Do crises originate in the real or the monetary economy?

Section 2: The Form of Value — Money

Introduction: Do crises originate in the real or the monetary economy?

In the wake of the Great Depression, progressive economists played down the importance of monetary policy as opposed to fiscal policy. Instead, the progressive economists of the New Deal and post-New Deal eras saw the source of capitalist economic instability in either the instability of private investment or its chronic insufficiency. Progressives gave little weight to the importance of what is called monetary policy – the policies of the central bank. Instead, progressive economists emphasized the importance of fiscal policy. Fiscal policy refers to the central government’s taxation, spending, and borrowing policies. This view is supported by the belief that economic crises such as the one that led to the Great Depression arise in the sphere of production and not in circulation.

Expanded Reproduction

Chapter 6: Expanded Reproduction

According to Marx, the capitalist mode of production can, in the long run, exist only as a system of expanded reproduction. However, expanded reproduction can only take place if certain proportions are maintained between Department I, which produces the means of production, and Department II, which produces the means of (personal) consumption. These proportions must be maintained in terms of both use value and value.

Missiles, Minerals, and Money

There have been a series of dramatic developments over the last several weeks. The most dangerous being the collapse of Syria’s Baath Party government and its replacement by imperialist-backed rebels who emerged out of Al Qaeda and ISIS. This removes Syria from the axis of resistance that supported the Palestinian resistance.

We have also seen an imperialist-backed attempt to overthrow the government of the country of Georgia, and in Romania, a right-wing, anti-NATO candidate won. The U.S.-NATO-backed Romanian regime solved this problem by having the constitutional court throw out the election.

There has also been an attempted coup by South Korea’s president to restore the dictatorship that dominated the country before 1987.

Disproportionality

Chapter 5: Disproportionality

Disproportionality was a popular crisis theory among Marxists of the Second International era that preceded World War I — from Engels’ death in 1895 to 1914. It is less popular among Marxists today, at least judging from the Internet, where the seemingly incompatible “not enough” surplus value or “too much” surplus value/underconsumptionist theories are fighting it out.

Production and Reproduction

Chapter 4: Production and Reproduction

The capitalist mode of production and, indeed, all economic systems involve not only production but reproduction. What is the difference between production and reproduction? Let’s take any factory — for example, a garment shop that specializes in belt production. In order to produce the belts, the boss — industrial capitalist — needs workers, a building, raw materials in the form of leather, electricity to run the shop’s machines and provide lighting, and so on. The industrial capitalist then must combine these forces of production to produce the belts. This is an example of production.