The end of the end of history: what have we learned so far?

 Wars are the most horrible events. They should never happen. The entire human effort should be directed toward making wars impossible. Not just illegal, but impossible, in the sense that no-one would be either able or have incentive to start them.

But we are, unfortunately, not there yet. The humankind has not evolved that far. We are now in the midst of a war that may become a very murderous war.

Wars are also an opportunity  (however cold-hearted this might seem) to reassess our priors. Things are suddenly thrown into a much sharper focus. Our beliefs are transformed into illusions. The nostrums become meaningless. We have to deal with the world as it is, not with the world we imagined until a day before.

So, what have we learned after one week of the Ukraine-Russia war? I will try not to speculate about the outcome. Nobody knows it. It can end with the occupation and subjugation of Ukraine, or it can end with the break-up of Russia. And everything in between. Neither I, nor the reader, nor Putin, nor Biden know it. So I will not speculate on it.

But what do we seem to have learned so far?

1. Power of oligarchy. The power of oligarchy when it encounters le raison d’état is limited. We tended to believe that Russia, being an oligarchic capitalist economy, is also one where the rich decisively influence policy. Perhaps that in many everyday decisions that is the case. (I do not have in mind here the oligarchs who live in London and New York, but those who live in Moscow and St Petersburg and who may be also heads or large shareholders of powerful private and semi-state-owned companies.) But when the matters of state are serious, for the organized power, that is, the state, oligarchy is no match. The threat of sanctions, so visibly displayed and trumpeted by the US weeks before the war started, might have influenced Russian oligarchs to move their yachts as far as possible from US jurisdiction, or to engage in fire-sales of their property, but it made no difference to Vladimir Putin’s decision to go to war.

Nor did all the buying of influence by the rich Russians among the Tories in the UK or both political parties in the US matter. Neither did the “sanctity of private property” on which the United States was created (and which so much attracted  the oligarchs to move their stolen wealth there in the first place). The US proceeded to probably the largest inter-state transfer of wealth in history. It is the equivalent of Henry VIII’s seizure of church lands. While we have seen such gigantic confiscations within countries (the French and Russian revolutions) we have never seen it, in one fell swoop, in 24 hours, between the countries.

2. Financial fragmentation. The corollary of this point is that extremely rich people are no longer safe from political forces—even if they change citizenship, contribute to political campaigns, or dedicate a wing of a museum. They can fall victim to geopolitics they do not control and which are much beyond their remit—and at times beyond their understanding. To remain excessively rich would require more than ever political nous. Whether the globally rich will interpret this confiscation to mean that they must more seriously than ever capture the machinery of the state, or they interpret it to mean that they should find other new havens for their investments is impossible to tell. Most likely it will lead to the fragmentation of financial globalization and to the creation of new and alternative financial centers, probably in Asia. Where will they be? I think the strong candidates are the democratic countries with a degree of judicial independence, but also enjoying sufficient international political clout and margin of maneuver not to yield to the pressure of the US, Europe or China. Bombay, Djakarta come to mind.

3. The end of the end of history. We—or at least some people--tended to believe that the “end of history” meant not only that the ultimate political and economic system was discovered in one night in November of 1989, but that the old-fashioned tools of international struggles will not reappear. The latter was shown wrong several times already, from Iraq and Afghanistan to Libya. A more brutal demonstration is in the process of being executed right now where borders are being redrawn using the instruments that the world has practiced for 5,000 years of recorded history but that were thought obsolete.

The current war displays to us that the complexity of the world, its cultural and historical “baggage”, is great and that the idea that one type of system will eventually be embraced by all is a delusion. It is a delusion whose consequences are bloody. To have peace, we need to learn to live while accepting differences. These differences are not trivial differences that go under the current title of being open to variety, in way we dress, in our sexual preferences or the food we eat. The differences we need to accept, and to live with, are much more fundamental and they relate to the way societies function, what they believe in, and what they think is the source of legitimacy of their governments. That of course can change in the course of time for any one given society, as it did many times in the past. But at a given point, it will differ from country to country, from region to region, from religion to religion. To assume that everyone  who is not “like us” is somehow deficient, or not aware that they would be better off being “like us” will –if we maintain this flawed belief—remain the source of endless wars.  

