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Socialist Party of Great Britain - Capitalism In Crisis - Capitalism in Crisis: Who is to blame?.

The media are playing a tiresome game of who to blame for the current crisis.

The capitalist Left like the SWP are blaming greedy bankers, spivs, and City fat cats. The Conservatives are blaming Gordon Brown while Gordon Brown is blaming the sub-prime market in the US. The Labour Party supporting GUARDIAN is blaming Margaret Thatcher’s liberalisation of the City in 1986. The INDEPENDENT blames the Government, the Bank of England and the Financial Regulation Service. The DAILY MAIL sees the crisis as a result of a Trotskyist conspiracy where former Trots like the current Chancellor of the Exchequer, Alistair Darling burrowed, mole-like, into the Labour Party to create a financial crisis so that the Government could nationalise the banking industry. The SPECTATOR leaves the crisis at the door of President Clinton's “egalitarian” policies in the 1990’s where he bullied the Banks to lend money to the poor for mortgages they could not afford to repay. The journalist Dominic Lawson, following Lord Rees Mogg, believes it is the fault of governments for leaving the gold standard. The novelist, A. N. Wilson blames everyone.

What all these excuses have in common is to erroneously personalise the cause of economic crisis as though an individual or an institution could be blamed for such a seismic failure. These pundits cannot understand the cause of economic crisis and cannot offer an objective revolutionary remedy. What they all conveniently ignore is that economic crisis is a result of the anarchy of commodity production and exchange for profit. Yet, as supporters of the profit system the last thing they can do is to conclude that capitalism should be abolished and replaced by Socialism.

Marx was under no political restraints. It was Marx who gave a considered view of the cause of periodic economic crisis: “…capitalist production moves through certain periodical cycles. It moves through a state of quiescence, growing animation, prosperity, overtrade, crisis and stagnation” (WAGES PRICE AND PROFIT in SWI, p. 440).

Marx showed that in developed capitalism production no longer simply moves in response to demand but has its own anti-social independent growth-capital accumulation for the sake of accumulation.

If capital accumulation is carried beyond a certain limit it will result in too much capital seeking a share of surplus value. Although the reason of capitalism is capital accumulation and making a profit, the more successful in this the more commodity production and exchange for profit brings about the conditions for crisis. In this sense a boom is only a pre-condition for a slump. Contrary to the assertion of the Prime Minister Mr Brown, while capitalism exists there will always be “boom and bust”.

As Marx sums it up:

Since the aim of capital is not to minister to certain wants, but to produce profit, and since it accomplishes this purpose by methods which adapt the mass of production to the scale of production, and not vice versa, a rift must continually ensue between the limited dimensions of consumption under capitalism and a production which forever tends to exceed this immanent barrier” (CAPITAL VOLUME III Chapter XV Internal Contradictions of the Law p. 256 Lawrence and Wishart 1972)

Marx wrote of this contradiction a little later:

The contradiction of the capitalist mode of production,…, lies precisely in its tendency towards the absolute development of the productive forces, which continually come into conflict with the specific conditions of production in which capital moves, and alone can move” CAPITAL VOLUME III loc cit p. 257).

It is therefore unavoidable that periodically some industries find they have overproduced for their particular markets and are compelled to cut back production and stand workers off, with all the repercussions the increase of unemployment and curtailment of buying has on other industries.

Marx had already stated this.

He wrote:

Crises are always but momentary and forcible solutions of the existing contradictions. They are violent eruptions which for a time restore the disturbed equilibrium. The contradiction, to put it in a very general way, consists in that the capitalist mode of production involves a tendency towards absolute development of the productive forces, regardless of the value and surplus value it contains, and regardless of the social conditions under which capitalist production takes place; while, on the other hand, its aim is to preserve the value of the existing capital and promote its self-expansion to the highest limit (CAPITAL VOLUME III Chapter XV, Internal Contradictions of the Law p.249 Lawrence and Wishart1972)..

For Marx the accumulation of capital always entailed capitalist crisis.

The real barrier of capitalist production is capital itself. It is that capital and its self-expansion appear as the starting and closing point, the motive and the purpose of production; that production is only production for capital and not vice versa, the means of production are not mere means for a constant expansion of the living process of the society of producers” (CAPITAL VOLUME III loc cit p.250).

As a consequence of this “desire of the capitalists…to enlarge their capital” (THEORIES OF SURPLUS VALUE, volume 2, p. 492) an overproduction of capital occurs and therefore an accumulation of capital, since economic activity is being carried out in the various sectors of production without any knowledge that there will be buyers for the commodities produced and for profit to be realised. This causes a subsequent fall in the rate of profit.

Each capitalist anticipates a potential market for their commodity and anticipates the price at which it may be sold. But time and time again capitalists find no buyers who are prepared to pay the necessary price. Because capitalism is one in which branches of the same industry develop independently in competition of one another, capitalists may find that in entering the market they are met by competitors who can produce at a lower price or no buyers because they have decide to invest elsewhere. As Marx dryly puts it, “commodities are in love with money, but “the course of true love never did run smooth” (CAPITAL VOLUME I Chapter III Money, or the Circulation of Commodities p. 109).

Unlike the media and politicians, Marx demonstrated that capitalism could never be run in the interest of the working class. Instead, he advocated the abolition of the wages system through conscious political action by the working class.

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