Crisis Theory by David Kennedy

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A CLARIFICATION OF MARX'S THEORY OF CRISISDAVID KENNEDY

It is ironic that a Marxist theory of crisis would seem to

be most relevant and necessary just at the point in history

at which Marxism appears to be at its lowest theoretical

ebb....Simon Clarke1

That the epoch in which we live lends itself urgently to a rigorous Marxist

analysis, and that such an analysis is conspicuously absent from the

enquiries of mainstream, contemporary Marxism is, perhaps, self evident.

However, Clarke implies that no 'adequate theory' of crisis exists2. This

implication must be rejected. What follows below is an attempt to clarify

Marx's theory of crisis. It is argued that only by approaching Marx's

theory of capitalist society from a starting point informed with the

significance to Marx's work of it's organicist and Hegelian pedigree can an

understanding of Marx's theory of capitalist crisis hope to be arrived at.

It is suggested that 'orthodox' Marxist crisis theories have, in neglecting

Marxism's philosophical roots, wandered into a cul-de-sac of their ownlogical empiricist making and are unable to offer, therefore, a viable

commentary of contemporary bourgeoisie society and the possibilities open

to it.

An attempt will be made to clarify and re-emphasise a Marxist theory of

capitalism in crisis informed by a view of capitalist society as a definite

stage in human social relations - an entity defined by the peculiarity of its

form of social relations based (as with all other societies) upon the

dominant mode of surplus extraction. In the case of capitalism this takes

the form of a surplus of value extracted from waged labour. It is in the

nature of all entities that they undergo a definite life-process of genesis,

maturity and, finally, decline - the latter of which, it is argued, being

1 Simon Clarke, , p74, London, 1994.

2 The source of this 'inadequacy', for Clarke, being that: 'Nowhere in his own works does Marx present a systematic and thoroughly worked out exposition of a theory of crisis' - ibid, p5.

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capitalism's present moment. The task, therefore, for Marxists is to

understand the changing status of the social relations and to empirically

bear this out.

Such a view, it is recognised, is hardly orthodox in the canon of twentieth

century Marxism. Part of the task of this article is to demonstrate the

validity of such a reading of Marx's work: that Marx (the materialistdialectician), cannot hope to be comprehended in the logical mis-reading of

his work which has been, and still remains, de rigeur in Marxist circles -

an environment where any notion of viewing the value relation in decline

is dismissed as being insubstantial and, therefore, metaphorical.

MARXIST THEORIES OF CRISIS

(1) 'CAPITAL LOGIC THEORY

The various Marxist theories of crisis which, in turn, have become vogue

within Marxism during the epoch of decline - primarily, disproportionality,

underconsumptionism, and the tendency for the rate of profit to fall - have

all been exhaustively documented, and there will be no laboured detailing

of them here.

Some, in an effort to locate what is essential and relative in each of thesetheories, have insisted upon their broader division into, on the one hand,

theories of crisis in the sphere of circulation and, on the other, theories of

crisis in the sphere of consumption.3 It is argued here that, ultimately, all

of these theories are unified in their analysis of crisis - unified, that is, in

their attribution to capital of an abstract logic to its development.

Luxemburg, unwittingly articulating dramatically the shared assumption of

all Capital Logic theories of crisis, scolds the reformist Bernstein thus:

From the standpoint of scientific socialism, the historical

necessity of the socialist revolution manifests itself above

all in the growing anarchy of capitalism which drives the

system into an impasse. But if one admits, with

Bernstein, that capitalist development does not move in

3 See M. Itoh, Value and Crisis, London 1980, pl 19 and A. Negri , Marx beyond Marx, Mass.1984, p96.

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the direction of its own ruin, then socialism ceases to be

objectively necessary.4

Implicit in such statements is a deductive methodology. What seems to be

a dynamic commentary is, on closer inspection, a profoundly abstract,

ahistorical and static analysis - an attempt to explain crisis by way of

projecting Marx's formulaic pronunciations on the phenomenal forms of crisis onto reality itself, rather than, as with Marx, attempting to explain

those aspects of reality which provide the conditions for crisis in terms of a

changing social relation. This amounts to the elevation of form over

content. Whereas "Marx emphasised the dialectic and made use of logic",5

others have emphasised logic and paid lip-service to the dialectic. In a

general way (without breaking an earlier promise to avoid a detailed

discussion) this Capital Logic problem can be demonstrated.

