Marx & Engels

“What did Marx mean by the contradictions of capitalism?” asks Samuel Brittan, the right-wing economist writing in the Financial Times. “Basically, that the system produced an ever-expanding flow of goods and services, which an impoverished proletarianised population could not afford to buy. Some 20 years ago, following the crumbling of the Soviet system, this would have seemed outmoded. But it needs another look, following the increase in the concentration of wealth and income.” 1

Assistant Secretary, U.S. Treasury, Harry Dexter White (left) and John Maynard Keynes, honorary advisor to the U.K. Treasury at the inaugural meeting of the International Monetary Fund's Board of Governors in Savannah, Georgia, U.S., March 8, 1946.

“We are all Keynesians now.” So said Richard Nixon, the Republican and former President of the USA, in 1971. Forty years later, it seems that John Maynard Keynes is back in fashion, especially amongst the leaders of the British Labour movement. The reformist leaderships of the Labour Party and the trade unions cling to the Keynesian idea that the economy can simply be “stimulated” back in growing. But as the Marxists have explained before, the current economic crisis is not just part of some boom-and-slump, but is an organic crisis of capitalism, and growth cannot simply be created at will.

The crisis that has shaken the world economy since 2008 has pushed bourgeois ideologists to desperately seek a solution. They are looking for alternative ways of running their system, seeking to square the circle and maintain capitalism without its inevitable contradictions. As Asia, and China in particular, is doing so well, there is a burgeoning literature about the Chinese model, just as in the past there was so much made of the “Japanese miracle”. In Part One of this article Luca Lombardi looks at the experience of Taiwan.

When the 1929 Crash broke out it affected the Italian economy dramatically. Italy had just been through a serious monetary crisis, from which it had not yet recovered when the world crisis broke out. In this situation the capitalists desperately turned to the State for help.

The classical view of how capitalism develops is that within feudal society a class emerges made up of merchants, bankers, early industrialists, i.e. the bourgeoisie, and that for this class to be able to develop its full potential a bourgeois revolution is required to break the limits imposed by the landed feudal aristocracy. That is how things developed, more or less, in countries like France and England, but not in Japan.

Inflation was persistently high throughout 2010, with an average RPI of 4.6% - the highest since 1991. Meanwhile, the CPI has been above 3% for the last 15 months, a whole percentage point above the Bank of England’s 2% target, prompting Mervyn King, the governor of the Bank of England, to write a total of four letters to George Osborne, the Chancellor of the Exchequer, explaining the causes for such consistently high inflation.

Marxists have long since been conscious of the nature of the state, its industrious defence of the capitalist class, and its prejudice against working people. But much of the public are unaware of just how incestuous the capitalists and governments really are. Will Roche continues with his second in a series of three articles on monopoly capitalism.

To mark the 60th anniversary of Trotsky’s death we published a series of articles on our Trotsky.net website in the year 2000, among them this article on capitalist development. The purpose then was to underline the fact that although capitalism was experiencing a boom, the period we had entered was actually one of overall capitalist decline. As we explained in the introduction “Rather than a new upswing, capitalism is heading for a new slump and a downward curve of development similar to the interwar period.”

There has been no levelling off of the global economy, as economists predicted. Although industrialisation has expanded to lesser-developed countries, it has generally been along lines determined by global corporations based in advanced capitalist countries. From colonialism, we have moved into the age of multinational corporate domination.

“Now we must expect the opposite: profound, long, and painful crises, while the upward movements are weak and short-lived. If the old cycles were the mechanism of a broad upward movement, the new ones can only be the mechanism of capitalist decay.” Written almost 80 years ago, but extremely relevant to today’s situation.

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