Further Reflections on Yanis Varoufakis’s ‘Erratic’ Marxism

Karel Ludenhoff

Karel Ludenhoff continues the discussion on Greek finance minister Yanis Varoufakis’s relation to Marx and ‘Marxism’ – Editors

marx-als-prometheus-1843Yanis Varoufakis’s article in the Guardian, February 18, 2015 should be required reading for anyone trying to make sense of the present historic moment and the contradictions in Syriza’s “erratic Marxism”. In this essay, based on a lecture he gave in 2013, Varoufakis writes,

“If this means that it is we, the suitable erratic Marxists, who must try to save European capitalism from itself, so be it. Not out of love for European capitalism, for the eurozone, for Brussels, or for the European Central Bank, but just because we want to minimise the unnecessary human toll from this crisis.”

Varoufakis draws on his interpretation of Marx’s theory, as well as his experiences with Marxist movements and thinking, and his experience of the Thatcher era and the present situation in Greece. Before discussing his interpretation of Marx’s theory, we should note that he reduces the crisis to a European phenomena and does not include in his view the situation of world capitalism, except when perhaps, giving a hint, he says that “…most commentators [who] fail to appreciate the dialectical process under their nose” regarding the European crisis, the crisis in the USA and the long- term stagnation in Japan.

Let us see how he interprets some essential notions of Marx. I select only a few examples.


  1. Critical social theory of capitalist society.

When he is talking about the two approaches critical social theorists of capitalist society can take, Varoufakis differentiates between 1) an approach which accepts the assumptions of the mainstream theory whilst demonstrating its inconsistencies/ contradictions in real world developments and, 2) the approach aimed at constructing an alternative theory to the established theories. Varoufakis thinks the first approach is the best and claims that Marx favoured it too by accepting every axiom of Adam Smith and David Ricardo in order to demonstrate that in the context of their assumptions capitalism was a contradictory system.

To begin with, we can see that whereas Varoufakis is splitting up the two approaches, Marx considered both ways to be possible at the same time (and we can add that this possibility applies to our own time). Secondly, Varoufakis reduces his notions about Marx in this essay mainly to economics. Thus his summary of Marx as “The man who equipped us with human freedom as a first order economic concept…”

But we know that Marx concerned himself with much more than economics. In criticising political economy — and out of this criticism capitalist society itself and its ideological theories — he focused on all aspects of human liberation.

In Marx’s view, capitalist society is indeed a contradictory system. But he did not come to this conclusion by accepting every axiom of Smith and Ricardo as Varoufakis is saying; rather, Marx was criticising their assumptions as bourgeois, ahistorical and naturalised.

Only a reading of the first chapter of Capital, Volume I, especially the fetishism part, will suffice to show Marx’s totally different assumptions and method of analysis as compared to Smith and Ricardo. Marx’s notion of the contradictory nature of capitalist society becomes clearer when we turn to how Varoufakis interprets Marx’s notion of the irrationality of capitalist society.


  1. The irrationality of capitalist society.

In talking about freedom, rationality, justice and inequality in capitalism Varoufakis states that Marx, being adamant about the nature of capitalism, was saying the problem with capitalism is not that is unfair but that it is irrational, as it habitually condemns whole generations to deprivation and unemployment and even turns capitalists into angst-ridden automata, etc. Capitalist society, indeed, is irrational in Marx’s view. But it is not irrational because it condemns whole generations to deprivation and unemployment, etc. These phenomena are expressions of an inhuman society. Capitalists and their ideologists and pundits are not interested in deprivation, unemployment and the misery of people. They are only interested in profit. Capitalist society is irrational in Marx’s view because it is a system which itself produces its own conditions of supersession.


  1. Dialectics, determination and mathematics in Marx

In his essay Varoufakis writes about the dialectic in Marx:

“Marx erected a narrative populated by workers, capitalists, officials and scientists who were history’s dramatis personae. They struggled to harness reason and science in the context of empowering humanity while, contrary to their intentions, unleashing demonic forces that usurped and subverted their own freedom and humanity.”

Note that in the picture he conjuers up here of “unleashing demonic forces” he also is referring to the situation in Greece today. Varoufakis takes note of:

“This dialectical perspective, where everything is pregnant with its opposite, and the eager eye with which Marx discerned the potential for change in what seemed to be the most unchanging of social structures, …”

Next, Varoufakis writes that the commentators on the crisis in Europe, the USA, and the long-term stagnation in Japan “… recognise the mountain of debts and banking losses but neglect the opposite side of the same coin: the mountain of idle savings that are ‘frozen’ by fear and thus fail to convert into productive investments.” And he adds: “A Marxist alertness to binary oppositions might have opened their eyes.”

