Karl Marx Was Right
By Chris Hedges
On Saturday at the
Left Forum in New York City, Chris Hedges joined professors
Richard Wolff and
to discuss why Karl Marx is essential at a time when global
capitalism is collapsing. These are the remarks Hedges made to open
June 01, 2015 "Information
Clearing House" - "TruthDig"
- Karl Marx exposed the peculiar dynamics of capitalism, or what he called “the
bourgeois mode of production.” He foresaw that capitalism had built within it
the seeds of its own destruction. He knew that reigning ideologies—think
neoliberalism—were created to serve the interests of the elites and in
particular the economic elites, since “the class which has the means of material
production at its disposal, has control at the same time over the means of
mental production” and “the ruling ideas are nothing more than the ideal
expression of the dominant material relationships … the relationships which make
one class the ruling one.” He saw that there would come a day when capitalism
would exhaust its potential and collapse. He did not know when that day would
come. Marx, as
Desai wrote, was “an astronomer of history, not an astrologer.” Marx was
keenly aware of capitalism’s ability to innovate and adapt. But he also knew
that capitalist expansion was not eternally sustainable. And as we witness the
denouement of capitalism and the disintegration of globalism, Karl Marx is
vindicated as capitalism’s most prescient and important critic.
In a preface to “The Contribution to the Critique of Political
Economy” Marx wrote:
No social order ever disappears before all the productive
forces for which there is room in it have been developed; and new higher
relations of production never appear before the material conditions of their
existence have matured in the womb of the old society itself.
Therefore, mankind always sets itself only such tasks as
it can solve; since looking at the matter more closely, we always find that
the task itself arises only when the material conditions necessary for its
solution already exist, or are at least in the process of formation.
Socialism, in other words, would not be possible until
capitalism had exhausted its potential for further development. That the end is
coming is hard now to dispute, although one would be foolish to predict when. We
are called to study Marx to be ready.
The final stages of capitalism, Marx wrote, would be marked by
developments that are intimately familiar to most of us. Unable to expand and
generate profits at past levels, the capitalist system would begin to consume
the structures that sustained it. It would prey upon, in the name of austerity,
the working class and the poor, driving them ever deeper into debt and poverty
and diminishing the capacity of the state to serve the needs of ordinary
citizens. It would, as it has, increasingly relocate jobs, including both
manufacturing and professional positions, to countries with cheap pools of
laborers. Industries would mechanize their workplaces. This would trigger an
economic assault on not only the working class but the middle class—the bulwark
of a capitalist system—that would be disguised by the imposition of massive
personal debt as incomes declined or remained stagnant. Politics would in the
late stages of capitalism become subordinate to economics, leading to political
parties hollowed out of any real political content and abjectly subservient to
the dictates and money of global capitalism.
But as Marx warned, there is a limit to an economy built on
scaffolding of debt expansion. There comes a moment, Marx knew, when there would
be no new markets available and no new pools of people who could take on more
debt. This is what happened with the subprime mortgage crisis. Once the banks
cannot conjure up new subprime borrowers, the scheme falls apart and the system
Capitalist oligarchs, meanwhile, hoard huge sums of wealth—$18
trillion stashed in overseas tax havens—exacted as tribute from those they
dominate, indebt and impoverish. Capitalism would, in the end, Marx said, turn
on the so-called free market, along with the values and traditions it claims to
defend. It would in its final stages pillage the systems and structures that
made capitalism possible. It would resort, as it caused widespread suffering, to
harsher forms of repression. It would attempt in a frantic last stand to
maintain its profits by looting and pillaging state institutions, contradicting
its stated nature.
Marx warned that in the later stages of capitalism huge
corporations would exercise a monopoly on global markets. “The need of a
constantly expanding market for its products chases the bourgeoisie over the
entire surface of the globe,” he wrote. “It must nestle everywhere, settle
everywhere, establish connections everywhere.” These corporations, whether in
the banking sector, the agricultural and food industries, the arms industries or
the communications industries, would use their power, usually by seizing the
mechanisms of state, to prevent anyone from challenging their monopoly. They
would fix prices to maximize profit. They would, as they [have been doing], push
through trade deals such as the
CAFTA to further weaken the nation-state’s ability to impede exploitation by
imposing environmental regulations or monitoring working conditions. And in the
end these corporate monopolies would obliterate free market competition.
May 22 editorial in The New York Times gives us a window into what Marx said
would characterize the late stages of capitalism:
As of this week, Citicorp, JPMorgan Chase, Barclays and
Royal Bank of Scotland are felons, having pleaded guilty on Wednesday to
criminal charges of conspiring to rig the value of the world’s currencies.
According to the Justice Department, the lengthy and lucrative conspiracy
enabled the banks to pad their profits without regard to fairness, the law
or the public good.
The Times goes on:
The banks will pay fines totaling about $9 billion,
assessed by the Justice Department as well as state, federal and foreign
regulators. That seems like a sweet deal for a scam that lasted for at least
five years, from the end of 2007 to the beginning of 2013, during which the
banks’ revenue from foreign exchange was some $85 billion.
The final stages of what we call capitalism, as Marx grasped,
is not capitalism at all. Corporations gobble down government expenditures, in
essence taxpayer money, like pigs at a trough. The arms industry with its
official $612 billion defense authorization bill—which ignores numerous other
military expenditures tucked away in other budgets, raising our real expenditure
on national security expenses to over $1 trillion a year—has gotten the
government this year to commit to spending $348 billion over the next decade to
modernize our nuclear weapons and build 12 new Ohio-class nuclear submarines,
estimated at $8 billion each. Exactly how these two massive arms programs are
supposed to address what we are told is the greatest threat of our time—the war
on terror—is a mystery. After all, as far as I know, ISIS does not own a
rowboat. We spend some $100 billion a year on intelligence—read surveillance—and
70 percent of that money goes to private contractors such as Booz Allen
Hamilton, [which] gets 99 percent of its revenues from the U.S. government. And
on top of this we are the largest exporters of arms in the world.
