[Marxism] Karl Marx is Hot

Greg McDonald gregmc59 at gmail.com
Fri Aug 19 10:19:50 MDT 2011

Karl Marx Is Hot

Joe Weisenthal	 | Aug. 19, 2011, 5:24 AM |

With things going the way they are, a lot of people are talking about
big history in action, whether it's the breakup of the Eurozone, or
the simultaneous market/economic/political spasm happening in the US.
Today Paul Krugman reminds us once again that this could be 1937 all over again.
Simon Johnson thinks it could be even worse: The long depression of
the 1870s all over again.
Recently Nouriel Roubini got a lot of attention for saying that Marx
basically got the battle between labor and capital correct, and that
capitalism itself now stood on the brink of collapse.
And even on Wall Street...
UBS' George Magnus has a big piece out on political economy favorably
quoting Karl Marx:
“At a certain stage of development, the material productive forces of
society come into conflict with the existing relations of production
or - this merely expresses the same thing in legal terms - with the
property relations within this framework of which they have operated
Preface to A Contribution to the Critique of Political Economy, Karl
Marx (1859)

In ‘The Return of Political Economy’ (Economic Insights, 5th February
2010), I wanted to emphasize how, in the wake of the financial and
economic crisis of 2008-09, the interaction between political and
economic decision-making would come to play an increasingly
significant role in the determination of economic, and market
outcomes. Looking at the time at the complicated legacy of de-
leveraging in developed markets, the embryo of the sovereign debt
crisis, especially in Europe, and growing social and economic
contradictions in China, it was possible to imagine, if not predict
precisely, pretty much what we see playing out today.

Now you don’t have to be a member of the Socialist International to
recognize that Marx’s words above have contemporary relevance. For
him, post-feudal ‘conflict’ would lead to social revolution and the
overthrow of bourgeois society, but we know different, not least
because the Western model of economic development overhauled and
democratised the concept of ‘ownership’ (of the
means of production). Nevertheless, the old guy was a pretty shrewd analyst,
learned a lot about political economy from likes of Adam Smith and
David Ricardo among others, and offered some still relevant insights
into how and why things happen in the economy and society.
The quote above captures the important idea of conflict or turbulence
when events happen that lead to challenges to the power, authority and
legitimacy of the existing political and economic order. During the
last several months, we have seen a succession of such challenges in
the Eurozone, the US, and even, in embryonic form, in China. The
recent skittishness in financial markets and increase in risk premiums
reflect not only a rise in anxiety about the deteriorating health of
the global economy, but the draining of confidence that political
elites are up to the task of addressing it.

This note, then, considers the existential crisis in the Eurozone,
‘deficit attention disorder’ in the US and other advanced economies,
and China’s current political economy, for which the recent high-speed
rail accident serves as an interesting metaphor.
Again, you know it's a real panic when everyone's trotting out the old
guys, and even capitalists think Marx got the endgame right.

Read more: http://www.businessinsider.com/karl-marx-is-hot-2011-8#ixzz1VUa5eJH7

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