| This question <1540|1629> overall <1616|1618> J: <1559|1937>. graded B |
| Question 376: How does Marx define a crisis? |
| [1617] J: A crisis as defined by Hans in e-mail [957] is the forceful “unification” or “re-unification” of things which are too far apart. In the exchange process the separation comes from the contradictory condition that the trader as producer is trying to realize the value of their product and the trader as consumer trying to get the use-value that suits their needs. To solve this contradiction the barter of the product is separated into first selling then buying. This solves the contradiction but re-creates it in a different form because now there is “too much” independence between buyer and seller. Once a seller sells, he/she is under no obligation to buy and vice versa. | Originally: A crisis as defined by Hans in [957] is the forceful “unification” or “re-unification” of things which are too far apart. In the exchange process this (re)unification of use values and values is the contradictory condition. To solve this contradiction the buying and selling portion should be seperated. This contradictory condition causes “too much” independence between buyer and seller, therefore there is an unequal distribution of goods. Once a seller sells, he/she is under no obligation to buy and vice versa. |
| The second type of crisis is the use a national currency used as an international currency. This is where the concept of dollarization comes into play. Ecuador, for example, has adopted the U.S. dollar as its own form of national currency. According to Marx the potential crisis lies in the fact that if a nation adopts another nation's national currency, then “sooner or later” confidence in that nation's currency will be eroded. In terms of the U.S. confidence in the US dollar could be eroded because of dollarization. | The second type of crisis is the use a national currency used as an international currency.This is where the concept of dollarization comes into play. Ecuaudor, for example has adopted the U.S. dollar as its own form of national currency. According to Marx the potential crisis lies in the fact that if a nation adopts another nations national currency, then “sooner or later” confidence in that nation's currency will be eroded. In terms of the U.S. condifidence in the US dollar could be eroded because of dollarization. |
| Hans: Your resubmission omitted an important part of the argument which you made in the in-class exam. I edited it back into it, and had to make so many changes that I found it worth while to show both the original and the edited version. |
| Your original answer had the sentence: “Once a seller sells, he/she is under no obligation to buy and vice versa.” The “vice versa” was out of place. After someone buys they will usually consume the commodities; there is nothing left to re-sell. The critical question is: what do people do after selling, i.e., after the first half of their C-M-C? If too many transactors hold on to their money instead of buying again, this can give a liquidity crisis. |
| The dollarization of Ecuador and other countries may give problems for Ecuador but this is not the same as the Triffin dilemma. Triffin sees a problem with a national currency doubling as world money, i.e., as the medium in which all international transactions are contracted and settled. |
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