This is an edited version of a talk given to the international forum, ‘Marx-XXI, 200 years after the birth of Karl Marx’, 17–19 May 2018, Lomonosov Moscow State University.
In April, the respected American bourgeois newspaper, the New York Times, published an article by Jason Barker, an associate professor of philosophy, with the cheerful title: ‘Happy Birthday, Karl Marx, you were right!’11 NYT, 30 April 2018.View all notes Soon after, the voice of the City of London, the equally respected and equally bourgeois Financial Times featured a book review by the economic historian Adam Tooke under the impressive headline, ‘Why Karl Marx is more relevant than ever’.22 Sven-Eric Liedman, A World to Win (London: Verso, 2018), reviewed in FT, 4 May 2018.View all notes.
The unavoidable question is posed: why do these internationally influential press organs of powerful sections of the capitalist class publish such celebratory articles praising the most implacable revolutionary enemy of their class?
Clearly, and surprisingly for its declared enemies and disappointed former supporters, Marx’s legacy is still alive and well, and retains its relevance — even in the camp of its enemy.
The mantra of its death that dominated political discourse in the decades after the collapse of the Soviet Union can no longer be sustained. Marx was supposed to be buried long ago, together with communism, revolution, even history itself. Now the ‘Red Knight returns’; no longer as a ‘specter’ or ‘specters’, as in the famous, and in one sense even prophetic 1993 book by Jacques Derrida.33 Jacques Derrida, Specters of Marx: The State of the Debt, the Work of Mourning and the New International (London: Routledge, 2006).View all notes Now he is back, vindicated in his analysis and prognosis (‘You were right!’ trumpets the New York Times). He is even considered as being ‘more relevant than ever’ — as judged by the press that is the most hostile to his revolutionary ideas and to the revolutionary praxis inspired by them.
The New York Times and Financial Times obviously have not become Marxist or even ‘Marx-friendly’. The reason for the publication of such articles can be found in a passage in the NYT article cited above. It refers to Nouriel Roubini, the mainstream economist and financier who became famous, post festum, because he was one of the very few amongst his colleagues who sensed and warned of the coming catastrophe: the eruption of the world capitalist crisis, after the collapse of the US sub-prime mortgage market in 2007, the debacle of Lehman Brothers in 2008, followed by the global financial meltdown and the Great Recession (or ‘Third Great Depression’).
‘Even liberal economists such as Nouriel Roubini’, Barker writes in NYT, ‘agree that Marx’s conviction that capitalism has an inbuilt tendency to destroy itself remains as prescient as ever’. Such statements are often dismissed as ‘catastrophist’ by self-proclaimed skeptic ‘Marxists’ or former Marxists who prove to be more optimistic about capitalism’s future than the capitalists themselves — and the latter are the ones with something to lose!
This belated recognition of Marx’s prescience by his opponents has more to do with the historic failure of bourgeois economics itself than with a real understanding of Marx and of his discovery of the contradictions and immanent limits of capitalism as a social mode of production which drive it towards crises and historical oblivion.
This defining failure to understand Marxism was dramatised in the meeting of leading bourgeois economists convened by Queen Elisabeth in the aftermath of the 2007–2008 global crash. Silence fell when the queen asked why all of them — economists, thinktanks, bankers and banks, institutions such as the International Monetary Fund — completely failed to see, predict or warn of the coming global financial catastrophe?
Ten years later, after more than a decade of continuing, unresolved global capitalist crisis, now threatening the world with new, more devastating economic, political and geopolitical explosions, the royal question remains unanswered. Not only can bourgeois economics not explain the past — the lack of prognosis leading up to the 2007 global crisis and the lack of retrospective understanding of its deepest causes — it also cannot understand the present. In cannot fathom why the crisis remains unresolved, despite the extraordinary heterodox measures taken by central banks and governments — gigantic stimulus packages, quantitative easing and nearly zero interest rates. Last but not at all least, it cannot anticipate the future, although sinister signs are already appearing on the horizon.
‘While we just about mustered the palliatives to survive the previous slump, there is no confidence we’ve got enough left in the cupboard for next time’, says Tom Clark answering yes to the Financial Times’ question — ‘Has economics failed?’44 FT, 24 April 2018.View all notes
Even while answering no to the same question, the optimist economist Chris Giles still comments: ‘The future is uncertain. The present is uncertain. The past is uncertain.’55 FT, op. cit.View all notes
It is worthwhile looking at the presentation by Janet Yellen, former chair of the US Federal Reserve, to the 18th Annual Hyman P. Minsky Conference on the state of the US and world economies.66 16 April 2009.View all notes This was titled ‘A Minsky Meltdown: Lessons for Central Bankers’.
