Giles Fraser - The truth about capitalism is out as Marx’s magic cap starts to slip
Wasn’t this supposed
to be the party conference in which the Tories reminded everyone of the virtues
of market capitalism? “Tories need to start explaining the unassailable truth that markets
don’t just make us richer, they make us happier too,” urged the former
chair of Northern Rock, Matt Ridley, in the Times. “Time for a full-throated Tory defence of enterprise and capitalism,” insisted
Simon Heffer in the Telegraph. With Comrade Corbyn riding high, it has been
quite some time since economic liberals have so felt so threatened to their
ideological core. Next month it will be a hundred years since the Bolsheviks
took power in Russia. Ever since the fall of the Berlin Wall in 1989, the right
have assumed that the argument against communism had been won, and won
decisively. But the young are picking up their Karl Marx once again. And just
at the point when the right seem to have forgotten their lines.
Viscount Ridley argues
that capitalism makes us better people as well as richer. It is a morality
driven by enlightened selfishness in which my own interests are only advanced
if I look after yours as well. This is supposed to be the moral case for market
capitalism: I only get to be extremely rich if you get to be a little bit
richer too. This is the economy of the “invisible hand”, powered by greed,
where my own desire for ever greater wealth drives ingenious new opportunities
for this magical thing called growth, which in turn creates greater wealth for
everyone else.
Yes, capitalism is basically a superstition, a belief in the
power of magic. I’m with David Attenborough: “We have a finite environment – the planet. Anyone who thinks that you
can have infinite growth in a finite environment is either a madman or an
economist.”
Of course, I am not
the first person to argue that capitalism is based on a superstitious belief in
the efficacy of magic. Marx’s Kapital, one of the great works of 19th-century
atheism, is a genius attempt to disabuse us of this dangerous mystification. Of
course, the god in Marx’s sights is not the one of the Bible but one celebrated
by the philosophers of Enlightenment rationalism: the god of capital.
In the first chapters
of Das Kapital, Marx explains how money makes money – or how, in the words of
Matthew’s Gospel, “to everyone who has, more shall be given … but from the
one who does not have, even what he does have shall be taken away”. Those with
money are able to own the means of production and the labour needed to operate
it. Throughout the whole cycle of making things and selling them on, the
capitalist creates more money for themselves by getting employees to work
longer and longer hours. This extra labour creates surplus value that results
in profits for the capitalist.
Profit here is
intrinsically exploitative – it does not exist without the extra hours worked
by the capitalist’s employees. This is the source of the capitalist’s wealth,
and when it is reinvested to capture an even greater share of the means of
production and employ more workers, it grows off itself. Thus more and more is
owned by fewer and fewer people. And money makes money, as if by magic. But when, with Marx,
we begin to understand that money is a way of capturing a social relationship
between those who own the means of production – whether factories or apps – and
those who work in them or for them, we begin to recognise that capitalism is
not magic but exploitative to its core. The magical quality of our faith in
money and in economic growth is a deliberate mystification of the social
exploitation that the capitalist – understandably – wants to cover up.
And “we draw the magic cap down over eyes and ears as a make-believe that
there are no monsters,” as Marx put it in the preface to Das Kapital. All of this becomes
more and more obvious as global capital seeks new and ever more ingenious forms
of concentration. The generation who learned their politics through the Occupy
movement have had the scales fall from their eyes. Since then the 1% has become
the 0.1%. And the magic cap is beginning to slip.
see also
Anders Åslund - Russia’s Neo-Feudal Capitalism; More posts on Russia
Posts on Greece
