** eh, solo repro ii -- ** Por qué Trump se retiró de una guerra total con Irán.,... -- ** 6 julio-2026 ** A Critique of Crisis Theory/Una crítica a la teoría de la crisis **...
Por qué Trump se retiró de una guerra total con Irán.,... --
** 6 de julio de 2026
** A Critique of Crisis Theory/Una crítica a la teoría de la crisis,...
Desde una perspectiva marxista -- **
Por qué Trump se retiró de una guerra total con Irán.,... -- ** 6 de julio de 2026
El 17 de junio, el presidente iraní Masoud Pezeshkian y Donald Trump firmaron un Memorando de Entendimiento (MOU). Extiende el alto el fuego de abril al menos sesenta días —con posibilidad de prórroga— y proporciona un marco para negociar el fin de la guerra entre Estados Unidos e Israel contra Irán. Aunque esto no es un tratado de paz, representa un gran retroceso respecto a la exigencia de Trump de que Irán se rindiera incondicionalmente cuando comenzó la guerra el 28 de febrero. Inició la guerra con el asesinato del líder supremo iraní, Seyyed Ali Khamenei, y otros líderes. Si Irán se hubiera rendido, habría caído bajo control del gobierno estadounidense.
Ofensiva imperialista estadounidense que condujo a la Guerra de Irán
Tras años de guerra, ataques israelíes, presión económica y bloqueo, el imperialismo estadounidense logró el 8 de diciembre de 2024 derrocar al presidente baazista sirio Bashar al-Assad. Assad fue el último de una oleada de líderes nacionalistas árabes relativamente seculares que formaron parte de la ola panárabe que surgió tras la Segunda Guerra Mundial. Esto ocurrió mientras el "Joe del Genocidio" Biden aún era presidente, tras la segunda elección de Trump pero antes de asumir el cargo en enero siguiente. Biden ganó el merecido apodo de "Genocide Joe" debido a su apoyo a la masacre de Gaza llevada a cabo por la entidad sionista a partir de octubre de 2023.
Obama había intentado establecer relaciones diplomáticas normales con Cuba, con la idea de fomentar tendencias capitalistas dentro del país, con la esperanza de que eventualmente llegaran a ser lo suficientemente fuertes como para establecer un gobierno capitalista. Obama no puso fin a la guerra económica, pero alivió la presión con la esperanza de animar al sector privado de la economía a destruir los avances democráticos y socialistas de la revolución.
Durante el primer mandato de Trump, revirtió las políticas de Obama, alegando que solo daban espacio a Cuba socialista, y empezó a endurecer aún más las políticas de bloqueo y guerra económica. Biden continuó las políticas de Trump. En el segundo mandato de Trump, Trump continuó con las políticas de Biden e intensificándolas. Su plan era hacer imposible que Cuba comprara o vendiera algo en el mercado mundial y establecer un bloqueo militar a gran escala contra las importaciones de petróleo. Esto ha creado una situación desesperada en Cuba.
Trump aumentó la presión secuestrando al presidente venezolano Nicolás Maduro y a Cilia Flores, ambos ahora a la espera de juicio en una cárcel de Nueva York. A partir de entonces, actuando en nombre de la industria petrolera estadounidense —que durante mucho tiempo estuvo en el centro del imperialismo estadounidense—, Trump tomó el control de la industria petrolera venezolana, cortando casi todas las importaciones de petróleo de Cuba.
La elección venezolana de Hugo Chávez y la posterior Revolución Bolivariana, aunque no sustituyeron la ayuda de la Unión Soviética que hizo posible la construcción del socialismo en Cuba, permitieron a Cuba importar petróleo de Venezuela a cambio de médicos cubanos. Esto permitió que Cuba emergiera del Periodo Especial, que tuvo lugar cuando la Unión Soviética sucumbió a la contrarrevolución capitalista Gorbachov-Yeltsin de 1985-91.
Envalentonado por estas victorias, Trump asumió que Irán sería una presa fácil. Irán había perdido a su aliado sirio en un golpe cruel al "eje de resistencia" frente a la agresión sionista en Gaza y Líbano. En enero de 2026, fuerzas proimperialistas en Irán, con la ayuda de la CIA estadounidense y el Mossad israelí, organizaron una violenta manifestación en Irán, atacando la moneda del país. Trump creía que solo tenía que lanzar algunas bombas durante unos días, o semanas como mucho, y Irán se derrumbaría. Había calculado mal.
Cambios en la tecnología militar desde la Guerra de Irak
Desde la Segunda Guerra Mundial, el poder aéreo ha formado la base del poderío militar estadounidense, tal como lo fue el poder naval para los británicos un siglo antes. El ejército estadounidense no tuvo tan buenos resultados en la guerra insular contra el Japón imperial de 1941 a 1945, cuando el poder aéreo no podía intervenir fácilmente. Durante la "Batalla de las Ardenas" a finales de 1944, mientras las fuerzas estadounidenses se preparaban para invadir la Alemania propiamente dicha, los cielos nublados les impidieron el uso del poder aéreo. Sin ella, las fuerzas alemanas demostraron ser superiores.
Cuando el tiempo cambió y el cielo se despejó, las fuerzas estadounidenses se despejaron rápidamente, reanudando la marcha hacia Alemania mientras Alemania combatía al ejército soviético que avanzaba hacia Berlín desde el este. A finales de 1944 y principios de 1945, la temida fuerza aérea alemana, encabezada por el nazi número dos, Hermann Goering, estaba en gran parte destruida. Sin poder aéreo, las fuerzas estadounidenses eran vulnerables, pero con él, eran invencibles. Durante la invasión estadounidense de Irak en 2003, la fuerza aérea iraquí era demasiado débil para ofrecer resistencia. Con el monopolio del poder aéreo, Estados Unidos marchó a Bagdad en tres semanas con bajas mínimas. Irak solo pudo resistir usando la guerra de guerrillas urbana, donde el combate cuerpo a cuerpo hace que el poder aéreo sea menos efectivo — una de las lecciones de la Guerra de Vietnam. La guerra de guerrillas comenzó cuando el ejército convencional iraquí, irremediablemente superado, fue disuelto y el ejército estadounidense marchó hacia Bagdad.
Los tiempos han cambiado, aunque en lo que respecta a los bombarderos, Estados Unidos sigue dominando, como lo ha hecho desde la Segunda Guerra Mundial. Desde 2003, la tecnología de misiles ha avanzado mucho. No solo los misiles modernos controlados por ordenador pueden alcanzar objetivos con precisión, sino que además se están volviendo cada vez más baratos de producir. Su desventaja es que solo pueden usarse una vez. Los aviones pueden usarse muchas veces hasta ser derribados, lo que hace que bombardear con aviones sea más barato que usar misiles. Hoy en día, los drones —esencialmente aviones y helicópteros no tripulados— son baratos de producir y están reemplazando cada vez más a los bombarderos tradicionales. Y como son baratos, los están utilizando países pobres e incluso movimientos de resistencia no gubernamentales.
