is Cat Financial. At just 7% of revenue and sales, it generates 15% of profits. Most of its lending is to its dealers and customers so that they can buy Cat built machinery. The productive aspect of Caterpillar is intimately dependent upon the financial aspect. How are we supposed to separate the financial from the so-called real? The answer: we cant. If Marxs analysis of the laws of capitalist economy cannot help us understand the current crisis, then might his acknowledgment that we are responsible for our societies and histories serve us better? The first thing we would conclude is that this crisis emerged, not because of any inevitable historical necessity, but because of immanent decisions made by those who have political economic power. The situation emerges from the actions of particular peoples with their own subjective desires and capabilities. This is not the same as saying it was planned and implemented. However, both policy and business choices were made that have contributed to the crisis. There will be capitalists who benefit from the crisis and it is not beyond belief to imagine that conscious actions were taken to provoke a situation in which they would be able to differentially accumulate - that is, accumulate relative to other capitalists. In fact, before Naomi Klein was talking about the Shock Doctrine or Disaster Capitalism, Jonathan Nitzan and Shimshon Bichler demonstrated that the other side of capitalist expansion is accumulation through crisis. This also means that, apart from a challenge to the system of capitalism as a whole, all capitalist crises are merely a crisis for one subset of capital. For others, such crises present an opportunity. Most importantly, an immanent perspective on history and society make a necessity of struggle. The current crisis is not the inevitable collapse of capitalism, as there will be no inevitable demise written into the code of capitalism. If we wish to proceed beyond the capitalist system, we will have to imagine alternatives and work toward them.
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