Leo Panitch, Economist and Professor at York University, talks to Paul Jay about the relevance of Marxist theories in studying today�s global economy. Panitch discusses the ideological crisis of the free market theory and notes that at this time �Marx would not be offering policy advice to governments about what is to be done in the face of this crisis; he would tell people to overcome their social isolation, form new collective organizations and identities, and make a social revolution.�


Story Transcript

PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network, coming to you today from our studio in Toronto. There is a magazine in the United States�you can see it here, and see up here “FP”�and it features an article which more or less asks the question: is Karl Marx relevant today? Well, FP does not stand for “fomenting the proletariat.” It’s a magazine called Foreign Policy, and the article that mostly deals with this is�you can see here, is a piece called “Fairly Modern Marx,” and it’s written by our guest today, Leo Panitch. Thanks for joining us, Leo.

LEO PANITCH, ECONOMIST AND PROFESSOR, YORK UNIVERSITY: Hi, Paul.

JAY: PANITCH: Leo is professor of political economy, political science at York University, also author of the book Renewing Socialism. So, Leo, is Marx relevant today? Now, just so�I’m going to show you this again, ’cause it’s kind of a cute cover, I suppose. But what you see here, “Is Marx Relevant?” And what they have here is a bunch of bread all around Marx’s face. The nose is a potato. The eyes are megaphones of some sort, which I suppose means propaganda. A hammer and a sickle. So I guess, Leo, we’re to take from this as Marx is equivalent to we will all be equal ’cause we’ll all eat bread and potatoes.

PANITCH: Well, no. I’m not sure that the cover, which is very arresting but somewhat bizarre, really gets at what they were looking for by way of the article. They, in tracking me down to do it, which they did via my publisher in London, having heard that the editor of The Socialist Register presumably knows something about Marx. They thought that Marx needed to be taken seriously as an analyst of the crisis. It wasn’t so much about, you know, what would socialism be; it was much more Marxism or Marx’s Das Kapital they imagined gave us the basic clues for understanding the current crisis.

JAY: So what does that tell us, first of all, about American culture and our American intelligentsia that probably, arguably, neck-and-neck with the Bible, the works of Marx are probably the most read works in history, and certainly to do with political economy, clearly are the most read works in the history of humanity. What does it tell us that it’s such a big deal that you’ve got to ask this question?

PANITCH: Well, it’s very interesting. I think it does reflect the ideological crisis of neoliberalism, of free-market ideology, of Hayek and Friedman and so on. I think it was already taking a very, very big beating.

JAY: It reminds me of that moment when Alan Greenspan, testifying in front of Congress, has to say, well, oh, there was a hole in our theory.

PANITCH: Exactly. I never imagined that these banks would not take care of their own bottom line, you know, that we might have to look after it for them. Yeah, no. And so, yes, the Ayn Rand ideology that Greenspan founds his thinking on, it has been taking a big hit. It was taking a hit before the crisis, because it was so clear that neoliberal globalization was not developing large parts of the world, and that even in the parts of the world it was developing, a hell of a lot of people were suffering. And that gave rise to the anti-globalization movement. And already you could see before the crisis at meetings like Davos, they were responding in a way that were trying to get social justice issues discussed at these meetings of the world elite. But with this crisis, it’s really taken a hit. I mean the gloss is off. So this also then immediately produces: Well, what analysts are there of why this thing was full of contradiction? And what’s so interesting is that Marx has been so fashionable not only in the media, etcetera, but in universities. And, you know, postmodernism and poststructuralism, which are primary literary theories, have no interest in the economy. So, you know, neoclassical economics, the voodoo that’s taught about supply and demand and price theory in our economics departments is appalling stuff. And then what’s taught in the sociology department these days is culturalism that ignores capitalism. Where do they turn to? Some of them turn to Keynes and Schumpeter. But, you know, if you’re really going to find something exciting in a popular magazine, it’s not going to be Schumpeter; it’s going to be Marx. And they’re turning to it. And what’s astonishing is�what I wrote I thought they’d never publish. You know, I said Mark should not be offering policy advice to governments about what is to be done in the face of this crisis; he would tell people to overcome their social isolation, form new collective organizations and identities, and make a social revolution. They went gaga over it and put it on the front cover, to my amazement.

JAY: Now, in your article, you talk about the issue of the derivatives and the financial speculation and the crisis that resulted therefrom. But you also talk about some of the basic things that Marx talks about, which has to do with the impoverishment of working people and the reliance on credit and all of this issue, which is not something that people seem to want to discuss very much. Everyone wants to focus on the financial shenanigans, and nobody wants to talk about some of the basic contradictions within the economy.

PANITCH: Yeah. And they assume that what Marx was famous for was talking about financial speculation in the 19th century, and therefore that he was, you know, foreseeing Bear Stearns and Lehman Brothers and so on. And I had two insist, against some of their editing, that they leave in phrases like “commodity production” and “the contradictions of accumulation”, “the falling rate of profit”, you know, those things that go on in the sphere of production that aren’t just about banks and financial speculation. And, yes, I think it’s their perception, which can be corrected�and they did run the piece�needs to be in a Marxian sense clarified so that�.

JAY: But one of the points you make in the article is that the real romantics, the real utopians, are the reformers�and to some extent, I think I guess you’d think the Obama camp�who think you can have capitalism without these profound crises if only you had better technocratic management.

PANITCH: Exactly. They’re the real utopians. Marx was a much greater realist. You cannot take crisis out of the system. And, yes, that does have to do with with, as you said, the social relations that produce exploitation, the nature of commodity production and market production, which is so unplanned. There is no hidden hand that guides the market.

JAY: And the Obama administration, of course the Canadian administration, but Obama in particular because they have had some rhetoric in other ways, are so wedded to this free-market model that even when it comes to something like climate change, it’s only this cap-and-trade, free-market solution.

PANITCH: Which depends on derivatives.

JAY: So, in the next segment of our interview, we’re going to talk about: Is Marx relevant to some very specific issues? So we’re going to deal with climate change, and then we’re going to do a segment on health care, we’re going to do a segment on banking, and we’re going to do a segment on something else, and I can’t remember what it was, but by the time we get there, we’ll know. So please join us for the next segment of our interview Leo Panitch.

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