With the crisis currently envoloping capitalism across the globe, there has been a wave of hype regarding the ideas of John Maynard Keynes, the British economist. Many see Keynesian policies as giving a solution to capitalism’s woes. Even many on the left, and far-left, explicitly or unthinkingly see Keynesianism as representing some kind of move towards socialism. It is not. It is an attempt to rescue the moribund capitalist system, not overcome it.
The following article written by Paul Mattick for the Western Socialist in Boston, USA, in 1955 is well worth a read:
Marx and Keynes
Classical economy, whose beginning is usually traced to Adam Smith, found its best expression and also its end in David Ricardo. Ricardo, as Marx wrote, “made the antagonism of class-interest, of wages and profits, of profits and rent, the starting-point of his investigation, naively taking this antagonism for a social law of nature. But by this start the science of bourgeois economy had reached the limits beyond which it could not pass,” for a further critical development could lead only to the recognition of the contradictions and limitations of the capitalist system of production. By doing what could no longer be done by bourgeois economists, Marx felt himself to be the true heir, and the destroyer as well, of bourgeois economy.
The further development of economic theory supported Marx’s opinion. Though bourgeois economy was indeed unable to advance, it was able to change its appearance. Classical economics had emphasized production and the system as a whole. Their followers emphasized exchange and individual enterprise. Although there arose no serious doubt that the capitalist system is natural, reasonable, and inalterable, yet the early confidence of bourgeois economy was slowly destroyed by a growing discrepancy between liberal theory and social reality. The increasing economic difficulties which accompanied the accumulation of capital developed an interest in the business cycle, in the factors that make for prosperity, crisis and depression. The neo-classical school, whose best-known proponent was Alfred Marshall, attempted to transform economy into a practical science, that is, to find ways and means to influence market movements and to increase both the profitability of capital and the general social welfare. But the increasing length and violence of depressions soon changed a new optimism into even deeper despair, and the sterility of bourgeois economics led economists once more to embrace the less-embarrassing security of “pure theory” and the silence of the academies.
In the midst of the Great Depression, bourgeois economic theory was suddenly raised from the dead by the “daring” theories of John Maynard Keynes. His main work, The General Theory of Employment, Interest and Money, was hailed as a “revolution” in economic thought and led to the formation of a school of “Keynesian economics.” While persistent “orthodox” economists opposed this new school as “socialistic” or “illusionary,” so-called socialists attempted to blend Marx with Keynes, or rather, to accept Keynes’ theories as the “Marxism” of our time. Marx’s scepticism with regard to the future of bourgeois economy was now said to indicate only his inability or unwillingness to criticize the classicists constructively. Of Keynes it was said that he made real Alfred Marshall’s aspirations for a reformed and improved capitalism. These endeavors, as well as the great popularity of the “Keynesians,” both generally and in academic circles, and also their insistence upon the practical applicability of their economic reasoning and their apparent political influence, make it both advisable and interesting to investigate their claims and to review the work of their deceased master in the light of the actual development and the recognizable trend of present-day society. This invites a comparison of the Keynesian with the Marxian point of view.
To read the rest of this article, click here: http://www.marxists.org/archive/mattick-paul/1955/keynes.htm