The monetisation of human activities and relations, and the consequential alienation of the workers from fruits of his/her labour have resulted, in the words of Marx, to a situation which “leaves no other nexus between man and man than naked self-interest, and callous cash payment.” Capitalism, Marx posited, leaves society “mired in the icy water of egotistical calculation.”

I READ two articles on the current global economic and financial crisis, both of which provided perspectives that are not only dissimilar but in some ways diametrically opposed to each other. I thought of sharing these perspectives if only to provide some intellectual stimulation.

The first article captioned “Thoroughly Modern Marx” written by Leo Panitch, a research professor of political science at York University, Toronto, saw the crisis as a manifestation of the ‘contradictions’ inherent in a world characterised by competitive markets, commodity production and financial speculation.

This view is consistent with that of the Marxist paradigm which likened unregulated market forces to that of a “sorcerer who is no longer able to control the powers of the netherworld whom he has called up by his spells”. (Karl Marx: Manifesto of the Communist Party).

According to the writer, Marx were he alive today, would have felt vindicated in his thesis that capitalism by its very nature would lead to crisis situation, ultimately leading to its own demise.

He would have seen for example, how modern developments in finance, such as securitisation of derivatives, have allowed markets to diversify and spread the risks of global economic integration. Without these innovations, capital accumulation over the previous decades would have been significantly lower.

The same would have been true had it not been for the fact that finance has been penetrating deeper and deeper into society. One consequence of this penetration is that consumer demand, and hence prosperity has depended more and more on credit cards and mortgage debt, which coupled with the weakened power of trade unions and cutbacks in social welfare have rendered the working people more vulnerable to market shocks.

This leveraged, volatile global financial system, according Professor Panitch, contributed to overall economic growth in recent decades, but it also produced a series of inevitable financial bubbles, the most pronounced of which took place in the United States housing sector. The bubble’s subsequent bursting had a profound impact across the globe due mainly to its centrality in maintaining both U.S. consumer demand and international financial markets.

Despite the depth of the current financial and economic crisis, there is no immediate threat that capitalism, as a system of production and distribution is about to collapse.

Marx, for his part, had no illusions about the fact that capitalism is its own gravedigger in the sense that the socialisation of production would create its own internal dynamics which could ultimately lead to its own demise.

The monetisation of human activities and relations, and the consequential alienation of the workers from fruits of his/her labour have resulted, in the words of Marx, to a situation which “leaves no other nexus between man and man than naked self-interest, and callous cash payment.” Capitalism, Marx posited, leaves society “mired in the icy water of egotistical calculation.”

This perspective, contrasts sharply with that of Fareed Zakarai, in his article “The Capitalist Manifesto” (Newsweek, July 22, 2009) in which he argued that despite arguments to the contrary in a few years from now people will find out that what they in fact needed was “more capitalism, not less”.

According to Zakarai, the simple truth is that “with all its flaws, capitalism remains the most productive economic engine mankind has yet invented”. He cited China and India which, he said have been able to grow and pull millions of people out of poverty by supporting markets and free trade.

This may be true, but only to a point. The issue here is not more trade but fair trade. China, and to a lesser extent India, have in fact demonstrated some exceptionally high growth rates but these are in no way a vindication of the market forces at work.

In fact, the reverse may be closer to the truth. China’s ability to grow and in the process lift millions of its people out of poverty is due more to the controls placed by the authorities to regulate the market and in the process to ensure that there is no significant disequilibrium between production and consumer demand.

The same can be said with respect to checks and balances in the financial markets in both China and India which have emerged from the crisis relatively unscathed.

Capitalism may have some strength in terms of profit-optimisation when compared to state-managed and controlled entities.

After all, the main emphasis under capitalism is profits and not people and their well-being.

State-controlled entities under a pro-labour administration is more concerned with a more equitable distribution of whatever surplus is being generated in order to foster the greater good of society as a whole as opposed to the satisfaction of individual needs under a capitalistic production mode.

This is why the laws of capitalist production and the mode of distribution of surpluses generated from human labour sets it in a confrontational path with the true producers of wealth, namely the working people.

If there is one thing that remains unchallenged, it is that capitalism has failed to address the sufferings of humanity. If anything, the gap between the rich and the poor is getting wider and wider.

What is needed is a more enlightened system which puts people at the centre of all production activities and not just a handful of people who enjoy a parasitic existence at the expense of the labouring class.