Tag Archives: Karl Marx

Philosophers have hitherto only interpreted the world in various ways; the point is to change it. A reply to Grace Blakeley.

One of the problems with the left of today is that it is stuck with the ideas of its peers which apart from being outdated have been misconstrued by many years of Leninist and Trotsykist influence in European socialist literature. I have great admiration for Marxists like Ernest Mandel who in the Second-World War fought with the Resistance, but the Marxist ideas of our peers have a particular history to them which is completely different from the historical conditions which have caused today’s state of affairs. Mandel was born in a world run by empires and where capitalism was ruthlessly oppressive, where racism was the official normal, and wars took place which massacred millions of people. Post Second-World War, the world changed to a great extent. Western Europe adopted the social-contract and the traditional empires were dismantled, however great injustices like the Vietnam War still echoed the oppressive vicissitudes of capitalist-imperialism of the old world and international communist movement lived to fight these injustices.

Back then socialism was an incredibly innovative political-ideology which was adhered to by political-movements that directly addressed the needs and aspirations of ordinary people. It was also fueled by countless of political, economic and philosophical debates. For example, Anuerin Bevan’s programme for the National Health Service to provide free health-care for all was a very radical concept back then which even some of his fellow members of the Labour Party were opposed to. Today, free-health care is embedded in the European psyche as a given-right, but the historical thought process which brought about this idea in our psyche was fraught with many barriers. Just look at the debate in the US on the student debt-jubilee proposal. Some of those who oppose it claim that it is unfair on them after having paid off their debts themselves. The idea that someone else is going to get something for free while I had to pay for it may be, for some, unfair, but the simple logical answer to this should be that if I have suffered injustice, it doesn’t mean that I am going to accept that it is repeated on others. Indeed, from my European perspective, forcing young people into debt for a basic university education is an injustice which restricts social mobility.

This is why it was very refreshing to see AOC coming in defense of the Reddit users in the GameStop saga – a glimmer of light amongst the recycling of idealist left-wing critique which doesn’t make any sense. Rashida Tlaib’s proposed bill on stable-coins signals to me that the left still doesn’t understand the world we live in and refuses to think outside its dogmatic box. It is after all true that the leftt keeps failing to relate to ordinary people and keeps being sidelined to the periphery of politics. Grace Blakeley‘s text on the GameStop saga produces the same kind of frustration. Hers is a very dogmatic and idealistic critique which once again re-affirms the left’s refusal to re-read Marx in the light of the events which followed the collapse of the Soviet Union. Even Slavoj Zizek is not meticulously engaged with Marx and history as he is more concerned with Hegel and Lacan, but at least he has been one of the only few contemporary left-wing intellectuals who brought some tangible and rational discourse forward that broke away from left-wing idealism – case in point was when Zizek actually extolled the virtues of voting and inspired many young English left-wingers to eventually join the Labour Party and militate for Corbyn.

Post-GameStop saga, Blakeley argues that the fact that people can buy a company’s shares in an economy where most shares are owned by a very few number of people may create the illusion that somehow, ordinary people can successfully become owners of capital and achieve economic emancipation by becoming capitalist owners. Blakeley says, somewhat bizarrely, that neo-liberalism entices workers to believe that they can only exercise power as capitalist owners. I find this sentiment strange given that the point of Marx was that workers should become collective owners, but it seems to me that Blakeley sees this as an abstraction and an impossibility in today’s capitalist framework. Never mind the current phenomenon were countless of small businesses are being decimated and the aspirations of young people to open their own business in some of the most difficult conditions ever – from Blakeley they should rather keep their pay-cheque. But let’s drop this for a moment and go into some theory. The problem with Blakeley’s argument is that she does this from the stand-point of Mandel’s Marxist idealism whereas private ownership of assets under capitalism, primarily what used to be described as the workers’ collective ownership of the means of production, is not emancipatory given that this collective ownership will still uphold the rules of capitalism in trade and probably even finance. She highlights this point hyperbolically by saying that ordinary people buying stocks “are in an alliance against workers” and supporting companies which do great damage in the “Global South”.

