Marx at 200

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Marx at 200

Sunday, 25 November 2018 | Miniya Chatterji lilaramani

Marx at 200

Are we finally at the tipping point of capitalism, heading towards a post-capitalist society, as imagined by Karl Marx? The answer is relevant to the world as much as it is to India

Last week, I was at the annual Tata Literature Live Festival in Mumbai. The festival had an evident focus on quality over quantity, lining up a fantastic set of topics for panels, envigorating discussions both on and off stage, and a delightfully engaged audience. I spoke on two panels, one of which was about the relevance of Marx’s ideas 200 years after his birth. When Marx died, little did he know that he would be remembered even two centuries later. In fact, Marxism was propagated posthumously more by his friend Engels than by Marx himself whilst he was alive. Indeed thereafter there have been entire nations that have been inspired by Marx’s views, structuring their economic institutions — if not their politics — accordingly. And so our panel in Mumbai was asked to discuss if we are now finally at the tipping point of capitalism, heading towards a post-capitalist society, as imagined by Marx?

The answer to that question is a complex one, and is relevant to the world as much as it is specifically to India. Marx had certainly got it right when he pointed out the importance of economic forces in shaping human society. He wrote how the mode of production, in other words, how labour and capital combined — and under what rules — would explain society, politics, and culture. Another reason for Marx’s relevance today is that we have seen how a financial bust led to a crisis of capitalism, and Marx had explained how and why capitalism would succumb to recurrent crisis after a credit bust. Marx’s empirical data was indeed inadequate to help him understand how the 1957-58 economic slump started and finished. But it showed him that crisis would appear in a capitalist economy but not necessarily lead to revolution.

However, even though Marx had rightly pointed out that capitalism can not escape being subject to regular and recurring slumps, his analysis was limited in pronouncing profitability to be the ultimate cause of crisis in a capitalist economy. We have seen in the past that each crisis can have a different cause. This I would say is also because in the past 200 years, capitalism has been in a constant process of metamorphosis, taking new forms and structures from time to time in different regions. The capitalism that Marx had analysed has changed enormously since his times. For example, capital markets are now based on demand and supply — and not alone from value from exploitation of labour, as was suggested by Marx.

Marx had written that capitalism will perish. On this too he has been proved wrong thus far. A strong middle class has developed around mid-level corporate managers, and this — amongst many other factors — has helped in blocking the chances to end capitalism. Instead, the centre of capital accumulation has shifted in the last 200 years from Europe to the US and parts of Asia in the 20th Century, and now towards China and India. The latter, Marx never saw coming.

In fact, since the death of Marx, capitalism has become global. While developing countries provide huge supplies of cheap labour overseas, the imperialist economies are still bases of finance capital globally. Today’s global economy bears some resemblance to what Marx foresaw, but not entirely. His rejection of capitalism is highly debatable too as the big reduction of poverty in the world over the past 40 years was achieved in large part because of China’s rise. And China is not an example of free enterprise.

One of my co-panelists at the Tata Literature Live Festival was Sanjeev Sanyal, the firebrand Principal Economist to our Finance Ministry. He labelled Marxism as the deadliest ideology of all times that has only led to bloodshed and gore. We did not hear much from him that was not tempered with great emotional drama, in drastic contrast to my other fellow panelist Ferdinand Mount, the prolific British writer and political commentator who delivered a sage historical explanation of why Marx is indeed relevant today.    

My take on the question posed to our panel was that a more practical approach would be to not limit ourselves to debate or choose between Marxism or capitalism alone, and instead go with any alternative or hybrid economic system that can turn economic advances into social progress. We desperately need to do this in India, as never before has the share of our national income taken by top 1 per cent income earners been higher than what it is now.

In India, our richest 1 per cent own 53 per cent of the country’s wealth, the richest 5 per cent Indians own 68.6 per cent of wealth, while the top 10 per cent have 76.3 per cent of it. At the other end of the pyramid, the poorest half jostles for a mere 4.1 per cent of national wealth. India dominates the world’s poorest 10 per cent with 22 per cent of the country’s population living below the international poverty line. We even have the unfortunate honour of having the largest number of malnourished children in the world in 2016.

But these inequalities in India are by no means exceptional cases. In Europe, there were huge inequalities in the 19th and early 20th Centuries. This trend stopped and was reversed in the  20th century after the World War II when the welfare state redistributed income within the framework of a capitalist economy.

I suggested that perhaps integrating welfare state policies for the most vulnerable communities within a capitalist framework is a possible solution India can consider until the time we are able to shrink income and social inequality. The Indian Government does not really provide social security to citizens and nor does the private sector offer products such as redundancy insurance that can help those who are at the losing end of capitalism. Offering a well-structured safety net for the disabled, employment seekers, single parents, or the aged, will not blunt capitalism’s edge. It will only ensure that while some prosper on a level play field, those who lose are not forgotten.

The writer is the CEO of Sustain Labs Paris, the world’s first sustainability incubator. She is a Global Leadership Fellow alumna of the World Economic Forum. miniya@labsparis.com

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