http://www.newstatesman.com/ideas/2011/01/8220-crisis-interview-theory
I chose St Pancras to impress him, but he is not impressed. Stumbling off the Eurostar, he barely notices the architecture and thumbs his BlackBerry when I point out the champagne bar.
I've prepared this whole historical decompression briefing for him: the match girls' strike, the petrol engine, cinema, Lenin, the Warsaw Pact, the John Betjeman statue. But he stops me short: "I know, I know all about it. You think we don't have Wikipedia up there?"
“You see everything?"
“Better than you! We see it without sen*suous historical experience. It's like watching a slow-motion car crash. Just wait till you get there: it will restore your faith in the objective forces of history."
I explain that I want to ask about the credit crunch, how it fits with his theory of crisis -
“I've got an hour and then I'm doing a book signing . . ."
“Which book?" I joke.
He laughs: as we all learned in the 1980s, there is more than one volume of Marx's Capital, and more than one theory of crisis therein. So which one fits the events since the Lehman Brothers crash?
“OK. Crisis 101," he begins. We've grabbed a table at a Starbucks on Euston Road and he's let me buy him a double espresso.
“In the book, what I say is that the possibility of crisis is there right from the moment you separate sale from purchase. Once you've got a society based on money and commodities you can have a situation where there's enough produce to go around - enough Fairtrade coffee, iPods, Prada overcoats" (he is wearing a Prada overcoat) - "but not enough money for people to buy it."
“So the commodity is the root of all evil?"
“It makes crisis possible, is all."
So what has caused this one?
“In the book I never actually got around to a synthetic crisis theory so, as you know, 'ze Marxists'" - he does inverted commas with his fingers - "had to scrabble around in my notebooks to concoct one."
“So you don't have a synthetic theory of the credit crunch?"
“There is one, but you have to remember that the book was written at a certain level of *abstraction . . ."
“OK," I press him. "There are three recognised causes of crisis in Marxist economics: underconsumption, disproportionality and overproduction. Do you buy that, at least?"
He looks glazed, impatient. I've seen this look in the eyes of the other celebrity profs and hedge-funders who predicted the 2008 credit crunch and have now shot to fame.
He retorts: "OK, but you have got to think of them as layers; they're not competing explanations. They work at different levels of abstraction, like biology, chemistry and physics."
So what's the physics? What's the root cause of this crisis? I push my digital voice recorder closer to him. "All three," he laughs. "That's why it's a whopper. Let's start with the debt *issue. Why do you think they were shovelling cheap credit into the hands of poor African Americans and Hispanics who could never pay it back?" Low wages, I answer. "Precisely. They held down the real wages of the working class during a boom. Unheard of since before the 1936-49 war."
So the underconsumption theory is still valid? "Pah!" He rocks in his seat with frustration. "Have you actually read Volume II?"
I fidget. There was a student occupation going on when I was trying to read it. And I was in a rock band. I settle on the assertion that I "skim-read" it 30 years ago. He pulls out his iPad and reads: "'It is sheer *redundancy to say that crises are produced by the lack of paying consumption or paying consumers . . . When people say the working class does not receive enough of its own product and that the evil would be dispelled immediately once it received a greater share, all one can say is that crises are invariably preceded by periods in which wages in general rise . . .' Volume II."
And your point is?
“I still stand by that. The anarchists had this theory about underconsumption. I had a lot of fun with them, up there, later when Henry Ford borrowed it, and then Oswald Mosley. And then Keynes. You can't solve a crisis with higher wages. Crisis is born out of the contradictions of profit and production." He's animated now. "Are we going to be talking about *algebra soon?" I joke. He nods. I go and get two more espressos.
“Here's why all the people going around saying, 'Marx was right' are just a bunch of schlimazels." He starts finger-jabbing, point by point: "Look at the global rate of profit. Is it high or low?" High. "Wrong." Corporate profits are high, I protest.
“But capitalism long ago ceased to be just about corporates. You know that."
We are getting to the heart of the problem.
“It's financial capitalism now. It's a different beast from the system I was writing about in 1867. But reality did me a big favour: once it goes financial, the concrete world becomes just as abstract, generalised and - as it were, pure - as in my infamously abstract book. Modern capitalism has achieved the level of simplicity I gave it in Volume I."
