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February 03, 2006

Comments

Unity

"[w]hy do we hear so much about the green argument that capitalism is unsustainable, and so little about the more conventional economic arguments?"

Politics and ignorance.

The primary assumption is that Marx = Soviet-model Communism. This leads to the false assumption that the failure of the Soveit-model command economy equates to the failure of Marxism, in all its forms, and therefore discredits Marx's work entirely - this despite the fact his analysis of structural instabilities in capitalism stands on its own is and widely thought to be valid by economists on both the left and the right.

One of the more interesting yet oblique comments on the collapse of the Soviet Union came from Fukayama who announced that this marked 'the end of history' - a fairly deliberate if ironic reference to Marx - which just goes to show that he gets everywhere.

It's unsurprising to see Rob advancing the green view as a rejection of Marxism in its entirety is a central facet of the New Labour project - it's also illustrative of one of the reasons why that project will ultimately end in failure, not simply because of the wholesale rejection of Marx but because it has failed to find adequate philosophical and ideological underpinnings for its programme, leaving an intellectual vacuum at the heart of the party in government.

Blair's key philosophical problem is that where he was able to turn to Giddens and the 'Third Way' to cover the party in the economic sphere, he has never been able to unearth anything to fulfil that same function in the social domain - we can forget the third major political domain, foreign policy, as no matter how much anyone might claim to the contrary that remains firmly locked into the realpolitik.

Blair has tried to eek out a position on social policy based on Berlin's (well originally Mill's) concept of two liberties but, unfortunately, I don't think he understands the concept well enough to put it into practice - he certainly has never understood Berlin's concerns about that concepts potential for misuse by authoritarian government.

Robert Schwartz

BIOYA Unity. You are starting to sound like the Black Knight*. Marxism is twaddle, always has been and always will be.

The Green argument is just as bad. Free market economies eliminate waste and excessive consumption as a natural part of their operation. The real trend is to dematerialize economic processes. The future is so bright you have to wear dark glasses to see it. The biggest problem we have getting there is shutting up the Greens.

*
http://www.mwscomp.com/movies/grail/grail-04.htm

Unity

I beg to differ here, Robert.

As I said, Marx's basic analysis of structural instabilities in capitalism stands up as valid whether you agree or disagree with his ideas about to tackle those instabilities.

That's a widely accepted position amongst even the most ardent supporters of the free market - or rather amongst those who are economically literate.

All economic systems are subject to boundary conditions where the overriding principles of the system begin to break down - in a free market economy that comes at the point where in certain basic commodities - food, water, energy - demand exceeds supply but there remains no further room for either the elimination of waste or excessive consumption.

At such a point, the market, if left unchecked, will start to price people out of the basic commodities that are necessary for survival, which leads inexorably to social disorder and eventually revolution - hence Bakunin's successful prediction that Marxist revolutions would not occur in industrial economies, such as Britain or Germany, by in countries with predominantly agricultural/peasant economies - Russia, China, etc.

It's not often noted but the Rwandan genocide was actually triggered by conflicts over a critical resource - water - which then spiralled out of control into ethnic conflict.

Likewise Iraq is primarily and economic/resource driven conflict - although it is more complex than simply the matter of Iraqi oil and takes in everything from the need for regional stability to enable safe access to the resources of the Caspian region to trying to prevent the spread of Islamic fundamentalism, particularly in relation to Saudi Arabia and the Gulf States. It has to be remembered the US is not only a nett importer of resources, but a nett importer of capital - something like 6-7% of the US economy is built on inward investment from the Middle East - turn off the tap on either inward flow, or worse on both, and the US economy is down the pan before it knows what hit it.

John East

I don't see why this should be true,

"Capitalism is not sustainable by its very nature. It is predicated on infinitely expanding markets, faster consumption and bigger production in a finite planet."

The capitalism practiced over recent centuries has followed this path, but that is because the human race has been growing in numbers and filling all available niches on the planet.

No one knows that capitalism won't function perfectly well through a period of de-population, resource depletion, and energy conservation. In the coming centuries we will probably find out if this is the case.

rjw

I beg to differ on the 'marxism is twaddle argument'. Chris has made a couple of great posts here highlighting those parts of marx that remain important in understanding our economic system. And if you need convincing read some kalecki, elster or marglin and bhaduri, all of whose (great) work has been influenced deeply by marx.

Of course - to paraphrase a quote by someone I can't remember - 'some books on marx are wrong, some are incomprehensible, and some are dull. and a few glorious ones manage to be all three'.

So the trick is being able to separate out the good stuff from the garbage. Both in marx and his intellectual offspring.

Robert Schwartz

Some things are so gobsmackingly stupid that only an intellectual could believe them.

david

Good point Robert, presuming you are an intellectual.

On to my point:

"Markets" doesn't mean much if you thing that "primitive tribal exchanges," understood in the conventional way (that word primitive is no longer conventional, but anyway), are markets. I can't tell if that's what you are suggesting, or rather you are pointing to alternative exchange systems not predicated on growth.

angry economist

I can't agree more with the frustration of Unity at the simplicity in which Marxism and socialism are dismissed because of the end of the Soviet Union. The Communist model is not the only actual or potential application of marxist or socialist ideas.

Capitalism isn't perfect, and neither are markets. But, neither is Marx nor socialist theory or application.

In economic terms, Marxism is useful to understand the economy. So are environmental economics too. But none of them are perfect.

Where I differ personally is that I don't follow Environmentalism, Marxism, Hayekism or Capitalism as a religion, but rather use them as frameworks and disciplines of learning on which to try to understand the world.

Alex

Hmm. I think there's an issue of poor historical foundations here. Capitalism predates industrialisation. Adam Smith didn't drive. The East India Company didn't burn oil. And industrialisation's killer app - the division of labour - predates steam power. I grew up in West Yorkshire and there is a very good reason why all the first generation of textile mills are next to rivers - they were water-powered before they were steam-powered.

Bad history=bad data. GIGO implies that even with correct reasoning your answer will still be wrong.

A further point; it's quite possible to imagine an apocalyptic future scenario that ends up, not with neo-Digger communes, but capitalism that sucks even more than it already sucks.

I have to say Newman's article read like a mashup of half-digested modish US student politics about "the corporation" - usually, when you find yourself referring to "the" something ("the Arab mind", "the German"..) it's a good marker of being on the edge of saying something utterly stupid.

Robert Schwartz

"Good point Robert, presuming you are an intellectual."

God forbid. But it is amusing to watch you folks play the Black Night and think you are on to something.

tony

Interesting comments. In my humble opinion, the Green argument brings up a valid point on the finiteness of energy and resources but isn't that a problem that would face ANY economic system at one point or another? The only difference is that capitalism in its encouragement of consumption, would bring the crux point much quicker.

Seems to be a case of X causing Y. Problem is that X causes Z, B, A and D as well.

Personally, I think the collapse of capitalism will be predicated by the formation of a few giant global monopolies. Capitalism is based on competition. With the rapid growth of mergers and acquisitions, competition will gradually snuffed to the point where the corporation's customers will also be it's staff, thereby eliminating the ability to generate profit.

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