The return of the prophet
In Highgate Cemetery, three miles from where I write, Karl Marx's body
lies a-mouldering in his grave; and, for so many years, it seemed that
his critique of the capitalist system was also safely buried.

But suddenly, the ideas which Marx and his collaborator Friedrich
Engels developed a century and a half ago are back; and notably, given
that there is no longer a mass movement which draws guidance from Karl
Marx's work, commentators and politicians firmly within the capitalist
mainstream find the urge to refer to Marx irresistible. The President of
France has been improving his understanding of the current crisis by
reading Marx's Capital, and Germany's Finance Minister has grudgingly
conceded the correctness of "certain elements of Marxist theory". In the
USA, where to make such a remark would be political suicide, there has
been a counterpart phenomenon; in a CNN interview, it was demanded of
the likely next Vice-President of the United States that he admit or
deny that the likely next President of the USA is a Marxist- a charge
which was taken up with alacrity by supporters of the opposing

On 18th October, the Irish Times published a thoughtful article by its
foreign editor, Paul Gillespie, entitled 'Crisis allows us to reconsider
left-wing ideas'. Gillespie noted:

Marx's work has suddenly become popular again in Germany, as a new
generation tries to understand the dynamics of these events and how they
should be evaluated historically. There are disturbing memories of the
1929 crash and its awful political consequences, coming after the
1922-1923 financial collapse which destroyed German savings.

On the probable consequences of the crisis on the 'real' world economy
and the global balance of power, Gillespie took a moderate position:

Although this is undoubtedly a grave crisis for finance capitalism,
with deep effects on the real international economy, it is not - as yet
- a systemic collapse. The extraordinary speed and depth of the events
and the $1.8 trillion response to them, especially this week in the
European Union, have helped avoid the meltdown heralded at the weekend
by Dominique Strauss-Kahn at the International Monetary Fund meeting in
Washington. French president Nicolas Sarkozy, British prime minister
Gordon Brown, German chancellor Angela Merkel and Spanish prime minister
José Luis Rodríguez Zapatero are taking the lead to create a "refounded
capitalism" more capable of withstanding such cyclical shocks by better
global regulation.

In an audacious initiative, Sarkozy and EU Commission president José
Manuel Barroso are meeting US president George Bush this weekend to seek
a G8 summit next month on a new agreement to regulate global finance.
Presumably it would include the president-elect. If that is Barack
Obama, he will be confronted with a dramatic adjustment of US power to a
more multipolar world, for which he is better prepared and which he is
more willing to accept than John McCain.

In decades past, a crisis on this scale would have presented an
immediate opportunity for the 'left'; but the 'left' as it is- defeated,
tamed and fragmented- is in no position, as yet, to rise to the
occasion. As Paul Gillespie observed:

Note that most of these leaders are from the centre right, not the
centre left. Centrism is resurrected from the wreckage of radical
right-wing deregulation, more than is the left. The argument is about
re-regulation rather than redistribution, the public rather than the
private interest, transnational against national sovereignty.

So far, that is. The traditional left has had little operational
purchase on the crisis other than I-told-you-so utterances about their
inherently cyclical nature. Confronted with this international
convulsion, "the Left" is for the most part as weak and tame as it
certainly is in Ireland. Popular anger here and in the US, for example,
is far more radical, but not expressed in such vocabularies. This is a
real challenge and also an opportunity for the left - just as it was for
Marx and Engels 150 years ago.

But does the left refer to traditional social democracy, which accepts
market capitalism but seeks to equalise it; to the "third way" variety
popularised by Blair and Brown; or to the "democratic socialism" of
post-Stalinist parties? What of more recent green socialism? How to
classify the rump of traditional Stalinist parties in Europe, India and
elsewhere? Should Chinese and Vietnamese one-state authoritarian
capitalisms led by such communist parties be included? Where do the left
of South Africa's ANC and the burgeoning variety of Latin American
left-wing movements fit in? Is the US Democratic Party part of that
family? How do all of these relate to the growing radical or far-left
tendencies and social movements drawing on previous bottom-up
revolutionary traditions such as Trotskyism and anarchism?