“And what about Volume III?" I ask.
This is the heart of darkness question, I can tell. He looks at his watch, checks his BlackBerry, sighs and then shouts suddenly:
“Ben Bernanke is right!"
The noise makes several svelte hipsters look up dozily from behind their MacBooks. I am hoping nobody recognises him.
“It's the rise of Asia. They save too much and spend too little. Of course Bernanke's solution is wishful thinking - China should save less, spend more."
What's your solution? "The Chinese Revolution, of course! But never mind that. I am coming to the key point. Is your thing working?" He jabs at my digital recorder.
Then: "Company profits are high; profits for savers are low. But companies don't reinvest. They typically bank their profits or pay them out in dividends. What this is telling me is that the rate of profit for capital in general is low.
“So, anyway, this is a profits crisis at root. It's a global profits crisis masked by the incredible returns bankers were earning and all this crazy, childlike, credit-driven consumption." He waves a hand in the direction of everybody and everything in Starbucks.
“So let me recap," I say: "the underconsumption piece of the theory explains the low-wage, high-credit model but it's not the key factor. And overproduction explains the historically low, you allege, returns on capital. What about disproportionality?"
“You are staring at a huge disproportionality element in this crisis as well. It's a shame the theory went out of fashion . . ."
He trails off into a reverie, mesmerised by the digital recorder; his eyes take on the narrow slant of a cat toying with a mouse. Then he speaks: "Let's make it easy for the Anglo-Saxon audience and put it into two syllables: mis-match. There is an inevitable mismatch between the producer goods sector and the consumer goods sector, and it leads to crisis - only now you don't call it that. You call it the global imbalances."
Between China and the United States?
“Exactly. China produces, America consumes. Chinese workers save, American workers spend. The American state runs up debts, the Chinese state - and Asia in general - holds those debts. The whole situation is a mess - played out on a world scale and then at a micro level inside the eurozone. Germany produces, the Greeks consume. The Greeks borrow, the German banks lend. See where that got them?"
OK, so we now have underconsumption, overproduction and disproportionality all contributing to an explanation, but where's the synthesis? Surely by now you have some synthetic theory?
“Look." He pulls a grubby card from his pocket. It is a British Library reader pass circa 1870. "I had to lie to get this. Lie, grovel, ass-kiss. Twenty-odd years I was in the British Library trying to come up with a synthetic *theory - and that was before the days of lady postgrads in miniskirts studying for a PhD in the Lacanian interpretation of manga comics.
“Twenty-odd years of solid work and all I could come up with is this - if there is a fun*damental driver of crises, it is probably the *tendency to overproduction. However, capitalism evolves."
“If there's no synthetic theory, how come your work's so popular again?" I venture.
“You see here . . ." he waves in the direction of the trendy refugees from the British Library some queuing for coffee, others hunkered down beneath DJ headphones, faces beatified in the screenlight of a Mac. "Their heads are full of ideology. A lot of them studied economics and were told it could predict the outcome of the economic cycle. On top of that, they were told they could use graphs and charts to predict the future. Correct?"
I nod.
“What I discovered is that economic laws operate 'behind the backs of the producers' - Volume I, page 44! They're objective laws but often so deep that you can only experience their secondary effects. I mean" - his face takes on a mock grimace of despair - "it's not f***ing rocket science: we know tectonic plates. Ever seen a tectonic plate? Ever seen one photographed from below, in the magma of the earth? It's impossible, so you need logic."
He leans across the table, animated, as if he's thinking of grabbing my lapel. "What I said, quite simply, to the economists of my time was that their theories were crap, their graphs were crap and that the power of what you would call human agency is very, very limited. And what they've just discovered is that I am right.
“The result is ideological collapse: the psychological shock of realising you're not actually the master of the universe but that the universe hasuniversal laws, some understood, some not, that operate independently of your will. It's that, really . . ."
He shrugs his shoulders and indicates that I should turn the microphone off.
“Did you personally see it coming?" I ask.
He shakes his head. "Up there we have total knowledge of the past but we don't have a fast-forward button."
So, where next?
