Alex Callinicos

Marx: Hit and Myth

(http://www.marxists.de/theory/callinicos/marxmyth.htm)


Having been treated like a dead dog for most of the 1990s, Karl Marx is
back in fashion. Over the past year or so commentators in establishment
organs such as the Financial Times and the New Yorker have carried pieces
affirming the relevance of Marxs thought to the contemporary world. It is
rare that a week passes without the economic pages of the Guardian making
at least one reference to Marxs critique of capitalism.

Indeed, as Bill Clinton famously put it, its the economy, stupid that
explains the revival in Marxs reputation. While world capitalism appeared
to have triumphed in the first half of the 1990s, Marx was ignored. Now
that the world economy is in increasingly deep trouble, his works are
being dusted off again.

Yet there is in many ways less to this return to Marx than meets the eye.
Despite the greater respect and attention with which he is now treated,
the substance of his thought is still largely discounted. Thus the
Guardians Victor Keegan wrote at the start of January that hed like to
have one of those One-2-One talks with Marx, but then went on to argue,
What would really have astonished Marx is the resilience of the market
system, which seems to have survived yet another crisis.

Behind this kind of, in reality, very dismissive reference to Marx lies a
set of very persistent myths about the nature of his thought. None of
these are new most were formulated by his first critics a century ago. But
they are perpetuated by the education system and the mass media,
particularly in their higher, supposedly more sophisticated, reaches.
These are, as I say, myths that is, they misrepresent the real content of
Marxs thought. Here are five of the most deeply entrenched.


Myth one: A Victorian conception of class

From the Communist Manifesto onwards Marx portrays capitalist society as
divided between a tiny minority of capitalists in whose hands all economic
power is concentrated, and the large majority of workers on whose labour
the system depends. But, say numerous sociologists, contemporary society
doesnt fit this picture. Most people, in countries like Britain at least,
are middle class, doing white collar jobs in service industries rather
than toiling in Victorian factories.

This criticism is based on a complete misunderstanding of Marxs conception
of class. For him, class is defined not by a persons lifestyle or
occupation, or even, within limits, their income. An individuals class
position depends on his or her relationship to the means of production.
These are the productive resources land, buildings and machinery without
which no economic activity can take place.

Workers lack access to productive resources with the very important
exception of their labour power, their ability to work. In order to live
they must sell this labour power to the capitalists, whose wealth allows
them to control the means of production. Workers weak bargaining position
relative to the bosses means that they sell their labour power on
unfavourable terms. They work under the tight control of managers and
bosses in exchange for wages which allow the bosses to profit from their
labour.

Class for Marx is thus a social relationship. To be a worker on his
definition you can work in an office, a supermarket or a hospital, rather
than a factory. You can do some kind of white collar job or you can help
produce a service say, by teaching children or serving hamburgers rather
than a material good. On this definition, then, the large majority of the
workforce in countries such as Britain are workers and indeed opinion
polls show that, to the sociologists despair, a majority consistently
regard themselves as working class.


Myth two: The iron law of wages

Marx is further accused of believing that the working class would, in the
course of capitalist development, become increasingly impoverished. This
is what is sometimes called his prediction of the progressive immiseration
of the masses. But since real wages have, in the advanced capitalist
countries, risen substantially over the past 100 years or so, Marx has
surely been proven wrong.

This is an astonishing distortion of Marxs thought. The iron law of wages,
according to which real wages cannot rise above the bare minimum of
physical subsistence, was one of the main dogmas of orthodox
pro-capitalist economics during the 19th century. It was based on Thomas
Malthuss theory of population, according to which population tends to rise
much faster than the production of food. Any rise in wages above
subsistence will, according to this theory, stimulate population growth
thus producing mass impoverishment.

Far from accepting this theory, Marx set out vigorously to combat it and
he sought to persuade socialists not to accept it. In Wages, Price and
Profit he challenged the argument of a follower of the utopian socialist
Robert Owen that the iron law of wages meant trade unions could never
improve workers conditions. Marx showed that the division of the product
between labour and capital depended on the balance of power between the
two sides, and therefore on the class struggle.

What is true is that Marx distinguished between absolute and relative
impoverishment. Real wages do rise, but the share of the product of labour
taken by workers may simultaneously fall compared to the share taken by
bosses in the form of profits. If workers labour becomes more productive,
their living standards can rise, but they will still be more exploited
because the bosses are getting more profits out of them.

Marx also argued that there are limits to the reforms trade unions can
achieve. The bosses control of production means they can weaken workers
bargaining power by sacking them. This is what happens during recessions.
Higher unemployment forces those workers still with jobs to accept
speed-up, lower wages and worse working conditions. During the past 25
years of economic crisis, real wages in the United States, the richest
country in the world, have fallen significantly. This hardly suggests that
Marx got it wrong.


Myth three: Inevitable economic breakdown

But, say the critics, didnt Marx claim that capitalism would inevitably
break down as a result of its economic contradictions? And since no such
capitalist collapse has taken place surely Marx has, once again, been
proven wrong?

