The Global Economy in Turbulent Times

CHAPTER 37 Lessons from Marx to Market¹

Today, we still face not just about the worst recession since the 1930s, but a challenge to the rich West’s economic order. The poverty of orthodox economics is now exposed. It showed up capitalism as fundamentally flawed. Karl Marx had contentiously labeled capitalism as inherently unstable. Sure, some of Marx’s predictions had failed: no dictatorship of the proletariat; nor has the state withered away. Even among Americans, it’s reported just 50 percent surveyed were positive on capitalism; 40 percent were not. Young people are markedly more disillusioned. So, the recent vogue for Marx should not surprise now that the euro stands on the precipice of collapse; and Jeffrey Sachs’s The Price of Civilization points to US poverty levels not seen since 1929.² Indeed, the Vatican’s L’Osservatore Romano recently praised Marx’s diagnosis of income inequality. Brazil elected a former Marxist guerrilla, Dilma Rousseff, as president in 2010. Marx may still be misguided, but his written pieces can be shockingly perceptive.

Marx and Global Disorder

Examine the daily European headlines: There is the specter of a possible Greek default, an impending explosive bank-made disaster, the imminent collapse of the euro—all reflecting a bewildering mixture of denial, misdiagnosis, and bickering undermining European policy response. As Mohamed El-Erian (chief executive officer of PIMCO, the world’s largest bond fund manager) observed: “Rather than proceeding ...