“Switch that thing back on if you like, but it's only the same as I told the Huffington Post last week: the rise of China; the decline of America; deflation in southern Europe; collapse of the eurozone; state capitalism - and that's before you get to the resource wars and the ageing time bomb."
And the workers? "Don't get me started on that," he says, laughing. "I know how to live through a lull in the struggle. Anyway, I doubt the readers of Vanity Fair will be worried much about the proletariat."
“What?"
“Aren't you from Vanity Fair magazine?" he asks, puzzled.
I explain that I am not.
“Then where the f*** is the journalist from Vanity Fair? I was supposed to meet him at St Pancras an hour ago. Are you sure it's not you? They're supposed to be doing a whole in-depth profile piece with Annie Leibovitz coming over to do the portrait . . ." He starts fiddling with his BlackBerry again.
“Look," he says, gathering his stuff together, flustered, "you'll have enough with that. Just write: overproduction of capital. Will they solve it? They always solve it; but at what cost? They create some new social contradiction and then another crisis. And, by the way, you can kiss goodbye to Copenhagen, Doha and the Millennium Development Goals. And the euro. And the goddam Geneva Convention isn't looking very clever, either."
What about socialism? "Hey, baby, look at this!" He's getting louche now, and sarcastic, as he flings the overcoat on, gesturing at the querulous youths, the baristas, the brown walls and the tepid jazz music, the whole unstated atmosphere of preening and sexual attraction, the whole previously impossible combination of leisure, work and courtship:
“What do you think this is? In the middle of the worst crisis ever? Aufheben, my friend, aufheben!"
I mentally thank God that English has no single word that means simultaneously destroy, preserve and transcend. But I get his drift. The boundaries between work and leisure are somewhat abolished in the land of the cinnamon latte, and the rate of exploitation is difficult to calculate.
And with that, he bustles through the door and is gone. Three minutes later I get this on my iPhone: "Shit, 4got to plug new book. PR lady will kill me. Can you plug title pls? 'Crash: Why Random Swans Lie Down on Broadway and the Tao of Hu Jin-Tao'. Publisher rejected 'Capital Vol IV'
) Pls link to my twitterfeed also. Karl."
I chose St Pancras to impress him, but he is not impressed. Stumbling off the Eurostar, he barely notices the architecture and thumbs his BlackBerry when I point out the champagne bar.
I've prepared this whole historical decompression briefing for him: the match girls' strike, the petrol engine, cinema, Lenin, the Warsaw Pact, the John Betjeman statue. But he stops me short: "I know, I know all about it. You think we don't have Wikipedia up there?"
“You see everything?"
“Better than you! We see it without sen*suous historical experience. It's like watching a slow-motion car crash. Just wait till you get there: it will restore your faith in the objective forces of history."
I explain that I want to ask about the credit crunch, how it fits with his theory of crisis -
“I've got an hour and then I'm doing a book signing . . ."
“Which book?" I joke.
He laughs: as we all learned in the 1980s, there is more than one volume of Marx's Capital, and more than one theory of crisis therein. So which one fits the events since the Lehman Brothers crash?
“OK. Crisis 101," he begins. We've grabbed a table at a Starbucks on Euston Road and he's let me buy him a double espresso.
“In the book, what I say is that the possibility of crisis is there right from the moment you separate sale from purchase. Once you've got a society based on money and commodities you can have a situation where there's enough produce to go around - enough Fairtrade coffee, iPods, Prada overcoats" (he is wearing a Prada overcoat) - "but not enough money for people to buy it."
“So the commodity is the root of all evil?"
“It makes crisis possible, is all."
So what has caused this one?
“In the book I never actually got around to a synthetic crisis theory so, as you know, 'ze Marxists'" - he does inverted commas with his fingers - "had to scrabble around in my notebooks to concoct one."
“So you don't have a synthetic theory of the credit crunch?"
“There is one, but you have to remember that the book was written at a certain level of *abstraction . . ."
“OK," I press him. "There are three recognised causes of crisis in Marxist economics: underconsumption, disproportionality and overproduction. Do you buy that, at least?"
He looks glazed, impatient. I've seen this look in the eyes of the other celebrity profs and hedge-funders who predicted the 2008 credit crunch and have now shot to fame.
