Impasse of market
ideology
THE IDEA of socialism, as a form of social organization alternative to the market, is losing ground in the consciousness of Western workers and is openly discredited among broad sections of the population in Eastern Europe. The cause of this ideological decline of socialism has to be sought in the crisis of so-called "actually existing socialism", and also in the ideological offensive against it.
In this article, I will try to bring out the basic elements of this offensive, showing that the present discourse is not substantially different from the one flowing from Adam Smith's "invisible hand" or from the writings of the first neo-classical economists. In that sense, it is still a nineteenth century ideology, and the Marxist critique of that will not have changed very much. However, the ideological offensive has some other very important characteristics. On the one hand it tries to fight socialism by taking advantage of the impact of the crisis of "actually existing socialism". On the other, it tries to push back the Keynesian ideas that have ruled the economic policy of Western governments for decades, since a large sector of the bourgeoisie thinks that the most appropriate policy to overcome the crisis derives from economic liberalism. To conclude 1 make some very general remarks on the effects that this offensive is having on the Western left.
10 International Marxist Review The "invisible hand": a 19th century ideology
The ideological offensive is propelled by the idea that market economy has intrinsic virtues which make it superior to any other way of organizing economic life. Before tackling this question, two prior remarks are required.
The first is the aim of this type of analysis because it uses the terms market and market economy interchangeably although they are not synonyms.' The market is an institution which has existed since before capitalism, and which will perhaps outlive it for a long time, as it will be impossible to suppress it totally as long as scarcity exists. The market economy is a particular form of social organization, the basic aim of which is not directly to satisfy needs, but to produce commodities to sell with the purpose of making a profit. The market plays a central role in the market economy, but no less important are private ownership of the means of production, the mercantile nature of the labour force, the fact that society does not decide consciously what, how and for whom it produces, but only the owners of capital, etc.
Thus, the object of the ideological offensive is not the market but the market economy, that is capitalism. You can defend the continuation of some mercantile forms in the transition to socialism, as Trotsky did in the 1920s or as in the first moments of perestroika, though with other goals, without necessarily defending capitalist ideology, since capitalism is much more than the market. Nowadays, however, from the ideological point of view, when the term market is used, it includes private property, labour market, etc.; that is to say, in general, capitalist ideology is being promoted. In fact, one of the messages of the ideological offensive is that a truly free market cannot work without the existence of private entrepreneurs, i.e. that market equals market economy. This is important because what is making progress in ideological terms is not only the market against planning, but also capitalism against socialism.
The second remark is about the difference between theory and ideology. Through the history of economic thinking, there have been many theories of how market economy works. The crisis of "actually existing socialism" and the points scored by the market do not prove that some theories are better than others, nor that the classic and neo-classic or Keynesian theoretical constructs are any better than those of Marxism. It is possible that new questions require new answers, but the greater or lesser extension of the market does not challenge the law of value, its intrinsic inequality, nor the cyclical nature of capitalist development, just to give some examples.? The ideological
Impasse of market ideology 11 offensive does not take place in the theoretical field.
But in practice, market theories also work as ideologies: economic liberalism, Keynesianism, or scientific socialism. They work as guiding ideas which penetrate people's minds, shaping their behaviour as active subjects in the world which surrounds them. For example, you do not need to understand the theories of Adam Smith, Walras, Pareto, or Marshall to believe that the market economy is the best system for organizing society, because it combines the most individual freedom and the best collective well-being. Of course, there is a theory trying to justify it, but you do not need understand it. This is the terrain on which the offensive is located, not in the sphere of theory.
The ideological discourse developed today defending the market economy takes advantage of the crisis of "actually existing socialism" and has some important peculiarities that I will explain later, but it also uses previously existing theories. The guiding idea is not substantially different from the one coming from Adam Smith's "invisible hand" (individuals, when only working in their own interest are led as by an invisible hand to promote the common interest), or from writings of Walras, Pareto or Marshall. Their fundamental elements are the following:
The market is a mechanism making it possible to allocate the meagre existing productive resources in such a way that production is the maximum possible and the most appropriate for society's needs. The demand for goods shows the needs and directs the decisions of the entrepreneurs, who contract productive factors in the free market, and produce, with them, the goods needed to satisfy the demand. Supply and demand generate equilibrium prices, which indicate the scarcity of each good. With the income generated from selling products, the entrepreneur recompenses all the factors which have contributed to creating them, i.e., the income is distributed in wages, rents and interests, and, if this has been efficient, there will be an excess: profit.
For the whole of society, production will yield a total income, the national revenue, which is distributed to all those who have taken part in producing it. A chunk will be spent in consumer goods and the rest will be saved. These savings can be made by the wage-earners or the capitalists, this is not what counts here. Any of them can try to lend them to get an interest to recompense for the fact that they have not consumed their whole income. These savings will be used by entrepreneurs for investment and to increase production. The growth of production will allow to pay more to the factors which have participated in it: to people who made possible this increase by saving, wage-earners, etc. Thus, there will be more national revenue, and the circuit
12 International Marxist Review will be closed.
If the market works freely, any disruption will tend to be corrected. If an entrepreneur takes a mistaken decision on production, supplying a good for which there is insufficient demand, then there will be losses and either the activity will be corrected or the entrepreneur will perish; if unemployment exists, it is only due to workers' demands for wages higher than those determined by full employment; and so on. In addition, the state has to intervene in the economy to guarantee that the system functions appropriately. The market economy is thus an almost perfect mechanism which makes it possible to combine maximum efficiency in satisfying needs with the maximum individual freedom. Marxism: a theoretical critique of capitalism today
Facing this renaissance of nineteenth century ideology, the Marxist critique of the market economy cannot be substantially different today than before.4
The market does not allocate productive resources in the most adequate way to satisfy social needs. Capitalist ideology mystifies the market economy, since its aim is not to fulfil human needs, but to manufacture commodities to make a profit by selling them in the market. So the market does not allocate the available resources to meet all needs but only those which are manitest because someone pays for them. The market carries social inequality within it — between capitalists and workers, intellectual and manual workers, technicians and labourers, permanent and temporary employees, etc. This social inequality is expressed in an uneven distribution of revenue, so demand prices will never represent the needs of individuals. They will represent the income of the great majority of the population - whose revenue forces them to do without some necessary goods — and of a minority — who will ask for luxury goods. In addition, needs which cannot be paid for are inexistent for the market, despite their importance for humankind. The market economy today seeks economic efficiency and equilibrium regardless of social costs. The famine in Ethiopia or the poverty in underdeveloped countries, for example, are considered as inevitable consequences, which can be very inadequately dealt with, not by the market, but by charity, social assistance, etc. It is impossible to speak of production factors which each receive the retribution they deserve according to what they have contributed to the production, but of appropriation of the surplus product by a minority. There are two
Impasse of market ideology 13 fundamental classes in capitalist society: the capitalists, who hold the means of production and decide what to do with the productive resources, and the toilers, people who find themselves freely forced, for economic reasons, to sell their labour power in exchange for a wage as a means of subsistence. The two classes take a very different place in production and in social life: the first are the ones who exploit and appropriate the surplus product, the latter are the exploited. The owners of the means of production did not become so because they abstained from consuming their income, but because they have invested the surplus value that they appropriated in the past. The market is hence a mechanism making it possible to perpetuate the appropriation of the surplus by the minority, and the income of capital is not an award for patience but for outright exploitation.
The market is not the perfect mechanism by which any problems appearing will tend to be corrected. Problems appear because needs do not precede production decisions; on the contrary, production takes place first and it is seen if it agrees with the needs expressed by the market. That is to say that the market functions by showing capitalists their errors too late, and the result is an unavoidable waste of resources (goods which do not sell while others lack; restructuring which destroys whole sectors; ongoing unemployment while there are many needs to satisfy which could absorb the work-force, etc.) and the emergence of periodical industrial crises flowing from an objective tendency to over-production, putting a brake on the development of the productive forces. Besides, pursuing the maximum profit blocks the development of new products and technologies which are not profitable (as with solar energy), bars the rational use of existing technological resources, and has destructive effects (progressive devastation of the environment, development of the arms industry and dangerous technologies, such as nuclear energy, etc.).
Neither is it the almost-perfect mechanism combining maximum efficiency and maximum freedom. The only freedom which the market economy cannot eliminate without losing its substance is the freedom to exploit. The market cannot be detached from the political and historical context in which exists. It is not an abstract mechanism but a real thing. It can take the form of free competition, monopolies, multinationals, etc., and in all of them the allocation of resources is made after the event, though not as efficiently from the capitalist point of view. Galloping inflation in Latin America, for instance, is occurring in a market economy, but who would dare talk of market efficiency in that case? It can co-exist with autocracies as much as with advanced forms of parliamentary democracy and the way it works is not the same. In Chile,
14 International Marxist Review for example, is the relative improvement of the economy due to the virtues of the market or to the repression with which the Pinochet dictatorship has compelled the extraction of surplus value? It can worsen the misery of broad mass sectors (as happened in the eighteenth and nineteenth centuries and in the Third World today or make possible noticeable improvements in the average standard of living (as in Western countries in the thirty years before First World War and in the twenty-five after the Second). So different situations cannot be simply explained by the market.
Finally, the capital resorts more and more to mechanisms alien to the market to make it function. The work allocated through the market has been severely cut in relation to the work allocated directly, since enterprises increasingly plan their production. In the era of multi-nationals, the plan becomes world-wide and affects many enterprises. Logically, not market prices but a carefully-timed plan rules the transactions between the different Ford factories around the world. In addition, a substantial section of productive resources are not allocated by market criteria nor is their activity ruled by prices. Health and welfare services, workers' gains, are needs which, in Western countries, are financed by at-source deductions from workers' pay, although these services are not bought in the market, i.e., people do not pay for them at the moment when they are provided.
The effects of these changes in capitalism have been both positive (more welfare) and negative (monopolies and super-profits, prices fixed for long periods of time which have nothing to do with the market equilibrium, Third World super-exploitation and misery, etc.). However today, their negative impact is obvious: economic crisis, with its upturn in unemployment and erosion of the standard of living of the masses, the problems deriving from the capitalist world market (North-South problems, poverty in the Third World), environmental damage, etc., are living proof of this. The market shines with reflected light The present offensive does not only use traditional arguments to defend the market economy, it also takes advantage of a real life change, the crisis of so-called "actually existing socialism", to fight socialism. First of all, it relies on the fact that things that exist have a bigger effect on people's consciousness than those that do not exist. Up to now, a section of humanity lived in countries in which resources were not allocated by the market but by a plan. The discussion on the viability of this was ended by the
Impasse of market ideology 15 practical experience of it for more than seventy years, despite the many problems it left unsolved, among which the lack of democracy was not the least. "Actually existing socialism" had a negative impact on the consciousness of the Western working classes, which could not take bureaucratic degeneration In as a model to follow, but it showed in practice that there were forms of orgale nizing the economy different from the market. However this has collapsed; re there is no point in fighting for something which does not exist "and cannot exist" ", and much less in designing a policy to change progressively something which does not exist in real life any more. The market economy exists rand this is what cements its great ideological strength. Socialist planning n does not exist and this is what constitutes its great weakness. Secondly, the offensive has an ethical component, trying to structure and normalize working class desires. The market is good because it makes it possible to channel individual interests to attain common well-being. It has shortcomings and generates inequality, but these can and should be corrected without altering its basic principles. They are not speaking of "primitive" y capitalism, with high levels of tuberculosis among workers, but of the n present one, based on democracy, in which a noticeable degree of well-being has been attained. True, there is hunger in the world, but that is only because the market economy has not progressed enough. There are also dictatorships in capitalist countries, but this is not the fault of the market economy, but of e other factors. After all, there can be a market economy with political dictatorg ships, but is there a single democratic system which is not based on the d market? e
But socialism is bad. On the one hand, its founders' ideas were wrong. The labour theory of value is false, commodities are not exchanged according to e the added labour in them, there is no contradiction between capital and labour, there is only a problem of income distribution, there is not a working class with specific interests, and so on. All these ideas have thrown oil onto the fire of a conflict which could have been normally solved within parliamentary democracy, benefiting every one, without class struggle, because competition and solidarity are not incompatible, but complementary. On the e other hand, socialism contains in itself the germ of the lack of freedom. This derives from the Marxist conception of the dictatorship of the proletariat itself, which really is a dictatorship, and in which the elimination of the market eliminates a fundamental mechanism through which the whole of society 1 f can decide democratically what should be produced, how and by whom. In this sense market equals democracy and socialism is identical with lack of freedom. That it to say that a confusion is established between economic
16 International Marxist Review freedom (the freedom to exploit) and political freedoms (of expression, of conscience, of thought, etc), everything is subordinated to the economy and the market is sanctified as the sources of all freedoms.
