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Underconsumption. A situation where, it is alleged, there is insufficient demand in the economy leading to crisis and depression. In one form or another this belief informs the Keynesian theory of unemployment. However, crises are usually the result of a failure of profitability and not the lack of markets or an inability to buy back what is produced. Marx warned against trying to explain crises in terms of the workers’ lack of purchasing power:

‘ … crises are always prepared by precisely a period in which wages rise generally and the working class actually gets a larger share of that part of the annual product which is intended for consumption’ (Capital, volume 2, chapter 20, section 4).



Simon Clarke, Marx's Theory of Crisis, 1994


Unemployment. Capitalist economics identifies different types of unemployment:

  • Frictional unemployment: caused by people between jobs

  • Classical unemployment: caused by ‘excessively’ high wages

  • Structural unemployment: caused by changes in the structure of the economy

  • Keynesian unemployment: caused by a deficiency of aggregate demand

Capitalist economics never identifies profitability as even a theoretically possible cause of unemployment. This shows how ideologically loaded capitalist economics is. What is the ‘opportunity cost’ of the enforced idleness of millions while unmet needs abound? (See also CRISES; DEPRESSIONS; KEYNESIAN ECONOMICS.)


Uneven development. Industrial development is not evenly spread over the world. In Europe, North America, Australasia, the Pacific Rim, the vast majority of the population live and work under capitalist conditions of production for profit and the wages system, while in some parts of the world capitalist industry is only an oasis in the midst of a desert of less developed agriculture. In between are countries in varying stages of industrial development. As yet not all mankind are propertyless wage-workers, many of the remainder being peasants exploited by landlords and moneylenders.

To say that a major part of mankind are not living under capitalist conditions as wage earners is not to say that their lives are not affected by that system. Price fluctuations in the world market directly touch on their standard of living and they cannot escape the consequences of wars between capitalist powers. In view of this and in view of the fact that the bulk of the world’s wealth is produced in the capitalist parts, we can say that capitalism is the predominant social system in the world today.

We don’t need to wait for capitalist production to predominate everywhere before socialism can be established. World socialism has been possible for many years now, for as many in fact as its industrial basis has existed. As soon as the workers of the world want to, they can establish common ownership of the means of production. For the same reason, socialists do not support movements for ‘national liberation’ which aim to gain political power in the less developed countries and, of necessity, pursue policies of capitalist development.

The very idea of socialism, a new world society, is clearly and unequivocally a rejection of all nationalism. Those who become socialists will realise this and also the importance of uniting with workers in all countries. The socialist idea is not one that could spread unevenly. (See also NATIONALISM; NATIONAL LIBERATION.)


David Harvey & Neil Smith, Uneven Development, 2008


Use value. The use value of a good or service is its power to satisfy a human desire. Under capitalist commodity production, however, their use value is secondary to their exchange value. Commodities are produced primarily to be exchanged, for their exchange value. (See also EXCHANGE VALUE; VALUE.)


Utopian socialism. A term used to describe the ideas of Claude Henri de Saint Simon (1760-1825), Francois-Charles Fourier (1772-1837) and Robert Owen (1771-1858).

They provided interesting criticisms of existing society (competitiveness, the cause of crime, etc.) and useful ideas for a future society (individual self-realisation, co-operation, etc.), but were politically naïve about how this was to come about. Owen, for example, appealed to the ruling class for their implementation. (See also OWEN; SOCIALISM.)


B. Goodwin & K. Taylor, The Politics of Utopia, 1982

Krishan Kumar, Utopia and Anti-Utopia in Modern Times, 1991