DAVID 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 own logical 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.


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 materialist dialectician), 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 these theories, 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.


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 by
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., p31 7 Ibid p54.


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 disproportionality theory of crisis. See S. Clarke, op cit., p39. 9 Quoted by S. Clarke, op cit., p40


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 a consequence 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 the falling 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


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 clearly undergo 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, p115 13P. Kennedy, op cit 14K. Marx, Theories of Surplus Value, 2 London 1969, p492.


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 does concern 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 when the unity of labour, its concrete form and socially supplied abstract form,
Quoted by E. Mandel, Late Capitalism, London 1993, p28. K. Marx, op. cit, p152 17 Ibid, p514
15 16


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


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 polarise themselves 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 projection that 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
A. Negri, op cit, p72. Ibid, p25 22 H. Cleaver, Reading Capital Politically, Brighton 1979, p83.
20 21


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), and thereby 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
H. Cleaver, Radical Chains 4, p13 H. Cleaver, Reading Capital Politically, p62. 25 Aufheben 3, pages 33-34.
23 24


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 the one 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
K. Marx, Grundrisse, London, 1973, p651. 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.
26 27


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.
Ibid. (The passages on this dual assertion are an extremely concise outline of the argument put forward 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.


What, then, is the 'substance-universal' in social terms? If we say, for instance, that the capitalist social relation is the exemplar of a substanceuniversal (and thereby lays claim to be treated as an irreducible whole), we are drawing attention to the fact that capitalist society has an essential nature which it shares in common with others. The question then becomes: 'what is this essential nature?' Its answer - if one is a Marxist - is that, essentially, social organisms are class organisms where a surplus of labour is extracted from one class and appropriated by another. The particular form in which this process takes place delineates the stages of human history. Society, then, is for Marx, an irreducible whole - a whole, moreover, whose totality can only be comprehended in terms of the unity of the opposing forces of which it is comprised. The latter aspect is drawn out to good effect by Allen Wood when he states: An organic whole is essentially made up of different reciprocally negating processes, which constitutes the thing the conflicting elements are not incompatible in the sense that they cannot exist for a time in the thing. But they are incompatible in the sense that the opposition between them undermines the stability of the structure, and eventually destroys it along with the contradictions which constitute it. The opposing elements in an organic whole are reciprocally dependent and cannot exist without one another.31 The 'whole', for Marx, is one which is seen to be in a constant state of flux. Again, therefore, a question needs to be posited and then answered: 'What is it in capitalist society which represents the restless contradiction described above?'

In Marx's own words: 'Crisis is the forcible establishment of unity between elements that have become independent'.32 By this, Marx means that crisis
Quoted in S. Meikle, op. cit, p66. 32 Quoted by S. Meikle, op. cit, p67.


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 at this 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 34

S. Meikle, op. cit, p67. Quoted by S. Meikle, op. cit, p118


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 to the 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 be reduced 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. cit 37 K. Marx, A Contribution to the Critique of Political economy, Moscow, 1979, p30.


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 foundation stone 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 a deformed 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

K. Marx, Grundrisse, p704.


the nineteenth century - the institutional deflection of independent working class action). Could this not be what Marx meant when stating that the capitalists are compelled to exploit the already gigantic means of production on a larger scale....there is a corresponding increase in earthquakes, in which the trading world can only maintain itself by sacrificing part of wealth, of products and even of productive forces to the gods of the netherworld - in a word, crises increase?39 Only in this way - by locating the fundamental source of capitalist crisis in the contradiction between capital and labour, and more specifically, the ongoing contradiction existing within labour itself - can we view with clarity the relationship between the objective and subjective elements of capitalist crisis and dispel theories of it which emphasise the importance of one to the detriment of the other. Any theory emphasising the level of conscious action by the working class in forcing a situation where crisis occurs effectively downplays the part played by the objective unfolding of the dialectical laws peculiar to capitalist accumulation identified above. On the other hand, as Kay suggests: The vision of capital running out of momentum and losing its capacity to survive as capital for lack of sufficient profit, precisely because of its success in revolutionising the forces of production (though having D.K.) great intellectual appeal cannot yield to any real understanding of the death crisis of capital as the birth pangs of a new form of society. It can produce a breakdown theory, of sorts, but it tells us nothing, and can tell us nothing, about the class that will make the revolution.40 Each extreme position, it has been argued, flows from a common inability to grasp Marx's ontological starting point in relation to human society from
39 40

K. Marx and F. Engels, Selected Works, London, 1977, p228. G. Kay, op. cit, p74.


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 out depressions 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 as monopoly, 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 twentieth century were indeed a response to a period of historical
41 K. Marx, Grundrisse, p651. 42 H. Ticktin, Critique 26, p80.


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 the fact')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's growth 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
M. Machover, Critique 23, p148 & 151. 44 Ibid, p147. 45 A. Negri. The politics of Subversion, Cambridge 1989, p10.


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's theoretical 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
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H. Ticktin, Critique 26, p79. S. Clarke, op. cit, p73.


equilibrium'.48 As Meikle points out, though, 'Crises do not occur in order that the self-expansion of capital can start up again. They are, as Marx treats them, crises of the society, not cycles in an economic mechanism'.49 The real basis of Marx's theory of crisis lies, it has been argued here, in the contradictory nature of the value relations, or, more accurately, the realisation of the contradiction (an ever more antagonistic contradiction) between the unity of concrete human labour and its social form, abstract labour. Crisis theory, to be meaningful, must be harnessed to the dialectical account of this growing contradiction - in doing so, the dynamic view Marx had of capitalist development, in terms of an entity with a definite life-process, becomes essential. Writing in 1929, Henryk Grossman identified the reason for Marxism's production of 'unsatisfactory literature' on the subject of 'economic breakdown' as having methodological roots: Marxism had turned to empiricism and away from theory.50 Sadly, it seems that little in the intervening years has changed within Marxism. As we move into a period where the complexities of capital's crisis and decline give ever more contradictory signals to its commentators, the need to re-establish Marxism's theoretical foundations becomes a crucial task.
E. Mandel, op. cit, p26. S. Meikle, op. cit, p66. 50 Quoted by P. Kennedy, op-cit.
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