For much of the epoch of capitalist crisis, Marxist orthodoxy, in analysing

crisis, has centred upon an underconsumptionist critique. Put succinctly, it

is, in the words of its most well-known expositor, Rosa Luxemburg, a

theory where "crises arise from the contradiction between the capacity and

tendency of production to expand and the limited capacity of the markets to

absorb the products".6 The anarchy of the system itself, then, is to blame:consumption and production pull apart as part of the surplus value created

in production, under the logic of competing capitals, and is ploughed back

into production, expanding it at the expense of consumption. With the

capitalist class unwilling (due to the law to out-compete its competitors) to

take up the slack of an ever increasing surplus, and a working class whose

standard of living does not allow for increased consumption on the scale

required, crisis inevitably occurs. With the mechanics of crisis so simply

stated, the problem, as Clarke states, " becomes not so much that of

explaining the breakdown of capitalism but that of explaining how

capitalism is possible at all ".7

For Luxemburg the solution (albeit an imperfect one) was imperialism,

whereby surplus was dumped off onto regions as yet untainted by4 Quoted by S. Clarke, op-cit, p94.5 P. Kennedy, unpublished paper on Grossman's crisis theory, Glasgow, 1994.

6 Quoted by S. Clarke, op cit., p317 Ibid p54.

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capitalism. For more contemporaneous underconsumptiomsts the shortfall

is taken up by rising real wages and /or rising state expenditure (a 'Marxist'

political economy which gave rise, of course, to a reformist 'Marxist'

political discourse).

The same mechanistic preoccupation with causation can be witnessed in

the 'disproportionality theory'. Despite their heated disputes over the phenomenal economic forms crises take,8 both underconsumption and

disproportionality theories share the fundamental view that crises are

essentially caused due to the breakdown of the relation between production

and consumption.

For Hilferding this breakdown occurs with the greater interpenetration of

banking and industrial capital - the movement of capital into its stage as

finance capital. Under these conditions there is greater fixity of capital

which leads to the extension of production via economies of scale, but

which also hinders capital's mobility - capital's ability to respond to

disproportionalities (especially that between the 'capital goods' and

'consumer goods' sectors). This creates an inherently unstable society

wherein equilibrium between supply and demand becomes rigid and hence

problematic. Thus the chaotic nature of the system is identified as crises'fundamental cause:

The enormous inflation of fixed capital means, however,

that once capital has been invested its transfer from one

sphere to another becomes increasingly difficult The

result is that the equalisation of the rate of profit is

possible, increasingly, only through the influx of new

capital into those spheres in which the rate of profit is

above the average, whereas the withdrawal of capital

from those branches which have a large amount of fixed

capital is extremely difficult.9

8 Hilferding writes, for example, "The term underconsumptionism has no sense in economics".

Underconsumptionism is "impossible to conceive if production is carried out in the right proportions". For Hilferding, then, underconsumption is subsumed within a disproportionalitytheory of crisis. See S. Clarke, op cit., p39.

9 Quoted by S. Clarke, op cit., p40

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It can be said that because of his treatment of the law of value as an abstract

category of logic, Hilferding failed to locate the aspects of finance capital in

relation to the developing real contradiction within the form of labour: that

between abstract and concretely useful labour. Hilferding, thus, was

condemned to elevate the growing discrepancy within the economy between

industries/sectors - the form which crisis can take - into the crisis itself.In recent years, and especially with the growing realisation from the late

1960s that the Keynesian demand management policies which sought to

address such imbalances between production and consumption could do

little to solve the present crisis, explanation of crises has shifted away from

concentration on the breakdown between production and consumption and

toward an explanation based on the tendency for the rate of profit to fall. A

fall in the rate of profit had preceded the present crisis, seemingly causing

it (a fall in the rate of profit having hitherto been thought of as aconsequence of crisis).

