Although more than a century has passed since the death of German philosopher and economist Karl Marx, his ideas continue to make an impact on a world marred with dynamic shifts, as capitalism meanders through the decades with its boom and bust cycles.
The end of the Cold War heralded the death knell of communism as we knew it. When the Berlin Wall came down, the big yellow McDonalds logos eclipsed the hammer and sickle crested red star over the streets of Moscow and Warsaw. But did toppling statues of Lenin and widespread adoption of neoliberal policies open up a prosperous future? Wealth inequality is at an all-time high coupled with the bouts of recession ever eight to ten years and then you have things like climate change and tensions between nuclear armed super powers.
Amid this anxiety and confusion, perhaps it is time we consult Marx again and understand the crisis of capitalism and grasp has been misinterpreted by one of the most important economic thinkers. Sunday Observer Business spoke to Dr. Kalpa Rajapaksha who teaches Marxist Political Economy at the Department of Economics and Statistics, University of Peradeniya for some answers to some of our burning questions.
Q: Since 2000, Sri Lanka has gone to the IMF five times. Is this pattern seen in all developing countries?
A: Yes, you can clearly see a pattern. Developing nations are going to the IMF seeking short-term loans while seeking long-term structural changes. The first reason is that capitalism by nature creates uneven development. The unique feature of capitalism is that you have certain nations developing faster while others slink further into underdevelopment. With respect to the process of capitalistic development, certain countries are in a terrible economic situation; they are not equally treated within the economic process.
They cannot be treated equally since unequal value processes are ongoing. Second thing is neo-classical economics has hegemony in universities, academia, economies and think tanks in all developing nations. Their advice for developing nations and their policymakers is “go to the IMF”. So on one hand I can clearly see a practical steps embedded in the whole process of economic development; on the other hand there is an ideological reason why developing nations are going to the IMF, because the most popular argument is that there is no alternative within the international financial architecture other than going to the IMF.
Q: The economic crisis during Sirimavo Bandaranaike’s rule is cited as a reason why planned economies don’t work. What are your thoughts?
A: I wouldn’t call the kind of socialism practiced during Sirimavo Bandaranaike’s time as true socialism nor would I like to see it developing in an economy. The popular argument is that economic development was close to zero during this time with no economic growth. A lot of industries were nationalised, imports were restricted and a certain class of businessmen were treated unequally; they were provided with facilities, licences and many other things.
But look at the situation right now where we have the same results. We are actually in full capitalism and moving in full neo-liberalism as an economy. For example, the growth rate right now is negative. A planned economy was introduced in 1971. But after almost five decades we have a completely different economic process that brought us to worse circumstances than the planned economic system.
The planned economy introduced by Sirimavo Bandaranaike generated negative economic consequences but what about the neoliberal capitalism we are currently practicing? It doesn’t work. I want to highlight the fact that criticisms of Sirimavo Bandaranaike’s policies are very ideological.
You cannot look at the present situation by measuring the failures of the past. You have to look at situation concretely and implement the most vital dynamics of a planned economy. I would propose a planned economic system as viable and sustainable for a country like Sri Lanka. As a small country, where preparation is required, a planned economy is vital. Free-market thinkers say that market is not planned, but I argue that markets are planned. I would recommend one of the greatest economic literatures of all time, Karl Polanyi’s ‘The Great Transformation’ where he theorises that the market process is in fact planned.
Go to a simple firm. The process is well planned, well measured. They have all the information, data, meta data, algorithms and patterns. They base their production, their decision making on plans. The market itself is very well planned. For Sri Lanka, where disparities are high and where economic matters are decided by a certain class of people, planning is needed.
Q: Does Marxian economics propose all means of production to be under state control or has socialist countries throughout the decades got it wrong?
A: It depends on what you mean by the state? If the state is under the control of workers - people who work for the economic surplus, I would agree that the means of production should be under the state. But if the state is under the control of a particular class - a socialist bourgeoisie and their bureaucrats, then I would not say that the means of production to be under the state’s control. In such a situation the class struggle itself should always challenge the ownership of the means of production and the distribution of the fruits of production.