She emphasised that the crash represented a very serious ‘systemic breakdown’. She challenged superficial approaches that blamed ‘complacency by investors’ for the crisis. She also rejected as narrow, mainly nationally based, the hypothesis advanced by her predecessor chair of the Fed, Ben Bernanke, that the main reason was that
a glut of foreign saving mainly generated in developing countries such as China and India fueled demand for dollar-denominated assets [which] combined with a low US personal saving rate, large US government deficits, and high productivity gains to produce a huge current account deficit.
Yellen bases her approach on Hyman Minsky’s ‘financial instability hypothesis’ — which was quite popular after the crash. She stresses that in 2008
the Minsky meltdown is global in nature reflecting the ever-increasing interconnectedness of financial markets and institutions around the world. The recession is the first during the post war period to see simultaneous contractions in output in Europe, Japan, and North America.
Consistently based on the Minsky approach, Yellen, from the very first as well as in her 2009 speech, supported all the heterodox measures taken by the Fed (and much later by the European Central Bank) to restrain the slide into the abyss. As I have outlined, these meant introducing huge ‘stimulus packages’, near zero interest rates, and quantitative easing (QE) schemes that provided trillions of dollars in liquidity. For Yellen all these were ‘Minsky’s policy prescriptions’. She approvingly quotes Paul McCulley who emphasised the importance of QE, referring to it as ‘the reverse Minsky journey’; that is, reversing the production of high-risk finance speculative and Ponzi bubbles. 77 Paul McCulley, ‘Saving Capitalistic Banking from Itself’, Global Central Bank Focus, Pacific Investment Management Company, February 2009.View all notes
The problem is that, ten years after all these applications of Minsky’s policy prescriptions — lavishly praised by Yellen and all Minskyans, whether liberal or left — the result has been failure. Even worse, they produced gigantic financial speculative bubbles even bigger than those that popped in 2007–2008, thus threatening devastating new explosions.
The current debates about a more ‘activist’ or a ‘prudent’ monetary and interest increase policy for ‘bubble’ management are hopeless and impart a sense of déjà vu. The same fruitless arguments were exchanged ten years ago, as referenced in the 2009 speech by Janet Yellen.
It is not only a gifted and insightful post-Keynesian like Minsky, or his admirers like Yellen, who are refuted by reality. During the past decade we have seen the demonstrable failure of both policies opposing neo-liberal monetarists focusing on money circulation without fiscal measures and the post-Keynesians supporting the combination of fiscal and monetary central interventions. Both economic strategies elaborated by competing schools of bourgeois economics after the 1929 Crash and Great Depression — Keynesianism and neo-liberalism — have, in all their shades and combinations, proved totally unable to deal with the on-going capitalist crisis and the global contradictions driving it. As we have stressed on other occasions, the failure of bourgeois economics represent a strategic impasse for capitalism; what we had dubbed the death agony of homo economicus — that is, of the methodological individualism of bourgeois political economy. To put it simply — the capitalist class is running out of strategic economic options. Thus, we see the turn to imperialist aggression and war.
The results of this impasse can be seen by all. The reversal now of the desperate measures taken after Lehman Brothers collapse proves to be a medication worse than the disease. Starting from the US Fed and soon followed by the European Central Bank, a reversal of the ‘reverse Minsky journey’ is taking place. This is manifest in the ending of the QE programmes and increases in interest rates. This apparently prudent ‘reversal of the reverse Minsky journey’ has already created havoc — particularly in the context of rising protectionism and Trumpian trade wars; sharpening international antagonisms; dramatically increasing geopolitical risks; internationally expanding wars; even a generalised chaos as in the Middle East. The new dramatic situations in Argentina and Turkey are symptoms of the deteriorating global crisis, with the collapse of their currencies, over-indebtedness, deficits and/or the desperate turn towards the International Monetary Fund’s strictures — as the neo-liberal President Macri has done, rightly condemned by its victims, the Argentine people. Not only social economic disasters and barbaric wars are on the agenda, but also popular uprisings and revolutions.
It is this last prospect that frightens the ruling classes. It is what makes liberal economists, who also perceive the danger, reluctantly acknowledge the strength of Karl Marx’s analysis of capitalism. They are alarmed by the fact that his prognosis of the tendency of capitalism to self-destruction is empirically confirmed. It obviously does not mean that they grasp his method of historical materialist dialectics, nor that they share his revolutionary conclusions.
