On Saturday a young Maoist , from the Communist Party of Great Britain (Marxist Leninist), came into Head Office. We paid for copies of their paper Proletarian and Lalkar (published by Harpal Brar of the Stalin Society) with 5 volumes of the writings of Kim Il Sung which someone had donated to us. The point of this is that in the January/February issue of Lalkar there’s an article which puts the case for the present crisis being a crisis of underconsumption (even though it calls it a crisis of “overproduction”). The article can be found here. It’s paragraphs 2 and 3 in the subsection “The crisis in Europe” that offer their explanation of the crisis:
Quote:
This crisis has been building up over at least the last 30 years. It is at heart a classic crisis of overproduction, this being the design fault built into the capitalist system. As the masses of workers – who at the same time make up the bulk of consumers – are, in the interests of profit, paid as little as possible and reduced in number as much as possible, they are increasingly unable to buy all the increasing mass of commodities that the capitalist enterprises bring to market. This in turn bankrupts the least “efficient” of the capitalist enterprises, causing further job losses and downward pressure on wages caused by an excess of the supply of labour power over the demand for the same. Bankruptcies start to escalate, while economic activity stagnates. However, this process can be, and is, retarded by the simple expedient of the capitalists, who would otherwise find it difficult in the circumstances to invest profitably, lending money to workers to enable them to continue as consumers despite their relative poverty. (…) But then comes the day of reckoning – literally speaking – the day the borrowing must be repaid. So much has been borrowed, however, that repayment is no longer possible.
This is quite a common explanation of the current crisis, put forward even by people who consider themselves Marxists, but it’s not true as it ignores the fact that what the workers can’t buy (out of their wages) the capitalists can (out of their profits). In fact, from one point of view, a crisis is caused by capitalists choosing not to buy (not invest profits because they judge they won’t make any profits or not enough). Crises are not caused by workers not being able to buy back all they’ve produced. If this was the case, what would need explaining would not be crises but why there could ever be a boom.And Marx himself noticed:
Quote:
It is sheer tautology to say that crises are caused by the scarcity of effective consumption, or of effective consumers. The capitalist system does not know any other modes of consumption than effective ones, except that of sub forma pauperis or of the swindler. That commodities are unsaleable means only that no effective purchasers have been found for them, i.e., consumers (since commodities are bought in the final analysis for productive or individual consumption). But if one were to attempt to give this tautology the semblance of a profounder justification by saying that the working-class receives too small a portion of its own product and the evil would be remedied as soon as it receives a larger share of it and its wages increase in consequence, one could only remark that 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. From the point of view of these advocates of sound and “simple” (!) common sense, such a period should rather remove the crisis. It appears, then, that capitalist production comprises conditions independent of good or bad will, conditions which permit the working-class to enjoy that relative prosperity only momentarily, and at that always only as the harbinger of a coming crisis.
