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¡¡ REPRODUCIMOS ¡¡ : John Maynard Keynes y Anwar Shaikh. ¡¡. "" Ventaja comparativa, monopolio, dinero, John Maynard Keynes y Anwar Shaikh – Una crítica de la teoría de la crisis (wordpress.com) ¡¡. Una crítica de la teoría de la crisis  Desde una perspectiva marxista,... - Ventaja comparativa, monopolio, dinero,...¡¡¡.

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Según el ministro de Relaciones Exteriores de Rusia, Sergey Lavrov, el "Occidente colectivo" lanzó una "guerra híbrida total" contra Rusia. La guerra de disparos en el Donbass (1) y Ucrania es solo una parte de ella. Miles de soldados ucranianos y rusos muertos son lo suficientemente malos. Pero esto es solo el comienzo de la historia. La interrupción del comercio, así como de la producción de granos y fertilizantes, de los cuales tanto Rusia como Ucrania son proveedores críticos, amenaza con crear escasez mundial de alimentos y, en algunas áreas, hambruna a gran escala. La escasez de alimentos trae la muerte a las personas del Sur Global y más allá. Las muertes ocurren no solo por inanición, sino también por debilitamiento del sistema inmunológico, lo que los hace más susceptibles a COVID y otras enfermedades infecciosas. Pero la mayor amenaza es que podría terminar en una guerra nuclear. ¿Qué ha llevado a este peligroso y desastroso estado de cosas en la relación entre las dos potencias?

Cualquiera que haya tomado cursos de economía de nivel universitario se ha topado con la teoría que afirma que la ventaja comparativa, no la ventaja absoluta, gobierna el comercio internacional. Esta teoría sostiene que el libre comercio es igualmente en interés de todas las naciones, independientemente de su grado de desarrollo económico. Sin embargo, los gobiernos de las naciones subdesarrolladas que muestran alguna independencia del imperialismo a menudo siguen políticas que los economistas neoclásicos llaman neomercantilistas. Los partidarios de la ventaja comparativa afirman que tales políticas son perjudiciales tanto para los países en desarrollo como para los desarrollados.

Los economistas de izquierda que rechazan la economía neoclásica generalmente apoyan las políticas neomercantilistas para los países en desarrollo. Estos economistas aprendieron la teoría de la ventaja comparativa de los maestros neoclásicos. Pero, a diferencia de los economistas neoclásicos ortodoxos, admiten que la ley de la ventaja comparativa no funciona como los libros de texto dicen que debería.

Los economistas de izquierda afirman que si la libre competencia prevaleciera genuinamente, la ventaja comparativa en el comercio internacional funcionaría en beneficio de todas las naciones. Pero ellos y otros economistas heterodoxos creen que el crecimiento del monopolio capitalista niega esas leyes. Anwar Shaikh rechaza este análisis. Dice que el monopolio no es necesario para explicar por qué la ventaja comparativa no funciona de la manera en que se supone que debe hacerlo. Dice que la ventaja comparativa no gobierna el comercio internacional bajo el capitalismo en absoluto. También cree que el capitalista con los costos más bajos gana la batalla de la competencia en el mercado interno, así como en el comercio internacional y, por lo tanto, la ventaja absoluta prevalece en el comercio internacional y nacional.

Shaikh doesn’t agree with Lenin’s theory that imperialism is the monopoly stage of capitalism. He says the whole history of capitalism is imperialism. I have a lot to cover before examining Shaikh’s view that a monopoly stage of capitalism does not exist. I will cover this at a later date.

The concrete history of capitalism is that of wars between capitalist nation-states. Before Lenin developed his theory of imperialism, Marx and Engels used another concept, that of commercial wars. From Lenin’s point of view, modern imperialist wars are a special kind of commercial war. We are not interested in the special case of modern imperialism based on monopoly capitalism. We want to know why wars occur throughout capitalism’s history.

Some eras have seen more commercial wars than others. These more peaceful eras are marked by the domination of one powerful capitalist nation. The period between 1815 and 1914 was an era of domination by Britain. Another relatively peaceful era is the era since 1945. This was marked by the domination of the United States. This relative peace now threatens to come to an end.

Even in relatively peaceful eras, wars between capitalist nations of various degrees of capitalist development never stopped. Are these wars, big or small, the result of evil leaders like Adolf Hitler, or more recently, George W. Bush? Bush ordered the invasion of capitalist, though non-imperialist, Iraq. Or are wars of capitalist countries the result of false political and economic policies, such as those pursued by France and Britain toward defeated Germany after World War I?

Si las políticas falsas y los líderes malvados son los culpables de las guerras, existe la esperanza de que el estado capitalista pueda aprender de la historia y evitar que las políticas den lugar tanto a líderes malvados como a guerras. Si las guerras son el resultado de la producción capitalista combinada con el estado-nación, hay pocas esperanzas de poner fin a las guerras entre ellos mientras continúen existiendo. El estado actual de las relaciones de los Estados Unidos y la OTAN con la Rusia capitalista hace que una respuesta correcta a esta pregunta sea urgente.

Si las guerras entre estados capitalistas no son inevitables, podríamos ser capaces de salir adelante por un tiempo más, aunque la crisis climática hace que esto sea dudoso. Si la guerra híbrida total entre Estados Unidos y la OTAN y Rusia no se debe al malvado Vladimir Putin o al malvado Joseph Biden, sino al resultado del capitalismo y el estado-nación, entonces, ¿cuánto tiempo más puede durar el capitalismo antes de que estallen las bombas nucleares?

La inevitable guerra entre estados capitalistas

Mucho antes de que Rusia lanzara su operación militar especial el 24 de febrero, se habló de una Nueva Guerra Fría entre Estados Unidos y Rusia. Nunca me ha gustado el término "Nueva Guerra Fría" para describir la crisis en las relaciones entre los dos países. Primero, no podemos estar seguros de que esta nueva guerra permanezca fría. Pero una razón más importante: la Guerra Fría original entre los Estados Unidos y la Unión Soviética implicó una lucha entre dos clases diferentes que presidían dos sistemas económicos y sociales diferentes. La clase capitalista estadounidense frente a la clase obrera soviética gobernaba sobre dos sistemas diferentes. El sistema capitalista estadounidense frente al sistema socialista soviético en construcción. (2) Esa Guerra Fría fue una guerra de clases global.

Hoy en día, los Estados Unidos y Rusia están gobernados por la clase capitalista, y el sistema económico y social capitalista prevalece. Incluso los sistemas políticos son similares: ambos tienen repúblicas federadas con sistemas presidenciales. Sólo hay algunas diferencias menores en los detalles constitucionales.

