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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.
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.
Last week, the Bank of England hiked its
interest rates, yet again, to 5.75%. This
was the fifth rise since August 2005.
And the head of the bank, Mervyn King, said that "further action" on
interest rates could be necessary. Most
observers reckon the interest rate that most borrowing and mortgages are based on
- the bank rate - will go to 6% or more by the end of this year.
The world's stock markets having been hitting all-time
highs in their prices, especially the markets of India and China,
where there seems no end to the upward spiral of the burgeoning capitalists
economies and their accompanying stock markets. Only the US economy is slowing as its
housing market collapses. 
Gordon Brown wants the UK to be 'the most
attractive location to do business.' He has a problem. Every other finance
minister in the capitalist world wants the same for their own country. What is happening is a race to the bottom. The rich get richer, the poor pay more.
Socialists have always been opposed to all forms of discrimination, not only because it is unfair to a part of the working class, but because discrimination divides us as a class and weakens us as a result.
Michael Roberts takes a look at the role played by the US Federal Reserve Bank and what its chairman, Ben Bernanke, has had to say about the inequality of income in capitalist society.
Behind the term "private equity" hides good old "asset stripping". It is not about making things. It's about making money from money, buying up companies, stripping them and selling them off with a mountain of debt. Or to use a simpler term, it's capitalism.
This is an updated version of an educational piece on Marxist economics that was produced in October 1974. It is an introduction to what often seems a complicated subject. It includes recommendations for further reading and should be read by all those interested in deepening their knowledge about Marxism.
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