Dec 27, 2008

Comment on, "Capitalism in Crisis?"

Juan de la O has left a new comment on your post "Capitalism in
Crisis?" (by D. Hamerquist, posted September 25, 2008):

As the late Paul Mattick put it:

The tendency towards collapse which is expressed through crises is
nevertheless slowed down and temporarily halted by these very crises
though they be the embryonic form of the final collapse; but the
counter-tendencies are essentially of a temporary character. They can
postpone the collapse of the system. If the crisis is only an embryonic
collapse, the final collapse of the capitalist system is nothing else
but a crisis fully developed and unhindered by any counter tendencies.

If the causes of crisis are over-accumulation which makes the
“utilisation” of capital impossible, then new means must be established
to assure again the necessary capital “utilisation” in order to end the
crisis. According to Marx, a crisis is only a process of healing, a
violent return to further profitable expansion; from the point of view
of the capitalists, a “cleaning out”. But after the “cleaning”, with
its series of capitalistic bankruptcies, and the starvation of the
workers, the process of accumulation is continued and after a while the
“utilisation” of capital again becomes insufficient. The self-expansion
stops as the accumulated capital again becomes too large on its new
basis. The new crisis sets in. In this manner, the tendency towards
collapse is broken up into a series of apparently independent cycles.
(The Permanent Crisis -
Henryk Grossman’s Interpretation of
Marx’s Theory Of Capitalist Accumulation)

In short, 'crisis' and 'collapse' are dialectically related moments of
the same overall process -- capital's long and historically limited
curve. Something 'progressive' Marxists seem to have never learned but,
right along with bourgoise apologists, deny in favor of saving capial
from itself even to include such idiocies as salvation through state
But then most 'Marxists' have never read Marx muchless been in the
thick of no holds barred struggle.


Nick Paretsky said...

Most of the mainstream left analysis of the current crisis I’ve seen concentrates on the financial system and how to reform it. For instance, over at there’s been a lot of very informative articles explaining the operation of financial markets and the machinations of Wall Street and how they led up to the present impasse. Also, see Doug Henwood’s Left Business Observer. But while useful and insightful, these analyses don’t address the roots of capitalism’s crisis, if the focus of classical marxist crisis theory on the process of production is correct, particularly the theory of the tendency of the rate of profit to fall (which has several variants) – although, of course, money and the credit system are very much involved in capitalist crises, as David Harvey, among others, has stressed. This means limitations on the various reforms being prescribed. Keynesian fiscal stimulus and regulation of finance, as being proposed and increasingly accepted within the ruling class, and the “democratized” version of Keynesian intervention advocated by many on the left, will have little success in helping to drive an upturn in the economy without a fundamental restructuring of capital and the “cleaning out” process described by Mattick.

The incoming Obama administration’s program of massive public works spending, such as projects in “green” infrastructure, that is supposed to help revitalize industry as well as maintain employment, will encounter some problems based in the sphere of production, and not all these problems require a marxist perspective to understand. Some hard-hit manufacturing industries, such as steel, as well as auto, are looking to this as a bailout. (There’s a recent New York Times article in this regard about the U.S. steel industry.) But a bailout of manufacturing that keeps technologically inefficient producers afloat will simply postpone the needed “cleaning out” of capital, as the capitalist deadwood continues to be a drag on the rate of profit. If government aid is to facilitate the retooling of industry, the adoption of the latest production techniques (for example, U.S. steel companies if ditched the old blast furnaces and used electric furnaces) may have a labor-saving effect, which may blunt the stimulus to employment. In general, a program to reindustrialize America on the basis of high-technology, in such areas as “green” technology and information technology, does not seem to have good prospects for creating jobs (although some skilled labor from older manufacturing industries might find use in the new industries.)

This last point also relates to the “secular crisis” idea, at least that aspect of the idea concerning the undermining of the law of value that occurs as science and technology replaces direct labor as the “determinant factor in the production of wealth,” and is sketched out in Marx’s Grundrisse, in the section entitled “Contradiction between the foundation of bourgeois production (value as measure) and its development” (pp.704-706). If capitalism “recovers” from the current crisis, which is certainly possible, it will be on the basis on industries which not only contribute little to overall growth of employment, but will actually accelerate the marginalization of large sectors of the population from production. The argument that capitalist development is now accompanied by increasing mass marginalization is also elaborated on by Loren Goldner, in his most recent article on the crisis, “The Biggest ‘October Surprise’ of All: A World Capitalist Crash” (at his website, “Break Their Haughty Power”;, although he uses the concept of “capitalist decadence” rather than “secular crisis” or “crisis of the law of value.”

But to return to the various versions of classical marxist crisis theory, with each period of deep crisis the “creative destruction” of both capital and labor required for a new phase of profitable expansion increases in scale. Crises increasingly take on a political aspect, as the state is brought in to manage them; an uncontrolled crash of the old 19th century variety under conditions of contemporary capitalism, in which large-scale economic organizations are densely intertwined (the “systemic risks” we’ve heard about recently) must be avoided. This management by the state will increasingly involve force, a notion which again converges with the theory of the secular crisis, as elaborated by Hamerquist. I quote here from David Harvey, in his The Limits to Capital (pp.328-329):

[With] “the increasing socialization of capital itself, first via the agency of the credit system and ultimately through socially necessary interventions on the part of the state[,] the character of periodic crashes is thereby also transformed.… Instead of being the aggregate social effect of an essentially atomistic, individualized process, they become a social affair from the very outset. The state, via its policies, becomes responsible for creating what it hopes will be a ‘controlled recession’ that will have the long-run effect of putting accumulation back on track.… The options for the internal transformation of capitalism become increasingly limited, more and more confined to innovations within the state apparatus itself. And once the limit of the state’s capacity to manage the economy creatively is reached, the increasingly authoritarian use of state power – over both capital and labour (though usually with far more devastating effects upon the latter) – appears the only answer. Crises embrace the legal, institutional and political framework of capitalist society and their resolution increasingly depends upon the deployment of naked military and repressive power. The whole problematic of the transformation of capitalism – either by evolutionary or revolutionary means – is thereby altered. The problems and prospects for the transition to socialism shift dramatically.”

Don’t know exactly what all this means, but it seems that a capitalism which increasingly, as a system and for the long term, rests on state repression, is going to be the framework for socialist struggle.