Finally, the offensive is based on what is possible and worth the trouble of fighting for, and what is impossible. The October Revolution was possible, in the historical context of the time, but now, at the end of the twentieth century, with the well-being that the working class has achieved in the Western countries, it is impossible. We have seen that bureaucratic and degenerated "actually existing socialism" was possible, but the socialism of freedom, which has never existed and never could exist, is impossible. What is possible is the market economy and reforms to correct its insufficiencies and injustices, and this is worth fighting for.
Some of these arguments are not new. The existence of a working class with historical interests or the possibility of revolution in industrial countries are discussions which have gone on for decades. But the crisis of "actually existing socialism" and the clever use of this by the bourgeoisie have given them additional strength. It should be recognized that socialism is very weak on this terrain. The working class will not make a leap into the dark towards something that it does not even know is possible and, if it is, whether it is not worse and more unjust that what exists. What is the democratic structure of a socialist society? What is socialist planning? What role does the market play in this? It would be possible to convince them that the market is a bad thing, but while there are no answers to these questions, capitalism will continue to have a more favourable ideological position than socialism. Like the phoenix, socialism will arise from the ashes The ideological discourse is not directed solely to fighting socialism, but also to pushing out the Keynesianism which dominated the economic and social policy of the industrial countries during the prosperous phase of late capitalism. In this sense, economic liberalism has arisen from the ashes like the phoenix. Up to the crisis of the 1930s, the neo-classical economy, ultimate foundation of free-market ideology, was hegemonic within the bourgeoisie. The market was the perfect institution par excellence, because it guaranteed that any increase in production would be expressed in an increase in demand for the same. As von Misses and von Hayek said in 1929, there could not have been a depression if perfect competition had functioned without obstacles.
The neo-classical structure was established on the supposition that full employment would be the level at which the economy usually worked and that any deviation from this would be conjunctural and that the economy itself would generate the necessary remedies for a return to normal. There would be periodic crises but they would play an objective role of adapting productive capacity to the existing purchasing power. The least productive and most antiquated enterprises would disappear, thus causing an increase in productivity and creating the conditions for a new recovery. It would be sufficient to allow market forces free play for the economy to function well in
But this had nothing to do with the reality of of the 1930s: unemployment reached unprecedented levels, idle productive capacity was the norm and nothing indicated that the situation would improve of its own accord. And the dangers of such a situation for capitalism began to be considered as greater than the non-reorganization of the productive apparatus and monetary stability. The most important capitalist and governmental groups of the principal countries opted for a change in economic policy as a way of mitigating the effects of the crisis. The so-called "Keynesian revolution"
the role of the state in managing the economy which this supposed, were only the conscious ideological expression of this change of priorities by the ruling classes. Since then, the state has played a prominent role in the functioning of the capitalist economy, Keynesian ideology has been dominant and the governments have used its recipes with the dual purpose of maintaining effective demand and avoiding crises, and extending public spending of a social character to incorporate the demands of the working class. This was change in economic policy and liberalism can stimulate what the bourgeoisie considers the best way of overcoming the economic crisis.? As far as this is concerned, the fundamental axes of the ideological offensive are the
The neo-liberal offensive attempts to present the crisis as a result of not having allowed the market work freely. The cause of this should not be sought in any pretended decrease in demand or in the fall of the rate of profit but in a "supply shock" which has negatively affected the conditions which determine production: the successive rises in oil prices. The crisis would d n
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Impasse of market ideology 17
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what was known as the "welfare state" a) market as supreme regulator
