The International Marxist Tendency is proud to present the Winter 2022 edition of the in Defence of Marxism theoretical journal. The feature article in this issue takes on the Austrian School of economists who attempted to ‘disprove’ Marx’s economic theory and the very possibility of socialist planning. We publish the editorial by editor-in-chief Alan Woods below.
In the first issue of the newly relaunched In Defence of Marxism (IDOM), we dealt with issues relating to Marxist philosophy, while the second concentrated on the question of historical materialism. In the present issue, we move on to the third of what Lenin described as “the sources and components of Marxism” – namely, economics.
The main article by Adam Booth – The Austrian school of economics: capitalism’s free-market fanatics – is a polemic against one of the most significant elements of bourgeois economic theory, the free-market dogma and in particular, the man who was probably its chief inspirer and guru, Friedrich Hayek.
The Communist Manifesto of 1848 had already pointed out the great advances made possible by capitalism in its period of ascent. But it also explained the inherent and insoluble contradictions that lie within it, and that are periodically exposed by crises that shake it to its very foundations.
Free market fanatics like Hayek attribute these crises to subjective factors: the irresponsibility of investors, the obtuseness of central bankers and the meddlesome activities of financial regulators, who persist in interfering with the free market, instead of allowing it to work its magic unaided by the state.
These so-called ‘theories’ will convince no serious person today. Faced with looming disaster, the ruling class has been forced to throw all the accepted economic theories into the dustbin. The same state which, according to free-market theory, should play little or no role in economic life, has now become the only thing propping up the capitalist system.
Already, as of 2009, the celebrated economist Paul Krugman, admitted that for the past 30 years most macroeconomic theory had been “spectacularly useless at best, and positively harmful at worst”. That would be a fitting epitaph for bourgeois economics in general, and the free market nonsense of reactionaries like Hayek in particular.
What would Marx think?
While preparing notes for this editorial, I happened to find an article published in Businessweek on 27 June 2013 with an intriguing title: “What Would Karl Marx Think?”
It started out with a nostalgic account of the good old days, when the global economy opened up following the collapse of the Berlin Wall and the Soviet Union in the late 1980s.
Marxists maintain that the main obstacles to the development of the productive forces under capitalism are: 1) private ownership, and 2) the nation state. But, at least for a temporary period, the capitalists had succeeded in overcoming the second obstacle by an unparalleled expansion of world trade.
The entry of China, India and other economies into the world economy gave a new lease of life to what has been called ‘globalisation’ – a word that served to express the intensification of the international division of labour, accompanied by the rapid integration of capital, technology, people, and information across national borders.
This phenomenon was already predicted by Marx and Engels in the pages of The Communist Manifesto. It was the main motor force for the rapid growth of the world economy, permitting capitalism to establish a certain equilibrium for several decades.
By the time the article appeared in Businessweek, world trade had tripled as compared to the early 1990s, reflecting the increasingly free flow of goods, investments, people and ideas. At that time, everything seemed rosy in the capitalist garden. Francis Fukuyama triumphantly proclaimed the end of history.
The capitalist class and its apologists were puffed up with a new-found confidence. At last, the spectre of communism had been exorcised. Or so they thought.
But behind this triumphalism, dark clouds were already gathering. Despite everything, the same article admitted in worried tones: “Yet Marx remains incredibly relevant.” It went on to explain why:
“More fundamental, sweeping research into longer-term causes echoes Marx’s perspective that capitalism and instability are two sides of the same coin.”
And it added:
“The argument Marx made that is gaining adherents around the world is that capitalism has a built-in tendency toward the unfair and unhealthy distribution of wealth and income.”
The article even quoted Capital, where Marx writes: “Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery at the opposite pole.”
These words, written over 150 years ago are a faithful description of the world we are living in today.
A fractured world
There is scarcely any need to comment on the economic consequences of the present crisis. We have dealt with these many times in many articles and documents.
Contrary to what many people believe, the pandemic did not cause the present crisis. It merely served to exacerbate the contradictions that already existed.
Even before the pandemic, globalisation – the open system of trade that had dominated the world economy for decades – was in crisis. The rapid expansion of world trade resulted in an increasingly complex web of supply chains. Very low transport costs enabled goods that might have been produced in China to be assembled in India, packaged in Germany, and sold in Canada.
But the very complexity of this network of supply lines represented the Achilles’ heel of the entire fragile edifice of globalisation. It did not take much effort on the part of Donald Trump to upset it. His America First policy and the trade wars that resulted from it were the clearest expression of this.
