To Reform Capitalism, Look to Marx

Posted on by

By Fred Block, whose new book is being published this month by the University of California Press. He is a Research Professor of Sociology at the University of California, Davis. Originally published at

200 years after Marx’s birth, many elites have taken unabashed pride in capitalism, a term that originally had negative connotations. To make our economy more just, we must reclaim Marx’s understanding of capitalism’s contradictions.

Even 200 years after his birth, Karl Marx cannot rest easily in his grave. His fundamental theoretical achievement has been appropriated by his sworn enemies to defend the very institutions he despised. The term “capitalism” that was popularized by Marx’s followers has been redefined to persuade people that even modest reforms of our economic arrangements will inevitably damage the economy’s main engines and do more harm than good. Conservatives have taken Marx’s ideas and turned them upside down.

Marx himself did not actually use the word “capitalism”—he typically referred to “bourgeois society” or “the reign of capital”—but his followers in the mass socialist parties of the late 19th Century and early 20th Century popularized it to great effect. Capitalism, they argued, was to blame for poverty, unemployment, miserable working conditions, and periodic economic crises. After the Bolshevik Revolution, Soviet propagandists tirelessly linked every problem of the West to the evils of capitalism.

After World War II, defenders of the American economic system almost always used the term “free enterprise” as a way to highlight the lack of political freedom in the Soviet Bloc countries. Even in the mid-1960’s, the word capitalism was still used primarily by those sympathetic to the Soviet Union and Communist China.

The situation changed when thinkers on the Right realized the power of taking a negative term and giving it a positive spin. This was what the Black Power movement had done; the word “black” previously had negative associations, but the movement empowered people to say: “We are black and we are proud.” One of the innovators who pioneered this rhetorical move with “capitalism” was Malcolm Forbes, the publisher of Forbes Magazine who adopted the advertising slogan: “Forbes—a capitalist tool.” Denouncing a politician as a capitalist tool had been one of the most stinging indictments in the Left’s arsenal, but Forbes was telling his readers they should be proud to be capitalists.

However, the most influential work along these lines was done by Irving Kristol, an advisor to Ronald Reagan who is credited with founding neoconservativism, the movement of liberals who abandoned the social, economic, and foreign policies of the Democratic Party in the 1970’s and 1980’s. In the late 1970’s, Kristol published a book called, Two Cheers for Capitalism. Kristol knew his Marx very well; decades earlier he had been part of a Left-wing faction at New York’s City College that was famous for its sophistication in wielding Marxist theory. Kristol recognized that appropriating the idea of a “capitalist system” from the Left could have extraordinary benefits for conservative thinkers.

Both in the 1930’s and in the 1960’s, the Left in the U.S. had progressed not by fundamentally challenging the existing order, but by creating new social programs such as Social Security, Medicare, and Medicaid and by extending the structure of economic regulation to include labor relations, consumer protection, and environmental protection. The Right tried to resist these initiatives, but it lost out because liberals and progressives could argue that these measures did not challenge the market but just made it work in a way that was better and fairer.

But Kristol insisted that capitalism was a unified and completely coherent system, so that changing any aspect of it would produce an equal and opposite reaction. Ever since, conservatives have been arguing that the reason that the economy is performing badly is that all of the well-intentioned measures pushed by the Left have impaired the capitalist system’s functioning. Thus, we must roll back spending programs and regulation to realize the system’s full potential.

It is not coincidental that the Right has been winning the battle of ideas ever since Irving Kristol turned Karl Marx on his head. Left scholars and activists continue to denounce the evils of capitalism, but when they do so, they actually reinforce the Right’s claim that capitalism is an unchanging and unchangeable system whose fundamental logic must be obeyed.

While Marx urged his followers to overturn capitalism rather than reform it, he insisted that capitalism was actually incoherent, irrational, flexible and constantly changing. It is Kristol’s definition of capitalism as unchanging, unchangeable, and unified that is an illusion. The reality is that making our society more egalitarian, more just, more democratic and more environmentally sustainable would also make our economy stronger. To win urgently needed reforms, we need new concepts and new language. This would not fit Marx’s revolutionary vision, but it is what our times demand.

Print Friendly, PDF & Email

54 comments

  1. The Rev Kev

    If a person comes to you saying that they are a Capitalist it is like saying them saying that they are a Christian. It sounds OK until a moment’s reflection makes you ask what sort of Christian – Catholic, Protestant, Eastern Orthodox, Oriental Orthodoxy or any of a variety of flavours. Big differences between them all. Same with Capitalism. There are all sorts and the present dominant type is only one variant. I find it hard to describe the present type of Capitalism. Crony Capitalism? Neofeudal Capitalism? Gilded Age Capitalism?
    I would think it obvious that a variant of Capitalism that sends the climate into chaos, wrecks whole landscapes, impoverishes people by the hundreds of millions and destroys resources that are by their nature irreplaceable is not one that can be described as sustainable for any length of time. Economist can formulate any number of laws that describes and justifies the present system but the laws of physics and thermodynamics get the final say. The problems that the present system are racking up will soon enough take it down as fewer and fewer people benefit from this system and are thus capable of defending it. It all comes down to how much further damage is caused between now and then.
    In passing, I saw an ad a coupla years ago that for me epitimizes the type of Capitalism that we have and others may recognize it-

    Reply
    1. Clive

      And if it was only “capitalism” which has you constantly looking for prefixes or suffixes. “Market” is another. We’ve got “free” ones, “competitive” ones, “open” ones, “closed” ones, “fair” and “unfair” ones.

      So when you get talked to about “market forces”, it is impossible to know from where and to where and by what propulsion mechanism you, or something else, is being moved by.

      Words, I guess, matter.

