Capitalist Meltdown

By now you've all see those adverts on TV begging for gold offering you a wonderful opportunity to exchange your unwanted jewellery for additional asset liquidity in these challenging economic times. These vultures entrepreneurs are everywhere: on TV, in shopping centres... in capitalist terms, everywhere. Now, you don't need me to tell you that this is a scam and that anyone who actually goes ahead with this is going to be woefully underpaid for their gold (they're better as a quick no questions asked market for stolen jewellery than anything else), but that's not the topic of this post.

Instead I want to look at the economics behind the transaction in Marxian terms. The intellectual poverty of bourgeois economics is exposed here, able only to tell us that the seller of the gold does so because s/he needs money, while the buyer of the gold does so for... more money. By applying the labour theory of value we can get a better idea of what's happening beneath the surface.

When gold is processed into jewellery socially useful labour is performed adding value to the end product. By melting down jewellery value is destroyed, this apparent madness is financially justified by the capitalist as it allows for the purchasing of (although not the creation of) large quantities of money capital.

The same drive to destroy value can be seen throughout the economy during a capitalist crisis. This process allows for the rationalisation of the market, overcoming the problem of overproduction. The necessary consequence of capitalist productive relations is that more commodities are produced than can be consumed (purchased). This abundance of value in the economy then needs to be destroyed; as far as methods of destroying value goes, gold vultures are preferable to a World War, I guess, although a public works programme wouldn't go amiss.