CURRENCY CRISIS

The latest round in the monetary crisis-by far the most serious since August 15, 1971—is more than anything a great vindication of the Marxist analysis of capitalism.

Throughout the post-war boom period, all the reformists and revisionists declared that capitalism had changed fundamentally. No longer was it prone to crisis and breakdown, as Marx had said.

This new type of capitalism ('neo-capitalism' for Ernest Mandel and the Pabloites; 'permanent arms economy for the state-capitalist International Socialists) meant that social revolution and the taking of power by the working class were things of the past. Only sectarians' and 'dogmatists' talked about such things.

Revolutionary parties were no longer necessary—-'structural reforms' or 'consistent

KARL MARX ON MONEY AND THE FALLING RATE OF PROF

ALLING RATE OF PROFIT Far left: Karl Marx. Left: the 1944 Bretton Woods agreement, Henry Morgenthau and J. M. Keynes. ance and stock speculation?

It is here that she 'assetstripper' and 'offshore funds' operator fits into the picture. It is an indication of the depth of the impending crisis that these sectors should have been the first to feel its blast.

It is in a crisis that. these contradictions burst: with great violence. Now money (gold) once more comes into its own everybody rushes out of credit and much of the swindling of the boom is revealed for what it is:

'In a system of production, where the entire continuity of the reproduction process rests upon credit, a crisis must obviously occur-a tremendous rush for means of credit suddentment-when 6T001)

Cases and only cash payments have eate the At first whole orsis seems to merely question of the convertibility of bills of exchange these are the main forms of cedit-P/ into money... At the same time, an enormous quantity of these bills of exchange represents plain V0710N0 which now reaches the light and collapses.' ('Capital' 3, p. 478.)

Here we can see the seeds of the giant crisis which is now being prepared. The very length of the boom and with it the extension of credit prepares for an equally catastrophic fall.

The more the capitalists have tried to dispense with money and relied money Euro - dollars, international credits etc., the harder their system must fall.

'The entire credit mechanism is continually occupied in reducing the actual metallic circulation to a relatively more and more decreasing minimum by means of sundry operations, methods and techth the entire machinery and nical devices. The artificiality the possibility 01 disturbing its normal course increase to the same extent? ('Capital' Vol. 3, p. 500.) Thursday 15, February talists can continually increase the mass of profits i through the rising productivity labour which goes with technical improvements in production) the rate of profit will tend to fall.

The aim of production is not use, but profit. declining rate of profit spells crisis for the capitalist system.

It is here that the role of must be understood. For it has been largely through credit that constant capital has been extended and built up The rate of profit tends to fall in a crisis because too much capital has been created comparison with the available surplus value. The rate of rofit is determined b the variable capital compared pius 'atio of constant capita surplus value (s/c plus v.)

It is because has been 'overexpanded' that a crisis of profitability is created. The crisis is not one of the over- roduction of an goods, the Keynesians and revisionists imagine, but an over-expansion of capital. 'The ultimate barrier to the expansion of capital is capital itself' writes Marx How is this crisis tackled by the capitalists? Through a sayage competitive struggle in ensure that it is not his cable which each tries desperately to tal which is deemed to 'excess'.

'So long as things last well, competition effects an operating fraternity of the capitalist class. But as soon as it is no longer a question of shar ing profits, but sharing losses, everyone tries to reduce his own share to a minzmum and shove off onto another' ('Capital' Vol. 3, p. 248.)

The present vicious struggle is principally one of the large capitalists against their weaker bretheren. Here, OCe more, we can see the Europe-Ameri can conflict as the major element in the world crisis.

The Americans are determined that the vast quantities of excess capital, built up via credit and a lot of it now representing no value, shall not wiped their cost.