[OPE-L:7232] Marx's Revenge (review of Desai)

From: Rakesh Bhandari (rakeshb@stanford.edu)
Date: Tue May 21 2002 - 12:01:18 EDT

Can you hear Marx tittering in Highgate?
If only socialists had studied Marx properly, they would have known 
all along that capitalism would triumph. Meghnad Desai gets behind 
the slogans in
Marx's Revenge
Faisal Islam
Saturday May 18 2002
The Guardian

Marx's Revenge
Meghnad Desai
Verso £19, pp383

Practical jokes, last laughs and vengeance would have been more the 
sphere of Groucho rather than Karl Marx. But Meghnad Desai argues 
that the great
thinker's most prominent legacy was a huge confidence trick. 
Capitalism has now triumphed, it is 'the only game in town', statist 
socialism is 'dead', and, yes,
that is what Marx had said would happen all along.

Desai, a London School of Economics professor and Labour peer, 
performs conceptual somersaults to pursue this contention. Most of 
the evidence comes
from Marx's economic writings, ignored by everyone apart from Desai, 
previously the author of a textbook on the subject. Marx's Revenge 
is, however, far
broader than that, racing through a history of economic thought, 
which is vital in that it shows what incubates the contemporary 
consensus in economics.

The key to understanding why Marx is tittering in Highgate Cemetery 
is the difference between the words Marxian and Marxist. The former 
refers to those
who faithfully study all his works, specifically his analytical 
writings about the dynamics of capitalism; the latter is the 
reductive Bolshevism that emerged in
the last century, shaped by Lenin's pamphlet on imperialism and these 
days incorporating a wide span of belief, including the fringes of 

Marx recognised this trend. On hearing of the establishment of a 
Marxist party in France, he famously said: 'Je ne suis pas marxiste'. 
But he was
subsequently ignored. Marxism in the twentieth century became defined 
by interpretations such as Lenin's Imperialism: the highest stage of 

In the 1920s, Das Kapital dropped off the Marxist's must-read list. 
Imperialism became the key text beside the Communist manifesto. 
Almost all debates
about Marxian economics, particularly on the fall in the rate of 
profitability over time, were ruled out as 'uninteresting 
scholasticism'. 'The answers were
known, Marx became a bundle of catechisms,' writes Desai.

Marx developed some pioneering economics. He was the first economist 
to incorporate an explanation of boom and bust within his theory. He 
constructed a
simple model to show how profit came from the exploitation of the 
'surplus value' of labour. This led to the ups and downs of 
profitability. But in volume II
of Das Kapital Marx calculates a numerical scheme of a capitalist 
economy which does not run into crisis and enjoys perpetual growth.

The later volumes were published after his death, after Engels 
assembled Marx's notes. The famous words about the tendency to a 
falling rate of profit
giving rise to the end of capitalism is hardly mentioned in volume 
III, argues Desai, and mentioned only as a possibility in volume I 
and in the Communist
manifesto. So this misconception, misreading, or perhaps highly 
selective reading, of Marx has led to a vulgar simplificaton of what 
was a complex and
nuanced body of work.

Desai's chapter six shows why some Marxists may have skipped the 
surplus profit exploitation equilibrium models. These technicalities, 
crucial to Desai's
understanding of Marx, do not trip off the tongue as lightly as the 
'revolt of the lumpenproletariat'. 'Popular Marxism' took Marx's more 
prophetic writings
on the fate of capitalism, without noting that Marx had not given a 
timescale. If socialism is destined to usurp capitalism, but the 
transition period could last
many hundreds of years, as the transitions between previous modes of 
production like feudalism and capitalism had lasted, then the 
prediction is not entirely

It is the political economy equivalent of Michael Fish telling us to 
wrap up warm because the Ice Age will return at some point. Rather 
than get his revenge,
Desai's work seems to show Marx hedged his bets. If that is true, why 
should we care that his more obscure work has been vindicated?

In the process of explaining Marx's Revenge, Desai illuminates the 
work of Smith, Hegel, Popper, Polanyi, Keynes and Samuelson. A 
similarly revisionist
tract would show that Adam Smith was not quite the market 
fundamentalist he is assumed to be.

Economics is more than a social science. It has become the theology 
of public policy in liberal democracies, justifying how societies are 
taxed, the
ownership of the media and immigration policy. As its norms encroach 
on many other disciplines, such as politics, sociology, the law, even 
biology, its base
assumptions and its evolution require a mainstream dissemination. 
Desai refers to this as 'social astronomy' which would be fair if it 
concerned only
descriptive analyses of the structures in society. Unfortunately, 
Marxists appear to have indulged in too much social astrology.

It is an important book because of who it is directed at. Nobody in 
Wall Street or the City of London will care that Marx is now on their 
side. But for those
who still express moral indignation at pronounced and prolonged 
inequality and poverty, the market is the most likely rescue route.

Whether it is called the market, or capitalism, or neoliberalism, it 
is a tool that has not yet been harnessed fully for poverty 
alleviation. As Desai points out,
the market is a tool for eliminating scarcity. It is departures from 
the free market, such as big subsidies for agriculture in rich 
countries, that are doing most
to solidify poverty. Even from a tactical perspective, arguments 
expressed in the language of the free market are listened to, whereas 
moral sentimentality
about excessive inequality is worthy but ineffective.

Copyright Guardian Newspapers Limited

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