Imaginary debate over Keynes and Marx

First speaker:  Keynes has an under-consumption theory of unemployment (to relate the classic Marxist under-consumption vs overproduction debate on crises).

Second speaker:
American Marxists have in their majority plumped for good ol' Keynesian pump-priming as a solution to the unemployment problem. But leaving aside the technical arguments against that policy in a contemporary US setting, what they forget is....

First Speaker:
When I say Keynes has an under-consumption theory of unemployment, I don't mean that American Marxists adopt Keynesianism. Only that Keynes's theory has limited value under capitalism based on it partial overlap with Marxism, and is thereby the basis for reform measures. Reform measures not revolutionary change. All the American Marxists I know have consistently criticized Keynesianism, in the first place because there is no end to mass unemployment and crisis under capitalism, so Keynesian measures are not sufficient.  I think Marx didn't clarify his theory of crisis because he didn't want Marxists to spend a lot of time arguing for economic reforms. It's not that Marxists don't advocate reforms at all, but they do so in the context of arguing for more fundamental change.

Second Speaker:
But American Marxists don't really understand the problem in that case. The problem is that there isn't even any significant popular movement in the US for reform. If you have a movement of reform, then it would be easy to be on the left side of it and try to radicalize it more. But there isn't even any great impetus for reform. So really the question is whether you can mobilize people around any campaign to achieve progressive change. What are the common denominators? Which kinds of campaigns have succeeded in the past, and why? It is a nonsense to lambast reformists for being reformists when there is hardly any movement for reform anyway. The best book I have read on underconsumption theories is by Michael Bleaney

First Speaker:
I think we know quite well that there isn't enough popular movement for reform in the US, comrade. We've been living it, suffering it painfully for 30 years. Would be hard not to notice that reforms of the New Deal, Great Society and War on Poverty have been eroded, not expanded in the last 30 years, because of steps backward in mass consciousness. No lambasting of reformists in what I said. Communists constantly call for organizing people's movement for reform. In other words, there has been a reaction over the last period. A deformation. Not only not reforms , but anti-socialist reaction. Included in this on the global level  is the fall of the Soviet Union.

Second Speaker:
In order to get any Green economy going, there will have to be massive economic reform, a massive reallocation of resources. But in fact the Obama administration hasn't implemented anything much in the way of Green reforms either...

First Speaker:  
Obama enters office while we are still in a period of reaction in US politics. The main trend is deforms, destruction of past reforms. This is why the very small reforms that Obama has achieved or put on the national agenda- equal pay for women, health care – are significant. He is paddling up stream. To get any reforms in an overall period of reaction is remarkable. This is why the right-wing is so anti-Obama. It explains the extreme rhetoric of the tea-Republicans.

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  • I think this format of "imaginary debates" has a lot of promise.

    --jim lane in Dallas

    Posted by JIm Lane, 05/25/2011 4:40pm (7 years ago)

  • I find John Henry's piece on an imaginary debate between Keynes and Marx a confusing dialog. I am not sure what light it sheds. As written, I can't really tell if the writer has read much of either Keynes, or Marx.

    First there is the confusion over revolution and reform. The American revolution is termed a revolution because it expropriated both the property and political power of a dominant social class -- landed British royalty. It also looked revolutionary because it required the force of arms to accomplish, but what kind of force must be employed is not the critical question. What change occurs in the role of social classes, IS. The American revolution shared another feature with almost, but not all, revolutions in that it also had a profound ideological dimension -- republicanism vs divine right as the fundamental contending philosophical frameworks that judge from whence political authority arises: from the governed, or from God.

    While the American revolution was indeed a class transformation, economic development proceeded indeed, exactly, as a series of reforms that gradually enhanced the marketability and scale of domestic agriculture (of both the yeoman and slave/plantation varieties) and emerging manufacture, with an overriding theme of finding ways to closer unite a new and vast country.

    The Civil war was also a revolution. Two social and economic classes, slave-masters and enslaved peoples, were abolished. The slave-owners property was expropriated. However it took over a 100 years (and counting) of reforms to abolish the political and economic subjugation of enslaved African Americans.

    [And, by the way, where does this phrase come from: "The problem is that there isn't even any significant popular
    movement in the US for reform".? Huh? the election of Barak Obama was not a mass movement for reforms???]