After a short-lived vogue of viewing this fall in profit-levels as a result of

rising wages - a distributional interpretation rejected by Marx: "The rate of

profit does not fall because labour becomes less productive, but because it

becomes more productive" 10 - consensus settled around a view of thefalling rate of profit based on the 'rising organic composition of capital'. Its

proponents view crisis as being the result of the 'objective tendencies' of

capitalist accumulation. Much analysis tends, unfortunately, to slip into

mathematical formulae. More still uses Marx's pronouncements on the

subject to lapse into a technological analysis.

The theory states that the organic composition of capital, which occurs with

the displacement of living labour by machinery, rises with this growth of

fixed capital over living labour - the source of value. Despite questions over

the theory's validity, principally over the offsetting of a fall in profitability

through 'countervailing tendencies' such as the cheapening of the contents

of constant capital or an increase in the intensity of exploitation, the theory

is justifiable over the long-run. As Ticktin argues:

[Marx] points out that the logic of the development of machinery is the total replacement of manpower by

10 Quoted by A.Callinicos, Karl Marx, London, 1983, p134

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machinery. At that point no value is produced. In other

words, to the extent that capital successfully reproduces

itself it will negate itself through the removal of the

source of value, labour. Put differently, it would appear

that when machines make machines, there will be no

value and hence no profit....such a society would clearlyundergo a crisis.11

Empirically, the validity of a declining rate of profit bears weight: the

United State economy, for example, has over the period from 1945 to 1976,

experienced a 30%-40% decline in the rate of profit, whilst in other

O.E.C.D.countries a 20%-30% decline has been suffered over the same

period.12

Again however, the real problem resolves itself, as with the other theories

of crisis previously mentioned, into a logical superimposition of sections of

Marx's work (in this case Volume Three of Capital) onto empirical

phenomena: "Hence, monopoly, labour collectivity, the public sector etc, all

become functional forms which either increase the tendency for the rate of

profit to fall or counteract it or delay it ". 13

However, it would be a mistake to underplay the importance of these phenomenal forms of crisis - Marx certainly did not. In relation to the

disproportion which occurs within the capitalist economy he writes:

All equalisations are accidental and although the

proportion of capital employed in different spheres is

equalised by a continuous process, the continuity of this

process itself presupposed the constant disproportion

which it has continuously, often violently, to even out.14

Or, elsewhere, on the problem of underconsumption:

11 H. Ticktin, Critique 26, p172.

12 F. Mosely, Capital and Class 48, p11513P. Kennedy, op cit14K. Marx, Theories of Surplus Value, 2 London 1969, p492.

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The conditions . of direct exploitation, and those of

realising it, are not identical. They diverge not only in

time and place, but also logically. The first are only

limited by the productive power of society, the latter by

the proportional relation of the various branches of

production and the consumer power of society....consumer power based on antagonistic

conditions of distribution, which reduce the consumption

of the bulk of society to a minimum varying within more

or less narrow limits.15

It would be a greater mistake, however, to overstate the explanatory

importance of the phenomenal forms of crisis. Marx was at pains to make

this plain in his Theories of Surplus Value, Volume Two: "These forms

alone do not explain why their crucial aspect becomes prominent and why

the potential contradiction contained in them becomes a real

contradiction".16 "In investigating why the general possibility of crisis

turns into a real crisis, in investigating the conditions of crisis, it is

therefore quite superfluous to concern oneself with the forms of crisis...." n

It is worth, at this point, locating what exactly it is which Marx doesconcern himself with in an essential study of capitalist crisis. The

developing contradiction which underlies the crisis is something more

fundamental than that between production and consumption, which lies at

the heart of most orthodox crisis theory. Such phenomenal forms can only

be understood in relation to the source of all contradiction which arises

from the peculiarity of the society in which we live based on the duality of

labour. That is, labour is at once both useful and exchangeable and thus has

both a concrete aspect and (for measurability of value) an abstract aspect.

