Letter to the editor of The Times (for entertainment and comment)

Sir,

Your leader writer of 17th September 2008 should go back to University for a crash (sic) course in Marx

He quotes Marx but completely misunderstands him.

Yes “Capital is money, capital is commodities." By virtue of it being value, it has acquired the occult ability to add value to itself. It brings forth living offspring, or, at the least, lays golden eggs

But Marx does not argue that capital and money are the source or creators of value - labour power is that source and creator. Capital masquerades as the creator but this is an illusion (Vol 1 Capital).

Capital and money are stored value not the creators of value - they create nothing but enable capitalists to grab value from labour power as profit, dividends and interest; what Marx calls 'the occult ability to add value to itself'.

The root of the present crisis is because the rate of profit in manufacturing and industry has over the past decade or more stagnated The mass of profit has increased but has to be spread over larger and larger amounts of capital invested in these areas.

In these circumstances capital looks for larger profits elsewhere albeit at the cost of assuming greater risks-in our present case in housing,land,and financial speculation in stocks, shares, oil, metals and agricultural commodities. This creates a financial bubble (see Vol 111 Capital) which eventually bursts. Capital is eager to take the greater risk for the larger profits (contrary to your columnist Mick Hume) but seeks to spread that risk through derivatives - nothing new there - re-read your Marx Mick!

But when the bubble bursts the spread of the risk brings down many.

The mortgage lenders gambled on employment continuing to grow, wages to rise and property prices to go on increasing. Employment did grow but much more slowly than they had assumed. Wages stagnated and when the mortgage defaults began property prices fell rapidly. In other words their gamble failed.

Further, contrary to your columnist Chris Dillow, hedge funds are archetypal financial speculators interested only in short term gains - therefore they win in boom or bust -eg HBOS shares yesterday on which hedge funds made a killing by driving them down.Their ability to survive has nothing to do with ownership structures

Editor, send them all back to uni!!

Ian Grigg-Spall