 

How modern bombings look: The bombing of Belgrade in 1999

 The Russian bombing of Kiev brought back very painful memories of a similar bombing of Belgrade (1.5 million people) by NATO forces in the Spring of 1999. I was not then in Belgrade and I watched the bombing, as long as I was able mentally to do so, on US evening news. I noticed that while watching I almost had no feelings: seeing streets and houses which I knew well, including the building where I lived and where I still have an apartment, getting suddenly lit by the flame from the nearby explosions left me almost numb—as if my mind migrated somewhere else. The bombing lasted 78 days. I think I stopped watching the news after a couple of days. That whole period is just a blur for me. (I could not watch the much more brutal bombing of Baghdad in 2003, nor can I watch now the bombing of Kiev.)

Many of my family and friends were in Belgrade during these 78 days. There are several interesting experiences that are useful to share about high-precision bombing as was practiced at the end of the 20^thcentury. NATO bombing was always conducted at night. The planes flew at high attitude at which the Serbian air defense could not reach them. Only one US plane was brought down (the pilot catapulted) out of probably hundreds of sorties that were made. Most of the sorties were from an air base in Italy, eponymously called Aviano, but some planes flew ten or more hours from US bases, just to bomb for a hour or so and then fly back to the US.

At first,  NATO thought that Serbia will surrender quickly (meaning that President Milosevic, the then autocratic even if democratically elected leader of Serbia, would withdraw the troops from Kosovo where they were engaged in, or about to start, conducting military operations and atrocities). So, at first NATO targeted only non-civilian objects, many of them empty: different ministries which were previously evacuated (especially Ministry of Defense and Ministry of Internal Affairs), the HQ of the General Staff, Milosevic’s personal residence, the building of Socialist (formerly Communist) party etc. They were all fully or largely destroyed. These were  ritualistic bombing because almost nobody was left in these building and  all documents were taken out or burned. The only exception was Milosevic’s residence where NATO did hope to catch him and kill him. (More on that later).

How did my family and friends react? They were not too scared and they also believed that the bombing would last only a few days. Three days, many thought. Some slept in the basements of large buildings, others in their bedrooms. A friend refused to ever move out of her bedroom as she believed that Americans were not going for civilian targets and were so precise that the only thing she feared was that the Serbian air defense might bring down a US bomber and the debris might fall on her building. A bit like Obelix.

Since the bombing was always at night (it was in the months of March, April, May and early June) life during the day was more or less normal. There were no shortages of essential goods. The sirens would blast at the sunset or later and then people would run to the shelters, or just head back home. The US weapon of choice was the smart Tomahawk cruise missile. A  friend told me that he watched it from his window fly several meters above the water for a kilometer (Belgrade lies on two rivers), make a turn exactly where the river bends and hit its target on the shore. Like in a video game.

But as the surrender was not forthcoming, NATO decided to up the ante. They began targeting thermal plants, factories, refineries (which led to frightful fires) etc. I was later working with a team that tried to assess the damage. It was difficult to do: do you use the accounting value of  destroyed factories or the net present value of future income? I think we came up with $25 billion. (I will try to find the booklet and get the correct number.)

Yet the surrender was still not forthcoming. So NATO then decided to invent what its inimitable spokesman, cynic and liar, the brother-in-untruth of Maria Zaharova,  Jamie Shea decided to call dual-use facilities. These are things that could be used for both civilian and military purposes, like,  for example, a bakery: it sells bread both to solders and to civilians. Things started getting ugly. In addition, NATO came up with the so-called carbon bombs which disable the system of electricity transmission (they accumulate on the wires) and thus leave the city entirely in darkness until things are fixed. This sometimes  took a whole day. But when there is no electricity, there is also no water in large apartment blocks, and when there is no water toilets do not function properly. Elevators also do not work. I had a friend who lived on the 20^th floor of an apartment building. He  almost never went out, to the ground: neighbors would organize teams of several young persons to buy bread, milk etc. and bring it up.

Belgrade was fortunate that the bridges on which the city depends were spared. Without them the city would have almost died. Every night, crazily brave groups of some 100-200 people would gather on the bridge, singing songs and expecting (but hoping not) to die. Luckily, it never happened. Apparently, French President Jacques Chirac refused to clear bridges as targets. However, in the second largest city in Serbia, Novi Sad, two bridges were destroyed.

