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MARX IS BACK! OR IS IT KEYNES? by Ken Howell

posted 24 Jun 2014, 09:27 by Gerry Kangalee   [ updated 25 Jun 2014, 16:17 by Dave Smith ]
Karl Marx
The spirit of Karl Marx is haunting the capitalist world and this is freaking out capitalists and their apologists in Europe and America. As fate would have it, a French Economist by the name of Thomas Piketty is the source of their problem; all because of a book which he wrote entitled “Capital in the Twenty First Century.” 
 
To make matters worse, Pope Francis appears to have joined forces with him. So if they play the ass with him they likely to get spirit lash, left, right, and centre. On a more serious note: in his book, Piketty confessed that he was not a Marxist and as a young man who grew up at a time when the Berlin Wall fell, all he knew was that the Soviet Union was anti-democratic and that was what led to its collapse. 

But he found himself in a place where Karl Marx was in his time in the 19th century. Significant events had occurred and were occurring and the reasons for such occurrences needed to be analysed in order to make sense of their meaning. As a result of his analysis Marx arrived at certain conclusions which he outlined in his famous works; the Communist Manifesto and Capital. Like Thomas Piketty, Karl Marx was not a Communist when he began to observe the events as they unfolded around him.                                                                                                                                                 
 
Marx was just a young man no doubt fresh from University, caught up in the intellectual upheavals taking place around him in Germany, as well as the industrial revolution in England and the adverse consequences which it brought with it for the sea of dispossessed which he described as the proletariat. 

After exhaustive research and analysis which he was able to do by not just sitting in a room, but by also holding meetings with workers in groups where they would have spoken about the type of society they wished to create. He arrived at the conclusion that capitalism was creating its own grave diggers because of the concentration of capital in the hands of a few, thereby creating inequality in the society. He went on to point out that this new class which capitalism created is the class which will change
Thomas Piketty
society for the better. 
 

In the case of Thomas Piketty: after receiving his Doctorate in Economics, he went to America where he taught economics at the Massachusetts Institute of Technology, but he soon felt a longing to be back in France. During the time he spent in America, he found that economics was being taught in a vacuum without reference to the other sciences, and that Economists, appeared to be treated with the highest regard while in France they were regarded on the same level with their colleagues in the other sciences. 
 
In France, it would appear that economists had to earn their spurs as the Americans would say. But he realised that what was being taught was the same old mathematical formulas and that mathematics by itself does not always explain why things are the way they are in society. And so, it appears from his writings that he did not want to follow the same old route that  economists, post-Marx, had followed.                                                                                                                                                      
 
He got his answer, when he read the lecture presented by Simon Kuznets President of the American Economics Association in Detroit in December 1954 entitled “Economic Growth and Income Inequality”. Piketty pointed out, that according to the Kuznets theory, inequality everywhere can be expected to follow a “bell curve”. In other words, it should first increase and then decrease over the course of economic development. 
 
Simon Kuznets presented voluminous data in support of his contention. This apparently led to Piketty being driven to the decision to test this theory of Kuznets and in the search for truth he set out on a journey which led him along the same path which Marx followed. 

As a result he came upon one of the monsters which capitalism has created, which is; the increasing concentration of capital in the hands of the ever decreasing few. To him that was frightening, especially since he confessed that he was not a Marxist, but just someone who was seeking after truth, using the tools of his trade, while adopting an historical approach in the process of acquiring data with which to support his conclusions. 
 
It would appear, that Piketty deliberately avoided Marx's conclusion, that capitalism will collapse like all other forms of society and that the working class is that class which will change society, not because he did not agree with it, but because such a conclusion, might have led to him being victimized. However, he did recognize Marx's principal conclusion i.e. the “principle of infinite accumulation” In other words, according to Piketty, there is an inexorable tendency for capital to accumulate and become concentrated in fewer hands, with no natural limit to the process. 

The Sunday Guardian of 1, June 2014, carried an article which head line asked the question, “Is Piketty's inequality data flawed?” The writers, Chris Giles and Ferdinando Giugliano questioned the accuracy of the data which he presented in support of the conclusion he arrived at in his book. He also came under attack in some newspapers in Europe. One particular writer accused him of being a Marxist. As a result, he was forced to respond, to defend his conclusions by pointing out that if his intention was to mislead, he would not have placed all of the data he used, to arrive at his conclusions, on line for all to see.                                                                                              
 
But the right wing elements, who lead the ideological charge against all views which exposes the soft under belly of capitalism, are unwilling to face the truth which is staring them in the face. In Europe with all the upheavals occurring in Greece, Spain, Italy, England, Ukraine and America since 2008, in Brasil, where unemployment is high as is the case in Greece and Spain social unrest is on the agenda.

In their haste to dismiss Piketty, his warning might have escaped them: that a continuous rise in inequality could lead to unacceptable levels of social and economic crises. In an effort to avert such consequences, he proposed the introduction of an international wealth tax, through which things may be brought back into equilibrium. The fact of the matter is this; Thomas Piketty is on a mission to save capitalism, just like John Maynard Keynes did in the thirties and forties. The question is will he succeed? Remember the spirit of Marx is back!
    
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