Marx indeed develops a theory of economic crisis in his great work
Capital. Long before the economist Maynard Keynes, he demolished the idea
still central to mainstream economics and trumpeted by Gordon Brown today
that a properly organised market economy is bound to achieve an
equilibrium at which all its resources are fully used. He further shows
that there are deep-seated forces driving capitalism towards crises.

The most important of these is the tendency of the rate of profit to fall.
The rate of profit the return capitalists make on their investments is the
chief measure of success in a capitalist economy. But the bosses are an
internally divided class they compete with one another, each seeking a
larger share of the profits they have squeezed out of the workers.

Individual capitalists invest in improved methods of production in order
to win a larger share of the market. Their rivals are forced to copy them
in order to survive. As a result, investment in particular in machinery
grows more rapidly than the workforce. But the labour of these workers is
the source of profits. The mass of profits thus grows more slowly than the
mass of investment, and so the rate of profit falls. When the overall rate
of profit falls below a certain point, new investment ceases and the
economy goes into crisis.

There is, however, only a tendency for the rate of profit to fall. Marx
lists the counteracting influences which serve to push the rate of profit
back up. Indeed, he says, the same influences which produce a tendency in
the general rate of profit to fall, also call forth counter-effects, which
hamper, retard and partly paralyse this fall. The most important of these
are crises themselves.

During economic crises, firms go bust and their assets are sold off cheap.
This reduces the total amount of capital in the economy. At the same time,
as we have seen, workers are forced under the whip of unemployment to
accept greater exploitation. These forces help to restore the rate of
profit to a level where investment and hence growth resume.

Therefore, as Marx put it, permanent crises do not exist. The fluctuations
in the rate of profit lead capitalism through a cycle of boom and slump
which Marx was among the first to analyse. The downward phases in this
business cycle cause workers enormous suffering. When the system is in
crisis, the class struggle becomes more bitter and intense. Out of this
polarisation can come a working class that is politically determined to
overthrow capitalism. But this does not mean that capitalism is bound to
collapse economically.


Myth four: Economic determinism

This distortion of Marxs economic theory is part of a larger
misinterpretation of his thought. Too often he is depicted as an economic
determinist, who believed that historical change is the inevitable outcome
of the development of the productive forces. More particularly, he is
accused of believing that socialism itself is inevitable.

Certainly there is a strain in the Marxist tradition particularly during
the debates among the socialist parties who joined the Second
International which emerged after Marxs death which argued that history
did develop according to inevitable economic laws. But, despite the
occasional formulation of Marxs which lends support to this view, the main
thrust of his thought is very different.

Men make their own history, but they do not make it just as they please,
Marx famously wrote, they do not make it under circumstances chosen by
themselves, but under circumstances directly encountered, given and
transmitted from the past. This suggests that human beings are indeed
constrained by their material circumstances, but that these constraints do
not deprive them of choice or initiative.

Again, in the Communist Manifesto Marx says that each great crisis of
class society has ended in either a revolutionary reconstruction of
society at large, or the common ruin of the contending classes. In other
words, crises pose alternatives rather than predetermine outcomes. How
workers react to a major economic slump depends not just on their material
situation but also on the strength of their collective organisations, the
different ideologies that influence them, and the political parties that
compete to lead them.

Marx distinguishes between the economic base of society and its political,
legal and ideological superstructure. He describes the former as the real
foundation of social life. But this doesnt mean, as his critics claim,
that he regards the superstructure as irrelevant. On the contrary, in
times of crisis, what happens in the superstructure where, as he puts it,
men become conscious of this conflict and fight it out becomes of decisive
importance in determining the outcome.


Myth five: State socialism

Finally, we are told that Marxs vision of socialism is a totalitarian one
in which the state gains control of the economy and regulates everyones
lives in the most minute detail. The collapse of the Stalinist societies
at the end of the 1980s was therefore a direct consequence of the defects
of Marxs own conception of the future.

Yet again, this is a complete distortion of Marxs actual views. He
regarded the idea of state socialism as a contradiction in terms. Freedom,
he wrote, consists in converting the state from an organ superimposed on
society into one completely subordinate to it.

In his writings on France, he railed against the growth of a centralised
bureaucratic state battening on society in the interests of capital. He
welcomed the Paris Commune of 1871 precisely as a revolution against the
state itself. He praised the workers of Paris for dismantling the
bureaucratic state apparatus and replacing it with public institutions
under their direct democratic control.

Socialism, Marx insisted, could not be imposed on people by some
enlightened elite. It was the self emancipation of the working class a
process through which ordinary people freed themselves by democratically
organising to tear power from the minority of capitalist exploiters. The
Stalinist societies, with their immense concentration of power at the top,
were thus the opposite of Marxs conception of socialism.



This is why the collapse of these societies did not invalidate Marxs
thought. As the inequalities and irrationalities endemic in the liberal
capitalist societies that dominate the world today become more and more
evident, it is time to turn back to Marx not the Marx of the myths refuted
here, but the genuine Marx, with his penetrating critique of the existing
system and his vision of the alternative: human liberation.