ECONOMIC CRISIS AND FALLING RATE OF PROFIT
We saw how in a capitalist production, the capitalists’ desire for profit periodically collides with the necessity of division of labour. We saw how crises are intrinsic to the capitalist system to reintegrate the two. We saw how crises results in a widespread collapse of political and economic relations of production. Marx constantly refers to the laws of motion whenever he talks about capitalist system. We saw Marx’s law of falling tendency of rate of profit. We also looked at the counteracting tendencies given by Marx only, which annul or cancel the effects of the general law. Sheikh talks about two ways in which a law emerges from the tendency and the counter tendency: -
First is to conceptualize the various tendencies as operating on an equal footing. Capitalism gives rise to a set of conflicting tendencies and the system’s final direction will be determined by the balance of forces existing at a particular historical conjuncture. Two things are of great potential here. State Intervention and Structural reform -
Second is to look into the tendency of the fall in rate of profit as a dominant tendency and consider the counter-vailing tendencies as sub-ordinate ones which operate within the limits of the dominant tendency. Marx explained this by saying that the dominant tendencies arise out of the very nature of the capitalist system and have a very powerful momemtum which channels the subordinate tendencies in a definite direction. Structural reform, State intervention and class struggles are of lmited potential because they end up being subordinated to the intrinsic dynamic of the system. Anwar Sheikh through the description of possibility and necessity theories of crises tries to answer the role of state intervention and structural reform, and the inevitability crises in capitalism. These two theories correspond to two different methodological approaches to capitalist history: Possibility theories- Based on the...
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