Marx's Revenge by Meghnad Desai

Was the prophet of socialism really the pioneer of globalisation? Will Hutton rises to a challenge

Marx, if we did but know it, is the prophet and advocate of globalisation. Capitalism's restless quest for profit is so dynamic that it is compelled, however inequitably, to be a transforming economic force that must flow into every nook and cranny of the globe. Only once all its possibilities have been exhausted – which might take centuries or even millennia – can socialism be expected to follow.

Thus speaks Karl Marx – or, at least, the Marx who inhabits Meghnad Desai's new book. Desai's central thesis is rich in paradox. The inspirer of communism would have deplored the way his ideas were bent to serve the Russian revolution and Soviet Communism, because that development obstructed what capitalism had to do. The revolution came far too early; it massively predated the development of Russian capitalism, which could not have done its modernising work by 1917.

The years between 1917 and 1989 were thus an aberration. But now capitalism is free to universalise modernity and the logic of markets. We are back on the true road to socialism, except none of us may ever see it. Indeed, if capitalism is as creative as Desai claims that Marx thought, its possibilities may be inexhaustible. In which case, socialism will remain a dream.

It's a neat argument, which Desai evidently hopes will infuriate the remnants of the socialist left while paradoxically beginning to restore the reputation of a political economist he much admires – but not in a way that has the slightest progressive implications. If you thought Marx thundered against capitalist exploitation and called for revolution, think again. In Desai's world, he is more a history-obsessed, pro-capitalist intellectual. He hopes for a better communist order in some future never-never land, but in the meantime cheers on capitalism-cum-globalisation as a necessary but benign evil – while characterising attempts at social justice in the here and now as nice but futile.

This Marx is for the World Trade Organisation because, as an agency in which any country has only one vote, it has the best chance to promote globalisation. But he is against the IMF and World Bank because these are institutions dominated by the older capitalist states, which might use government power to curtail the full power of markets. This is a Marx that comes uncannily to occupy the same intellectual position as Professor Desai.

The chapters that discuss Marxism and its internal debates up to the Russian revolution are the fulcrum on which the book turns. Desai shows how Marx could only argue that the rate of falling profit – upon which any prediction of capitalist crisis depends – was a tendency rather than a law. This is because, once he focused on the role of surplus value in his system, he stumbled upon how effectively profits dynamise capitalist growth.

Desai also shows how, in theory and in argument, Marx was committed to the idea that capitalism has to flower fully if, in the last pre-socialist epoch, it is to allow the bourgeois class to fufill its modernising destiny. He is pretty convincing when he argues that Marx would have condemned the Bolsheviks as traducing his theories, so that Stalinism was the result: the imposition of a modernisation by force upon Russia, which had not been done by capitalism.

The trouble is that Desai is a two-category man; there is socialism, which he understands in Marxist terms, and there is capitalism. Like many of the old Marxist left, if the first category is found wanting, then there is no point of stopping before the second category. This Manichean division informs the rest of his book. If you are not a Marxist, then you must be a conservative enthusiast for capitalism – the journey that many formerly left-wing intellectuals made.

Yet for those of us who never found Marxism attractive, who have been wedded to some combination of liberalism and social democracy all our lives, and who believe in human agency rather than inevitable historical laws, such two-category thought is inherently alien. As a result, Desai's account of the 20th century before globalisation is one-dimensional: capitalism and its intellectual allies are the good guys, while anything leftist is regressive or of only transient usefulness.

Yet suppose there is never going to be socialism. Suppose the task is the liberal social-democratic objective of building what the American philosopher John Rawls calls an infrastructure of justice to underwrite risk and promote opportunity, in an economy organised around the profit motive and market principles. In this framework, some of the 20th-century state's great achievements – a universal health service, education and income support for the disadvantaged – are not outgrowths of some misconceived statist attempt to create socialism, but the heart of the matter.

If you believe this, you will find Desai's book an important account of how Marx's ideas got murderously distorted but, beyond that, one that serves little purpose except to legitimise the right. Maybe that's what the author intends but, for all Desai's intellectual agility, I have a hunch it is not what his Marx would have either wanted or believed. E

Will Hutton's new book 'The World We're In' is published this month by Little, Brown