The REDSTAR2000 Papers

Listen to the worm of doubt, for it speaks truth. - Leftist Discussion

Does Capitalism "Self-Destruct"? A Problem in Marxist Economics January 8, 2004 by RedStar2000

The "final period" of capitalist society--how does it end? Is there an "inevitable" economic melt-down...a crisis so severe that the system cannot recover?

This is a collection of posts discussing the "law" of the "tendency of the rate of profit to fall over time".

None of us, unfortunately, are trained Marxist the possibility of gross error is present to an unusual degree.

Still, it was a good discussion and raised some interesting alternative hypotheses.



Houston, we have a problem. -- Apollo VII

I know the feeling; we have one in the area of Marxist economics...and it's a big one.

I've recently read two books--Marx--a Radical Critique by Alan Carter and Debunking Economics--The Naked Emperor of the Social Sciences by Steve Keen. Both of them contain extremely sharp and very technical critiques of the "labor theory of value".

So what? So this. It's Marx's labor theory of value (taken from Ricardo) that underpins his "tendency of the rate of profit to fall over time". It is that tendency, according to Marx, which generates crises of over-production in the normal course of capitalism and, according to the vivid account in the first volume of Capital, the final crisis in which capitalism "melts down".

Take away the labor theory of value, lose the tendency of the rate of profit to fall over time, and you lose the "inevitability" of capitalist crises...including the final one.

Capitalism could endure and even flourish indefinitely.

Pretty big problem, right?

None of us here are trained economists, I the technical attacks on the labor theory of value are probably beyond our ability to refute--in my case, beyond my ability to understand. (!) We can "hope" that some brilliant young Marxist economist will tackle this problem and solve it.

Meanwhile, what to do?

We can empirically observe that capitalists constantly seek to reduce the cost of labor as a proportion of production costs. Any time they can force a reduction of wages, a reduction in the number of employees, an increase in machine/computer labor and a decrease in human labor...they do it. They act "as if" the labor theory of value had some kind of validity, regardless of theoretical critiques. The more production they can squeeze out of each "unit" of labor power that they purchase, the better they like it--the more they profit thereby...or think they do.

But what we really need here is an empirical justification for "the tendency of the rate of profit to fall over time". If we had that, then it would not matter whether the labor theory of value was correct or partially correct or just plain wrong. We would have a "proof" that the life-span of capitalism was limited and not infinite.

Easier said than done.

We can't just look, for example, at corporate tax returns. The numbers on those returns can be legally manipulated in many ways to shrink or inflate both corporate income and profit...and, as we have seen in recent years, they can also just outright lie.

Nor can we rely on something simple like the ratio of dividends to share-prices. The fashions in business are such that an increase or decrease in dividends is an arbitrary decision that appears to bear little relation to the actual profitability of any particular corporation. Companies admit losing money but still pay the same dividends; companies report huge increases in profits but keep the dividends the same. Some major corporations pay no dividends at all--the investor's profit is supposed to come from increases in the share prices.

The truth is, the actual amount of "profit" that a corporation says it made in a given year is an arbitrary number...that may be fairly close or may be very distant from what the real number would be--if there were any way to figure that number out.

In addition to these difficulties, there are also some minor problems...the span of time must be long enough to show a pronounced trend, the sample of businesses must be approximately representative of the economy as a whole, etc.

It would be a huge and complicated job!

I suspect that's one of the major appeals of economic "hard" as it is to do, it's still a lot easier than actually gathering empirical data on what really happens in a capitalist economy. Neo-classical bourgeois economic models are notoriously inaccurate when applied to the real world.

Should the neo-liberal economic policies of "Anglo-American" capitalism win out over the planet, we will return to the era of global economic crises--IF Marx was right. In that case, it may not matter--ultimately--if the labor theory of value was correct or not. We will still see something like the 1930s great depression...only even more severe. The economic melt-down in Argentina may be an early taste of what is in store for the advanced capitalist countries in the rest of this century.

In the meantime, if some bright and energetic young folks would subject the "tendency of the rate of profit to fall over time" to an empirical test, they would thereby do the communist movement a great service.

After all, the very thought of a capitalist system that could exist indefinitely is rather...discouraging!
First posted at Che-Lives on December 26, 2003


Have there not been countless depressions and recessions throughout capitalist economic systems?...What more do we need? Do these cyclic depressions not show that capitalism is unstable at its very core?

Well, yes and no. They do indeed show that capitalism never reaches the "equilibrium" so beloved of neo-classical bourgeois economists.

