[Pen-l] sequence of causation in crises

["Chris Burford" <cburford@xxxxxxxxxx>]

One reasonably informed UK news anchorman, today commented that the bank
crisis is now causing a severe and deep general economic crisis.

Another commentator on Newsnight argued that today we saw the "spillover" of
the banking crisis into the real economy.

Although this is the surface appearance, from a Marxian point of view this
mistakes the fundamental process of causation, does it not?

>From that point of view, capitalism as a system is always vulnerable to
periodic crises because of the fundamental contradiction between the social
character of production and the private character of appropriation. This
expresses itself in the endless need for capital to accumulate, which comes
up repeatedly against the limited purchasing power of the masses.

A financial crisis is a *symptom* not a *cause* of this fundamental
contradiction, is it not?

This remains so even when a wobbly economy has tried to continue to maintain
circulation by means of relentless deficit spending and the creation of ever
more elastic creations of capital. These include appearing to supply
attainable housing to working class people on mortgages, that are
sustainable only if warm economic summers never cease. They also
include credit default insurance which is supposed never to involve real
risk, but only give the opportunity for clipping a proportion of surplus
value indefinitely.

Capital is elastic. The fact that it tightens in a crisis is not the cause
of the crisis: it is arguably the first sign of the crisis.

The hard truth was not particularly revolutionary even in 1848 when the
Communist Manifesto said that the way out of crises requires the destruction
of (real) capital, (not just overstretched capital) until accumulation can
start again on a lower capital base.

So while the governments of the world busy themselves with nationalizing and
globalizing debt, they should not be blamed that this cannot stop the stock
exchanges panicking. The stock exchanges *should* be panicking, destroying
10-20% of the total value of real capital that they expect to be able to
produce profits!

There needs to be a real bonfire of the vanities, as
theatrical as possible, provided it is also real.

And with as few working people as possible caught up in the conflagration.


Chris Burford

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