Marx's Theory of Crisis

Did Karl Marx ever develop a truly Marxian theory of economic crisis? No, argues Simon Clarke's extremely complete and informative book on Marxian theories of economic crisis. That is, Marx, not to mention his followers, never showed that crisis was "a necessary expression of the inherently contradictory form of capitalist production" (3). To argue this point, this book collects, analyzes, and criticizes a large number of quotes from Marx's host of books and manuscripts, including his recently published notebooks from the 1850s and 1860s. Because of the critical content, and because Clarke puts Marx's statements in the context of his scholarly and political work, this is not mere "Marxology." Though somewhat repetitive, Clarke's argument is very convincing. More importantly, the book provides a basis for the future construction of a truly Marxist theory of crisis.

Mainstream, including Keynesian, theories explain economic downturns and depressions in terms of exogenous shocks to the system; at the same time, these events or their consequences can be solved via institutional reform or government policy without abolishing capitalism. The truly Marxist theory of crisis, on the other hand, would explain these events as endogenous to capitalism. Further, as Rosa Luxemburg argued, forces that alleviate crisis tendencies (such as credit expansion, institutional reform, or government policies) serve only to delay the actual crisis, but in doing so, only intensify it (31). Of course, for most Marxists, such inevitability does not imply the automatic replacement of capitalism with socialism; a mass socialist movement is also needed. Absent such a movement, crises sooner or later play a restorative or purgative role, allowing the restarting of accumulation.

The early chapters survey "Marxian crisis theory." Clarke starts with a very illuminating summary of Frederick Engels' crisis theory, in which capitalist competition drives accumulation to surpass the limits set by consumption, which lags because it is determined by different laws of motion. This overaccumulation in turn leads to a crisis. The "pope of Marxism," Karl Kautsky, created an uneasy combination of a somewhat similar theory of secular overproduction and underconsumption with a theory of basically accidental cyclical crises with "no distinctively Marxist features" (27). The "revisionists," Eduard Bernstein and Michael Tugan-Baranowsky, attacked Kautsky's "orthodoxy," ending up with a notion of crisis essentially similar to his latter...