    Keynes addressed economic policies -- basically what we call today public deficit spending, borrowing from the future to correct a market failure today --- that were designed to counteract capitalism's inherent instability and tendency toward crisis. However, every public expenditure of capital deprives private capital of actual or potential resources. This arouses fears of expropriation among private capital even when the expenditures are necessary to stabilize capitalism. The bosses hated Roosevelt even if he saved their hides from Bolshevism. This is because the bosses are indeed correct. Every advance of public sector investment, regulation and control is indeed an incremental act of expropriation, of reallocation of wealth,or potential wealth, from one class to another. We call it reforms. But -- enough of these reforms equals revolution at whatever time the dominant power of capital over political institutions is critically compromised -- maybe it happens all at once, or gradually. The line between reform and revolution is not fixed, and in most left political debates that i have read is a false dichotomy.

    The great contribution of Keynes is that he shows that it is POSSIBLE -- not inevitable -- for incremental socialism to advance at the expense of market failures and instability and crisis. Marx's writing assumed the crises would cause capitalism to unravel altogether in part because for most of his writing career working class democracy was simply too primitive to envision a sufficient political base for this to happen. And, of course, in weaker capitalist nations, like Tsarist Russia, attempts at bourgeois democracy were crushed by the autocracy.

    Yet, contrary to the impressions you get from much so-called "Marxist" writing, Marx and Engels spent most of their political lives campaigning for basic democratic rights, suffrage, unionization, etc --- reforms --- for working people. Numerous European revolutions occurred as stages in the achievement of these rights, these reforms. In early writings especially, both Engels and Marx underestimated the potential for reform, --- that is, the potential for social democracy to advance under capitalism -- a defect Engels happily noted repeatedly in his later years.

    On the Left, the Marxist position is often contrasted with Keynes, and social democracy, as the choice between socialism and capitalism, and these terms themselves are confounded, sometimes having a predominantly political, and at others, a predominantly economic, definition. Marx had a clear notion of what he meant by revolution in this context: the expropriation of private capital by the public, the abolition of capitalist as a social and economic class, and the abolition of wage worker as well as a social and economic class. But what were the conditions for such transformation? The truth is: he wisely, due to insufficient data in his era, did not choose to say in any detail. But today, over 125 years later, and with several socialist revolutionary experiments under our belts, we CAN say a little more:

    1. There is NO path to a society or economy that can implement the principle of "from each according to his ability, to each according to his work" without passing through industrialization.

    2. There is NO path through industrialization that can escape markets and commodities, and thus NO path that can escape capitalism, no matter what class is in dominant political power in a particular time or nation.

    3. There is NO path through industrialization that can rely only on markets or private capital: every society needs industrial and public policy (Keynesianism, in a word) and enhanced democratic empowerment of workers. That last bit is the part, by the way, that Keynes missed: his remedies for capitalist instability require the independent leadership and political mobilization of workers to implement and sustain -- the bosses cannot and will not do it on their own!

    4. Post industrial services and intangibles (which can arise only on the foundation of high tech, super high productivity manufacture and agriculture) are all very poor commodities from an economic standpoint, and provide inherently weak support for markets and private property, and thus are the natural ground of non-capitalist economic development and sustainable relations, a field we are only in the past 20 years beginning to seriously understand and study.

    Both Marx and Keynes have much to offer -- but we need to ground our understanding much more deeply in understanding the class analysis of NOW. In doing so we will naturally pay more attention to the real context in which both these thinkers lived, struggled and thought. They too were both exemplary critics and practitioners of NOW in their own times.


    Posted by John Case, 05/18/2011 1:12pm (7 years ago)

  • Imagine yourself a business owner with a plant that makes thing, or plans for a plant that makes things. Which is more important to you in today's economy, a tax cut or a batch of fresh purchase orders? Which would cause you to hire new workers?

    To every business people I've ever asked this to, the answer is a no-brainer. Every single one voted for the purchase orders, in a heartbeat.

    It's only people who been educated by neoliberal think-tanks that get confused and wrong on the matter.

    Posted by Carl Davidson, 05/18/2011 9:23am (7 years ago)

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