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What Were Considered "Radical" Economics Are Re-Emerging in Wake of Crisis

The worldwide market meltdowns have many turning the pages back to Marx and Keynes.
 
 
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Among the few things whose sales are picking up in these recessionary times are the works of Karl Marx and John Maynard Keynes. Both, in their own way, argue a central role for the state in managing the economy.

"Thanks to the crisis of neo-liberalism, Karl Marx is en vogue again," says Joern Schuetrumpf, managing director of the Berlin-based publishing house Karl-Diez Verlag. Schuetrumpf publishes the original German edition of Marx's collected works, including Das Kapital (The Capital).

"When Marx's books become bestsellers, it means that society is badly off," Schuetrumpf tells IPS. "The financial turmoil and the ensuing economic recession are the motors of a Marx revival."

Schuetrumpf is profiting from the crisis. In October Karl-Diez Verlag sold more than 500 copies of Das Kapital, confirming a trend that began early in 2008.

"Until 2004, we sold less than 100 copies of Das Kapital per year," Schuetrumpf said. "In the 10 months of 2008, we have sold more than 2,500 copies. It is clear that people are interested in learning what Marx has to say about why capitalism does not work."

Marx's popularity in Germany is being renewed mostly among left-wing intellectuals. At least 30 universities around the country are now offering new courses on Marxist theory, and lectures on Das Kapital.

Most courses have been organised by the Socialist Student Federation and the Rosa-Luxembourg-Foundation linked to The Left party formed by former communist and Social-Democrat militants.

"I think that Marx's popularity will spread beyond these groups," Schuetrumpf said. "In this crisis, I see many people going back to the church. Others, the more rational people, are looking for an answer to social problems beyond religion, and Marx is a good place to start."

Some are even trying to bring about a synthesis of religion and Marxist theory. Reinhard Marx, for instance. Marx, no relation of Marx the philosopher, is Archbishop of Munich and author of a new book -- titled Das Kapital. The first edition appeared in September with a print run of 15,000, and is sold out.

"I have never given in to the temptation of becoming a Marxist," Marx the bishop told IPS. "I am faithful to the spirit of the encyclical Rerum Novarum." This document, issued by Pope Leo XIII in 1891 as an open letter addressed to all Catholic bishops, discussed the relationship between capital and labour, and between government and citizens.

The paper expressed the need for alleviation of "the misery and wretchedness pressing so unjustly on the majority of the working class." While supporting the rights of workers to form unions, it rejected both communism and unrestricted capitalism, and affirmed the right to private property.

And yet, time and again, whenever Archbishop Marx confronted "misery and wretchedness", he always went back to reading the original Kapital.

In the foreword to his own Kapital, Marx the bishop writes to Marx the revolutionary theorist expressing admiration for his foresight. "Is capitalism really going to be only a chapter in economic history ... and will disappear, victim of its own contradictions, as you foresaw?"

A hundred and fifty years ago, the bishop tells IPS, "Marx predicted globalisation, and saw already the failures of capitalism."

Marxist theorists recall that the financial crisis of 1857 in the U.S. inspired Marx to intensify his studies on finance capital and its cycles of boom and bust. Ten years later, he published Das Kapital, in which he described capitalism as anarchic, irrational and blind competition led by the frantic pursuit of profit and accumulation.

In place of this doomed system, Marx argued, state-managed economy would be needed, based on a rational system of rules to eliminate poverty and social inequality. Twenty years before publishing Das Kapital, Marx had argued in The Communist Manifesto in 1848 that "history of all hitherto existing society is the history of class struggles."

Marx's new popularity is not restricted to Germany. In France, the University Press (PUF, after its French name), publisher of Das Kapital in Paris, confirmed that the book has recently begun to sell. "Normally, we sell less than 50 copies of the book per month," a PUF spokesperson told IPS. "Since mid 2008, we are selling more than 150 copies a month."

Many of the new readers are searching for economic wisdom beyond Marxist theory. Other classic analyses of the failures of capitalism, by John Maynard Keynes and John Kenneth Galbraith, are also finding big new sales.

Keynes, and later Galbraith, argued that freewheeling capitalism, especially the globalisation of finance, would necessarily bring economic and social catastrophe. Like Marx, Keynes argued that intervention by the state was essential to avoid the cycles of boom and boost. But unlike Marx, Keynes wanted capitalism reformed and managed, not eradicated.

"Last April, we decided to reprint the French edition of Galbraith's The Great Crash of 1929'," Benoîte Mourot, managing director of Editions Payot & Rivages told IPS. "This new edition had 3,000 copies, and we sold out in October, without any marketing campaign." A reprint has been ordered.

Payot & Rivages is also publisher of Keynes in French. "Of Keynes's main work, 'The General Theory of Employment, Interest, and Money', we sell normally some 500 copies per year," Mourot said. "In September alone, we sold 400 copies."

The new recognition for both Keynes and Galbraith is based also on the worldwide appeals for "a new Bretton Woods" system; that is, a new set of regulations to manage financial and trade relations. A conference in 1944 in Bretton Woods in New Hampshire in the U.S. had produced the International Monetary Fund (IMF) and the World Bank.

Keynes, as leader of the British delegation to the Bretton Woods conference of 1944, and chairman of the World Bank commission at the time, was a key actor in the negotiations that established the Bretton Woods institutions.

But now, Joerg Huffschmid, professor of economics at the University of Bremen in Germany says, "a re-edition of Bretton Woods would not suffice to lead the world to a new welfare status for all citizens of the world. The original Bretton Woods system did not consider the welfare of the countries of the south, which were colonies or neo-colonies at the time."

This time around, Huffschmid said, "the set of rules to manage the world economy to avoid a new crisis like the present one cannot aim simply to reform capitalism." Marx the philosopher, if not the bishop, would certainly agree.