12:00 AM, May 31, 2018 / LAST MODIFIED: 01:33 PM, May 31, 2018

The Ghost of Marx

Courtesy: Medium

A ghost is haunting the global capitalist elites—the ghost of Karl Marx. On the day of the 200th birth anniversary of Marx (May 5, 2018), the influential conservative journal, The Economist observed: "why does the world remain fixated on the ideas of a man who helped to produce so much suffering" (The magazine referred to famines, gulags and party dictatorships. Interestingly, one of the top leaders of the global capitalist system, Jean-Claude Junker—the president of the EU Commission, remarked: “Marx isn't responsible for all the atrocity his alleged heirs have to answer for”).

The magazine also finds Marx's vision of post-capitalist future "dangerous" since it "…provides a license for the self-anointed vanguard to impose its vision on the masses". On the same day, a highly puzzled columnist of the conservative daily, The Telegraph, noted "the truly extraordinary thing (about Marxism) is that, despite that monstrous record, it remains intellectually respectable". The most serious warning came from Mark Carney, Governor of the British central bank (Bank of England). Observing that automation of millions of jobs might lead to mass unemployment, wage stagnation and the growth of communism within a generation, he warned that "Marx and Engels may again become relevant". I could go on and on quoting dozens of statements coming from capitalist elites and conservative intelligentsias (some of which are pretty desperate), especially since the global financial crisis of 2008. But let me stop here.

Why Marx now?

The million dollar question is why Marx and his ideas are deemed so dangerous and influential at the current juncture of the history of global economy? I believe one of the most important reasons for this is that we have gone back to the reality of the 19th century capitalism (when Marx wrote about the nature and dynamics of this economic system) with far more brutality and class oppression and more efficient class war against the 99 percent by the one percent. As Warren Buffett, the third richest person in the world (valued at USD 83.6 billion) noted recently: “There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning” (Bank owners in Bangladesh, I assume, can claim the same with one hundred percent confidence and credibility). Sven-Eric Liedman correctly noted in a new biography of Marx: “It is the Marx of the 19th century who can attract the people of the twenty-first".

I said "we" above to essentially indicate the advanced economies, not the developing countries like Bangladesh since the latter countries have hardly went beyond the reality of 19th century capitalism (think of our Dickensian reality—Rana Plaza, the sweat shops, barely surviving wage rates, de facto barriers to formation of workers' union, the urban slums and the landless peasants, among others).

Note that during the 20th century, especially after the '40s, Karl Marx's ghost was not "haunting" Europe and North America that much. He was rather haunting the late- and post-colonial world—the peripheries of capitalism (where all agrarian "socialist" revolutions and nationalist movements influenced by radical ideologies occurred). The western world managed the crisis with Keynesianism, welfare states, robust regulations, compact agreements/social contracts with trade unions/workers etc. Inequality went down a considerable extent and capitalism was tamed to a certain degree by the prudent political elites, social democratic parties, particularly.

Lest you doubt my evidence and arguments, in the narrative below, as Marxist-biased or worse, as "fake news" and "alternative facts", I will heavily use non-Marxist sources—both liberal and conservative.

Who have, so far, endorsed Marx's relevance for understanding 21st century capitalism?

The following list is but a very small sample of a large and growing pool of endorsements (since 2008):

The Economist (conservative): "Why Marx was right"; "Rulers of the world: read Karl Marx". Financial Times (London, conservative): "Why Karl Marx is more relevant than ever"; New York Times (liberal): "Happy Birthday, Karl Marx. You Were Right!"; Desh magazine (Kolkata, liberal): "As long as capitalism exists throughout the world, exploited people will consider Marxism as indispensable"; EU Commission President Jean-Claude Junker (conservative): "Anyone would do well in remembering Marx because remembering and understanding are part of securing the future"; Liberal economists Nouriel Roubini (Professor, NYU—who became famous for correctly predicting the 2008 financial crisis: "Karl Marx had it right”); and Paul Krugman, (Nobel laureate): Marx's economic analysis of capitalism cannot be avoided while discussing current financial crises.

Why are they endorsing Marx?

For the sake of brevity I will just focus on three sources: The Economist (magazine), Professor Nouriel Roubini, and Nobel Laureate Paul Krugman.

Paul Krugman brought the relevance of Marx to explain the crises of 21st century capitalism in a quite dramatic manner in a New York Times op-ed. He observed that the American economy continued to be deeply depressed. But at the same time corporate profits remained at a record high. His explanation of this apparent paradox was that profits continued to increase rapidly as a share of national income, while wages and other labour compensations are decreasing. For this reason capital is "doing fine by grabbing an ever-larger slice, at labor's expense". And then surprised by his observations he said: "Wait — are we really back to talking about capital versus labor? Isn't that an old-fashioned, almost Marxist sort of discussion, out of date in our modern information economy?" He argued that economists like him largely avoided the capital/labour dimension of inequality since "It has echoes of old-fashioned Marxism — which shouldn't be a reason to ignore facts, but too often is. And it has really uncomfortable implications.”

Professor Nouriel Roubini's reference to Marx in the context of understanding the dynamics of capitalism was blunt and straightforward. In an interview with the conservative daily Wall Street Journal, he observed that Marx's analysis of crisis of capitalism was playing itself out in the recent financial crises. He was indicating the argument of Marx that capitalism's internal contradictions tend to crisis in a cyclical manner. Echoing Marx's relevant theory he remarked: "At some point capitalism can self-destroy itself. That's because you cannot keep on shifting income from labor to capital without not having an excess capacity and a lack of aggregate demand. We thought that markets work. They are not working. What's individually rational ... is a self-destructive process."

The Economist exhorted "liberal reformers" that "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." What are the "serious faults" of contemporary capitalism that The Economist was referring to? The magazine agrees with Marx that capitalists are rent-seekers too and such rent-seeking has reached abysmal proportions. The statistics provided by the magazine is mind boggling: while in 1980 the top executives of the 100 biggest listed firms earned 25 times more than a typical employee, in 2016 the same executives earned 130 times more. In addition to these bloated salaries they also get fat pensions, "private health-care and golden hellos and goodbyes". Another issue pointed out by the magazine where it thinks Marx's prognosis has been accurately realised is the monopolisation/concentration of capital as it progresses: According to the magazine, the number of listed companies has gone down considerably while profits are close to their highest levels ever. The statistics it provides is stunning: "Google controls 85 percent of Britain's search-engine traffic". Also "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". The list, of the relevance of Marx's predictions to the actual reality of the 21st century, goes on and on.

Back to the ghost story

The Communist Manifesto's most famous line: "A spectre is haunting Europe—the spectre of communism”, have a Shakespearean quality as recently pointed out by the eminent Greek economist Yanis Varoufakis, also a former Finance Minister of Greece. Hamlet, confronting his murdered father's ghost, who appealed to his conscience, to correct a moral corruption, was forced to give up the Hamletian dilemma ("to be or not to be") and take a position.

As I said earlier, in the 21st century, it is not the spectre or ghost of communism but the ghost of Marx that is haunting us. His ghost, as a wise father figure, pleading to us—the entire humanity—to take a position. Like Hamlet, we too have dilemmas: the question is—is it nobler to put up with all the nasty things that capitalism throws your way (to be an atomised precarious proletariat as in non-contractual jobs in the gig economy, to be alienated, to surrender our self and identity to Facebook, to be a dupe of consumerism, to let the ecological/environmental disaster continue unabated) or should we fight against such apparently inexorable forces of history and achieve freedom?

Mirza Hassan is a researcher and his works focus on the political economy of development and social change. He can be contacted at mirzahass@gmail.com

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