The Austrian/Chicago school of bourgeois economists say that doesn't matter how large the "boom" or how devastating the "bust", capitalism always "naturally recovers".

Global capitalism "recovered" from the great depression of the 1930s by virtue of World War II and the "cold war" which followed.

Capitalism limps on in Argentina...mainly by virtue of a fresh loan from the International Monetary Fund.

And something I forgot to mention in my initial post: Japanese capitalism has been essentially stagnant since the early 1990s...the only reason that it continues to function is enormous deficit spending by the Japanese government.

Those are hardly signs of an economic system that can "naturally" recover from set-backs.

On the other side of the ledger: there have been no "great depressions" since the 1930s. There "should have been" one or several--if not in the U.S., then elsewhere. Recessions...yes. Real economic depressions--as in "crisis"--no.

Periodic instability is not much "help" for us; as long as it is "always" followed by "recovery", people will have no "rational reason" to turn against the system. They will think of "an economic downturn" the way we think about "bad weather" "will pass". It "always has".

We can always assert that the time will come when it "will not pass"...but without a solid theoretical or empirical basis for making that statement, we would be going out on an extremely shaky limb. Essentially, our "forecast" would have no more verifiability than some god-sucker's "forecast" of the "rapture".

It's hard to see how an appeal to "faith"--even if secular in nature--can have any good results. Whether it's Bakunin as "church father" or Stalin as "pope", we know that the mind-set of the "faithful" has very little to do with the kind of society that we want or the genuine realization of human potential that we wish to bring about.

Like I said, we have a problem.
First posted at Che-Lives on December 26, 2003


I maintain that the only way forward for humanity is socialist revolution of some sort yet the chances of this happening (as opposed to the world falling into a prolonged dark-age of neo-feudalist fascism with the current ruling class--or possibly a new ruling clique--maintaining and extending its control) are not promising.

There's an extant letter from Marx to Engels in which he (Marx) says "in passing" that "humanity must choose between socialism and barbarism".

That's pretty ominous if support cannot be found--theoretical and/or empirical--for "the tendency of the rate of profit to fall over time".

The vision that comes to mind is of some of the modern "dystopias" created by a number of science-fiction writers.

They posit a planet ruled entirely by a few giant corporations (headquartered in artificial satellites), an ecologically devastated Earth, suburban upper-class enclaves guarded by military force from the mass of semi-civilized "proles", etc.

It would definitely be a "new dark age" least for 99% of the human species. Life would be "nasty, brutish, and short".

Probably world-wide epidemics would follow...leading to a massive "great dying".

And then...?

It may be, of course, that this is much fuss over nothing. The labor theory of value could be valid in a way that no one suspects at this time; the tendency of the rate of profit to fall over time could be "chugging along" even as we speak; and proletarian revolution could be getting closer with every passing day.

It's not necessary, after all, to have a knowledge of theoretical physics in order to use a bow and shoot an arrow and actually hit what you were aiming it.

But, speaking personally, I would like to know...that the arrow is not going to suddenly reverse its course, fly behind me, and plant itself in my ass, for example.

"Knowing" is better than just "believing".
First posted at Che-Lives on December 31, 2003


Keynesian policies no longer work...

Maybe, maybe not...or maybe partially.

One of the guys I mentioned in my first post on this thread--Steve Keen--is a "neo-Keynesian" fact, he would probably say that he is a "real Keynesian".

His idea is that the "neo-classical consensus"--Milton Friedman, claiming to have "absorbed Keynes" have actually repudiated Keynes.

It is "neo-classical" economists that advise ruling class governments today: tactics like privatization, manipulation of the money supply and interest rates, dismantling of government social benefits, elimination of trade barriers and especially controls on the movement of capital, etc. are all opposed to what Keynes really advocated.

What we think of as "social democratic" policies are, in Keen's eyes, really "Keynesian economics"--capital controls, a generous welfare system, government protection of "key" industries, a "partnership of capital and labor", etc.

All of which leads me to wonder if what the long-range policy of the ruling class might not turn out to be is a cycle between "neo-classical" and "Keynesian" policies.

When things look grim--a depression or at least one on the horizon--call in Keynes. When the bubble is growing--call in Friedman.

Under Keynes, the capitalists get to keep most of their wealth by giving up a little of it; under Friedman, the capitalists get to keep all their wealth and add to it at the expense of the working class.

