MAGA

On June 13, 2025, Israel attacked Iran. It is clear that the Trump regime knew it was coming and approved of it. Then, on June 22, the U.S. directly attacked the peaceful Iranian nuclear energy program with bunker-busting bombs. On June 25, the U.S. and the Zionist entity announced they were halting the bombing attacks for the time being, and Iran then halted its counterattacks against the Zionist entity, ending what is being called “the twelve-day war” for now. Next month, we will examine the consequences of the twelve-day war.

Last month, I noted that the tariff war shows we are entering a period similar to that between August 1914 and August 1945. The U.S.-Israeli twelve-day war against Iran confirms it. Significantly, Israel has threatened to launch such a war many times over the last 30 years, claiming it was concerned Iran was developing nuclear bombs. This is even though there is no indication Iran was interested in developing a nuclear bomb — Iran’s clergy-run regime has declared many times that nuclear weapons are sinful and forbidden by the Muslim religion and God.

One or Two or Many Cycles?

In the chapters on the “ideal” industrial cycle, I assumed that there is one capitalist economic cycle, what Marx called the industrial cycle. Furthermore, I assumed that all the contradictions of capitalist production accumulated during this cycle of about ten years are then discharged in a single crisis at the end of the cycle. If actual industrial cycles corresponded to the “ideal cycle” I described, each cycle would have a crisis, a depression, a phase of average prosperity, and a boom of more or less equal length.

Even if there were a tendency for the length of the various stages to change over time, this would be a secular process, not a cyclical one. Concrete industrial cycles differ from each other. These differences are not a matter of theory but a matter of empirical fact. Are the sometimes drastic differences observed among individual concrete cycles due to accidental forces, secular forces, or cyclical tendencies at work?

In addition to the possible existence of a long cycle, many economists have claimed that a short cycle of about 40 to 48 months exists. A complete theory of crises and capitalist economic cycles also has to account for the existence of this cycle.

To my knowledge, at least five different economic cycles within the capitalist economy have been proposed at one time or another. Perhaps readers have heard of even more.

The Long Cycle and Historical Trends

The question of whether, in addition to the industrial cycle of more or less ten years’ duration, there is a longer cycle extending over several “10-year” cycles has divided Marxists as well as bourgeois economists who have shown interest in business cycles.

Keynes and the falling rate of profit

Keynes, along with Adam Smith, Ricardo, Marx, and even the classical marginalists, believed that the long-term trend of the rate of profit was downward. However, Keynes and other marginalists gave different explanations than Marx for this tendency.

Unraveling of the Post-1945 Order

As May winds down, the Gaza genocide continues, as do negotiations to end the Russo-Ukraine war, with no clear end in sight as of this writing. The Republican House of Representatives passed a bill now being considered by the Senate aimed at big cuts in government-supported Medicaid and possible cuts in Medicare and Social Security. The bill also features making earlier Trump-Republican tax cuts permanent, as well as adding more.

Liberals and progressives claim Republicans want to cut Medicaid to finance the tax cuts (capitalists don’t like to pay taxes) — but this is not their main motive.

Cutting Medicaid forces more of the poor onto the labor market by making them financially desperate to find a job or go without medical insurance. Nothing is being done to make more jobs available, nor are there plans to force bosses to provide medical insurance or wages sufficient to afford private insurance. They are intended to force people to work for wages that do not even pay the value of their labor power.

Keynes on the ‘Trade Cycle’

Keynes, throughout the “General Theory,” was concerned with explaining how his marginalist equation of “equilibrium” — marginal efficiency of capital = rate of (money) interest — could correspond to mass unemployment. The industrial cycle itself was of secondary concern for him. Nevertheless, in Chapter 22, entitled “Notes on the Trade Cycle,” Keynes does deal with the industrial cycle, or as he called it in the English manner, the “trade cycle.”

Keynes Attempts To Generalize Marginalist Theory

In previous chapters, we saw that Keynes denied that the unpaid labor of the working class produced surplus value. So, how does surplus value — profit, interest, and rent — arise, according to Keynes, if the working class does not produce it?

Ricardo and Marx vs. Keynes

Ricardo, unlike Adam Smith, attempted to use the law of labor value consistently. He sensed that this law applied not only to simple commodity production but also to capitalism proper. Ricardo was only partially successful in this, but he was on the right track. He realized that price is a relationship between the commodities whose price is being measured and the money commodity — gold — in which the commodity’s price is reckoned.

Liberation Day

On April 2, President Trump announced his “Liberation Day” tariffs. As this blog concentrates on economic questions, this was the biggest event of the last month. But before I get to the tariff, I’ll look at other developments.

Kilmar Abrego Garcia lived and worked legally in Maryland since 2019. The Trump administration accused him of belonging to a gang, arrested and put him on a plane heading for a notoriously brutal El Salvadoran prison. He had not been convicted of any crime. They then claimed they’d committed an administrative mistake.

On April 10, the Supreme Court unanimously ordered the return of Kilmar Abrego Garcia. As of this writing (April 28), he remains imprisoned, and Trump has refused to follow the court’s order. [I wonder whether the high court regrets last year’s decision that even after leaving office, a president cannot be criminally prosecuted for any action taken while in office in pursuit of their duties? I don’t know the answer, but it seems the court is like a man sawing off the branch he is sitting on. -SW]

Keynes on the ‘Classical’ Marginalist Economists

In the second chapter of his “General Theory of Employment, Interest, and Money,” Keynes summarizes the theories of the “classical economists.” Keynes uses the same terminology that Marx uses and indeed borrowed the terminology from Marx. However, Keynes referred to the “classics” of marginalism, or rather, he lumped together the marginalists with the classical economists in Marx’s sense of the term.