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Saturday, September 15, 2012

Capital and Punishment

Are we in a Marxian cycle, leading, willy-nilly, to an unknown future?
The article below is but an introduction to Marx on
(1) Credit Crises and Banks, and
(2) Unemployment.

From Philosophy Now:

Karl Marx famously pronounced: “The last cause of all real crises always remains the poverty and restricted consumption of the masses as compared to the tendency of capitalist production to develop the productive forces in such a way that only the absolute consuming power of society would be their limit.”

In a less well-known pronouncement, quoted in Vince Cable's 2009 book The Storm, Marx also predicted in Nostradamus-like fashion: “Owners of capital will stimulate the working class to buy more and more of expensive goods, houses and mechanical products, 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 nationalised and the state will have to take the road which eventually will lead to communism.”

He believed there was a fatal contradiction between the need for an ‘industrial reserve army’ of unemployed to keep wages and prices down (and profits up), and the incompatible need for high employment at good rates of pay to consume the full product (and keep profits up).

Marx did not see how any juggling act within capitalism could resolve this contradiction with its attendant crises and human misery. This is why Marx thought that capitalism would eventually have to go, to be replaced by a more rational system of economics. True, he was not terribly clear about the details of this more rational economics, and so his professed followers (Lenin, Trotsky, Stalin, Mao, Castro, Pol Pot) had to more or less make it up as they went along, weaving an uncertain path between Marx’s ideas, historical expediency, and in the case of Stalin, Mao and Pol Pot, extreme megalomania.

 To be fair, John Maynard Keynes too could not see how any such juggling act was possible within existant capitalism. But he did believe it was possible within a modified form of capitalism, which would then constitute the more rational system of economics apparently needed...



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