Pero hay diferencias importantes entre los dos, que si se ignoran, causarán graves errores políticos. Rusia produce materias primas y productos agrícolas que intercambia por productos de consumo. Tiene una relación colonial o neocolonial clásica dentro de la economía capitalista global. Económicamente, si no geográficamente, Rusia pertenece al Sur Global. Parafraseando a Malcolm X, el Sur Global comienza en el polo norte. (3)

Una cosa que los dos países tienen en común es que ambos se sometieron al proceso de desindustrialización. Los procesos tienen diferentes caracteres y causas en cada país. La desindustrialización a gran escala en los Estados Unidos comenzó con el corvejón Volcker S de 1979-1982. La desindustrialización de Estados Unidos no ha llegado tan lejos como la de Rusia. Hay similitudes entre las condiciones que se encuentran en muchos centros de producción industrial ex soviéticos y el cinturón de óxido de los Estados Unidos. Pero la desindustrialización de Estados Unidos es fundamentalmente el producto de un desarrollo desigual, una consecuencia del capitalismo.

La desindustrialización rusa comenzó a finales de la década de 1980 como consecuencia de la contrarrevolución política y social de 1985-1991 (4) la restauración del dominio capitalista en las antiguas repúblicas de la Unión Soviética. Esta desindustrialización más radical reflejó una transición de un modo de producción más alto a uno más bajo. Esta transformación regresiva de las relaciones sociales de la producción se logró con la destrucción de las fuerzas productivas de las antiguas repúblicas soviéticas.

Ambos países producen materias primas, productos agrícolas y lingotes de oro. Pero Estados Unidos es el centro del capital financiero mundial. El dólar estadounidense sigue siendo la principal moneda de reserva del mundo. El sistema monetario internacional puede llamarse el sistema del dólar. El rublo ruso nunca se ha utilizado como moneda de reserva. Como Lenin subrayó en su libro "El imperialismo, la etapa más alta del capitalismo", el capital financiero es dominante sobre el capital industrial. Y aunque ambos países tienen enormes arsenales de armas nucleares, Estados Unidos gasta aproximadamente 12 veces más que Rusia en defensa. (Fuente: Gasto militar por país 2022)

Estados Unidos solo mantiene un alto nivel de gasto militar porque lidera el mundo en capital financiero. El dólar estadounidense como moneda global juega un papel clave. Esto permite el enorme presupuesto militar más allá de la capacidad financiera de Rusia.

Rusia sólo se involucra en guerras defensivas cerca de sus fronteras. En contraste, Estados Unidos mantiene bases militares y libra guerras agresivas en todo el mundo. Russia se convirtió en una nación oprimida en la economía capitalista mundial debido a la contrarrevolución política y social de 1985-91. Estados Unidos sigue siendo la principal nación opresora del mundo, con Gran Bretaña en un distante segundo lugar, y Francia y otras potencias imperialistas a la zaga. Sin embargo, esto no cambia el hecho de que tanto Rusia como Estados Unidos son países capitalistas, gobernados políticamente por la clase capitalista.

Dado que Rusia ha adoptado el sistema social, económico e incluso político de Estados Unidos, no hay base para una guerra de clases global entre ellos. Sin embargo, las relaciones son ahora tan malas que una guerra de disparos es al menos tan cercana como durante la Guerra Fría.

¿Cómo llegamos a este estado de cosas y qué hay detrás de él? Durante la contrarrevolución en la Unión Soviética denominada "perestroika", sus partidarios justificaron su política de rendición al imperialismo estadounidense con el argumento de que pondría fin al peligro de una guerra nuclear global. Los periódicos de la época citaron al politólogo soviético Georgi Arbatov, partidario de la perestroika, diciendo: "Vamos a hacerte algo terrible. Te vamos a privar de un enemigo".

Now 30 years later it is clear the claim that the Soviet surrender to global imperialism freed the world from the threat of nuclear war was an illusion. A study of 20th-century history should have proved that Russia’s embrace of capitalism could only increase the threat of nuclear war. Let’s look at the 20th-century’s world wars.

During World War II, the United States and Britain went to war against Nazi Germany and Imperial Japan. Both had capitalist economies much like the United States and Britain. Japan had a parliamentary system. In the late 1930s and 1940s, Japan was imperialist, militaristic and repressive, but it wasn’t a fascist dictatorship. This did not prevent Washington and London from claiming World War II was to defeat global fascism represented by Nazi Germany, Fascist Italy, and Imperial Japan.

Going back to World War I, there were no fascist dictatorships. The chief powers involved were Britain, Germany, France, Austria-Hungary, Czarist Russia and the United States. These powers all had similar social, economic and political systems. There were differences concerning the degree of capitalist development and the extent of the lingering elements of feudalism. Instead of feudal remnants, the United States had the aftermath of modern slavery. (5) This existed in the form of the Southern states’ legal Jim Crow system and second-class citizenship for the descendants of the African slaves in all the other states.

France had the least feudalism thanks to the French Revolution of 1789-94, while Japan and Russia had the most. The United States, under racist President Woodrow Wilson, claimed to represent democracy as opposed to autocratic Germany. Germany had an autocratic monarchy and the feudal remnants of the militarist caste of Prussian Junkers. It also had a mass workers party, the Social Democratic Party of Germany. Slavery had never existed in Germany. The U.S. Socialist Party was weak. The working class in the U.S. was less well-organized than in Germany. And we shouldn’t forget that none of them, the democratic-republican United States, France, monarchical-autocratic Germany, or Czarist Russia, allowed women to vote.

Differences in political systems did not line up with the alliances of the contending powers. Czarist Russia was allied with republican France!

Today, the Biden administration is embarrassed by the similarities between U.S. and Russian social, political, and economic systems. It is reduced to claiming the current war is about democracy and autocracy, reminiscent of the claims made by World War I’s Wilson administration. In contrast, during the Cold War, there really were differences between the social, political and economic systems of the two countries.

The current struggle is not over forms of government, nor is it ideological. It is not a class war, since the governments and states of both countries have the same class character. This struggle is about the drive of U.S. imperialism to bring Russia’s and Ukraine’s colossal wealth in natural resources under its control.

Both countries are rich in farmlands as well as mineral- and fossil-fuel-bearing lands but this isn’t enough for the economic needs of U.S. imperialism that have long outstripped the resources available within its borders. U.S. imperialism wants the resources of Western Asia, Africa, Latin America, Ukraine, and Russia under its control. Russian capitalists are forced to fight to maintain control of their own natural resources. Russia’s capitalists are too weak to control the resources of the rest of the world. This war now threatens to turn into a global war and a nuclear holocaust.

A total hybrid war can be described as a commercial war. Its ideological content favoring the United States, despite official politician and media-shaped public opinion, is completely forced. For example, U.S. complaints that Russia’s political system is dominated by the autocratic President Putin ignore that the Russian presidency is copied from that of the United States.