Keynesian economies are stagnant or grow very slowly; Friedmanian economies grow very rapidly...and then crash.

Western Europe is Keynesian...but drifting in the direction of Friedman. The U.K. is much more Friedmanian and the U.S. is outstandingly so.

Now, what "could" happen?

Friedmania could become so pervasive on a global scale as to prompt a global depression...and a proletarian revolution.

Or, intelligent capitalists could foresee this possibility in time to "switch" back to Keynesian policies and thus avoid disaster (for them, of course).

What I'm looking for, of course, is evidence of some economic factor(s) that compel the ruling class to make the "disastrous choice" go with Friedman "to the bitter end".

The "tendency of the rate of profit to fall over time" would be, if it could be shown to actually exist, such a "compulsion". The capitalists would have no choice.

But, as you can see, that is now a very big if.
First posted at Che-Lives on January 1, 2004


There is no 'final crisis' as Red Star talks about. Capitalism will not collapse but must be done away with by the conscious action of the working class.

Well, that just moves the problem to a different level.

Why should the working class become conscious of the need to destroy capitalism if capitalism is an on-going "success"?

In general, we humans need real material reasons to make our decisions...particularly the "big ones"--like revolution. As a rule, we don't just sit in our armchairs and, pondering the abstractions of history, decide that we should be the next ruling class.

It's true that Marx seemed to be "of two minds" about the working of capitalism itself. In Vol. I of Capital, capitalism collapses due to the strains of its internal contradictions--particularly the strain between the advancing means of production and the old bourgeois-proletarian relations of production. In Vol. III, capitalism seems to enjoy the possibility of indefinite existence...though "cramped" by the tendency of the rate of profit to fall over time.

But in neither scenario does Marx posit that "consciousness" is, in and of itself, a deus ex machina...something that just falls out of the sky and "gets the job done".

Consciousness is a derivative of material conditions...and those conditions must include the obvious failure of the existing system to "deliver the goods".

Otherwise, why bother? More specifically, why take a big chance on an unknown future when "after all", things are "not so bad" with what we have now?


It would appear he is one of these 'economic determinists' who thinks that Socialism is inevitable.

Well, that's half-right. Obviously, I'm an "economic determinist" was Marx.

I do not think that communism is "inevitable" in an absolute sense. What I have argued is that without the collapse of capitalism, the "opening" for the communist alternative...doesn't open.


The problem with Red Star is that he thinks the case for Socialism is based on this collapsist nonsense - trying to scare workers into becoming Socialists.

The problem with this criticism is that it's nonsense, period. The collapse of capitalism is not a rhetorical device to "frighten workers into choosing communism" is, or is supposed to be, a prediction based on the "laws" of capitalism itself.

If the "law" on which the prediction is based is shown to be invalid, then it can no longer be asserted that capitalism will collapse...and "we have a problem".


The case for Socialism is based upon the theory that the working class are a subject class and in the law of social evolution, the next stage is for their class liberation.

What "law" of "social evolution" is this? What does it actually say? What is the evidence for its validity? Upon what actual material conditions is it based?

To be honest, I've never heard of such a thing but, as always, I'm willing to be instructed.


Those who think the working class are incapable of scientific thought need to make use of scaremongering tactics like Collapsist theories.

I think the obstacles to scientific thought in the working class are of considerable magnitude; the ruling class devotes enormous resources to preventing the spread of scientific thought among workers.

That doesn't mean that workers "can't do it"...but it takes considerable effort and even a bit of luck for "an ordinary person" to "break through" the numerous illusions that the ruling class provides.

But material reality is very powerful; a capitalist crisis radicalizes people precisely because material reality has shattered many bourgeois illusions. There are probably more working class radicals in Argentina right now than anywhere else in the world...not because they all suddenly decided to "think scientifically", but because material reality revealed the sterility and utter uselessness of many forms of "unscientific thought".

And I have to repeat this, just so you're clear about it. I am not telling people "choose communism now or die in the next capitalist depression". That would be a silly thing to say to people.

What I want to be able to say to people--with evidence to back me up--is that capitalism by its very nature will inevitably reach a point at which it can no longer function. There is nothing the ruling class can do about it. It is "hard-wired" for ultimate collapse.

If that cannot be truthfully said, the alternatives look extremely grim.
First posted at Che-Lives on January 2, 2004


You ask me why the workers should get rid of capitalism if it is a "success". I never said it was a success, but only that it would not collapse.

