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FUENTES, MARX AND PIKETTY (PART I)

June 23, 2014

FUENTES, MARX AND PIKETTY (PART I)
Several months ago I had the pleasure of reading “The Death of Artemio Cruz,” by Carlos Fuentes. It was time well spent, and I recommend it to my followers. Among other conclusions Fuentes reached with his book was that revolutions do not bring change because their history is that of merely changing tyrants if successful, and the firing squad if not. Of course, his experience was in Latin America, where weekend revolutions and new constitutions were rife, but nonetheless we have had a 20th century experience in Europe that verifies his conclusion (along with subsequent others such as Viet Nam, Myanmar, China, and dozens more around the globe who have ignored Fuentes’s advice).
The end of Czars and the takeover by communist dictators in Russia is a case in point. Just how was the lot of the ordinary Russian improved by the communist takeover of his/her government following the Russian Revolution? Did the ordinary Russian enjoy a “workers’ paradise” and the ultimate in equality as class distinctions were abolished? Hardly. He or she had no democratic freedoms before and none after; they had no vote before or after. As per Fuentes, they merely exchanged tyrants. “Freedom” to act was concentrated in the communist elite in this preview of 1984, who in their lust for power and its accompanying paranoia from their revolutionary experience saw a plot to overthrow their regime behind every bush. Revolutionaries’ chief concern when in power is the prevention of counter-revolution. Having stirred up the hornet’s nest, it is now time for the hornets to retire to their hives.
Marx was a utopian; he foresaw a democratic if socialistic state where everyone shared the load. He did not reckon with a communist state that killed millions of its own people whose leaders in their lust for power would literally stop at nothing to obtain and retain and expand their powers and pretended ideology. Some argue today that it was not communism but the lack of it that did the Soviet empire in as the utopian idea was smothered by the lust of the few to successfully seize and maintain power. I will leave that argument in alternative history to the academics; it matters little at this stage of the game. I am more interested in comparing the promises of communism and those of capitalism in terms of promise-keeping to the hoi polloi.
Lenin and Co. promised reform to their people which would lead to abolition of class distinctions and a sharing of the wealth by all. That didn’t happen. Our capitalists today promise us that we can all share in the American dream, that we are a free people, that if we “work hard and play by the rules” and avail ourselves of the opportunities afforded by capitalism (and only capitalism, all other “isms” being corrupted and unworkable), we will move up the social mobility ladder and enjoy a Horace Greely life as we journey from “rags to riches” and live out the Jeffersonian ideal of equality and the pursuit of happiness. That isn’t happening, and Piketty’s ground-breaking r > g formula (which, simply stated, is the ratio of rate of return on capital to the rate of nominal economic growth over time), if it remains unadjusted, forever gives the lie to such promises. Piketty proved that this maladjusted and inherently undemocratic finding was built into capitalism. It is not therefore a matter of grafted greed from his perspective; it is part of the system itself. I personally think it is both organic and a product of greed.
I am also of the view that capitalism can still work for all of us living under its spell if we adjust some of the causes that give rise to r > g. This is not the Middle Ages. Serfs of that day arguably had little to aspire to and there was little need for social mobility. They “knew their place.” They knew they would never live in the castle but would rather remain on this side of the drawbridge while harvesting wheat for their “lord(s).” Capitalists today should know that that day is gone; we have no “place.”
Great increases in accumulated capital due to European colonization (gold, silver, slaves – and especially the Industrial Revolution) exacerbated distinctions in class and gave rise to the idea of escaping one’s classification via moving up in this world and sharing the wealth of the rich. The rich resisted (as they do today with their opposition to wage increases, medical care etc.) and thereby set utopian and other revolutionary fires ablaze, notably those stoked by Karl Marx, who correctly diagnosed the problems caused by overzealous capitalists of his day but incorrectly recommended the wrong medicine to correct such excesses, excesses that are returning today and in need of correction and adjustment lest the entire structure fall in ruins and the dissection of historians. Marx’s medicine is still the wrong medicine. Revolutions don’t usually work out. (See the advice of Fuentes.)
Marx’s muckraking caused quite a ruckus both then and now, as American capitalists and their cronies these days suggest that communism is the only alternative to our destined-to-fail brand of capitalism (which ignores the current success of European social democracies being currently practiced, and since r > g, though in vogue for some three centuries per Piketty, cannot and will not be sustained in this day and age). There is still time to adjust the factors giving rise to the inherent r > g’s continuation, and I propose to choose that path of reform over revolution. While Wall Street may be properly compared to the Czar of a century ago, I would prefer to try to reform his court than chance a Josef Stalin as his replacement (and I’m sure Fuentes would agree).
Part II will involve my take on who Marx really was and what he was trying to sell. Stay tuned. GERALD E

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