More hypocritical are the complaints of U.S. leaders about the wealth and power of Russian oligarchs — rich capitalists. Not as rich as U.S. capitalists, their wealth is the result of the capitalist mode of production. During the Cold War, the U.S. insisted the Soviet Union adopt capitalist production, making the emergence of oligarchs inevitable. Do U.S. capitalist leaders and their media opinion-makers now regret they worked so hard to destroy the attempt to build a society without oligarchs? You can be sure they regret nothing! On the other hand, the claim that Russia is fighting against the collective West’s attempts to dominate the globe has a degree of truth. Russian capitalists would be more than happy to dominate if they could. But they know they can’t.

Since the current war crisis is commercial in character, we turn to economics to understand its roots. David Ricardo’s theory of comparative advantage, later that of neoclassical economics, holds that all capitalist nations have a common interest in world trade. There should be no commercial wars among capitalist nations. Ricardo held that under the capitalist system, comparative advantage, not absolute advantage, rules world trade. This theory depends on the correctness of Ricardo’s quantity theory of money. (6) If this theory is false, the claim that comparative advantage rules world trade is also false. If the law of absolute advantage rules world trade, as Shaikh believes, then commercial wars between capitalist nations are not only possible but inevitable as long as both capitalism and the capitalist nation-state exist.

Shaikh believes there are four outstanding figures in the history of economics: Adam Smith, David Ricardo, Karl Marx and John Maynard Keynes. The last of these had some interesting things to say about the laws governing world trade and the inevitably of war among capitalist countries. Smith, along with the French physiocratic school of political economy, is considered the beginning of economic liberalism. During the late 18th century, economic liberalism replaced mercantilism as the dominant trend in political economy. Ricardo provided economic liberalism and free international trade advocates with their strongest arguments against their mercantilist predecessors.

Marx wrote a considerable amount of material against the quantity theory of money particularly as it applied to the British Bank Act of 1844. (7) The quantity theory of money is vital to Ricardo’s claim that comparative — not absolute — advantage prevails regarding trade between capitalist nations. Marx’s writings on the Bank Act are a polemic against a vital pillar of the Ricardo-neoclassical view that comparative advantage prevails in international trade. If Marx’s writings against the Bank Act are correct, Ricardo’s claim that comparative rather absolute advantage prevails in international trade falls to the ground.

Marx was clear about rejecting the quantity theory of money. There is no way he could have accepted the theory of comparative advantage, despite what some modern Marxists think. Shaikh is very much aware of that fact. But he complains that Marx nowhere put forward a theory of world trade of his own. Marx planned to deal with world trade and crises in a book that would crown his critique of political economy. But this book was never written.

That leaves the last of Shaikh’s great economists, John Maynard Keynes. Keynes had some interesting things to say about mercantilism and comparative advantage. Throughout most of his life, Keynes was a supporter of free trade and the comparative advantage theory. He was trained in neoclassical economics emerging at the time he was a young man. In 1936, under the impact of 15 years of mass unemployment in Britain, Keynes wrote “The General Theory of Employment, Interest and Money.” The book attempted to reconcile the neoclassical system with the reality of the large-scale chronic massive involuntary unemployment of Britain and other capitalist countries in the 1920s and 1930s.

En este post nos interesa únicamente la primera parte del Capítulo 23 de la "Teoría General", titulada "Notas sobre el Mercantilismo, las Leyes de Usura, el Dinero Estampado y las Teorías del Subconsumo". Aquí estamos interesados en la primera sección que trata de los mercantilistas de los siglos 16 al 18. Keynes explica que está rechazando la teoría ricardiana de la ventaja comparativa, aunque no usa ese término. Este cambio es el resultado de su alejamiento de la teoría cuantitativa del dinero.

Keynes cita algo que escribió en 1923 cuando todavía apoyaba la teoría ricardiana del comercio internacional: "Si hay algo que la Protección no puede hacer, es curar el desempleo. ... Hay algunos argumentos a favor de la protección, basados en su obtención de ventajas posibles pero improbables, a los que no hay una respuesta simple. Pero la pretensión de curar el desempleo implica la falacia proteccionista en su forma más burda y cruda".

Keynes continúa: "En cuanto a la teoría mercantilista anterior, no había un relato inteligible disponible; y nos hicieron creer que era poco mejor que una tontería".

Explica: "Tan absolutamente abrumadora y completa ha sido la dominación de la escuela clásica".

Por teoría clásica Keynes significa neoclásico. Esto incluye la trinidad de la teoría cuantitativa del dinero, la ley de Say y la ley de la ventaja comparativa. Pero Keynes de 1923 y Keynes de 1936 tenían diferentes puntos de vista de la teoría mercantilista. "Permítanme primero declarar en mis propios términos lo que ahora me parece que es el elemento de la verdad científica en la doctrina mercantilista. Luego compararemos esto con los argumentos reales de los mercantilistas. Debe entenderse que las ventajas reclamadas son ventajas declaradamente nacionales [énfasis añadido -SW] y es poco probable que beneficien al mundo en su conjunto". Estas son observaciones astutas. En la visión mercantilista, el interés de las diferentes naciones capitalistas involucradas en el comercio mundial es de antagonismo, no de armonía, como lo son en los sistemas ricardianos y neoclásicos.

Keynes creía que el nivel de inversión dentro de un país capitalista se rige por el número de oportunidades de inversión que los capitalistas esperan que produzcan una tasa de ganancia superior a la tasa de interés. La tasa de interés y la tasa de ganancia son dos variables que determinan el volumen de inversión. Pero, ¿qué determina la tasa de interés? Smith, Ricardo y Marx vieron el interés como una porción de la ganancia, la plusvalía. La otra parte era el beneficio de la empresa.

Keynes vio que el interés aumentaba independientemente de las ganancias. Creía que el interés aumentaba por la escasez de capital monetario a medida que aumentaban las ganancias por la escasez de capital real. Evita explorar los orígenes de la plusvalía en el ámbito de la producción. Esto está en el espíritu de la escuela neoclásica. El Keynes de 1936 sigue siendo un defensor del capitalismo.

Como Keynes no veía el interés como una parte de la ganancia, renombró la tasa de ganancia como la eficiencia marginal del capital. Esto se define como la ganancia que los capitalistas industriales esperan obtener de nuevas inversiones. El punto de equilibrio hacia el que tiende la economía capitalista es donde la eficiencia marginal del capital es igual a la tasa de interés.

En este punto de equilibrio, la competencia iguala la tasa de interés acumulada al prestar dinero con la tasa de ganancia – ganancia que el capitalista industrial espera – en nuevas inversiones en negocios industriales. En equilibrio, la economía no se está expandiendo ni contrayendo. El crecimiento económico es desequilibrio, la tasa de ganancia sobre el capital real es más alta que la tasa de interés sobre el dinero prestado.

