Marxism without revolution: Crisis

I’m writing series of posts examining the question – what is left of Marxism, as a way to understand the world, and as a way to change it, once it is accepted that capitalism is not going to be overthrown by a working class revolution. Last time I talked about class. This post is about crisis. As before, the shorter JQ is “there are lots of valuable insights, but there’s a high risk of political paralysis.”

One of the most powerful feature of Marxian analysis is the idea that crisis is a normal part of capitalism rather than an aberration resulting from exogenous shocks. Marx asserts that crises arise from inherent contradictions in the system and proposes a dialectical account by which the resolution of one crisis produces the contradictions that set the scene for the next. That seems to me to remain valuable

On the other hand, the central point of Marx’s theory of crisis was the claim that crises would grow steadily more intense, driven by the declining rate of profit, until they brought about the revolutionary overthrow of the system. Hence, despite the short-term suffering they caused, crises were to be welcomed as steps on the path to the inevitable downfall of the system.

Once the link between crisis and revolution is abandoned, it is necessary to reconsider the whole analysis of crises. Without the declining rate of profit and the inevitable progress towards revolution, it is obvious that different crises have had different effects on class relations.

Some, such as the Great Depression, weakened the position of the dominant class, giving rise to the New Deal in the US and social democratic reforms in other developed countries

Other crises, such as that the 1970s have strengthened the dominant class. The failure of Keynesian stabilization policy paved the way for the resurgence of market liberalism, the set of ideas I discussed in Zombie Economics, most of which is online here.

The Global Financial Crisis, which initially seemed (to me at any rate) likely to bring an end to the dominance of the financial elite, has so far reinforced it, though it will be quite a while before the final whistle blows.

Standard Marxist analyses don’t deal with this very well, in my view. The tendency is always to present the response to each crisis in terms of increasing exploitation, and of papering over the cracks in a system that is doomed to inevitable failure. After three hundred years of such crises (if you start with the South Sea Bubble), it’s necessary to work on the hypothesis that crises are inherent features of the capitalist system.

The problems with the standard Marxist approach were evident in the response of the German Social Democrats to the Great Depression, which we discussed in the seminar on Sheri Berman’s book The Primacy of Politics The orthodox Marxist response, exemplified by the leading Social Democrat theorist Hilferding was that within the system, there was no alternative to ‘sound finance’. The revisionist Swedish Social Democrats weren’t so constrained and produced a response that was social democratic in the modern sense of the term.

Closely related is the question of what, if anything, can and should be done to stabilise the capitalist economy. The orthodox Marxist answer, it seems to me, is the same as that of classical economics, namely “Nothing”. By contrast, I read the historical evidence as showing that the system can and should be stabilised to a significant extent, as was done during the postwar decades, using Keynesian macroeconomic policies and tight regulation of the financial system. Obviously, those policies broke down in the late 1960s and early 1970s. On the other hand, the limited resort to Keynesian methods in 2008 and 2009 did prevent complete collapse of the system.

As I argued in Zombie Economics, the most promising route forward is to redevelop Keynesian economics in a way that overcomes these failings. That’s not a strategy with a guarantee of success, but it seems more hopeful than any alternative, and certainly better than standing by and restating the obvious fact that crises are part of the system.

39 thoughts on “Marxism without revolution: Crisis

  1. Once upon a time there was something called Simplicity!
    Simplicity said that Greed was bad, so is Lying; and the ‘good’ in human beings was good.
    It doesn’t really matter whether we are talking about a primitive tribal economy, a slave economy, a feudal economy, a capital economy or the next one to arrive.
    It’s human nature and intelligent application of what we know to be true that matters!
    The concepts and systems should follow suit …..


  2. @Tim Dymond Or, conversely, this from The Holy Family:

    ‘History does nothing, it “possesses no immense wealth”, it “wages no battles”. It is man, real, living man who does all that, who possesses and fights; “history” is not, as it were, a person apart, using man as a means to achieve its own aims; history is nothing but the activity of man pursuing his aims.’

