Eco­nomic col­lapse of 2008 showed Karl Marx is cer­tainly not out­dated

Cape Times - - INSIGHT - John Naidoo

ON MARCH 14, 1883, at 2.45pm, the great­est thinker ceased to think. Sit­ting in an arm­chair, peace­fully gone to sleep – but for­ever.

Just as Dar­win dis­cov­ered the law of evo­lu­tion in or­ganic na­ture, so Karl Marx dis­cov­ered the law of evo­lu­tion in hu­man his­tory; he dis­cov­ered the sim­ple fact, hith­erto con­cealed by an over­growth of ide­ol­ogy, that mankind must first of all eat and drink, have shel­ter and cloth­ing be­fore it can pur­sue pol­i­tics, science, art, reli­gion, etc.

Marx also dis­cov­ered the spe­cial law of mo­tion gov­ern­ing present-day cap­i­tal­ist modes of pro­duc­tion and the bour­geois so­ci­ety this mode of pro­duc­tion cre­ated. He just did not an­a­lyse cap­i­tal, he said where it would lead: glob­al­i­sa­tion, where we are to­day; the con­ser­va­tion and cen­tral­i­sa­tion of cap­i­tal. In the early 1960s then labour prime min­is­ter Harold Wil­son de­clared that we must not look for so­lu­tions in High­gate ceme­tery. And who can dis­agree with that? In the af­ter-men­tioned ceme­tery one can only find old bones and dust, and a rather ugly stone mon­u­ment. Then prime min­is­ter Gor­don Brown con­fi­dently pro­claimed “The End of Boom and Bust”. Af­ter the crash of 2008, he was forced to eat his words.

For decades the econ­o­mists never tired of re­peat­ing that Marx’s pre­dic­tions of an eco­nomic down­turn were to­tally out­dated.

In July 2009, af­ter the start of the re­ces­sion, The Econ­o­mist held a sem­i­nar in Lon­don to dis­cuss the ques­tion: what is wrong with eco­nomics?

Paul Krug­man, a No­bel Prize win­ner, made an as­ton­ish­ing ad­mis­sion: “The last 30 years’ devel­op­ment in macroe­co­nomic the­ory have at best been spec­tac­u­larly use­less or at worst di­rectly harm­ful.” The Vat­i­can’s of­fi­cial news­pa­per, L’Osser­va­tore Ro­mao, pub­lished an ar­ti­cle in 2009 prais­ing Marx’s di­ag­no­sis of in­come in­equal­ity.

Ge­orge Mag­nus, a se­nior eco­nomic an­a­lyst at UBS Bank, wrote an ar­ti­cle “Give Marx a chance to save the world econ­omy”. Switzer­land- based UBS is a pil­lar of the estab­lish­ment with of­fices in more than 50 coun­tries. In an es­say for Bloomberg View, Mag­nus wrote that “To­day’s global econ­omy bears some un­canny re­sem­blances to what Marx fore­saw”.

The Wall Street Jour­nal car­ried an in­ter­view with well-known econ­o­mist Dr Nouriel Roubin, known as “Dr Doom” be­cause of his pre­dic­tion of the 2008 fi­nan­cial cri­sis. His con­clu­sions could not be more pes­simistic: “Karl Marx got it right: at some point cap­i­tal­ism can de­stroy it­self. We thought mar­kets worked, they’re not work­ing.” The eco­nomic col­lapse of 2008 showed who was out­dated, and it was cer­tainly not Marx.


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