In the days of the mercantilists, capitalist trading nations didn’t have significant gold or silver mines on their territories. Their quantity of money was governed by the balance of trade. To get the highest level of economic growth, it was necessary to maintain the lowest possible rate of interest. To maintain this rate, (8) it was necessary to maintain the highest possible quantity of money within the nation. The mercantilists knew money was not neutral. Keynes observes the main concern of government policy regarding economic policy involved “the domestic rate of interest and the balance of foreign trade.”

These two variables were linked in the minds of the mercantilists. If the foreign trade balance was negative, money would flow out of the country, and the interest rate would rise. Economic activity would be strangled. If the balance of trade was positive, money would flow into the country, and the interest rate would fall, causing investment to rise and the economy to thrive.

By agreeing with the mercantilists on these points, Keynes breaks with neoclassical orthodoxy. According to the neoclassicals, the quantity of money governs the general price level, not the interest rate. But the mercantilists and Keynes in “General Theory” believed the quantity of money governs the interest rate.

Long ago in my history courses, teachers and textbooks explained that mercantilist theory said wealth was gold and silver alone. Then I knew little about economic theory. What a ridiculous theory this mercantilism was, I thought. Everybody knows gold and silver are very valuable. But wealth consists of more than gold and silver. They are beautiful to look at, but food and shelter are more important than either when it comes to maintaining life. Even luxury goods consist of more than gold and silver. How could they have been that stupid! The amazing thing, it seemed to me, was that it wasn’t until the late 18th century that anybody realized it!

Keynes’ 1930s writing explains that the mercantilists were not so dumb after all. Under the capitalist mode of production, mercantilists knew their country needed to accumulate gold and silver if capitalists were to find it profitable to produce the commodities whose use values makeup actual wealth.

To make profits, it is not only necessary to produce surplus value. You have to sell commodities containing surplus value for money to realize the surplus value. Profit is nothing but surplus value realized in money form.

The mercantilists and Keynes weren’t interested in the origins of surplus value in unpaid labor. But they were very interested in the conditions allowing commodities to be sold at profitable prices. And the only way for capitalist nations lacking gold and silver mines, like Britain, to make the realization of surplus value possible was to run a positive balance of trade. This would cause gold and silver to flow into Britain, causing interest rates to fall, and allow business to thrive.

As Keynes rather dryly sums it up: “At a time when the authorities had no direct control over the domestic rate of interest or the other inducements to home investment, measures to increase the favorable balance of trade were the only direct means at their disposal for increasing foreign investment; and, at the same time, the effect of a favorable balance of trade on the influx of the precious metals was their only indirect means of reducing the domestic rate of interest and so increasing the inducement to home investment.”

To support a healthy growth rate within a capitalist country, it’s necessary to accumulate gold and silver, but there is the danger that it can pile up into stagnant hoards. This also caught Keynes’s attention. It contrasts with Ricardo and the neoclassical view that all the money in the country will circulate because the capitalists can only make profits on invested money, not hoarded.

Central to Marx’s analysis that Keynes did not explore was the relationship between potential money capital and the presence of a class of people with nothing to sell but their labor power. To create such a class, direct producers must be separated from the means of production. Without this step, money cannot be transformed into industrial capital.

The transformation of money into capital can also be accomplished with chattel slaves. But in a market economy, slaves are not the ideal solution. Proletarians can be discharged (fired) by the capitalist with no capital loss when market conditions prevent surplus value contained in commodities the proletarians produce to be realized. Unlike a capitalist exploiting wage workers, the slave owner must maintain the life of the slave or lose his investment in his slave capital. (9)

The creation of a world market in the 16th century saw the birth of two modes of large-scale production. One was modern chattel slavery carried out with kidnapped enslaved Africans. The other was capitalist wage slavery carried out first largely with European workers and later with all nationalities. If not for modern chattel slavery and wage slavery, the expansion of the quantity of money material beginning in the 16th century would have congealed into stagnant hoards as in India and China. By the end of the 19th century, only one mode of large-scale production was left standing: capitalist production based on wage slavery. Despite their lack of interest in examining the conditions that make the production of surplus value possible, Keynes and the mercantilists were aware that it’s not enough to produce an adequate amount of surplus value. There must also be an adequate quantity of money and the money must circulate.

Keynes wrote: “Schrötter, for instance, employed the usual mercantilist arguments in drawing a lurid picture of how the circulation in the country would be robbed of all its money through a greatly increasing state treasury. … He, too, drew a perfectly logical parallel between the accumulation of treasure by the monasteries and the export surplus of precious metals, which, to him, was indeed the worst possible thing which he could think of. Davenant explained the extreme poverty of many Eastern nations — who were believed to have more gold and silver than any other countries in the world — by the fact that treasure ‘is suffered to stagnate in the Princes’ Coffers’. … The mercantilists were the originals of ‘the fear of goods’ and the scarcity of money as causes of unemployment which the classical theorists were to denounce two centuries later as an absurdity.

“One of the earliest instances of the application of the Unemployment argument as a reason for the prohibition of imports is to be found in Florence in the year 1426. … The English legislation on the matter goes back to at least 1455. … An almost contemporary French decree of 1466, forming the basis of the silk industry of Lyons, later to become so famous, was less interesting in so far as it was not actually directed against foreign goods. But it, too, mentioned the possibility of giving work to tens of thousands of unemployed men and women. It is seen how very much this argument was in the air at the time. …” The need to ensure an adequate quantity of money is available within the nation was understood as far back as the 15th century.

The 15th century saw a shortage of gold and silver relative to the needs of the European economy. This shortage and attempts of various European governments to overcome it led to the great geographic discoveries of the 16th century, resulting in the birth of the world market, what bourgeois historians call the commercial revolution. . With the commercial revolution, the scattered small-scale production of the Middle Ages was no longer adequate to meet the demands of an expanded market.

Large-scale production, employing chattel slaves or wage slaves, became both profitable and necessary. Among the results of the commercial revolution was the genocide of the Indigenous Peoples of the Americas, the rise of the transatlantic slave trade and the birth of the capitalist system based on wage labor. But the increase in the scale of the production of commodities increased the need to find still more markets. These were not always forthcoming.

Keynes: “The best instance to my knowledge of a typically mercantilist discussion of a state of affairs of this kind is the debates in the English House of Commons concerning the scarcity of money, which occurred in 1621, when a serious depression had set in, particularly in the cloth export. The conditions were described very clearly by one of the most influential members of parliament, Sir Edwin Sandys. He stated that the farmer and the artificer had to suffer almost everywhere; that looms were standing idle for want of money in the country, and that peasants were forced to repudiate their contracts, ‘not (thanks be to God) for want of fruits of the earth, but for want of money.’”

Mercantilists realized the interest rate must be lower than the profit rate.