I find this argument non-dialectical, simplistic and akin to Lassalle’s argument of the abolishment of the wages system which Marx derided. The failure of the re-reading of Marx by the left probably stems from the lack of appreciation of history itself which was essential for Marx to break with Hegel through Hegel himself by outlying the dialectical forces of history. And the lack of appreciation for history also stems from the rigid and dogmatic Leninist and Trotskyist views which were adopted by the left as the mainstay of Marxist philosophy. It seems that the left is confident in its misconstrued world-view and speaks as if it is a textbook of Andre Gunder-Frank’s theories while ignoring the massive historical changes that have happened ever since Marx wrote his Communist Manifesto. The point of Marx is to break from economic idealism, but the left is instead building its own idealistic bunker.

Marx can not be read idealistically or from the lack of a historical stand-point. I would say it is even non-Marxist to apply many of Marx’s concepts in today’s world. It should be obvious to a historian that even capitalism itself has changed its form and nature and this is also where Fukuyama gets it wrong with his constant hip-hopping of his endless list of static categories which are imposed on a linear course of history that supposedly explain how and why liberal-democracy and capitalism have mutually grown together. Feudalism took many hundreds of years to change and transform itself, so much so that historians have a difficulty and disagree between them on marking its beginning and the end on exact chronological terms. It is also similar with capitalism. We have seen through the course of the last century great changes to capitalism, most noteworthy, probably, the abolishment of traditional empires and the emergence of new global economic powers like Japan and today, China. Western Europe in the post-Second World War era adopted a new social contract which ensured free healthcare, free education and social mobility and the 1960s European Social Charter also echoes Marx’s words in the Economic and Philosophic Manuscripts that we should live in a meritocratic economy where people can freely chose their career out of will, desire and ambition and achieve success at it instead of having to forcefully choose a job and work simply to pay the bills. Additionally, the taxation regimes have changed and liberal-democracy have provided the opportunity for people to fight for their interests with their vote creating a wave upon wave of social-legislation which improved people’s lives.

Blakeley underlooks history. Europe after the plague epidemic of the 14th century had a serious labour-shortage which led to many serfs becoming peasants and this was a decisive hit to feudalism in its transition to capitalism. After the Second-World War we have seen changes in capitalism which are distinct from Victorian era-capitalism such as the nationalisation of companies to protect jobs, workers becoming capitalists, the booming of small businesses and the rise of the middle-class, free healthcare and free education, strong welfare states and much more. Although the rich got richer, workers and ordinary people also got richer and had greater access to money and the financial markets. The boomer generation is indistinguishable from the workers and ordinary people of the 1920s and the 1930s. The great material progress made ever since Marx wrote on the abolishment of capital is overwhelming. Marx never denied the incredible forces of capitalism which can produce great wealth. Marx’s problem with capitalism is that its basic legal system was built to make the wealthy wealthier at the expense of free labour. But Marx’s problem with the system of production also had a historical aspect to it and Marx was very aware of this:

The so-called distribution relations, then, correspond to and arise from historically determined specific social forms of the process of production and mutual relations entered into by men in the reproduction process of human life. The historical character of these distribution relations is the historical character of production relations, of which they express merely one aspect. Capitalist distribution differs from those forms of distribution which arise from other modes of production, and every form of distribution disappears with the specific form of production from which it is descended and to which it corresponds.

The relations of production are taking a different character in their historical course thanks to technology and also thanks to the introduction of intellectual property. The invention and widespread use of computer coding drastically increased the meritocratic opportunity in the world of business while the process of value creation took historically different characteristics wherein young and capable coders could build their products and their businesses even single-handedly. Today, the problem is that some of these businesses such as Microsoft and Apple have grown so big as to effectively wield monopolistic power. On the other hand, we have also seen digital companies extracting value from small-business and replacing them with cheap-paying jobs and huge returns to shareholders – case in point is Amazon. Oil brought great changes to the economy as well, but the green-energy transition is also changing that again. Surely, the process of value creation is changing and one can not apply Marx’s literal texts on these themes because they have historical distinctive characteristics from the process of value creation in Marx’s time. Undoubtedly the concept of free-labour in relation to the surplus-value still exists in the capitalist system, and in some sectors of the economy this aberration has actually got worse with new digital brokers and middle-men coming into the scene and taking a cut of the profit from both businesses and workers – Gig economy, Bolt, Uber etc…

Classes are also changing dramatically. The old capitalist-elite has changed dramatically. The financial elite who took over from the industrial elite in the 19th century are now being taken over by the digital elite. The old families who were in the car business ever since cars were invented are being challenged by a young entrant who coded Paypal and then sold it to start an electric-car company and space-company with the aim to go go to Mars. The historical rise of the middle-class, the house equipped with the domestic appliances and the family car, mass-literacy, the huge decrease in poverty and the eradication of polio, has also been met with advent of space-capitalists.

