Cross posted from Pruning Shears.

Ismael Hossein-zadeh has an essay this week about how Marxism is better than Keynesianism at explaining the current terrible economic picture, and has better prescriptions for fixing it as well. To me the article is a great example of both the strengths and (greater) weaknesses of Marxist critique.

Drought

Drought

Marxist critique is strongest in describing the nature of capitalism and the environment it seeks to create. Capitalism seems to gravitate toward a permanent “reserve army of labor” – lots of out of work people who would love to have a job. Having a pool of idle but willing unemployed puts pressure on those who do have jobs. It puts downward pressure on wages, discourages organizing, and gives maximum leverage to the employer.

So far, so good. That dynamic should be front and center in any discussion on how to improve things. Asserting the right of collective bargaining and finding ways to support it is crucial. Getting all those people on the sidelines back into the game is vital. The article also has some interesting material on how the globalization of capital and labor are challenges that Keynes did not seem to anticipate, and that his theory does not adequately address.

Hossein-zadeh’s critique starts to go astray with what he calls structural or systemic causes of unemployment, with Keynesianism producing a perpetual cat-and-mouse game. Stimulus spending gets an economy out of an economic downturn. When the economy is humming again the stimulus is pared back, which leaves the field open for capitalist exploitation, which then brings about an economic downturn. Repeat forever. In this telling Keynesianism is the cause of downturns, because that cycle could be done away with forever by not ending the stimulus. That seems at best uncharitable, since Keynesianism doesn’t claim to abolish the business cycle. It merely describes the tools to use during down times.

But Hossein-zadeh really goes far afield when he conflates Keynesians’ prescriptions with their expectations:

The Keynesian view that the government can fine-tune the economy through fiscal and monetary policies to maintain continuous growth is based on the idea that capitalism can be controlled or manipulated by the state and managed by professional economists from government departments in the interest of all. The effectiveness of the Keynesian model is, therefore, based largely on a hope, or illusion; since in reality the power relation between the state and the market/capitalism is usually the other way around. Contrary to the Keynesian perception, economic policy making is more than simply an administrative or technical matter of choice; more importantly, it is a deeply socio-political matter that is organically intertwined with the class nature of the state and the policy making apparatus.

It’s fair to describe the Keynesian approach as administrative or technical – magneto trouble and all that – but I haven’t gotten the impression that Keynesians, Paul Krugman foremost among them, are under any illusion that policymakers are compelled to embrace Keynesianism. There certainly seems to be a great deal of frustration about the nature of the public debate. The austerity narrative continues to be ascendant in spite of the overwhelming evidence of the harm it has caused. Keynesian policy, particularly the 2009 stimulus package, has been vindicated (and Krugman wrote at the time that it was actually not large enough) – yet it still seems to be regarded as disreputable in the capitol.

So of course Keynesians are frustrated, but not because they thought Washington was required to implement Keynesian policies and had not. They are frustrated because they see the current problem as a technocratic one with a known solution – but austerity budgeting continues to rule the day, even in the face of overwhelming evidence that it has failed. The carburetor is broken; fix it. Krugman sees a moral or ethical dimension as well: the refusal to fix it has inflicted a great deal of unnecessary misery. But Keynesianism ultimately just says, if this is your problem, here’s the solution.

Keynesianism is also clear about the role government plays in the economy: Let the private sector be the economic engine of first resort and government the last. If businesses are creating lots of jobs at good wages, money is circulating through the economy, and everything is going swimmingly, then leave it at that. If the private sector is stagnating or shrinking though, then the public sector needs to step in and provide the spending and job creation that the private sector isn’t. Once that changes – once businesses start hiring and spending again – government backs off and lets them do their thing. Policymakers can choose not to do that, and the expected result will be to make the problem worse. No illusions required. (Krugman does get irritated when leaders plead ignorance or act like no one knows what the answer is, though.)

Marxist critiques like Hossein-zadeh’s, on the other hand, lead with a lot of “workers of the world, unite” rhetoric, but leave what comes after the revolution offstage. Maybe it’s because that role – a centrally planned economy – doesn’t have a very good track record, and would be a tough sell for an American audience. Maybe it’s because it is much more entertaining to issue calls to arms than to figure out how to make a just, equitable and vibrant economy in a nation with hundreds of millions of citizens. Whatever the reason, though, it leaves a glaring and obvious hole in the center of the argument. And if you can’t bring yourself to name the thing you want, you can’t expect to reach anyone not already in the fold.

There’s a similar hole in the description of how the change will come about. Hossein-zadeh says Keynesianism’s fatal flaw is its expectation that politicians sympathetic to big money will enact policies antagonistic to it. (Again, I don’t think that’s true – Keynesiansm just describes how to address the issue. Whether leaders actually take that approach is another matter.) Hossein-zadeh envisions a bottom-up approach, with change being generated by “overwhelming political pressure from workers and other grassroots.” But he never describes how to build that pressure, and that makes his position look as fanciful as the one he criticizes. He writes: “the Marxian view that meaningful, lasting economic safety-net programs can be carried out only through overwhelming pressure from the masses – and only on a coordinated global scale – provides a more logical and promising solution.” OK, great. How?

Building a political movement in response to a gradually developing disaster is unbelievably difficult. It’s far more likely to spontaneously occur in response to a spectacular event. The activism in Ferguson since the killing of Mike Brown is a good recent example. (And incidentally, if one wants to build a grassroots social justice movement, identifying and supporting the issues people are currently speaking out on might be a good starting point – even if the issue isn’t the one you’re focused on.) A hurricane and a drought are both extreme ecological events, but one happens suddenly and visibly while the other is gradual and harder to spot. Which of those is more likely to inspire a strong response?

Marxist critique depends on workers rising up en masse, but never seems to describe how that happens. It leaves the hardest task to the imagination. And since spontaneous large scale organizing doesn’t just naturally happen on its own, the likely situation is for people in bad situations to stay in them. (Which can easily lead to a theoretical love of the common man souring into contempt for the actual sheeple who participate in their own oppression.) Hossein-zadeh is presumably aware of this, since he links to a piece by Alan Nasser noting that “US workers tend to quiescence.” Isn’t that a rather big hurdle? How does he propose to overcome it? Instead of utopian calls for wide scale mobilization, presumably led by those doing the calling, why not show solidarity with those already doing so on a smaller scale?

Why not go to those in Ferguson, or those fighting water shutoffs in Detroit, and say “what do you need us to do?” Marxist prescriptions like Hossein-zadeh’s never seem to want to get into the details, or to recognize the activism already dotting the landscape. It always seems to boil down to, everyone throw in with us. And that might be the biggest illusion of all.

Picture from Bert Kaufman licensed under Creative Commons