On February 11 I posted a link to a David Harvey article regarding the likely failure of the stimulus package to recover the U.S. economy. Interestingly, prominent neoliberal economist/blogger Brad DeLong (often cited by Matthew Yglesias) responded to Harvey in a less than charitable manner. David Harvey responds back by questioning DeLong’s usage of neoclassical economic theory, with DeLong responding back (again) by arguing that Marxism is “objectively-reactionary,” and apparently theological (a claim I actually would embrace), while unironically citing (economist) Joan Robinson:

[Keynesian success provides] the strongest argument against socialist critics. “You used to complain… with… justification, that a capitalist system that permits heavy and chronic unemployment is indefensible. Now we offer you capitalism with a high and stable level of employment.”… Marxist critics have understood that Keynes’ theory leads to conclusions which from their point of view are reactionary. They therefore deny the logic of [Keynes’s] analysis… [make] alliance with the protagonists of the humbug of finance…. Professor Baran… bring[s] in the quantity theory to show that [Keynesian fiscal polices] cannot work because government expenditure causes inflation. This is another example of confusion between logic and ideology. Because Keynes has shown a way for the capitalist system to remove its most obvious defect, he is a reactionary and therefore his theory is false. But if [Keynes’s] theory were false it would be quite harmless…. [It is that] the diagnosis was correct, the treatment… work[s], and the life of the patient is being prolonged [that is so] disconcerting [to the Marxist] would-be heirs…

Rather than reinventing the wheel, commenter “hartal,” like the majority of the commenters on DeLong’s post (who surprisingly have criticized DeLong—the Keynesian—rather than Harvey—the Marxist) makes my point for me:

Professor DeLong’s citation of Joan Robinson is especially inapt. She exudes the confidence, shared by Paul Samuelson, that Keynesian policies had conquered the business cycle. But this passage was written in the early 60s, if I remember correctly. And the Keynesian hubris would go up in stagflationary ashes a decade later. Also note that where Paul Baran (and Maurice Dobb) thought that monopoly power would turn government deficit spending into inflation rather than employment generation—and that does not seem to be a prima facie crazy explanation of what did happen in the 1970s— it’s possible today that the deleveraging of the financial system will dwarf the effects of the what may prove to be a puny stimulus.

DeLong has dug himself too deep with his bombastic rhetoric to realize that he’s wrong, but on the other hand I think—as an avowed Marxist—that Harvey is too quick to reject neoclassical economics (based on the nebulous outcome of the Cambridge capital controversy), namely if we put aside the ridiculous and discredited claims based off of equilibrium theory, derived as it is from long-out-dated Newtonian principles. Following Kojin Karatani’s analysis, who I think is spot on here, the neoclassical critique of Ricardo is crucial to grasp Marx’s “transcendental” standpoint towards value. Marxian political economy, as opposed to Ricardian political economy, does not see value as an “objective” feature of a commodity (Marx is often wrongly conflated with Ricardo on this point, which allows most neoclassical economists to completely disregard Marxian analyses of value and surplus-value). Rather, Marx drew on Samuel Bailey, who argued that value only exists qua use-value, i.e. marginally, by bracketing and oscillating between Bailey and Ricardo, argued that value exists transcendentally, that is, as the product of a relational system of value, i.e. through the process of exchange between differential systems of capital (the spatial plurality of capitals). Consequently, Marx’s notion of surplus-value is different than Ricardo’s rationalist/objective view of surplus-value, precisely because for Marx labour-power does not generate value, but rather the other way around: that value transcendentally determines what is socially necessary (labour-time). The surplus emerges in the spatial-temporal circulation of commodities in the process of exchange (M-C-M’), either through the lengthening of the working-day (absolute surplus-value) or through technological innovation (relative and temporal surplus-value).

This is why Harvey’s emphasis on geopolitics, viz. geography, and its role in the wake of the financial disaster (a feature of the long-term, as opposed to short-term, trade cycle) is absolutely crucial, despite his dismissal of the neoclassical critique of Ricardian economy (a critique which has to be understood in order to understand Marx’s trans-critical position). Again, though, I’m not so sure I would follow Harvey here in arguing that the economic disturbances translate into political reconfigurations (although his claim, here, is certainly measured, despite DeLong’s absurd remarks to the contrary). Following Zizek, we should claim as Marxists, paraphrasing a famous Lacanian dictum, “there is no relationship between the economy and politics.” Because the economy structures not only the order of things, that is, commodities, but always already social relations (between people), it is hard to say, beyond the analysis of the limits of capitalism, what can and can’t occur in the political realm, i.e. regardless of whether the Keynesian plan succeeds, whether the revolutionary Left or neo-fascism will prevail in any serious way.

On the other hand, we can say with a definitive degree of certainty that the moment of crisis, like all crises in capitalism, allows and necessitates radical structural reconfiguration of the economy (although still limited to capitalism, obviously). In that sense, I would not be at all surprised if the old “industrial” aesthetical-economical configuration of the “modern” economy shifts towards the post-modern/ecology-friendly aesthetical-economical configuration, which, sans trade cycle, would be an impossible shift to make. One can already discern this at the level of government funding for “green-friendly” architecture, automobiles (shifting away, at least incrementally, from gasoline/petrol-based fuel), etc., as well as shifting towards green-energy in general through carbon-taxes. Again, these are mostly piecemeal measures, but the important point to grasp is that they represent technological innovation, the essence of relative surplus-value, which is how the system will regenerate itself until the next necessary crisis.