Brad DeLong on Karl Marx

Evaluating Karl Marx as Political Activist: Morning Coffee for Holy Thursday

Good morning. I am Brad DeLong. And this is my morning coffee–my morning coffee for Holy Thursday.
Yesterday I said that I divided up–that we divide up–Karl Marx into three: Marx the economist, Marx the political activist, and Marx the moralist prophet, and that I might talk about Marx the activist and Marx the prophet some other time. And Holy Thursday appears to be a good time.

Marx the political activist. Marx the political activist had five reasons that he thought it necessary and possible to work to overthrow the current system. First, he believed that because capital is not a complement to but a substitute for labor, and so technological progress and capital accumulation that raise average labor productivity also lower the working-class wage. Hence the market system could not and in the end would be seen to be unable to deliver the good society we all deserve, and so it must and will be overthrown. This seems to me to be simply wrong.

Second, Marx believed that businessmen continually extend the domain of captalism, and competition from poor workers in newly-incorporated peripheral regions puts a lid on the wages of labor. Hence inequality grows in the core, which should and in the end must trigger revolution. This seems to me to be largely wrong as well: it is very possible for the international economy, if properly managed, to balance up and not balance down as far as the level of real wages is concerned.

Third, Marx believed that previous systems of hierarchy and domination maintained control by hypnotizing the poor into believing that the rich in some sense “deserved” their high seats in the temple of civilization. Capitalism, Marx thought, unveils all–replaces masked exploitation by naked exploitation–and without its ideological legitimation, unequal class society cannot survive. This also seems to me to be completely wrong on its own terms–see Antonio Gramsci, passim, also Fox News.

Four, Marx believed that even though the ruling class could appease the working class by sharing the fruits of economic growth, they would not. They were trapped by their own ideological legitimation–they really do believe that it is in some sense “unjust” for a factor of production to earn more than its marginal product. Hence social democracy would inevitably collapse before an ideologically-based right-wing assault, income inequality would rise, and the system would be overthrown. The Wall Street Journal editorial page works day and night 365 days a year to make Marx’s prediction come true. But I think they will fail.

Fifth, Marx believed that factory work–lots of people living in cities living alongside each other working alongside each other–would lead people to develop a sense of their common interest and of class solidarity, hence they would be able to organize, and revolt, and establish a free and just society in a way that they could not back in the old days when the peasants of this village were suspicious of the peasants of the next village. Here I think Marx mistook a passing phase for an enduring trend: active working-class consciousness as a primary source of loyalty and political allegiance was never that strong; nation and ethnos seem to trump class much more often than not.

There is very little in Marx the political activist that is worth paying attention to–in fact, I would say that there is less than nothing once you recognize that his own polemical habits and his failure to prophesy what would happen after the Revolution created the cracks that turned Marx’s world-religion into one of the greatest evils humans have ever managed to create.
I’m Brad DeLong, and this is my morning coffee.

Afternoon Coffee: Relevance of Marx

That’s Karl Marx, not Groucho, I’m talking about today. I am Brad DeLong, and this is my afternoon coffee…

This week I asked my graduate students to write on the following question: whether–and how–Karl Marx is relevant to a twenty-first century neoclassical economist. They turned it around, and asked me to answer the same question. So here goes…

First, let me say that I am here to talk about Marx the economist. Marx did not divide himself into Marx the moralist-prophet, Marx the political activist, and Marx the economist. But we do. I’ll talk about Marx the moralist-prophet and Marx the political activist some other time. But today I am interested only in Marx the economist, who I think is worth studying for five reasons:

First, Marx the economist was among the very first to get the industrial revolution right: to understand what it meant for human possibilities and the human destiny in a sense that people like Adam Smith did not.

Second, Marx the economist got a lot about the economic history of the development of modern capitalism in England right–not everything, but he is still very much worth grappling with as an economic historian of 1500-1850.

Third, fourth, and fifth, Marx made a three-fold critique of the capitalist economy he say developing. He believed, third, that a system that reduced everybody to some form of prostitute working for wages and wages alone–in which people viewed their jobs not as ways to gain honor or professions that they were born into or as ways to serve their fellow-man or expressions of their inmost essence as a species-being but as ways to earn money so that you can begin your real life when the five o’clock whistle blows–that such an economy is an insult, delivering low utility, and also sociologically and psychologically unsustainable in the long run.

Fourth, Marx believed that the capitalist economy was incapable of delivering an acceptable distribution of income for anything but the briefest historical epochs.

Fifth, Marx was among the very first to recognize that the fever-fits of financial crisis and depression that afflict modern market economies were not a passing phase or something that could be easily cured, but rather a deep disability of the system–as we are being reminded once again right now, this time with Ben Bernanke in the Hot Seat.

Now we modern neoliberals have parries to these latter three critiques.

On the business cycle, we respond that Keynesianism–or monetarism, if you prefer–gives us the tools to transform the business cycle from a life-threatening economic yellow fever of the society into the occasional night sweats and fevers: that with economic policy quinine we can manage if not banish the disease.

On the distribution of income, we respond that Beveridgism or Myrdahlism–social democracy, progressive income taxes, a very large and well-established safety net, public education to a high standard, channels for upward mobility, and all the panoply of the twentieth-century social-democratic mixed-economy democratic state can banish like bad dreams all Marx’s fears that capitalist prosperity must be accompanied by great inequality and great misery.

On the cash nexus, we modern neoliberals shrug our shoulders and say that we are in favor of a market economy but not of a market society, and that there is no reason why people cannot find jobs they like or insist on differentials that compensate them for jobs they don’t. And we go on to say that the demand for and forecast of utopia–that jumped-up monkeys with big brains be perfectly happy–is a demand and forecast that belongs in the Book of Daniel or of the Apocalypse, not something that has any place in a work of political economy relevant to this fallen world.

I am Brad DeLong. And this is my afternoon coffee.

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