Skip to Content

Crises

The Crisis: The Planners’ Swansong

Capitalism we know and have long endured. Socialism we could have and will have when a majority understands the need for it. But is there a half-way house, something that has ceased to be Capitalism but is not Socialism? Socialists know that there can be no such thing, but many people both in the Labour Party and outside thought that it was possible and desirable. Not that the Labour supporters of planned capitalism called it that. Indeed they said precisely the opposite—" there is no half-way house between a society based on private ownership in the means of production, with the profit of the few as the measure of success, and a society where public ownership of those means deliberately planned for attaining the maximum of general well-being." (For Socialism and Peace, Labour Party).

The Cause of the Crisis

In the two preceding articles it was shown that the fundamental cause of the crisis is not to be found in the defects of the world's monetary systems, and that the collapse of the gold standard, in this and other countries, was not responsible for the chapter of accidents but merely one of the features of the economic collapse. The real cause of that collapse has now to be determined. In discussing the depression in which the trade of the world has been floundering since the end of 1929, it is usual to relate the sequence of dismal events since then to the sharp break in general gold prices that occurred at that date.

Marx’s Financial Articles

In the critique of political economy which became his life work Marx set out, as he put it in the Preface to the first German edition of Capital, to "lay bare the economic law of motion of modern society". One of his conclusions was that the expansion of production under capitalism did not proceed at a smooth, steady pace, but was "a series of periods of moderate activity, prosperity, overproduction, crisis and stagnation" (Capital Vol I, Pelican, p.58), in which the long-term trend was nevertheless upwards.

The crisis which marked the end of the period of boom took the form of a financial crash—that is, a collapse of credit and a strong demand to be paid in cash. This gave rise to the illusion that the crisis was simply a monetary question whereas in fact the monetary crisis was a reflection of the real overproduction that had taken place.

Cooking the Books: Capitalism in Action

In a speech in January David Cameron talked about using “this crisis in capitalism to improve markets, not undermine them”. At least he admits that capitalism does have crises, which is progress compared to the previous Prime Minister. He said he wanted “these difficult economic times” to “lead to a socially responsible and genuinely popular capitalism. One in which the power of the market and the obligations of responsibility come together. One in which we improve the market by making it fair as well as free, and in which many more people get a stake in the economy and share in the rewards of success. That’s the vision of a better, more worthwhile economy that we’re building”.

Syndicate content


Theme by Dr. Radut.