Otro cambio importante es el desarrollo de misiles hipersónicos. Los misiles convencionales a menudo pueden ser derribados por "antimisiles". Los nuevos misiles hipersónicos son tan rápidos que, a estas alturas, no pueden ser derribados por antimisiles. Por supuesto, no debemos subestimar el poder militar estadounidense. Sus capacidades ofensivas siguen siendo las más poderosas del mundo, aunque no disfrutan del mismo monopolio que hace veinte años. El declive relativo a largo plazo de sus capacidades es un reflejo tanto del cambio tecnológico como del declive de la maquinaria industrial estadounidense. Un mundo en el que la mayor maquinaria militar industrial se encuentra en la República Popular China no es el mismo mundo que existía cuando dominaba Estados Unidos. En última instancia, fue la maquinaria industrial la que convirtió a Estados Unidos en la mayor potencia militar del mundo, y su declive relativo, incluso absoluto, está reduciendo ahora el poder militar estadounidense.
Además de los cambios en la tecnología militar desde la guerra de Irak que han reducido el poder militar estadounidense, hay factores adicionales. Irán es un país mucho más grande que Irak en términos de geografía y población: la población de Irak es inferior a cincuenta millones, mientras que la de Irán supera los noventa millones. Irán también es muy montañoso, lo que dificulta invadir, especialmente si la capital es el objetivo. Las montañas también hacen que el país sea ideal para la guerra de guerrillas.
Teniendo en cuenta los cambios en la tecnología militar y el tamaño y población de ambos países, en 2003, las fuerzas invasoras estadounidenses no enfrentaron ataques aéreos, ni de bombarderos ni de misiles, mientras que las fuerzas iraquíes defensoras eran diezmadas por ataques aéreos. Si Estados Unidos intentara una "marcha hacia Teherán", enfrentaría ataques de misiles iraníes de alta precisión así como de drones. Las fuerzas estadounidenses se verían obligadas a luchar en terreno montañoso que es muy ventajoso para los defensores. Aunque muchos iraníes caerían víctimas del poder aéreo y de fuego estadounidenses, la guerra podría convertirse en un lodazal sangriento para los invasores, peor que Corea o Vietnam.
Además, si las fuerzas estadounidenses intentaban abrirse paso hasta Teherán, no recibirían ayuda de nada como el ejército soviético en la Segunda Guerra Mundial, que fue el que más combatía contra la Wehrmacht. En cambio, aunque solo sea para defender sus propios intereses vitales, Rusia y la República Popular China — ahora la mayor potencia industrial del mundo y, por tanto, potencialmente la potencia militar más poderosa del mundo — probablemente tendrían que prestar ayuda militar a Irán para evitar que sea aplastado por el imperialismo estadounidense.
Cualquier intento de marcha hacia Teherán sería, con diferencia, la mayor operación militar estadounidense desde la Segunda Guerra Mundial. De hecho, podría resultar ser mayor que la invasión estadounidense de Europa entre junio de 1944 y mayo de 1945, o las operaciones llevadas a cabo contra Japón durante la campaña del Pacífico de 1941-1945, a menos que Estados Unidos esté dispuesto a usar armas nucleares. Las armas nucleares llevarían las cosas a una etapa completamente nueva. Recuerda que tanto Rusia como China ahora tienen armas nucleares, mientras que en 1945 Estados Unidos tenía un monopolio nuclear absoluto.
Como mínimo, una marcha estadounidense hacia Teherán requeriría la movilización de las reservas, la introducción de una economía bélica completa y un reclutamiento militar. Habría que formar un ejército de quizás un millón de hombres, y quizá también mujeres, para llevarlo a cabo. La última reducción de impuestos republicana incluida en la "gran y hermosa ley" tendría que dar paso a un aumento masivo de impuestos en tiempos de guerra si hubiera alguna esperanza de evitar el colapso del dólar.
Desde el principio, la guerra contra Irán fue impopular en Estados Unidos, quizás por primera vez al inicio de una guerra. La gente en Estados Unidos no tiene ganas de sacrificarse por una guerra de agresión descarada contra Irán, que en ningún caso amenazaba a Estados Unidos. Además, Donald Trump es uno de los presidentes estadounidenses más odiados de la historia. Es hijo de un hombre muy rico y, cuando era joven, evitó el servicio militar en Vietnam, aunque tampoco participó ni apoyó el enorme movimiento contra la guerra. Trump ha pasado tanto su primer como su segundo mandato intentando quitar beneficios médicos a la gente en EE. UU. y ha recortado los servicios gubernamentales y el apoyo a la educación en un frente amplio. Se sabe que fue un playboy que tuvo relaciones sexuales con muchas mujeres que no eran su esposa, algunas de las cuales, se cree, eran simples chicas. Fue amigo de toda la vida del traficante de esclavos sexuales Jeffrey Epstein, y aunque no tuvo relaciones sexuales con menores de edad, ciertamente estuvo involucrado y se benefició de la explotación de muchas mujeres. Trump no es el tipo de líder que inspira a jóvenes a tomar las armas contra un país lejos de las fronteras estadounidenses. No es de extrañar que se haya visto obligado a retirarse de su exigencia de que Irán se rinda incondicionalmente.
Teniendo todo esto en cuenta, Trump no tuvo más remedio que retirarse de una guerra que tenía el potencial de provocar consecuencias desastrosas para él personalmente, así como para el imperialismo estadounidense en general. Esto no significa que el peligro de una invasión estadounidense a Irán haya terminado.
Primero, no debemos olvidar que la guerra contra Irak se dividió en dos fases. La fase original llegó en 1991, cuando Estados Unidos bombardeó Irak y luego invadió y restauró la monarquía petrolera kuwaití que había sido robada a Irak por los británicos. Pero Bush I — George H.W. Bush — no intentó una marcha hacia Bagdad en 1991. Se conformó con invadir Kuwait y restaurar la monarquía que había sido derrocada por el gobierno de Sadam Husein. Bush Probablemente asumí que el gobierno iraquí caería mientras EE. UU. libraba una guerra económica contra Irak, pero no fue así. Solo en 2003, bajo el hijo, Bush II — George W. Bush — Estados Unidos invadió y marchó hacia Bagdad. Entre medias hubo la guerra económica y bombardeos periódicos sobre Irak.
Desde el "alto el fuego" de abril de 2026, Estados Unidos ha llevado a cabo ataques militares periódicos a pequeña escala contra Irán. La guerra ha pasado a una fase de menor intensidad, pero no ha cesado por completo. El alto el fuego de abril y el actual Memorando de Entendimiento no descartan en absoluto un ataque mayor del imperialismo estadounidense en el futuro, quizás bajo un presidente más popular y una posición económica y financiera más favorable.
Suministro de petróleo
Cuando estalló la guerra el 28 de febrero, Irán restringió el acceso a través del Estrecho de Ormuz, la vía fluvial que conecta el Golfo Pérsico con el Golfo de Omán, y desde allí con el Océano Índico y la economía mundial. Una vez que comenzó la guerra, quedó claro que no había una forma fácil de romper el control iraní sobre el Estrecho. Antes de la guerra, alrededor del 20% del suministro mundial de petróleo pasaba por el Estrecho, por lo que el cierre casi total del Estrecho provocó un pánico comprador en el mercado petrolero global. Esto se intensificó aún más porque, en las semanas previas, el precio del oro en dólares había superado los 5.000 dólares. El mercado mundial del oro no había visto nada parecido desde 1979-80. (1)
Como se mencionó antes, ya fuera por instigación de asesores belicistas, el primer ministro israelí Netanyahu, o simplemente por su propia estupidez — tome la decisión — Trump esperaba aplastar a Irán en días o semanas, tal como había doblegado a Venezuela a su voluntad en enero. A principios de 2026 se sintió animado por una oleada de manifestaciones antigubernamentales en Irán. Estas reflejaban las presiones económicas causadas por la guerra imperialista contra la economía iraní, incluyendo, como se mencionó, la manipulación de la moneda iraní.
