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Gordon Brown and Chancellor Darling are trying to cut public sector pay and impose three year pay deals, despite the price of basic goods rising. In effect the deals the are trying to impose are pay cuts. Why? 
We have seen the sharpest falls in stock markets around the
world for almost a decade. Billions have been wiped off share prices worldwide.
As we have predicted, fear mounted among the financial authorities that the
panic could lead to a full-blown recession.
This article was originally written on the occasion of the seventieth
anniversary of the 1929 Wall
Street Crash. It was not intended purely as a
commemorative or historical piece. It was written because, to Marxists, all the
signs were then apparent that another stock price ‘correction’ was in
preparation.
Andrew Glyn died from a brain tumour on 22 December 2007. He was 64 years old. A fellow of Corpus Christi College
in Oxford since
1969, he was a leading socialist economist for all that time.
Everywhere the cry is: credit crunch!
The final part of this extended article on Marx's theory of crisis focuses on the tendency for the rate of profit to fall, with reference to the generalised world-wide crash of 1974. The tendency for the rate of profit to fall manifests itself in practice through the development of internal contradictions, as part of a cycle and not, as over-production
theorists would have it, as a crash coming out of a clear blue sky.
The second part of this extended article on the Marxist theory of Crisis looks at world
capitalism since the Second World War. It deals with Glyn and the profit rate, the tendency of the rate of profit to fall and the increasing organic composition of capital. 
Marx's theory of crisis has been the source of controversy for more than
a century. Many competing schools have been set up, basing themselves on
isolated quotes. This is partly because Marx's key observations are
scattered through his economic writings. This extended article looks
first at the different theories that try to explain capitalist crisis
and at how Marx's own theory of crisis fits in with his broader view of
capitalist development. The next part will apply this analysis to world
capitalism since the Second World War.
The bourgeois economists are incapable of understanding
crises, which are an inescapable result of capitalism. They look for subjective
factors such as "confidence", even "human nature". In reality what we are
witnessing are the real workings of the capitalist system in a period of
decline.
The recent chaos on world stock markets is a
manifestation of the general turbulence that is the most prominent feature of
the present epoch. The crisis that affected the Northern Rock bank in Britain
is but an indication of dramatic
events that are being prepared globally.
Over the past 15 years production has risen at
about 3% a year in the OECD countries, while money supply, mortgage and company
debt, personal borrowing and the massive so-called derivatives market based on
this credit has increased at over 25% a year! Result? A huge bubble which is
now bursting, starting with Northern Rock.
The collapse of Metronet , the consortium entrusted with upgrading the
tube, spells the collapse of the whole notion of 'Public Private
Partnership', otherwise known as the Private Finance Initiative.
The financial turbulence of recent days has
wiped billions off the price of shares all around the world. On Friday August
10th London’s stock exchange, the FTSE 100, alone dropped £63
billion. What does this mean? The same firms are still employing the same workers and
making the same things. But these firms are suddenly worth £63 billion less
than twenty-four hours before. And this should sound alarm bells for their
workers - and for the rest of us.
This is an important book, written by Andrew Kliman, and published by
Lexington Books. In a nutshell, what Andrew Kliman shows is that Marx's laws of
motion of capitalism (how capitalism works and does not work) are logically
consistent and theoretically valid.