NATO used cluster bombs and depleted uranium (both banned by international conventions to which the US is a signatory). Several kids were killed by cluster bombs. Depleted uranium has long-term effect on higher cancer rates (although  these finding are disputed by some). The effect of the depleted uranium was the greatest (because the delivery was the greatest) in Kosovo. But, since Kosovo’s  population saw the bombing as liberation, there was not much incentive to research later if bombing was linked to the increase in diseases. The overall civilian toll was between 1500 and 2000 deaths (less than a half of that in Belgrade).

When I talk (rarely) about this episode, people always ask me about the US bombing of the Chinese embassy. The embassy happens to be some 300 meters  from my apartment (as I said, I was not there then, but my friend was). She heard a powerful blast that broke many windows on the nearby buildings, but not hers. It killed three Chinese journalists, injured more. Was it a mistake or not? The ostensible ritualistic target was, according to the US, the Federal Office of Special Goods Exports (i.e. of arms exports). But that building is much bigger, has an entirely different shape, is two blocks away, and even the angle at which it sits is different. So I am skeptical. I think that the bombing was motivated by the stories that circulated –even I heard them—of Milosevic staying overnight in the Chinese embassy on the assumption that the Americans would not bomb a diplomatic compound. So I do not think it was an accident,                            

Of course, it was also the time when Novak Djokovic trained during the day only and in a swimming pool. This is often presented in the news as some funny story, but it was far from funny. As he himself has said, it has been a traumatic experience that had marked him for life.

War is not fun. It is not good in Belgrade. It was  not good for the victims of the Sarajevo siege shelled by Serbian forces; it was not fun in Kosovo. And it is not fun in Kiev today. I wish that some of those who decide to bomb cities spend some time being bombed themselves. Perhaps they would think twice about ordering such attacks. We should all hope that none of them ever happens again..

Putin’s Century of Betrayal speech

Vladimir Putin’s speech on 21 February 2022 at the occasion of the recognition of Donbas and Lugansk republics is one of the most extraordinary political speeches of the present time.  It consists of more than 6,000 words, and it was delivered over 55 minutes without the help of a single piece of paper or without a single hesitation. To the extent that one can judge there was no teleprompter either.

It is a speech that lays bare, and intends to do so, Putin’s own philosophy of history. It covers the past one hundred years of Russia’s history. It gives one, not unreasonable, but very narrow version of that history, where historical events with multiple causes and multiple meanings are simplified to a single cause and single meaning.

It is a form of “J’accuse” speech that tells, according to Putin, a story of a century of betrayals of Russia: by Communists, by Russia’s own elites, and by Russia’s pretended friends. It is thus best to divide the text into three parts, the three betrayals.

Betrayal by Bolsheviks

The speech takes the reader over exactly the past century, from 1922 when the Union of Soviet Socialist Republics was formed. (The only two episodes, prior to that period, are  a very brief mention of the 17^th century Russia, and the Brest-Litovsk peace agreement of 1918.  The latter was also seen as a Bolshevik betrayal.)  

The Soviet Union, as created in 1922, involved the formation of ethnically-based republics and granted to each republic the right of self-determination, up to, and including, the right to secession. Putin says: “Leninist, substantially confederal, state structure and the slogan about each nation’s right to self-determination up and including secession were built in the foundation of the Soviet state: at first, in 1922 they were included in the Declaration on the Creation of the Union of Soviet Social Republics, and then after Lenin’s death in 1924, in the USSR Constitution.”

This was the land-mine, as Putin will later claim, that was installed in the very act of  the USSR creation and that will later explode, destroying the union, and thus directly leading to the problems faced today. Why, Putin asks, “was it necessary to satisfy the endlessly increasing nationalist ambitions of different parts of the former [Russian] empire? Why giving them newly-formed, often arbitrarily created, huge administrative units –union republics—that often had nothing to do with them [titulary nations]? To repeat, giving them the territories together with the populations of the historic Russia.”

Even if Putin does not use the term, it was clearly a move that can be explained only by the anti-Russian sentiment of the Bolsheviks: a betrayal. Putin does not stop to think about the fact that the Russian revolution was the revolution of social and national emancipation, that it included the components of both equality between citizens and equality between peoples who were oppressed in the Czarist Russia. This is the reason why Bolsheviks had in their ranks so many representatives of various ethnicities, and why they –and Lenin in particular—insisted on the need to fight Great Russian chauvinism.

