We can’t say Karl Marx didn’t warn us: capitalism contains the seeds of its own destruction. In their chase for ever higher profits, the capitalists shed workers for machines. The higher return on capital means that the share of profits rises and the share of wages falls, and soon the mass of the population isn’t earning enough to buy the goods capitalism produces. Ever increasing income inequality leads to ever weaker aggregate demand and, finally, the collapse. You don’t have to be a communist to see that this is so. Should we all be Marxists now?
Or shouldn’t we? Every time capitalism hits an inevitable bad patch, Marx’s name is invoked with wearisome regularity. But no serious economist or political thinker has ever suggested capitalism can break free of booms and busts. Once bust, as we’ve seen time and again, the capitalist economy has a robust ability to restore itself. As for all the talk of growing inequality, hasn’t anyone noticed that ordinary people in the capitalist West have enjoyed an astonishing long-term rise in their standard of living? We are not suffering an existential economic crisis. We do not need extraordinary remedies. What use is there for Marx? So which is it? Is Marx the voice we should be heeding?
Illustration: Karl Marx by Chaitanya Modak