It is despite this present weakness and incoherence of the left that
Gillespie makes a remarkable suggestion, implicit in which is the
notion- fully supported by recent events- that the ideas of the
'free-market' right wing have been bankrupted by the capitalist crisis;
hence the key ideological struggle of the near future will be between,
on the one hand, socialists who utilise the ideas of Karl Marx and
Friedrich Engels, and on the other hand, 'social democratic' supporters
of a 'refounded', moderated version of capitalism, utilising the ideas
of various other 'big names'. The Irish Times article concludes:

Big events revive these debates, but they need to be reinvented for new
times. Conventional sociological post-industrialism accounts rendering
left ideologies and movements redundant badly need revision in the light
of falling living standards and growing inequalities. So does Fukuyama's
notion of the end of ideology and the triumph of market capitalism - as
he now admits. Big names too: Keynes, Polanyi, Kondratieff, Galbraith
and now Paul Krugman are deployed by social democrats against those who
want to resurrect Marx and Engels.

If it is true that the new main battle of ideas is to be fought between
the social democrats (who wish to ressurect a moderated capitalism in
order to save capitalism) and the Marxists (who wish to abolish
capitalism), then the ideological success of the former will in large
part depend on their practical ability to, in Gillespie's words, "create
a 'refounded capitalism' more capable of withstanding such cyclical
shocks by better global regulation"; as we shall see, not only better
global regulation would be required in order for such a new-model
capitalism to be better at withstanding 'cyclical shocks', but a
reversal of the "falling living standards and growing inequalities"
which characterise the contemorary model of capitalism would also be
required if future crises on a similar scale to our current ongoing
crisis- or even worse- are to be avoided.

If such a radically different 're-founded capitalism' cannot be
achieved, the Marx-inspired socialists will begin to make serious

So, is it possible that a new-model capitalism can arise in the course
of, or subsequent to, the efforts of governments to cope with the
current crisis? This is a matter on which a consideration of 20th
Century history, and of the underlying causes of the present crisis, can
both offer some guidance.

Changing spots

For proof that it could be possible to re-found capitalism on a
different basis, we can look to the period following the catastrophic
slump of the 1930s, particularly after World War Two, in the developed
capitalist countries. For an extended period, the gap between rich and
poor was steadily narrowed, the living standards and economic security
of of working class people vastly improved, and cyclical shocks were

Marx had not predicted that such a development would be possible
without the revolutionary overthrow of the capitalist system; and it
seemed that the prediction of the non-Marxist social democrats, that
capitalism could be reformed so thoroughly as to provide a much better
and improving life for the majority of people, was vindicated.

Then in the 1970s, a major economic crisis did occur; but it did not
appear to resemble the 19th Century crises so vividly described by Marx,
or indeed the crises of the early 20th Century, which broadly followed
the same pattern. The main economic symptom of the crisis of the 1970s,
as identified by the establishment experts of that time, was rising
inflation (caused to some extent by rapidly increasing wages); and in
order to defeat inflation (involving of course the defeat of the trade
unions which had succeeded in raising wages faster than the increase in
industrial productivity), the Western governments deliberately caused a
rise in unemployment. That explanation of the economic disturbances of
the time was far closer to the reality, which anyone could observe, than
anything which could be found in the pages of Capital.

Thus orthodox Marxism in the developed capitalist countries was already
in ideological retreat, even before the events of 1989 to 1991. 

Since when, enthused by the defeat of inflation, the defeat of the
trade unions and- that crown of glory- the defeat of the socialist
regimes in Eastern Europe and the USSR; capitalism has returned, by
leaps of privatisation, bounds of ending progressive taxation, and
accelerating global deregulation- to a modernised, turbo-charged version
of its former self.

So, along comes the immense and frightening crisis; the basic nature of
which- as anyone, even a president or a finance minister, can observe-
can be understood with the help of volumes 1 to 3 of Capital. 

Indeed, Marx's dissections of the crises of the old-model capitalism of
the 19th Century show remarkable similarities to the processes of our
current debacle. Consider this, for example:

In a system of production, where the entire continuity of the
reproduction process rests upon credit, a crisis must obviously occur
— a tremendous rush for means of payment — when credit suddenly
ceases and only cash payments have validity. At first glance, therefore,
the whole crisis seems to be merely a credit and money crisis. And in
fact it is only a question of the convertibility of bills of exchange
into money. But the majority of these bills represent actual sales and
purchases, whose extension far beyond the needs of society is, after
all, the basis of the whole crisis. At the same time, an enormous
quantity of these bills of exchange represents plain swindle, which now
reaches the light of day and collapses; furthermore, unsuccessful
speculation with the capital of other people; finally, commodity-capital
which has depreciated or is completely unsaleable, or returns that can
never more be realised again. The entire artificial system of forced
expansion of the reproduction process cannot, of course, be remedied by
having some bank, like the Bank of England, give to all the swindlers
the deficient capital by means of its paper and having it buy up all the
depreciated commodities at their old nominal values. Incidentally,
everything here appears distorted, since in this paper world, the real
price and its real basis appear nowhere, but only bullion, metal coin,
notes, bills of exchange, securities. Particularly in centres where the
entire money business of the country is concentrated, like London, does
this distortion become apparent; the entire process becomes
incomprehensible; it is less so in centres of production.