They created republics so that the nations of the former Empire might feel to have a real stake in the new socialist commonwealth, and originally they even thought that the entire world, as it became Communist, would be unified in a single Soviet Socialist republic (hence, no geographical terms in the name of the USSR). This idea of a single world-wide socialist republic where contradictions between different ethnicities are overcome explains the annexation of the Baltic republics in 1940 (as opposed to keeping them as allied states, as happened after 1945 in Eastern Europe) as well as both Yugoslav and, more importantly, Chinese Communists, after their successful revolutions, suggesting to unify their countries with the Soviet Union.

 “Again I ask myself: why was it necessary to make such generous gifts, which the most ardent nationalists had never even dreamed of before, and even give the republics the right to secede from the united state without any conditions?”  The answer is simple: it was not some special anti-Russian feeling that motivated the creation of the Soviet republics. It was due to the origin of the revolt against the Czardom and the vision of a new world of national equality.

Such broad accusations against the Bolsheviks, of having arbitrarily surrendered vast Russian territories, implicitly question the legitimacy of all republics, not only of Ukraine. In the speech of course, Ukraine is singled out by showing that it was cobbled together first by Lenin, then by Stalin who gave it some Polish, Rumanian and Hungarian territories at the end of the World War II, and finally by Khrushchev who “for whatever reason” gave Crimea. 

Betrayal by communist elites

What happened next? “…[T]he Red Terror and the rapid transition to the Stalinist dictatorship, the dominance of the Communist ideology and the Communist Party's monopoly on power, nationalization and the system of the planned national economy - all this in fact turned [the right to secession] into a simple declaration, into a formality, the declared, but non the working principle of the state system”  The right of the republics to self-determination and secession was just a dead letter so long as the Soviet Communist Party was strong and centralized. The initial 1922 damage did not manifest itself.

That, however, began to change in the 1980s with the deep crisis of the Soviet economy and society. The crisis stimulated growing “appetites of local elites. Each of these elites…in order to expand the base of support, began to mindlessly stimulate, encourage nationalist sentiments, play on them, promising their potential supporters whatever they wished”. Since the legitimacy of the Soviet rule collapsed, the new legitimacy was to be found in ethnic nationalism, and the right to secession was the perfect tool to realize such objectives. Here Putin is indeed on very strong grounds. This was the process that broke up not only the USSR, but also Yugoslavia and Czechoslovakia and created 23 or, if we include all the additional republics, 28 new states. It was the process foreshadowed by Hélène Carrère d’Encause in her “L’empire éclaté” and by   Wisla Suraska “How the Soviet Union Disappeared?” (reviewed here). But it is hard to see how the process was specifically anti-Russian. All elites, including Yeltsin's which brought Putin to power, played the same game, dressing themselves up in nationalist garb.

Thus, in 1989, the CPSU Plenum adopted, Putin quotes, such statements as: “To the Union Republics belong all the rights, reflecting their status of sovereign socialist states” and "The highest representative authorities of the union republics may protest and suspend the operation of resolutions and orders of the union government on their territory." The break-up of the USSR was then only a matter of time. That break-up and the creation of newly independent states was not accomplished by nationalist leaders, Putin says, who now, especially in Ukraine, claim this but “[t]he break up of our country was brought by the historical and strategic mistakes of Bolshevik leaders, and the leadership of the Communist Party of the USSR.”

That was the second betrayal.

Betrayal by the USA

Russia, says Putin, accepted such uneven and unfair outcome and behaved toward the new republics in the spirit of friendship. Putin here lists, with respect to Ukraine, a number of “good deeds” done by Russia including massive subsidies between 1991 and 2013, estimated at $250 billion, payment of all Ukrainian debts (accrued under the Soviet Union), etc. This took place despite Ukraine’s constant attempts to cheat Russia (“banal stealing of gas”) and not to respect the undertaken commitments (to return some of Soviet assets that were allocated to Russia).

Russia also wanted to establish cordial relations of friendship with the United States. In 2000, Putin, in a detail that he says he publicly mentions only now, asked Bill Clinton how would US react if Russia asked to join NATO. He was, Putin says, taken aback by Clinton’s very reserved reaction. The more time passed, the more evident it became to Putin that the United States treated Russia as an enemy: the official US military plans say so. In these plans Ukraine is the spring-board for US ability to military threaten Russia. Americans have renovated a number of Ukrainian airports, and with new weapons, including tactical nuclear arms, the entire Russian territory up to the Urals, and apparently in the near future, even beyond the Urals is an easy target for American weaponry. Such systems can deliver Tomahawk rockets against Moscow in 35 minutes and hyper- sound missiles in five minutes.