Agentes de la CIA y del Mossad israelí que operaban en Irán fomentaron ataques violentos contra comisarías de policía y mezquitas, ambos vistos como símbolos del gobierno iraní dominado por el clero. Algún día, sabremos más sobre el papel que jugaron la CIA y el Mossad. Pero una vez estallada la guerra, la población se unió en torno al gobierno iraní, y las manifestaciones proimperialistas colapsaron ante la muestra mucho mayor de apoyo a la resistencia del gobierno al ataque entre Estados Unidos e Israel.
Cuando el gobierno iraní no se rindió y en su lugar lanzó contraataques militares efectivos usando misiles y drones, Trump tuvo un gran problema. Por un lado, no pudo evitar que subiera el precio del petróleo. Intentó limitarlo vendiendo desde la reserva de petróleo estadounidense, aunque esto solo podía durar un tiempo limitado y pronto se agotaría. Si la guerra continuara, el precio del petróleo se dispararía, con todas las consecuencias económicas y financieras. El alto el fuego de abril provocó una disminución en parte de la demanda de petróleo en pánico. En junio, según los medios, el agotamiento total de las reservas de petróleo estaba a un mes de llegar. Incapaz de romper el control militar iraní durante meses, Trump se vio obligado a aceptar el Memorando de Entendimiento.
Aspectos financieros y bancarios de la guerra
La deuda nacional de EE. UU. supera ahora los 39 billones de dólares y sigue aumentando. Además, el "gran proyecto de ley" republicano-Trump significa otra reducción de impuestos que sigue acelerando el aumento de la deuda nacional. Esto fue, por supuesto, una medida arriesgada económicamente [enlace a publicaciones sobre la verdadera motivación de la rebaja fiscal] incluso en ausencia de una guerra a gran escala. Los efectos de una deuda nacional determinada dependen no solo de su tamaño total, sino también de las condiciones del mercado monetario global. La condición del mercado monetario depende de la relación entre el dinero — oro — y las materias primas. Cuando el dinero — el oro — es abundante en relación con las materias primas, los gobiernos pueden pedir prestado considerablemente más que cuando el dinero escasea en comparación con las materias primas no monetarias.
The latter is, to some extent, counterintuitive. Certainly, countries with bigger GDPs can borrow more than those with smaller ones. As the GDPs of the leading capitalist nations grow while expanded production proceeds, doesn’t it become easier for governments to borrow money to finance their operations, including fighting wars? Actually, the opposite is true.
During the upward phase of the industrial cycle, when GDP and industrial production grow most rapidly, it paradoxically becomes more difficult for the government to borrow money, though how difficult it becomes depends on the specific conditions of the international money market. As a rule, during a period of rapid expansion, the government can’t borrow without driving up interest rates and making it harder for anyone else to borrow. The longer a boom continues, the more true this becomes. I have examined this throughout this blog, but will briefly review it here.
As a boom develops, commodity prices rise in terms of the use value of the money commodity, gold. This depresses the profit rate of the industry producing the money commodity relative to other branches. Capital moves from money-commodity production to other branches of industry. A growing gap develops between the expansion of non-money-commodity capitalist industry as a whole and the expansion of the industry producing additional money material. The money market tightens, increasing competition between the capitalists, the state and other borrowers for loan money. It becomes harder for the state to borrow money to finance a war without depriving the rest of the economy of the money and credit it needs to function.
The Depression-ridden 1930s created extremely favorable conditions for financing war. The greatest depression in the history of capitalism was followed, not by accident, by the bloodiest war in world history. Though the pre-World War I period was generally one of great capitalist prosperity, immediately before the war, in 1913-1914, there was a global recession. This created a pool of idle loan money that provided the initial financing for the war, which the European governments that unleashed it expected to last only a few months. Unlike the Second World War, financing World War I led to financial difficulties that ended in the Great Depression. Today’s surge in gold’s dollar price and tightening of the money market have created powerful pressure on the Trump administration to halt any further war escalation before things get completely out of control.
The Federal Reserve retreats
Just as Trump’s signing of the MOU represents a retreat from active war with Iran, the Federal Reserve is being forced to carry out a retreat of its own. Not long ago, Wall Street was talking about how quickly the Federal Reserve would lower its federal funds rate target. It was taken for granted that the government and the Federal Reserve would continue the policy begun in the wake of the disappointing recovery from the Great Recession: running the economy “hot.” But that was before gold’s dollar price skyrocketed to over $5,000 right before the start of the war against Iran.
Now the talk on Wall Street is that the Federal Reserve might raise, not cut, its federal funds rate target by year’s end. The website Kitco.com wrote on June 29, 2026: “Those fears [that the dollar price of gold might drop — SW] are quickly becoming reality after the Federal Reserve shifted from a loosening bias to a hawkish stance, signaling support for a potential rate hike [a reference to the federal funds rate — SW] by the end of the year.”
In plain English, this is a retreat from the Fed’s recent policy of running the economy hot, and it increases the chance of a near-term recession with soaring unemployment. Until that recession arrives, from the financial point of view, any new expensive military operations will be extremely dangerous.
The federal funds rate is the interest rate that commercial banks charge one another for overnight loans. At first glance, this appears to be a dry technicality, but under circumstances such as the present, it can have enormous political and even military significance. The federal funds rate is set by the market, not the Federal Reserve. What is it, and why is it so important? Here I’ll cover the essentials without going too deep into the technicalities.
Under the traditional reserve system, commercial banks were required by law to keep a certain reserve of cash behind their deposit liabilities. Deposit liabilities are what your bank owes you when you make a deposit. These cash reserves consisted of vault cash and the deposits that commercial banks held behind their deposit liabilities.
When you withdraw money from your personal account, the teller opens a drawer and pulls out some green cash to pay you. In these days of electronic payments through debit and credit cards and cellphones, this happens far less often than it used to. As a result, there is much less day-to-day use of cash defined as legal tender: Federal Reserve notes — green dollar bills with pictures of dead presidents on them — along with nickels, quarters, half dollars, and even a few dollar coins made out of base metals. As I write these lines, this also includes pennies, but the Treasury has stopped minting these now almost worthless coins, which accumulate in your pockets and are a constant nuisance. This is thanks to decades of dollar depreciation against gold, which have made currency tokens representing 1/100 of a dollar almost worthless. So in the coming years, pennies will disappear from circulation and will be of interest only to coin collectors.
When the teller runs low on hundred-dollar, fifty-dollar, twenty-dollar, ten-dollar, five-dollar, two-dollar, and one-dollar bills, or on half-dollar coins, quarters, dimes, nickels, and the soon-to-be-extinct pennies, the teller asks the back office to supply more currency. In the back office, there is a safe holding currency, which employees gradually draw down to replenish the teller’s cash drawer. Eventually, the cash in the safe will be gone.