As Shaikh, Keynes and Marx were aware, the need for the interest rate to remain below the profit rate if capitalist production and trade are to proceed normally was understood as far back as the 17th century. Keynes wrote: “How easily the mercantilist mind distinguished between the rate of interest and the marginal efficiency of capital is illustrated by a passage (printed in 1621) which Locke quotes from A Letter to a Friend concerning Usury: ‘High Interest decays Trade. The advantage from Interest is greater than the Profit from Trade, which makes the rich Merchants give over, and put out their Stock to Interest, and the lesser Merchants Break.’ Fortrey (England’s Interest and Improvement, 1663) affords another example of the stress laid on a low rate of interest as a means of increasing wealth.”

Mercantilism and the inevitably of war among capitalist nations

Keynes wrote: “The mercantilists were under no illusions as to the nationalistic character of their policies and their tendency to promote war [emphasis added -SW]. It was national advantage and relative strength at which they were admittedly aiming.” The struggle of the emerging nation states to increase the quantity of money within their borders by striving to run balance of trade and payments surpluses was behind the commercial wars of the mercantilist era.

He says, “We may criticize them for the apparent indifference with which they accepted this inevitable consequence of an international monetary system. But intellectually their realism is much preferable to the confused thinking of contemporary advocates of an international fixed gold standard and laissez-faire in international lending, who believe that it is precisely these policies which will best promote peace.”

Here Keynes blames not the capitalist system and the system of nation-states but what he saw as a faulty international monetary system based on gold. No need to overcome capitalism and its system of nation-states with contradictory interests. We simply have to get rid of the gold standard.

Non-commodity money to the rescue

Keynes’ solution to the inevitably of war among capitalist nation-states is non-commodity money. As long as gold is the basis of national monetary systems any outflow of gold, caused for example by a foreign trade deficit, will cause a fall in the domestic money supply, and rising interest rates, followed by crisis, depression and mass unemployment. An inflow of money means falling interest, meaning good business. Businesses engaged in foreign trade as well as those engaged in trade within the home market benefit from a foreign trade surplus and suffer from a deficit.

Keynes: “Never in history was there a method devised of such efficacy for setting each country’s advantage at variance with its neighbors’ as the international gold (or, formerly, silver) standard. For it made domestic prosperity directly dependent on a competitive pursuit of markets and a competitive appetite for the precious metals. When by happy accident the new supplies of gold and silver were comparatively abundant, the struggle might be somewhat abated. But with the growth of wealth and the diminishing marginal propensity to consume, it has tended to become increasingly internecine. The part played by orthodox economists, whose common sense has been insufficient to check their faulty logic, has been disastrous to the latest act. For when in their blind struggle for an escape, some countries have thrown off the obligations which had previously rendered impossible an autonomous rate of interest, these economists have taught that a restoration of the former shackles is a necessary first step to a general recovery.”

Keynes hopes to avoid future depressions as well as future wars among capitalist nations with his belief — remember this was written in the mid-1930s (10) — that “some countries have thrown off the obligations which had previously rendered impossible an autonomous rate of interest.” The heretofore inevitable wars among capitalist nations stemmed not from the capitalist mode of production combined with the capitalist nation-states, but only with an international monetary system based on gold and silver. Keynes believed that by getting rid of the role of gold in the international monetary system the inevitably of war goes away.

He notes further, “It is the policy of an autonomous rate of interest, unimpeded by international preoccupations, and of a national investment program directed to an optimum level of domestic employment which is twice blessed in the sense that it helps ourselves and our neighbors at the same time. And it is the simultaneous pursuit of these policies by all countries together which is capable of restoring economic health and strength internationally, whether we measure it by the level of domestic employment or by the volume of international trade.”

Keynes saw non-commodity money as crucial to avoid depression and mass unemployment and necessary to prevent war between capitalist countries. As long as money creation was in the hands of the gold and silver miners and refiners, individual capitalist states had no alternative but to pursue balance of trade and payments surpluses. Only by running a payments surplus, were individual capitalist nation-states without their own gold mines able to grow the domestic money supply and keep the interest rate from rising to where it choked off domestic investment. The most important component of the balance of payments is the balance of trade. This was a game that only some nations would win, and others would lose.

Keynes hoped if money creation could be transferred from the gold miner and refiner to a domestic monetary authority such as the central bank, a balance of trade and payment surplus would no longer be necessary to grow the domestic money supply to hold down the interest rate. The growth of the economy of one capitalist nation would not have to be at the expense of others. All armed with non-commodity money through their monetary authorities would be able to hold their national interest rates below their profit rates. Thanks to non-commodity money created by their central banks, capitalist nation-states could now thrive together in peace. The commercial wars inevitable in the mercantilist era and later during the era of the international gold standard were now avoidable without abolishing the capitalist system and the nation state. Crucially, the non-inevitability of war among capitalist nations depends on the possibility of non-commodity money under the capitalist production mode.

Keynes tried to kill two birds with non-commodity money. Number one, he hoped to reconcile the interests of the capitalist and the working classes through full employment policies financed by state-created non-commodity money. Number two, he hoped to reconcile the interests of competing capitalist nation-states through state-created non-commodity money. Countries would no longer need to run balance-of-trade surpluses to expand their domestic money supplies.

But if non-commodity money is impossible under the capitalist mode of production as long as it and the capitalist nation-state persists, wars between competing nation states remain inevitable. The wars may take the form of the current conflict between the U.S.-NATO and Russia, or it could take the form of widespread conventional war. Or it may escalate into a limited or full-scale nuclear war. But in the latter case, the capitalist system, the nation-state and our civilization will end.

At first glance, the question of non-commodity money seems rather esoteric, of little practical interest except for devotees to the finer corners of Marxist theory. But this view is mistaken. If non-commodity money is possible we might be able to muddle through with capitalism and the nation-state for a long time by reconciling both the interests of the contending classes and nation-states through the creation of adequate quantities of non-commodity money. But if it is not possible under the capitalist system, we will have to tackle the question of transforming capitalism into socialism or our modern civilization will be destroyed. The clock is ticking. Shaikh’s views on the possibility of non-commodity money under capitalism take on special importance. I will begin my examination of his approach to this crucial question next month.

Karl Marx as a free trader

Many present-day progressives who oppose globalization are surprised to find Marx and Engels were free traders, but with a twist. In late 1847, a Free Trade Congress was held in Brussels, Belgium. At that time free trade was championed by British industrial capitalists. Any person supporting free trade was invited to speak at the Congress, so Marx asked to speak. He was added to the speakers’ list, but congress organizers made sure to close the congress before Marx’s turn came up.

Marx, in the speech he was not allowed to deliver, laid bare the real reason British industrial capitalists were demanding free trade. They wanted to cheapen the commodities going into determining the value of labor power. In 1847 Marx did not yet use this terminology as he did not yet distinguish between labor and labor power. Using Marx’s later terminology, British industrial capitalists wanted free trade because they knew it would increase the rate of surplus value.

Marx did not really need the tools he developed later (distinguishing between labor and labor power, and his developed theory of surplus value) to get to the essence of the matter. If British wage goods, largely foodstuffs, are cheapened through their free importation, workers can be paid lower money wages without the real wage falling below the level of subsistence. Cheapening the price of labor (power) raises the profit rate.