All of this happened against the background of American verbal assurances that NATO will not expand “which turned out to be just words”, and moreover “later, they [the West] began to assure us that the accession to NATO of the countries of Central and Eastern Europe would only improve [their] relations with Moscow, relieve these countries of the fears of a heavy historical legacy, and even, moreover, create a belt of states friendly to Russia. Everything turned out exactly the opposite.”

This was the third betrayal.

What to do?

What can one conclude from this view of history which in many respects is accurate, but limited in the sense that all actions are viewed from only one angle: enmity to Russia. The rationale of everything is somehow the weakening of Russia and tricking her into submission. I think that hoping to change this view of the world through small adjustments in posture and relations is well-nigh impossible. It is such a well-established and strongly-held interpretation of history that perhaps only twenty years of explicitly pro-Russian policy by everybody might begin to change it. That, however is not forthcoming.

The only silver lining—if there is one—and assuming also that the world manages to survive the next years without a major conflict, is that reading Putin speech carefully and realizing that his views are shared by large segments of the Russian population and the elite might prompt Western politicians to treat Russia with greater awareness of these historical traumas and greater consideration in the future—in order to avoid another similar scenario.

Counterrevolution or the long NEP?

 For the hundredth anniversary of the Communist Party of China, Lin Chun has written a critical history of the Party and the country (Revolution and counterrevolution in China, Verso, 2021).  The criticism is levelled from the left as is immediately apparent from the title of the book. I would like, following the chronology adopted by the book, to divide the discussion into three parts. The first, going from the fall of the Imperial regime  in 1911 to the end of the Cultural Revolution; the second, dealing with the  Dengist “counterrevolution”, and the third, the theme spread throughout the book and then wrapped up in the last two chapters: Lin's view on what the real rejuvenation of the Party and the Chinese nation should look like.

            The 1949 revolution is rightly shown by Lin to have been a dual revolution: against the quasi-colonial status of China and against feudal institutions, among  them concentrated land holdings, mistreatment of women, lack of access to education. This dual character of the revolution bestowed on CPC and China some global soft power: to be an example for other poor countries. It is to the issues of this implied internationalism that Lin will return a number of times in the rest of the book, including in her discussion of the Belt and Road Initiative.

            Lin is, in my opinion, right to point to a number of achievements of the revolution despite the tragedy of the Great Leap Forward and chaos of the Cultural Revolution. When economists say that Deng’s reforms started under the conditions of relatively high literacy and good health indicators (both necessary ingredients for industrial success), they often forget to mention that these are not the inheritance of some ancient Chinese culture: they are the product of the 1949 Revolution. The success of Dengist reforms was therefore directly built on the earlier successes of Mao.

            What Lin sees as happening after 1976-78 was a counterrevolution in which the top of CPC bureaucracy, severely tried and exhausted by the vagaries of the Cultural Revolution, decided to single-mindedly pursue economic growth in collusion with the nascent domestic bourgeoisie and foreign capitalists: “Not only submitting to the financial superpower [USA] but directly aiding it, China has taken a suicidal model of economic development” (p. 149). One of great ironies is “the leap from excessive class ideology in the context of a basically egalitarian society and the subsequent stifling of such politics with the onset of class polarization" (p. 169).  Put in such terms, and buttressed by the statistics about the loss of effective land rights by farmers, fifty million workers who lost their jobs in the privatizations of the early 1990s, and mindless hedonism combined with apolitization of the masses, Lin’s characterization of the “second (counterrevolutionary) 1949 republic” (my terminology) may indeed appear reasonable.

            But, I think, it is not. While bureaucracy burned by the Cultural Revolution certainly preferred stability, it is not given any credit by Lin for choosing the best path toward the “common prosperity.” That path was not painless; but no industrial revolution anywhere was painless. It could be argued that in terms of human costs exacted, and taking into account the size of the country and the extent of the transformation, Chinese post-1978 growth was much less destructive of lives than the equivalent American transformation (destruction of the indigenous population and slavery), British (enclosures, anti-vagrancy laws and colonialism), or Soviet (collectivization).  None of these stains disfigured the Chinese trajectory.