18 International Marxist Review have been of short duration if the workers had accepted lower wages, conjunctural job losses, a change in working conditions and stabilizing measures in general. That is to say if market forces had been allowed free play. The social and economic policy of the governments in the industrial countries should have been based on the fact that only the market can contribute to resolving the crisis, and that there should have been advances in deregulating the economy. It was then a question of allowing the crisis to develop in order to make possible a restructuring of production and increasing the rate of profit through a devaluation of labour power. b) state intervention should be reduced
It is not a question of returning to the liberal state of the nineteenth century which is neither possible nor desirable, but of forcing back the frontiers of the "welfare state". The economic crisis has in general provoked an increase in the public debt. On the one hand it has been the cause of lower growth in total income and the reduction of some of its components. The drop in employment has affected the social security budget and the lower level of activity has affected income from both direct and indirect taxation. On the other hand, it has created an increase in costs, as much to palliate the effects of the crisis on the workers (unemployment and redundancy benefits for example) as to support the costs of reconversion of capitalist enterprises. There has also been a considerable rise in arms spending in the principal capitalist countries which has meant that some public debts have reached astronomical proportions (in the United States for example, but this is far from being the only case).
The rise in public spending and the deficit is not the type of policy that capitalism needs to resolve the crisis and on the contrary contributes to blocking the solution. The rise in the rate of profit which occurred during the first period of the phase of expansion made it possible to create sufficient resources for state spending to increase and for an extension of the welfare state, and for a substantial part of this to be financed by tax income. But the rate of profit then fell and recovery required an increase in the rate of exploitation. This could be done by reducing real wages, but also by attacking indirect wages (health, education, etc) and deferred wages (pensions). In addition, recovery of capitalist profits requires a reduction in taxes on them, which makes the public deficit worse.
There are also monetary reasons. During the present recessive phase, per-
manent inflation continues to be the dominant trend. Capital requires a certain level of price rises in order to realize surplus value, but all countries are interested in reducing inflation so that their goods do not lose their competitiveness in the world market and it has to be controlled because a sharp rise would disiocate the whole economic system. The growth of credit and the money supply have to be limited, but to the extent that the deficit of the public sector increases a smaller margin is left for the growth of credit in the private sector. The growth of this latter is a source of inflation, but this suits capital better because it reduces the effects of the crisis on profits and makes easier the production of surplus value. Increasing public deficit is not the best policy for capitalism to resolve the crisis but the worst, because it is an additional obstacle to the rise in the rate of profit and also a source of undesirable c) private management is efficient and public manage-
During the boom period of late capitalism, the state intervened actively in the economy, not only in public spending but also through public enterprises.
It attempted to maintain an active industrial policy, readjust regional inequalities, take on activities which did not attract private initiatives but were useful
In practice, nationalizations were also a mechanism for socializing losses, but public management played an important role in the productive sector as well. But now things have changed. On the one hand, there is an attempt to eliminate the drain of subsidies to public enterprises in deficit. On the other, there is the passing to the private sector of those public enterprises which are profitable, at a time when the crisis has freed large amounts of capital which do not find investment because of the fall in the rate of profit. Public services are also to be offered by private capital, because it is not important who prorides the service, only that its financing is public. And private management is better than public because being subject to market forces means being profitable in order to survive. Thus the free-market ideological offensive is not only seeking to reduce the role of the state in the economy — which can only be achieved to a limited extent because history cannot go backwards — but also to submit its action to the laws of the market. Market-based management criteria are supposed to govern everything: health, education and even
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Impasse of market ideology 19
20 International Marxist Review Redefining socialism
During the post-war boom, the socialist and communist parties won hegemony in the Western workers' movement. Both these currents developed in reference to "actually existing socialism" and have been affected by the crisis.