      Reply
    2. chewitup

      The type of capitalism depicted in that commercial is pretty standard and I think most folks are fine with. If you are willing to work work work, you can have lots of stuff. If you don’t want to work that hard, that’s ok too. You can drive a Chevy.
      It’s the rapacious, crony, nondemocratic, and rigged capitalism that we’re all up in arms about. Revisiting Marx is a great way to get a solid philosophical foundation on political economy. For most of my life I associated Marx with communism. It’s only in the last ten years where I’ve learned how wrong I was.

      Reply
    3. James

      Better question: is the current “variant” of capitalism an inevitable end state, which any capitalist variant would inevitably arrive at sooner or later? The simple child’s game of Monopoly is (once again) illustrative. In the end it’s all good fun as everyone merrily rolls their way around the board. But by and by the fangs come out as one or two players assert dominance, and then in most of the games I’ve played at least, begin colluding with each other and/or making side agreements with the down and out players to consolidate their winnings. A simplistic and fun child’s game played for funny money, but quite illustrative of the basic fundamentals of capitalist psychology. All of the techno-wizardry laid over the top of the current real version of capitalism just amounts to so much eye candy to intimidate and profit from the rubes.

      Reply
      1. Clive

        I think rather than the question of the fate of capitalism, which is as shown here highly questionable, the first order of business is deciding on the fate of neoliberalism. Upon which, there seems to be two schools of thought emerging:

        1) That neoliberalism can be pruned, pared down and kept into a nice, tidy shape. If it gets too unruly, you can get out the secateurs to keep it in bounds.

        2) That neoliberalism is like Japanese Knotweed. You can hack it back, you can cut it to the ground, you can lop off wherever you might see new growth emerging. But this isn’t at all sufficient. If the slightest part of it remains in the ground, it’ll grow back and eventually becomes just as much of a pest as it was before. Instead, it must be totally eradicated. All visible parts must be removed and then you must dig out and replace the first couple of feet of topsoil. And then subject to eternal vigilance is needed lest you find you missed a bit. Failure to do so will result in regrowth which will shade out the enlightenment that the rest of the garden might otherwise be bathed in. Just as it is being shaded out right now.

        I tend towards the latter. For the US, you’re starting with the Democratic Party. For eurozone members, it’s the ECB. Perhaps for the UK, it’s Brexit. Most other countries have their own version of this radical de-vegetation strategy available and are currently mulling over whether it’s worth the ecosystem destruction it requires.

        We have no manual to tell us what the “right” or “wrong” approach is to keeping neoliberalism under control. Maybe just an annual trim is the correct thing to do. Maybe total purging is essential.

        We’re all about to find out.

        Reply
        1. Grebo

          The economy is a system, which is part of a bigger system called society or civilization, which is part of a bigger system called nature.

          All these systems are complex, meaning they have many interacting parts with delays and backs, so it is not clear what effect changing any one part will have.

          Some parts of these systems we can control and others we can’t. We need a holistic and fairly complete understanding of these systems to be sure of the right way to rejigger them to our liking. That understanding does not yet exist.

          Marx did not have the tools to understand such systems, nor did Mises, Hayek, or Friedman. We do, but there has been resistance to using them. Once we have overcome that and gained an appropriate understanding there will still be the question of how we want the systems to work.

          This is a long-term project but civilization only has a short time left, so we can’t wait. We’ll just have to wing it.

          Reply
          1. Scott1

            I’ve been pushing Pragmatism myself.
            I like Industrial Service Banking.
            Human nature likes private property.
            How you get it is either civilized or barbaric.
            Systems of negative & positive reinforcement providing a wider band of options for
            people to be and do & have food, clothing & shelter
            that are working are to be saved.
            Goals matter.
            Americans were loved for American Eclectic Pragmatism, not anything fancy or mean.

            Reply
        2. hemeantwell

          That neoliberalism is like Japanese Knotweed. You can hack it back, you can cut it to the ground, you can lop off wherever you might see new growth emerging. But this isn’t at all sufficient. If the slightest part of it remains in the ground, it’ll grow back and eventually becomes just as much of a pest as it was before.

          My guess is that you have to threaten it with Roundup. I say threaten to set up this bit from Streeck’s review in the latest NLReview of Joseph Vogel’s “The Ascendancy of Capital.”

          Central bankers themselves have always been aware, although they hide it as best they can from the unwashed, that central banking is ‘not a science but an art’. This means that what they sell to the public as a quasi-natural science is in fact nothing more than intuitive empathy, an ability acquired by long having moved in the right circles to sense how capital will feel, good or bad, about what a government is planning to do in relation to financial markets. (Economic theory is best understood as an ontological reification of capitalist sensitivities represented as natural laws of a construct called ‘the economy’.)

          Aside from the last sentence, which is sure something to consider, what I like here is that behind the idea of “intuitive empathy” there’s a capitalist consensus that’s malleable by force. If capital feels that it has no choice but to work within a welfare capitalist framework to avoid expropriation, it will find a way to do so. The problem, of course, is that since the mid-20th century capital has been relatively free of the threats of expropriation.

          Dunno about knotweed, but bamboo works as an ornamental if you surround it with a deep enough barrier.

          Reply
      2. lyman alpha blob

        The history of the railroads in the 19th century speaks to your question. The economic power that the railroad barons wielded led to the antimonopolist movement which was a broad and ever- changing coalition. There were capitalists among the antimonopolists who felt the the government should foster policies that would allow for increased competition as a counter to the monopolies, seemingly oblivious to the fact that it was all the small railroads competing with each other for dominance that led to mergers and monopoly in the first place. At the other end of the spectrum were socialists who thought large essential industry ought to be nationalized.

        Judging from history I think the answer to your question is yes, the inevitable endpoint of unfettered crony capitalism is the concentration of power into the hands of a few – oligarchy. Perhaps the only way to stop this trend is the threat of nationalization from a strong central government. But maybe rather than framing it as a threat, it could be something to aspire too, with the government rewarding truly successful enterprises. For example, when an company reaches a certain critical point of market share in any industry, the owner and top executives are rewarded with a few billion dollars and an early retirement, and the government takes over. Here I’m thinking of utilities and essential services, some of which the government already provides – transportation, communication, energy, healthcare, etc. So thanks for creating this great platform for commerce Mr. Bezos (with all the government largesse that made it possible) – we’ll be taking this off your hands now but enjoy the 5 billion and your time at the beach. Want to stay in charge of your enterprise, then don;t get too greedy.

