Marx - still valid
By Victor Perlo, in People's Weekly World, 20 April, 1996
The books of MIT economics professor Paul Krugman were called to my attention 
recently. Krugman dismisses the liberal economist John K. Galbraith as a "media 
personality," one not taken seriously by academic economists. 

Although he may not admit it, Krugman has much in common with Galbraith. Both 
criticize the "supply-side" snake oil of Reaganomics and its economic lap-dogs, 
without mentioning the anti-working class and imperialist-expansionist essence 
of its theories and policies. 

Krugman favors the new technologies and "high-value-added" industries advocated 
by Lester Thurow and Clinton's Labor Secretary Robert Reich. And, like them, he 
fails to approve the necessary funding for high-tech education or to explain 
how -- even if there were funding -- millions of newly- trained "symbolic 
thinkers" will find jobs in a downsizing capitalist economy. 

The pendulum may be swinging to the left, as Krugman asserts -- and I agree -- 
but that is despite the pro-capitalist, anti-working class and racist ideology 
of economists like Krugman. Neither the accelerating rate of exploitation of 
labor and intensified racism, nor their resulting crisis- breeding 
contradictions, are mentioned by Krugman and Co. Nor are the mounting struggles 
of labor and the oppressed against these developments. 

Krugman accepts the capitalist myth that declining productivity is the cause of 
growing poverty -- and that it is a mistake to think the government can do much 
about it because, he says, "nobody knows how to do either of these things. The 
roots of inadequate productivity performance are deep and poorly understood, 
the causes of growing inequality and poverty hardly less so." 

To polish his reputation as a liberal, Krugman proclaims his adherence to John 
Maynard Keynes, but opposes the fundamental tenet of Keynesianism -- the 
expansion of public works to provide jobs during a recession. 

Keynes' major work, "The General Theory of Employment, Interest and Money" was 
published in 1935 when "workers of the world," inspired by the tremendous 
accomplishments of socialism in the USSR, were seeking a revolutionary way out 
of the Great Depression and a significant section of the capitalist class 
considered it necessary to make substantial concessions to workers and peasants 
in order to avert socialist revolutions. 

Keynes wrote: "The outstanding faults of the economic society in which we live 
are its failure to provide full employment and its arbitrary and inequitable 
distribution of wealth and income." He called for a "somewhat comprehensive 
socialization of investment" as needed to secure "full employment" -- but to be 
carried out only as far as needed to establish a new balance in capitalist 

Keynes called for the gradual "euthanasia of the rentier, ... the functionless 

Today such proposals are anathema to economists and politicians of both the 
Reagan- Bush-Gingrich variety and the more moderate Clinton-Rubin-Reich school. 

The books of Krugman and Keynes compel one to study the writings of Karl Marx 
-- work that is the foundation of working class economics and politics. Much of 
what is valid in Keynes' analysis of capitalist crises is derived from Marx, 
all covered up and distorted to serve Keynes' basically pro-capitalist 

While never quoting Marx, Keynes limits himself to the remark that the "Great 
puzzle of effective demand ... could only live on furtively ... in the 
underworlds of Karl Marx, Silvio Gesell or Major Douglas." One might ask: What 
underworld?" Marx' Capital may be the most widely read book of all time. 

Although Marx analyzed the course of the business cycle in all its complexity, 
he expressed the central feature of every crisis succinctly and accurately: 
"The ultimate reason for all real crises always remains the poverty and 
restricted consumption of the masses as opposed to the drive of capitalist 
production to develop the productive forces as though only the absolute 
consuming power of society constituted their limit," he wrote in Capital, 
Volume III. 

Neither Krugman nor Keynes recognized Marx' observation that exploitation of 
labor and the creation of surplus value are the driving force of the capitalist 
class, that "the production of surplus-value -- and the reconversion of a 
portion of it into capital ... is the immediate purpose and compelling motive 
of capitalist production." 

Surely a look at the soaring profits of corporations, along with the downsizing 
of hundreds of thousands of workers, makes it clear that the capitalist class, 
today more brutal than ever, is intensifying the exploitation of labor, 
multiplying income inequality and causing declining living standards for the 
majority of the working class. 

While Krugman and Keynes look to the economists to convince politicians of what 
they consider desirable changes, Marx and the Communists look to the working 
class to win better conditions through struggle and, eventually, to eliminate 
forever capitalist exploitation through a socialist revolution. Science and 
action are inseparable in the approach of Communists. 

Marx' Capital and Lenin's Imperialism define the nature of the system. The 
necessity of socialism, as proclaimed by Marx and Engels in The Communist 
Manifesto, is as valid as a guiding light for political struggles today as when 
it was first issued nearly 150 years ago.

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