The latest Business podcast featured Professor David Harvey, in the company of Julian Glover, Aditya Chakraborrty and Larry Elliott of the Guardian.   Quick observations:

  • is there a quicker, more insightful or more thoughtful commentator than Julian Glover anywhere?  I’m not sure there is.  Listen to this podcast just for his interventions about financial reform, what the public is asking for, anything
  • Pretty much all of the other speakers seemed to have a more nuanced and realistic understanding of how capitalism works to the Professor.  In my humble opinion.  To expand:

Professor DH seems to think that the developed economies should not or cannot grow, and at the end asks, straightforwardly ‘well, where do you think 3% growth will come from?’  He seems to have a stereotypically Marxist view of how growth happens: more of the same stuff, basically.  Larry Elliott points out that technological improvements deliver growth (as they have for 200 years).  It is not ALL about capital deepening.   Finding ways of doing the same things better is a form of growth – replacing a clunky inefficient spewing car with a neat, efficient computer-enabled Prius, say.

When Professors and miserabilist commentators sit back and say ‘I can’t see where growth can come from’, the following observations are in order:

  • People have felt we saturated all opportunities for many decades.  It reflects poverty of imagination. 1960s levels of living standards might have seemed ‘good enough’ back then, but don’t now because of the inventions and improvements since.  We have higher standards – in health, in our living spaces, in where we can holiday, in how we can communicate and play and interact.   Fulfilling those standards is growth
  • Failing to see ‘how’ is why we need entrepreneurs, because it is not about one big mind saying ‘What we need is X% more roads and y% more hospitals and Z% more diesel-buses’ but endless tweaking responses to intuited demands, constantly updating modifying and adapting the existing models.   Look, for example, at the frugal innovation that Unilever, P&G and others are learning about in India.

For the second time I find myself linking to a Tim Worstall comment on a Cif Thread (hattiping my own excellent post about the problem with nef-ish Green thinking on growth).  GDP growth is about adding value – and adding value does not mean adding endless new stuff.

Growth also happens in ways that subtract from GDP; I can Skype my folks in France for nothing ; I can replace time consuming visits to the library with Google; I can calculate thousands of seat-swings without employing hundreds of humans with bits of paper; all of these improvements fail to show up in GDP. This is why I get annoyed when I see people calling for ‘new models of growth’.  What we perhaps need is a recognition that improvements in life are not all captured in GDP indices.

There are plenty of ways to grow in the future. Ignore the Marxist miserabilists and their defunct model.

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9 thoughts on “Guardian podcast: the poverty of Marxism

  1. What’s really weird is that people have been saying “it can’t continue! It will all end in tears – and soon!” for 250 years, and they’ve always been wrong. Yet people still don’t stop. Youre partly right that it’s lack of imagination – but it’s also something else; that miserabilists simply get off on being miserable. It’s safe and comfy for them, because they are dispositional moaners. Accordingly, the economics or the history doesn’t really bother them – misery and doom-saying uber alles is the default setting.

    1. As someone who has attacked youth all too often, I suspect it is an age thing. People remember things being better 30 years ago …. why? Because their knees worked better back then, as well as lots of other stuff. Women looked at them more, perhaps. They got jokes quicker, understood technology quicker, …. and so construct a theory to explain it on a global scale…

      Then again, Simon Heffer always was a miserable b****r. Then again again, he always was 50 or so.

  2. When I want a critique of academic Marxism I always turn to Old Nick:

    “This post at K-Punk epitomizes a gathering trend among neomarxists to finally bury all aspiration to positive economism (‘freeing the forces of production from capitalist relations of production’) and install a limitless cosmic despair in its place. Who still remembers Khruschev’s threat to the semi-capitalist West – “we’ll bury you.” Or Mao’s promise that the Great Leap Forward would ensure the Chinese economy leapt past that of the UK within 15 years? The Frankfurtian spirit now rules: Admit that capitalism will outperform its competitors under almost any imaginable circumstances, while turning that very admission into a new kind of curse (“we never wanted growth anyway, it just spells alienation, besides, haven’t you heard that the polar bears are drowning …?”).”

    Critique of Transcendental Miserablism
    http://hyperstition.abstractdynamics.org/archives/008891.html

    1. Brilliant answer. Atfirst I was concerned when you said Old Nick. I don’t like to encourage Satanism here you know. Looks like another great post you’ve forced me to read though.

  3. It’s worth making a distinction between Marxian and Marxist views. A Marxian analysis can tell us quite a bit about how capitalism functions.

    You are right to make the distinction between quantitative and qualitative growth – however GDP doesn’t measure quality so well.

    It may be that nef, though they are clumsy in expressing it, have a point. We may need to change the way we measure a successful market economy.

    1. “It may be that nef, though they are clumsy in expressing it, have a point. We may need to change the way we measure a successful market economy.”

      That’s kind of like saying “although alchemists had a clumsy way of expressing it, they had a point. Base metals are composed of different atomic structures, therefore alloys can be created”.

      It doesn’t follow that we can turn lead into gold. Accordingly, let’s remember that the nefs are fucktards who do the left far more harm than good.

      Rather like alchemists still searching for the philosopher’s stone in the 19th Century.

  4. “Professor DH seems to think that the developed economies should not or cannot grow, and at the end asks, straightforwardly ‘well, where do you think 3% growth will come from?’”

    As you point out, the answer to that is entrepreneurs. Which is why we don’t have an economy planned by politicians, one planned by Professors or even one planned by people who might conceivably know what they’re talking about (a group that may or may not contain politicians or professors).

    Markets are a discovery mechanism.

    1. I think what Harvey and others are getting at is that decoupling carbon-based economic growth appears to be quite difficult – added to which, private investment has fallen significantly during the recession.

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