What would Marx think about us today? For some, the two-hundred-year-old ideas of the revolutionary German economist and political theorist Karl Marx still help explain the world around us. Others consider his theories obsolete, or even dangerous. After all, he was wrong about a global revolution of the proletariat, and regimes during the Cold War purporting to put his theories into practice were exposed as murderous, despotic, and corrupt. On the other hand, the 2008 global economic crisis has made many question whether unrestrained free markets really hold all the answers.
Marx would certainly recognise the problem of inequality in capitalism today. According to the aid organisation OXFAM, the world’s eight richest billionaires own as much wealth as the poorest 50% of people on Earth. Yet there is no revolution in sight. Perhaps not everybody feels the system is not working? The global economy is growing again, and over a billion people have been lifted out of poverty since 1990.
May 2018 will mark the 200th anniversary of the birth of Karl Marx, and February 2018 will be the 170th anniversary of the publication of the Communist Manifesto. To mark these dates, Debating Europe is launching a series of online discussions dedicated to examining the impact and legacy of Marx and his writings.
What do our readers think? We had a comment sent in from Carlos, who argues that the inequality we see around us today is proof that capitalism presents a serious danger to society. Is he right?
To get a reaction, we put Udo’s comment to Ulrike Herrmann, a German journalist whose career has focused primarily on the consequences of the global economic crisis. She has just written a book about what we can still learn from the “classics” like Marx and other political economists. What would she say to Carlos?
Yes, of course, Marx’s warnings about capitalism are still relevant, so Marx and Engels are still read today. One of the guiding questions was already there in the Communist Manifesto: how can it be that poverty exists in rich countries? That is still the question today, and also the question that Carlos is asking. There is a lot – a LOT – of wealth, and yet it does not benefit the majority. How can that be? That’s what Marx tried to explain. A key finding from his book Das Kapital is that a few large corporations control the entire production chain of products, so capitalism always leads to a concentration of wealth. That is still true today; we are still living in a world of large corporations.
To get another perspective, we put the same comment to Adrian Wooldridge, a British journalist and columnist for The Economist. What would he say?
I think what Carlos says is true, in that we’re seeing extraordinary concentration of wealth in the hands of a few people. There was a day last week when Jeff Bezos’ wealth increased by more $1 billion in a day. You have these gigantic Silicon Valley fortunes. I would say [we need] an inheritance tax. That means that some of these giant fortunes don’t exist forever.
You also have the casualisation of labour, by which I mean, the Uber economy, the Internet, is creating a market of just-in-time, on-tap labour, which is in a sense very ‘casual’ labour, and I think that if we’re going to have the majority of people without stable jobs, in ‘just-in-time’ employment, it creates a very unstable basis for society. I’m not absolutely certain about the casualisation of labour, but I think we’ll have to have certain rules about people paying into the tax system for their own retirement, maximum hours of work, and we will have to introduce certain formalities into this massively growing informal economy in the longer term. We need this just to have a stable middle class, which is the basis of any society.
Marx’s solutions to these problems were not very good solutions: abolishing private property, nationalising means of production, distribution and exchange. Those things have been tried and they haven’t worked. What we need is a series of solutions that are informed by a notion of what’s wrong with capitalism – but go with the grain of capitalism – to try and solve them. We had reforms in the late 19th century, we had them in the 1930s when we had serious problems, and I think it’s not beyond our wits to have another set of sensible reforms. So: reform not revolution.
Our next comment came from Bart. While he is not blind to the problems of capitalism, he is nevertheless convinced that modern capitalism is the best system we’ve ever had. Bart argues that capitalism has is bringing more people greater prosperity and economic growth than ever before. How would Adrian Wooldridge react?
Absolutely, I think that’s absolutely true. Capitalism is, as it were, the only game in town. If you look at the history of the world, up until about the 18th century economies were essentially flat. They grew at about 2% a century. People did what their parents did. Society didn’t create much new wealth. We basically had a static society in which history is a series of repetitions. What happens in the 18th century, with the arrival of capitalism, is you begin to get sustained growth. And that growth, for a long time, has been 2% or 3% a year, not a century. So, societies got immeasurably richer, and over the last 30 years, when we’ve had so-called ‘turbo-charged’ capitalism (or ‘globalisation’), the world as a whole has seen the most extraordinary advances against poverty. But just because capitalism is the only show in town, and just because capitalism is the only way to gain sustained economic growth, doesn’t mean it’s the perfect system. It doesn’t mean it can’t be fixed by simple government action.
What we’ve seen over the last three decades are a series of very worrying things: one is the financial crisis, which destroyed a huge amount of wealth; second is concentration of capitalism with companies such as Google having massive market shares, market shares that haven’t been seen since the late 19th century; and third, a very significant increase in inequality, with some of the people at the very top doing extraordinarily well. There are ways of dealing with that that don’t mean the abolition of capitalism, but mean sensible and active use of government. So capitalism isn’t just a thing that can’t progress. It can be improved by intervention.
Finally, how does Ulrike Herrmann think Karl Marx would have regarded the world we live in today? What would his reaction have been to the inequality we see? Would he have appreciated the benefits that capitalism can bring?
Marx would have [appreciated the benefits]. He was a big fan of technology, he was enormously interested in new inventions, and he found capitalism good. This must be clearly stated: Marx was not a critic of capitalism. Rather, he tried to describe capitalism scientifically. Marx saw that capitalism leads to enormous wealth, but only for the few and not the many. He found the ability of capitalism to generate wealth to be good. According to Marx, this wealth could then be distributed in Communism. But Marx thought that if, at a certain point, there were very few large owners left, it would be easier to dispossess those few under Communism. But, obviously, that did not happen. The system of large corporations – the oligopoly – has proven to be extremely stable.
What would Karl Marx have thought about the world today? Would he be fascinated by the achievements of capitalism and the welfare state? Or would he be shocked by global injustice? Let us know your thoughts and comments in the form below and we’ll take them to policymakers and experts for their reactions!