            Lin's assessments of successes and failures in the last four decades would run at approximately 10 percent to the former and 90 percent of the latter. I think that the real ratio is probably closer to the very opposite: 90% of successes, 10% of failures. But when emphasizing some of these costs, Lin makes insightful comments and thus provides an important antidote to the bulk of recent economic literature on China which does the very opposite of what Lin argues in the book: minimizes the achievements of the first, socialist, period, and treats the second as successful only to the extent that it leads China toward becoming a multi-party capitalist democracy well integrated into the US-led international system.

            Among such points made by Lin is the asymmetric distribution of gains from globalization.  China gained a lot thanks to the high-quality and disciplined nature of its labor force, but other countries’ capitalists (most notably American) gained disproportionately more. Lin gives the (by now) well-known data about the minimal Chinese share in Apple’s profits, multiple tax advantages enjoyed by foreign investors, political power of such investors (to complain to CPC officials whenever workers show signs of possible disobedience), and very importantly, the concession made by China to join the WTO. Charlene Barshefsky, US trade representative, is cited as saying that no country has made as many trade concessions as China. The Chinese authorities, ever sensitive to the specter of unequal treaties, did not publish some of 2020 trade concessions in Chinese, but only in English. These are the points of view, or rather facts,  that among the current anti-China voices in the West are hardly ever heard. (One wishes however that Chen had provided more detailed statistics on each of these issues. One of the weaknesses of the book is the use of statistics only in a suggestive and illustrative way.)

            Lin is also right to suggest that SOEs are more successful than is often thought. This is based on the fact that the effective tax rates paid by  SOEs are higher than those of privately-owned companies, and that SOEs in addition are saddled with a number of social tasks that are never done, nor are expected to be done, by private companies.

            This leads us to the third topic: what should China do now? Lin is much more circumspect and vague there. Jargon and long, often hard to understand, sentences do not help. Regarding land ownership, Lin is against formal privatization of land (which is not envisaged anyway) but it is not clear if she would prefer the continuation  of the present petty-commodity production with excess labor being sucked by the industrial sector or some form of return to rural communes. In the manufacturing, Lin –again very vaguely—is in favor of much greater workers’ agency. She sees it as necessary  if CPC is to return to its class-based political roots. But does this agency mean free trade unions within the privately-owned enterprises, or worker-run cooperatives? Or perhaps does it mean greater reliance on SOEs? Lin never commits.

            Lin’s critique does not involve only domestic economic policies, but spreads to the sociological question of whom CPC represents (the theory of the Three Represents by Jiang Zemin is, not surprisingly, criticized), what type of globalization should China follow, how it should help poor countries, as well to the domestic ethnic issues (Uyghurs) and one-country two-systems (Hong Kong, Macao and Taiwan). On all of them, Lin provides important insights, much more realistic, in my view, than when critiquing economic policies.  

How should the spirit of revolution be recaptured or rekindled? Lin’s preferred path is to keep on working within the CPC whose potential, despite having strayed from the right path, is not yet exhausted. She does not seem to have high hopes in the success of that project however, and rejects the idea that Xi Jinping and Mao have much (or anything) in common.

Yet, the last chapter, that surveys the most recent events (the pandemic, US trade sanctions, clamping down on internet platforms and financial monopolies, reinforcing the role of SOEs) suddenly provides a more hopeful picture. The reader gets the impression that, up to the last chapter, probably written just before the publication, Lin was very pessimistic about the likelihood of a left-turn and dismissive of Xi. But the events of the past two years seem to have made her entertain some hope that CPC could return to a more revolutionary road  both in foreign affairs and domestically.  

Marx on income inequality under capitalism

 Among those who have read Marx, it is well known that Marx was rather uninterested in the issue of inequality under capitalism. Among those who have not read him, but know the left-wing views from social-democracy and assume that Marx’s view must have been similar (but just more radical) this is not well known, nor are the grounds for such an attitude well understood.

(Marx’s views on the topic are dispersed: they are in Grundrisse, The 18^th  Brumaire…, Capital, Critique of the Gotha program. A very nice and succinct recent discussion can be found in Allen W. Wood’s piece “Marx on equality”.)

There are several grounds on which Marx treats inequality as we currently understand it –that is, inequality of income or wealth between individuals—as  relatively inconsequential.

