Marx’s revenge

Meghnad Desai writes that Karl Marx is back in fashion as a result of the financial disaster-

Adam Smith is out. Karl Marx is the new a la mode economist. President Sarkozy carries Das Kapital around; which translation, which edition or indeed which volume – one or all three – does anyone ask, or even care?

So with John Maynard Keynes. Suddenly everyone is a Keynesian. Deficits don’t matter any more. To hell with public debt. Divorce prudence and marry profligacy. No one so far has been seen reading The General Theory; it somehow does not have the same cache as a German tome.

Beware! Marx said during his lifetime that he was not a Marxist. Nor was Keynes a Keynesian. Think of the simple fact that if budget deficits and carelessness about public debt defined a Keynesian, George W Bush is the biggest Keynesian of them all. He even beats that other big spender, Ronald Reagan. Bill Clinton balanced the budget.
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Public debt should be reduced, so we don’t spend valuable revenue on paying interest on debt. It was Brown who dinned that lesson in our heads.

Yes, let us all be Keynesians, but fiscally responsible ones, as Keynes was.

Last month, he wrote that capitalism should be saved from its friends–

There was a time when the left could not think of a problem without seeking the guidance of some high priest of orthodox Leninism in Moscow. They sadly always got it wrong. Capitalism, they said, every time, was in a terminal crisis and was about to go under. In the event, Leninism went under instead, though various dissident Trotskyist sects still exist, hoping for the final crash.

Alas the final crash never comes. Karl Marx knew that though few read him so even fewer knew what he said. In 1857 there was a crash and Marx feared that capitalism would end before he had penned his critique of the system. But the fear passed and 26 years later, when Marx died, the system was still there. Lenin wrote a pamphlet in 1916 – Imperialism: the highest stage of capitalism – predicting its demise, and 92 years later the beast is still there.
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The solution both Marx and Hayek would agree on is not to rescue the bad investors. This is not a moral issue. It is not their greed which is the problem. The health of capitalism requires that people take the consequences of their good and bad actions on their chin. Shareholders and hedge-fund players and investment bankers are adults who should know what they are doing.

They will never listen. When the times get tough, the free marketeers run to nanny for tax-funded bailouts. If Margaret Thatcher, the one great Hayekian, were around and in power, she would send them the same way as she sent British Steel, British Coal and British Rail. Had she not restructured them we would still be wasting taxpayers money on bad manufacturing and worse telephone systems. The best thing is to get rid of the non-performing banks, hedge funds, mutual funds and so on. Let us take capitalism at its face value for a while. It won’t hurt, except where it should.

which of course did not happen.

I guess its time for people to really start reading Marx, to know what he really said; I haven’t, yet. There is one thing he said which I agree with completely – “The philosophers have only interpreted the world in various ways; the point however, is to change it.”