    The point being that Marx could describe tendencies in how capitalism produced social change and revolt — including its tendency to produce a collective working class response because of the way workers are organised in the production process and exploited — as well as arguing for the crucial role that human choices play in shaping outcomes. Rather than plucking out one or other type of quote, it is important to see that he pulls in one direction or the other to emphasise particular aspects of his analysis, those contradictions summed up in the idea that people make history but not in circumstances of their own choosing.

    So there is an element of determinism — some processes unfold because of the laws of historical development of capitalist society — but conscious human practice is crucial in whether the end result is socialism or ‘the common ruin of the contending classes’.

    Having recently read Capital Vol 1 as part of a reading group, Chapter 32 is clearly situated in explaining the ‘historical tendency of capital accumulation’ and its potentials. In that context it would be hard to shoehorn it as a serious statement of the historical inevitability of the victory of socialism. More importantly, it is impossible to square such a view with Marx’s obsessively interventionist approach to political struggle throughout his entire adult life. Why bother with all that (especially writing that 3-volume magnum opus) if the outcome was inevitable?

  3. @Dr_Tad
    “Are you only interested in preaching to the (anti-Marx) converted, at a time when capitalism is looking in worse shape than any time since the 1930s? ”

    The latest out of North Korea:

    “North Korea has drastically cut public food handouts as it heads towards a new hunger crisis with people again eating grass to survive, one of the most experienced aid workers in the isolated nation said.

    Food rations have been cut to as low as 150 grammes (5.3 ounces) a day per person in some parts of the country as foreign donations collapse and higher international prices make imports more expensive, said Katharina Zellweger, head of a Swiss government aid office in Pyongyang.”

    “Zellweger said she had seen “a lot more malnourished children” on recent travels around the country.

    “You see more people out in the fields and on the hillsides digging roots, cutting grass or herbs. So there are signs that there is going to be a crisis.”

    Capitalism has many problems but if characters like Dr Tad want the working class to contemplate revolution they’ll need to have a very good explanation for why the next revolution won’t produce another hideous disaster like North Korea.

  4. @Mel

    North Korea is the last fully state capitalist Stalinist regime left on the planet. It is hard to make a historical case that it was the result of any “revolution”. Marx argued that the emancipation of the working class had to be the act of the working class itself, so whatever type of “Marxism” North Korea may claim to be it has no basis in Marx’s own thinking.

    This 2002 article written by South Korean Marxists is a good summary of the Northern regime’s class basis.

    North Korea is certainly an impoverished, repressive basket case, but its ruling elite’s use of Marxist terminology to justify itself shouldn’t absolve us from trying to get to grips with the nature of the society we are criticizing.

  5. I think that the only way to carry this topic further is to determine why “history” has, so profoundly, not delivered the “revolt” that Marx thought to be so inevitable.

    Apart from the possibility that Marx was more attempting to drive an outcome of revolt rather than predicting it, will we ever be able to forget “Bush and his tireless harangue on weapons of mass destruction and Sadam Hussein”, there must have been changes that occurred to steer capitalism away from the path to self destruction.

    Either Marx was fully wrong in his conclusions on capitalism, or some new “game changing” force came into play to change the course of “history” as Marx saw it.

    I am going to suggest that what provided the change force, multiplier, sufficient to alter the course of history was the arrival of oil, electricity, and the subsequent acceleration of automation with the cascade of change that has unrolled throughout the following century and a half.

  6. @BilB

    “Either Marx was fully wrong in his conclusions on capitalism, or some new ‘game changing’ force came into play to change the course of ‘history’ as Marx saw it”.

    That seems like a sensible point, to me.

  7. ‘More importantly, it is impossible to square such a view with Marx’s obsessively interventionist approach to political struggle throughout his entire adult life. Why bother with all that (especially writing that 3-volume magnum opus) if the outcome was inevitable?’

