How Relevent Is Marx Today?

In preparation for Drew’s lecture I conducted research and discovered alternative ideas I want to share. These are supported in many articles and books including “Turbo Capitalism: Winners and Losers in the Global Economy by Edward Luttwak” and “Karl Marx: A Nineteenth Century Life by Professor Jonathan Sperber”.

In the 19th century Marx defined a phase of capitalism that marked the economic revolution at the time. However, Marx was good at analysing the present and the past but wrong when trying to project that into the future. Marx describes the system as dynamic but inherently unstable. However, many now believe he was wrong as capitalism is not unstable but subject to fluctuations. A capitalist system is unstable only in the sense that it gives rise to cycles of crises. Where Marx went wrong was he described these crises as unbounded and would exponentially get bigger and bigger until the system collapses. However, these cycles are volatile, erratic and tend to eventually even themselves out in the end.

Marx defined capitalism against a traditional society at the time. This society had a way of producing and consuming which did not change and was based upon ritual, religion, habit and custom. Capitalism, according to Professor Sperber, has changed so much that Marx’s insights into the working of capitalism are irrelevant to our understanding of the present-day conditions.

Marx also underestimated capitalisms ability to generate prosperity. This is because he saw capitalism as a downward spiral of related events where in fact it’s an upward spiral. Luttwak in his book Turbo Capitalism – Winners and Losers in the Global Economy states that “with the possible exception of nuclear weapons, capitalism is the most powerful of human inventions”. This is supported by the sheer scale and progress the globe has developed over the past 50 years.

Up to the 1930’s Marx analysis of capitalism was not too far off the mark. Systems were developing and generating a crisis growing more and more in severity and leading to degrees of class conflict (Jarrow March 1936). However, In the 1930’s the capitalist world began to find a way of controlling these crises through a certain degree of government intervention in the economy. Without this intervention there was the possibility of larger degrees of social unrest. This introduced the concept of you need a government mechanism to control capitalism to make it more stable. This would have been an unacceptable concept in the 19th century when Marx was writing his criticism of capitalism.

In 2008 the banking system in Britain nearly collapsed. It was saved by government interventions; it was capitalism that almost broke down and was rescued by the state. Today we have global enterprises including large oil companies, banks, Google, Microsoft, Nissan, and so on. In Marx’s day the business and the state were distinct; today the state is almost interlocked with big business.

The belief that capitalism has an inherent tendency to become global was restated by Marx in The Communist Manifesto, published in 1848: ‘The need of a constantly expanding market for its products chases the bourgeoisie over the whole surface of the globe. It must nestle everywhere, settle everywhere, establish connections everywhere.’ 

However, there is a tendency for capitalist enterprises to expand and increase because there are clear advantages in being large, in terms of costs, market power, and in the struggle with competitors because it’s is a case of the survival of the fittest.  Over time as these enterprises grow and find domestic markets are too small for their operations. They are led to find markets and resources in other countries and these leads them to locate their operations across the world.

So, my question is: “Following 150 years of 'Das Kapital': How relevant is Marx today”?