Even if it were a success, the question is posed as to what class it is a success for. Certainly not the working class.

I'm using a "common sense" definition of "success", of course. The system, with ups and downs, continues to effectively function.

There is an additional factor that must be considered, naturally: the immiseration of the proletariat. Neo-classical economic policies sharply increase the gap between "winners" and "losers" under capitalism. A few workers achieve an unusual prosperity--the majority find their living standards slowly but steadily depressed over time.

This appears to actually be least in the U.S. Over the last three decades, the "middle class" standard-of-living of the American working class has been maintained only by large numbers of female spouses becoming full-time workers and by huge amounts of consumer credit. American capitalism at the present time is quite literally a "house of (credit) cards".

This is a phenomenon that was completely unknown in Marx and Engels' time (Marx got his loans from his neighborhood pawn shop!).

Vastly expanded consumer credit plays the same "stabilizing" role in a neo-classical economy as government spending plays in a Keynesian economy. Thus far, it has successfully held off a "crash"...but no one knows if this can continue. There is already a problem in South Korea...with credit card companies facing disaster over billions of dollars in bad consumer debt.

With regard to class consciousness, I still maintain that it will be marginal as long as working people think that things are generally going well for them. I've heard working people complain of the "constant strain" of trying to "stay even", "meet the monthly payments", "needing the overtime but always being exhausted", etc.

But the payments still get made, the new(er) car gets purchased, the loan to buy a house gets approved. This is capitalism "delivering the goods"...and proletarian revolution is not going to happen as long as the goods keep being delivered.


What do you suppose getting rid of the social problems of poverty, environmental destruction, war etc. is, if not a material reason?

Of course they are material reasons...which is why capitalism produces communists no matter how "prosperous" it might be at any given moment. The problem is numbers.

In the U.S., I would imagine that there are no more than a few hundred thousand people who would be "comfortable" with proletarian revolution (the numbers that would actually fight for proletarian revolution are far smaller, of course).

Perhaps five or six million would support a "social democratic"--really Keynesian--alternative...people who would vote for Franklin D. Roosevelt if he were alive today.

The adult population of the U.S. is probably around 250 million. (!)

The material conditions that you mention do produce revolutionary class consciousness...but in amounts too small to matter. Even reformism is marginalized...except in its most pallid and servile manifestations.

Of course, things change. But consider: poverty primarily affects those who are poor. Environmental destruction primarily affects those who actually live in or near the destroyed areas. War primarily affects those who are in the military and their families. For the most part, these are presently not large numbers...though they could certainly become a lot larger.

For most people, capitalism is still "working".

To be sure, there is some portion of the population that actually does make an "arm-chair" decision in favor of revolution. Whether they are college students or self-educated working class intellectuals, they have learned to "think scientifically" about class for reasons other than "immediate necessity".

But again, I assert that those numbers grow significantly only when capitalism itself is manifestly in difficulties.

Based on historical experience, I don't think it is reasonable to expect a significant majority of the working class in any country to develop revolutionary consciousness until material reality "opens the door" for the revolutionary alternative to be considered.


To argue that capitalism is collapsing to convince people to become Socialists is scaremongering.

I tried to respond to this twice! Once more, that is not the "appeal" that I propose to make. Communism has its "own appeal" that is independent of capitalism. Emancipation is a "good" that is independent of the "conditions" of slavery.

What a severe capitalist crisis accomplishes is getting very large numbers of working people to take the communist alternative seriously.

I'm sure you've heard people say that "communism is a good idea". All of us have heard that at one time or another. But there are always lots of "good ideas" floating around. To start to seriously consider a radical alternative to habitual behavior, most humans need to see that the "old ways" are "not paying off any longer".

If we are in a position to tell people--based on a correct theory--that not only are the old ways (capitalism) not "paying off" anymore...but they will "never pay off again", then we have a real opening to raise revolutionary alternatives.

quote: simply is not true that Socialist propaganda is impossible during booms any more than it is during depressions.

But the question is who is listening? You can make all the intellectual arguments for communism that you want...but if capitalism is functioning well, very few will even be willing to listen to you and even fewer will want to make the effort to become involved in political action. Communism looks both "hopeless" and "unnecessary".

Reformists--social democratic/Keynesian--have a little easier time of things. Making capitalism "work even better" is always a "respectable" appeal.

But for us? We need "spectacular failures" of capitalism just to get people to listen to what we have to say.

And even then, the reformists give us a "tough battle"...don't forget that proletarian revolution is a "last alternative". It's what working people do only when they see that there is no other rational alternative.


