Byline: FRANCIS WHEEN
The way to save capitalism will be hotly debated in London this week and suddenly the man who predicted its demise is fashionable again. Two writers argue over his legacy
YES - BOOM AND BUST IS INEVITABLE says FRANCIS WHEEN "OF COURSE," the French theorist Louis Althusser wrote, "we have all read, and all do read, Das Kapital." What a posturing ninny he was: of course we haven't and we don't. Even Althusser himself, who produced a book on Karl Marx's magnum opus, eventually confessed in his memoirs that he was a "trickster and deceiver" who had read no more than "a few passages of Marx".
Yet in a broader sense he was right: ever since the publication of Das Kapital's first volume in 1867 -- the only one completed in Marx's lifetime -- we have read it in the world about us, in the dramas and conflicts of contemporary history.
Like Moliere's bourgeois gentilhomme who discovered to his amazement that for more than 40 years he had been speaking prose without knowing it, many have absorbed Marx's ideas without ever noticing. Think of the famous slogan that Bill Clinton's campaign staff stuck on their wall during the 1992 presidential election, "It's the economy, stupid!", a perfect precis of Marx's argument that we are creatures of our material circumstances.
Since the latest crisis began I've heard many people say that "we're all Keynesians now" -- a reference to the most influential economist of the 20th century who challenged the notion that capitalism had a natural tendency to regulate and balance itself. John Maynard Keynes, who was born in the year of Marx's death, argued that its occasional crises were intrinsic to the system, not negligible aberrations.
So did Karl Marx. No one claims that we're all Marxists now but I do think the old boy deserves some credit for noticing that it's the economy, stupid -- and that many of the apparently omniscient titans who ascend the commanding heights of the economy are not so much stupid as downright imbecilic, driven by a mad exploitative greed that threatens us all.
Marx's work is not holy writ, despite the strivings of some disciples to present it as such. The fact that he brilliantly discovered a new continent -- the contours of capitalism, with its precipitous cliffs and fatal crevasses -- doesn't mean that he mapped it all correctly. The fall of the bourgeoisie and the victory of the proletariat have not come to pass.
Even so, he exposed for the first time that capitalism is a force of creative destruction, and that its most lethal wounds may be inflicted by its own weapons. "All that is solid melts into air," he wrote -- as good a summary as one can imagine for the headlines of the past year, which revealed even apparently robust and prudent Scottish banks to be as flimsy as Posh Spice's underwear.
Gordon Brown told me almost a decade ago that he had read and admired one of my books about Karl Marx. Why, then, did he keep reciting that ridiculous mantra, "No return to boom and bust"? Marx, for all his faults, would never have said anything half so silly. Even in capitalism's infancy he could see that it depended on boom and bust, just as humans live by inhaling and exhaling.
In the Communist Manifesto of 1848, Marx noted "the commercial crises that by their periodical return put on trial, each time more threateningly, the existence of the entire bourgeois society". As every war contains the seeds of another war, so each crisis makes the next crisis inevitable.
The credit crunch was caused by reckless lending and spending. What was Gordon Brown's solution? To urge the banks to lend even more. "That is to say," as Marx wrote more than 150 years ago, "by paving the way for more extensive and more destructive crises, and by diminishing the means whereby crises are prevented." The first consequence of a recession is a huge fall in prices and depreciation in capital; but that restores the rate of profit, enabling investment and growth to resume. …