Why does capitalism go through cycles of booms and slumps?excerpted from http://www.socialistworker.co.uk/art.php?id=16008 - 13/1/09 The chaos that we see around us is only the latest crisis of capitalism. The global economy has under-gone a series of recessions over the last 35 years, including in 1973, 1990-93, 1998 and 2001-2.
Profit rates have not recovered to the level they were at before the 1973 crisis. Each time a recession ends, the prophets of the free market tell us that all of the problems in the system have been fixed. But then they are thrown into panic by the next recession.
This cycle of booms and slumps is down to the competitive and anarchic nature of capitalism. Because there is no centralised plan for the economy, each company tries to grab the biggest share of the market by producing more of one or more goods.
This leads to more goods being produced than are needed and these pile up unsold – hitting profits, forcing companies to the wall and leading to workers being laid off.
Workers then have less money to buy goods, which makes the crisis worse and the system goes into slump.
The failings of some companies then helps with the revival of the system as their competitors buy up their technology and markets.
Underlying all of this is a fundamental problem with the system – the tendency of the rate of profit to fall.
Karl Marx identified this tendency over 100 years ago ... the rate of return on their investments, over time, tends to decrease.
This is because real value comes from workers’ labour. The value people create through work is greater than the amount they receive back in wages.
Therefore the capitalist is stealing some of the value workers’ labour has created. This “surplus value” forms the basis of profit.
But the pressure on bosses to compete means that they try to cut the amount that they have to invest in labour.
Instead they invest in new technologies that mean they will spend less on workers. They can produce the same or more with less people because of new technology or machinery. It also means that they will try to increase the level of exploitation of workers – making people work harder for less.
Companies may benefit from investing in new technology in the short term because they can undercut their competitors. But once the other companies catch up, this advantage is lost, and bosses must try and find new ways of increasing their profits.
The falling rate of profit pushes capitalists to try and constantly find new ways of making money.
They may do this by developing new markets or by building up speculative bubbles. This may keep the economy afloat temporarily and mask the problems that exist. But because crisis is built into the way that capitalism works, these same problems are bound to re-emerge in the future.
The Theory of Base & Superstructure excerpted from Das Kapital by Karl Marx"The specific economic form, in which unpaid surplus-labour is pumped out of direct producers, determines the relationship of rulers and ruled, as it grows directly out of production itself and, in turn, reacts upon it as a determining element. Upon this, however, is founded the entire formation of the economic community which grows up out of the production relations themselves, thereby simultaneously its specific political form. It is always the direct relationship of the owners of the conditions of production to the direct producers — a relation always naturally corresponding to a definite stage in the development of the methods of labour and thereby its social productivity — which reveals the innermost secret, the hidden basis of the entire social structure and with it the political form of the relation of sovereignty and dependence, in short, the corresponding specific form of the state. This does not prevent the same economic basis — the same from the standpoint of its main conditions — due to innumerable different empirical circumstances, natural environment, racial relations, external historical influences, etc. from showing infinite variations and gradations in appearance, which can be ascertained only by analysis of the empirically given circumstances."
Harry Bridges by RancidBloody Thursday was July 6th The pigs killed three workersHarry Bridges grabbed the mic
The city shut down July 6th The workers outraged it was a general strike
The media claimed that the commies were taking over and some believed it was true
3 uncomprimising strikes paved the way
Minn SF. & Toledo
Over annd over agian the doors are locked and the windows are broken
Eddie worked for General Motors & he swore that he'd never lose his job again
A union man who owned his own home in beautiful Flint, Mich. Eddie lost his job and Eddie lost his wife
So Eddie lost his self esteem
Last time I saw Eddie he was livin' in the trailor park again
I believe Eddie forgave too much Too soon
I got a letter about Eddie & it was bad news
Banks of MarbleI've traveled round this country
From shore to shining shore.
It really made me wonder
The things I heard and saw.
I saw the weary farmer,
Plowing sod and loam;
I heard the auction hammer
A knocking down his home.
CHORUS:
But the banks are made of marble,
With a guard at every door,
And the vaults are stuffed with silver,
That the farmer sweated for.
I saw the seaman standing
Idly by the shore.
I heard the bosses saying,
Got no work for you no more.
CHORUS
I saw the weary miner, Scrubbing coal dust from his back, I heard his children cryin', Got no coal to heat the shack. CHORUS
I've seen my brothers working Throughout this mighty land; I prayed we'd get together, And together make a stand.
Then we'd own those banks of marble, With a guard at every door; And we'd share those vaults of silver, That we have sweated for.
Words and Music by Les Rice Copyright 1950 by Stormking Music Inc."...And We Thought That Nation-States Were A Bad Idea" PROPAGANDHI "Publicly subsidized! Privately profitable!" That's the anthem of the upper-tier (the puppeteer untouchable).
We focus a moment, nod in approval and bury our head back in the bar-codes of these neo-colonials while our former nemesis
(ah, the romance!): the nation-state, now plays fund-raiser for a new brand of power-concentrate.
Try again, but now we're confused- what is "class-war"? Is this class war? Yes, this is class war.
And I'm just a kid- I can't believe that I gotta worry about this kind of s---!
What a stupid world! Yeah, this is just beautiful... absolutely no regard for principle.
What a stupid world. (We're): 1) born 2) hired 3) disposed!
Where that job lands, everybody knows and you can tell by the smile on the CEO's that the environmental restraints are about to go. You can bet that laws will be set to ensure the benefit of unrestricted labor-laws
(all kept in place by displaced government death squads).
They own us. They produce us. They consume us. Can you believe this? What a stupid world.
F-- this bullshit display of class-loyalties. The media and "our" leaders wrap it all up in a flag- their s---rag. Hooray!
Marxism Review Major Theories1. The Dialectic
2. Primitive accumulation of capital
3. Labor Theory of Value
4. Vampirization
5. Alienation of Labor
6. Immiseration
7. Base & Superstructure
8. Capitalism Crashing
Key Vocab:1. Capital
2. Expropriate
3. Rate of Return
4. General Strike
5. Union
6. Labor Power
7. Dialectic
8. Proleterian
9. Humanist
10. Alienation
11. Reserve Army of Labor
12. Pittance