In fact, depressions are usually associated with the growth of racist and fascist politics.

No argument. Extreme situations call for extreme measures. The ruling class looks to fascism; the working class looks to communism (we hope!). As I indicated earlier, the victory of proletarian revolution is not inevitable even in a serious capitalist crisis.

It just gives us the chance.


You say that the view that capitalism will collapse is a prediction. What if that prediction was proven to be erroneous? Would you still retain it?

Of course not. Why do you think I started this thread? I think we need to do some serious thinking if a "final" capitalist crisis is not inevitable.


What I meant by the ‘law of social evolution’ is that capitalism has not existed for all time but is part of a process. We have achieved a state that there are only two economic classes - and the next stage is the elimination of these classes as classes - the resolution of the class struggle through class emancipation.

Well, if I understand you, you posit a "law" of the "reduction of the number of economic classes over time".

Even if that "law" could be shown to be valid, it doesn't give us much insight into what is actually happening.

Why does the number of classes decrease over time? And having reached two, why should it fall to one?

What's going on "underneath" this "law"?


Perhaps more people become Socialists during recessions, but this is not our case for getting rid of capitalism.

I agree; it's our opportunity to "make our case" when people are ready to listen.

And your "perhaps" is know as well as I do that radical political trends increase significantly during periods of capitalist crisis.

Indeed, the parliamentary successes that you boast of in Canada and Australia took place in the 1930s. Even though you argued that "capitalism will not collapse"--and, that time at least, you were right--the fact that large numbers of people were willing to vote for a socialist alternative demonstrates the point I have made.


The reason we have much less support now is that we have all these trendy "left-wingers" walking around offering palliatives - claiming to be "doing something now".

Trendy? You sound a little bitter here.

Instead, you should ask yourself why they have the appeal they do (such as it is).

I agree with you that material conditions do not justify proletarian revolution at this time. Thus, the "trendy" ones...they attempt to offer options that "make sense" to people at the present time.

The "options" don't make all that much sense to me...nor to you. They don't really change anything.

These seem to me to be the real questions...

Under what material conditions does proletarian revolution make sense to the working class itself?

Have we any scientific reason(s) to expect those material conditions to actually materialize?

If you think that proletarian revolution will happen "when it happens", then perhaps my questions will seem to you either unanswerable or irrelevant or both.

They seem crucial to me.
First posted at Che-Lives on January 3, 2004


Feudalism did not suffer a 1930's style collapse yet it was abolished, so why could the same not also happen with capitalism?

Well, actually feudalism suffered a whole series of crises, wars, rebellions, etc. spread over several centuries.

Probably the initial crisis of feudalism was environmental...the black plague epidemic(s). So many serfs died that lords began "poaching" each other's remaining serfs by offering reduced feudal obligations. When the population of serfs recovered in the early 16th century, the lords attempted to re-impose the old obligations, provoking wide-spread peasant rebellions. The rebels were crushed...but it proved impossible to make the old obligations "stick".

The "wars of religion" in the late 16th and the 17th century also damaged the "institutional infra-structure" of feudalism...particularly in the Netherlands, Germany, and Switzerland.

The rise of centralized monarchies--which was almost certainly intended to strengthen the nobility in its privileges...turned out in the end to weaken those privileges.

Meanwhile, bourgeois ideologues were attacking feudal ideology as "unreasonable".

The "crisis" of 1789 in France was a crisis in the finances of the centralized monarchy.

When the autocrats of land and church proved unable to resolve this crisis, the "new men" (capitalists) and the "rabble" took matters into their own hands.

Although this great revolution was a failure in the end, it shattered the notion of the "inevitability" of the existing feudal order everywhere in Europe. In France, the capitalists did not actually become, in a formal sense, the ruling class until after the last catastrophic defeat of the old order in 1870.

If you like, the "transition period" between feudalism and capitalism in France was 1789-1870. In Germany, it was 1848-1945. In the U.S., it was 1776-1865...a rare case of "stage-skipping" by the way--from slavery to capitalism. Interestingly enough, both in France (Napoleon III) and Germany (Adolph Hitler), the bourgeoisie first tried to rule "through" a populist despot before taking power in their own name.

All of which is to say that history is "messy"...there were many major crises in the course of feudalism and any number of them "could" have proved to be "final".

Can the same be said of capitalism? I do not know. What I do "know"--or at least something I'm pretty certain of--is that a capitalism that manages to avoid serious crises is one that should be able to survive indefinitely.


