Last time we examined how the money appearances conceal a vast communal world-wide web of producers

Producers who produce what we need but also the things we think we need and love!

However, private ownership (enforced by states, police and armies) of the means of production controls the means of production (dead labour-ie factories, land etc) for their max private profit.

Producing for max individual profit not workers’ needs and luxuries.

BUT we need to go deeper to answer the question how ‘greed is good’ turns into ‘greed is bad'(banker wankers today); How ‘momey makes the world go round? To money makes the world grind to a halt boom to bust?

Adam Smith argued that greed was good

How did he justify that??

Remember that great film Wall Street with Michael Douglas as Gordon Gecko

He argued that if everyone pursued their own selfish aims in competitive markets individual greed would turn into collective good


Pursuing individual greed – max profit – would make some producers more efficent and reduce the cost of commodities

In technical terms the Average Socially Necessary Labout Time for a commodity would reduce and the money price would fall

Workers would buy from the most competitive producer and money prices would fall even further and so on and so forth

Smith and Marx agreed on this

In history the money price of food, cars, TVs, clothes etc etc has reduced as the ASNLT and money price fell – ie it takes less of the workers’ labour time to produce the goods.

As Marx said – capitalism is ‘the most progressive mode of production the world has ever seen’

Yes he praised it to the heavens

But because the means of production were in private hands the aim of production was individual max profit

So production is skewed to favour the rich

Production of luxury goods and not basic food, essential drugs etc which the starving and disease ravaged billions need.

If the world could vote on one person one vote they in their billions would vote for a very different set of goods. Don’t you think?

Workers would then be producing for human needs not indidual private max profit

An utopia? Not at all a real communal world which we already have but without private ownership

All we need to do is abolish private ownership of the means of production and run under worker democracy production for human need

Of course here will be a little bit of a fight by the private owners!!!!!!


We could have a democratic vote on what is needed by the billions.The internet now provides the technology to do that

On Facebook it would be known as the World Democracy Party (presently The Real Democracy Party – do join)

World hunger and illnesses would be abolished at a stroke

Just think no more boring Jubilee marches no more Children in Need and no more bloody Geldof!!!

BUT how does money become bad/evil?

How does money go from making the world go round to money bringing the world to a grinding halt?

Well, the private pursuit of max profit drives down the value/money price of goods and the mass of profit increases for the efficent private producers

As competitors rush to invest in more efficent means of production the mass of capital in production also increases

So there is a tendency for the rate of profit to decrease

Thus in 1956 mass of profit is say £20 billion and mass of capital is £100 billion pounds
The rate of profit is 20% – very nice too-for some

In 2000 the mass of profit is £40 billion but the mass of capital is £320 billion.
The rate of profit is 12% – not so good for capitalist investors

You get the idea don’t you????

there would be a tendency for the rate of profit to decline

By 1994 the rate fell to 3% which was negative given inflation at 3%

What then happens?

Well, investors won’t invest in that production but look for higher profit elsewhere


Why in land, house building, shares, stocks paintings etc etc

This drives up the cost of these things and so a price bubble develops (see Robert Brenner Boom and Bubble)

But as say the housing industry in the USA shows this bubble bursts as Brenner predicted in 2003

In the main industries as we have said wages stagnate as profits are lower and unemployment creeps up

So you get mortgage defaults and repossessions start and more houses are for sale than there is demand

House prices fall and what were good assets for banks turn into toxic debts – rational behaviour by bankers leads to irrational consequences which they – poor chaps not being marxixt method persons – could not predict

The crisis appears as financial – a banking crisis – but is actually a crisis in the real economy because of the tendency of the rate of profit to fall which causes factories to close and workers to lose their jobs which causes more factories to close as demand falls and so on into a classic capitalist spiral downwards


Bankers become wankers and unemployed
Bankers are the villians or are they?????

In Section 3 we ask what can governments do and more importantly what can we do now