Tag Archives: foresight

Marx Was Right: Five Surprising Ways Karl Marx Predicted 2014

From the iPhone 5S to corporate globalization, modern life is full of evidence of Marx’s foresight

There’s a lot of talk of Karl Marx in the air these days – from Rush Limbaugh accusing Pope Francis of promoting “pure Marxism” to a Washington Times writer claiming that New York City Mayor Bill de Blasio is an “unrepentant Marxist.” But few people actually understand Marx’s trenchant critique of capitalism. Most people are vaguely aware of the radical economist’s prediction that capitalism would inevitably be replaced by communism, but they often misunderstand why he believed this to be true. And while Marx was wrong about some things, his writings (many of which pre-date the American Civil War) accurately predicted several aspects of contemporary capitalism, from the Great Recession to the iPhone 5S in your pocket.Here are five facts of life in 2014 that Marx’s analysis of capitalism correctly predicted more than a century ago:

1. The Great Recession (Capitalism’s Chaotic Nature)

The inherently chaotic, crisis-prone nature of capitalism was a key part of Marx’s writings. He argued that the relentless drive for profits would lead companies to mechanize their workplaces, producing more and more goods while squeezing workers’ wages until they could no longer purchase the products they created. Sure enough, modern historical events from the Great Depression to the dot-com bubble can be traced back to what Marx termed “fictitious capital” – financial instruments like stocks and credit-default swaps. We produce and produce until there is simply no one left to purchase our goods, no new markets, no new debts. The cycle is still playing out before our eyes: Broadly speaking, it’s what made the housing market crash in 2008. Decades of deepening inequality reduced incomes, which led more and more Americans to take on debt. When there were no subprime borrows left to scheme, the whole façade fell apart, just as Marx knew it would.

2. The iPhone 5S (Imaginary Appetites)

Marx warned that capitalism’s tendency to concentrate high value on essentially arbitrary products would, over time, lead to what he called “a contriving and ever-calculating subservience to inhuman, sophisticated, unnatural and imaginary appetites.” It’s a harsh but accurate way of describing contemporary America, where we enjoy incredible luxury and yet are driven by a constant need for more and more stuff to buy. Consider the iPhone 5S you may own. Is it really that much better than the iPhone 5 you had last year, or the iPhone 4S a year before that? Is it a real need, or an invented one? While Chinese families fall sick with cancer from our e-waste, megacorporations are creating entire advertising campaigns around the idea that we should destroy perfectly good products for no reason. If Marx could see this kind of thing, he’d nod in recognition.

3. The IMF (The Globalization of Capitalism)

Marx’s ideas about overproduction led him to predict what is now called globalization – the spread of capitalism across the planet in search of new 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.” While this may seem like an obvious point now, Marx wrote those words in 1848, when globalization was over a century away. And he wasn’t just right about what ended up happening in the late 20th century – he was right about why it happened: The relentless search for new markets and cheap labor, as well as the incessant demand for more natural resources, are beasts that demand constant feeding.

4. Walmart (Monopoly)

The classical theory of economics assumed that competition was natural and therefore self-sustaining. Marx, however, argued that market power would actually be centralized in large monopoly firms as businesses increasingly preyed upon each other. This might have struck his 19th-century readers as odd: As Richard Hofstadter writes, “Americans came to take it for granted that property would be widely diffused, that economic and political power would decentralized.” It was only later, in the 20th century, that the trend Marx foresaw began to accelerate. Today, mom-and-pop shops have been replaced by monolithic big-box stores like Walmart, small community banks have been replaced by global banks like J.P. Morgan Chase and small famers have been replaced by the likes of Archer Daniels Midland. The tech world, too, is already becoming centralized, with big corporations sucking up start-ups as fast as they can. Politicians give lip service to what minimal small-business lobby remains and prosecute the most violent of antitrust abuses – but for the most part, we know big business is here to stay.

5. Low Wages, Big Profits (The Reserve Army of Industrial Labor)

Marx believed that wages would be held down by a “reserve army of labor,” which he explained simply using classical economic techniques: Capitalists wish to pay as little as possible for labor, and this is easiest to do when there are too many workers floating around. Thus, after a recession, using a Marxist analysis, we would predict that high unemployment would keep wages stagnant as profits soared, because workers are too scared of unemployment to quit their terrible, exploitative jobs. And what do you know? No less an authority than the Wall Street Journal warns, “Lately, the U.S. recovery has been displaying some Marxian traits. Corporate profits are on a tear, and rising productivity has allowed companies to grow without doing much to reduce the vast ranks of the unemployed.” That’s because workers are terrified to leave their jobs and therefore lack bargaining power. It’s no surprise that the best time for equitable growth is during times of “full employment,” when unemployment is low and workers can threaten to take another job.

