Economics

Defenders of the free market look towards libertarians such as Hayek and Mises – and their assertion of an ‘economic calculation problem’ – in order to attack socialism. But in truth, Marxists answered these reactionary arguments long ago.

After rising to dizzying heights as part of an orgy of speculation, the price of cryptocurrencies has come crashing down in recent weeks, with investors seeking a safe haven. This is a harbinger of a deeper, wider crisis to come for capitalism.

The 2008 crash and coronavirus crisis have revived interest in the theories of J.M. Keynes, the liberal English economist. But a look at Keynes’ life and ideas show that he was no friend of the working class. We need socialism, not Keynesianism.

In the midst of the pandemic, some parts of the economy are booming. Speculative investments are continuing in a frenzied fashion. The latest celebrity-driven fads, NFTs and SPACs, are among the insane expressions of this whirlpool of speculation.

Organised on Reddit, a movement of amateur stock traders has taken on the big hedge funds, exposing how rigged and rotten the whole system is. Capitalism is a casino. We need socialism, not speculation.

The present crisis is a stark vindication of the ideas of Karl Marx, who long explained that capitalism produces an accumulation of wealth at one pole, and an accumulation of misery at the other. This rotten system must be overthrown.

Modern Monetary Theory has become in vogue on the left, as a supposed answer to the austerity agenda pursued by big business politicians. But the limits of a new book by a leading MMT proponent show why we need the ideas of Marxism.

Governments everywhere are pumping money into the world economy to keep it on life support. Subscribers to Keynesian economic ideas – of government stimulus and demand-side management – feel vindicated. But only Marxism offers a solution.

Labour-led Sheffield City Council recently announced that they would support a trial of Universal Basic Income. This is being championed as a victory for the left. But just how radical is the demand for a UBI?

MMT has created a buzz on the left recently, with its supporters citing it as an answer to all our economic woes. Instead of trendy new ideas, however, we need the clear scientific analysis of capitalism that Marxism provides.

Rob Sewell takes up some of the ‘new’ ideas that have been put forward on the left regarding alternative forms of ownership and control. What we need is a socialist plan of production and workers’ power.

Adam Booth looks at the speculative mania developing around Bitcoin and other digital currencies, which is a reflection of the general crisis of capitalism.

In amongst all the confusion and panic of the capitalist class, a handful of extreme right-wing economists have begun arguing for a return to the gold standard as a way of solving the economic crisis. The reality is that the contradictions of capitalism cannot be solved by measures taken within the capitalist system.

Today, in numerous areas, from automation to green energy to information technology, we are seeing a validation of Marx’s assertion: that society’s productive forces at a certain stage come into conflict with the way in which society is organised. These “economic singularities”, as Adam Booth discusses, demonstrate clearly that the system has broken.

Every Easter, millions of people tuck into inadvisable quantities of chocolate eggs. But crack the yummy surface and you’ll find a gooey core of brutality underlying the history of the sugar and cocoa trade. As Joe Attard of the KCL Marxists explains, those who desire guilt-free guilty pleasures need to support the revolutionary cause!

The board game Monopoly is a useful tool for understanding the transformation of ‘free market’ capitalism into monopoly capitalism. Under socialism, the monopolies can be nationalised and run for the benefit of the whole of society – not a tiny handful of capitalists.

Universal basic income (or UBI), an unconditional payment to all citizens, has become part of the economic zeitgeist in recent times, embraced by advocates on both the Left and the Right as a solution to the symptoms and sores of the crisis-ridden capitalist system. But who is actually raising the proposal – and in whose interest?

In the final part of his series on the history and development of money, Adam Booth explores how monetary theories and systems have changed over time in response crises, and looks at the “solutions” proposed to overcome the contradictions facing the money system today. How do we break the spell of the so-called “root of all evil” and free ourselves from these “chains of gold”.

In the fourth part of his series on the history and development of money, Adam Booth examines the factors lying behind inflation and explores the role of gold as the basis for an international monetary system. As the collapse of the gold standard – and more recently the European single currency – demonstrate, the contradictions of capitalism will eventually always come to the fore.

In the third part of his series on the history of money, Adam Booth looks at the growth of finance, the development of banking, and the role of credit within capitalism. As Adam stresses, the economic problems we face today lie not with an overbloated finance sector, greedy bankers, or a lack of credit, but with the anarchic, chaotic, and crisis-ridden capitalist system.

In the second part of his series looking at the role of money within capitalist society, Adam Booth explores the questions of value, alienation, and profit in order to develop a more in-depth understanding about the nature of money.

In the final part of his series on the rise of the sharing economy, Adam Booth reviews Paul Mason’s new book, PostCapitalism, about the impact of information technology and its contradictory contribution within the crisis-ridden capitalism system. How can we truly utilise the abundance of technology and wealth we see around us today?