For example you take China. People might think that China is a socialist country or that it is on the path to communism. I strongly disagree, because some of the means of production are under the control of the state and the state itself appears to be socialist. It is a capitalist state with a bureaucratic flavour. Think about the class struggle in China. There is no space for protest, alternative arguments and views. All the western capitalist companies are living on the blood and sweat of the Chinese people. So the state itself has allowed the exploitation to happen under its watch.
Some of the socialist countries got it wrong because they thought keeping the state under the control of a bureaucratic class or the so-called “leaders of the revolution” is the way forward.
What Marxists propose is keeping the means of production solely in the hands of the workers. That way, the workers themselves can challenge the state and there is autonomy within the workers themselves. What is meant by the “dictatorship of the workers” is that the means of production should be in the hands of workers who organise themselves in autonomous collectives or communes.
Q: Advocates of free market capitalism show the Singaporean model as an example to be emulated. Is Singapore’s success story entirely to do with economic freedom?
A: No, it is not entirely due to economic freedom but historical and social conditions that Singapore mingled with like where it’s located and the policies implemented during Lee Kwan Yew’s time. One of the most important dimensions of Singapore’s success story, which people usually forget, is the barricading of and limiting democracy under the state.
There was a certain time period where democracy was severely limited; there was no protest, no freedom of speech and no way of confronting the state’s economic policies. In that condition, you can have a certain control over the economy. So under these historical, political and social conditions Singapore is a success story but in economic terms. But not in social, cultural and human dimension, in which Singapore is a very backward country.
For example, I would call it a “dry land” bereft of human connection where all the cultural and social life is fetishised by capitalism itself. In terms of human development, I don’t believe Singapore is a success story. I don’t agree that Singapore should be the model that Sri Lanka must follow.
Q: India got rid of socialism after the collapse of the Soviet Union and is a rising world power. China adopted the Dengist reforms in the 80s and turned its economy into one of the most prosperous in the world. Surely free markets have been helpful in these cases?
A: If you take the numeric indicators, yes then these countries have been successful. But look at the disparities and inequalities of the people. For example, before Modi came into power, Adani was among the 200th richest people in the world, but right now he is like second or third richest person.
At the same time wealth inequality in India has expanded, same in China although it was able to uplift from absolute poverty in many rural areas. If economic success can be measured in terms of wealth accumulation you have to consider the expanding inequality. One can argue that these countries got rid of socialism but there will be a situation where they have to come back and think about the social dimensions seriously. Inequality is one of the reasons and ecology is a main concern. These countries will have to revaluate their policies in the near future.
Capitalism is very infantile in terms of human civilisation. Human civilization is two million years old and capitalism is 300 years old. Compared to the scale of human civilisation, it is a very primitive and amateur mode of production even though it appears to be advanced.
Q: Critiques of Marx say that he failed to see how capitalism could innovate and reform itself or do you think the economic disparity he predicted will trigger a massive working class uprising in the world?
A: Marx is, I won’t use the term ‘Marx was’ intentionally. Marx is someone who predicted the greater capability of capitalism to innovate. He is one of the pioneers who identified the innate quality of capitalism itself to revolutionise the means of production. In the Communist Manifesto he states, “The bourgeoisie cannot exist without revolutionising the means of production”.
Even though he doesn’t go into greater details in the Manifesto, I would recommend someone interested in Marx to read Grundrisse Capital volumes 1, 2 and 3 and the theories of surplus value. You will see how clearly and cleverly Marx explains the possible future of technology. A famous chapter in Grundrisse called ‘The Fragment on Machines’ explains the future possibilities of technology to development into a certain form of dominance. He also talks about what would happen to human labour in a fully automated society.
And yes, you can see the working class rising up around the world right now. For example, the IMF’s director says that right now there is greater civil unrest all around the world. I would call it a greater ‘class struggle’ going all around the world. Not just in the developing world but also in the advanced capitalist countries.
In Britain people are fighting for their pensions, unbearable inflation, more social security, equal rights even though an ethnic Indian is Prime Minister this cannot cover the disparities of capitalism. In France people are fighting against neo-liberalism. In the US there is a massive unrest regarding inflation. The advanced economies are not processing the situation in a very healthy way.
In his book on insurgencies in the global south, Immanuel Ness argues that the global north successfully shifted their workforce to the global south, so the uprisings and insurgencies would come up from the global south because all the corporations and their factories are located there.
The class struggle is happening. It is ongoing, there are unseen micro-processes going on and workers are organising themselves where they would erupt as global uprisings.