The commercial bank must then withdraw cash from its own bank account at one of the twelve Federal Reserve banks, which are owned by member commercial banks that make up the Federal Reserve System. When the commercial bank finds its reserve of vault cash running low, it has to withdraw from its bank deposit held at its district Federal Reserve bank. Where does the bank’s account come from? It might come from other banks. Just like nations, commercial banks have a balance of payments. When their balance is favorable, they accumulate money from other commercial banks. When it is negative, they suffer a loss of monetary reserves. If we treat the commercial banks as a unit, how does the banking system as a whole grow its combined deposit with the Federal Reserve?
There are two main ways it’s done. Decades ago, before the huge military empire that the U.S. runs today existed, commercial banks would sell, or discount, some of the short-term debts they held against industrial and commercial capitalists as a result of their short-term loans and discounts. The Federal Reserve, or other central banks like Britain’s Bank of England, would then debit — that is, increase — the size of the deposit. For example, say a garment shop needs to pay its workers in cash. In those days, wages were paid mostly in coins that bought far more commodities than they do today. The garment shop would have to withdraw from its account with its commercial bank. It would then have to replenish its bank account by depositing the money it got when its garments were sold to wholesale merchants.
The garment workers, living from week to week, likely had no bank accounts of their own. This is the way things were, more or less, before the Great Depression of the 1930s. The middle class and skilled workers of the labor aristocracy might have had bank accounts in savings banks, savings and loans, and similar institutions, but most workers would rarely even own “paper” dollar bills. In those days, the Federal Reserve and other central banking systems manipulated the money market through their (re)discount rates. The commercial world would hold its breath whenever the Bank of England announced a change in its discount rate, much like today’s breath-holding whenever the Fed announces a new federal funds rate target.
The Federal Reserve, like other central banks, still carries out rediscounting operations, but today those operations play second fiddle to what are called “open market operations.” In addition to rediscounting operations, the Federal Reserve buys mostly short-term bills from the Treasury for its own account. Without getting bogged down in the technical details, the Federal Reserve goes to the open market — hence the expression “open market operations” — and purchases these bills. And here comes one of the greatest mystifications of the banking system. Where does the Fed get the money it uses to purchase the Treasury bills? Economic and financial textbooks explain that central banks “create new money” out of thin air.
Or so it seems. Basically, leaving aside all the middlemen involved, an owner of a short-term IOU from the Treasury, called a Treasury bill, sells it to the Federal Reserve. The Federal Reserve cuts a check to pay for the bill. When the seller deposits the check in their commercial bank account, the bank then deposits the check in its account with the Federal Reserve, which increases the commercial bank’s account with the Federal Reserve without reducing the account of any other commercial bank. The total reserves of the commercial banks as a whole increase.
This everyday operation conceals many of the mysteries surrounding money. In a capitalist society, almost everyone is obsessed with money. Everybody, including professional economists, wants money, and they all think they know what it is. But if you ask them to explain what it really is, they get tongue-tied. Most laypeople believe that money is something created by the government so people can be paid for their labor and then use the money to buy the commodities they need to live and meet their rent or mortgage payments. If they have taken a college-level economics course, perhaps they remember that money is supposed to be somehow created by the banking system itself.
Professional economists are not much better off in this regard. They believe money is a kind of synonym for the wealth of society. Wealth is money, and money is wealth, they proclaim. When we say Mr. Musk is worth more than a trillion U.S. dollars, we don’t literally mean that if you counted all the cash and bank accounts he owns, it would come close to a trillion dollars. What it means is that if he sold off all his wealth at current prices for one-dollar bills, he would have more than a trillion one-dollar bills. Of course, Mr. Musk wouldn’t dream of attempting to carry out such a pointless operation. What is true is that all his salable wealth, when measured in current dollar prices, comes to more than a trillion dollars. But don’t worry, Mr. Musk doesn’t lack dollar bills when he needs them; he simply doesn’t need a trillion one-dollar bills. This points to one of capitalism’s biggest contradictions: the relationship between commodities whose value is measured in money terms and the money commodity itself.
Laypeople are startled when told that the value of the bank accounts held at commercial banks far exceeds the quantity of actual dollars held by the banks. If all owners of commercial bank accounts tried to withdraw all their money in legal-tender cash at one time, the system would not have anywhere near the cash needed to pay them off. Is the banking system just one huge swindle? Maybe people wonder whether they should pull their money out of their accounts and stuff it in their mattresses after all. But that, of course, is dangerous as well, since money can be stolen and paper money can burn up in a fire.
The truth is that under normal circumstances, there is virtually no chance that people will withdraw all their money at one time. This is what makes the “fractional reserve” banking system possible. This is all the more true today because, unlike in the past, people can purchase their groceries, even their morning coffee, with debit or credit cards or smartphones, as long as they keep sufficient balances in their accounts and, if they use credit cards, stay within their credit limits. No one needs to handle paper dollar bills or struggle to pull almost worthless coins from their pockets nowadays. Today, it seems we live in an (almost) cashless society. Electronic bookkeeping and credit seem to have replaced money almost entirely. And yet, more than ever, money appears all-powerful. Something doesn’t quite compute here.
The possibility remains that, as a result of some type of crisis or mass hysteria, the banking public might panic and try to convert a large part of their bank accounts into actual cash. A bank account, after all, is a promise by the bank to pay a certain amount of legal-tender cash on demand by the depositor. And no bank has enough cash on hand to meet the legal obligations represented by all its deposit liabilities.
Like other types of capitalists, individual and collective, a commercial bank wants to make the maximum amount of profit possible. And banks don’t make money by letting their money collect dust as vault cash or by earning only minimal interest in their own accounts with the Federal Reserve. Instead, they want to lend all the money they can at the highest interest they can get, even if their loans create deposit liabilities that far exceed the cash they have on hand at any particular moment. They lend money and then borrow the money back in the form of deposits, then lend the same money out again and again, creating more and more liabilities with a fixed amount of ready cash. This is called fractional reserve banking. Welcome to the beauties of the capitalist credit system.
While these operations usually go smoothly, things can go wrong. Between 1931 and 1933, well-founded doubts about the ability of commercial banks to meet their liabilities led to huge waves of bank runs in the U.S., Germany, Austria, and Poland. Nor was this limited to 1931-1933; it happened in other, lesser crises as well. In the U.S., there were such panics in 1819, 1837, 1857, 1873, 1893, and 1907, as well as in 1931-1933. When this happened, banks would cease lending money altogether and call in their existing loans in a last-ditch attempt to survive. During these crises, the flow of credit would dry up, and money in circulation would contract sharply as panic-stricken depositors lined up, hoping to get to a teller before the bank completely ran out of cash. If they did get their cash out in time, they would hide it away somewhere, like under a mattress. Money dropped out of circulation and into hiding, bringing a sudden contraction in the circulation of commodities as well as in industrial production and employment.
If such a crisis occurred today, the consequences would be far worse than anything in the past because people now depend on electronic bookkeeping, instant bank loans in the form of credit cards, and debit-card and smartphone payments. Imagine if suddenly you couldn’t buy your morning coffee because the coffee shop demanded cash payment and you didn’t have any. You can’t go to your bank to withdraw the cash because it has gone bankrupt and closed its doors. The coffee shop won’t be able to sell any coffee because nobody has the means to buy it; the wholesaler who sells to your shop can’t sell any; the coffee growers in Brazil can’t sell anything to the wholesaler. If this goes on for any length of time, the shop’s employees will be laid off, the wholesaler’s workers will be laid off, the shipping workers bringing supplies to the United States from Brazil will be laid off, and the Brazilian plantation workers will also lose their jobs because the planters won’t be able to sell their product or make any profit.
