John Quiggin recently ran a series on “Marxism without revolution”, with posts covering Marx’s ideas on class, crisis and capital. I began a response here. In this post I look at his claims about Marx’s theory of crisis and his approach to Left strategy. John’s attack on Marx’s crisis theory, specifically the “law of the tendency of the rate of profit to fall”, is different to his criticisms of Marx’s “value theory”.
Firstly, he claims that Marx says falling profit rates make working class revolution inevitable rather than just possible and necessary. Marx did argue there were strong “laws” of capitalist development which did inevitably lead to crisis and resistance, but it is quite another thing to suggest he really thought that the outcome (socialism) was assured. Otherwise, why would he have spent so much time on theory and activism rather than just await the fateful day? Famous works like The Eighteenth Brumaire of Louis Bonaparte analyse in detail how economic, political and ideological moments of the class struggle interact to produce outcomes incompatible with an economic determinist view. John, by locating the impossibility of workers’ revolutions in part in a dismissal of falling profit rates, is the real economic determinist here.
Secondly, he makes an empirical claim about profit rates not falling, but it is difficult to know what he bases this on. Most attempts to calculate profit rates for the period from the 1960s have shown a decline, even if there has been a debate over how successful increased exploitation under neoliberalism has been in restoring them.
Thirdly, he ignores Marx’s description of countervailing tendencies. Crucially, Marx points to the destruction of capital as one way that falling profit rates can be reversed, and this forms a one part of modern Marxist explanations (.doc) of the remarkable period of high profit rates after WWII (the other part being the permanent arms economy). John seems unaware of Marxist efforts to explain the long boom, a period of unprecedented capitalist growth and stability, instead giving the impression that Marxists today hold onto a teleological dogma long since disproven by history.
Keynesianism and capitalism’s ‘Golden Age’
John implies that this relatively brief “Golden Age” could potentially be the capitalist norm when it has in fact been a glaring exception to the usual pattern of bubbles, booms, busts and intermittent depressions that have marked the rest of capitalism’s history. That exceptional period is not adequately explained with reference to “Keynesian macroeconomic policies and tight regulation of the financial system”. It is hard to know what John means by the latter, because greater financial controls did little to prevent the crisis of the 1970s. Regarding the former, there are alternative Marxist explanations that look at what really happened rather than accept such superficial claims about Keynesianism:
The long boom was in part sustained by a form of Keynesian economics, only not as Keynes himself had envisioned it. The United States did organize expenditures on a massive scale that both stimulated demand but also helped prevent an overproduction of capital. This was in the form of arms spending, or what some termed the “permanent arms economy.” Prior to World War II, peacetime military spending never rose above 1 percent of GDP. In the 1950s, at the height of the Cold War, it averaged 7 to 10 percent, and for the entire period from the 1940s until the 1990s it averaged between 4 and 14 percent of GDP. Overall, $4.5 trillion was spent on defense in the forty-seven years after the end of World War II. “It was by way of inflation, debt accumulation, government-induced production, war preparation, and actual warfare that the dominant capitalist nations reached an approximation of full employment,” writes [Paul] Mattick. “This experience strengthened Keynesianism and led to the widespread belief that a government-maintained ‘quasi-boom’ could be indefinitely continued.”
That belief crashed and burned with the global crisis of the 1970s, which saw the same elites who had sung from the Keynesian songbook suddenly switch allegiance to monetarist and then neoclassical ideas. But two stubborn facts remain: It was military state capitalism rather than a coherent Keynesian policy that underpinned the boom, and when crisis re-emerged in the 1970s Keynesian methods abjectly failed to restabilise the system.
John’s mistaken claims for Keynesianism lead him to miss the material basis for the hold of neoliberal ideology among elites today, a hold he admits has been more persistent than he’d expected. Neoliberal ideas persist because they are a powerful ideological framework for the class struggle from above, with their justifications for inequality, private wealth and market forces favouring capital over labour under the cloak of apparently value-neutral, technical economic propositions. Neoliberalism is hostile to Keynesianism because the latter suggests that things like full employment might be a good thing. But that doesn’t stop elites being happy with the use of Keynesian or even state capitalist methods as long as they enforce capitalist interests.
It is not far-fetched to imagine a shift in elite ideology in response to the mutating global crisis, but a return to post-war policies requires first a return to the growth conditions that underpinned them. But whatever ideas are put forward to justify elite policies, such actions are most likely to continue to be centred on goals like increasing exploitation or speeding up austerity.
Agents of change
In arguing for a Left strategy, John identifies a social democratic program based around four points:
- reimposition of control over the financial system
- restoration of a progressive tax structure, combined with a more vigorous assault on international tax evasion/avoidance
- shifting the burden of ‘austerity’ back to those responsible for the crisis, and rejection of cuts to the welfare state
- repeal of anti-union laws and measures to make union organization easier
There is little in these demands for Marxists to quibble with, but that’s not really the point. The question of agency is central to any politics that seeks reforms, yet John is silent on the implicit agent of change in his analysis — the state. By rejecting revolution and the agency of the working class, it is axiomatic that the existing state machine is the only actor that can implement John’s program. John refers in passing Marx’s description of the state as “a committee for managing the common affairs of the whole bourgeoisie” but doesn’t really argue what he thinks is wrong in conceiving of the state as capitalist.