Paradoxically, the present unstable recovery, far from solving anything, has cruelly exposed all these fault lines. Huge quantities of stimulus cash – amounting to twenty trillion dollars – have combined with dramatic global shifts in consumption and the unleashing of a flood of pent-up demand to completely overwhelm production capacity and supply chains.
This was expressed in the sudden emergence of all kinds of bottlenecks. Labour shortages and the disruption of supply lines, in turn, have prevented suppliers from reaching customers, causing chaos in markets and soaring prices.
Long lines of cargo ships formed outside congested ports that were unable to unload their goods into warehouses packed to the ceiling with packages that could not be collected because of a shortage of lorry drivers.
Inflation is rampant everywhere, deepening social discontent and collapsing living standards, and spreading geopolitical instability. And all the time, the menace of economic nationalism is growing stronger, as each nation tries to unload the burden of the crisis onto the shoulders of its neighbours.
Most recently, France and Britain have been squabbling over fishing rights and refugees, while the whole fragile equilibrium of Brexit is threatened by the impasse over Northern Ireland; officials of the European Union are talking of “strategic autonomy” and are creating a fund to buy stakes in firms; the United States is urging businesses to build plants at home, and the trade war between the USA and China continues to threaten the recovery of world trade; and various nations are threatening to apply punitive tariffs.
Never has the anarchy of capitalism been so cruelly in evidence.
Capitalism and the pandemic
Just as western politicians were congratulating themselves on the success of their vaccination projects, news of a new and even more dangerous variant in South Africa immediately caused a panic in the stock markets.
This immediately exposed the failure of the so-called free market to solve the most serious problems facing humanity. The big pharmaceutical companies are making obscene profits, while millions of poor people in Africa, Asia and Latin America are left to die horrible deaths for a lack of elementary healthcare.
A lasting solution to the pandemic can only be achieved through a concerted international plan that mobilises all the material, technical and scientific capabilities of the planet to eradicate this disease in every country without exception.
A system based solely on greed, oppression and exploitation can never offer such a solution. The narrow interests of the capitalist class of each nation are expressed in economic nationalism, and the strengthening of borders to exclude millions of desperate men, women and children fleeing wars, disease and poverty. The capitalists’ slogan is: “Every man for himself, and let the devil take the hindmost.”
But viruses know no frontiers. And in leaving poor countries to their fate, they have created a breeding ground for the emergence of new and ever more deadly mutations, which can eventually prove resistant to any vaccine. Sooner or later, these new mutations will cause havoc in the advanced capitalist countries, and no amount of laws, prohibitions and border guards will suffice to prevent it.
After two years of constant suffering and death all around the world, public opinion is becoming increasingly restive and distrustful of the rulers who have mismanaged the crisis, threatening their lives and their livelihoods.
The attempt by corrupt and incompetent governments to combat the spread of the virus by draconic measures have sparked violent protests on the streets of Rotterdam and Vienna. And this is just the beginning.
But let us now return to our point of departure.
At the end of the Businessweek article, the author – perhaps realising that he has gone a bit too far in his praise of Marx, hastens to calm the jangling nerves of his readers. Having caused them a serious bout of indigestion, he now seeks to provide them with some degree of reassurance.
He assures them that “Marx the revolutionary prophet is dead. Marx the razor-sharp analyst persists.” And he adds the comforting thought that, “there’s nothing inevitable about the collapse of capitalism.”
And on that question, we have to say that he is not mistaken. Lenin explained long ago that there is no such thing as a final crisis of capitalism. All history shows that the capitalist system will always recover even from the deepest crisis.
It can and will continue to stagger on until it is overthrown by the conscious revolutionary movement of the working class. But here we must add a word of warning. The capitalist system has long since exhausted any progressive role it may once have possessed.
It now displays all the horrible features of a senile creature that has lost all reason to exist, but which stubbornly refuses to die. The future that it offers can only be one of endless misery, suffering, disease, wars and death for the human race. It is sufficient to turn on the television news to find the proof of this assertion.
But that is not all. Marx once said that the choice before humanity was socialism or barbarism. The elements of barbarism already exist and threaten the very existence of civilisation. But now we are entitled to say that the continued existence of capitalism poses a far greater threat: to the very existence of the human race.
The pathetic farce of the COP conference in Glasgow was an admission that the capitalist class is incapable of solving the existential threat that is hanging over our planet. It cannot solve it because the problem is capitalism itself.
Let us speak frankly: In order that humanity may live, the capitalist system must die. That is the most urgent task facing us. It is the duty of the Marxists to make conscious the unconscious, or semi-conscious, striving of the working class to change society.