The Left is still rehashing mumbo-jumbo from Karl Marx

No mention of Marx’s racism of course. But the real problem is that Marx just didn’t understand economics

Buried in Highgate Cemetery, London
Charles Crawford
On 1 April 2012 13:22

Over at the London Review of Books is a flawed but interesting article by writer John Lanchester who blows the dust off Karl Marx’s coffin and looks at how far Marx's predictions about society have been borne out.

Of course, Lanchester leaves out the very best bits of Marxist analysis, such as his description of poor people: “… the “dangerous class”, the social scum, that passively rotting mass thrown off by thelowest layers of the old society…”

Not to forget another great Marxist contribution to world thought in his letter to Engels in July 1862, namely the idea of the "Jew Nigger":

“It is now perfectly clear to me that, as the shape of his head and the growth of his hair indicates, he is descended from Negroes who joined Moses' flight from Egypt (unless his mother or grandmother on the father's side was crossed with a nigger). This union of Jew and German on a Negro base was bound to produce an extraordinary hybrid.”

These robust Marxist insights are best not shared with the delicate readers of the London Review of Books, so John Lanchester instead looks at Marx’s ideas about capitalism which he describes as "extraordinarily prescient ... the most astonishing insight into the nature and trajectory and direction of capitalism”.  Although as Lanchester himself points out, the word "capitalism” itself scarcely appears in Das Kapital.

Read the whole piece. It is long and discursive and ends up in mainly the right place, namely that the extraordinarily prescient Marx was wrong in most key respects: "capitalism" and market processes have been overwhelmingly beneficial.

What caught my eye, however, were the passages where Lanchester looks at the Marxist concept of "Surplus Value", an idea he finds impressive and unexpectedly relevant – especially at airports:

“… there is a gap between what the labourer sells his labour for, and the price the employer gets for the commodity, and that difference is the money which accumulates to the employer and which Marx called surplus value. In Marx’s judgment surplus value is the entire basis of capitalism: all value in capitalism is the surplus value created by labour…And in examining that question he creates a model which allows us to see deeply into the structure of the world, and see the labour hidden in the things all around us. He makes labour legible in objects and relationships.

"When you start looking for this mechanism at work in the contemporary world you see it everywhere, often in the form of surplus value being created by you, the customer or client of a company. Online check-in and bag drop at airports, for example … what the airlines do is employ so few people to supervise the bag drop-off that there’s no time-saving at all for the customer … They’re transferring their inefficiency to the customer, but what they’re also doing is transferring the labour to you and accumulating the surplus value themselves.

It happens over and over again. Every time you deal with a phone menu or interactive voicemail service, you’re donating your surplus value to the people you’re dealing with. Marx’s model is constantly asking us to see the labour encoded in the things and transactions all around us."

To which the one and correct answer is: drivel!

The other day I flew to Prague. Expedia charged me £345.10 for the round trip of 1300 miles, of which £93.10 were ‘taxes and fees’. So the airline got from me a puny £252. Given that it now approaches £100 to fill a car with petrol in the UK, the fact that the airline can offer this fare and still hope to make any money at all as “profit” is a staggering technical - and moral - achievement.

True, if you want to trivialise the argument you can say that some customers who wish to check in a bag may not save much time. But it’s also true that those with only hand luggage who have checked-in online (and had the added benefit of some extra seat choice) can walk straight through.

What is happening here? It is because the airline has trimmed labour costs for e.g. checking-in that customers get an “undeserved” windfall benefit of lower prices and all sorts of new flight options to new destinations. Compared to that advantage, the airline has not saved or appropriated customers’ surplus value in any sense that is morally or economically significant.

In other words, the very fact of the open market compels a constant struggle at the margins to add value to customers while maintaining some profit to businesses. This is the driver for the innovation and spectacular advances in knowledge that Lanchester rightly praises:

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