| This question <951|1395> overall <954|960> Hans: <949|966>. |
| Question 376: How does Marx define a crisis? |
| [957] Hans: Definition of crisis, with examples. A crisis is the forceful (re)unification of things which belong together but which have drifted apart too much. That is the definition you need for the reading here. |
| Let us be more concrete. What are in the presently assigned readings the two aspects which belong together? To understand this, we have to go back to chapter Two. Marx argued that each exchange of two commodities simultaneously has to satisfy two contradictory purposes: the traders have to select the right use-value which they need, and they have to realize the value of the good they are giving in trade. |
| The resolution of this contradiction is to split each exchange of commodities into two acts, first sale, and then purchase. The first act specializes on the realization of the value of the commodity, and the second on the selection of the use-values. |
| The problem is that this split makes the two transactions too independent. People can sell and then just go home and keep their money, without buying again for a long time, or they can buy somewhere else, etc. There you have two things which belong together, sale and subsequent purchase, which can drift apart. A liquidity crisis, in which everybody tries to sell and nobody wants to buy, was one of the main forms of crises Marx witnessed in his time. (Nowadays policy makers can prevent liquidity crises, but they cannot prevent international currency crises.) |
| Crises can also be the forceful separation of things which should be independent but which are somehow fused together. One example for this can be found in mainstream economics, namely, the so-called “Triffin dilemma,” see Robert Triffin, Gold and the Dollar Crisis, Yale University Press, 1960. |
| Triffin said that there is an inherent and unresolvable contradiction between the role of the dollar (or any other national currency, the Euro is not exempt either) as a national currency and as an international currency (world money). As world money, so many dollars are needed by the system, that sooner or later the confidence in the dollar as a national currency will be eroded. |
| This is an example of the second definition of crisis: two things which should be separate (world money and national currencies) are fused (because this fusion gives economic privileges to the dominant power), and Triffin says that at some point, their independence will assert itself violently. |
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