        Maybe it’s the successful propaganda of this 80s Wendy’s commercial , but while I might not mind government keeping the buses on schedule, I’d still rather not have them decide what shoes I get to wear. There’s still room for a free market, a term which doesn’t necessarily equate to capitalism.

        Ideally we’d do away with ideologies altogether – it doesn’t have to be all capitalist or socialist or communist – and just do what works best for the greatest number of people.

        Reply
        1. 19battlehill

          YOu make me laugh — can’t you see the game? A strong central govt that controls all means of production is exactly what the capitalists want. They OWN the govt’s of the world, they have spent the last hundred years using debt as a weapon to control the resources of form colonized third world countries and they have used unpayable entitlements to lure the Western countries into unsustainable debt. When this all breaks down and govt promises are not kept (because it is fiscally impossible to keep them) then chaos and social unrest break out — YEAH! Because now we need a stronger central govt that takes more of its citizens liberties and rights away from them to keep the peace. And now we have FASCISM, which was the corporte goal all along. Centralized control of the masses. Wake the F up already.

          Reply
    4. JCC

      I find it hard to describe the present type of Capitalism. Crony Capitalism? Neofeudal Capitalism? Gilded Age Capitalism?

      You forgot Surveillance Capitalism :-)

      Reply
      1. JEHR

        Finance Capitalists as redundant as that sounds describes people who increase their money, not through producing anything of value, but by making their money make more money which eventually results in their hoarding of most of the wealth and income while those at the bottom become more and more poverty stricken. I do not think that the wealthy will give up their positions of power willingly.

        Reply
    5. DJG

      The Rev Kev: An astute observation about capitalism. It is also an astute observation about Christianity, especially U.S. Christianity, which is basically warmed-over Methodism mixed with fundamentalist certainties about being “saved.” All one has to do is mention the challenge of the Epistle of Saint James, that there is no redemption without good works, and U.S. religion melts into a puddle of prosperity-gospel tergiversations about Biblical Certainties. And you mentioned the Oriental churches–as if Armenian Orthodoxy even registered in the U S of A. (Except maybe in Fresno.)

      As I always say, I am all in favor of prayer in public schools so long as it is the Hail Mary on most days with the Three Jewels of Buddhism on, say, Thursdays and Fridays.

      Reply
    6. RBHoughton

      “I find it hard to describe the present type of Capitalism” – try Fascism Your Holiness

      Reply
  2. skippy

    Kristol is a creative [class] writer not unlike many other payed sycophants looking for a meal ticket, tis a long list – antiquity is chockerblock with examples.

    Anywho…. Capitalism is not a monolith and one could argue we have been doing it since Ag e.g. sunk costs and environmental consequences – since inception. Probably the most acute issue is how society is expected to conform to the dictates of the currant neoliberal manifestation and still have some reasonable means of social cohesion.

    I think the U.S. is up to its 20+ school shooting for the year, Libby got a preznit pardon, and there is a push on for Chicago school deregulation surpassing even the original authors intent, and latent mea culpas.

    Reply
  3. John

    Very pleased to see another article on Marx from NC, although would love to see an article from the perspective of Marxian economics (rather than just history).

    A couple things though.

    “It is not coincidental that the Right has been winning the battle of ideas ever since Irving Kristol turned Karl Marx on his head.”

    As we learned from Marx, history is not moved by ideas but rather by material forces. It’s not that the Right started ‘winning the battle of ideas’ since the 70’s and 80’s, it’s that the economic system changed. The left lost power because the compromise between labor and capital that defined the Bretton Woods era was upended. Big business no longer feared the specter of the Great Depression and the malaise of the 70’s meant that they could strike back without worrying too much about opposition from the masses (they could convince a lot of Americans that unions and regulations were the problem). This explains the success of Kristol’s ideas; it was not that the ideas were the result of the Right’s success.

    “The reality is that making our society more egalitarian, more just, more democratic and more environmentally sustainable would also make our economy stronger.”

    Are we sure about that? And, if it wouldn’t make our economy stronger, would we still advocate for such policies? And regarding “environmentally sustainable”–if we want to remain within planetary boundaries, we have to drastically reduce our consumption. This would greatly reduce aggregate demand (GDP) and cause a massive depression. Keynesian promises to solve capitalism’s crises through increasing consumption by fiscal stimulus, which has negative impacts on the environment. Living “sustainably” is completely incompatible with a capitalist economy.

    Reply
    1. Carolinian

      A good comment. As for

      Big business no longer feared the specter of the Great Depression

      the logical conclusion is that the only thing that will bring back that specter is another economic collapse. Certainly politics doesn’t seem to be restoring the social contract.

      Undoubtedly this is why TPTB went to such extremes to save the system in 2008. The illusion of normalcy must be maintained.

      Reply
      1. John

        Another collapse will happen eventually. None of the structural problems that caused the first crisis were resolved, the asset bubbles were just reflated and the party continued. The question is whether the right-wing or the left-wing reaction will defeat the center.

        Reply
  4. Jim Haygood

    An alternative perspective on Marx:

    Marx, the man, and Engels, his financial backer, came from the bourgeoisie, and had nothing in common with the proletariat. Their motivation was fundamentally dishonest. After expecting the destruction of the bourgeoisie through an evolution out of capitalism, they actively sought a violent revolution, and there can be little doubt that they impatiently expected to emerge as the leaders of the new order.

    Marx and Engels despised both nationalism and national socialism, because they sought a global revolution so there was no place for national characteristics or cooperation with governments. It was, in effect, their bid for world domination, cooked up in the reading room of the British Library.

