John
Maynard Keynes, though bourgeois in his outlook, was
a remarkably insightful economist, whose book Economic
Consequences of the Peace was copiously quoted by Lenin
at the Second Congress of the Communist International
to argue that conditions had ripened for the world revolution.
But even Keynes' insights could not fully comprehend
the paradox that is capitalism.
In a famous essay ''Economic Possibilities for our Grandchildren'',
written in 1930, Keynes had argued: ''Assuming no important
wars and no important increase in population, the economic
problem may be solved, or be at least within sight of
solution, within a hundred years. This means that the
economic problem is not, if we look into the future,
the permanent problem of the human race (emphasis in
the original).
He had gone on to ask:
''Why, you may ask, is this so startling? It is startling
because, if instead of looking into the future, we look
into the past, we find that the economic problem, the
struggle for subsistence, always has been hitherto the
most pressing problem of the human race… If the economic
problem is solved, mankind will be deprived of its traditional
purpose.'' He had then proceeded to examine how mankind
could fruitfully use its time in such a world.
True, after Keynes had written there has been the Second
World War, but thereafter mankind has had six and a
half decades without any ''important war'' of the sort
that could interrupt what he had called the ''era of
progress and invention''. And the rate of population
growth has also not accelerated to a point that can
be considered to have invalidated Keynes' premise. And
yet if we take mankind as a whole, it is as far from
solving the economic problem as it ever was. True, there
has been massive accumulation of capital, and with it
an enormous increase in the mass of goods available
to mankind; and yet, for the vast majority of mankind,
the ''struggle for subsistence'' that Keynes had referred
to has continued to remain as acute as ever, perhaps
in some ways even more acute than ever before.
To say that this is only because not enough time has
passed, that over a slightly longer time period Keynes'
vision will indeed turn out to be true, is facile. The
fact that the bulk of mankind continues to face an acute
struggle for subsistence is not a matter of degree;
it is not as if the acuteness of this struggle for this
segment of mankind has been lessening over time, or
that the relative size of this segment has been lessening
over time. We cannot therefore assert that the passage
of more time will lift everybody above this struggle.
Likewise, to say that while enormous increases have
taken place in the mass of goods and services available
to mankind (the increase in this mass being more in
the last hundred years than in the previous two thousand
years, as Keynes had pointed out), its distribution
has been extremely skewed and hence accounts for the
persistence of the struggle for subsistence for the
majority of the world's population, is to state a mere
tautology. The whole point is that there is something
structural to the capitalist system itself, the same
system that causes this enormous increase in mankind's
capacity to produce goods and services, which also ensures
that, notwithstanding this enormous increase, the struggle
for subsistence must continue to be as acute as before,
or even more acute than before, for the bulk of mankind.
Keynes missed this structural aspect of capitalism.
His entire argument in fact was based on the mere logic
of compound interest, i.e. on the sheer fact that ''if
capital increases, say, 2 percent per annum, the capital
equipment of the world will have increased by a half
in twenty years, and seven and a half times in a hundred
years''. From this sheer fact it follows that output
too would have increased more or less by a similar order
of magnitude, and mankind, with so much more of goods
at its disposal, would have overcome the struggle for
subsistence. The reason Keynes assumed that an increase
in the mass of goods would eventually benefit everyone
lies not just in his inability to see the antagonistic
nature of the capitalist mode of production (and its
antagonistic relationship with the surrounding universe
of petty producers), but also in his belief that capitalism
is a malleable system which can be moulded, in accordance
with the dictates of reason, by the interventions of
the State as the representative of society. He was a
liberal and saw the state as standing above, and acting
on behalf of, society as a whole, in accordance with
the dictates of reason. The world, he thought, was ruled
by ideas; and correct, and benevolent, ideas would clearly
translate themselves into reality, so that the increase
in mankind's productive capacity would get naturally
transformed into an end of the economic problem. If
the antagonism of capitalism was pointed out to Keynes,
he would have simply talked about state intervention
restraining this antagonism to ensure that the benefit
of the increase in productive capacity reached all.
The fact that this has not happened, the fact that the
enormous increase in mankind's capacity to produce has
translated itself not into an end to the struggle for
subsistence for the world's population, but into a plethora
of all kinds of goods and services of little benefit
to it, from a stockpiling of armaments to an exploration
of outer space, and even into a systematic promotion
of waste, and lack of utilization, or even destruction,
of productive equipment, only underscores the limitations
of the liberal world outlook of which Keynes was a votary.