Q: Left wing politics are making traction in the west. US politicians like Alexandria Ocasio-Cortez openly advocate for socialist reforms in a country that is the perfect example of capitalism. Why do you think these ideas are becoming popular in the first world?
A: I don’t consider Ocasio-Cortez a socialist. She proposes a very “comfortable” form of socialism. She is proposing a “new deal” where means of production is not in the hands of producers, but instead she promotes taxing the rich.
She attended the Met Gala with filthy rich people in New York City wearing a dress with the slogan “Tax the Rich” written on it. I think this is a very comfortable way of challenging capitalism. You can see the appeal to this form of approach and why these ideas are becoming popular, it’s because they are convenient. The middle classes can easily relate to these antics without seriously challenging or occupying the means of production.
The other more social dimension is the US has gone through capitalism for decades and the flavour of Keynesianism has ended since the 70s. Social disparities are high and the American working class are facing so many challenges in terms of shelter, food, healthcare, childcare and education fees. In such a situation, it’s not surprising that socialist ideas are getting attention.
Q: Environmentalists and social activists blame climate change, conflicts and the widening gap between rich and poor as a consequence of capitalism’s unrelenting pursuit of profits. Will humanity eat itself and the planet?
A: Not humanity itself, but capitalism would eat the planet. I would recommend the movie ‘Don’t look up’ where capitalists creates the idea that there is no alternative capitalism. And if this process would continue, then yes capitalism will eat the planet completely; exhausting natural resources causing widespread famine in addition to climate change.
Regional disparities will be severe, food crisis will be severe. Capitalist agriculture cannot sustain the existing food needs. The market will completely fail to provide food for planet’s inhabitants because it will decide that it will be more profitable to destroy food than feed people.
I would like to say that capitalism should be entirely blamed for climate change and conflicts. One of the interesting books on the subject is Jason W. Moore’s ‘Anthropocene or Capitalocene? where he identifies capital as the factor that changes existing social, cultural and economic relations instead of humans. All environmentalists, socialist activists and LGBTQ activists should focus on capitalism and not humans. Capitalism is a living thing; it has its own destructive lifestyle.
Q: The global pandemic exposed the structural flaws of the current system like wealth inequality and how vulnerable global supply chains are. How could things have been different in a communist world?
A: In a communist world commodities will be produced for use instead of exchange. Emergency needs would be addressed immediately. There won’t be “supply shocks” like in capitalism. The priority would be given to social needs. Production won’t focus on profits but social use.
The person who developed the Polio vaccine is the US scientist Jonas Salk. He refused to be paid for the patent and freely distributed the vaccine. Under communism something like this would be very possible.
Q: The World Economic Forum (WEF) is suggesting ‘Stakeholder Capitalism’ as a remedy to current problems. Is this attempt at a compromise by a system that is failing?
A: Yes it is. Even Keynesianism is a form of compromise, where failing capitalism takes shelter while the government stimulates the economy when profits are falling. Stakeholder capitalism is another predatory form of capitalism in the guise of reforms and let the same evil, destructive form to keep moving. It is not a solution for the world scale issues but a remedy for a failing system.
You have to look at capitalism as a circuit where everything is connected. What the WEF is suggesting is to avoid this circuit of capitalism and look at the situation using a different perspective.
Q: Some of the UN Sustainable Development Goals clash with global corporate interests. What would Marx say about the UN’s programme?
A: Most of the corporations are the problem. I think Marx would consider the UN’s program as a reactionary step and the UN itself as a reactionary institution that serves capitalism. I don’t think he would take the UN as a serious organisation that is looking for a qualitatively different society.
Q: The Malthusian Catastrophe theory says that population growth driven by accelerating development will deplete the world’s natural resources and cause extinction? Could this be averted and has it been slowed by Capitalism’s boom and bust cycle?
A: Population growth is the second ratio but the distribution of wealth is the primary ratio. In the current world order, a lot of people from the extreme right like Neo Nazis would blame the population growth without looking at the distribution of wealth and inequality. Without seriously wrestling with wealth distribution there is no legitimacy to the question of population growth. Not the boom and bust cycle, but the clear inequality of the distribution of wealth between developed and developing nations is what has clearly damaged the quality of life including the birth rate.