Steve Keen’s Critique of Marx’s Theory of Value: A Rejoinder

After a long period of being virtually a lone voice in the non-Marxist wilderness railing against neoclassical economics, its structure, assumptions, and ideas, Professor Steve Keen appears to finally be heard. The current crisis has dented much of public and scientific confidence alike in economic orthodoxy (as it should). Nothing illustrates this better perhaps than the story of the British Queen, Elizabeth II, writing to the colleagues of the London School of Economics and asking them the pointed question: how did you not see this coming, and if you could not, what are you being paid for? This is perhaps somewhat unfair, as the specifics of any particular crisis depend on many specific and contingent factors that the more general and imprecise nature of neoclassical (macro-)economics is barely equipped to address, and few other theories fare that much better. But Keen has rightly pointed out that he did predict this crisis, and also in its form as the collapse of a speculative bubble in real estate and finance, as he did in the previous edition of his excellent best-selling critique of political economy, Debunking Economics. This Cassandra position, now perhaps turned into one more akin to Tiresias, has given him occasion to publish a new and expanded version of this book – one I recommend all readers to buy for its excellent and systematic critiques of the inconsistency of much of the neoclassical framework beyond the sphere of mere applied mathematics.(1)

However, this is not to say one should not also examine Keen’s work itself with a critical eye. As a supporter of the contemporary (neo-)Marxist theories of economics, and since this blog has the purpose, among other things, of promoting a Marxist outlook on politics and economics suitable for contemporary conditions, it is a serious fact that in the book mentioned above Professor Keen rather sharply dismisses the contribution of Marxist economics to understanding modern political economy. (He explicitly subtitles a paragraph: “Why most Marxists are irrelevant, while most of Marx is not”).(2) While he seems inclined to rhetorically praise Marx, he quite explicitly dismisses Marx’s economic theories as inferior to his own approach, which appears based on an understanding largely derived from Piero Sraffa. To go into the specifics of Sraffianism, post-Keynesianism and so forth would require a lengthy narration of the history of economic thought, one that would interest few people. More to the point, the average intelligent layman reading Keen’s book will want to know: who is right? And quite justly so. Now in chapter 17 of his book, Professor Keen provides, after a brief overview of classical economics, essentially three arguments against what he takes as Marx’s theory of value (often called the “labor theory of value”). Therefore, I shall endeavour to rejoin these arguments Keen advances against Marx’s theory of value in due order. –I must warn the reader that this will contain a considerable amount of complex and very abstract discussion, based on Marx’s conceptual understanding and terminology as applied to his pure theory of capitalism. Although I have endeavoured to write it so it is maximally understandable for people not much used to Marx’s terms and way of thinking, one may find it boring and confusing, as I cannot summarize the entirety of his theory as well as address Professor Keen’s critiques. Therefore, one may want to skip this article, or focus only on the sections dealing with the implications of all this theorizing.– Continue reading “Steve Keen’s Critique of Marx’s Theory of Value: A Rejoinder”

Book Review: István Mészáros, “The Challenge and Burden of Historical Time”

If Hungarian Marxist philosopher Istvan Meszaros is indeed Hugo Chavez’s favorite theorist, as implied by the book cover, the President of Venezuela must be a patient man indeed. The Challenge and Burden of Historical Time appears to present Meszaros’ philosophy of history, and because of the high regard he is held in by many (as shown also by the enthusiastic introduction from John Bellamy Foster), this seems promising enough. But in reality, the book is a mere collection of essays, articles, and occasional pieces, by and large on the same topic. As a result, the argument, the content and even the quotations are extremely repetitive, an effect which is worsened by Meszaros’ ineptly abstract, obscurantist writing style. When all is said and done, The Challenge and Burden of Historical Time introduces few new ideas to the body of socialist theorizing about the historical course of capitalism and the transition to socialism. Continue reading “Book Review: István Mészáros, “The Challenge and Burden of Historical Time””

Death Agony of Social-Democracy

Where can social-democracy go? In Greece, the parties of the center, once utterly dominant on the country’s political scene, can barely scrape together a majority combined even with the help of a mass of bonus seats for the plurality party. Their opposition is now formidable in the form of SYRIZA, a left social-democrat outfit with a programme of radical reform that would stretch liberal political economy to the breaking point, but staying well short of an explicit commitment to revolution. In France, the victory of the Parti Socialiste is complete with its clear majority in the Assemblée Nationale following François Hollande’s election to the Elysée. In the UK, the Conservative-LibDem coalition appears ever weaker and less able to enforce its majority, while the Labour Party has been leading it in the polls by large numbers for months on end. In Germany, the ruling rightist coalition has suffered painful defeats in the länder against the SPD. In short, it seems finally things are looking up for European social-democracy. Continue reading “Death Agony of Social-Democracy”

Uprising in Syria

It is right to rebel. For anyone of a revolutionary mind, even within bourgeois-Jacobin boundaries, there can be no doubt that this is the beginning of all political wisdom. As Corey Robin has recently narrated in his excellent history of the political right, The Reactionary Mind, the decisive political differentiation has rested since the French Revolution itself on this: the right supporting the power of elites against those rebelling in opposition to it, whereas the left has been on the side of the insurgents.(1) In many societies and many historical cases, things are of course not as simple in practice as an oligarchic and oppressive Ancien Régime opposed by a great mass of popular will. The recent revolts and transformations in the Arab world have proven this. In Tunisia, the situation was still relatively straightforward. In Egypt, the overthrow of the tyrant Mubarak has left the country with a situation where power is precariously balanced between the Jacobins of Tahrir, the army-bureaucratic interest and its ‘temporary’ rule, and the parliamentary power in the hands of the Muslim Brotherhood. In Libya, the overthrow of Ghadaffi has predictably led to a split of the country among its major geographic division, that between Tripolitania and Cyrenaica. But perhaps more significantly, the real power, which grows out of the barrel of a gun, is in the hands of militias located in the desert cities and whose reach does not extend beyond a local military rule in the name of this or that clan, or this or that area. Of course, under such conditions any political or economic developments are stifled until these immediate contradictions are resolved, which almost inevitably requires either a civil war, or a new dictatorship, or both. And then there is the shadow of Iraq, where the fall of the Saddam Hussein regime after Western intervention brought the country years of massacres and sectarian civil strife, its parliamentary government reigning on the most precarious basis, and its the illusory nature of its national unity now shown for what little it practically is.

But it is always easy to point to the chaos of a transition. This is not itself a response befitting revolutionaries. The above cases are by no means all identical in origins, nor in their legitimacy – there is a world of difference between an invasion of Western powers into a country to merely lop off the head of a hated but effective regime, leaving the body politic to fall apart; and on the other hand, an uprising of popular-democratic power, establishing a t least the formal trappings of democratic legitimacy and thereby opening up a political struggle that had been artificially repressed for decades. Iraq is not Tunisia or Egypt. Moreover, the countries themselves are not necessarily similar in their social structure, so the structure of each uprising is not identical any more than overthrowing a monarch in Austria-Hungary was the same as doing so in Russia. Algeria has not too long ago seen a prolonged dirty war between the government and a coalition of shadowy ‘Islamist’ organizations, characterized by massacres with unknown perpetrators, and leading to a climate of terror and stagnation destroying any prospects for extending popular power.

This may well be the future of Syria, on its current course. The Assad regime cannot be overthrown outright, for it has maintained too much support, not least within the army; but the insurgency, largely operating from the northern and eastern areas of the country, supported by various armed columns of disparate origins and ideology, is likely also too strong to be simply quelled. Each has their popularity and their unpopularity; neither provides a clear revolutionary programme capable of resolving the contradiction. “Between equal rights”, Marx said, “force decides”, and this then is sadly the only real prospect. Already, massacres of civilians by mysterious militias, accusations back and forth of atrocities, and the bombardment of cities and neighbourhoods are a daily phenomenon. Effectively, this means civil war, as the Western powers for their own reasons now also allege; and the very fact it is denied by both the government’s supporters and opponents proves its truth. (This paradox is easily explained by the fact both sides have imposed an effective ban, on penalty of death, on the presence of foreign journalists to observe the facts on the ground.) Even if the process towards a domestic war with the full participation of the general population is by no means complete, the strength of each side and the impossibility of a clear resolution on the basis of their demands proves that civil war has become a necessity outcome.

This is tragic, for such wars are often the most bloody, and their resolution into a positive result the most difficult to achieve, with their legacy lingering for decades. But it is important to understand that such a scenario is not the fault of the uprisings as such, and that one cannot condemn the insurgents on the basis of having ‘divided the country’ or the like. The very fact that only force can decide the contradictions of Arab politics is the consequence of the artificial repression of all political movements by decades of tyranny. It is first and foremost the tyrants whose fault the violence is. This is not the fault of the uprisings against oppression. One blames the Czar for the violence of the Russian Revolution, and the intervention of the Whites and the ‘fourteen armies’ for that of the Russian Civil War. This applies not just to Syria, but to Egypt, to Bahrain, to Tunisia, even to Libya. No imperialist intervention can be accepted any more than Western conspiracy can be blamed, precisely because the act itself is legitimate: it is right to rebel.

This does not, of course, tell foreign observers sympathetic to revolutionary politics how to read the evolution of Syrian affairs. Class societies ruled by quasi-monarchical dynasties of tyrants for long periods have one common trait: the more nationally united the tyranny makes them seem, the more divided they really are. In Syria, the Alawite (or Alevite) minority often supports the regime, which belongs to this denomination and has given its elite a strong grip on the country’s political and economic commanding heights. The Sunni majority for this same reason may often oppose it. But the divisions between the south and the north of the country, supporting and opposing the regime respectively, are at least as significant. Moreover, all these are, as always, mediations of the class divide in a capitalist society. With regard to the great imperialist powers, the case is clear enough. Israel and Syria have long been in strife; but the Israeli government knows well enough that like any man without legitimacy, Assad can survive only by making deals, and it will prefer him to the unknown alternative.

