Karl Marx Was Two-thirds Right

Paul Krugman wrote in The New York Times last Sunday:

“More than two years have passed since European leaders committed themselves to their current economic strategy – a strategy based on the notion that fiscal austerity and ‘internal devaluation’ (basically, wage cuts) would solve the problems of debtor nations. In all that time the strategy has produced no success stories; the best the defenders of orthodoxy can do is point to a couple of small Baltic nations that have seen partial recoveries from Depression-level slumps, but are still far poorer than they were before the crisis.”

In these two years, untold billions have been spent on bail-out of many kinds – to banks and bankers.

Could it be that the defenders of orthodoxy were governed not by their devotion to the scientific method but rather by their devotion to the interests of the banks and the bankers?

Paul Krugman did not say this.

But Karl Marx would have said it.

Karl Marx was two-thirds right. He was only wrong about recommending the dictatorship of the proletariat.

None of us is perfect.

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3 responses to “Karl Marx Was Two-thirds Right

  1. David Schatzky

    And here’s what Groucho Marx said (although not about this):
    “A child of five would understand this. Send someone to fetch a child of five.”

  2. Seems to me that the bailouts weren’t primarily meant to foster recoveries, but rather to avoid catastrophic failures. Viewed in that light, it may be argued that they have succeeded, at least to the extent that we’ve been spared a replay of the joys of 2008-09.
    Would we have preferred to watch the European dominoes fall, starting with Greece? if the banks in Spain, Italy and very possibly France (major Greek exposure there) had gone down, what sort of shape would the EU and North American economies be in? We’d be looking at 08-09 as the Good Old Days.
    Of course, many would credibly predict that it’s all going to happen anyway.

    • Your comment makes a lot of sense. Let everyone choose the economist who suits his or her temperament (or political beliefs). The ones I like at the moment are those who say, “Yes, governments had to intervene to prevent a catastrophe but this intervention was performed in such a way that millions of people who are suffering seem to have a good reason to believe that the banks were helped, but not they.”