We are of course, still living in capitalism and the financial markets are clear testament of this. The stock market mirrors society’s hierarchy of classes quite explicitly as the massive number of assets available are mostly owned by the very few while the masses own a tiny fraction of it. At the same time, the architecture of finance is changing too. Bitcoin and crypto-currency are changing finance to the extent of making banks obsolete with decentralised finance and Bitcoin platforms which take on the banking role of providing loans and paying interest. So far the left has overlooked this incredible development, despite the fact that the banking system is one of the most important structures which make the system of capital so skewed in favour of those who hold assets at the expense of those who don’t (more on this another time).

The GameStop saga also shows a very interesting reality which was non-existent even a few years ago. Ordinary people can actually, and with concentrated and collective effort cause significant events in the financial market. No, we are not speaking of a systematic event here, and sure, there were investors in the GameStop long like Michael Burry who also made a lot of money on the trade, but by now no one can deny the power of the collective retail investor which can in some situations be very effective and may even put hedge funds out of business. But not only so. GameStop was in fact a classic case of a business going bust due to severe economic conditions and competition by bigger businesses like Amazon. It was shorted aggressively and greedily by hedge funds who were fought back by a retail army who loved their brand. This was a very rare occasion in history where the small fish gathered together and successfully exerted their power in the stock market. Now, of course, the retail guys could have been front-run by the insiders who manage of the plumbing of the system, but no one can deny that this event actually happened just like no one can deny that hedge funds and rich people have been buying billions of Dollars of Bitcoin from small fish who bought in early when hardly anyone wanted to buy it, creating as a result what may be described as one of the biggest wealth transfer events from rich to poor in recent history.

Just because wealth re-distribution doesn’t necessarily abolish capitalism as Mandel said it doesn’t mean it isn’t emancipatory. For many years people have fought for their right to be represented in parliament and be able to vote. When everyone was eventually able to vote, social legislation became more popular. Nowadays, we see more people wanting to participate in the financial markets and many of them feel entitled to make money out of it – this is good. Eventually financial markets will also change due to the increased popular participation and they are already changing – case in point is Bitcoin and crypto-currency. As more and more young people come into the financial markets, the political, financial and economic aspects of the financial system will also change. I’m not saying it will change for the good, but this is history in the making and refusing to accept is akin to once again ignoring the aspirations of ordinary people. The financial system is run by bankers, bureaucrats and big capitalists who set the rules of the game in their favour, but, if thanks to the internet and the democratisation and profusion of knowledge ordinary people are becoming well versed in financial markets, and in some cases even beating hedge funds, then that’s welcome. This will not bring more injustice to the world. So, instead of admonishing young people for trying to get rich from the stock market aby condemning them as “allies of oppressive capital”, socialists should be trying to make sure that many more ordinary people owned assets and even more power in the financial markets. It’s like Proudhon has taken over the left and the moralistic disengagement from the system is the only way out. This idea is absurd and would be equivalent to ask workers to refuse to join trade-unions because they compromise with capitalists. I’m pretty well sure that both Marx and Lenin thought that a tangible improvement in the workers’ life is way much more valuable than a hundred political programmes. Disengaging with the system to adopt moralising platitudes will give you just that: the bleating of age-old slogans. After all, even the British left realised very well in 2010 that engaging with the system, joining Labour and voting in elections is the best way to effect positive and progressive change.

To conclude, Marx’s most famous adage in The German Ideology applies, but the left has once again entered the trap of idealistic remorse. It’s as if the left is stuck in Plato’s post-modern cave creating ideas which are not really applicable outside, a disenfranchised character in a novel by Camus or the woman in the dunes of Hiroshi Teshigahara, resigned to live in the sand for ever. And this is very unfortunate with its results apparent to everyone – the left in the periphery of power while the right keeps winning more and more.