This would affect most other commodities as well. To prevent such a disaster, the capitalist government has to regulate the commercial banking system, in effect saving the banking capitalists, who are slaves to profit, from themselves. Under such a system, government and central bank regulators, as representatives of the state, tell commercial banks that they must keep a certain cash reserve behind their deposits. Driven by the profit motive, the banks want to lend money until they are close to the legal limit, and often exceed it.
At the end of an ordinary business day, some banks find that their cash on hand is below the limit. What do they do? They borrow money overnight in what is called the federal funds market to meet the limit. Who lends them this money? Other banks that have a surplus of cash above the limit lend it to avoid the opportunity cost of idle money — money that should be appropriating surplus value in the form of interest instead of lying idle. So, to avoid this disaster, capitalists driven by competition must maximize profits, lending the money overnight at the prevailing market rate to banks with deficient reserves. The interest rate on these overnight loans is called the federal funds rate.
This is the interest rate that the Federal Reserve and other central banks manipulate when they engage in open market operations. For example, the Federal Open Market Committee decides that the target rate on these loans should be 3.5% on an annualized basis. It can’t just decree this figure. It might set a low end of 3.25 and a high end of 3.75%. If the rate at the end of a given business day falls toward 3.25%, the Federal Reserve Bank of New York, which carries out open market operations, sells some Treasury securities — IOUs issued by the Treasury to raise cash for the federal government — to the commercial banks. The banks pay for these IOUs with cash, and the transaction reduces the amount of cash held in the system. The federal funds rate then rises as bank reserves contract, and the money market tightens. If the rate rises to 3.75%, the Federal Reserve Bank of New York buys some more Treasury securities for its account to lower the rate again.
Let’s examine this transaction in more detail, as this is where the mystification of the entire operation is greatest. To understand it, let’s go back to California’s gold rush of the late 1840s. Back then in the U.S., there were commercial banks but no central banking system. Let’s assume I made a gold strike and had a bag full of gold. I could take it to a mint or assay office, where it could be turned into gold coins. I could then deposit those coins in a commercial bank. This would cause the cash reserves of that bank, and ultimately the global commercial banking system, to increase. When we take into account all the new bank reserves that were created this way in the wake of the discovery of gold in California’s Sierra foothills, the entire global capitalist system entered a boom phase on a scale never experienced before. These reserves were not made out of “thin air”; they were made by the labor put into panning for gold in the streams of the California gold country. Today, whatever the textbooks on economics and finance claim, bank reserves are ultimately created the same way, except that gold is now produced by huge for-profit capitalist mining and refining enterprises.
Today, when the Federal Reserve Bank of New York purchases a Treasury security, the money it uses appears to come out of thin air. When the owner deposits the check into a commercial bank, the reserves of that bank, as well as those of the entire system, expand. If the supply of gold on the world market doesn’t expand enough to match the rise in dollar reserves, the increased dollar-denominated monetary reserves of the system will sooner or later raise the dollar price of gold. The monetary reserves the Federal Reserve is trying to create will then be burned up through inflation.
In terms of gold, there’s no real expansion of reserves in terms of money material. Instead, we will have inflation, where the quantity of money increases in dollar terms, but once inflation is taken into account, the purchasing power of the cash in the system fails to increase in real terms and, under panicky conditions, can contract as capitalists sell their dollars for gold. This is what we saw in the 1970s and what is threatening to occur once again today.
Gold is produced every day by the modern capitalist gold mining and refining industry. As long as the Federal Reserve doesn’t create dollars faster than gold is produced, the dollar won’t depreciate — that is, the dollar price of gold will not rise. But if the Federal Reserve does create dollars faster than gold is produced, the added dollar reserves will be burned away through inflation. The dollar will depreciate against gold. Real money is not created by bankers out of thin air after all but by workers who toil in the world’s gold mines and refineries.
In the long run, capitalist governments cannot finance wars with money created out of thin air. They must fight the war with weapons as well as with the money to buy those weapons — money created by workers’ labor in the mines and refineries. This is something that Mr. Trump and his associates must consider when they ponder their next moves in the war on Iran.
Historical materialism
Over the last several months, global politics have been unusually turbulent. In part, this reflects the rather bizarre, to say the least, personality of President Trump. For example, Trump and his supporters put his name on the Kennedy Center, named for the late John F. Kennedy, in Washington, D.C. In June 2026, a federal judge ordered Trump’s name removed from the building.
Another example is the proposal to put Trump’s picture on a proposed $250 bill. Historically, kings and emperors have had their portraits put on metal coins and paper currency. But never in the history of the U.S. have images of a living president been put on currency. This is one of the differences between a republic like the United States, where the head of state is elected — though not necessarily democratically — and a hereditary monarchy, where the head of state belongs to a ruling dynastic family based on the claim of being chosen by God for that role. In a republic, a dead president can be put on the currency, but not a living one. Trump seems to believe that there is nothing wrong with putting his image on currency. (2)
Capitalist politics, particularly in the last few months, seems chaotic, and there are many accidental elements, including a president’s personality. But underneath the political surface lurks economics. You can ignore the economy, but it won’t ignore you. As Marx and Engels pointed out, before people can participate in any cultural, artistic, scientific, or political activity, they must first obtain food, water, clothing, and shelter, one way or another. Indeed, labor — production — marked the beginning of the differentiation between the human world and the rest of the animal kingdom. And changes in the mode of production have been the underlying factor governing the general course of human prehistory and then history.
Changes in the mode of production have governed the transition from the original clan-tribal, communist organization of human society to the various forms of human society based on private property and the state, which goes with it. Within the history of class societies, changes in the mode of production have governed the transition from the earliest class societies, such as irrigation-based agricultural societies, to chattel slavery, feudal society, and modern capitalist society. Marx showed that the further development of our productive forces will sooner or later lead to a communist society without classes or private property in the means of production and the state that protects that private property. Today, capitalism dominates the world economy. Capitalism is a dynamic, contradictory, and unstable economic system in which production is socialized while appropriation remains private. The fluctuations of the capitalist economy profoundly affect the political evolution of capitalist society. War is thoroughly rooted in politics and is itself ruled by the evolution of the capitalist mode of production.
The politics of the last several months have been dominated by the U.S.-Israeli war against Iran. The war has directly involved three entities: the United States and the so-called State of Israel on one side, and the Islamic Republic of Iran on the other. These entities have very different histories. The United States today is the most powerful capitalist-imperialist state in the world. Until recently, it was the dominant industrial country. Now the People’s Republic of China has taken that role, though the United States remains by far the most powerful financial and military power in the world.
What is the history of the United States? I’ve always lived in the U.S., and it’s the country I know best. The events that eventually led to its origin as a country began with the so-called “Age of Discovery.” In the 1400s, long before the United States existed, Europe experienced a growing shortage of money. What existed at that time was a long-term monetary crisis, not to be confused with the cyclical monetary crises that occur periodically in the course of the industrial cycle that marks modern capitalism.
This overall shortage of money relative to the needs of commodity circulation meant that European governments were under great pressure to find additional supplies of the money material to support the existing level of circulation and make possible its further expansion. Most of the world’s supply of money — gold and silver — was in Asia, mainly in China. European governments, especially those of Spain and Portugal, believed the solution to their financial problems was to find a sea route to China rather than rely on land routes. Contrary to what is sometimes claimed, educated Europeans of the 15th century knew full well that the world was a sphere.
What they didn’t realize was that if you sailed west over the Atlantic Ocean, before you reached China, you would run into what we now call the Americas. But the European explorers in the pay of the Spanish government were in luck. The Americas were rich in what they were after: gold and silver, the monetary commodities. Columbus himself was absolutely obsessed with gold and, as far as we can tell, interested in little else. While he himself found only limited quantities, his successors found plenty of it. The monetarily effective demand for commodities in Europe exploded, and one result was that about 90% of the Indigenous population of what Europeans called the Americas died.
The “discovery” by bourgeois, gold-obsessed Europeans was itself made possible by the previous development of the productive forces in Europe. This made possible the building of sailing ships capable of reaching the Americas and returning to Europe. This led to the “commercial revolution,” as historians call the explosion of the market for commodities during the 16th century that launched the capitalist system.
From the commercial revolution to capitalism
When the first sugar cane plantations were established in the Caribbean islands to meet rising demand in Europe, the planters couldn’t put up “help wanted” signs and expect the Indigenous people to offer to sell their labor power. The Indigenous peoples had their own modes of production not based on wage labor, and they had no interest in selling their labor power. The Indigenous societies were largely destroyed, but this did not solve the problem of who would work on the plantations. The main solution was to bring Africans to the plantations as chattel slaves, and in time, this slavery system spread to South and North America.
In Europe itself, the demand for the labor power needed to produce commodities was met by wage labor. Under the system of wage labor, the boss who needs more workers to produce particular commodities has to buy more labor power. Tomorrow, the demand for those commodities might slump, perhaps due to seasonal factors, changes in fashion, or something else. Then the boss will lay off workers, and what happens to them is not the boss’s concern.
In contrast, under chattel slavery, the slaveowner does not buy the workers’ labor power but the workers themselves. If the slaveowner doesn’t need the labor power of all the slaves, the slaveowner might sell some of them. If no buyers could be found, all the investment in fixed capital that the slaves represented could be lost. The slaves would still have to be fed until a buyer could be found, because if the slave is not fed, the slave dies and the fixed capital the slave represents is lost, or until their labor power was needed again because of changing market demand. Under a market slave economy, the slave, not the slave’s labor power, is the commodity.
Under the slave system, the loss in fixed capital represented by the slave was greater than the cost of feeding temporarily idle slaves. Under the system of “free wage labor,” as soon as workers become superfluous, they can be laid off; to the capitalist boss, their labor power represents circulating, not fixed, capital. Eventually, the great expansion of the world market, fueled by an explosion in the amount of money material — called by historians the commercial revolution — led to the rise of two modes of production.
One was the rise of what was called “modern slavery” — commercial slavery, to distinguish it from ancient slavery. The other was the rise of the capitalist mode of production based on wage slavery. In the modern slavery system, the boss owns workers outright, not their labor power. The modern slavery system based on the enslavement of Africans reached its climax in the southern U.S. on the eve of the war of the slaveholders’ rebellion, the U.S. Civil War, fought between 1861 and 1865. (3) After that war, the modern slavery mode of production declined rapidly, while capitalist wage slavery spread throughout the world, destroying all non-capitalist modes of production it came into contact with. The rise of the capitalist mode of production, with all its contradictions and industrial cycles, transformed political and military affairs.
Unlike earlier modes of production, capitalist production continuously transforms the mode of production itself. Capitalism has evolved from manufacture — centralized and organized handcraft production in factories with an elaborate division of labor — to mechanized production beginning with steam as the chief motive power, and then to mechanized production with electricity as the main motive power. There are indications that we are on the brink of a new stage, where “intelligent” computers and machines that can “learn,” controlled by computers running AI programs, will increasingly take over factory and other forms of production. What the limits of AI or machine-learning technology are is not apparent now.
Each new stage in the evolution of the capitalist mode of production has one thing in common: it has led to a drop in the amount of human labor needed to produce commodities of given use values and quality. By organizing and centralizing production in factories during the first stage of capitalist production from the 16th century onward, it became possible to reduce the amount of labor necessary to produce commodities compared to the amount needed under guild production or a system of disorganized craft production organized, at best, only through the market.
Steam power reduced the labor necessary to produce commodities much further, and the replacement of steam by electricity as the motive force made possible the industrial production we knew during the 20th century. Machine learning could radically reduce still further the amount of labor needed for commodity production, as well as make possible the creation of commodities with new use values compared to what existed in the last century. Production activity that has resisted mechanization up to now will likely yield to machine learning. This whole movement was kicked off by the explosion of demand tied to the “discovery” of the Americas at the end of the 15th century by bourgeois Europeans hungry for money material — gold and silver.
The formula for specifically capitalist production is M-C … P … C’-M’. Where does the initial M come from? The movement begins and ends with money — M. Looking at an individual capitalist, it doesn’t matter where this initial M comes from. The capitalist might inherit the M, steal it, borrow it, sell illegal drugs, and so on. Looking at the total social capital, the initial M largely came from the “discovery” of gold and silver in the Americas. This was done at the price of the destruction of Indigenous societies and Indigenous peoples themselves. Once the monetary explosion — the commercial revolution — began, the guild and unorganized craft production that had met the demands of the narrow, limited markets of the European Middle Ages was no longer adequate to meet the expanded and growing monetarily effective demand for commodities.
The explosive development of capitalism transformed the class structure of society. At one pole, we’ve seen the concentration of wealth in the hands of the capitalist class, especially the richest capitalists, whose wealth would have been undreamed of in any earlier age. As I write these lines, Elon Musk has become the world’s first dollar trillionaire. We’ve gone from millionaires to billionaires, and now trillionaires. While some of this reflects the depreciation of the dollar, it also reflects the centralization of capital by the richest capitalists. At the other pole is the growing portion of the global population that owns no means of production, and that portion keeps expanding.
The global capitalist economy is very unstable because, in a sense, it has two souls. One soul is the unprecedented cooperation of more than 3.6 billion wage workers in the world, along with nature, producing the entire wealth of the world. The other soul is the means of production that make possible the world’s enormous wealth, which continues to be the private property of the individuals and families that make up the capitalist class. As a result, the products of the billions of workers engaged in socialized labor still consist of commodities split into use values and exchange values. This means that the world of commodities, on a scale not seen before, has split into the money commodity, gold, on one side, and all other commodities on the other. This contradiction was visible when Marx was writing “Capital,” but on a scale that was a mere tempest in a teapot compared to what exists today.
Since the 1980s, the world has passed through an era of political reaction resulting from the counterrevolutionary destruction of the Soviet Union, the first prolonged attempt to build a modern socialist society. This doesn’t mean that the clock of history has been turned all the way back to where it stood on November 6, 1917. On that date, most of what today is called the “Global South,” especially the African continent, was under colonial, not neocolonial, control by the British, French, and other European empires. The economic logic of the declining U.S. world empire points toward the reestablishment of full colonial control. As the competitive power of U.S. industry and agriculture declines relative to China and other newly industrialized countries, the U.S. can rely less and less on the overwhelming economic domination it exercised in the decades following 1945.
