The following was originally posted on August 20 by Sparky as a comment on the article “On the Roots of the Current Economic Crisis and Some Proposed Solutions” that appears above. In order to bring it to wider attention, we have made it a post in its own right.
I’m surprised at how many self-professed Marxists say that the LTRPF [law of the tendency of the rate of profit to fall] is somehow flawed, or cannot explain the current outbreak of crises. Marx himself described it as central to his critique of political economy. I can see no other alternate explanations coming forward that even begin to approach an adequate explanation. I’ve seen plenty of Keynesian explanations that blame the lack of regulation, or neo-con orthodoxy.
The advent of the microprocessor showed the world that technology in late capitalism was now wiping out more jobs than it would ever create as opposed to earlier technological innovations of capitalist society that caused more new jobs to be created than they eliminated. That is to say, the weight of the constant element of capital hangs so heavily on capitalist production that the only thing a sensible capitalist can do currently is to entirely remove his capital from the messy productive process altogether and achieve profits through what could be called fictitious or speculative capital.
Even in my high school when I asked my leftist teacher about the falling rate of profit, which even in the eighties made a great deal of sense in explaining the crisis, the only answer I got was that rates of profit don’t fall, they go up. The trouble with this was that this only took into account the years of post-war prosperity, and conflated this forty year period of relative prosperity in a handful of imperialist powers to a universal constant that “disproved” the Law of Falling Rates of Profit.
A machine will consistently depreciate in value as soon as it is put into production. A commercial CNC board cutting machine, in order to pay for itself must produce a maximum amount of product in order to realize its value. This too causes the value of the machine to depreciate at an even faster rate. A worker can be laid off and rehired at a lower wage. The value of the machine starts to deteriorate through wear and tear from the day it first is put into use in production. I can see this tendency at work, where I work. It isn’t an abstraction. I would argue that it is an observable phenomenon that workers see and experience.
In light of this current outbreak of open crisis within capitalism that the detractors on the left were spectacularly wrong. The collapse of the USSR and the collapse of the US dollar today are a part of the same process in capitalist society, a tendency which has been at work and observable since the early seventies. Having global currency allowed US capital to have what is in essence the largest corporate welfare scam in history-the US dollar itself. This situation is coming to an end as are the post-Marxian certainties of bourgeois economic thought. I’ll never again be able to do anything other than laugh at those who used to tell me that the working class no longer existed or that rates of profit do not fall.