Peace Train: U.S. capitalism a series of crises

By Tom Mayer

Rocky Mountain Peace and Justice Center

The capitalist economic system is an extremely mixed bag. It has, on the one hand, fostered prodigious economic growth and stunning technological innovation. In 1950, life expectancy on planet Earth was 48 years. Today, a newborn infant can expect to live over 71 years. The human population of our planet has increased by 40 percent since 1950, but the number of people living in dire poverty has been cut in half.

On the other hand, capitalism is a turbulent and divisive economic system. It induces extreme inequality both within and between nations, causes periodic economic crises, and generates cancerous forms of growth that now endanger the environment of our planet.

All forms of capitalism feature private ownership of the means of production, energetic pursuit of profit and expanding commodity markets. But within this general framework, many different types of capitalism can exist. Economic crises often change the rules by which the system operates and create new varieties of capitalism. Modern capitalism has an oligopolistic structure: a few giant corporations control most industries. It also has endemic tension between two tendencies within the capitalist class: (a) the entrepreneur-production tendency, which seeks capital accumulation and increased corporate power, and (b) the financial-rentier tendency, the primary goal of which is enriching the owners of capital.

United States capitalism experienced major economic crises in the 1890s (collapse of competitive capitalism), the 1930s (the Great Depression), the 1970s (rampant stagflation), and 2007-12 (the Great Recession). The 1890s crisis was instigated by cutthroat competition which decimated the profit rate. The crisis unleashed a wave of corporate consolidation, which was funded by large banks. It also fostered the rise of a managerial class distinct from the owners of capital. Between the 1890s and the Great Depression, U.S. capitalism was dominated by…

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