The emphasis of some Marxist political economists on the innate instability and injustice of the capitalist economy has suggested to me that it may not be a massive leap politically from the Marxist left analysis of capitalism to the free market right. This may sound a little odd, but Marxists often emphasise the production side of a capitalist economy as dominant over the consumption and distributional aspects. Although this usually includes the historical, political and sociological aspects of the system, while those on the right of the political spectrum focus more on purely economic aspects, they could both be seen to be concerned with the ‘supply-side’, by contrast with Keynesians for example, who see demand as a more important driver of the system.
Marxists emphasise the rate of profit as a key determinant of investment and accumulation or economic growth. They then often follow Marx in proposing that his ‘long run tendency of the rate of profit to fall’ (LRTPF), despite its counteracting tendencies, will prevail in the long run and lead to the collapse of capitalism and its replacement by a more rational socialist mode of production. In this vein, even the best policies, Keynesian or otherwise, cannot prevent this happening in the long run, hence the inevitability of socialism and many or most Marxists’ commitment to it.
However, the LRTPF remains a controversial part of Marxist theory, and economists have debated extensively whether the counteracting tendencies are enough to prevent the collapse of capitalism in the long run and allow a rate of profit to be restored during a crisis or otherwise which enables satisfactory growth to be restored, at least until the next crisis or recession.
If we allow for the rate of profit to tend downwards at times during periods of growth under capitalism, but for innate processes and policies to restore the rate of profit to a higher level at a certain point, and for such processes to continue to operate over time, then the capitalist mode of production could continue indefinitely and socialism need not be inevitable. Capitalism may not be ‘nice’: it may not be socially just or stable, and it may require periodic crises or recessions and the consequent suffering of millions as part of its functioning, but it might remain the best system for achieving material progress that we have.
The potentially ‘short hop from left to right’ in terms of political persuasion and economic policies favoured under capitalism comes about if we reject the inevitability of socialism as described above and accept that if capitalism becomes too ‘nice’ or socially just, it will cease to function well. Thus while many left capitalist economists may push for political and social reform in the form of Keynesian and social democratic policies, which attempt to improve social justice and avoid recessions as far as possible, this may be durable only periodically. The turn away from social democratic Keynesianism in the 1970s and 1980s in the UK and elsewhere was a reaction which attempted to restore the rate of profit in the economy, and it laid the seeds for future growth. The result may have been deeply unjust, as inequality and unemployment increased hugely, but the restoration of a higher rate of profit was essential. Both left and right can accept this, although the broadly Keynesian left would object to the political and economic policy methods and resulting injustice, and try and put forward an argument that there was an alternative.
The Marxist left committed to socialism see the methods used to restore the rate of profit as highly objectionable, but possibly inevitable under the flawed nature of capitalism, and here they can connect with the right’s view that the methods and outcomes were the only way forward. They do have a way out however: the replacement of capitalism, deeply flawed as it is, with socialism. But if we reject socialism as an option, given its own flaws, demonstrated where it has been tried around the world, we can in some sense make an intellectual ‘hop’ from the far left to the right politically in seeing no alternative.
Now there is much in Marxist political economy which cannot be found in free market theories, namely that crises are part of capitalisms process of stimulating restructuring and restoring the rate of profit which allows growth to continue. Free market theories tend to suggest that if only we could remove all state interference and ‘distortions’ in the economy and promote free markets as totally as possible then we would have a form of social justice, individual freedom and the avoidance of recessions. This is an extreme view, and in my opinion without foundation. Marxists call for the abolition of capitalism and its replacement by socialism as a way towards social justice and a more widely shared material progress. Keynesians and moderate leftists argue for reform within capitalism as a way towards these latter goals.
In my view, the Marxist argument that capitalism is generally not ‘nice’ and that there are limits to reform in preventing crises and social injustice is the correct one. But, to echo my previous post, this does not mean that we should abandon all attempts at reform and cry out for either socialist or free market utopia. Reform, both political and economic, remain on the table as options to pursue in building a better society.