A (usually court-ordered) forced restructuring of a debt load which involves the reduction of the amount owed, in order to allow the debtor to at least be in the position to continue to pay back part of the debt. This happens most often in bankruptcy proceedings. The term arises from the fact that lenders view such reductions in the debts owed them as something that is being “crammed down” their throats!
Under present U.S. law (as of November 2009) if a person files for “Chapter 13 bankruptcy” (a court-supervised, multi-year plan designed to provide at least partial payment of debts to the creditors), the judge can reduce the amount owed on credit cards, auto loans, student loans and even mortgages on second homes, but not on mortgages on an individual’s principal residence. At present there are once again proposals to change the law in order to allow cramdowns on these sorts of mortgages as well, as part of the desperate effort to resolve the financial crisis in the U.S. which first broke out in the sub-prime mortgage sphere in 2008. At present, banks are often rapidly forcing foreclosures, and then the sale of the house to someone else (even at a much lower price), in order to quickly recover as much of the bad loan as they can. If this change is made it might make it somewhat more difficult for the banks to do this, because a judge might cut the mortgage amount owed and allow the person in bankrupcy proceedings to keep their home (thus preventing the bank from selling it again).
CRASH OF 1929
The major stock market crash and financial crisis that broke out in the United States in the fall of 1929 and is generally viewed as the beginning of the Great Depression of the 1930s.
Most bourgeois economists view this Crash and overall financial crisis, along with the inept handling of it by the Hoover Administration and the Federal Reserve, as the main causes of the Great Depression, which then spread through the entire world capitalist economy. This theory, however, is mostly nonsense. A recession was already developing in the U.S. economy by the spring of 1929, and it was the fundamental workings of the real capitalist economy that led to overproduction of capital, the massive debt bubble, the initial recession, the wild financial speculation, then the Crash, and finally the Depression. While it is true that financial crises such as the Crash of 1929 virtually always play a prominent role in capitalist economic crises, they are by no means the fundamental cause of them. Still, it is also true that a more rational response from the government (for example, via what is now called Keynesian deficit financing) might have somewhat mitigated or even postponed the Depression, at least for a while. But the bourgeoisie was trapped by its own ideology that proclaimed the capitalist system as self-regulating, and therefore was unable to respond with even limited effectiveness.
CRATYLUS OF ATHENS (5th century BCE)
Ancient Greek idealist philosopher who was a disciple of Heraclitus and an influence on Plato. He was a Sophist, who arrived at his extreme relativist views on the basis of Heraclitus’s dialectics. This appears to have led to a misconception of Heraclitus’s actual philosophy by Plato and Aristotle and by many others for centuries following them.
The religious doctrine that matter, energy, life, animal species, human beings, and the world in general, were created by God out of nothing. Among fundamentalist Christians this is assumed to have occurred as is described in the first book of the Bible, Genesis. Of course this entire doctrine is totally unscientific nonsense.
CREDIT (Acknowledgement of Efforts or Contributions)
“There is no end to the good a person can do if he or she doesn’t care who gets the credit.” —Wise old adage.
The benefit granted someone by allowing them to buy goods or services without immediate payment, but requiring payment at some usually definite time in the future. Credit is essential to the functioning of capitalism for a variety of reasons; most fundamentally because the workers who produce all the goods to be sold are not themselves paid enough to buy them all back! Thus, if they are to buy the “excess goods” at all, they must be extended credit to do so. Of course, the repetition of this extention of credit, over and over again, creates a CREDIT BUBBLE (see below).
See also: CREDIT SYSTEM, LEVERAGE, DELEVERAGING
The expanding amount of credit outstanding, as those who will never be able to pay back all that they owe are granted more and more credit. Those borrowing money, or buying things on credit, always imagine that they will someday be able to pay it back. And those lending the money would not do so unless they expected to be paid eventually. But in a capitalist economy this is inherently impossible because of the extraction of surplus value from the workers, or—in other words—from the fact that the value of their wages is necessarily less than the value of the commodities they produce. But because things are going well for a certain period, the lenders and borrowers always jump to the conclusion that the good times will continue for ever. This is, alas, an illusion. All credit bubbles eventually burst, and this forms the heart (though not necessarily the initial phase) of a major financial crisis of the sort the world entered in 2008.
Cards, generally made of plastic, which allow consumers to receive short-term loans to make purchases. Although these loans are usually interest free if they are paid off in the first month, many credit card holders are unable to pay off the entire amount immediately and therefore end up paying what are in effect usurious interest rates to the credit card company. The credit card company also charges businesses which accept their credit cards a percentage fee. This forces businesses to raise their prices to cover these fees, but they are willing to do this to attract more customers to their shops. Moreover, those using credit cards tend to spend more, even if they really cannot afford to do so. Many workers and other low-income consumers end up getting very deeply into debt because of these factors.
“One section of the book discusses how credit cards are used to
‘phish’ [deceive and ripoff] the unsuspecting. Why do shops accept cards when it is so
costly? One study found that credit-card firms charge convenience shops fees that
amount to over twice their profits. But cards also trick people into spending more
than they really want to. Richard Feinberg of Purdue University demonstrated this in
a psychology experiment. After putting MasterCard symbols nearby, subjects said that
they would pay significantly more for a basket of goods than the control group—in
some cases 200% more. You, the consumer, may think that credit cards make life more
convenient. In fact they ‘phish’ you on a daily basis.”
—“The Econonomics of Deception: You Have Been Warned”, the Economist, Sept. 19, 2015, p. 82. This is a book review of: George Akerlof and Robert Shiller, Phishing for Phools: The Economics of Manipulation and Deception (2015).
CREDIT CARD RECEIVABLES [Capitalist Finance]
The ownership right to receive the payments on outstanding credit card debt. While the credit card company itself makes the loan to the customer when he or she uses the credit card, that credit card company may sometimes turn around and sell the right to receive payment on that debt to a third party. They are especially apt to do this if too many of their customers are getting behind in their payments, and the risk of never being paid is increasing. The credit card company will of course have to sell this right to receive payment at a discount, and the company purchasing these “receivables” is gambling that it will be able to collect enough of this outstanding debt to be able to make a profit on the deal.
CREDIT DEFAULT SWAP (CDS)
[Capitalist finance:] An insurance contract that supposedly protects the holder against corporate defaults by paying him or her the face value of a loan, bond or security if the corporation issuing it fails to do so when it comes due. Buying a CDS therefore supposedly removes the risk from buying very speculative bonds and various kinds of otherwise extremely risky derivatives. However, the risk is really only removed if the insurance company issuing the CDS can itself be relied on. The 2008 failure of AIG (the American International Group), which was then the world’s largest insurance company and which had issued hundreds of billions of dollars of CDS contracts, shows that this assumption by financial speculators was not at all correct. Credit Default Swaps can themselves be traded and thus form yet another arena for speculation. Even the original purchaser of the CDS does not need to itself have issued the loan that is covered by it. Thus it is possible in this way (as well as other ways) for speculators to gamble on (and make money from) the defaults by other companies!
By the end of 2007, just as the speculative bubble began to burst, more than $62 trillion in CDS’s had been issued, almost all of it in the previous 7 years. This shows the truly absurd level of speculative gambling in modern capitalism!
CREDIT RATING AGENCIES
Since capitalist companies and corporations cannot be trusted—even by other corporations—to be honest about their financial status, capitalism requires the existence of credit rating agencies to inform outsiders about just how great a risk it is to loan money to them. This is in the form of public credit ratings for the securities (e.g. bonds) that they issue, from say a top rating of AAA+ to a bottom rating of CCC-. (The precise rating system used varies from one agency to another.) However, under the current system in the U.S., it is most often the corporations being rated who pay the rating agencies! Thus there is an incentive for these agencies to give companies a higher rating than they should, and to be tardy in lowering their ratings when adverse developments occur. This partly explains how risky sub-prime mortgages which were chopped up and repackaged as Collateralized Debt Obligations managed to receive top-of-the-line AAA credit ratings! This foolishness even suckered in some of the financial corporations who issued these phony CDOs in the first place, and led to huge losses for investors and banks in the financial crisis that began in 2008.
There are also credit rating agencies that assign a rating to individual people, for the protection of the capitalist corporations who issue them loans. Of course in this case the agencies are by no means biased in favor of those they rate, and often make errors which unjustly lower the credit rating of ordinary people.
“Of the 150 rating enterprises around the world, three dominate. Moody’s and Standard and Poor’s—the two industry giants—have an 80 percent market share. The US Justice Department refers quaintly to them as a ‘partner monopoly.’ Fitch has between 10 and 15 percent, and all the others share what remains. This industry structure generates massive profits and profit rates at the top. Moody’s, for example, generated 2006 revenues of $2 billion, from which it derived a pre-tax income of $1.1 billion (a better than 50 percent profit rate.) No wonder that Moody’s top shareholder (a 19 percent stake) is Warren Buffett. That wizard was wise enough to buy Moody’s but not the securities that Moody’s rated.” —Richard D. Wolff, Capitalism Hits the Fan (2010), pp. 111-112.
[Intro material to be added...]
“The credit system itself [arose] out of the difficulty of employing capital ‘productively’, i.e., ‘profitably’. The English, for example, are forced to lend their capital to other countries in order to create a market for their commodities. Over-production, the credit system, etc., are means by which capitalist production seeks to break through its own barriers and to produce over and above its own limits.” —Marx, TSV, 3:122.
A specialized type of bank operated as a cooperative and owned by its members. Credit unions only accept deposits from, and only make loans to, their own members. They are often set up by labor unions, professional organizations, and the like.
[Intro to be added...]
“Mark the part of your city where crime flourishes. Now look at the map of your city. You have marked the areas where there are slums, poor schools, high unemployment, widespread poverty; where sickness and mental illness are common, housing is decrepit and nearly every site is ugly—and you have marked the areas where crime flourishes.... Poverty, illness, injustice, idleness, ignorance, human misery, and crime go together. That is the truth. We have known it all along. We cultivate crime, breed it, nourish it. Little wonder we have so much. What is to be said of the character of people who, having the power to end all this, permit it to continue?” —Ramsey Clark, Attorney General in the Lyndon Johnson Administration, quoted in Andrew Karmen, “Poverty, Crime, and Criminal Justice,” in Wm. Heffernan & John Kleinig, eds., From Social Justice to Criminal Justice: Poverty and the Administration of of Criminal Law (2000), p. 28.
“The question of which behaviors are identified as criminal is a highly social one—Prime Ministers who lead their countries into illegal wars, or bankers who speculate recklessly with other people’s money, tend not to fall under such definitions.” —Hilary & Steven Rose, Genes, Cells and Brains (2014), p. 268.
CRISES — ECONOMIC
An economic crisis is a serious interruption in the operation of the economy in a society. Before the capitalist era, the most common causes of such crises were general crop failures, wars and plagues (though after the “Black Death” in Europe there was a modest economic boom, since fewer people now owned the same amount of material wealth).
Besides these traditional sorts of economic crises, new types have appeared in the capitalist era. Marx notes that the sudden interruption of trade channels caused an economic crisis in England after the war of 1815. [See: Marx, TSV, 3:122] And in our own era it now appears that global warming and other devastation caused by the capitalist disregard for the environment may well result in a major long-term economic crisis (in addition to a general health and well-being crisis) during the 21st century.
But in capitalist society by far the most important and powerful type of economic crisis is usually the overproduction crisis, which can exist only under capitalism. This means overproduction by the capitalists of commodities relative to the actual market demand (and not in relation to what people actually need and want). There are mechanisms (such as the credit system and Keynesian deficit financing) which allow the capitalists to keep expanding production (beyond what the market would otherwise be) for a long while. In the process they hugely expand the amount of capital itself beyond what could otherwise be supported. This creates a tremendous economic house of cards which must periodically come tumbling down. (The “house of cards” metaphor seems doubly appropriate in the current crisis, since the collapse of the housing bubble was the fuse that ignited it!)
CRISES — FINANCIAL
See: FINANCIAL CRISES
CRISES — and MONOPOLY
See: MONOPOLY—AND CRISES
CRISES — OVERPRODUCTION
See: OVERPRODUCTION CRISES
CRISIS OF 1873
A significant financial crisis, one of the most serious of the 19th century, that marked the beginning of a prolonged period of economic weakness lasting about two decades.
CRISIS THEORIES (For Capitalist Economic Crises)
[To be added... ]
The name given by adherents of the “Frankfurt School” to their idealist and revisionist reinterpretation of Marxism.
CRITICISM AND SELF-CRITICISM
[Intro to be added...]
See also below and: CONFABULATION, CONFESSIONS—False or Insincere, SELF-CRITICISM
“We have the Marxist-Leninist weapon of criticism and self-criticism. We can get rid of a bad style and keep the good.” —Mao, “Report to the Second Plenary Session of the Seventh Central Committee of the Communist Party of China” (March 5, 1949), SW 4:174.
CRITICISM — In Socialist Society
“Thoroughgoing materialists are fearless; we hope that all our fellow fighters will courageously shoulder their responsibilities and overcome all difficulties, fearing no setbacks or gibes, nor hesitating to criticize us Communists and give us their suggestions. ‘He who is not afraid of death by a thousand cuts dares to unhorse the emperor’—this is the indomitable spirit needed in our struggle to build socialism and communism.” —Mao, “Speech at the Chinese Communist Party’s National Conference on Propaganda Work” (March 12, 1957); Quotations from Chairman Mao Tse-tung, 1st ed. (1966), pp. 258-259.
“If we have shortcomings, we are not afraid to have them pointed out and criticized, because we serve the people. Anyone, no matter who, may point out our shortcomings. If he is right, we will correct them. If what he proposes will benefit the people, we will act upon it.” —Mao, “Serve the People” (Sept. 8, 1944), SW 3:227.
CRITICISM — Sharp
“Criticism should be sharp. I don’t find the criticism made by some comrades at this conference very sharp; they seem to be afraid of offending others. If you are not sharp enough, if the sting doesn’t reach home, the person criticized will not feel any pain and take any heed.... Fear of offending others is only fear of losing votes and of an uneasy relationship at work. Will I lose my rice-bowl if you don’t vote for me? Nothing of the kind. Actually, if you speak your mind and lay the issues on the table sharply, you’ll find it easier to get along with others. Don’t draw in your horns. Why does an ox have two horns? They are for fighting, for self-defense and attack. I often ask comrades if they have ‘horns’ on their heads. Comrades, touch and feel if you have any. I can see some comrades have horns, some have horns but not very sharp ones, and others have no horns at all. In my opinion, it is better to have them, for that goes well with Marxism. One of the tenets of Marxism is criticism and self-criticism.” —Mao, “Speeches at the National Conference of the Communist Party of China: Concluding Speech” (March 31, 1955), SW 5:170-1.
“[I]n opposing subjectivism, sectarianism and stereotyped Party writing we must have in mind two purposes: first, ‘learn from past mistakes to avoid future ones’, and second, ‘cure the sickness to save the patient’. The mistakes of the past must be exposed without sparing anyone’s sensibilities; it is necessary to analyze and criticize what was bad in the past with a scientific attitude so that work in the future will be done more carefully and done better. This is what is meant by ‘learn from past mistakes to avoid future ones’. But our aim in exposing errors and criticizing shortcomings, like that of a doctor curing a sickness, is solely to save the patient and not to doctor him to death. A person with appendicitis is saved when the surgeon removes his appendix. So long as a person who has made mistakes does not hide his sickness for fear of treatment or persist in his mistakes until he is beyond cure, so long as he honestly and sincerely wishes to be cured and to mend his ways, we should welcome him and cure his sickness so that he can become a good comrade. We can never succeed if we just let ourselves go, and lash out at him. In treating an ideological or a political malady, one must never be rough and rash but must adopt the approach of ‘curing the sickness to save the patient’, which is the only correct and effective method.” —Mao, “Rectify the Party’s Style of Work” (Feb. 1, 1942), SW 3:50.
CRITICISM — Timeliness Of
“Whenever a problem crops up, tackle it right away; don’t let problems pile up and then try to settle them all at one go. Make criticism in good time; don’t get into the habit of criticizing only after the event.” —Mao, “On the Co-operative Transformation of Agriculture" (July 31, 1955), SW 5:200-201. [Slightly different translation in Quotations From Chairman Mao Tse-tung, 1st ed. (1966), p. 266.]
CRITIQUE OF THE GOTHA PROGRAMME [By Marx]
A very important work criticizing the Gotha Programme, a draft of which had been prepared for a conference of the united German Social Democratic Party to be held in the city of Gotha in 1875.
This work by Marx is available in many editions, including MECW 24:75-99, and also online at several places, including: http://www.marxists.org/archive/marx/works/1875/gotha/index.htm
“Marx’s Critique of the Gotha Programme deals with fundamental
questions of the theory and programme of the working class party. It consists of a series
of comments on points contained in the draft programme prepared for a unity conference
of the German working class movement held at Gotha in 1875. Marx’s comments were
suppressed by the opportunist leadership of the German Social Democratic Party, and were
subsequently published by Engels in 1891, against the wishes of the leadership.
“The intention of the draft programme—the ‘Gotha Programme’—was to provide a platform behind which the whole German working class movement could unite. But for the sake of ‘unity’ it made a number of concessions on points of principle to the followers of the splinter group led by Ferdinand Lassalle.
“What are the principal points clarified in Marx’s critique?
“1. He shows that the capitalist mode of production has created the material conditions for advancing to socialism, and deals with the way in which the social product will be distributed in socialist society. Socialism is only the first phase of communism, and is guided by the principle, ‘From each according to his ability, to each according to his labor.’ It will lead to full communist society, the principle of which is, ‘From each according to his ability, to each according to his need.’
“2. He attacks the reformist slogan of ‘a fair distribution of the products of labor,’ and exposes the theoretical confusion behind this slogan. For the distribution of the products of labor, must always be a consequence of the mode of production. He likewise attacks the reformist slogan of ‘state aid under democratic control,’ and shows that the aim of the working class must be ‘to revolutionize the present conditions of production.’
“3. He attacks the conception that, relatively to the working class, all other classes are only one reactionary mass. It is necessary to examine concretely the actual position of each class at each stage of history, and not lump them all together as ‘reactionary.’ Thus the workers may fight together with sections of the capitalists against feudal survivals, together with the lower middle class for certain democratic demands, and so on.
“4. He affirms the international character of the working class struggle in opposition to the narrowly national aims of the Gotha Programme.
“5. He refutes the conception of an ‘iron law of wages,’ according to which the worker’s real wages can never be raised above a minimum subsistance level.
“6. He attacks the reformist slogan of a ‘free state,’ and shows that ‘between capitalist and communist society lies the period of the revolutionary transformation of the one into the other. There corresponds to this also a political transition period in which the state can be nothing but the revolutionary dictatorship of the proletariat.’”
—Maurice Cornforth, Readers’ Guide to the Marxist Classics (London: 1952), pp. 9-10.
CROCE, Benedetto [Pronounced: CROW-chay] (1866-1952)
Italian bourgeois philosopher of the neo-Hegelian school, historian, critic and politician. He developed his own metaphysical system along the lines of Hegel, but without the dialectical sophistication. His philosophy is that of absolute idealism. He also devoted much attention to aesthetics and art criticism, and had a strong influence on bourgeois aesthetics theory. He viewed art as an “intuitive cognition of the singular” as contrasted with logical reasoning as a rational process of “knowing the general”. In an idealist way he denied the physical reality of the work of art. (Cf. AESTHETIC OBJECT. ) In ethics he tried to obscure the social roots and class nature of morality.
Politically Croce was a prominent liberal bourgeois ideologist, and member of the Italian government before Mussolini’s rise to power and after his fall. He was a determined opponent of Marxism and revolution as well as of Mussolini and Fascism. He wrote a short book, Historical Materialism and the Economics of Karl Marx (1914) which is focused mostly against popularizers of Marx such as Antonio Labriola.
A number term in India and other south Asian countries which means 10 million. One crore equals 100 lakhs. Thus to say that the government spent $60 crores in an particular anti-revolutionary military campaign means that it spent $600 million.
Central Reserve Police Force. This is one of many government paramilitary forces seeking to destroy Naxalites (Maoist revolutionaries) in India.
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