Next crisis

[Rafiq]

What do Marxian economists have to say about the prospects of another major financial crisis, either in the United States or Asia?

[tuwix]

In terms of future you should rather ask a seer instead of economist. :)

As far I know, according to Marx the major reason of crises of capitalism is insufficient investment in labour. Simply, in workers' salaries. And as crises of capitalism are cyclical, we should only wait for another one and hope it will be the last one that will finally destroy a capitalism.

[BIXX]

In terms of future you should rather ask a seer instead of economist. :)

As far I know, according to Marx the major reason of crises of capitalism is insufficient investment in labour. Simply, in workers' salaries. And as crises of capitalism are cyclical, we should only wait for another one and hope it will be the last one that will finally destroy a capitalism.

As some level of curiostiy, can you give me an example of all the crises since the second world war?

[Rafiq]

Marxists previously were able to predict the economic crisis of 2007, and with his theoretical knowledge Marx was able to predict the long depression. I'm not asking for when a specific crises would occur, but the nature of our "recovery" from the previous one.

[DOOM]

Explaining current crises with falling rates of profit is the most accurate way in my opinion.


RJ: What kind of economic crisis is the current one?

EL: Marx distinguishes between collective and particular crises, saying that, “In world market crises, all the contradictions of bourgeois production erupt collectively; in particular crises (particular in their content and in extent) the eruptions are only sporadical [sic], isolated and one-sided.”[1] No crisis in the history of capitalism has really deserved to be called a collective crisis so much as the one that has become manifest since fall 2008. It is an entire system of partial crises that mutually create, overlap, and build upon one another.

Above all, two main layers have to be looked at separately. First there is a structural crisis of real value production. This has been ongoing below the surface since the 1970s, has never been overcome, and in fact cannot be overcome because is it caused by the fact that productivity since then has been too high to keep the process of capital valorization going. Capital has to reproduce itself because otherwise it ceases to be capital and for that purpose a continuously growing workforce has to be utilized to produce commodities. But at the same time, competition is driving an unstoppable productivity race that at its core leads to the permanent replacement of labor with physical capital. That is the fundamental internal contradiction in the capitalist mode of production that ultimately has to turn on the mode of production itself. Specifically, if productivity is so high that huge masses of labor power are made superfluous, that jeopardizes the very basis of capital valorization. That is precisely what is at the core of the fundamental structural crisis that the global capitalist system has found itself in since the end of the postwar boom.

RJ: What is the other essential component of the crisis?

NT: The crisis that we just described has been covered up by the bloat in the financial markets for decades. On the level of our entire society, capital accumulation went back into overdrive after the crises of the 1970s and the global economy managed to start growing again. That growth was no longer supported by actual production of value through the use of labor, however, but by explosive increase in capital within the finance industry. While the finance industry was circulating more and more property titles (debts, stocks, derivatives, etc.), it managed to transform the sleight of hand known as future value, meaning value that has not actually been produced yet and may never be produced, into abstract wealth.

But this reproduction of capital through anticipation of value, which has long since reached astronomical proportions, has itself fallen into crisis. Although the permanent increase in property titles, which capitalism can no longer survive without, is operating in the same way that it always has and is even picking up speed, that’s only because that job is now being done by governments and above all by central banks. States drive up their debt and central banks guarantee private banks excessive credit at what amounts to zero interest while simultaneously buying up government bonds that no one else will buy. In fact we’re slowly reaching the limits to this, the euro crisis being one example.

http://www.krisis.org/2012/making-every-central-bank-a-bad-bank-ernst-lohoff-and-norbert-trenkle-discuss-the-economic-and-financial-crisis-part-1-of-3

[edwad]

i guess this a bit more of a controversial view but ernest mandel was a supporter of kondratiev waves. maybe you'll find those interesting. he has a book about them called "long waves of capitalist development" where he talks about them. its sitting on my bookshelf but i haven't cracked it open yet.

[Ceallach_the_Witch]

not that this is really based in any hard analysis but I feel that on reflection, the 'recovery' from the crisis beginning in 2007 has been what i guess i'd term a shallow one. certainly in the UK, i cant really speak for other countries, its been based on shadowy financial alchemy and a huge expansion in insecure, part-time jobs. Its also frequently been apparent that more than ever, governments rely on some serious book-cookery to deliver the figures global financial institutions want to see. The UK recovery is also based partly (once again) on grossly inflating house prices in the south.