Their unity, the basis of a stable social relation between capital and labour,

whereby labour fetishes this relation and its phenomena, makes for a viable

surplus labour extracting organism - that is, capitalist society is not

threatened with its negation: communal society. Capitalism, therefore, this

social relation briefly outlined, experiences its many forms of crisis whenthe unity of labour, its concrete form and socially supplied abstract form,

15 Quoted by E. Mandel, Late Capitalism, London 1993, p28.16 K. Marx, op. cit, p152

17 Ibid, p514

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pull apart. Large areas of the economy are given over to a purely "useful"

supply of labour independent of its abstract form as fetishism is broken

down under the growing consciousness of labour brought about, in turn, by

its growing socialisation under the auspices of an ever greater division of

labour required for accumulation. Ticktin encapsulates the situation thus:

In its essence it [crisis-D.K.] expresses the fact that theeconomic relationships stand in an "absolute

contradiction" with one another. They are pulling apart

instead of interpenetrating. Hence production stands

opposed to consumption, agriculture to industry, labour

power to the means of labour, and sale to purchase. Put

succinctly, value has broken down. Disintegration sets

in.18

It is on this very last point of a disintegrating/declining law of value which

we must take issue with what is loosely termed the 'Autonomist' school of

Marxism which has, with its attempt to escape the mechanistic

interpretation of Marx's work already outlined, attained a certain amount of

credibility in this period.

(2) THE AUTONOMIST SCHOOL

The task in analysing what has become known as Autonomism is to sort

out the wheat from the chaff. In its favour is the obvious disregard for

theory which downplays the role played by the working class in

capitalism's crisis. It points out, rightly, the (at best) 'stage army' view of

the working class, which is trundled out sporadically for its minor role

whilst the 'protagonists', the blind forces of capitalist production, act out

their historical mission. As Geoff Kay points out: "The inevitable outcome

of the degeneration of Marxism to logical-positivism is the objectification

of the working class, and the reduction of its opposition to capital to purely

quantitative struggles (for example, the struggle over wages - D.K.)". Kay

trails off by concluding that "the ultimate failure is to turn away from the

law of value and objectify the forces of production".19

18 H. Ticktin, op cit, p74.19 G. Kay, Critique 6, p74.

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Antonio Negri, the Autonomists' most well known expositor, talks in terms

of capitalism's 'antagonistic character' having its origin in "the relation of

scission between use-value and exchange-value, a relation of scission in

which two tendencies are liberated from the forced unity to which they have

been constrained".20 So far, so good. However, it becomes apparent that in

their haste to get clear of logical-positivism, the Autonomists polarisethemselves at the other extreme, relying on a theory of crisis 'top heavy' in

its subjective content. That is, crisis is caused through overt working class

action which - as we shall now see - is the propellant toward 'death', to use

Negri's words, of the law of value.

To understand the problem we must highlight the Autonomists'

preoccupation with what they see as the fundamental contradiction:

between necessary labour and surplus labour. In this respect Negri's words

are instructive:

Marx's route is that which descends from an adherence to

the monetary image of the crisis to an analysis of the

crisis of social relations, from the crisis of circulation to

the crisis of the relation between necessary labour and

surplus labour And it is in this historical projectionthat the crisis becomes a crisis of the law of value.21

For the Autonomists, crisis emanates from advancement in the productive

forces. As science and technology take on greater significance in

production vis-a-vis living labour, the potential develops for the gap

between necessary labour time and surplus labour to increasingly grow. In

other words, less physical labour is required to supply the material needs of

society. However, the possibilities this advance presents are not realisable

as capitalism's primary aim is that of social control through the

imposition of work. "With the growing contradiction between the rising

level of social productivity and capital's continuing insistence on more

work", concludes Harry Cleaver, "working class struggle has more and

more taken on the character of a struggle against work".22 Thus

20 A. Negri, op cit, p72.

21 Ibid, p25

22 H. Cleaver, Reading Capital Politically, Brighton 1979, p83.

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phenomenal forms of crisis such as that arising out of the tendency of the

organic composition of capital to rise " can be re-read in terms of the

increasing difficulty of imposing work".23

It is this struggle against the 'subordination to work' which underlies the

Autonomists 'scission' between use and exchange value (less work = less

labour = [in its abstract form] less of a measuring rod for capital), andthereby the crisis of the law of value. Analysis of capitalism and its crises

in terms of an objective unfolding of the laws of that social form is

eschewed in favour of charting the composition and recomposition of the

working class (for example from the 'mass worker' of the 'Fordist' era to the

'social worker' of the 'post-Fordist' present), the working class being seen,

of course, as a class for itself . Thus Cleaver can state:

With the working class understood as being within

capital yet capable of autonomous power crisis can

no longer be thought of as a blind "breakdown1 generated

by the mysterious invisible laws of competition crisis

has been reinterpreted in terms of the power relations

between the classes.24

A true reading of Marx, it is argued, has to reject the Autonomist,subjectivist argument. Its analysis by-passes the view (consistent with

Marx) of an epoch of decline, and fails to register, in its attack upon the

reification of categories witnessed in 'objectivist' Marxism, the real extent

to which the categories do have an objective life as aspects of capital.25

(Marx writes in the Grundrisse of the part played by capital in its own

destruction thus:

As soon as it begins to sense itself and becomes conscious

of itself as a barrier to development, it seeks refuge in

forms which, by restricting free competition, seem to

make the rule of capital more perfect, but are at the same

23 H. Cleaver, Radical Chains 4, p13

24H. Cleaver, Reading Capital Politically, p62.

25 Aufheben 3, pages 33-34.

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time the heralds of its dissolution, and of the dissolution

of the mode of production resting upon it ").26

How, for example, can a theory of crisis based upon the 'concrete

behaviours' of the working class explain the palpable deepening of crisis in

the 1980s and 1990s alongside an equally palpable cessation in an

offensive class struggle? A theory born of the marriage between, on theone hand, the immediate euphoria of European struggles in the 1960s and

1970s and the (justified) distaste of many on the Marxist left for the

structuralist, anti-humanism of Althusser on the other, Autonomism is, it is

fair to say, a theory inappropriate to the present.

What is needed, therefore, in any investigation of capitalist crisis, is a way

of determining the relationship between both objective and subjective

factors which leaves behind the mechanistic interpretations of the 'capitallogic'

school and the overemphasis upon the struggle of a class 'in itself

characteristic of the Autonomist school. What is needed, in other words, is

a faithful reading of Marx's work - something which, it is argued, can only

be attempted with an understanding of Marx's ontological assumptions.

MARX'S METHOD(1) MARX'S ONTOLOGY

Marx, unlike many of those contemporaries in political economy he spent

much of his time criticising, was able to both accept and explain the

contradictions which gave rise to crisis. Marx, as Meikle points out, had

this ability because 'he based his understanding on the category of a whole

identity in movement'.27

There is, of course, not enough room here to get to grips fully with what is,

to use Stern's words, ' one of the central disputes of philosophy'28: that

is, the fundamental debate over the structure of the object between those

26 K. Marx, Grundrisse, London, 1973, p651.

27 S. Meikle, Essentialism in the thought of Karl Marx London 1985, p66.

28 R. Stern, Hegel, Kant and the Structure of the Object, London 1990, p5.

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holding a 'pluralistic' (or atomistic) ontology, and those holding a holistic

(or organic) ontology. However, a brief outline of Marx's pedigree in this

respect is, perhaps, essential to appreciate Marx's understanding of

contradiction (and, of course, the concrete form it takes in capitalist

society).

For Marx, the object (including social phenomena such as a system of human relations) is - if it is to be made sense of - irreducible. In this,

Marx both demonstrates his Hegelian roots, and his rejection of Kantian

constructivism (upon which, whether conscious of it or not, much

bourgeois political-economic thought rests).29

Taking the latter first, Kant's 'unity' of the object (whatever it may be) is

one which takes place as a result of a 'synthesizing' process by the subject,

whereby more fundamental, self-subsistent and independently existent

elements, are given a mind-imposed identity - in other words, unity is

conferred externally. (Later, it will be drawn out from this point how such

an ontological standpoint insidiously informs many Marxist accounts of

capitalist crisis, treating the system in such a reductionist way that their

analysis lapses into a glorified empiricism rather than a dialectical

understanding of a living organism.)Following Hegel, Marx rejects any account of the subject which starts out

by giving ontological primacy to the parts which make up that object,

stressing instead their 'indivisible totality1, in which their elemental parts

are subsequent to this totality. As Stern informs us, Hegel is able to reject

the Kantian premise thus: "The object does not need to be organised or

unified by us, because, as the exemplification of a substance-universal it is

no longer treated as reducible to the kind of atomistic manifold that

requires this synthesis'.30 In this account of the object the particular

aspects are not ignored but made sense of as qualities which have meaning

only in relation to the nature of the whole. In short, for both Hegel and

Marx the object as a whole is given ontological primacy.

