Sunday, July 11, 2010

Socialism Is The Answer

I was reading a post at Seeking Alpha about why the economy is headed further down and came across this comment:

This is a classic crisis of capitalism, an epidemic of over-production brought about by its most fundamental limitation/contradiction: the tendency of the rate of profit to fall. This tendency exerts its death-grip every 60-80 years so... it was only a matter of time.
I have two questions and an answer for the gentleman.

Let me get this straight. The problem with capitalism is that it produces too much? You would rather have the reverse problem? Socialism is your answer.

Cross Posted at Classical Values


Neil said...

Well, Marx did actually do some interesting analysis of the capitalist economy of the Victorian era. His useful observations were largely answered by anti-trust law here in the U.S., however.

And the economy does, in fact, tend to undergo a decrease in profit margin every 80 years or so. But that probably has little to do with capitalism per se. My working hypothesis is that demographics is the dominant factor. Every 80 years or so, you get a smallish young generation--the Baby Bust follows the Baby Boom, if you will. Deflation is the logical result. Actually, if we've seen the worst of our current troubles, then we're weathering it surprisingly well, considering the scale of our own Boomer generation.

I'm not quite willing to say the worst is over, though. The next year will tell the tale.

simentt said...

Hi Simon,

While socialism seems destined to minimize the ability and maximize the need of the individual, there may still be something to Marx. I have not yet read my Marx-book, so I can't really say what Marx really says (except that I've seen him argue against non-market pricing, which is delightful in any case), but as a philosopher there may very well be something to him.

Recently, I found this piece from Fofoa on Marx' error of class-distribution.

Marx argues (as is commonly known) that there is a struggle for dominance between the 'workers' and the 'capitalists'. The Fofoa -writer argues that the two classes are savers and spenders, and that the mechanisms under which power changes are fairly known.

The spenders spend until they go broke (this is where we are today), where the savers effectively end up in power. When the spenders later get bored with having to live within their means, they overthrow the rule of the savers, and start spending - restarting the cycle.

It's an interesting piece ,-)