“I remember quite clearly watching with comrades in a Capital study group on Sunday August 15, 1971 the broadcast of Nixon’s announcement that he had ordered the “closing of the gold window.” Given that we were reading for the previous few months passages like the following from Capital: “money–in the form of precious metal–remains the foundation from which the credit system, by its very nature, can never detach itself” (Marx 1994:606), we left each other that night with the thought that either Capitalism or Marxism was coming to an end before our very eyes! —George Caffentzis, Marxism After the Death of Gold
What crippled and ultimately killed off the Marxian theory was the realization that capitalism, although severely damaged by the Great Depression, did not die. The confidence Marxists felt before the depression that capitalism was a historically limited, relative, mode of production was shattered by the post-depression recovery of the Golden Age of Fascism.
Critical to the difficulties post-war Marxian theory has suffered is it inability to come to grips with the significance of the collapse of the gold standard. That collapse is the subject of this two part series.