In his new book, Capitalism
Unleashed, Andrew Glyn attempts to explain how capitalism moved from the
crisis of the 1970s to recovery in the 1980s and 1990s. However, although full
of interesting information, the book fails to provide an overall analysis and
misses some essential aspects of Marxist theory.
Milton Friedman died on 16 November aged 94
years. He was one of the foremost bourgeois economists of the 20th
century. His reputation as a monetarist theoretician and advisor to the likes
of Thatcher, Reagan and Pinochet as these attacked all the gains of the working
class was well earned.
The financial press and the investment houses of global finance capital are in euphoria. The world's stock markets are booming. But a closer look reveals that all this euphoria is misleading and the real situation is far less healthy than would appear on the surface.
Financial Times recently claimed the British economy has been doing
rather well out of globalisation. A closer look at the figures shows that what
we have before us a growing polarisation, with the rich getting richer and the
poor poorer. On a world scale the position is even worse, which may possibly
explain the growing instability all across the globe.
Capitalism cannot provide
a decent living to everyone, but as long as it guarantees significant
layers of the population a reasonable standard of living it can
maintain a degree of social stability. Recent figures on the
situation in the USA show that “middle America” is beginning to
feel the pinch, a phenomenon which indicates that social turmoil will
soon be on the agenda.
One of the key elements in holding up consumer spending – and therefore sales and profits – in the USA has been growing house prices. The growing nominal value of housing has led to a widespread phenomenon of remortgaging, i.e. borrowing more to keep up annual family incomes. This cannot continue for much longer. The signs are already there that we are close to the limit.
Capitalism in the advanced capitalist countries is becoming ever more based on finances and services. The idea is that the actual production of real goods can be done in less developed countries where labour costs are much cheaper. For this to work, the consumer boom in the West must be maintained permanently, otherwise who will buy the goods? Can this be maintained in the long run?
After Hurricanes Katrina and Rita have
ravaged the US coast of the Gulf of Mexico, does the fast-rising oil price presage a worldwide economic
recession? The track record of oil shocks is indeed close to perfect. In the
case of the US, each of the previous three oil shocks was followed by recession.
reveal that US corporate profits as share of GDP have moved up from lows in
2001 to reach near record levels in 2005. But if you look over the much longer
term, US profits are still below the levels achieved in the 'golden years' of
capitalism back in the 1960s. The steady decline of the ability of capitalists
to extract profits from their workforces is revealed even more clearly when we
look at the profit figures before tax.
Marxist economics answers the question ‘how did the many start poor?’ with an analysis of primitive accumulation, the historical process of the dispossession of the toilers from the means of production and creation of a propertyless working class. We then go on to explain capitalist production as the production not just of commodities, but also of rich and poor. Reproduction is the reproduction not just of factories and offices, but of the capitalists who own them and the workers who labour in them.
The socialist calculation debate is usually regarded as beginning in 1920 with a challenge to the socialists thrown down by the right wing Austrian economist von Mises. He opined that rational economic calculation would be impossible in a socialist commonwealth. Unfortunately, the socialists who took up this challenge did not, with the sole exception of Maurice Dobb of the British Communist Party, regard themselves as Marxists.
When Meghnad Desai comes to discuss this aspect of Marx’s work, this is the area where his ‘equilibrium’ interpretation of Marx’s economics leads him most seriously astray. He seems to imply that Marx can be used to defend the idea of the long-term survival of capitalism, which is something alien to Marx. It is also an oversimplification of what Marx said.