Passive revolution: are the rich starting to get scared?

by Jerome Roos on August 20, 2011

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Warren Buffet wants to tax the rich, Forbes warns about a global class war and Nouriel Roubini says that Marx was right about capitalism. What’s going on?

It was a week of opposites. As stock markets around the world continued to nosedive into financial meltdown, the world’s third wealthiest man told US Congress to stop coddling the super-rich; Forbes, the ultimate magazine of the rich and famous, warned about the “coming global class war“; and Nouriel Roubini, one of the world’s leading economists, told the Wall Street Journal that Karl Marx was actually right in saying that capitalism is doomed.

And as if that string of radical comments from some of the world’s least radical sources weren’t enough, Business Insider piled onto the scrimmage stating that “Karl Marx is hot” and TIME Magazine called on the West to “heed Marx’s warning” and realize that capitalism simply won’t survive without heavy-handed state intervention. Even on Wall Street a specter was haunting investors, with several leading analysts quoting Marx favorably in important research notes.

What’s going on here? Why this sudden mainstream interest in issues that the radical left has been crying out about at the fringes of the political debate for the past 20-30 years? Certainly these capitalists didn’t turn into revolutionary socialists overnight? Indeed, all of them make it very clear that they disagree with Marx on the crucial issue of socialism. They just believe he “might have been right” about capitalism’s tendency to self-destruct.

In other words, the sudden (superficial) interest in the work of Marx points at the growing sense of fear among the ruling classes. As Business Insider put it, “you know it’s a real panic when everyone’s trotting out the old guys, and even capitalists think Marx got the endgame right.” In an op-ed, Roubini pointed out that “Karl Marx was right that globalization, financial intermediation, and income redistribution could lead capitalism to self-destruct.”

But it’s not just the fear of financial collapse that’s driving Marx’s comeback. Apparently, the ruling classes are fearing an imminent rising of the masses. As Fortune wrote, “the riots that hit London and other English cities last week have the potential to spread beyond the British Isles. Class rage isn’t unique to England; in fact, it represents part of a growing global class chasm that threatens to undermine capitalism itself.”

The only “logical” conclusion for the more enlightened bourgeois press, therefore, is old-fashioned progressive liberal reformism. Consider TIME‘s conclusion: “capitalism can be saved from the excesses that Marx warned would be its downfall, but only through the sort of state intervention that has become almost as politically unfashionable as Karl Marx himself.” In other words: capitalism needs socialism to survive — but we still want to keep capitalism!

Stefan Stern, a professor in management at Cass Business School in London, just echoed a similar conclusion in the Independent: “Marx said that while interpreting the world was all very well, the point was to change it. If capitalists want to keep their world safe for capitalism, they need to face up to what is wrong with it, and change it, fast.” But is changing capitalism to save the system really the same as “changing the world“? It certainly doesn’t seem to be.

Indeed, what we are witnessing here is the ultimate case of a “passive revolution“. As Antonio Gramsci (wiki), the great Italian philosopher, wrote in his Prison Notebooks, Marx was wrong to put so much faith in his “economic determinism”. Capitalism, Gramsci observed, did not rule merely through force or oppression. Neither would its internal contradictions automatically lead to a socialist revolution. Instead, Gramsci accorded a major role to culture.

For Gramsci, the ruling groups in society maintained their position in two ways: firstly, through the traditional Marxist form of physical and economic oppression; and, secondly, through cultural hegemony, which operates via ideological consent. Thus Gramsci opened up a major new battlefield in the revolutionary process: civil society. There, outside of the realm of the state or the economy, ruling groups clashed with subordinate ones in a discursive “war of position” to gain or retain popular legitimacy.

It was this brilliant theoretical innovation that allowed Gramsci to explain capitalism’s resiliency to an all-out popular revolution. When their dominant position came under fire, Gramsci observed, and the ruling classes were about to lose the crucial consent of the people, they could always accommodate for the concerns of the masses by going against their own direct short-term interests in order to retain the dominant social order in the long-term.

In this respect, while we may feel an intuitive moral appreciation for the seeming selflessness of Warren Buffet or the sheer frankness of Nouriel Roubini, we have to realize that these enlightened capitalists, for all their “Marxian” rhetoric, are even more dangerous than the blunt ones like Lloyd Blankfein or the Koch brothers. For it is the Buffets and Roubinis of this world who, through their passive reformism, will allow the latter to keep controlling the rest of us.