To defend its position on the world market, the U.S. needs to be able to dictate to the countries it dominates who they can trade with, the terms of that trade, and which countries they are not allowed to trade with at all. This is true of the countries of the Global South dominated by the U.S. empire, as well as the satellite imperialist countries of the Global North — Europe and Japan. For example, under both Biden and Trump, the U.S. told its Western European “allies” that they could not buy Russian pipeline gas.
The U.S. has used all the political-military power it possesses through the U.S.-controlled NATO “alliance” to force the Western European satellite imperialist powers to go directly against their own economic interests. Instead, they have been made to act in the national and commercial interests of U.S. imperialism by purchasing more expensive U.S. liquefied natural gas, or LNG, shipped across the Atlantic Ocean. This is expensive and puts European industry at a disadvantage relative to U.S. industry. These policies are good for the U.S. and bad for Europe.
To drive the point home, the second Trump administration threatened to go to war with Denmark if it didn’t hand over its Greenland colony and “suggested” that Canada end its limited political independence to become the fifty-first state — or part of it, along with Greenland. While there was undoubtedly a considerable amount of political grandstanding here, of the type that is so much a part of Trump’s personal style, it would be a mistake to reduce it to that.
Along the same lines, in Venezuela, Trump ordered U.S. armed forces to bomb Caracas, kidnap Venezuelan President Nicolás Maduro and Cilia Flores, and fly them to New York City to be tried in a U.S. court as common criminals. This is a move to take over Venezuela and turn it into a colony. On January 3, 2026, Trump announced similar plans for Cuba.
This parallels a similar evolution that occurred in the last quarter of the 19th century, as Britain lost the industrial monopoly it had enjoyed over the preceding century. Today, the U.S. is under pressure to do the same, increasingly unable to compete with Chinese industry, including high-tech production as well as traditional 20th-century industries like steel and textiles. The now eighty-year-old Donald Trump will be gone soon enough. But long after his obnoxious personality and personal corruption are unpleasant memories, the economic imperatives will remain.
In addition to long-term economic evolution, short-term economic fluctuations play a crucial role in the evolution of the political and military situation. Much of this reflects the fluctuations of the industrial cycle. During the boom phase of the industrial cycle, competition drives capitalists to expand as rapidly as possible. To expand industrial capital, the capitalist must obtain money capital. The basic formula for industrial capital is M-C … P … C’-M’. The industrial cycle begins with a sum of money capital — we don’t care where the M comes from.
The industrial capitalist begins as a mere money capitalist but doesn’t remain one. Some of the money is transformed into constant capital, including factory buildings, machinery, raw materials, and auxiliary materials such as electricity. This constant capital transfers its value to the products it helps to produce, nothing more. No new value, and most importantly, no surplus value, is produced. The capitalist cannot make a profit this way. In addition to transforming money capital into constant capital, some must also be transformed into variable capital. Unlike constant capital, variable capital — which in its real form is the purchased labor power of wage workers — replaces its value as it is productively consumed by industrial capital. It produces a value greater than itself: surplus value.
To produce surplus value, the capitalist must transform a portion of money capital into labor power. The capitalist transforms the money form of variable capital into its real form: the labor power of the working class, purchased on the labor market and engaged in production.
Unlike the slaveholder, the capitalist isn’t interested in purchasing the worker; they purchase only the worker’s ability to work. When capitalists can’t carry out production profitably, they simply decline to purchase labor power. From the capitalist’s viewpoint, they’re not stuck with ownership of idle, non-profitable slaves. The replacement of chattel slavery by “free” wage labor is not a mere concession made to the worker; it’s very much in the capitalist’s interest.
If demand for certain use values increases, the industrial capitalist can hire workers skilled in producing these commodities. If, for whatever reason, demand ebbs, the boss can decide not to purchase their labor power but instead use their money capital to purchase the labor power of workers skilled in producing commodities that are in demand. Or the capitalist can hold the money form of variable capital off the labor market until it is again profitable to employ it in its real form: the labor power of workers put to work producing still more surplus value.
The capitalists, who insist on owning the means of production other than the workers’ bodies, purchase the workers’ ability to work and then combine the means of production with the labor power they have purchased from the workers. The use value of the worker’s labor power for the capitalist is that it produces a value greater than itself — surplus value. Assuming that all commodities sell at their values — their direct prices — the capitalist purchases labor power at its value. The capitalist begins with a sum of money that purchases labor power. The workers work part of the working day to reproduce the value of their labor power. During the rest of the working day, the worker works free of charge, producing surplus value. This surplus value is embodied in commodity capital, the commodity product that must be sold on the market. Commodity capital consists of commodities that contain surplus value that has not yet been realized on the market.
The capitalist starts with a sum of money. Once production is completed, the capitalist possesses commodity capital with a value greater than the value they began with. As an owner of commodity capital, our capitalist, who started out as a money capitalist, is now a merchant capitalist. Assuming the capitalist can sell the commodities at their value, a profit has been made, which is the whole point of being a capitalist.
Profit, while it cannot exist without a surplus product, cannot be reduced to the surplus product. Profit is measured in money terms, not in the use values of the commodities that make up the surplus product, except for the small part of the surplus product that consists of the money commodity itself.
If there is not enough money material produced, even if all other use values are produced in perfect proportions, it will sooner or later cripple the process of expanded capitalist reproduction. First, if the initial M — the money the capitalist begins with — is not enough, it will be impossible to achieve the expanded scale of production needed to maintain expanded reproduction. The capitalist will complain about insufficient capital, but what they really mean is that there is insufficient money capital. If the scale of production is expanded, there remains the problem of transforming the commodities containing surplus value into money. To maintain expanded capitalist reproduction, it is necessary to match the expansion of non-money commodities with a comparable expansion of the total quantity of the money commodity that is accumulated throughout the history of capitalist production and even before.
We have to distinguish between the case involving a particular industrial capital and the case involving total social capital. A money famine will arise whenever the increase in the total quantity of the money commodity lags behind the level needed to initiate expanded capitalist reproduction and realize the value of the expanded mass of commodities that must be sold. This means more and more individual capitalists will have difficulty finding enough money to initiate expanded reproduction. They will be less and less able to expand production, complaining of insufficient money capital and slow returns on commodities containing surplus value they have already produced.
As expanded reproduction develops, the extra M needed to initiate expanded reproduction normally comes from the preceding sale of commodities. When the scale of production is expanded, the extra M often has to be raised on money-capital markets by floating new bonds. When the production of new money material lags behind the total needed to maintain the rate of expanded reproduction, capitalists find they can’t raise enough money. Interest rates rise, and they find it harder to sell commodities profitably, since many commodities are sold on credit.
The money famine that immediately precedes and accompanies the crisis is just the flip side of general overproduction, since money shortages are not absolute but relative to non-money commodities. Monetary shortages hit not only capitalists but also commodity buyers, such as home buyers and buyers of expensive durable commodities designed for personal consumption — or even buyers of morning coffee when credit cards are used. A monetary shortage makes it harder to raise the money needed to initiate expanded reproduction, as well as to realize the surplus value once it has been produced and embodied in commodities. That realized surplus value is needed to launch another cycle of expanded reproduction.
Local, state or provincial, and central governments also act as borrowers. This is where war comes in. In the long run, enough of the commodity serving as money must be produced to match the increase in the amount of non-money commodities being produced. In the short run, the money commodity is either overproduced, causing money to accumulate in idle hoards in the banks and driving interest rates toward zero, or underproduced, making money “tight” and raising interest rates.