The first ground has to do what is the main, as opposed to derivative, contradiction in capitalism: that between owners of capital and those who have nothing else but their labor-power. As for Ricardo, for Marx too, class determines one’s position in income distribution. Class is therefore prior to income distribution. It is the abolition of classes that matters. Engels (who certainly on this had the same opinion as Marx) wrote: “The elimination of all social and political inequality” [as stated in the social-democratic program that he is criticizing] rather than ‘the abolition of class distinctions’, is…a most dubious expression, as between one country, one province and even place and another, living conditions will always evince a certain inequality which may be reduced to a minimum but never wholly eliminated”. (Letter to August Babel) Thus, "to clamor for...equitable remuneration on the basis of the wages system is the same as to clamor for freedom on the basis of slavery" (Marx,Value, Price and Profit).

Once classes are abolished, the “background institutions” are just and this is the moment to begin any real discussion about what is a fair distribution. This is the topic about which Marx wrote relatively late in his life, in Critique of the Gotha program in 1875. He introduced there the famous distinction between the distribution of income under socialism (“to everybody according to their work”) and under communism (“to everybody according to their needs”).

Under socialism, as Marx writes, equality in treatment presupposes an original inequality because people of unequal physical or mental abilities will be rewarded unequally: ”This equal right is an unequal right for unequal labor.” (Critique..).  

Under communism, however, in a Utopia of abundance, the real equality may imply an observed inequality in consumption, as some people whose “needs” are greater decide to consume more than other  people whose “needs” are less. If in a hypothetical communist society we observe a Gini coefficient of 0.4 like in today’s United States, it tells us nothing about inequalities in the two societies—and certainly not that the two societies display the same level of inequality. In one (communism), it is voluntary inequality, in the other involuntary.

One is, of course, reminded here of Amartya Sen’s “capabilities approach”: achievement of equality might require unequal treatment of unequal individuals.

The second ground of relative unconcern comes from Marx’s insistence that production and distribution are “unified”: capitalist mode of production, with private ownership of the means of production and hired labor, results in a given distribution of income. It does not make sense to focus on a change in distribution so long as the endowments are distributed unequally, and some people, thanks to such unequal distribution of endowments, are allowed to collect income while hiring others to work. Marx here disagrees explicitly with J. S. Mill who thought that the laws of production are “physical” or “mechanical” while the laws of distribution are historical. For Marx both are historical.

Any distribution whatever of the means of consumption is only consequence of the distribution of the conditions of production themselves. The latter distribution, however, is a feature of the mode of production itself. The capitalist mode of production, for example, rests  on the fact that the material conditions of production are in the hands of non-workers in the form of property in capital and land, while the masses are only owners  of the personal conditions of production, of labor power. If the means of production are so distributed, then the modern-day distribution of the means  of consumption results automatically.  (Critique of the Gotha program).

And quite importantly,

Vulgar socialism has taken over from the
bourgeois economists the consideration and treatment of distribution as independent of the mode of
production and hence the presentation of socialism as turning principally on distribution. (Critique…)

This point of view can be criticized by pointing out to the redistributive role of the state. In Marx’s time that role was minimal, and hence distribution of income perfectly mirrored the distribution of endowments. But if the link between the two is broken or modified through the intermediation of the state, the mode of production no longer uniquely determines the distribution of “the means of consumption.”

The third ground for unconcern is more philosophical. Hired labor implies alienation of the worker from the meaning and product of his work. If the fundamental issue is alienation, it cannot be overcome by mere improvements in the distribution of income. As a hired worker in Amazon, I am as alienated from my work at Amazon whether my wage is $10 per hour or $50 per hour. To transcend alienation both private property and the division of labor have to be abolished.

All of these grounds lead to the rejection of the salience of inequality as such under capitalism. How is it then that trade union activity, or social activism in general, is justified if the improvements in the material conditions of workers cannot be the ultimate objective of a Marxist-inspired movement operating under capitalist conditions? Here, Marx takes a very different stance from the usual social-democratic. The struggle for the increase in wages, the shortening of the working week, lower intensity of work etc. are all valuable because they highlight the antagonistic nature of capitalist relations and, more importantly, because the joint work and unity of purpose implicit in social activism create bonds that presage the future society of collaboration and even of altruism.  As Shlomo Avineri writes: “[Workers’ association] does not have a narrowly political, nor a trade union significance: it is the real constructive effort to create the social texture of future human relations” (The social and political thought of Karl Marx, p. 142).