29 Ibid. (The passages on this dual assertion are an extremely concise outline of the argument putforward in R. Stern's book and are certainly not meant to be seen as an original contribution on my

part - D.K.).

30 Ibid, p5.

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is a conscious attempt by capital to address the antithesis which arises from

the necessarily dual form of labour supply that is typical under capital, viz.

the concretely useful, and the social form in which surplus labour is

extracted - abstract labour. As Meikle stresses, the fundamental history

(of capitalist society - D.K.) consists in the changes, developments or

adaptations which are made to ease the friction (of these two elements -D.K.) or to dampen it down when it threatens to burst into flame'.33

The fact that for Marx this is a dialectical contradiction, not conducive to

the static misreadings of these categories made commonplace by those who

followed, can be seen from the words of Marx himself: ' the antithetical

phases of the metamorphoses of the commodity are the developed forms of

motion of this immanent contradiction'.34 From this, it is obvious to

conclude that Marx was talking of a relationship (identified here as the

fundamental source of capitalist crisis) which faces a permanent and

deepening schism. The corollary of this is the ever greater ferocity of the

general forms of crisis (identified earlier in this paper) as the capitalist

class is forced into action in an attempt to bridge the chasm into which it

ultimately must fall.

Following on from what has been said, the natural question to be posed atthis stage is to ask what precisely is causing this friction between use and

exchange value (the dialectic being concerned, firstly, with revealing the

essential contradiction at work in society - that between use value and

exchange value - and, secondly, the uncovering and explanation of its

development: the progressive decaying of exchange value on the one hand,

and the assertion of use value on the other hand).

Crisis, in essence, is the attempt by capital to halt an historical process: the

breakdown of one social relation and its supersession by another, higher

social relation. More specifically, it is an attempt to arrest the transition

between a society where social wealth is measured in terms of exchange

value and a society where social wealth is measured increasingly in terms

of use and need - even if this means the retardation of the forces of

33 S. Meikle, op. cit, p67.

34 Quoted by S. Meikle, op. cit, p118

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production and the quality of life of the great mass of people in that society.

'Production is only production for capital and not vice-versa' (Marx).35

Marx shows in the Grundrisse where the problem facing capital emanates

from: accumulation is its life blood. The development of the accumulation

process, however, gives rise to the growth of socialised labour, and with it

the criteria of production shifts from exchange to a use value orientation:'Marx makes abundantly clear what the real dialectical process is: with the

progress in production technique a socialised worker emerges which

increasingly negates his exchange value extreme as abstract labour within

the capitalist integument'.36

The transformation in the supply of labour Marx refers to can best be

appreciated from back-to-back statements, the first from A Contribution tothe Critique of Political Economy, the second from the Grundrisse:

The following basic propositions are essential for an

understanding of the determination of exchange-value by

labour-time. Labour is reduced to simple labour, labour,

so to speak, without any qualitative attributes...To

measure the exchange value of commodities by the labour

time they contain, the different kinds of labour have to bereduced to uniform, homogeneous simple labour, in

short, to labour of uniform quality, whose only

difference, therefore, is quantity.37

To the degree that large industry develops, the creation of

wealth comes to depend less on labour time and on the

amount of labour employed than on the power of the

agencies set in motion during labour time...Labour no

longer appears so much to be included within the

production process; rather, the human being comes to

relate more as watchman and regulator, to the production

process itself In this transformation, it is neither the

35 Quoted by P. Kennedy, op. cit.36 P. Kennedy, op. cit37 K. Marx, A Contribution to the Critique of Political economy, Moscow, 1979, p30.