On the political effect of capitalist crises, Marx noted:

Modern bourgeois society, with its relations of production, of exchange
and of property, a society that has conjured up such gigantic means of
production and of exchange, is like the sorcerer who is no longer able
to control the powers of the nether world whom he has called up by his
spells [...] It is enough to mention the commercial crises that, by
their periodical return, put the existence of the entire bourgeois
society on its trial, each time more threateningly.

Among the many very pertinent aspects of Karl Marx's work is his
insistence that all value is created in the productive sectors of the
economy- the sectors which, since the start of this present crisis, the
commentators have begun to call the 'real economy'- and that the wealth
which is supposedly 'created' in the stock exchange and the financial
sector is a combination of: (a) value which is transferred into that
sector from the 'real economy' (in Vols. 2 and 3 of Capital, Marx goes
into some detail about the mechanisms by which this takes place), and
(b) fictitious value, resulting from speculation, the illusory nature of
which is suddenly exposed when the inevitable crisis ensues.

Why do crises inevitably occur under capitalism, according to Marx?
Karl Marx considered this matter from various aspects and in great
detail, and in a very brief article like this one risks the dangers of
over-simplification. But two factors can be explained fairly quickly and
without too much distortion. Firstly, the possibility of crisis arises
because, in the economy as a whole, production is unplanned; and
futhermore, goods are produced not to directly fulfill a need, but to be
sold so that the owner of the enterprise can make a profit. However,
though each individual enterprise is operated to maximise the profit of
its owner, the enterprises are tied together through money and credit.
So what happens if a significant proportion of the capitalists find that
they are unable to sell all, or nearly all, of the products made in
their enterprises? Marx gives an example:

The flax grower has drawn on the spinner, the machine manufacturer on
the weaver and the spinner. The spinner cannot pay because the weaver
cannot pay, neither of them pay the machine manufacturer, and the latter
does not pay the iron, timber, or coal supplier. And all of these in
turn, as they cannot realize the value of their commodities, cannot
replace that portion of value which is to replace their constant
capital. Thus the general crisis comes into being. This is nothing other
than the possibility of crisis described when dealing with money as a
means of payment.

Secondly, why should this situation actually occur- or rather, why does
it inevitably, eventually, occur, resulting in the 'cyclic shocks'
which, now that Gordon Brown's boast of 'an end to boom and bust' has
disappeared like a mirage, the mainstream commentators now concede are
inherent to capitalism?  

Principally, because each capitalist enterprise is run with the
objective of making the greatest profit: therefore it must strive to
expand production while holding down, or even reducing, its costs- and
key among those costs is the wages of its workers. Fine, so far, for the
owner of the individual enterprise. But who are the majority of the
ultimate consumers of the goods created in the productive enterprises?
They are, in the phrase of the old constitution of the British Labour
Party, 'the workers, by hand or by brain'. So invariably, the situation
sooner or later arises in which the masses of the people cannot purchase
the increasing volume of consumer goods produced; and the inevitable
crisis follows.

Thus, Marx argues, even if the crisis first makes its appearance in the
financial sector:

The ultimate reason for all real crises always remains the poverty and
restricted consumption of the masses as opposed to the drive of
capitalist production to develop the productive forces as though only
the absolute consuming power of society constituted their limit.

A tale of two countries

On 21st October, Chris Dillow, a columnist for the Investors Chronicle,
was sufficiently emboldened by his passing aquaintance with the works of
Karl Marx, and no doubt also by his equal knowledge of the backgound of
our current crisis, to write a blog article on  which sought to refute
the applicability of Marx's analysis to the present debacle. The
article, entitled 'Marx: less relevant' was duly promoted in the
electronic editions of the Guardian and the Daily Telegraph.

Dillow conceded that:

On many things, Marx was right. He was right to show that capitalism
was a force for great growth and great instability; right to show that
profits arose from exploitation; right to stress that technical progress
determines social conditions; right on alienation and primitive

But, he claimed:

To Marx, crises originated in the real economy [...]