The fossil fuel industry swallows up $5.3 trillion a year
worldwide in hidden costs to keep burning fossil fuels,
according to the International Monetary Fund (IMF). This money, the IMF
noted, is in addition to the $492 billion in direct subsidies offered by
governments around the world through write-offs and write-downs and land-use
loopholes. In a sane world these subsidies would be invested to free us from the
deadly effects of carbon emissions caused by fossil fuels, but we do not live in
a sane world.
Bloomberg News in the 2013 article
“Why Should Taxpayers Give Big Banks $83 Billion a Year?” reported that
economists had determined that government subsidies lower the big banks’
borrowing costs by about 0.8 percent.
“Multiplied by the total liabilities of the 10 largest U.S.
banks by assets,” the report said, “it amounts to a taxpayer subsidy of $83
billion a year.”
“The top five banks—JPMorgan, Bank of America Corp., Citigroup
Inc., Wells Fargo & Co. and Goldman Sachs Group Inc.—account,” the report went
on, “for $64 billion of the total subsidy, an amount roughly equal to their
typical annual profits. In other words, the banks occupying the commanding
heights of the U.S. financial industry—with almost $9 trillion in assets, more
than half the size of the U.S. economy—would just about break even in the
absence of corporate welfare. In large part, the profits they report are
essentially transfers from taxpayers to their shareholders.”
Government expenditure accounts for 41 percent of GDP.
Corporate capitalists intend to seize this money, hence the privatization of
whole parts of the military, the push to privatize Social Security, the
contracting of corporations to collect 70 percent of intelligence for our 16
intelligence agencies, as well as the privatization of prisons, schools and our
disastrous for-profit health care service. None of these seizures of basic
services make them more efficient or reduce costs. That is not the point. It is
about feeding off the carcass of the state. And it ensures the disintegration of
the structures that sustain capitalism itself. All this Marx got.
Marx illuminated these contradictions within capitalism. He
understood that the idea of capitalism—free trade, free markets, individualism,
innovation, self-development—works only in the utopian mind of a true believer
such as Alan Greenspan, never in reality. The hoarding of wealth by a tiny
capitalist elite, Marx foresaw, along with the exploitation of the workers,
meant that the masses could no longer buy the products that propelled capitalism
forward. Wealth becomes concentrated in the hands of a tiny elite—the world’s
richest 1 percent will own more than half of the world’s wealth by next year.
The assault on the working class has been going on now for
several decades. Salaries have remained stagnant or declined since the 1970s.
Manufacturing has been shipped overseas, where workers in countries such as
China or Bangladesh are paid as little as 22 cents an hour. The working poor,
forced to compete with the labor of those who are little better than serfs in
the global marketplace, proliferate across the American landscape, struggling to
live at a subsistence level. Industries such as construction, which once
provided well-paying unionized jobs, are the domain of nonunionized, often
undocumented workers. Corporations import foreign engineers and software
specialists that do professional work at one-third of the normal salary on
H-1B, L-1 and other work visas. All these workers are bereft of the rights
The capitalists respond to the collapse of their domestic
economies, which they engineered, by becoming global loan sharks and
speculators. They lend money at exorbitant interest rates to the working class
and the poor, even if they know the money could never be repaid, and then sell
these bundled debts, credit default swaps, bonds and stocks to pension funds,
cities, investment firms and institutions. This late form of capitalism is built
on what Marx called “fictitious capital.” And it leads, as Marx knew, to the
vaporization of money.
Once subprime borrowers began to default, as these big banks
and investment firms knew was inevitable, the global crash of 2008 took place.
The government bailed out the banks, largely by printing money, but left the
poor and the working class—not to mention students recently out of college—with
crippling personal debt. Austerity became policy. The victims of financial fraud
would be made to pay for that fraud. And what saved us from a full-blown
depression was, in a tactic Marx would have found ironic, massive state
intervention in the economy, including the nationalization of huge corporations
such as AIG and General Motors.
What we saw in 2008 was the enactment of a welfare state for
the rich, a kind of state socialism for the financial elites that Marx
predicted. But with this comes an increased and volatile cycle of boom and bust,
bringing the system closer to disintegration and collapse. We have undergone two
major stock market crashes and the implosion of real estate prices in just the
first decade of the 21st century.
The corporations that own the media have worked overtime to
sell to a bewildered public the fiction that we are enjoying a recovery.
Employment figures, through a variety of gimmicks, including erasing those who
are unemployed for over a year from unemployment rolls, are a lie, as is nearly
every other financial indicator pumped out for public consumption. We live,
rather, in the twilight stages of global capitalism, which may be surprisingly
more resilient than we expect, but which is ultimately terminal. Marx knew that
once the market mechanism became the sole determining factor for the fate of the
nation-state, as well as the natural world, both would be demolished. No one
knows when this will happen. But that it will happen, perhaps within our
lifetime, seems certain.
“The old is dying, the new struggles to be born, and in the
interregnum there are many morbid symptoms,”
What comes next is up to us.
Chris Hedges, spent nearly two decades as a foreign
correspondent in Central America, the Middle East, Africa and the Balkans. He
has reported from more than 50 countries and has worked for The Christian
Science Monitor, National Public Radio, The Dallas Morning News and The New York
Times, for which he was a foreign correspondent for 15 years.
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