    There is certainly a fundamental contradiction for Marx as and analyist and an activist: ‘philosophers have only interpreted the world, the point is to change it’. Marx clearly believed that people (‘men’) had to do things for things to happen – ‘but not in circumstances of their own choosing’. From his writing however it is hard to construct any kind of distinctive policy program for a active political party. The 10 points of the Communist Manifesto are the least original or interesting part of that otherwise fascinating pamphlet. Many people have pointed out – all the points worth achieving (I can’t think why we would ‘Confiscat[e] of the property of all emigrants and rebels’) can be achieved without a break from capitalism.

  8. John

    You might find this article by two leading Historians of Economic Thought interesting.

    Howard M C & King J E 2001 ‘Where Marx Was Right: Towards a More Secure Foundation for Heterodox Economics’ Cambridge Journal of Economics 25 78-807

    Best regards


  9. @Tim Dymond

    Certainly the tension between thre deterministic “laws of history/forces-relations of production” on the one hand and the humanistic and subjective was never resolved satisfactorily in Marx. The two remain eyeballing each other in the way one imagines, metaphorically, wave and particle conceptions of energy might.

    In relation to what might be achived “without a break from capitalism” you might note that at the time Marx wrote he continued to regard capitalism as having unfinished business in authoring modernity, “developing the productive forces” and so forth, and so his program in 1847 was unashamedly reformistic. Indeed, Engels speculated as late as the 1890s on the possibility in at least some jurisdictions of a perfectly peaceable reform driven approach to the the rule of the working class.

    Confiscation of the property of “emigrants” was as I recall, a reference to absentee landlordism.

  10. I’m coming from the other side of the fence to you John but could I gently make a few points in defence of real capitalism –
    1) You wrote “without a break from capitalism” – most real capitalists I know don’t think we have much of a capitalist system…it is crony capitalism. Capitalism is a profit and loss system. The profit encourages the risk taking and the loss encourages the prudence… governments around the world keep bailing out losers so they keep making bad choices…thats how they got too big to fail. So I think we should give real capitalism a go. As a capitalist i can assure you i think the system we have is terrible but it is unfair to call this capitalism. Friedman used to give a speech called ‘where is the friend of the free market’ which talked about how special interest groups all dislike free markets (eg unions, businesses etc)
    2) I don’t think redeveloping Keynesian theories will help. The problem is that with political incentives the discretionary spending by politicians is a joke…the money just gets wasted and diverted from important activities. Friedman has showed that the simplistic keynesian approach doesn’t work (eg stagflation). Higgs has shown that it wasn’t some keynesian multiplier from WWII spending that ended the depression.
    3) tighter regulation….there is already plenty of regulation and none of the regulators saw the gfc coming….just like they won’t see the next gfc coming. At least with a (real) capitalist system anyone who bets on a particular outcome suffers a loss when they get it wrong….our current problem is that we bail out these losers…let them make more bad bets and then bail them out again with our money.
    4) why is capitalism better – freedom!…should i plan for myself or leave it to you…i want plans by the many not by the few

    History and practice has shown that communism won’t make us all richer.

  11. First up, Andy, would you care to outline your system of values. Does capitalism in your view require elimination of human rights, for instance?

  12. Hi BilB,
    I am not good at explaining this too well but basically I believe in individual freedom…freedom to choose what transactions to enter into and upon what basis…freedom to own property/capital and to choose how to use it…in my view capitalism is the best system to enhance human rights (not eliminate them).

    Under real capitalism a producer profits and becomes wealthy only by satisfying the voluntary choices of other market participants and in direct proportion to the value those participants find in transactions with that producer.

    Milton Friedman often spoke and wrote about how economic freedom (capitalism) is a necessary (but not sufficient) condition for political freedom.

    I think Milton Friedman in Free to Choose and Capitalism & Freedom explains it better than I can. Also Ayn Rand in Capitalism: The Unknown Ideal does a good job too.

  13. Thanks Andy,

    The question to you was for those people who do not have the equal opportunity, ability, or inclination to choose. How do these people fare in the Friedmanian world of your choosing?

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