The watchword of the Party of Order is always ‘stability’, and this is why the ‘stability’ of tyrants is favored by the likes of Israel over the ‘chaos’ of political struggle. No observer sympathetic to revolutionary politics can be deceived by this – it is identical to the support for the Gulf monarchies by the Western powers, the same ones who now seek Assad’s deposition and an armed intervention in Syria. This does not prove Assad’s virtues, but on the contrary, simply the hypocrisy of the Americans and the Europeans; they have no interest in a Syrian revolution, merely in establishing a new ‘stability’, one favorable to their third remaking of the Middle Eastern map. Russia and China support Assad in turn because of their own desire for a ‘stability’ of lesser powers against the great ones in the West – again no motive or argument that can be of interest to revolutionaries, other than by denouncing it. The affairs of the Syrians must be settled by the Syrians themselves, even if this does mean that “force decides”. It is right to rebel.

Nothing is therefore less coherent than the argument of ‘principled anti-imperialism’. The question is not of supporting this regime or that, in the vain hope that one strengthens revolutionary politics by substituting the imperialism of Russia and China for that of the United States and the European powers. This is to play the game of 1914. It is also the error of the ‘lesser evil’; where a real possibility for a third option, a rejection of the choice between evils, exists, this path must be followed. This is not always the case, but certainly nothing necessitates upholding the rights of the likes of Assad and Ghadaffi. Not just because such a move is strategically ineffective – for any revolutionary politics, the greatest development of the last decade must be this opening up of the political sphere in the Middle East. This is perhaps the world’s most contradictory region in Mao’s sense, and full of potential for a much greater blow against the rule of the exploiting classes and states than would be a rhetorical support for some militarist clique or another. Such a move could only weaken revolutionary forces by making them look opportunistic and ridiculous, without actually affecting events on a broader scale.

But the most important argument is that it rests on a misunderstanding of the potential involved for our Party, for our side – a consistent underestimation of the power of the peoples in rebellion to create their own path, even through the fires of civil war and through the depths of sectarian strife. Indeed, one may make different strategic decisions in terms of rhetoric or domestic opposition, but it is not for us to delineate what Bassam Haddad has called “the threshold of pain“. This is for ‘reason in revolt‘ to do. The very struggle itself, on both sides, will work out the contradictions. Perhaps such an acceptance of violence as a political phenomenon may seem cynical, and it should certainly never be glorified. But this is the nature of revolt, and, as mentioned, revolt is the fault of the oppressors. Perhaps it is cynical, but faith in people’s own ability to take a stand and make a move is less cynical than the cynicism of ‘principled anti-imperialism’. We may then also be spared the cynicism of its opportunistic appeals to vague, unprincipled reformism in the form of bribery on the part of this or that ‘enlightened ruler’, as we heard so often about Ghadaffi. As Haddad has pointed out, “no other contradiction surpasses the one that exists between the state’s professed political-economic principles and its actual policies, regarding matters that concern the left: social justice, equity, class, empowerment, exploitation, labor, peasantry, and so on, especially since 1986”.(2)

Let us be clear then where we draw the line: The Czar is not better than Wilhelm and Wilhelm not better than the Czar; Putin is not better than Obama and Obama not better than Putin; the Islamists are not better than Assad and Assad is not better than the Islamists; but it is right to rebel.

1) Corey Robin, The Reactionary Mind (New York, NY 2011).
2) Bassam Haddad, “Hizballah, Development, and the Political Economy of Pain: For Syria, What is ‘Left’ (Part 3)”. Jadaliyya, op cit.

Unions and the West: The Scott Walker Affair

Following a headlong confrontation over the Governor of Wisconsin, the reactionary Scott Walker, and his direct assaults on the public sector unions and their legislative achievements, much of the US left is now abuzz with the resounding failure of the campaign to recall him. In what had been seen as one of the last great revivals of the labor movement in the United States, workers officially and unofficially organized against Walker, even going so far as to occupy the Capitol building and to make the functioning of the Wisconsin legislature impossible. There were massive campaigns for opposition against the anti-union onslaught, and it was seen by many in organized labor as a decisive battle on whether the fight for union rights could be won in America. Laws undermining the public sector unions had already passed without much difficulty in Indiana and Missouri, but were defeated in Ohio. In this way, Wisconsin became something of a battleground, befitting a state which has a reputation for supplying leading politicians of both the left wing and the right wing, relative to American standards. But the Democratic Party took the leadership of the campaign together with the unions, and supplied a weak centrist called Tom Barrett against Walker – a candidate who, as mayor of Milwaukee, failed to even endorse unequivocally the union position, and who had lost the election against Walker in the first place. In the end, Barrett added about 150.000 extra votes, but Walker added 200.000 extra votes, and therefore won by a larger margin than before. For all the union efforts, the Democratic Party nationally put in no real support for the campaign, and President Obama could not be bothered to do more than post a Tweet about it. This despite his pledge, during his own campaigning, that in case of an attack on union organizing he’d “put on a pair of comfortable shoes and join them on the picket line”. Continue reading “Unions and the West: The Scott Walker Affair”