May Day is a good day to recommend the book I finished reading last weekend, Meghnad Desai’s Marx’s Revenge. It’s a vigorous, reliable and entertaining account of the fortunes of capitalism and its major theorists from Adam Smith to more or less the present. Desai’s Marx emphasizes the dynamism of capitalist accumulation and the flexibility of market mechanisms. Marx’s role as the best student and chief critic of classical political economy is brought out well. Being a student means you share a lot with your teachers, something that’s often lost in presentations of Marx’s ideas.

There are three main themes. The first, and the main pitch of the book, is that “if it came to a choice between whether the Market or the State should rule the economy, the modern libertarians would be shocked as much as the modern socialists to find Marx on the side of the Market.” Desai gives a good account of Marx in this regard. The second follows variants of socialism: “socialism outside capitalism,” with its horrible failures and peaceful end; “socialism within captialism” (i.e., social democracy), which had its golden age from 1948-73 and was ultimately destabilized by the rise of globalized capital and the resurgence of classical liberalism; and “socialism beyond capitalism” which is still the same vague utopia it ever was, and nothing in Marx’s mature political economy should lead us to expect otherwise. Third, Desai threads his way through the main efforts to understand captialism and in the process delivers some sharp readings of the major players—Hayek, Polanyi, Schumpeter, Keynes—and informative accounts of scholastic (but important) episodes like the socialist calculation debate. It’s all done with considerable brio.

Desai suggests that there are “three competing visions of the global financial market.”

The first is a classical liberal/Marxian view: cycles are endemic to capitalism, but they are also self-correcting and self-sustaining … Marx subscribes to this view but he also emphasizes the self-destructive capacity of the system… Hayek and the neo-Austrians highlight the spontaneity of the underlying order.

A diametrically opposed view is that the market is subject to frequent failures and may crash if not governed properly. Memories of the Great Depression colour this view … Polanyi is the spirit behind this vision.

In the middle is a vision which asserts that the system is normally, and usually, self-regulating but has an occasional tendency to go haywire… The action of the US Federal Bank in the autumn of 1998 was an example of such effective intervention … The person most associated with such a vision would be Keynes.

“There is no reason to believe,” Desai comments, “that any one is the correct one” all the time. Perhaps the first mode most of the time; the third on occasion; and really only once—during the 1930s—the second.

The end of the book brings us up to the “ideological tidal wave” of neoliberalism and, thus, “Marx’s revenge” of the title. (Marx’s revenge is on the Marxists, by the way.) Monetarism and the first wave of privatizations in the ’70s and ’80s were

midwife to the much more deep-seated change which came in its wake: the revival on nineteenth-century liberal beliefs. They are now being labelled libertarian, but they are basically the set of ideas that all nineteenth-century thinkers—Left and Right—espoused. The basic notion is civil society (the market, as well as larger society) as an organic process which is a result of human action, but not of human design. Thus, no one single agency, or even a handful of conspiring institutions, is responsible for the course of events which unfolds every day. Marx does not blame monopoly capitalists; he talks of a class monopoly of ownership. Even capitalists only seek to make profit and accumulate. They do not control the market, nor can they overcome competition.