Economic theory

In the third part of his series on the history of money, Adam Booth looks at the growth of finance, the development of banking, and the role of credit within capitalism. As Adam stresses, the economic problems we face today lie not with an overbloated finance sector, greedy bankers, or a lack of credit, but with the anarchic, chaotic, and crisis-ridden capitalist system.

In the second part of his series looking at the role of money within capitalist society, Adam Booth explores the questions of value, alienation, and profit in order to develop a more in-depth understanding about the nature of money.

What is money? Where does it come from? and what does it represent?

In their desperate search for profitable fields of investment, the capitalist class, especially the financial oligarchy, has presided over an explosive growth of unproductive expenditure that today threatens to undermine the very edifice of capitalism. As more and more surplus value is siphoned off into unproductive activities, the issue of “productive” and “unproductive” labour has once again resurfaced as a factor contributing to, and a reflection of, the present terminal decline of world capitalism.

The world economy has been mired in a deep crisis since 2007. The bourgeois have tried everything to climb out of the crisis, from quantitative easing, to zero interest rates, to the socialization of banking losses, but all to no avail. Why is it that a modern-day version of Keynesianism cannot work?

What is value? This question has perplexed the human mind for more than 2,000 years. The classical bourgeois economists grappled with the question, as did Marx. After much deliberation, they correctly concluded that labour was the source of value. This idea then became a cornerstone of bourgeois political economy, beginning with Adam Smith. On this question, there was common ground between Marx and the classical bourgeois economists.