The socialist parties denounced the bureaucratic system and based themselves on the negative image that this had in the eyes of Western workers to insist that real democratic socialism would not come about through a revolutionary adventure but by reforming capitalism, correcting its injustices and extending democratization. In theory and in practice they accepted the market and the market economy but identified with the "welfare state" taking it as a symbol of their particular identity, and where they were in government they sought to develop it. With the crisis started a process of shifting to the right, first from the French Socialist Party, then the Spanish and finally it affected the Swedish social-democracy as well. They continue to base themselves on a sector of the workers to win elections, but practise a liberal economic policy that is difficult to distinguish from that of Thatcher or Reagan, and when they are in opposition, their differences with the right are not in the framework of more or less market. Their ideological discourse claims to distinguish them from the right in ethical values (solidarity, cooperation, striving for equality, the elimination of poverty) but they have embraced the market and the market economy as part of their identity and have become economic liberals.
The Communist Parties made reference to "actually existing socialism" theory they did not accept the market or the market economy and presented the USSR as an alternative system for organizing the economy. Some became Eurocomunists, like the Spanish or Italian parties, when Stalinism was presenting its most disagreeable profile on the television screens. But their identity continued to be the elimination of a market economy, although from a reformist perspective. The crisis has affected them profoundly. Some, like the French or Portuguese parties, continue to defend vigorously positions similar to those they have held up to now, but the majority accept the market economy and not only the market, although with what they call "hardcore reformism"9
The crisis of "actually existing socialism" could have meant that the mainstream left would understand the market should play a role in the transition to socialism but that the market economy, that is capitalism, should be eradicat-
ed at the same time as the taking of power. This has not been the case, so thoroughly have they been steeped in capitalist ideology. Socialist ideology has given ground because the market has won a victory over planning. As
The power of Christianity in the Roman empire was decided by the victory of Constantine's and ver Majencin and the later expansion of Islam was carried our by the victorious Arab
This could be what is happening with the crisis of "actually existing socialism" and the new world order. But, as Therborn said in relation to religions and we could apply today to ideologies, dissidence arose and spread among
1. This confusion does not only exist in every day life, but it is also co-substantial to the most widely used manuals of introduction to economy in Western universities. See, for instance, the first chapter of the manuals by Samuelson and Nordhaus (Economics,
McGraw-Hill), Dornbusch, Fischer and Schmalensee (same title, same publisher) or even Phelps (Political Economy, 1985), which as its title suggests is not a conventional
2. The collapse of "actually existing socialism" is now being used as an argument against
Marxism, but even when it was firmly based, bourgeois ideologues insisted that this did not prove the Marxist principles true. To quote an example, take W. Fellner's opinion in
Emergence and Content of Modern Economic Analysis (McGraw-Hill, 1960), very much used in European universities in the 1960s and 1970s to study the history of economic thought. When discussing Marxism, it states in its conclusions: "If a time comes in which Marxism were to be fimly based in areas outside the advanced capitalist world, it
Will not have been because its arguments have convinced people capable of thinking on their own. In those countries where Marxism has become a challenge to Western institutions, this is mainly due to the fact that they did not manage to reform in time their pre- capitalist social structure, that there was an insufficient supply of entrepreneurial intelligence, and that, anyhow, the immediate future was not very bright." In other manuals
3. To prove that there is nothing new there, it is enough to read Adam Smith, John Stuart Mill, the first marginalists or Marshall. However, all these authors have a 19th century aftertaste. Much more interesting, since their arguments resemble more the present ones, are von Hayek's and von Mises' writings in the 1930s polemic on the viability of socialism
(in Collectivist Economic Planning, selection by F.A. von Hayek, London 1935) or the books of the same epoch by German liberals, such as W. Röpke (Die Levre von der
Wirtschaft, Viena, 1937) or W. Eucken (Die Grundlagen der Nationalökonomie, 1939).