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direct human labour he himself performs, nor the time

during which he works, but rather the appropriation of

his own general productive power, his understanding of

nature and his mastery over it by virtue of his presence as

a social body - it is, in a word, the development of the

social individual which appears as the great foundationstone of production and of wealth... labour time ceases

and must cease to be its measure, and hence exchange

value must cease to be the measure of use value.38

In the former, Marx conjures up the scenario of an efficient, mature

capitalist economy where the supply of labour in its abstract form rests

unproblematically with its content, simple human labour - the necessary

social basis of the commodity form. In the latter, Marx is concerned with

conveying the tendency toward the negation of abstract labour - the

'measuring rod' of exchange - as technique and organisational

improvements in the production process leads to the emergence of a

socialised worker capable of forcing concessions from capital it can illafford

to concede. In short, the forcing of the quantitative (accumulation)

brings about, at a certain point, a qualitative change in the social relation.The progression in the division of labour, destroying craft divisions and

skills, lends itself to the subjective assertion of the working class and so the

pragmatic development by capital of a strategy of control through

concessions to the working class. By the end of the nineteenth century the

organisation of the British working class posed a dangerous alternative to

bourgeois society: a society it looked increasingly upon as having limited

possibilities. The working class could not, if the system were to survive, be

allowed to evolve their socialistic tendencies. Intervention was required,

and intervention came in the forms of: a shift to production on the basis of

need in certain areas of the economy; the withdrawing of whole sectors (or

partial withdrawal) from market discipline; and the negation of exchange

value by use. All of this was done in order to ensure that the enforced

contradiction at the heart of accumulation might continue in however adeformed manner elsewhere. (This was channelled through and

administered by the reformist tide of institutions and individuals which

swept over the social and political life of the nation from the last quarter of

38 K. Marx, Grundrisse, p704.

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which the dynamic contradiction he identified within capitalist society can

only be understood. Marx's pronouncements on capitalist society (where

the law of value holds sway) lose their incisiveness when law is defined in

terms of regularities rather than as the necessary working out of an

essential contradiction. Crisis here, therefore, must be seen as functional

to the system - a point where capital is (if unchallenged) able to ride outdepressions in trade and continue, 'business as usual', none the worse for

wear.

The result of this misreading has been to disassociate capitalist crisis with

the objective decline of capitalist social relations, which in turn, condemns

many Marxists to misread the nature of the present period of capitalist

development. We are living through an era when the life-blood of the

system (abstract labour) continues to haemorrhage at an alarming rate, an

era when capital has begun 'to sense itself and become conscious of itself as

a barrier to development'.41 The encroachment of the state - 'the executive

committee of the bourgeoisie class' as Marx perceptively described it - is a

particular feature of this era of capitalist decline. It is an overseer of

capital's affairs. Decision making concerning the economy shifts from

private capital to capital on a collective basis.42 Other phenomena such asmonopoly, nationalisation, welfarism, the embracing by the state of

bureaucratic trade unionism, and the flight into finance capital keep the

system of wage labour in existence, but only at the terrible cost of curtailing

the law of value in ever larger areas of the economy.

However, these very developments are seen by many Marxists to mark not the progressive decline of capitalism but, rather, merely its movement from

one form of accumulation to another (even, for some, its exact opposite -

the movement toward a more stable social relation). Machover, for

example, can write:

As the end of the century draws near and we look back at

the epoch from 1900 to the present day, it is clear that

this has been a century of great upheavals and

crises....The late nineteenth and first half of the twentiethcentury were indeed a response to a period of historical

41 K. Marx, Grundrisse, p651.

42 H. Ticktin, Critique 26, p80.

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crisis of capitalism; but this was a crisis of youth and

growth rather than of senility and of decline.43

(Revealing the depth of his analysis, Machover goes on to pose and answer

the question 'What does a moribund capitalism look like? We shall only be

certain of the answer in retrospect, when capitalism is on its deathbed

history is this kind of science - very good at explaining after thefact')44

The same kind of empiricism which infects Machover's Marxism can be

perceived in Negri and the Autonomists in their analysis of capital's

movement:

In post-war Europe, which was undergoing

reconstruction, capitalism's excellent health was

interpreted by those believers in the ineluctable

superiority of the 'socialist cause' as a chance mishap, like

the secondary counter tendencies against the downward

trend of the capitalist mode of production. There was no

doubt that capitalism's days were numbered and sooner or

later the economy's inherent and catastrophic

contradictions would emerge. However, capitalism'sgrowth rate was maintained, the internationalisation of

capital continued unhindered, working class house-holds

increased their standard of living, technological

innovation flourished in short, the productive forces

developed very nicely.45

There has indeed been, within much of contemporary Marxism, a

fetishisation of the ability of capital to expand the forces of production

during the present period, without, it has to be said, addressing whether

such an ability is capable of being fully utilised. As Ticktin points out:

'It is the progress of accumulation that is critical. In

other words, the whole question revolves around the

43 M. Machover, Critique 23, p148 & 151.44 Ibid, p147.

45 A. Negri. The politics of Subversion, Cambridge 1989, p10.

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question of the growth of surplus value. A vibrant

capitalism is able to raise productivity to the limits and

use the surplus value generated to further raise production

and then productivity. To the extent that an increasing

gap opens up between the potential for productive

investment and the reality, capital is malfunctioning.46

We have reached a stage when the forces of production have, to use Marx's

expression, become fettered - not in the sense of the ability to conceive and

construct them, but in the ability to realise the role they have been created

for in capitalism - to facilitate surplus value extraction.

The alarming inability of many Marxists to fully comprehend Marx's

methodological approach to his critique of capitalism shows itself most

starkly in such misunderstandings.

CONCLUSION

In his book, , Simon Clarke observes that it is 'the

supreme responsibility of socialists' to discover and lay-bare the 'necessary

reasons' of capitalist crisis.47 It can be said that the first step for Marxists

wishing to fulfil this responsibility is to familiarise themselves with Marx'stheoretical pedigree - more specifically, the input into Marx's work of both

the organicist and Hegelian traditions which gives Marxism its explanatory

dynamism, distinguishing Marx's critique of capitalism from all others.

A failure to begin our journey with Marx's methodology to gain our

bearings can only result in travelling down the usual intellectual cul-de-sac

of viewing capitalist crisis in terms of something which is functional to the

capitalist system. Typical of this view are the words of Mandel: the

development of the capitalist mode of production is marked by 'periods of

equilibrium and disequilibrium, each of the two elements engendering its

own negation. Each equilibrium inevitably leads to a disequilibrium, and

after a certain period of time this, in turn, makes possible a new provisional

46 H. Ticktin, Critique 26, p79.47 S. Clarke, op. cit, p73.

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BIBLIOGRAPHY

A. CALLINICOS, KARL MARX, LONDON, 1983.

S. CLARKE, MARX'S THEORY OF CRISIS, LONDON, 1994.

H. CLEAVER, READING CAPITAL POLITICALLY, BRIGHTON, 1979.

M. ITOH, VALUE & CRISIS, LONDON, 1980.

E. MANDEL, LATE CAPITALISM, LONDON, 1993.K. MARX, THEORIES OF SURPLUS VALUE - VOL 2, LONDON, 1969.

K. MARX, GRUNDRISSE, LONDON, 1973.

K. MARX, A CONTRIBUTION TO THE CRITIQUE OF POLITICAL

ECONOMY,

MOSCOW, 1979.

K. MARX & F. ENGELS, SELECTED WORKS, LONDON, 1977.

S. MEIKLE, ESSENTIALISM IN THE THOUGHT OF KARL MARX,

LONDON, 1985.

A. NEGRI, MARX BEYOND MARX, MASSACHUSSETTS, 1984.

A. NEGRI, THE POLITICS OF SUBVERSION, CAMBRIDGE, 1989.

R. STERN, KANT, HEGEL AND THE STRUCTURE OF THE OBJECT,

LONDON, 1990.

ARTICLES/JOURNALSG. KAY, THE FALLING RATE OF PROFIT, UNEMPLOYMENT &

CRISIS, CRITIQUE 6.

H. TICKTIN, THE TRANSITIONAL EPOCH, FINANCE CAPITAL & BRITAIN, CRITIQUE 16.

M. MACHOVER, THE NATURE OF THIS EPOCH, CRITIQUE 23.

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Crisis Theory by David Kennedy

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