A Marxist View of Our Present Economic Crisis

Found on the Net:

My belief is that Monopoly Capital describes a unique period of U.S. history between 1945 and 1970, when large U.S. corporations dominated the U.S. economy and exported large amounts of goods overseas.

During this 25 year period – created by the convergence of two items – the devastation of European capitalism and the New Deal promotion of unions – companies could give decent wages to workers, raise prices to pay for those wages, and export profitably to other nations. That was the era of Monopoly Capital and the era of large amounts of surplus capital. The manufacturing sector generated 40 to 50% of corporate profits during this time. Note that this time period is the period of rising wages/income that stopped in 1973.

However, in the 1970s this system broke down. More and more U.S. companies were competing against cheaper, higher quality imports from Japan, Germany, and a few other countries. The trade balance went into deficit around 1973 and since then we have a huge trade imbalance. Profits for manufacturing companies went down, jobs were lost, and companies attacked their unions because they no longer had monopoly pricing power. Reagan breaking the airline controllers union and Volker sending interest rates over 15% were markers of the period.

During the Reagan-Bush era there was an industrial depression and a corresponding boom in financial, real estate, and trade (the FIRE sector). By the 1990s, the FIRE sector was generating 40% of corporate profits and manufacturing profits were plunging below 20% of profits. Thus, the onslaught of foreign competition in manufactured goods ignited a tidal wave of job cuts and pay cuts and destruction of unions and the loss of pensions etc.

Now the capitalists all around the world (including the Chinese capitalists) have squeezed so much out of workers, there isn’t enough demand in the world to buy all of their products. So, for example, now U.S. corps have a trillion dollars sitting in bank accounts overseas because they have nowhere to invest it profitably in the U.S. or anywhere. So I believe the age of inequality is the results of fierce worldwide competition which forced wages down which now leads to to what Marx called a “Realization” crisis – capitalists have trouble using their greatly increased share of the surplus because there isn’t enough demand to invest it into new profitable ventures.

Finally, a more technical Marxist issue. It is unclear if, in a competitive world market, things like marketing and research into new products are surplus or whether they are necessary to realize profits. Changing tail fin designs on cars was unnecessary in the 1950s, but doing research on hybrid engines in the 2000s was necessary for American companies to compete with Japanese companies. Thus, the whole measurement of the surplus changes depending on how necessary the components are.

There are charts and articles in the past five years that show how the share of income going to labor is falling and the share that goes to capital is growing. But the cause of that seems to me be falling real wages rather than an abstract surplus being grabbed. I suggest you look into this literature plus the work of Robert Brenner who wrote The Economics of Global Turbulence which is a Marxist account of the new world of capitalist competition and squeezing labor and labor unions.

As usual, the Marxist analysis of capitalism is as immaculate now as it was when Marx himself was writing. Of course, there is not a single conservative, rich person or capitalist on Earth who will agree with this assessment because these people have a unique view of what constitutes a true or false question.

To capitalists, the rich and conservatives, a question is true or false depending only on certain variables.

To these people an answer to a question is false if:

  • It makes my ideology look bad
  • It makes capitalism look bad
  • It interferes with my profits or promotes a view that may lower my profits.
  • It conflicts with my ideology.

An answer to a question is true if:

  • It makes my ideology look good
  • It makes capitalism look good
  • It makes me more money or promotes a view that increases my profits.
  • It is congruent with my ideology.

A shorter version is that for the rich, conservatives and capitalists, anything that increases my wealth or profits is a true statement and anything that lowers my wealth or profits is a false statement.

As Upton Sinclair noted, it’s hard for a man to truthfully answer a question when his money and profits are involved in the answer. He will always support any answer that is good for his money and profits, and he will always oppose any answer that is bad for his money and profits.

So in a capitalist society, philosophy itself goes out the window. Not only is God dead, but philosophy itself is dead. Philosophy can be thought of as a search for the truth. Once a society decides that “the truth is whatever makes me money, and falsehood is whatever makes me less money” then the whole concept of truth and falsehood is out the window.

