‘The truth about capitalism is out as Marx’s magic cap starts to slip’
By Giles Fraser. This article was first published in the Guardian on Thursday 5 October 2017
‘A century after the rise of the Bolsheviks, the young are reading Karl Marx again – and faith in the superstitious beliefs that underpin market economies is faltering’
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.”
Capitalism and Poverty in the USA. Photo: beliefnet.com
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.
Further related reading: