What is the real cause of crises? Is it major slumps in the rate of profit on investment in which capitalists fail to find a way to recover? Is it producing too much shit and automating or cutting wage so that workers can't even buy the shit they made? Could it be both at once? Does it matter which it is?
Profitability vs Overproduction
When you cut corners by outsorcing your jobs to sweatshops, automate all your manufacturing and oppose any meaningful tax reform, along with a living wage and increased interest rates, you have a recipe for a monumental clusterfuck.
Not that the rich give a shit about that. If it wasn't for classcucks' support for capitalism, we wouldn't be all down the shitter.
You can blame those boomers sacks of shit for being entitled cunts.
Presently, the way to keep rate of profit up is via financial majyyk.
Basically, you print extra fake money by giving people different kinds of debt. The crisis happens when the people that expect to be paid back realize they won't be.
It keeps everything afloat for a short while. Investors always assume the next economic cycle will leave them more than the one before.
According to the attached document, (which imo is just a mathematical way of expressing some of Marx's theories), eventually we'll reach the endpoint, where it'll only be down from there.
Fun part is, it'll involve stupid speculators thinking they reached the bottom of the dip and end up buying, making them lose more money as at that point, momentum is all downward.
The ultimate crisis will be when profits are too low to justify investment. Very good chance that it's triggered by a typical market crash, where the stock market is inflated so profits look high enough before crashing below sustainable levels and never recovering. The way it looks this time might be the one. If you think it's bad when we've got homeless people freezing to death on the streets outside warm buildings in major cities, just wait until the "but we won't make money if we let them in" mentality starts applying to everyone.
Profiteering causes bubbles.
The expectation of a rising exchange value for something (profit when sold) increases demand for the thing, which then indeed makes the exchange value go up.
Kind of hoped I'd get more debate out of this. Where did all the theorists go?
Communism is nothing but centralised capitalism, with the state being a single giant company that turns all its subjects into nothing more than a means to produce capital for the state. The state then pays its subjects what it believes they deserve. If people need to starve, lose all their autonomy, or lose their lives to keep the state afloat, than so be it. Nothing is more important than the state.
Communism exists as a movement and has been the sole identity of many countries.
Capitalisms modern meaning was invented by communists. Capitalism never existed as an ideology, No country has Identified as capitalist. Everything that isn't communist is called capitalist by communists. Humans and countries and companies have been accumulating capital since the stone age. Anyone can be accused of being capitalist. It is a meaningless term much like racism.
All I got out of that tbh fam. What are your thoughts on the falling rate of profit on investment though?
As I said before, the falling rate of profit can be negated by rent-seeking, which almost applies to the entire entertainment industry already. The problem is that eventually, this will lead to political instability, when you restrict access to the proceeds of production via a "subscription" because everybody hates landlords as it won't mask exploitation as well as commodity exchange.
At least I don't think with classical imperialism you can save the day for another fifty years. Countries like Brazil, India and China rapidly step up to the West which will force the West to export more capital to Africa and considering the ramifications of mass migration will be felt so much in combination with climate change way before capitalism hits absolute zero.
A low rate of profit is the product of well functioning unmonopolized markets and provides justification for the capitalist system, because there is no reason to take somebodys assets away from him if the amount of profit they provide doesnt justify the costs of seizing them.
Is that what you call the present state of capitalism? And if the rate profit is low, doesn't that also mean the only realistic way to maintain a reliable profit margin is through economics of scale which systematically eliminates smaller competitors?
Apparantly we are moving towards it, when many companys compete for the same consumers, prices have to fall just above the production cost.
Economy of scale can only function under very stable and secure political conditions, othwise all your efficiency will fall prey to piraty and banditry. Geopgraphic obstacles and the likes can also hinder the free flow of goods.
This guaratees a certain minimum profit margin for everybody.
If you hit the point where your profit margin comes close to zero you will have no extra capital left to take over your comeptitors.
If the demand plummets there will be takeovers naturally, we currently have such a situation with printing companys around here. The last company with a owner below 60 is buying up the others for cheap because they are all one man shows and their services are less and less demanded because internet.
The contradictions of capitalism. It can take many forms, like what you posted, because of the tendency of capitalism to obfuscate its problems with financial and linguistic wizardry. It doesn't matter in the sense that revolt against capital isn't determined on the flavor of crisis and that crisis will negatively impact the proletariat along with the exploitation inherent to wage labor.
