Letters from Tomis

Lecture

Here is a lecture on Ted Grant’s “Will There Be A Slump?”

https://www.marxists.org/history/etol/writers/grant/1960/slump.htm

Introduction:

Today, our discussion revolves around the Marxist analysis of capitalist economic cycles, particularly through the perspective articulated by Ted Grant in his seminal 1960 text, “Will There Be A Slump?” Grant provides an insightful Marxist critique of the capitalist economic structure, focusing on post-World War II developments.

Key Points:

1. Marxist Foundations of Economic Cycles:

Marxism posits that the capitalist mode of production inherently generates cyclical crises. Grant reiterates Marx’s theory that capitalism is prone to periodic crises because of the internal contradictions within the system, particularly the tendency of the rate of profit to fall. This phenomenon results from increased investments in constant capital (machinery, technology) relative to variable capital (labor).

2. Post-War Economic Upswing:

Grant examines the economic upswing after World War II, acknowledging that while the post-war boom significantly raised production and temporarily stabilized capitalist economies, it did not alter capitalism’s fundamental contradictions. Factors such as destruction during war creating market demand, Marshall Plan economic assistance, and state intervention via Keynesian policies provided temporary relief but did not resolve capitalism’s inherent instability.

3. Overproduction and Crisis:

The lecture emphasizes overproduction as capitalism’s central crisis-causing mechanism. According to Grant, the capitalist economy inevitably produces excess goods—both consumer and capital goods—due to its market-driven and competitive nature. This leads to recurring economic slumps. Despite temporary booms, the structural contradictions remain unresolved, leading inevitably to cyclical downturns.

4. Role of State Intervention:

Grant critically evaluates the role of state intervention in capitalist economies. While Keynesian economics advocates government spending as a stabilizer, Grant argues that this merely shifts or delays crises but does not prevent them. Deficit financing, he argues, often leads to inflation rather than genuine economic stability, eventually undermining purchasing power and profitability, thus exacerbating economic contradictions.

5. Nationalization and Its Limitations:

Grant also critiques the role of nationalization in capitalist economies. He points out that while nationalization can temporarily prop up failing industries, it primarily serves the interests of larger capitalist enterprises by socializing losses and privatizing profits. State ownership under capitalism does not equate to socialist planning; instead, it acts to stabilize capitalist markets temporarily.

6. Global Economic Dynamics and Imperialism:

Analyzing international dynamics, Grant highlights how global capitalism exacerbates inequalities between developed and undeveloped nations. Economic booms in industrial nations lead to overinvestment in raw materials from poorer countries, which later contributes to global overproduction and market crashes. This cyclical exploitation reinforces global economic disparities.

Conclusion and Contemporary Relevance:

Grant’s 1960 analysis remains strikingly relevant today. The recurring cycles of boom and bust witnessed throughout subsequent decades—including the 2008 global financial crisis—underscore capitalism’s unresolved contradictions. His Marxist critique provides essential tools for understanding current economic phenomena, reminding us that capitalism’s inherent instability demands structural change rather than superficial policy adjustments.