In Conclusion:

Marx was wrong about many things. Most of his writing focuses on a critique of capitalism rather than a proposal of what to replace it with – which left it open to misinterpretation by madmen like Stalin in the 20th century. But his work still shapes our world in a positive way as well. When he argued for a progressive income tax in the Communist Manifesto, no country had one. Now, there is scarcely a country without a progressive income tax, and it’s one small way that the U.S. tries to fight income inequality. Marx’s moral critique of capitalism and his keen insights into its inner workings and historical context are still worth paying attention to. As Robert L. Heilbroner writes, “We turn to Marx, therefore, not because he is infallible, but because he is inescapable.” Today, in a world of both unheard-of wealth and abject poverty, where the richest 85 people have more wealth than the poorest 3 billion, the famous cry, “Workers of the world uniteyou have nothing to lose but your chains,” has yet to lose its potency.

Courtesy: Rolling Stone

The myopia continues – Cyril Almeida


…..  Well, no less a person than the American president has weighed in on what he thinks ought to be the fate of a piddling employee/contractor of the American government.

Whatever spurred those comments — he was asked a question rather than made a prepared statement — you can be sure the weight and might of the American state machinery will press very, very hard to ensure their president isn’t embarrassed by the self-righteous defiance of some judges and a few politicians in a country surviving on American handouts.

The Americans want their guy back and, by golly, they seem bent on getting their way. Which leaves our response.

By now the cat is out of the bag. When the interior minister, the ex-foreign minister and the all-powerful spy chief met to decide the fate of Raymond Davis, two of those gents were of the opinion that Davis doesn’t enjoy ‘full immunity’.

One of those two has now been fired by Zardari. The other, well, if Zardari tried to fire him, the president might find himself out of a job first.

Which leaves the obvious question: once the government had, surprise, surprise, screwed up, what did the self-appointed custodians of the national interest make of the situation?

Forget all that mishegoss about Vienna conventions and legal minutiae and the like. In its dealings with the US over the past decade, the security establishment’s concern for the letter of the law has been, at best, patchy.

Tongues are wagging in Islamabad that the calculus would have been far simpler: through a stroke of luck, the Pakistani state now has something the Americans desperately want back — Raymond Davis — so what will the Americans be willing to give in return?

The Davis incident has come at a time when by all accounts relations between the US and Pakistan were growing more tense, and worse was expected in the months ahead. All manner of American pressure was expected to be put on Pakistan to further US counter-terrorism and counter-insurgency goals in this country and across the border in Afghanistan.

Some believe the contours of the security establishment’s response had become visible in recent months: discreetly and indirectly encourage anti-American sentiment in the country as a bulwark against American pressure. If/when the Americans leaned too heavily on the security establishment here, the generals would be able to turn around and say, we can’t do what you want, the people won’t let us.

But long after Raymond Davis is back home in the US, hawking his talents in the lucrative private sector there, we here in Pakistan will still be stuck with the fallout.

The security establishment seems to view extremist sentiment like a faucet: turn it off, turn it on, leave it half open, depending on the need of the hour. But in the real world it doesn’t quite work like that.

Once released into society, the poison lingers on, its pernicious effects revealed years and maybe even decades later. Kind of what Pakistan looks like today, 30 years since Zia tried to Islamise this unfortunate land and her luckless people.

The recent evidence is just as harrowing. Hafiz Saeed was trotted out in support of the blasphemy laws, and everyone knows what that fire ended up consuming. Now the right-wing is up in arms again, demanding the head of Raymond Davis, arguing for a swap with Aafia Siddiqui, crying out for the lives of Pakistanis to be treated at par with American lives — with the security establishment passively looking on, possibly counting the benefits.

Who knows, the arrogant Americans may or may not get their way on Raymond Davis. The security establishment may or may not be able to wrest some compromises from the US in return for facilitating the release of Davis.

But Pakistani society will be uglier, more intolerant and a little more vicious as a result — and that surely cannot be worth whatever the short-term tactical advantage which may or may not be gained.

Read more : DAWN