In 1825, shortly after Ricardo’s death, the first global crisis of overproduction swept over Britain. A second global crisis erupted in 1837 with far more devastating results. It was followed by years of industrial depression and mass unemployment. Stormy class struggles broke out, from which came the Chartist movement, the first mass working-class political party. It was during the depression that followed the 1837 crisis that Marx and Engels were themselves radicalized.
Month: March 2025
The Ricardian Theory of International Trade
Our examination of the laws governing international trade begins with David Ricardo’s theory of comparative advantage. This theory has dominated bourgeois political economy as regards the theory of international trade for the last two centuries. It has survived the transition from his theory of value based on the quantity of labor socially necessary to produce a commodity of a given use value and quality to the modern marginalist theory of value. It has also survived the transition from the gold standard to the universal use of so-called fiat money.
Value, Price and Crisis
Marx noted that in the boom phase of the industrial cycle — the introduction of technical advances — state-of-the-art machinery will reduce the price of production while the general price remains stable or even rises. So prices tend to rise.
The Decline of Imperialist Democracy
As explained last month, Donald Trump kept his promise to end the genocidal military assault by the Zionist entity against Gaza. I will not call this a war. He then unveiled his own plan for “post-war” Gaza. Trump plans the permanent removal of 100% of the Palestinians from Gaza.
Who will replace them? Trump indicates that the U.S. itself would own Gaza, not Israel. Trump did not explain what this ownership means. Does it mean that U.S. businesses (including Trump’s family businesses) would build hotels and casinos to take advantage of Gaza’s beautiful Mediterranean climate? Or would Gaza become some sort of U.S. territory? He also implied that U.S. forces would replace Israeli forces, though he later walked that back claiming U.S. forces wouldn’t be needed in a Palestinian-free Gaza. (1)
Trump claimed Gaza Palestinians would be resettled at some beautiful place nearby, such as in Jordan or Egypt, though there were some stories it might be distant Indonesia. The governments of Jordan and Egypt expressed strong opposition to any forcible resettlement in their countries. His plan also raises questions about the future of West Bank Palestinians. Many of them, as in Gaza, are refugees from other parts of Palestine. Even before Israel began its genocide in October 2023, the Zionist entity was putting pressure on the West Bank — will the next step be to drive Palestinians out of there as well? Will the U.S. own the West Bank as well as Gaza?
World Trade and Crisis Theory
In the last few chapters, we examined an ideal capitalist industrial cycle. To simplify, we assumed the capitalist world was a single country with a gold-bullion-standard currency system. Based on these assumptions, we saw that once capitalism developed to the point where it acquired the ability to carry out sudden expansions of industrial production, an industrial cycle with all its phases of crisis, depression-stagnation, average prosperity, and boom emerged.
A Critique of Crisis Theory 