Matthew Yglesias on Marxism: Capitalism is looking pretty shabby: (Late) Monday DeLong Smackdown/Hoisted

Understanding Karl Marx

So I woke up this morning bright and early ready to work... and I promptly let myself get distracted and procrastinated for an hour tracing links from Noah Smith's denunciation of Karl Marx:

Noah Smith: Remember Karl Marx for the many things he got wrong: "Marx didn’t make it to 200, but the ideas he injected into the global conversation and the ideologies that bear his name far outlasted the German economist and philosopher...

I, of course, agree with Noah—he does cite me favorably, after all. And then I realized that I had never put my "Understanding Karl Marx" lecture slides up anywhere... THE STOCK













Understanding Karl Marx

J. Bradford Delong
[email protected]

2018-05-10 THE STOCK

The Shores of Utopia…

In the beginning was Karl Marx, with his vision:

  • The Industrial Revolution would transform everything
  • Be followed by a Great Communist Social Revolution
    • Greater than the political French Revolution
  • And wash us all up on the shores of Utopia…


The Marxist Intellectual Project

The mature Marx saw the economy as the key to history. This project as carried forward by others ran dry:

  • In Eric Hobsbawm’s hands it worked well
  • In Perry Anderson’s hands, not so well
  • And when Marx’s writings became sacred texts for a world religion, things passed beyond absurd into tragedy and horror…


Marx’s Three-Part Intellectual Trajectory

Marx the Prophet

In this world the New Jerusalem does not descend from the clouds “prepared as a Bride adorned for her Husband…”

  • But Marx clearly thought at some level that it would.
  • He got too much into the magic mushrooms of the Isle of Patmos.
  • Marx the prophet is of interest to cultists, and to historians of cults.


Marx the Activist Had Three Big Ideas

  • Ruthless capitalism drops the mass replacing masked exploitation by naked exploitation.
    • Then scales fall from people's eyes
    • Without masking ideological legitimations unequal class society could not survive
  • Capitalists will never compromise produce an acceptable income distribution
  • Large-scale factories are the human destiny.

All three of these big ideas were wrong.

  • Hence his activism was… counterproductive… both in his day and in ours…


Marx the Economist: Three Goods

  • Business Cycles: recognized that financial crisis and depression were not a passing phase but a deep disability of the system.

  • The Industrial Revolution as Game Changer: got the industrial revolution right as giving us the statues of Daedalus, the tripods of Hephaestus, looms that weave and lyres that play by themselves, and thus people can become lovers of wisdom without being supported by the labor of a mass of illiterate, brutalized, half-starved, and overworked slaves.

  • Economic History: got a lot about thedevelopment of modern capitalism in England right—but not everything. Still worth reading…


Marx the Economist: Three Bads

  • Capital Accumulation and Wages: believed capital could never be a complement to but had to be a substitute for labor. Hence the market system simply could not deliver a good or half-good society but only a combination of obscene luxury and mass poverty. This is an empirical question…
  • The Cash Nexus: mistook the effects of capitalism for the effects of poverty…
  • Income Distribution: believed capitalist market economy was incapable of delivering an acceptable distribution of income, saw political democracy as only surviving for as long as the rulers could pull the wool over the workers' eyes. Western Europe over the past fifty years serves as a significant counterexample…


Marx the Economist: Assessment

As a worker-out of theories and an advancer of ongoing discussions…

  • …Marx was a second-class Ricardian…

As a generator of insights and potential research programs…

  • …Marx was a first-class innovator…

As a writer of sacred texts…

  • …Marx is powerful malware hacking your wetware…


Why Did Marx Go Wrong?

I blame Hegel

  • Marx expects “unmasking”, and a deeper reality accessible via concentrated thought… Believed he could access that deeper reality through the labor theory of value
  • Use value and exchange value
  • Trapped himself in an intellectual prison-hell


He thought Manchester was typical

  • Saw Manchester in the late 1840s, at its nadir for the working class
  • But working class poverty a result of the very bad bargaining position of British workers
    • Due to demographic pressures
    • That were about to ease
  • Marx “mistook the birth pangs of capitalism for its death throes”


Turning To Russia

Marx 1878: The British working class “was nothing more than the tail of the Great Liberal Party, i.e., of the oppressors, the capitalists…”

Engels 1894: “One is indeed driven to despair by these English workers... bourgeois ideas... viewpoints... narrow-mindedness…”

  • In the late 1870s—after the failure of the British working class to become more militant, the failure of the Paris Commune and the founding of the French Third Republic, and Bismarck's creation of a unified Prussified German Empire...
  • Marx and Engels started to turn their attention toward Russia…


What Do You Think?