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.
Political Economy and the Necessity of Crisis
With every boom the apologists for capitalism claim that the tendency to crisis that has plagued the capitalist system since its very beginnings has finally been overcome. When the boom breaks, economists fall over one another to provide particularistic explanations of the crash. The crisis of the early nineteen nineties was the result of the incautious lending of the nineteen eighties. The crisis of the early nineteen eighties was the result of excessive state spending in the late nineteen seventies. The crisis of the mid nineteen seventies was the result of the oil price hike and the inflationary financing of the Vietnam war … the crisis of the nineteen thirties was the result of inappropriate banking policies … … . Every crisis has a different cause, all of which boil down to human failure, none of which are attributed to the capitalist system itself.
And yet crises have recurred periodically for the past two hundred years. Bourgeois economists have to deny that crises are inherent in the social form of capitalist production, because the whole of economic theory is built on the premise that the capitalist system is self-regulating, the principal task of the theoretical economist being to identify the minimal conditions under which such self-regulation will be maintained, so that any breakdown will be identified as the result of exceptional deviations from the norm.