Sunday, April 25, 2010

Economic Depression

"There are two main causes for economic depressions. First, the concentration of wealth and secondly, blockages in the rolling of money. If the capital is concentrated in the hands of a few individuals or state, the majority of people are exploited by a handful of people. As a result of this process of severe exploitation, a serious explosion takes place. This explosion is known as a depression in the economic world ... The second cause: when money that is in the possession of individual or state capitalists stops rolling. Money remains inert or unutilized because those capitalists think that if the money is allowed to roll freely then their profits will decrease, even though it will bring relief to the common masses. The very psychology of the capitalists is to make profit from the rolling of money. When they discover that the investment of money does not bring profit up to their expectations, then they stop rolling the money. This keeps the money immobile or inert in various ways. As the money does not roll, there is no investment, no production, no income and hence no purchasing power, and the situation becomes so dangerous that there are few buyers to buy the commodities."

P.R. Sarkar, 1987

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