{ 15 comments… read them below or add one }

Zacqary Adam Green August 21, 2011 at 00:20

In a way, the 2008 bank bailouts were a sort of half-assed, miniature passive revolution. They were intended to prevent the economy from immediately collapsing, but didn’t actually solve the serious systematic flaws that caused the problem.


Jérôme E. Roos August 21, 2011 at 01:44

Yep, fully agree!


Red Heretic August 21, 2011 at 11:06

Personally, I am under the impression that those pleading for a return to a sort of reformist capitalism are not the majority in the ruling classes. In my view, the latter are too imbued with the radical neoliberal ideology that has become hegemonic in the last thirty years. They might agree with the need to give some crumbles (probably more as ‘voluntary contributions’ rather than by law, that is to say through public taxations) to the most disciplined layers of the ‘mob’… while firmly wielding the stick. In the end, it is to the stick that they will resort (let’s look at the reactions in Britain after the recent riots, about which you wrote a great piece btw). As an aditional means of discipline for the ‘underclasses’, they might as well go back to religion. In the end, this is exactly what the Republican right is endeavouring to do in the US, ain’t it?


Michael Kenny August 23, 2011 at 18:40

I agree that all this “Marx was right” talk indeed reflects the fear of the elite at the prospect of the social changes they see coming but What is perhaps more interesting is who ISN’T talking about Marx: the young! We are witnessing a youth revolt such as we haven’t seen since the 1960s (I’m old enough to remember!) and the name on nobody’s lips, so to speak, is old Karl! It sounds to me like the elite are trying to resurrect the old communist bogey man to discredit the youth movement. What’s actually happening is that capitalism and communism were each other’s crutch. Once one went down, the other was condemned to collapse slowly but surely because it was being judged on its own merits and could no longer blame its failures on the bogey man. If capitalism had collapsed 20 years ago, communism would now be collapsing. What will emerge from the present youth revolt will not be the resurrection of earlier “-isms”, but something totally new. Bear in mind that all political issues start on the fringes of civil society and their early proponents are seen as screwy. A generation later, they are mainstream issues. And a generation after that they are outdated! That’s what has always happened in the past and I don’t see why the world is suddenly going to start going backwards now. So the talk about Marx is encouraging inasmuch as it shows that the elite are starting to panic but don’t read into that any idea of a Marxist “revival”.


Jérôme E. Roos August 23, 2011 at 18:43

Very insightful perspective Michael, thanks for sharing your views! I wholeheartedly agree!


Dnifdoog August 24, 2011 at 19:28

There is only so much wealth / property in the world; when “-ism” allows that wealth to stray outside of a normal distribution, the model will collapse.


D in VT August 24, 2011 at 21:20

So which fringe will win out? That’s the scary question.


Alex Jakeman August 24, 2011 at 17:48

There is always the danger that when a system is under stress there will be calls to change the system. Capitalism has always had two major faults:

1. By its very nature it is culturally and economically oppressive
2. It is a system orientated towards market values and the production of materialist oriented socio-cultural values. It commodifies labour, nature and ideas for profit.

These qualities are not necessarily negative in themselves as a part of a wider infrastructure, but their place as central tenets of a system, in this instance capitalism results in a highly stratified social, cultural economic judicially balanced barren environment. Where the tenets work against and undermine the values that are required to form stable and just moral communities.

Business ethics theory seems to imply that corporations are, or at least should be socially responsible to the communities they exist in, however this seems to assume individuals with a corporation can make a significant difference to the cogs in motion.

The role of cultural values play a significant role in maintaining authority. Take for example the fines for swearing in public. If an individual is in the unfortunate position of having had an upbringing where swearing was prevalent, the learnt behaviour now defined as illegal represents a criminalisation of this persons very nature. This means that the prevalence of socio-cultural values that are acceptable to those with political and legal power immediately place certain parts of society in a position of persecution and weakness. These properties of the system are problematic because few would question whether swearing is a good value/behaviour to have. Yet if we are unwilling as societies to adequately educate and alleviate the social, cultural and economic differences that exist then we will continue to persecute people for being victims of the very system that we refuse to change for their ultimate benefit. How is an underclass able to change their social and cultural behaviours without the help from the other social structures to break the prevalence of the behaviours that we see as unacceptable? If we do not wish to criminalise people for being themselves then we need to give them the means to change those characteristics.