He retorts: "OK, but you have got to think of them as layers; they're not competing explanations. They work at different levels of abstraction, like biology, chemistry and physics."
So what's the physics? What's the root cause of this crisis? I push my digital voice recorder closer to him. "All three," he laughs. "That's why it's a whopper. Let's start with the debt *issue. Why do you think they were shovelling cheap credit into the hands of poor African Americans and Hispanics who could never pay it back?" Low wages, I answer. "Precisely. They held down the real wages of the working class during a boom. Unheard of since before the 1936-49 war."
So the underconsumption theory is still valid? "Pah!" He rocks in his seat with frustration. "Have you actually read Volume II?"
I fidget. There was a student occupation going on when I was trying to read it. And I was in a rock band. I settle on the assertion that I "skim-read" it 30 years ago. He pulls out his iPad and reads: "'It is sheer *redundancy to say that crises are produced by the lack of paying consumption or paying consumers . . . When people say the working class does not receive enough of its own product and that the evil would be dispelled immediately once it received a greater share, all one can say is that crises are invariably preceded by periods in which wages in general rise . . .' Volume II."
And your point is?
“I still stand by that. The anarchists had this theory about underconsumption. I had a lot of fun with them, up there, later when Henry Ford borrowed it, and then Oswald Mosley. And then Keynes. You can't solve a crisis with higher wages. Crisis is born out of the contradictions of profit and production." He's animated now. "Are we going to be talking about *algebra soon?" I joke. He nods. I go and get two more espressos.
“Here's why all the people going around saying, 'Marx was right' are just a bunch of schlimazels." He starts finger-jabbing, point by point: "Look at the global rate of profit. Is it high or low?" High. "Wrong." Corporate profits are high, I protest.
“But capitalism long ago ceased to be just about corporates. You know that."
We are getting to the heart of the problem.
“It's financial capitalism now. It's a different beast from the system I was writing about in 1867. But reality did me a big favour: once it goes financial, the concrete world becomes just as abstract, generalised and - as it were, pure - as in my infamously abstract book. Modern capitalism has achieved the level of simplicity I gave it in Volume I."
“And what about Volume III?" I ask.
This is the heart of darkness question, I can tell. He looks at his watch, checks his BlackBerry, sighs and then shouts suddenly:
“Ben Bernanke is right!"
The noise makes several svelte hipsters look up dozily from behind their MacBooks. I am hoping nobody recognises him.
“It's the rise of Asia. They save too much and spend too little. Of course Bernanke's solution is wishful thinking - China should save less, spend more."
What's your solution? "The Chinese Revolution, of course! But never mind that. I am coming to the key point. Is your thing working?" He jabs at my digital recorder.
Then: "Company profits are high; profits for savers are low. But companies don't reinvest. They typically bank their profits or pay them out in dividends. What this is telling me is that the rate of profit for capital in general is low.
“So, anyway, this is a profits crisis at root. It's a global profits crisis masked by the incredible returns bankers were earning and all this crazy, childlike, credit-driven consumption." He waves a hand in the direction of everybody and everything in Starbucks.
“So let me recap," I say: "the underconsumption piece of the theory explains the low-wage, high-credit model but it's not the key factor. And overproduction explains the historically low, you allege, returns on capital. What about disproportionality?"
“You are staring at a huge disproportionality element in this crisis as well. It's a shame the theory went out of fashion . . ."
He trails off into a reverie, mesmerised by the digital recorder; his eyes take on the narrow slant of a cat toying with a mouse. Then he speaks: "Let's make it easy for the Anglo-Saxon audience and put it into two syllables: mis-match. There is an inevitable mismatch between the producer goods sector and the consumer goods sector, and it leads to crisis - only now you don't call it that. You call it the global imbalances."
Between China and the United States?
“Exactly. China produces, America consumes. Chinese workers save, American workers spend. The American state runs up debts, the Chinese state - and Asia in general - holds those debts. The whole situation is a mess - played out on a world scale and then at a micro level inside the eurozone. Germany produces, the Greeks consume. The Greeks borrow, the German banks lend. See where that got them?"
