Re:Pëtr Kropotkin and Mutual Aid
by imtringued on Saturday November 05, 2022 @08:19PM
(#33487373)
Capitalism is irrational.
What sense does a fixed positive profitability constraint make? It makes no sense. It discourages people from economic activity.
People talk about the profit motive but when you really think about it, profit is a demotivator.
The more borrowed capital you use the more profit you have to make. But in principle any economic activity that breaks even is worth doing even at no profit.
So in theory the return on capital should represent that competitors know how to use the capital better than you, but at the same time this would imply that unemployment and recessions are impossible. It's entirely possible for the interest rate to be so high and money to be so tight to cause mass unemployment throughout the entire economy as we have seen in the great depression.
Marx treated money as a simple "medium of exchange" and therefore sought for an answer in the sphere of production. In reality it is money that has the power to cripple capital and land.
What sense does a fixed positive profitability constraint make? It makes no sense. It discourages people from economic activity. People talk about the profit motive but when you really think about it, profit is a demotivator.
The more borrowed capital you use the more profit you have to make. But in principle any economic activity that breaks even is worth doing even at no profit. So in theory the return on capital should represent that competitors know how to use the capital better than you, but at the same time this would imply that unemployment and recessions are impossible. It's entirely possible for the interest rate to be so high and money to be so tight to cause mass unemployment throughout the entire economy as we have seen in the great depression.
Marx treated money as a simple "medium of exchange" and therefore sought for an answer in the sphere of production. In reality it is money that has the power to cripple capital and land.