The debt dilemma

Michael Roberts Blog

I have mentioned many times on this blog that rising global debt reduces the ability of capitalist economies to avoid slumps and find quick way to recover (and see ‘Debt Matters’ in my book, The Long Depression and also in World in Crisis).

As Marx explained, credit is a necessary component in oiling the wheels of capitalist accumulation, by making it possible for investment in longer and larger projects to be financed when recycled profits are not sufficient; and in more efficiently circulating capital for investment and production.  But credit becomes debt and, while it can help expand capital accumulation, if profits do not materialise sufficiently to service that debt (ie pay it back with interest to the lenders), the debt becomes a burden that eats into the profits and ability of capital to expand.

Moreover, two other things happen.  In order to meet the obligations of existing debt…

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One response

  1. Dobra analiza sodobnega kapitalizma, ki se po Marxu očitno približuje svojemu končnemu stadiju, ko se profitna stopnja na kapital približuje ničli. Vendar, tako kot drugi sodobni marksistični teoretiki, ne zna povedati, kaj potem. Dokler pa tega ne izvemo/izumimo, nam kvečjemu preostane “šraufanje” obstoječega sistema in zavedanje, da je stanje stvari le začasno.

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