Wait, you're arguing for the marxist economic model?
I do? I was just formulating my thoughts
According to the man in this podcast
it's the first one, "the tendency of the rate of profit to fall."
According to the Labour Theory of Value, the value of a commodity depends on the amount of labour "socially necessary" for its production (in other words, the average amount of labour necessary for a commodities production, across the market. )
If you make a pair of shoes and it takes ten hours, it's worth so much. If you spend two more hours and carve some embellishments in the leather, they're going to be worth more. (Assuming there's a buyer for on the market who likes your designs.)
Porky makes profit from trousering the difference in value between what you make for him, and the value of what your wages buy you (housing i. e. mortgage or rent, clothes, food, etc.)
It's in porky's interest to increase efficiency. If he can get you making shoes on a machine instead of by hand, you can make shoes in a day, while his wages bill is the same. Porky now has a competitive advantage over his rivals.
The problem is this only lasts until other porkys copy him and introduce the same machines. When this happens, there is less profit oversell. because there is now less total labour in the productive process, and so less *aggregate* gaps between the value of what the workers' pay can buy, and what is produced for porky. Basically, as mechanisation takes place across an industry, prices (which fluctuate around value) drop.
"Constant capital" (machines etc) is discussed in the podcast around 13 min.
Other highlights from the podcast
17 min "if that was the end of the story, why the fuck is capitalism still around? “ (counter tendencies to the tendency of the rate of profit to fall explained. )
" the way in which crises are resolved depends on how effectively the working class organises around revolutionary politics. In economic crises it becomes very obvious to vast numbers of people that capitalism is not delivering the goods. And large numbers of people look around for an alternative. And that alternative if revolutionary socialists are effectively organised is their politics rather than the politics of the far right who do offer an alternative to the mainstream conventions."
41min discusses the global financial crisis as a result of porky getting profit from speculation.
Then why is porky bankrolling the alt-right? buzzfeednews.com
Based ZeroBooks poster
How exactly is capitalism supposed to end from falling rates of profits, what aspect of it is will make it break?
Capitalism is "generalised commodity production" .I. e. - when commodity production is the basis of society.
A commodity is something that's made to be sold, in order to turn a profit.
When it's not possible to turn a profit any longer…well porky could give up, and turn his factories over to the local blue haired freaks in the IWW to produce things for free, but that wouldn't be capitalism anymore.
It won't (unless you're one of those heterodox Marxists who believe capital will somehow transform itself).
Capitalism will only end through the organized, self-conscious action of the proletariat. Otherwise every crisis and period of low profitability will eventually end once enough stuff is destroyed (through wars, collapse, etc.) to restart capital accumulation.
When profits fall below about three percent or so, capitalists stop investing capital. When that happens the wheels come of the wagon. The last time that this happened, it was resolved by large part of the bourgeoisie (the American oligarchs mostly) devouring another large part of the rest of the bourgeoisie (the Axis and the old empires' colonies). Capitalism will no doubt lead us back to that point, but it is becoming an issue of just how small the bougeois class can get and still maintain the system.
Their will be no investment because investing stuff won’t be profitable.
But this would have to happen to every single factory at the same time, thats quiet unrealistic.
But total destruction has lead to a much greater amount of equality in central Europe in the
1950s-60s than before and after
But maintainance is already deducted before calculating profits. So stagnation would be assured. And there are new bourgouise classes spawning, in East Asia e.g.
as production becomes increasingly mechanised there are less ways for competing capitalists to make a profit by undercutting the other, whereas human workers can be organised in various different ways (artisan vs assembly line, paid badly vs paid well, treated like shit vs being part of a "team" etc) a bunch of 3d printers or whatever cannot, they don't steal, come in drunk, go on strike, they just produce, by definition at 100% and when they don't its obvious what the problem is
What would? The introduction of machinery? It wouldn't /doesn't.
That's the whole point - porky introduces machines to gain a competitive advantage over other porkys.As mentioned , value depends on the "socially necessary" labour for a commodities production - in other words the labour time necessary * on average*,to produce a commodity across an industry as a whole. If porky can get commodities produced for less labour time than the average, he's quids in.
But this only works for a while, because there's nothing stopping other porkys from eventually introducing the same mschines, and then the rate of profit falls. (Because there are now less workers being employed, and as explained above, porkys source of profit is the difference between the value of the workers "labour power "(the ability of a worker to keep working, what he needs to live on, basically), and the larger value created during his working hours.