Not only is philosophy dead, but science is too. Inevitably, science is ruined in a capitalist society. The capitalists soon take over most of the sciences and the universities, and both the universities and the sciences become utterly corrupted by money. When the views in so-called scientific publications are dependent on whether or not that view makes people money or loses people money, then empiricism itself is history.

Now the Marxists have no money whatsoever riding on the answers to the questions that they are answering, so there is no motivation for them to lie. That’s why the best analyses of whatever is going on in any capitalist situation anywhere on Earth will always come from the Marxists.

I have looked over the statement above and I cannot see one false statement anywhere in it. Of course, you will never find such an analysis anywhere in any US media outlet because this analysis if adopted stands to lose the capitalists, the rich and the conservatives (these people control 100% of US media) a lot of money.

The real problem is that in a capitalist society almost everyone is lying a good part of the time. From the time you awaken til the time you bed down, the individual in capitalist society is assaulted by the endless lies of conservatives, capitalists and the rich (who are really the same people).

The individual goes to the media for answers to questions about this or that, and all he finds are nothing but lies. 95% of media consumers are not intelligent or sophisticated enough to parse the lies from the facts. I can do it myself, but I have a genius IQ, am nearly unemployed, and I have been studying political economy for decades. Most people do not have my gifts or attributes necessary to figure out what is going on. Even with my gifts and attributes, it is often very difficult for me to figure out what is going on because the US media is usually in Lockstep Lie Mode on so many issues. The only way I can figure things out is by going to alternative media on the Net, and even then, it is not so easy to piece it all together.

What are the consequences of living in a society where you are lied to about as much as a North Korean? This is not known, but I would assume that the consumers of these lies often start lying a lot themselves, as they parrot the media, and soon find it nearly impossible to tell fact from fiction. Because most folks seem oblivious to the idea that they can even tell fact from fiction, and do not even seem to be care that they are being lied to, the astute individual in a capitalist country quickly takes the masses as suckers who cannot even figure out if they are being conned.

If people actually do start mimicking the dishonestly of the elites, politics and the media, then you end up in a Society of Liars or at least a society of folks who think lying is no big deal. Now the fact-conscious person, in addition to having to tease apart the media-politics propaganda, also has to deal with probable mass lying in his personal world as he goes about business in a capitalist society.

I can’t see how sort of mass promotion of degeneracy and depravity in terms of moral philosophy can possibly have a good effect on the body politic.

And perhaps even more importantly, who wants to live in a Society of Liars anyway? Is it fun? I don’t find it to be a blast. It strikes me as profoundly discouraging and depressing.


Filed under Capitalism, Conservatism, Economics, Higher Education, History, Journalism, Labor, Left, Marxism, Philosophy, Political Science, Politics, Religion, Republicans, Science, Social Problems, Sociology, US, US Politics

12 responses to “A Marxist View of Our Present Economic Crisis

  1. Jason Y

    To think as this might lead to conspiracy theories involving different schemes of prisons, war manufacturers, legal drug companies, illegal drug companies etc.. However, given the nature of capitalism, are such theories really for idiots?

  2. Jason Y

    Right, advertising biases everything. For instance, let’s say you want something, say web hosting, or anything. You look for reviews on the net. However, all of them are probably biased. In fact, it’s known you can buy fake reviews. If you go on Flippa or Fiverr and you want a website or a service, do you really believe what is written, knowing a bunch of guys can scheme together to write fake reviews?

  3. Wayen

    So Robert, between Hillary and Trump who is the better option for the Alt Left to support?

    • Hillary is better on US economic issues.

      • Wayen

        How do you figure?

      • Heaviside

        In the Left there is to often a tendency to speak about capitalism in terms that make it seem as if there is a homogenous process occurring in all industrialized countries. In reality what we have is the state capitalist societies of the Far East reaping imperialistic superprofits through the exploitation of the Fifty Colonies. Trump is good because he doesn’t follow neoliberal orthodoxy on tariffs and will impede this imperialism. We should adopt Deng Xiaoping Theory With Trump Thought.

