Marxism and Keynesianism

Over the past month, the Crooked Timber blog (referred to below as CT) has posted three attacks on Marxism by John Quiggin, an Australian economist who I have a particular distaste for after he deleted something I wrote about Yugoslavia that went against the liberal/social democratic orientation of the blog’s professorial co-owners five years ago.

The first installment was titled Marxism without revolution: class that makes about as much sense as writing about Christianity without god or Opera without singing. It is basically a Panglossian vision of the world in tune with the privileged status of a don: “The creation of a democratic welfare state, funded primarily by progressive taxation, produced societies with a more equal distribution of economic and political power than any seen since the emergence of agriculture, and with better standards of living for virtually everyone in the developed world.” Who needs revolution when things are going so good? Since Quiggin has never written a single word about people living in places like the Congo or the Philippines, one can understand his fat and jolly burgher stance.

The next was titled Marxism without revolution: crisis. In it he accuses Marxists of being incapable of offering proposals that can “stabilise the capitalist economy.” Well, fancy that. By contrast, Quiggin offers up Keynesianism as just the ticket: “I read the historical evidence as showing that the system can and should be stabilised to a significant extent, as was done during the postwar decades, using Keynesian macroeconomic policies and tight regulation of the financial system.” Of course, the question of what Keynesianism can offer those underdeveloped countries that play such a secondary role in his ideological worldview is never considered. More about that anon.

The last was titled Marxism without revolution: Capital. It is perhaps the 2000^th attempt to dismiss the labor theory of value that is the foundation for Marx’s analysis of politics and much else. There’s not a single thing that Quiggin writes that hasn’t already been written before, starting with Eugen Bohm-Bawerk’s 1896 Karl Marx and the Close of His System. The never-ending assault on the labor theory of value reminds me of the tale of the princess and the pea. Like the pea that is Marxism concealed under a dozen thick mattresses, princesses like Quiggin are so irritated by the thing jabbing at their ribs that they cannot get a proper night’s sleep.

Just to make sure that his readers get his point, Quiggin throws in another tidbit titled You say you want a revolution  that opines “Most attempts at revolution fail, leaving the participants and the oppressed worse off than before.” The article unsurprisingly does not refer to the role of imperialist armies in making them fail. Of course, given Quiggin’s record on Yugoslavia, we must assume that he saw NATO as freedom fighters when they were raining uranium-tipped bombs on the dastardly Serbs.

Quiggin’s thoughts are exceedingly banal and hardly worth commenting on, but the most recent item on Marxism at CT does deserve some attention. It is a link to an article titled Zombie Marx by Mike Beggs  that appears in the latest issue of Jacobin, a print quarterly edited by Bhaskar Sunkara, a DSA’er who was subbed to the Marxism mailing list briefly. CT excerpts a Joan Robinson article titled Open Letter from a Keynesian to a Marxist that Mike Beggs considered as complementary to his own article, stating that he “would rather have the kind of Marx in Joan Robinson’s bones than either a Frankenstein Marx pieced together from scraps of quotations, or a Zombie Marx, embalmed in the 1860s and reanimated whole.”

It is a bit difficult figuring out what this “embalmed” version of Marxism amounts to. Beggs doesn’t appear to appreciate what economist Andrew Kliman (a member of a tiny sect grouped around the thoughts of Raya Dunayevskaya) is up to:

But in each generation, there are others who have defended an “orthodox” Marxian economics as a separate and superior paradigm, which can only be contaminated by absorbing ideas from elsewhere. The pugnacious Andrew Kliman, for example, opens his Reclaiming Marx’s Capital with the line “The economists have changed Marx, in various ways; the point is to interpret him – correctly.”

Kliman certainly is a piece of work. A one-time member of a listserv established to “discuss controversial issues in political economy”, he was so volatile over interpretations of the LTV that differed from his own that the moderator was forced to unsub him. He was also involved in some legal action against a journal put out by the URPE collective after they rejected one of his submissions.

But Beggs doesn’t even have Kliman in mind. He writes:

What I call Zombie Marx is different – the reanimation of a corpse which still holds organically together in some way. This is the reconstruction of Marxist economics as a coherent body of thought, not a collection of quotations. … It is unfair to single out Marxists. Rather, it is scholasticism that is the problem – the need to ground everything in a 140-year-old text. It would be wrong to say that the likes of Kliman are dogmatic in the sense that they demand unthinking acceptance of everything in Capital – it is obviously a lot of intellectual hard work to “interpret Marx correctly.” It cannot be taken for granted that Marx was right; it must be proven anew with each generation, against both rival interpretations and the revisions the previous generation had found necessary to make.

I understand Beggs’s unwillingness to name names, but without an example of what he is talking about when it comes to “Zombie Marx”, I remain somewhat at a loss to understand what the problem is. Ultimately we have to rely on his own approach to Karl Marx’s writings that sounds okay, as far as it goes.

Mostly Beggs has an aversion to the kind of Talmudic-like exegesis of Karl Marx’s Capital that Kliman engages in. Others more prominent than Kliman are guilty, including David Harvey who Beggs describes as being susceptible to the same tendencies, relieved however by his “empiricism”. Beggs does not seem to mind if Marxist economists ground themselves on Marx’s Capital as long as they stay true to the underlying goals of Marx’s work, which is to “demonstrate the social preconditions that lie beneath the concepts of political economy, and especially their dependence on class relationships; and second, to demonstrate these social relations as historical, not eternal.”

