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Karl Marx on the Financial Crisis

In: Business and Management

Submitted By mkosarkani
Words 733
Pages 3
Ethan Tremblay
Strayer University
Eco 400
Prof Elkhana Faux

Karl Marx On Our Recession

I am choosing Karl Marx as my reference and using his theories to try to form a subjective view of how he would try to explain the problem that is ongoing in the financial global recession. He would blame the recession do to the Overproduction of the system and its struggled to sell it all.

Marx would have been bold in his prediction that a host of problems in the current system (capitalism) namely overproduction, declining rates of profit, class inequality and speculative bubbles would inevitably produce a serious global recession. Marx would argue that since the development of capitalist monopolies around the world at the end of 19th century, there has been a systematic tendency toward stagnation in businesses. Monopolies have eliminated competition, set prices to increase their profits, but do not invest in expanded reproduction (new factories, new technology, new machinery), and therefore the economy tends to face a problem of low growth. Overproduction as Marx would call it is transformed by reformist theorists into under consumption, the idea that the mass of workers are paid too little to buy back what they did produce. This surely leads to the program of persuading owners to advance their own interests by paying the workers more. Those workers will then be able to consume and purchase more, and thereby crises will be forestalled or dampened.
Marx would say that overproduction demonstrates the necessary contradictions of a system that has the potential to produce real abundance but under which that very potential causes a breakdown every time it evolves. The class struggle compelled the business owners to advance productivity, accumulate more and more means of production and therefore to produce useful commodities more cheaply.
Marx would also argue that the...

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