That's Karl Marx, not Groucho, I'm talking about today. I am Brad DeLong, and this is my a ternoon co ee...

This !eek I asked my graduate students to !rite on the ollo!ing "uestion# !hether$$and ho!$$Karl Marx is rele%ant to a t!enty$ irst century neoclassical economist. They turned it around, and asked me to ans!er the same "uestion. &o here goes... 'irst, let me say that I am here to talk about Marx the economist. Marx did not di%ide himsel into Marx the moralist$(ro(het, Marx the (olitical acti%ist, and Marx the economist. But !e do. I'll talk about Marx the moralist$(ro(het and Marx the (olitical acti%ist some other time. But today I am interested only in Marx the economist, !ho I think is !orth studying or i%e reasons# 'irst, Marx the economist !as among the %ery irst to get the industrial re%olution right# to understand !hat it meant or human (ossibilities and the human destiny in a sense that (eo(le like )dam &mith did not. &econd, Marx the economist got a lot about the economic history o the de%elo(ment o modern ca(italism in *ngland right$$not e%erything, but he is still %ery much !orth gra((ling !ith as an economic historian o +,--$+.,-. Third, ourth, and i th, Marx made a three$ old criti"ue o the ca(italist economy he say de%elo(ing. /e belie%ed, third, that a system that reduced e%erybody to some orm o (rostitute !orking or !ages and !ages alone$$in !hich (eo(le %ie!ed their 0obs not as !ays to gain honor or (ro essions that they !ere born into or as !ays to ser%e their ello!$man or ex(ressions o their inmost essence as a s(ecies$ being but as !ays to earn money so that you can begin your real li e !hen the i%e o'clock !histle blo!s$$that such an economy is an insult, deli%ering lo! utility, and also sociologically and (sychologically unsustainable in the long run. 'ourth, Marx belie%ed that the ca(italist economy !as inca(able o deli%ering an acce(table distribution o income or anything but the brie est historical e(ochs. 'i th, Marx !as among the %ery irst to recogni1e that the e%er$ its o inancial crisis and de(ression that a lict modern market economies !ere not a (assing (hase or something that could be easily cured, but rather a dee( disability o the system$$as !e are being reminded once again right no!, this time !ith Ben Bernanke in the /ot &eat. 2o! !e modern neoliberals ha%e (arries to these latter three criti"ues. 3n the business cycle, !e res(ond that Keynesianism$$or monetarism, i you (re er$$gi%es us the tools to trans orm the business cycle rom a li e$threatening economic yello! e%er o the society into the occasional night s!eats and e%ers# that !ith economic (olicy "uinine !e can manage i not banish the disease. 3n the distribution o income, !e res(ond that Be%eridgism or Myrdahlism$$social democracy, (rogressi%e income taxes, a %ery large and !ell$established sa ety net, (ublic education to a high standard, channels or u(!ard mobility, and all the (ano(ly o the t!entieth$century social$democratic mixed$economy democratic state can banish like bad dreams all Marx's ears that ca(italist (ros(erity must be accom(anied by great ine"uality and great misery.

3n the cash nexus, !e modern neoliberals shrug our shoulders and say that !e are in a%or o a market economy but not o a market society, and that there is no reason !hy (eo(le cannot ind 0obs they like or insist on di erentials that com(ensate them or 0obs they don't. )nd !e go on to say that the demand or and orecast o uto(ia$$that 0um(ed$u( monkeys !ith big brains be (er ectly ha((y$$is a demand and orecast that belongs in the Book o Daniel or o the )(ocaly(se, not something that has any (lace in a !ork o (olitical economy rele%ant to this allen !orld. I am Brad DeLong. )nd this is my a ternoon co ee.