Official figures reveal that US corporate profits as share of GDP have moved up from lows in 2001 to reach near record levels in 2005. But if you look over the much longer term, US profits are still below the levels achieved in the 'golden years' of capitalism back in the 1960s. The steady decline of the ability of capitalists to extract profits from their workforces is revealed even more clearly when we look at the profit figures before tax.

Marxist economics answers the question ‘how did the many start poor?’ with an analysis of primitive accumulation, the historical process of the dispossession of the toilers from the means of production and creation of a propertyless working class. We then go on to explain capitalist production as the production not just of commodities, but also of rich and poor. Reproduction is the reproduction not just of factories and offices, but of the capitalists who own them and the workers who labour in them.

The socialist calculation debate is usually regarded as beginning in 1920 with a challenge to the socialists thrown down by the right wing Austrian economist von Mises. He opined that rational economic calculation would be impossible in a socialist commonwealth. Unfortunately, the socialists who took up this challenge did not, with the sole exception of Maurice Dobb of the British Communist Party, regard themselves as Marxists.

When Meghnad Desai comes to discuss this aspect of Marx’s work, this is the area where his ‘equilibrium’ interpretation of Marx’s economics leads him most seriously astray. He seems to imply that Marx can be used to defend the idea of the long-term survival of capitalism, which is something alien to Marx. It is also an oversimplification of what Marx said.

Economists, with outstanding exceptions such as Marx, have usually set out to glorify capitalism. They tend to conclude that it will automatically produce full employment and increasing prosperity – so long as nobody messes about with its workings. That is the outlook of monetarism. But Marxists believe that Keynesianism doesn’t work either. It doesn’t work because capitalism can’t be made to work. The problem of capitalism in crisis is not just a matter of inadequate demand - of markets - it’s a problem of profitable markets.

Meghnad Desai has published a book, Marx’s Revenge in which he poses a fundamental question for Marxists – could capitalism go on for ever? The short answer to this is that capitalism will last until such time as it is overthrown through socialist revolution, conscious action by millions of people. So the question needs to be reformulated: is socialism on the agenda? If capitalism is a flawed system, as we argue, then it will offer endless opportunities for its overthrow. Desai, on the other hand, seems to argue that a crisis-free future is possible for capitalism. Talk of socialism is therefore premature. Mick Brooks argues the case for socialism in the twenty-first century.

In this introduction to the special feature Rob Sewell gives a general view of the meaning of the present turbulence in the markets and explains why we say these are just the first tremors of a coming slump.

Michael Roberts, ecomics editor of Socialist Appeal, explains the immediate causes of the present crash of the markets: the currency crisis in South East Asia and how these economies, which were supposed to be models of capitalist development suddenly collapsed.

In this major article, Ted Grant provides us with a general analysis of the present state of capitalism. With chapters on the nature of the boom/slump cycle, the peculiarities of the present "boom", the claim that Information Technology has solved the problems of capitalism, the crisis of overproduction, the situation in South East Asia, the consecuences that the coming slump will have and the tasks in front of Marxists at this particular juncture.

MARXIST.COM HOLIDAY BREAK

In Defence of Marxism will be publishing irregularly over the holiday period, and will resume regular output on 1 September.

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