        Trump will probably not implement the multiple five year plans and socialist development theory (such as Feldman’s) necessary to fix the American economy but at least it is a step in the right direction, as opposed to Killary who is simply for absolutely revisionist State Department Socialism.

        Trump is objectively revolutionary, even if he doesn’t realize it.

      • Hasdrubal

        I’m a single issue voter and that issue is overturning Citizens United. That means shifting to a 5-4 or better liberal majority on the SC.
        Trump says he would nominate another Scalia. I don’t know who HRC would nominate, but it won’t be another Scalia and whoever it is will likely be willing to overturn Citizens United, provide a chance to do away with the money=free speech bullshit and we would have a shot of finding better way to fund election campaigns than legalized bribery.

  4. Ed

    Both the post and the passage excerpted deserves a longer and more thoughtful than usual comment.

    Many people don’t know that the term “capitalism” was coined by Karl Marx. He was the first economist to attempt to describe capitalism, and his analysis remains the most comprehensive on the subject.

    Marx predicted that the relentless search for profit would eventually undermine capitalism, as the free market was replaced by monopolies, and the downward pressure on workers’ wages gradually destroyed consumer demand. Historically, both of these tendencies played big roles in producing the Great Depression. Before Marx, Adam Smith had described merchants’ relentless search for monopolies, and David Ricardo wrote a great deal on the downward pressure of wages, and Marx probably at least picked up Ricardo’s analysis. The point about profit seeking eventually squeezing out needed investments in science and profit-generating technology itself is also a good one.

    However, I think one big blindspot in Marx’s analysis is the effect on the environment (Toynbee’s term “biosphere” is probably a more accurate description, but I will go with the more commonly used word here). Capitalism, as Marx knew, was tied to the industrial revolution. The concentration of large amounts of capital in private hands was used and required to set up the fossil fuel exploiting industries. As the system continued to operate, the environment was gradually polluted and fossil fuel reserves depleted, to the point of creating a poorer world.

    A big, decisive factor behind the Great Depression was World War I. The Great War quite simply destroyed a fair portion of the world’s wealth. This was papered over for a decade with financial speculation (there is evidence that ordinary people in developed countries actually tended to have lower standards of living in the 1920s than in the 1930s), but eventually the fact that the Great War had made the world a poorer place couldn’t be hidden.

    Likewise, the U.S. reaching peak oil production was the decisive factor in the problems of the 1970s. The world as a whole seems to have reached peak oil production in the 00s. Again, financial speculation and propaganda was deployed to hide the fact that the world was simply poorer. This coincided with a huge population boom worldwide, which even without the resource and environmental depletion, would have produced a couple of generations that would have been too large to completely absorb into the workforce. With a poorer world, wages had to be depressed if the capital was going to continue to squeeze out profits.

    This is a separate point, but between 1792 and 1945 there were several really big wars that required mass mobilization of ordinary people by the elites to serve in huge armies and the industries that supported them. The elites had to go with more distribution of wealth downward to achieve this than they normally would. Modern warfare doesn’t require this degree of mass mobilization.

    The points about living in a society where pretty much everyone not only lies, but has to lie to achieve a “normal” standard of living are good, but this is characteristic of all declining societies.

    • Jason Y

      A big, decisive factor behind the Great Depression was World War I. The Great War quite simply destroyed a fair portion of the world’s wealth. This was papered over for a decade with financial speculation (there is evidence that ordinary people in developed countries actually tended to have lower standards of living in the 1920s than in the 1930s), but eventually the fact that the Great War had made the world a poorer place couldn’t be hidden.

      Interesting. I never heard or thought of that before.

    • Punjabi Sardar

      So what you’re saying, is unless Vaishya are controlled by Ksytrias they will run amock & be self destructive.


      It’s actually strange how the west has turned buddhism anti india but only sowed the seeds of its own destruction in doing so.

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