Marx explained: “Ricardo, the apostle of the English free-traders, the most eminent economists of our century, entirely agrees with the workers upon this point. In his celebrated work on political economy, he says:

"Si en lugar de cultivar nuestro propio maíz... descubrimos un nuevo mercado desde el que podemos abastecernos... a un precio más barato, los salarios caerán y las ganancias aumentarán. La caída en el precio de los productos agrícolas reduce los salarios, no sólo del trabajador empleado en el cultivo del suelo, sino también de todos los empleados en el comercio o la manufactura".

Si bien Ricardo fue brutalmente honesto sobre los objetivos de las políticas de libre comercio que defendía, no se podía decir lo mismo de los capitalistas industriales. Esto no impidió que los capitalistas afirmaran que su lucha por el libre comercio estaba motivada por una preocupación por reducir el costo de vida de los trabajadores. Entonces, ¿por qué Marx, el campeón de los trabajadores, apoyó el libre comercio?

Marx dijo: "[El proceso] de establecer la industria a gran escala en un país dado, es decir, de hacerla dependiente del mercado mundial, y desde el momento en que se establece esa dependencia del mercado mundial, ya hay más o menos dependencia del libre comercio. Además de esto, el sistema de protección ayuda a desarrollar la competencia de libre comercio dentro de un país. De ahí que veamos que en los países donde la burguesía está empezando a hacerse sentir como clase, en Alemania por ejemplo, hace grandes esfuerzos para obtener deberes protectores. Sirven a la burguesía como armas contra el feudalismo y el gobierno absoluto, como un medio para la concentración de sus propios poderes y para la realización del libre comercio dentro del mismo país.

"Pero, en general, el sistema de protección de nuestros días es conservador, mientras que el sistema de libre comercio es destructivo. Rompe viejas nacionalidades y lleva el antagonismo del proletariado y la burguesía al extremo. En una palabra, el sistema de libre comercio acelera la revolución social. Es solo en este sentido revolucionario, señores, que voto a favor del libre comercio".

Marx estaba a favor del libre comercio porque creía que aceleraría el desarrollo del capitalismo y acortaría el tiempo restante antes de la revolución proletaria que condujera a la transformación de la sociedad capitalista en sociedad comunista.

Hay sutilezas en el argumento de Marx que necesitan un mayor desarrollo sobre la cuestión nacional. La tasa de crecimiento de la capacidad del mercado para absorber productos básicos de un valor y precio determinados se rige en gran medida por la tasa de crecimiento de la cantidad de material monetario. La tasa de velocidad de la circulación de piezas individuales de dinero combinada con el desarrollo de cámaras de compensación también juega un papel en la determinación del nivel de demanda del mercado en un momento determinado. En las cámaras de compensación, los pagos que se compensan entre sí pueden liquidarse a través de la contabilidad en lugar del dinero, reduciendo así la cantidad de dinero necesaria para apoyar la actividad económica. (11)

Las políticas mercantilistas se centraron en la concentración de oro, plata y la demanda monetariamente efectiva en regiones geográficas gobernadas por estados-nación. El capitalismo, aunque dependiente del desarrollo del mercado mundial, se basaba en estados-nación individuales. En ausencia de estos estados, la demanda global total podría haber sido demasiado difusa para lograr el desarrollo que ocurrió durante el capitalismo temprano. En la medida en que el mercantilismo logró acelerar el desarrollo del capitalismo, acercó el logro de una sociedad comunista global.

Hay otro lado de las políticas mercantilistas. Asumiendo una ventaja absoluta, el proteccionismo a menudo niega a los capitalistas el acceso a las mercancías más baratas producidas en algún lugar del mundo. Estas mercancías pueden entrar en la formación de capital variable, bienes asalariados o capital constante. El acceso a los productos más baratos disponibles es necesario para lograr la tasa de ganancia más alta y la mayor tasa de acumulación de capital posible.

A mediados del siglo 19 los capitalistas industriales británicos querían desesperadamente el libre comercio para importar alimentos baratos, así como algodón barato producido por mano de obra esclava en los Estados Unidos. El algodón era la materia prima de la principal industria británica de la época: los textiles. Suponiendo que la cantidad de dinero y su volumen de negocios sean fijos, así como el desarrollo de las cámaras de compensación, la única forma de expandir los mercados es bajar los precios de las materias primas. El algodón no se puede cultivar en Gran Bretaña. El grano se puede producir más barato en los Estados Unidos y Rusia, incluso después de tener en cuenta los costos de transporte.

Cuanto más avanzan las fuerzas productivas, mayor proteccionismo se convierte en una barrera para el desarrollo de las fuerzas productivas dentro del sistema capitalista. Marx quería que el desarrollo más rápido de las fuerzas productivas alcanzara el nivel más alto posible compatible con el capitalismo lo antes posible. Quería acelerar la llegada de la revolución socialista y la transición al comunismo. En este sentido, Marx apoyó el libre comercio.

Cabe destacar la observación de Marx: "[El libre comercio] rompe las viejas nacionalidades y empuja el antagonismo del proletariado y la burguesía al extremo".

En 1936 Keynes se dio cuenta de que una nación individual puede aumentar las tasas de crecimiento siguiendo políticas mercantilistas, pero a expensas de otras naciones. A nivel mundial, no hay aumento en la tasa de crecimiento general de la economía capitalista mundial. Al socavar la división internacional del trabajo, las políticas proteccionistas neomercantilistas —y las sanciones son una forma de proteccionismo o neomercantilismo— ralentizan el crecimiento general de la economía capitalista mundial. Al ralentizar el ritmo del desarrollo capitalista, la vida útil del sistema capitalista se prolonga y la transición a la sociedad comunista se pospone.

Como quedó claro para Marx y Engels en los años siguientes, debemos hacer una distinción entre las nuevas naciones capitalistas emergentes que se industrializan a través de políticas neomercantilistas para asegurar sus mercados nacionales como preparación para ingresar al mercado mundial, y los países capitalistas desarrollados que utilizan el proteccionismo para apuntalar monopolios en decadencia. La Gran Bretaña de keynes de las décadas de 1920 y 1930 es un ejemplo de una nación en decadencia. Si las políticas neomercantilistas tienen éxito en frenar la decadencia, se hace a expensas del desarrollo de otros países capitalistas. Tales políticas sólo posponen la necesaria transformación de la sociedad capitalista en sociedad comunista una vez que el desarrollo de las fuerzas productivas de una nación se ha vuelto incompatible con el mantenimiento de la producción capitalista. En la medida en que tales políticas tienen éxito, ralentizan el desarrollo de las fuerzas productivas globales. Las políticas proteccionistas de las administraciones de Trump y Biden, así como sus políticas de sanciones, son completamente reaccionarias.

