Double devalorization - Robert Kurz

Double devalorization - Robert Kurz

In this short article first published in 2012, Robert Kurz discusses developments in finance and real production that point towards the possibility of a simultaneous generalized devalorization affecting both spheres of capital, which “would signify the onset of the historic bankruptcy of the ‘mode of production based on value’ (Marx) as a whole, due to the fact that it can no longer serve as the basis for any social reproduction”.

Double Devalorization – Robert Kurz

What is the ultimate cause of economic crises? It is often said that the value that has been produced cannot be realized due to a lack of purchasing power. But why is there so little purchasing power? Because, actually, very little value is being produced and this is why ordinary wages and profits are too small. And why is so little value being produced? Because competition on the world market, due to technological development and programs initiated for the purpose of cost reduction in the private economy, have rendered too much labor power superfluous. But it is precisely labor power, as the integral part of capital, which alone produces new value. For this same reason, this waste of labor power is not reducible to merely a problem of people affected by unemployment, since it is also a problem for the capitalist system.

The crisis therefore begins as the devalorization of labor. If, however, more and more commodities are produced with less and less labor power, then the value of these commodities also falls. And since there is less value to distribute, competition leads to surplus capacity for production. Then the commodities are devalorized, too. More and more enterprises go bankrupt or have to close factories, whose real capital (means of production) also succumbs to devalorization. Without new products to mobilize masses of labor power, the crisis escalates into a spiral of devalorization.

In reality, we are today confronted by this kind of process of devalorization throughout the world. But the crisis has been gradually increasing in intensity. Financial and debt bubbles appeared to be capable of producing new values forever, even without the use of labor power. Ever since money capital, largely “unutilized”, began to undergo devalorization in financial crashes and debt crises, the central banks opened the sluice gates. Throughout the world they injected into the banking system money created from out of thin air on ever-longer terms. The European Central Bank (ECB) increased the terms of its loans from a maximum of three months, at first, to a year, and later raised it to three years and on the basis of this extended term distributed more than a trillion euros in two installments in one four month period to the banks. Most of this money is protected from the devalorization of the mass of bad debts, keeping the balance sheets of the endangered banks and major enterprises in the black, and is used to make the value of their stocks rise. In this way an enormous potential for inflation was created that, for now, remains within the financial superstructure.

On the other hand, this level of containment of the devalorization of debt and real estate values is not by itself sufficient to delay for much longer the depreciation of the value of the real component of capital. In the European Union (EU), unemployment rose to its highest level since the end of World War Two (1945). The economies of the indebted countries are being ruined and threaten to drag down with them the entire world economy. Major bankruptcies, such as that of the drugstore chain Schlecker (17,000 stores) announce another round of the depreciation of real capital. The French automotive industry is poised on the edge of collapse, and in Germany Opel is once again struggling for air.

But once the flood of money from the central banks, beyond the salvation of balance sheets, is transformed into real demand, the potential for inflation emerges. Since the crisis has been underway for such a long time, it is even possible that, for the first time in the history of capitalism, a simultaneous devalorization of the monetary medium itself as well as a large part of capital (commodities, means of production, labor power) could occur. This double devalorization would signify the onset of the historic bankruptcy of the “mode of production based on value” (Marx) as a whole, due to the fact that it can no longer serve as the basis for any social reproduction.

Robert Kurz
Published in Neues Deutschland, March 5, 2012

Translated in August 2013 from the Spanish translation available online at:

Portuguese translation from the original German is available online at:

German original online at: