Marx Quote Is Bogus, Thanks Pimm, But This Hayek One is Real

OK -- I listened to Bloomberg's Pimm Fox and I got some bad mojo. I should have read the IHT first:

A banker in China recently forwarded this quote to me: "Owners of capital will stimulate the working class to buy more and more expensive goods, houses and technology, pushing them to take more and more expensive credits, until their debt becomes unbearable. The unpaid debt will lead to bankruptcy of banks, which will have to be nationalized, and the State will have to take the road which will eventually lead to communism. (Das Kapital, 1867)"

"How prescient Karl Marx was," my friend marveled.

The problem is, Marx never said it - it's a bogus quote that has made its way to Beijing from Wall Street. But the fact that people would look to the father of communism at this time of financial upheaval offers an interesting insight on the state of minds today.
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Whether Marx said it or not, is not muy importante. The fact that it is being relayed at all through a news organization can tell you much about the state of the world and the behavior of market participants. It is constructive of the current state of the market's psychology and mood. As someone who looks at and appreciates the qualitative side of data -- the words, frequency and meaning -- I find this all fascinating and luckily, it is something I get to work on regularly. Numbers are important(understatement of the century for financials, etc.) but in most cases for finance they are backward looking. Language I believe is becoming very important and can be forward looking and in a growing number of cases predictive.

So if we begin with pseudo-Marx, let's end with some Friedrich von Hayek - from a Meets the Press Interview in 1975

Will:

"Dr. von Hayek, capitalism and particularly American capitalism would seem to have a good record at giving people a rising standard of living. Why are so many intellectuals, and particularly so many economists, skeptical about and even hostile to capitalism?"

Hayek:

"Well, I've been puzzling about it for a long time, particularly about the economists who ought to understand better. It's very difficult to know why they don't. I think it's the intellectual attraction of a system you can deliberately control, which is fascinating to the intellectual."

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Think on the language of that for a while. Hopefully it starts to make some rounds...

Comments

[Francine McKenna]

Is an economist still considered an intellectual?

[Robert Passarella]

That is a loaded question. I know many intellectuals that are budding economists.