El próximo mes comenzaré el análisis de las opiniones de Anwar Shaikh sobre el dinero. Después de eso, echaremos otro vistazo a su defensa de la ley de Marx de la tendencia a la caída de la tasa de ganancia y sus puntos de vista sobre el comercio internacional.

(1) Las Repúblicas Populares de Donetsk y Lugansk se encuentran en la región de Donbass, donde se ha producido la mayor parte del combate terrestre. Estas dos repúblicas declararon su independencia de Ucrania en 2014. Sin embargo, el gobierno ucraniano sigue insistiendo en que estas dos repúblicas son territorios ucranianos.

De acuerdo con el principio del derecho de las naciones a la libre determinación, si las personas que viven en una región desean declararse independientes o unirse a otro Estado, tienen el derecho democrático de hacerlo. Esto es lo que hizo el pueblo de Crimea cuando votó para unirse a la Federación Rusa en 2014 como resultado del golpe de Euromaidán.

Este es un principio democrático básico, a menos que un principio democrático aún más básico anule su derecho de secesión. En 1861, en el sur de los Estados Unidos, la población blanca declaró su independencia. Lo hicieron para preservar la esclavitud de la población afroamericana, negando cualquier derecho a la secesión. No existe tal principio primordial en las declaraciones de los pueblos de Donbass o Crimea. (volver)

(2) La Unión Soviética fue una dictadura política del Partido Comunista del país. A través de su partido, la clase obrera soviética ejerció su dictadura política. La degeneración burocrática y política del PCUS a lo largo de las décadas, modificó pero no negó este hecho. Bajo la dictadura obrera, la URSS estaba en transición del capitalismo hacia la primera etapa del comunismo. Una vez que se alcanza la primera etapa del comunismo, las clases, la producción de mercancías y el dinero desaparecen. Bajo la primera etapa del comunismo, a las personas se les paga de acuerdo con la cantidad de trabajo que realizan, y no de acuerdo con la necesidad.

During the transitional stage from capitalism to the lower stage of communism called socialism by Lenin, classes and class struggle continue. During this transition, the state takes the form of the dictatorship of the proletariat. Since the Russian Revolution failed to spread to industrial Western Europe and the United States, it remained possible for the capitalist class to regain political power and abort the transition. This happened in the Soviet Union during 1985-1991 as a result of the political and social counterrevolution.

Today Russia, Ukraine, and the other former Soviet Socialist Republics are again under the political dictatorship of the capitalist class, expressed in Russia through a presidential federal republic headed by Vladimir Putin. The United States was and remains a political dictatorship of the capitalist class expressed through a presidential federal republic headed at this time by Joseph Biden. (back)

(3) Malcolm X famously said: “If you are Black, you were born in jail, in the North as well as the South. Stop talking about the South. As long as you are South of the Canadian border, you are South.”(source: marxists.org) (back)

(4) The events that unfolded in the Soviet Union between 1985 and 1991 represent a classic political and social counterrevolution. It restored both political power and social and economic domination to a class that had previously exercised it but was overthrown.

This is not to be confused with a process of political reaction within a revolution that does not restore power to the previous class. Most self-identified Trotskyist groups — though not Trotsky — insist Joseph Stalin’s coming to power and the rise of the Stalinist bureaucracy in the 1920s was a counterrevolution. Regardless of your opinion of Stalin as an individual or the bureaucracy as a group, neither ruled Russia before the 1917 October Revolution. The rise of Stalin was neither a political nor a social counterrevolution because it didn’t restore political power to a social class or strata who previously ruled. Rather the reaction represented by Stalin has the same relationship to counterrevolution as reform to revolution.

Another example of such a reaction was in France during the Thermidorian Reaction. This followed a revolution that began with the overthrow of Robespierre on the ninth of Thermidor – July 27, 1794. It did not restore power to the previous ruling class. It ended the reign of terror that had marked Robespierre’s reign. The Jacobin Club, the driving force of the reign of terror, was abolished. The Thermidorian Reaction marked the victory of the new capitalist ruling class over the popular masses. It did not return political power or social dominance to the feudal ruling class.

In the Russian October (Old Style Julian calendar), the ruling capitalist class was overthrown in a political revolution beginning October 25 (Old Style) or November 7 (New Style Gregorian calendar) and was replaced by a new ruling class — the working class. Social revolution followed the shift in political power as Russian capitalism was replaced by a system of state ownership first of land, then of industrial enterprises. Later small-scale agriculture gave way to large-scale collective and state farms, though small-scale agricultural production continued in the form of private plots. These institutions were safeguarded from world market pressures by a state monopoly of foreign trade.

Though there were political shifts, achievements, and reactionary developments over the years, the constant was the dictatorship of the Soviet Communist Party and its safeguarding of the state ownership of land and industry, the planned economy, and state monopoly of foreign trade. After Mikhail Gorbachev’s March 1985 election to General Secretary of the Communist Party Central Committee changes occurred.

Over the next six years, the political power of the CPSU disintegrated and the capitalist class regained the political power lost in 1917. The planned economy was abandoned in favor of market reforms, the state monopoly of foreign trade was abolished, and the role of private enterprise expanded while state enterprise was phased out. In 1992, most remaining large-scale industries and land were privatized, though feudal land ownership was not reestablished.

The events of 1985-1991 resemble the French Thermidorian Reaction in one sense. The Russian Revolution was not a pure socialist revolution but a combined socialist and democratic revolution. The overthrow of the Czarist empire, the overthrow of feudal landowners, the nationalization of the land, and granting of the right of self-determination to nations that had been oppressed by Czarism represented democratic not socialist measures.

Though the capitalist class regained political power in Russia, Ukraine and the other former Soviet Socialist Republics, feudal landowners did not. Czarism was not restored, and Russia hasn’t been able to re-establish rule over non-Russian former Soviet Republics. While the socialist gains of the Russian Revolution were destroyed in the counterrevolution, bourgeois-democratic gains remain intact. It is important to understand what happened — and what did not happen — in the years between 1985 and 1991. (back)

(5) Modern slavery differed from the slavery of classical Greece, Rome, and other ancient societies. Modern slavery grew out of an expansion of the world market, the result of the discovery of vast quantities of gold and silver in the Americas. The consequent increased demand for commodities could not be satisfied by the modes of production of the Middle Ages. A free proletariat, free in the double sense of not being slaves or serfs and free from ownership of the means of production, was still underdeveloped. The increased demand could only be satisfied by slave labor.