First, we can remark that mainstream commentators cannot see these so called binary oppositions or contradictions, because Marx’s dialectic is not class neutral and they have another class position. Secondly, capitalists are only investing with regard to how they think they might to be able to make a profit. So, I think it will be a difficult task, if not an illusion, to say as Varoufakis does in regard to Europe “…to put forward an analysis of the current state of play that non-Marxist, well meaning Europeans who have been lured by the sirens of neo liberalism, find insightful”. Thirdly, and very importantly, Varoufakis says the following about determination in the theory of Marx:

“Alas, that recognition would be tantamount to accepting that his ‘laws’ were not immutable. He [Marx] would have to concede to competing voices in the trades union movement that his theory was indeterminate…”

And in another statement Varoufakis speaks of:

“…; the scholar [Marx] who elevated radical indeterminacy to its rightful place within political economy; …”

He comes to these statements after writing that he has no doubt that Marx was aware “that a proper economic theory must respect the idea that the rules of the undetermined are themselves undetermined.” Then there follows a sentence which we should read with all scrutiny:

“In economic terms this meant a recognition that the market power, and thus the profitability, of capitalists was not necessarily reducible to their capacity to extract labour from employees: that some capitalists can extract more from a given pool of labour or from a given community of consumers for reasons that are external to Marx’s own theory.”

Nothing is further from the truth. The notion of surplus value, as we know, is basic for Marx’s theory of profit. That some capitalists are taking in more profit than others with a given pool of labour, or from a given community of consumers, is explained by Marx with his theory of prices (production prices and market prices). His price theory is compatible with his theory of value. So we have here to do with phenomena which are not external to Marx’s theory, but which we have to work out for today!

I would like to add a few words on Marx’s mathematics and dialectics. I am not an expert in mathematics and refer the interested reader to Guglielmo Carchedi’s Behind and Beyond the Crisis (Appendix three — p.283), which concludes about Marx’s mathematical manuscripts:

“…, the important question here is not whether and how Marx would have applied differential calculus to his economic theory. This is scarcely important. Rather, the point is that even though the Manuscripts do not deal with the relation between dialectics and differential calculus, Marx’s method of differentiation provides key insights into what was Marx’s dialectical view of reality.”

In this sense there is in Marx no question of a mathematical model out of which the truth about capitalism springs, but a dialectical use of mathematics to get more of a grip on social reality. So, we do not need to talk about a “more sinister error” of Marx and we can conceive of Marx’s mathematical method as part of his dialectics which is, contrary to what Varoufakis is saying, quite different to the way the vulgar economists use mathematics.


  1. Labour

Varoufakis talks about “commodifying labour,” but it is not clear what he means by this term and why he does not use Marx’s concepts of abstract labour and concrete labour. In one place he writes about how “…prospective employees go through the wringer in an anxious attempt to commodify their labour power, to write and rewrite their CV’s in order to portray themselves as purveyors of quantifiable units.”

Elsewhere he states:

“… the greater capitalism’s success in turning labour into a commodity the less the value of each unit of output it generates, the lower the profit rate and, ultimately, the nearer the next recession of the economy as system”.

How do both statements relate to each other? In contrast to Varoufakis’s interpretation, Marx, in formulating the law of the tendential fall in the rate of profit, states that the greater the constant part of capital is in relation to the variable part of capital (growth of organic and value composition of capital), the less the value in every unit of output.

Varoufakis writes that the Thatcher era had a big influence on him as to radical proposals for the situation in Greece. The lesson learned by him from that period is that he now has to confess his “sin of choosing not to propose radical political programs that seek to exploit the crisis as an opportunity to overthrow European capitalism, etc.”

And for today, for the situation in Greece, he says explicitly:

“What good will it do today to call for a dismantling of the eurozone, of the European Union itself, when European capitalism is doing its utmost to undermine the eurozone, the European Union, indeed itself?”

This notion is reminiscent of the theory of “Capital as an Automatic Subject,” as if capital itself will destroy capitalist society instead of a revolutionary subject.

See: http://www.internationalmarxisthumanist.org/articles/marx-capitalism-automatic-subject-karel-ludenhoff

(Editor’s note: See also http://www.internationalmarxisthumanist.org/articles/syrizas-stormy-greek-spring-buying-time-saving-capitalism-david-black )



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