Let us examine Varoufakis and his journey with Marx. He
states:
My view on this dilemma has always been that the powers
that be are never perturbed by theories that embark from assumptions different
to their own. The only thing that can destabilize and genuinely challenge
mainstream, neoclassical economists is the demonstration of the internal
inconsistency of their own models. It was for this reason that, from the very
beginning, I chose to delve into the guts of neoclassical theory and to spend
next to no energy trying to develop alternative, Marxist models of capitalism.
My reasons, I submit, were quite Marxist.
His argument is that capitalism is flawed and to demonstrate
this fundamental flaw and to demonstrate it is necessary not to examine and
defend Marx but to examine and explain the flaws of capitalism itself, many
which he claims are self-evident from the current crisis.
He sees the Marxist world as did Marx, and he recounts it as
follows:
Marx created a narrative populated by workers,
capitalists, officials and scientists who were history’s dramatis personae.
They struggled to harness reason and science in the context of empowering
humanity while, contrary to their intentions, unleashing demonic forces that
usurped and subverted their own freedom and humanity.
The Marxist view of the existence of disparate but well
defined “groups” rather than individuals was a means to explain the basis for
the ultimate clash via his dialectic process. He continues with his dialectic
understanding by stating:
This dialectical perspective, where everything is
pregnant with its opposite, and the eager eye with which Marx discerned the
potential for change in what seemed to be the most unchanging of social
structures, helped me to grasp the great contradictions of the capitalist era.
It dissolved the paradox of an age that generated the most remarkable wealth
and, in the same breath, the most conspicuous poverty. Today, turning to the
European crisis, the crisis in the United States and the long-term stagnation
of Japanese capitalism, most commentators fail to appreciate the dialectical
process under their nose. They recognize the mountain of debts and banking
losses but neglect the opposite side of the same coin: the mountain of idle
savings that are “frozen” by fear and thus fail to convert into productive
investments. A Marxist alertness to binary oppositions might have opened their
eyes.
Here he posits some Marxist opposition yet he is near
impossible to follow as to just what that binary opposition is. The US economic
problems are fundamentally political and secondarily structural. The core to
the collapse in 2008 was a result of political changes in the late 1990s as
well as accomplices in Government who facilitated and then protected those
whose actions led to the collapse. One must recall that it was the Government
housing agencies which led the way with overextending in real estate and that
were Government action and not a rational market response.
The Marxist view of anti-individualism, the existence and
commonality of labor, may have had validity in the 19th Century but
the core changes in the economy today are fundamentally driven by the
destruction of that commonality. Production line workers are replaced by
robots, the ultimate Marxist proletariat. Technology is fundamentally
individual but it requires effort, more effort than just “showing up” at the
assembly line. He continues:
Both electricity and labour can be thought of as
commodities. Indeed, both employers and workers struggle to commodify labour.
Employers use all their ingenuity, and that of their HR management minions, to quantify
measure and homogenize labour. Meanwhile, prospective employees go through the
wringer in an anxious attempt to commodify their labour power, to write and
rewrite their CVs in order to portray themselves as purveyors of quantifiable
labour units. And there’s the rub. If workers and employers ever succeed in
commodifying labour fully, capitalism will perish. This is an insight without
which capitalism’s tendency to generate crises can never be fully grasped and,
also, an insight that no one has access to without some exposure to Marx’s
thought.
His observation above is of merit. Indeed one sees new
workers trying to seek employment by commoditizing themselves as what they
perceive are interchangeable units of production. In reality business needs
flexible and creative workers. I have often said and have often acted upon the
selection of a good High School grad versus a University post grad. It is
essential in today’s world to have an employee who can adapt rather than
conform. That being so, the concept flies in the face of Marx.
The author continues:
If capital ever succeeds in quantifying, and subsequently
fully commodifying, labour, as it is constantly trying to, it will also squeeze
that indeterminate, recalcitrant human freedom from within labour that allows
for the generation of value. Marx’s brilliant insight into the essence of
capitalist crises was precisely this: the greater capitalism’s success in
turning labour into a commodity the less the value of each unit of output it
generates, the lower the profit rate and, ultimately, the nearer the next
recession of the economy as a system. The portrayal of human freedom as an
economic category is unique in Marx, making possible a distinctively dramatic
and analytically astute interpretation of capitalism’s propensity to snatch
recession, even depression, from the jaws of growth.