    A decade after the Communist manifesto was published, Marx stopped advocating peaceful revolution, in favour of civil war in all countries to destroy the bourgeois class. Marx and Engels sought to provoke and benefit from it. The plotting with Engels increasingly took that direction and Engels studied military science in preparation for his role as commander-in-chief.

    Following the publication of the Communist Manifesto until his death in 1883, despite the boom and bust cycles following the middle of that century, the lot of the proletariat improved immeasurably. Something was going horribly wrong with Marxist predictions, and the chief architect had passed away into obscurity. He had, however, set the template for Lenin, who took up the Marxist banner with the Russian revolution thirty-four years later.

    A bid for world domination, cooked up in the reading room of the British Library” — man, I would’ve gone for that as a 19-year-old radical student. :-)

    Reply
    1. EoH

      In the decades leading up to 1883, “the lot of the proletariat improved immeasurably.”

      No dark satanic mills, then. No wars, sieges, starvation. No Haussmann or Paris Commune. No need to build Sacre-Coeur to hide the bones of men and cannon. No Leopold in the Congo or Britain in the Punjab, South Africa. Argentina or China. No union busting and immigrant brutalizing. No slums. No immense aggregations of capital in the railroad, steel, oil and mining industries. Just uplift and sunshine.

      And they say that market capitalism is about economics and not religion.

      Reply
      1. Tony Wikrent

        Health, medical, and demographic statistics in fact show huge improvements that can be interpreted as “the lot of the proletariat improved immeasurably.” But that does not invalidate the point you make with your sarcastic litany of human suffering and misery. Almost all the improvements result from two factors: the mechanization of agriculture which begins to solve the problem of recurring food scarcities and resulting famines; and the imposition of public health and sanitation standards — which, be it noted, is a project of state intervention, and, hence, socialistic. Governments planned and funded things like sewers and clean water supplies, but private industry carried out most of the work.

        Also largely overlooked is that imposing public health and sanitation standards pushed forward technological progress in medicine, engineering, construction, and other fields. The 1812 Fairmount Waterworks of Philadelphia, for example, was a crucial incubator for the design and building of large steam engines.

        Reply
        1. EoH

          Marx might be among the first to suggest that factory production was not an unalloyed benefit for the working man and woman. Control over the work day shifted dramatically in favor of the capitalist. Working conditions were often lowly paid and startlingly unhealthy. Metalworking, asbestos, oil, mining of all kinds especially unhealthy. Mechanized cloth production, with its emphasis on child labor, poor lighting, fiber-filled air, and the ubiquitous long hours was as well.

          Mechanization was a mixed blessing. Specialization in production was also an outcome of capitalism’s need to produce greater sures than local economies required and to aggregate those sures into fewer hands. That greater efficiency was the capitalists, not labor’s.

          As you say, greater food production was important, if its distribution was uneven owing to technology and culture. Ireland produced a food sur during its famous famine. Capital exported substantial food stocks; the idea of redirecting towards a starving population was incomprehensible. Nineteenth century factory productivity also depended in considerable part on food drugs, notably sugar and caffeine.

          Public health and sanitation were indeed important public works, slow in coming owing both to the relatively slow pace of medical progress and reluctance of governments to invest in it.

          Reply
    2. TroyMcClure

      My favorite part of this ahistorical drivel has to be how Marx and Engels somehow traveled through time to learn about national socialism and absolutely hated it!

      Reply
    3. Alejandro

      ^An alternate [universe] perspective on Marx:
      brought to you from the goldbuggers at “anti-state”…”pro-market”…

      >”— man, I would’ve gone for that as a 19-year-old radical student.” ;-|

      Instead you went for mammon’s favored myth-tank, with mystical conjurings of |absolute| {value} magically “stored” in precious metals. Still looking for Aladdin’s lamp?

      Reply
    4. Synoia

      Following the publication of the Communist Manifesto until his death in 1883, despite the boom and bust cycles following the middle of that century, the lot of the proletariat improved immeasurably.

      Well of course. Who read the Communist Manifesto, and threw out the minimum crumbs to avoid it?

      Now they want the fruit of their crumbs back, as rent extraction from all.

      Reply
    5. John

      This is poor logic. First of all, Marx and Engels weren’t the same person. Second, if Marx and Engels really believed enough in their ideas to want to “benefit” of the imminent revolution, they also believed that Utopian society was right around the corner and that they were fighting for it.

      You can’t blame philosophers for how people interpret their ideas. And trying to pass judgement on a philosopher’s character is a futile exercise.

      Reply
  5. Tony Wikrent

    Can anyone point to an example of Marx’s ideas of political economy actually succeeding in creating a functioning national economy?

    Charles Beard, author of An Economic Interpretation of the Constitution (1913) — which many Marxists and leftists cite as scholarly proof that social and political development is determined by the mode of production and ownership of the means of production — was actually aghast that people thought he was a closet Marxist. In 1922, Beard published The Economic Basis of Politics () to clarify that he thought Marx and Lenin had proven failures, and that the analysis and scheme of Madison and Hamilton — that political factions are usually based on economic interests, and that the major role of government is to regulate those interests to promote the general welfare — had proven far more successful.

    Understanding Hamilton is crucial to understanding what the political economy of the USA republic is supposed to be. And Hamilton’s program for creating the USA economy directly contradicts the basic tenets of Marx. Hamilton noted that it is human nature to resist changes in the way of doing things. But Hamilton also saw the huge potential of the Industrial Revolution to introduce machine technology replacing human and animal muscle power. Hence, the government Hamilton set up — even after Jefferson became president — encouraged and promoted the development of new technologies and new industries. This is NOT the ownership of the means of production determining the political system: this is the political system developing new means of production and creating new ownership of the means of production. For example, computer and internet technologies are developed almost entirely in government-funded labs during World War 2 and the Cold War. But a deliberate decision was made to spread these new technologies into the civilian economy. Hence I can write this in North Carolina, and you can view it a minute later while sit in your home this morning in your pajamas and sipping coffee. Silicon Valley and its venture capitalists are a direct result of the political system developing new means of production.