I initially found John’s opening assumption — about the impossibility of revolution — quite unusual in view of the significant rise in radical social struggles in the last six months, most spectacularly in an ongoing revolutionary process in the Middle East. John’s response has been to downplay their significance in terms of what Marx predicted, although even a cursory reading of Marx will reveal these events are very much in the mould of what he analysed. Ironically, it is in places like Egypt, or Greece and Spain that John’s four-point program would get a big hearing because there is mass popular involvement in politics in a way that the social democratic model of going through the state actually forecloses on.
The problem in seeing the state as being able to deliver such reforms is two-fold. First there is the question of whether the state can be captured for the popular good. It is one thing to place a demand on the state, quite another to leave it to the state to implement your agenda, thereby demobilising the popular movement that can pressure it in the first place (a process we saw clearly with the Accord in Australia, one the Left is still paying for politically).
Second there is the limit set by the functioning of the capitalist system, which is currently in deep crisis in many key regions. Reforms of the sort John raises actually run up against what capitalism can deliver in the longer term, especially as there is no guarantee that such policies would resolve the current crisis in and of themselves. I mean, look at Greece, where even softening the current austerity program is treated as beyond the pale by the elites in the EU, ECB and IMF.
Opening up the strategic debate on the Left
These issues, in my opinion, make a Marxist approach to the state and capitalism indispensible to debates over a serious Left strategy in the crisis. John writes:
For those engaged in attempts to achieve a better, more equal and more sustainable society, Marx’s theory of value has little to offer. What can it tell us, for example, about the relative merits of trying to promote equality through higher minimum wages, through more progressive taxation or through expansion of public ownership?
On one hand this approach reflects a category error, trying to turn a theory that describes the fundamental contradictions in the capital relation into a tool for incremental redistributive justice carried out by capitalist states. But it also misses how those concrete reform mechanisms John mentions (wages, taxation, public ownership) cannot simply be taken at face value as simply technical options; rather that their effect in terms of specific class interests has to be considered. So, for example, public ownership of private hospitals may in theory be of benefit to ordinary people, but Obama’s effective nationalisation of Detroit car manufacturers ended up being part of a massive attack on autoworkers’ benefits and jobs. Marx provides a serious basis for examining such questions — it’s just that these ideas fall outside the remit John sets.
It is true that a Marxist orientation leads to arguing that certain policy debates are a dead-end for progressives — for example Left Flank has argued that “carbon pricing” is one such cul de sac. But that doesn’t mean that Marxists have nothing to say about alternative policies and political strategies, for example, the UK One Million Climate Jobs Now! initiative arguing for state intervention to drive a rapid transition. Or take Greece, where a Marxist analysis of the specificity of the crisis in the Eurozone developed by Costas Lapavitsas’ group at SOAS has led to a spirited debate on whether their proposal that default, exit and bank nationalisation should be taken up by the Greek working class movement.
John implicitly sees the continuation and health of capitalism as the precondition for resolving pressing reform questions. Yet apart from its relatively brief Golden Age, capitalism has not been able to deliver such health and certainly not in a way that has systematically trickled down to the general population. This raises the question of what happens when progressive reforms and the health of the system pull in opposite directions — will John see the role of progressives to first “stabilise the capitalist economy” as happened when a “limited resort to Keynesian methods in 2008 and 2009 did prevent complete collapse of the system” only to once again find that capitalists are happy with Keynesianism for the rich as long as the working class foots the bill?
Those “Keynesian” bailouts have been followed by a sharp intensification of class attacks, provoking mass revolts that threaten governmental stability and hold the potential for more. These are all policies carried out, with help of riot police and tear gas, by the very states and institutions that John wants to harness for his social democratic project. I believe it is this that leads him to minimise the significance of the Tunisian and Egyptian revolutions and claim that liberal democracy remains unshakeable — he simply cannot imagine a world beyond capitalism. In addition, his virulent anti-Leninism sees him draw a straight line from Marx to the Gulag, as if it wouldn’t be easy (but equally empty) to draw similar lines from the classical political economists to the Holocaust.
He does recognise that the crisis is opening up a bigger space for a different politics, a period where “far more than in the 1980s and 1990s, or even the first decade of the 2000s, the opening is there for a radical alternative”. But it’s indicative of his political project that he greets this by immediately closing off options for the Left rather than opening them out. John has complained that his Marxist critics seem keener to “keep faith with long-dead certitudes” than debate on what is novel about the situation today. I am sure most of us would be very happy to debate him on modern developments like the rise of financialisation or changes in the structure of the working class. But to expect us to first accept a dismissal of Marx’s ideas on the basis of his mis-readings and distortions is no grounds for the kind of dialogue the broader Left — revolutionary and reformist — desperately needs.