Somehow he sees this power of “capital” and its control over
“labor” as the ultimate Marxist dialectic. That view is in sharp contrast to
the changing reality of the evolving entrepreneurial world. Greeks leave Greece
and prosper by adapting, by being individuals, not by being cogs. In Greece, so
many line-up at the dole of Government jobs, lack creativity, and become the
Marxist pool of labor.
He then discusses the issue of markets. Namely “markets” as
a mechanism to deal with everything in our daily lives from health care to
pollution control. He states:
In his recent book Never Let a Serious Crisis Go to
Waste, the historian of economic thought, Philip Mirowski, has highlighted the
neoliberals’ success in convincing a large array of people that markets are not
just a useful means to an end but also an end in themselves. According to this
view, while collective action and public institutions are never able to “get it
right”, the unfettered operations of decentralized private interest are
guaranteed to produce not only the right outcomes but also the right desires,
character, ethos even. The best example of this form of neoliberal crassness
is, of course, the debate on how to deal with climate change. Neoliberals have
rushed in to argue that, if anything is to be done, it must take the form of
creating a quasi-market for “bads” (eg an emissions trading scheme), since only
markets “know” how to price goods and bads appropriately. To understand why
such a quasi-market solution is bound to fail and, more importantly, where the
motivation comes from for such “solutions”, one can do much worse than to
become acquainted with the logic of capital accumulation that Marx outlined and
the Polish economist Michal Kalecki adapted to a world ruled by networked
oligopolies.
Neoliberals have rushed in with quasi-market responses to
climate change, such as emissions trading schemes.
Indeed markets have limits, and sometimes economists tend to
value them where they really do not belong. Take the market mechanism to
control pollution or carbon emissions. Frankly, if it is a problem, then the
solution is technical, not political, that is a “market” solution. All too
often these “market” solutions are euphemisms for political beliefs. A prime
example is the Pigou tax. Some neo-liberal economists are enamored with them.
They see them as a fancy and efficient way to control a perceived problem. In
fact if it is a technical problem, carbon gas, then the solution must be a technical
one, not a political one.
Finally he makes some interesting remarks as to the
mathematical characterization of economics.
Why did Marx not recognize that no truth about capitalism
can ever spring out of any mathematical model? If I am right, Marx knew what he
was doing. He understood, or had the capacity to know, that a comprehensive
theory of value cannot be accommodated within a mathematical model of a dynamic
capitalist economy. He was, I have no doubt, aware that a proper economic
theory must respect the idea that the rules of the undetermined are themselves
undetermined. In economic terms this meant a recognition that the market power,
and thus the profitability, of capitalists was not necessarily reducible to
their capacity to extract labour from employees; that some capitalists can
extract more from a given pool of labour or from a given community of consumers
for reasons that are external to Marx’s own theory.
Indeed, mathematical models in economics work if they are ex
post facto accounting models, dealing with tautological facts, but all too
often stretch the slightest truth when they prognosticate.
As a closing statement he appeals to the perceived loss of human
equality. He bases that view on the following observation:
My personal nadir came at an airport. Some moneyed outfit
had invited me to give a keynote speech on the European crisis and had forked
out the ludicrous sum necessary to buy me a first-class ticket. On my way back
home, tired and with several flights under my belt, I was making my way past
the long queue of economy passengers, to get to my gate. Suddenly I noticed,
with horror, how easy it was for my mind to be infected with the sense that I
was entitled to bypass the hoi polloi. I realized how readily I could forget
that which my leftwing mind had always known: that nothing succeeds in
reproducing itself better than a false sense of entitlement. Forging alliances
with reactionary forces, as I think we should do to stabilize Europe today,
brings us up against the risk of becoming co-opted, of shedding our radicalism
through the warm glow of having “arrived” in the corridors of power.
Instead of bemoaning his failure to be with the masses, he
should be happy that the masses have the ability to travel. The economic messes
we have, albeit shabby at times, have actually enabled the masses to live
better lives and enjoy a modicum of equality amongst the power elite.
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