Instead, this crisis originates in the financial system. To Marx,
however, finance was not so much a cause of capitalist crises - and for
that matter of capitalist growth as well - but a mere accelerant of
them. It’s the petrol, not the spark. Credit, he wrote (vol III,
p572), “accelerates the violent outbreaks of this contradiction,
crises…”  Accelerate, note, not cause.

It is important to evaluate this claim. If the current crisis is purely
or mainly the creation of the financial system, and the devastating
effects on the 'real economy' are merely the fallout from the financial
crisis, then one can at least envisage that a 'refounded capitalism', by
enforcing stricter regulation on the financial sector, by repressing
speculation and fraudulent dealings, could thereby- and without
addressing the issues of 'real economy' production and the living
standards of the masses- prevent the emergence, in future, of such major

So let's put to one side (only for a moment) what has been taking place
in the financial sector, and look at what has been taking place in
global 'real economy' production, and in the incomes of the masses of
the people, in the period leading up to our current crisis, in terms of
Marx's insistence that: "the ultimate reason for all real crises always
remains the poverty and restricted consumption of the masses as opposed
to the drive of capitalist production to develop the productive forces
as though only the absolute consuming power of society constituted their

What do we find? We find that globally, the production of goods for
sale has been increasing, while the incomes of the majority of the
people have been held down. How has that gap been bridged? It was
bridged by the phenomenon of rising debt. 

Two great countries appear as opposite poles of the modern process of
globalisation: so let us take them as our examples- China and the USA.

China, the world's biggest country by population but a poor country by
its per-capita income, has for almost three decades, by means of foriegn
investment and the import of technology, been increasing its
manufacturing production at a rate of between 10% and 15% annually. In a
typical period, the five years from 1998 to 2003, China's output of
manufactured products rose by 91%. 

The average incomes of people in China have also been rising- but by a
significantly lower rate. Advanced on the one hand by the country's huge
trade union movement, depressed on the other hand by the influx of
workers from the countryside, real wages in China have been rising at
around 8% annually. In any case, too rapid a growth in wages would have
made China a much less attractive destination for foreign investment,
and would have undermined China's price advantage in selling its
products abroad. During the nine years from 1997 to 2006, taking urban
and rural incomes as a whole, the mean average household income in China
rose by 72%- a very respectable figure, but far less than the increase
in manufacturing output.

Thus the vastly rising volume of goods made in China could not possibly
be purchased by the Chinese; but this was not a problem, because a high
proportion of the Chinese-made products were created in order to be sold
abroad, to much richer countries. The biggest destination for China's
exports was the world's most lucrative consumer market, and still,
despite China's relative rise, the world's biggest producer of goods by
dollar value, the United States of America. In 2007, approximately 20%
of exports from China went to the USA.

Now, the majority of people in the US can hardly be described as poor,
or as suffering from restricted consumption, when considered against
global average living standards. Yet, due to the decline in trade union
power and various other factors including the re-location of industrial
production by US corporations to other countries where the labour costs
are much lower (China, for instance), the real hourly wage rate of the
median average worker in the USA has been held down to such an extent
that it is no higher now than it was in the mid 1970s. Yet production in
the USA, despite the transfer of industry abroad, continued to increase
with the introduction of new technology. In the non-financial corporate
sector, productivity has been increasing by an average of between 2% and
4% annually, resulting in a cumulative increase of 45% in hourly
production per worker in the United States between 1992 and 2005. 

During this time, production processes have of course become
increasingly globalised, and not everything made in the USA has to be
consumed in the USA- but it has to be consumed somewhere. To take for
example the fastest growing sector of US industry, the computer and
electronics sector: a high proportion of its products are components,
which require for their manufacture very advanced levels of production
technology and skill; these are sent to low-wage countries such as
China, where they are assembled, combined with other components which
require lower levels of skill and production technology- and the
resultant finished products are then sent to the USA and other developed
countries to be sold to the final consumers.

And, despite the stagnation in their hourly pay, the masses in the
United States have until very recently kept on increasing their
spending, thus squaring the gap between production and consumption.

