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Capitalism’s Self-Destructive Spontaneity

Posted by Jeff on July 1st, 2010

“[A] veritable crisis in the capitalist world, is actually upon us. Capitalism therefore currently lacks any means of pulling itself out of the crisis and growing unemployment (it can hope at best for some new “bubble” which again will be only of a transient nature).” | by Prabhat Patnaik | MR Zine

This entry was posted on Thursday, July 1st, 2010 um 2:33 pm and is filed under Economics/Trade, World. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

One Response to “Capitalism’s Self-Destructive Spontaneity”

  1. Wojtek Says:
    July 1st, 2010 at 11:24 pm

    Don’t have time to read whole thing, but already the first few paragraphs are incorrect — historically that is. There was no stable period 1850 to 1910 — this period was marked by an ever increasing oscillation in markets caused by a long-standing debate in world governments between whether to adopt a gold, mixed gold-silver, or fiat currency standard. All three were tried, and the constant shifting meant that vast amounts of human time were consumed digging up these substances, only to bury them in government vaults, then pull them out again, melt them down and convert into tradable forms, etc. This happened quite a few times throughout the 1860s – 1890s until the new century brought in a slew of central banks (state attempts to control currency value by dictum); not coincidentally, these entities were brought in at just the time that governments needed to steal a lot of money to produce weapons to lob at each other’s citizens. Understandably, what was sold as a stabilising force, the central bank, was merely a new way to steal people’s savings, and led to massive fluctuations in currency values, and near total collapses and, arguably, the first and second world wars. Both started in times of severe inflation and resulting famines.

    Perhaps the author meant to reference the period between 1750 and 1850. That’s the time when stability actually was the norm; in parts of the western world there was no state currency. In Canada and Scotland several currencies were in circulation, and all were printed and controlled by banks. The necessity that each of these should be convertible into real goods created a firm check on overprinting. Banks, in competition with each other, could not print money in excess, since it would most abruptly result in flight from their stores of value and eat significantly into their solvency. The same environment was in place in Belgium.. These countries were wealthy at the time, and all stable. Imposition of a state currency in the 19th century and creation of state central banks in the 20th ended all that by creating a state monopoly in currency; massive market and welfare fluctuations ensued.

    It was not, as the article suggests, a shift into capitalism that caused the massive instability during and after the world wars, it was a significant and greedy return to state monopoly in printing currency – a destruction of capital. Governments just couldn’t stand not being able to put their hands in the cookie jar, so they destroyed their citizens’ ability to save. A simple comparison between the time before and after the re-imposition of state currency, and before and after the creation of central banks shows the results. Things has just gotten worse and worse as a result.

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