The law of value and the crisis of our time

This essay is about the present crisis of the institutions, structures, and policiesthat made possible the remarkable growth of the capitalist world economy for more thanthree decades following World War II. It deals with the weakening of the dollar, instability ofthe international financial system, extreme indebtedness of countries, firms and governments,and deterioration of institutions like the IMF and GATT. We maintain that the present predicamentalso involves a crisis of the general mechanisms of capitalist regulation, i.e. thelaw of value and its pseudo-substitutes, such as state intervention and oligopolistic administration.In sum, we argue that the crisis that capitalism faces at the present time is general– economic, political, and institutional – and that it results from the same mechanisms whichstimulated rapid growth in previous decades. In this sense, the present imbroglio is a kind of“auto-immune” response, or in other words, it is due to blockage of the sanitizing action ofSchumpeter’s “creative destruction”. JEL Classification: P10; D46.