In the second part of his article on the rise of the sharing economy, Adam Booth examines the impact that new technologies and business models will have on the nature of work and jobs. The trend under capitalism is towards more precarious employment and rising inequality.

We are surrounded by a wealth of technology and innovation. We are promised a world of plenty; a super-efficient system of production and distribution; and a life of leisure. And yet the reality is ecological crises, “secular stagnation”, and eye-watering inequality. In the first of a three-part article, Adam Booth examines the rise of the sharing economy.

In the final part of his series on Marx’s Capital, Adam Booth tries to answer the question of how capitalism initially arose. In what way was an initial disparity and inequality created to allow for the laws of capitalism to set in? It is this issue of “primitive accumulation” that Marx turns to in chapters 26-33.

We continue here our series on Marx’s Capital, looking at the question of accumulation. Capital is dynamic. “Money never sleeps”. For capital to act as capital, it must continuously be in motion – continually seeking to create value from value. It is this overall dynamic of capital towards which Marx now turns his attention in chapters 23-25.

We continue our series looking at Marx’s Capital by discussing chapters 16-22, in which Marx delves further into the question of surplus-value and looks also at the issue of wages. The conclusion is clear: within the capitalist system – a system of wage labour and capital – the benefits of scientific, technological, and industrial progress will always overwhelmingly flow towards the capitalists.

We continue our series looking at Marx’s Capital. Having discussed how the capitalists are able to increase profits by improving productivity through the application of new organisational means within the workplace, Marx now turns his attention towards the most revolutionary of developments within capitalism: the machine.

We continue our series on Marx’s Capital with an analysis of Chapters 12-14. Having demonstrated how the capitalists squeeze greater profits from workers by extending the hours of the working day, Marx now turns his attention towards how the capitalists increase their profits by increasing the productivity of workers through the division of labour and co-operation within the workplace.

In their desperate search for profitable fields of investment, the capitalist class, especially the financial oligarchy, has presided over an explosive growth of unproductive expenditure that today threatens to undermine the very edifice of capitalism. Rob Sewell examines the qualitative difference between productive and unproductive labour within capitalism.

We continue our series on Marx’s Capital by looking at Chapters 9-11, in which Marx looks at the question of exploitation and the issue of the working day, opening up the roof of the factory and peering in to examine the conditions inside. What we see when we peek behind this magician’s curtain is a brutal history of exploitation and class struggle.

We continue our series looking at Marx’s Capital. Having charted the historical development of commodity production and money in previous chapters, in chapters 4-8 Marx now turns his attention to the question that had stumped the classical economists: what is the source of profit within capitalism?

We continue our series of articles on Marx’s Capital by looking at Chapters 2-3, in which Marx turned his attention to the question of money, explaining the various roles and functions that money plays in commodity production and exchange, and the relationship between money, commodities, and value.

Karl Marx’s Capital is an undeniable masterpiece of political economy. Marx’s magnum opus, however, remains a dense and difficult book to penetrate and absorb. To help guide readers through the pages of Capital we are publishing a series of articles that give a chapter by chapter analysis of this great Marxist classic. We begin with Volume One, Chapter One, in which Marx discusses the concept of the commodity and the question of value.

This article provides an overview of Marx’s explanation of why capitalism goes into crisis, discussing the inherent contradictions within the capitalism system, and posing the only alternative: a socialist plan of production.

The digital currency Bitcoin has hit the headlines in recent times for its novelty, as well as for its phenomenal rise in price over the past few years. Ben Gliniecki looks at the hype and reality of the Bitcoin sensation.

What is value? This question has perplexed the human mind for more than 2,000 years. The classical bourgeois economists grappled with the question, as did Marx. Rob Sewell looks at Marx’s Labour Theory of Value and provides a defence of these economic ideas against attacks from modern day critics.

To celebrate the centenary of Ted Grant, founder of the Militant Tendency and Socialist Appeal, we are re-publishing Ted’s article entitled “Will There Be a Slump?”. Written in 1960 in the middle of the post-war boom, when many others on the Left had accepted Keynesian economic ideas, Ted explained the fundamental causes behind the boom and how these would eventually lead to crisis. For more information on this topic, come along to the Marxist Summer School, where Adam Booth will be speaking on the subject.

The following article was originally published in the summer issue of our theoretical magazine In Defence of Marxism. In a previous article from the IDOM magazine, we polemicised against the theory of “under-consumption” as an explanation of capitalist crisis. In this article, we wish to look at Marx’s law of the tendency of the rate of profit to fall and explore the wider question of how to approach economics in a dialectical manner.