There are times when great surpluses of money exist, the most extreme example in history up to the present— 2026 — being the 1930s. These surpluses can be caused by new geographical discoveries of gold, as described above in the “New World” during the 1500s, and, from the end of the first quarter of the 19th century onward, by the course of the modern industrial cycle itself. Discoveries of new mines continue to play a role in the expansion of the quantity of money needed for expanded capital reproduction. But the alternating periods of abundant idle money and money shortage primarily reflect the alternating phases of the industrial cycle, though gold discoveries, or the lack of them, feed back on the industrial cycle.
The process of expanded reproduction is elastic by nature. Capitalists don’t get rich by sitting on idle money but by expanding the scale of production and, through that, increasing the number of workers producing surplus value. With a given rate of surplus value, the more workers they exploit, the more surplus value is produced. Each turn of the cycle M-C … P … C’-M’ is carried out on a larger scale, with the aim of increasing the total mass of surplus value realized in the form of a mass of profit — leaving aside temporary cyclical crises. The total mass of surplus value can also be increased by increasing the ratio of unpaid to paid labor. But this process runs into the limit set by the resistance of the workers on one side and the capitalists’ attempts to increase exploitation on the other. It also runs into the limits set by the laws of mathematics, since the rate of surplus value is upwardly limited by the fact that necessary labor — the labor that is paid for — cannot fall to zero.
This process of expanded capitalist reproduction also runs into a historical limit. The most important thing is the need to find ever greater numbers of workers to exploit. To find new workers, sufficient means of subsistence must be produced to support them. This process cannot go on forever because, if it did, the physical mass of the workers and the means of subsistence needed to produce an ever greater amount of surplus value would eventually exceed the mass of the Earth, the solar system, and finally the total observable universe. In other words, the indefinite continuation of expanded capitalist reproduction violates the laws of physics and therefore is impossible. As Marx explained, no form of human production can violate natural law. Therefore, capitalism is an historically limited system.
In addition, since capitalist production is unplanned, shortages of certain inputs are bound to appear. These are not absolute limits, but they can present temporary obstacles to expanded capitalist reproduction and create crises and stoppages. For example, the disruption of oil production caused by the U.S.-Israel war against Iran caused an underproduction of key commodities involved in the production of energy, as well as other vital commodities involved in food production, threatening global capitalist expanded reproduction.
Even in the absence of war, drought, or epidemic — all of which we have seen in recent years — whenever the planless, profit-driven process of expanded reproduction proceeds with full vigor, more or less accidental disproportions are bound to occur, creating accidental disruptions of capitalist expanded reproduction. This is felt most strongly when production is near its physical potential. Operating the economy well below its physical potential, the normal condition under capitalism, cushions these disproportions and enables capitalist reproduction to proceed more or less smoothly. Periods of vigorous production associated with cyclical booms and war economies bring these disproportions to the surface.
The law of value, operating through the tendency of the profit rate to equalize, achieves over time a proportionate development of mutually dependent branches of production. But this proportionality can be achieved only through constant deviations in the short run, reflected in the continual divergence of the actual profit rates in various branches of industry from the average rate of profit.
In addition to all this, there is the inevitable disproportion between the production of the commodity that serves as money and the production of all other commodities. Inevitably, periods of underproduction of money material, reflected in a profit rate above the average, lead to a surge of money-material production. This causes monetarily effective demand for commodities to rise, leading to an economic boom and a rise in commodity prices measured in terms of the money commodity. This leads to a fall in the rate of profit in money-commodity production relative to the production of other commodities. There will then be an underproduction of money material relative to the needs of capitalist circulation, followed by a money famine resulting in a crisis of commodity circulation and generalized commodity overproduction. The crisis reduces non-money commodity production while stimulating money production. This leads back to the overproduction of money material, expressed in the accumulation of idle money capital and plunging interest rates — easy money. The cycle then repeats. Periodic overproduction crises aren’t accidents; they’re a necessary feature of capitalist expanded reproduction.
Faced with the dollar’s recent plunge, even if it has partially recovered since the war broke out, as well as pressure on the Treasury market and the disruption of energy markets caused directly by the war, the Trump administration has been forced to retreat from an all-out war against Iran at this time. The administration instead seems to have decided on a lower-intensity war combined with diplomacy, though this too could again get out of hand.
I will close this post with some thoughts about the possible future development of the Iran war. Trump is faced with a squeeze on oil supplies caused by the war, as well as a potential money famine caused by the normal mechanisms of the industrial cycle, forcing him to retreat from his demand for unconditional surrender. He, and more importantly U.S. imperialism, is playing for time. None of the conditions that have caused U.S. imperialism to bitterly oppose the Iranian Revolution since 1979 has disappeared, even if current negotiations lead to a treaty and the normalization of U.S.-Iran relations.
This could change over the next few years. If a significant recession develops, there will be more unemployed young workers who could be absorbed into the U.S. military. The widely hated Donald Trump will be gone, “Genocide Joe” Biden will be largely forgotten, and a new, more popular capitalist politician — quite possibly a Democrat — may be put into office on January 20, 2029. The dollar will likely be much stronger due to cyclical factors, even as long-term economic factors continue to undermine it. This will create an improved position for U.S. imperialism to launch wars against Iran and other countries. Though Trump will be gone, the economic imperatives to establish something like old-fashioned colonial control over the countries of the Global South, and even Europe, will be stronger than ever.
We will continue to analyze these possibilities as the situation evolves in future posts.
NOTES
(1) After the war broke out, oil and other commodity prices spiked, and the money market tightened, knocking down the dollar price of gold from above $5,000 to, at times, below $4,000. (back)
(2) This shows Trump’s Bonapartist politics. Despite claiming royal titles, the original French Bonaparte family was not considered legitimate by European royalty. They were called mere upstarts because, unlike “real” European crowned heads, they were not supposedly appointed by God Himself. Today, Trump is attempting to assume the rights of a king by putting his name on buildings and currency. He was not appointed by God Himself; according to the Constitution, he is only a president chosen by the Electoral College. (back)
(3) The U.S. founding fathers were strong supporters of the ideas of the bourgeois epoch in which they lived, including the idea of the equality of all commodity owners before the law. This made the U.S. different from old Europe, which was still saddled with all kinds of feudal privileges. But there was a problem: some of the founding fathers were slaveholders. How could chattel slavery be reconciled with the equality and freedom of all commodity owners before the law?
One way to solve the problem was to modify the principle of the equality of commodity owners before the law into the equality of all white commodity owners. Since Africans weren’t white, it was claimed they belonged to a lower order of beings somewhere between white people, who were considered fully human, and the animal kingdom. Animals didn’t own commodities, and some were themselves owned as commodities, so the principle of equality didn’t apply to them.
Los partidarios de la esclavitud moderna basada en la esclavitud de africanos argumentaban que los africanos estaban en la misma situación. A diferencia de los trabajadores blancos libres, que venden su fuerza de trabajo a los patrones, los africanos esclavizados no tenían nada que vender, sino que ellos mismos se vendían como mercancía. Especialmente en Estados Unidos, el principio burgués de igualdad se aplicaba solo a los blancos. Este racismo se exportó de vuelta a la vieja Europa y evolucionó en otras formas de racismo, como el antisemitismo y el sionismo, que vandalizaron los siglos finales del XIX, el XX y ahora el XXI. (espalda)
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