Karl Marx - finally achieving media celebrity status

A Political "Solution" by Thomas Sowell

 

Who was it who said, "crack-brained meddling by the authorities" can "aggravate an existing crisis"? Ronald Reagan? Milton Friedman? Adam Smith? Not even close. It was Karl Marx. Unlike most leftists today, Marx studied economics.

 

 

What if Marx and Mao were right after all? by Rupert Wright

 

But Marx, despite the failure of communism, had important and interesting things to say about globalisation, although few people were listening. His model economy made it clear that capitalism tended towards monopoly, which should lead to strong regulation. But Wall Street bankers resist regulation in the way that small children resist going to bed. Marx's "theory of immiseration", which stated that profits would increase faster than wages, so workers would become poorer in time, was proving correct. Inflation-adjusted wages in the late 1990s were lower than in the 1970s, with one exception – those working on Wall Street.

Capitalism went forward, unchecked and often without regulation; even the world's last major communist country, China, embraced it. But the Chinese were smarter than anybody had thought. Utilising their vast resources and workforce, they became the world's factory. Five years ago my then 10-year-old son asked me: "Is everything made in China?"

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Soon everything won't be just "made in China", but owned by China. Perhaps Savile Row suits one day will no longer be the clothing of choice on Wall Street, but instead blue tunics, just like Chairman Mao's. Bankers will be carrying little red books, reminding them of the importance of regulations, not to deal in financial instruments that they don't understand and not to lend to people who cannot pay them back.

 

 

Karl Marx and the markets

 

Daily Telegraph readers had a shock last week when they opened their paper to find the main cartoon was of Karl Marx laughing in his grave at the woes on Wall Street.

One of the effects of this financial crisis was Marx's analysis of capitalism being debated across the media. These are ideas that we were told had been dead and buried in the rubble of the Berlin Wall.

 

Capitalist crisis - Karl Marx was right

"It is a moment Karl Marx would have relished. From every angle financial capitalism is taking a battering" (The Guardian).

The economic witch-doctors and soothsayers of capitalism were wrong and the socialists and Marxists were right. This is what the collapse of Lehman Brothers - the fourth largest investment bank in the world - means.

The financial 'bloody Sunday' was followed by 'meltdown Monday' and the collapse of share prices worldwide. This has shattered the current ideological foundations - and much more besides - of capitalism.

Capitalism's representatives argued that the collapse of Stalinism and, with it, the planned economies of Russia, Eastern Europe and elsewhere, left capitalism as the only effective vehicle for delivering goods and services to the peoples of the world. The future was one of endless rises in living standards.

We argued that the inherent contradictions within capitalism - a system based on production for profit and not need - remained, particularly the economic cycle of 'boom and bust'. These, however, were masked for an historical period by the unprecedented 'financialisation' of the system through the massive extension of credit.

But like an elastic band stretched to breaking point, it was bound to snap at some stage. Lehman Brothers, for instance, was 'leveraged' - that is, borrowed - on a monumental scale of 35 times the value of its assets. It was 164 years old, had survived two world wars, the depression of the 1930s and a collapse and rescue in 1984 but has now been brought to its knees by this crisis. Yet its chief, Dick Fuld, known as the 'gorilla' for his aggressive manner, paid himself £22 million last year when the weaknesses of the bank were already obvious! He will not suffer - except from loss of face - but the 25,000 Lehman Brothers employees will.

 

Henry Ford, Karl Marx and You by Scott Roberts

Ford's living wage took auto workers, whom Marx would have called the proletariat, and turned them into a type of worker Marx did not fully anticipate; the middle-class worker.

Marx saw the world as basically a struggle between the haves (the capitalist) and the have-nots (the working-class proletariat). He noted that other classes existed, but believed that as time (and capitalism) moved forward, these other relatively minor-sized classes would eventually disappear, and society would become stratified until only the two classes remained, which would then become more and more polarized as time went on.

Marx never anticipated America; a powerful western nation brimming with middle-class workers, managers and professionals, a nation where even industrial workers lived a life of prosperity; working forty-hour workweeks, owning their own home, having access to healthcare, retirement plans, and quality public education for their children. Most importantly, in America, class was fluid; any child could grow up and become a `doctor, a lawyer, a scientist or even a wealthy industrialist.

In 1929, with the collapse of the American stock market and the onset of the Great Depression, the future of America's middle-class workers was seriously threatened. President Franklin Roosevelt introduced Social Security, work programs, and additional labor law safeguards that helped lure workers away from the siren song of Marxist ideology.

Has history proven Marx wrong?

The wave of communist-based nationalism that swept the world during the 20th century has ebbed. Russian-style centralized economic planning has clearly been an abysmal failure. With China's turn to state-supervised market capitalism, the remaining Marxist states scattered across the world seem quaint holdouts of a long-past era. Today, it appears that American-style market-capitalism has successfully led to wealth being spread across the spectrum of American society.

Or has it?