I had one of those big Aha moments earlier this year — as is so often the case, while reading one of Steve Randy Waldman’s posts. Karl Marx was a “sharp analyst”, but a “terrible futurist”, he says (emphasis mine for easy skimming; read his whole post, in fact everything he’s written).
… the story I was told in my impressionable youth was this: … Marx thought that capitalists were trapped in an unstable dynamic of capital accumulation from which they benefited, on the one hand, but which led inevitably to collapse …
I remember pride in my businessman father’s voice when he explained to me that this was wrong. Marx had underestimated the ingenuity and flexibility of capitalist societies, and particularly of the United States during the New Deal. Government intervened to solve Marx’s collective action problem, enabling capitalists [to] secure their enlightened self-interest by keeping a distribution of prosperity sufficiently broad that the predicted collapse could be avoided.
I’m prompted to reflect on this by another big Aha quotation, this from Karl Smith’s latest (I’ve reversed the order because I think the punch line lands better):
That people have money but there are no goods in the shop window is the classic failure of socialism.
That people can see goods and services in the shop window but have no money to buy them is the classic failure of capitalism.
Unfortunately I have to do some real work right now, so I can’t go on about how that failure of capitalism has its epicenter on Wall Street, how Wall Street money traders are not the intrepid capitalists who create jobs and prosperity, that they’re not at all what the Tea Party likes to think of as capitalists — even though they spend their whole lives manipulating financial capital. (Have I mentioned yet today that financial capital and real capital aren’t the same thing?)
So in my time available I’ll just ask: can Occupy Wall Street do for capitalism what The New Deal managed to do? Can it demonstrate the flexibility and ingenuity of capitalist societies, their ability to manage capitalism for the benefit of all?
Can it once again prove Karl Marx wrong?
Comments
3 responses to “#OWS: Saving Capitalism from the “Capitalists”?”
“Can it once again prove Karl Marx wrong? Let’s hope so.
I see you have an appointment scheduled with Dr. Hudson. :o)
“Industrial capital makes profits by spending money to employ labor to produce commodities to sell at a markup, a process he summarized by the formula M-C-M’. Money (M) is invested to produce commodities (C) that sell for yet more money (M’). But usury capital seeks to make money in “sterile†ways, characterized by the disembodied (M-M’).
Growing independently from tangible production, financial claims for payment represent a financial overhead that eats into industrial profit and cash flow. Today’s financial engineering aims not at industrial engineering to increase output or cut the costs of production, but at the disembodied M-M’ – making money from money itself in a sterile “zero-sum†transfer payment.”
http://michael-hudson.com/2010/07/from-marx-to-goldman-sachs-the-fictions-of-fictitious-capital1/
Nice one, Beowulf. Hudson’s really good, I gotta read more of his stuff. The one you link to is a brilliant manifesto.