    It’s not that Marx is entirely wrong. Marxist analysis is an important tool that can help us understand how capitalism has developed by usurping and replacing republicanism and democracy. What is happening now, with Silicon Valley becoming increasingly a center of rentier interests and rent extraction, perfectly aligns with Marx’s analysis.

    But at the same time, understand that the republican system Hamilton designed has been under unceasing assault by oligarchical forces who have never accepted the idea of people governing themselves. Indeed, the very idea of regulating economic interests has been under sustained attack by conservative and libertarian fifth columns. Most egregious has been the explicit attack by the Austrian / Chicago school on promotion of the general welfare as the “road to serfdom.”

    Finally, there is nothing in Marxist analysis that is able to adequately explain why a Marxist state cannot be established and maintained without the repression of a red army. Anyone who is not doctrinaire can recognize the threshold insanity and social uselessness of a debate between Trotskyists, Bukharinists, Maoists, Marxists, and Leninists.

    By contrast, Thorstein Veblen’s analysis of a predatory leisure class very well explains why authoritarian structures arise in societies, no matter whether a society styles itself capitalist, socialist, or Marxist. Or republican or democratic, for that matter.

    If you really want to be revolutionary, and bring about social change that will benefit all people, study Hamilton and Veblen as well as Marx.

    Reply
    1. EoH

      Beard was almost drummed out of the academy for that first book, which suggested that something as mundane as economic and personal financial interests might have motivated mythological founding fathers. Hamilton’s work is, in fact, an excellent example of that thesis.

      Reaction to Beard’s book became more critical with the onset of elite manipulation of public opinion during WWI (the demise of Debs’s career is an illustration), in general, and its heated reaction to the 1917 Russia revolution, in particular.

      I doubt that the conservative, authoritarian Hamilton would have thought much of Marx, born decades after his death. Hamilton’s forte seems quite modern: using the new power of a federal government to create a system of public finance that was not transactional – borrow for public goods and repay promptly. It was systemic, designed to create a permanent, low-risk market for the private holders of wealth, who financed it.

      As for the interest of hoi polloi, Hamilton’s tax bill, followed by what he derisively labeled the Whiskey Rebellion, suggests he was not a fan of the average working man or woman.

      Reply
      1. Tony Wikrent

        I saw a front pager at DailyKos today posted an article gushing about the royal wedding. I think the contrast fully illustrates how lies have come to dominate public discourse in USA: Hamilton is dismissed as a “conservative, authoritarian” while one of the most visited liberal websites celebrates a wedding of the God damn English oligarchy.

        Compare ownership of the USA economy with that of Britain. A handful of the richest families from centuries ago still are the richest families in Britain, and in fact own most of the land in places like London. Remove the Indians and Russians from the list of richest in UK, and you’re left with some very familiar names: Caddogan, Oppenheimer, Barclay, Grosevenor. Where, today, are the richest American families from 250 years ago? Where are the Washingtons? The Adams? The Jeffersons? Do these names predominate in the corporate councils of America?

        That’s the measure of what Hamilton created and achieved. The typical left misunderstanding of Hamilton centers on not understanding the difference between wealth versus the creation of wealth. Non-productive versus productive wealth. Hamilton broke the USA economy free of feudal mercantilism by creating a national economy in which the production of new wealth through industrialization could predominate over old non-productive wealth that was content to simply amass holdings of land, gold and silver, serfs and slaves, and debuntures.

        Just a small step from not understanding what Hamilton actually did, to allowing dirty money to come in, asset-strip, deindustrialize and decapitalize USA. This is why the left has been completely ineffective in opposing the rise of a new corporatist oligarchy the past half century: the left simply does not understand what a republic, and republican principles of political economy, are supposed to be.

        Reply
        1. Indian Jones

          This is why the left has been completely ineffective in opposing the rise of a new corporatist oligarchy the past half century: the left simply does not understand what a republic, and republican principles of political economy, are supposed to be.

          Unbelievable. From your political redoubt, you pretend the left’s failure to understand republicanism means they have failed to support the republicans who would maintain productive wealth. Are your republicans even fewer in number than leftists? Have not republicans (lower case r) themselves failed to maintain their own ideology?

          Then there is the prime issue that productivity is the means to maintain social order. As I understand, Hamilton’s argument rests more on national power – it is fundamentally related to today’s securitarian, empiratical economy. If there weren’t limits to accumulation, perhaps this means to social order would be achievable. But that dream is absurd. More than absurd, it is an illusion which freed the “irresponsible” capitalists to revolutionize capitalism.

          Too many would-be republicans were fooled by this illusion. Worse, it seems they still don’t understand that their ideology is perhaps more illusive (and probably more destructive) than the communists’.

          Reply
          1. JTFaraday

            I’m sure you’re aware that there are exactly 32 republicans left remaining in the US today and only half a dozen are of the democratic type.

            The “republicans” to which you refer are actually “producerists,” and we can blame them for our national religion, Plantation Overseerism. The faithful are countless, and Paul Ryan mans the Holy See.

            As for Charles Beard’s view of Hamilton, well… He’s not as bad as Robert Rubin, (except when he is).

            Reply
            1. Indian Jones

              The “producerists” are not all plantation bosses. They are all sort of mobsters – there are likely high costs to bucking the family.

              Their legacy is poisonous, so they’re spewing nonsense like the con man in chief – everybody is a worse villain than them.

              Reply
        2. EoH

          I might agree with you about “the God damn English oligarchy”. It’s possible, though, that the liberal website Daily Kos published an article about a royal wedding because it’s not a one-horse stable. Even so, I don’t think that makes it a fan of the Tory party, or Mrs. Thatcher’s or Theresa May’s economic (or any other) policies.

