Anticipating the Dawn's Collapse: Capitalism, 19th Century

Anticipating the Dawn's Collapse: Capitalism, 19th Century

Marx extolled capitalism as a system that harbors the seeds of crisis within itself. Even as production expands, workers' wages are suppressed, and overproduction occurs because purchasing power cannot keep up. In other words, the logic of capitalism is that the more wealth is created, the hungrier the market becomes, and the imbalance between supply and demand leads to periodic depressions. After the industrial revolution of the nineteenth century, the world economy actually experienced major crises. In particular, the depression of 1873, a combination of excessive railroad investment and financial instability caused a prolonged recession that swept across Europe and the United States. Excess capital was left with nowhere to go, profit margins fell, and investment stagnated. To overcome this, capitalism expanded credit and opened up new markets, but this also created new imbalances and debt. Marx saw that crises are not accidental, but are movements that inevitably arise fro
m capitalism's self-contradictions. Thus, he saw through history the fatal structure of capitalism's repeated cycles of prosperity and collapse.