Karl Marx had it right–
much righter then we give him credit for.

May 5th 2018 marked the 200th anniversary of the birth of Karl Marx, and far from being a historical curiosity, his ideals and predictions for society have proved far more accurate than we in the Capitalist West might care to admit.

In an ideal Marxist State for example, “the proletariat rises up against its exploiters and creates a communist utopia” – well, not quite in Britain, but as a result of continuing socialist reforms, we now have a Welfare State in which proletariat workers pay lower taxes for more benefits, while the rich highly-taxed exploiters provide the budget shortfall.

And while in a truly Marxist society the State controls every aspect of economic activity, we’re already halfway there, as Government now controls around half of the nation’s economy, so it can be argued that Marx’s vision of a centrally directed Communist State has at least been significantly fulfilled.

Yet our comrades in today’s contemporary Socialist Party fail to recognize the real threats which Marx clearly foresaw: the inexorable tide of Monopoly as companies devour one another, creating giant behemoth corporations with less choice for consumers, less power and wealth for employees, more profit to Capital.

Marx clearly foresaw that capitalism has a tendency towards monopoly, as successful capitalists drive their weaker rivals out of business in a prelude to extracting monopoly profits. Again this seems to be a reasonable description of the commercial world that is being shaped by globalisation and the internet. The world’s biggest companies are not only getting bigger in absolute terms but are also turning huge numbers of smaller companies into mere appendages. New-economy behemoths are exercising a market dominance not seen since America’s robber barons. Amazon for example controls more than 40% of the country’s booming online-shopping market, and with its growing appetite for staff, governments and regions scramble to attract a projected new Amazon warehouse-distribution centre, with its implied promise to soak up local unemployment and increase local prosperity.

As productivity increases, goods become cheaper to produce, but productivity gains flow to Capital as increased profits, not to workers as higher wages, nor to society as lower prices.

In Marx’s view capitalism yielded an army of casual labourers who existed from one job to the other. And the growing gig economy combined with zero-hours contracts is indeed assembling a reserve force of robot labourers who wait to be summoned, via electronic foremen, to deliver people’s food, clean their houses or act as their chauffeurs.

The truth is that the continuing interest in Marx is not just historical, but ever more relevant, indeed his ideas are now more relevant than they have been for decades. Globalisation and the rise of a virtual economy are producing a version of capitalism that once more seems to be out of control. The backwards flow of power from labour to capital is finally beginning to produce a popular, and often populist reaction. The backlash against capitalism is mounting – if more often in the form of populist anger than of proletarian solidarity.

Solutions are clear for politicians who choose to recognize and put them into effect.

A National Investment Bank can create jobs across the country, giving more power to workers as unemployment is reduced, and increasing the nation’s prosperity. A National Standard for Pay, Profit and Price Evaluation coupled with a limit on profits would channel productivity gains into lower prices for the benefit of all.

But so far liberal-socialist reformers are proving sadly inferior to their predecessors in terms of both their grasp of the crisis and their ability to generate solutions. They should use the 200th anniversary of Marx’s birth to reacquaint themselves with the great man – not only to understand the serious faults that he brilliantly identified in the system, but to remind themselves of the disaster that awaits if the system fails to confront them.

Development Banking can spread growth across the nation, creating jobs and providing the wherewithal for existing companies to increase their competitiveness and productivity.

Despite the negative human and economic effects of unemployment, and the desirability of full productive use of all economic resources, the ability to expand an economy to full capacity cannot presently be realized, for as the economy expands to near-full employment, the danger of inflation causes the Central Bank to put the brakes on.
Full Employment. Zero Inflation. And a Fair Day's Pay.

Productivity in Government Government takes half the nation's income. It needs to maximize its own productivity.

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