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Marx's Theory of Crisis
The theory of crisis has always played a central role within Marxism, and yet has been one of the weakest theoretical elements of Marxist political economy, while Marx's own writings on crisis have been neglected. The recent publication of the last important manuscripts makes it possible for the first time to provide a complete and systematic account of Marx's theory of crisis. Simon Clarke's important new book begins with a critical analytical survey of Marxist theories of crisis, before focusing on the development of the theory of crisis in Marx's own works, examining the theory within the context of Marx's critique of political economy and of his distinctive theory of the dynamics of capitalism. The book concentrates on the scientific interpretation and evaluation of the theory of crisis, and will be of interest to mainstream economists, as well as to sociologists, political scientists and students of Marx and Marxism.
304 pages, Paperback
First published December 17, 1993
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About the author
Simon Clarke
169 books16 followersSimon Clarke is a British sociologist specialising in social theory, political economy, labour relations, and the history of sociology. He has a particular interest in employment relations in China, Vietnam, and the former-Soviet nations. He is Professor Emeritus of Sociology at the University of Warwick.
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Displaying 1 - 5 of 5 reviews
October 26, 2020
Really cool book that bridges the realms of academia and politics. To say that marxism is a living, dynamic science is an unfashionable but familiar truism. To apply this to Marx himself, as he engaged in various projects, observed upheavals and defeats, and adjusted or refocused his writings, is much less evident. Simon Clarke has done the commendable job of tracing how Marx dealt with the notion of crisis throughout his life, not apparent when simply reading the primary sources without biographical knowledge.
There are two important aspects to this: A) the functioning of crisis and B) the political importance of crisis.
A) Marx has never devoted to the concept of crises a full book or even a pamphlet; everything must be cobbled together from where it appears in his various works. When I finished Capital, I spontaneously assumed there was only one 'scientific' cause of crises: the law of the tendency of the falling rate of profit.
As competing capitals force one another to lower prices so as to gain in the market, they are incentivized to upgrade their productiveness per worker, driving down the labour content of each individual commodity, allowing commodity prices to fall. The first capitalist to innovate reaps the greatest benefits (a greater market share), but the perverse endgame is that once every producer has adapted, the organic (= fixed costs of machinery) content of capital has risen, the total capital required to participate in the market has risen, and all things being equal the stabilized profit margin per product is lower than it was initially. Thus, this is a game of ever-rising costs and ever-declining profit rates, not to mention fewer workers and greater social unrest. Paul Cockshott, for one, has found empirical proof of this tendency .
However, this tendency is only a tendency, and it can be temporarily overpowered by other tendencies (such as the depreciation of constant capital), effectively stabilizing the organic composition - something I hadn't internalized before reading Clarke. More to the point, though: Marx himself never related this tendency to the eruption of crises. Indeed, the horizon of zero profitability is approached but never reached, while crisis effectively means the crisis of profitability: investing is temporarily a net loss. Only after the interbellum did this tendency gain in prominence in academia, driven by The Law of Accumulation and Breakdown of the Capitalist System, Being also a Theory of Crises.
What díd Marx think about crises, then? Clarke points to two other aspects: overproduction and disproportionality. These bring us closer to modern-day economics, as they both revolve around the trouble with consumption and production. Crisis is made possible because capitalists use money to link every stage in the production process (M-C-M'-C'-M''-...): while they must all sell their commodities, they are not obliged to use their money to buy again immediately, or employ workers.
Overproduction simply means that at any given time, too many commodities are on the market for consumers and investors to absorb, leading to a loss of stock and a cascade of defaults and destruction of capital. Clarke makes sure not to confuse if for underconsumptionism, which is supposed to point to the relative poverty of the working class as the root of this overproduction. This is a fallacy, however: working class consumption (ie commodities traded for wages) tautologically equals the value in commodities of all paid-out wages. But there is an entirely different mass of commodities untouched by worker consumption, equal to the mass of surplus value: capital goods, consumed by capitalists or reabsorbed in the production process (and hence exchanging against capital investment). In other words, working-class consumption by itself has never been enough to result in a net profit, and hence it cannot be the only source of 'underconsumption' - the capitalists themselves restrict their spending too, dictated by profitability. Clarke leaves out an important counterpoint: as pointed out by Keynes (The General Theory of Employment, Interest, and Money) and Desai (Geopolitical Economy: After US Hegemony, Globalization and Empire), the worker spends a larger part of her income on consumption, while capitalist income to a greater degree tends to disappear in luxury consumption and speculation. The difference between the two circuits does have an impact on crisis generation.
