We hopefully have learned a few thing since. I'm one of those weird lefties that loves markets, capitalism, competition, etc. So long as we are clear-eyed about it and actively counterbalance winner-takes-all.
I think we've mostly learned that Marx was right.
You seem to be thinking of Marx from the sort of popular fiction of someone that protests capitalism as some great injustice. Marx's logic, at least in Capital, isn't that Capitalism is a moral evil, or that Capitalists are bad people (in fact he argues pretty clearly that the moral character of individual capitalists is irrelevant).
Marx's central point is that Capitalism is a system filled with internal contradictions that will continually manifest themselves as crises. These crises will continue until the system finally becomes unstable an collapse. Marx's vision of course was that it would collapse into socialism, but his utopia solutions can be viewed quite independently from his theory of capital.
Marx predicted a fairly large portion of our world today: the increasing globalization of capitalism, growing interdependence of labor and capitalist classes, increasing fragility of the labor class, the development of the credit system and financial system to temporarily resolve some of these contradictions.
If there is a good critique of Marx it is that he failed to predict the ecological and environmental damage that capitalism would bring. He failed to fully understand the way that these contradiction work with resource use.
I think if contemporary dialogue about Marx focused more on Capital and less on The Communist Manifesto we'd have less confusion about what Marx was trying to say.
I think it's perfectly okay to agree with his concept of dialectical materialism and also disagree with the statist solution put forth in the manifesto.
We also understand the business cycle in a way that Marx didn't. It's not really his fault -- Capital is 150 years old -- but we have much better explanations of the business cycle, thanks to John Maynard Keynes. We now know that money and banking is central to the cycle, and that the government can act to ameliorate the cycle. The financial crisis of 2008 essentially recreated the starting conditions of the Great Depression, and even though the government response was far from optimal (there was lots of talk of "expansionary austerity"), we had nowhere near the disaster of the Great Depression.
We also understand economic growth better than Marx did. In Marx' day, the idea was that capitalists would steal from the workers to build factories, and then once this process was over the final crisis would hit. He did not know the endless march of technological advance that would follow. (To be fair, how could he? No one can see the future.) We know from Robert Solow's research on growth theory that most of the rise in output is not from building factories, but from technological advance.
Marx also didn't really understand the role of finance in the economy. Since capital can only come from worker exploitation, there's no role for savings or investment. You can see how the communist economies struggled with this. The only idea they had for funding development was expropriation, so they would just have the state do the expropriating. (This is the source of the criticism of the Soviet Union and Maoist China for being "state capitalist"). There's no role for people saving for the future. TIAA/CREF and the Norwegian wealth fund cannot exist. There's no role for investors trying to diversify risk. There's no role for entrepreneurs trying to raise money to fund future technological advance. That is why when China switched to capitalist development, it averaged 6% economic growth for like 50 years. Strikingly, they still teach Marx in schools in China, but they didn't become the world power they are today until they started ignoring him.
This is a bizarre claim. He absolutely predicted this, it was a huge focus of most of his work and is central the 'tendency for the rate of profit to fall'. It is also one of the essential parts of how surplus value is extracted. The common notion is simply that factory workers get paid less than the value of their labor but this is only a part of how surplus value is taken. Capitalist also do this by raising the quality of life but at a slightly slower rate the efficiencies that they benefit from in the production process, allowing them the extract surplus value through both consumption and production.
So much of Capital and Grundrisse is about the relationship between technology and capital its hard to imagine that you have even passing understanding of Marx and can make a comment like that.
> Marx also didn't really understand the role of finance in the economy.
Another very strange claim since a good amount of Capital vol. 3 deals with "Fictitious capital" and Marx is quite aware of the increasing role that finance will play in the resolution of periodic crises.
> So the central prediction of Marx has failed to come to pass.
With the increasing instability of our global financial system I think a few years time you'll revisit some of the claims of yours with a bit more skepticism
He didn't predict it. He predicted capital accumulation. The tight relation between technology and capital in Capital is exactly the mistake he's making. You can't explain the increase in output in terms of capital. This is the fundamental insight of Solow's research. With technological advance, the output of the economy becomes larger for the same inputs.
Marx had heard of finance, since it existed by the time he was writing, but he didn't understand it. Otherwise he would have understood that profits do not exist solely because of exploitation. People have time preferences, and risk preferences. People would rather get paid today, and would rather avoid risk. Thus, profits are required to fund projects with long-dated payoffs, or are risky. Take away those profits, and you see those projects go largely unfunded. That's why the China that took Marx' advice was one of the poorest in the world, and the China that ignored his advice makes up 15% of world output.
The instability of the global financial system is overrated. Look how easily the Fed stepped in this summer and stabilized financial markets.
But I'm not sure we can talk about a central point in Capital. Capital is a description of a system based on private commodity production, for exchange. It has many points, and one of them is the one you mention about the inevitable replacement of the capitalist mode of production with communism, and it comes at the end of Vol 1. Funnily enough, I believe it's the only point he asserts without arguments, and it's, as we know, thoroughly wrong.
If I had to highlight one important point from Capital, I think Marx's explanation for why the mass poverty of workers is an inescapable necessity for the capitalist mode of production would get my vote (chapters 4, 5, 6 of volume 1). It's an argument he was the first to develop, and that many people still refuse to acknowledge.
You are very right to point out that Capital does indeed predict many phenomena that we see today. In general, Capital holds up as a description of how the capitalist mode of production works.
My main concern has always been fairness. I might be a Rawlsian. Not inequity or egalitarianism stuff, like most lefties, but fairness.
I blame this on being raised in a liberal Christian church and the Beatitudes. And sibling rivalry. Because I need things to be very simple, I somehow landed on:
- Help people help themselves.
- Help those who cannot help themselves.
Note that I don't focus on merit, worthiness, guilt, blame, punishment, and so forth. While all very important, those are someone else's problems. In my upbringing, it was god's job to pass judgement, not mine. So I'm content to mitigate cheating and freeloading.
One derivation of my "help each other" ruleset is we have a shared responsibility.
Not the notion of personal responsibility from the conservatives. And not the notion of equal rights from the liberals. I have no quarrel with either of those beliefs; they're both good and true. I just think "shared responsibility" resolves the paradox, is more fundamental.
I see shared responsibility as the most effective way to achieve my half-baked notions of libertarian and anarchist styled maximal personal freedom. We can't just cut people loose. We're all stuck on this rock together. So we have to figure out how to bring the least of us (Beatitudes FTW) on the journey. (Goldblatt's theory of constraints also applies here.)
--
I have a geek's game theoretic worldview of stuff like capitalism, democracy, competition, markets, taxes, etc. They're just clever algorithms for tackling optimization problems. Slice and dice and recombine them as needed to best attain desired social and civil outcomes.
I was learning and applying (professionally) optimization and voting systems around the same time (1990s). Many eurekas. Bee colony optimization (for example) and group decision making (using approval voting, for example) are both part of a whole.
So that's about it. My views on politics, economy, collective action all come from my half-baked notions of fairness and figuring out how to best help each other. Confusingly, my advice for action changes as circumstances change, because the problem space is always changing.