OK, so we now have underconsumption, overproduction and disproportionality all contributing to an explanation, but where's the synthesis? Surely by now you have some synthetic theory?
“Look." He pulls a grubby card from his pocket. It is a British Library reader pass circa 1870. "I had to lie to get this. Lie, grovel, ass-kiss. Twenty-odd years I was in the British Library trying to come up with a synthetic *theory - and that was before the days of lady postgrads in miniskirts studying for a PhD in the Lacanian interpretation of manga comics.
“Twenty-odd years of solid work and all I could come up with is this - if there is a fun*damental driver of crises, it is probably the *tendency to overproduction. However, capitalism evolves."
“If there's no synthetic theory, how come your work's so popular again?" I venture.
“You see here . . ." he waves in the direction of the trendy refugees from the British Library some queuing for coffee, others hunkered down beneath DJ headphones, faces beatified in the screenlight of a Mac. "Their heads are full of ideology. A lot of them studied economics and were told it could predict the outcome of the economic cycle. On top of that, they were told they could use graphs and charts to predict the future. Correct?"
I nod.
“What I discovered is that economic laws operate 'behind the backs of the producers' - Volume I, page 44! They're objective laws but often so deep that you can only experience their secondary effects. I mean" - his face takes on a mock grimace of despair - "it's not f***ing rocket science: we know tectonic plates. Ever seen a tectonic plate? Ever seen one photographed from below, in the magma of the earth? It's impossible, so you need logic."
He leans across the table, animated, as if he's thinking of grabbing my lapel. "What I said, quite simply, to the economists of my time was that their theories were crap, their graphs were crap and that the power of what you would call human agency is very, very limited. And what they've just discovered is that I am right.
“The result is ideological collapse: the psychological shock of realising you're not actually the master of the universe but that the universe hasuniversal laws, some understood, some not, that operate independently of your will. It's that, really . . ."
He shrugs his shoulders and indicates that I should turn the microphone off.
“Did you personally see it coming?" I ask.
He shakes his head. "Up there we have total knowledge of the past but we don't have a fast-forward button."
So, where next?
“Switch that thing back on if you like, but it's only the same as I told the Huffington Post last week: the rise of China; the decline of America; deflation in southern Europe; collapse of the eurozone; state capitalism - and that's before you get to the resource wars and the ageing time bomb."
And the workers? "Don't get me started on that," he says, laughing. "I know how to live through a lull in the struggle. Anyway, I doubt the readers of Vanity Fair will be worried much about the proletariat."
“What?"
“Aren't you from Vanity Fair magazine?" he asks, puzzled.
I explain that I am not.
“Then where the f*** is the journalist from Vanity Fair? I was supposed to meet him at St Pancras an hour ago. Are you sure it's not you? They're supposed to be doing a whole in-depth profile piece with Annie Leibovitz coming over to do the portrait . . ." He starts fiddling with his BlackBerry again.
“Look," he says, gathering his stuff together, flustered, "you'll have enough with that. Just write: overproduction of capital. Will they solve it? They always solve it; but at what cost? They create some new social contradiction and then another crisis. And, by the way, you can kiss goodbye to Copenhagen, Doha and the Millennium Development Goals. And the euro. And the goddam Geneva Convention isn't looking very clever, either."
What about socialism? "Hey, baby, look at this!" He's getting louche now, and sarcastic, as he flings the overcoat on, gesturing at the querulous youths, the baristas, the brown walls and the tepid jazz music, the whole unstated atmosphere of preening and sexual attraction, the whole previously impossible combination of leisure, work and courtship:
“What do you think this is? In the middle of the worst crisis ever? Aufheben, my friend, aufheben!"
I mentally thank God that English has no single word that means simultaneously destroy, preserve and transcend. But I get his drift. The boundaries between work and leisure are somewhat abolished in the land of the cinnamon latte, and the rate of exploitation is difficult to calculate.
And with that, he bustles through the door and is gone. Three minutes later I get this on my iPhone: "Shit, 4got to plug new book. PR lady will kill me. Can you plug title pls? 'Crash: Why Random Swans Lie Down on Broadway and the Tao of Hu Jin-Tao'. Publisher rejected 'Capital Vol IV'
) Pls link to my twitterfeed also. Karl."