          Much of the vaunted social and economic mobility in America is a myth. It was good for labor in the 1920’s and from 1945 until about 1980. Before and after, not so much.

          Nineteenth century economic development depended on great risk taking by capital. It also depended considerably on taking the commons held by our Native American predecessors – land, timber, mining, furs, agriculture – on vast supplies of immigrant labor, and on government subsidies. To pick two, the demise of the buffalo – and all its consequences – and the building of the transcontinental railways depended heavily on government subsidies. In the case of the railways, it was obtained through not a little bribery. The financial fraud associated with 19th century railway stocks is infamous.

          Reply
        3. JTFaraday

          “Where, today, are the richest American families from 250 years ago? Where are the Washingtons? The Adams? The Jeffersons? Do these names predominate in the corporate councils of America?”

          It’s no credit to Hamilton that the Adamses didn’t play.

          Reply
        4. ChrisPacific

          I am not sufficiently informed to contribute to this debate, but I keep thinking of Matt Stoller’s piece on Hamilton’s popularity among modern Democrats:

          One of you is wrong.

          Reply
  6. ObjectiveFunction

    Vintage Christopher Hitchens seems to fit here (if Hitch believed in a hereafter, he’d be smiling upon NC):

    “As I write this [2009], every newspaper informs me of frantic efforts by merchants to unload onto the consumer, at almost any price, the vast sur of unsold commodities that have accumulated since the credit crisis began to take hold. The phrase crisis of over-production, which I learned so many long winters ago in “agitational” meetings, recurs to my mind.

    “On other pages, I learn that the pride of American capitalism has seized up and begun to rust, and that automobiles may cease even to be made in Detroit as a consequence of insane speculation in worthless paper “derivatives.” Did I not once read somewhere about the bitter struggle between finance capital and industrial capital?

    “The lines of jobless and hungry begin to lengthen, and what more potent image of those lines do we possess than that of the “reserve army” of the unemployed—capital’s finest weapon in beating down the minimum wage and increasing the hours of the working week.”

    Reply
  7. Denis Drew

    “To win urgently needed reforms, we need new concepts and new language.”

    Marx reportedly said that America doesn’t need socialism because it had labor unions. America needs to turn to that old concept — or should I say return to. America needs to turn into today’s German.

    Here”s how:
    Why Not Hold Union Representation Elections on a Regular Schedule?
    Andrew Strom — November 1st, 2017

    Bonus: federally mandated certification and re-certification elections — one, three or five year cycle; local plurality rules — will automatically become the hottest issue (maybe in a hundred years) because transformative in some way for almost every household. Dreadful for Republicans to defend against as we are stealing a page from their own anti-union (state gov unions) playbook (hat tip to Wisconsin governor Scott Wilson! ;-]).

    Reply
  8. Norb

    Corruption and greed will eventually undermine any social system. Such a system requires violence to survive, and as the natives adapt to counter the abuse, escalation of violence reaches a plateau. The reigning power either adapts, is overthrown, or stagnates in its corrupt, victorious glory- only to be eventually surpassed by some external force more socially cohesive, and adaptable.

    Capitalism cannot survive because it provides, on close examination, nothing for nourishing the human soul. It is a tool, an appendage, that is attached to the greater body politic and if its mores are too closely internalized by its adherents, they loose any sense of humanity. Collective action becomes a lie. A means to an end instead of providing a purpose for life or a guide for future generations to emulate.

    Now that capitalism and its adherents have achieved supremacy, there is nowhere for them to go. The choice is to turn socialist in spirit, and being to address problems facing humanity openly and truthfully, or to continue creating a dream world where people are totally disconnected from reality, blithely consuming their way to oblivion. It is a social system that depends on chaos and promotes division. It is a destructive system masquerading as a productive system. It is a system of fear.

    The Matrix comes to mind. It is the true vision of a victorious Capitalist world. Westworld is another. Another dream world constructed to cover over the flaws inherent in the system.

    Capitalist political economy is a dead end. One must strive for socialism or end up with dystopian capitalism, where the elites are selected from a pool of sociopaths.

    How else to explain the lack of empathy persistent in todays Capitalist leadership- ruling the world with marketing and public relations gimmicks- supported by seemingly endless use of violence.

    Reply
    1. Tony Wikrent

      “Corruption and greed will eventually undermine any social system…” ‘Zackly. But Marxists believe that the elimination of property will alter human nature. By contrast, Hamilton took human nature as it is, and created a government and an economic system designed to function despite it.

      “One must strive for socialism or end up with dystopian capitalism…” Here I disagree a bit. Human nature has an important duality. The republicanism of USA’s founding enshrined the idea of public virtue — a citizen is duty-bound to abandon self-interest when it conflicts with the General Welfare — in the Constitution. Capitalism has developed in USA largely by usurping and replacing republicanism, all the while insisting that any abrogation or abandonment of self-interest not only violated the natural order of “survival of the fittest,” but was also an attack on individual liberty. I have come to believe that we need to revive some understanding of republicanism and public virtue (instead of letting the conservatives and libertarians have a monopoly on defining the concepts) because they are just as amenable to socialism as they are to capitalism. Thus, the “mixed economy.” It’s obvious to all who are not doctrinaire conservatives and libertarians that socialized medical care is the future. But, look at the full range of economic activity: does anyone really want to socialize production and distribution of draperies and shower curtains?

      The task of statecraft, therefore, is higher than mere politics: figuring out what economic sectors and activities are best socialized, and which are best left to “market forces,” and organizing society accordingly.

      Reply
      1. Norb

        While I agree with your sentiments, I don’t see how Republican government can be maintained if the means of production is not firmly in control of the Government. While this does not mean the Government and bureaucrats determine how production is conducted in a micromanaged way, they must have ultimate power to determine what is produced and how. Otherwise, economic power in private hands will ultimately undermine the government- and the common good. Capitalists were able to usurp our Republican ideals for this very reason. Even if you could go back, forces would arise to undermine the effort.

