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Socialist Party of Great Britain - Capitalism In Crisis - The Difference between a Recession and a Depression? Absolutely nothing.

According to the DICTIONARY OF ECONOMICS (PENGUIN 2003), a recession is defined as two successive declines in seasonally adjusted gross domestic product GDP (page 327). The dictionary also defines a “depression” as “A down-turn in the business cycle in which there is a sustained high level of unemployment”. Both definitions are unsatisfactory. The first definition is arbitrary while the second is vague. There is no definition given for “stagnation”.

Marx favoured the word “stagnation” to describe periods of high levels of bankruptcy and unemployment following an economic crisis. Stagnation can be considered as a time of little or no economic growth associated with high unemployment.

In his one place Marx wrote:

…capitalist production moves through certain periodical cycles. It moves through a state of quiescence, growing animation, prosperity, overtrade, crisis and stagnation (WAGES, PRICES AND PROFIT in SW1, p. 440).

In CAPITAL VOLUME III, Marx again uses the word “stagnation” when he writes of “the turnover cycles” as consisting of “…inactivity, growing animation, prosperity, overproduction, crash, stagnation, inactivity…” (Ch. 22, p 482 Penguin edition).

Engels also used the word “stagnation” and “depression” in his introduction to the English translation of Marx’s CAPITAL. However, he erroneously believed, for a time, that the “GREAT DEPRESSION” in the last quarter of the nineteenth century was a “slough of despond of a permanent and chronic depression” (p. 113 Penguin ed.). In contrast Marx had stated that there were no permanent crises. He summed it up with the words “There are no permanent crises” (THEORIES OF SURPLUS VALUE Vo II Part 2 p 269).

The Socialist Party of Great Britain used the expression “trade depression” in its 1932 pamphlet “WHY CAPITALISM WILL NOT COLLAPSE” (page 14 and republished in CAPITALISM'S FUTURE..COLLAPSE? REFORMED? ABOLISHED? nd).

When Alfred Kahn, former President Jimmy Carter's chief economic advisor, used the politically taboo word "depression" in a statement from the White House in the 1970’s, the economist was attacked by politicians and others for using this politically charged word which conjured up images of the 1930’s. According to the journalist, William Saffire: “as a result, the hapless but happy man pledged to substitute the word "banana" for "depression" in any future economic message” (NEW YORK TIMES 09.02.09). This brings into play the political use of words by politicians to lessen the pain of having to explain why the economy is in crisis and depression.

Recently the INDEPENDENT (11.02.09) noted that up until the 1930’s “crises” were referred to as “panics”. Herbert Hoover, for political reasons changed the word from “panics” to “depression”, thinking that it would be more palatable with the electorate. Harry Trueman didn’t want to go back to depressions so he started to use the term “recession”. Gordon Brown now prefers the anaemic word “down-turn” to describe the current crisis and almost choked himself recently when he uttered the word “depression” at Prime Minister’s Question Time.

While some may think it pedantic to quibble about words the political object of re-definition is to move away from Marx. This was begun in the 1920’s when economists were forced to produce a Business Cycle theory in an attempt to soften the blow of Marx’s critique of capitalism which showed crises as a result of the anarchy of commodity production and exchange for profit. An attempt was made to draw attention away from the failure of capitalist production to either financial and credit problems on the one hand and the policy failure of bankers and politicians on the other.

And as an example of this anti-Marxist politics attention is drawn to an essay THE NEW DEPRESSION written by the former editor of MARXISM TODAY (one-time theoretical journal of the Communist Party of Great Britain), Martin Jacques. He conveniently splits the current economic turmoil into a “recession” and “depression” saying that Keynes should be restored to his rightful position to deal with the “recession” but; “if the recession turns into a depression, Marx will once again become required reading” (NEW STATESMAN 16th February 2008).

As far as Socialists are concerned Marx should be required reading for the working classes no matter what the state of the economy. Jacques is also completely silent on the failure of Keynesianism in the 1970’s to deal with “stagflation” simultaneous inflation and unemployment as well as the anti- working-class politics he and the Communist Party of Great Britain pursued up to 19991 while supporters of Russian capitalism.

If a political lesson is to be learnt it is this; if Marx described accurately the anarchic and social destructiveness of capitalism in the 19th century which has continued to this day through war, poverty and unemployment, why has not the working class done something about it by now? Capitalism can never be made to run in the interest of the working class majority no matter how economists and politicians describe the system of exploitation and the words they use to describe its effects of economic hardship and pain.

Writing in 1932 the SPGB said:

so long as the workers are prepared to resign themselves to the evils of Capitalism, and so long as they are prepared to place in control of Parliament parties that will use their power for the purpose of maintaining Capitalism, there is no escape from the effects of Capitalism. The workers will continue to suffer from the normal hardships of the capitalist system when trade is relatively good, and from the aggravated hardships which are the workers’ lot during trade depressions” (CAPITALISM WILL NOT COLLAPSE. p16).

That was seventy-seven years ago!!!! Surely it should be plainly obvious to anyone by now that the profit system needs to be replaced with Socialism.

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