Talk:Pavel Maksakovsky

Untitled

Just noticed the "no consensus" delete discussion.

In case it comes up again I just want to note that the book and hence also its author are extremely notable in the light of the ongoing financial crisis and are likely to soon be a subject of widespread discussion.

I am not a regular wikipedia editor but recommend someone who is take a look at the book itself (available at "library genesis") before any deletion.

This excerpt should be included in both a separate page for the book "The Capitalist Cycle" and in this author's page:

"If the central bank and an entire network of banks, ignoring the risk of collapse, began to satisfy the increased demands of the money market by issuing currency, by acceptances, by extending the dates for bad loans, by preserving the convertibility of banknotes into gold and of bills of exchange into banknotes, and by expanding their discount operations in response to needs rather than curtailing them, they would still not ‘save’ the situation. On the contrary, despite their intentions and plans, this response would only provoke greater ‘overproduction’. By enabling the capitalists to avoid cutting production while prices remained high, they would drive capitalist production even further off its rails and aggravate the already developed disproportionality. Every new turnover of capital would be accompanied by even higher demands for money credits as a necessary condition for the preservation of capital values. If we pursue this thought to its logical conclusion, then social reproduction - as an economic whole - would swallow up all the money resources of society; that is, it would swallow one of its own parts, causing even greater overproduction of both productive and commodity capital. As if anticipating Hilferding’s formulation of the matter, Marx provided the following response: ‘The entire artificial system of forced expansion of the reproduction process cannot, of course, be remedied by having some bank, like the Bank of England, give to all the swindlers the deficient capital by means of its paper and having it buy up all the depreciated commodities at their old nominal values’. 36 The sole means for curtailing the inordinately inflated production is a collapse of the high price level, which also entails

35 [Hilferding wrote: ‘A monetary crisis is not an absolutely necessary feature of the crisis, and may not always occur. Even during a crisis the turnover of commodities continues, even though on a much reduced scale. Within these limits circulation can be carried on with credit money, all the more so since the crisis does not affect all branches of production simultaneously or with the same force. Indeed, the slump in sales seems to reach its lowest point only when the situation is complicated by a monetary and banking crisis. If the necessary credit money is made available for circulation the monetary crisis can be averted; and even a single bank whose credit position is unimpaired can do this by advancing credit to industrialists against their collateral. In fact, monetary crises have been avoided wherever such an expansion of the means of circulation was possible, and on the other hand they have always occurred when banks whose credit remained unimpaired were prevented from making credit money available’ (Hilferding 1981, pp. 274-5).]

36 Marx 1962, p. 479 [Maksakovsky’s italics].

28 . Pavel V. Maksakovsky

destruction of a part of the redundant production apparatus and of commodity capital. In that way, the crisis, regardless of how highly developed the economic and organisational factors may be, remains the inevitable transition stage from expansion to depression. The intervention of credit for the purpose of preventing the activity of forces that determine the reversal of the conjuncture -forces that are ‘not subordinated’ to credit - can only result in further aggravation of disproportions and, as a result, in the increased severity of the crisis. But none of this means that credit institutions, once they have set aside the idea of preventing the crisis, are unable to exert any influence on how it develops.

By conducting a preventive policy, credit institutions can somewhat ameliorate the catastrophic reversal of the conjuncture and moderate its effects in quantitative terms, even if they cannot prevent it in qualitative terms. They could do this with all the more success if, at the moment when the market reveals its disproportions through a slowing down of C-M-C, they conducted a highly ‘individualistic’ policy of quickly and significantly raising the interest they charge, thus decisively refusing to jeopardise the money funds concentrated in their hands. In that manner, they would reduce the severity of overproduction and guarantee to the capitalists the return of their reserves, on the one hand, while preventing the further growth of overproduction on the other. With that kind of policy, and forgetting about any idea of changing the structure of the cycle, they would turn out to be more capable of conducting a ‘reformist’ attempt to diminish the consequences of the existing overproduction for national economic life. But even this policy, when conducted with the greatest far-sightedness and understanding of the inevitable reversal in the conjuncture, cannot be completed by the credit network - even if it is organised to the highest degree and fully committed to the conduct of a ‘rational’ policy."

He goes on to explain why the banks cannot complete such a rational policy and go instead for postponing but consequently intensifying the developing crisis.

This was written just before the Great Depression and the decades since seem to have been one attempt after another to prove Marx (and Maksakovsky) wrong by successfully avoiding another such crisis but only by postponing it with it repeatedly looming up again looking likely to be more severe than ever.

The levels of despair at the central banks having become dealers of last resort far beyond the money market but trying to keep the whole thing going while repeatedly telling governments they are only responsible for money and it is somebody else's job to deal with the underlying problems and governments not doing anything much as there isn't much more they can do when interests rates have been pushed to zero and central banks balance sheets swollen by trillions.

After stress testing the British banks to strengthen capital reserves to meet stress we have just seen them authorized to weaken capital reserves because of Brexit stress.

Maksakovsky and his book will be of widespread interest rather soon. 58.175.33.136 (talk) 12:29, 6 July 2016 (UTC)