{"resolved":true,"match_type":"uuid","source_type":"original_book","book_id":"4a3d22bd-c5b9-47a4-a022-bd35d44d9bfe","title":"Zombie Capitalism Global Crisis and the Relevance of Marx","author":null,"edition":null,"publisher":null,"year":null,"isbn":"9781608461042","requested_by":"printed_page","book":{"source_type":"original_book","book_id":"4a3d22bd-c5b9-47a4-a022-bd35d44d9bfe","id":"4a3d22bd-c5b9-47a4-a022-bd35d44d9bfe","uuid":"4a3d22bd-c5b9-47a4-a022-bd35d44d9bfe","title":"Zombie Capitalism Global Crisis and the Relevance of Marx","normalized_title":"zombiecapitalismglobalcrisisandtherelevanceofmarx","author":null,"edition":null,"publisher":null,"year":null,"isbn":"9781608461042","isbns":["9781608461042"],"parsed":true,"ai_readable":true,"document_type":"book","page_count":426,"navigation_url":"https://workshop.closeclaw.top/ai/book/4a3d22bd-c5b9-47a4-a022-bd35d44d9bfe","title_url":"https://workshop.closeclaw.top/ai/title/Zombie%20Capitalism%20Global%20Crisis%20and%20the%20Relevance%20of%20Marx","fixed_page_url_template":"https://workshop.closeclaw.top/ai/book/4a3d22bd-c5b9-47a4-a022-bd35d44d9bfe/page/{printed_page}","path_api_url_template":"https://workshop.closeclaw.top/api/ai/book/4a3d22bd-c5b9-47a4-a022-bd35d44d9bfe/page/{printed_page}","read_url":"https://workshop.closeclaw.top/api/ai/read/4a3d22bd-c5b9-47a4-a022-bd35d44d9bfe","page_url":"https://workshop.closeclaw.top/api/ai/books/4a3d22bd-c5b9-47a4-a022-bd35d44d9bfe/page","search_url":"https://workshop.closeclaw.top/api/ai/books/4a3d22bd-c5b9-47a4-a022-bd35d44d9bfe/search"},"page":{"printed_page":151,"pdf_page":151,"physical_index":151,"physical_index_base":0,"printed_page_status":"recognized","page_sha256":"e871ce4cb7a598629e2c715dacad985b16d509038103a19ee193b7cc66b33d16"},"chapter":"Zombie Capitalism Global Crisis and the Relevance of Marx","content":"Hayek expressed in passing the same view of what was happening to profits, although from a different reasoning. He claimed that cyclical crises resulted from disproportions between different sectors of production-with \"excessive credit\" causing the output of producer goods to grow too rapidly in the relationship to the output of consumer goods.38 In this way, he believed, he could explain the cycle as an inevitable means by which the different sectors adjusted to each other, much as Marx saw the crises as able partially to resolve internal contradictions in capitalism-but what Marx viewed negatively Hayek viewed positively. His theory still, however, had a big hole in it. Why should the lag between the sectors cause so much greater problems than in previous decades? Why, in particular, should the production goods sector not keep growing fast enough to pull the rest of the economy behind it? The answer he put forward in passing in 1935 (and which never made it into the Hayekian orthodoxy) was that profitability fell with the expansion of what he called \"roundabout processes of production\"-that is processes with a high ratio of means of production to workers, or as Marx would have put it, a high organic composition of capital:\n\nThat [profit] margins must exist is obvious . . .if it were not so, there would exist no inducement to risk money by investing it in production rather than to let it remain idle . . . These margins must grow smaller as the roundabout processes of production increase in length . . . 39\n\nIn other words, both Keynes and Hayek recognised, though they could not clearly explain, the feature which is central to Marx's theory of capitalist crisis-the downward pressures on the rate of profit.\n\nIn fact, Marxist theory can provide an explanation of the slump which avoids the contradictions of all the mainstream theories. Profit rates in the US had fallen about 40 percent between the 1 8 80s and the early 1920s,40 those in Britain were already in decline before 191441 and those in Germany had failed \"to return to their pre-war 'normal' level\" .42 Such declines could be traced back to long-term rises in the ratio of investment to the employed workforce (the \"organic composition of capital\"), about 20 percent in the case of the US.43 American profitability was able to make a small recovery through the 1 920s on the basis of a rise in the rate of exploitation. But the rise was not sufficient to induce productive investment on the scale necessary to absorb the surplus value accumulated from previous rounds of production and exploitation. Firms were torn between the competitive pressures to undertake investment in massive new complexes of plant and equipment (the Ford River Rouge plant, completed in 1928, was the largest in the world), and the fear that any new equipment would not be profitable. Some would take the risk, but many did not. This meant that the big new plants that came into operation towards the end of the boom necessarily produced on too big a scale for the market, flooding it with products which undercut the prices and profits of old plants. New investment came to a halt, leading to a fall in employment and consumption that worsened the crisis.\n\nThe Great Slump\n\n151","previous_page":150,"next_page":152}