Conway Hall, in London, was pretty full - over 200 people - for a meeting on 21 October on "Marx and the Credit Crunch". The content was, however, disappointing.
The meeting was organised by Andrew Burgin's "Public Reading Rooms" group, with a platform of three: the writer Istvan Meszaros, the SWP's Chris Harman, and Richard Brenner of Workers' Power.
Brenner's speech was particularly formulaic, composed almost entirely of generalities equally applicable (or inapplicable) to any economic disturbance at any time in the history of capitalism.
The crisis arose, said Brenner, from the Tendency of the Rate of Profit to Fall. At some point financiers "became aware that they could not get the expected returns". That created a "huge sudden puncturing of creditworthiness across the financial system".
Since this Tendency of the Rate of Profit to Fall is supposed to be something that operates across the entire history of capitalism, this amounts to no explanation at all of anything "sudden". And in fact the run-up to the crisis was a period of increased profit rates, thanks to sharply increased rates of exploitation. The UK profit rate in 2007 was the highest in the whole run of statistics available.
The speakers from whom one might have expected better were not much so. Chris Harman also based his exposition on the alleged Tendency of the Rate of Profit to Fall.
That, he said, had led more and more capitalists to put money into financial dealings, since they can't make adequate profits in industry. It was all a giant Ponzi scheme - "trying to get profits out of nothing" - and so eventually "came crashing down".
Now, financial firms can show paper profits which are actually unrealisable in hard cash or material commodities, and this Ponzi scheme element was important in the immediate run-up to the crisis.
But, whatever Harman says, the whole gigantic expansion of global finance over the last three decades has not just been a story of fictitious profits. The financiers have appropriated real surplus value, created by real workers, and they have the mansions, the yachts, and the private jets to show for it.
Finance is not an alternative way for capital to expand if real exploitation is insufficient. It is a way to redistribute surplus value, and in the last three decades it has been redistributed to the advantage of financiers. The global finance markets have grown up not as an alternative to the growth of global capitalist production networks, but as an organic accompaniment to it.
Harman concluded by predicting increased stability, and increased intercapitalist conflict.
Increased intercapitalist conflict has been the SWP's staple prediction since the late 1980s, when they evolved their "new imperialism" theory to rationalise their 1987 change of line on the Iran-Iraq war, from opposing both sides to backing Iran. In fact the dominant trend of the 20 years since then has been the relative smoothness with which world capitalist institutions - IMF, WTO, G7, European Union - have expanded to embrace the ex-Stalinist states.
Like the stopped clock right once a day, though, the SWP's prediction may become correct now. Crisis fire-fighting has vastly increased the role of governments in aiding and regulating the capitalist firms based in their own countries. It therefore increases the probability of those governments coming into conflict when the firms they regulate or bail out come into conflict, as they surely will as the recession generates a competitive battle to survive in shrinking world markets.
Harman was downbeat in his political predictions. Workers will face many defensive struggles, in a situation where the left is weak. There will be increased social bitterness, but that may accrue to the benefit of the far right. We should look to small acts of resistance.
Meszaros's speech was surprisingly insubstantial. He devoted a long time to mocking a Time magazine cover from 1987, "Marx is dead". I was reminded of Gramsci's critical remark on Bukharin: "Bukharin only wants to attack the weakest people and on their weakest points, in order to win easy verbal victories... On the ideological front, however... it is necessary to defeat the eminent people... the great champions of the opposing tendencies".
Meszaros stated - I can't say he argued - a prediction that we face a crisis of "unimaginable" proportions, vastly bigger than that of 1929-33, which, he said (inaccurately), only touched a small part of the world. He repeated his prediction that the USA will default on its foreign debt, a prediction he had already made in 1987 (p.960 of Beyond Capital, a book in which he argued, unconvincingly in my view, that capital has reached a terminal "structural crisis").
Stuart King of Permanent Revolution struck a different note from most floor contributions, drawing attention to the big expansion of capital over the last decades (16 years, he said, presumably to date it from the collapse of the USSR, but actually the expansion started before that). His conclusion was that the current crisis should be compared not to 1929-1933, but to the Panic of 1907. That, he said, was certainly a severe slump, but within a "long wave" of capitalist upswing.
I doubt the comparison is very useful. Anyway, can a generality about the "long wave" really guarantee us a quick recovery?
In my contribution from the floor, I asked for more attention to the unique features of this crisis.
* The fact that vast nationalisations and bail-outs and government interventions come after 20 years in which the dogma that "the markets" rule, and must rule, has permeated society.
The need for social regulation of the economy is again on the agenda. We should organise around the idea of workers' regulation, through a workers' plan and a workers' government. We should not allow that argument to be swamped by routine agitation about the distributional aspects of the crisis, let alone by cod-Keynesianism such as Richard Brenner offered when, after much bellowing about how very Marxist he is, he recommended "taxing the rich and increasing public spending in order to prevent a recession". So that would be enough to overcome the contradictions of capitalism, eh?
* I think the whole thesis of the Tendency of the Rate of Profit to Fall is wrong. To put it briefly: in technological change, as such, what Marx adduced as "countervailing tendencies" will generally prevail over tendencies to depress the profit rate. In fact, the long history of capitalism shows no clear downward trend of profit rates.
Adam Smith and David Ricardo, and other classical economists, believed a slow long-term downward trend of the rate of profit to be a fact. So did John Maynard Keynes. They all had their (wrong) theories about it, which allowed little room for countervailing tendencies. Marx's contribution was to give a more rational (though still, I think, flawed) explanation of why such a tendency might exist, and to analyse numerous "countervailing tendencies".
Far from considering the Tendency of the Rate of Profit to Fall a cornerstone of economic analysis, Marx never mentioned it in anything he readied for publication. And in his main writings on crisis (mostly in Theories of Surplus Value volume 2 and Capital volume 2, both unfinished) he did not mention it either.
I did not have time for this argument in my contribution from the floor. I just pointed out that, whatever you think in general about the Tendency of the Rate of Profit to Fall, this particular crisis was preceded by rising profit rates.
* The vast expansion of global finance markets is an integral companion of the expansion of globalised production, and not to be explained away as a mere futile search after fictitious profits.
In addition, finance capital has begun to be able to extract further surplus value from the working class outside production, by direct tribute via workers' payments to service mortgage and credit-card debts (not much less than 20% of household spending now, in the USA and in the UK). This is the first ever crisis in which an implosion of consumer credit is a big factor.
* The crisis takes place in a world economy more globalised - with faster and more various global interactions - than any before.