The richest man in China worries about the social disparity in his Communist country. Marx recognised the roots of that inequality
It is often said that if you want to be a proper Marxist then the first thing you must do is subscribe to the FT. The house journal of capital does not dress its business in fine, embroidered veils but lets you know exactly what is going on. There are sometimes exceptions though. In an impeccably moderate and yet wrong-headed article in the Financial Times on 15 November, Karl Sternberg argued that if Karl Marx were alive today he would be a banker, on the grounds that by 2007 the banks had reached a state of "communist perfection" in that the workers had managed to take control of their institutions and accrue to themselves more than the full fruits of their (rather meagre) labours. Nice try and a good journalistic trick, but no cigar and top hat, I'm afraid.
Apart from the fact that Marx would, were he alive today, be continuing to play the markets while waiting for them to collapse – and oh how he would be enjoying this crisis – the idea that the banking crisis was caused just by the greed of a few bankers has always been risible. He would be showing in volume four of Das Kapital (as he had started to do already in volume three) that rentier and finance capitalism is not the antithesis but the logical consequence of an industrial capitalism that has grown so vast (see China and India today) that only vast and flexible sums of imaginary money can lubricate it.
In other words: the debt that is now dragging us all down is not the result of lazy Greek workers, benefit scroungers or illegal immigrants being personally handed bundles of cash by Gordon Brown, but was absolutely necessary for the massive transition from national to globalised production during the 1980s and 1990s. The credit bubble was not a mistake, but a necessity and now that it has burst the costs are being passed on to those who did not create it but who are chained into an economic system that allows no escape, unless you have access to offshore havens. As Marx himself put it:
"The two characteristics immanent in the credit system are, on the one hand, to develop the incentive of capitalist production, enrichment through exploitation of the labour of others, to the purest and most colossal form of gambling and swindling, and to reduce more and more the number of the few who exploit the social wealth; on the other hand, to constitute the form of transition to a new mode of production."
Point one? Tick. Real wages in the west have not risen since the 1970s and, combined with improved technology the rate of exploitation has increased everywhere. The French call the period from 1945-1975 "le trente glorieuses" ("the glorious thirty"); three decades of almost full employment in Europe and the US, expansionary policies, rising wages and the development of a welfare state that transferred daily concerns about things such as housing, health and education to the state. This allowed people to spend their hard-earned cash on consumer goods, creating effective demand in the economy. China will have to move in this direction soon.
The crisis we are living through in the west dates from the mid-1970s, when the decision was taken to drive down real wages and replace state with private spending on all of those things we took for granted. This crisis has sped up the transition to the pay-as-you-go society of the Wall Street consensus and the privatisation of everything that moves, while the division between rich and poor has constantly increased.
The mistake is to think, however, that the golden years from 1945-1975 were anything other than a temporary exception. In fact, normal capitalist service is now being resumed, but in a more advanced and brutal form. Austerity will become the new normal until our wages are low enough to compete globally.
Point two? Tick. The Chinese walls of national capital have been well and truly battered down and we have become the new barbarians, being forced on pain of extinction to adapt to the lowest wages and the cheapest commodities. This is not, of course, the new mode of production Marx wanted to see, but it may work out to be the transition to it.
On Thursday on the BBC we had the fine sight of the richest man in China, worth some $20bn (£12.6bn), sitting at a desk with the hammer and sickle prominently displayed, worrying about the social disparities that have led to more than 12,000 major and minor popular uprisings in the last year alone. So on second thoughts, maybe Marx would have been a Chinese banker.
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