AUT: Spectre of Marx haunts the Financial Times

[Scott Hamilton <s_h_hamilton@xxxxxxxxx>]

Bourgeois strategists continue to be haunted by Marx
By Rob Sewell

The Financial Times is the organ of finance capital in
Britain. Its latest issue (August 17-18) contains a
prominent article by Niall Ferguson, Professor of
Political and Financial History at Oxford and Visiting
Professor at the Stern School of Business, New York
University. The author of this long article entitled
"Full Marx", given the present crisis unfolding under
the noses of the bourgeois, is again forced to
recognise the important contribution of Marx in his
analysis of capitalism.

Professor Ferguson is no friend of Marxism - God
forbid! In fact, he describes himself as amongst "the
most passionate believers in capitalism".
Nevertheless, our bourgeois academic is forced to
grudgingly recognise some of Marx's comments as
perfectly fitting in the current crisis:

"Not many MBA courses include the reading of Marx's
Capital. Not many CEOs could quote from The Communist
Manifesto. But there are times when it pays even the
most passionate believers in capitalism (and I count
myself among them) to heed the bearded Cassandra.
Times like these: the worst bear market since the
Great Depression - although Marx himself would have
preferred to call it a 'crisis of capitalism'," states
Ferguson.

For the record, Ferguson is forced to describe Marx as
a "washout" and a "class traitor", for siding of the
proletariat instead of the bourgeoisie. As usual, he
attacks Marx as the supporter of a "socialist utopia
[which] turned out to be a corrupt tyranny",
presumably Stalinism, which had nothing in common with
Marx or his teachings.

"Even so," says the Professor, "Marx's insights into
capitalism can still illuminate?Marx got one thing
right. Behind the bubbles and busts of the capitalist
system there is a class struggle; and that class
struggle is the key to modern politics."

At this, many FT readers must have choked on their gin
and tonics. "This may read like heresy, especially in
the pages of the Financial Times," said Ferguson,
somewhat on the defensive. "But a little reflection on
the current crisis of capitalism will show otherwise.
Not that today's class struggle bears much relation to
that of Marx's day." In fact, says our professor, it
is, believe it or not, "a conflict within the
bourgeoisie."

Professor Ferguson ritually attacks Marx's Capital as
"long, verbose, abstruse" which ranks as one of the
most "unreadable books of all time". But this attack
only shows his ignorance of Marx's method and his
inability to understand the processes, economic or
otherwise, that govern our lives. Yet, apparently,
"there is something to be learned in the bottom line
of chapter 32, in part VIII of volume one, where Marx
argues that the history of capitalism is the history
of expropriation and the concentration of wealth - the
means of production - in the hands of an
ever-decreasing minority."

For Marx, the defining characteristics of capitalism
in his own time included "the centralisation of
capital", "the expropriation of the mass of the people
by a few usurpers" and "the entanglement of all
peoples in the net of the world-market, and with this,
the international character of the capitalistic
regime". In other words, says Ferguson, "widening
inequality and globalisation".

"These characteristics, however, were precisely what
made capitalism crisis-prone. Its periodic busts, he
hoped, were the preliminary tremors heralding a final
and violent collapse." This words are enough to prove
that Professor Ferguson doesn't understand Marx and
attempts to paraphrase a few comments that serve his
purpose. Marx never saw an automatic violent collapse
of the system, but its overthrow by the working class.
But this is not the point.

"Forget Marx's utopian prophesy that capitalism would
be succeeded by socialism, with all property
redistributed according to the workers' needs," says
Ferguson. "The real point is that many of the defects
he identified in 19th century capitalism are again
evident today. In the last 20 years, there has been a
significant increase in inequality in the pre-eminent
capitalist economy, the United States. In 1981, the
top 1 percent of households owned a quarter of
American wealth; by the late 1990s, that single
percentage owned more than 38 percent, higher than at
any time since the 1920s." This is truly an
astonishing admission by a representative of Capital,
and confirms what Marxists have been saying for a long
time.

"At the same time, the world's commodity, labour and
capital markets have become significantly more
integrated: in particular, the vast scale of today's
international capital flows recalls the first age of
globalisation in the late 19th century", says the
Professor.

"As for the susceptibility of our own capitalism to
crisis, the figures speak for themselves. The Dow
Jones index is down 26 percent since its peak back in
January 2000. Just a few months before that peak, a
couple of notorious bubble-blowers published a book
predicting that the Dow Jones would reach 36,000 in
the foreseeable future. Far from tripling your money,
if you were naive enough to follow their
recommendation and track the Dow from the day their
book came out, you would have made an average
inflation-adjusted annual return of minus 11 percent.

"True, we are still a long way from a new Great
Depression: between 1929 and 1932 the Dow Jones fell
by some 89 percent. Nor can it be said that the US is
going through a Japanese-style collapse: between
December 1989 and July 1992 the Nikkei 225 fell by
just under 60 per cent.

