You can always count on the New York Times, the American Izvestia, to give you the Party line on Capitalism. Not on the Wall Street Journal, which like Pravda is still mostly restricted to Party insiders and apparatchiki. That explains why admissions of a broad failure in the system are allowed in the Wall Street Journal but almost unheard of in the New York Times.
On Sunday, December 9, the news were gently broken on the front page of the Week in Review, under the headline, "When the Price Isn't Right." It might as well have read "When the Glorious Five-Year Plan fails."
Because, remember, in Free-Market economics there's no such thing as a price that isn't right. You see, there's this Invisible Hand that goes around making sure that everything you buy or sell is sold or bought for what it's really worth. That doesn't mean, of course, that everybody's happy. The Invisible Hand can't help that, it has no brain and no heart; it's a force of nature like Jehovah or the Great Spaghetti Monster, minus the human attributes or the meatballs.
But, says our timesman, the "forces of financial ambiguity" are now fostering a "crisis of belief in the traditional ways of valuing things" which, he says, renders textbook economics "as sensible as consulting Homer to find your way around Greece."
As I recall the ancient Greeks did consult Homer, perhaps because the gods of Homer, unlike those of Capital, were close enough to humans in their weakness: careless, fickle, often hateful. Humans who understood the gods might hope at least to sway them through burnt offerings, or later on through candles or soaring cathedrals. But the gods of Wall Street are implacable and silent. The Beauty of Capitalism is the Beauty of the Sublime.
And so our writer needs to come up with another god: "In the ideal system there's a let's pretend auctioneer who runs around and collects all the chits of the buyers and the sellers, says [an economist.]." "Now," responds the writer, "buyers and sellers are effectively boycotting the pretend auctioneer, unwilling to believe what he has to say."
Well, it's nice to know the god of Wall Street's human after all: you can't believe or disbelieve a machine. And anyone who's done the rounds at Sothebys and Christie's knows that auctioneers are human, all too human. What our timesman's saying, is that the system used by the system to run itself—the ghost in the machine—doesn't quite seem to be rebooting the way it's supposed to.
Εί οι θεοί εισί κακοί... A god that has human failings has lost his usefulness as a god. The Greeks began to realize this around the time they realized that Homer wasn't so useful, himself. In the same way, Capital must now be understood to have its human failings: it functions like an auction in which manipulation isn't simply an occasional glitch in the system, it's a fundamental part of the machinery, kind of like buying a computer that's hard-wired to run a type of software that's set to sell you stuff you don't want.
In a letter to his old factory-boss buddy Friedrich Engels, Karl Marx revealed the "whole secret of the critical conception" of Capitalism: "merchandise has a double character: use-value and exchange-value," adding that an economic theory that ignores this twofold character (meaning all of economic theory) "is bound to come up everywhere against the inexplicable." Which boils down, in fact, to saying that stuff may be worth whatever it's worth, if nobody can be persuaded to buy it society is up Milton Friedman Creek. Our timesman's figured out what Marx knew all along: the relationship between use-value and exchange-value is not irrational like God, it's irrational like religion.
Of course, our timesman claims the aberration's temporary: sure, the gods are angry, but toss' em a few market virgins and life will settle back to normal; he concludes, "The economy is waiting for markets to absorb the new possibilities and settle on prices that make enough sense to enough people."
That's what Marx said, too: "The material productive forces of society come in conflict with the existing relations of production... With the change of the economic foundations the entire immense superstructure is more or less rapidly transformed." I dropped the line that goes, "Then begins an epoch of social revolution." What the hey, plenty of time for that.
[12-7-2007; last revised 3-6-2012]
New York Times makes it official: Capitalism is failing.