t. It has become fashionable to say that Marxism is a 19th century ideology, but this is not true. The capitalism that Marx analysed was not so much the one he had before him as today's. In the second half of the 19th century, the capitalist economy was limited to
Western Europe up to the Danube, North America, and some cities or states in the south of Africa or Oceania. Most of the known world was not capitalist and in industrial counзеin he nto lund arit ent he it man, he isivhe me In red me sm But gh ne, sithe rdinI to at-
Therborn said:
Notes manual.
the subjugated and oppressed despite the existing powers.
from that time you can find many more examples of this sort.
It is surprising how up to date they seem.
Impasse of market ideology 21
22 International Marxist Review tries the immense majority of the population in agriculture, so the working class was a small minority. The difference in wealth between capitalist countries and the others was not very big (using present parameters, 1 to 1.8) and, for example, no intelligent observer would have considered the economy or civilization of China as inferior to that of Europe. The system analysed in Das Kapital is more similar to capitalism today than in the 19th century. See also E.J. Hobsbawm, The Age of Empire, 1875-1914, London, 1987. 5. The considerations by Perry Anderson in the Postscript to In the Tracks of Historical Materialism (London, 1983) are absolutely relevant in considering this problem: what is the political structure of a socialist democracy, what should socialist planning be, what will new men and women be like, what international relations should there be between unevenly developed socialist countries? He concludes: "Merely to enumerate such questions is to register how little most of them have been directly confronted within the Marxist tradition in the West." With the current crisis of the bureaucratic system this is undoubtedly an enormous weakness of socialism from the ideological point of view. 6. In the final pages of the General Theory of Employment, Interest and Money (1937), the book which is considered the most complete theoretical formulation of the changes necessary in governmental political economy to deal with the crisis, Keynes insists on the theoretical role of this revolution. For him the new theory would in the end impose itself, because the determining factor was ideas and not material interests. It would take more or less time for these ideas to become generally accepted, but they would be in the end. But he was mistaken: it was the material interests of capitalism suffering from massive unemployment, social conflict and deep crisis, which paved the way for the acceptance of Keynesian ideas. They were only the ideological vehicle for a conscious change in the priorities of the bourgeoisie. 7. The ideological offensive does not only refer to the virtues of the market, but also to what policies are necessary to overcome the crisis. In fact, the decline of Keynesian influence and the advance of liberal ideas can be noted almost from the beginning of the crisis. Reading reports of the IMF, the OECD or the EEC from the 1970s demonstrates to what extent such ideas had impregnated the explanations and recommendations of the "supply-siders" or monetarists. But there is now a qualitative extension of free-market ideology. 8. Deregulation also answers the current needs of capital accumulation because it makes possi-
Able the centralization and the concentration of capital at an international level. Building the single market of 1993 requires breaking down the physical, technical, legal or fiscal barriers that currently exist as a result of the different regulations in the member countries. The aim is to replace them by new regulations based on the greatest freedom for the movement of goods, capital and the labour force. At the same time, the single market is being used by most European governments as an alibi for imposing both this deregulation and a regressive social and economic policy in their own countries. 9. It is only in this way that we can state, without falling into a contradiction, that the market is
La factor for efficiency and stimulation of the economic system and, at the same time, that the social and ecological goals of sustainable development will not emerge spontaneously from the inherent mechanisms of the market.... The requirements of fairness impose a policy of redistribution of resources and powers and not the elimination of the basis of accumulation. This paragraph, extracted from the report of Achille Occhetto at the 18th Congress of the Italian Communist Party (PCI), shows to what extent market ideology has been assimilated
Impasse of market ideology 23 s a by the Western Communist Parties. vas rv- 10. Göran Therborn, The Ideology of Power and the Power of Ideology, London 1980. of I in on, Hethe will neons xist ibtthe ecthe ose ake the lasepnge hat nce sis. hat upket ssiling scal unfor rket ulaet is that usse a s of Italated
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