"Nevertheless, the fact is that at one point last
month the Standard & Poor's Total Return Index was
more than 46 percent below its peak. And even after
the recent rally, the Nasdaq is still down 74 percent
from its peak."

Like a rabbit mesmerised by the headlights of a car,
our Professor see the dangers confronting the
capitalist system. "The global implications of a
slowdown in the vast American economy are alarming.
The other key element of the late-90s bubble was the
willingness of foreign investors to pour money into
the US, funding an enormous balance of payments
deficit. These foreign investors are now staring at
income statements spattered with red ink. And they
have more to worry about than American investors,
because a slide in the dollar exchange rate threatens
to make those losses even bigger. If the experience of
the 1980s is anything to go by, the dollar could fall
steeply as foreign investors sell off. The resulting
reduction of American imports would further hurt the
rest of the world."

But don't worry, our Professor assures us that
everything will turn out right! "Not that you should
prepare for the death-knell of capitalism just yet. I
was in New York during the very worst week of the
recent sell-off and came away with a consoling list of
reasons to stay cheerful." He then goes on to list a
few "cheerful" reasons: the US stock market has simply
retraced its steps back to mid-1997, we are free from
the spectre of inflation, the American financial
sector is in far better health than its Japanese
counterpart, and above all, the Fed is not the Bank of
Japan. "So relax: the recession was last year, and you
barely felt it. This is the kind of crisis of
capitalism Argentineans can only dream about."

On the other hand, he says, there are also reasons to
be deeply concerned. "For there is no question that
the bubble economy of the last decade has brought
about a quite astonishing transfer of wealth from one
class to another: not from the working class to the
bourgeoisie, but from one part of the middle class to
another. To be precise, from the sucker class to the
CEOcracy."

"More than half of American households now own shares;
in 1987 the proportion was about a quarter. Much of
this expansion in share ownership happened between
1997 and 2000. So a substantial fraction of American
households bought shares at or close to the peak of
the market. Their portfolios are now worth
significantly less than their original investment."
Our professor forgets to point out that it was
precisely the working class and the middle class that
bought shares, hoping to capitalise on the new boom.
But this "hope" has turned to dust, and there is
growing anger against the corporations and the
capitalist system itself.

"The beneficiaries of the bubble are the CEOcracy -
men such as Andrew Fastow, who was chief financial
officer of Enron, and Bernie Ebbers, the former chief
executive of WorldCom. But the CEOcracy includes not
just the chief executives of collapsed companies, but
the whole range of insiders who knew enough to cash in
their shares and share options before the bubble
burst." This is crystal clear, but they are not the
only culprits - the whole capitalist class is being
correctly tarred with the same brush.

Our upper class sage is desperate to avoid any
suggestion the crisis is about to get worse. "It is
not that the US economy is about to collapse into a
1930s-style slump. Enough has been learnt from the
past to avoid repeating the fiscal and monetary policy
errors that turned recession into depression (though
after the Bush administration's recent decisions to
raise steel tariffs and farm subsidies, the same
cannot be said for trade policy)." As old Hegel once
said, the only real lesson you can learn from history
is that nobody learns from history! This is doubly
true of the ruling class.

The bourgeoisie is facing a growing economic crisis
from which they cannot escape. This is not simply a
cyclical crisis, but a social crisis eating away at
its core. Marx explained that through these
experiences and events the working class - the
grave-digger of capitalism - would come to understand
that none of their problems will be solved within the
framework of capitalism. Only the overthrow of the
system would suffice, laying the framework for the
world planning of resources bequeathed by capitalism.
Certain bourgeois strategists may refer to Marx as an
aside, to warn the ruling class of the dangers
inherent in their system. "It is the social structure
of American capitalism that is in real need of
attention," squeaks Ferguson. "You do not have to be a
Marxist to see that something is amiss."

But this is something the bourgeois cannot simply
patch up, as if it were some secondary problem. What
Ferguson is referring to is a malaise of the
capitalist system, which is inherent to it.
Overproduction and crises are part and parcel of
capitalism. Only the working class can resolve this
problem, not through the reform of the system, but its
overthrow. This is not a Utopian dream, as our
Professor argues. The revolutionary crisis sweeping
Latin America and the general strikes in Europe are
the heat lightening of a world revolution as predicted
by Marx. Far from being out-of-date, Marxism is now
more relevant than ever.

August 18, 2002
http://www.marxist.com/




=====
"Revolution is not like cricket, not even one day cricket"

__________________________________________________
Do You Yahoo!?
Everything you'll ever need on one web page
from News and Sport to Email and Music Charts
http://uk.my.yahoo.com


     --- from list aut-op-sy@xxxxxxxxxxxxxxxxxxxxxxxxxx ---