Monday, 2nd February 2009
Karl Marx on capitalism and banking
I refer to the letter Prophetic Economists And World Leaders by Karm Farrugia (January 29). Mr Farrugia quoted Karl Marx on capitalism and banking. Unfortunately, I have not been able to find the quotation in any of Marx's works which I consulted. I would be grateful were Mr Farrugia to be so kind as to provide the source of the quotation.
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Quote: `Centralization of credit in the hands of the state.`
125 years later we find Gordon Brown the British Prime Minister doing just that.
Communism apart, had this been the norm, the world would not be in the mess that it is in today.
Privatization has its own merits,but let us not forget the past, Centralization was the savior of the UK in postwar Britain.
Marx’s new relevance relates mainly to his warning about the creation of an exploitative capitalism that ends up destroying itself: “An over-expansion of credit can enable the capitalist system to sell temporarily more goods than the sum of real incomes created in current production, plus past savings, could buy,” said Ernest Mandel, the Marxist scholar, quoting his guru, “but in the long run, debts must be paid”. Since these debts cannot be automatically paid through expanded output and income, capitalism is destined for a “Krach” - Marx’s word for a crash.
Marx set out his thoughts not only in Das Kapital but in articles such as “The Financial Crisis in Europe” which was written for the New York Daily Tribune in 1857, and in the Communist Manifesto, which was written with Engels.
In the manifesto, published in 1848, he lists the ten essential steps to communism. Step five was: “Centralisation of credit in the hands of the state. . .”