Whilst i couldnt say when a crisis will happen or what shape it will take, my gut feeling is probably that we're going to see another global economic downturn of serious proportions within the next 2-5 years.

[BIXX]

I'm really curious though, is there a list of every crisis since the second world war?

[Ethics Gradient, Traitor For All Ages]

I couldn't find a global list, though I wold like to see one as well. https://en.m.wikipedia.org/wiki/List_of_recessions_in_the_United_States This US one is interesting by itself, theres been a crisis almost every 3 to 5 years

[hexaune]

not that this is really based in any hard analysis but I feel that on reflection, the 'recovery' from the crisis beginning in 2007 has been what i guess i'd term a shallow one. certainly in the UK, i cant really speak for other countries, its been based on shadowy financial alchemy and a huge expansion in insecure, part-time jobs. Its also frequently been apparent that more than ever, governments rely on some serious book-cookery to deliver the figures global financial institutions want to see. The UK recovery is also based partly (once again) on grossly inflating house prices in the south.

Whilst i couldnt say when a crisis will happen or what shape it will take, my gut feeling is probably that we're going to see another global economic downturn of serious proportions within the next 2-5 years.


A lot of the so called jobs they've created in the UK aren't even real sustainable jobs. Loads of people have gone from JSA to being self employed, doing things that don't bring in anywhere near enough money to support them, but being able to survive on working tax credits/housing benefit/counciltax reduction, which is only a few quid less than JSA but you don't have someone on your back every week. Of the 1.1m jobs created since 2008, 0.73m of them were self employed jobs!

[Ocean Seal]

What do Marxian economists have to say about the prospects of another major financial crisis, either in the United States or Asia?

The United States is a rather insulated economy unlike the periphery states of Europe so financial crises on the scale of the 30's are quite unlikely. Marxism is ill-equipped to predict smaller crises although some Marxists would like to claim otherwise. Many Marxists claim to have predicted the 2007 crisis much in the same way that Ron Paul claimed. This is quite useless since if you are claiming crisis all the time you are bound to be right sometime. Financial crises are cyclical, and while things like the housing bubble are predictable, there are analogous predictions in bourgeois economics.

Asia is interesting. I don't really know much about it outside of China, but I will explain what I know. China has a labor shortage, and as a result workers can organize and make gains relatively often. Despite this, real wages in China have been falling for the past few years. The labor shortage will soon be a thing of the past just like in the west because money will flow to more unprotected economies as the workers grow to be more organized and less profitable. Chinese management is quite good and may be able to offset this, but ultimately the contradictions between the classes will come out and I would say within 20 years workers and managers will be in conflict for the long term.

[cyu]

A lot of pro-capitalist "libertarians" believe that the root of their problems comes from the abandonment of the gold standard. The root is actually much deeper than that, since gold is merely another medium of exchange. Basically the entire financial system has been built on what amounts to thin air for a long time. Pro-capitalist propagandists only like to focus on gold since it is something easy for capitalists to "own" - they don't really want to admit that wealth really comes from the means of production and the workers who use the means of production, since that puts more power in the hands of the working class than they would like to admit. When you want capitalists to rule, you have to maintain the illusion that it is the capitalists who are vital to the economy, rather than the working class that is vital to the economy.

As long as the system is built on fraud, there will be crises to the end of time - and half the academic economists would have no clue what is going on, since they were indoctrinated with fraud.

[Tim Redd]

Even if the capitalists used machinery or automation exclusively to create commodities, the 99% would still have cause to claim the forces of production and its fruit commodities.

That is because the forces of production, no matter what social or physical form they take, are the means for the survival and much of the means of wish fulfillment of all of society.

See Automation Won't Save Capitalism (http://www.risparty.org/Automation.htm) by me for details.

[BIXX]

I think that perhaps one might say that these crises aren't even actual crises for capital, but rather moments of self-reformation- not a crisis for capital, but an opportunity. For me it just means a new form of enemy. The crsis is capital.