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Cooking the Books: Marx Right About What?

‘Marx was Right’ was the title of the text of the opening speech at a conference of leftwingers in New York in May ( This is certainly a welcome change from the usual ‘Marx was Wrong’ found in economics textbooks. But there was a problem: the speaker, Chris Hedges, was wrong about what he thought Marx got right.

Marx, he claimed, ‘saw that there would come a day when capitalism would exhaust its potential and collapse’. Marx certainly didn’t think that capitalism would last for ever as he saw it as a passing phase in the history of humanity. Hedges, however, commits Marx to the view that capitalism will one day collapse economically (actually he thinks it’s already happening):

‘… 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. (…) The hoarding of wealth by a tiny capitalist elite, Marx foresaw, along with the exploitation of workers, meant that the masses could no longer buy the products that propelled capitalism forward.’

This suggests that capitalism will eventually collapse through a lack of market demand on the part of ‘the masses’ whether from their pay or from what they have borrowed. The trouble with this theory is that it doesn’t explain why capitalism hasn’t already collapsed, long ago, since the market demand of ‘the masses’ has always been limited because a part of what is produced goes to the exploiting capitalist class as profits. In fact, what they can’t buy, the capitalists can. They don’t always do, but that only causes the periodic economic slumps that are a feature of capitalism not the collapse of the whole system.

To attribute such an incoherent view to Marx is not doing him a favour. It also assumes that the aim of production under capitalism is to meet the needs that people can pay for, that capitalism is an economic system geared to meeting paying consumer demand. Marx, on the other hand, analysed capitalism as being geared to making profits, where money is invested in production with a view to profit, most of which is then reinvested as further capital.

For Marx, what ‘propels capitalism forward’ is capitalist firms seeking profits, not what non-capitalists buy. So, if capitalism were going to collapse it would have to be from a lack of profits rather than a lack of markets. But Marx didn’t hold that view either.

In his main work, Volume I of Capital, Marx does set out (at the end of Chapter 32 on ‘The Historical Tendency of Capitalist Accumulation’) how he thought capitalism would eventually come to an end. Economics was still involved, but it was neither a lack of markets nor a lack of profits. It was the concentration and centralisation of the means of production operated co-operatively by a collective labour force. This would come into conflict with the continuing class ownership of the means of production, a contradiction that would express itself in a ‘revolt of the working class’. It would be resolved when ‘the expropriators are expropriated’ by the workers transforming ‘capitalistic private property, already practically resting on socialised production, into socialised property’, ushering in a society based ‘on cooperation and the possession in common of the land and of the means of production.’

In short, capitalism would have to be collapsed not collapse. It would not self-destruct, but would have to be purposefully replaced by a new society.