It is common knowledge that the patron saint of Vox Nova is Karl Marx (after all, he *is* on our banner, along with such notorious commies as Adam Smith and Bono; also, if you play this video backwards you can hear the words “Policraticus is dead” in the background, but I digress). So it’s only natural that I spend a few moments surveying the recent bloom of commentary relating Marx to the current financial crisis.
The CPUSA is, of course, opposed to the bailouts. But as the SSPX of communism, they are perhaps not the best guide here (don’t they realize that all that class conflict stuff went out with Vatican II?).
But while the leaders of actual Communist Countries don’t seem to care much for Marx these days, a renewed appreciation for the man does seem to be spreading in other places. Writing in the Atlantic and Foreign Policy respectively, Christopher Hitchens and Leo Panitch write that Marx was one of the first to note the periodic financial crises that beset capitalist countries. Also writing at Foreign Policy, Matt Yglesias writes that this is a silly reason to read Marx, as the idea that the business cycle is inherent in capitalism is an insight broadly shared across the theoretical spectrum. Yglesias still thinks that reading Marx is important, however, on account of his unique insight that “wealth and power have a tremendous ability to gin up self-justifying narratives.”
Probably the most helpful analysis of the question (of the one’s I’m linking to, anyway) comes from this recent lecture by Brad DeLong:
Marx the economist was among the very first to recognize that the fever-fits of financial crisis and depression that afflict modern market economies were not a passing phase or something that could easily be cured, but rather a deep disability of the system – as we are being reminded once again right now, this time with Ben Bernanke, Tim Geithner, and Larry Summers in the Hot Seats. Marx pointed the spotlight in the right direction here. However, I don’t think that his theory of business cycles and financial crises holds up. Marx thought that business cycles and financial crises were evidence of the long-term unsustainability of the system. We modern neoliberal economists view it not as a fatal lymphoma but rather like malaria: Keynesianism – or monetarism, if you prefer – gives us the tools to transform the business cycle from a life-threatening economic yellow fever of the society into the occasional night sweats and fevers: that with economic policy quinine we can manage if not banish the disease.
Actually the whole DeLong lecture is probably worth your time.
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