From Subprime to Slump? By Jon Amsden
The collapse of Lehman Brothers has got the mainstream media hitting the panic button and talking of systemic crisis. But the crisis isn't just spreading to the real economy, it began there, argues Jon Amsden
In May of this year, Brian Marks made a valiant attempt to tie together inflation, the current crisis in financial markets, and struggles of the world working class. Marks wrote:
"The food and energy crises are key ways capital is trying to displace the costs of devaluation onto the working class. (Foreclosures, the manipulation of interest rates, and the outright bailout of banks with public money are other important measures). The transfer of workers' wealth through energy and food costs to the energy sector is then conveyed in a concentrated form to save (by buying up) the banks in crisis. That is where primitive accumulation meets fictitious capital."
Marks argued that inflation is a special form of ‘looting' whereby the capitalist class attempts to appropriate ‘the wealth of the workers', for the purpose of ‘propping up fictitious capital'. In a discussion on the Meltdown mailing list Ben Seymour queried Marks' logic on this point, noting that since inflation essentially devalues the workers' portion, at least in monetary terms, such would not be a particularly effective form of ‘looting'. For Seymour, the very thing that is supposed by Marks to constitute an accelerated ‘looting' of the working class, ‘an escalation of the ongoing compulsion of work' which presumably increases the rate of surplus value extraction, is at the same time undermining or cancelling out the value extracted. Thus, crisis can increase the economic pressure on the working class, but the actual rate of exploitation is offset by the devaluation of the currency which measures the product and price of their labour power. We will visit the ‘increased economic pressure' that inflation places on the working class a bit later on. In one respect, however, inflation can, in fact, be favorable to that part of the working class who may be net debtors. For example, Joe Sixpack has an outstanding credit card balance of $9,000 US. As the real value of this figure is diminished by inflation, Joe will have to contribute less value to pay it back than he received (on credit) in the first place.
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