> This is an old chestnut; those antagonistic to (orthodox/classical)
> historical materialist theories of history posit a _superficial_
> resemblance
> to "messianic-apocalyptic visions" and "sadomonetarism". This kind of
> slur
> does not, however, disprove historical materialist theories of history.
It wasn't meant to disprove it. That requires a different kind of analysis, the kind that provides the rest of the basis for Keynes’s quip.
The problem is that any attempt – such as Marx’s attempt to deduce immiserization from long run changes in the organic composition of capital and the rate of profit – to deduce long run consequences from fixed axioms ignores the feature of reality that makes Marx’s materialism “historical,” namely that reality is a system of “internal relations.” This is the idea that the essences of things are the outcome of their relations and so change with changes in their relations.
This limits the applicability of deductive reasoning, the limits becoming greater the less stable the relevant relations and the farther into the future the consequences to be deduced. This is because changed relations may invalidate the axioms. As I’ve previously pointed out (http://squawk.ca/lbo-talk/0111/0208.html), Whitehead explains why this is so for deductive reasoning in general and for any form of deductive reasoning that makes use of the logical concept of the “variable” (e.g. algebra) in particular.
Marx’s argument ignores this implication. For instance, it makes assumptions about the nature of technical change in the long run, something which can’t be known and which there is no reason to believe must be of the kind the argument requires. Nor is it evident why, even if the organic composition were to rise and the rate of profit fall, this would lead to immiserization. This depends on, among other things, what happens to the identities of capitalists and workers (certain features of these identities must remain unchanged for them to continue to be capitalists and workers, but this leaves lots of room for variation in their identities, variation having significant implications for the functioning of capitalism).
Marx himself claims, for example, that the subjectivity – the identity – of the capitalist changes through time. The capitalist characteristic of early capitalism is dominated by more irrational feelings about money and money-making than the capitalist characteristic of mature capitalism. Psychollogically, he is primarily a “hoarder,” “ a martyr to exchange-value, a holy ascetic seated at the top of a metal column” (http://www.marxists.org/archive/marx/works/1859/critique-pol-economy/ ch02_3.htm#hoard). He’s also much more overtly sadistic. One expression of this early capitalist psychology is a focus on making money through commerce and usury rather than through control of an industrial labour process. In contrast, the capitalist of mature capitalism focuses on industrial production and is less given psychologically to hoarding and asceticism (see, e.g., Capital, vol. I [Penguin ed.], pp.738-46 (<http://www.marxists.org/archive/marx/works/1867-c1/ch24.htm#S3>).
The assumption that relations are internal is also an essential feature of Keynes’s economics. He claims, for instance, that, as capitalism matures, the psychology of both capitalist and worker will change in a way that will, as in Marx, increase capitalist consumption out of profits but will also increase wages (this is the basis of his claim in his last published article that the US balance of payments would not continue in surplus because the US, for these psychological reasons, was in the process of “becoming a high-living, high-cost country” (this repeats an argument made in The Economic Consequences of the Peace about capitalism in general). Mistakenly basing himself on, among other things, his own falling rate of profit argument, he also claimed that a falling rate of profit would improve income distritution in capitalism by making necessary the “euthanasia of the rentier” (General Theory, pp. 374-7).
The conclusion that capitalism will be transformed into a better system by absolute immiserization also requires that such immiserization be not merely consistent with but productive of a subject able to do this.
Socialism requires a particular kind of subject – a very highly developed one - both for its creation and for its continuing existence.
The idea that such a subject could develop in conditions of absolute immiserization is prima facie absurd (certainly it contradicts what is claimed about the requirements for positive development in Klein's version of psychoanalysis).
Keynes also associated mistaken reliance on formal logic with psychopathology. Such mistaken reliance is the problem with Ricardo’s approach to economics and constitutes the “Ricardian vice” (a criticism of Ricardo also made, as Keynes points out, by Marshall on the ground that it ignores the fact of internal relations). One sign of this psychopathology is immunity to reductio ad absurdum arguments. As I’ve also pointed out before (http://squawk.ca/lbo-talk/0107/0488.html and http://squawk.ca/lbo-talk/0207/0711.html), Keynes used arguments of Hayek to illustrate this.
Hayek argued that the suffering associated with the Great Depression would be much more than fully offset by future benefits because it was a necessary concomitant of correcting the investment errors generated by the preceding boom, errors caused by inflationary increases in the money supply (both these ideas ignore internal relations – long run predictions based on the quantity theory of money were, in fact, the original object of Keynes’s quip.) Keynes claims of this argument that it is "an extraordinary example of how, starting with a mistake, a remorseless logician can end up in Bedlam."
Psychologically consistent with all this, Austrian economics defines human being in terms of Keynes’s idea of capitalist “purposiveness” (http://squawk.ca/lbo-talk/0103/0226.html).
All these features - messianic-apocalyptic thinking, the embracing of suffering, the mistaken identification of reason with formal logic, the belief in magical mathematical formulas relating money to the achievement of some ultimate good, capitalist “purposiveness” – are claimed in Kleinian psychoanalysis to be aspects of the same psychopathological complex, a complex issuing from a particular set of social relations (Klein’s theory derives subjectivity from “object relations”). These psychological claims are, therefore, claims grounded in an approach consistent with “historical materialism” understood as an ontology of internal relations.
Ted