        This is why Capitalism is anti-Democratic, and alternative social systems- Russia, China- must be eliminated. The solution to human suffering is all encompassing, or it will be perpetual. Then human progress is an illusion and a farce.

        General welfare and public virtue derive from an enlightened desire to improve the human condition by reducing suffering. To expand and nourish the soul if you will.

        That needs to be the goal of political action and hammered home again and again. You can’t fake caring and empathy. The answer to the question, “Can you end human suffering?” needs to be answered in the affirmative-YES. Only then can society be organized in a matter that will work toward that end.

        Without that, you have the decadence that is so prevalent in the West today. The whole notion of a “Market” needs to be seen as the perversion it truly is. Maybe then, it will become impossible to murder individuals seeking justice and believe in the ultimate goal of the “Common Good”.

        Reply
    2. animalogic

      I agree with your comment. However, I suspect that your views of (capitalist) Elites is somewhat lacking.
      “Now that capitalism and its adherents have achieved supremacy, there is nowhere for them to go.”
      Are there “ends in themselves” ? That is, points of activity, of striving which are final goals, the achievement of which IS the very meaning of the striving itself.
      I can’t answer that question — were I to guess, I probably say not.
      Which returns us to Elites. IMHO, elites strive for power. To maintain & expand their power. Money is one (major) tool of power. Power is addictive, the exercise of which may be an end in itself.
      In a dynamic, ever fluid world can/will a member of the 0.01% ever feel that they have enough power ? Is the quest for power a “never-end-ing”

      Reply
  9. Susan the other

    I like Stiglitz’s ‘capitalism is just too successful’ logic. We could take a page from the neoconservatives and use the phrase “human nature” constructively: Human/Nature. And if we are indeed destined to be too successful let us focus on achieving sustainability. That, to my thinking, requires us to do things that are antithetical to profiteering, aka capitalism. But possibly there is a creative angle there too because Nature is a successful free enterprise if left to its own devices. One thing is Kristol clear: there are too many of us on this planet to sustain free marketeering any longer. Free profiteering at the expense of nature. That was the subtle brainwashing in the commercial, when the protagonist unplugs his new electric car, implying we can just keep keeping on. We cannot. That Cadillac commercial simply begs the whole question. And we all know there is no time left to quibble.

    Reply
    1. Norb

      I think the idea of sustainability is an important one. Thinking and acting on its precepts will alter the current political system. Individuals can practice it and set examples for others to follow and emulate. It is a way to live and runs contrary to the existing narrative.

      Bottom up approach to social change- good for the human psyche too.

      Striving to become a human being is a strong political message.

      Reply
  10. Grebo

    Marx is a red herring. A great mind, no doubt, but human, flawed and unfinished.
    Steve Keen, in a recent podcast, said Marx’s economic works alone make a stack three feet high. How many people have, or could, read and understand all that? His thought evolved and changed as he went along and he died before completing the second and third volumes of Capital.
    Is the final answer buried in there somewhere? What did he really mean? Was he right, partly right, wrong?
    The arguments continue, but with Marxists they are mostly about Marx not about the world.
    When I read The Communist Manifesto as a teenager I wanted to know what would replace Capitalism and how it would happen. It didn’t really say, and I don’t believe he ever really said. It was simply inevitable, 150 years ago.
    So don’t get too distracted by what Marx is said to have said. Try to understand the reality of today.

    Reply
    1. Synoia

      Understanding that workers have their livelihood invested in their workplace, and those with only money invested have much lower risk.

      If we must live in a rentier (capitalist) society, loans have not to be a burden, and the concept of “the common good” expanded from its current foul definition of mostly funding the MIC.

      Reply
    2. Michael Fiorillo

      What has worked for me over the years, at least since bailing out of the Trotskyist organization I joined at 12 in 1968 (foolish, impressionable yout’, what can i say?), is to admire the descriptive insight and power of Marx’s analysis, and concern myself far less with prescriptive side.

      I’m an ESL and English teacher, and like all English teachers have gotten into arguments over descriptive vs. prescriptive grammar: grammar as a naturally-evolving and pliant structure of innate human behavior (like work and trade, and the social relations following from them) or grammar as promulgated rules to be reflexively obeyed.

      Stick with Marx as a descriptive grammarian, and you can roll with the feints and punches of history a little better; reflexively obeying his prescriptions takes you to the same dead end it would with any ideology.

      Reply
  11. John

    Susan the other’s comment on Nature as a successful free enterprise is brilliant. I might extend that to think about Nature as a free enterprise banker. Nature might give debt extensions, rollovers and refis, but her version of Jubilee might be something we don’t want to experience.

    Reply
  12. EoH

    Humans apprehend the new by comparing it with the known. The new is different from or similar to the old. But analogies have limits. Misapplying or going beyond them leads to misunderstanding.

    To me, nature is nature, not a human-devised economic system, such as capitalism. Nor are humans “resources” or “capital”. They are people.

    Reply
  13. Mattski

    Reads like the preamble to an article about how Marx’s awareness of the contradictions of capitalism might be used to reform the savage beasty. But that article isn’t here, so we’re left to do the rather tired little dance about whether Marx is or is not dead meat.

    The most interesting issue raised is the question of whether capitalism is in fact a system or just a hodgepodge of exploitative activities carried out by those with capital and power around the catalysing agent of profit. Disappointed that no one takes the idea up.

    I’d say that once investor profit and its attendant pressures enter the scene, and once regulation–in the form of the WB, WTO, and international trade accords–push these into hyperdrive, you do indeed have a system; the same with the way slavery shapes the question of food/discipline of the working class.

    Neoliberalism has worked to systematize capitalism in the name of select interests. But surrounding these systematically organized aspects, the system is in many ways nasty, brutish, and very contradictorily adhoc. It seeks to overcome skepticism of its contradictions not with systemization but with ideology and religion, and with increasingly sophisticated narcotizing agents.

