At Project Syndicate, Roubini wrote:
So Karl Marx, it seems, was partly right in arguing that globalization, financial intermediation run amok, and redistribution of income and wealth from labor to capital could lead capitalism to self-destruct (though his view that socialism would be better has proven wrong). Firms are cutting jobs because there is not enough final demand. But cutting jobs reduces labor income, increases inequality and reduces final demand.Say what? Roubini needs to look a little deeper into what he babbles here.
First off, Marx was in favor of "globalization". In the Communist Manifesto, Marx writes:
The Communists are further reproached with desiring to abolish countries and nationality.
The working men have no country. We cannot take from them what they have not got. Since the proletariat must first of all acquire political supremacy, must rise to be the leading class of the nation, must constitute itself the nation, it is so far, itself national, though not in the bourgeois sense of the word.
Marx was also in favor of government influence over financial intermediation, certainly at least at the national level. In the Manifesto, he calls for :
National differences and antagonism between peoples are daily more and more vanishing, owing to the development of the bourgeoisie, to freedom of commerce, to the world market, to uniformity in the mode of production and in the conditions of life corresponding thereto.
The supremacy of the proletariat will cause them to vanish still faster. United action, of the leading civilised countries at least, is one of the first conditions for the emancipation of the proletariat.
Centralisation of credit in the hands of the state, by means of a national bank with State capital and an exclusive monopoly.And currently, rather than wealth being taken from labor and given to capital, we see the opposite in progressive taxes and inheritance taxes, all of which Marx called for:
The proletariat will use its political supremacy to wrest, by degree, all capital from the bourgeoisie, to centralise all instruments of production in the hands of the State, i.e., of the proletariat organised as the ruling class; and to increase the total productive forces as rapidly as possible.
Of course, in the beginning, this cannot be effected except by means of despotic inroads on the rights of property, and on the conditions of bourgeois production; by means of measures, therefore, which appear economically insufficient and untenable, but which, in the course of the movement, outstrip themselves, necessitate further inroads upon the old social order, and are unavoidable as a means of entirely revolutionising the mode of production.
Nevertheless, in most advanced countries, the following will be pretty generally applicable...
Thus, as more and more Marxist measures are pressed on economies, the more and more they suffocate free market economies. No. it is not Capitalism that has failed, it it the Marxist themes imposed on a free market society that are making for the crashing economic scene that we are now witness to.
As for Roubini's mention of final demand. This is not a Marxian notion but a Keynesian one. Keynes was an even more confused thinker than Marx. As Murray Rothbard once remarked,
There is one good thing about Marx: he was not a Keynesian.Keynes theory on final demand, when it comes down to it, is that if people aren't bidding up prices high enough for goods (relative to where Keynesians would like to see prices bid up), well then, the government should borrow money and or print money and bid higher for goods then individuals want to bid. Thus, individuals end up without the goods and the "final demand" is diverted to such government goods as drones, TSA naked body scanners and the like. All because individuals are supposedly bidding less than at what prices the government wants to see bidding taking place at.
In truth, Keynesianism is a scam theory designed to create more money flow going into the hands of government.
Thus, Roubini takes this Keynesian scam, mixes it with misunderstood Marxist themes and somehow manages to call this the failure of capitalism. Amazing.
Was Karl Marx right about capitalism? Only in Nouriel Roubini's mind.
Marx was not forecasting an inevitable move toward globalization, etc., as much as calling for an aggressive move toward such. Marx wrote in his Manifesto:
You are horrified at our intending to do away with private property...
We have seen above, that the first step in the revolution by the working class is to raise the proletariat to the position of ruling class to win the battle of democracy.