Costas Lapavitsas and the growing desperation of the underconsumptionist school

by Jehu

In an interview with Jacobin, “Greece: Phase Two”, Costas Lapavitsas defends Yanis Varoufakis and, in the course of this defense, highlights the forces behind the increasing desperation of the Marxist underconsumptionist school:

“Let me come clean on this. Keynes and Keynesianism, unfortunately, remain the most powerful tools we’ve got, even as Marxists, for dealing with issues of policy in the here and now. The Marxist tradition is very powerful in dealing with the medium-term and longer-term questions and understanding the class dimensions and social dimensions of economics and society in general, of course. There’s no comparison in these realms.

But, for dealing with policy in the here and now, unfortunately, Keynes and Keynesianism remain a very important set of ideas, concepts, and tools even for Marxists. That’s the reality. Whether some people like to use the ideas and not acknowledge them as Keynesian is something I don’t want to comment upon, but it happens.

So I cannot blame Varoufakis for that, for associating himself with Keynesians, because I’ve also associated myself with Keynesians, openly and explicitly so. If you showed me another way of doing things, I’d be delighted. But I can assure you, after many decades of working on Marxist economic theory, that there isn’t at the moment. So yes, Varoufakis has worked with Keynesians. But that isn’t really, in and of itself, a damning thing.”

maxresdefaultI guess I am not so much speechless that Lapavitsas said this as I am speechless that it is completely true. After 150 years, Marxists still have no other policy tools in their book bags except Keynesian ones; Marxist economists have yet to give birth to their own policy tools derived organically from the premises of labor theory of value.

In the middle of crises, this places Marxists in the uncomfortable position of either issuing sterile calls for FULL COMMUNISM or adopting the least offensive reformist policy arguments of the sworn enemy of the working class for slightly adjusting capitalism at its margins. A choice which, as Lapavitsas, explains, is not really a choice at all.

“Now, is this position tantamount to saying you cannot do anything unless you overthrow capitalism, which is what sections of the ultra-left are saying? That is clearly absurd ultra-leftism. You don’t need a socialist revolution, and you don’t need to overthrow capitalism at every minute of the day to do small things. Of course, we aim for the overthrow of capitalism, and of course ultimately we would like to see the socialist revolution. But that’s not in the cards at the moment.

You don’t need socialist revolution in Greece, and you don’t need to overthrow capitalism in Greece to get rid of austerity. You don’t. But you certainly need to get rid of the institutional framework of the euro. That simple position is not understood — or is not widely appreciated — within Syriza and not within the European left, and that has been a tragedy for years.”

Lapavitsas tries to turn the problem into a critique of KKE and ANTARSYA — they are afraid of power, he alleges. But, perhaps, there is something else at work; perhaps, those two organizations realize how empty the Marxist toolbox really is and how little it has to offer a Left party once in power. The absence of organic labor theory policy tools means you cannot even balance the fascist state budget without a proletarian revolution; the end of austerity requires the complete overthrow of capitalism.

By contrast, Lapavitsas only demands the overthrow of the euro as a precondition for ending austerity. Nevertheless his proposal for grexit is just a weak, limited, reformist version of KKE’s ultra-left position. According to Lapavitsas, Marxists only have Keynesian policy tools at their disposal, and since these policy tools are just a set of countercyclical fiscal and monetary policy measures, Lapavitsas makes the seemingly reasonable argument that a Left government must have sovereign control of the state’s budget and national currency.

And this is the force driving the underconsumptionist school toward its inevitable collapse. The lack of organic policy tools drawn on labor theory of value and the critique of labor in the capitalist mode of production has left Marxism with a fool’s choice between reforms on the margins of existing relations and immediate calls of proletarian revolution. And it is not just that the gulf between limited marginal reforms and proletarian revolution cannot be bridged by Marxist politics. As Lapavitsas himself explains, Marxism and Keynesianism have completely different aims:

“Keynes is not Marx, and Keynesianism is not Marxism. Of course there’s a gulf between them, and it’s pretty much as you have said. Marxism is about overturning capitalism and heading towards socialism. It has always been about that, and it will remain about that. Keynesianism is not about that. It’s about improving capitalism and even rescuing it from itself.”

According to Lapavitsas, the very tools Marxists rely on for their policy prescriptions was itself designed to rescue capitalism from its own self-negating movement.  The policy tools Marxists have grafted onto labor theory call for slashing the real wage in a crisis to restore the rate of profit and extending hours of labor to increase the mass of profits; while these policy tools are supposed to serve the greater aim of emancipating society from labor.

For Marxist underconsumptionists in SYRIZA, the situation is getting desperate; the clock is ticking down toward the next round of negotiations and no one has a realistic Plan B. The euro common currency cannot be reformed and the Greece working class will not accept grexit. Yet, within the euro common currency, the Keynesian policy tools Marxists have stupidly relied on for decades cannot work.