    Those of a more radical bent will have noted that the author speaks of using Marxism to reform the system, not to do away with it. From time to time, as he himself notes, the ruling class does see fit to draw from the radical playbook in order to win itself more time.

    I have learned a lot from Marx, thanks to writers like Harvey and Bellamy-Foster. He and his successors give us tools to analyze the system. But I think that where creating a new world is concerned we start where we are, and locally, building around our basic needs, around agreement that we must share and plan for the use of finite resources. For this we draw on the ideas left to us by like-minded predecessors (whom we might call “socialists”) and our own invention going forward.

    Obviously, ten to twenty percent guaranteed annual ROI to some a**hole on Wall Street that keeps women wearing Depends in Hanoi City while making his sneakers has got to go. That’s evil.

    Reply
  14. Indian Jones

    So, we are coming to the conclusion that the illusions created by neo-capitalists are worse than those of communists? Did those ex-trotskyites go full politique du pire AND maximize their capital reserves?

    Clever devils defrauded the fraudsters.

    To hell with them.

    Reply
  15. Roland

    @Tony Wikrent,

    “Finally, there is nothing in Marxist analysis that is able to adequately explain why a Marxist state cannot be established and maintained without the repression of a red army. Anyone who is not doctrinaire can recognize the threshold insanity and social uselessness of a debate between Trotskyists, Bukharinists, Maoists, Marxists, and Leninists.”

    I think that such a debate, so far from being useless, is essential to an understanding of much of 20th cent. history.

    Lenin was trying to socially engineer a proletarian revolution in a country in which the proletarian class barely constituted 15% of the population. A Marxist would have told him, flatly, that if the proletariat comprises a minority of the society, then any revolution that takes place in that society could not lead to proletarian socialism. You might get a bourgeois revolution, or you might get a peasant revolution, but at any rate the proletariat cannot be the driving political force in a society that has barely emerged from feudal aristocracy.

    In 1917 the largest single class in Russia was the middle peasantry. That class had some land rights, and most of the members of that class wanted more land rights. Peasants are not proletarians! While, like the proletarians, the middle peasants are usually poor and oppressed, that does not mean they belong to the same class in terms of political economy.

    Remember that Marx defines classes by their relationship to the control of the means of production. The relationship of a middle peasant to the means of production is quite different from that of a proletarian. While the middle peasant’s standard of living might resemble that of a proletarian, nevertheless in terms of how a peasant economically produces, and what a peasant politically wants, are not the same as a proletarian’s.

    Put it this way: when the proletarian communists are in a situation in which they have to dispossess a large segment of the population of their control over land, then you know for sure that such a society is not ready for proletarian socialism.

    Again, what Marx tells us is that it is the bourgeoisie who do the historic job of dispossessing the majority of people of their private control of the means of production. After all, that is one of the essential contradictions of the entire bourgeois idea of political economy: that a system based on private property has the result of concentrating control of that property into too few hands!

    The proletarians should never have to do the job of taking private property and economic independence away from large numbers of people. Goodness no, that’s the job of the bourgeoisie, and they do it very well! All the proles should need to do is to tidy up the last 1%, after the bourgeoisie have eliminated the capital of the 99%.

    All the proles do is take the necessary steps, to make bearable to humanity, life in a society in which hardly anyone has private control of their production. The bourgeoisie will create a historic reality of a world dominated by centralized capital–the proles figure out a way to make it a world worth living in.

    The dismal outcome of the Bolshevik Revolution is not only explicable by Marxism, it was predicatable using Marxism.

    The Leninist notion was that a disciplined revolutionary party, benefiting from the experience of those in more advanced states, could seize power opportunistically in a less advanced state, and then once in power, perform the social engineering necessary to create the conditions that would justify its leadership.

    Lenin was brilliant, Lenin was bold, and Lenin was brave. But as it turned out, Lenin was mistaken. Under Lenin’s version of a vanguard party, the proletariat got put in the contradictory position of having to liquidate the classes of the middle peasants and big peasants. From a Marxist view, that’s just, like, weird.

    One must admire Lenin’s scholarship (e.g. his pamphlet Imperialism: The Highest Stage of Capitalism is chock full of contemporary relevance). One must respect Lenin’s staggering degree of success as an actual, practical, politician. i.e. very few revolutionaries can plan a revolution, make their revolution, and then consolidate it. But in terms of Marxist historical dialectic, Leninism was an aberration and a failure.

    So Tony Wikrent, the reason why the Bolshevik state needed to use enormous force to politically and economically stifle the peasantry, was that Lenin was trying to use aggressive social engineering, to take a historic short cut, to try to bypass an entire bourgeois/capitalist phase of Russian history.

    Now the “right deviationists,” like what Bukharian became, wanted to back away from the implications of Leninism, and let a smallholder class develop. But as Stalin correctly pointed out, that’s a contradiction, too. How can you build proletarian socialism in a society in which the most flourishing class are the yeomen peasants? No, what you’re going to get is a society run by NEP-men run amok. That might turn out to be a fine thing in itself, but at the very least, it’s not why guys like Lenin and Stalin risked their necks in a civil war! Worse, it would mean a long delay in the development of large-scale heavy industry and modern armaments in Russia, which would probably be fatal in power-political terms. If a foreign power subjugates Russia, or ousts the Bolsheviks from power in Russia, then the entire Leninistic social engineering programme would be in vain.

    That’s the main why Stalin insisted on maintaining what we saw as the correct Bolshevik course of action, and aggressively proceeded to liquidate the peasant smallholders as a class. Besides, Stalin reasoned that if Russia were defeated again in a major war, those peasants would get enslaved or slaughtered anyhow, and without even the possibility of a socialist future.

    To sum up, Tony Wikrent, I don’t even understand how you can claim this debate of the Marxists, Leninists, etc. to be merely the province of quibblers. Instead, I think you fail to appreciate the scale, meaning, and drama, of the ideas and events concerned.

    Reply

Leave a Reply