In this paper I intend to contrast the ‘falling rate of prot’ crisis theories of the 1970s with the ‘underconsumptionism’ of the orthodox Marxist tradition. The central argument is that in rejecting traditional underconsumptionist theories of crisis contemporary Marxism has thrown the baby out with the bathwater, with unfortunate theoretical and political consequences. A more adequate critique of traditional underconsumptionism leads not to the falling rate of prot, but to a disproportionality theory of crisis, which follows the traditional theory in seeing crises not as epochal events but as expressions of the permanent tendencies of capitalist accumulation.

The background to the paper is my recent book, Keynesianism, Monetarism and the Crisis of the State (Clarke, 1988a), in which analysed the development of capitalism on the basis of a version of the theory of overaccumulation and crisis which is proposed here. However in the book this theory is developed in relation to the historical analysis, without reference to either traditional or contemporary debates. The purpose of this paper is to draw out the theoretical signicance of the argument as the basis of a re- evaluation of the Marxist tradition. The issue is of the highest importance as erstwhile Marxists, in both East and West, fall victim once more to the ‘reformist illusion’ that the negative aspects of capitalism can be separated from the positive, that the dynamism of capitalism can be separated from its crisis tendencies, that capitalist prosperity can be separated from capitalist immiseration.

1 Contemporary Marxist Crisis Theory

The Marxist theory of crisis is distinguished from bourgeois theories in the first instance in being concerned with the necessity of crisis, in order to establish that the permanent stabilisation of capitalism and amelioration of the class struggle, on which reformism pins its hopes, is impossible. To show that crises are possible, and can result from a whole range of causes, is a relatively trivial exercise. To show that they are necessary is a much harder task.

The 1970s saw the development of a range of Marxist crisis theories. On the one hand, there were theories which explained crisis in terms of the impact of the class struggle on the rate of prot, `neo-Ricardians’ focussing on the wages struggle (Glyn and Sutclie, 1972; Boddy and Crotty, 1975), `labour process’ theorists focussing on the struggle over production (Bell, 1977). On the other hand, there were theories which explained crisis in terms of the `law of the tendency for the rate of prot to fall’, whether directly, as a result of the rising organic composition of capital (Mattick, 1969; Yae, 1972; Cogoy, 1972, 1973a, 1973b), or indirectly, as a result ofthe exhaustion of the reserve army of labour (Itoh, 1980, 1988).

All these theories, despite their dierences, were based on a rejection of approaches which saw barriers to realisation as the source of crises, which were associated with the ‘underconsumptionism’ which had supposedly dominated the orthodox Marxist tradition. Politically the reasons for this rejection were clear: underconsumptionism had become associated with a Keynesian reformist politics, which sought to overcome the crisis-tendencies of accumulation by intervention at the level of distribution and exchange, while leaving the social relations of capitalist production intact. Theoretically this led to an insistence that the necessity of crisis could not be located at the level of distribution or exchange, but had to be based on the ‘general conditions of capitalist production’ (Marx, Theories of Surplus Value, II, 515).

This insistence on the primacy of production tended to be implicitly grounded in a mechanical materialism, which insisted that the immediate process of production was in some sense more ‘real’ than relations of distribution or exchange, a materialism which was a philosophical reection of a narrow conception of the class struggle in which the horny-handed sons of toil were the privileged class warriors, a conception which might have re ected the reality of the rank-and-le struggles of the 1960s and early 1970s, but which was already becoming out-dated by the mid 1970s.

The implication of this ‘productivism’ for the theory of crisis was that the source of crisis could not be seen in problems confronting the realisation of surplus value, but had to be rooted in the conditions for the production of surplus value. In other words, whereas for the orthodox Marxist tradition a fall in the rate of prot was only a result of a crisis of realisation, for the theories of the 1970s the fall in the rate of prot was the cause of the crisis. Dierent theories diered as to the precise cause of the fall in the rate of prot, but there was widespread agreement that the tendency to crisis lay in some form of tendency for the rate of prot to fall.

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