It is a bit harder to figure out what Beggs thinks about the labor theory of value since his article is so heavily qualified when it comes to this business:

But the labor theory of value had problems of its own, most prominently the awkwardness involved in modifying labor values to take account of differences in capital intensity. Both Ricardo and Marx were well aware of the problem, but it is hard to avoid seeing Marx’s “transformation” solution as ad hoc in the manner of Ptolemy’s epicycles, even if put in a logically coherent form.

Ptolemy, just to remind you in case you had forgotten, wrote that the Sun revolved around the earth. I don’t think that Beggs finds Marx as outdated as Ptolemy but you have to assume that Joan Robinson’s wholesale rejection of the labor theory of value must have recommended itself to him sufficiently to state at the very end of his article: “As undead Marxes go, I would rather have the kind of Marx in Joan Robinson’s bones than either a Frankenstein Marx pieced together from scraps of quotations, or a Zombie Marx, embalmed in the 1860s and reanimated whole. That is a spirit that might haunt again.”

This brings me to my own take on such matters, which comes at things at a totally different angle. As I alluded to above, Keynesian economics makes very little sense outside of the framework of countries like Britain, the USA, Germany and Japan that are heavily based on manufacturing and that are capable of launching the kinds of ambitious programs that were identified with Roosevelt’s New Deal, British Labour governments, and the Swedish social democracy. What possible relevance do they have to countries that are not suffering from some downturn in the business cycle but a permanent structural weakness that is related to their place in the global economy? For example, what role could deficit spending play in a nation like Malawi or Zambia, where agriculture or mining are the primary revenue generators? Such nations will never escape from the poverty trap unless they free themselves from foreign domination and begin producing for human need rather than private profit. They will not become prosperous in Western European terms, no matter what propaganda Thomas Friedman writes, but at least they will be able to provide the basic necessities of life for its citizens, as Cuba has done despite embargo and military interventions from the “democracies”.

To go one step further, there is not much in Marx’s Capital that directly relates to the problems of countries like Malawi or Zambia. Marx was trying to analyze the origins of the prototypical capitalist society in writing about Britain, as well as illustrating the fundamental class relations embodied in the formula M-C-M’. As a sign of how insufficiently engaged he was in the problems of a nascent imperialism when he wrote Capital, just look at the preface to V. 1: “The country that is more developed industrially only shows to the less developed, the image of its own future.”

It was only toward the end of his life that Marx rejected this notion, seeing Britain’s role in India as one of “larceny”.

As someone who has a great deal of respect for Joan Robinson and even someone who questions the value of abstruse discussions of the labor theory of value (when I first came across the abbreviation LTV on the Internet in the early 90s, I could not figure out why some leftists were so exercised about the aircraft company Ling-Temco-Vought), I want to conclude with some thoughts on one of her most famous dictums.

In chapter 2 of her “Economic Philosophy,” she wrote:”As we see nowadays in South-East Asia or the Caribbean, the misery of being exploited by capitalists is nothing compared to the misery of not being exploited at all.”

Although he did not mention her name, New York Times op-ed columnist Nicholas Kristof repeated her observation in a January 14, 2009 article:

Mr. Obama and the Democrats who favor labor standards in trade agreements mean well, for they intend to fight back at oppressive sweatshops abroad. But while it shocks Americans to hear it, the central challenge in the poorest countries is not that sweatshops exploit too many people, but that they don’t exploit enough.

Fundamental to the Keynesian worldview is the notion that capitalism is dynamic enough of a system that it can generate jobs for everybody, even if they come as a result of imperialist domination. This view was challenged by the Monthly Review dependency theory school that was launched ironically by Paul Sweezy who by all accounts was as much of a Keynesian as he was a Marxist. However, I doubt that he would have ever recommended such policies to the people in Malawi or Zambia, a function of the Marxism that had much more weight in his thinking in the long run.

Finally, a word should be said about his long-time collaborator Harry Magdoff who actually held a post in FDR’s New Deal and who based on such prima facie evidence might have been seen as some kind of Keynesian in his own right. However, the evidence is much to the contrary according to this letter to a contributor that was made public in the January 1998 Monthly Review:

There are two aspects to the faith in what Keynesian interventionism can accomplish. One has to do with moderating or eliminating the business cycle. For this, there has to be confidence in the ability to foretell where and how far the economy is likely to turn. With this knowledge, followed by the requisite changes in monetary and fiscal policies, the business cycle can be tamed and economic insecurity overcome. As it turned out neither of these claims have substance. Forecasting is at best an art, not science, and even as an art, untrustworthy. Moreover, the tinkering with money, interest rates, and federal finance are more often than not lesser influences among the gale-force winds that tear through the economy. I don’t mean that money and fiscal policy are totally unimportant. Money has to be centrally managed for the economy to work. And at times the actions of the monetary authorities can make a real difference. For example, in a society which lives on credit, a sharp rise in the interest rate for the sake of controlling inflation may be able to hold back an inflationary wave, while at the same time causing heavy unemployment and many business failures. In general, the Fed’s fiddling with the money supply and interest rates is mostly a response to the needs of the financial community and has little, if anything, to do with creating jobs and promoting economic growth. The simple refutation about the claims for Keynesian intervention, however, is that there were three recessions during the “golden age.”

Read the letter here http://monthlyreview.org/1998/01/01/a-letter-to-a-contributor