Alternative Visions - Marx’s Economics vs. Contemporary Marxist Economics: Part 3

In this final 3rd show discussion the differences between what Marx said and what economists today erroneously say he said, Dr. Rasmus addresses two historic issues in Marx’s analysis of capitalism. First is the idea, held by many contemporary economists who consider themselves Marxists, that under capitalism the rate of profit tends to decline over time, leading to ‘crises’ in the form of severe business cycle contractions (recessions, depressions, etc.). Rasmus shows this is incorrect, that Marx’s ‘Falling Rate of Profit’ tendency is a ‘in the long run’ argument and about breakdown of capitalism and not an explanation of short run business cycle ‘crises’ like economic depressions. Rasmus debunks the assumptions in the Falling Rate of Profit tendency argument and explains how 21st century capitalism cannot be expressed in such terms. The second issue addressed is by critics of Marx, contemporary mainstream economists, who hold that Marx failed to explain how values get transformed into prices in the real world. Thus Marx’s explanation of how exploitation of labor drives capitalist profits is never proven by Marx. Rasmus concludes with commentary why both contemporary Marxists and Mainstreamers fail to understand the financialization of capitalism today as a key source of crises, short run and long.