Are you talking about overhead?
I am not sure what you mean by "stagnation." Do you mean that profits would stablize?
That is not a new class. It is just individuals within an existing class accumulating wealth.
Its usually external factors.
Imagine you are an African clothing manufacturer.
You sacrifice a lot and invest your money wisely and set up a production line.
You give plenty of people jobs and also help African culture by allowing people to buy traditional african dress.
Then Oxfam dumps 60 metric tonnes of second hand clothing from the west in your town which people can have for free.
So you have no business anymore. You close your factory, let go of your staff and join the queue for the clothing like everyone else.
I wasn't aware Oxfam was an aid organization.
At a certain low point profits will stabilize because nobody wants to put money into an saturated or oversaturated market. Then the demand for the maschinery will fall, lowering the prices for replacements, the lower prices and lower cost of upkeep will reduce the worth of the induvidual companys towards ca 20x their individual profit margin. Thats what happened to Feudal societys at least, you could precisely estimate some heirs income by knowing how much he is going to inherit. The 20x ist mostly psychological and is caused by time preference
>Then the demand for the maschinery will fall, lowering the prices for replacements
The problem with that prediction is that the cost of the machinery cannot fall below the cost to produce it. If it were to do so, capitalists would stop investing in their production. This is a sterling example of why price cannot be divorced from the process of production.
For anyone interested, there's a good book on this, Financial Alchemy in Crisis, by Anastasia Nesvetailova:
"At the level of financial institutions themselves, the axiom that financial innovation and engineering have the capacity to *liquify * any type of asset - or, more accurately, debt-has resulted in the now mainstream notion of liquidity that is divorced from any attribute of assets *per se*… the hollow notion of liquidity lies at the heart of the great illusion of wealth and the belief in financial markets' capacity to invent money that are the real causes of the global meltdown. " p16-17
And a good film to rent is The Big Short
But the cost of production can and will fall, a crisis will lead to deflation and cost cutting in the production process, a company tends to aquire a certain degree of lard during good times (e.g. free food for employees etc) and tends to overspend on certain issues (like marketing). And sometimes they might temporally stop reinvesting into new and better maschinery, cause there is overproduction anyway.
1929 had some severe deflation, and in the EU only massive bailout programms and ruining the banks normal interest business by printing e-money prevented the same thing from happening again.
And in such a case the civil order will break down and calls for more security get louder, and since the lefts front man, the sozdem-labour etc. movements are not really known to strong police units and head cracking (cause they are pussies) and your underdog the antifa-ancom continuum are know at being outright hostile to public order, the public will allways turn to the right and to fascism tο fix it.
We are not talking about trimming the fat. We are talking about a floor at which nothing more can be trimmed. That exists regardless of how much supposed "fat" (things that were once necessary but are no longer so) you pile onto it. Machinery requires labor and resources (which themselves require labor) to produce, which means that the means of substistence for the requisite number of workers must factor into the cost of said equipment.
In other words, capital stops flowing into it, which was the original point.
More like the Americans obliterating OPEC and driving the cost of petroleum into the ground has been holding the impending crisis at bay.
The only calls that matter come from the ruling class.
Fascism is dead and irretrievable. Capitalism is no longer broken into numerous spheres that can sustain themselves. The rate of profit is too low and capital is too consolidated for that manufacturer-run shit to be viable. Cut up global capitalism, and all you will get is capitalism's corpse.
The falling rate of profit well explained in this four minute video.
Even if the explanations in the thread above are still a head fuck to any anons, the main thing is as eventually prices go down with better machinery +techy stuff , there is less profit to be made.
It's important because if /when capitalism becomes unsustainable, the two options on the table are likely to be, either, in the classic formulation, "socialism" (/communism) "or barbarism" (fascism.)
Or those who like videos with a retro Maoist chic, Jason did a good one on the same subject :youtu.be
There are many postitions in companys that arent necessary at all and never will be, but they are maintained by a mixture of corruption, comradeship, pity and lazyness, costs can be cut to an enourmous degree, when the need arises, reaching a floor is unlikely to happen.
LESS capital is flowing in thats a big difference from your point
Americas newfound oil only counteracted the inflation and prevented it from reaching the rural middle class. It contained the damage to the urban housing market and the stock exchange
Bullshit. The urban lower class is the most affected by crimes, the ruling class will get a first class ticket to tropic Island XYZ or will raise a private security force and wait it out.
fascism, military junta, authoritarian police state, call it what you like. It can break up again, when international relations break down, raising the rate of profit by cutting of foreign competition. An organic system like capitalism will allways outperform anythingthat relies on planning and shooting people for doing well
Only so many. They are finite.