Why Karl Marx would have liked Bitcoin

imagesBitcoin was launched in 2009 as a Peer-to-Peer monetary network with a blockchain technology which can be used to send money to another party without going through a middle-man such as a bank or a money-institution.1 Many young people were back then familiar with the P2P concept thanks to programmes which enabled users to share files. A P2P network is independent from a central server and its existence relies on the network of its users. It is in this way that Bitcoin gets its value. When someone says I’m buying Bitcoin, they are actually buying part of the Bitcoin network – the more money is put into this network, the higher its value. At the time of writing, the Bitcoin network cost €114.3 billion which equates to the total amount of value of all Bitcoin held. This does not include the multiplier effect of this Bitcoin network which includes brokerage companies and Bitcoin financial institutions, but includes the value of the miners who produce Bitcoin by mining it through complex mathematical equations. The value of Bitcoin can only increase if more money is added to the network because the supply of Bitcoin is capped at 21 million units. The Bitcoin digital network itself is by its own nature a security-function against digital attacks known popularly as hacking, however online brokers and financial institutions storing or owning Bitcoin may be more prone to hacking and digital attacks.

Karl Marx would have liked Bitcoin. Marx is one of the most misunderstood economists and philosophers in the world. Unfortunately, the theories and philosophy of Marx have been mostly understood and interpreted across the world through the lens of the Bolsheviks, namely Lenin, Stalin and Trotsky. This polemic may be the subject of another essay some other time.

Andrew Kliman is one of the few Marxist economists whom I prefer against the mainstream Marxist traditions. Kliman offers a very rational and literal interpretation of Marx’s Capital. Das Kapital is Marx’s magnum opus, but it has often been obfuscated with Marx’s own political work such as the more popular The Communist Manifesto which was commissioned by an international political association of workers called The Communist League. Readers of Capital should simply take it as it is: a deep and technical critique of the capitalist system, and when one reads Capital in this unbiased way, one can only be fascinated with Marx’s insights on the abstractions of capitalism.

As Kliman rightly points out, in Capital, Marx did not say that capitalism was to implode, and neither did he say that the rate of profit would gradually decrease to the extent that capitalism would stagnate permanently. Marx put forward the case that when technological innovations decrease labour-costs and increase productivity, surplus-value may increase and the rate of profit decreases.2 It is logical that if you want to make profits, you need customers, and customers are possible only if wages are paid and workers have money to spend. Furthermore, as Kliman correctly points out, Marx’s distinction between commodity-value and the price of the commodity was theoretical and in the real economy the two are interchangeable.3 Marx defined the value of a commodity according to its labour-time, and Marx’s contention with capitalism was that labour-value is artificially suppressed to create surplus-value.4 When one takes this logic in a literal manner, most of the economic stuff written about Marx’s theory of value which argues that capitalism produces two distinct values of the commodity is irrelevant. The second most important critique Marx makes of capitalism is that the concept of supply and demand in capitalism is not natural, given that demand is only conditioned by the supply and velocity of money and not by real and tangible demand. One can logically explain this by saying that if people had more money, they would spend more.5 The supply and velocity of money in the system is regulated by various means – namely credit, banking and interest-rates which in turn help regulate commodity prices and wages.6 When the general conditions of the economy reflect increasing commodity prices and people do not have any money to spend, an economic crisis is created which requires a readjustment in the system so as to increase the rate of profit. One way of adjusting the system is by issuing cheaper credit by lowering interest-rates.

Marx criticised the general notions and concepts adhered to the capitalist system, and clearly, Marx had a contention with how labour was valued. Marx’s contentions were made when workers lived very grueling lives and their wages were only meant to supplement their most basic needs. Those were the times of the industrial revolution, the child-workers, the dirt and disease, the poverty and hand-to-mouth subsistence life.7 Marx saw that the way the monetary and financial systems were constructed in capitalism favoured first and foremost the capitalist class. This does not mean that Marx was against the concept of money as a universal measure of value, in fact Marx made fun of Proudhon for proposing a system based on bartering.8

Briefly, what Marx saw was a gigantic financial and monetary system, run by a capitalist-class and regulated by a compromised government which enabled the same capitalist-class to accumulate even more capital and appropriate more resources. The private bankers and financiers were for Marx some of the most powerful players in the system so much so that in many cases they appropriated the resources of the capitalist, industrialist and merchant himself. On the other hand, the labourers were unable to determine their own labour-value let alone decide how this gigantic financial system worked. Marx never proposed any practical solutions for the creation of a society based on what he described as the “mode of production of associated labour”.9 Politically, Marx believed that the system had to change in its entirety, but after spending those years producing his lengthy critique of capitalism, Marx did not have enough time to creatively explore new and practical alternatives.