The state, instead of being an embodiment of reason,
which intervenes in the interests of society as a whole,
as liberalism believes, acts to defend the class interests
of the hegemonic class, and hence to perpetuate the
antagonisms of the capitalist system.
These antagonisms perpetuate in three quite distinct
ways the struggle for subsistence in which the bulk
of mankind is caught. The first centres on the fact
that the level of wages in the capitalist system depends
upon the relative size of the reserve army of labour.
And to the extent that the relative size of the reserve
army of labour never shrinks below a certain threshold
level, the wage rate remains tied to the subsistence
level despite significant increases in labour productivity,
as necessarily occur in the ''era of progress and innovation''.
Work itself therefore becomes a struggle for subsistence
and remains so. Secondly, those who constitute the reserve
army of labour are themselves destitute and hence condemned
to an even more acute struggle for subsistence, to eke
out for themselves an even more meagre magnitude of
goods and services. And thirdly, the encroachment by
the capitalist mode upon the surrounding universe of
petty production, whereby it displaces petty producers,
grabs land from the peasants, uses the tax machinery
of the State to appropriate for itself, at the expense
of the petty producers, an amount of surplus value over
and above what is produced within the capitalist mode
itself, in short, the entire mechanism of ''primitive
accumulation of capital'', ensures that the size of the
reserve army always remains above this threshold level.
There is a stream of destitute petty producers forever
flocking to work within the capitalist mode but unable
to find work and hence joining the ranks of the reserve
army. The antagonism within the system, and vis-à-vis
the surrounding universe of petty production, thus ensures
that, notwithstanding the massive increases in mankind's
productive capacity, the struggle of subsistence for
the bulk of mankind continues unabated.
The growth rates of world output have been even greater
in the post-war period than in Keynes' time. The growth
rates in particular capitalist countries like India
have been of an order unimaginable in Keynes' time,
and yet there is no let up in the struggle for subsistence
on the part of the bulk of the population even within
these countries. In India, precisely during the period
of neo-liberal reforms when output growth rates have
been high, there has been an increase in the proportion
of the rural population accessing less than 2400 calories
per person per day (the figure for 2004 is 87 percent).
This is also the period when hundreds of thousands of
peasants, unable to carry on even simple reproduction
have committed suicide. The unemployment rate has increased,
notwithstanding a massive jump in the rate of capital
accumulation; and the real wage rate, even of the workers
in the organized sector, has at best stagnated, notwithstanding
massive increases in labour productivity. In short our
own experience belies the Keynesian optimism about the
future of mankind under capitalism.
But Keynes wrote a long time ago. He should have seen
the inner working of the system better (after all Marx
who died the year Keynes was born, saw it), but perhaps
his upper class Edwardian upbringing came in the way.
But what does one say of people who, having seen the
destitution-''high growth'' dialectics in the contemporary
world, still cling to the illusion that the logic of
compound interest will overcome the ''economic problem
of mankind''? Neo-liberal ideologues of course propound
this illusion, either in its simple version, which is
the ''trickle down'' theory, or in the slightly more complex
version, where the State is supposed to ensure through
its intervention that the benefits of the growing mass
of goods and services are made available to all, thereby
alleviating poverty and easing the struggle for subsistence.
But this illusion often appears in an altogether unrecognizable
form. Jeffrey Sachs, the economist who is well-known
for his administration of the so-called ''shock therapy''
in the former Soviet Union that led to a veritable retrogression
of the economy and the unleashing of massive suffering
on millions of people, has come out with a book where
he argues that poverty in large parts of the world is
associated with adverse geographical factors, such as
drought-proneness, desertification, infertile soil,
and such like. He wants global efforts to help these
economies which are the victims of such niggardliness
on the part of nature. The fact that enormous poverty
exists in areas, where nature is not niggardly, but
on the contrary bounteous; the fact that the very bounteousness
of nature has formed the basis of exploitation of the
producers on a massive scale, so that they are engaged
in an acute struggle for existence precisely in the
midst of plenitude; and hence the fact that the bulk
of the world's population continues to struggle for
subsistence not because of nature's niggardliness but
because of the incubus of an exploitative social order,
are all obscured by such analysis. Keynes' faith in
the miracle of compound interest would be justified
in a socialist order, but not in a capitalist one.
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