I suppose we have to therefore ask whether we want a system that teaches all people to empower their lives, not just those with fortunate social and economic circumstances? Many who break through the stratification barriers are likely to have tried to emulate behaviours they perceive as valuable to social and economic progress/success. But these people are lucky if they have an adequate role model and the insight to recognise this strategy. Most will not, and therefore require help to empower themselves.

The solution to capitalisms problems as I see them are; to remove the value of economic prosperity at the detriment of other aspects of society or the wider world as the central tenet of the system; and learn from the lessons of communisms orientation towards a communal perception of common values and meeting the socio-economic justice needs of those that require them the most, by giving them the skills through education to live up to the social cultural values that the system is orientated towards. Perhaps it is therefore no longer enough to educate facts, but also values and social mores and codes of conduct. Ask 100 people as a sample what ethics is and you have your answer.

Finally a system that allows humans to live such economically dichotomous lives, that they are unrecognisable or unimaginable from either position is a system that should not exist. No system should be permitted to continue in its current state, if it allows humans to no longer recognise hardship as real, and be so detached from the realities of poverty and deprivation that can stagnate social and educational values, and the perception of freedom to change ones life. In short to no longer recognise that there is an ethical imperative to be responsible to those who are poor and deprived is a result of the inability to empathise because the system results in such dichotomous positions of power and economic prosperity. In such a system how can social economic justice ever prevail. The system needs adjustment.


AngryMan9000 August 24, 2011 at 18:17

Keep pushing you will push the rich into the arms of the right, we will finally be able to put down the communists once and for all.


Alex Jakeman August 24, 2011 at 23:51

In France as we speak those rich are offering to pay more taxes to help ease the deficit.

Who said anything about being communist, learning from communisms good qualities is a different matter. Besides, communism as we have seen it bares little resemblance to the idea envisioned by Marx (if I remember correctly). Perhaps you should explain your position and distaste for communism then I might be able to understand your position.


C. Lorenz August 24, 2011 at 23:25

Communism in essence is a radical backlash against oppressive systems – not necessarily just capitalism. Historically it was societies with great social injustice that triggered violent communist revolutions – if we ignore for the sake of argument some ravolutions that were instigated by power players such as the Soviet Union or China later on during the cold war.

Communism, on paper, sounds like a beautiful alternative to what is effectively feudalism in it’s different manifestations, pure capitalism being one of them. Sadly history has proven that communism quickly becomes as totalitarian and oppressive as the systems it aims to replace.

So what is the answer? Social capitalism, as practiced throughout Europe.
Is it perfect? No. But it is indefinitely more future proof than the dog-eat-dog system we can see collapsing in the US (where, besides all other factors, a vast faction of the population, while lacking on education, has access to military grade firearms).

The government and the legal system need to regulate and supervise the markets, which doesn’t in any way mean eastern-bloc like regulation – it just means that greed and corporate interests are monitored and held accountable, and the immense gain of few simply does not precede over the well-being of millions.
It works in Sweden, it works in Germany, and in many other western European nations – the state makes sure that its citizens are protected and prosper – through a functioning health care system, through proper educational systems and other similar mechanisms that ensure that the “common man” doesn’t get into a situation where he feels that he has nothing left to lose – the usual trigger for a revolution.
France, Russia, China – all those places went through a bloody reorganization of a society that simply had only a future in serfdom and despair to offer to the majority of people.
The US are currently steering towards just such a situation, combined with a final attempt by fundamentalist christianity to turn the country into a theocracy – and smart people like Buffet realize that.


Alex Jakeman August 25, 2011 at 17:32

C. Lorenz do you think that the American system is endemically “dog eat dog” or do you think that there are individuals in positions that allow them to exploit the system as it exists?

I suppose I may be taking your terms literally, instead of reading into the fact that after this comment you suggest more regulation as a solution.

The problem with this suggestion is that I tend to be of the opinion that capitalism unregulated is not the problem, the problem is a lack of personal and institutional code of ethical guidelines, and a system that seems to perceives an exponential model of economic profits as the ultimate goal, perhaps by simply changing the graph the individuals have as their sales/profit guidelines is enough to regulate them.


Billy the little August 24, 2011 at 23:33

” In my view, the latter are too imbued with the radical neoliberal ideology that has become hegemonic in the last thirty years.”

mommmy i am scared of them and their childrens…


kolesnik August 29, 2011 at 14:57

There’s a russian translation of this article


dave January 21, 2012 at 10:54

these guyes caused the collapse there greed and bogus milton fridman economics i say F them time get the piano wire and the nearest lamp post and put it to good use , the top 1 percent are a cancer and hanging is the cure .


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