Marx's Revenge

Meghnad Desai's book, Marx's Revenge: The Resurgence of Capitalism and the Death of Statist Socialism (Verso, 2004:UK) is mainly about attacking Keynesian Economics not Marxism. I found his ideas on the Law of Value, Imperialism, American Economic Philosophy, The New Deal, Markets, and the survival of Capitalism to be interesting.

Law of Value

On p.57, Desai writes:

Marx had therefore cracked the basic issue of providing a single theory of prices, wages, and profits. The separation of the exchange value and use value of labour-power, and their commensurate quantitative measurement, was central to his breakthrough.

And Desai goes on to completely misinterprets what Marx wrote. Marx's Law of Value simply states that there is no gain through exchange. One value of an item does not increase by being exchanged. This is what Marx called the Exchange Value in order to distinguish that value from its Use Value - how useful the item is to the owner.

The sum of the Use Values may well increase due to the exchange, but the sum of the Exchange Values will not. Furthermore, these two types of value are not comparable. This is where Desai fails - he writes that they are.

Imperialism

On pp.132-3, Desai writes:

By the late twentieth century, the imperialist episode of world history had passed. No one was able to predict that accurately, but the First World War was the last war between European imperial monarchies. Yet this reliance on irrationality as an explanation of imperialism and war did not fit in with the rational spirit of the age. ...

And yet, we are in another period of Imperialist Expansion: China into Tibet, Africa, South America, and Central Asia; Russia into Central Asia; India into Sri Lanka, and Africa; and USA over everywhere. Desai does not see economic control, or military intervention as Imperialism only direct political control as such. Yet these enforce the latter.

American Economic Philosophy

On p.139, Desai writes:

... But eventually, America stayed liberal and capitalist. Its politics continued to be an ideology-free zone, as they do to this day. This is not to say that there are differences among parties, but political theory - Marxist, socialist, fascist - has not had any lasting impact. ...

Except for Milton Freidman and the Chicargo School, and the Berkeley School, there is no economic philosophy. Hah!

The New Deal

On pp.166-7, Desai writes:

... But Roosevelt's interference with free markets was minimal, though it was novel enough to arouse great opposition. Nor - contrary to later impressions - did he deviate from fiscal orthodoxy. He demonstrated American power by taking over the task of fixing the price of gold in his US Treasury. Roosevelt's goals were to save democracy and capitalism by minimal tinkering. He reaffirmed the strength of the liberal order even as he mildly challenged it.

Markets

On p.177, Desai contends that

... the liberal school of thought forgot that the market and capitalism were not the same thing. Markets are ubiquitous in capitalism, but they work in the context of dynamic ever-changing disequilibrium. ...

Markets exists wherever exchanges of items take place. No exchanges, no markets.

Survival of Capitalism

On pp.185-6, Desai writes that

... Capitalism had survived its worst years. For a while, it was rescued by rearmament and war. But Keynes had given it the recipe for peaceful development in a non-totalitarian context. Never again would capitalism face a similar collapse. Never again could capitalism be said to be in terminal crisis. Lenin had lost his battle with capitalism - though few were able to see it in such a light, thanks to Hitler's invasion of Russia in 1941.

Now that we are entering into a period of great economic turmoil, these words ring very hollow. Capitalism may well survive this crisis and the next.

What the capitalists forgot is that surplus labour-power creates value. The capitalists thought that value could sponataneously arise, and they have been proved wrong.