'Disproportionality' reads like a variation on the same theme: capital is temporarily overinvested in the wrong sector or industry, leading to an overabundance of commodities in one department, which, unsold, set in motion the cascade mentioned above. Clarke tends to classify these two notions as different emphases of the same phenomenon.
Clarke notes that while Marx' thinking shifted between these three poles, particularly the last two, Engels always had a 'crude underconsumptionist' streak running through his works, finding the cause of crisis in a relative dearth of wages. In his eyes, Engels was less of an economist than Marx was, leading him to simplify a complex set of relationships.
B) But what does all of this mean politically?
It's getting late so I'll return to this point over the next few days. But the bottom line is this: Marx and Engels' appreciation of crises changed dramatically throughout their lifetimes. Around the time they wrote the Communist Manifesto, young Marx & Engels hyped up every crisis as potentially the final straw: they could not but lead to immiseration, social upheaval and an inflow of workers in Communist and Workers' Parties. Their letters to each other showed an intense fascination with news of burgeoning crises all around the world, and they grew ever more convinced that these were gaining in both frequency and vehemence.
However, by the sixties (if I recall correctly), the duration between each crisis started to extend, while they did not produce the labour militancy Marx & Engels prophesized. It is quite humbling to read about their ad-hoc responses to these repeated offenses against their Millenarian doctrine: they gradually lost interest in crises as political events. What did happen is much more interesting. Clarke notes that M & E's 'apocalyptic' take on crises was intimately linked to their political activities: various intellectual fraternities that amounted to nothing much than sects, in the sense that they did not constitute mass parties and did not set in motion political struggles. So removed from practice, it made sense for them to envision salvation coming from the spontaneous dynamics of capitalism: they could not themselves build it. However, later on they very heavily invested in various labour parties and trade unions (also apparent in Eleanor Marx: A Life). As they did this and the agency of history shifted from inherent abstract dynamics to the organized organs of the working class, so did their estimation of crisis. Less and less did they see them as a crescendo of ruptures, building up to a final break, and more like Hayek: necessary purges of an unstable system, constantly on the verge of breaking out and shaking up matters when they do, but not themselves the prelude to the end. Only the people make history, and political organizing was a necessity during both crisis and temporary equilibrium.
There are two important aspects to this: A) the functioning of crisis and B) the political importance of crisis.
A) Marx has never devoted to the concept of crises a full book or even a pamphlet; everything must be cobbled together from where it appears in his various works. When I finished Capital, I spontaneously assumed there was only one 'scientific' cause of crises: the law of the tendency of the falling rate of profit.
As competing capitals force one another to lower prices so as to gain in the market, they are incentivized to upgrade their productiveness per worker, driving down the labour content of each individual commodity, allowing commodity prices to fall. The first capitalist to innovate reaps the greatest benefits (a greater market share), but the perverse endgame is that once every producer has adapted, the organic (= fixed costs of machinery) content of capital has risen, the total capital required to participate in the market has risen, and all things being equal the stabilized profit margin per product is lower than it was initially. Thus, this is a game of ever-rising costs and ever-declining profit rates, not to mention fewer workers and greater social unrest. Paul Cockshott, for one, has found empirical proof of this tendency .
However, this tendency is only a tendency, and it can be temporarily overpowered by other tendencies (such as the depreciation of constant capital), effectively stabilizing the organic composition - something I hadn't internalized before reading Clarke. More to the point, though: Marx himself never related this tendency to the eruption of crises. Indeed, the horizon of zero profitability is approached but never reached, while crisis effectively means the crisis of profitability: investing is temporarily a net loss. Only after the interbellum did this tendency gain in prominence in academia, driven by The Law of Accumulation and Breakdown of the Capitalist System, Being also a Theory of Crises.
