Well, if products are being sold at a cost less than it costs to produce them, then that means the company would lose money. That would mean that the producer could not attract investments/loans etc.... so they would go bust. ... Of course, producers don't keep on producing when their products can't be sold for a profit... so a crisis of overcapacity is another way of looking at it.... those producers will eventually go bust.
Yes, sometimes they do if demand never picks up. You see, the point is that when you sell goods at a lower price than production, they will sell faster because they're cheaper. This means that the supply will be lower, therefore demand will rise again - that's when you rise prices and avoid going bust. It also allows you to out compete the competition, and it can also make the good more popular if it is not a permanent good, meaning you can create a demand where none existed before - this is why Ford sold the Model-T at lower than production value, because it pays off long term. Investors know these strategies, so it doesn't necessarily imply that they'll turn away from investing.
You are right that 'markets' always have more money.... but 'markets' actually consist of a relatively small percentage of people, mainly rich investors. I'm more concerned with the end users of those products, the ordinary people who suffer.
Everyone has money, potential or real. You exchange the commodities you produce for money. The most common form of making money is by working, i.e. selling your labour. In fact, major corporations have only employees who sell labour, the only businesses where profit belongs to a person is a small or family business. In corporations the executives are paid salaries, even the CEO works for a wage - their wages are higher because their work is of greater value, they have skills which the shareholders are willing to pay more for, because they know how to make greater returns on investments. As for the rich investors, the majority of the worlds wealth isn't held by them - if it was the economies of the world would be insanely unstable and inflation and deflation would rocket out of control from day to day, this is because the richest investors take high amounts of risk to make that money. Instead, the majority of investors hold shares in relatively stable stocks. As for where the majority of the worlds wealth lies, unfortunately it's in debt, but that's another issue that is rooted in issues with currencies.
David Harvey wasn't just talking about moving labour or companies around when he was talking about capitalism moving its problems around. One way of solving its problems is just to destroy capacity... i.e. close factories, sack workers, they even destroy produce ... like when the EU stored food millions of tons of food until it went rotten just to keep prices high in the market. I heard something about a Japanese company that took grain out to sea to dump it... though it might have been an urban myth?
Commodity destruction is different from the notion of the displacement of crisis. So we're talking about different things, but I mentioned this here: "A depression for Marx is the period in which excess production is sold off and demand rises again." You can refer to my argument after that in the previous post for what my opinion is of that. If you want to talk about the causes of depressions, we can later.
Anyway, 'demand' here means economic demand.... not the real needs of ordinary people. There are people who have desperate need in this world: homes, food, medicine etc. but because they are poor they don't produce the economic demand... the corps don't want to reduce prices to sell to them because they want to keep prices and profits up. It is shameful that some child in a third world country can work all day producing trainers and shoes, but can't afford to buy shoes for themselves.... that's capitalism.
One of the main reasons the third world is the way it is, is both poor management today, and the presence of communism. Most of these countries are former or communist/socialist regimes. Markets do require a country with good management and good security, which is what most of the third world doesn't have. And today, the governments of those nations allow western corporations to come into their countries and do this. These countries also let the IMF and World Bank sell them junk loan deals. They should not be doing this, they should raise border and trade controls, develop their own industries without external competition, and then export when those industries are developed. This is what South Korea did: South Korea was far more backwards and less developed than North Korea before the war, but by using trade controls and limiting external commerce, they were able to develop their own industries and technologies, and then export them and open the borders when they are on an economic par. In the end, let's be honest, can you name one third world country that isn't run by an idiot? How can a nation like Venezuela, which has immense riches, be as poor as it is, while Singapore, which is just an island with no resources, can provide all the wishes of its citizens?
I simply don't accept your assertion that there has never been a crisis of over production/capacity. I think we are in one right now.... but of course capitalist economists will avoid giving that explanation ... they blame it on the weather, or sun-spots or the alignments of the planets etc. , but they generally work for big firms or simply havent been educated in marxian economics or understand it... that is why they got taken by surprise... that is why they are desperate to come up with an 'explanation' of these 'black swan' events that don't point the finger at the profit driven capitalist system itself.
I have been educated in Marxian economics, and I don't work for a big firm. This is a really silly conspiracy theory.
I can explain it but I don't have time right now. But there are a lot of explanations, and a lot of economists warned of the 2008 crisis, as with many others. For the most part I agree with Misesian economics now, but I have reservations on some points. Anyway, here's an explanation, which you don't think exists, http://mises.org/daily/3263
Marx thought that, overtime (unless distorted by monopolies etc) , supply and demand would tend to average out. Even though there are fluctuations, generally, production would be increased to meet demend. This means that the profit that a firm makes actually comes from paying the worker less than the true value of their labour.
No, that's not Marx, Marx argues that profit is surplus value of the commodity produced - and your explanation is a non sequitur.
Look, the simple way for you to get around this, is to actually read Marx's capital - in fact, David Harvey's lectures, if you go with them along with the book, are great. But I think he only covers Volume I. Be sure to read all 3, and also read Wage Labour and Capital, the Grundrisse, and the Economic and Philosophic Manuscripts of 1848.
Here's Marx on wages:
Wage Labour and Capital wrote:Let us take any worker; for example, a weaver. The capitalist supplies him with the loom and yarn. The weaver applies himself to work, and the yarn is turned into cloth. The capitalist takes possession of the cloth and sells it for 20 shillings, for example. Now are the wages of the weaver a share of the cloth, of the 20 shillings, of the product of the work? By no means. Long before the cloth is sold, perhaps long before it is fully woven, the weaver has received his wages. The capitalist, then, does not pay his wages out of the money which he will obtain from the cloth, but out of money already on hand.....Wages, therefore, are not a share of the worker in the commodities produced by himself. Wages are that part of already existing commodities with which the capitalist buys a certain amount of productive labor-power.....
Now, the same general laws which regulate the price of commodities in general, naturally regulate wages , or the price of labor-power. Wages will now rise, now fall, according to the relation of supply and demand, according as competition shapes itself between the buyers of labor-power, the capitalists, and the sellers of labor-power, the workers. The fluctuations of wages correspond to the fluctuation in the price of commodities in general. But within the limits of these fluctuations the price of labor-power will be determined by the cost of production, by the labor-time necessary for production of this commodity: labor-power.
What, then, is the cost of production of labor-power?
It is the cost required for the maintenance of the laborer as a laborer, and for his education and training as a laborer.
Then after you read Marx's works, please read the works of Mises, and compare.
And in the end, you're still overlooking the central point and the central thesis - you're not making arguments which prove or disprove the labour theory of value, that's the thesis on which all of Marx's arguments rest.
Please see my post on that topic above.