Deckard
 
Reply Fri 30 Apr, 2010 05:42 pm
I'm just going to pull the explanation off wikipedia:
Quote:
Overproduction is the accumulation of unsalable inventories in the hands of businesses. Overproduction is a relative measure, referring to the excess of production over consumption. The tendency for an overproduction of commodities to lead to economic collapse is specific to the capitalist economy. In previous economic formations, an abundance of production created general prosperity. However in the capitalist economy, commodities are produced for profit. This so-called profit motive, the core of the capitalist economy, creates a dynamic whereby an abundance of commodities has negative consequences. In essence, an abundance of commodities disrupts the conditions for the creation of profit.
The overproduction of commodities forces businesses to reduce production in order to clear inventories. Any reduction in production implies a reduction in employment. A reduction in employment, in turn, reduces consumption. As overproduction is the excess of production above consumption, this reduction in consumption worsens the problem. This creates a "feed-back loop" or "vicious cycle", whereby excess inventories force businesses to reduce production, thereby reducing employment, which in turn reduces the demand for the excess inventories. The general reduction in the level of prices (deflation) caused by the law of supply and demand also forces businesses to reduce production as profits decline. Reduced profits render certain fields of production unprofitable.
Marx said that overproduction and the resulting recessions and depressions were inevitable and inescapable in the Capitalist system. He claimed that overproduction was the root cause of the periodic booms such as the one we had in the 90's and busts such as the one we're having now. Thoughts?
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Fido
 
  1  
Reply Sat 1 May, 2010 11:38 pm
@Deckard,
Deckard;158585 wrote:
I'm just going to pull the explanation off wikipedia:
Marx said that overproduction and the resulting recessions and depressions were inevitable and inescapable in the Capitalist system. He claimed that overproduction was the root cause of the periodic booms such as the one we had in the 90's and busts such as the one we're having now. Thoughts?

Thoughts??? Sure...I think he quoted some one else, but he said High profits and glut (depressions) were synonymous...

And you should realize how unique is that problem of over production, because it was never known before capitalism and the industrial revolution...It is not just increased ability to produce, and high profits sucking the wealth out of society; but the anarchy of capitalism which has every producer producing for the same market... But with every depression the number of producers fall, and then less do the job of more with hardly a beat being missed...
0 Replies
 
HexHammer
 
  1  
Reply Sun 2 May, 2010 04:00 am
@Deckard,
Deckard;158585 wrote:
I'm just going to pull the explanation off wikipedia:
Marx said that overproduction and the resulting recessions and depressions were inevitable and inescapable in the Capitalist system. He claimed that overproduction was the root cause of the periodic booms such as the one we had in the 90's and busts such as the one we're having now. Thoughts?
Marx was essential a naive idiot, sure he was right per se in this postulation, but what he made of communism was far worse.
Pepijn Sweep
 
  1  
Reply Sun 2 May, 2010 04:10 am
@Deckard,
Deckard;158585 wrote:
I'm just going to pull the explanation off wikipedia:
Marx said that overproduction and the resulting recessions and depressions were inevitable and inescapable in the Capitalist system. He claimed that overproduction was the root cause of the periodic booms such as the one we had in the 90's and busts such as the one we're having now. Thoughts?

He also spoke of the proletariate and hoped for a Dictatorship. With a Republican framework and a 44 president this Dictatorship is steadily on it's way. Wether Communist, Capitalist or Socialist.

Communist is least likely, or the Green Man must become popolair.

PepI

---------- Post added 05-02-2010 at 04:45 AM ----------

Fido;159191 wrote:
Thoughts??? Sure...I think he quoted some one else, but he said High profits and glut (depressions) were synonymous...

And you should realize how unique is that problem of over production, because it was never known before capitalism and the industrial revolution...It is not just increased ability to produce, and high profits sucking the wealth out of society; but the anarchy of capitalism which has every producer producing for the same market... But with every depression the number of producers fall, and then less do the job of more with hardly a beat being missed...


Schumpeter wrote about this shift from capitalisme old-style to multinationals. Marx observation media is the drug for the people still stands. Religion is entertainment in this value-less world of consumism.

I could make luxery dessert but prefer a healthy soup. Gold covered straw-berries ! Oh. Right, chocolate covered it is.
Laughing
0 Replies
 
Fido
 
  1  
Reply Sun 2 May, 2010 07:22 am
@HexHammer,
HexHammer;159239 wrote:
Marx was essential a naive idiot, sure he was right per se in this postulation, but what he made of communism was far worse.

Not at all an idiot if one follows the word to its root; for Socrates was that, one who stand neutral in the political affairs of his polis....

Rather, Marx was a great economist and an idealist, and this idealism caused him to take a hand in the affairs of history which is always a huge mistake...The Communist Manifesto did not put the working people on their feet as he had hoped, but it did put the capitalist class on their guard, as if they needed to be...

Bismark, the old Prussian Junker often appears in their writing, and he carried on his own personal war with the socialist in Prussia; and in empowering the right, and feeding their press and parties he made certain that they, rather than any sort of moderate social democrat would survive a prolongued political dry spell... Without him, there would have been no first world war, and without him there would have been no Paris Commune, and without him there would have been no Hitler, for Hitler clearly used Bismark as a model in foreign relations with his brinkmanship, and the cycnical use of treaties...

Idealism whether Communist or Religious or Fascist does not work... Ideals are good to think with, but in the construction of social forms the forms should be molded to the needs of the people rather than trying to mold the people to the needs of the ideal...People are not perfect and social forms should not aim at perfection, but rather at a simple functionalism..

But, Marx understood capitalism, and that is why at least two billionaires I can think of had an early training in Marxian economics... As true in our time as in his, the state was forced to buck up the economy from time to time, and advance it money which it then collected from the people... Were it not for the state, capitalism as another ideal would have been trashed long ago; but if you look at it, we cannot get out of one depression without another falling upon us...

The government is bankrupt, morally and financially, and the people do not have the means to pay the taxes the rich refuse to pay... I am not saying communism is the future, and I don't have to...I am not saying communism is the answer and I don't have to... I will say that America, and the world will one day have the socialism of poverty if it will not have the socialism of plenty, because if left to its own lead the rich will destroy every resource they do not burn up in production, waste, and war...
0 Replies
 
prothero
 
  1  
Reply Sun 2 May, 2010 09:33 am
@Deckard,
I remember an old story although I can not attest to its truth.

Marx during one of the many famines and bouts of starvation noted farmers destroying their crops in order to raise prices and food rotting in warehouses and fields and he thought there has to be a better way and thus formulated his economic theories about capitalism and socialism.

Indeed he was right that there should be a better way but communism was not it.
0 Replies
 
 

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