What díd Marx think about crises, then? Clarke points to two other aspects: overproduction and disproportionality. These bring us closer to modern-day economics, as they both revolve around the trouble with consumption and production. Crisis is made possible because capitalists use money to link every stage in the production process (M-C-M'-C'-M''-...): while they must all sell their commodities, they are not obliged to use their money to buy again immediately, or employ workers.
Overproduction simply means that at any given time, too many commodities are on the market for consumers and investors to absorb, leading to a loss of stock and a cascade of defaults and destruction of capital. Clarke makes sure not to confuse if for underconsumptionism, which is supposed to point to the relative poverty of the working class as the root of this overproduction. This is a fallacy, however: working class consumption (ie commodities traded for wages) tautologically equals the value in commodities of all paid-out wages. But there is an entirely different mass of commodities untouched by worker consumption, equal to the mass of surplus value: capital goods, consumed by capitalists or reabsorbed in the production process (and hence exchanging against capital investment). In other words, working-class consumption by itself has never been enough to result in a net profit, and hence it cannot be the only source of 'underconsumption' - the capitalists themselves restrict their spending too, dictated by profitability. Clarke leaves out an important counterpoint: as pointed out by Keynes (The General Theory of Employment, Interest, and Money) and Desai (Geopolitical Economy: After US Hegemony, Globalization and Empire), the worker spends a larger part of her income on consumption, while capitalist income to a greater degree tends to disappear in luxury consumption and speculation. The difference between the two circuits does have an impact on crisis generation.
'Disproportionality' reads like a variation on the same theme: capital is temporarily overinvested in the wrong sector or industry, leading to an overabundance of commodities in one department, which, unsold, set in motion the cascade mentioned above. Clarke tends to classify these two notions as different emphases of the same phenomenon.
Clarke notes that while Marx' thinking shifted between these three poles, particularly the last two, Engels always had a 'crude underconsumptionist' streak running through his works, finding the cause of crisis in a relative dearth of wages. In his eyes, Engels was less of an economist than Marx was, leading him to simplify a complex set of relationships.
B) But what does all of this mean politically?
It's getting late so I'll return to this point over the next few days. But the bottom line is this: Marx and Engels' appreciation of crises changed dramatically throughout their lifetimes. Around the time they wrote the Communist Manifesto, young Marx & Engels hyped up every crisis as potentially the final straw: they could not but lead to immiseration, social upheaval and an inflow of workers in Communist and Workers' Parties. Their letters to each other showed an intense fascination with news of burgeoning crises all around the world, and they grew ever more convinced that these were gaining in both frequency and vehemence.
However, by the sixties (if I recall correctly), the duration between each crisis started to extend, while they did not produce the labour militancy Marx & Engels prophesized. It is quite humbling to read about their ad-hoc responses to these repeated offenses against their Millenarian doctrine: they gradually lost interest in crises as political events. What did happen is much more interesting. Clarke notes that M & E's 'apocalyptic' take on crises was intimately linked to their political activities: various intellectual fraternities that amounted to nothing much than sects, in the sense that they did not constitute mass parties and did not set in motion political struggles. So removed from practice, it made sense for them to envision salvation coming from the spontaneous dynamics of capitalism: they could not themselves build it. However, later on they very heavily invested in various labour parties and trade unions (also apparent in Eleanor Marx: A Life). As they did this and the agency of history shifted from inherent abstract dynamics to the organized organs of the working class, so did their estimation of crisis. Less and less did they see them as a crescendo of ruptures, building up to a final break, and more like Hayek: necessary purges of an unstable system, constantly on the verge of breaking out and shaking up matters when they do, but not themselves the prelude to the end. Only the people make history, and political organizing was a necessity during both crisis and temporary equilibrium.
December 14, 2023
This is first and foremost an intellectual history of Marx and Engels' theory of crisis. Clarke has gathered all commentary of this duo regarding economic crises throughout the assembled works. As if he could already ctrl f in the online pdf's. It's impressive, really. He does not limit himself to superficial comments in letters. Marx' more serious engagements with political economy in Contribution to the Critique, Gründrisse, and of course Capital, are all very well dissected.