The founders of Bitcoin have, unwittingly, addressed one of Marx’s greatest contentions with capitalism – that of creating artificial values based on the needs of profits of one particular class rather than on natural and intrinsic values. Given that the value of Bitcoin is inherently based on the amount of money put into it, there can be, in theory, no artificial manipulation of the price of Bitcoin, in contrast to fiat currency, for example, where quantitative easing or other measures may influence the value of the currency. Simultaneously, Bitcoin is a monetary instrument inside another monetary system and is co-dependent on the mother monetary-system. Bitcoin is measured against fiat currency, like anything else, and one needs a bank account to extract the value of the Bitcoin but it is also this fungibility that makes Bitcoin potentially valuable. Founders of the blockchain technology have emphasised the argument that the monetary success of crypto-currency, namely Bitcoin, is simply that of buying the value of social scalability.10 This basically means that when I buy Bitcoin I believe that more people will buy it later and therefore its worth would increase.

One could argue that given that the price of Bitcoin has increased exponentially during the last ten years, being currently worth €6,242 at the time of writing, Bitcoin has been a massive success in social scalability. Indeed, many people made money from Bitcoin, but today it seems that Bitcoin has become a speculative instrument, so much so that in the recent weeks it has been correlated to the stock-markets.11 The excessive volatility of the Bitcoin price makes it unattractive to people who would want to use it as a store-of-value, and a safe-haven asset, and in fact, gold as of now, marching slowly once again to its all-time-high, seems to remain the preferred safe-haven asset to investors. Bitcoin has proved that it could create value by itself due to social scalability and without direct interference from government institutions, however Bitcoin as of now remains an exotic financial and/or monetary asset. The number of total Bitcoin owners in the world f have been estimated at 20 million12 to 25 million people.13

Could Bitcoin serve as a financial asset in a similar way to the traditional concept of bonds? Due to quantitative easing, and low interest-rates we have seen bonds turning into a speculative instrument and savers have been punished. Ordinary people no longer have the opportunity to receive some returns from their savings unless they risk their money in the equity market. It would be very difficult for Bitcoin to be considered as a safe investment if speculative capital drives up and down the Bitcoin price so violently in a short amount of time. Speculative capital in Bitcoin can only be counteracted in Bitcoin by exponential scalability which can either occurorganically or by strategic government use of Bitcoin itself.

Governments could make strategic use of Bitcoin to increase consumption in the economy and increase wages. For example, governments can buy Bitcoin units and then allow their employees to be paid from government’s Bitcoin supply in Bitcoin units. If European governments coordinate such schemes together and thus simultaneously attempt to stabilise the Bitcoin price, the large scalability of such use would exponentially increase the value of Bitcoin and the money held by people. Similar methods can be applied to financial aid packages and social relief payments during the current economic crisis. Naturally, such an international and strategic effort could only be made by an institution such as the European Union or the US Government.

Marx would have liked Bitcoin because he would have probably considered it as a way by which to appropriate value from a monetary-system which first and foremost served the interest of the capitalist classes. Bitcoin does not solve Marx’s dilemmas on value, but helps address it by offering a window of opportunity into an alternative monetary-value system which may rely only on the network of its users rather on large institutional or financial entities. Marx would have probably called Bitcoin “an associative way how to appropriate value from the capitalist-monetary system”. It is with great irony that most of the issue that Bitcoin maximalists complain about, namely the central-banking system, the debasement of currencies and inflation, the government’s appeasement of big financiers and the banking industry, were all targets of Marx’s deep critique of capitalism. I have no doubt that if Marx was alive today, he would have bought Bitcoin.

Disclosure: I own Bitcoin

1Satoshi Nakamoto, Bitcoin: A Peer-to-Peer Electronic Cash System, 2008. Downloaded from http://www.bitcoin.org

2Andrew Kliman, Reclaiming Marx’s “Capital” (Lexington Books, 2007), 30-31.

3Ibid, 32-38.

4Capital Volume 1, Chapter 3.

5Capital Volume III, Chapter 10.


7Readings which may provide details on the economic conditions of the working-class in the 19th century include Friedrich Engles, The Conditions of the Working Class in England, Henry Mayhew, London Labour and the Poor and E.P. Thompson, The making of the English working-class.

8Capital Volume III, Chapter 36.


10Nick Szabo, Money, blockchains and social scalability, 2017 http://unenumerated.blogspot.com/2017/02/money-blockchains-and-social-scalability.html