Many analysts — liberals, some lefts and even conservatives — can see today, in these conditions of unresolved global crisis, that it is quite possible that there can be an end to the crisis-ridden, declining capitalist system. What is unthinkable for them — impossible for them to envisage (especially after 1989–91 and the collapse of Stalinism) — is not the end of an old world, but the beginning of a new one.
Hegel, despite his idealist world view, could grasp and theorise the contradiction. In his Philosophy of the Right, he sees that historical decline, the decadence of the old, is the negative form of appearance of the emergence of the new, a transition through the sharpening of the contradictions immanent in the old formation. If the conditions for the resolution of the contradictions are not present — if a dialectical Aufhebung is impossible — then the outcome is the mutual ruin of the opposing poles of that contradiction.
A real, dialectical Aufhebung, according to Marx, is not a reconciliation of the opposites; a Hegelian pseudo-negation of negation.88 K. Marx, 1844 Manuscripts.View all notes Actually, it is a break in continuity — a Cäsur to use the term of Hölderlin. It is a qualitative leap, a revolutionary transformation of both poles of the contradiction.
Of course, this dialectical path of cognition is considered simply as metaphysics by the dominant theoretical strands of positivism; particulalry among economists and sociologists. In his critque of bourgeois political economy, Marx showed that its main methodological flaw was its incapacity to go deeper than the surface appearances of phenomena; to distinguish them from essence, the inner driving contradictions.
In the post-2007 global crisis, neo-liberal or post-Keynesian economists (including Minsky and theorists of ‘financialisation’, liberal or left versions) primarily (or solely) see a crisis of the dominant, deregulated, over-expanded finance sector of the capitalist economy. In this way, they separate this sphere from that of production; from the production of surplus value and capital valorisation. Thus, its mediated dependency on the capital accumulation process clashing with its immanent limits is obscured and, in the last instance, from the value relation based on the twofold nature of social labour — abstract and concrete. Without a critique of classical political economy’s labour theory of value — as Marx undertook in his magnum opus, Das Kapital — it is impossible to have a scientific conception of the mediations between value, money, money capital, credit and finance. For this reason, Marx is more pivotal than ever as the theoretical compass and indispensable methodological guide in today’s global, historical, structural and systemic crisis of globalised capital.
The primary cause of the current crisis is not ‘irresponsible de-regulation of globally over-expanding finance’ in all its exotic ramifications. Is the problem still to be solved by a kind of Minskyan re-regulation, or a recognition that ‘Die wahre Schranke der kapitalistischen Production ist das Kapital selbst’?99 ‘The real barrier of the capitalist production is capital itself.’ Das Kapital, III, Marx/Engels Werke, Vol. 25, p. 260View all notes
Marx emphasises that It is that capital and its self-expansion appear as the starting point, the motive and the purpose of production; that production is only production for capitaland not vice versa, the means of production are not mere means for a constant expansion of the life process [Lebenprozesses] of the society of the producers […] The means — unconditional development of the productive forces of society — comes continuously into conflict with the limited purpose, the self -expansion of the existing capital.1010 K. Marx, Capital Vol. 3 (Moscow: Progress, 1974), p. 250.View all notes
Capitalist globalisation of the last three decades — leading to the 2007 implosion — has driven this continuous conflict in the inverted relation between means and purpose to its extremes. The over-accumulation of capital exacerbated by liberalisation and globalisation of finance reached a crucial point of irreconciliable incompatibility with the pressing, illimited demands of what Marx calls the life process — Lebensprozess — of society, including living Nature. Against all forms of economicist distortions of the mechanical pseudo-Marxism of the Second International and of Stalinism, we have to grasp again that life itself is the central category of Marx’s revolutionary theory.