His conclusion: there was no clear-cut crisis theory in Marx' work. Marx, although often retreating into simple theories of overproduction when commenting on contemporary developments, kept on tripping over the same theoretical problems. In the end, it is hard to prove that a capitalist system bumps into an insurmountable barrier. The market is, theoretically, able to overcome its self-created obstacles, even though it might do so through violent crises. Marx is unable to prove it, struggles with it, and eventually retreats from trying to prove it. The revenge of Say's Law (which does not contradict with his critique of the Law in Volume 1). Clarke shows convincingly how other strands of marxist crisis theory suffer from the same problem: underconsumption, overaccumulation, monopoly theory, disproportionality, falling rate of profit. For readers today, people engaged in the Brenner debate should really pick up this work!
Since reading this book, the quote: "The point is neither that capitalism can develop without limit, nor that it faces fixed limits, but that it is a living contradiction.” Is my #1 point of reference to judge the crisis theory people invoke. We need a Marxian theory of crisis able to handle this criterium. I'm sorry Brenner!
His conclusion: there was no clear-cut crisis theory in Marx' work. Marx, although often retreating into simple theories of overproduction when commenting on contemporary developments, kept on tripping over the same theoretical problems. In the end, it is hard to prove that a capitalist system bumps into an insurmountable barrier. The market is, theoretically, able to overcome its self-created obstacles, even though it might do so through violent crises. Marx is unable to prove it, struggles with it, and eventually retreats from trying to prove it. The revenge of Say's Law (which does not contradict with his critique of the Law in Volume 1). Clarke shows convincingly how other strands of marxist crisis theory suffer from the same problem: underconsumption, overaccumulation, monopoly theory, disproportionality, falling rate of profit. For readers today, people engaged in the Brenner debate should really pick up this work!
Since reading this book, the quote: "The point is neither that capitalism can develop without limit, nor that it faces fixed limits, but that it is a living contradiction.” Is my #1 point of reference to judge the crisis theory people invoke. We need a Marxian theory of crisis able to handle this criterium. I'm sorry Brenner!
May 22, 2025
molt bo, clarke no defrauda.
Clarke resegueix la recepció de la t. de la crisi de marx en la tradició marxista (resumint, els marxistes es van fer un lios importants) i després estudia exhaustivament com evoluciona la t de la crisi al llarg de tota l'obra de marx.
La conclusió que dona és que marx no té una t de la crisi, almenys no en el sentit d'una teoria sistemàtica. Marx estudia múltiples tendències a la crisi al llarg de la vida, com la llei de la caiguda de la taxa de guany que, com la resta de (contra) tendències poden, PODEN, ser tan manifestacions com causa de crisis particulars.
La contradicció que fonamenta tant la possibilitat com la necessitat de la crisi ha de ser una que sigui abstracte en el sentit que no sigui contingent a cada crisi històrica particular. Per això, entre altres motius, la caiguda de la taxa de guany és insuficient, i Marx no ho dubtava. La crisi és allò més abstracte i més concret del capitalisme, d'aquí la dificultat de caracteritzar-la.
Aquesta contradicció fonamental és la mateixa que caracteritza el mode de producció capitalista: que la producció es realitza via productors privats i independents que subordinen la producció de mercaderies a l'apropiació de plusvàlua. La producció de plusvàlua és el que mou als capitalistes, però sense la seva realització en la venta no hi ha plusvàlua que valgui. Producció i circulació estan unides per una relació de dependència mútua, però a la vegada, estan separades, esquena contra esquena. Quan la producció sobrepassa la capacitat de la circulació, tenim una crisi, que es manifestarà de la forma contingent q calgui (monetària, financera..) però la dinàmica subjacent és una de SOBREPRODUCCIÓ! Clarke sintetitza:
"...la tendencia a la crisis es omnipresente, ya que la regulación competitiva de la acumulación de capital no se consigud mediante la suave anticipación de los ajustes del mercado por parte de capitalistas omniscientes, sino mediante el proceso de sobreacumulación y crisis, a medida que la tendencia a la sobreproducción choca con la barrera del mercado ilimitado."
petoneeets críticsss muac
Clarke resegueix la recepció de la t. de la crisi de marx en la tradició marxista (resumint, els marxistes es van fer un lios importants) i després estudia exhaustivament com evoluciona la t de la crisi al llarg de tota l'obra de marx.