The primary objective of such social activism is…pedagogical:  the learning of social cooperation, and only secondarily, the improvement in the economic conditions of the working class—or any other group whose interests are thus promoted: gender, race or ethnicity. (One can even go further and say that such social activism is the essence of praxis: “man’s conscious shaping of the changing historical conditions” (Kolakowski, vol. 1, p. 138)).

For all these reasons, a student of income distribution, in the current sense of the term, or the social activist who proposes one or another meliorative measure, is involved into something that, from Marx’s perspective, while not useless, as it makes the underlying contradictory class interests more apparent, fundamentally does little to move the reality of life under capitalism towards the creation of just “background institutions.”

Deaths vs. the economy: an unexpected reversal

 Every decision to impose a lockdown in a pandemic is a decision to sacrifice the economy in order to save lives, at least in the short-run. The lockdown decisions may prove, over the longer term, even good for the economy—but it is clear that every government, at every administrative level, has since the very beginning of the pandemic weighed its lockdown decisions that would save lives against the costs they would impose on the economy.

            Now, assume that you do not know anything about how different countries have handled the pandemic so far and are given the following exam questions: there is a very rich country with a democratic government, and there is a significantly less rich country trying to catch up with the richest (but still at 1/3 of the richest country’s per capita income level) with an authoritarian government. Which government is more likely to use lockdowns to stop the spread of the disease?

            I assume that you are a very good student. You would say the former. And would explain it on several grounds. First, richer countries, in principle, value human lives more than poor countries. Not only if we look at individuals as economic producing machines: a person living and working in a rich country will during his/her lifetime produce X amount of real goods and services, while an equivalent person living and working in a poor country would produce a fraction of X. (Consequently, the death of the former would reduce output by more than the death of the latter.)  Likewise, you could add, supporting this argument, when people from rich countries are killed by people from  poor countries, the compensatory payments are much greater than when people from rich countries kill people from poor countries.

Second, as countries get richer, they tend to become “nicer”: there are greater social spending as a share of total income, more attention is being paid to the handicapped and sick people, there are more days of vacation, sick leave is compensated fully etc. It follows that in the case of a pandemic too, the rich country will tend to care more for its people---because it can afford it, and because there is a greater demand for such protection.

            Third, our good student will write that democracy as such will care more about the lives of its citizens than an authoritarian regime that can leave them out to die. He could easily give numerous historical examples that support his case.

            Finally, the student could provide yet another argument: if the authoritarian government is obsessed with catching up with the democratic country in terms of its GDP,  will it not be additionally loath to sacrifice economic growth.

            He would thus conclude that on all reasonable grounds, rich democratic country should impose lockdowns more frequently. And he would probably get an A.

            But this pandemic has shuffled cards in very unexpected ways. When we look at the reality around us, we see rich democratic countries averse to lockdowns and quite willing to run a huge bill in terms of human casualties. And we see an authoritarian government in a less rich country that is in the grip of an ideology of “GDP-ism”,  much more willing to impose lockdowns, protect lives and sacrifice the economy.

            So we have to ask another student to give us his answer.

            Now, the iconoclastic student might answer as follows. The authoritarian county’s government finds its legitimacy in showing that it is much more efficient than a democratic government. It thus has to fight all the time. It has to be on its toes permanently. So if it sees saving lives to be an indicator of its efficiency (and if people seem to agree) it will apply lockdowns whenever it thinks they are needed.

            But a democratic government is an elected government. It knows that the elections are far away. It is not well organized; different parts of the government think differently; they often work at cross-purpose. The central part of the government might also think that, by the time the elections are called, many people will have forgotten about the pandemic and even about  the dead. (And the dead, as we know, do not vote.) But people  might not have forgotten about having lost their jobs and slid into poverty, even if temporarily. So the government might lose more votes by being seen as callous about people’s jobs than by being callous about people’s lives

            The iconoclastic student might continue: if individuals tend to underestimate their risks of getting the disease and dying, while the risks of losing income and jobs are quite clear and obvious, would not this add to the pressure on the government to refrain from lockdowns? And since it is a democratic government, would not that government listen to the voice of the people, and keep the economy going?  

            The iconoclastic student would have made some good points too. But before the reality was revealed to us, we would have probably given him a B: good but not wholly persuasive, especially when compared with our hard-working first student.

            Would our grading be right?