Marx profoundly analysed and foresaw the tremendous role of credit both to a ‘monstrous1111 Ungeheure in German, K. Marx op. cit., p. 452.View all notes expansion of the scale of [capitalist] production and of enterprises’, as well to the explosion of crises: ‘credit accelerates the violent eruptions of this contradiction-crises — and thereby the elements of disintegration of the old mode of production’.1212 Marx, op. cit., p. 441View all notes
Here, the deepest nature of the current global crisis can be clearly seen. Not only a crisis of capital over-production as a way out from the predicament, but ‘elements of disintegration of the old mode of production’- and even more important moments of transition beyond the disintegrating old world capitalist system to a new mode of production:
The two characteristics immanent in the credit system are, on one hand to develop the incentive of capitalist production, enrichment through exploitation of the labour of others, to the purest and most colossal form of gambling and swindling and to reduce more and more the number of the few who exploit the social wealth; on the other hand, to constitute the form of transition to a new mode of production.1313 Marx, op. cit.View all notes
Everybody, not only professional economists, can see today’s world taking the form of a colossal casino of financial gambling and swindling. Everybody can see the monstrous ever-growing inequality, when, in 2017, according to Oxfam, 82 per cent of the global wealth generated last year went to a parasitical oligarchy of the world’s richest 1 per cent. What cannot be seen is the transition beyond this hell, to a new, truly human world, namely world communism — a new global community without exploitation, oppression, or the humiliation of human beings by others. The fallacious myth of late Thatcherite orthodoxy — TINA (‘There Is No Alternative’) — still holds sway, unfortunately, despite the bankruptcy of Thatcherite neoliberalism in 2007 . The most important contribution by Marx for today’s world is precisely to provide a guiding method to grasp the driving forces of our epoch of transition in the present historical moment of the greatest dangers for humankind.
The representatives of the old, dying world repeat ad nauseam the statement of the economist I cited earlier in this talk: ‘The future is uncertain. The present is uncertain. The past is uncertain.’ Those who base themselves solidly on Marx’s legacy and fight for a liberated world can proclaim the opposite.
The present period of crisis is the present to be grasped in theory and fought in revolutionary practice as a living, not predetermined history of social struggle for universal human emancipation. ‘History’, Marx warns in the Holy Family, ‘is not, as it were, a person apart, using man to achieve its own aims; history is nothing but the activity of man pursuing his aims.’
The past is not a burden of deceptions and defeats to be forgotten. Marx is crucial to understanding not only the distortions of his theory by epigones and bureaucrats, who used it either for class collaboration and reformist accommodation to capitalism, or as a state ideology of Stalinist bureaucratic self-justification. No, without Marx, we cannot discover the precious lessons of the revolutionary past with all its uncompleted demands still pressing. We cannot save the ‘Tradition of the Oppressed’, as Walter Benjamin called it; the legacy of all the epic victories and tragic defeats of the world socialist revolution after its beginning in Russia, in October 1917.
Above all, Marx with his historical materialist theory of transition and his development of dialectics as the algebra of revolution opens a horizon of the future, a future of a finally liberated humankind. Marx was not a soothsayer or an astrologist; he hates, as he said, to prepare recipes for the kitchens of the future. But this was a polemical attack against abstract utopianism, as Ernst Bloch explained, not a rejection of a concrete Utopia, realising on Earth and in the universe the deepest demands, expectations, and dreams for liberation of all processes of human life.
Quoting from a poem by Nekrasov, Lenin — that most realist of revolutionaries — insisted: We have to dream. To dream the future. And Karl Marx, first and above all, belongs to the future.
No potential conflict of interest was reported by the author.
Notes on contributor
Savvas Matsas studied Medicine at the Faculty of Medicine, University of Athens (1965–1971), and did his post-graduate studies in Radiology and Oncology in Paris, where he also studied Philosophy, History and Political Economy (1971–1974). During the last 30 years, Savas has published many books, articles and essays on philosophy, political economy, Jewish studies, history and literary theory based on a nondogmatic Marxism. He teaches philosophy and cultural studies at the National University of Athens. His essays have been translated to English, French, Spanish, Portuguese and Turkish. <email@example.com>
1 NYT, 30 April 2018.
2 Sven-Eric Liedman, A World to Win (London: Verso, 2018), reviewed in FT, 4 May 2018.
3 Jacques Derrida, Specters of Marx: The State of the Debt, the Work of Mourning and the New International (London: Routledge, 2006).
4 FT, 24 April 2018.
5 FT, op. cit.
6 16 April 2009.
7 Paul McCulley, ‘Saving Capitalistic Banking from Itself’, Global Central Bank Focus, Pacific Investment Management Company, February 2009.
8 K. Marx, 1844 Manuscripts.
9 ‘The real barrier of the capitalist production is capital itself.’ Das Kapital, III, Marx/Engels Werke, Vol. 25, p. 260
10 K. Marx, Capital Vol. 3 (Moscow: Progress, 1974), p. 250.
11 Ungeheure in German, K. Marx op. cit., p. 452.
12 Marx, op. cit., p. 441
13 Marx, op. cit.