It is inevitable as the rate of profit diminishes. This is what the hegelians called a "contradiction." A company must make a profit by investing less then the returns on their investment will be, but the system in which they function can only produce ever decreasing returns without new sources of resources (a frontier) to inject into it. Eventually, the contradition must reach a point where it is fatal to the system that it is inherent to, and the system collapses utterly.
"Less" eventually winds up at zero.
Kek. That's not hard, since it doesn't exist.
What the fuck do you think that has to do with anything?
What do liberals and American antifa have in common? Neither knows what fascism is.
You mistakenly still think of economies as qualities that are native to nation-states. They are not. Honestly, I do not know how you nationalists manage to fall for that naked mystification. One look at the "made in" labels on all of the commodities that you consume, one look at the structure of multi-national corporations, one look at the ships in the harbor buried under stacks of containers should disabuse you of that foolish fantasy.
By "doing well" you of course mean taking the lion's share of the proceeds created by the people who actually do things besides hookers and blow.
HAPAS ARE SUPERIOR TO WHITES
HAPAS ARE SUPERIOR TO WHITES
HAPAS ARE SUPERIOR TO WHITES
HAPAS ARE SUPERIOR TO WHITES
HAPAS ARE SUPERIOR TO WHITES
What happens when the rate of profit finally reaches zero? Could a new system of exploitation (neo-feudalism) rise to displace capitalism? Can a system of exploitation exist at all at that point?
I'm pretty sure shit will collapse before then and we'll end up in ecofascism.
That already happened in the 1930s; industrial society had a massive crisis when so much shit was produced where new investment couldn't work because birthrates had dropped from 5 kids per woman to 2. From that we got the Great Depression and WW2, only emerging from it because so many new technologies were invented and better labor laws meant workers had more money ergo more kids.
Back then it was just luxury crops eg cotton, coffee, sugar and bananas that were outsourced today it's smartphones and TV displays. In both cases the system is totally unsustainable as the amount of people buying bananas and smartphones peaks.
No because feudalism is expensive. At the very least workers who agree to share their wages with their company in exchange for a job/house/college degree only wind up costing the company tons of money in interest creating an inescapable cycle. Since slavery is banned, people would just drop out of it all and the company would collapse. Even if slavery was allowed, now the company is paying for shit like food and housing for their employees which is very expensive compared to hiring them as disposable contractors.
The system can't go back unless it physically regresses technologically. No reason to have sharecroppers when combine harvesters exist, no reason to have hundreds of truck drivers when trains exist, and no reason to have accountants when excel exists. Everything just freezes and nothing happens until the government steps in and forces movement.
Basically, what the New Deal was. It's a shame so many Americans have forgotten what those little "WPA" marks under bridges represent.
Which to conclude: to get an idea of how absolutely fucked things are now consider that even Republicans are walking away from the US's biggest infrastructure project, the Interstate freeway network, because they consider it too expensive to fully maintain at it's current level. For better or worse, they'd rather have truck drivers absorb the increased maintenance or toll cost of roads or better yet shove them off onto railroads. Meanwhile, urban states are increasingly unwilling to subsidize suburban life with 10-lane freeways that have no fare recovery.
For as exploitative as these attitudes might be, it's symbolic of a larger breakdown within capitalism: capitalists no longer want to pay for shit like freeways that many communities rely on. Even if those communities were stupid to have such a reliance in the first place, as the money is gradually pulled back they will be forced to pay out of their own pockets (either in tolls, vehicle repairs, or sales taxes) that hurt their disposable income. End result is that the old system cannot sustain itself and urban development evolves around a new model. The same shit happened in the 20th century with the freeways themselves and caused urban decay. It also just so happens that railroads get their monopoly power back while car companies are killed off.
However, nobody will willingly go back to trains unless road technology (aka, pavement) fails to the point where prices increase to the RR's fees. RRs make huge profit for some time, while regular people get screwed. Basically it's what happened in the 1870s when RRs got really big in the first place against wagon trains, a machine that lasted until the model T and 1929 stock crash which gave us the US Highway system in the first place.
By "neofeudalism" people typically mean corporations owning fucking everything and people simply renting out their shit on a daily basis. Not quite the same as previous feudalism.