according to Marx's description of capitalist crises, interest rates ought now to be rising:
Marx refers to a "money famine".
Yet the most perceptive conventional commentators are now pointing to a liquidity trap - that the central banks cannot reduce interest rates any further, and the rate is also reducing any incentive to invest further in capitalist enterprises.
Can anyone explain and elucidate?
Let me try, and ask for criticisms, if no one wants to leap in.
Marx also argues
"The superficiality of [bourgeois] Political Economy shows itself in the fact that it looks upon the expansion and contraction credit, which is a mere symptom of the periodic changes of the industrial cycle, as their cause." Capital Vol I p633 Lawrence and Wishart)
What has changed is the ability of the modern state, indeed on a global basis, to treat the symptom so vigorously by lowering state interest rates that they can cause a liquidity trap.
Note how even with these low interest rates, Swissair has just gasped to a standstill, on the airports of the world, panting, not just for aviation fuel, but of course for the capital to buy it with.
"The man on the money market sees the movement of industry and the world market in the inverted reflection of the money and stock market and the cause becomes for him the effect." Engels Letter to Conrad Schmidt 27 October 1890.
Does that salvage the honour of Marxism, even if it does not salvage the world economy?
Chris Burford
London
