Reflecting on Marx and money gone mad
by Duncan Cameron
October 9, 2007
The Bank of Canada is busily handing out money to buoy the Canadian financial system, resorting to purchase, and re-purchase agreements which allow financial institutions time to find more funds to satisfy their need for liquidity aka cash. Note that public money is readily available to banks with shortfalls, but not for the homeless.
Watching the waves of speculative transnational finance crash around the world economy, shaking faith in not only sub-prime mortgage funds, but national currencies, and banks as well, brings to mind the important intellectual legacy of the German philosopher, economist, journalist and political activist Karl Marx: his theory of history.
While the reputation of Marx as a thinker has been besmirched by the political idolatry accorded him by his would-be followers, his analysis of the dynamics of public affairs has never been refuted.
Marx developed a theory of prices that could not be made operational. He mistakenly thought gold was all there was to money. And his thinking about how to achieve political change was “over-determined” by the proximity of the French revolution. Nonetheless, there is more than a kernel of truth in Marx 101 about how the world is transformed.
Marx started with material production, how people went about their daily lives. He showed that a society created forces of production: the ability to produce for use and exchange. Technology, science, infrastructure, and above all skilled human beings working and living together, produced and re-produced the material conditions of existence.
Marx then showed how forces of production were bound up within particular social relations, feudalism for instance, where serfs were tied to the manor, and then obeyed their Lord and master; and capitalism, where salaried workers did the bidding of employers.
His crucial insight was that the forces of production were eventually constrained by the social relations of production. An out-dated, repressive social regime inhibited the potential development of society. When the social relations of production could no longer contain the forces of production, these forces would then burst the old social order apart, and propel society in a new direction.
Feudalism, for instance, was the eventual victim of industrial capitalism, but it began to give way when independent agriculture, and cottage industry flourished outside the walls of the manor.
Today, speculative transnational capitalism is just such a fetter, not just on the development of human potential — the forces of production — but on ecological sanity as well. A few thousand financiers acquire riches measured in billions, while the reproduction of material existence is threatened by money lending, and credit creation to produce destructive goods, and over-exploit natural resources.
The Alberta tar sands is a good example of money gone mad. The tar sands hold an estimated 174 billion barrels of oil, and production is forecast to quadruple by 2015. Over $100 billion has been invested to recoup heavy oil. It takes three barrels of water to produce one barrel of oil, drying up the Athabasca river; heavy oil production produces toxic waste, and acid rain effects are felt all the way to Quebec. Most of the production is slated to feed the enormous American appetite for yet more waste, and environmental destruction.
Social classes are the active element in the Marxian analysis, and the one that creates the most controversy. For Marx, classes are created through production, and constitute its social relations. A rising class can develop a mind of its own, as did the bourgeois, for example, in 18th century France, leading to the overthrow of the feudal Lords.
The followers of Marx predicted an awakening, and then rise of the industrial proletariat, which we await still today. In the former Soviet Union and its dependent territories, a satanic tyranny known as Stalinism ruled, and killed, in the name of Marx.
Meanwhile, in the capitalist West, instead of the falling rate of profit pushing workers to revolt, huge leaps forward in productive capacity have been turned into waste of every sort imaginable: militarism, environmental destruction, and useless consumption, while basic human needs go unmet in much of the world.
In defence of economic and social rights, citizens groups have emerged that together constitute a democracy movement; not a class as such, but certainly a cottage industry political force.
The exponential growth of transnational finance is predicated on the ability of productive forces to deliver revenue through economic growth. But, growth of productive forces now consigns the earth to global warming, and environmental calamities yet to be detected.
The citizens' democracy movement must take dead aim at the speculative form of financial capitalism, and insist on returning control over money lending and credit to local and public institutions. The increase in productivity should be funding citizen’s incomes, not a rentier class. Democratically regulated, and supervised financial institutions have to be the norm, not the wildly out of control markets for financial derivatives. Instead of the Bank of Canada directing our money into the pockets of financiers, we need a democratic infrastructure to promote equality, social justice, and environmental sanity.
Duncan Cameron is associate publisher of rabble.ca. He writes from Vancouver.
