A look at the look that Karl Marx is getting in light of the Great Recession

After the 2008 stock market crash, the image of Karl Marx started popping up in respectable magazines with headlines proclaiming the return of Marx or something along those lines. This partially reflected the panic that seizes the hearts of the business elite in any recession, when some of them are sure the Bolsheviks are waiting in the wings ready to nationalize the means of production. Since even the Bush Administration had to do some substantial nationalization - temporary, not expropriation - perhaps that fear was marginally less paranoid among American business leaders than in previous post-Second World War recessions.

Even the blog of the staid Encyclopedia Britannica got into the act with The Return of Karl Marx (The “Comeback Kid” of the Economic Crisis) 01/05/2009, accompanied by this video:



The Rupert Murdoch-owned Times of London also saw fit to run a piece called Karl Marx: did he get it all right? by Philip Collins 10/21/2008, which includes comments on the topic by several intellectuals on the topic. The subhead on the article declares, "As financial markets crash, the reputation of Karl Marx soars. So has his time come at last?" Peter Gumbel wrote from Time about Rethinking Marx 01/29/2009. After Barack Obama took office as President, FOX News and the rest of the Republican Party started calling his economic and health-care plans socialist and Marxist and so on. So then the discussion in the media about Marx was more McCarthyist hot air than anything else.

Of course, Marx "returned" a decade earlier, too, with the Asian and Argentinian debt crisis, as reported by John Cassidy in The Next Thinker: The Return of Karl Marx New Yorker 10/20/1997.

But Marx provided the classical criticism of the capitalist system, just as Adam Smith provided the classical philosophically liberal defense. So it's understandable that some people not previously so inclined would actually look seriously at more fundamental criticisms of prevailing economic assumption in the wake of the beginning of the Great Recession. Joseph Stiglitz, a winner of the Nobel Prize in economics and the former chief economist for the World Bank, gave this Keynesian view in Freefall: America, Free Markets, and the Sinking of the World Economy (2010):

The current crisis has uncovered fundamental flaws in the capitalist system, or at least the peculiar version of capitalism that emerged in the latter part of the twentieth century in the United States (sometimes called American-style capitalism). It is not just a matter of flawed individuals or specific mistakes, nor is it as matter of fixing a few minor problems or tweaking a few policies.

Stiglitz is calling for Keynesian reforms, not for Soviet-style expropriation of the means of production.

Benjamin Kunkel takes a serious look at the question of what Marxism may have to say relevant to the current crisis in How Much Is Too Much? London Review of Books 33:3 (02/03/2011). He focuses on two books by David Harvey of the City University of New York (CUNY), who seems to have become a high-profile Marxist among respectable publications like the London Review. The Progressive has a podcast of an interview with Harvey (n/d, accessed 02/06/2011). He can be found in a number of YouTube videos, including this one from 2008: The state of the empire 08/19/2008.

He looks at three issues that arise in Harvey's Marxian analysis: short-term profit squeezes at full employment; the tendency of the rate of profit to fall (a key concepts of Marxist economics); and, how underconsumption contributes to recessions and larger economics crises.

It's not really clear from Kunkel's discussion how Harvey provides any insights into the current extended economic crisis, either in diagnosing it or proposing shorter-range policies, that can't be found in some of the many solid Keynesian analyses that have been done, including those by Joseph Stiglitz, Paul Krugman, and Jamie Galbraith, among others. Harvey himself is a geologist and anthropologist, not an economist. That's not to say than only economists have anything noteworthy or insightful to say about economic problems.

But it is interesting to see a serious analysis in a major publication like this of how a prominent Marxist thinker addresses the current crisis. It's worth reading. But it does get into some issues in a more substantive way than one would find in "popular" presentations of economic topics. It's a wonky article, in other words.

Tags: benjamin kunkel, david harvey, karl marx