ReMarx, II

As always, objections/corrections/brickbats welcome

Still reading Kolakowski, discovering all the ways I’ve drifted away from my youthful revolutionary delusions. I still find a lot of value in Marxism itself, as did Kolakowski, but some basic tenets are really non-starters for me.

The most obvious is the notion of an inexorable tendency towards revolts of the working class. This is supposedly fueled by growing immiseration, combined with the advancing technical competence required in production. Growing immiseration is not happening, quite the contrary in the most advanced industrial nations where the working class is supposed to become the most agitated and militant, to become self-taught in the ways of socialism.

The agitation we do observe, unfortunately, goes in opposite directions due to race and ethnicity. Marxism wasn’t ready for that. I like to point out that the premise that working people act on their material interests was recently blown up by their response to Covid health advice: many deliberately put their own lives at risk to make some daffy political statement.

I do like the idea of the division of labor, driven by technical progress, leading to the alienation of the worker from what he produces, to the dehumanizing reduction of workers to things. But the idea of abolishing the division of labor is nuts. Nor is it obvious that all workers resent being pigeon-holed in a specialized job. Of course, many, maybe most, do, but it depends. Me, I like the routine of knowing what I need to do without the need for someone to be looking over my shoulder all the time. Routine allows you to function at a semi-conscious level and get through the day.

The inevitability of revolution can merge with what was called “catastrophism,” the cousin to immiseration. I believed this, but I was 20 years old. I was impatient after finding how f**ed up the world was, contrary to comforting childhood fantasies, and became persuaded we could “make” a revolution. But revolutions are not made.

Upsurges happen but they are unpredictable. There are cases where a tightly-knit group of conspirators can take advantage of them, but usually they do not. In the U.S. we had Occupy and Black Lives Matter, which were essentially leaderless. No vanguard emerged to lead the masses to anything greater. Instead we got George Bush and Trump.

Another chestnut was the idea of the tendency of the rate of profit to fall, and overproduction leading to crisis, catastrophe, and revolution. Uh-uh. First off, it is not clear that any such tendency prevails. A long time ago, Paul Sweezy made a splash suggesting the tendency went in the opposite direction. In the U.S., profits have surged for some time, generating the inequality we have come to resent. Crises appear to originate in the financial sector, amplified by unstable international flows of capital. One of my heroes is Hyman Minsky, no Marxist, who was onto the tendency of finance to blow up.

In general, the instability resides in the financial sector, not in the domain of production itself. The growth of derivatives generates “notional value” far in excess of the value of real assets — plant, equipment, and housing. The great financial crisis of 2008 resulted from securities linked to house prices blowing up, when house prices stopped increasing.

Falling profits by some Marxists were associated with increasing concentration of industry. We certainly see the latter, but not with falling profits. Again, quite the contrary. Moreover, thanks to huge profits, the biggest monopolists have more slack to keep their employees content, if not deliriously happy.

It is interesting to note that the presence of monopolies led some in the early 20th Century to think that socialists could just take them over and redirect them. The same thought was reflected in a recent book I reviewed. Related discussion recently arose around Dan Davies’ new book. This also gives me the opportunity to recycle my old bit on how nationalization of the means of production is not all that.

In the early 20th Century there was the idea that the concentration of finance — the “Money Trust” — was holding back economic growth, but this was only understood relative to what might have been. As I noted in a previous posts about the Steve Fraser book “Every Man A Speculator,” even with the centralization of finance, the U.S. economy grew spectacularly until the crash. Then the big banks kept things from getting very much worse.

There is food never sold and hungry people, but that is not what I would consider “over-production.” It’s a politics-based failure of social insurance and the safety net. The great economist Amartya Sen did a book making the case that famines were not a result of an absolute shortage of food, but of a lack of income for the starving masses. Some firms do get over their skis, accumulate unsold inventory, and go bust, but I’m not aware of that pattern leading to general crises.

To me over-production means firms accumulating inventory and going broke for failure to sell their goods. This certainly occurs but not as far as I can see in some giant wave that brings the economy down. The problem seems to begin with speculation leading to over-priced shares of stock that eventually blow up, bankrupting those unfortunates holding the hot potato at the wrong time, Minsky’s moment again.

The road to socialism is discrete steps by means of parliamentary democracy, if there is any road at all. Catastrophe does not educate or mobilize the working class, it just seems to magnify its neuroses. In the U.S., we are further hampered by voting rules and a Constitution that enforces a two-party system, though that system is in jeopardy these days. If it goes away, we will miss it.