For a while, two means were available to achieve this. The first was by
increasing the number of working hours per family: men began to have a
longer average working week, there was a big increase in the number of
women in the workforce, and it became common for people to hold two or
even three jobs. But this, of course, raises the amount of material
products and services which need to be sold. Also, in the end, there are
physical and social limits to the average number of working hours per

By the start of the 21st Century, the increase in working hours had
come to a halt; and the continuing rise in mass consumption was
facilitated exclusively by the second available means of increasing
spending: rising debt. As Edward Luce noted in the Financial Times:

Between 2000 and 2006, the US economy expanded by 18 per cent, whereas
real income for the median working household dropped by 1.1 per cent in
real terms, or about $2,000 (£1,280, €1,600). Meanwhile, the top tenth
saw an improvement of 32 per cent in their incomes, the top 1 per cent a
rise of 203 per cent and the top 0.1 per cent a gain of 425 per cent. 

Edward Luce added:

According to Emmanuel Saez at the University of California, Berkeley,
the distribution of income today almost exactly matches that of 1928 on
the eve of the Wall Street crash. In 1928, the top 1 per cent of
Americans took in 24 per cent of national income, compared with 23 per
cent today. Between 1940 and 1984 their share never exceeded 15 per cent
and it was in single digits for most of the 1960s and 1970s.

However, the big rise in incomes at the top could not compensate for
the stagnation or decline in incomes at the middle and the bottom;
because, unlike nearly everybody in the lower social strata, the richer
people do not spend all their money: they invest much of their income;
and that investment goes either into the 'real economy' locally or
abroad (thus further increasing production) or into the various kinds of
financial speculation.

The debt bubble

In an article entitled 'The Household Debt Bubble', published in the
May 2006 issue of Monthly Review, John Bellamy Foster observed:

...for households in the bottom 60 percent of the income distribution
in the United States, average personal consumption expenditures equaled
or exceeded average pre-tax income in 2003; while the fifth of the
population just above them used up five-sixths of their pre-tax income
(most of the rest no doubt taken up by taxes) on consumption. In
contrast, those high up on the income pyramid—the capitalist class and
their relatively well-to-do hangers-on—spend a much smaller percentage
of their income on personal consumption. The overwhelming proportion of
the income of capitalists (which at this level has to be extended to
include unrealized capital gains) is devoted to investment. 

It follows that increasing inequality in income and wealth can be
expected to create the age-old conundrum of capitalism: an accumulation
(savings-and-investment) process that depends on keeping wages down
while ultimately relying on wage-based consumption to support economic
growth and investment.

Under these circumstances, in which consumption and ultimately
investment are heavily dependent on the spending of those at the bottom
of the income stream, one would naturally suppose that a stagnation or
decline in real wages would generate crisis-tendencies for the economy
by constraining overall consumption expenditures. 

But, even after the '' stockmarket crash in 2000, that 'age-old
conundrum of capitalism' did not manifest itself in a major crisis;
following that stockmarket crash, the US government cut interest rates,
after which, as John Bellamy Foster noted in 2006:

...overall consumption has continued to climb. Indeed, U.S. economic
growth is ever more dependent on what appears at first glance to be
unstoppable increases in consumption.

This was made possible by a huge increase in personal debt- some on
credit cards, but the largest part through the mortgaging and
re-mortgaging of houses; a seeming safe bet, given the steep rise in
house prices (fuelled in large part by the low interest rates), and
which also appeared to be unstoppable. Average outstanding consumer
debt, which had crept up from 62% of consumer disposable income in 1975
to 96.8% in 2000, splurged to 127.2% of disposable income in 2005.

It has been made clear to all, since the credit first began to crunch
in the summer of 2007, that the US government, by reducing interest
rates, relaxing controls on lending, and allowing the financial sector
to 'regulate' itself, had thereby facilitated the production of both the
'raw material' and the 'tools' by which an enormous volume of debt-based
speculation was created in the financial sector. Less attention has been
paid to the other main effect of these debt-inducing measures: that of
delaying the onset of the crisis.

We have taken the USA as our developed country example; and although it
is the biggest and richest of the developed countries, it might be
argued that it is an extreme example, given that hourly wages in the USA
have been held flat for more than thirty years. However, a not
dissimilar phenomenon has occurred in the other main rich countries. The
average annual real wage increase in 13 OECD countries (as shown in
figure 1.2 in Andrew Glyn's book 'Capitalism Unleashed') which had been
running at between 3% and 5% through the 1960s and mid-1970s, fell by
the 1980s to between 1% and 2% and has remained at those low levels; and
the burden of personal debt in Britain, Germany, Japan and the other
major developed countries has been rising inexorably.

