Marxist Analysis at Business Week???
[On Feb. 8, 2009, I forwarded an article in Business Week (mentioned below) to a bunch of my friends, and prefaced it with the following brief comments. —Scott H.
Subject: Marxist Analysis at Business Week???
My subject line is facetious of course! But there is an interesting article entitled “What Falling Prices Tell Us”, by Peter Coy in the current issue of Business Week (dated Feb. 16, 2009) which actually does lean toward a Marxist analysis of the current economic crisis in some ways.
Coy raises doubts about what he correctly calls “the usual explanation for the recession” (in bourgeois circles anyway), “that it’s mainly due to the credit crunch and the resulting squeeze on demand”. Instead, he says, “it appears that supply—that is, oversupply—is at least as important a factor.”
Coy doesn’t use the Marxist term “overproduction”, but he does talk about “overcapacity”, which is the same thing. In some ways this is even a better word than “overproduction”, since it puts the emphasis where it really belongs—on the overproduction of capital, and not just the overproduction of consumer commodities.
He makes a number of interesting observations, such as that “at the end of 2008, North American auto plants were running at just 70% of capacity even after massive shutdowns.” While he notes that “things are going to get worse”, it is not clear if he understands that capacity utilization levels themselves will be continuing to drop substantially. The “overhang” of overcapacity which he refers to is only partially exposed so far.
Of course neither Coy nor any bourgeois economist can really explain just why this overcapacity has developed in the U.S. and world economy. “For economists, overcapacity is a tricky concept,” he says! “Human wants are unlimited, so how could the world ever produce too much of a good thing?” Here’s where we Marxists start to chuckle, when we see their inability to understand that Say’s so-called “Law” (that “capitalist production produces its own markets”) is bullshit! The bourgeoisie will never admit or come to understand that the workers are not paid enough to buy back all that they produce, and that this is inherent in the very extraction of surplus value in any capitalist system of production. But Coy is already on rather dangerous ground here (for bourgeois theory) when he says that the problem is that goods are currently priced too high, and that this is why people can’t afford to buy everything that is produced.
Well, in reality his explanation for the crisis is still a confused mishmash. But it is always fun to see an ideologist of the ruling class start to even slightly wonder if there might be some sort of flaw in their system!
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