The last time capitalism collapsed it resulted not in proletarian revolution but in fascism and world war. If that happened again with today's technology, it would probably destroy civilization.

I cannot deny that possibility...and there are many possible scenarios for major imperialist wars between countries that have nuclear weapons and the means to deliver them.

"Probable" is stronger than I would want to say...but "possible" is undeniable.


One [possible crisis] is the emergence of a global ruling class and its conflict with (and eventual overthrow of) the American Empire. Hypothetically this could lead to a temporary global crisis, similar to France 1789 or Russia 1917 on an international level, which may create an opening for a global revolution.

Yes, that is a plausible hypothesis. And it requires no "labor theory of value" to make it work.


The other is environmental crisis. Capitalism, especially stable capitalism, is a system that continually uses more and more resources. It is based on growth for the sake of growth. Thus it will progressively destroy the environment because the Earth is finite. Eventually things will grow to a breaking point, bringing about ecological crisis.

This, I think, is much less likely. Capitalists are "good" at "resource substitution". When the oil "runs out", they will have another (expensive) substitute "ready to go".

Of course, it is always possible that the ruling class will blunder grossly and, as a consequence, actually threaten the existence of human life on this planet. But they hire a lot of scientists to warn them of unintended consequences, so...I rate it as a low probability event.

This does raise an interesting "side issue". If neo-classical economic policies continue to be implemented, the standard-of-living of much of the "middle class" working class is going to decline quite a bit. I would not put it past "our" ruling class to "excuse" that development as a "response" to "environmental concerns". I can see their propagandists telling us that we "have to make sacrifices" in order to "save the environment".


This is why I think the revolution(s) will probably begin first in the "third world" - it is more oppressed.

Yes, but up to now, these have all been peasant-based bourgeois revolutions...wrapped in Leninist red flags though they were. The result always turns out to be the removal of the old servile colonial ruling classes and the triumph of a vigorous new native capitalist class.

Perhaps that could change as many of these countries have an embryonic working class...the consequence of moving manufacturing industries out of the "first world". But it seems to me that the "best" you could hope for is another "Petrograd"...a small and very radicalized working class in an ocean of backward peasantry.


We can't just sit around and hope that capitalism will automatically destroy itself. We have to organize to bring about its destruction.

No one has ever suggested that we should just "sit around". This is about something different: does capitalism contain within itself a mechanism of "self-destruction"?


Capitalism wasn't in a major depression in the late 60s.

I saved this one for last...the great French General Strike of May 1968 came "from nowhere". The working class, inspired by student radicals, just "decided to do it".

Could that happen again...and result in a victorious proletarian revolution?

Beats me!
First posted at Che-Lives on January 4, 2004

I thought this was the most interesting comment from the above link...


Moseley argues, and we agree, that the present epoch of capitalism is characterised by a huge increase in unproductive expenditure. He finds this a dead weight on the system, acting as an involuntary levy upon the profits of individual capitalists. And he shows unproductive spending exploding out of control over the past fifty years. He assesses this effect as significant as the rise in the organic composition of capitalism in causing the secular decline of profits since the War.

The explosion in the "finance" industry, for example, is clear and obvious to all.

Even more dramatic, if I am not mistaken, there are now more people employed in "private security" than the total number of police and those serving in non-officer positions in the armed forces.

This "tax" on profitability required to "keep the system going" may well be "spiraling out of control".

In which case the effective rate of profit is falling regardless of any nominal increase that may be recorded (accurately or inaccurately).

That would be clearly a "mechanism of self-destruction" in the capitalist system that would be completely independent of the "validity" of the labor theory of value.

Is there anything the capitalist class could "do" about this? Clearly, the explosion in the finance "industry" is so inextricably tied up with modern capitalism itself that they can no longer do without it. They simply can't do a modern business deal without an enormously complex package of financial details...and the hordes of people required to write them up and check the fine print.

Nor does it seem terribly likely that they can do without their bloated "private security apparatus". No matter where they construct their means of production, they must be guarded against growing armies of enemies...including, by the way, each other. Industrial espionage and counter-espionage is of crucial significance.

Whether it is potentially angry workers in the west or neo-Luddite religious terrorists in the east, their wealth is built on the slopes of restless volcanoes. They must part with more and more of it in order to protect the rest.

A very interesting hypothesis, indeed.
First posted at Che-Lives on January 6, 2004
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