The jitters in the financial markets first appeared in August 2007, as
the revenue streams which supported the values of the various debt-based
financial instruments, in which the banks and hedge funds had invested
trillions of dollars, began to be revealed as less reliable than had
previously been surmised. And whence was this revenue supposed to
stream? From the incomes of the increasingly indebted mortgage and
credit card holders, particularly those in the USA- incomes which were
stagnant or even declining, while their burden of debt, and the payments
due on that debt, were rising steeply.

At the time it had been little reported in the mainstream press,
especially outside the United States; but already by the spring of 2007,
mortgage defaults in the USA, especially in the sub-prime sector, were
increasing to an alarming scale. The enormous inevitable crash was
beginning to emerge.

And where could this crisis lead? On 28th October, one respected
analyst, Martin Wolf of the Financial Times, speculated on the possible
medium-term consequences if further radical measures are not taken
immediately to address the financial meltdown:

...the idea that a quick recession would purge the world of past
excesses is ludicrous. The danger is, instead, of a slump, as a mountain
of private debt – in the US, equal to three times GDP – topples over
into mass bankruptcy. The downward spiral would begin with further decay
of financial systems and proceed via pervasive mistrust, the vanishing
of credit, closure of vast numbers of businesses, soaring unemployment,
tumbling commodity prices, cascading declines in asset prices and
soaring repossessions. Globalisation would spread the catastrophe

Many of the victims would be innocent of past excesses, while many of
the most guilty would retain their ill-gotten gains. This would be a
recipe not for a revival of 19th-century laisser faire, but for
xenophobia, nationalism and revolution. As it is, such outcomes are

Western governments, argues Martin Wolf, must- without delay- slash
interest rates, increase state debt, insist that the banks lend money to
those businesses which some chance of survival, provide financial
assistance to the 'emerging economies' of the poorer countries, and
pressurise countries in 'strong financial positions' to 'expand domestic

He concluded with a swipe not only at those who do not endorse such
immediate measures, but also at those who are already considering the
lines of a new and improved global capitalist order:

Decisions made over the next few months may well shape the world for a
generation. At stake could be the legitimacy of the open market economy
itself. Those who view liquidation of past excesses as the solution fail
to understand the risks. The same is true of those dreaming of new
global orders. Let us first get through the crisis. The danger remains
huge and time is short.

This is incorrect in terms of political tactics. The people are now
witnessing the consequences of the current global order, and, even if
the programme which Martin Wolf proposes is implemented in full, we will
now undergo a period of seriously increased suffering. If the 'open
market economy' (ie, capitalism) is not to lose further legitimacy, then
the prospect must be held out of a 'refounded capitalism' which would be
able to minimise and withstand economic 'cyclic shocks'.

Back to the future?

Is such a prospect realistic? As the great physicist Nils Bohr once
said, making predictions is very difficult, especially about the future.
But it must be remarked that the prospects for a new-model capitalism
are rather doubtful; the main reason being that merely re-regulating the
financial system and suppressing speculation, even on a global level,
would not be sufficient to ensure the success of such a model. In order
to avoid the re-appearance of catastrophic economic crises, the
'refounded' system would also have to allow the incomes of the masses of
the people to rise in line with increases in production and drastically
reverse the trend of inequality; it would require a dramatic
rolling-back of the scope of the private sector in the 'real economy',
through a combination of nationalisation, regulation and state control.

That, after all, was the basis on which the Western economies refounded
themselves after World War 2, in order to avoid a repeat of the great
slump of the 1930s. But among the many differences between the situation
which followed World War 2 and that of our near and foreseeable future,
one is particularly significant. Six decades ago, the political
consequences had there been another huge economic crisis involving the
whole developed capitalist world was not a matter of speculation- it was
a matter of certainty. The USSR had emerged triumphant and with huge
renown from the war against Nazism; in almost  half of Europe the
communists had taken power; and the People's Liberation Army headed by
Mao Zedong was in the process of taking power in China. 

It was encumbent on the politicians to prove that Marx was wrong about
the inevitability of catastrophic crises under capitalism, and it was
encumbent on the capitalists to allow them to make such drastic
amendments to the system as would allow them to do so. Otherwise, the
overthrow of capitalism in several of the major developed countries
would be guaranteed.

However bad this crisis proves to be, such an immediate and
overwhelming threat to the capitalist system in the developed countries
does not now exist, and will not exist for the foreseeable future. And
therefore, it is unlikely that sufficiently thorough amendments will be
made to the system as would be required to prevent a further massive
crisis, sooner or later, following this one.

In which case, the future might not be quite so foreseeable.

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