Crisis OF Capitalism?

Karl Marx is considered by many as a black sheep of the economist flock. He was a vehement opponent of capitalism and argued that it would eventually meet a violent and unavoidable end. Essentially, he described an elitist class as the owners of capitalist factories and suggested they would exploit the working class to maximize their profits. In doing so, they would minimize wages in order to sustain rising output, trapping workers in poverty. Therefore, to escape this poverty a violent takeover would be initiated by workers to seize the capitalist factories. Furthermore, Marx argued that this would be further facilitated by a tendency for capitalism to move toward monopolization, making a takeover by the working class increasingly plausible.

Karl Marx (1818-1883)

In this way Marx argued that crises were an inherent component of capitalism, and that crises would continue to exacerbate until an inevitable fall of the final curtain.  Whilst many of Marx’s ideas have been discredited by mainstream economists, his proposition that capitalism is systemically crisis-prone has considerable resonance in current times.  However, the question about the sustainability of capitalism, for now remains unanswered. 

Yet, Saral Sarkar (2012) in his book “The Crises of Capitalism” takes a different view.  Whilst, he recognizes that there may be a current crisis of capitalism, he suggests this may not be the product of a particular political-economic system, but rather industrialism in its entirety.  In particular, Sarkar proposes that the foundation of modern capitalism a “material resource base....is eroding fast and irreparably”.  This proposition seems credible especially if we consider how Victorian Britain emerged as an industrial power-house facilitated by capitalist innovation, and sustained by a ‘colonial resource reservoir’.  Hence Sarkar, like Marx, seems to suggest that capitalism is a finite system and intuitively this may lead to a more socialist society.  However, we must not forget the distinguishing traits of capitalism such as dynamism and innovation, and therefore remember even in times of crisis that necessity is the mother of invention!