La conclusió que dona és que marx no té una t de la crisi, almenys no en el sentit d'una teoria sistemàtica. Marx estudia múltiples tendències a la crisi al llarg de la vida, com la llei de la caiguda de la taxa de guany que, com la resta de (contra) tendències poden, PODEN, ser tan manifestacions com causa de crisis particulars.
La contradicció que fonamenta tant la possibilitat com la necessitat de la crisi ha de ser una que sigui abstracte en el sentit que no sigui contingent a cada crisi històrica particular. Per això, entre altres motius, la caiguda de la taxa de guany és insuficient, i Marx no ho dubtava. La crisi és allò més abstracte i més concret del capitalisme, d'aquí la dificultat de caracteritzar-la.
Aquesta contradicció fonamental és la mateixa que caracteritza el mode de producció capitalista: que la producció es realitza via productors privats i independents que subordinen la producció de mercaderies a l'apropiació de plusvàlua. La producció de plusvàlua és el que mou als capitalistes, però sense la seva realització en la venta no hi ha plusvàlua que valgui. Producció i circulació estan unides per una relació de dependència mútua, però a la vegada, estan separades, esquena contra esquena. Quan la producció sobrepassa la capacitat de la circulació, tenim una crisi, que es manifestarà de la forma contingent q calgui (monetària, financera..) però la dinàmica subjacent és una de SOBREPRODUCCIÓ! Clarke sintetitza:
"...la tendencia a la crisis es omnipresente, ya que la regulación competitiva de la acumulación de capital no se consigud mediante la suave anticipación de los ajustes del mercado por parte de capitalistas omniscientes, sino mediante el proceso de sobreacumulación y crisis, a medida que la tendencia a la sobreproducción choca con la barrera del mercado ilimitado."
petoneeets críticsss muac
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June 27, 2025This was very hard but rewarding despite the slightly anticlimactic ending. I think I found the conclusion satisfying. It made more sense to be into capital-c Crisis Theory in 2009 or maybe even 2020/1. Capitalism isn’t going to knock itself over for us when The Big One hits. The characterisation of Crisis as the superficial manifestation of the underlying contradictions of the system (separation between purchase/sale, the money form, tendency to overproduction) makes sense from the vantage point of the present day. Small-c crisis is the rule rather than the exception.
Politically this has consequences - towards slow and patient build up of organisation over prioritising the rupture and spontaneity. It’s interesting that communisers picked up the value form stuff heavily - while Clarke seems to start with the same concerns, he takes them to a different place. It’s not really the point of the book so I wasn’t too bothered by his oversimplification of the relationship between the two.
There was also an interesting aside about secular stagnation (resulting from concentration and centralisation) as an alternative to boom/bust dynamism - maybe if Clarke had lived a bit longer he could’ve picked up this thread.
Politically this has consequences - towards slow and patient build up of organisation over prioritising the rupture and spontaneity. It’s interesting that communisers picked up the value form stuff heavily - while Clarke seems to start with the same concerns, he takes them to a different place. It’s not really the point of the book so I wasn’t too bothered by his oversimplification of the relationship between the two.
There was also an interesting aside about secular stagnation (resulting from concentration and centralisation) as an alternative to boom/bust dynamism - maybe if Clarke had lived a bit longer he could’ve picked up this thread.
June 26, 2025
"To insist that Marx had no theory of crisis is to insist that the focus
of Marx's work is not the crisis as catastrophic event, but the inherent
tendency to crisis that underlies the permanent instability of social existence under capitalism. From this perspective Marx is the first and
the most radical theorist of the 'post-modern' condition, a condition
whose novelty has only just struck the metropolitan capitalist intelligentsia, but which has afflicted the proletariat since the beginning
of capitalism. However, Marx does not offer us a philosophical discourse on post-modernity, but a scientific account of the contradictory
foundations of modern society."
of Marx's work is not the crisis as catastrophic event, but the inherent
tendency to crisis that underlies the permanent instability of social existence under capitalism. From this perspective Marx is the first and
the most radical theorist of the 'post-modern' condition, a condition
whose novelty has only just struck the metropolitan capitalist intelligentsia, but which has afflicted the proletariat since the beginning
of capitalism. However, Marx does not offer us a philosophical discourse on post-modernity, but a scientific account of the contradictory
foundations of modern society."
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