Marxism

Karl Marx's pamphlet Wage Labour and Capital first appeared as a series of articles in Neue Rheinische Zeitung, the newspaper that Marx edited during the 1848-9 revolution that swept Germany and Europe.

The articles were based lectures that Marx had given to German workers in Brussels in 1847.

Marx's aim in the pamphlet is to set out and explain "the economic conditions which form the material basis of the present struggles between classes."

A new radical think-tank kicked off last year in the UK. It's got a great name: Class: the Centre for Labour and Social Studies. Sounds socialist, even Marxist, doesn't it? Unfortunately, at its first meeting the speakers, especially the economists, were all Keynesians. All the arguments against austerity were Keynesian. Apparently, a Marxist analysis has no contribution to make in explaining the Great Recession and the ensuing long depression - or what to do about it.

When David Cameron or Iain Duncan Smith offers moral lectures to the poor about the merits of hard work and independence, socialists understandably turn away in disgust at their hypocrisy. It is wrong, they tell us, to "live off the state", yet the bankers who made millions speculating in financial markets but turned to government to bail them out when their bets went bad, are barely chided.

It has been translated into more than a hundred languages. It is a historical materialist approach to history, a critique of capitalism and a guide to the international class struggle.

More than one and half centuries later the words of the preface to the 1872 German edition of the Manifesto remain applicable today: "However much the state of things may have altered during the last 25 years, the general principles laid down in the Manifesto are, on the whole, as correct today as ever."

Globalisation emerged as a fashionable concept in the years after the ending of the Cold War. Neoliberalism had established itself as the new economic orthodoxy in the West during the 1980s, preaching the need for privatisation and attacks on the welfare state.

With the disintegration of the Soviet Union, champions of neoliberalism declared "the end of history", expecting an end to any systemic opposition to capitalism. Globalisation was to sweep the free market, unfettered and unregulated, into former "communist" countries and beyond.

The long boom that lasted from the 1940s to the 1970s was the "golden age" of capitalism. Today it is something only glimpsed in episodes of Mad Men and old movies. Yet this golden age did exist with full employment and rising living standards and the creation of the welfare state. It was an age of consumption and there was a widespread feeling that things really could only get better.

• Keynes argued against cutting workers' wages in a recession and leaving the market to its own devices

• He argued that governments should cut interest rates and directly invest to lift the economy

• But he tailored his solutions to what bosses would accept

The ideas of John Maynard Keynes are back with a vengeance. This has been a consistent theme in the past few years, from the corridors of power to the pages of the Financial Times. After 30 years of deriding Keynes's ideas many are now reconsidering the economic remedies he prescribed.

Marx defined the rate of profit as the ratio of profit to investment. A long-term feature of capitalism has been the tendency for this rate of profit to fall - for booms to get shorter, and slumps deeper and longer.

When the credit crunch hit in 2008 and governments bailed out banks with trillions of pounds so they didn't collapse many people recognised that this was because of the huge amounts of debt in the system. Banks had loaned money to people and companies with no idea if they'd be able to pay it back, and these debts had then been sold on and bets taken on their future value.

So if the crash was caused by credit and debt, is it the fault of the banks for lending money, or people for borrowing? And couldn't we just regulate the system to get rid of this toxic aspect?