The following quote from Karl Marx has apparently been doing the rounds of Wall Street:
The only problem is that it's a bogus quote. Yet the whole saga is still a fascinating insight into the current state of politics. After all - most of the quote does apparently actually exist in various parts of Das Kapital, and the fact that so many people find the quote of interest is significant in itself. [Read more below]
Various parts of the blogosphere are discussing the hoax Marx quote. Two of the more insightful commentaries that I've read are below, the first from James Heartfield, clarifying the relationship between the quote and the reality in Marx's Capital; the second from Michael Rainey arguing that the hoax Marx quote saga raises interesting questions about its resonance on Wall Street and beyond. Rainey suggests that it indicates the declining faith in the strength of capitalism.
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The bankers 'quote' is probably a garbled recollection of the following from Capital, Volume 1, though as you will see, it only comes close to supporting the meaning of the first sentence, their is nothing like the second about banks and bankruptcy in Volume 1.
"A larger part of their own surplus product, always increasing and continually transformed into additional capital, comes back to them in the shape of means of payment, so that they can extend the circle of their enjoyments; can make some additions to their consumption funds of clothes, furniture, &c., and can lay by a small reserve-funds of money. But just as little as better clothing, food, and treatment, and a larger peculium, do away with the exploitation of the slave, so little do they set aside that of the worker. A rise in the price of labour, as a consequence of accumulation of capital, only means in fact, that the length and weight of the golden chain the wage-worker has already forged for himself, allow of a relaxation of the tension of it." Chapter 25, p 579-580, Lawrence and Wishart edition.
Marx does write about the role of credit in driving speculation and fictitious capital leading to bankruptcies in Volume III, and he writes about all kinds of credit notes (including in one throwaway comment, personal credit, but from the context it seems clear that it is personal credit extended to capitalists, p 403). But his main example of credit's role in the business crisis of 1845-47 is dealing with credit notes given on cargos of cotton goods exported to the Far East, which turned out to be unsupported. (Interestingly the crisis was avoided by the suspension of the Banking Act limiting the amount of fiat money the Bank of England could print, Marx says, p 408)
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But the quote raises some interesting questions: Why is this faux quote making the rounds, and why do people find it so interesting?
One reason might be the increasing fear that people are feeling about the stock markets and even capitalism itself. We've been living in a strongly pro-capitalist environment for decades now -- at least since Reagan was elected, and certainly since the fall of the Soviet Union -- and there has been very little by way of a legitimate leftist resistance to the organization of just about everything on a capitalist basis.
The problem is that capitalism hasn't worked out as promised. Instead of wealth for everyone, we've gotten massive bubbles, falling wages and increasing concentration of wealth at the very top of the socio-economic ladder. Even Alan Greenspan, one of the great theorists and elder statesmen of modern capitalism, admitted that something is deeply wrong with the basic ideas many have held and cherished. And now, as Bernie Madoff's Ponzi scheme and John Thain's $87,000 mink chairs come to light, a lot of people are starting to feel revulsion toward the system that generated such startling results.
The growing fear may bring some people back to the old critiques of capitalism. Although the quote is certainly false -- as this blog points out, the terminology is all wrong and the basic idea of foreign to Capital volume 1, which predicts that the working class will end up in poverty due to falling wages, not debt and housing they can't afford -- it does capture one key aspect of Marx's argument: that capitalism is severely crisis prone. And right now, that's a hard point to ignore.
On the other hand, it may be that this quote is part of a more or less conscious effort by the right wing to discredit any effort to nationalize banks in the U.S. Make up a quote, attribute it to a vile enemy, and bingo, you've helped (further) delegitimize an option that may make sense -- unless you're a financial capitalist.
In any event, the hoax Marx quote is certainly an interesting sign of the times. I can only hope that it will inspire more careful analysis of our current economic mess, rather than fearful reaction against 'un-American' ideas that may help us out of our dicey situation.