There is a tendency amongst the leaders of the labour movement to draw a distinction between the ‘parasitic’, ‘irresponsible’ financial sector of the economy and ‘productive’, ‘responsible’ manufacturing. But is it useful to draw this distinction between financial and industrial capitalism? In this history of finance capital, Luke Wilson discusses how such a distinction is artificial: the growth of industrial capitalism was intimately bound up with the growth of finance capital.

We will deal with the tendency of the rate of profit to fall in a future article, but for now it is sufficient to observe that the views expressed in Anti-Dühring represent the standpoint of both Marx and Engels, which, despite all the efforts of the revisionists to misrepresent them, was identical.

The crisis of capitalism is
accompanied by a crisis of bourgeois thought: philosophy, economics,
morality – all are in a state of ferment. In place of the earlier
optimism that stated confidently that capitalism had solved all its
problems, there is an all-pervading mood of gloom. Not so long ago,
Gordon Brown confidently proclaimed “the end of boom and bust”. After
the crash of 2008 he was forced to eat his words.

“We are all Keynesians now.” So said Richard Nixon, the Republican and former President of the USA, in 1971. Forty years later, it seems that John Maynard Keynes is back in fashion, especially amongst the leaders of the British Labour movement. The reformist leaderships of the Labour Party and the trade unions cling to the Keynesian idea that the economy can simply be “stimulated” back in growing. But as the Marxists have explained before, the current economic crisis is not just part of some boom-and-slump, but is an organic crisis of capitalism, and growth cannot simply be created at will.

Earlier this year, it was announced by the Office of National Statistics (ONS) that inflation had risen from November to December, with the Consumer Prices Index going up from 3.3% to 3.7% and the Retail Prices Index (PRI) – which includes housing costs such as mortgage interest payments and council tax – rising from 4.7% to 4.8%. Inflation was persistently high throughout 2010, with an average RPI of 4.6% – the highest since 1991.

Monopolisation of big
business is endemic to the capitalist system. Big business has become
wealthier and more powerful today than ever before.The revolving doors between government and industry has ensured the
continued domination of big business over parliament and state. Capitalist economists constantly argue that
privately run industry driven by pursuit of profit is the best way for
an economy to function. But, even a cursory look at the world around us
tells a very different story. Far from being efficient, capitalism is
riddled with contradictions and crisis. You could write multiple
volumes, as Karl Marx did, on the inadequacies of capitalism, but here,
in this limited space, we shall deal with just a few.

Marxists have
long since been conscious of the nature of the state, its industrious defence
of the capitalist class, and its prejudice against working people. But much of
the public are unaware of just how incestuous the capitalists and governments
really are. Read part two of Will Roche’s study of monopoly capitalism.

There has
been no levelling off of the global economy, as economists predicted. Although
industrialisation has expanded to lesser-developed countries, it has generally
been along lines determined by global corporations based in advanced capitalist
countries. From colonialism, we have moved into the age of multinational
corporate domination. Will Roche looks at the rise of monopoly capitalism.

The holy trinity of ideological concepts for the modern capitalist age
are neoliberalism, globalisation and financialisation. Of these three concepts
financialisation occupies a position akin to that of the holy ghost, as the
least understood and least discussed of the three. Financialisation is a
reality under modern capitalism. Marxists need to examine how much it has
changed capitalism, and how far the system remains fundamentally the same.

For over a century Marxists have argued the need to take the banks and
other financial institutions into public ownership as part of the
socialist transformation of society. The founding document of
scientific socialism, the ‘Communist Manifesto’, in 1848 called for,
"Centralisation of credit in the hands of the state, by means of a
national bank with state capital and an exclusive monopoly."

"Neoliberalism", sometimes called "market
fundamentalism", i.e. the policy of non-intervention by the state in
the economy, has been the dominant ideology of the bourgeoisie for close to
three decades, involving widespread privatisation and all the
other policies that go with it. The present economic meltdown,
however, is forcing governments to intervene, regulate, and even
nationalise firms because they have no choice. So is "neoliberalism"
dead?

This is an updated version of an educational piece on Marxist economics that was produced in October 1974. It is an introduction to what often seems a complicated subject. It includes recommendations for further reading and should be read by all those interested in deepening their knowledge about Marxism.

We republish this article on the referundum on the EEC Common Market, written by Ted Grant in 1979. The article explains that the struggle against a capitalist common market needs to be linked to the struggle of changing society on socialist lines, as the struggle against the European Constitution today must also be.

We publish this article written by Ted Grant just before the general
election in Britian in 1979. The article demonstrates that the Tory
policies were doomed to failure because of the sickness of British
capitalism and that the reforms offered in the Labour Party programme
were unattainable on a capitalist basis. The only way to carry out
these reforms and take society forward was the nationalisation of the
means of production, and the creation of a planned economy under the
democratic control of the working class.