Wednesday, October 26, 2011

When is a Euro Crisis Not A Euro Crisis?

Tensions are running high between Germany and France in particular
European leaders are gathering in Brussels for an emergency summit over the sovereign debt crisis. In recent weeks, the anti-European wing of British ruling class have tried to make hay from the strife tearing the European Union apart, insisting that it demonstrates UK elites would be better off outside the EU. But as duvinrouge has pointed-out for The Commune, it's really a crisis of value, which would exist even if the Euro did not.

I tried to write an article on this yesterday, but wasn't quite up to grappling with the numbers, so instead I'll leave you in the more than capable hands of duvinrouge:

Even if there was no Euro, or even if there was the Euro and political union, there would still be a crisis. Why? Because the crisis is a crisis of value, says duvinrouge.

That’s not to understate the problem of trying to get economic convergence of divergent economies through monetary union. It cannot be done without a political union that is prepared to use regional policy and the consequent transfer of wealth from north to south. Even without the backdrop of world capitalist crisis the Euro‘s future would be in doubt. But it is the recurrent capitalist crises that bring such problems to a head. And still it is left to Marxists to explain why capitalism is crisis.

Say’s law (supply creates its own demand) does not hold because production is commodity production – things are produced to be exchanged for money, furthermore a monetary amount greater than the original outlay. This increase in value occurs in production – the amount paid to labour in wages is less than the value created by the labourer. But it’s not just about increasing value in production; there’s also the need for the effective demand – money – to be there.

Read the rest of the article on The Commune's website.
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