It is clear that not only is there a synchronised slow-down in economic activity in the capitalist heartlands. There is a coordinated reduction in interest rates set by the central banks.
Yet according to Marx's description of capitalist crises, interest rates ought now to be rising: "On the eve of the crisis, the bourgeois, with the self-sufficiency that springs from intoxicating prosperity, declares money to be a vain imagination. Commodities alone are money. But now the cry is everywhere: money alone is a commodity! As the hart pants after fresh water, so pants his soul after money, the only wealth." (Capital Vol 1 Chapter 3 Section 3b) Marx refers to a "money famine". Yet the most perceptive conventional commentators are now pointing to a liquidity trap - that the central banks cannot reduce interest rates any further, and the rate is also reducing any incentive to invest further in capitalist enterprises. Do these phenomena disprove the marxian model of capitalist crises? Or show that state intervention has now become more sophisticated than in Marx's day? Or that even with state intervention, the contradictions identified by Marx, are working themselves out in other ways? Can anyone explain and elucidate? Chris Burford London