Slave labor in Europe had largely vanished after the Western Roman Empire ended in the 5th century. European colonizers turned to enslaved peoples imported from Africa. The ancient slavery of Greece and Rome was not based on skin color. The new slavery was. It was justified on grounds that African peoples were a “lower race” and therefore fit only for slavery. From modern slavery comes modern racism. Eventually, the two modes of production arising from the commercial revolution of the 16th century clashed. This clash was expressed in the United States during the war of the slave-owners rebellion, or Civil War, of 1861-1865. The capitalist mode of production was victorious, but modern slavery’s remnants and ideology, along with the colonial-settler origin of the country, continue to poison the politics of the United States to the present. (back)

(6) According to Ricardo’s quantity theory of money, the level of prices in terms of gold is determined by the quantity of money — gold — relative to the value and quantity of commodities in a given country. (back)

(7) The Bank (re)Charter Act of 1844 divided the Bank of England, Britain’s central bank, into two departments. One department was the Issue Department. It was to issue additional banknotes whenever the gold reserve of the Bank rose and to destroy banknotes when the gold reserve fell. In this way, the number of banknotes was tied to the quantity of gold present in the Bank of England’s vaults. The other was the Banking Department. It was to take deposits from the commercial banks and the government, (re)discount bills of exchange and grant loans to the commercial banks.

Bank Act supporters were called the currency school. They were inspired by Ricardo’s theory of comparative advantage and the quantity theory of money. The currency claimed that by linking the number of banknotes with that of gold in the vaults, prices would rise when gold flowed in and would fall when gold flowed out. This would, according to the currency school, not only allow Ricardian comparative advantage to function, but also prevent a recurrence of the 1825 and 1837 financial crises.

Three years later it was suspended due to the crisis of 1847. The suspension of the Bank of Act gave the Bank of England authority to issue additional banknotes beyond the gold in its vaults if necessary to break the crisis. The mere knowledge that the Bank could issue additional banknotes was sufficient to break the crisis.

In 1857 a new economic crisis hit and the events of 1847 were repeated with the difference that this time the Bank actually had to issue additional banknotes beyond its gold reserves. In 1866, thecrisis was halted without having to issue notes, the possibility of more notes was sufficient.

Contrary to the quantity theory of money, it was interest rates, not prices that were sensitive to fluctuations in banknote quantity.. Not only was the Bank Act a failure as an attempt to end economic crises, but its failure is also strong empirical evidence that the the Ricardian — neoclassical claims that comparative advantage prevails in international trade as opposed to absolute advantage are false. (back)

(8) The fact that interest rates and not prices respond to fluctuations in money quantity shows the quantity theory of money is wrong. (back)

(9) The slave can be sold if the slaveholder cannot profitably make use of the slave’s labor. The breaking up of slave families as different family members were sold to different masters was one of the worst features of modern slavery. If a slave owner was unable to find a buyer or one who could meet his price, he might have to sell at a loss. In contrast, a capitalist can always discharge a wage worker whenever business conditions warrant without incurring a loss. (back)

(10) Britain left the gold standard in 1931. The United States left it in 1933 but returned to it in a limited way in 1934 when the U.S. fixed the international dollar price of gold at $35 an ounce, though there was no domestic convertibility of the dollar in gold. When Hitler came to power in 1933, the convertibility of the German mark into gold became a dead letter. The gold bloc of France, Belgium, Luxembourg, the Netherlands, Italy, Poland, and Switzerland attempted to maintain the convertibility of their currencies into gold at a fixed rate. The gold bloc collapsed in 1936. (back)

(11) I didn’t mention credit. Credit can permanently expand the market only by accelerating the velocity of money and through the development of clearing houses linked to the banking system. The rise of the modern credit system permanently accelerated the turnover of money.

Assume that a machine lasts 10 years before it has to be replaced. As the machine depreciates through wear and tear, industrial capitalists accumulate a fund of money which at the end of 10 years is used to replace the machine. With no credit system, the money the capitalists plan to use to replace the machine accumulates in a stagnant hoard. But thanks to the credit system, the money can either be deposited in a bank or lent out in some other way, reentering circulation immediately. This process reduces the quantity of money necessary to support a given degree of economic activity.

Under the modern capitalist credit system, monetary hoards are centralized in banks and reduced to a minimum relative to the money in circulation. Bank clearing houses reduce the demand cash has as a means of payment.

Credit can also replace money as a means of purchase. In this case, the act of purchase and payment is separated in time. Credit becomes the means of purchase but money is still necessary to pay off the debts. As long as credit is growing faster than the need to pay off the debts, the expansion credit causes the market to expand. As soon as the payment of debt exceeds the growth of credit, the market contracts as money is diverted from the means of purchase of commodities to a means of payment of debts. We experience this process in every recession.

Monetary hoards stagnate in the banks, especially during recessions when money falls out of circulation causing the velocity of the circulation of money to fall.

Deficit spending by the central government accelerates the velocity of circulation of money. The government borrows some of the money hoarded in banks, increasing the velocity of circulation of money. But the government’s ability to borrow money without crowding out other borrowers is limited by the amount of money lying idle in the banks at the time. During the period of overproduction preceding a recession, the quantity of money lying idle is minimal so government deficit spending cannot prevent crises from breaking out.

Finally, there is credit money. As the term implies, credit money combines some of the functions of money and credit. The expansion of credit money in developed capitalism is mainly imaginary bank deposits created through bank loans and discounts. These imaginary deposits are transferred from buyer to seller by check or electronically. If the banks create too much credit money relative to the cash they hold, the system of credit money is destabilized. The banks then must reduce their loans and the creation of new imaginary bank accounts declines. Existing loans must be paid back by retiring a portion of the credit money created during the previous credit money inflation. We see this happen to a greater or lesser degree in every recession.

The bottom line is, that inflation of the credit system can temporarily expand the market. Credit inflation obliges industrial capitalists to create new productive forces leading to overproduction. Overproduction leads to the contraction of credit and crisis. Or, as Marx put it, new productive forces are created beyond the limits of capitalism. This causes the economic crises that periodically shake capitalist society to its foundation.

Una extensión permanente del mercado, no basada en la expansión de la cantidad de material monetario, depende del desarrollo de instituciones que permitan la aceleración de la velocidad del dinero, y de cámaras de compensación donde el dinero solo es necesario para liquidar pagos que no se compensan entre sí. Una vez que la aceleración del dinero y el desarrollo de las cámaras de compensación alcanzan su máximo grado de desarrollo, cualquier extensión adicional del mercado depende de la expansión de la cantidad de material monetario a través de la minería y refinación de oro y la reducción de los precios de los productos básicos en términos de material monetario.

Los marxistas modernos que creen en el dinero no mercantil piensan que el dinero se crea a través del crédito. Más bien, la expansión del crédito depende en última instancia de la cantidad de material monetario disponible en un momento dado. El material monetario que forma la base del sistema de crédito se crea a través del trabajo de los trabajadores en las industrias de minería y refinación de oro e indirectamente a través del trabajo de los trabajadores que crean los medios de producción utilizados en las industrias de minería y refinación de oro y los medios de sustancia necesarios para sostener la vida del trabajador involucrado directa o indirectamente en la producción de material monetario. 

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