Was Marx Really Wrong About This? Or, What Brad DeLong Seems to Have Gotten Wrong

Brad DeLong has hoisted from his archives a post from May Day, 20013, about what Karl Marx got right and wrong.  It is, in many ways, DeLong at his best.  He has clearly read Marx carefully, and sympathetically, but without illusions.  Unfortunately, sometimes the world conspires against you.  One of the things he does is discuss three things he thinks Mark got wrong.  Here's the third of those:

Marx believed that the capitalist market economy was incapable of delivering an acceptable distribution of income for anything but the briefest of historical intervals. As best as I can see, he was pushed to that position by watching the French Second Republic of 1848-1851, where the ruling class comes to prefer a charismatic mountebank for a dictator--"Napoleon III"--over a democracy because dictatorship promises to safeguard their property in a way that democracy will not. Hence Marx saw political democracy as only surviving for as long as the rulers could pull the wool over the workers' eyes, and then collapsing. I think that Western Europe over the past fifty years serves as a significant counterexample. It may be difficult to maintain a democratic capitalist market system with an acceptable distribution of income. But "incapable" is surely too strong. Beveridgism or Myrdalism--social democracy, progressive income taxes, a very large and well-established safety net, public education to a high standard, channels for upward mobility, and all the panoply of the twentieth-century social- democratic mixed-economy democratic state can banish all Marx’s fears that capitalist prosperity must be accompanied by great inequality and great misery.

I want to suggest, gently, that the events of the last 18 to 24  months call into question DeLong's optimism here, three specific events that suggest an alternative, less optimistic conclusion.

First, there is the intellectual challenge to the question of whether a" capitalist market economy" can "deliver...an acceptable distribution of income for anything but the briefest of historical intervals."  Thomas Piketty's Capitalism in the Twenty-First Century raises that very question, and Piketty concludes that the great leveling that occurred in (call it) the middle third of the 20th century was the exception.  Obviously not everyone agrees with Piketty, but he has raised a serious set of questions about the long-term level of (in)equality in capitalist economies.

The second challenge is Brexit and the wider emergence in Europe of challenges to the idea of a united Europe.  The rise of nationalist, exclusionary, racist/fascist political movements across the continent, and the rejection, if only by a narrow margin, by British voters of Britain's membership in the economic union--in large part because of fears of the "open borders" approach to the movement of people within the union, suggest that the "democratic mixed-economy democratic state" is itself under attack in Europe.

Third, of course, is the even more open attack on the democratic state that seems to me to underlie the election of a preening, bigoted, grasping plutocrat as president of the United States.  Again, we see the xenophobia, the desire for closed borders.  We see the cynical use of real failures of government (and of economists, who forgot that potential Pareto improvements might mean a very large number of people being made worse off) to maintain and sustain a "large, well-established safety net, public education to a high standard, [and] channels for upward mobility."  That use of these failures is to divide people by class, ethnicity, and gender, and use those divisions to enrich the richest members of the society.

It's possible to feel a lot more sympathy for Marx's position, if not for his analysis of  how we got there and how we can escape, than DeLong (and, to be honest, I) felt three and a half years ago.